Exhibit 10.5

 

CONFIDENTIAL TREATMENT REQUESTED

 

EXECUTION VERSION

UNDER 17 C.F.R §§ 200.80(b)4, AND 240.24b-2

 

 

 

 

CALL OPTION AGREEMENT

 

 

BY AND AMONG

 

 

ISIS PHARMACEUTICALS, INC.,

 

 

IBIS BIOSCIENCES, INC.

 

 

AND

 

 

ABBOTT MOLECULAR INC.

 

 

January 30, 2008

 

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TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

 

ARTICLE I DEFINITIONS

 

1

 

 

 

 

 

ARTICLE II GRANT OF CALL OPTION; SUBSCRIPTION RIGHTS

 

2

 

 

 

 

 

Section 2.1

 

Grant of Option

 

2

 

 

 

 

 

Section 2.2

 

Subscription Right

 

2

 

 

 

 

 

Section 2.3

 

Purchase Price

 

2

 

 

 

 

 

Section 2.4

 

Milestone Adjustments

 

2

 

 

 

 

 

ARTICLE III EXERCISE OF OPTION

 

3

 

 

 

 

 

Section 3.1

 

Exercise of Call Option

 

3

 

 

 

 

 

Section 3.2

 

Exercise of Subscription Right

 

4

 

 

 

 

 

Section 3.3

 

Call Option Extension

 

4

 

 

 

 

 

Section 3.4

 

Call Option Acceleration

 

4

 

 

 

 

 

Section 3.5

 

Effect of Expiration and Termination of Call Option, Subscription Right

 

5

 

 

 

 

 

Section 3.6

 

Call Option Exercise and Subscription Right Exercise Preparation

 

5

 

 

 

 

 

ARTICLE IV MISCELLANEOUS PROVISIONS

 

6

 

 

 

 

 

Section 4.1

 

Assignment

 

6

 

 

 

 

 

Section 4.2

 

Notices

 

6

 

 

 

 

 

Section 4.3

 

Counterparts

 

7

 

 

 

 

 

Section 4.4

 

Amendment

 

7

 

 

 

 

 

Section 4.5

 

Severability

 

7

 

 

 

 

 

Section 4.6

 

Remedies Cumulative

 

8

 

 

 

 

 

Section 4.7

 

Governing Law; Alternative Dispute Resolution

 

8

 

 

 

 

 

Section 4.8

 

Rules of Construction

 

8

 

 

 

 

 

Section 4.9

 

Further Assurances

 

8

 

 

 

 

 

 

 

 

 

 

Exhibits

 

 

 

 

A

Form of Stock Purchase Agreement

 

 

B

Form of Stock Subscription Agreement

 

 

C

[***] Milestone and Value Accretion Milestones

 

 

D

Option Notice

 

 

 

i

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CALL OPTION AGREEMENT

 

THIS CALL OPTION AGREEMENT (this “Agreement”) is made and entered into as of
this 30th day of January 2008, by and among Isis Pharmaceuticals, Inc., a
Delaware corporation (“Isis”), Ibis Biosciences, Inc., a Delaware corporation
(“Ibis”), and Abbott Molecular Inc., a Delaware corporation (“AMI”).  Isis, Ibis
and AMI are sometimes referred to herein individually as a “Party,” and
collectively as the “Parties.”

 

RECITALS

 

WHEREAS, on the date hereof, the Parties have entered into a Strategic Alliance
Master Agreement (the “Master Agreement”) and certain other Investment
Documents, pursuant to which, among other things, AMI has acquired the Shares
from Ibis;

 

WHEREAS, in connection with the transactions contemplated by the Investment
Documents, Isis has agreed to grant an option to AMI and AMI has agreed to
acquire from Isis an option for AMI to acquire all of the Capital Stock (other
than the Shares (and the Additional Shares if AMI elects to acquire the
Additional Shares pursuant to the Stock Subscription Agreement)) of Ibis (the
“Optioned Stock”) from Isis on the terms set forth in this Agreement and the
Acquisition Agreement;

 

WHEREAS, in connection with the transactions contemplated by the Investment
Documents, Ibis has agreed to grant a subscription right to AMI and AMI has
agreed to acquire from Ibis a subscription right to subscribe for and acquire
the Additional Shares from Ibis on the terms set forth in this Agreement and the
Stock Subscription Agreement; and

 

WHEREAS, the execution and delivery of this Agreement by Isis and Ibis is a
material inducement for AMI to enter into the Master Agreement and to acquire
the Shares.

 

NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Capitalized terms used but not defined herein have the meanings ascribed to such
terms in the Master Agreement.  In addition to the terms defined elsewhere
herein and in the Master Agreement, the following terms when used in this
Agreement have the following meanings:

 

“Acquisition Agreement” means the form of Stock Purchase Agreement attached
hereto as Exhibit A.

 

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“Call Option Expiration Date” means 5:00 p.m. (Pacific Time) on the date the
Call Option expires pursuant to the terms hereof, which, subject to Section 3.1,
Section 3.2, Section 3.3 and Section 3.4, shall be December 31, 2008.

 

“Call Period” means the period of time commencing on the date hereof and ending
on the Call Option Expiration Date.

 

“Cut-Off Date” means, subject to Section 3.2, 5:00 p.m. (Pacific Time) on
July 31, 2008.

 

“Stock Subscription Agreement” means the form of Stock Subscription Agreement
attached hereto as Exhibit B.

 

ARTICLE II

GRANT OF CALL OPTION; SUBSCRIPTION RIGHTS

 

Section 2.1             Grant of Option.  Subject to the terms set forth in this
Agreement, Isis hereby grants to AMI, and AMI hereby acquires from Isis, an
exclusive option, in AMI’s sole discretion (the “Call Option”), to purchase the
Optioned Stock on the terms set forth in this Agreement and in the Acquisition
Agreement.

 

Section 2.2             Subscription Right.  Subject to the terms set forth in
this Agreement, Ibis hereby grants to AMI, and AMI hereby acquires from Ibis the
exclusive right, in AMI’s sole discretion (the “Subscription Right”), to
subscribe for and purchase the Additional Shares on the terms set forth in this
Agreement and in the Stock Subscription Agreement for an aggregate purchase
price of $20,000,000.

 

Section 2.3             Purchase Price.  The “Transaction Value” for the
Optioned Stock shall be equal to (a) either (i) One Hundred Seventy Five Million
and No/100 Dollars ($175,000,000.00) if AMI has exercised the Subscription Right
and acquired the Additional Shares or (ii) One Hundred Ninety Five Million and
No/100 Dollars ($195,000,000.00) if AMI has not exercised the Subscription Right
(the “Base Purchase Price”) plus (b) the Milestone Adjustments (as defined
below), if any.

 

Section 2.4             Milestone Adjustments.  If AMI, in good faith,
determines that the [***] Milestone (as set forth in Exhibit C hereto) has been
reached prior to AMI’s delivery to Isis of the Option Notice or Isis’ delivery
to AMI of the Purchase Offer Notice (as defined below), as the case may be,
then:

 

(A)   IF AMI, IN GOOD FAITH, ALSO DETERMINES THAT THE [***] MILESTONE (AS SET
FORTH IN EXHIBIT C HERETO) HAS BEEN REACHED AS OF THE DATE OF THE OPTION NOTICE
OR THE PURCHASE OFFER NOTICE, AS THE CASE MAY BE, THEN THE TRANSACTION VALUE
SHALL BE INCREASED BY [***] (THE “[***] MILESTONE ADJUSTMENT”);

 

(B)   IF AMI, IN GOOD FAITH, ALSO DETERMINES THAT THE [***] MILESTONE (AS SET
FORTH IN EXHIBIT C HERETO) HAS BEEN REACHED AS OF THE DATE OF THE OPTION NOTICE
OR THE PURCHASE OFFER

 

2

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Notice, as the case may be, then the Transaction Value shall be increased by
[***] (the “[***] Milestone Adjustment”); and

 

(C)   IF AMI, IN GOOD FAITH, ALSO DETERMINES THAT THE [***] MILESTONE (AS SET
FORTH IN EXHIBIT C HERETO) HAS BEEN REACHED AS OF THE DATE OF THE OPTION NOTICE
OR THE PURCHASE OFFER NOTICE, AS THE CASE MAY BE, THEN THE TRANSACTION VALUE
SHALL BE INCREASED BY [***] (THE “[***] MILESTONE ADJUSTMENT” AND, TOGETHER WITH
THE [***] MILESTONE ADJUSTMENT AND THE [***] MILESTONE ADJUSTMENT, THE
“MILESTONE ADJUSTMENTS”).

 

The Milestone Adjustments shall not, under any circumstances, exceed Fifteen
Million and No/100 Dollars ($15,000,000.00) in the aggregate, and the
Transaction Value shall not, under any circumstances, exceed, in the aggregate
(1) One Hundred Ninety Million and No/100 Dollars ($190,000,000.00) if AMI has
exercised the Subscription Right and acquired the Additional Shares or (2) Two
Hundred Ten Million and No/100 Dollars ($210,000,000.00) if AMI has not
exercised the Subscription Right.

 

ARTICLE III

EXERCISE OF OPTION

 

Section 3.1             Exercise of Call Option.

 

(A)   AMI, IN ITS SOLE DISCRETION AT ANY TIME PRIOR TO THE CALL OPTION
EXPIRATION DATE, MAY EXERCISE THE CALL OPTION BY EXECUTING AND DELIVERING TO
ISIS THE OPTION NOTICE ATTACHED HERETO AS EXHIBIT D (THE “OPTION NOTICE”).  IF
AMI EXERCISES THE CALL OPTION IN ACCORDANCE WITH THIS SECTION 3.1, THEN IN THE
OPTION NOTICE AMI SHALL INSTRUCT ISIS AND IBIS TO EXECUTE AND DELIVER TO AMI,
PROMPTLY UPON RECEIPT OF THE OPTION NOTICE, THE ACQUISITION AGREEMENT AND THE
DISCLOSURE SCHEDULES THERETO (WHICH SHALL BE THE MOST RECENT DISCLOSURE
SCHEDULES DELIVERED BY ISIS PURSUANT TO SECTION 3.6(A), UNLESS OTHERWISE AGREED
TO BY THE PARTIES IN WRITING).

 

(B)   IF THE DISCLOSURE SCHEDULES ATTACHED TO THE ACQUISITION AGREEMENT EXECUTED
AND DELIVERED BY ISIS AND IBIS PURSUANT TO SECTION 3.1(A) ARE THE MOST RECENT
DISCLOSURE SCHEDULES DELIVERED BY ISIS PURSUANT TO SECTION 3.6(A), THEN THE CALL
OPTION SHALL AUTOMATICALLY EXPIRE IF AMI, IN ITS SOLE DISCRETION, DOES NOT
EXECUTE AND DELIVER THE ACQUISITION AGREEMENT TO ISIS WITHIN FIVE (5) BUSINESS
DAYS AFTER AMI’S RECEIPT OF THE EXECUTED ACQUISITION AGREEMENT.

 

(C)   IF THE DISCLOSURE SCHEDULES ATTACHED TO THE ACQUISITION AGREEMENT EXECUTED
AND DELIVERED BY ISIS AND IBIS PURSUANT TO SECTION 3.1(A) ARE NOT THE MOST
RECENT DISCLOSURE SCHEDULES DELIVERED BY ISIS PURSUANT TO SECTION 3.6(A), THEN
THE CALL OPTION SHALL AUTOMATICALLY EXPIRE IF AMI, IN ITS SOLE DISCRETION, DOES
NOT EXECUTE AND DELIVER THE ACQUISITION AGREEMENT TO ISIS ON OR PRIOR TO THE
LATER OF (I) THE DATE THAT IS ONE MONTH AFTER AMI’S RECEIPT OF THE EXECUTED
ACQUISITION AGREEMENT AND (II) THE CALL OPTION EXPIRATION DATE (WHICH, IN THIS
INSTANCE, SUBJECT TO SECTION 3.3 AND SECTION 3.4, IS DECEMBER 31, 2008).

 

3

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Section 3.2             Exercise of Subscription Right.

 

(A)   AMI, IN ITS SOLE DISCRETION AT ANY TIME PRIOR TO THE CUT-OFF DATE, MAY
EXERCISE THE SUBSCRIPTION RIGHT BY PROVIDING WRITTEN NOTICE TO ISIS.  IF AMI
EXERCISES THE SUBSCRIPTION RIGHT IN ACCORDANCE WITH THIS SECTION 3.2, THEN,
PROMPTLY UPON RECEIPT OF NOTICE FROM AMI, IBIS AND ISIS SHALL EXECUTE AND
DELIVER TO AMI THE STOCK SUBSCRIPTION AGREEMENT AND THE DISCLOSURE SCHEDULES
THERETO (WHICH SHALL BE THE MOST RECENT DISCLOSURE SCHEDULES DELIVERED BY ISIS
PURSUANT TO SECTION 3.6(A), UNLESS OTHERWISE AGREED TO BY THE PARTIES IN
WRITING).

 

(B)   IF THE DISCLOSURE SCHEDULES ATTACHED TO THE STOCK SUBSCRIPTION AGREEMENT
EXECUTED AND DELIVERED BY ISIS AND IBIS PURSUANT TO SECTION 3.2(A) ARE THE MOST
RECENT DISCLOSURE SCHEDULES DELIVERED BY ISIS PURSUANT TO SECTION 3.6(A), THEN
THE SUBSCRIPTION RIGHT AND THE CALL OPTION SHALL AUTOMATICALLY EXPIRE IF AMI, IN
ITS SOLE DISCRETION, DOES NOT EXECUTE AND DELIVER THE STOCK SUBSCRIPTION
AGREEMENT TO ISIS WITHIN FIVE (5) BUSINESS DAYS AFTER AMI’S RECEIPT OF THE
EXECUTED STOCK SUBSCRIPTION AGREEMENT.

 

(C)   IF THE DISCLOSURE SCHEDULES ATTACHED TO THE STOCK SUBSCRIPTION AGREEMENT
EXECUTED AND DELIVERED BY ISIS AND IBIS PURSUANT TO SECTION 3.2(A), ABOVE ARE
NOT THE MOST RECENT DISCLOSURE SCHEDULES DELIVERED BY ISIS PURSUANT TO
SECTION 3.6(A), THEN THE SUBSCRIPTION RIGHT AND THE CALL OPTION SHALL
AUTOMATICALLY EXPIRE IF AMI, IN ITS SOLE DISCRETION, DOES NOT EXECUTE AND
DELIVER THE STOCK SUBSCRIPTION AGREEMENT AND ACQUIRE THE ADDITIONAL SHARES ON OR
PRIOR TO AUGUST 31, 2008.

 

(D)   SUBJECT TO SECTION 3.2(A), SECTION 3.2(B) AND SECTION 3.2(C), IN THE EVENT
THAT ISIS OR IBIS OR ANY OF THEIR RESPECTIVE REPRESENTATIVES RECEIVES A PURCHASE
OFFER WITHIN [***] OF THE CUT-OFF DATE, THEN THE CUT-OFF DATE SHALL BE THE CALL
ACCELERATION DATE.

 

Section 3.3             Call Option Extension.  If the [***] Milestone has not
been met on or before [***], then AMI, in its sole discretion and without the
payment of any additional consideration, may elect to extend the Call Option
Expiration Date to June 30, 2009, by providing written notice to Ibis at any
time prior to 11:59 p.m. (Pacific Time) on [***]

 

Section 3.4             Call Option Acceleration.

 

(A)   IF, DURING THE CALL PERIOD, ISIS OR IBIS OR ANY OF THEIR RESPECTIVE
REPRESENTATIVES RECEIVES A PURCHASE OFFER, THEN ISIS SHALL, WITHIN [***] AFTER
SUCH RECEIPT, NOTIFY AMI IN WRITING OF SUCH PURCHASE OFFER, SETTING FORTH IN
SUCH NOTICE (THE “PURCHASE OFFER NOTICE”) [***] AND INDICATING THEREIN WHETHER,
ASSUMING THAT THE CONDITIONS IN SECTION 3.4(B) HAVE BEEN MET, IT INTENDS TO
PURSUE SUCH PURCHASE OFFER.

 

(B)   IF (I) THE PURCHASE OFFER IS FROM AN UNAFFILIATED THIRD PARTY AND IS
UNSOLICITED, BONA FIDE AND IN WRITING, (II) THE [***], (III) AMI HAS NOT
EXERCISED THE CALL OPTION, (IV) THE CONSUMMATION OF THE PURCHASE OFFER WOULD
RESULT IN AMI [***] IN EXCHANGE FOR THE SURRENDER OF THE SHARES AND, IF AMI HAS
EXERCISED THE SUBSCRIPTION RIGHT AND ACQUIRED THE ADDITIONAL SHARES, [***] IN
EXCHANGE FOR THE SURRENDER OF THE ADDITIONAL SHARES AND (V) IN SUCH PURCHASE
OFFER NOTICE, ISIS INDICATES THAT IT DESIRES TO PURSUE THE PURCHASE OFFER, THEN
THE CALL OPTION EXPIRATION DATE SHALL ACCELERATE TO THE DATE WHICH IS [***] DAYS
(THE “CALL ACCELERATION DATE”) FROM THE DATE ON WHICH AMI RECEIVES SUCH PURCHASE
OFFER NOTICE.

 

4

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(C)   AT ANY TIME PRIOR TO 5:00 P.M. (PACIFIC TIME) ON THE CALL ACCELERATION
DATE, AMI SHALL HAVE THE RIGHT, IN ITS SOLE DISCRETION, TO EXERCISE THE CALL
OPTION FOR EITHER (I) [***], OR (II) [***]; PROVIDED THAT, IF AMI, IN ITS SOLE
DISCRETION, ELECTS OPTION (II) ABOVE, THE ACQUISITION CLOSING SHALL BE
CONSUMMATED [***].  IF AMI DOES NOT EXERCISE THE CALL OPTION PRIOR TO 5:00 P.M.
(PACIFIC TIME) ON THE CALL ACCELERATION DATE, THEN THE CALL OPTION SHALL EXPIRE.

 

(D)   IF ISIS OR IBIS (AS APPLICABLE) FAILS TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY SUCH PURCHASE OFFER ON TERMS NO LESS FAVORABLE TO ISIS OR IBIS
(AS APPLICABLE) THAN THOSE INDICATED IN THE PURCHASE OFFER NOTICE WITHIN [***]
DAYS FROM THE DATE OF THE PURCHASE OFFER NOTICE (THE “PURCHASE OFFER TERMINATION
DATE”), THEN (I) ISIS AND IBIS SHALL BE PROHIBITED FROM PURSUING THE PURCHASE
OFFER, (II) THE CALL OPTION SHALL BE REINSTATED, (III) THE CALL PERIOD SHALL BE
EXTENDED AUTOMATICALLY TO THE DATE THAT IS THE LATER OF (A) [***] DAYS AFTER THE
PURCHASE OFFER TERMINATION DATE AND (B) [***] DAYS AFTER THE CALL OPTION
EXPIRATION DATE (GIVING EFFECT TO ANY EXTENSIONS THEREOF, BUT DISREGARDING ANY
ACCELERATION OF SUCH DATE PURSUANT TO SECTION 3.4(B)) AND (IV) DURING THE CALL
PERIOD, ISIS AND IBIS SHALL NOT BE PERMITTED TO ENTERTAIN ANY SUBSEQUENT OFFERS
FROM THE THIRD PARTY THAT SUBMITTED SUCH PURCHASE OFFER.

 

Section 3.5             Effect of Expiration and Termination of Call Option,
Subscription Right. After (a) the Call Option Expiration Date (subject to
Section 3.4(d)) or (b) if AMI exercises the Call Option, (i) the termination of
the Acquisition Agreement in accordance with its terms or (ii) the Acquisition
Closing, (A) this Agreement shall terminate automatically and the Call Option
and Subscription Right shall be null and void and of no further force or effect
without any further action by the Parties and (B) Isis, Ibis and AMI shall have
no further rights or obligations under this Agreement.  Except as expressly set
forth in any Investment Document, the expiration of the Call Period shall not
affect the rights and obligations of any of the parties hereto and thereto.

 

Section 3.6             Call Option Exercise and Subscription Right Exercise
Preparation.

 

(A)   AMI MAY, IN CONNECTION WITH ITS GOOD FAITH DETERMINATION WHETHER TO
EXERCISE IN ITS SOLE DISCRETION THE SUBSCRIPTION RIGHT OR THE CALL OPTION,
REQUEST THAT ISIS DELIVER THE DISCLOSURE SCHEDULES TO THE STOCK SUBSCRIPTION
AGREEMENT OR THE ACQUISITION AGREEMENT, AS THE CASE MAY BE, TO AMI AND,
THEREAFTER, ISIS SHALL, AS SOON AS REASONABLY POSSIBLE, DELIVER TO AMI THE
DISCLOSURE SCHEDULES TO THE STOCK SUBSCRIPTION AGREEMENT OR THE ACQUISITION
AGREEMENT, AS THE CASE MAY BE, TOGETHER WITH A CERTIFICATION OF AN AUTHORIZED
SIGNATORY OF ISIS THAT THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE STOCK
SUBSCRIPTION AGREEMENT OR THE ACQUISITION AGREEMENT, AS THE CASE MAY BE, AS
QUALIFIED BY THE DISCLOSURE SCHEDULES, ARE TRUE AND CORRECT IN ALL RESPECTS AS
OF THE DATE OF DELIVERY TO AMI.  IN ANY EVENT, ISIS SHALL DELIVER THE DISCLOSURE
SCHEDULES TO THE STOCK SUBSCRIPTION AGREEMENT TO AMI NO LATER THAN JUNE 30,
2008.

 

(B)   ISIS AND IBIS SHALL REASONABLY COOPERATE WITH AMI TO (I) OBTAIN ALL
NECESSARY WAIVERS, CONSENTS AND APPROVALS AND (II) EFFECT ALL NECESSARY
REGISTRATIONS, FILINGS AND SUBMISSIONS THAT MAY BE REQUIRED IN CONNECTION WITH
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS,
INCLUDING, BUT NOT LIMITED TO, A) FILINGS UNDER THE HART SCOTT RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED AND ANY OTHER SUBMISSIONS REQUESTED BY THE
FEDERAL TRADE COMMISSION OR DEPARTMENT OF JUSTICE AND (B) SUCH FILINGS,

 

5

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CONSENTS, APPROVALS, ORDERS, REGISTRATIONS AND DECLARATIONS AS MAY BE REQUIRED
UNDER THE LAWS OF ANY FOREIGN COUNTRY.

 

ARTICLE IV

 

MISCELLANEOUS PROVISIONS

 

Section 4.1             Assignment.  No Party hereto may assign this Agreement
or its rights and obligations hereunder without the prior written consent of the
other Parties; provided, that AMI may (i) designate one or more of its
Affiliates to exercise the Call Option or Subscription Right hereunder or to
receive title to the Optioned Stock or Additional Shares by providing written
notice to Ibis at any time prior to the Acquisition Closing or the acquisition
of the Additional Shares and (ii) assign its rights and obligations hereunder in
connection with a Change of Control of AMI; provided further that Isis may
assign its rights and obligations in connection with a Change of Control of Isis
if such Transfer involves all of the Capital Stock of Ibis that is owned by Isis
and the surviving or acquiring entity assumes all of Isis’ obligations under the
Investment Documents.

 

Section 4.2             Notices.  All notices or other communications that are
required or permitted under this Agreement will be in writing and delivered
personally with acknowledgement of receipt, sent by facsimile or other
electronic means (and promptly confirmed by personal delivery, registered or
certified mail or overnight courier as provided herein), sent by
nationally-recognized overnight courier or sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:

 

If to Ibis, to:

 

Ibis Biosciences Inc.
1896 Rutherford Road
Carlsbad, California 92008
Attn: President
Facsimile Number: (760) 603-4653

 

 

 

If to Isis, to:

 

Isis Pharmaceuticals, Inc.
1896 Rutherford Road
Carlsbad, California 92008
Attn: Chief Financial Officer
Facsimile Number: (760) 603-4650

 

 

 

with a copy to:

 

Isis Pharmaceuticals, Inc.
1896 Rutherford Road
Carlsbad, California 92008
Attn: General Counsel
Facsimile Number: (760) 268-4922

 

6

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If to AMI, to:

 

Abbott Laboratories
Corporate Transactions and Medical Products Legal Operations
Dept. 322, Bldg. AP6A
100 Abbott Park Road
Abbott Park, Illinois 60064-6010
Attn: Vice President and Associate General Counsel
Facsimile Number: (847) 938-1206

 

 

 

with a copy to:

 

Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, Illinois 60601
Attn:R. Scott Falk, P.C.
Facsimile Number: (312) 861-2200

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Parties in writing in accordance herewith.  Any such
communication will be deemed to have been given (i) when delivered on a Business
Day, if personally delivered or sent by facsimile or other electronic means
(subject to confirmation of such delivery), on such Business Day, (ii) when
delivered other than on a Business Day, if personally delivered or sent by
facsimile or other electronic means (subject to confirmation of such delivery),
on the first Business Day after dispatch, (iii) on the first Business Day after
dispatch, if sent by nationally-recognized overnight courier, and (iv) on the
third Business Day following the date of mailing, if sent by mail.  It is
understood and agreed that this Section 4.2 is not intended to govern the
day-to-day business communications necessary between the Parties in performing
their duties, in due course, under the terms of this Agreement.

 

Section 4.3             Counterparts.  This Agreement may be executed in any
number of counterparts, each of which will be an original, but all of which
together will constitute one instrument.  This Agreement and any signed
agreement or instrument entered into in connection with this Agreement, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine or other electronic means, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person.  At the request of any Party hereto or to any such
agreement or instrument, each other Party hereto or thereto shall re-execute
original forms thereof and deliver them to all other Parties.  No Party hereto
or to any such agreement or instrument shall raise the use of a facsimile
machine or other electronic means to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine or other electronic means as a defense to the
formation of a contract and each such Party forever waives any such defense.

 

Section 4.4             Amendment.  This Agreement may be amended or modified,
and the rights and obligations of the Parties under this Agreement may be
waived, only upon the written consent of each Party.

 

Section 4.5             Severability.  In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement shall continue in full force and effect and the

 

7

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application of such provision to other Persons or circumstances shall be
interpreted so as reasonably to effect the intent of the Parties hereto.  The
Parties further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business and other purposes of such void or
unenforceable provision.

 

Section 4.6             Remedies Cumulative.  Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a Party shall be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such Party, and the exercise by a Party of any one
remedy shall not preclude the exercise of any other remedy.

 

Section 4.7             Governing Law; Alternative Dispute Resolution.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to principles of conflicts of law.  The Parties
agree that any dispute arising from or relating to this Agreement shall be
exclusively resolved by the Alternative Dispute Resolution procedures set forth
in Exhibit D to the Master Agreement, the result of which shall be binding upon
the Parties.

 

Section 4.8             Rules of Construction.  The Parties acknowledge and
agree that they have been represented by counsel during the negotiation,
preparation and execution of this Agreement and, therefore, waive the
application of any Law or rule of construction providing that ambiguities in an
agreement or other document shall be construed against the Party drafting such
agreement or document. Where specific language is used to clarify by example a
general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates.  When the context so requires the word “or” when
used herein shall mean “and/or.”  All pronouns contained herein, and any
variations thereof, will be deemed to refer to the masculine, feminine or
neutral, singular or plural, as the identity of the Parties may require.

 

Section 4.9             Further Assurances.  Each of the Parties to the
Agreement shall use commercially reasonable efforts to effectuate the
transactions contemplated hereby.  Each Party hereto, at the reasonable request
of another Party hereto, shall execute and deliver such other instruments and do
and perform such other acts and things as may be necessary or desirable for
effecting completely the consummation of this Agreement and the transactions
contemplated hereby.

 

*   *   *   *   *

 

[Remainder of page intentionally left blank; Signatures on following page]

 

8

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IN WITNESS WHEREOF, Isis, Ibis and AMI each have caused this Call Option
Agreement to be executed and delivered in their names by their respective duly
authorized officers or representatives.

 

 

ISIS:

 

 

 

ISIS PHARMACEUTICALS, INC.

 

 

 

 

 

By:

   /s/ B. Lynne Parshall

 

Name:

  B. Lynne Parshall

 

Title:

    COO & CFO

 

 

 

 

IBIS:

 

 

 

IBIS BIOSCIENCES, INC.

 

 

 

 

 

 

 

By:

/s/ Michael J Treble

 

Name:

 Michael J Treble

 

Title:

   President

 

 

 

 

 

 

 

AMI:

 

 

 

 

ABBOTT MOLECULAR INC.

 

 

 

 

 

 

 

By:

 /s/ Stafford O’Kelly

 

Name:

 Stafford O’Kelly

 

Title:

   President

 

 

SIGNATURE PAGE TO CALL OPTION AGREEMENT

 

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EXHIBIT A

 

 

STOCK PURCHASE AGREEMENT

 

by and among

 

IBIS BIOSCIENCES, INC.,

 

ISIS PHARMACEUTICALS, INC.

 

and

 

ABBOTT MOLECULAR INC.

 

 

Dated:

 

[                      ,             ]

 

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TABLE OF CONTENTS

 

 

 

 

 

Page No.

 

 

 

 

 

Section 1.

 

Definitions

 

1

 

 

 

 

 

Section 2.

 

Basic Transaction; Purchase Price

 

13

2.1

 

Sale and Transfer of the Remaining Shares

 

13

2.2

 

Purchase Price

 

14

2.3

 

Earnout Payments

 

14

2.4

 

Restricted Assets

 

15

 

 

 

 

 

Section 3.

 

Closing Of The Transaction

 

16

3.1

 

The Closing

 

16

3.2

 

Deliveries at the Closing

 

16

 

 

 

 

 

Section 4.

 

Conditions To Obligation To Close

 

17

4.1

 

Conditions to Obligation of AMI

 

17

4.2

 

Conditions to Obligation of Isis

 

19

 

 

 

 

 

Section 5.

 

Representations And Warranties

 

19

5.1

 

Representations and Warranties of Isis

 

19

5.2

 

Representations And Warranties Of AMI

 

36

 

 

 

 

 

Section 6.

 

Reserved

 

37

 

 

 

 

 

Section 7.

 

Pre-Closing Covenants

 

37

7.1

 

General

 

37

7.2

 

Affirmative Covenants of Isis and Ibis

 

37

7.3

 

Negative Covenants of Isis

 

38

7.4

 

Notices and Consents

 

40

7.5

 

Full Access

 

40

7.6

 

Transition Assistance

 

40

7.7

 

Notice of Developments

 

41

7.8

 

Exclusivity

 

41

7.9

 

Indebtedness and Intercompany Accounts

 

41

7.10

 

Distribution of Cash and Grants Receivable

 

42

 

 

 

 

 

Section 8.

 

Additional Agreements

 

42

8.1

 

Survival

 

42

8.2

 

Indemnification

 

43

8.3

 

Press Release and Announcements

 

45

8.4

 

Expenses

 

45

8.5

 

Setoff

 

45

8.6

 

Certain Tax Matters

 

46

8.7

 

Further Assurances

 

49

8.8

 

Confidentiality

 

50

8.9

 

Noncompetition and Nonsolicitation

 

51

 

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8.10

 

Access to Books and Records

 

53

8.11

 

Employee and Related Matters

 

53

8.12

 

Consolidated Return

 

55

8.13

 

Isis Intellectual Property License

 

55

 

 

 

 

 

Section 9.

 

Termination

 

56

9.1

 

Termination

 

56

9.2

 

Effect of Termination

 

56

 

 

 

 

 

Section 10.

 

Miscellaneous

 

56

10.1

 

No Third Party Beneficiaries

 

56

10.2

 

Entire Agreement

 

56

10.3

 

Successors and Assigns

 

57

10.4

 

Counterparts

 

57

10.5

 

Headings

 

57

10.6

 

Notices

 

57

10.7

 

Governing Law

 

58

10.8

 

Alternative Dispute Resolution Procedure

 

59

10.9

 

Amendments and Waivers

 

59

10.10

 

Delays or Omissions

 

59

10.11

 

Incorporation of Exhibits and Schedules

 

59

10.12

 

Construction

 

60

10.13

 

Remedies

 

60

10.14

 

Severability

 

60

10.15

 

No Other Compensation

 

60

 

ii

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STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
this [    ] day of [                ,           ], by and among Isis
Pharmaceuticals, Inc., a Delaware corporation (“Isis”), Ibis Biosciences, Inc.,
a Delaware corporation and majority owned subsidiary of Isis (“Ibis”), and
Abbott Molecular Inc., a Delaware corporation (“AMI”) and Affiliate of Abbott
Laboratories, an Illinois corporation (“Abbott”).  AMI, Ibis and Isis are
sometimes referred to herein individually as a “Party” and collectively as the
“Parties.”

 

WHEREAS, on January 30, 2008, the Parties entered into the Master Agreement, the
Call Option Agreement and the Investor Rights Agreement, pursuant to which,
among other things, AMI acquired the Shares and the Call Option for an aggregate
purchase price of $20,000,000;

 

[WHEREAS, on [                      ], 2008, the Parties entered into the Stock
Subscription Agreement, pursuant to which, among other things, AMI acquired the
Additional Shares for an aggregate purchase price of $20,000,000;]

 

WHEREAS, Isis owns 1,000,000 shares of Ibis’ Common Stock (the “Remaining
Shares”);

 

WHEREAS, on [                ] [200    ], pursuant to the terms of the Call
Option Agreement, AMI exercised the Call Option, electing to acquire the
Remaining Shares pursuant to the terms hereof; and

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, Isis
desires to sell to AMI and AMI desires to acquire from Isis the Remaining
Shares.

 

NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:

 

Section 1.              DEFINITIONS.  Capitalized terms used and not otherwise
defined herein have the meanings ascribed to such terms in this Section 1.

 

(A)           “ABBOTT TRANSACTION TEAM” MEANS THE INDIVIDUALS LISTED ON SCHEDULE
1(A).

 

(B)           [“ADDITIONAL SHARES” MEANS 114,250 SHARES OF COMMON STOCK ACQUIRED
BY AMI PURSUANT TO THE STOCK SUBSCRIPTION AGREEMENT, AS MAY BE HELD FROM TIME TO
TIME BY AMI AND ITS PERMITTED ASSIGNS, WHICH, TOGETHER WITH THE SHARES,
REPRESENT APPROXIMATELY 18.6% OF THE ISSUED AND OUTSTANDING COMMON STOCK.]

 

(C)           “AFFILIATE” OF AN ENTITY MEANS ANY OTHER ENTITY THAT, DIRECTLY OR
INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY, OR
IS UNDER COMMON CONTROL WITH SUCH FIRST ENTITY.  FOR PURPOSES OF THIS DEFINITION
ONLY, “CONTROL” (AND, WITH CORRELATIVE MEANINGS, THE TERMS “CONTROLLED BY” AND
“UNDER COMMON CONTROL WITH”) MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF
THE POWER TO DIRECT THE MANAGEMENT OR POLICIES OF AN ENTITY,

 

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WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES OR BY CONTRACT RELATING TO
VOTING RIGHTS OR CORPORATE GOVERNANCE; PROVIDED, THAT (I) WITH RESPECT TO AMI
AND ABBOTT, THE TERM “AFFILIATE” SHALL SPECIFICALLY EXCLUDE [***] AND (II) WITH
RESPECT TO ISIS, THE TERM “AFFILIATE” SHALL SPECIFICALLY EXCLUDE [***].

 

(D)           “APPLICABLE LAW” OR “LAW” MEANS ALL APPLICABLE COMMON LAW, LAWS,
CONSTITUTIONAL PROVISIONS, ORDINANCES, STATUTES, RULES, REGULATIONS,
ADMINISTRATIVE RULINGS, EXECUTIVE ORDERS AND OTHER PRONOUNCEMENTS HAVING THE
EFFECT OF LAW OF ANY FEDERAL, NATIONAL, MULTINATIONAL, STATE, PROVINCIAL,
COUNTY, CITY OR OTHER POLITICAL SUBDIVISION, AGENCY OR OTHER BODY, DOMESTIC OR
FOREIGN, INCLUDING BUT NOT LIMITED TO ANY APPLICABLE RULES, REGULATIONS,
GUIDELINES, OR OTHER REQUIREMENTS OF GOVERNMENTAL AUTHORITIES THAT MAY BE IN
EFFECT FROM TIME TO TIME.

 

(E)           “APPLICABLE RATE” MEANS AS OF ANY PARTICULAR DATE, THE PRIME RATE
AS QUOTED IN THE MONEY RATES SECTION OF THE WALL STREET JOURNAL, PLUS [***]%.

 

(F)            [***]

 

(G)           “BUSINESS” MEANS RESEARCHING, DEVELOPING, MANUFACTURING, SELLING,
MARKETING, DISTRIBUTING AND USING A SYSTEM, PROCESS OR REAGENTS FOR THE
IDENTIFICATION AND/OR QUANTITATION OF NUCLEIC ACIDS OR THE PERFORMANCE OF
SERVICES RELATING TO ANY OF THE FOREGOING, AS CONDUCTED BY IBIS OR BY ISIS, WITH
RESPECT TO THE DIVISION, ON AND PRIOR TO THE CLOSING DATE.

 

(H)           “BUSINESS DAY” MEANS ANY DAY OTHER THAN A SATURDAY, SUNDAY, OR A
DAY ON WHICH THE BANKS IN CHICAGO, ILLINOIS ARE AUTHORIZED OR OBLIGATED BY LAW
TO CLOSE.

 

(I)            “CALL OPTION” HAS THE MEANING ASCRIBED TO SUCH TERM IN THE CALL
OPTION AGREEMENT.

 

(J)            “CALL OPTION AGREEMENT” MEANS THAT CERTAIN CALL OPTION AGREEMENT,
DATED AS OF THE INVESTMENT DATE, BY AND AMONG ISIS, IBIS AND AMI.

 

(K)           “CAPITAL STOCK” MEANS ALL CAPITAL STOCK, EQUITY OR CONTROLLING
INTERESTS AND OTHER SECURITIES IN AN ISSUER, INCLUDING, WITHOUT LIMITATION,
OPTIONS, WARRANTS, DEPOSITARY RECEIPTS, STOCK APPRECIATION OR PHANTOM STOCK
RIGHTS OR OTHER AGREEMENTS OR UNDERTAKINGS, INCLUDING STOCK OR SECURITIES
CONVERTIBLE OR EXCHANGEABLE FOR ANY SHARES OF CAPITAL STOCK, EQUITY OR
CONTROLLING INTERESTS OR OTHER SECURITIES IN AN ISSUER OR CONTAINING ANY PROFIT
PARTICIPATION FEATURES OR PURSUANT TO WHICH SUCH ISSUER IS OR COULD BE BOUND TO
ISSUE OR REPURCHASE ANY CAPITAL STOCK, EQUITY OR CONTROLLING INTERESTS OR OTHER
SECURITIES.

 

(L)            “CHANGE OF CONTROL” MEANS, WITH RESPECT TO ANY PERSON, THE
OCCURRENCE OF (I) ANY CONSOLIDATION OR MERGER OF SUCH PERSON WITH OR INTO ANY
OTHER PERSON, OR ANY OTHER CORPORATE REORGANIZATION OR TRANSACTION (INCLUDING
THE ACQUISITION OF CAPITAL STOCK OF SUCH PERSON (OR ANY RIGHTS TO ACQUIRE, OR
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR, ANY SUCH CAPITAL STOCK)),
WHETHER OR NOT SUCH PERSON IS A PARTY THERETO, IN WHICH THE STOCKHOLDERS OR
EQUITY-HOLDERS OF SUCH PERSON OR OTHER PERSONS CONTROLLING SUCH PERSON
IMMEDIATELY PRIOR TO SUCH CONSOLIDATION, MERGER, REORGANIZATION OR TRANSACTION,
OWN CAPITAL STOCK EITHER (A) REPRESENTING DIRECTLY, OR INDIRECTLY THROUGH ONE OR
MORE ENTITIES, LESS THAN FIFTY PERCENT (50%) OF THE ECONOMIC INTERESTS IN OR
VOTING POWER OF SUCH PERSON OR OTHER SURVIVING ENTITY IMMEDIATELY AFTER SUCH

 

2

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CONSOLIDATION, MERGER, REORGANIZATION OR TRANSACTION OR (B) THAT DOES NOT
DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE ENTITIES, HAVE THE POWER TO ELECT A
MAJORITY OF THE ENTIRE BOARD OF DIRECTORS OR EQUIVALENT GOVERNING BODY OF SUCH
PERSON OR OTHER SURVIVING ENTITY IMMEDIATELY AFTER SUCH CONSOLIDATION, MERGER,
REORGANIZATION OR TRANSACTION OR (II) A SALE, LEASE, LICENSE OR OTHER
DISPOSITION OF ALL OR A MATERIAL PORTION OF THE ASSETS OF SUCH PERSON.

 

(M)          “CLAIM” MEANS ANY CLAIM, LAWSUIT, DEMAND, AUDIT, INVESTIGATION,
CHARGE, SUIT, HEARING, NOTICE OF A VIOLATION, LITIGATION, ACTION, PROCEEDING,
ORDER, JUDGMENT, GRIEVANCE, OR ARBITRATION, WHETHER CIVIL, CRIMINAL,
ADMINISTRATIVE OR OTHERWISE, WHETHER AT LAW OR IN EQUITY, OR ANY INQUIRY LIKELY
TO RESULT IN ANY OF THE FOREGOING.

 

(N)           “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM
TIME TO TIME.

 

(O)           “COMMON STOCK” MEANS THE COMMON STOCK OF IBIS, PAR VALUE $0.001
PER SHARE.

 

(P)           “CONFIDENTIAL INFORMATION” MEANS ALL INFORMATION AND ANY TANGIBLE
EMBODIMENTS THEREOF PROVIDED BY OR ON BEHALF OF THE DISCLOSING PARTY TO THE
RECEIVING PARTY OR TO THE RECEIVING PARTY’S REPRESENTATIVES EITHER IN CONNECTION
WITH THE DISCUSSIONS AND NEGOTIATIONS PERTAINING TO THE TRANSACTION DOCUMENTS OR
IN THE COURSE OF PERFORMING THE TRANSACTION DOCUMENTS, INCLUDING WITHOUT
LIMITATION: KNOW-HOW; DATA; KNOWLEDGE; PRACTICES; PROCESSES; RESEARCH AND
DEVELOPMENT PLANS; ENGINEERING DESIGNS AND DRAWINGS; RESEARCH DATA;
MANUFACTURING PROCESSES AND TECHNIQUES; SCIENTIFIC, MANUFACTURING, MARKETING AND
BUSINESS PLANS; AND FINANCIAL AND PERSONNEL MATTERS RELATING TO THE DISCLOSING
PARTY OR TO ITS PRESENT OR FUTURE PRODUCTS, SALES, SUPPLIERS, CUSTOMERS,
EMPLOYEES, CONSULTANTS, INDEPENDENT CONTRACTORS, INVESTORS OR BUSINESS;
REGARDLESS OF WHETHER ANY OF THE FOREGOING ARE MARKED “CONFIDENTIAL” OR
“PROPRIETARY” OR COMMUNICATED TO THE OTHER BY THE DISCLOSING PARTY IN ORAL,
WRITTEN, GRAPHIC OR ELECTRONIC FORM.  NOTWITHSTANDING THE FOREGOING, INFORMATION
OF A PARTY WILL NOT BE DEEMED CONFIDENTIAL INFORMATION TO THE EXTENT THAT THE
RECEIVING PARTY CAN SHOW BY COMPETENT PROOF THAT SUCH INFORMATION:

 

(I)            IS OR BECOMES GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN AS A
RESULT OF AN UNAUTHORIZED DISCLOSURE BY THE RECEIVING PARTY OR ITS
REPRESENTATIVES;

 

(II)           WAS AVAILABLE TO THE RECEIVING PARTY OR ITS REPRESENTATIVES ON A
NON-CONFIDENTIAL BASIS PRIOR TO ITS DISCLOSURE BY THE DISCLOSING PARTY OR ITS
REPRESENTATIVES;

 

(III)          IS OR BECOMES AVAILABLE TO THE RECEIVING PARTY OR ITS
REPRESENTATIVES FROM A PERSON, OTHER THAN THE DISCLOSING PARTY OR ITS
REPRESENTATIVES, WHO IS NOT BOUND BY A CONFIDENTIALITY OBLIGATION TO THE
DISCLOSING PARTY OR ITS REPRESENTATIVES; OR

 

(IV)          IS INDEPENDENTLY DEVELOPED BY THE RECEIVING PARTY OR ITS
REPRESENTATIVES WITHOUT REFERENCE TO OR USE OF ANY CONFIDENTIAL INFORMATION OF
THE DISCLOSING PARTY.

 

3

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(Q)           “CONTRACT” MEANS ANY CONTRACT, LEASE, DEED, MORTGAGE, LICENSE,
INSTRUMENT, NOTE, COMMITMENT, UNDERTAKING, UNDERSTANDING, INDENTURE, JOINT
VENTURE, PURCHASE ORDER, SERVICE ORDER AND ALL OTHER AGREEMENTS AND
ARRANGEMENTS, WHETHER ORAL OR WRITTEN.

 

(R)            “CONTRIBUTION AGREEMENT” MEANS THE CONTRIBUTION AGREEMENT, DATED
AS OF JULY 31, 2007, BY AND BETWEEN ISIS AND IBIS.

 

(S)           “CORPORATE SERVICES AGREEMENT” MEANS THAT CERTAIN CORPORATE
SERVICES AGREEMENT, DATED AS OF JULY 31, 2007, BY AND BETWEEN ISIS AND IBIS.

 

(T)            “DIVISION” MEANS THE IBIS BIOSCIENCES DIVISION OF ISIS.

 

(U)           “EARNOUT THRESHOLD” MEANS $150 MILLION MINUS ALL COMMERCIAL
REVENUE FOR THE PERIOD BEGINNING ON THE DATE [***] THROUGH THE CLOSING DATE AS
SET FORTH ON SCHEDULE 1(U), WHICH HAS BEEN PREPARED IN ACCORDANCE WITH GAAP AND
ISIS’ INTERNAL CONTROLS AND PROCEDURES FOR FINANCIAL REPORTING.

 

(V)           “EMPLOYEE PENSION BENEFIT PLAN” HAS THE MEANING SET FORTH IN
SECTION 3(2) OF ERISA.

 

(W)          “EMPLOYEE WELFARE BENEFIT PLAN” HAS THE MEANING SET FORTH IN
SECTION 3(1) OF ERISA.

 

(X)            “ENCUMBRANCE” MEANS ANY MORTGAGE, COVENANT, HYPOTHECATION,
CONDITION, CLAIM, EASEMENT, ENCROACHMENT, RIGHT OF WAY, RESTRICTION, OPTION,
LIEN (STATUTORY OR OTHERWISE), PLEDGE, CHARGE, LICENSE, SECURITY INTEREST OR
ENCUMBRANCE OF ANY NATURE WHATSOEVER.

 

(Y)           “ENVIRONMENTAL LAWS” MEANS ANY FEDERAL, STATE, LOCAL OR FOREIGN
STATUTES, ORDINANCES, CODES, TREATIES, OR OTHER LAWS (INCLUDING, WITHOUT
LIMITATION, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND
LIABILITY ACT, THE RESOURCE CONSERVATION AND RECOVERY ACT, THE CLEAN AIR ACT,
THE CLEAN WATER ACT, THE TOXIC SUBSTANCES CONTROL ACT, THE OIL POLLUTION
PREVENTION ACT, THE FEDERAL INSECTICIDE, FUNGICIDE, & RODENTICIDE ACT, THE SAFE
DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE SOLID WASTE
DISPOSAL ACT, THE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT, THE
OCCUPATIONAL SAFETY AND HEALTH ACT), INCLUDING ANY REGULATIONS, RULES, PLANS,
OTHER CRITERIA, POLICIES OR GUIDELINES PROMULGATED PURSUANT TO SUCH LAWS, AND
ALL COMMON LAW, ORDERS, JUDGMENTS, DECREES, JUDICIAL OR AGENCY INTERPRETATIONS
NOW OR HEREAFTER IN EFFECT RELATING TO POLLUTION, THE GENERATION, PRODUCTION,
INSTALLATION, USE, STORAGE, TREATMENT, TRANSPORTATION, RELEASE, THREATENED
RELEASE, INVESTIGATION, MONITORING, REMEDIATION, CLEANUP, ABATEMENT, REMOVAL, OR
DISPOSAL OF HAZARDOUS MATERIALS, NOISE CONTROL, ODOR OR THE PROTECTION OF PUBLIC
OR WORKPLACE HEALTH OR SAFETY, NATURAL RESOURCES, OR THE ENVIRONMENT.

 

(Z)            “ERISA” MEANS THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED.

 

(AA)         “ESCROW AGENT” MEANS LASALLE BANK NATIONAL ASSOCIATION, A NATIONAL
BANKING ASSOCIATION.

 

4

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(BB)         “FUNDAMENTAL AMI REPRESENTATIONS” MEANS THOSE REPRESENTATIONS AND
WARRANTIES OF AMI SET FORTH IN SECTION 5.2(A) (POWER AND AUTHORITY), SECTION
5.2(B) (ENFORCEABILITY), SECTION 5.2(C) (GOVERNMENTAL AUTHORITY; CONSENTS), AND
SECTION 5.2(D) (NO CONFLICTS).

 

(CC)         “FUNDAMENTAL ISIS REPRESENTATIONS” MEANS THOSE REPRESENTATIONS AND
WARRANTIES OF ISIS SET FORTH IN SECTIONS 5.1(A) (POWER AND AUTHORITY), 5.1(B)
(ENFORCEABILITY), 5.1(C) (GOVERNMENTAL AUTHORITY; CONSENTS), 5.1(D) (NO
CONFLICTS), 5.2(E) (DUE ORGANIZATION; QUALIFICATION), 5.1(G) (CAPITALIZATION;
VOTING RIGHTS), 5.1(J) (TITLE TO PROPERTIES AND TANGIBLE ASSETS; LIENS, ETC.),
5.1(K) (SUFFICIENCY OF ASSETS), 5.1(M) (COMPLIANCE WITH OTHER INSTRUMENTS) AND
5.1(V) (BROKERS’ FEES).

 

(DD)         “GAAP” MEANS UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, APPLIED ON A CONSISTENT BASIS.

 

(EE)         “GOVERNMENTAL AUTHORITY” MEANS ANY GOVERNMENTAL OR
QUASI-GOVERNMENTAL AGENCY, DEPARTMENT, BUREAU, OFFICE, CENTER, INSTITUTE, COURT,
COMMISSION OR OTHER UNIT OF THE GOVERNMENT OF THE UNITED STATES OF AMERICA OR OF
ANY OF ITS RESPECTIVE STATES OR LOCAL UNITS OF GOVERNMENT THEREOF, OR OF A
FOREIGN SOVEREIGN OR OF A PROVINCIAL, REGIONAL OR METROPOLITAN GOVERNMENT
THEREOF, INCLUDING, WITHOUT LIMITATION, ANY REGULATORY AUTHORITY.

 

(FF)           “GRANTS RECEIVABLE” MEANS (I) ANY PAYMENTS DUE TO IBIS FROM A
GOVERNMENTAL AUTHORITY OR NOT FOR PROFIT PERSON WITH RESPECT TO GRANTS AWARDED
TO IBIS OR CONTRACTS WITH IBIS, IN EACH CASE TO THE EXTENT IBIS HAS PERFORMED
THE RESEARCH OR OTHER SERVICES DESCRIBED IN THE GRANT OR CONTRACT, BUT NOT
RECEIVED PAYMENT THEREFOR AS OF THE CLOSING AND (II) THE RATE RESERVES
IDENTIFIED AS “GOVERNMENT RATE RESERVES” ON SCHEDULE 1(FF), WHICH HAS BEEN
PREPARED IN ACCORDANCE WITH GAAP AND ISIS’ INTERNAL CONTROLS AND PROCEDURES FOR
FINANCIAL REPORTING.

 

(GG)         “HAZARDOUS MATERIALS” MEANS ANY SUBSTANCE, CHEMICAL, SOLVENT,
COMPOUND, WASTE, RESIDUE, CONTAMINANT OR OTHER MATERIAL WHICH IS REGULATED BY OR
FORMS THE BASIS OF LIABILITY NOW OR HEREAFTER UNDER ANY ENVIRONMENTAL LAW,
INCLUDING, WITHOUT LIMITATION:  (I) ANY “SOLID WASTE,” “DANGEROUS GOODS,”
“HAZARDOUS WASTE,” “HAZARDOUS SUBSTANCE,” “HAZARDOUS MATERIAL,” “EXTREMELY
HAZARDOUS WASTE,” “POLLUTANT,” “CONTAMINANT,” “HAZARDOUS CONSTITUENT,” “SPECIAL
WASTE,” “UNIVERSAL WASTE,” “TOXIC SUBSTANCE,” OR ANY OTHER SIMILAR TERM OR
PHRASE AS DEFINED UNDER ANY ENVIRONMENTAL LAW; (II) ANY PETROLEUM, OR PETROLEUM
PRODUCTS, BYPRODUCTS OR BREAKDOWN PRODUCTS, INCLUDING CRUDE OIL AND ANY FRACTION
THEREOF; (III) NATURAL SYNTHETIC GAS USABLE FOR FUEL; (IV) ANY ASBESTOS,
LEAD-BASED PAINT, POLYCHLORINATED BIPHENYL, MOLD, RADON GAS, RADIOACTIVE
MATERIAL OR BYPRODUCT, ISOMER OF DIOXIN, OR ANY MATERIAL OR THING CONTAINING OR
COMPOSED OF SUCH SUBSTANCE OR SUBSTANCES; AND (V) ANY VIRUS, BACTERIA, PROTOZOA,
PARASITE, FUNGI, OR OTHER PATHOGEN OR ANY OTHER SUBSTANCE, CHEMICAL, SOLVENT,
COMPOUND, WASTE, RESIDUE, CONTAMINANT OR OTHER MATERIAL WHICH IS HAZARDOUS,
TOXIC, POISONOUS, REACTIVE, CORROSIVE OR OTHERWISE MAY PRESENT A THREAT TO HUMAN
HEALTH, SAFETY, NATURAL RESOURCES, WILDLIFE OR THE ENVIRONMENT.

 

(HH)         “IBIS EMPLOYEE RETENTION AMOUNT” MEANS $[***].

 

5

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(II)           “IBIS NET SALES” MEANS:

 

(I)            THE GROSS AMOUNT BILLED BY IBIS OR ITS AFFILIATES AFTER THE
CLOSING FOR THE SALE OR OTHER TRANSFER OR DISPOSITION OF PRODUCTS TO, OR
PERFORMANCE OF SERVICES FOR, NON-AFFILIATE THIRD PARTIES IN BONA FIDE ARMS
LENGTH TRANSACTIONS, LESS DEDUCTIONS FOR:

 

A.            discounts, including cash discounts, customary trade allowances or
rebates actually taken, and promotional discounts;

 

B.            credits or allowances given or made for rejection, recall or
return of previously sold Products and rebates for previously provided Services;

 

C.            any Tax (including any Tax such as a value added or similar Tax)
levied on the sale, transportation or delivery of Products when included on the
invoice or other written document between the parties as payable by the
purchaser and collectable by Ibis; and

 

D.            freight, postage, transportation, insurance and duties on shipment
of Product when included on the invoice or written document between the parties
as payable by the purchaser and collectable by Ibis;

 

(II)           [***]; AND

 

(III)          THE AMOUNT OF ANY [***].

 

Ibis Net Sales calculations shall be applied as provided above and modified as
appropriate as follows:

 

1. When a Product is sold or licensed by Ibis or its Affiliates or a Service is
provided to a non-Affiliate third party with whom Ibis or such Affiliate does
not deal at arms length, Ibis Net Sales for that Product or Service shall equal
an average of Ibis Net Sales for similar quantities of Products sold or Services
provided within the same calendar quarter in an arms length transaction in the
same geographic market and class of purchasers or Service recipients  as the
non-arms length purchaser or Service recipient.

 

2. In the event that a Product is sold or a Service provided in combination with
any other product(s) or service(s), Ibis Net Sales with respect to the Product
or Service of the combination shall be determined by the fraction A over A + B
in which “A” is Ibis Net Sales of the Product or Service portion of the
combination when sold separately during the applicable calendar quarter, and “B”
is Ibis Net Sales of the other product(s) or service(s) of the combination
product or service when sold separately during the applicable calendar quarter.

 

3. In the event a Product or Service is incorporated into a profile in which
said Product or Service contributes only a small proportion of the value of the
total package, but the adjustment set forth in paragraph 2, above is impractical
or if similar quantities of product(s) are not sold or similar quantities of
Services are not provided pursuant to paragraph 1, above, then the Parties

 

6

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shall negotiate in good faith to establish an equitable adjustment to Ibis Net
Sales for such Product or Service to fairly reflect the proportion of the value
of the profile contributed by the Product or Service or the value of the Product
or Service.

 

(JJ)           “INDEBTEDNESS” MEANS (I) ALL INDEBTEDNESS OR OTHER OBLIGATIONS OF
IBIS FOR BORROWED MONEY, WHETHER CURRENT, SHORT-TERM OR LONG-TERM, SECURED OR
UNSECURED, AND ALL ACCRUED INTEREST, PREMIUMS, PENALTIES AND OTHER OBLIGATIONS
RELATING THERETO, (II) ALL INDEBTEDNESS OF IBIS FOR THE DEFERRED PURCHASE PRICE
OF PROPERTY OR SERVICES WHICH IS NOT EVIDENCED BY ACCOUNTS PAYABLE INCURRED IN
THE ORDINARY COURSE OF BUSINESS, (III) ALL EXISTING LEASE OBLIGATIONS OF IBIS
UNDER LEASES WHICH ARE CAPITAL LEASES IN ACCORDANCE WITH GAAP, (IV) ANY
LIABILITY OF IBIS UNDER DEFERRED COMPENSATION PLANS, PHANTOM STOCK PLANS,
SEVERANCE OR BONUS PLANS, OR ANY CHANGE IN CONTROL OR SIMILAR PAYMENT OR
INCREASED COST WHICH IS TRIGGERED OR MADE OR WILL BE MADE PAYABLE BY IBIS AS A
RESULT OF THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN THE PERMITTED
EMPLOYEE COMPENSATION PLAN, (V) ANY OFF BALANCE SHEET FINANCING OF IBIS,
(VI) ANY PAYMENT OBLIGATIONS OF IBIS IN RESPECT OF BANKER’S ACCEPTANCES OR
LETTERS OF CREDIT, (VII) ANY LIABILITY OF IBIS WITH RESPECT TO INTEREST RATE
SWAPS, COLLARS, CAPS AND SIMILAR HEDGING OBLIGATIONS, (VIII) ALL OBLIGATIONS OF
IBIS ARISING UNDER OR WITH RESPECT TO ANY CONDITIONAL SALE OR OTHER TITLE
RETENTION AGREEMENT WITH RESPECT TO PROPERTY ACQUIRED BY IBIS, (IX) PAST DUE OR
DEFERRED RENT OF IBIS, (X) THE AMOUNT OF ACCOUNTS PAYABLE OWED BY IBIS TO ANY
PERSON THAT HAVE NOT BEEN PAID WITHIN 45 DAYS OF THE DATE OF INVOICE THEREOF
(XI) ALL “CUT” BUT “UNCASHED” CHECKS OF IBIS OUTSTANDING AS OF THE CLOSING,
(XII) ANY INDEBTEDNESS REFERRED TO ABOVE OF ANY PERSON WHICH IS EITHER
GUARANTEED BY, OR SECURED BY A SECURITY INTEREST UPON ANY PROPERTY OWNED BY,
IBIS AND (XIII) ACCRUED AND UNPAID INTEREST OF, AND PREPAYMENT PREMIUMS,
PENALTIES OR SIMILAR CONTRACTUAL CHARGES ARISING AS A RESULT OF THE DISCHARGE OF
ANY SUCH FOREGOING OBLIGATION.

 

(KK)         “INTELLECTUAL PROPERTY” MEANS ALL OF THE FOLLOWING IN ANY
JURISDICTION THROUGHOUT THE WORLD:  (I) PATENTS, PATENT APPLICATIONS AND PATENT
DISCLOSURES AND STATUTORY INVENTION REGISTRATIONS, INCLUDING REISSUES,
DIVISIONS, CONTINUATIONS, CONTINUATIONS IN PART, EXTENSIONS AND REEXAMINATIONS
THEREOF; (II) TRADEMARKS, SERVICE MARKS, TRADE DRESS, TRADE NAMES, CORPORATE
NAMES, LOGOS AND SLOGANS (AND ALL TRANSLATIONS, ADAPTATIONS, DERIVATIONS AND
COMBINATIONS OF THE FOREGOING) AND INTERNET DOMAIN NAMES ANY AND ALL COMMON LAW
RIGHTS AND REGISTRATIONS AND APPLICATIONS FOR THE REGISTRATION THEREOF, AND ALL
EXTENSIONS AND RENEWALS OF ANY OF THE FOREGOING; (III) COPYRIGHTS AND
COPYRIGHTABLE WORKS (INCLUDING SOFTWARE), REGISTERED COPYRIGHTS AND COPYRIGHT
APPLICATIONS, MASK WORKS, NET LISTS AND SCHEMATICS; (IV) CONFIDENTIAL AND
PROPRIETARY INFORMATION INCLUDING TECHNOLOGY, KNOW-HOW, TRADE SECRETS,
UNPATENTED INVENTIONS, IDEAS, ALGORITHMS AND PROCESSES (INCLUDING, WITHOUT
LIMITATION, MANUFACTURING AND PRODUCTION PROCESSES AND TECHNIQUES, DRAWINGS,
SPECIFICATIONS, DESIGNS, PLANS, PROPOSALS, TEST DATA INCLUDING PHARMACOLOGICAL,
BIOLOGICAL, CHEMICAL, BIOCHEMICAL, TOXICOLOGICAL AND CLINICAL TEST DATA,
ANALYTICAL AND QUALITY CONTROL DATA, STABILITY DATA AND CUSTOMER AND SUPPLIER
LISTS AND RELATED INFORMATION); (V) OTHER INTELLECTUAL PROPERTY AND PROPRIETARY
INFORMATION AND (VI) ALL COPIES AND TANGIBLE EMBODIMENTS OF THE FOREGOING, SUCH
AS INSTRUCTION MANUALS, LABORATORY NOTEBOOKS, PROTOTYPES, SAMPLES, SPECIMENS,
STUDIES AND SUMMARIES.

 

(LL)           “INVESTMENT DATE” MEANS JANUARY 23, 2008.

 

(MM)       “INVESTMENT DOCUMENTS” MEANS THE MASTER AGREEMENT, THE CALL OPTION
AGREEMENT, THE INVESTOR RIGHTS AGREEMENT [AND THE STOCK SUBSCRIPTION AGREEMENT].

 

7

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(NN)         “INVESTOR RIGHTS AGREEMENT” MEANS THAT CERTAIN INVESTOR RIGHTS
AGREEMENT, DATED AS OF THE INVESTMENT DATE, BY AND AMONG ISIS, IBIS AND AMI.

 

(OO)         “ISIS LICENSED INTELLECTUAL PROPERTY” MEANS THE INTELLECTUAL
PROPERTY SET FORTH ON SCHEDULE 1(QQ).(1)

(PP)         [***]

 

(QQ)         “KNOWLEDGE” AND TERMS OF SIMILAR MEANING (INCLUDING, WITHOUT
LIMITATION, “IS AWARE OF”) MEAN (I) WITH RESPECT TO IBIS AND ISIS, THE ACTUAL
KNOWLEDGE OF ANY OF THE INDIVIDUALS SET FORTH ON SCHEDULE 1(QQ), AFTER DUE
INVESTIGATION, INCLUDING, WITHOUT LIMITATION, INQUIRY OF PERSONS WITH SUBJECT
MATTER KNOWLEDGE, PROVIDED THAT (A) SOLELY FOR PURPOSES OF SECTIONS 5.1(L)(V),
5.1(L)(VI) AND 5.1(L)(IX), “KNOWLEDGE” AND TERMS OF SIMILAR MEANING (INCLUDING,
WITHOUT LIMITATION, “IS AWARE OF”) MEAN THE ACTUAL KNOWLEDGE OF ANY EMPLOYEE OF
IBIS OR ISIS, AFTER DUE INVESTIGATION, INCLUDING, WITHOUT LIMITATION, INQUIRY OF
PERSONS WITH SUBJECT MATTER KNOWLEDGE AND (B) SOLELY FOR PURPOSES OF SECTION
5.1(L), INQUIRY OF PERSONS WITH SUBJECT MATTER KNOWLEDGE SHALL INCLUDE INQUIRY
OF THE OUTSIDE COUNSEL INVOLVED IN THE DEVELOPMENT OR PROSECUTION OF THE
BUSINESS IP OR WHO CONDUCTED ‘FREEDOM TO OPERATE ANALYSES’ IDENTIFIED ON
SCHEDULE 1(QQ) AND (II) WITH RESPECT TO AMI, THE ACTUAL KNOWLEDGE OF ANY OF THE
INDIVIDUALS SET FORTH ON SCHEDULE 1(QQ), AFTER DUE INVESTIGATION.

 

(RR)           “LICENSES” MEANS ALL LICENSES, PERMITS, CERTIFICATES OF
AUTHORITY, VARIANCES, AUTHORIZATIONS, APPROVALS, REGISTRATIONS, FRANCHISES,
ORDERS  AND SIMILAR CONSENTS ISSUED BY ANY GOVERNMENTAL AUTHORITY OR OTHER
PERSON, PROVIDED THAT THE TERM LICENSE SHALL NOT INCLUDE ANY LICENSE OR OTHER
RIGHT TO USE ANY INTELLECTUAL PROPERTY.

 

(SS)         “LOSS” MEANS ANY LOSS, LIABILITY, DEMAND, CLAIM, ACTION, CAUSE OF
ACTION, COST, DAMAGE, DIMINUTION IN VALUE, DEFICIENCY, TAX, PENALTY, FINE OR
EXPENSE (INCLUDING INTEREST, PENALTIES, REASONABLE ATTORNEYS’ FEES AND EXPENSES
AND ALL AMOUNTS PAID IN INVESTIGATION, DEFENSE OR SETTLEMENT OF ANY OF THE
FOREGOING AND THE ENFORCEMENT OF ANY RELATED RIGHTS), WHETHER OR NOT ARISING OUT
OF THIRD PARTY CLAIMS.

 

(TT)           “MANAGEMENT PRESENTATIONS” MEANS THE MANAGEMENT PRESENTATIONS OF
IBIS DELIVERED TO AMI PURSUANT TO SECTION 2(H) OF THE MASTER AGREEMENT.

 

(UU)         “MASTER AGREEMENT” MEANS THAT CERTAIN STRATEGIC ALLIANCE MASTER
AGREEMENT, DATED AS OF THE INVESTMENT DATE, BY AND AMONG ISIS, IBIS AND AMI.

 

(VV)         “MULTIEMPLOYER PLAN” HAS THE MEANING SET FORTH IN SECTION 3(37) OF
ERISA.

 

(WW)       “OFFERING MEMORANDUM” MEANS THE OFFERING MEMORANDUM OF IBIS, DATED
NOVEMBER 2006 AS MADE AVAILABLE TO AMI.

 

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(1) THIS WILL BE THE ISIS INTELLECTUAL PROPERTY THAT IBIS EMPLOYEES HAVE
IDENTIFIED AS BEING USEFUL TO THE BUSINESS.

 

8

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(xx)          [***] means any payments, including, but not limited to royalty
payments, license fees and milestone payments that are made by non-Affiliate
third parties to [***](or any of its Affiliates) in bona fide arms length
transactions in consideration for one or more license or equivalent agreements
that grant such non-Affiliate third party rights under any [***](i) make, have
made, use, sell, offer for sale or import any products [***]to another party for
a fee, in each case, where any of the foregoing conduct by such non-Affiliate
third party in the absence of such rights under license or equivalent agreement
would infringe (directly, contributorily, by inducement or otherwise),
misappropriate or otherwise conflict with any [***]

 

(YY)         “PERMITTED EMPLOYEE COMPENSATION PLAN” MEANS THE COMPENSATION PLAN
MUTUALLY AGREED BY THE PARTIES REGARDING THE [***] THE TERMS OF WHICH ARE
DESCRIBED ON EXHIBIT D ATTACHED HERETO.

 

(ZZ)          “PERMITTED ENCUMBRANCES” MEANS (I) LIENS FOR CURRENT PROPERTY
TAXES NOT YET DUE AND PAYABLE, (II) ENCUMBRANCES ARISING IN CONNECTION WITH AND
SOLELY AS A RESULT OF PERMITTED INDEBTEDNESS AND (III) EXCEPT WITH RESPECT TO
INTELLECTUAL PROPERTY, OTHER IMPERFECTIONS OF TITLE, RESTRICTIONS OR
ENCUMBRANCES, IF ANY, WHICH IMPERFECTIONS, RESTRICTIONS OR ENCUMBRANCES DO NOT,
INDIVIDUALLY OR IN THE AGGREGATE, IMPAIR THE CONTINUED USE AND OPERATION OF THE
ASSETS USED IN THE OPERATION OF THE BUSINESS AND DO NOT AFFECT THE
MERCHANTABILITY OF THE TITLE TO SUCH ASSETS TO WHICH THEY RELATE.

 

(AAA)       “PERMITTED INDEBTEDNESS” MEANS (I) ACCOUNTS PAYABLE INCURRED IN THE
ORDINARY COURSE OF BUSINESS THAT ARE PAID WITHIN FORTY-FIVE (45) DAYS OF THE
DATE OF INVOICE THEREOF, (II) INDEBTEDNESS ARISING FROM EXISTING AND FUTURE
LEASE OBLIGATIONS OF IBIS UNDER EQUIPMENT LEASES THAT ARE CAPITAL LEASES IN
ACCORDANCE WITH GAAP SO LONG AS THE COLLATERAL FOR SUCH CAPITAL LEASES IS
LIMITED TO THE EQUIPMENT ACQUIRED AND THE AGGREGATE AMOUNT OF SUCH CAPITAL
LEASES DOES NOT EXCEED $[***] AND (III) INDEBTEDNESS INCURRED PURSUANT TO THE
CORPORATE SERVICES AGREEMENT OR THE CONTRIBUTION AGREEMENT.

 

(BBB)      “PERSON” MEANS AN INDIVIDUAL, A PARTNERSHIP, A CORPORATION, AN
ASSOCIATION, A LIMITED LIABILITY COMPANY, A JOINT STOCK COMPANY, A TRUST, A
JOINT VENTURE, AN UNINCORPORATED ORGANIZATION, OR A GOVERNMENTAL AUTHORITY (OR
ANY DEPARTMENT, AGENCY, OR POLITICAL SUBDIVISION THEREOF).

 

(CCC)       “PRE-CLOSING TAX PERIOD” MEANS A TAX PERIOD ENDING ON OR BEFORE THE
CLOSING DATE AND THE PORTION THROUGH THE END OF THE CLOSING DATE FOR ANY TAX
PERIOD THAT INCLUDES (BUT DOES NOT END ON) THE CLOSING DATE.

 

(DDD)      “POST-CLOSING TAX PERIOD” MEANS A TAX PERIOD BEGINNING AFTER THE
CLOSING DATE AND, FOR ANY TAX PERIOD THAT INCLUDES (BUT DOES NOT END ON) THE
CLOSING DATE, THE PORTION OF SUCH PERIOD BEGINNING AFTER THE CLOSING DATE.

 

(EEE)       “PRODUCTS” MEANS THE T5000 BIOSENSOR SYSTEM (INCLUDING KITS) AND ANY
SUCCESSOR PRODUCTS.

 

(FFF)         “PURCHASE OFFER” MEANS ANY PROPOSAL OR OFFER FROM ANY PERSON
(OTHER THAN AMI AND ITS AFFILIATES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY) OR ANY AGREEMENT OR OFFER RELATING TO ANY
(I) REORGANIZATION, LIQUIDATION, DISSOLUTION, SHARE EXCHANGE,

 

9

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business combination or recapitalization of Ibis, (ii) merger or consolidation
involving Ibis, (iii) purchase or sale of any assets or Capital Stock of Ibis
(other than the purchase and sale of inventory and capital equipment in the
ordinary course of business), (iv) distribution of Ibis’ existing or future
products, (v) licensing of any Business IP from Ibis or (vi) any other
transaction or business combination involving Ibis or its business or assets
which would reasonably be expected to interfere with, impede or materially delay
the transactions contemplated by the Transaction Documents or dilute the
benefits thereof to AMI and its Affiliates.

 

(GGG)      “REAL PROPERTY” MEANS THE LEASED REAL PROPERTY.

 

(HHH)      “REGULATORY AUTHORITY” MEANS ANY GOVERNMENTAL AUTHORITY THAT HAS
RESPONSIBILITY FOR GRANTING ANY LICENSES OR APPROVALS OR GRANTING PRICING AND/OR
REIMBURSEMENT APPROVALS NECESSARY FOR THE MARKETING AND SALE OF MEDICAL DEVICES
OR DIAGNOSTIC PRODUCTS, INCLUDING WITHOUT LIMITATION, THE FDA, THE EUROPEAN
MEDICINES AGENCY AND THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES.

 

(III)          “RELEASE” MEANS ANY SPILLING, LEAKING, PUMPING, POURING,
EMITTING, EMPTYING, DISCHARGING, INJECTING, ESCAPING, LEACHING, DUMPING,
DEPOSITING, DISPOSING OR OTHER RELEASE INTO THE ENVIRONMENT (INCLUDING THE
ABANDONMENT OR DISCARDING OF BARRELS, DRUMS, CONTAINERS OR OTHER CLOSED
RECEPTACLES), INCLUDING ANY DISPERSAL, MIGRATION OR OTHER MOVEMENT OF ANY
SUBSTANCE THROUGH OR IN AIR, SOIL, SURFACE WATER, GROUNDWATER OR PROPERTY.

 

(JJJ)          “REPRESENTATIVES” MEANS WITH RESPECT TO ANY PERSON, SUCH PERSON’S
EMPLOYEES, DIRECTORS, OFFICERS, AFFILIATES AND AUTHORIZED AGENTS.

 

(KKK)       “SCHEDULE” MEANS ANY OF THE DISCLOSURE SCHEDULES DELIVERED TO AMI
HEREWITH AND INCORPORATED HEREIN PURSUANT TO SECTION 10.11 HEREOF.

 

(LLL)          “SEC” OR “COMMISSION” MEANS THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION.

 

(MMM)    “SECURITIES ACT” MEANS THE SECURITIES ACT OF 1933, AS AMENDED.

 

(NNN)      “SERVICES” MEANS USING ANY BUSINESS IP TO ANALYZE SAMPLES CONTAINING
NUCLEIC ACIDS AND PROVIDING THE RESULTS OF SUCH ANALYSES TO A THIRD PARTY FOR A
FEE.

 

(OOO)      “SHARES” MEANS 114,251 SHARES OF COMMON STOCK ISSUED TO AMI PURSUANT
TO THE MASTER AGREEMENT, AS MAY BE HELD FROM TIME TO TIME BY AMI AND ITS
PERMITTED ASSIGNS, REPRESENTING APPROXIMATELY 10.25% OF THE ISSUED AND
OUTSTANDING COMMON STOCK.

 

(PPP)      “SOFTWARE” MEANS ANY AND ALL (I) COMPUTER PROGRAMS, LIBRARIES,
FIRMWARE AND MIDDLEWARE, INCLUDING ANY AND ALL SOFTWARE IMPLEMENTATIONS OF
ALGORITHMS, MODELS AND METHODOLOGIES, WHETHER IN SOURCE CODE OR OBJECT CODE,
(II) DATABASES AND COMPILATIONS, INCLUDING ANY AND ALL DATA AND COLLECTIONS OF
DATA, WHETHER MACHINE READABLE OR OTHERWISE, (III) DESCRIPTIONS, FLOW-CHARTS AND
OTHER WORK PRODUCT USED TO DESIGN, PLAN, ORGANIZE AND DEVELOP ANY OF THE
FOREGOING AND (IV) ALL PROGRAMMER AND USER DOCUMENTATION, INCLUDING USER MANUALS
AND TRAINING MATERIALS, RELATING TO ANY OF THE FOREGOING.

 

10

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(QQQ)      [“STOCK SUBSCRIPTION AGREEMENT” MEANS THE STOCK SUBSCRIPTION
AGREEMENT DATED AS OF [                  ], 2008, BY AND AMONG IBIS, ISIS AND
AMI.]

 

(RRR)         “SUBSIDIARY” MEANS, WITH RESPECT TO A PERSON, ANY CORPORATION,
LIMITED LIABILITY COMPANY, PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ENTITY OF
WHICH (I) IF A CORPORATION, A MAJORITY OF THE TOTAL VOTING POWER OF SHARES OF
STOCK ENTITLED (WITHOUT REGARD TO THE OCCURRENCE OF ANY CONTINGENCY) TO VOTE IN
THE ELECTION OF DIRECTORS, MANAGERS OR TRUSTEES THEREOF IS AT THE TIME OWNED OR
CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH PERSON OR ONE OR MORE OF THE OTHER
SUBSIDIARIES OF SUCH PERSON OR A COMBINATION THEREOF, OR (II) IF A LIMITED
LIABILITY COMPANY, PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ENTITY, A MAJORITY
OF THE PARTNERSHIP OR OTHER SIMILAR OWNERSHIP INTEREST THEREOF IS AT THE TIME
OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH PERSON OR ONE OR MORE
SUBSIDIARIES OF SUCH PERSON OR A COMBINATION THEREOF.  FOR PURPOSES HEREOF, A
PERSON SHALL BE DEEMED TO HAVE A MAJORITY OWNERSHIP INTEREST IN A LIMITED
LIABILITY COMPANY, PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ENTITY IF SUCH
PERSON SHALL BE ALLOCATED A MAJORITY OF LIMITED LIABILITY COMPANY, PARTNERSHIP,
ASSOCIATION OR OTHER BUSINESS ENTITY GAINS OR LOSSES OR SHALL BE OR CONTROL ANY
MANAGING DIRECTOR OR GENERAL PARTNER OF SUCH LIMITED LIABILITY COMPANY,
PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ENTITY.

 

(SSS)       “SUCCESSOR PRODUCTS” MEANS ANY PRODUCT THAT (I) RELIES UPON [***]
AND DETERMINATION OF [***] BY [***] USING EITHER THE IBIS [***], EACH AS IN
EXISTENCE IN THE BUSINESS AT THE CLOSING, INCLUDING AS MAY BE MODIFIED
SUBSEQUENTLY BY AMI OR (II) IS DESCRIBED IN U.S. PATENT NO.’S [***].

 

(TTT)         “T5000 BIOSENSOR SYSTEM” MEANS THE BIOSENSOR PLATFORM GENERALLY
KNOWN AS THE T5000 BIOSENSOR SYSTEM, TOGETHER WITH ALL EQUIPMENT, HARDWARE,
SOFTWARE, SYSTEMS AND OTHER MATERIALS REQUIRED FOR ITS USE, OR PROVIDED OR
RECOMMENDED BY IBIS, ISIS OR ANY OF THEIR RESPECTIVE AFFILIATES FOR ITS USE, AS
WELL AS ALL PRIOR VERSIONS OF THE T5000 BIOSENSOR SYSTEM, INCLUDING SUCH SYSTEMS
KNOWN AS “TIGER.”

 

(UUU)      “TAX” MEANS ANY FEDERAL, STATE, LOCAL, OR FOREIGN INCOME, GROSS
RECEIPTS, LICENSE, PAYROLL, EMPLOYMENT, EXCISE, SEVERANCE, STAMP, OCCUPATION,
PREMIUM, WINDFALL PROFITS, ENVIRONMENTAL, CUSTOMS AND OTHER DUTIES, CAPITAL
STOCK, FRANCHISE, PROFITS, WITHHOLDING, SOCIAL SECURITY, UNEMPLOYMENT,
DISABILITY, REAL PROPERTY, PERSONAL PROPERTY, SALES, USE, TRANSFER,
REGISTRATION, VALUE ADDED, ALTERNATIVE OR ADD-ON MINIMUM, ESTIMATED, OR OTHER
TAX OF ANY KIND WHATSOEVER, INCLUDING ANY INTEREST, PENALTY, OR ADDITION
THERETO, WHETHER DISPUTED OR NOT, AND INCLUDING ANY OBLIGATION TO INDEMNIFY OR
OTHERWISE ASSUME OR SUCCEED TO THE TAX LIABILITY OF ANY OTHER PERSON.

 

(VVV)      “TAX RETURN” MEANS ANY RETURN, DECLARATION, REPORT, CLAIM FOR REFUND,
OR INFORMATION RETURN OR STATEMENT RELATING TO TAXES, INCLUDING ANY SCHEDULE OR
ATTACHMENT THERETO, AND INCLUDING ANY AMENDMENT THEREOF.

 

(WWW)    “THIRD PARTY PAYMENTS” MEANS PAYMENTS, INCLUDING, BUT NOT LIMITED TO
DAMAGE AWARDS, ROYALTY PAYMENTS, LICENSE FEES AND MILESTONE PAYMENTS, THAT ARE
MADE BY[***]TO A THIRD PARTY, WHICH ARE BASED UPON MAKING, HAVING MADE, USING,
SELLING, OFFERING FOR SALE OR IMPORTING [***]UNDER ORDER OF A GOVERNMENTAL
AUTHORITY OR LICENSE AGREEMENTS OR EQUIVALENT AGREEMENTS WITH THE THIRD PARTY TO
OBTAIN RIGHTS UNDER ANY UNITED STATES OR FOREIGN

 

11

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COPYRIGHTS, PATENT APPLICATIONS OR PATENTS THAT ARE [***]TO MAKE, HAVE MADE,
USE, SELL, OFFER FOR SALE OR IMPORT ANY [***]

 

(XXX)        “TRANSACTION DOCUMENTS” MEANS THE MASTER AGREEMENT, THE INVESTOR
RIGHTS AGREEMENT, [THE STOCK SUBSCRIPTION AGREEMENT, ] THE CALL OPTION
AGREEMENT, THE TRANSITION SERVICES AGREEMENT, THE ESCROW AGREEMENT AND THIS
AGREEMENT.

 

(YYY)      “TRANSFER” MEANS, WITH RESPECT TO CAPITAL STOCK, ANY SALE, PLEDGE,
HYPOTHECATION, ASSIGNMENT, ENCUMBRANCE OR OTHER TRANSFER OR DISPOSITION, WHETHER
DIRECTLY, INDIRECTLY, VOLUNTARILY, INVOLUNTARILY, BY OPERATION OF LAW, PURSUANT
TO JUDICIAL PROCESS OR OTHERWISE AND, WHEN THE CONTEXT SO REQUIRES, THE ACT OF
DOING ANY OF THE FOREGOING.

 

Section references for definitions of defined terms defined in the body of this
Agreement rather than in this Section 1.

 

Defined Term

 

Section

“§ 338(h)(10) Election”

 

8.6(g)

“Abbott”

 

Preamble

“ADR”

 

10.8

“Agreement”

 

Preamble

“AMI”

 

Preamble

“AMI Group”

 

8.2(a)

“AMI Proceeding”

 

8.6(e)(ii)

“Applicable AMI Proceeding”

 

8.6(e)(ii)

“Closing”

 

3.1

“Closing Date”

 

3.1

“Closing Purchase Price”

 

2.2

“Disclosing Party”

 

8.8(a)

“Disclosure Schedules”

 

Section 5

“Earnout Payments”

 

2.3(e)

“Earnout Period”

 

2.3(a)

“Escrow Agreement”

 

4.1(l)

“Financial Statements”

 

5.1(t)

“Foreign Person”

 

4.1(m)

“Government Contracts”

 

5.1(l)(ii)

“HSR Act”

 

4.1(d)

“Ibis”

 

Preamble

 

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“Ibis Contracts”

 

5.1(x)(i)

“Ibis Employees”

 

8.11(a)

“Indemnified Party”

 

8.2(e)

“Indemnifying Party”

 

8.2(e)

“Isis”

 

Preamble

“Isis Proceeding”

 

8.6(e)(i)

“Isis Retirement Plans”

 

8.11(d)

“Leased Real Property”

 

5.1(w)(ii)

“Leasehold Improvements”

 

5.1(w)(ii)

“Leases”

 

5.1(w)(ii)

“Material Adverse Effect”

 

4.1(j)

“Material Licenses”

 

5.1(q)(ii)

“Noncompete Period”

 

8.9(a)

“Nonsolicitation Period”

 

8.9(c)

“Parties”

 

Preamble

“Party”

 

Preamble

“Purchase Price”

 

2.2

“Receiving Party”

 

8.8(a)

“Remaining Shares”

 

Recitals

“Restricted Assets”

 

2.4

“Seller Group”

 

8.2(b)

“Straddle Period”

 

8.6(c)(ii)

“Third Party Claim”

 

8.2(e)

“Transaction Value”

 

2.2

“Transition Services Agreement”

 

4.1(k)

“WARN Act”

 

8.11(b)

 

Section 2.            BASIC TRANSACTION; PURCHASE PRICE.

 

2.1           Sale and Transfer of the Remaining Shares.  Subject to the terms
and conditions of this Agreement, at the Closing, Isis shall sell, convey,
assign, transfer and deliver to AMI all of the Remaining Shares, free and clear
of all Encumbrances, and AMI shall purchase, acquire and accept the Remaining
Shares from Isis.

 

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2.2           Purchase Price.  The purchase price (the “Purchase Price”) for the
Remaining Shares shall be equal to (i) $[                  ](2) (the
“Transaction Value”), minus (ii) the amount of any Indebtedness of Ibis as of
the Closing (not including the amount of any Indebtedness that is Permitted
Indebtedness under clauses (i) or (ii) of the Permitted Indebtedness
definition), minus (iii) the Ibis Employee Retention Amount, plus (iv) the
Earnout Payments.  The “Closing Purchase Price” is an amount equal to (x) the
Transaction Value, minus (y) the amount of any Indebtedness of Ibis as of the
Closing (not including the amount of any Indebtedness that is Permitted
Indebtedness under clauses (i) or (ii) of the Permitted Indebtedness
definition), minus (z) the Ibis Employee Retention Amount.

 

2.3           Earnout Payments.

 

(A)           SUBJECT TO SECTIONS 2.3(E) AND 2.3(F), FROM AND AFTER THE CLOSING
DATE UNTIL DECEMBER 31, 2025 (THE “EARNOUT PERIOD”), IBIS WILL PAY TO ISIS AN
AMOUNT EQUAL TO FIVE PERCENT (5%) (THE “EARNOUT RATE”) OF CUMULATIVE IBIS NET
SALES THAT ARE (I) IN EXCESS OF THE EARNOUT THRESHOLD AND (II) LESS THAN OR
EQUAL TO $2.1 BILLION.  SUCH AMOUNTS PAYABLE TO ISIS WILL BE REDUCED BY AN
AMOUNT EQUAL TO [***]% OF ANY [***], BUT IN NO EVENT WILL SUCH AMOUNTS FOR SUCH
IBIS NET SALES BE LESS THAN TWO AND A HALF PERCENT (2.5%) OF SUCH CUMULATIVE
IBIS NET SALES.

 

(B)           FOR CUMULATIVE IBIS NET SALES THAT ARE IN EXCESS OF $2.1 BILLION,
THE EARNOUT RATE WILL REDUCE FROM 5% TO 3%.  THE CORRESPONDING AMOUNTS PAYABLE
TO ISIS WILL BE REDUCED BY AN AMOUNT EQUAL TO [***]% OF ANY [***], BUT IN NO
EVENT WILL SUCH AMOUNTS FOR SUCH IBIS NET SALES BE LESS THAN ONE AND A HALF
PERCENT (1.5%) OF SUCH CUMULATIVE IBIS NET SALES.

 

(C)           IN CALCULATING THE AMOUNT OF ANY REDUCTION TO THE EARN-OUT
PAYMENTS PERMITTED BY THE SECOND SENTENCE OF EITHER SECTION 2.3(A) OR
SECTION 2.3(B) THAT RESULT FROM ANY [***] THAT ARE [***], THE AMOUNT OF SUCH
[***] WILL BE [***] OF THE EARNOUT PERIOD FROM THE DATE OF SUCH [***].  FOR
EXAMPLE, IF IBIS MAKES A [***] IN THE FORM OF [***] EQUAL TO [***] TO [***]
WHICH, IN AMI’S REASONABLE JUDGMENT WAS [***] AND SUCH [***] WAS MADE IN 2015,
THEN, IN EACH CALENDAR QUARTER, IBIS WOULD BE ABLE TO REDUCE THE CORRESPONDING
AMOUNTS PAYABLE FOR SUCH QUARTER BY [***], IN EACH CASE SUBJECT TO THE
APPLICABLE 2.5% OR 1.5% FLOOR UNDER SECTION 2.3(A) OR SECTION 2.3(B).

 

(D)           THE EARNOUT AMOUNTS DESCRIBED IN SECTIONS 2.3(A) AND 2.3(B) WILL
BE PAYABLE ON A QUARTERLY BASIS, WITHIN [***] DAYS AFTER THE LAST DAY OF EACH
CALENDAR QUARTER, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT
DESIGNATED BY ISIS.  WITHIN [***] DAYS OF THE END OF EACH CALENDAR QUARTER, IBIS
WILL DELIVER TO ISIS ITS NON-BINDING, PRELIMINARY, GOOD FAITH ESTIMATE OF IBIS
NET SALES FOR SUCH CALENDAR QUARTER.  ALL AMOUNTS INCLUDED IN IBIS NET SALES
SHALL BE IN UNITED STATES FUNDS COLLECTIBLE AT PAR IN CHICAGO, ILLINOIS.  WITH
RESPECT TO PRODUCT OR SERVICE REVENUES, [***], OR [***] THAT ARE USED IN THE
CALCULATION OF IBIS NET SALES AND ARE IN MONIES OTHER THAN UNITED STATES
DOLLARS, THE AMOUNT TO BE USED WILL FIRST BE DETERMINED IN THE FOREIGN CURRENCY
OF THE COUNTRY FOR SUCH MONIES AND THEN CONVERTED INTO EQUIVALENT UNITED STATES

 

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(2) The Transaction Value from the Option Notice to be inserted here.

 

14

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funds using the same conversion methodology that Abbott uses to prepare its
financial statements filed with the SEC.

 

(E)           NOTWITHSTANDING THE FOREGOING, SECTIONS 2.3(A) THROUGH 2.3(C),
(I) THE EARNOUT AMOUNTS DESCRIBED IN SECTIONS 2.3(A) AND 2.3(B) WILL BE PAYABLE
ONLY ON CUMULATIVE IBIS NET SALES IN EXCESS OF THE EARNOUT THRESHOLD, (II) NO
SUCH EARNOUT AMOUNTS WILL BE PAYABLE IN ANY CALENDAR YEAR IN WHICH TOTAL IBIS
NET SALES IN SUCH CALENDAR YEAR WERE LESS THAN OR EQUAL TO $[***] MILLION,
(III) IN ANY CALENDAR YEAR IN WHICH IBIS NET SALES EXCEED $[***] MILLION AND
CUMULATIVE IBIS NET SALES EXCEED THE EARNOUT THRESHOLD, THE EARNOUT AMOUNTS
DESCRIBED IN SECTIONS 2.3(A) AND  2.3(B) WILL BE PAYABLE WITH RESPECT TO ALL
IBIS NET SALES IN SUCH CALENDAR YEAR WHICH ARE IN EXCESS OF THE EARNOUT
THRESHOLD AND (IV) ALL IBIS NET SALES, REGARDLESS OF WHETHER EARNOUT AMOUNTS ARE
PAYABLE THEREON, WILL BE INCLUDED IN CUMULATIVE IBIS NET SALES FOR PURPOSES OF
DETERMINING THE APPLICABLE EARNOUT RATE.  FOR EXAMPLE, IF IBIS NET SALES IN EACH
OF THE CALENDAR YEARS 1 AND 3 ARE EQUAL TO $[***] MILLION AND IBIS NET SALES IN
EACH OF THE CALENDAR YEARS 2 AND 4 ARE EQUAL TO $[***] MILLION, NO EARNOUT
AMOUNTS WOULD BE PAYABLE IN CALENDAR YEARS 1 THROUGH 3, BUT EARNOUT AMOUNTS
WOULD BE PAYABLE WITH RESPECT TO THE ENTIRE $[***] MILLION IN IBIS NET SALES IN
CALENDAR YEAR 4.  THE EARNOUT AMOUNTS PAYABLE BY IBIS TO ISIS PURSUANT TO THIS
SECTION 2.3 ARE REFERRED TO HEREIN AS THE “EARNOUT PAYMENTS.”

 

(F)            IBIS SHALL MAINTAIN ITS BOOKS AND RECORDS USED TO DETERMINE IBIS
NET SALES, [***], AND [***] FOR A PERIOD OF THREE (3) YEARS FROM THE DATE OF THE
EARNOUT PAYMENT TO WHICH THEY PERTAIN.  IBIS SHALL MAKE SUCH BOOKS AND RECORDS
AVAILABLE FOR INSPECTION BY THIRD PARTY REPRESENTATIVES OF ISIS APPROVED IN
WRITING (WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR
DELAYED) ONCE PER CALENDAR YEAR AT REASONABLE TIMES AND UPON REASONABLE WRITTEN
ADVANCE NOTICE FROM ISIS.  ALL INFORMATION CONTAINED IN THESE BOOKS AND RECORDS
SHALL BE CONFIDENTIAL INFORMATION AND WILL BE USED ONLY FOR THE PURPOSE OF
DETERMINING THE ACCURACY OF IBIS’ CALCULATION OF ANY EARNOUT PAYMENT.

 

(G)           NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, EXCEPT WITH RESPECT TO ANY [***] ARISING AS A RESULT OF OR
IN CONNECTION WITH A BREACH OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 5.1(L)(V), THE EARNOUT PAYMENT REDUCTIONS SET FORTH IN SECTIONS
2.3(A) AND 2.3(B) WILL BE THE AMI GROUP’S SOLE AND EXCLUSIVE REMEDY FOR ANY
[***].

 

2.4           Restricted Assets.  Notwithstanding any other provision in this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign or transfer any interest in any Contract, asset, claim, right or benefit
the assignment or transfer of which is otherwise contemplated by the
transactions contemplated by this Agreement to the extent such assignment or
transfer (or attempt to make such an assignment or transfer) without the consent
or approval of a third party would constitute a breach or other contravention of
the rights of such third party, or affect adversely the rights of any Party or
their Affiliates thereunder (such assets being collectively referred to herein
as “Restricted Assets”).  Any assignment or transfer of a Restricted Asset shall
be made subject to such consent or approval being obtained.  If any such consent
or approval is not obtained prior to the Closing, (i) the assigning or
transferring Party shall continue to use its commercially reasonable efforts to
cooperate with the other Party in attempting to obtain any such consent or
approval and (ii) establish alternative arrangements (such as a license,
sublease, subcontract or operating agreement) until such time as such consent

 

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or approval has been obtained which results in the assignee or transferee Party
receiving all the benefits and bearing all the burdens with respect to any such
Restricted Asset (subject to Section 8.4, pursuant to which Isis shall be liable
for and pay all out-of-pocket costs and expenses associated with obtaining third
party consents associated with any Ibis Contract or Restricted Asset in excess
of $[***] in the aggregate).

 

Section 3.              CLOSING OF THE TRANSACTION.

 

3.1           The Closing.  Subject to the satisfaction or waiver of the
conditions set forth herein, the closing of the transactions contemplated by
this Agreement (the “Closing”) shall take place at the offices of Kirkland &
Ellis LLP in Chicago, Illinois, at 10:00 a.m. local time on or before the third
Business Day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated herein,
or such other time and place as the Parties may mutually determine (the “Closing
Date”), and the Closing shall be deemed effective as of 12:01 a.m. local time on
the Closing Date.

 

3.2           Deliveries at the Closing.  At the Closing:

 

(A)           ISIS SHALL DELIVER TO AMI (I) THE VARIOUS CERTIFICATES,
AGREEMENTS, INSTRUMENTS AND DOCUMENTS REFERRED TO IN SECTION 4.1 BELOW AND
(II) SUCH OTHER INSTRUMENTS OF SALE, TRANSFER, CONVEYANCE AND ASSIGNMENT AS AMI
REASONABLY MAY REQUEST;

 

(B)           AMI SHALL DELIVER TO ISIS (I) THE CLOSING PURCHASE PRICE, VIA WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED IN WRITING BY
ISIS AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE CLOSING DATE, AND (II) THE
VARIOUS CERTIFICATES, AGREEMENTS, INSTRUMENTS AND DOCUMENTS REFERRED TO IN
SECTION 4.2 BELOW;

 

(C)           AMI SHALL DELIVER TO THE ESCROW AGENT THE IBIS EMPLOYEE RETENTION
AMOUNT, VIA WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT
DESIGNATED BY THE ESCROW AGENT, TO BE HELD IN ESCROW PURSUANT TO THE TERMS OF
THE ESCROW AGREEMENT;

 

(D)           ISIS SHALL DELIVER TO IBIS ALL BOOKS, RECORDS AND OTHER MATERIALS
OF IBIS OR RELATED TO OR USED BY IBIS IN THE BUSINESS (UNLESS OTHERWISE
SPECIFICALLY SET FORTH IN THE TRANSITION SERVICES AGREEMENT);

 

(E)           ISIS SHALL DELIVER TO AMI THE PERMITTED EMPLOYEE COMPENSATION
PLAN; AND

 

(F)            ISIS SHALL DELIVER TO AMI ONE OR MORE COMPACT DISCS OR OTHER
ELECTRONIC MEDIA CONTAINING THE CONTENTS OF THE ELECTRONIC DATAROOM MAINTAINED
BY ISIS AT [***] AS OF THE DATE THAT IS THREE BUSINESS DAYS PRIOR TO THE DATE
HEREOF, TOGETHER WITH A CERTIFICATE OF AN AUTHORIZED OFFICER CERTIFYING THAT
SUCH COMPACT DISCS CONTAIN TRUE, ACCURATE AND COMPLETE COPIES OF THE MATERIALS
IN SUCH DATAROOM AS OF SUCH DATE.

 

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Section 4.              CONDITIONS TO OBLIGATION TO CLOSE.

 

4.1           Conditions to Obligation of AMI.  The obligation of AMI to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

 

(A)           THE REPRESENTATIONS AND WARRANTIES OF ISIS SET FORTH IN THIS
AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AT AND AS OF THE
DATE HEREOF AND AS OF THE CLOSING DATE (DISREGARDING ANY MATERIALITY OR MATERIAL
ADVERSE EFFECT QUALIFICATIONS CONTAINED THEREIN); PROVIDED, THAT ANY
REPRESENTATION OR WARRANTY OF ISIS SET FORTH IN THIS AGREEMENT THAT IS MADE AS
OF ANY DATE OTHER THAN THE DATE HEREOF SHALL BE TRUE AND CORRECT AS OF SUCH DATE
IN ALL MATERIAL RESPECTS (DISREGARDING ANY MATERIALITY OR MATERIAL ADVERSE
EFFECT QUALIFICATIONS CONTAINED THEREIN).

 

(B)           EACH OF ISIS AND IBIS SHALL HAVE PERFORMED AND COMPLIED IN ALL
MATERIAL RESPECTS WITH ALL OF THEIR COVENANTS HEREUNDER THROUGH THE CLOSING.

 

(C)           NO CLAIM SHALL BE PENDING BEFORE ANY COURT, ARBITRATOR, OTHER BODY
OR ADMINISTRATIVE AGENCY OF ANY GOVERNMENTAL AUTHORITY WHEREIN AN UNFAVORABLE
INJUNCTION, JUDGMENT, ORDER, DECREE, RULING OR CHARGE WOULD PREVENT CONSUMMATION
OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (AND NO SUCH
INJUNCTION, JUDGMENT, ORDER, DECREE, RULING OR CHARGE SHALL BE IN EFFECT).

 

(D)           ALL FILINGS WITH AND AUTHORIZATIONS AND APPROVALS OF GOVERNMENTAL
AUTHORITIES THAT ARE REQUIRED FOR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL HAVE BEEN DULY MADE AND OBTAINED ON TERMS REASONABLY
SATISFACTORY TO AMI.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL
APPLICABLE WAITING PERIODS (AND ANY EXTENSIONS THEREOF) UNDER THE HART SCOTT
RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE “HSR ACT”), SHALL
HAVE EXPIRED OR OTHERWISE BEEN TERMINATED.

 

(E)           ISIS SHALL HAVE DELIVERED TO AMI (I) A CERTIFICATE FROM AN OFFICER
OF ISIS TO THE EFFECT THAT EACH OF THE CONDITIONS SPECIFIED IN SECTION 4.1(A),
SECTION 4.1(B) AND SECTION 4.1(J) IS SATISFIED IN ALL RESPECTS, (II) A COPY OF
THE RESOLUTIONS OF THE GOVERNING BODY OF EACH OF ISIS AND IBIS APPROVING THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, CERTIFIED BY AN OFFICER OF EACH OF
ISIS AND IBIS, RESPECTIVELY, (III) CERTIFICATES FROM APPROPRIATE AUTHORITIES,
DATED AS OF OR ABOUT THE CLOSING DATE, AS TO THE GOOD STANDING AND QUALIFICATION
TO DO BUSINESS OF IBIS IN ITS JURISDICTION OF INCORPORATION, (IV) SUCH OTHER
DOCUMENTS OR INSTRUMENTS AS ARE REQUIRED TO BE DELIVERED AT THE CLOSING PURSUANT
TO THE TERMS HEREOF AND (V) SUCH OTHER DOCUMENTS OR INSTRUMENTS AS AMI
REASONABLY REQUESTS TO EFFECT THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(F)            ISIS SHALL TENDER TO AMI A CERTIFICATE REPRESENTING THE REMAINING
SHARES DULY AND VALIDLY ENDORSED FOR TRANSFER IN FAVOR OF AMI OR ACCOMPANIED BY
A SEPARATE STOCK POWER DULY AND VALIDLY EXECUTED BY ISIS AND OTHERWISE
SUFFICIENT TO VEST IN AMI LEGAL AND BENEFICIAL OWNERSHIP OF THE REMAINING
SHARES.

 

(G)           ISIS SHALL HAVE RECEIVED AND DELIVERED TO AMI ALL THIRD PARTY
CONSENTS IDENTIFIED ON SCHEDULE 4.1(G) AND ISIS AND AMI SHALL HAVE RECEIVED ALL
OTHER

 

17

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AUTHORIZATIONS, CONSENTS, AND APPROVALS OF GOVERNMENTAL AUTHORITIES REFERRED TO
IN SECTIONS 5.1(C) AND 5.1(D).

 

(H)           IBIS SHALL HAVE THE BENEFIT OF ALL LICENSES NECESSARY TO CONDUCT
THE BUSINESS AS IT HAD BEEN CONDUCTED PRIOR TO THE CLOSING AND AS CONTEMPLATED
TO BE CONDUCTED IMMEDIATELY THEREAFTER.

 

(I)            ISIS SHALL HAVE OBTAINED (A) PAYOFF LETTERS FOR ANY INDEBTEDNESS
OF IBIS TO BE PAID BY AMI ON BEHALF OF ISIS AT THE CLOSING AND (B) RELEASES OF
ANY AND ALL ENCUMBRANCES ON THE REMAINING SHARES OR THE ASSETS OF IBIS (EXCEPT,
WITH RESPECT TO THE ASSETS OF IBIS, PERMITTED ENCUMBRANCES), ALL ON TERMS
REASONABLY SATISFACTORY TO AMI.

 

(J)            SINCE THE INVESTMENT DATE, THERE SHALL HAVE BEEN NO OCCURRENCE OR
DISCLOSURE OF ANY EVENT, CIRCUMSTANCE OR STATE OF FACTS WHICH HAS, OR WOULD
REASONABLY BE EXPECTED TO HAVE, A MATERIAL ADVERSE EFFECT ON THE BUSINESS,
ASSETS, CONDITION (FINANCIAL OR OTHERWISE), OPERATIONS, OPERATING RESULTS,
EMPLOYEE RELATIONS, CUSTOMER RELATIONS OR SUPPLIER RELATIONS OF IBIS (A
“MATERIAL ADVERSE EFFECT”).

 

(K)           ISIS AND IBIS SHALL HAVE EXECUTED AND DELIVERED TO AMI THE
TRANSITION SERVICES AGREEMENT SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS
EXHIBIT A (THE “TRANSITION SERVICES AGREEMENT”) AND THE TRANSITION SERVICES
AGREEMENT SHALL BE IN FULL FORCE AND EFFECT.

 

(L)            ISIS SHALL HAVE EXECUTED AND DELIVERED TO AMI AN ESCROW AGREEMENT
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT B (THE “ESCROW AGREEMENT”)
AND THE ESCROW AGREEMENT SHALL BE IN FULL FORCE AND EFFECT.

 

(M)          ISIS SHALL HAVE EXECUTED AND DELIVERED TO AMI A NON-FOREIGN
AFFIDAVIT DATED AS OF THE CLOSING DATE AND IN FORM AND SUBSTANCE REQUIRED UNDER
THE TREASURY REGULATIONS ISSUED PURSUANT TO SECTION 1445 OF THE INTERNAL REVENUE
CODE STATING THAT ISIS IS NOT A “FOREIGN PERSON” AS DEFINED IN CODE § 1445.

 

(N)           THERE SHALL NOT HAVE BEEN ANY MATERIAL BREACH OF ANY OF THE TERMS
AND PROVISIONS OF THE TRANSACTION DOCUMENTS THAT HAS NOT BEEN WAIVED BY AMI.

 

(O)           EXCEPT AS CONTEMPLATED BY SECTION 2.4 AND THE TRANSITION SERVICES
AGREEMENT, IBIS SHALL BE ENTITLED TO FULLY EXERCISE WITHOUT RESTRICTION OR
LIMITATION ALL LEGAL AND BENEFICIAL RIGHTS UNDER THE IBIS CONTRACTS (INCLUDING
THE GOVERNMENT CONTRACTS) AND ALL OTHER ASSETS, PROPERTIES AND RIGHTS RELATED
TO, USED IN OR NECESSARY TO OPERATE AND CONDUCT THE BUSINESS IN ALL RESPECTS IN
THE MANNER CONDUCTED ON AND PRIOR TO THE CLOSING DATE AND AS CONTEMPLATED TO BE
CONDUCTED FROM AND AFTER THE CLOSING DATE.

 

(P)           [***].

 

AMI may waive any condition specified in this Section 4.1 if it executes a
writing so stating at or prior to the Closing.  In the event of any such waiver,
AMI shall be deemed to have waived any claim against Isis for failure to satisfy
such condition; provided that, except to the extent specifically and expressly
set forth in such waiver, any such waiver shall not limit

 

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AMI’s right to recovery hereunder for a breach by either Isis or Ibis of any
other provision of this Agreement.

 

4.2           Conditions to Obligation of Isis.  The obligation of Isis to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

 

(A)           THE REPRESENTATIONS AND WARRANTIES OF AMI SET FORTH IN THIS
AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AT AND AS OF THE
DATE HEREOF AND AS OF THE CLOSING DATE.

 

(B)           AMI SHALL HAVE PERFORMED AND COMPLIED IN ALL MATERIAL RESPECTS
WITH ALL OF ITS COVENANTS HEREUNDER THROUGH THE CLOSING;

 

(C)           NO CLAIM SHALL BE PENDING BEFORE ANY COURT, ARBITRATOR, OTHER BODY
OR ADMINISTRATIVE AGENCY OF ANY GOVERNMENTAL AUTHORITY WHEREIN AN UNFAVORABLE
INJUNCTION, JUDGMENT, ORDER, DECREE, RULING OR CHARGE WOULD PREVENT CONSUMMATION
OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (AND NO SUCH
INJUNCTION, JUDGMENT, ORDER, DECREE, RULING OR CHARGE SHALL BE IN EFFECT).

 

(D)           ALL FILINGS WITH AND AUTHORIZATIONS AND APPROVALS OF GOVERNMENTAL
AUTHORITIES THAT ARE REQUIRED FOR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL HAVE BEEN DULY MADE AND OBTAINED ON TERMS REASONABLY
SATISFACTORY TO ISIS.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL
APPLICABLE WAITING PERIODS (AND ANY EXTENSIONS THEREOF) UNDER THE HSR ACT SHALL
HAVE EXPIRED OR OTHERWISE BEEN TERMINATED.

 

(E)           AMI SHALL HAVE DELIVERED TO ISIS A CERTIFICATE OF AMI TO THE
EFFECT THAT EACH OF THE CONDITIONS SPECIFIED ABOVE IN SECTION 4.2(A) AND
SECTION 4.2(B) IS SATISFIED IN ALL RESPECTS.

 

(F)            AMI SHALL HAVE EXECUTED AND DELIVERED TO ISIS THE ESCROW
AGREEMENT AND THE ESCROW AGREEMENT SHALL BE IN FULL FORCE AND EFFECT.

 

(G)           AMI (AND ANY OTHER ABBOTT HOLDERS (AS DEFINED IN THE INVESTOR
RIGHTS AGREEMENT)) SHALL HAVE EXECUTED AND DELIVERED TO ISIS A WRITTEN CONSENT
IN FORM REASONABLY SATISFACTORY TO AMI AND ISIS, CONSENTING TO THE TRANSACTIONS
CONTEMPLATED BY SECTION 7.10.

 

Isis may waive any condition specified in this Section 4.2 if it executes a
writing so stating at or prior to the Closing.  In the event of any such waiver,
Isis shall be deemed to have waived any claim against AMI for failure to satisfy
such condition; provided that, except to the extent specifically and expressly
set forth in such waiver, any such waiver shall not limit Isis’ right to
recovery hereunder for a breach by AMI of any other provision of this Agreement.

 

Section 5               REPRESENTATIONS AND WARRANTIES.

 

5.1           Representations and Warranties of Isis.  As a material inducement
to AMI to enter into this Agreement, except as set forth in the corresponding
Section of the Disclosure

 

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Schedules delivered to AMI herewith on the date hereof (the “Disclosure
Schedules”), Isis hereby represents and warrants the following representations
and warranties are as of the date hereof, and will be as of the Closing Date,
true and correct:

 

(a)   Power and Authority.  Each of Ibis and Isis (i) has the power, authority
and the legal right to enter into each of the Transaction Documents and to
perform its obligations hereunder and thereunder, and (ii) has taken all
necessary action required to authorize the execution and delivery of each of the
Transaction Documents and the performance of its obligations hereunder and
thereunder.

 

(b)   Enforceability.  Each of the Transaction Documents has been duly executed
and delivered on behalf of Ibis and Isis and constitutes a legal, valid and
binding obligation of each such Party and is enforceable against each such Party
in accordance with its terms subject to the effects of bankruptcy, insolvency or
other Laws of general application affecting the enforcement of creditor rights.

 

(c)   Governmental Authority; Consents.  All necessary consents, approvals and
authorizations of all Governmental Authorities and other parties required to be
obtained by Ibis and Isis in connection with the execution and delivery of each
of the Transaction Documents and the performance of their obligations hereunder
and thereunder have been obtained.

 

(d)   No Conflicts.  The execution and delivery of each of the Transaction
Documents by each of Ibis and Isis and the performance of each such Party’s
obligations hereunder and thereunder, with or without the passage of time or
giving of notice, (1) do not and will not conflict with or violate any
requirement of Applicable Law or any provision of the certificate of
incorporation, bylaws or any similar instrument of such Party, as applicable
(2) do not and will not require any notice, conflict with, violate, or breach or
constitute a default or require any consent or give rise to any termination or
acceleration right or the creation of any Encumbrance on the Shares, the
Additional Shares or the Remaining Shares or any of the properties or assets of
Ibis under, any contractual obligation by which such Party is bound or subject
to and (3) do not and will not cause the suspension, revocation, impairment,
forfeiture or nonrenewal of any License applicable to Ibis, the Business or any
of Ibis’ operations, assets or properties.

 

(e)   Due Organization; Qualification.  Each of Ibis and Isis is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to enter into each of
the Transaction Documents.  Except as would not reasonably be expected to have a
Material Adverse Effect, Ibis has obtained and currently maintains all
qualifications to do business as a foreign corporation in all jurisdictions in
which the character of the Business requires it to be so qualified.  Ibis has
all requisite power and authority and all authorizations and Licenses necessary
to own, operate or conduct the Business.

 

(f)    Subsidiaries.  Ibis does not own or control any Capital Stock or other
interest of any Person.  Ibis is not a participant in any joint venture,
partnership, limited liability company or similar arrangement.  Since its
inception Ibis has not merged with, acquired all or substantially all of the
assets of (except pursuant to the Contribution Agreement) or acquired the
Capital Stock of or any interest in any Person.  Ibis does not hold the right to
acquire any Capital

 

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Stock or interest in any other Person or have any obligation to make any
investment in any Person and no such rights, Capital Stock or interests are
necessary for the operation of the Business.  Isis does not control or possess
the power, directly or indirectly to control the management, actions or policies
of Regulus Therapeutics, LLC.

 

(g)   Capitalization; Voting Rights.

 

(I)            THE AUTHORIZED CAPITAL STOCK OF IBIS CONSISTS OF 1,228,501 SHARES
OF COMMON STOCK, PAR VALUE $0.001 PER SHARE, [1,114,251] SHARES OF WHICH ARE
ISSUED AND OUTSTANDING, 1,000,000 OF WHICH ARE HELD BY ISIS (THE “REMAINING
SHARES”) [AND 114,251 SHARES OF WHICH ARE HELD BY AMI].

 

(II)           THE ISSUED AND OUTSTANDING CAPITAL STOCK OF IBIS AS OF THE
CLOSING WILL CONSIST EXCLUSIVELY OF THE SHARES[, THE ADDITIONAL SHARES] AND THE
REMAINING SHARES.  EXCEPT AS SET FORTH IN THE INVESTOR RIGHTS AGREEMENT, IBIS
DOES NOT HAVE ANY OBLIGATIONS TO ISSUE OR REDEEM ANY SHARES OF CAPITAL STOCK [,
OTHER THAN WITH RESPECT TO THE ADDITIONAL SHARES] AND IBIS HAS NOT ISSUED ANY
CAPITAL STOCK OTHER THAN THE SHARES, [THE ADDITIONAL SHARES] AND THE REMAINING
SHARES.  NO CAPITAL STOCK ISSUED BY IBIS IS LISTED ON ANY STOCK EXCHANGE OR
UNREGULATED MARKET.  OTHER THAN THE TRANSACTION DOCUMENTS, THERE ARE NO
AGREEMENTS WITH ISIS OR IBIS OR ANY OTHER PERSON WITH RESPECT TO THE VOTING OR
TRANSFER OF THE REMAINING SHARES.

 

(III)          THE REMAINING SHARES ARE: (A) DULY AUTHORIZED, VALIDLY ISSUED,
FULLY PAID AND NONASSESSABLE; (B) ISSUED IN COMPLIANCE WITH ALL APPLICABLE STATE
AND FEDERAL LAWS CONCERNING THE ISSUANCE OF CAPITAL STOCK; AND (C) FREE AND
CLEAR OF ALL ENCUMBRANCES OTHER THAN THE CALL OPTION; PROVIDED, THAT THE
REMAINING SHARES MAY BE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER STATE AND/OR
FEDERAL SECURITIES LAWS AS SET FORTH HEREIN OR AS OTHERWISE REQUIRED BY SUCH
LAWS AT THE TIME A TRANSFER IS PROPOSED.

 

(IV)          THE SALE OF THE REMAINING SHARES TO AMI HEREUNDER IS NOT SUBJECT
TO ANY PREEMPTIVE RIGHTS, RIGHTS OF FIRST REFUSAL OR SIMILAR RIGHTS.

 

(h)   Agreements; Liabilities.

 

(I)            THERE ARE NO JUDGMENTS, ORDERS, WRITS OR DECREES TO WHICH IBIS OR
ISIS IS A PARTY CURRENTLY PENDING OR, TO ISIS’ OR IBIS’ KNOWLEDGE, THREATENED
WHICH WOULD PREVENT IBIS OR ISIS FROM ENTERING INTO THE TRANSACTION DOCUMENTS OR
ISSUING OR TRANSFERRING THE REMAINING SHARES PURSUANT TO THE TERMS OF THE
TRANSACTION DOCUMENTS.

 

(II)           IBIS HAS NOT (A) ACCRUED, DECLARED OR PAID ANY DIVIDENDS, OR
AUTHORIZED OR MADE ANY DISTRIBUTION UPON OR WITH RESPECT TO ANY CLASS OR SERIES
OF ITS CAPITAL STOCK, (B) INCURRED OR GUARANTEED ANY INDEBTEDNESS (OTHER THAN
PERMITTED INDEBTEDNESS), (C) MADE ANY LOANS OR ADVANCES TO ANY PERSON, OTHER
THAN ADVANCES FOR REASONABLE TRAVEL EXPENSES TO IBIS EMPLOYEES IN THE ORDINARY
COURSE OF BUSINESS, OR (D) SOLD, EXCHANGED, LICENSED OR OTHERWISE DISPOSED OF
ANY OF ITS TANGIBLE ASSETS, OTHER THAN THE SALE OF ITS INVENTORY IN THE ORDINARY
COURSE OF BUSINESS.

 

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(iii)          Ibis has no material obligations or liabilities (whether accrued,
absolute, or to Isis’ or Ibis’ Knowledge contingent, unliquidated or otherwise,
whether due or to become due and regardless of when or by whom asserted),
including, without limitation, Taxes, except (A) obligations under the Ibis
Contracts made available to AMI or under Contracts entered into in the ordinary
course of business which, because of the dollar thresholds set forth in Sections
5.1(l) and 5.1(x), are not required pursuant to Sections 5.1(l) and 5.1(x) below
to be described on Schedules 5.1(l) or 5.1(x) (but not liabilities for breaches
of any such Contracts), (B) liabilities reflected on the Most Recent Balance
Sheet, (C) liabilities and obligations which have arisen after the date of the
Most Recent Balance Sheet in the ordinary course of business (none of which is
material or is a liability for breach of contract, tort, infringement (directly,
contributorily, by inducement or otherwise), Claim or warranty (other than
warranty claims arising in the ordinary course of business in connection with
the sale of Products or under Ibis Contracts made available to AMI, none of
which warranty claims individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect) and (D) other liabilities and
obligations to the extent expressly disclosed in Schedule5.1(h)(iii).

 

(i)    Obligations to Related Parties.  There are no obligations of Ibis to
Affiliates, officers, directors or employees of Ibis or Isis other than (A) for
payment of salary to employees of Ibis for services rendered in the ordinary
course of business, (B) reimbursement to employees of Ibis for reasonable
expenses incurred in the ordinary course of business on behalf of Ibis,
(C) standard employee benefits made generally available to all employees,
pursuant to the Plans described on Schedule 5.1(p)(ii), (D) the Permitted
Employee Compensation Plan or (E) Ibis’ rights and obligations to Isis under the
Contribution Agreement and Corporate Services Agreement.  To Isis’ and Ibis’
Knowledge, all of the Contracts to which Ibis is a party or by which the
Business or any of its assets is bound have been negotiated on an arms length
basis.

 

(j)    Title to Properties and Tangible Assets; Liens, Etc.  Ibis has good and
marketable title to its properties and tangible assets and good and valid title
to its leasehold estates, in each case subject to no Encumbrance other than
(i) Permitted Encumbrances and (ii) rights of the U.S. federal government in
certain equipment purchased using government funds, as set forth on Schedule
5.1(j).  The tangible assets of Ibis have been maintained in accordance with
normal industry practice and are in good operating condition and repair (except
for ordinary wear and tear).

 

(k)   Sufficiency of Assets.

 

(I)            EXCEPT FOR THE SERVICES, FUNDING AND FACILITIES PROVIDED UNDER
THE CORPORATE SERVICES AGREEMENT, IBIS HAS ALL ASSETS, PROPERTIES AND RIGHTS
USED IN OR NECESSARY TO OPERATE OR CONDUCT THE BUSINESS IN ALL RESPECTS.

 

(II)           EXCEPT THE SERVICES, FUNDING AND FACILITIES PROVIDED UNDER THE
CORPORATE SERVICES AGREEMENT AND INDIRECTLY, VIA THE REMAINING SHARES, ISIS AND
ITS AFFILIATES DO NOT HAVE ANY RIGHT, TITLE OR INTEREST IN OR TO ANY ASSET,
PROPERTY, TITLE OR INTEREST THAT IS USED IN OR NECESSARY TO OPERATE OR CONDUCT
THE BUSINESS AS CONDUCTED ON AND PRIOR TO THE CLOSING DATE OR AS CONTEMPLATED TO
BE CONDUCTED BY IBIS AND ISIS AFTER THE CLOSING DATE AS REFLECTED IN THE
OFFERING MEMORANDUM AND MANAGEMENT PRESENTATIONS.

 

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PURSUANT TO THE CONTRIBUTION AGREEMENT, ISIS HAS TRANSFERRED TO IBIS ALL ASSETS,
PROPERTIES AND RIGHTS ISIS OWNED OR WHICH ARE OR WERE USED IN OR NECESSARY TO
OPERATE OR CONDUCT THE BUSINESS EXCEPT THE SERVICES, FUNDING AND FACILITIES
PROVIDED UNDER THE CORPORATE SERVICES AGREEMENT.  NO PERSON EMPLOYED BY THE
DIVISION PRIOR TO THE DATE OF THE CONTRIBUTION AGREEMENT IS CURRENTLY EMPLOYED
BY ISIS AND NO FORMER EMPLOYEE OF IBIS OR THE DIVISION IS OR HAS BEEN EMPLOYED
BY ISIS.

 

(l)    Intellectual Property.

 

(I)            SCHEDULE 5.1(L)(I) SETS FORTH A COMPLETE AND CORRECT LIST OF ALL
OF THE FOLLOWING INTELLECTUAL PROPERTY USED IN OR NECESSARY TO OPERATE OR
CONDUCT THE BUSINESS (WHETHER OWNED BY IBIS OR ANY OTHER PERSON), AND INDICATES
WITH RESPECT TO EACH ITEM, WHETHER IBIS OWNS OR LICENSES SUCH INTELLECTUAL
PROPERTY AND THE OWNER OF ANY INTELLECTUAL PROPERTY COVERED BY SUCH LICENSE: 
(A) PATENTED OR REGISTERED INTELLECTUAL PROPERTY AND PENDING PATENT APPLICATIONS
OR OTHER APPLICATIONS FOR REGISTRATIONS OF INTELLECTUAL PROPERTY (INCLUDING
JURISDICTION, REGISTRATION AND APPLICATION NUMBER, AS APPLICABLE, AND RECORD
OWNER), (B) REGISTERED AND MATERIAL UNREGISTERED TRADEMARKS, SERVICE MARKS,
TRADE NAMES, AND INTERNET DOMAIN NAMES, (C) SOFTWARE (OTHER THAN UNMODIFIED,
COMMERCIALLY AVAILABLE, OFF-THE-SHELF SOFTWARE PURCHASED OR LICENSED FOR LESS
THAN AN INDIVIDUAL COST OF $[***] AND A TOTAL COST OF $[***] IN THE AGGREGATE
FOR ALL SUCH LICENSES), (D) MATERIAL ALGORITHMS EMBODIED IN THE PRODUCTS AND ANY
OTHER MATERIAL TRADE SECRETS; AND (E) ALL OTHER MATERIAL INTELLECTUAL PROPERTY
USED IN OR NECESSARY TO OPERATE OR CONDUCT THE BUSINESS (INCLUDING, WITHOUT
LIMITATION, ALL INTELLECTUAL PROPERTY SET FORTH OR REQUIRED TO BE SET FORTH IN
THE FOLLOWING SCHEDULES TO THE CONTRIBUTION AGREEMENT: SCHEDULE 2.1 (IBIS
BUSINESS ASSETS), SCHEDULE 2.2 (IBIS BUSINESS PATENTS), SCHEDULE 2.5 (IBIS
TRADEMARKS) AND SCHEDULE 2.6 (IBIS BUSINESS SOFTWARE)) (ALL INTELLECTUAL
PROPERTY DESCRIBED IN THE FOREGOING, (A) THROUGH (E), COLLECTIVELY, (WITHOUT
REGARD TO WHETHER SUCH INTELLECTUAL PROPERTY IS SET FORTH ON SCHEDULE 5.1(L)(I))
“BUSINESS IP”).

 

(II)           SCHEDULE 5.1(L)(II) SETS FORTH A COMPLETE AND CORRECT LIST OF ALL
OF THE FOLLOWING CONTRACTS (OTHER THAN LICENSES FOR UNMODIFIED, COMMERCIALLY
AVAILABLE, OFF-THE-SHELF SOFTWARE PURCHASED OR LICENSED FOR LESS THAN AN
INDIVIDUAL COST OF $[***] AND A TOTAL COST OF $[***] IN THE AGGREGATE FOR ALL
SUCH LICENSES) RELATING TO THE BUSINESS IP (COLLECTIVELY, THE “IP CONTRACTS”):
(A) CONTRACTS IN WHICH IBIS OR ISIS OR ANY OF THEIR RESPECTIVE AFFILIATES IS A
LICENSEE OR SUBLICENSEE OF BUSINESS IP; (B) CONTRACTS IN WHICH IBIS OR ISIS OR
ANY OF THEIR RESPECTIVE AFFILIATES IS A LICENSOR OR SUBLICENSOR OF BUSINESS IP;
(C) CONTRACTS TO WHICH IBIS OR ISIS OR ANY OF THEIR RESPECTIVE AFFILIATES IS A
PARTY, OR BY WHICH ANY OF THE BUSINESS IP IS BOUND, THAT GIVE ANY THIRD PARTY
ANY RIGHT, TITLE OR INTEREST IN OR TO ANY SUCH BUSINESS IP; (D) CONTRACTS WITH
ANY GOVERNMENTAL AUTHORITY WHEREIN ANY PORTION OF THE BUSINESS IP WAS DEVELOPED
OR USED (“GOVERNMENT CONTRACTS”); AND (E) CONTRACTS THAT RESTRICT IBIS’ RIGHTS
IN OR USE OR DISCLOSURE OF BUSINESS IP.

 

(III)          IBIS OWNS AND POSSESSES ALL RIGHT, TITLE AND INTEREST IN AND TO,
FREE AND CLEAR OF ALL ENCUMBRANCES (OTHER THAN THE RIGHTS OF GOVERNMENTAL
AUTHORITIES UNDER GOVERNMENT CONTRACTS IDENTIFIED IN SCHEDULE 5.1(L)(III) TO THE
INTELLECTUAL PROPERTY IDENTIFIED IN SUCH SCHEDULE) OR HAS A VALID AND
ENFORCEABLE LICENSE TO USE (PURSUANT TO A

 

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WRITTEN LICENSE AGREEMENT SET FORTH AND DESCRIBED IN SCHEDULE 5.1(L)(II) OR A
WRITTEN LICENSE FOR UNMODIFIED, COMMERCIALLY AVAILABLE, OFF-THE-SHELF SOFTWARE
PURCHASED OR LICENSED FOR LESS THAN AN INDIVIDUAL COST OF $[***] AND A TOTAL
COST OF $[***] IN THE AGGREGATE) THE BUSINESS IP.

 

(IV)          NEITHER ISIS NOR ANY OF ITS AFFILIATES (OTHER THAN IBIS) HAS ANY
RIGHT, TITLE OR INTEREST IN OR TO ANY OF THE BUSINESS IP.

 

(V)           TO ISIS’ OR IBIS’ KNOWLEDGE, NEITHER IBIS, NOR WITH RESPECT TO THE
BUSINESS, ISIS, HAS INFRINGED (DIRECTLY, CONTRIBUTORILY, BY INDUCEMENT OR
OTHERWISE), MISAPPROPRIATED OR OTHERWISE CONFLICTED WITH, AND THE OPERATION OF
THE BUSINESS (INCLUDING THE DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF
THE T5000 BIOSENSOR SYSTEM (INCLUDING THE [***] AND [***]) AND THE ASSAY KITS
SPECIFICALLY LISTED IN THE [***] [***]) DOES NOT AND WILL NOT INFRINGE
(DIRECTLY, CONTRIBUTORILY, BY INDUCEMENT OR OTHERWISE), MISAPPROPRIATE OR
OTHERWISE CONFLICT WITH, THE PATENTS, TRADEMARKS, COPYRIGHTS OR TRADE SECRETS OF
ANY PERSON, AND NEITHER IBIS NOR ISIS IS AWARE OF ANY FACTS THAT INDICATE A
LIKELIHOOD OF ANY OF THE FOREGOING (INCLUDING WITHOUT LIMITATION, ORAL OR
WRITTEN DEMANDS OR OFFERS TO LICENSE ANY INTELLECTUAL PROPERTY FROM ANY PERSON).
WITH RESPECT TO WHETHER THE OPERATION OR CONDUCT OF THE BUSINESS HAS OR WILL
INFRINGE (DIRECTLY, CONTRIBUTORILY, BY INDUCEMENT OR OTHERWISE), MISAPPROPRIATE
OR OTHERWISE CONFLICT WITH PATENT, TRADEMARK, COPYRIGHT OR TRADE SECRETS OF ANY
PERSON (OTHER THAN IBIS OR ISIS OR THEIR RESPECTIVE AFFILIATES), THE PARTIES
HERETO ARE RELYING UPON THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
SECTION 5.1(L)(V) AND NOT THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SECTIONS 5.1(K)(I), 5.1(L)(VIII) OR 5.1(L)(IX).

 

(VI)          ALL OF THE BUSINESS IP IS VALID AND TO ISIS’ OR IBIS’ KNOWLEDGE
ENFORCEABLE.  ISIS AND IBIS HAVE TAKEN ALL NECESSARY ACTIONS TO MAINTAIN AND
PROTECT ALL OF THE BUSINESS IP, INCLUDING, WITHOUT LIMITATION, ENTERING INTO
CONFIDENTIALITY AGREEMENTS WITH EACH OF ITS EMPLOYEES, CONSULTANTS AND
INDEPENDENT CONTRACTORS, AND CUSTOMERS AND VENDORS AS NECESSARY SO AS NOT TO
ADVERSELY AFFECT THE VALIDITY OR ENFORCEABILITY THEREOF AND HAVE COMPLIED WITH
DISCLOSURE REQUIREMENTS AS PROVIDED BY ANY GOVERNMENT CONTRACT.  NEITHER IBIS
NOR ISIS HAS DISCLOSED ANY SOURCE CODE FOR ANY SOFTWARE INCLUDED IN THE BUSINESS
IP TO ANY PERSON IN A MANNER THAT WOULD IMPAIR THE TRADE SECRET OR OTHER
INTELLECTUAL PROPERTY PROTECTION OF SUCH SOURCE CODE.  THERE ARE NO CLAIMS,
OPPOSITIONS OR CANCELLATION PROCEEDINGS THAT EITHER WERE MADE OR BROUGHT WITHIN
THE PAST [***] YEARS, OR ARE PRESENTLY PENDING OR, TO ISIS’ OR IBIS’ KNOWLEDGE,
THREATENED, AGAINST EITHER IBIS OR ISIS CONTESTING THE VALIDITY, USE, OWNERSHIP,
ENFORCEABILITY OR REGISTRABILITY OF ANY BUSINESS IP.  NEITHER IBIS NOR ISIS IS
AWARE OF ANY BASIS FOR ANY SUCH CLAIM, OPPOSITION OR CANCELLATION PROCEEDING,
AND NEITHER IBIS NOR ISIS HAS RECEIVED ANY NOTICES REGARDING ANY OF THE
FOREGOING.  NO LOSS OR EXPIRATION OF ANY MATERIAL BUSINESS IP IS PENDING OR
REASONABLY FORESEEABLE OR, TO ISIS’ OR IBIS’ KNOWLEDGE, THREATENED, EXCEPT FOR
PATENTS EXPIRING AT THE END OF THEIR STATUTORY TERMS (AND NOT AS A RESULT OF ANY
ACT OR OMISSION BY EITHER IBIS OR ISIS, INCLUDING, WITHOUT LIMITATION, A FAILURE
TO PAY ANY REQUIRED MAINTENANCE FEES) OR LIMITATIONS TO THE SCOPE OF CLAIMS OF
ANY PENDING PATENT APPLICATION MADE DURING THE ORDINARY COURSE OF PROSECUTING
SUCH PENDING PATENT APPLICATIONS.  COMPLETE COPIES OF ALL FILE HISTORIES FOR
ISSUED PATENTS AND PENDING PATENT APPLICATIONS OF THE BUSINESS IP OWNED OR HELD
BY EITHER IBIS OR ISIS HAVE BEEN PROVIDED TO AMI.

 

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(VII)         TO ISIS’ OR IBIS’ KNOWLEDGE, (A) NO PERSON HAS INFRINGED
(DIRECTLY, CONTRIBUTORILY, BY INDUCEMENT OR OTHERWISE), OR MISAPPROPRIATED ANY
OF THE BUSINESS IP AND (B) NO PERSON IS INFRINGING (DIRECTLY, CONTRIBUTORILY, BY
INDUCEMENT OR OTHERWISE) OR MISAPPROPRIATING ANY OF THE BUSINESS IP.

 

(VIII)        IBIS HAS SUFFICIENT RIGHT, TITLE AND INTEREST IN AND TO THE
BUSINESS IP: (A) TO CONDUCT THE BUSINESS, INCLUDING THE DEVELOPMENT, MANUFACTURE
AND COMMERCIALIZATION OF THE T5000 BIOSENSOR SYSTEM (INCLUDING THE [***]) AND
THE ASSAY KITS SPECIFICALLY LISTED IN THE [***] ON A WORLDWIDE BASIS, WITH NO
PAYMENT OBLIGATION TO ANY PERSON, EXCEPT PURSUANT TO AN IP CONTRACT, AND (B) TO
MAKE, HAVE MADE, IMPORT, USE, OFFER FOR SALE, OR SELL ANY PRODUCT (INCLUDING
[***]) CURRENTLY MARKETED BY THE BUSINESS AND THE ASSAY KITS SPECIFICALLY LISTED
IN THE [***] [***] WITHOUT INFRINGING (DIRECTLY, CONTRIBUTORILY, BY INDUCEMENT
OR OTHERWISE), MISAPPROPRIATING OR CONFLICTING WITH ANY INTELLECTUAL PROPERTY
RIGHTS OF ANY PERSON.  THE BUSINESS IP IS AND WILL BE AS OF THE CLOSING DATE,
OWNED BY OR AVAILABLE FOR USE BY IBIS ON TERMS AND CONDITIONS IDENTICAL TO THOSE
UNDER WHICH IT WAS OWNED OR USED BY IBIS AND THE BUSINESS PRIOR TO THE DATE
HEREOF.

 

(IX)           TO ISIS’ OR IBIS’ KNOWLEDGE, IBIS HAS SUFFICIENT RIGHT, TITLE AND
INTEREST IN AND TO THE BUSINESS IP: (A) TO DEVELOP, MANUFACTURE AND
COMMERCIALIZE THE [***] ON A WORLDWIDE BASIS, WITH NO PAYMENT OBLIGATION TO ANY
PERSON, EXCEPT PURSUANT TO AN IP CONTRACT MADE AVAILABLE TO AMI, AND (B) TO
MAKE, HAVE MADE, IMPORT, USE, OFFER FOR SALE, OR SELL THE [***] WITHOUT
INFRINGING (DIRECTLY, CONTRIBUTORILY, BY INDUCEMENT OR OTHERWISE),
MISAPPROPRIATING OR CONFLICTING WITH ANY INTELLECTUAL PROPERTY RIGHTS OF ANY
PERSON.

 

(X)            NO FUNDING, FACILITIES OR RESOURCES OF A GOVERNMENTAL AUTHORITY,
UNIVERSITY, COLLEGE, OTHER EDUCATIONAL INSTITUTION OR RESEARCH CENTER OR FUNDING
FROM THIRD PARTIES WAS USED IN THE DEVELOPMENT OF ANY OF THE BUSINESS IP AND NO
GOVERNMENTAL AUTHORITY, UNIVERSITY, COLLEGE, OTHER EDUCATIONAL INSTITUTION OR
RESEARCH CENTER HAS ANY CLAIM OR RIGHT IN OR TO ANY OF THE BUSINESS IP.

 

(XI)           EACH CURRENT OR FORMER EMPLOYEE OF EACH ISIS PARTY OR ANY OF
THEIR RESPECTIVE AFFILIATES, WHO WAS INVOLVED IN, OR WHO CONTRIBUTED TO, THE
CREATION OR DEVELOPMENT OF ANY BUSINESS IP, EXECUTED THE STANDARD FORM OF
PROPRIETARY RIGHTS AGREEMENT SET FORTH IN SCHEDULE 5.1(L)(XI) UPON COMMENCEMENT
OF HIS OR HER EMPLOYMENT AND EACH SUCH CURRENT OR FORMER EMPLOYEE AND ANY
CONSULTANT OR INDEPENDENT CONTRACTOR WHO WAS INVOLVED IN, OR WHO CONTRIBUTED TO,
THE CREATION OR DEVELOPMENT OF ANY BUSINESS IP HAS VALIDLY ASSIGNED ALL RIGHT,
TITLE AND INTEREST IN AND TO SUCH BUSINESS IP TO IBIS.

 

(XII)          NONE OF THE TRANSACTION DOCUMENTS NOR THE TRANSACTIONS
CONTEMPLATED BY ANY OF THE TRANSACTION DOCUMENTS WOULD RESULT IN OR REASONABLY
BE EXPECTED TO RESULT IN:  (A) IBIS, AMI OR ANY OF THEIR RESPECTIVE AFFILIATES
GRANTING TO ANY PERSON ANY RIGHT TO OR WITH RESPECT TO ANY INTELLECTUAL PROPERTY
OWNED BY, OR LICENSED TO, ANY OF THEM AS A RESULT OF ANY ENCUMBRANCE OR CONTRACT
TO WHICH, IBIS OR ANY OF THEIR AFFILIATES IS A PARTY OR BOUND BY, (B) OTHER THAN
STANDARD NON-SOLICITATION AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF
BUSINESS AND MADE AVAILABLE TO AMI, IBIS, AMI OR ANY OF THEIR RESPECTIVE
AFFILIATES BEING BOUND BY, OR SUBJECT TO, ANY NON-COMPETE OR OTHER

 

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MATERIAL RESTRICTION ON THE OPERATION OR SCOPE OF THEIR RESPECTIVE BUSINESSES AS
A RESULT OF ANY ENCUMBRANCE OR CONTRACT TO WHICH ISIS, IBIS OR ANY OF THEIR
AFFILIATES IS A PARTY OR BOUND BY, (C) OTHER THAN AS CONTEMPLATED BY THE
ACQUISITION AGREEMENT, IBIS, AMI OR ANY OF THEIR RESPECTIVE AFFILIATES BEING
OBLIGATED TO PAY ANY ROYALTIES OR OTHER MATERIAL AMOUNTS, TO INCREASE OR
ACCELERATE ANY ROYALTY OR PAYMENT OBLIGATION, OR TO OFFER ANY DISCOUNTS, TO ANY
PERSON AS A RESULT OF ANY ENCUMBRANCE OR CONTRACT TO WHICH ISIS, IBIS OR ANY OF
THEIR AFFILIATES IS A PARTY OR BOUND BY, OR (D) ANY ADVERSE EFFECT ON IBIS’
RIGHT, TITLE OR INTEREST IN AND TO ANY OF THE BUSINESS IP.

 

(XIII)         ALL COMPONENTS OF THE CURRENT VERSION OF THE T5000 BIOSENSOR
SYSTEM PERFORM IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH THEIR CURRENTLY
ADVERTISED, DISPLAYED, DISTRIBUTED OR PUBLISHED SPECIFICATIONS.  ALL SERVICES
THAT HAVE BEEN PERFORMED IN THE CONDUCT OF THE BUSINESS WERE PERFORMED IN
MATERIAL CONFORMITY WITH THE TERMS AND REQUIREMENTS OF THE RELATED CONTRACTS AND
ALL APPLICABLE LAWS.  ALL SOFTWARE INCLUDED IN THE BUSINESS IP IS FREE OF ANY
DISABLING CODES OR INSTRUCTIONS, TIMER, COPY PROTECTION DEVICE, CLOCK, COUNTER
OR OTHER LIMITING DESIGN OR ROUTING AND ANY “BACK DOOR,” “TIME BOMB,” “TROJAN
HORSE,” “WORM,” “DROP DEAD DEVICE,” “VIRUS” OR OTHER SIMILAR DISABLING CODES,
SOFTWARE ROUTINES OR HARDWARE COMPONENTS.  NO OPEN SOURCE, PUBLIC SOURCE OR
OTHER SOFTWARE THAT IS LICENSED PURSUANT TO A LICENSE THAT PURPORTS TO REQUIRE
THE DISTRIBUTION OF, OR ACCESS TO, SOURCE CODE OR PURPORTS TO RESTRICT ONE’S
ABILITY TO CHARGE FOR DISTRIBUTION OF SOFTWARE (INCLUDING, WITHOUT LIMITATION,
ANY VERSION OF ANY SOFTWARE LICENSED PURSUANT TO ANY GNU GENERAL PUBLIC LICENSE
OR LIMITED GENERAL PUBLIC LICENSE OR OTHER SOFTWARE), WAS USED IN, INCORPORATED
INTO, INTEGRATED OR BUNDLED WITH ANY SOFTWARE THAT HAS BEEN USED IN THE T5000
BIOSENSOR SYSTEM OR ANY OTHER PRODUCT THAT HAS BEEN DISTRIBUTED OR IS CURRENTLY
DISTRIBUTED.  IBIS DOES NOT HAVE ANY PLANS TO INCLUDE ANY SUCH SOFTWARE IN ANY
SUCH SYSTEM OR PRODUCT.  THE SOURCE CODE FOR ALL SOFTWARE INCLUDED IN THE
BUSINESS IP IS SUFFICIENTLY DOCUMENTED SUCH THAT A SOFTWARE PROGRAMMER OF
ORDINARY SKILL WOULD BE ABLE TO MAINTAIN AND MODIFY SUCH SOURCE CODE USING
REASONABLE EFFORTS.

 

(XIV)        WITHOUT LIMITING ANY OTHER REPRESENTATION OR WARRANTY HEREIN, THE
COMPUTER AND OTHER INFORMATION TECHNOLOGY SYSTEMS AND NETWORKS OWNED OR
CONTRACTED FOR BY IBIS HAVE BEEN MAINTAINED IN ACCORDANCE WITH NORMAL INDUSTRY
PRACTICE, ARE IN GOOD OPERATING CONDITION AND REPAIR (EXCEPT FOR ORDINARY WEAR
AND TEAR) AND ARE SUFFICIENT FOR THE OPERATION OF THE BUSINESS.  EACH OF IBIS
AND ISIS HAS TAKEN ALL REASONABLY NECESSARY ACTION TO SAFEGUARD THE COMPUTER AND
OTHER INFORMATION TECHNOLOGY SYSTEMS AND NETWORKS USED IN THE OPERATION OF THE
BUSINESS AND THERE HAS BEEN NO UNAUTHORIZED INTRUSIONS OR BREACHES OF THE
SECURITY OF THE COMPUTER AND OTHER INFORMATION TECHNOLOGY SYSTEMS AND NETWORKS
USED IN THE BUSINESS THAT HAVE MATERIALLY COMPROMISED OR ARE CURRENTLY
MATERIALLY COMPROMISING THE SECURITY, INTEGRITY OR OPERATIONS OF SUCH SYSTEMS OR
NETWORKS.

 

(XV)         THE INDIVIDUALS IDENTIFIED AS THE OUTSIDE COUNSEL INVOLVED IN THE
DEVELOPMENT OR PROSECUTION OF THE BUSINESS IP ON SCHEDULE 1SECTION 1(QQ)
REPRESENT THE OUTSIDE COUNSEL WHO HAVE PROVIDED ISIS OR IBIS STRATEGIC LEGAL AND
INTELLECTUAL PROPERTY ADVICE RELATED TO THE BUSINESS IP AND THE IBIS BUSINESS
DURING THE THREE (3) YEARS PRIOR TO THE CLOSING DATE.

 

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(m)  Compliance with Other Instruments.  Neither Ibis nor, with respect to the
Business, Isis is in violation or default of any term of its charter documents,
each as amended, or of any provision of any Contract to which it is party or by
which the Business is bound or of any judgment, decree, order or writ.

 

(n)   Litigation.  There is no Claim pending or, to Isis’ or Ibis’ Knowledge,
threatened against Ibis or, with respect to the Business, Isis (or against any
Ibis or Isis employee (in their capacity as such)), at Law or in equity, or
before or by any Governmental Authority, and to Isis’ or Ibis’ Knowledge, there
is no reasonable basis for any of the foregoing.  Neither Ibis nor, with respect
to the Business, Isis is subject to any outstanding order, judgment, or decree
issued by any Governmental Authority or any arbitrator.  Neither Ibis nor any of
its Affiliates has received any opinion or memorandum or advice from legal
counsel to the effect that Ibis or the Business is or was exposed, from a legal
standpoint, to any material liability.

 

(o)   Tax Matters.

 

(I)            [IBIS HAS NOT BEEN REQUIRED TO FILE ANY TAX RETURNS.]  ALL TAXES
OWED AND DUE BY IBIS HAVE BEEN PAID.  NO CLAIM HAS EVER BEEN MADE BY AN
AUTHORITY IN ANY JURISDICTION THAT IBIS IS OR MAY BE SUBJECT TO TAXATION BY THAT
JURISDICTION.  THERE ARE NO ENCUMBRANCES ON ANY OF THE ASSETS USED BY IBIS THAT
AROSE IN CONNECTION WITH ANY FAILURE (OR ALLEGED FAILURE) TO PAY ANY TAX. 
SCHEDULE 5.1(O)(I) CONTAINS A LIST OF STATES, TERRITORIES AND JURISDICTIONS
(WHETHER FOREIGN OR DOMESTIC) IN WHICH IBIS IS REQUIRED TO FILE TAX RETURNS.

 

(II)           IBIS HAS WITHHELD AND PAID ALL TAXES REQUIRED TO HAVE BEEN
WITHHELD AND PAID IN CONNECTION WITH AMOUNTS PAID OR OWING BY IBIS TO ANY
EMPLOYEE, INDEPENDENT CONTRACTOR, CREDITOR, STOCKHOLDER, OR OTHER THIRD PARTY,
AND ALL FORMS W-2 AND 1099 REQUIRED WITH RESPECT THERETO HAVE BEEN PROPERLY
COMPLETED.

 

(III)          THERE IS NO DISPUTE OR CLAIM CONCERNING ANY TAX LIABILITY OF IBIS
EITHER (A) CLAIMED OR RAISED BY ANY GOVERNMENTAL AUTHORITY OR (B) AS TO WHICH
ISIS OR IBIS HAS KNOWLEDGE.

 

(IV)          NEITHER IBIS NOR, WITH RESPECT TO THE BUSINESS, ISIS, HAS WAIVED
ANY STATUTE OF LIMITATIONS IN RESPECT OF TAXES OR AGREED TO ANY EXTENSION OF
TIME WITH RESPECT TO A TAX ASSESSMENT OR DEFICIENCY.

 

(v)           To Isis’ or Ibis’ Knowledge based in good faith on advice of
Deloitte & Touche LLP, (A) Ibis and Isis are and will be members of the same
consolidated group, as such term is defined by Treasury Regulation §
1.1502-1(h), with Isis being the common parent of such consolidated group for
all taxable years through and including the Closing and (B) unless the
provisions of the Code pertaining to filing Tax Returns as a consolidated group
are amended prior to the Closing, Ibis and Isis will be eligible to file a
consolidated Tax Return in lieu of separate Tax Returns with respect to income
Tax imposed by Chapter 1 of the Code for all taxable years through and including
the Closing.

 

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(VI)          IBIS IS NOT AND WILL NOT AT THE CLOSING BE A PARTY TO ANY ORAL OR
WRITTEN TAX SHARING AGREEMENTS OR ARRANGEMENTS.

 

(p)   Employees.

 

(I)            NEITHER IBIS NOR, WITH RESPECT TO THE BUSINESS, ISIS, IS PARTY TO
ANY COLLECTIVE BARGAINING AGREEMENT.  THERE IS NO LABOR UNION ORGANIZING
ACTIVITY PENDING OR, TO ISIS’ OR IBIS’ KNOWLEDGE, THREATENED WITH RESPECT TO
IBIS.  EACH OF IBIS AND, WITH RESPECT TO THE BUSINESS, ISIS HAS COMPLIED WITH
ALL APPLICABLE LAWS RELATING TO THE EMPLOYMENT OF LABOR AND, WITHIN THE LAST
FIVE (5) YEARS, NEITHER IBIS NOR ISIS, WITH RESPECT TO THE BUSINESS, HAS
EXPERIENCED ANY STRIKE, WORK STOPPAGE, LOCKOUT, GRIEVANCE, UNFAIR LABOR PRACTICE
CLAIM OR OTHER LABOR RELATION PROBLEM, INCLUDING, WITHOUT LIMITATION, ANY
WRITTEN DISPUTE WITH OR CLAIM BY FORMER EMPLOYEES REGARDING TERMINATION AND/OR
SEVERANCE PAY. TO THE KNOWLEDGE OF ISIS OR IBIS, NO EXECUTIVE, KEY EMPLOYEE OR
GROUP OF EMPLOYEES OF IBIS HAS ANY PLANS TO TERMINATE EMPLOYMENT WITH IBIS.  IN
THE PAST THREE (3) YEARS, IBIS AND ISIS HAVE COMPLIED IN ALL RESPECTS WITH THE
NOTIFICATION PROVISIONS (OR PAID SEVERANCE IN LIEU THEREOF) OF THE WARN ACT AND
APPLICABLE SIMILAR STATE OR LOCAL LAWS.  NO EXECUTIVE, KEY EMPLOYEE OR GROUP OF
EMPLOYEES OF IBIS OR THE BUSINESS HAS BEEN TERMINATED OR RESIGNED THEIR
EMPLOYMENT SINCE THE INVESTMENT DATE.

 

(II)           SCHEDULE 5.1(P)(II) CONTAINS A TRUE AND COMPLETE LIST OF EACH
EMPLOYMENT (OTHER THAN AT-WILL OFFER LETTERS WITH NO SEVERANCE, COMPENSATION
TERM GUARANTEE OR MATERIAL BENEFIT), BONUS, FRINGE BENEFIT, DEFERRED
COMPENSATION, INCENTIVE COMPENSATION, STOCK PURCHASE, STOCK OPTION, STOCK
APPRECIATION RIGHT OR OTHER STOCK-BASED INCENTIVE, SEVERANCE, CHANGE-IN-CONTROL,
OR OTHER TERMINATION PAY, HOSPITALIZATION OR OTHER MEDICAL, DISABILITY, LIFE OR
OTHER INSURANCE, SUPPLEMENTAL UNEMPLOYMENT BENEFITS, PROFIT-SHARING, PENSION, OR
RETIREMENT PLAN, PROGRAM OR CONTRACT AND EACH OTHER EMPLOYEE BENEFIT PLAN,
PROGRAM OR CONTRACT SPONSORED, MAINTAINED OR CONTRIBUTED TO OR REQUIRED TO BE
CONTRIBUTED TO BY IBIS, OR BY ANY TRADE OR BUSINESS, WHETHER OR NOT INCORPORATED
(AN “ERISA AFFILIATE”), THAT TOGETHER WITH IBIS OR ISIS WOULD BE DEEMED A
“SINGLE EMPLOYER” UNDER SECTION 414(B), (C), (M) OR (O) OF THE CODE, FOR THE
BENEFIT OF ANY CURRENT OR FORMER EMPLOYEE OR DIRECTOR OF IBIS (THE “PLANS”).
SCHEDULE 5.1(P)(II) IDENTIFIES EACH PLAN THAT IS AN “EMPLOYEE WELFARE BENEFIT
PLAN” OR “EMPLOYEE PENSION BENEFIT PLAN” AS SUCH TERMS ARE DEFINED IN SECTIONS
3(1) AND 3(2) OF ERISA (SUCH PLANS BEING HEREINAFTER REFERRED TO COLLECTIVELY AS
THE “ERISA PLANS”).

 

(III)          NEITHER IBIS NOR ISIS HAS ANY FORMAL PLAN OR BINDING COMMITMENT
TO CREATE ANY ADDITIONAL PLAN OR MODIFY OR CHANGE ANY EXISTING PLAN THAT WOULD
AFFECT ANY CURRENT OR FORMER EMPLOYEE OR DIRECTOR OF IBIS, EXCEPT AS REQUIRED BY
APPLICABLE LAW OR TO CONFORM SUCH PLAN TO THE REQUIREMENTS OF ANY APPLICABLE
LAW.  EXCEPT FOR THE MASTER AGREEMENT AND THIS AGREEMENT, THERE ARE NO CONTRACTS
OR OMISSIONS THAT WOULD PREVENT OR IMPAIR ANY PLAN (INCLUDING ANY PLAN COVERING
RETIREES OR OTHER FORMER EMPLOYEES) FROM BEING AMENDED OR TERMINATED BY IBIS OR
ISIS PRIOR TO OR AT THE CLOSING, OR, WITH RESPECT TO THE PLANS LISTED ON
SCHEDULE 5.1(P)(XII) IF ANY, BY IBIS OR AMI (OR ANY SUCCESSOR THERETO) ON OR AT
ANY TIME AFTER THE CLOSING.

 

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(IV)          NEITHER ISIS NOR IBIS HAS INCURRED AND HAS NO REASON TO EXPECT
THAT EITHER WILL INCUR ANY LIABILITY TO THE PENSION BENEFIT GUARANTY CORPORATION
(OTHER THAN PREMIUM PAYMENTS) OR OTHERWISE UNDER TITLE IV OF ERISA (INCLUDING
ANY WITHDRAWAL LIABILITY) OR UNDER THE CODE OR ANY APPLICABLE LAW WITH RESPECT
TO ANY EMPLOYEE PENSION BENEFIT PLAN THAT ISIS OR IBIS, OR ANY OTHER ENTITY THAT
TOGETHER WITH ISIS OR IBIS IS TREATED AS A SINGLE EMPLOYER UNDER SECTION 414 OF
THE CODE, MAINTAINS OR EVER HAS MAINTAINED OR TO WHICH IT CONTRIBUTES, EVER HAS
CONTRIBUTED, OR EVER HAS BEEN REQUIRED TO CONTRIBUTE.

 

(V)           NEITHER IBIS NOR ISIS, NOR ANY OF THE ERISA PLANS, NOR ANY TRUST
CREATED THEREUNDER, NOR TO ISIS’ OR IBIS’ KNOWLEDGE, ANY TRUSTEE OR
ADMINISTRATOR THEREOF HAS ENGAGED IN A TRANSACTION OR HAS TAKEN OR FAILED TO
TAKE ANY ACTION IN CONNECTION WITH WHICH IBIS COULD BE SUBJECT TO ANY MATERIAL
LIABILITY FOR EITHER A CIVIL PENALTY ASSESSED PURSUANT TO SECTIONS 409 OR
502(I) OF ERISA OR A TAX IMPOSED PURSUANT TO SECTIONS 4975, 4976 OR 4980B OF THE
CODE.

 

(VI)          EACH PLAN IS IN ALL MATERIAL RESPECTS IN COMPLIANCE, AND HAS BEEN
ADMINISTERED IN ALL MATERIAL RESPECTS IN ACCORDANCE, WITH THE APPLICABLE
PROVISIONS OF ERISA, THE CODE AND ALL OTHER APPLICABLE LAWS, INCLUDING, BUT NOT
LIMITED TO, MEDICAL CONTINUATION UNDER SECTION 4980B OF THE CODE.  NEITHER ISIS
NOR IBIS HAS (A) ENGAGED IN ANY TRANSACTION PROHIBITED BY ERISA OR THE CODE;
(B) BREACHED ANY FIDUCIARY DUTY OWED BY IT WITH RESPECT TO THE PLANS; OR
(C) FAILED TO FILE AND DISTRIBUTE TIMELY AND PROPERLY ALL REPORTS AND
INFORMATION REQUIRED TO BE FILED OR DISTRIBUTED IN ACCORDANCE WITH ERISA OR THE
CODE.

 

(VII)         OTHER THAN ROUTINE CLAIMS FOR BENEFITS, THERE ARE NO CLAIMS,
INTERNAL REVENUE SERVICE OR DEPARTMENT OF LABOR COMPLIANCE PROGRAMS OR OTHER
PROCEEDINGS PENDING OR, TO ISIS’ OR IBIS’ KNOWLEDGE, THREATENED AGAINST OR
OTHERWISE INVOLVING ANY PLAN.

 

(VIII)        EACH PLAN WHICH IS INTENDED TO BE QUALIFIED UNDER
SECTION 401(A) OF THE CODE (A) HAS BEEN AMENDED TO REFLECT ALL REQUIREMENTS
UNDER THE CODE WHICH ARE REQUIRED TO BE ADOPTED PRIOR TO THE END OF THE
APPLICABLE REMEDIAL AMENDMENT PERIOD AND (B) HAS RECEIVED FROM THE INTERNAL
REVENUE SERVICE A FAVORABLE DETERMINATION LETTER WHICH CONSIDERS THE TERMS OF
THE PLAN AS AMENDED FOR SUCH CHANGES IN LAW.

 

(IX)           NONE OF THE PLANS OBLIGATES ISIS OR IBIS EITHER (A) TO PAY ANY
SEPARATION, SEVERANCE, TERMINATION OR SIMILAR BENEFIT TO IBIS EMPLOYEES OR
(B) TO MAKE AN EXCESS PARACHUTE PAYMENT WITHIN THE MEANING OF CODE SECTION 280G.

 

(X)            NO PLAN PROVIDES BENEFITS, INCLUDING WITHOUT LIMITATION DEATH OR
MEDICAL BENEFITS (WHETHER OR NOT INSURED), WITH RESPECT TO CURRENT OR FORMER
EMPLOYEES OF IBIS AFTER RETIREMENT OR OTHER TERMINATION OF SERVICE (OTHER THAN
(A) COVERAGE MANDATED BY ANY APPLICABLE LAW, (B) DEATH BENEFITS OR RETIREMENT
BENEFITS UNDER ANY EMPLOYEE PENSION BENEFIT PLAN OR (C) BENEFITS, THE FULL
DIRECT COST OF WHICH ARE BORNE BY THE CURRENT OR FORMER EMPLOYEE (OR BENEFICIARY
THEREOF)).

 

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(XI)           TO ISIS’ OR IBIS’ KNOWLEDGE, OTHER THAN AS PROVIDED UNDER THE
TERMS OF THE PLANS, NEITHER IBIS NOR ISIS HAS MADE ANY REPRESENTATION OR
COMMITMENT TO, OR ENTERED INTO ANY FORMAL OR INFORMAL UNDERSTANDING WITH, ANY
IBIS EMPLOYEE WITH RESPECT TO COMPENSATION, BENEFITS, OR TERMS OF EMPLOYMENT TO
BE PROVIDED BY AMI OR IBIS OR ANY OF THEIR RESPECTIVE AFFILIATES AT OR
SUBSEQUENT TO THE CLOSING.

 

(XII)          EXCEPT FOR THE PERMITTED EMPLOYEE COMPENSATION PLAN, IBIS NEITHER
SPONSORS NOR MAINTAINS NOR HAS ANY LIABILITY FOR (A) ANY OF THE PLANS OR (B) ANY
OTHER EMPLOYEE BENEFIT PLANS OR ARRANGEMENTS.

 

(XIII)         ALL CONTRIBUTIONS, PREMIUMS OR PAYMENTS UNDER OR WITH RESPECT TO
EACH PLAN WHICH ARE OR WERE DUE HAVE BEEN PAID.

 

(q)   Compliance with Laws; Licenses.

 

(I)            IBIS, THE BUSINESS AND, WITH RESPECT TO THE BUSINESS, ISIS ARE
NOT IN MATERIAL VIOLATION OF ANY LAW.  IBIS, THE BUSINESS, AND, WITH RESPECT TO
THE BUSINESS, ISIS AND IBIS’ AND ISIS’ REPRESENTATIVES HAVE COMPLIED WITH, AND
ARE IN MATERIAL COMPLIANCE WITH, ALL APPLICABLE LAWS, INCLUDING, WITHOUT
LIMITATION, THE FEDERAL FOOD, DRUG, AND COSMETIC ACT, AS AMENDED AND REGULATIONS
PROMULGATED THEREUNDER, AND ALL U.S. FOOD AND DRUG ADMINISTRATION (“FDA”) OR ITS
FOREIGN EQUIVALENT REGULATIONS GOVERNING, AMONG OTHER THINGS, THE PROTECTION OF
HUMAN SUBJECTS AND REGULATIONS GOVERNING CLINICAL INVESTIGATORS.  NO
GOVERNMENTAL ORDERS, PERMISSIONS, CONSENTS, APPROVALS OR AUTHORIZATIONS ARE
REQUIRED TO BE OBTAINED AND NO REGISTRATIONS OR DECLARATIONS ARE REQUIRED TO BE
FILED IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THE TRANSACTION DOCUMENTS
OR THE TRANSFER OF THE REMAINING SHARES.

 

(II)           IBIS HOLDS ALL LICENSES NECESSARY FOR THE OPERATION OR CONDUCT OF
THE BUSINESS (INCLUDING PURSUANT TO ENVIRONMENTAL LAWS).  SCHEDULE
5.1(Q)(II) SETS FORTH A LIST OF ALL LICENSES MATERIAL TO THE BUSINESS (THE
“MATERIAL LICENSES”).  IBIS IS AND HAS BEEN IN COMPLIANCE WITH ALL TERMS AND
CONDITIONS OF SUCH MATERIAL LICENSES AND ALL MATERIAL LICENSES MAY BE RELIED
UPON BY IBIS IMMEDIATELY FOLLOWING THE CLOSING FOR THE LAWFUL OPERATION OF THE
BUSINESS AS CONDUCTED ON AND PRIOR TO THE DATE HEREOF.  EACH MATERIAL LICENSE IS
VALID, BINDING AND IN FULL FORCE AND EFFECT AND IBIS AND THE BUSINESS HAVE
COMPLIED IN ALL MATERIAL RESPECTS WITH ALL REQUIREMENTS OF AND ARE NOT IN
DEFAULT UNDER ANY MATERIAL LICENSE AND HAVE NOT RECEIVED WRITTEN OR, TO ISIS’ OR
IBIS’ KNOWLEDGE, ORAL NOTICE THAT THE BUSINESS OR IBIS IS IN VIOLATION OF ANY OF
THE TERMS OR CONDITIONS OF SUCH MATERIAL LICENSE.  NO LOSS OR SUSPENSION OF ANY
LICENSE NOR ANY PROCEEDING OR INVESTIGATION WHICH IS SEEKING SUCH A LOSS OR
SUSPENSION IS PENDING OR, TO ISIS’ OR IBIS’ KNOWLEDGE, THREATENED.  NEITHER IBIS
NOR ISIS IS OPERATING UNDER ANY WRITTEN OR ORAL FORMAL OR INFORMAL AGREEMENT OR
UNDERSTANDING WITH ANY LICENSING AUTHORITY, REGULATORY AUTHORITY OR ANY OTHER
GOVERNMENTAL AUTHORITY WHICH RESTRICTS THE CONDUCT OF THE BUSINESS OR REQUIRES
IBIS OR, WITH RESPECT TO THE BUSINESS, ISIS, TO TAKE OR REFRAIN FROM TAKING ANY
ACTIONS.

 

(r)    Environment, Health and Safety.  Ibis and the Business have at all times
materially complied with and are in material compliance with all Environmental
Laws,

 

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including, without limitation, all Licenses and other authorizations that are
required pursuant to Environmental Laws for the ownership and occupation of the
assets used by Ibis and the operation of the Business. Neither Ibis nor Isis,
with respect to the Business is aware of or has reason to be aware of or has
received any notice, request for information, report, order, directive,
communication or other information, written or oral, regarding any actual or
alleged violation of Environmental Laws, or any Claims or other liabilities or
potential liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise) arising under Environmental Laws, relating to the Business, the Real
Property or Ibis, which has not been resolved without liability to Ibis. 
Neither Ibis nor its Affiliates nor any of its legal predecessors has, in
violation of Environmental Laws, treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or Released, or exposed any
Person to, any Hazardous Materials, or owned or operated any property or
facility (and no such property or facility including the Real Property is
contaminated by any such Hazardous Materials) so as to give rise to any current
or future liability under Environmental Laws, including without limitation, any
liability to investigate, remediate, cleanup, monitor or take any similar
actions with respect to the environmental condition of any property (whether
owned or non-owned), facility or treatment, storage or disposal facility.  None
of the following exists or to Isis’ or Ibis’ Knowledge, has ever existed at the
Real Property: underground storage tanks, septic tanks, asbestos containing
materials, polychlorinated biphenyls, lead-based paint, urea-formaldehyde,
dumps, landfills, or waste disposal areas, sumps, pits, lagoons, surface
impoundments or wetlands, or any contamination of any kind of the surface,
subsurface, groundwater or surface water.  Ibis has not assumed or become
subject to, whether expressly or by operation of Law, any liabilities of any
other Person arising under Environmental Laws or pursuant to any type of
agreement.  The consummation of the transactions contemplated by this Agreement
do not impose any obligation on the Business under any Environmental Law or
require notification to or consent of any Governmental Authority or third party
pursuant to any Environmental Law.  Ibis has provided to AMI copies of all
material environmental Licenses, reports, audits, assessments, and
investigations, and any other material environmental documents, relating to Ibis
or the Business to the extent the foregoing are in the possession, custody, or
control of Isis or any of its Affiliates or Ibis.

 

(s)   Offering Valid.  Assuming the accuracy of the representations and
warranties of AMI contained in Section 5.2 hereof, the offer and sale of the
Remaining Shares will be exempt from the registration requirements of the
Securities Act, and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities Laws.  Neither Isis nor any
agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Remaining Shares to
any Person or Persons so as to bring the sale of such Remaining Shares by Isis
within the registration provisions of the Securities Act or any state securities
Laws.

 

(t)    Financial Statements.  Schedule 5.1(t) attached hereto contains the
following financial statements (collectively the “Financial Statements”):
(i) the profit and loss statement for the Division for the fiscal year ended
December 31, 2007 and (ii) the profit and loss statement for Ibis and the
related balance sheet (the “Most Recent Balance Sheet”) for the [            ]
month period ended [                ].  The Financial Statements have been
prepared in accordance with GAAP throughout the periods covered thereby, present
fairly in all material respects the financial condition of Ibis or the Division
(as the case may be) as of such dates and

 

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the results of operations of Ibis or the Division (as the case may be) for such
periods, and are materially correct and complete and consistent with the books
and records of Ibis (which books and records are materially correct and
complete).

 

(u)   Subsequent Events.  Since the date of the Most Recent Balance Sheet, there
has not been any material adverse change in the business, assets, liabilities,
condition (financial or otherwise), operations, operating results, prospects,
customer relations or supplier relations of Ibis and Ibis has and Isis has
caused Ibis to conduct the Business in the ordinary course.  Since the date of
the Most Recent Balance Sheet:

 

(I)            IBIS HAS NOT SOLD, LEASED, TRANSFERRED, OR ASSIGNED ANY OF ITS
ASSETS TO A THIRD PARTY, TANGIBLE OR INTANGIBLE, OTHER THAN INVENTORY IN THE
ORDINARY COURSE OF BUSINESS;

 

(II)           NO PARTY (INCLUDING IBIS OR ISIS) HAS ACCELERATED, TERMINATED,
MODIFIED, OR CANCELED ANY MATERIAL CONTRACT (OR SERIES OF RELATED CONTRACTS) TO
WHICH IBIS IS OR WAS A PARTY OR BY WHICH THE BUSINESS IS OR WAS BOUND;

 

(III)          IBIS HAS MADE CAPITAL EXPENDITURES CONSISTENT WITH ITS NORMAL
COURSE OF OPERATIONS;

 

(IV)          IBIS HAS NOT EXPERIENCED ANY DAMAGE, DESTRUCTION, OR LOSS (WHETHER
OR NOT COVERED BY INSURANCE) TO ITS PROPERTY OVER $50,000 IN THE AGGREGATE;

 

(V)           IBIS HAS NOT GRANTED ANY INCREASE IN THE BASE COMPENSATION OF ANY
EMPLOYEE, EXCEPT IN THE ORDINARY COURSE OF BUSINESS (INCLUDING AS TO AMOUNT) OR
ANY BONUS TO, ANY EMPLOYEE, OTHER THAN IN THE ORDINARY COURSE OF BUSINESS;

 

(VI)          IBIS HAS NOT AMENDED, MODIFIED, OR TERMINATED ANY PLAN;

 

(VII)         IBIS HAS NOT ENTERED INTO ANY TRANSACTION WITH ANY OF ITS
DIRECTORS, OFFICERS, EMPLOYEES OR AFFILIATES, EXCEPT FOR TRANSACTIONS WITH ITS
EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS;

 

(VIII)        NEITHER IBIS NOR ISIS HAS LICENSED, SUBLICENSED, ALLOWED ANY
ENCUMBRANCE TO EXIST ON, ABANDONED, OR PERMITTED TO LAPSE ANY BUSINESS IP OR,
EXCEPT IN THE ORDINARY COURSE OF BUSINESS, DISCLOSED ANY CONFIDENTIAL
INFORMATION OF IBIS OR THE BUSINESS TO ANY PERSON (OTHER THAN AMI AND AMI’S
REPRESENTATIVES);

 

(IX)           IBIS HAS NOT MADE A CHANGE IN ITS ACCOUNTING METHODS; AND

 

(X)            IBIS HAS NOT COMMITTED IN ANY BINDING MANNER TO ANY OF THE
FOREGOING.

 

(v)   Brokers’ Fees.  There are no brokerage commissions, finders’ fees or
similar compensation due in connection with the transactions contemplated by the
Transaction Documents based on any arrangement or agreement made by or on behalf
of Isis or Ibis.  To the extent there are any brokerage commissions, finders’
fees or similar compensation due in

 

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connection with the transactions contemplated by the Transaction Documents to
[***], Isis shall be solely liable for any and all such amounts.

 

(w)  Leased Real Property.

 

(I)            IBIS DOES NOT OWN ANY REAL PROPERTY AND THE OWNERSHIP OF ANY REAL
PROPERTY IS NOT NECESSARY FOR THE OPERATION OF THE BUSINESS.  IBIS DOES NOT
LEASE, SUBLEASE, LICENSE OR OTHERWISE GRANT ANY PERSON THE RIGHT TO USE ANY REAL
PROPERTY.  NEITHER ISIS NOR ANY OF ITS AFFILIATES LEASES, SUBLEASES, LICENSES OR
OCCUPIES ANY REAL PROPERTY USED OR OCCUPIED BY, OR NECESSARY FOR THE OPERATION
OR CONDUCT OF, THE BUSINESS.

 

(II)           SCHEDULE 5.1(W)(II) SETS FORTH THE NAMES OF THE LESSOR AND
LESSEE, THE ADDRESS OF EACH PARCEL OF REAL PROPERTY USED BY IBIS (COLLECTIVELY,
THE “LEASED REAL PROPERTY”), AND A LIST OF ALL LEASES, SUBLEASES, LICENSES AND
OTHER AGREEMENTS (WHETHER WRITTEN OR ORAL) (COLLECTIVELY, “LEASES”) FOR EACH
SUCH LEASED REAL PROPERTY.  NONE OF THE LEASES IS A GROUND LEASE.  IBIS AND ISIS
HAVE DELIVERED TO AMI A TRUE AND COMPLETE COPY OF EACH SUCH LEASE DOCUMENT, AND
IN THE CASE OF ANY ORAL LEASE, A WRITTEN SUMMARY OF THE MATERIAL TERMS OF SUCH
LEASE.  IBIS DOES NOT OWN ANY STRUCTURES, IMPROVEMENTS OR FIXTURES LOCATED ON
ANY LEASED REAL PROPERTY (COLLECTIVELY, “LEASEHOLD IMPROVEMENTS”) AND NO
LEASEHOLD IMPROVEMENTS OTHER THAN THOSE PROVIDED TO IBIS UNDER THE CORPORATE
SERVICES AGREEMENT ARE MATERIAL TO THE OPERATION OF THE BUSINESS.

 

(III)          EACH SUCH LEASE IS LEGAL, VALID, BINDING, ENFORCEABLE AND IN FULL
FORCE AND EFFECT.

 

(IV)          NEITHER IBIS NOR, TO ISIS’ OR IBIS’ KNOWLEDGE, ANY OTHER PARTY TO
A LEASE IS IN BREACH OR DEFAULT UNDER SUCH LEASE, NO EVENT HAS OCCURRED OR
CIRCUMSTANCE EXISTS WHICH, WITH THE DELIVERY OF NOTICE, THE PASSAGE OF TIME OR
BOTH, COULD REASONABLY BE EXPECTED TO CONSTITUTE SUCH A BREACH OR DEFAULT, OR
PERMIT THE TERMINATION, MODIFICATION OR ACCELERATION OF RENT UNDER SUCH LEASE
AND NEITHER IBIS NOR ISIS HAS RECEIVED NOTICE THAT THE LEASED REAL PROPERTY IS
IN VIOLATION OF ANY APPLICABLE LAW.

 

(V)           NO SECURITY DEPOSIT OR PORTION THEREOF DEPOSITED WITH RESPECT TO
SUCH LEASE HAS BEEN APPLIED IN RESPECT OF A BREACH OR DEFAULT UNDER SUCH LEASE
WHICH HAS NOT BEEN REDEPOSITED IN FULL.  NEITHER IBIS NOR ANY OTHER PERSON OWES
ANY BROKERAGE COMMISSIONS, FINDER’S FEES, FREE RENT OR ALLOWANCES WITH RESPECT
TO SUCH LEASE.

 

(x)    Contracts.

 

(I)            SCHEDULE 5.1(X)(I) LISTS THE FOLLOWING CONTRACTS RELATING TO THE
BUSINESS OR TO WHICH IBIS IS A PARTY:  (A) CONTRACT FOR THE EMPLOYMENT OF ANY
OFFICER, INDIVIDUAL EMPLOYEE, OR OTHER PERSON ON A FULL-TIME, PART-TIME,
CONSULTING, OR OTHER BASIS OR CONTRACT RELATING TO LOANS TO OFFICERS, DIRECTORS,
EMPLOYEES OR AFFILIATES; (B) AGREEMENT OR INDENTURE RELATING TO BORROWED MONEY
OR OTHER INDEBTEDNESS OR THE MORTGAGING, PLEDGING, OR OTHERWISE PLACING AN
ENCUMBRANCE ON ASSETS OR CAPITAL STOCK OF IBIS; (C) LEASE OR AGREEMENT UNDER
WHICH IBIS IS THE LESSEE OF OR HOLDS OR OPERATES ANY PROPERTY, REAL OR PERSONAL,
OWNED BY ANY OTHER PARTY, EXCEPT FOR ANY LEASE OR AGREEMENT FOR REAL OR PERSONAL
PROPERTY UNDER WHICH THE AGGREGATE ANNUAL CONSIDERATION IS LESS THAN OR EQUAL TO

 

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$25,000; (D) LEASE OR AGREEMENT UNDER WHICH IBIS IS THE LESSOR OF OR PERMITS ANY
PERSON TO HOLD OR OPERATE ANY PROPERTY, REAL OR PERSONAL, OWNED OR CONTROLLED BY
IBIS; (E) DISTRIBUTION OR FRANCHISE AGREEMENT; (F) AGREEMENT WITH A TERM OF MORE
THAN SIX MONTHS AND (1) WHICH IS NOT TERMINABLE BY IBIS UPON LESS THAN 90 DAYS’
NOTICE WITHOUT PENALTY OR (2) WHICH INVOLVES AGGREGATE ANNUAL CONSIDERATION IN
EXCESS OF $25,000; (G) AGREEMENTS RELATING TO OWNERSHIP OF OR INVESTMENTS IN ANY
BUSINESS OR ENTERPRISE, INCLUDING JOINT VENTURES AND MINORITY EQUITY
INVESTMENTS; (H) CONTRACT PROHIBITING IT FROM FREELY ENGAGING IN ANY BUSINESS OR
COMPETING ANYWHERE IN THE WORLD; (I)  EXCEPT AS OTHERWISE DISCLOSED ON SCHEDULE
5.1(X)(I) ANY OTHER CONTRACT OR GROUP OF RELATED CONTRACTS WITH THE SAME PARTY
OR GROUP OF AFFILIATED PARTIES THAT INVOLVES AGGREGATE ANNUAL CONSIDERATION FROM
OR TO IBIS IN EXCESS OF $100,000; OR (J) ANY CONTRACT THAT IS OTHERWISE MATERIAL
TO IBIS AND/OR THE BUSINESS, INCLUDING, WITHOUT LIMITATION, ANY IP CONTRACT OR
GOVERNMENT CONTRACT, WHETHER OR NOT ENTERED INTO IN THE ORDINARY COURSE OF
BUSINESS AND WHETHER OR NOT PERFORMANCE THEREUNDER HAS BEEN COMPLETED.  ALL OF
THE CONTRACTS AND OTHER SIMILAR ARRANGEMENTS SET FORTH ON OR REQUIRED TO BE SET
FORTH ON SCHEDULE 5.1(X)(I) (THE “IBIS CONTRACTS”).

 

(II)           ALL OF THE IBIS CONTRACTS ARE VALID, BINDING, ENFORCEABLE AND IN
FULL FORCE AND EFFECT, AND THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION
DOCUMENTS WILL NOT CAUSE SUCH CONTRACTS TO CEASE TO BE VALID, BINDING,
ENFORCEABLE AND IN FULL FORCE AND EFFECT ON IDENTICAL TERMS FOLLOWING THE
CLOSING.  EACH OF ISIS OR IBIS, AS APPLICABLE, AND, TO ISIS’ OR IBIS’ KNOWLEDGE,
EACH COUNTERPARTY THERETO HAS PERFORMED ALL MATERIAL OBLIGATIONS REQUIRED TO BE
PERFORMED BY IT AND IS NOT IN DEFAULT UNDER OR IN BREACH OF OR IN RECEIPT OF ANY
CLAIM OF DEFAULT OR BREACH UNDER ANY IBIS CONTRACT.  NO EVENT HAS OCCURRED WHICH
WITH THE PASSAGE OF TIME OR THE GIVING OF NOTICE OR BOTH WOULD RESULT IN A
DEFAULT, BREACH OR EVENT OF NONCOMPLIANCE BY EITHER IBIS OR ISIS OR, TO ISIS’ OR
IBIS’ KNOWLEDGE, ANY OTHER PARTY UNDER ANY SUCH IBIS CONTRACT.  NEITHER ISIS NOR
IBIS HAS RECEIVED NOTICE OF THE INTENTION OF ANY PARTY TO CANCEL OR TERMINATE
ANY IBIS CONTRACT AND, TO ISIS’ OR IBIS’ KNOWLEDGE, THERE HAS NOT BEEN ANY
BREACH OR ANTICIPATED BREACH BY THE OTHER PARTIES TO ANY SUCH IBIS CONTRACT.

 

(III)          ISIS HAS PROVIDED AMI WITH A TRUE AND CORRECT COPY OF ALL IBIS
CONTRACTS IN EACH CASE TOGETHER WITH ALL AMENDMENTS, WAIVERS, OR OTHER CHANGES
THERETO (ALL OF WHICH ARE DISCLOSED ON SCHEDULE 5.1(X)(I)).  SCHEDULE
5.1(X)(I) CONTAINS AN ACCURATE AND COMPLETE DESCRIPTION OF ALL MATERIAL TERMS OF
ALL ORAL CONTRACTS REFERRED TO THEREIN.

 

(y)   Insurance.  Schedule 5.1(y) attached hereto lists and briefly describes
each insurance policy maintained by Ibis or Isis with respect to the Business
(the “Insurance Policies”), together with a claims history for the past five
(5) years for Ibis and, with respect to the Business, Isis.  All of the
Insurance Policies are in full force and effect, and neither Ibis nor Isis with
respect to the Business is in default with respect to its obligations under any
such insurance policy and neither Ibis nor Isis, with respect to the Business
has been denied insurance coverage.  Neither Ibis nor Isis, with respect to the
Business has any self-insurance or co-insurance programs.

 

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(z)    Customers and Suppliers. Schedule 5.1(z) accurately sets forth a list of
the Business’ top ten customers by revenue for the fiscal year ended
[December 31, 2007] and the [        ] month period ended
[                        ].  Except as set forth on Schedule 5.1(z), neither
Isis nor Ibis has received any indication from any material customer of the
Business or any Governmental Authority to the effect that, and neither Isis nor
Ibis has any reason to believe that, such customer or Governmental Authority
will in the future stop, or materially decrease the rate of buying products or
services from the Business.  Schedule 5.1(z) also accurately sets forth a list
of the Business’ top ten suppliers by dollar amount for the [        ] month
period ended [                        ].  Except as set forth on Schedule
5.1(z), neither Isis nor Ibis has received any indication from any material
supplier of the Business to the effect that, and neither Isis nor Ibis has any
reason to believe that, such supplier will stop or materially decrease the rate
of providing products or services to the Business and its customers.  Neither
Isis nor Ibis is involved in any material dispute with any customer or supplier
of or to the Business.

 

(aa) No Material Adverse Effect.  Since September 30, 2007, there has been no
Material Adverse Effect.

 

(bb) Names and Locations.  During the five-year period prior to the date hereof,
neither Ibis nor the Business has used any name or names under which it has
invoiced account debtors or maintained records concerning the assets used in the
operation of the Business, other than Ibis Biosciences, Inc. and all of the
assets used in the operation of the Business are located at the Leased Real
Property.

 

(cc) Directors, Officers and Bank Accounts.  Schedule 5.1(cc) (i) sets forth a
true and correct list of the directors and officers of Ibis and the title of
each such officer.  Schedule 5.1(cc) (ii) lists all of Ibis’ bank accounts,
safety deposit boxes and lock boxes (designating each authorized signatory with
respect thereto).

 

(dd) Regulatory Filings.  Ibis and Isis have made available for inspection by
AMI all material registrations, filings or submissions made with any Regulatory
Authority or the SEC, and reports of audits ever issued by any Governmental
Authority made by or with respect to Ibis or the Business.  Ibis or Isis has
timely filed, or caused to be timely filed, all material reports, statements,
documents, registrations, filings or submissions required to be filed by Ibis or
the Business with any Governmental Authority in connection with the operation of
Ibis or the Business.  All such registrations, filings and submissions are in
material compliance in all respects with all Laws when filed or as amended or
supplemented, and no deficiencies have been asserted by any such Governmental
Authority with respect to such registrations, filings or submissions.

 

(ee) Disclosure.  Neither the Transaction Documents, nor any of the Schedules
delivered in connection herewith or therewith, contains any untrue statement of
a material fact or omits a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which they were
made, not misleading.  To Isis’ or Ibis’ Knowledge, there is no event,
circumstance or other fact which Isis or Ibis has not disclosed to AMI in
writing which has had or would reasonably be expected to have a Material Adverse
Effect.

 

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5.2           Representations And Warranties Of AMI.  As a material inducement
to Isis to enter into this Agreement, AMI hereby represents and warrants to Isis
that, except as set forth in the corresponding Section of the Disclosure
Schedules, the following representations and warranties are as of the date
hereof, and will be as of the Closing Date, true and correct:

 

(a)   Power and Authority.  AMI has the power, authority and the legal right to
enter into the Transaction Documents and to perform its obligations hereunder
and thereunder, and it has taken all necessary action required to authorize the
execution and delivery of each such agreement and the performance of its
obligations hereunder and thereunder.

 

(b)   Enforceability. Each of the Transaction Documents has been duly executed
and delivered on behalf of AMI and constitutes its legal, valid and binding
obligation and is enforceable against it in accordance with its terms subject to
the effects of bankruptcy, insolvency or other Laws of general application
affecting the enforcement of creditor rights.

 

(c)   Governmental Authority; Consents.  All necessary consents, approvals and
authorizations of all Governmental Authorities and other parties required to be
obtained by AMI in connection with the execution and delivery of the Transaction
Documents and the performance of its obligations hereunder and thereunder have
been obtained.

 

(d)   No Conflicts.  The execution and delivery of the Transaction Documents by
AMI and the performance of its obligations hereunder and thereunder (i) do not
conflict with or violate any requirement of Applicable Law or any provision of
its certificate of incorporation or bylaws and (ii) do not require any notice,
conflict with, violate, or breach or constitute a default or require any consent
not already obtained or give rise to any termination or acceleration right
under, any contractual obligation by which such Party is bound.

 

(e)   Due Organization; Qualification.  AMI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to enter into the Transaction Documents
and to perform its obligations hereunder and thereunder.

 

(f)    Investment Representations.  AMI understands that the Remaining Shares
have not been registered under the Securities Act.  AMI also understands that
the Remaining Shares are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon AMI’s
representations contained in this Agreement.  AMI hereby represents and warrants
as follows:

 

(i)            AMI Bears Economic Risk.  AMI may be required to bear the
economic risk of its investment in the Remaining Shares indefinitely unless the
Remaining Shares are registered pursuant to the Securities Act, or an exemption
from registration is available.

 

(ii)           Acquisition for Own Account.  AMI is acquiring the Remaining
Shares for AMI’s own account for investment only, and not with a view towards
their distribution.

 

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(iii)          Accredited Investor.  AMI represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.

 

(iv)          Ibis Information.  Ibis and Isis have given AMI an opportunity to
discuss Ibis’ business, management and financial affairs with directors,
officers and management of Ibis and AMI has had an opportunity to review Ibis’
operations and facilities.

 

(v)           Rule 144.  AMI acknowledges and agrees that the Remaining Shares
are “restricted securities” as defined in Rule 144 promulgated under the
Securities Act as in effect from time to time and must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available.  AMI has been advised or is aware of the
provisions of Rule 144, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things: the availability of certain current public information about
Ibis, the resale occurring following the required holding period under Rule 144
and the number of shares being sold during any three-month period not exceeding
specified limitations.

 

(g)   Legends.  AMI understands and agrees that the certificates evidencing the
Remaining Shares will bear legends relating to restrictions on Transfer under
federal and state securities Laws and legends required under applicable state
securities Laws.

 

Section 6.      RESERVED.

 

Section 7.      PRE-CLOSING COVENANTS.  The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing:

 

7.1           General.  Each of the Parties shall use its commercially
reasonable efforts to take all action and to do all things necessary in order to
consummate and make effective the transactions contemplated by this Agreement.

 

7.2           Affirmative Covenants of Isis and Ibis.  Except as otherwise
contemplated by this Agreement, between the date hereof and the Closing, each of
Isis, with respect to the Business, and Ibis shall:

 

(A)           CONDUCT THE BUSINESS ONLY IN THE ORDINARY COURSE; USE COMMERCIALLY
REASONABLE EFFORTS TO CARRY ON THE BUSINESS IN THE SAME MANNER AS CURRENTLY
CONDUCTED AND TO KEEP IBIS’ BUSINESS ORGANIZATION AND PROPERTIES INTACT,
INCLUDING ITS BUSINESS OPERATIONS, PHYSICAL FACILITIES, WORKING CONDITIONS,
EXECUTIVES AND KEY EMPLOYEES AND IBIS’ AND THE BUSINESS’ RELATIONSHIPS WITH
LESSORS, LICENSORS, SUPPLIERS, CUSTOMERS, CARRIERS, CONSULTANTS, INDEPENDENT
CONTRACTORS AND OTHERS HAVING BUSINESS RELATIONS WITH IBIS OR THE BUSINESS;

 

(B)           KEEP IN FULL FORCE AND EFFECT IBIS’ ORGANIZATIONAL EXISTENCE AND
ALL OF ITS AND THE BUSINESS’ ASSETS, CONTRACTS, RIGHTS, FRANCHISES, AND BUSINESS
IP AND USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE IBIS’ AND THE BUSINESS’
CURRENT INSURANCE (OR REINSURANCE) POLICIES NOT TO BE CANCELED OR TERMINATED OR
ANY OF THE COVERAGE THEREUNDER TO LAPSE;

 

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(C)           MAINTAIN THE REAL PROPERTY AND OTHER ASSETS OF IBIS (INCLUDING THE
BUSINESS IP) IN GOOD REPAIR, ORDER AND CONDITION (NORMAL WEAR AND TEAR EXCEPTED)
CONSISTENT WITH CURRENT NEEDS, REPLACE IN ACCORDANCE WITH PRUDENT PRACTICES
INOPERABLE, WORN OUT OR OBSOLETE ASSETS WITH ASSETS OF GOOD QUALITY CONSISTENT
WITH PRUDENT PRACTICES AND CURRENT NEEDS AND, IN THE EVENT OF A CASUALTY, LOSS
OR DAMAGE TO ANY OF SUCH ASSETS OR PROPERTIES BEFORE THE CLOSING DATE, EITHER
REPAIR OR REPLACE SUCH DAMAGED PROPERTY OR USE THE PROCEEDS OF SUCH INSURANCE IN
SUCH OTHER MANNER AS MUTUALLY AGREED UPON BY ISIS AND AMI; AND

 

(D)           MAINTAIN THE BOOKS, ACCOUNTS, AND RECORDS OF IBIS CONSISTENT WITH
PAST PRACTICE AND MAKE CAPITAL EXPENDITURES AT LEVELS CONSISTENT WITH THE PAST
PRACTICES OF IBIS AND THE BUSINESS.

 

7.3           Negative Covenants of Isis.  Except as expressly contemplated by
this Agreement or as set forth on Schedule 7.3, between the date hereof and the
Closing, Ibis shall not and, with respect to Ibis and the Business, Isis shall
not and shall cause Ibis not to:

 

(A)           AMEND OR WAIVE ANY PROVISION OF IBIS’ CERTIFICATE OF
INCORPORATION;

 

(B)           TAKE ANY ACTION THAT WOULD REASONABLY BE EXPECTED TO ADVERSELY
AFFECT THE RIGHTS, PREFERENCES OR PRIVILEGES OF THE SHARES, THE ADDITIONAL
SHARES OR THE REMAINING SHARES;

 

(C)           TAKE ANY ACTION BY WRITTEN STOCKHOLDER CONSENT OF IBIS WITHOUT AT
LEAST 2 BUSINESS DAYS PRIOR WRITTEN NOTICE TO AMI;

 

(D)           REDEEM, REPURCHASE, PAY OR DECLARE DIVIDENDS OR OTHER
DISTRIBUTIONS WITH RESPECT TO ANY CAPITAL STOCK OF IBIS;

 

(E)           ISSUE ANY CAPITAL STOCK OF IBIS OR ANY RIGHTS TO ACQUIRE CAPITAL
STOCK OF IBIS;

 

(F)            AUTHORIZE OR DESIGNATE, WHETHER BY RECLASSIFICATION OR OTHERWISE,
ANY NEW CLASS OR SERIES OF CAPITAL STOCK OF IBIS OR ANY INCREASE IN THE
AUTHORIZED OR DESIGNATED NUMBER OF ANY SUCH CLASS OR SERIES OF CAPITAL STOCK OF
IBIS;

 

(G)           ENTER INTO ANY TRANSACTION OF MERGER, CONSOLIDATION OR SALE OF
CONTROL, OR LIQUIDATE, REORGANIZE, RECAPITALIZE, WIND UP OR DISSOLVE IBIS, OR
TRANSFER ANY PORTION OF IBIS’ CAPITAL STOCK, PROPERTIES, ASSETS OR BUSINESS
OTHER THAN TRANSFERS OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS;

 

(H)           SELL, TRANSFER, ASSIGN, LICENSE OR SUBLICENSE, OR ALLOW ANY
ENCUMBRANCE ON ANY BUSINESS IP OTHER THAN (I) RIGHTS OF THE U.S. FEDERAL
GOVERNMENT IN INTELLECTUAL PROPERTY PURSUANT TO THE GOVERNMENT CONTRACTS SET
FORTH ON SCHEDULE 5.1(L)(III) OR NEW GOVERNMENT CONTRACTS ENTERED INTO IN THE
ORDINARY COURSE OF BUSINESS AND (II) END USER LICENSE AGREEMENTS RELATED TO THE
SOFTWARE EMBODIED IN THE T5000 BIOSENSOR SYSTEMS THAT ARE ISSUED IN THE ORDINARY
COURSE OF BUSINESS SOLELY TO PURCHASERS OF T5000 BIOSENSOR SYSTEMS;

 

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(I)            ABANDON OR PERMIT TO LAPSE ANY BUSINESS IP OTHER THAN PATENTS
EXPIRING AT THE END OF THEIR STATUTORY TERMS (AND NOT AS A RESULT OF ANY ACT OR
OMISSION BY EITHER IBIS OR ISIS, INCLUDING, WITHOUT LIMITATION, A FAILURE TO PAY
ANY REQUIRED MAINTENANCE FEES) AND LIMITATIONS TO THE SCOPE OF CLAIMS OF ANY
PENDING PATENT APPLICATION MADE DURING THE ORDINARY COURSE OF PROSECUTING SUCH
PENDING PATENT APPLICATIONS;

 

(J)            DISCLOSE ANY CONFIDENTIAL INFORMATION OF THE BUSINESS TO ANY
PERSON (OTHER THAN AMI AND ITS REPRESENTATIVES) OTHER THAN IN THE ORDINARY
COURSE OF BUSINESS;

 

(K)           CREATE, INCUR, GUARANTEE, ASSUME, OR BE LIABLE FOR ANY
INDEBTEDNESS, OTHER THAN PERMITTED INDEBTEDNESS IN THE ORDINARY COURSE OF
BUSINESS;

 

(L)            SUBJECT ANY TANGIBLE ASSET OF THE BUSINESS TO ANY ENCUMBRANCE,
OTHER THAN PERMITTED ENCUMBRANCES IN THE ORDINARY COURSE OF BUSINESS AND RIGHTS
OF THE U.S. FEDERAL GOVERNMENT IN CERTAIN EQUIPMENT PURCHASED USING GOVERNMENT
FUNDS PURSUANT TO (I) THE GOVERNMENT CONTRACTS SET FORTH ON SCHEDULE
5.1(L)(III) OR (II) NEW GOVERNMENT CONTRACTS ENTERED INTO IN THE ORDINARY COURSE
OF BUSINESS;

 

(M)          (I) MAKE ANY LOAN TO OR ENTER INTO ANY TRANSACTION WITH ANY
OFFICER, EMPLOYEE, PARTNER OR AFFILIATE, (II) INCREASE ANY OFFICER’S, EMPLOYEE’S
OR PARTNER’S COMPENSATION OUTSIDE THE ORDINARY COURSE OF BUSINESS,
(III) INCREASE OR ACCELERATE ANY BENEFIT, VESTING SCHEDULE, OBLIGATION, SUBSIDY
OR SIMILAR FEATURE UNDER ANY PLAN OUTSIDE THE ORDINARY COURSE OF BUSINESS,
(IV) ESTABLISH ANY PLAN (EXCEPT FOR THE PERMITTED EMPLOYEE COMPENSATION PLAN AS
CONTEMPLATED BY THIS MASTER AGREEMENT), OR (V) AMEND ANY PLAN OUTSIDE THE
ORDINARY COURSE OF BUSINESS OR COMMENCE MAKING CONTRIBUTIONS TO ANY
MULTIEMPLOYER PLAN;

 

(N)           MAKE ANY ACQUISITION, BY MEANS OF MERGER, CONSOLIDATION OR
OTHERWISE, OR ANY DISPOSITION, OF ASSETS OR CAPITAL STOCK OF ANY OTHER PERSON;

 

(O)           MAKE ANY LOANS OR CAPITAL CONTRIBUTIONS TO, OR INVESTMENTS IN, ANY
OTHER PERSON, EXCEPT ADVANCES TO EMPLOYEES FOR REASONABLE EXPENSES INCURRED IN
THE ORDINARY COURSE OF BUSINESS;

 

(P)           ENTER INTO ANY CONTRACT OR AMEND ANY CONTRACT REQUIRED TO BE
DISCLOSED OR TO HAVE BEEN DISCLOSED ON SCHEDULE 5.1(L) OR SCHEDULE 5.1(X),
EXCEPT IN THE ORDINARY COURSE OF BUSINESS;

 

(Q)           ENTER INTO ANY STRATEGIC ALLIANCE, JOINT VENTURE OR JOINT
MARKETING ARRANGEMENT OR AGREEMENT;

 

(R)            DELAY OR DEFER MAINTENANCE OR REPAIRS ON ANY OF IBIS’ ASSETS;

 

(S)           WAIVE OR RELEASE ANY MATERIAL CLAIM OF IBIS;

 

(T)            EXCEPT AS MAY BE REQUIRED BY GAAP, MAKE ANY MATERIAL CHANGES IN
POLICIES OR PRACTICES RELATING TO SELLING PRACTICES, RETURNS, DISCOUNTS OR OTHER
TERMS OF THE BUSINESS OR ACCOUNTING THEREFOR, OR IN RESPECT OF THE PAYMENT OF
TRADE PAYABLES OR OTHER SIMILAR LIABILITIES INCURRED IN CONNECTION WITH THE
OPERATION OF IBIS;

 

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(U)           INCREASE OR DECREASE MARKETING OR PROMOTIONAL SPENDING IN ANY
MATERIAL RESPECT FROM THE RATES ESTABLISHED AS OF THE DATE HEREOF, OTHER THAN IN
THE ORDINARY COURSE OF BUSINESS;

 

(V)           INCUR OR GUARANTEE ANY LIABILITY OTHER THAN IN CONNECTION WITH THE
PERFORMANCE OR CONSUMMATION OF THIS AGREEMENT;

 

(W)          INCUR OR COMMIT TO INCUR ANY CAPITAL EXPENDITURES IN EXCESS OF
$100,000 WHICH WOULD BE PAYABLE AFTER THE CLOSING;

 

(X)            TAKE OR OMIT TO TAKE ANY ACTION THAT HAS OR COULD REASONABLY BE
EXPECTED TO HAVE THE EFFECT OF ACCELERATING TO PRE-CLOSING PERIODS SALES THAT
WOULD OTHERWISE BE EXPECTED TO OCCUR AFTER THE CLOSING OR OTHERWISE IN
ANTICIPATION OF THE TRANSACTIONS CONTEMPLATED HEREBY;

 

(Y)           TAKE OR OMIT TO TAKE ANY ACTION THAT HAS OR COULD REASONABLY BE
EXPECTED TO HAVE THE EFFECT OF DECELERATING TO POST-CLOSING PERIODS ANY PAYMENTS
OR LIABILITIES THAT WOULD OTHERWISE BE EXPECTED TO OCCUR PRIOR TO THE CLOSING OR
OTHERWISE IN ANTICIPATION OF THE TRANSACTIONS CONTEMPLATED HEREBY;

 

(Z)            EXCEPT AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT, PAY,
DISCHARGE, SETTLE OR SATISFY ANY CLAIM, LIABILITY OR OBLIGATION OR LITIGATION
(WHETHER OR NOT COMMENCED PRIOR TO THE DATE OF THIS AGREEMENT) OUTSIDE THE
ORDINARY COURSE OF BUSINESS;

 

(AA) TAKE ANY OTHER ACTION WHICH WOULD REASONABLY BE EXPECTED TO INTERFERE WITH,
IMPEDE OR MATERIALLY DELAY THE TRANSACTIONS CONTEMPLATED HEREBY OR DILUTE THE
BENEFITS HEREOF TO AMI AND ITS AFFILIATES; OR

 

(BB) COMMIT, OR ENTER INTO ANY AGREEMENT TO DO, ANY OF THE FOREGOING.

 

7.4           Notices and Consents.  Each of the Parties will give any notices
to, make any filings with and use its commercially reasonable efforts to obtain
any authorizations, consents and approvals of third parties and Governmental
Authorities in connection with the matters referred to in Sections
5.1(c) (Governmental Authority; Consents) and 5.1(d) (No Conflicts) above,
including without limitation the transfers of Licenses.

 

7.5           Full Access.  Ibis will cooperate with AMI in AMI’s investigation
of Ibis and the Business, and Ibis will permit AMI and its employees, agents,
accountants, attorneys, environmental consultants, and other authorized
representatives to (i) have full access to the premises, books and records of
Ibis and, to the extent related to the Business, Isis, upon reasonable prior
notice during normal business hours, (ii) visit and inspect any of the
properties of Ibis and, to the extent related to the Business, Isis, upon
reasonable prior notice during normal business hours and (iii) discuss the
affairs, finances and accounts of Ibis with the officers, directors, employees,
key customers, suppliers and independent accountants of Ibis.

 

7.6           Transition Assistance.  From and after the date hereof, neither
Isis nor Ibis will in any manner take or cause to be taken any action which is
designed, intended or might reasonably be anticipated to have the effect of
discouraging current or potential customers,

 

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suppliers, licensors, lessors, independent contractors, consultants, employees
and other associates of Ibis or the Business from establishing or maintaining
the same business relationships with AMI after the date of this Agreement as
were maintained with Ibis or the Business prior to the date of this Agreement.

 

7.7           Notice of Developments.

 

(A)   ISIS SHALL PROMPTLY (ONCE ISIS OR IBIS OBTAINS KNOWLEDGE THEREOF, BUT IN
ANY EVENT WITHIN [***] OF SUCH KNOWLEDGE) INFORM AMI IN WRITING OF ANY
INACCURACY IN OR BREACH OF THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SECTION 5.1 OR ANY BREACH OF ANY COVENANT HEREUNDER BY IBIS OR ISIS.  NO SUCH
DISCLOSURE BY ISIS PURSUANT TO THIS SECTION 7.7, HOWEVER, SHALL BE DEEMED TO
CURE ANY BREACH OF ANY REPRESENTATION OR WARRANTY OR COVENANT CONTAINED HEREIN
FOR PURPOSES OF DETERMINING THE FULFILLMENT OF THE CONDITIONS SET FORTH IN
SECTIONS 4.1(A) AND 4.1(B) AS OF THE CLOSING OR FOR PURPOSES OF DETERMINING THE
LIABILITY OF ISIS WITH RESPECT THERETO UNDER SECTIONS 8.2(A)(I), 8.2(A)(II) OR
8.2(A)(IV).

 

(B)   AMI SHALL PROMPTLY (ONCE AMI OBTAINS KNOWLEDGE THEREOF, BUT IN ANY EVENT
WITHIN THREE (3) BUSINESS DAYS OF SUCH KNOWLEDGE) INFORM ISIS IN WRITING OF ANY
INACCURACY IN OR BREACH OF THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SECTION 5.2 OR ANY BREACH OF ANY COVENANT HEREUNDER BY AMI.  NO SUCH DISCLOSURE
BY AMI PURSUANT TO THIS SECTION 7.7, HOWEVER, SHALL BE DEEMED TO CURE ANY BREACH
OF ANY REPRESENTATION OR WARRANTY OR COVENANT CONTAINED HEREIN FOR PURPOSES OF
DETERMINING THE FULFILLMENT OF THE CONDITIONS SET FORTH IN SECTIONS4.2(A) AND
4.2(B) AS OF THE CLOSING OR FOR PURPOSES OF DETERMINING THE ACCURACY OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 5.2 AND THE LIABILITY OF AMI
WITH RESPECT THERETO UNDER SECTION 8.2(C).

 

7.8           Exclusivity.

 

(A)   UNTIL THE CLOSING, NEITHER ISIS, NOR IBIS NOR ANY OF THEIR RESPECTIVE
AFFILIATES SHALL (AND EACH SHALL (I) CAUSE ITS REPRESENTATIVES AND (II) INSTRUCT
ITS INVESTMENT BANKERS, ATTORNEYS AND ACCOUNTANTS, NOT TO), DIRECTLY OR
INDIRECTLY, ENCOURAGE, SOLICIT, APPROVE OR RECOMMEND OR PARTICIPATE IN OR
INITIATE DISCUSSIONS OR NEGOTIATIONS WITH, OR PROVIDE ANY INFORMATION TO, ANY
PERSON OR GROUP (OTHER THAN AMI AND ITS REPRESENTATIVES) CONCERNING ANY PURCHASE
OFFER.

 

(B)   ISIS SHALL PROMPTLY, BUT IN ANY EVENT WITHIN [***] [***], NOTIFY AMI OF
THE EXISTENCE OF ANY ATTEMPTED [***] BY A NON-INTERMEDIARY PRINCIPAL RECEIVED BY
IBIS OR ISIS OR THEIR RESPECTIVE REPRESENTATIVES, REGARDING ANY [***] AND IBIS
AND ISIS SHALL PROMPTLY, BUT IN ANY EVENT WITHIN [***] [***], COMMUNICATE TO
[***] WHICH THEY MAY RECEIVE (AND WILL IMMEDIATELY PROVIDE TO AMI [***] AND THE
[***].  ISIS AND IBIS SHALL PROMPTLY PROVIDE TO AMI ANY [***] PROVIDED TO ANY
OTHER PERSON BY OR ON BEHALF OF IBIS OR ISIS IN CONNECTION WITH [***].

 

7.9           Indebtedness and Intercompany Accounts.

 

(A)   PRIOR TO THE CLOSING, ISIS (I) SHALL ASSUME, EXTINGUISH, REPAY OR
CONTRIBUTE AS EQUITY, OR SHALL CAUSE TO BE ASSUMED, EXTINGUISHED, REPAID OR
CONTRIBUTED AS EQUITY, ALL INDEBTEDNESS AND ANCILLARY OBLIGATIONS THERETO OWED
BY IBIS TO ANY PERSON (INCLUDING ISIS AND ITS AFFILIATES) (NOT INCLUDING THE
AMOUNT OF ANY INDEBTEDNESS THAT IS PERMITTED INDEBTEDNESS UNDER

 

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CLAUSES (I) OR (II) OF THE PERMITTED INDEBTEDNESS DEFINITION THAT IS OWED TO ANY
PERSON OTHER THAN ISIS OR ANY OF ITS AFFILIATES), SUCH THAT IBIS SHALL HAVE NO
INDEBTEDNESS OR ANCILLARY OBLIGATIONS TO ANY PERSON (NOT INCLUDING THE AMOUNT OF
ANY INDEBTEDNESS THAT IS PERMITTED INDEBTEDNESS UNDER CLAUSES (I) OR (II) OF THE
PERMITTED INDEBTEDNESS DEFINITION THAT IS OWED TO ANY PERSON OTHER THAN ISIS OR
ANY OF ITS AFFILIATES) AND (II) SHALL, AND SHALL CAUSE ITS AFFILIATES TO, REPAY
IN FULL ALL INDEBTEDNESS AND ANCILLARY OBLIGATIONS THERETO IT OR THEY OWE TO
IBIS.

 

(B)   PRIOR TO THE CLOSING, ISIS SHALL, AND SHALL CAUSE ITS AFFILIATES TO,
SETTLE OR EXTINGUISH ALL INTERCOMPANY RECEIVABLES AND PAYABLES THAT WERE
INCURRED ON OR PRIOR TO THE CLOSING AND THAT AROSE FROM TRANSACTIONS BETWEEN
ISIS OR ITS AFFILIATES (OTHER THAN IBIS), ON THE ONE HAND, AND IBIS, ON THE
OTHER HAND.

 

(C)   AT THE CLOSING, ISIS SHALL CAUSE TO BE DELIVERED TO AMI (I) THE REMAINING
SHARES FREE AND CLEAR OF ALL ENCUMBRANCES, (II) THE ASSETS OF IBIS FREE AND
CLEAR OF ALL ENCUMBRANCES, OTHER THAN PERMITTED ENCUMBRANCES AND (III) PAYOFF
LETTERS WITH RESPECT TO ANY INDEBTEDNESS OF IBIS TO BE PAID BY AMI AT THE
CLOSING (IN EACH CASE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AMI).

 

(D)   AT OR PRIOR TO THE CLOSING, ISIS AND IBIS SHALL TERMINATE THE CORPORATE
SERVICES AGREEMENT AND SHALL AMEND THE CONTRIBUTION AGREEMENT AS REASONABLY
REQUESTED BY AMI.

 

7.10         Distribution of Cash and Grants Receivable.

 

Immediately prior to the Closing, Ibis may distribute (i) all of its cash and
cash equivalents and (ii) Grants Receivable to Isis.

 

Section 8.              ADDITIONAL AGREEMENTS.

 

8.1           Survival.  The covenants in this Agreement shall survive the
Closing indefinitely, except as otherwise provided herein.  The representations
and warranties in this Agreement shall survive the Closing as follows:

 

(A)   THE FUNDAMENTAL ISIS REPRESENTATIONS AND FUNDAMENTAL AMI REPRESENTATIONS
SHALL TERMINATE ON [***];

 

(B)   THE REPRESENTATIONS AND WARRANTIES IN SECTION 5.1(O) (TAX MATTERS),
SECTION 5.1(P) (EMPLOYEES) AND SECTION 5.1(R) (ENVIRONMENT, HEALTH AND SAFETY)
SHALL TERMINATE [***] AND THE REPRESENTATIONS AND WARRANTIES IN
SECTION 5.1(L) (INTELLECTUAL PROPERTY) SHALL TERMINATE ON THE [***] ANNIVERSARY
OF THE CLOSING DATE; AND

 

(C)   ALL OTHER REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT SHALL TERMINATE
ON THE [***] ANNIVERSARY OF THE CLOSING DATE.

 

Notwithstanding the foregoing, claims for indemnification pursuant to
Section 8.2 as to which the Indemnified Party has given the Indemnifying Party
proper notice pursuant to Section 10.6 prior to the expiration of the applicable
survival period shall survive such expiration

 

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until such claims are resolved by written agreement of the Parties or by order
of a court of competent jurisdiction.

 

8.2           Indemnification.

 

(A)   ISIS SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS AMI, IBIS, THEIR RESPECTIVE
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES, AGENTS AND
AFFILIATES (COLLECTIVELY, THE “AMI GROUP”) AGAINST ANY LOSSES WHICH ANY OF THEM
MAY SUFFER, SUSTAIN, OR BECOME SUBJECT TO, AS A RESULT OF:

 

(I)            THE BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY EITHER ISIS
OR IBIS IN THE TRANSACTION DOCUMENTS OR IN ANY CERTIFICATE DELIVERED BY ISIS OR
IBIS PURSUANT HERETO OR THERETO;

 

(II)           THE BREACH OF ANY COVENANT OR AGREEMENT MADE BY EITHER ISIS OR
IBIS IN THE TRANSACTION DOCUMENTS OR IN ANY CERTIFICATE DELIVERED BY ISIS OR
IBIS PURSUANT HERETO OR THERETO;

 

(III)          (A) ANY PLAN OF ANY ENTITY THAT TOGETHER WITH IBIS CONSTITUTES A
CONTROLLED GROUP OF ENTITIES WITH ISIS UNDER SECTION 414(B), (C), (M) OR (O) OF
THE CODE, (B) ANY FORMER EMPLOYEE OF IBIS OR ISIS WHO IS NOT AN IBIS EMPLOYEE
(REGARDLESS OF WHEN SUCH LOSS ARISES) AND (C) ANY IBIS EMPLOYEES, IN EACH CASE,
INCURRED ON OR PRIOR TO THE CLOSING DATE; AND

 

(IV)          THE CONDUCT OR OPERATION OF THE BUSINESS OR OWNERSHIP OR OCCUPANCY
OF THE ASSETS USED IN THE BUSINESS ON OR PRIOR TO THE CLOSING DATE.

 

(B)   WITH RESPECT TO CLAIMS FOR INDEMNIFICATION PURSUANT TO SECTIONS 8.2(A)(I),
8.2(A)(III) OR 8.2(A)(IV) ABOVE, ISIS WILL BE LIABLE TO THE AMI GROUP FOR ANY
SUCH LOSSES ONLY IF THE AGGREGATE AMOUNT OF ALL SUCH LOSSES RELATING TO ALL SUCH
BREACHES EXCEEDS [***], IN WHICH CASE ISIS WILL BE [***].  NOTWITHSTANDING THE
FOREGOING, THE RECOVERY LIMITATIONS SET FORTH IN THIS SECTION 8.2(B) SHALL NOT
APPLY TO ANY LOSSES SUFFERED AS A RESULT OF THE BREACH BY ISIS OR IBIS OF ANY
[***].

 

(C)   AMI SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS ISIS, ITS RESPECTIVE
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AFFILIATES (THE “SELLER GROUP”)
AGAINST ANY LOSSES WHICH ANY OF THEM MAY SUFFER, SUSTAIN OR BECOME SUBJECT TO,
AS THE RESULT OF:

 

(I)            THE BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY AMI IN THE
TRANSACTION DOCUMENTS OR IN ANY CERTIFICATE DELIVERED BY AMI PURSUANT HERETO OR
THERETO;

 

(ii)           the breach of any covenant or agreement made by AMI in the
Transaction Documents or in any certificate delivered by AMI pursuant hereto or
thereto; and

 

(iii)          the conduct or operation of the Business or ownership or
occupancy of the assets used in the Business after the Closing Date.

 

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(D)   WITH RESPECT TO CLAIMS FOR INDEMNIFICATION PURSUANT TO SECTIONS
8.2(C)(I) AND 8.2(C)(III) ABOVE, AMI WILL BE LIABLE TO THE SELLER GROUP FOR ANY
SUCH LOSSES ONLY IF THE AGGREGATE AMOUNT OF ALL SUCH LOSSES RELATING TO ALL SUCH
BREACHES EXCEEDS [***], IN WHICH CASE AMI WILL BE [***].  NOTWITHSTANDING THE
FOREGOING, THE RECOVERY LIMITATIONS SET FORTH IN THIS SECTION 8.2(D) SHALL NOT
APPLY TO ANY LOSSES SUFFERED AS A RESULT OF THE BREACH BY AMI OF ANY [***].

 

(E)   IF ANY THIRD PARTY SHALL NOTIFY ANY PARTY TO THIS AGREEMENT (THE
“INDEMNIFIED PARTY”) OF ANY MATTER WHICH MAY GIVE RISE TO A CLAIM (A “THIRD
PARTY CLAIM”) FOR INDEMNIFICATION AGAINST ANY OTHER PARTY TO THIS AGREEMENT (THE
“INDEMNIFYING PARTY”) UNDER THIS SECTION 8.2, THEN THE INDEMNIFIED PARTY SHALL
NOTIFY THE INDEMNIFYING PARTY THEREOF; PROVIDED THAT THE FAILURE TO SO NOTIFY
THE INDEMNIFYING PARTY SHALL NOT RELIEVE THE INDEMNIFYING PARTY OF ITS
OBLIGATIONS HEREUNDER EXCEPT TO THE EXTENT SUCH FAILURE SHALL HAVE ACTUALLY
MATERIALLY PREJUDICED THE INDEMNIFYING PARTY.  ONCE THE INDEMNIFIED PARTY HAS
GIVEN NOTICE OF THE MATTER TO THE INDEMNIFYING PARTY, THE INDEMNIFIED PARTY
SHALL DEFEND AGAINST THE MATTER IN ANY MANNER IT REASONABLY MAY DEEM
APPROPRIATE.  THE INDEMNIFYING PARTY MAY, AT ITS SOLE COST AND EXPENSE,
PARTICIPATE IN THE DEFENSE OF SUCH CLAIM WITH CO-COUNSEL OF ITS CHOICE. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE INDEMNIFYING PARTY SHALL
NOT HAVE THE RIGHT TO PARTICIPATE IN SUCH DEFENSE IF THE CLAIM IN WHICH THE
INDEMNIFYING PARTY SEEKS TO PARTICIPATE (I) SEEKS NON-MONETARY RELIEF THAT DOES
NOT SEEK TO OBTAIN A LICENSE OR OTHER ACCESS TO, RESTRICT THE SCOPE OF, OR
ADVERSELY AFFECT THE ENFORCEABILITY OF, ANY INTELLECTUAL PROPERTY CONTROLLED BY
THE INDEMNIFYING PARTY, (II) INVOLVES CRIMINAL ALLEGATIONS AGAINST AN
INDEMNIFIED PARTY OR (III) IS ONE IN WHICH THE INDEMNIFYING PARTY IS ALSO A
PARTY AND JOINT REPRESENTATION WOULD BE INAPPROPRIATE OR THERE MAY BE LEGAL
DEFENSES AVAILABLE TO THE INDEMNIFIED PARTY WHICH ARE DIFFERENT FROM OR
ADDITIONAL TO THOSE AVAILABLE TO THE INDEMNIFYING PARTY.  THE INDEMNIFIED PARTY
WILL NOT CONSENT TO THE ENTRY OF ANY JUDGMENT WITH RESPECT TO THE MATTER OR
ENTER INTO ANY SETTLEMENT WITH RESPECT TO THE MATTER WITHOUT THE INDEMNIFYING
PARTY’S PRIOR WRITTEN CONSENT (NOT TO BE UNREASONABLY WITHHELD, CONDITIONED OR
DELAYED).

 

(F)    NONE OF THE AMI GROUP OR THE SELLER GROUP SHALL BE ENTITLED TO RECOVER
ANY LOSSES RELATING TO ANY MATTER ARISING UNDER ONE PROVISION OF THIS AGREEMENT
TO THE EXTENT THAT ANY SUCH PERSON HAS ALREADY RECOVERED LOSSES WITH RESPECT TO
SUCH MATTER PURSUANT TO OTHER PROVISIONS OF THIS AGREEMENT (INCLUDING BUT NOT
LIMITED TO THE EARNOUT PAYMENT REDUCTIONS PROVIDED UNDER SECTIONS 2.3(A) AND
2.3(B)) OR THE MASTER AGREEMENT, IT BEING UNDERSTOOD AND AGREED THAT APPLICATION
OF THE FOREGOING PROVISION SHALL NOT PRECLUDE THE AMI GROUP FROM RECOVERING ANY
LOSSES INCURRED BY THE AMI GROUP IN CONNECTION WITH THE OPERATION OF THE
BUSINESS OR THE EXPLOITATION OF THE BUSINESS IP THAT ARE NOT [***].

 

(G)   IN DETERMINING (I) WHETHER ANY REPRESENTATION, WARRANTY, COVENANT OR
AGREEMENT CONTAINED HEREIN HAS BEEN BREACHED OR (II) THE AMOUNT OF ANY LOSS WITH
RESPECT THERETO, ANY MATERIALITY, MATERIAL ADVERSE EFFECT, OR SIMILAR
QUALIFICATION CONTAINED THEREIN SHALL BE DISREGARDED.

 

(h)           Indemnification for each Loss for which an Indemnifying Party, but
for this Section 8.2(h), would be liable under Section 8.2(a) or
Section 8.2(c) shall be reduced by the amount of any insurance proceeds actually
paid to any member of the AMI Group or the Seller Group, as the case may be, by
any unaffiliated third party with respect to such Loss, in

 

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EACH CASE NET OF ANY LOSSES INCURRED BY ANY MEMBER OF THE AMI GROUP OR THE
SELLER GROUP AS THE CASE MAY BE IN COLLECTING SUCH PROCEEDS OR PAYMENTS;
PROVIDED THAT THIS SECTION 8.2(H) SHALL NOT LIMIT IN ANY RESPECT THE RIGHT OF
ANY MEMBER OF THE AMI GROUP OR THE SELLER GROUP, AS THE CASE MAY BE, TO PURSUE
INDEMNIFICATION FROM AN INDEMNIFYING PARTY HEREUNDER OR FROM RECOVERING FOR ANY
LOSS NOT REDUCED TO ZERO PURSUANT TO THIS SECTION 8.2(H).  NOTHING CONTAINED
HEREIN SHALL BE DEEMED TO CAUSE ANY AMOUNTS FOR WHICH A MEMBER OF THE AMI GROUP
OR THE SELLER GROUP, AS THE CASE MAY BE, WOULD ULTIMATELY BE RESPONSIBLE, AS A
RESULT OF DEDUCTIBLES, SELF-INSURANCE, INDEMNIFICATION OF INSURERS, CAPS OR
SIMILAR ITEMS OR ARRANGEMENTS, TO NOT BE SUBJECT TO INDEMNIFICATION AS “LOSSES”
HEREUNDER..

 

(I)    FOR TAX PURPOSES, THE PARTIES AGREE TO TREAT ALL PAYMENTS MADE UNDER THIS
SECTION 8.2 AS ADJUSTMENTS TO THE PURCHASE PRICE.

 

8.3           Press Release and Announcements.  On the date hereof, the Parties
may issue a press release announcing [the execution of this
Agreement//consummation of the transactions contemplated
hereby](3) substantially in the form attached hereto as Exhibit E.  Each Party
agrees not to issue any other press release or other public statement relating
to or make any public filing with respect to the Transaction Documents or the
transactions contemplated hereby without the prior written consent of the other
Party, which consent will not be unreasonably withheld or delayed.  Each Party
agrees to provide to the other Party a copy of any public announcement or public
filing regarding the Transaction Documents or the subject matter thereof as far
in advance as practicable under the circumstances prior to its scheduled
release.  Except under extraordinary circumstances, each Party will provide the
other with an advance copy of any such announcement at least [***] prior to its
scheduled release.  The contents of any announcement or filing or similar
publicity which has been reviewed, approved and released by the reviewing Party
may be re-released by either Party without a requirement for advance notice or
re-approval.

 

8.4           Expenses.  Except as otherwise provided herein, each of AMI and
Isis will bear its own costs and expenses (including, without limitation, all
legal, accounting, consulting, investment banking, brokerage and other fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby; provided that all costs and expenses associated with
obtaining third party consents with respect to Ibis Contracts or any Restricted
Asset less than or equal to $[***] in the aggregate shall be borne by AMI and
that, in accordance with Section 2.4, all such costs and expenses in excess of
$[***] in the aggregate shall be borne by Isis; provided further, that the
initial premerger notification and filing fee for HSR shall be borne by AMI, but
any fees arising from any subsequent filings with respect thereto shall be borne
equally by AMI and Isis.

 

8.5           Setoff.  AMI and Ibis shall have the right to set off any claim
AMI or Ibis may have against Isis under this Agreement or the Transition
Services Agreement against any amounts owing to Isis under this Agreement;
provided that (i) AMI provides written notice to

 

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(3) Timing of press release TBD.

 

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Isis of such setoff claim and (ii) initiates the ADR process described in
Exhibit C hereto.  AMI shall setoff any amounts pursuant to the foregoing by
[***].

 

8.6           Certain Tax Matters.

 

(A)   TRANSFER TAXES.  ALL TRANSFER, SALES, USE, STAMP, REGISTRATION AND SUCH
TAXES AND FEES (INCLUDING ANY PENALTIES, INTEREST AND FILING EXPENSES) INCURRED
IN CONNECTION WITH THIS AGREEMENT SHALL BE PAID BY ISIS, AND ISIS WILL PREPARE
AND FILE ALL NECESSARY TAX RETURNS AND OTHER DOCUMENTATION WITH RESPECT TO ALL
SUCH TRANSFER, DOCUMENTARY, SALES, USE, STAMP, REGISTRATION AND OTHER TAXES AND
FEES, AND, IF REQUIRED BY APPLICABLE LAW, THE PARTIES WILL, AND WILL CAUSE THEIR
AFFILIATES TO, COOPERATE IN THE EXECUTION OF SUCH TAX RETURNS.  IF AMI OR ONE OF
ITS AFFILIATES IS REQUIRED TO EXECUTE ANY TAX RETURN PREPARED BY ISIS UNDER THIS
SECTION, ISIS WILL PROVIDE A COPY OF SUCH TAX RETURN TO AMI AT LEAST 10 DAYS
PRIOR TO THE ANTICIPATED FILING OF SUCH TAX RETURN AND AMI OR ITS AFFILIATE
SHALL EXECUTE THE TAX RETURN, SUBJECT TO ABBOTT’S REASONABLE APPROVAL.

 

(B)   AD VALOREM TAXES.  ALL REAL PROPERTY TAXES, PERSONAL PROPERTY TAXES, AD
VALOREM OBLIGATIONS AND SIMILAR TAXES IMPOSED ON A PERIODIC BASIS, IN EACH CASE
LEVIED ON IBIS, OTHER THAN TRANSFER TAXES PROVIDED FOR IN SECTION 8.6(A) ABOVE,
FOR A TAXABLE PERIOD WHICH INCLUDES (BUT DOES NOT END ON) THE CLOSING DATE SHALL
BE APPORTIONED BETWEEN ISIS AND AMI AS OF THE CLOSING DATE BASED ON THE NUMBER
OF DAYS OF SUCH TAXABLE PERIOD INCLUDED IN THE PRE-CLOSING TAX PERIOD AND THE
NUMBER OF DAYS OF SUCH TAXABLE PERIOD INCLUDED IN THE POST-CLOSING PERIOD.  ISIS
SHALL BE LIABLE FOR THE PROPORTIONATE AMOUNT OF SUCH TAXES THAT IS ATTRIBUTABLE
TO THE PRE-CLOSING TAX PERIOD.  WITHIN 90 DAYS AFTER THE CLOSING, ISIS AND AMI
SHALL PRESENT A REIMBURSEMENT TO WHICH EACH IS ENTITLED UNDER THIS
SECTION 8.6(B) TOGETHER WITH SUCH SUPPORTING EVIDENCE AS IS REASONABLY NECESSARY
TO CALCULATE THE PRORATION AMOUNT; PROVIDED, THAT IF THE FINAL TAX AMOUNT DUE
FOR A TAXABLE PERIOD THAT INCLUDES THE CLOSING DATE IS NOT DETERMINED WITHIN
SUCH PERIOD, A REIMBURSEMENT SHALL BE BASED ON THE AMOUNT OF THE RELEVANT TAX
FOR THE PRECEDING TAXABLE YEAR, SUBJECT TO AN ADJUSTMENT WITHIN 30 DAYS AFTER
THE FINAL AMOUNT OF SUCH TAX IS DETERMINED.  THE PRORATION AMOUNT SHALL BE PAID
BY THE PARTY OWING IT TO THE OTHER WITHIN 10 DAYS AFTER DELIVERY OF SUCH
STATEMENT.  THEREAFTER, ISIS SHALL NOTIFY AMI UPON RECEIPT OF ANY BILL FOR REAL
OR PERSONAL PROPERTY TAXES RELATING TO IBIS, PART OR ALL OF WHICH ARE
ATTRIBUTABLE TO THE POST-CLOSING TAX PERIOD, AND SHALL PROMPTLY DELIVER SUCH
BILL TO AMI WHO SHALL PAY THE SAME TO THE APPROPRIATE TAXING AUTHORITY, PROVIDED
THAT IF SUCH BILL COVERS ANY PORTION OF THE PRE-CLOSING TAX PERIOD, ISIS SHALL
ALSO REMIT PRIOR TO THE DUE DATE OF ASSESSMENT TO AMI PAYMENT FOR THE
PROPORTIONATE AMOUNT OF SUCH BILL THAT IS ATTRIBUTABLE TO THE PRE-CLOSING TAX
PERIOD.  IN THE EVENT THAT EITHER ISIS OR AMI SHALL THEREAFTER MAKE A PAYMENT
FOR WHICH IT IS ENTITLED TO REIMBURSEMENT UNDER THIS SECTION 8.6(B), THE OTHER
PARTY SHALL MAKE SUCH REIMBURSEMENT PROMPTLY BUT IN NO EVENT LATER THAN 30 DAYS
AFTER THE PRESENTATION OF A STATEMENT SETTING FORTH THE AMOUNT OF REIMBURSEMENT
TO WHICH THE PRESENTING PARTY IS ENTITLED ALONG WITH SUCH SUPPORTING EVIDENCE AS
IS REASONABLY NECESSARY TO CALCULATE THE AMOUNT OF REIMBURSEMENT.  ANY PAYMENT
REQUIRED UNDER THIS SECTION 8.6(B) AND NOT MADE WITHIN 10 DAYS OF DELIVERY OF
THE STATEMENT SHALL BEAR INTEREST AT THE APPLICABLE RATE FOR EACH DAY UNTIL
PAID.

 

(C)   TAX LIABILITY.

 

(i)            Isis shall, in accordance with Section 8.2(a) (except as
explicitly provided in this Section 8.6), indemnify and hold harmless the AMI
Group

 

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FROM ANY AND ALL LOSSES ARISING FROM: (1) ALL TAXES (OR THE NON-PAYMENT THEREOF)
OF IBIS FOR THE PRE-CLOSING TAX PERIOD, (2) ALL TAXES OF ANY MEMBER OF AN
AFFILIATED, CONSOLIDATED, COMBINED OR UNITARY GROUP OF WHICH IBIS (OR ANY
PREDECESSOR THEREOF) IS OR WAS A MEMBER ON OR PRIOR TO THE CLOSING DATE,
INCLUDING PURSUANT TO U.S. TREASURY REGULATION §1.1502-6 OR ANY ANALOGOUS OR
SIMILAR STATE, LOCAL, OR FOREIGN LAW, AND (3) ANY AND ALL TAXES OF ANY PERSON
(OTHER THAN IBIS) IMPOSED ON IBIS AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT OR
PURSUANT TO ANY LAW, WHICH TAXES RELATE TO AN EVENT OR TRANSACTION OCCURRING
BEFORE THE CLOSING.

 

(II)           TO THE EXTENT THERE IS ANY TAXABLE PERIOD THAT INCLUDES (BUT DOES
NOT END ON) THE CLOSING DATE (A “STRADDLE PERIOD”), THE AMOUNT OF ANY TAXES
BASED ON OR MEASURED BY INCOME OR RECEIPTS OF IBIS FOR THE PRE-CLOSING TAX
PERIOD SHALL BE DETERMINED BASED ON AN INTERIM CLOSING OF THE BOOKS AS OF THE
CLOSE OF BUSINESS ON THE CLOSING DATE (AND FOR SUCH PURPOSE, THE TAXABLE PERIOD
OF ANY PARTNERSHIP OR OTHER PASS-THROUGH ENTITY IN WHICH IBIS HOLDS A BENEFICIAL
INTEREST SHALL BE DEEMED TO TERMINATE AT SUCH TIME) AND THE AMOUNT OF OTHER
TAXES OF IBIS FOR A STRADDLE PERIOD THAT RELATES TO THE PRE-CLOSING TAX PERIOD
SHALL BE DEEMED TO BE THE AMOUNT OF SUCH TAX FOR THE ENTIRE TAXABLE PERIOD
MULTIPLIED BY A FRACTION THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS IN THE
TAXABLE PERIOD ENDING ON THE CLOSING DATE AND THE DENOMINATOR OF WHICH IS THE
NUMBER OF DAYS IN SUCH STRADDLE PERIOD.

 

(III)          AMI SHALL, IN ACCORDANCE WITH SECTION 8.2(C) (EXCEPT AS
EXPLICITLY PROVIDED IN THIS SECTION 8.6), INDEMNIFY AND HOLD HARMLESS THE SELLER
GROUP FROM ANY AND ALL LOSSES ARISING FROM: (1) ALL TAXES (OR THE NON-PAYMENT
THEREOF) OF IBIS FOR THE POST-CLOSING TAX PERIOD, (2) ALL TAXES OF ANY MEMBER OF
AN AFFILIATED, CONSOLIDATED, COMBINED OR UNITARY GROUP OF WHICH IBIS (OR ANY
SUCCESSOR THERETO) IS A MEMBER AFTER THE CLOSING DATE, INCLUDING PURSUANT TO
U.S. TREASURY REGULATION §1.1502-6 OR ANY ANALOGOUS OR SIMILAR STATE, LOCAL, OR
FOREIGN LAW, AND (3) ANY AND ALL TAXES OF ANY PERSON (OTHER THAN IBIS) IMPOSED
ON IBIS AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT OR PURSUANT TO ANY LAW, WHICH
TAXES RELATE TO AN EVENT OR TRANSACTION OCCURRING AFTER THE CLOSING.

 

(IV)          ISIS’ AND AMI’S OBLIGATIONS TO INDEMNIFY FOR ANY TAXES UNDER THIS
SECTION 8.6 SHALL SURVIVE THE CLOSING HEREUNDER AND CONTINUE UNTIL 30 DAYS
FOLLOWING THE EXPIRATION OF THE STATUTE OF LIMITATIONS ON ASSESSMENT OF THE
RELEVANT TAX.  NOTWITHSTANDING THE FOREGOING, ANY CLAIM FOR INDEMNIFICATION
SHALL SURVIVE SUCH TERMINATION DATE IF THE INDEMNIFIED PARTY, PRIOR TO SUCH
TERMINATION DATE, SHALL HAVE ADVISED THE INDEMNIFYING PARTY IN WRITING OF FACTS
THAT CONSTITUTE OR MAY GIVE RISE TO AN ALLEGED CLAIM FOR INDEMNIFICATION UNDER
THIS SECTION 8.6.

 

(D)   TAX RETURNS.

 

(I)            ISIS SHALL FILE OR CAUSE TO BE FILED WHEN DUE (TAKING INTO
ACCOUNT ANY EXTENSIONS RECEIVED FROM THE RELEVANT TAX AUTHORITIES) (1) ALL TAX
RETURNS THAT ARE REQUIRED TO BE FILED WITH RESPECT TO IBIS ON OR BEFORE THE
CLOSING DATE, AND (2) ALL TAX RETURNS THAT ARE REQUIRED TO BE FILED AFTER THE
CLOSING DATE WITH RESPECT TO INCOME TAXES OF IBIS WITH RESPECT TO ALL
PRE-CLOSING TAX PERIODS, AND SHALL PAY WHEN DUE (X) ANY

 

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INCOME TAXES DUE IN RESPECT OF SUCH TAX RETURNS, AND (Y) ANY OTHER TAXES DUE IN
RESPECT OF SUCH TAX RETURNS THAT ARE DUE ON OR BEFORE THE CLOSING DATE.

 

(E)   CONTEST PROVISIONS.

 

(I)            ISIS SHALL HAVE THE SOLE RIGHT TO CONTROL THE CONDUCT AND
RESOLUTION OF ANY AUDIT, LITIGATION, CONTEST, DISPUTE, NEGOTIATION, OR OTHER
PROCEEDING WITH ANY TAX AUTHORITY THAT RELATES TO INCOME TAXES OF IBIS RELATING
TO A PRE-CLOSING TAX PERIOD, INCLUDING, WITHOUT LIMITATION, BY SELECTING COUNSEL
OF ITS CHOICE TO REPRESENT IBIS, UNLESS ISIS FAILS TO ASSERT SUCH CONTROL WITHIN
30 DAYS OF RECEIVING NOTICE OF SUCH PROCEEDING (EACH SUCH PROCEEDING FOR WHICH
ISIS ASSERTS SUCH CONTROL, AN “ISIS PROCEEDING”); PROVIDED, THAT (1) ISIS SHALL
CONSULT WITH AMI AND KEEP AMI INFORMED REGARDING THE PROGRESS AND ANY POTENTIAL
COMPROMISE OR SETTLEMENT OF EACH ISIS PROCEEDING; AND (2) AMI SHALL BE ENTITLED
TO PARTICIPATE AT ITS OWN EXPENSE IN EACH ISIS PROCEEDING AND (C) ISIS SHALL NOT
SETTLE OR OTHERWISE COMPROMISE ANY ISIS PROCEEDING WITHOUT THE CONSENT OF AMI TO
THE EXTENT SUCH SETTLEMENT OR COMPROMISE WOULD HAVE AN ADVERSE EFFECT ON AMI OR
IBIS WITH RESPECT TO A POST-CLOSING TAX PERIOD, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.

 

(II)           AMI SHALL HAVE THE SOLE RIGHT TO CONTROL THE CONDUCT AND
RESOLUTION OF ANY AUDIT, LITIGATION, CONTEST, DISPUTE, NEGOTIATION, OR OTHER
PROCEEDING WITH ANY TAX AUTHORITY RELATING TO TAXES OF IBIS THAT IS NOT AN ISIS
PROCEEDING, INCLUDING, WITHOUT LIMITATION, BY SELECTING COUNSEL OF ITS CHOICE TO
REPRESENT IBIS (EACH SUCH PROCEEDING, AN “AMI PROCEEDING”); PROVIDED, HOWEVER,
THAT (A) AMI SHALL CONSULT WITH ISIS REGARDING THE PROGRESS AND ANY POTENTIAL
COMPROMISE OR SETTLEMENT OF ANY ISIS PROCEEDING THAT RELATES TO TAXES FOR WHICH
ISIS MAY BE LIABLE PURSUANT TO SECTION 8.6(C)(I) OF THIS AGREEMENT (AN
“APPLICABLE AMI PROCEEDING”); (B) ISIS SHALL BE ENTITLED TO PARTICIPATE AT ITS
OWN EXPENSE IN ANY APPLICABLE AMI PROCEEDING; AND (C) AMI SHALL NOT SETTLE OR
OTHERWISE COMPROMISE ANY APPLICABLE AMI PROCEEDING WITHOUT THE CONSENT OF ISIS
TO THE EXTENT SUCH SETTLEMENT OR COMPROMISE WOULD HAVE AN ADVERSE EFFECT ON ISIS
OR IBIS WITH RESPECT TO A PRE-CLOSING TAX PERIOD, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.

 

(III)          PROVIDED AMI FAILS TO ASSERT CONTROL OVER AN APPLICABLE AMI
PROCEEDING WITHIN 30 DAYS OF RECEIVING NOTICE OF SUCH PROCEEDING, ISIS SHALL
HAVE THE SOLE RIGHT TO CONTROL THE CONDUCT AND RESOLUTION OF AN APPLICABLE AMI
PROCEEDING WITH ANY TAX AUTHORITY, INCLUDING, WITHOUT LIMITATION, BY SELECTING
COUNSEL OF ITS CHOICE TO REPRESENT IBIS; PROVIDED, HOWEVER, THAT (1) ISIS SHALL
PROMPTLY CONSULT WITH AMI REGARDING THE PROGRESS AND ANY POTENTIAL COMPROMISE OR
SETTLEMENT OF ANY APPLICABLE AMI PROCEEDING; (2) AMI SHALL BE ENTITLED TO
PARTICIPATE AT ITS OWN EXPENSE IN ANY APPLICABLE ISIS PROCEEDING; AND
(3) NEITHER ISIS NOR IBIS SHALL SETTLE OR COMPROMISE ANY APPLICABLE AMI
PROCEEDING WITHOUT THE PRIOR WRITTEN CONSENT OF AMI, WHICH SHALL NOT BE
UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.

 

(f)    Assistance and Cooperation.  From and after the Closing Date, each of
Isis and AMI shall:

 

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(I)            ASSIST (AND CAUSE THEIR RESPECTIVE AFFILIATES TO ASSIST) THE
OTHER PARTY IN PREPARING ANY TAX RETURNS WHICH SUCH OTHER PARTY IS RESPONSIBLE
FOR PREPARING AND FILING IN ACCORDANCE WITH THIS SECTION 8.6;

 

(II)           COOPERATE FULLY IN PREPARING FOR ANY AUDIT, LITIGATION, CONTEST,
DISPUTE, NEGOTIATION, OR OTHER PROCEEDING WITH ANY TAX AUTHORITY REGARDING TAXES
OF IBIS;

 

(III)          MAKE AVAILABLE TO THE OTHER PARTY AND TO ANY TAX AUTHORITY, AS
REASONABLY REQUESTED, ALL INFORMATION, RECORDS, AND DOCUMENTS RELATING TO TAXES
OR TAX RETURNS OF IBIS (INCLUDING, WITHOUT LIMITATION, INFORMATION NECESSARY TO
FILE EXTENSIONS AND MAKE ESTIMATED TAX PAYMENTS); AND

 

(IV)          FURNISH THE OTHER PARTY WITH COPIES OF ALL CORRESPONDENCE RECEIVED
FROM ANY TAX AUTHORITY IN CONNECTION WITH ANY APPLICABLE ISIS PROCEEDING OR AMI
PROCEEDING.

 

(G)   CODE § 338(H)(10) ELECTION. AT AMI’S OPTION, ISIS AND AMI SHALL JOIN IN
MAKING AN ELECTION UNDER CODE § 338(H)(10) (AND ANY CORRESPONDING ELECTIONS
UNDER STATE, LOCAL, OR FOREIGN TAX LAW) (COLLECTIVELY A “§ 338(H)(10) ELECTION”)
WITH RESPECT TO THE PURCHASE AND SALE OF THE SHARES, [THE ADDITIONAL SHARES] AND
THE REMAINING SHARES, UNLESS AND TO THE EXTENT THE CODE IS AMENDED TO PREVENT OR
LIMIT THE FILING OF A § 338(H)(10) ELECTION. ISIS WILL PAY ANY TAX ATTRIBUTABLE
TO THE MAKING OF THE § 338(H)(10) ELECTION AND WILL INDEMNIFY THE AMI GROUP
AGAINST ANY LOSSES ARISING OUT OF ANY FAILURE TO PAY SUCH TAX.

 

(H)   ALLOCATION OF PURCHASE PRICE. THE PARTIES AGREE THAT THE PURCHASE PRICE
AND THE LIABILITIES OF IBIS (AND OTHER RELEVANT ITEMS) WILL BE ALLOCATED FOR TAX
PURPOSES TO THE ASSETS OF IBIS IN A MANNER CONSISTENT WITH CODE §§  338 AND 1060
AND THE REGULATIONS THEREUNDER. AMI, IBIS AND ISIS SHALL FILE ALL TAX RETURNS
(INCLUDING AMENDED RETURNS AND CLAIMS FOR REFUND) AND INFORMATION REPORTS IN A
MANNER CONSISTENT WITH SUCH ALLOCATION.

 

8.7           Further Assurances.  Isis will execute and deliver such further
instruments of conveyance and transfer and take such additional action as AMI
may reasonably request to effect, consummate, confirm or evidence the transfer
to AMI of the Remaining Shares and the assets of the Business (including the
Business IP and the Ibis Contracts), and Isis will execute such documents as may
be necessary to assist AMI in preserving or perfecting its rights in the Shares,
the Remaining Shares and the Business.  Except for the services, funding and
facilities provided under the Corporate Services Agreement, to the extent any
assets used in the Business on or prior to the Closing Date (including the
Business IP and the Ibis Contracts) or necessary to conduct the Business as
conducted on and prior to the Closing Date (including the Business IP and the
Ibis Contracts) or as contemplated to be conducted after the Closing Date have
not been duly and fully transferred to Ibis as of such date, Isis hereby
covenants, at its sole cost and expense and without further consideration by
AMI, to take all such actions as may be requested by AMI to promptly transfer
such assets to Ibis or AMI’s designee.

 

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8.8           Confidentiality.

 

(A)   EACH PARTY AGREES THAT FOR A PERIOD OF THREE (3) YEARS AFTER THE CLOSING
DATE, A PARTY (THE “RECEIVING PARTY”) RECEIVING OR THAT HAS RECEIVED
CONFIDENTIAL INFORMATION OF THE OTHER PARTY (THE “DISCLOSING PARTY”) WILL
(I) MAINTAIN AND CAUSE ITS REPRESENTATIVES TO MAINTAIN IN CONFIDENCE SUCH
CONFIDENTIAL INFORMATION USING NOT LESS THAN THE EFFORTS SUCH RECEIVING PARTY
USES TO MAINTAIN IN CONFIDENCE OTHER PROPRIETARY INFORMATION OF SIMILAR KIND AND
VALUE (IT BEING UNDERSTOOD AND AGREED THAT AMI SHALL HAVE NO OBLIGATION TO
MAINTAIN THE CONFIDENTIALITY OF ANY IBIS CONFIDENTIAL INFORMATION AND THAT ISIS
SHALL HAVE AN OBLIGATION TO MAINTAIN THE CONFIDENTIALITY OF ALL IBIS
CONFIDENTIAL INFORMATION PURSUANT TO THIS SECTION 8.8), (II) NOT DISCLOSE SUCH
CONFIDENTIAL INFORMATION EXCEPT TO THE RECEIVING PARTY’S EMPLOYEES OR AFFILIATES
HAVING A NEED-TO-KNOW SUCH CONFIDENTIAL INFORMATION SOLELY FOR PURPOSES OF
PERFORMING THE RECEIVING PARTY’S OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS,
(III) NOT DISCLOSE SUCH CONFIDENTIAL INFORMATION TO ANY PERSON WITHOUT THE PRIOR
WRITTEN CONSENT OF THE DISCLOSING PARTY, EXCEPT FOR DISCLOSURES EXPRESSLY
PERMITTED BY THE TRANSACTION DOCUMENTS, AND (IV) NOT USE SUCH CONFIDENTIAL
INFORMATION FOR ANY PURPOSE EXCEPT THOSE EXPRESSLY PERMITTED BY THE TRANSACTION
DOCUMENTS.  THE PROVISIONS OF THIS SECTION 8.8 SHALL SUPERSEDE THE PROVISIONS OF
SECTION 5.1, SECTION 5.2 AND SECTION 5.3 OF THE MASTER AGREEMENT WHICH SHALL
TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT FROM AND AFTER THE CLOSING DATE. 
UPON AMI’S REQUEST ISIS WILL RETURN OR DESTROY (AND CERTIFY TO AMI ANY SUCH
DESTRUCTION) ALL CONFIDENTIAL INFORMATION OF AMI OR ITS AFFILIATES AND UPON
ISIS’ REQUEST, AMI WILL RETURN OR DESTROY (AND CERTIFY TO ISIS ANY SUCH
DESTRUCTION) ALL CONFIDENTIAL INFORMATION OF ISIS THAT IS NOT CONFIDENTIAL
INFORMATION OF IBIS; PROVIDED, THAT AMI MAY RETAIN ONE (1) COPY OF ISIS’
CONFIDENTIAL INFORMATION IN ABBOTT’S CONFIDENTIAL FILES.

 

(B)   TO THE EXTENT (AND ONLY TO THE EXTENT) THAT IT IS REASONABLY NECESSARY, A
PARTY MAY DISCLOSE CONFIDENTIAL INFORMATION BELONGING TO THE OTHER PARTY IN THE
FOLLOWING INSTANCES:

 

(I)            WHEN DEFENDING LITIGATION RELATED TO THE CONFIDENTIAL INFORMATION
TO BE DISCLOSED;

 

(II)           WHEN COMPLYING WITH APPLICABLE LAWS (INCLUDING, WITHOUT
LIMITATION, THE RULES AND REGULATIONS OF THE SEC OR ANY NATIONAL SECURITIES
EXCHANGE, AND COMPLIANCE WITH TAX LAWS) AND WITH JUDICIAL PROCESS; AND

 

(III)          DISCLOSURE, IN CONNECTION WITH THE PERFORMANCE OF THE TRANSACTION
DOCUMENTS AND SOLELY ON A NEED-TO-KNOW BASIS, TO EMPLOYEES OR INDEPENDENT
CONTRACTORS (INCLUDING WITHOUT LIMITATION CONSULTANTS AND CLINICAL
INVESTIGATORS), EACH OF WHOM PRIOR TO DISCLOSURE MUST BE BOUND BY WRITTEN
OBLIGATIONS OF CONFIDENTIALITY AND NON-USE NO LESS RESTRICTIVE THAN THE
OBLIGATIONS SET FORTH IN THIS SECTION 8.8; PROVIDED, THAT THE RECEIVING PARTY
WILL REMAIN RESPONSIBLE FOR ANY FAILURE BY ANY PERSON WHO RECEIVES CONFIDENTIAL
INFORMATION PURSUANT TO THIS SECTION 8.8 TO TREAT SUCH CONFIDENTIAL INFORMATION
AS REQUIRED UNDER THIS SECTION 8.8.

 

(C)   IF AND WHENEVER ANY CONFIDENTIAL INFORMATION IS DISCLOSED IN ACCORDANCE
WITH THIS SECTION 8.8, SUCH DISCLOSURE WILL NOT CAUSE ANY SUCH INFORMATION TO
CEASE TO BE CONFIDENTIAL INFORMATION EXCEPT TO THE EXTENT THAT SUCH PERMITTED
DISCLOSURE RESULTS IN A PUBLIC DISCLOSURE OF SUCH INFORMATION (OTHER THAN BY
BREACH OF THIS AGREEMENT).  EXCEPT AS PROHIBITED BY

 

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LAW, THE RECEIVING PARTY WILL NOTIFY THE DISCLOSING PARTY OF THE RECEIVING
PARTY’S INTENT TO MAKE SUCH DISCLOSURE PURSUANT TO CLAUSES (I) OR (II) OF
SECTION 8.8(B) SUFFICIENTLY PRIOR TO MAKING SUCH DISCLOSURE SO AS TO ALLOW THE
DISCLOSING PARTY ADEQUATE TIME TO TAKE WHATEVER ACTION THE DISCLOSING PARTY MAY
DEEM APPROPRIATE TO PROTECT THE CONFIDENTIALITY OF THE INFORMATION.  IN
ADDITION, IN THE EVENT ANY PARTY PROPOSES TO FILE WITH ANY GOVERNMENTAL
AUTHORITY A TRANSACTION DOCUMENT, INCLUDING, WITHOUT LIMITATION, AS AN EXHIBIT
TO A REGISTRATION STATEMENT, PERIODIC REPORT, OR CURRENT REPORT, THE PARTY
PROPOSING TO MAKE SUCH FILING WILL NOTIFY THE OTHER PARTIES OF SUCH INTENTION
AND WILL WORK IN GOOD FAITH WITH THE OTHER PARTIES TO OBTAIN CONFIDENTIAL
TREATMENT OF ANY MATERIAL TERMS OF THE TRANSACTION DOCUMENTS THAT SUCH OTHER
PARTIES REQUEST BE KEPT CONFIDENTIAL (EXCEPT TO THE EXTENT ADVISED BY COUNSEL OR
SUCH GOVERNMENTAL AUTHORITY THAT CONFIDENTIAL TREATMENT IS NOT AVAILABLE FOR
SUCH INFORMATION).

 

(D)   AT THE CLOSING, ISIS SHALL DELIVER TO AMI ALL CONFIDENTIAL INFORMATION OF
THE BUSINESS IN ISIS’ OR ITS AFFILIATES’ POSSESSION AND CONTROL AND ALL COPIES
THEREOF, IN WHATEVER FORM OR MEDIUM, INCLUDING, WITHOUT LIMITATION, WRITTEN
RECORDS, OPTICAL AND MAGNETIC MEDIA, AND ALL OTHER MATERIALS CONTAINING ANY SUCH
CONFIDENTIAL INFORMATION.  IF AMI REQUESTS, ISIS SHALL PROMPTLY PROVIDE WRITTEN
CONFIRMATION THAT ALL SUCH MATERIALS HAVE BEEN DELIVERED TO AMI.

 

(E)   THE EXISTENCE AND THE TERMS AND CONDITIONS OF THE TRANSACTION DOCUMENTS
THAT THE PARTIES HAVE NOT SPECIFICALLY AGREED TO DISCLOSE PURSUANT TO
SECTION 8.8(B) OR SECTION 8.3 WILL BE CONSIDERED CONFIDENTIAL INFORMATION OF
BOTH PARTIES.  AMI AND, SUBJECT TO THE TERMS OF SECTION 7.8, ISIS MAY DISCLOSE
SUCH TERMS TO A BONA FIDE POTENTIAL INVESTOR, INVESTMENT BANKER, ACQUIRER,
MERGER PARTNER OR OTHER POTENTIAL BUSINESS PARTNER OF AMI OR ISIS, RESPECTIVELY,
AND THEIR ATTORNEYS AND AGENTS, PROVIDED THAT EACH SUCH PERSON TO WHOM SUCH
INFORMATION IS TO BE DISCLOSED IS INFORMED OF THE CONFIDENTIAL NATURE OF SUCH
INFORMATION AND HAS ENTERED INTO A WRITTEN AGREEMENT WITH THE PARTY REQUIRING
SUCH PERSON TO KEEP SUCH INFORMATION CONFIDENTIAL.

 

8.9           Noncompetition and Nonsolicitation.  The Parties hereby agree as
follows:

 

(A)   NONCOMPETITION.  DURING THE PERIOD FROM THE DATE HEREOF TO AND INCLUDING
THE [***] ANNIVERSARY OF THE CLOSING DATE (THE “NONCOMPETE PERIOD”), ISIS AND
ITS AFFILIATES SHALL NOT ENGAGE IN AND SHALL NOT HAVE ANY AFFILIATION WITH ANY
PERSON THAT ENGAGES IN A LINE OF BUSINESS THAT COMPETES WITH THE BUSINESS AS
CONDUCTED ON AND PRIOR TO THE CLOSING DATE AND AS CONTEMPLATED BY IBIS AND ISIS
TO BE CONDUCTED AFTER THE CLOSING DATE, AS REFLECTED IN THE OFFERING MEMORANDUM
AND THE MANAGEMENT PRESENTATIONS.  FOR PURPOSES OF THIS SECTION 8.9, THE TERM
“AFFILIATION” SHALL MEAN ANY DIRECT OR INDIRECT INTEREST IN SUCH PERSON OR
ENTERPRISE, WHETHER AS AN INVESTOR, PARTNER, STOCKHOLDER, OPERATOR, LENDER,
TRUSTEE, JOINT VENTURE CONTRIBUTOR, LICENSOR OR CONSULTANT (OTHER THAN PASSIVE
INVESTMENTS BY ISIS OF LESS THAN [***]% OF THE OUTSTANDING EQUITY SECURITIES OF
ANY ENTITY LISTED FOR TRADING ON A NATIONAL STOCK EXCHANGE OR INVESTMENTS IN
LESS THAN [***]% OF THE OUTSTANDING EQUITY SECURITIES BY ISIS IN A PERSON
ENGAGED IN DRUG DISCOVERY, DEVELOPMENT OR COMMERCIALIZATION).

 

(b)   Pre-Existing Business.  Notwithstanding the foregoing, if a Person becomes
an Affiliate of Isis after the Closing Date, and such Person was engaged in a
line of business that on or before the time such Person became an Affiliate of
Isis, competed with the Business as conducted on and prior to the Closing Date
and as contemplated by Ibis and Isis to be

 

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CONDUCTED AFTER THE CLOSING DATE, AS REFLECTED IN THE OFFERING MEMORANDUM AND
MANAGEMENT PRESENTATIONS (A “PRE-EXISTING BUSINESS”), THEN THE PROVISIONS OF
SECTION 8.9(A) WILL NOT APPLY TO SUCH PRE-EXISTING BUSINESS IF (I) SUCH THIRD
PARTY DOES NOT [***] AND (II) APPROPRIATE PROTECTIVE MEASURES AND PROCEDURES ARE
ESTABLISHED BY ISIS AND ITS AFFILIATES AND SUCH PERSON AND ITS AFFILIATES TO
PROTECT AND SAFEGUARD THE CONFIDENTIALITY OF ABBOTT AND IBIS CONFIDENTIAL
INFORMATION.

 

(C)   NO SOLICITATION OF AMI EMPLOYEES.  DURING THE PERIOD FROM THE DATE HEREOF
TO AND INCLUDING THE [***] ANNIVERSARY OF THE CLOSING DATE (THE “NONSOLICITATION
PERIOD”), ISIS (AND UNTIL THE CLOSING, IBIS) SHALL NOT AND SHALL NOT PERMIT ANY
OF THEIR RESPECTIVE REPRESENTATIVES TO DIRECTLY OR INDIRECTLY, (I) WITHOUT THE
PRIOR WRITTEN CONSENT OF AMI, INDUCE OR ATTEMPT TO INDUCE ANY EMPLOYEE OF AMI OR
ANY MEMBER OF THE ABBOTT TRANSACTION TEAM TO LEAVE THE EMPLOY OF AMI OR THE
APPLICABLE ABBOTT AFFILIATE, OR IN ANY WAY INTERFERE WITH THE RELATIONSHIP
BETWEEN AMI OR THE APPLICABLE ABBOTT AFFILIATES AND ANY EMPLOYEE OF AMI OR ANY
MEMBER OF THE ABBOTT TRANSACTION TEAM, OR KNOWN CONSULTANT OR INDEPENDENT
CONTRACTOR THEREOF OR (II) WITHOUT THE PRIOR WRITTEN CONSENT OF AMI, HIRE
DIRECTLY OR THROUGH ANOTHER ENTITY ANY EMPLOYEE OF AMI OR ANY MEMBER OF THE
ABBOTT TRANSACTION TEAM OR ANY PERSON WHO WAS AN EMPLOYEE OF AMI OR A MEMBER OF
THE ABBOTT TRANSACTION TEAM WHO WAS EMPLOYED BY ABBOTT OR ANY OF ITS AFFILIATES
DURING THE [***] MONTHS PRIOR TO THE DATE OF SUCH HIRING, IN EACH CASE TO WORK
FOR ISIS OR IBIS.

 

(D)   NO SOLICITATION OF IBIS OR ISIS EMPLOYEES.  DURING THE NONSOLICITATION
PERIOD WITH RESPECT TO EMPLOYEES OF ISIS AND UNTIL THE CLOSING WITH RESPECT TO
EMPLOYEES OF IBIS, AMI AND ITS AFFILIATES WILL CAUSE AMI AND THE MEMBERS OF THE
ABBOTT TRANSACTION TEAM NOT TO, DIRECTLY OR INDIRECTLY, (I) WITHOUT THE PRIOR
WRITTEN CONSENT OF ISIS OR IBIS (AS THE CASE MAY BE), INDUCE OR ATTEMPT TO
INDUCE ANY EMPLOYEE OF ISIS OR IBIS TO LEAVE THE EMPLOY OF ISIS OR IBIS, OR IN
ANY WAY INTERFERE WITH THE RELATIONSHIP BETWEEN ISIS OR IBIS AND ANY OF THEIR
RESPECTIVE EMPLOYEES, OR KNOWN CONSULTANT OR INDEPENDENT CONTRACTOR THEREOF OR
(II) WITHOUT THE PRIOR WRITTEN CONSENT OF ISIS OR IBIS (AS THE CASE MAY BE),
HIRE DIRECTLY OR THROUGH ANOTHER ENTITY ANY EMPLOYEE OF ISIS OR IBIS OR ANY
PERSON WHO WAS AN EMPLOYEE OF ISIS OR IBIS WHO WAS EMPLOYED BY ISIS OR IBIS
DURING THE [***] MONTHS PRIOR TO THE DATE OF SUCH HIRING, IN EACH CASE TO WORK
FOR AMI.

 

(E)   NO SOLICITATION OF IBIS EMPLOYEES.  DURING THE NONSOLICITATION PERIOD,
ISIS SHALL NOT AND SHALL NOT PERMIT ANY OF ITS REPRESENTATIVES TO DIRECTLY OR
INDIRECTLY (I) WITHOUT THE PRIOR WRITTEN CONSENT OF AMI, INDUCE OR ATTEMPT TO
INDUCE ANY EMPLOYEE OF IBIS TO LEAVE THE EMPLOY OF IBIS, OR IN ANY WAY INTERFERE
WITH THE RELATIONSHIP BETWEEN IBIS AND ANY EMPLOYEE, CONSULTANT OR INDEPENDENT
CONTRACTOR THEREOF, (II) WITHOUT THE PRIOR WRITTEN CONSENT OF AMI, HIRE DIRECTLY
OR THROUGH ANOTHER ENTITY ANY EMPLOYEE OF IBIS OR ANY PERSON WHO WAS AN EMPLOYEE
OF IBIS DURING THE [***] MONTHS PRIOR TO THE DATE OF SUCH HIRING OR (III) INDUCE
OR ATTEMPT TO INDUCE ANY CUSTOMER, SUPPLIER, LICENSEE, LICENSOR OR OTHER
BUSINESS RELATION OF IBIS, AMI OR ANY OF THEIR RESPECTIVE AFFILIATES OR THE
BUSINESS, TO CEASE DOING BUSINESS WITH IBIS, AMI OR ANY OF THEIR RESPECTIVE
AFFILIATES OR THE BUSINESS.

 

For purposes of Sections 8.9(c), 8.9(d) and 8.9(e), “recruit,” “solicit” or
“induce” shall not be deemed to mean (i) circumstances where an employee,
consultant or independent contractor or former employee, consultant or
independent contractor initiates contact with a Party with regard

 

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to possible employment, or (ii) general solicitations of employment not
specifically targeted at specific employees of a Party, including responses to
general advertisements.

 

Notwithstanding anything in this Section 8.9 to the contrary, if at any time a
court holds that the restrictions stated in Section 8.9(a), Section 8.9(c),
Section 8.9(d) or Section 8.9(e) or any part of any of the foregoing are
unreasonable or otherwise unenforceable under circumstances then existing, the
Parties hereto agree that the maximum period, scope or geographical area
determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or area.  The Parties acknowledge and
agree that money damages may not be an adequate remedy for any breach or
threatened breach of the provisions of Section 8.9(a), Section 8.9(c),
Section 8.9(d) or Section 8.9(e) and that, in such event, any Party or its
successors or assigns may, in addition to any other rights and remedies existing
in its or their favor, apply to any court of competent jurisdiction for specific
performance, injunctive and/or other relief in order to enforce or prevent any
violations of the provisions of this Section 8.9 (including, if the court so
determines, the extension of the Noncompete Period or the Nonsolicitation
Period, as applicable, by a period equal to the length of court proceedings
necessary to stop such violation).  Any injunction shall be available without
the posting of any bond or other security.  In the event of an alleged breach or
violation by any Party or any of their respective Representatives of any of the
provisions of this Section 8.9, the Noncompete Period or the Nonsolicitation
Period, as applicable will be tolled until such alleged breach or violation is
resolved.  The Parties agree that the restrictions contained in this Section 8.9
are reasonable in all respects.

 

8.10         Access to Books and Records.  After the Closing, Isis will permit
AMI and its representatives, and AMI will permit Isis and its representatives,
to have reasonable access upon prior notice and at reasonable times, and in a
manner so as not to interfere with the normal business operations of the other
Party, to all books, records (including Tax records), contracts and documents of
or pertaining to Ibis.

 

8.11         Employee and Related Matters.

 

(A)   IBIS EMPLOYEES. ALL EMPLOYEES OF IBIS EMPLOYED AS OF THE CLOSING DATE (THE
“IBIS EMPLOYEES”) SHALL, AS OF THE CLOSING, RECEIVE COMPENSATION AND BENEFITS
FROM ABBOTT THAT ARE SUBSTANTIALLY COMPARABLE, IN THE AGGREGATE, TO THE
COMPENSATION AND BENEFITS RECEIVED BY OTHER SIMILARLY-SITUATED EMPLOYEES OF
ABBOTT BASED ON ABBOTT’S EVALUATION OF THE NATURE AND SCOPE OF SUCH EMPLOYEE’S
DUTIES, PRINCIPAL LOCATION WHERE THOSE DUTIES ARE PERFORMED, GRADE LEVEL AND
PERFORMANCE.  TO FACILITATE ABBOTT’S OBLIGATIONS TO PROVIDE SUCH COMPENSATION
AND BENEFITS UNDER THIS SECTION 8.11, ISIS SHALL PROVIDE AMI PROMPTLY, UPON
AMI’S REQUEST, BUT IN ANY EVENT, NO LESS THAN [***] PRIOR TO THE CLOSING DATE
(AND AGAIN ON THE CLOSING DATE) A TRUE, COMPLETE AND ACCURATE LIST OF EACH IBIS
EMPLOYEE, INCLUDING THE DATE OF EMPLOYMENT AND TITLE OR JOB POSITION OF EACH
IBIS EMPLOYEE, INFORMATION REGARDING PAY AND BENEFITS, INCLUDING, BUT NOT
LIMITED TO, THE TOTAL ANNUAL SALARY, WAGES, BONUS OR OTHER COMPENSATION OF EACH
IBIS EMPLOYEE, AND, WITH RESPECT TO ANY IBIS EMPLOYEES WHO ARE INACTIVE IBIS
EMPLOYEES (AS DEFINED IN SECTION 8.11(F)), THE DATE SUCH INACTIVE EMPLOYEE
CHANGED FROM ACTIVE TO INACTIVE STATUS, THE REASON FOR SUCH INACTIVE STATUS AND,
IF APPLICABLE, THE ANTICIPATED DATE OF RETURN TO ACTIVE EMPLOYMENT.  IBIS
EMPLOYEES SHALL BE EMPLOYEES AT WILL, SUBJECT TO ABBOTT’S EMPLOYMENT POLICIES
AND NOTHING HEREIN SHALL BE CONSTRUED TO LIMIT ABBOTT’S ABILITY TO (A) TERMINATE
OR ALTER THE EMPLOYMENT TERMS OF ANY IBIS EMPLOYEE FOR ANY REASON, INCLUDING
WITHOUT CAUSE, OR (B) MODIFY, AMEND OR TERMINATE

 

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ANY EMPLOYEE BENEFIT PLAN, POLICY OR ARRANGEMENT, EXCEPT THAT NEITHER ABBOTT NOR
AMI NOR IBIS MAY MAKE ANY MATERIAL AMENDMENT TO THE TERMS AND PROVISIONS OF THE
PERMITTED EMPLOYEE COMPENSATION PLAN.

 

(B)   WARN.  ISIS COVENANTS AND AGREES TO CAUSE IBIS TO COMPLY, IF APPLICABLE,
WITH ALL REQUIREMENTS SPECIFIED UNDER THE WORKER ADJUSTMENT AND RETRAINING
NOTIFICATION ACT OF 1988 (THE “WARN ACT”) OR ANY SIMILAR OR SUCCESSOR FEDERAL,
STATE OR LOCAL LAW, INCLUDING THE PROVISION OF APPROPRIATE NOTICE TO AFFECTED
EMPLOYEES WITH RESPECT TO ANY “EMPLOYMENT LOSS” (AS DEFINED IN THE WARN ACT)
THAT OCCURS ON OR PRIOR TO THE CLOSING DATE.  EXCEPT AS SET FORTH ON SCHEDULE
8.11(B), NO IBIS EMPLOYEE HAS SUFFERED AN “EMPLOYMENT LOSS” DURING THE NINETY
(90)-DAY PERIOD PRIOR TO THE DATE HEREOF.  ISIS SHALL UPDATE SCHEDULE 8.11(B) AS
NECESSARY TO REFLECT ALL “EMPLOYMENT LOSSES” BETWEEN THE DATE HEREOF AND PRIOR
TO THE CLOSING DATE.

 

(C)   COBRA.  ISIS SHALL RETAIN RESPONSIBILITY FOR ALL LIABILITY FOR ANY HEALTH
CARE CONTINUATION COVERAGE OR NOTICE REQUIREMENT UNDER SECTION 4980B OF THE CODE
AND PART G OF SUBTITLE B OF TITLE 1 OF ERISA WITH RESPECT TO ANY PLAN, INCLUDING
WITH RESPECT TO ALL FORMER EMPLOYEES OF IBIS OR THE BUSINESS, WHO ARE FORMER
EMPLOYEES THEREOF AS OF THE CLOSING.

 

(D)   RETIREMENT PLANS.  PRIOR TO OR ON THE CLOSING DATE, ISIS AND/OR IBIS SHALL
MAKE ALL MATCHING CONTRIBUTIONS AND A PRO-RATED PORTION OF ANY PROFIT SHARING
CONTRIBUTIONS THAT WOULD OTHERWISE BE MADE FOR THE PLAN YEAR (WITHOUT REGARD TO
ANY YEAR-END EMPLOYMENT REQUIREMENTS) WITH RESPECT TO THE IBIS EMPLOYEES’
CONTRIBUTIONS TO ANY PLAN THAT IS INTENDED TO BE QUALIFIED UNDER
SECTION 401(A) OF THE CODE (THE “ISIS RETIREMENT PLANS”).  ISIS SHALL PRIOR TO
THE CLOSING: (A) AMEND EACH ISIS RETIREMENT PLAN TO CAUSE THE ACCOUNT BALANCES
OR ACCRUED BENEFITS OF IBIS EMPLOYEES TO BE FULLY VESTED AS OF THE CLOSING DATE
AND (B) AMEND EACH ISIS RETIREMENT PLAN THAT INCLUDES A CASH OR DEFERRED
ARRANGEMENT UNDER SECTION 401(K) OF THE CODE TO PERMIT IBIS EMPLOYEES WITH AN
OUTSTANDING PLAN LOAN TO ROLL OVER SUCH LOAN TO ABBOTT’S 401(K) PLAN.  ABBOTT
WILL CAUSE ITS 401(K) PLAN TO ACCEPT A DIRECT ROLLOVER OF THE IBIS EMPLOYEES’
401(K) ACCOUNT BALANCE, INCLUDING A DIRECT ROLLOVER OF ANY OUTSTANDING PLAN
LOAN.

 

(E)   PAYROLL TAX REPORTING.  IBIS, ISIS AND AMI AGREE THAT PAYROLL REPORTING OF
THE IBIS EMPLOYEES WILL BE TREATED IN ACCORDANCE WITH THE ALTERNATE PROCEDURE
SET FORTH IN SECTION 5 OF REVENUE PROCEDURE 2004-53.

 

(F)    RETENTION OF LIABILITY.  ISIS SHALL BE SOLELY RESPONSIBLE FOR, AND RETAIN
ALL LIABILITIES WITH RESPECT TO AND ISIS SHALL RETAIN, BEAR AND DISCHARGE ALL
LIABILITIES AND OBLIGATIONS WITH RESPECT TO ALL INACTIVE IBIS EMPLOYEES UNTIL
SUCH TIME AS THE INACTIVE IBIS EMPLOYEE RETURNS TO ACTIVE EMPLOYMENT WITH IBIS. 
ISIS SHALL BE SOLELY RESPONSIBLE FOR, AND RETAIN ALL LIABILITIES WITH RESPECT
TO, ALL WAGES, SALARIES, COMMISSIONS, BONUSES, VACATION PAY AND OTHER
COMPENSATION PAYABLE TO ANY IBIS EMPLOYEE FOR ALL PERIODS THROUGH AND INCLUDING
THE CLOSING DATE.  AMI SHALL NOT ASSUME LIABILITY FOR ANY RETENTION, SEVERANCE,
CHANGE-OF-CONTROL OR SIMILAR AGREEMENTS BETWEEN ISIS AND ANY OF THE IBIS
EMPLOYEES, AND ISIS SHALL RETAIN OR ASSUME LIABILITY FOR ALL OBLIGATIONS UNDER
ANY SUCH RETENTION, SEVERANCE, CHANGE-OF-CONTROL OR SIMILAR AGREEMENTS.  FOR
PURPOSES OF THIS SECTION 8.11, AN “INACTIVE IBIS EMPLOYEE” SHALL MEAN ANY
EMPLOYEE OF IBIS WHO, AS OF THE CLOSING DATE, IS ON ANY TYPE OF LEAVE OF ABSENCE
OR WHO HAS BEEN OTHERWISE

 

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CONTINUOUSLY ABSENT FROM WORK WITH IBIS FOR ANY REASON FOR LONGER THAN FIVE
(5) WORKING DAYS, OTHER THAN FOR APPROVED PAID VACATION.

 

(G)   FULL-TIME EQUIVALENTS.  FROM AND AFTER THE DATE HEREOF, ISIS AND IBIS
SHALL CAUSE THE NUMBER OF FULL-TIME EQUIVALENT EMPLOYEES (NOT INCLUDING
TEMPORARY EMPLOYEES AND CONSULTANTS) OF IBIS TO BE NOT GREATER THAN 70 IN THE
AGGREGATE AND TO BE NOT LESS THAN 56 IN THE AGGREGATE.

 

(H)   NO THIRD PARTY RIGHTS.  NOTHING IN THIS AGREEMENT, EXPRESS OR IMPLIED,
SHALL CREATE A CONTRACT OF EMPLOYMENT WITH ANY IBIS EMPLOYEE OR A THIRD PARTY
BENEFICIARY RELATIONSHIP OR OTHERWISE AMEND OR CREATE ANY EMPLOYEE BENEFIT PLAN
OF AMI OR IBIS OR CONFER ANY BENEFIT, ENTITLEMENT, OR RIGHT UPON ANY PERSON OR
ENTITY OTHER THAN THE PARTIES HERETO OR RESULT IN AMI OR IBIS HAVING ANY
LIABILITY UNDER ANY PLAN (OTHER THAN IBIS’ LIABILITY WITH RESPECT TO THE
PERMITTED EMPLOYEE COMPENSATION PLAN).

 

8.12         Consolidated Return.  From and after the date hereof, Isis will
file a consolidated Tax Return with respect to itself and Ibis in lieu of
separate Tax Returns with respect to income Tax imposed by Chapter 1 of the Code
for the Tax year beginning January 1, 2007 through and including the Closing
unless the provisions of the Code shall have been amended after the date hereof
to disallow the filing of such consolidated Tax Returns.  In the event of an
Internal Revenue Service audit of Isis arising out or related to the
consolidation of Ibis and Isis in such consolidated Tax Return, Isis will
promptly (but in any event within [***]) notify AMI of such audit and allow AMI
to participate and advise Ibis and Isis in connection with such audit.

 

8.13         ISIS INTELLECTUAL PROPERTY LICENSE.

 

(A)   TO THE EXTENT ISIS HAS NOT AS OF THE CLOSING DATE GRANTED RIGHTS
PREVENTING ISIS FROM MAKING ANY FURTHER LICENSE GRANTS, ISIS HEREBY GRANTS IBIS
A WORLDWIDE, FULLY-PAID, ROYALTY FREE, NON-EXCLUSIVE LICENSE (WITHOUT THE RIGHT
TO GRANT SUBLICENSES, EXCEPT TO PURCHASERS, DISTRIBUTORS OR RESELLERS OF
PRODUCTS TO USE, SELL OR RESELL, THE AMOUNTS OF PRODUCTS PURCHASED) UNDER THE
ISIS LICENSED INTELLECTUAL PROPERTY TO MAKE, HAVE MADE, IMPORT, USE (IN ANY
FIELD OF USE, INCLUDING RESEARCH PERFORMED INTERNALLY AND WITH COLLABORATORS,
AND IN THE SALE OF SERVICES), OFFER FOR SALE, AND SELL PRODUCTS.  THIS LICENSE
IS TRANSFERABLE BY IBIS TO ITS AFFILIATES OR TO A SUCCESSOR IN INTEREST TO IBIS
WITHOUT THE PRIOR WRITTEN CONSENT OF ISIS.

 

(B)   ADDITIONALLY, UPON IBIS’ REQUEST, ISIS SHALL GRANT IBIS WORLDWIDE,
FULLY-PAID, ROYALTY FREE, NON-EXCLUSIVE LICENSES (WITHOUT THE RIGHT TO GRANT
SUBLICENSES, EXCEPT TO PURCHASERS, DISTRIBUTORS OR RESELLERS OF PRODUCTS TO USE,
SELL OR RESELL, THE AMOUNTS OF PRODUCTS PURCHASED) TO ANY [***] MAKE, HAVE MADE,
IMPORT, USE (IN ANY FIELD OF USE, INCLUDING RESEARCH PERFORMED INTERNALLY AND
WITH COLLABORATORS, AND IN THE SALE OF SERVICES), OFFER FOR SALE AND SELL
PRODUCTS, TO THE EXTENT ISIS HAS NOT PREVIOUSLY GRANTED RIGHTS PREVENTING ISIS
FROM GRANTING SUCH LICENSES TO IBIS.  THIS RIGHT TO LICENSE ISIS’ INTELLECTUAL
PROPERTY IS TRANSFERABLE BY IBIS TO ITS AFFILIATES OR TO A SUCCESSOR IN INTEREST
TO IBIS WITHOUT THE PRIOR WRITTEN CONSENT OF ISIS.

 

(c)   Until [***], Isis and its Affiliates shall not license any [***] for use
with a [***].

 

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Section 9.              TERMINATION.

 

9.1           Termination.  AMI or Isis may terminate this Agreement as follows:

 

(A)   BY MUTUAL WRITTEN CONSENT AT ANY TIME PRIOR TO THE CLOSING;

 

(B)   BY GIVING WRITTEN NOTICE TO THE OTHER AT ANY TIME PRIOR TO CLOSING IF
THERE HAS BEEN A MATERIAL MISREPRESENTATION OR BREACH ON THE PART OF THE OTHER
PARTY OF THE REPRESENTATIONS, WARRANTIES OR COVENANTS SET FORTH IN THIS
AGREEMENT, WHICH BREACH CANNOT BE OR HAS NOT BEEN CURED, IN ALL MATERIAL
RESPECTS, WITHIN [***] AFTER THE GIVING OF WRITTEN NOTICE OF SUCH BREACH TO AMI
OR ISIS, AS APPLICABLE;

 

(C)   IF EVENTS HAVE OCCURRED WHICH HAVE MADE IT IMPOSSIBLE TO SATISFY A
CONDITION PRECEDENT TO THE TERMINATING PARTY’S OBLIGATIONS TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY UNLESS SUCH TERMINATING PARTY’S WILLFUL BREACH
OF THIS AGREEMENT HAS CAUSED THE CONDITION TO BE UNSATISFIED;

 

(D)   BY GIVING WRITTEN NOTICE TO THE OTHER PARTY AT ANY TIME PRIOR TO THE
CLOSING IF THE CLOSING SHALL NOT HAVE OCCURRED ON OR BEFORE THE DATE THAT IS
[***] FROM THE DATE HEREOF OR, IN THE EVENT THAT THE APPLICABLE WAITING PERIODS
(AND ANY EXTENSIONS THEREOF) UNDER THE HSR ACT HAVE NOT EXPIRED OR OTHERWISE
BEEN TERMINATED (WHETHER AS A RESULT OF A “SECOND REQUEST” OR OTHERWISE), THE
DATE THAT IS [***] FROM THE DATE HEREOF; PROVIDED THAT NEITHER AMI NOR ISIS
SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT PURSUANT TO THIS SECTION 9.1(D) IF
SUCH PARTY’S WILLFUL BREACH OF THIS AGREEMENT HAS PREVENTED THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY AT OR BEFORE SUCH TIME.

 

9.2           Effect of Termination.  In the event of termination of this
Agreement by either AMI or Isis as provided in Section 9.1, this Agreement shall
forthwith become null and void and there shall be no liability on the part of
any Party to any other Party under this Agreement, except that the provisions of
Section 1, this Section 9.2, Section 8.3, Section 8.4, Section 8.8, and Section
10 shall continue in full force and effect, except that nothing herein shall
relieve any Party from liability for any breach of this Agreement prior to such
termination.

 

Section 10.            MISCELLANEOUS.

 

10.1         No Third Party Beneficiaries.  This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

 

10.2         Entire Agreement.  This Agreement, the Exhibits and Schedules
hereto, the Transaction Documents and the other documents delivered pursuant
hereto or referred to herein constitute the full and entire understanding and
agreement between the Parties with regard to the subject hereof and no party
will be liable for or bound to any other in any manner by any oral or written
representations, warranties, covenants and agreements except as specifically set
forth herein or therein.  From and after the Closing, the Investment Documents
shall terminate and be of no further force or effect except that such
termination shall not relieve any Party from liability for any breach of such
agreements prior to such termination.

 

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10.3         Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and
permitted assigns.  No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other Party; provided that AMI may (x) assign any or all of its rights and
interests hereunder to one or more of its Affiliates, (y) designate one or more
of its Affiliates to perform its obligations hereunder (in any or all of which
cases AMI nonetheless shall remain responsible for the performance of all of its
obligations hereunder), and (z) assign any or all of its rights and interests
hereunder in connection with a Change of Control of AMI.  Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon and be enforceable by the Parties and their respective
successors, assigns, heirs, executors and administrators.

 

10.4         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.  This Agreement and any
signed agreement or instrument entered into in connection with this Agreement,
and any amendments hereto or thereto, to the extent signed and delivered by
means of a facsimile machine or other electronic means, shall be treated in all
manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person.  At the request of any party hereto
or to any such agreement or instrument, each other party hereto or thereto shall
re-execute original forms thereof and deliver them to all other parties.  No
party hereto or to any such agreement or instrument shall raise the use of a
facsimile machine or other electronic means to deliver a signature or the fact
that any signature or agreement or instrument was transmitted or communicated
through the use of a facsimile machine or other electronic means as a defense to
the formation of a contract and each such party forever waives any such defense.

 

10.5         Headings.  The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

10.6         Notices.  All notices, requests, demands, claims, and other
communications hereunder will be in writing.  Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) when
delivered on a Business Day, if personally delivered or sent by facsimile or
other electronic means (subject to confirmation of such delivery), on such
Business Day, (ii) when delivered other than on a Business Day, if personally
delivered or sent by facsimile or other electronic means (subject to
confirmation of such delivery), on the first Business Day after dispatch,
(iii) on the Business Day after dispatch, if sent by nationally-recognized
overnight courier, and (iv) on the third Business Day following the date of
mailing, if sent by mail, in each case, addressed to the intended recipient as
set forth below:

 

If to Ibis, to:

 

Ibis Biosciences Inc.

1896 Rutherford Road

Carlsbad, CA  92008

Attention:   President

Facsimile: (760) 603-4653

 

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If to Isis, to:

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: Chief Financial Officer

Facsimile: (760) 603-4650

 

with a copy to:

 

1896 Rutherford Road

Carlsbad, CA 92008

Attention:  General Counsel

Facsimile: (760) 268-4922

 

If to AMI:

 

Abbott Molecular Inc.

c/o Abbott Laboratories

Corporate Transactions and Medical Products Legal Operations

Dept. 322, Bldg. AP6A

100 Abbott Park Road

Abbott Park, IL 60064-6010

Attention:  Vice President and Associate General Counsel

Facsimile: (847) 938-1206

 

with a copy to:

 

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL 60601

Attn:  R. Scott Falk, P.C.

 R. Henry Kleeman

Facsimile:  (312) 861-2200

 

Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means, but no such notice, request, demand, claim or other communication
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient.  Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other Party notice in the manner herein set forth.

 

10.7         Governing Law.  This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice

 

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or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

 

10.8         Alternative Dispute Resolution Procedure.  The Parties recognize
that from time to time a dispute may arise relating to a Party’s rights or
obligations under this Agreement or the other Transaction Documents. The Parties
agree that any such dispute shall be resolved by the Alternative Dispute
Resolution (“ADR”) provisions set forth in Exhibit C the result of which shall
be binding upon the Parties.

 

10.9         Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by AMI
and Isis.  No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.

 

10.10       Delays or Omissions.  It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Party, upon any breach,
default or noncompliance by another party under a Transaction Document or
otherwise, will impair any such right, power or remedy, nor will it be construed
to be a waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring.  It is further agreed that any waiver, permit, consent or approval of
any kind or character on any Party’s part of any breach, default or
noncompliance under a Transaction Document or otherwise or any waiver on such
Party’s part of any provisions or conditions of a Transaction Document, or
otherwise must be in writing and will be effective only to the extent
specifically set forth in such writing.  All remedies, either under a
Transaction Document, Ibis’ Certificate of Incorporation, bylaw, or otherwise
afforded to any party, will be cumulative and not alternative.

 

10.11       Incorporation of Exhibits and Schedules.  The exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.  The Parties acknowledge and agree that (i) the Disclosure
Schedules are arranged in sections corresponding to the sections and paragraphs
of this Agreement and the disclosures therein qualify the specifically
referenced corresponding representations and warranties of the Parties contained
in this Agreement, (ii) to the extent this Agreement requires disclosure of any
matter, such matter disclosed pursuant to one provision, subprovision, section
or subsection of the Disclosure Schedules shall be deemed disclosed only to the
extent actually disclosed with respect to the specific provision, subprovision,
section or subsection of the Disclosure Schedule that it is actually disclosed
pursuant to and (iii) section numbers and titles inserted in the Disclosure
Schedules are for convenience of reference only and shall to no extent have the
effect of amending or changing the express description of such sections of the
Disclosure Schedules as set forth in this Agreement.  Information set forth in
each section of the Disclosure Schedules specifically refers to the section of
this Agreement to which such information is responsive, and such information
shall not be deemed to have been disclosed with respect to any statement made in
any other section of this Agreement.  Any capitalized terms used in any Schedule
but not otherwise defined therein shall have the meanings ascribed to such terms
in this Agreement.

 

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10.12       Construction.  The Parties acknowledge and agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any Law or rule of
construction providing that ambiguities in an agreement or other document shall
be construed against the Party drafting such agreement or document. Where
specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it relates. 
When the context so requires the word “or” when used herein shall mean “and/or.”
All pronouns contained herein, and any variations thereof, will be deemed to
refer to the masculine, feminine or neutral, singular or plural, as the identity
of the Parties hereto may require.  Other than with respect to Section 3.2,
Section 4.1 and the preamble to Section 5.1, the words, “provided to,”
“delivered” or “made available” or words of similar import when used in this
Agreement to refer to obligations of Isis and/or Ibis to “provide,” “deliver” or
“make available” materials to AMI mean “made available in the online dataroom
maintained by Isis at ‘[***]’ at least three (3) Business Days prior to the date
hereof”.  Unless otherwise provided therein, when used in any Transaction
Document or Schedule, “Dollars” or “$” means the lawful currency of the United
States of America.

 

10.13       Remedies.  Each of the Parties acknowledges and agrees that the
other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached.  Accordingly, each of the Parties agrees that, subject
to Section 10.8 the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to Section 10.8 above), in
addition to any other remedy to which they may be entitled, at law or in equity.

 

10.14       Severability.  In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement shall continue in full force and effect and the application of such
provision to other Persons or circumstances shall be interpreted so as
reasonably to effect the intent of the Parties hereto.  The Parties further
agree to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

 

10.15       NO OTHER COMPENSATION.

 

The Parties hereby agree that the terms of the Transaction Documents fully
define all consideration, compensation and benefits, monetary or otherwise, to
be paid, granted or delivered by Isis or Ibis to AMI or Abbott and by AMI or
Abbott to Isis or Ibis in connection with the transactions contemplated herein
and therein. Except pursuant to the Permitted Employee Compensation Plan, no
Party previously has paid or entered into any other commitment to pay, whether
orally or in writing, any employee of any other Party, directly or indirectly,
any consideration, compensation or benefits, monetary or otherwise, in
connection with the transactions contemplated in the Transaction Documents.

 

*    *    *    *    *

 

60

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IN WITNESS WHEREOF, the Parties hereto have executed this Stock Purchase
Agreement as of the date first above written.

 

 

ISIS PHARMACEUTICALS, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

IBIS BIOSCIENCES, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ABBOTT MOLECULAR INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

 

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LIST OF EXHIBITS

 

Exhibit A-

Transition Services Agreement

Exhibit B-

Escrow Agreement

Exhibit C-

Alternative Dispute Resolution Procedures

Exhibit D-

Permitted Employee Compensation Plan

Exhibit E

Press Release

 

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EXHIBIT A

 

TRANSITION SERVICES AGREEMENT

 

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EXHIBIT B

 

ESCROW AGREEMENT

 

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EXHIBIT C

 

ADR PROCEDURE

 

To begin the ADR process, a Party first must send written notice of the dispute
to the other Party for attempted resolution by good faith negotiations between
their respective presidents (or their designees) of the affected subsidiaries,
divisions, or business units within twenty-eight (28) days after such notice is
received (all references to “days” in this ADR provision are to calendar days).
If the matter has not been resolved within twenty-eight (28) days after the
notice of dispute, or if the parties fail to meet within such twenty-eight (28)
days, either Party may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel in such a proceeding.

 

1.             To begin an ADR proceeding, a Party shall provide written notice
to the other Party of the issues to be resolved by ADR. Within fourteen (14)
days after its receipt of such notice, the other Party may, by written notice to
the Party initiating the ADR, add additional issues to be resolved within the
same ADR.

 

2.             Within twenty-one (21) days following the initiation of the ADR
proceeding, the Parties shall select a mutually acceptable independent,
impartial and conflicts-free neutral to preside in the resolution of any
disputes in this ADR proceeding. If the Parties are unable to agree on a
mutually acceptable neutral within such period, each Party will select one
independent, impartial and conflicts-free neutral and those two neutrals will
select a third independent, impartial and conflicts-free neutral within ten
(10) days thereafter.  None of the neutrals selected may be current or former
employees, officers or directors of either Party, its Subsidiaries or Affiliates
or a current consultant or independent contractor of either Party or its
Affiliates.

 

3.             No earlier than twenty-eight (28) days or later than fifty-six
(56) days after selection, the neutral(s) shall hold a hearing to resolve each
of the issues identified by the Parties. The ADR proceeding shall take place at
a location agreed upon by the Parties. If the Parties cannot agree, the
neutral(s) shall designate a location other than the principal place of business
of either Party or any of their Subsidiaries or Affiliates.

 

4.             At least seven (7) days prior to the hearing, each Party shall
submit the following to the other Party and the neutral(s):

 

(a)           a copy of all exhibits on which such Party intends to rely in any
oral or written presentation to the neutral;

 

(b)           a list of any witnesses such Party intends to call at the hearing,
and a short summary of the anticipated testimony of each witness;

 

(c)           a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each issue. The proposed
rulings and remedies shall not contain any recitation of the facts or any legal
arguments and shall not exceed one (1) page per issue. The Parties agree that
neither side shall seek as part of its remedy any punitive damages.

 

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(d)           a brief in support of such Party’s proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page limitation
shall apply regardless of the number of issues raised in the ADR proceeding.

 

Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.

 

5.             The hearing shall be conducted on two (2) consecutive days and
shall be governed by the following rules:

 

(a)           Each Party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each Party has had the
five (5) hours to which it is entitled.

 

(b)           Each Party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross-examination time shall be charged against the Party
conducting the cross-examination.

 

(c)           The Party initiating the ADR shall begin the hearing and, if it
chooses to make an opening statement, shall address not only issues it raised
but also any issues raised by the responding Party. The responding Party, if it
chooses to make an opening statement, also shall address all issues raised in
the ADR. Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in the same
sequence.

 

(d)           Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.

 

(e)           Settlement negotiations, including any statements made therein,
shall not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR hearing also shall not be admissible. As to all other
matters, the neutral(s) shall have sole discretion regarding the admissibility
of any evidence.

 

6.             Within seven (7) days following completion of the hearing, each
Party may submit to the other Party and the neutral(s) a post-hearing brief in
support of its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages. This
page limitation shall apply regardless of the number of issues raised in the ADR
proceeding.

 

7.             The neutral(s) shall rule on each disputed issue within fourteen
(14) days following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the Parties on each disputed
issue but may adopt one Party’s proposed rulings and remedies on some issues and
the other Party’s proposed rulings and remedies on other issues. The
neutral(s) shall not issue any written opinion or otherwise explain the basis of
the ruling.

 

2

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8.             The neutral(s) shall be paid a reasonable fee plus expenses.
These fees and expenses, along with the reasonable legal fees and expenses of
the prevailing Party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room, shall be
paid as follows:

 

(a)           If the neutral(s) rule(s) in favor of one Party on all disputed
issues in the ADR, the losing Party shall pay 100% of such fees and expenses.

 

(b)           If the neutral(s) rule(s) in favor of one Party on some issues and
the other Party on other issues, the neutral(s) shall issue with the rulings a
written determination as to how such fees and expenses shall be allocated among
the Parties. The neutral(s) shall allocate fees and expenses in a way that bears
a reasonable relationship to the outcome of the ADR, with the Party prevailing
on more issues, or on issues of greater value or gravity, recovering a
relatively larger share of its legal fees and expenses.

 

9.             The rulings of the neutral(s) and the allocation of fees and
expenses shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.

 

10.           Except as provided in paragraph 9 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and briefs), and
the rulings shall be deemed Confidential Information. The neutral(s) shall have
the authority to impose sanctions for unauthorized disclosure of Confidential
Information.

 

3

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EXHIBIT D

 

PERMITTED EMPLOYEE COMPENSATION PLAN

 

AMI and Isis will mutually agree on the [***].  The money available for such
package, in the aggregate, will be $[***], a portion of which (approximately
$[***] assuming normal employee turnover rates) would be [***].  Any funds [***]
would be released to [***].

 

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EXHIBIT E

 

PRESS RELEASE

 

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EXHIBIT B

 

STOCK SUBSCRIPTION AGREEMENT

 

AMONG

 

IBIS BIOSCIENCES, INC.

 

ISIS PHARMACEUTICALS, INC.

 

AND

 

ABBOTT MOLECULAR INC.

 

[                              ], 2008

 

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

 

STOCK SUBSCRIPTION AGREEMENT

 

THIS STOCK SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into as
of this [    ] day of [                ], 2008, by and among Isis
Pharmaceuticals, Inc., a Delaware corporation (“Isis”), Ibis Biosciences, Inc.,
a Delaware corporation and majority owned subsidiary of Isis (“Ibis”), and
Abbott Molecular, Inc., a Delaware corporation (“AMI”).  Isis, Ibis and AMI are
sometimes referred to herein individually as a “Party,” and collectively as the
“Parties.”

 

RECITALS

 

WHEREAS, on January 30, 2008, the Parties entered into a Strategic Alliance
Master Agreement (the “Master Agreement”) and certain other Investment
Documents, pursuant to which, among other things, AMI acquired the Shares from
Ibis;

 

WHEREAS, in connection with the transactions contemplated by the Investment
Documents, Ibis granted a Subscription Right to AMI and AMI acquired the
Subscription Right from Ibis on the terms set forth in the Call Option
Agreement; and

 

WHEREAS, on [                  ], 2008, in accordance with the terms and
provisions of the Call Option Agreement, AMI has exercised the Subscription
Right and desires to acquire the Additional Shares pursuant to the terms hereof.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, and covenants set forth herein and in the Master Agreement and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

 

SECTION 1.         Definitions.

 

Capitalized terms used and not otherwise defined herein have the meanings
ascribed to such terms in the Master Agreement.

 

SECTION 2.         Subsequent Closing; Delivery And Payment.

 

2.1          Subsequent Closing.  The closing of the sale and purchase of the
Additional Shares under this Agreement (the “Subsequent Closing”) will take
place at 1:00 p.m. on the date hereof, at the offices of Kirkland & Ellis LLP,
200 E. Randolph Dr. Chicago, IL 60601 or at such other time or place as the
Parties may mutually agree (such date is hereinafter referred to as the
“Subsequent Closing Date”).

 

2.2          Delivery.  Subject to and upon the terms and conditions set forth
in this Agreement, and in reliance upon the respective representations and
warranties made herein by each of the Parties, at the Subsequent Closing:

 

1

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(a)           Ibis shall issue, sell, convey, assign, transfer and deliver to
AMI a certificate representing the Additional Shares sufficient to vest in AMI
legal and beneficial ownership of the Additional Shares, free and clear of all
Encumbrances; and

 

(b)           AMI shall purchase, acquire and accept the Additional Shares from
Ibis for $20,000,000, paid to Ibis via wire transfer of immediately available
funds to an account designated by Ibis in writing.

 

SECTION 3.        Representations And Warranties of the Parties.

 

3.1          Representations and Warranties of Ibis and Isis.  As a material
inducement to AMI to enter into this Agreement, except as set forth in the
corresponding Section of the Disclosure Schedules delivered to AMI herewith on
the date hereof (the “Disclosure Schedules”), Ibis and Isis each hereby jointly
and severally represent and warrant as follows:

 

(a)    Power and Authority.  Each of Ibis and Isis (i) has the power, authority
and the legal right to enter into this Agreement and to perform its obligations
hereunder and (ii) has taken all necessary action required to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder.

 

(b)    Enforceability.  This Agreement has been duly executed and delivered on
behalf of Ibis and Isis and constitutes a legal, valid and binding obligation of
each such Party and is enforceable against each such Party in accordance with
its terms subject to the effects of bankruptcy, insolvency or other Laws of
general application affecting the enforcement of creditor rights.

 

(c)    Governmental Authority; Consents.  All necessary consents, approvals and
authorizations of all Governmental Authorities and other parties required to be
obtained by Ibis and Isis in connection with the execution and delivery of this
Agreement and the performance of their obligations hereunder have been obtained.

 

(d)    No Conflicts.  The execution and delivery of this Agreement by each of
Ibis and Isis and the performance of each such Party’s obligations hereunder,
with or without the passage of time or giving of notice, (i) do not and will not
conflict with or violate any requirement of Applicable Law or any provision of
the certificate of incorporation, bylaws or any similar instrument of such
Party, as applicable, (ii) do not and will not require any notice, conflict
with, violate, or breach or constitute a default or require any consent or give
rise to any termination or acceleration right or the creation of any Encumbrance
on the Additional Shares or any of the properties or assets of Ibis under, any
contractual obligation by which such Party is bound or subject to and (iii) do
not and will not cause the suspension, revocation, impairment, forfeiture or
nonrenewal of any License applicable to Ibis, the Business or any of Ibis’
operations, assets or properties.

 

(e)    Due Organization; Qualification.  Each of Ibis and Isis is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to enter into this
Agreement.  Except as would not reasonably be expected to have a Material
Adverse Effect, Ibis has obtained and currently maintains all qualifications to
do business as a foreign corporation in all jurisdictions in which

 

2

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the character of the Business requires it to be so qualified.  Ibis has all
requisite power and authority and all authorizations and Licenses necessary to
own, operate or conduct the Business.

 

(f)    Capitalization; Voting Rights.

 

(i)          The authorized Capital Stock of Ibis consists of 1,228,501 shares
of Common Stock, par value $0.001 per share, 1,114,251 shares of which are
issued and outstanding and 1,000,000 of which are held by Isis (the “Remaining
Shares”) and 114,251 of which are held by AMI.

 

(ii)         The issued and outstanding Capital Stock of Ibis as of the
Subsequent Closing will consist exclusively of the Shares, the Additional Shares
and the Remaining Shares.  Except as set forth in the Investor Rights Agreement,
Ibis does not have any obligations to issue or redeem any shares of Capital
Stock, other than with respect to the Additional Shares and Ibis has not issued
any Capital Stock other than the Shares and the Remaining Shares.  No Capital
Stock issued by Ibis is listed on any stock exchange or unregulated market. 
Other than the Investment Documents, there are no agreements with Isis or Ibis
or any other Person with respect to the voting or Transfer of the Capital Stock.

 

(iii)       The Additional Shares are: (A) duly authorized, validly issued,
fully paid and nonassessable; (B) issued in compliance with all applicable state
and federal Laws concerning the issuance of Capital Stock; and (C) free and
clear of all Encumbrances other than the rights and obligations set forth in the
Investor Rights Agreement; provided, that the Additional Shares may be subject
to restrictions on Transfer set forth in the Investor Rights Agreement and under
state and/or federal securities Laws as set forth herein or as otherwise
required by such Laws at the time a Transfer is proposed.

 

(iv)        Neither the sale of the Additional Shares to AMI hereunder nor the
sale of the Remaining Shares to AMI under the Acquisition Agreement is subject
to any preemptive rights, rights of first refusal or similar rights.

 

(g)   Compliance with Other Instruments.  Neither Ibis nor, with respect to the
Business, Isis is in violation or default of any term of its charter documents,
each as amended, or of any provision of any Contract to which it is party or by
which the Business is bound or of any judgment, decree, order or writ.

 

(h)   Financial Statements.  Schedule 3.1(t) attached hereto contains the
following financial statements (collectively the “Financial Statements”):
[(i) the profit and loss statement for Ibis for the fiscal year ended
December 31, 2007, (ii) the profit and loss statement for Ibis and the related
balance sheet (the “Most Recent Balance Sheet”) for the [three] month period
ended [March 31, 2008].(1)  The Financial Statements have been prepared in
accordance with GAAP throughout the periods covered thereby, present fairly in
all material respects the financial condition of Ibis or the Division (as the
case may be) as of such dates and the results of operations of Ibis or the
Division (as the case may be) for such periods, and are materially

 

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

(1) The most recent financial statements available upon exercise of the
Subscription Rights will be referenced in this Section.

 

3

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correct and complete and consistent with the books and records of Ibis (which
books and records are materially correct and complete).

 

(i)    Customers and Suppliers. Schedule 3.1(z) accurately sets forth a list of
the Business’ top ten customers by revenue for the fiscal year ended
December 31, 2007 and the [three] month period ended [March 31, 2008].  Except
as set forth on Schedule 3.1(z), neither Isis nor Ibis has received any
indication from any material customer of the Business or any Governmental
Authority to the effect that, and neither Isis nor Ibis has any reason to
believe that, such customer or Governmental Authority will in the future stop,
or materially decrease the rate of buying products or services from the
Business.  Schedule 3.1(z) also accurately sets forth a list of the Business’
top ten suppliers by dollar amount for the fiscal year ended December 31, 2007
and the [three] month period ended [March 31, 2008].(2)  Except as set forth on
Schedule 3.1(z), neither Isis nor Ibis has received any indication from any
material supplier of the Business to the effect that, and neither Isis nor Ibis
has any reason to believe that, such supplier will stop or materially decrease
the rate of providing products or services to the Business and its customers. 
Neither Isis nor Ibis is involved in any material dispute with any customer or
supplier of or to the Business.

 

(j)    No Material Adverse Effect.  Since the Financing Closing, there has been
no Material Adverse Effect.

 

(k)   Master Agreement. The representations and warranties made by Isis and Ibis
in the Master Agreement are true and correct as of the date hereof, except that
the representations and warranties in Sections 3.1(t) and 3.1(z) of the Master
Agreement are true and correct as restated as set forth in Sections 3.1(h) and
3.1(i), respectively, above.  Ibis and Isis have complied with and performed the
covenants and agreements set forth in the Investment Documents in all material
respects as of the date hereof.

 

(l)    Offering Valid.  Assuming the accuracy of the representations and
warranties of AMI contained in Section 3.2 hereof, the offer, sale and issuance
of the Additional Shares is exempt from the registration requirements of the
Securities Act, and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities Laws.  Neither Ibis nor any
agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Additional Shares
to any Person or Persons so as to bring the sale of such Additional Shares by
Ibis within the registration provisions of the Securities Act or any state
securities Laws.

 

3.2          Representations And Warranties of AMI. AMI hereby represents and
warrants to Ibis and Isis as follows (provided that such representations and
warranties do not lessen or obviate the representations and warranties of Ibis
and Isis set forth in this Agreement):

 

(a)   Power and Authority.  AMI has the power, authority and the legal right to
enter into this Agreement and to perform its obligations hereunder, and it has
taken all

 

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

(2) Data for the period reflected in the most recent financial statements
available upon exercise of the Subscription Rights will be referenced in this
Section.

 

4

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necessary action required to authorize the execution and delivery of such
agreement and the performance of its obligations hereunder.

 

(b)   Enforceability. This Agreement has been duly executed and delivered on
behalf of AMI and constitutes its legal, valid and binding obligation and is
enforceable against it in accordance with its terms subject to the effects of
bankruptcy, insolvency or other Laws of general application affecting the
enforcement of creditor rights.

 

(c)   Governmental Authority; Consents.  All necessary consents, approvals and
authorizations of all Governmental Authorities and other parties required to be
obtained by AMI in connection with the execution and delivery of this Agreement
and the performance of its obligations hereunder have been obtained.

 

(d)   No Conflicts.  The execution and delivery of this Agreement by AMI and the
performance of its obligations hereunder and thereunder (i) do not conflict with
or violate any requirement of Applicable Law or any provision of its certificate
of incorporation or bylaws and (ii) do not require any notice, conflict with,
violate, or breach or constitute a default or require any consent not already
obtained or give rise to any termination or acceleration right under, any
contractual obligation by which such Party is bound.

 

(e)   Due Organization; Qualification.  AMI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to enter into this Agreement and to
perform its obligations hereunder and thereunder.

 

(f)    Investment Representations.  AMI understands that the Additional Shares
have not been registered under the Securities Act.  AMI also understands that
the Additional Shares are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon AMI’s
representations contained in this Agreement.  AMI hereby represents and warrants
as follows:

 

(i)            AMI Bears Economic Risk.  AMI may be required to bear the
economic risk of its investment in the Additional Shares indefinitely unless the
Additional Shares are registered pursuant to the Securities Act, or an exemption
from registration is available.  AMI understands that Ibis has no present
intention of registering the Additional Shares or any shares of its Capital
Stock.  AMI also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow AMI to Transfer all or any portion of
the Additional Shares under the circumstances, in the amounts or at the times
AMI might propose.

 

(ii)           Acquisition for Own Account.  AMI is acquiring the Additional
Shares for AMI’s own account for investment only, and not with a view towards
their distribution.

 

(iii)         Accredited Investor.  AMI represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.

 

5

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(iv)          Ibis Information.  Ibis and Isis have given AMI an opportunity to
discuss Ibis’ business, management and financial affairs with directors,
officers and management of Ibis and AMI has had an opportunity to review Ibis’
operations and facilities.

 

(v)            Rule 144.  AMI acknowledges and agrees that the Additional
Shares, are “restricted securities” as defined in Rule 144 promulgated under the
Securities Act as in effect from time to time and must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available.  AMI has been advised or is aware of the
provisions of Rule 144, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things: the availability of certain current public information about
Ibis, the resale occurring following the required holding period under Rule 144
and the number of shares being sold during any three-month period not exceeding
specified limitations.

 

(g)   Transfer Restrictions.  AMI acknowledges and agrees that the Additional
Shares are subject to restrictions on Transfer as set forth in the Investor
Rights Agreement.

 

(h)   Legends.  AMI understands and agrees that the certificates evidencing the
Additional Shares, or any other Capital Stock issued in respect of the
Additional Shares upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, will bear the legends required by the
Investor Rights Agreement, including legends relating to restrictions on
Transfer under federal and state securities Laws and legends required under
applicable state securities Laws.

 

(i)    Master Agreement. AMI has complied with and performed the covenants and
agreements set forth in the Investment Documents in all material respects as of
the date hereof.

 

SECTION 4.         Indemnification.

 

4.1          The representations and warranties of Ibis and Isis set forth in
Sections 3.1(a), 3.1(b), 3.1(c), 3.1(d), 3.1(e), 3.1(f) and 3.1(g), above and
each Fundamental Isis Representation set forth in the Master Agreement as
restated on the date hereof shall also be ‘Fundamental Isis Representations’
under the Master Agreement.

 

4.2          The representations and warranties of AMI set forth in Sections
3.2(a), 3.2(b), 3.2(c) and 3.2(d), above and each Fundamental AMI Representation
set forth in the Master Agreement as restated on the date hereof shall also be
‘Fundamental AMI Representations’ under the Master Agreement.

 

4.3          The representations, warranties, covenants and agreements of the
Parties set forth in this Agreement shall be subject to Sections 5.8, 7.1 and
7.2 of the Master Agreement.

 

SECTION 5.         Miscellaneous. Section 8 of the Master Agreement is
incorporated herein by reference.

 

6

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[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

7

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IN WITNESS WHEREOF, the parties hereto have executed this STOCK SUBSCRIPTION
AGREEMENT as of the date set forth in the first paragraph hereof.

 

 

 

ISIS PHARMACEUTICALS, INC.

 

 

 

Signature:

 

 

 

 

Print Name:

 

 

 

 

Title:

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

IBIS BIOSCIENCES, INC.

 

 

 

Signature:

 

 

 

 

Print Name:

 

 

 

 

Title:

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

ABBOTT MOLECULAR INC.

 

 

 

Signature:

 

 

 

 

Print Name:

 

 

 

 

Title:

 

 

 

 

Address:

 

 

 

 

 

Signature Page TO Stock Subscription Agreement

 

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EXHIBIT C

 

[***] MILESTONE AND VALUE ACCRETION MILESTONES

 

 

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[***]

 

C-1

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EXHIBIT D

 

OPTION NOTICE

 

Reference is made to that certain Call Option Agreement (the “Agreement”) dated
as of January 30, 2008 by and among Isis Pharmaceuticals, Inc., a Delaware
corporation (“Isis”), Ibis Biosciences, Inc., a Delaware corporation, and Abbott
Molecular Inc., a Delaware corporation (“AMI”).  Capitalized terms used but not
defined herein have the meanings given to such terms in the Agreement.

 

AMI hereby notifies Isis that AMI is exercising its Call Option pursuant to the
Agreement as of this        date of                   , 200    .

 

1.     The Base Purchase Price, per the Agreement is [One Hundred Seventy Five
Million and No/100 Dollars ($175,000,000.00)// One Hundred Ninety Five Million
and No/100 Dollars ($195,000,000.00)].

 

2.     AMI in its good faith judgment has determined that the [***] Milestone
has not been reached as of the date hereof and the Transaction Value is
therefore [One Hundred Seventy Five Million and No/100 Dollars
($175,000,000.00)// One Hundred Ninety Five Million and No/100 Dollars
($195,000,000.00)].

 

OR

 

2.     AMI in its good faith judgment has determined that the [***] Milestone
has been reached as of the date hereof and:

 

(i)            AMI in its good faith judgment has determined that the [***]
Milestone has//has not been reached as of the date hereof;

 

(ii)           AMI in its good faith judgment has determined that the [***]
Milestone has//has not been reached as of the date hereof; and

 

(iii)          AMI in its good faith judgment has determined that the [***]
Milestone has//has not been reached as of the date hereof and, therefore, the
Transaction Value is as follows:

 

Base Purchase Price

 

$175,000,000.00//
$195,000,000.00

 

[[***] Milestone Adjustment

 

$

[***]]

 

[[***] Milestone Adjustment

 

$

[***]]

 

[[***] Milestone Adjustment]

 

$

[***]]

 

Transaction Value

 

$

[                     ]

 

 

The Transaction Value is $[                ].  Pursuant to Section 3.1 of the
Agreement, AMI hereby instructs Isis to execute and return the Acquisition
Agreement to AMI via facsimile in accordance with the provisions of Section 4.2
of the Agreement upon receipt of this Option Notice.

 

AMI represents and warrants to Isis that AMI has obtained the consent of its
Board of Directors to exercise the Call Option and to execute the Acquisition
Agreement based upon the most recent Disclosure Schedules delivered by Isis to
AMI.

 

 

ABBOTT MOLECULAR INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

D-1

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