EXHIBIT 10.2

 

EXECUTION VERSION

ASSET PURCHASE AGREEMENT
by and among

1ST ORDER PHARMACEUTICALS, INC.
(a Delaware corporation),

and

XENON PHARMACEUTICALS INC.

(a corporation continued under the federal laws of Canada)

dated as of April 25, 2017

 

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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EXECUTION VERSION

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made as of April 25, 2017 (the
“Effective Date”), by and among, 1ST Order Pharmaceuticals, Inc., a Delaware
Corporation (“Seller”) and Xenon Pharmaceuticals Inc., a corporation continued
under the federal laws of Canada (“Acquiror”).

RECITALS:

A.   WHEREAS, the Seller previously entered into an Asset Purchase Agreement
between Seller and Valeant Pharmaceuticals Luxembourg S.a.r.l. (“Valeant”) dated
October 30, 2015 (the “Valeant APA”, which is attached hereto as Exhibit A)
pursuant to which Seller purchased from Valeant the VRX621698 compound and
certain related assets;

B.   WHEREAS, the Seller previously entered into an Intellectual Property
Assignment Agreement between Seller and Valeant dated February 8, 2017, pursuant
to which Valeant assigned to Seller additional intellectual property assets;

C.   WHEREAS, Seller and Acquiror entered into a certain Option Agreement
effective as of March 13, 2017 (the “Option Agreement”), with regard to the 1st
Order Technology (as defined in that agreement); and

D.   WHEREAS, the Seller desires to sell to Acquiror, and Acquiror desires to
purchase from Seller, all of Seller’s right, title and interest in and to all
assets purchased by Seller pursuant to the Valeant APA and all Intellectual
Property Rights related thereto, including without limitation, all rights with
respect to the investigational compound known as 1OP-2198 (previously VRX621698)
(the “Compound”), and any variant forms thereof, including as salt, freebase or
pro-drug, and all other assets of Seller related thereto, including Compound
Regulatory Documentation, reports (including all reports of pre-clinical
studies), data and API, upon the terms and subject to the conditions set forth
in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants and agreements contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:

ARTICLE 1 DEFINITIONS

For all purposes of and under this Agreement the capitalized terms shall have
the meanings set forth below.

1.1  “Action” means any action, suit or proceeding, claim, arbitration,
litigation or investigation.

1.2  “[†] Knowledge” means [†].

1.3  “Affiliate(s)” means, with respect to a particular party, a Person that
controls, is controlled by or is under common control with such party. For the
purposes of this definition, the word “control” (including, with correlative
meaning, the terms “controlled by” or “under the common control with”) means the
actual power, either directly or indirectly through one or more intermediaries,
to direct or cause the direction of the management and policies of such entity,
whether by the ownership of fifty percent (50%) or more of the voting stock of
such entity, or by contract or otherwise.

1.4  “ANDA Filing” means that a Third Party files an ANDA with the FDA with
regard to a Product in the [†] period after the expiration of the last to expire
of U.S. Patents Nos. [†] and [†] (including any patent term extension thereof).

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
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1.5  “API” means all quantities of the Compound owned or controlled by Seller.

1.6  “Assumed Liabilities” is defined in Section 2.1(b).

1.7  “Authorization” means any authorization, approval, consent, certificate,
license, notification, registration, permit, franchise, waiver, order, right, or
notification of any Governmental Entity.

1.8  “Base Purchase Price” is defined in Section 2.3.

1.9  “Business Day” means a day other than a Saturday, Sunday, or other day on
which banks located in British Columbia, Canada or North Carolina, USA are
authorized or required by Law to close.

1.10“Closing” is defined in Section 3.1.

1.11“Closing Date” is defined in Section 3.1.

1.12“Compound Material Adverse Effect” means [†].

1.13“Compound Regulatory Documentation” means any and all Authorizations
relating to the Compound, including, without limitation, applications,
registrations, licenses, authorizations, approvals, non-clinical and clinical
study authorization applications or notifications (including all supporting
files, writings, data, studies and reports), correspondence to or with any
Medical Product Regulatory Authority with respect to the Compound, and all data
contained in any of the foregoing, including all adverse event files and
manufacturing records.

1.14“Confidential Information” is defined in Section 6.5.

1.15“Confidentiality Agreement” means that certain Confidentiality Agreement
entered by and between Seller and Acquiror effective as of April 5, 2016.

1.16“Damages” is defined in Section 9.1(a).

1.17“EMA” means the European Medicines Agency.

1.18“Encumbrance” means any lien, mortgage, pledge, hypothecation, charge,
preference, security interest, attachment, claim, restriction, including
transfer restrictions, put, call, right of first refusal, easement, servitude,
right-of-way, option, warrant, conditional sale or installment contract or
encumbrance of any kind and any financing lease involving substantially the same
effect.

1.19“FDA” means the United States Food and Drug Administration.

1.20“FFDCA” means the U.S. Federal Food, Drug, and Cosmetic Act.

1.21“Governmental Entity” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local, or municipal government, or foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, or other
regulatory, administrative or judicial authority thereof.

1.22“Inbound Licenses” is defined in Section 4.7(j).

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1.23“IND” means (i) an investigational new drug application filed with the FDA
for authorization to commence clinical studies and its equivalent in the United
States or Canada and (ii) all supplements and amendments that may be filed with
respect to the foregoing.

1.24“Indemnified Acquiror Party” is defined in Section 9.1.

1.25“Indication” means a separate and distinct disease, disorder or medical
condition in humans that a Product is intended to treat, prevent, diagnose,
monitor or ameliorate, as set forth in the IND or label for such Product, as
approved by the applicable Medical Product Regulatory Authority. For clarity,
the use of a Product to treat an expanded set or subset of patients for a
disease, disorder or medical condition, when such Product has already received
regulatory approval with respect to such disease, disorder or medical condition,
shall not constitute a separate Indication with respect to such Product.

1.26“Intellectual Property Rights” means any and all of the rights in or
associated with the following throughout, or anywhere in, the world: (i) all
letters patent, patent applications, provisional patents, design patents, PCT
filings, invention disclosures and other rights to inventions or designs
(“Patents”), (ii) all registered and unregistered copyrights in both published
and unpublished works, mask works, moral rights, and other literary property or
authors rights (“Copyrights”), (iii) all trademarks and service marks (whether
or not registered), trade names, logos, trade dress, Domain Names, and other
proprietary indicia and all goodwill associated therewith (“Marks”), (iv)
Know-How, trade secret rights, and other rights in confidential or proprietary
information (“Trade Secrets”), (v) all applications, registrations, issuances,
divisions, continuations, renewals, reissuances and extensions of the foregoing;
and (vi) any equivalent intellectual property or proprietary rights to the
foregoing.

1.27“Know-How” means all technical, scientific and other know-how and
information, trade secrets, knowledge, technology, means, methods, processes,
practices, formulas, instructions, skills, techniques, procedures, experiences,
ideas, technical assistance, designs, drawings, assembly procedures, computer
programs, apparatuses, specifications, data (including biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical,
clinical, safety, manufacturing and quality control data), results and other
material, including high-throughput screening, gene expression, genomics,
proteomics and other drug discovery and development technology, assays and any
other biological methodology, pre-clinical and clinical trial results,
manufacturing procedures, test procedures and purification and isolation
techniques, (whether or not confidential, proprietary, patented or patentable)
in written, electronic or any other form.

1.28“Law” means any statute, law (including common law), constitution, treaty,
ordinance, code, order, decree, judgment, rule, regulation and any other binding
requirement or determination of any Governmental Entity.

1.29“Loan Agreements” means (a) [†], (b) [†], (c) [†], and (d) all other
agreements pursuant to which Seller was granted or received any funding with
respect to the operation of its business or exploitation of the Purchased
Assets.

1.30“Loan Payoff Amounts” means the aggregate Pay-Off Amount (as defined in the
Payoff Letters) set forth under the Payoff Letters.

1.31“Major Market” means each of the United States of America, the European
Union, and Japan.

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1.32“Medical Product Regulatory Authority” means any Governmental Entity that is
concerned with the safety, efficacy, reliability, manufacture, investigation,
sale or marketing of pharmaceuticals, medical products, biologics or
biopharmaceuticals, including, without limitation, FDA, the EMA, and state and
local government authorities.

1.33“NDA” means (a) a New Drug Application, as defined in the FFDCA, which is
required to be approved by FDA before the marketing of a product for its
FDA-approved intended use, and its equivalent in other countries or regulatory
jurisdictions or any successor application or procedure, and (b) all supplements
and amendments that may be filed with respect to the foregoing.

1.34“NDA Approval” means approval of an NDA by a Medical Product Regulatory
Authority in a Major Market, which approval is evidenced in a written
communication from the appropriate Medical Product Regulatory Authority.

1.35“Order” means any award, injunction, judgment, decree, order, ruling,
subpoena or verdict or other decision entered, issued or rendered by any
Governmental Entity.

1.36“Outbound Licenses” is defined in Section 4.7(k).

1.37“Payoff Letters” is defined in Section 7.5.

1.38“Permitted Encumbrance” means Encumbrances arising by operation of law for
taxes not yet due and payable.

1.39“Person” means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated association, a Governmental Entity
or any agency, instrumentality or political subdivision of a Governmental
Entity, or any other entity or body.

1.40“Phase III Trial” means, with respect to the Compound, a pivotal clinical
study sponsored by Acquiror or its Affiliates or licensees conducted in a
sufficient number of patients and whose primary objective is to obtain
additional information about the therapeutic efficacy and safety of the Compound
in patients for the particular indication in question that is needed to evaluate
the overall risk-benefit relationship of the Compound and to provide adequate
basis for obtaining requisite regulatory approval(s) and product labeling, as
more fully defined in 21 C.F.R. § 312.21(c).

1.41“[†]” means [†].

1.42“Product” means a pharmaceutical preparation containing the Compound, as an
active ingredient, in any formulation, dosage and form thereof, or as a
pro-drug, salt, solution, or hydrate, either alone or in combination with other
active ingredients, for all human and non-human therapeutic uses.

1.43“Purchased Assets” is defined in Section 2.1.

1.44“[†] Knowledge” means [†].

1.45“Representatives” is defined in Section 6.1.

1.46“[†]” means [†].

1.47“Seller Certificate” is defined in Section 8.2(d).

1.48“Seller Registered IPR” is defined in Section 4.7(a).

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1.49“sNDA Approval” means approval of a supplemental new drug application by a
Medical Product Regulatory Authority in a Major Market, which approval is
evidenced in a written communication from the appropriate Medical Product
Regulatory Authority.

1.50“[†]” means [†].

1.51“[†]” means [†].

1.52“Technology” means tangible embodiments of any of the following: (i)
inventions (whether or not patentable), trade secrets, technical data,
databases, customer lists, designs, tools, methods, processes, technology,
ideas, Know-How, product road maps and other proprietary information and
materials; (ii) trademarks and service marks (whether or not registered), trade
names, logos, trade dress and other proprietary indicia; (iii) documentation,
advertising copy, marketing materials, web-sites, specifications, mask works,
drawings, graphics, databases, recordings and other works of authorship, whether
or not protected by Copyright; (iv) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, firmware, development tools, files, records and
data, design documents, flow-charts, user manuals, documentation, and training
materials relating thereto and any translations thereof and all media on which
any of the foregoing is recorded (collectively, “Software”); and (v) domain
names, uniform resource locators and other names and locators associated with
the Internet (“Domain Names”).

1.53“Third Party” shall mean any Person or entity other than Seller, Acquiror
and their respective Affiliates.

1.54“[†]” means [†].

1.55“Transaction Documents” means this Agreement and any other, instrument,
agreement or document required to be delivered by the parties to this Agreement
pursuant to the terms hereof.

1.56“Transactions” means the purchase and sale of the Purchased Assets hereunder
and the other transactions contemplated by the Transaction Documents.

1.57“Transferred Intellectual Property” means, collectively, the Transferred IPR
and Transferred Technology.

1.58“Transferred IPR” means all Intellectual Property Rights of Seller,
including all Seller Registered IPR, Patent rights, Know-How and other
Intellectual Property Rights of Seller relating to the Compound or necessary or
useful for the development or commercialization of Products, but excluding the
“1st Order” trademark.

1.59“Transferred Technology” means all Technology of Seller relating to or used
in connection with the Compound, including (i) the Compound and all reports
(including completed development reports), raw data, and APIs related thereto,
and (ii) the Technology set forth on Schedule 1.59, but excluding off-the-shelf
software programs such as Microsoft 365 and Adobe.

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ARTICLE 2 PURCHASE AND SALE

 

2.1  Purchase and Sale of the Compound.

(a)Purchased Assets. On the terms and subject to the conditions set forth in
this Agreement, at the Closing, Acquiror hereby purchases from Seller, and
Seller hereby sells to Acquiror, all of Seller’s right, title, and interest in
and to all assets of Seller relating to or used in connection with the Compound
(the “Purchased Assets”), free and clear of all Encumbrances, including, without
limitation, the following assets:

(i)  The Transferred IPR;

(ii) The Transferred Technology;

(iii)All API existing as of the Effective Date;

(iv)The Compound Regulatory Documentation; and

(v) All other assets of Seller set forth in Schedule 2.1(a)(v).

(b)Assumed Liabilities. From and after the Closing, Acquiror hereby agrees as
follows (collectively, the “Assumed Liabilities”):

(i)  Acquiror will pay to Valeant any relevant milestone or royalty payments due
to Valeant from Seller with regard to the development or commercialization of
Products arising under Sections 2.4 and 2.5 of the Valeant APA, and

(ii) Acquiror will perform the obligations of Seller set forth in Sections 2.6,
2.8, and 2.9 of the Valeant APA.

(iii)Acquiror will pay any amounts required to be paid by Seller, or perform any
obligation of Seller, pursuant to Section 10.2(a)(ii) or Section 10.2(b) of the
Valeant APA in respect of claims by any Indemnified Seller Party (as such term
is defined in the Valeant APA, which for clarity refers to Valeant and its
specified affiliates) arising out of acts of Acquiror (or Acquiror’s failure to
act) with respect to (i) and (ii) above, that occur after the Closing.

(c)Retained Assets. Seller shall retain, and Acquiror will not acquire Seller’s
right, title or interest in or to, and the Purchased Assets will not include the
following (collectively, the “Retained Assets”):

(i)  Seller’s rights under this Agreement;

(ii) All cash and cash equivalents and all bank accounts of Seller;

(iii)all Contracts of insurance and policies of insurance held by Seller,
including casualty, liability or group life, health or accident insurance;

(iv)Seller’s organizational documents, qualification to conduct business,
arrangements with registered agents, taxpayer and other identification numbers,
corporate seal, minute books, stock transfer books, blank stock certificates,
books and records relating to federal, state, local or foreign income, net or
gross receipts, franchise, estimated, alternative minimum, or add-on taxes, tax
returns, and any other documents relating to the organization, maintenance or
existence of Seller as a limited liability company;

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(v) all equity interests in Seller; and

(vi)the Valeant APA (which Agreement, Acquiror and Seller agree, is not being
assigned to Acquiror).

(d)Excluded Liabilities. Acquiror shall not assume pursuant to this Agreement or
the Transactions, and shall have no liability for, any liabilities of Seller of
any kind, character or description whatsoever other than the Assumed
Liabilities, and Seller shall retain responsibility for all such liabilities and
obligations.

2.2  Purchase Price. The purchase price for the Purchased Assets shall be equal
to the Base Purchase Price plus, to the extent the underlying milestone events
are achieved, the Milestone Payments in accordance with Section 2.3.

2.3  Payment of Closing Consideration. The “Base Purchase Price” shall be three
hundred and fifty thousand U.S. dollars ($350,000); provided, pursuant to the
terms of the Option Agreement, the [†] U.S. dollars ($[†]) paid by Acquiror to
Seller pursuant to the Option Agreement is fully creditable against the Base
Purchase Price. Within [†] ([†]) [†] following the Closing, Acquiror shall (i)
deliver to Seller the amount equal to [†] U.S. dollars ($[†]) (as the remainder
of the Base Purchase Price) minus the Loan Payoff Amounts, and (ii) deliver to
the applicable creditors the Loan Payoff Amounts. The funds payable by Acquiror
pursuant to the immediately preceding sentence shall be made by wire transfer in
immediately available funds to accounts designated by Seller or as designated in
the Payoff Letters, as applicable.

2.4  Milestone Payments.

(a)Subject to the terms and conditions of this Agreement, the Seller shall be
entitled to certain milestone payments (each payment as it relates to a
particular event, a “Milestone Payment”), each of which, if achieved, will be
due and payable within [†] ([†]) [†] following achievement of the applicable
event set forth below for the first Product to achieve such event (each, a
“Milestone Event”); provided, however, that no Milestone Payments will be earned
or payable to Seller if an applicable event set forth below is achieved on or
after the [†] anniversary of the Closing Date:

 

Milestone Event Number

Patent Milestone Event

Milestone Payment

1.

[†]

[†]

 

Regulatory Milestone Event

 

2.

[†]

[†]

3.

[†]

[†]

4.

[†]

[†]

5.

[†]

[†]

6.

[†]

[†]

7.

[†]

[†]

8.

[†]

[†]

 

For purposes of clarity, (a) Milestone Event Number 2 is in addition to, and not
a replacement for, Milestone Event Number 3 (i.e., if a Milestone Payment is
triggered pursuant to clause (2) of Milestone Event Number 2, then Seller will
be entitled Milestone Payments in respect of Milestone Event Number 2 and
Milestone Event Number 3), and (b) if Milestone Event 1 is achieved, no payment
can be due with respect to Milestone 8.

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(b)Seller and Acquiror understand and agree that each of the Milestone Payments
referenced in this Section 2.4(a), shall be payable only once, upon the first
occurrence of the applicable Milestone Event for the first Product to achieve
the applicable Milestone Event.

(c)If an applicable Patent Milestone Event or Regulatory Milestone Event set
forth in the table above is not achieved, no Milestone Payment shall be due for
such Patent Milestone Event or Regulatory Milestone Event, as applicable.

2.5  Taxes. Notwithstanding anything in this Agreement to the contrary, each of
Acquiror and Seller is responsible for payment of any tax for which it is
required to pay to the applicable Governmental Entity in connection with the
purchase of the transactions contemplated by the Agreement. In the event any tax
or similar amount is paid or required to be withheld by Acquiror or any
Affiliate thereof on account of any payments payable to Seller under this
Agreement, the corresponding amounts payable to Seller shall be reduced by the
amount of taxes or similar amounts deducted and withheld, and Acquiror shall pay
the amounts of such taxes or similar amounts to the proper Governmental Entities
in a timely manner and promptly transmit to Seller an official tax certificate
or other evidence of such tax or other obligations together with proof of
payment from the relevant Governmental Entity of all amounts deducted and
withheld sufficient to enable Seller to claim such payment of taxes or similar
amounts. Any such withholding taxes or similar amounts required under applicable
Law to be paid or withheld shall be an expense of, and borne solely by, Seller.
Acquiror will provide Seller with, at Seller’s expense, reasonable assistance to
enable Seller to recover such taxes or amounts otherwise withheld as permitted
by Law. Without limiting the foregoing, Seller shall be solely responsible for
any and all taxes that may be incurred arising from or relating to Seller’s
corporate conversion to an S-Corporation, and shall indemnify Acquiror for any
claims, damages, expenses, or losses with respect thereto.

ARTICLE 3 CLOSING; TERMINATION AND TERM

3.1  Location; Date. The consummation of the Transactions (the “Closing”) shall
be held at the offices of Wyrick Robbins Yates & Ponton, LLP, at 4101 Lake Boone
Trail, Suite 300, Raleigh, NC 27607 on a date which shall be no later than [†]
([†]) [†] after satisfaction or waiver of the conditions set forth in 7.5 or at
such other date and place as may be mutually agreed upon by Acquiror and Seller
(the “Closing Date”). The Closing shall be effective for all purposes as of
11:59 p.m. (Eastern Time) on the Closing Date.

3.2  Deliveries. At the Closing and as a condition to Closing, Seller shall
deliver or cause to be delivered each of the following to Acquiror, unless
Acquiror waives the delivery thereof:

(i)  Evidence reasonably satisfactory to Acquiror that the API will be shipped
to the address provided by the Acquiror using a carrier selected by Seller and
delivered to Acquiror within [†] ([†]) [†] of the Closing Date. Seller and
Acquiror will each be responsible for [†];

(ii) Evidence reasonably satisfactory to Acquiror that any and all physical
and/or electronic files, reports, data and other documentation constituting
Know-How or otherwise related to Compound will be shipped to the address
provided by the Acquiror and delivered to Acquiror within [†] ([†]) [†] of the
Closing Date. Seller and Acquiror will each be responsible for [†];

(iii)Evidence reasonably satisfactory to Acquiror that each consent, approval,
order or authorization of, or registration, declaration or filing with any
Person required in connection with the execution, delivery or performance of
this Agreement as set forth in Schedules 4.3 and 4.7(c) has been obtained or
made and is in full force and effect;

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(iv)Transfer documents in form and substance reasonably satisfactory to Acquiror
required to transfer the Seller Registered IPR to Acquiror as of the Closing
Date, duly executed by an authorized officer of Seller;

(v) Such other and further certificates, assurances and documents as Acquiror
may reasonably request in order to evidence the accuracy of Seller’s
representations and warranties, the performance of covenants to be performed by
Seller at or prior to the Closing and the fulfillment of the conditions to
Seller’s obligations hereunder.

3.3  Termination.

(a)This Agreement may be terminated on or prior to the Closing Date only as
follows:

(i)  by mutual written consent of Acquiror and Seller;

(ii) by either Acquiror or Seller if a court of competent jurisdiction shall
have issued an order, decree or ruling permanently restraining, enjoining or
otherwise prohibiting the Transactions, and such order, decree or ruling shall
have become final and nonappealable; provided, however, that the right to
terminate this Agreement under this Section 3.3(a)(ii) shall not be available to
a party if such order, decree or ruling was primarily due to the failure of such
party to perform any of its obligations under this Agreement;

(iii)by the Seller if Seller is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant, or agreement of Acquiror contained in this Agreement such
that the conditions set forth in Section 8.3 would not be satisfied and such
breach has not been cured within [†] ([†]) [†] after written notice thereof to
Acquiror; provided that no cure period shall be required for a breach which by
its nature cannot be cured; or

(iv)by Acquiror if Acquiror is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant, or agreement of the Seller contained in this Agreement such
that the conditions set forth in Section 8.2  would not be satisfied and such
breach has not been cured within [†] ([†]) [†] after written notice thereof to
the Seller in accordance with Section 10.1; provided that no cure period shall
be required for a breach which by its nature cannot be cured.

(b)The termination of this Agreement by Acquiror shall be effectuated by the
delivery by Acquiror to the Seller of a written notice of such termination, in
accordance with Section 10.1. The termination of this Agreement by the Seller
shall be effectuated by the delivery by the Seller to Acquiror of a written
notice of such termination, in accordance with Section 10.1.

(c)In the event of the termination of this Agreement pursuant to this Section
3.3, this Agreement shall forthwith become void, and there shall be no liability
on the part of any party hereto (except that Section 3.3(c), ARTICLE 10, and the
Confidentiality Agreement shall survive). Notwithstanding the foregoing, in the
event that this Agreement is terminated due to a material breach or material
failure to fulfill of any of the representations, warranties, covenants or
agreements set forth in this Agreement, nothing in this Section 3.3(c) shall be
deemed to release any party from any liability for any willful and intentional
breach of any of the representations, warranties, covenants or agreements set
forth in this Agreement following such termination. This Section 3.3(c) shall
not impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement.

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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as set forth on the Seller Disclosure Schedule attached to this Agreement
as Schedule 4 (the “Seller Disclosure Schedule”), Seller represents and warrants
to Acquiror as of the date hereof and as of the Closing Date as to the
following:

4.1  Organization and Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation, has all requisite power to carry on its business as now being
conducted, and is duly qualified or licensed and in good standing to do business
in each jurisdiction in which such qualification or licensing is necessary.

4.2  Authority and Enforceability. Seller has the requisite power and authority
to enter into each of the Transaction Documents, to perform its obligations
under each of the Transaction Documents and to consummate the Transactions. The
execution and delivery of the Transaction Documents by Seller and the
consummation of the Transactions have been duly authorized by all necessary
corporate action on the part of Seller. Each of the Transaction Documents has
been duly authorized, executed and delivered by Seller and, assuming due
authorization, execution and delivery by the Acquiror, constitute the valid and
binding obligations of Seller, enforceable against each of them in accordance
with its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to creditors’ rights generally, and (b) the availability of injunctive
relief and other equitable remedies.

4.3  No Conflict; Authorizations.

4.3.1          No Authorization or Order of, or notice to, any domestic or
foreign Governmental Entity, is required to be made or obtained by Seller at or
prior to the Closing in connection with the execution and delivery of this
Agreement or the consummation by the Seller of the Transactions or compliance by
the Seller with the provisions hereof and thereof other than such customary
filings regarding any change of beneficial ownership or similar filings in
foreign jurisdictions that would not reasonably be expected to preclude or
impede the Seller’s ability to consummate the transactions contemplated by this
Agreement.

4.3.2          Neither the execution and delivery of this Agreement nor the
performance hereof by Seller will result in the breach of or give rise to any
right of termination, rescission, renegotiation or acceleration under, or
trigger any other rights under, any agreement or contract to which Seller is a
party or to which it may be subject that relates to any of the Purchased Assets.

4.3.3          Neither the execution and delivery of this Agreement nor the
performance hereof by Seller will conflict with or violate any provision of the
certificate of incorporation or bylaws of Seller.

4.4  Notice to Valeant.

4.4.1          Pursuant to Section 5.1 of the Valeant APA, Seller has notified
Valeant that Acquiror has made an offer to Seller to purchase the Purchased
Assets and, prior to the Closing Date, Seller has fulfilled its notice and
designation obligations to Valeant, and Valeant has expressly waived or failed
to timely exercise its rights under Section 5.1 of the Valeant APA such that
Seller may enter into this Agreement on the Closing Date with Acquiror without
further discussions with, or obligations (in respect of entering into this
Agreement) to, Valeant.

4.4.2          The sale contemplated by this Agreement qualifies as [†].

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4.5  Compliance with Laws.

4.5.1          Seller is, and since [†] has been, in compliance in all material
respects with each Law that is applicable to its business, any of the Purchased
Assets or the Assumed Liabilities. No event has occurred, and no condition or
circumstance exists, that will (with or without notice or lapse of time)
constitute or result in a violation by Seller of, or a failure on the part of
Seller to comply with, any Law that is applicable to its business, any of the
Purchased Assets or the Assumed Liabilities, except where the failure to so
comply does not have a Compound Material Adverse Effect. Seller has not received
any written notice (or, to the [†] Knowledge of Seller, other communication)
from any Person regarding any actual or possible violation of, or failure to
comply with, any Law that is applicable to its business, any of the Purchased
Assets or the Assumed Liabilities.

4.5.2          To the [†] Knowledge of the Seller, there is no Action, demand,
grievance, citation, summons, subpoena, or inquiry of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending or threatened
against Seller, any of its Affiliates or any Third Party, in each case in
connection with the Purchased Assets, the Compound or relating to the
transactions contemplated by this Agreement.

4.6  Regulatory. Seller has made available, or has caused to be made available,
to Acquiror all [†]. To Seller’s [†] Knowledge, there is not any Compound
Regulatory Documentation other than the Compound Regulatory Documentation in
Seller’s possession or control. Except as set forth in Schedule 4.6, all API was
manufactured in compliance with Good Manufacturing Practices (“GMPs”) as in
effect at the applicable time.

4.7  Intellectual Property.

(a)Schedule 4.7(a) contains a complete and accurate list (by title, registrant,
application or registration number, application or registration date, and
jurisdiction) of all Intellectual Property Rights that are owned by, exclusively
licensed to, or filed in the name of Seller and registered with any Governmental
Entity (“Seller Registered IPR”). All registration, maintenance and renewal fees
related to the Seller Registered IPR that are due as of the Closing Date have
been paid and all documents and certificates related to such Seller Registered
IPR have been filed with the relevant Governmental Entity or other authorities
in the United States or foreign jurisdictions, as the case may be, for the
purposes of maintaining such Seller Registered IPR and perfecting Seller’s
ownership interests therein. [†].

(b)Schedule 4.7(b) lists the status of any Actions (other than ordinary course
office actions in connection with the prosecution of applications relating to
the Seller Registered IPR) currently pending before the United States Patent and
Trademark Office or any other Governmental Entity anywhere in the world related
to any of the Seller Registered IPR, and identifies the due date for any
outstanding response by Seller in such Actions. [†].

(c)To its [†] Knowledge, Seller has complied with all Applicable Laws, including
any disclosure requirements, in connection with the filing, prosecution and
maintenance of Seller Registered IPR.

(d)The conception, development and reduction to practice of the Transferred
Intellectual Property have not constituted or involved the misappropriation of
trade secrets, Patents or other intellectual property rights of any Third Party,
since [†], and, to the [†] Knowledge of Seller, prior to [†].

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(e)(i) Seller is the sole legal and beneficial owner of all the Transferred
Intellectual Property, free of all Encumbrances other than Permitted
Encumbrances, and (ii) no person, firm, corporation or other entity (including
any Affiliate of Seller) has any right, interest or claim in or to any Purchased
Assets, and (iii) neither Seller nor any of its Affiliates has entered into any
agreement granting any right, interest or claim in or to, any Purchased Assets
to any Third Party (including any academic organization or agency).

(f)Seller has not received any written or oral claim of ownership or
inventorship of any Transferred Intellectual Property from any Third Party
(including without limitation by current or former officers, directors,
employees, consultants or personnel of Seller or Valeant Pharmaceuticals
Luxembourg).

(g)Except as set forth on Schedule 4.7(g), all assignments of Seller Registered
IPR to Seller have been properly executed and recorded. To the [†] Knowledge of
Seller, each of the patents and patent applications included within the Seller
Registered IPR properly identifies each and every inventor of the claims thereof
as determined in accordance with the laws of the jurisdiction in which such
patent is issued or such patent application is pending.

(h)Seller has heretofore (i) made available to Acquiror for review all material
scientific and technical information in its possession or control with respect
to the Compound, and (ii) made available to Acquiror for review all data in its
possession or control [†].

(i)No item of Transferred Intellectual Property is subject to any Action or
outstanding Order or settlement agreement or stipulation in litigation that
restricts in any manner the use, provision, transfer, assignment or licensing
thereof by Seller or may affect the validity, use, ownership, registrability or
enforceability of such Transferred Intellectual Property.

(j)Except as specifically identified and described on Schedule 4.7(j), there are
no licenses, sublicenses and other contracts pursuant to which Seller is
authorized to use, practice any rights under, or grant sublicenses with respect
to, any Intellectual Property Rights owned by a Third Party, including any such
Intellectual Property Rights which are embodied by any Transferred Intellectual
Property or any Technology incorporated into any Transferred Intellectual
Property (“Inbound Licenses”) and, with respect to each Inbound License, whether
the Inbound License is exclusive or non-exclusive.

(k)Except as specifically identified and described on Schedule 4.7(k), there are
no currently in-force licenses, sublicenses and other contracts pursuant to
which Seller authorizes a third party to use, practice any rights under, or
grant sublicenses with respect to, any Transferred Intellectual Property
(“Outbound Licenses”) and, with respect to each Outbound License, whether the
Outbound License is exclusive or non-exclusive.

(l)Except as specifically identified and described in Schedule 4.7(l), neither
this Agreement nor the consummation of the Transactions will result in (i) the
Acquiror being bound by, or subject to, any non-compete or other material
restriction on the Compound or Acquiror’s business, or (ii) the Acquiror being
obligated to pay any [†] to any Third Party in excess of those that the Seller
would have been required to pay had the Transactions not occurred.

 

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(m)           Neither the operation of Seller’s business, nor the use, sale,
import, export, and manufacture of the Compound or the Transferred Technology
(A) have infringed, misappropriated or otherwise violated or constituted the
unauthorized use of, and as currently conducted do not infringe, misappropriate
or otherwise violate or constitute the unauthorized use of, any Intellectual
Property Rights owned by any Person, and, to the [†] Knowledge of Seller, such
conduct will not constitute misappropriation or other violation of the
Intellectual Property Rights of any Person when conducted by Acquiror in
substantially the same manner, and (B) does not constitute and has not
constituted unfair competition or trade practices under the Laws of any
jurisdiction. Seller has not received written notice from any Person (1)
claiming the operation of Seller’s business, or the Compound or any Transferred
Technology infringes, misappropriates or otherwise violates or constitutes the
unauthorized use of any Intellectual Property Rights of any Person or
constitutes unfair competition or trade practices under the Laws of any
jurisdiction (nor does Seller have [†] Knowledge of any basis therefor) or (2)
demanding or offering to license to Seller any Intellectual Property Rights in
connection with the business.

(n)To the [†] Knowledge of Seller, no Person is infringing, misappropriating, or
otherwise violating or engaged in the unauthorized use of any item of
Transferred Intellectual Property. No Actions have been brought or threatened
against any Person by Seller, or, to Seller’s [†] Knowledge, by any Third Party,
alleging that any Person is infringing, misappropriating or otherwise violating
or is engaged in the unauthorized use of, any Transferred Intellectual Property.

(o)Seller has used [†] to maintain, protect and preserve the confidentiality of
all Know-How, trade secrets, and other confidential information relating to
Compound, Transferred Intellectual Property, and operation of Seller’s business
with respect thereto (collectively, the “Compound Confidential Information”). To
the [†] Knowledge of Seller, there has been no unauthorized disclosure by any
Person of any such Compound Confidential Information. Without limiting the
foregoing, each current and former employee and consultant of Seller who has
made any contributions to the development of the Compound or any other
Transferred Intellectual Property has executed a proprietary information and
inventions agreement or consulting agreement containing proprietary information,
confidentiality and assignment provisions that provide for (i) the
non-disclosure by such Person of any of confidential information and (ii) the
assignment by such Person to Seller of all Intellectual Property Rights arising
out of such Person’s employment or engagement by, or contract with, Seller,
which forms have been provided to Acquiror.

(p)Since [†], and to Seller’s [†] Knowledge, prior to [†] no government funding,
facilities or resources of a Governmental Entity, university, college, or other
educational institution or research center was used in the development of any
Transferred Intellectual Property and no Governmental Entity, university,
college, or other educational institution or research center has any claim or
right in or to any Transferred Intellectual Property. No Person (including any
current or former employee of Seller), who was involved in, or who contributed
to, the creation or development of any Transferred Intellectual Property, has
performed services for any Governmental Entity, university, college, or other
educational institution or research center during a period of time during which
such Person was also performing services for Seller.

(q)To Sellers’ [†] Knowledge, Seller is in compliance with all applicable Laws,
regulations, and contractual requirements pertaining to privacy, data security,
personally identifiable information, and protected health information. To
Seller’s [†] Knowledge, Seller has not suffered any security breach with respect
to any personally identifiable information.

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4.8  Contracts.

(a)Schedule 4.8(a) contains a complete and accurate list of all contracts to
which Seller is a party, other than the Inbound Licenses and Outbound Licenses
(such contracts, together with the Inbound Licenses and Outbound Licenses, the
“Seller Contracts”).

(b)Seller has not violated or breached in any material respect, and has not
committed any material default under, any Seller Contract, which remains
uncured, and, to the [†] Knowledge of Seller, no other Person has violated or
breached in any material respect, or committed any material default under, any
Seller Contract which remains uncured. To the [†] Knowledge of Seller no event
has occurred, and no circumstance or condition exists, that (with or without
notice or lapse of time) will, or could reasonably be expected to: (i) result in
a material violation or material breach of any of the provisions of any Seller
Contract; (ii) give any Person the right to declare a default or exercise any
remedy under any Seller Contract; or (iii) give any Person the right to
accelerate the maturity or performance of any Seller Contract.

(c)The execution and delivery by Seller of the Transaction Documents, the
performance by Seller of its obligations hereunder and thereunder, and the
consummation by Seller of the Transactions do not and will not conflict with,
result in a breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of any obligations under,
create in any party the right to accelerate, terminate, modify or cancel, give
rise to any obligation under, result in the creation of any Encumbrance upon any
of the Purchased Assets pursuant to, require any notice, consent or waiver
under, or result in the loss of any benefit under any Seller Contract.

(d)All loan agreements entered into by Seller with any third party that could
result in an Encumbrance on any of the Purchased Assets, including the Loan
Agreements, have been fully repaid prior to or in connection with the Closing
(assuming Acquiror makes the payments as specified in Section 2.3).

4.9  Litigation.

(a)There is no Action pending or, to the [†] Knowledge of the Seller, threatened
(i) against the Seller, (ii) relating to the Compound, or (iii) that challenges
or seeks to prevent, enjoin or otherwise delay the Transactions. To the [†]
Knowledge of the Seller, [†].

(b)There is no unsatisfied judgment, penalty, award, decree, injunction, rule or
order of any Governmental Entity, court or arbitrator, outstanding or pending
against the Seller or with respect to the Compound.

4.10Brokerage Fees. Seller has not incurred any liabilities for any brokerage,
finder, investment banking or other similar fees, commissions or expenses in
connection with the Transactions, except for such fees, commissions and expenses
of which will be paid by Seller.

4.11Complete Copies of Materials. Seller has delivered to Acquiror true, correct
and complete copies (or with respect to oral agreements, written summaries of
the same) of each contract and other document that has been requested by
Acquiror or its agents in connection with this Agreement or any of the other
Transaction Documents or that is referred to in the Schedules attached hereto.

4.12Disclosures. To the [†] Knowledge of Seller, [†].

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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ACQUIROR

Acquiror hereby represents and warrants to Seller as follows:

5.1  Organization and Good Standing. Acquiror has been duly continued and is
validly existing as a corporation in good standing under the Canada Business
Corporations Act and is up-to-date in all material corporate filings.

5.2  Authority and Enforceability. Acquiror has the requisite power and
authority to enter into each of the Transaction Documents, to perform its
obligations under each of the Transaction Documents and to consummate the
Transactions. The execution and delivery of the Transaction Documents by
Acquiror and the consummation of the Transactions have been duly authorized by
all necessary corporate action on the part of Acquiror. Each of the Transaction
Documents has been duly authorized, executed and delivered by Acquiror and,
assuming due authorization, execution and delivery by the Seller, constitute the
valid and binding obligations of Acquiror, enforceable against each of them in
accordance with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting or relating to creditors’ rights generally, and (b) the availability
of injunctive relief and other equitable remedies.

5.3  Financial Capability. Acquiror has, and at the Closing will have,
sufficient internal funds (without giving effect to any unfunded financing
regardless of whether any such financing is committed) available to pay the Base
Purchase Price and any expenses incurred by Acquiror in connection with the
Transactions.

5.4  Litigation. There is no Action pending or, to the knowledge of Acquiror,
threatened against Acquiror, that challenges or seeks to prevent, enjoin or
otherwise delay the Transactions. To the knowledge of Acquiror, no event has
occurred or circumstances exist that may give rise or serve as a basis for any
such Action.

ARTICLE 6 COVENANTS OF THE SELLER

6.1  Access to Information. Prior to the Closing and subject to the terms of the
Confidentiality Agreement, Seller shall afford to Acquiror’s officers,
directors, employees, accountants, counsel, consultants, advisors and agents
(“Representatives”) reasonable access, during normal business hours and upon
reasonable advance notice, to all of the assets and records, reports, contracts
and other documents related to the Purchased Assets as the Acquiror and its
Representatives may reasonably request, and shall permit them to consult with
Seller’s officers, employees, accountants, counsel and agents for the purpose of
making such investigation of the acquired Purchased Assets as Acquiror shall
desire to make.

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6.2  Notification of Certain Matters. Prior to the Closing, Seller shall give
prompt notice to Acquiror of any fact, event or circumstance known to it that
(a) individually or taken together with all other facts, events and
circumstances known to it, has had or would reasonably be expected to have,
individually or in the aggregate, a Compound Material Adverse Effect, or (b)
would cause or constitute a failure of any condition precedent to Acquiror’s
obligations set forth in this agreement. Seller shall give prompt notice to
Acquiror of: (i) any notice or other communication from any Third Party alleging
that the consent of such Third Party is or may be required in connection with
the Transactions, or (ii) any written notice or other written communication
received by the Seller from any Governmental Entity in connection with the
Transactions. The delivery of any notice pursuant to this Section 6.2 shall not
be considered an admission that any representation or warranty is untrue or that
any covenant has been breached and shall not limit or otherwise affect any
remedies available to Acquiror or prevent or cure any misrepresentations, breach
of warranty or breach of covenant, and disclosure by the Seller shall not be
deemed to amend or supplement the schedules hereto or constitute an exception to
any representation or warranty.

6.3  Actions Prior to Closing.

6.3.1          Status Quo. Prior to Closing, Seller shall cause all
registration, maintenance and renewal fees and any certifications, filings or
registrations related to Seller Registered IPR and due prior to Closing to be
paid, prepared and/or filed, as the case may be, with the relevant Governmental
Entity or other authorities in the United States or foreign jurisdictions, as
the case may be, for the purposes of maintaining the Seller Registered IPR and
perfecting Seller’s ownership interests therein. Prior to Closing, Seller shall
take or cause to be taken at its expense all other [†] actions necessary to
maintain the Purchased Assets, and shall continue to conduct its business in the
ordinary course, consistent with past practice. Without limiting the generality
of the foregoing, prior to Closing, Seller shall not take any of the following
actions in connection with the Purchased Assets: (1) sell, lease, license or
otherwise dispose of any Purchased Asset; (2) enter into, cancel or modify any
Inbound License or Outbound License; (3) grant or permit to exist any
Encumbrance on any of the Purchased Assets; or (4) agree to any of the foregoing
actions.

6.3.2          Exclusivity. [†].

6.4  Efforts and Actions to Cause Closing to Occur. Prior to the Closing, upon
the terms and subject to the conditions of this Agreement, Acquiror and Seller
shall use [†] to take, or cause to be taken, all actions, and to do, or cause to
be done, and cooperate with each other in order to do, all things necessary,
proper or advisable (subject to applicable Law) to consummate the Transactions
as promptly as practicable, including the matters described in 7.5 hereof and
the preparation and filing of all forms, registrations and notices required to
be filed and the taking of such actions as are necessary to obtain any requisite
consents of any Governmental Entity or other Person. In addition, no party
hereto shall take any action that could reasonably be expected to materially
delay the obtaining of, or result in not obtaining, any consent from any
Governmental Entity or other Person required to be obtained prior to the
Closing.

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6.5  Confidentiality. Following the Closing, each party hereto shall, and shall
cause its Affiliates and Representatives to, hold in strict confidence and not
utilize in its respective business any information and documents concerning any
other party hereto or any of its respective Affiliates or its or their
businesses or confidential or proprietary information (“Confidential
Information”). Notwithstanding anything herein or in the Confidentiality
Agreement to the contrary, Acquiror’s Confidential Information includes all
confidential or proprietary documents or information regarding the Purchased
Assets in the possession of Seller and its Affiliates, even though such
documents and information were first developed by, made known to, or obtained
from, Seller and its Affiliates. In the event a party is required to disclose
Confidential Information to comply with any applicable Law, the party proposing
to disclose such information shall give the original disclosing party with
respect to whom such information is Confidential Information reasonable advance
notice of such disclosure (to the extent not prohibited by applicable Law) and
to cooperate with such disclosing party in seeking a protective order or other
appropriate means for limiting the scope of the disclosure. Notwithstanding the
foregoing, the following will not constitute “Confidential Information” for
purposes of this Agreement: (a) other than confidential or proprietary documents
and information regarding the Purchased Assets, (i) information that is
independently developed by the receiving party or any Affiliate thereof without
the use of the Confidential Information, as demonstrated by the receiving
party’s contemporaneous written records, and (ii) information that the receiving
party can demonstrate is obtained or was previously obtained by the receiving
party or its Affiliates from a third party who is not known by the receiving
party after due inquiry to be subject to obligations of confidentiality with
respect thereto, and (b) information that the receiving party can demonstrate is
or becomes generally available to the public other than as the result of a
disclosure by the receiving party or any Affiliate thereof or their respective
agents or employees. Following the Closing, the foregoing restrictions in this
Section 6.5 shall not apply to the use by Acquiror or its Affiliates and its or
their successors, assigns and Representatives, and shall apply to the use by
Seller and its Affiliates and its or their successors, assigns and
Representatives, of any documents or information concerning the Compound or the
Purchased Assets furnished or transferred by Seller or its Affiliates hereunder.

ARTICLE 7 OTHER COVENANTS

7.1  Public Announcements. Seller shall not issue any press release or make any
public statement regarding the Transactions without the prior written consent of
Acquiror. Acquiror and Seller shall not be restricted from making any disclosure
it reasonably determines is required by Law, including, without limitation,
disclosure required pursuant to the securities laws of the United States and
Canada. Either party may make any disclosure, including public statements,
consistent with disclosures previously made pursuant to this Section. Nothing in
this Section 7.1 shall restrict or otherwise limit the Acquiror’s ability or
right to issue any press release or make any public statement after Closing
regarding its operations or the Purchased Assets, including, among other things,
the development and commercialization of the Compound; provided that Acquiror
shall provide Seller an opportunity to review and comment on Acquiror’s initial
press release announcing the Transaction.

7.2  [†]. Acquiror will [†].

7.3  Further Assurances. Upon the terms and subject to the conditions hereof
each of the parties hereto shall execute such documents and other instruments
and take such further actions as may be reasonably required to carry out the
provisions hereof and consummate the Transactions (prior to, at or after the
Closing). Each of the parties hereto shall use [†] to consummate the
Transactions as soon as practicable following the date hereof.

7.4  License by Seller to Valeant. Acquiror acknowledges that, pursuant to the
Valeant APA, Valeant has and will continue to have a [†] license under the
Patents listed on Part 1 of Schedule 4.3(a) thereto (the “Grant-Back
Intellectual Property”), which [†].

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7.5  Payoff Letters. Seller shall deliver to Acquiror executed payoff letters,
in the form attached hereto as Exhibit B, no later than [†] ([†]) [†] prior to
the Closing Date.

7.6  Notice and Inquiry. Until the [†] anniversary of the Effective Date,
Acquiror will notify Seller annually not later than [†] of any payments made to
Valeant in the prior Calendar Year pursuant to the Valeant APA. In addition,
Seller may, with notice, request that Acquiror confirm that appropriate payments
have been made to Valeant pursuant to the Valeant APA. Xenon shall respond to
such inquiry within [†], but shall not be obligated to disclose the amount of
any payment. Any information disclosed by Acquiror to Seller shall be treated as
Confidential Information of Acquiror.

ARTICLE 8 CONDITIONS TO CLOSING

8.1  Conditions to Each Party’s Obligation. The obligations of Acquiror and the
Seller to consummate the Transactions are subject to the satisfaction on or
prior to the Closing Date of the following conditions:

(a)All Authorizations and Orders of, declarations and filings with, and notices
to any Governmental Entity required to permit the consummation of the
Transactions shall have been obtained or made and shall be in full force and
effect.

(b)No temporary restraining order, preliminary or permanent injunction or other
order preventing the consummation of the Transactions shall be issued by any
Governmental Entity of competent jurisdiction and shall be in effect. No Law
shall have been enacted which makes the consummation of the Transactions
illegal.

8.2  Conditions to Obligations of Acquiror. The obligations of Acquiror to
effect the Transactions are subject to the satisfaction (or waiver by Acquiror
in its sole discretion) of the following further conditions:

(a)The representations and warranties of the Seller set forth in this Agreement
shall have been true and correct at and as of the date hereof and shall be true
and correct at and as of the Closing Date as if made at and as of the Closing
Date.

(b)There shall not have occurred since the date of this Agreement any event,
occurrence or change that has had or would reasonably be expected to have,
individually or in the aggregate, a Compound Material Adverse Effect.

(c)No action, proceeding or litigation brought by any Governmental Entity of
competent jurisdiction shall be pending or threatened before any court or other
Governmental Entity seeking to (i) prevent consummation of the Transactions,
(ii) affect adversely the right of Acquiror to control the Compound; or (iii)
restrain or prohibit Acquiror’s ownership of the Purchased Assets. No such Order
shall be in effect.

(d)Seller shall have delivered to Acquiror a certificate executed by an
authorized officer of Seller (the “Seller Certificate”) to the effect that each
of the conditions specified in clauses (a)-(c) of this Section 8.2 with respect
to Seller are satisfied in all respects.

(e)Seller shall have delivered to Acquiror written consents signed by each
member of Seller’s Board of Directors and each of Seller’s stockholders
approving the transactions contemplated by this Agreement under Seller’s
constitutive and other documents, in each case to the effect that each such
director and such stockholders have approved the transactions contemplated by
this Agreement.

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(f)Seller shall have delivered to Acquiror duly executed Transaction Documents.

(g)Seller shall have delivered to Acquiror documents reasonably satisfactory to
Acquiror evidencing repayment and release in full with respect to the Loan
Agreements, including delivery of the executed Payoff Letters pursuant to
Section 7.5.

(h)Seller shall have delivered the items required by it pursuant to Section 3.2
hereof.

8.3  Conditions to Obligation of the Seller. The obligation of the Seller to
effect the Transactions is subject to the satisfaction (or waiver by Seller in
its sole discretion) of the following further conditions:

(a)The representations and warranties of Acquiror set forth in this Agreement
that are [†] shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, and the representations and warranties that are [†] shall have
been true and correct in all [†] respects at and as of the date hereof and shall
be true and correct in all [†] respects at and as of the Closing Date as if made
at and as of the Closing Date, except to the extent that such representations
and warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date.

(b)Acquiror shall have performed in all [†] respects all obligations required to
be performed by it under this Agreement at or prior to the Closing Date.

8.4  Frustration of Closing Conditions. None of the parties hereto may rely on
the failure of any condition set forth in this 7.5 to be satisfied if such
failure was caused by such party’s failure to act in good faith or to use its
[†] to cause the Closing to occur.

ARTICLE 9 INDEMNIFICATION

9.1  By Seller. From and after the Closing Date, Seller, shall indemnify
Acquiror, its successors and assigns, and its officers, directors, employees,
stockholders and agents (each, an “Indemnified Acquiror Party”) and hold each
Indemnified Acquiror Party harmless from and against:

(a)any liabilities, claims, demands, judgments, losses, costs, settlements,
damages or expenses whatsoever (including reasonable attorneys’, consultants’
and other professional fees and disbursements of every kind, nature and
description) (“Damages”) that such Indemnified Acquiror Party, directly or
indirectly, sustains, suffers or incurs and that result from or arise out of:

(i)          any breach or inaccuracy of any representation or warranty of
Seller in the Transaction Documents; and

(ii)          any breach or nonfulfillment of any covenant or agreement of
Seller set forth in any Transaction Document;

(b)any Damages arising out of or resulting from any liabilities that are not the
Assumed Liabilities; and

(c)any and all actions, suits, claims, proceedings, investigations, allegations,
demands, assessments, audits, fines, judgments, costs and other expenses
(including reasonable attorneys’ fees and expenses) incident to any of the
foregoing or to the enforcement of this Section 9.1, but only in connection with
a claim for which any Indemnified Acquiror Party is entitled to indemnification.

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9.2  By Acquiror. From and after the Closing Date, Acquiror shall indemnify the
Seller, its successors and assigns, and its officers, directors, employees,
stockholders and agents (each, an “Indemnified Seller Party”) and hold each
Indemnified Seller Party harmless from and against:

(a)any Damages that such Indemnified Seller Party, directly or indirectly,
sustains, suffers or incurs and that result from or arise out of:

(i)  any breach or inaccuracy of any representation or warranty of Acquiror in
the Transaction Document; and

(ii) any breach or nonfulfillment of any covenant or agreement of Acquiror set
forth in any Transaction Document; and

(b)any Damages arising out of or resulting from any of the Assumed
Liabilities,  and pay any settlement costs or final judgment amounts with
respect thereto incident to any of the foregoing or to the enforcement of this
Section 9.2, but only in connection with a claim for which any Indemnified
Seller Party is entitled to indemnification; provided, in each case, that
Acquiror shall have no liability with respect to any such claims arising out of
or resulting from the gross negligence, willful misconduct, intentional
misrepresentation, or fraudulent conduct of Seller.

9.3  Limitation of Liability. EXCEPT IN CASE OF THE FRAUD OR WILFUL MISCONDUCT
OF A PARTY, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOST
BUSINESS OR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR
OTHER SPECIAL DAMAGES SUFFERED BY THE OTHER PARTY OR ITS AFFILIATES ARISING OUT
OF OR RELATED TO THIS AGREEMENT FOR ALL CAUSES OF ACTION OF ANY KIND (INCLUDING
TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, INDEMNITY AND BREACH OF WARRANTY)
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS
SUCH DAMAGES ARE PAYABLE TO A THIRD PARTY IN CONNECTION WITH A CLAIM BY SUCH
THIRD PARTY THAT IS INDEMNIFIABLE HEREUNDER.

9.4  Procedure for Claims. A party that intends to claim indemnification under
this ARTICLE 9 (the “Indemnitee”) shall promptly notify the other party (the
“Indemnitor”) in writing of the assertion or the commencement of any Action by a
Third Party (a “Third Party Claim”) and will provide the Indemnitor such
information with respect thereto that the Indemnitor may reasonably request. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any Action with respect to a Third Party Claim shall
not relieve the Indemnitor of its obligations under this ARTICLE 9 unless the
delay or failure is materially prejudicial to its ability to defend such action.
The Indemnitor shall be entitled to control the defense of any Third Party
Claim, at its expense, provided that any such Third Party Claim relates to the
ownership of any Purchased Assets, or their use, Acquiror shall be entitled to
control the defense of any such Third Party claim, at Seller’s expense. The
Indemnitee under this Section 9.1(c) shall cooperate fully with the Indemnitor
and its legal representatives in the investigation of any Action with respect to
a Third Party Claim covered by this indemnification. The Indemnitor shall
conduct the defense of such Action and shall keep the Indemnitee, reasonably
informed of the status of such Action. The Indemnitee shall cooperate fully with
the Indemnitor and its legal representatives in the investigation of any Action
with respect to any Third Party Claim. The Indemnitee shall be entitled to
participate in any such defense at its sole cost and expense, subject to the
obligation of Seller to pay expenses as described in the third sentence above.
The Indemnitor shall seek the prior written consent of the Indemnitee (which
consent shall not be unreasonably withheld, conditioned or delayed) in
connection with the Indemnitor’s settlement or compromise of any such third
party Action.

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9.5  Right of Offset. In the event that an Indemnified Acquiror Party is seeking
indemnification pursuant to this ARTICLE 9, Acquiror shall be entitled to
withhold the amount of any Damages sought from any amounts due from Acquiror to
Seller, including any Milestone Payments, to the extent any such amounts are
then, or may in the future, become payable.

9.6  Survival. The representations and warranties of Seller contained in this
Agreement, and any claims with respect thereto, shall survive the Closing for a
period of [†] ([†]) [†]. The representations and warranties of Acquiror
contained in this Agreement, and any claims with respect thereto, shall expire
at the Closing. The respective covenants of both parties shall survive the
Closing in accordance with their terms.

ARTICLE 10 MISCELLANEOUS

10.1Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and
shall be deemed given: (a) on the date established by the sender as the date of
actual personal delivery; (b) on the date delivered by a private courier as
established by the sender by evidence obtained from the courier; (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the [†]; or (d) on the [†]
after the date mailed, by certified or registered mail, return receipt
requested, postage prepaid. Such communications, to be valid, must be addressed
as follows:

If to Seller, to:

1ST Order Pharmaceuticals

5511 NC Highway 902

Pittsboro, NC 27312

Attn: President and Chief Scientific Officer

Facsimile: (919) 542-5421

Telephone: (919) 812-8119

With a copy to:

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, NC 27607

Attn: Thomas A. Allen

Facsimile: (919) 781-4865

If to Acquiror, to:

Xenon Pharmaceuticals, Inc.

3650 Gilmore Way

Burnaby, BC V5G 4W8, Canada

Attn: Legal Department

Facsimile: (604) 484-3450

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With a required copy to:

Wilson Sonsini Goodrich & Rosati, PC

650 Page Mill Rd. Palo Alto, CA 94304

Attn: Bryan King

Facsimile: (650) 493-6811

or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party. If
more than one method for sending notice as set forth above is used, the earliest
notice date established as set forth above shall control.

10.2           Amendments and Waivers.

(a)Any provision of this Agreement may be amended or waived if, and only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by Acquiror and the Seller.

(b)No failure or delay by any party in exercising any right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

(c)To the maximum extent permitted by Law, (i) no waiver that may be given by a
party shall be applicable except in the specific instance for which it was given
and (ii) no notice to or demand on one party shall be deemed to be a waiver of
any obligation of such party or the right of the party giving such notice or
demand to take further action without notice or demand.

10.3Expenses. Each of parties hereto shall bear its own costs and expenses in
connection with this Agreement and the Transactions, including all legal,
accounting, financial advisory, consulting and all other fees and expenses of
third parties, whether or not the Transactions are consummated.

10.4Successors and Assigns. This Agreement may not be assigned by Seller, by
operation of law or otherwise, without the prior written consent of Acquiror.
Acquiror may freely assign this Agreement and any of its rights obtained
hereunder as it deems appropriate. Subject to the foregoing, all of the terms
and provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective executors, heirs, personal
representatives, successors and assigns. Acquiror covenants that to the extent
that any person acquires all or substantially all of the assets or operations
related to the Purchased Assets, whether by merger, asset acquisition or
otherwise, it will ensure that such acquiring person agrees in writing to assume
Acquiror’s obligations under this Agreement and Acquiror shall provide a copy of
such assumption to Seller.

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10.5Governing Law; Venue. This Agreement and the exhibits and schedules hereto
shall be governed by and interpreted and enforced in accordance with the Laws of
the State of Delaware, without giving effect to any choice of Law or conflict of
Laws rules or provisions (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. Any legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement may be brought
or otherwise commenced only in any state or federal court located in the State
of Delaware. Each party to this Agreement: (i) irrevocably and unconditionally
consents and submits to the exclusive jurisdiction and venue of the state and
federal courts located in State of Delaware; (ii) agrees that each state and
federal court located in the State of Delaware shall be deemed to be a
convenient forum; and (iii) agrees not to assert (by way of motion, as a defense
or otherwise), in any such legal proceeding commenced in any state or federal
court located in the State of Delaware, any claim that such party is not subject
personally to the jurisdiction of such court, that such legal proceeding has
been brought in an inconvenient forum, that the venue of such legal proceeding
is improper or that this Agreement or the subject matter of this Agreement may
not be enforced in or by such court.

10.6Counterparts. This Agreement may be executed in any number of counterparts,
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other parties hereto. The parties agree that
the delivery of this Agreement may be effected by means of an exchange of
facsimile or other electronic signatures.

10.7Third Party Beneficiaries. No provision of this Agreement is intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder, except that, in the case of ARTICLE 9 hereof, the Indemnitees are
intended third party beneficiaries of such sections and shall have the right to
enforce such sections in their own names.

10.8Dispute over Obligations arising under Valeant APA. In the event of any
dispute arising as a result of the performance by Acquiror of any Assumed
Liabilities or any alleged breach of any such obligations, Seller shall
cooperate with Acquiror, at Acquiror’s request [†], in collecting any documents
or information in respect of the defense of any such action, claim or
proceeding, except to the extent such cooperation, upon advice of legal counsel,
would jeopardize or undermine any rights or claims of Seller.

10.9Entire Agreement. This Agreement and the documents, instruments and other
agreements specifically referred to herein or delivered pursuant hereto set
forth the entire understanding of the parties hereto with respect to the
Transactions. All exhibits and schedules referred to herein are intended to be
and hereby are specifically made a part of this Agreement. Any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement, other
than the Confidentiality Agreement which shall continue in full force and effect
in accordance with its terms except modified in accordance with Section 6.5
hereof.

10.10           Captions. All captions contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.

10.11           Severability. Any provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

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10.12           Specific Performance. Acquiror and Seller agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed by them in accordance with the terms hereof and that each
party shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at Law or equity.

10.13          Dispute Resolution.

10.12.1      In the event of any controversy, dispute, claim or counterclaim
arising out of or relating to this Agreement (a “Dispute”), the parties shall
first attempt to resolve such Dispute through good faith negotiations following
notification of such Dispute to the other party in accordance with the
procedures set forth in this Section 10.13.

10.12.2      The party claiming that such a Dispute exists shall give notice in
writing (a “Notice of Dispute”) to the other party of the nature of the dispute.

10.12.3      Within [†] ([†]) [†] of receipt of a Notice of Dispute, the Chief
Executive Officer of Acquiror, or his or her designee, and the Chief Executive
Officer of Seller, or his or her designee, shall meet in person or by
teleconference, as mutually agreed, for the purpose of attempting to resolve
such Dispute.

10.12.4      If, within a further period of [†] ([†]) [†], or if in any event
within [†] ([†]) [†] of initial receipt of the Notice of Dispute, the Dispute
has not been resolved, or if, for any reason, the meeting described in Section
10.12.3 has not been held within [†] ([†]) [†] of initial receipt of the Notice
of Dispute, then the parties agree that either party may initiate a proceeding
to resolve the Dispute in accordance with Section 10.12.5 or Section 10.5.

10.12.5      Notwithstanding any provision of this Agreement to the contrary,
either party may immediately initiate litigation in any court of competent
jurisdiction seeking any remedy in equity, including the issuance of a
preliminary, temporary or permanent injunction, to preserve or enforce its
rights under this Agreement.

10.13           Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF A PARTY
HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT

10.14          Interpretation.

(a)The meaning assigned to each term defined herein shall be equally applicable
to both the singular and the plural forms of such term and vice versa, and words
denoting either gender shall include both genders as the context requires. Where
a word or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.

(b)The terms “hereof”, “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement.

(c)When a reference is made in this Agreement to an Article, Section, paragraph,
Exhibit or Schedule, such reference is to an Article, Section, paragraph,
Exhibit or Schedule to this Agreement unless otherwise specified.

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(d)References to “dollars” or “$” are references to United States dollars.

(e)The word “include”, “includes”, and “including” when used in this Agreement
shall be deemed to be followed by the words “without limitation”, unless
otherwise specified.

(f)A reference to any party to this Agreement or any other agreement or document
shall include such party’s predecessors, successors and permitted assigns.

(g)Reference to any Law means such Law as amended, modified, codified, replaced
or reenacted, and all rules and regulations promulgated thereunder.

(h)The parties have participated jointly in the negotiation and drafting of this
Agreement. Any rule of construction or interpretation otherwise requiring this
Agreement to be construed or interpreted against any party by virtue of the
authorship of this Agreement shall not apply to the construction and
interpretation hereof.

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EXECUTION VERSION

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Asset Purchase Agreement to be executed by their duly
authorized representatives as of the date first written above.

1ST ORDER PHAMACEUTICALS, INC.

By: /s/ Christopher S. Crean

Name: Christopher S. Crean

Title: President and Chief Scientific Officer

XENON PHARMACEUTICALS INC.

By: /s/ Simon Pimstone

Name: Simon Pimstone

Title: Chief Executive Officer

By: /s/ Ian Mortimer

Name: Ian Mortimer

Title: Chief Financial Officer

 

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Exhibit A

Valeant APA

 

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Execution Copy

ASSET PURCHASE AGREEMENT

by and among

1st ORDER PHARMACEUTICALS, INC.

(a Delaware corporation),

VALEANT PHARMACEUTICALS LUXEMBOURG,

(a Luxembourg company)

Dated as of October 30, 2015

 

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Execution Copy

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (“Agreement”), is made as of October 30, 2015, by
and among, 1ST Order Pharmaceuticals, Inc., a Delaware Corporation (“Acquiror”)
and Valeant Pharmaceuticals Luxembourg S.ar.l. a Luxembourg company (“Seller”).

RECITALS:

A.  WHEREAS, the Seller desires to sell to Acquiror, and Acquiror desires to
purchase from Seller, all of Seller’s right, title and interest in and to the
investigational compound known as VRX621698, a potassium channel opener small
molecule (the “Compound”), and certain completed development reports, raw data,
API and intellectual property related thereto, upon the terms and subject to the
conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants and agreements contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:

ARTICLE 1 DEFINITIONS

For convenience, certain terms used in more than one part of this Agreement are
listed in alphabetical order and defined or referred to below.

“Affiliate(s)” means, with respect to a particular party, a Person or other
entity that controls, is controlled by or is under common control with such
party.  For the purposes of this definition, the word “control” (including, with
correlative meaning, the terms “controlled by” or “under the common control
with”) means the actual power, either directly or indirectly through one or more
intermediaries, to direct or cause the direction of the management and policies
of such entity, whether by the ownership of fifty percent (50%) or more of the
voting stock of such entity, or by contract or otherwise.

“Acquiror” is defined in the Preamble.

“Agreement” is defined in the Preamble.

“Authorization” means any authorization, approval, consent, certificate,
license, notification, registration, permit, franchise, waiver, order, right,
notification of any Governmental Entity.

“Base Purchase Price” is defined in Section 2.3.

“Business Day” means a day other than a Saturday, Sunday or other day on which
banks located in New York City are authorized or required by Law to close.

“Closing” is defined in Section 3.1.

“Closing Date” is defined in Section 3.1.

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“Compound Material Adverse Effect” means [†].

“Compound” is defined in the preamble.

“Compound Intellectual Property” means all Patent rights, Know-How and other
Intellectual Property relating to the Compound, including, without limitation,
the Intellectual Property set forth on Schedule 4.3(a).

“Compound Registered Items” is defined in Section 4.3(d).

“Compound Regulatory Documentation” means any and all Authorizations relating to
the Compound, including, without limitation, applications, registrations,
licenses, authorizations, approvals, non-clinical and clinical study
authorization applications or notifications (including all supporting files,
writings, data, studies and reports), correspondence to or with any Medical
Product Regulatory Authority with respect to the Compound, and all data
contained in any of the foregoing, including all adverse event files and
manufacturing records.

“Confidentiality Agreement” is defined in Section 7.1.

“Confidentiality Information” is defined in Section 7.6.

“Damages” is defined in Section 10.1(a).

“Drug Product” means any formulation or presentation of the Compound approved by
a Medical Product Regulatory Authority under an NDA for sale.

“EMEA” means the European Medicines Agency.

“EU Territory” is defined in Section 2.5(b).

“FDA” means the United States Food and Drug Administration.

“FFDCA” means the U.S. Federal Food, Drug, and Cosmetic Act.

“Generic Equivalent” means any drug product that is comparable to a Drug Product
in dosage form, strength, performance characteristics and intended use.

“Governmental Entity” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local, or municipal government, foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority thereof.

“Grant-Back Intellectual Property” is defined in Section 2.8.

“In-Bound Licenses” is defined in Section 4.3(b).

“Indemnified Acquiror Party” is defined in Section 10.1.

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“Indemnified Party” is defined in Section 10.2.

“Indemnified Seller Party” is defined in Section 10.2.

“Indemnitor” is defined in Section 10.3(a).

“[†]” is defined in Section 2.4(b).

“Intellectual Property” means: (i) inventions (whether or not patentable), trade
secrets, technical data, databases, customer lists, designs, tools, methods,
processes, technology, ideas, Know-How, source code, product road maps and other
proprietary information and materials (“Proprietary Information”);
(ii) trademarks and service marks (whether or not registered), trade names,
logos, trade dress and other proprietary indicia and all goodwill associated
therewith; (iii) documentation, advertising copy, marketing materials,
web-sites, specifications, mask works, drawings, graphics, databases, recordings
and other works of authorship, whether or not protected by Copyright;
(iv) computer programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or object code,
firmware, development tools, files, records and data, design documents,
flow-charts, user manuals and training materials relating thereto and any
translations thereof and all media on which any of the foregoing is recorded
(collectively, “Software”); (v) domain names, uniform resource locators (“URLs”)
and other names and locators associated with the Internet (collectively, “Domain
Names”); and (vi) all forms of legal rights and protections that may be obtained
for, or may pertain to, the Intellectual Property set forth in clauses (i)
through (v) in any country of the world (“Intellectual Property Rights”),
including all letters patent, patent applications, provisional patents, design
patents, PCT filings, invention disclosures and other rights to inventions or
designs (“Patents”), all registered and unregistered copyrights in both
published and unpublished works (“Copyrights”), all trademarks, service marks,
trade names and other proprietary indicia (whether or not registered) (“Marks”),
trade secret rights, mask works, moral rights or other literary property or
authors rights, and all applications, registrations, issuances, divisions,
continuations, renewals, reissuances and extensions of the foregoing.

“Know-How” means all technical, scientific and other know-how and information,
trade secrets, knowledge, technology, means, methods, processes, practices,
formulas, instructions, skills, techniques, procedures, experiences, ideas,
technical assistance, designs, drawings, assembly procedures, computer programs,
apparatuses, specifications, data (including biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical,
clinical, safety, manufacturing and quality control data), results and other
material, including high-throughput screening, gene expression, genomics,
proteomics and other drug discovery and development technology, assays and any
other biological methodology, pre-clinical and clinical trial results,
manufacturing procedures, test procedures and purification and isolation
techniques, (whether or not confidential, proprietary, patented or patentable)
in written, electronic or any other form.

“Knowledge” means [†].

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“Law” means any statute, law (including common law), constitution, treaty,
ordinance, code, order, decree, judgment, rule, regulation and any other binding
requirement or determination of any Governmental Entity.

“Medical Product Regulatory Authority” means any Governmental Entity that is
concerned with the safety, efficacy, reliability, manufacture, investigation,
sale or marketing of pharmaceuticals, medical products, biologics or
biopharmaceuticals, including, without limitation, FDA, the EMEA, and state and
local government authorities.

“Milestone” is defined in Section 2.4(a).

“Milestone Payment” is defined in Section 2.4(a).

“Net Sales” means [†].

“NDA” means (a) a New Drug Application, as defined in the FFDCA, which is
required to be approved by FDA before the marketing of a product for its
FDA-approved intended use, and its equivalent in other countries or regulatory
jurisdictions or any successor application or procedure, and (b) all supplements
and amendments that may be filed with respect to the foregoing.

“Order” means any award, injunction, judgment, decree, order, ruling, subpoena
or verdict or other decision entered, issued or rendered by any Governmental
Entity.

“Out-Bound License” is defined in Section 4.3(c).

“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association, a Governmental Entity or any
agency, instrumentality or political subdivision of a Governmental Entity, or
any other entity or body.

“[†]” is defined in Section 2.4(b).

“Purchased Assets” is defined in Section 2.1.

“Representatives” is defined in Section 7.1.

“ROW Territory” is defined in Section 2.5(c).

“[†]” is defined in Section 2.4(b).

“[†]” is defined in Section 2.4(b).

“Third Party” shall mean any Person or entity other than Seller, Acquiror and
their respective Affiliates.

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“Third Party Payments” means all fees, milestones or royalties paid to a Third
Party that Acquiror determines are commercially, reasonably necessary to obtain
a license to practice such Third Party’s Patent rights in order to sell a Drug
Product without infringing such Third Party’s Patents (a “Third Party Patent”),
provided, however, that Third Party Payments shall exclude fees, milestones or
royalties (a) reasonably attributable to a product other than a Drug Product
covered by the respective Third Party Patent, and (b) reasonably attributable to
Intellectual Property other than a Third Party Patent;

“Transaction Documents” means this Agreement and any other, instrument,
agreement or document required to be delivered by the parties to this Agreement
pursuant to the terms hereof.

“Transaction” means the purchase and sale of the Purchased Assets hereunder and
the other transactions contemplated by the Transaction Documents.

“US Territory” is defined in Section 2.5(a).

ARTICLE 2 PURCHASE AND SALE

2.1  Purchase and Sale of the Compound.

(a)On the terms and subject to the conditions set forth in this Agreement, at
the Closing, Acquiror shall purchase from Seller, and Seller shall sell to
Acquiror, all of Seller’s rights, titles, and interest in and to the Compound
(the “Purchased Assets”), including, without limitation, the following assets.

(i)  The Compound Intellectual Property;

(ii) The tangible drug substance material currently stored with [†]; and

(iii)The Compound Regulatory Documentation.

(b)Acquiror shall not assume pursuant to this Agreement or the transactions
contemplated hereby, and shall have no liability for, any liabilities of Seller
of any kind, character or description whatsoever, and Seller shall retain
responsibility for all such liabilities and obligations.

2.2  Purchase Price.  The purchase price for the Purchased Assets shall be equal
to the Base Purchase Price plus, to the extent achieved, the Milestone Payments
in accordance with Section 2.4, plus, to the extent payable, the royalty
payments in accordance with Section 2.5.

2.3  Payment of Closing Consideration.  At the Closing, Acquiror shall deliver
to Seller the amount of $[†] (the “Base Purchase Price”).

2.4  Milestone Payments.

(a)Subject to the terms and conditions of this Agreement, the Seller shall be
entitled to a milestone payment (each payment as it relates to a particular
event for a product, a “Milestone Payment”) upon achievement of each of the
following events (each, a “Milestone”) for the Compound in the particular
amounts specified below:

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Compound (VRX621698)

Milestone

Milestone Payment

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

Total possible Milestone Payments:

[†]

(b)Definitions: For purposes of determining Milestone Payments:

(i)  “[†]” means [†].

(ii) “[†]” means [†].

(iii)“[†]” means [†].

(iv)“[†]” means [†].

(v) “[†]” means [†].

(vi)“[†]” means [†].

(vii)           “[†]” means [†].

(viii)          “[†]” means [†].

(c)Milestones Payable Only Once.  The Parties understand and agree that, except
as otherwise noted in Section 2.4(a) above, each of the Milestone Payments
referenced under Section 2.4(a), shall be payable only once, upon the first
occurrence of the applicable Milestone, and are subject to the terms and
conditions set forth in this Section 2.4.

(d)Payment of Milestone Payments.  Subject to Acquiror’s right to offset
pursuant to Section 10.6, Acquiror shall cause each Milestone Payment, if any,
to be distributed to the Seller within [†] ([†]) [†] following the date the
applicable Milestone relating thereto is achieved by bank wire transfer of
immediately available funds to an account designated by Seller in writing.

2.5  Royalties.  In addition to (and not in lieu of) the Base Purchase Price and
the Milestone Payments, Acquiror shall pay to Seller the following:

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(a)Royalties on Products in the United States (US) Territory.  As partial
consideration of the sale of the Compound to Acquiror hereunder, Acquiror shall
pay to Seller amounts equal to the applicable percentage of aggregate Net Sales
of Compound as a Drug Product sold in the United States (and its territories)
(the “US Territory”) as described below, as follows:

(i)  [†] ([†]) of Net Sales of such Drug Product in the US Territory; and

(ii) [†] ([†]) of Net Sales of such Drug Product in the US Territory.

(b)Royalties on Products in the European Union (EU) Territory.  As partial
consideration of the sale of the Compound to Acquiror hereunder, Acquiror shall
pay to Seller amounts equal to the applicable percentage of aggregate Net Sales
of Compound as a Drug Product sold in the European Union (and its territories)
(the “EU Territory”) as described below, and country-by-country basis as
follows:

(i)  [†] ([†]) of Net Sales of such Drug Product in such country; and

(ii) [†] ([†]) of Net Sales of such Drug Product in such country.

(c)Royalties on Products in the Rest of World (ROW) Territory.  As partial
consideration of the sale of the Compound to Acquiror hereunder, Acquiror shall
pay to Seller amounts equal to the applicable percentage of aggregate Net Sales
of Compound as a Drug Product sold outside the US Territory or EU Territory (the
“ROW Territory”) as described below, and country-by-country basis as follows:

(i)  [†] ([†]) of Net Sales of such Drug Product in such country; and

(ii) [†] ([†]) of Net Sales of such Drug Product.

(d)Royalty Payments.  All royalties due under this Section 2.5 shall be paid
within [†] ([†]) [†] of the end of the calendar quarter during which the
applicable Net Sales occur.  Each royalty payment shall be accompanied by a
statement (i) stating (as applicable) the aggregate Net Sales, by country, of
each Drug Product sold during the relevant calendar quarter by Acquiror and its
Affiliates or its or their licensees, or its or their direct or indirect
sub-licensees, and (ii) detailing the calculation of royalties and amounts due
for such calendar quarter.  All payments due under this Section 2.5 shall be
made by bank wire transfer in immediately available funds to an account
designated by Seller in writing.  All payments hereunder shall be made in the
legal currency of the United States.  With respect to Net Sales invoiced in a
currency other than United States dollars, such Net Sales will be converted into
the United States dollar equivalent using the average conversion rate existing
in the United States (as reported in The Wall Street Journal, New York edition)
during the applicable calendar quarter.  If The Wall Street Journal ceases to be
published, then the rate of exchange to be used shall be that reported in such
other business publication of national circulation in the United States on which
the Parties reasonably agree.

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2.6  Taxes.  Notwithstanding anything in this Agreement to the contrary, each of
Acquiror and Seller are responsible for payment of any tax for which it is
required to pay to the applicable Governmental Entity in connection with the
purchase of the Compound.  In the event any tax or similar amount is paid or
required to be withheld by Acquiror or any Affiliate thereof for the benefit of
Seller on account of any royalties or other payments payable to Seller under
this Agreement, the corresponding amounts payable to Seller shall be reduced by
the amount of taxes or similar amounts deducted and withheld, and Acquiror shall
pay the amounts of such taxes or similar amounts to the proper Governmental
Entities in a timely manner and promptly transmit to Seller an official tax
certificate or other evidence of such tax or other obligations together with
proof of payment from the relevant Governmental Entity of all amounts deducted
and withheld sufficient to enable Seller to claim such payment of taxes or
similar amounts.  Any such withholding taxes or similar amounts required under
applicable Law to be paid or withheld shall be an expense of, and borne solely
by, Seller.  Acquiror will provide Seller with, at Seller’s expense, reasonable
assistance to enable RNR to recover such taxes or amounts otherwise withheld as
permitted by Law.

2.7  License by Acquiror to Seller.  Effective as of the Closing Date, the
Acquiror hereby grants to the Seller [†] license under the Patents listed on
Part 1 of Schedule 4.3(a) (the “Grant-Back Intellectual Property”), which
license may [†].

2.8  Filing, Prosecution and Maintenance of Patents.  Except as set forth
herein, Acquiror will be solely responsible for the preparation, filing,
prosecution and maintenance of the Grant-Back Intellectual Property at its sole
expense.  Acquiror will keep the Seller advised on the status of the
preparation, filing, prosecution and maintenance of all patent applications
included within the Grant-Back Intellectual Property and the maintenance of any
issued patents included within the Grant-Back Intellectual Property.  If
Acquiror elects not to file a patent application included in the Grant-Back
Intellectual Property in any jurisdiction or elects to cease the prosecution or
maintenance of any Grant-Back Intellectual Property in any jurisdiction,
Acquiror will provide Seller with written notice immediately, but not less than
[†] ([†]) [†] before any action is required, upon the decision to not file or
continue the prosecution of such patent application or maintenance of such
Patent.  In such event, Acquiror will permit Seller, in Seller’s sole
discretion, to file or continue prosecution or maintenance of any such
Grant-Back Intellectual Property in such jurisdiction on Acquiror’s behalf at
Seller’s sole expense.  If Seller elects to continue such prosecution or
maintenance, Acquiror will execute such documents and perform such acts, at
Seller’s expense, as may be reasonably necessary to assign to Seller all right,
title and interest in and to such Grant-Back Intellectual Property in such
jurisdiction.

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2.9  Enforcement and Defense of Patent Rights.  Except as otherwise provided in
this Section 2.9 as between the Parties, Acquiror will have the exclusive right,
but not the obligation, to institute litigation or take other steps to remedy
any infringement of the Grant-Back Intellectual Property by a Third Party or to
defend any declaratory judgment action against any Grant-Bank Intellectual
Property (or alternatively that such patent rights are invalid or
unenforceable), and any such litigation, steps or defense will be at the
Acquiror’s expense.  Acquiror will not, without the prior written consent of
Seller, enter into any compromise or settlement relating to such litigation that
(i) admits the invalidity or unenforceability of any Grant-Back Intellectual
Property or (ii) requires either party to abandon any Grant-Back Intellectual
Property; provided, that Seller’s consent shall be deemed given if Seller does
not respond to Acquiror within [†] ([†]) [†] after delivery of written notice to
Seller of such proposed action.  Seller will cooperate with the Acquiror in such
litigation, steps or defense at Seller’s expense.  Seller will have the right to
consult with the Acquiror about such litigation and to participate in and be
represented by independent counsel in such litigation at Seller’s own
expense.  If Acquiror fails to defend any declaratory judgment action against
any Grant-Back Intellectual Property within [†] ([†]) [†] of its receipt of
notice thereof, then Seller will have the right, but not the obligation, upon
[†] ([†]) [†] prior notice to Acquiror, to defend such litigation at Seller’s
expense.  In such event, at Seller’s request and expense, Acquiror will timely
commence or join in any such litigation and in any event will cooperate with the
Seller in such litigation, steps or defense at the Seller’s expense.  Acquiror
will have the right to consult with Seller about such litigation and to
participate in and be represented by independent counsel in such litigation at
Acquiror’s own expense.  Seller will not, without the prior written consent of
Acquiror, enter into any compromise or settlement relating to such litigation
that (i) admits the invalidity or unenforceability of any Grant-Back
Intellectual Property or (ii) requires Acquiror to abandon any Grant-Back
Intellectual Property.  All recoveries collected by the Parties in such
litigation, steps or defense will first be allocated between the Parties on a
pro rata basis to reimburse the Parties for their costs incurred in connection
with such litigation, steps or defense, and any remaining recoveries will be
retained by the party controlling such litigation, steps or defense.

ARTICLE 3 CLOSING; TERMINATION AND TERM

3.1  Location; Date.  The consummation of the Transaction (the “Closing”) shall
be held at the offices of Wyrick Robbins Yates & Ponton, LLP, at 4101 Lake Boone
Trail, Suite 300, Raleigh, NC 27607 on a date which shall be no later than [†]
([†]) [†] after satisfaction or waiver of the conditions set forth in ARTICLE 9
or at such other date and place as may be mutually agreed upon by Acquiror and
Seller (the “Closing Date”).  The Closing shall be effective for all purposes as
of 11:59 p.m. (Eastern Time) on the Closing Date.

3.2  Deliveries.  At the Closing and as a condition to Closing, Seller shall
deliver or cause to be delivered each of the following to Acquiror, unless
Acquiror waives the delivery thereof:

(i)  Evidence reasonably satisfactory to Acquiror that the tangible drug
substance material currently stored with [†] will be shipped to the address
provided by the Acquiror to the Seller [†];

(ii) Evidence reasonably satisfactory to Acquiror that any and all physical
files, reports, data and other documentation related to Compound will be shipped
to the address provided by the Acquiror to the Seller [†];

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(iii)Evidence reasonably satisfactory to Acquiror that each consent, approval,
order or authorization of, or registration, declaration or filing with any
Person required in connection with the execution, delivery or performance of
this Agreement has been obtained or made and is in full force and effect;

(iv)Transfer documents in form and substance reasonably satisfactory to Acquiror
required to transfer the Compound Intellectual Property that is registered
Compound Intellectual Property to Acquiror as of the Closing Date, duly executed
by an authorized officer of Seller;

(v) Termination or other modification of the Confidentiality Agreement
reasonably necessary for Acquiror to commercialize and develop the Compound
after Closing; and

(vi)Such other and further certificates, assurances and documents as Seller may
reasonably request in order to evidence the accuracy of Seller’s representations
and warranties, the performance of covenants to be performed by Seller at or
prior to the Closing and the fulfillment of the conditions to Acquiror’s
obligations hereunder.

3.3  Termination.

(a)This Agreement may be terminated on or prior to the Closing Date only as
follows:

(i)  by mutual written consent of Acquiror and Seller;

(ii) by either Acquiror or Seller if a court of competent jurisdiction shall
have issued an order, decree or ruling permanently restraining, enjoining or
otherwise prohibiting the Transaction, and such order, decree or ruling shall
have become final and nonappealable; provided, however, that the right to
terminate this Agreement under this Section 3.3(a)(ii) shall not be available to
a party if such order, decree or ruling was primarily due to the failure of such
party to perform any of its obligations under this Agreement;

(iii)by Acquiror if Acquiror is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant, or agreement of the Seller contained in this Agreement such
that the conditions set forth in Section 9.2 would not be satisfied and such
breach has not been cured within [†] ([†]) [†] after written notice thereof to
the Seller; provided that no cure period shall be required for a breach which by
its nature cannot be cured; or

(iv)by the Seller if Seller is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant, or agreement of Acquiror contained in this Agreement such
that the conditions set forth in Section 9.3 would not be satisfied and such
breach has not been cured within [†] ([†]) [†] after written notice thereof to
Acquiror; provided that no cure period shall be required for a breach which by
its nature cannot be cured.

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(b)The termination of this Agreement by Acquiror shall be effectuated by the
delivery by Acquiror to the Seller of a written notice of such termination.  The
termination of this Agreement by the Seller shall be effectuated by the delivery
by the Seller to Acquiror of a written notice of such termination.

(c)In the event of the termination of this Agreement pursuant to this Section
3.3, this Agreement shall forthwith become void, and there shall be no Liability
on the part of any party hereto (except for Sections 3.3, 8.2 and 11 and the
Confidentiality Agreement).  Notwithstanding the foregoing, in the event that
this Agreement is terminated due to a material breach or material failure to
fulfill of any of the representations, warranties, covenants or agreements set
forth in this Agreement, nothing in this Section 3.3(c) shall be deemed to
release any party from any liability for any willful and intentional breach of
any of the representations, warranties, covenants or agreements set forth in
this Agreement following such termination.  This Section 3.3(c) shall not impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER

4.1  No Conflict; Authorizations.  No Authorization or Order of, or notice to,
any domestic or foreign Governmental Entity, is required to be made or obtained
by Seller at or prior to the Closing in connection with the execution and
delivery of this Agreement or the consummation by the Seller of the transactions
contemplated by this Agreement or compliance by the Seller with the provisions
hereof and thereof other than such customary filings regarding any change of
beneficial ownership or similar filings in foreign jurisdictions that would not
reasonably be expected to preclude or materially impede the Seller’s ability to
consummate the transactions contemplated by this Agreement.

4.2  Regulatory.  Seller has made available, or has caused to be made available,
to Acquiror [†].

4.3  Intellectual Property.

(a)Schedule 4.3(a) contains a complete and accurate list of (by name, contact
information and, where applicable, registration number and jurisdiction of
registration, application, certification or filing) all Intellectual Property
that is owned by Seller relating to or filed in the name of the Compound
(“Compound Intellectual Property”); provided that Seller is not required to list
items of Intellectual Property which are not registered or the subject of an
application for registration.  Except as specifically identified and described
in the Schedule 4.3(a), the Seller solely and exclusively owns the entire right,
title and interest to all Compound Intellectual Property free and clear of all
liens or encumbrances.

(b)Schedule 4.3(b) contains a complete and accurate list of all licenses,
sublicenses and other Contracts pursuant to which Seller is authorized to use,
practice any rights under, or grant sublicenses with respect to, any
Intellectual Property owned by a Third Party which is incorporated into any
Compound Intellectual Property (“In-Bound Licenses”) and, with respect to each
In-Bound License, whether the In-Bound License is exclusive or non-exclusive.

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(c)Schedule 4.3(c) contains a complete and accurate list of all currently
in-force licenses, sublicenses and other contracts pursuant to which Seller
authorizes a third party to use, practice any rights under, or grant sublicenses
with respect to, Compound Intellectual Property or pursuant to which Seller
grants rights to use or practice any rights under any Intellectual Property
owned by a Third Party with respect to any Compound Intellectual Property and
(“Out-Bound Licenses”), with respect to each Out-Bound License, whether the
Out-Bound License is exclusive or non-exclusive.

(d)All registration, maintenance and renewal fees related to Compound
Intellectual Property and any other certifications, filings or registrations
related to registered Compound Intellectual Property that are owned by Seller
(“Compound Registered Items”) that are currently due, or due within [†] ([†])
[†] of the Closing Date, have been paid and all documents and certificates
related to such Compound Registered Items have been filed with the relevant
Governmental Entity or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining such Compound
Registered Items and perfecting Seller’s ownership interests therein.  [†].

(e)To the Knowledge of the Seller, [†].  Schedule 4.3(e) lists the status of any
Actions (for the avoidance of doubt, excluding office actions in connection with
the prosecution of applications relating to the Compound Registered Items)
currently pending before the United States Patent and Trademark Office or any
other Governmental Entity anywhere in the world related to any of the Compound
Registered Items, including the due date for any outstanding response by Seller
in such Actions.  [†].

 

(f)Except as specifically identified and described in Schedule 4.3(f), neither
this Agreement nor the transactions contemplated by this Agreement, including
the assignment to Acquiror by operation of Law or otherwise (if any) of any
contracts or agreements to which Seller is a party, will result in (i) either
the Acquiror’s being bound by, or subject to, any non-compete or other material
restriction on the Compound contained in an Out-Bound License or an In-Bound
License, or (ii) either the Acquiror’s being obligated, under an Out-Bound
License or an In-Bound License, to pay any [†] to any Third Party in excess of
those that the Seller would have been required to pay had the transactions
contemplated by this Agreement not occurred.

4.4  Litigation.

(a)There is no action, suit or proceeding, claim, arbitration, litigation or
investigation (each, an “Action”) pending or, to the Knowledge of the Seller,
threatened (i) against the Seller relating to the Compound, or (ii) that
challenges or seeks to prevent, enjoin or otherwise delay the transactions
contemplated by this Agreement.  To the Knowledge of the Seller, [†].

(b)There is no unsatisfied judgment, penalty, award, decree, injunction, rule or
order of any Governmental Entity, court or arbitrator, outstanding or pending
against the Seller with respect to the Compound.

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ARTICLE 5 RIGHT OF FIRST REFUSAL AND FIRST OFFER

5.1  Third Party Offer.  As soon as practicable, and in any event within [†]
([†]) [†] after Acquiror receives an offer to purchase the Compound for
continued development or an offer to commercialize the Compound (a “Third Party
Offer”) from any Third Party (each such Third Party, an “Offeror”), Acquiror
shall (a) provide Seller with written notice setting forth the material terms of
the Third Party Offer (a “ROFR Notice”), (b) not enter into a confidentiality or
non-disclosure agreement that would prevent Acquiror from making such
disclosures to Seller, and (c) not agree to an [†] agreement without first
complying with this Article 5.

5.2  ROFR Procedure.

(a)Following receipt of any ROFR Notice, Seller shall have [†] ([†]) [†] from
the date of receipt of such ROFR Notice to notify Acquiror in writing that it
would like to enter into negotiations with Acquiror to commercialize the
Compound (each, a “ROFR Negotiation Notice”).  If Seller fails to provide a ROFR
Negotiation Notice within such [†] ([†]) [†] time period, Acquiror shall be free
to accept any Third Party Offer (including, without limitation, the Third Party
Offer subject to the ROFR Notice) and close such a transaction within [†] ([†])
[†] of the end of such [†] ([†]) [†] time period, and Acquiror shall not be
required to comply with Section 5.1 with respect to any other Third Party Offer
during such [†] ([†]) [†] period.

(b)If Seller provides a ROFR Negotiation Notice to Acquiror, Acquiror shall
engage in good faith discussions with Seller for a period of at least [†] ([†])
[†] or such other period as Seller and Acquiror may agree upon (the “ROFR
Negotiation Period”).  During the ROFR Negotiation Period, Acquiror and Seller
agree to undertake good-faith discussions regarding Seller’s interest in
purchasing the Compound for further development and/or commercializing the
Compound on terms at least as favorable to Acquiror as those contained in the
ROFR Notice, and the Parties shall negotiate in good faith to finalize an
agreement or letter of intent that is mutually agreeable with respect to the
terms of such transaction.  If Acquiror and Seller do not enter into a written
agreement or letter of intent regarding the purchase or commercialization of the
Compound during the ROFR Negotiation Period, Acquiror shall be free to accept
any Third Party Offer (including, without limitation, the Third Party Offer
subject to the ROFR Notice) and close such a transaction within ([†]) [†] of the
end the ROFR Negotiation Period on terms that are, for the Acquiror, equal or
superior to the terms set forth in the ROFR Notice, and Acquiror shall not be
required to comply with Section 5.1 with respect to any other Third Party Offer
during such [†] ([†]) [†] period.

(c)If Acquiror does not enter into an agreement with a Third Party within the
[†] ([†]) [†] period set forth in Sections 5.2(a) or (b), then Acquiror shall
again comply with the provisions of this Article 5 with respect to any Third
Party Offer received after the end of such [†] ([†]) [†] period.

5.3  Right of First Offer.  If Acquiror desires to, on its own behalf or in
conjunction with any Third Party, directly or indirectly, in any capacity
whatsoever commercialize the Compound including any sale of the commercial
rights to the Compound, Acquiror shall first provide Seller the opportunity to
commercialize the Compound by providing Seller with written notice of such
desire (the “ROFO Notice”) and agrees that it will not agree to [†] agreement
with any Third Party without first complying with this Article 5.

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5.4  ROFO Procedure.

(a)Following receipt of any ROFO Notice, Seller shall have [†] ([†]) [†] from
the date of receipt of such ROFO Notice to notify Acquiror in writing that it
would like to enter into negotiations with Acquiror to commercialize the
Compound (each, a “ROFO Negotiation Notice”).  If Seller fails to provide a ROFO
Negotiation Notice within such [†] ([†]) [†] time period, Acquiror shall be free
to commercialize the Compound independently and shall also be free to enter into
a definitive agreement with any Third Party to sell or otherwise grant rights to
such Third Party with respect to the commercialization of the Compound, .

(b)If Seller provides a ROFO Negotiation Notice to Acquiror, Acquiror shall
engage in good faith discussions with Seller for a period of at least [†] ([†])
[†] or such other period as Seller and Acquiror may agree upon (the “ROFO
Negotiation Period”).  During the ROFO Negotiation Period, Acquiror and Seller
agree to undertake good-faith discussions regarding Seller’s interest in
commercializing the Compound, and the Parties shall negotiate in good faith to
finalize an agreement or letter of intent that is mutually agreeable with
respect to the terms of such transaction.  If Acquiror and Seller do not enter
into a written agreement or letter of intent regarding the commercialization of
the Compound during the ROFO Negotiation Period or agree to extend the ROFO
Negotiation Period, the negotiation period automatically shall be extended for
[†] ([†]) [†] in which time period Seller may, if it wishes to do so, provide
Acquiror with a written offer with respect to the commercialization of the
Compound (the “Seller Offer”).  Thereafter, Acquiror shall be free to
commercialize the Compound independently and shall also be free to enter into a
definitive agreement with any Third Party to sell or otherwise grant rights to
such Third Party with respect to the Compound, but only on terms with a Third
Party as a whole that are superior to those of the Seller Offer.  If Acquiror
does not take any substantive actions towards the commercialization of the
Compound independently or enter into an agreement with a Third Party to sell or
otherwise grant rights to such Third Party with respect to the Compound in any
manner, within [†] ([†]) [†] after the end of the ROFO Negotiation Period, then
Acquiror shall again comply with the provisions of this Article 5 before taking
such an action thereafter.

5.5  Exclusions and Termination.  For the avoidance of doubt, nothing in this
Article 5 shall restrict or limit the Acquiror’s ability to sell or issue equity
or debt securities or otherwise incur indebtedness or encumber its assets, in
each case for bona fide financing purposes, and the Seller’s rights hereunder
shall not apply to any such transaction.  This Article 5 shall terminate upon
the occurrence of (1) the closing of any transaction or series of related
transactions (including without limitation, any reorganization, merger or
consolidation) which will result in the Acquiror’s stockholders immediately
prior to such transaction(s) not holding (by virtue of such shares or securities
issued solely with respect thereto) at least a majority of the voting power of
the surviving, resulting or continuing entity, or (2) the closing of the sale,
license, lease or other disposition of all or substantially all of the assets of
the Acquiror.

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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF ACQUIROR

Acquiror represents and warrants to Seller as follows:

6.1  Organization and Good Standing.  Acquiror is a corporation duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation, has all requisite power to carry on its business as now being
conducted, and is duly qualified to do business and is in good standing in which
it conducts any business.

6.2  Authority and Enforceability.  Acquiror has the requisite power and
authority to enter into each of the Transaction Documents, to perform its
obligations under each of the Transaction Documents and to consummate the
Transaction.  The execution and delivery of the Transaction Documents by
Acquiror and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of Acquiror.  Each
of the Transaction Documents has been duly executed and delivered by Acquiror
and, assuming due authorization, execution and delivery by the Seller Party,
constitute the valid and binding obligations of Acquiror, enforceable against
each of them in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or other
similar Laws affecting or relating to creditors’ rights generally, and (b) the
availability of injunctive relief and other equitable remedies.

6.3  Financial Capability.  Acquiror has, and at the Closing will have,
sufficient internal funds (without giving effect to any unfunded financing
regardless of whether any such financing is committed) available to pay the Base
Purchase Price and any expenses incurred by Acquiror in connection with the
transactions contemplated by this Agreement.

6.4  Litigation.  There is no Action pending or, to the knowledge of Acquiror,
threatened against Acquiror, that challenges or seeks to prevent, enjoin or
otherwise delay the Transaction.  To the knowledge of Acquiror, no event has
occurred or circumstances exist that may give rise or serve as a basis for any
such Action.

ARTICLE 7 COVENANTS OF THE SELLER

7.1  Access to Information.  Subject to the terms of the Confidentiality
Agreement by and between Acquiror and the Seller dated [†] (the
“Confidentiality, Agreement”), and except as prohibited by applicable Law,
Seller shall, and shall cause its Subsidiaries to, afford to Acquiror’s
officers, directors, employees, accountants, counsel, consultants, advisors and
agents (“Representatives”) reasonable access, during normal business hours and
upon reasonable advance notice, to all of the assets and records, reports,
contracts and other documents related to the Compound as the Acquiror and its
Representatives may reasonably request, and shall permit them to consult with
Seller’s officers, employees, accountants, counsel and agents for the purpose of
making such investigation of the acquired Compound as Acquiror shall desire to
make.

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7.2  Notification of Certain Matters.  Prior to the Closing, Seller shall give
prompt notice to Acquiror of any fact, event or circumstance known to it that
(a) individually or taken together with all other facts, events and
circumstances known to it, has had or would reasonably be expected to have,
individually or in the aggregate, a Compound Material Adverse Effect, or
(b) would cause or constitute a failure of any condition precedent to Acquiror’s
obligations set forth in this agreement.  Seller shall give prompt notice to
Acquiror of: (i) any notice or other communication from any Third Party alleging
that the consent of such Third Party is or may be required in connection with
the Transaction, or (ii) any written notice or other written communication
received by the Seller from any Governmental Entity in connection with the
Transaction.  The delivery of any notice pursuant to this Section 7.2 shall not
be considered an admission that any representation or warranty is untrue or that
any covenant has been breached and shall not limit or otherwise affect any
remedies available to Acquiror or prevent or cure any misrepresentations, breach
of warranty or breach of covenant and disclosure by the Seller shall not be
deemed to amend or supplement the schedules hereto or constitute an exception to
any representation or warranty.

7.3  [†].  [†].

7.4  Actions Prior to Closing.  Prior to Closing, Seller shall cause all
registration, maintenance and renewal fees and any certifications, filings or
registrations related to Compound Registered Items to be paid, prepared and/or
filed, as the case may be, with the relevant Governmental Entity or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining the Compound Registered Items and perfecting
Seller’s ownership interests therein.  Prior to Closing, Seller shall take or
cause to be taken at its expense all other [†] actions necessary to maintain the
Purchased Assets.  Without limiting the generality of the foregoing, prior to
Closing, Seller shall not take any of the following actions in connection with
the Purchased Assets: (1) sell, lease, license or otherwise dispose of, or agree
to sell, lease, license or otherwise dispose of, any Purchased Asset; (2) enter
into, cancel or modify any In-Bound License or Out-Bound License; or (3) grant
or permit to exist any lien or encumbrance on any of the Purchased Assets.

7.5  Efforts and Actions to Cause Closing to Occur.  Prior to the Closing, upon
the terms and subject to the conditions of this Agreement, Acquiror and Seller
shall use [†] to take, or cause to be taken, all actions, and to do, or cause to
be done, and cooperate with each other in order to do, all things necessary,
proper or advisable (subject to applicable Law) to consummate the transactions
contemplated hereby as promptly as practicable, including the matters described
in Article 9 hereof and the preparation and filing of all forms, registrations
and notices required to be filed and the taking of such actions as are necessary
to obtain any requisite consents of any Governmental Entity or other Person.  In
addition, no party hereto shall take any action that could reasonably be
expected to materially delay the obtaining of, or result in not obtaining, any
consent from any Governmental Entity or other Person required to be obtained
prior to the Closing.

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7.6  Confidentiality.  Following the Closing, each party hereto shall, and shall
cause its Affiliates and Representatives to, hold in strict confidence and not
utilize in its respective business any information and documents concerning any
other party hereto or any of its respective Affiliates (“Confidential
Information”), including all confidential or proprietary documents or
information regarding the Compound in the possession of Seller and its
Affiliates even though such documents and information were first developed by,
made known to, or obtained from, Seller and its Affiliates, except where
disclosure may be necessary for any such party to enforce its rights under this
Agreement or any Transaction Document or to comply with applicable Law.  In the
event a party is required to disclose Confidential Information to comply with
any applicable Law, the party proposing to disclose such information shall give
the original disclosing party with respect to whom such information is
Confidential Information reasonable advance notice of such disclosure (to the
extent not prohibited by applicable Law) and to cooperate with such disclosing
party in seeking a protective order or other appropriate means for limiting the
scope of the disclosure.  Notwithstanding the foregoing, the following will not
constitute “Confidential Information” for purposes of this Agreement: (a) other
than confidential or proprietary documents and information regarding the
Compound, (i) information that is independently developed by the receiving party
or any Affiliate thereof without the use of the Confidential Information, and
(ii) information that is obtained or was previously obtained by the receiving
party or its Affiliates from a third party who is not known by the receiving
party after due inquiry to be subject to obligations of confidentiality with
respect thereto, and (b) information that is or becomes generally available to
the public other than as the result of a disclosure by the receiving party or
any Affiliate thereof or their respective agents or employees.  Notwithstanding
the foregoing, following the Closing, the foregoing restrictions in this Section
7.6 shall not apply to the use by Acquirer or its Affiliates and its or their
successors, assigns and Representatives of any documents or information
concerning the Compound or the Purchased Assets furnished or transferred by
Seller or its Affiliates hereunder.

ARTICLE 8 OTHER COVENANTS

8.1  Public Announcements.  None of the parties hereto shall issue any press
release or make any public statement regarding the transactions contemplated
hereby without the prior written consent of Acquiror (in the case of a press
release or statement by any of the Seller) or the Seller (in the case of a press
release or statement by Acquiror).  Acquiror and Seller shall not be restricted
from making any disclosure it reasonably determines is required by Law.  Either
party may make any disclosure consistent with disclosures previously made
pursuant to this Section.  Nothing in this Section 8.1 shall restrict or
otherwise limit the Acquiror’s ability or right to issue any press release or
make any public statement after Closing regarding its operations or the
Purchased Assets, including, among other things, the development and
commercialization of the Compound.

8.2  Expenses.  Each of parties hereto shall bear its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby,
including all legal, accounting, financial advisory, consulting and all other
fees and expenses of third parties, whether or not the Transaction is
consummated.

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8.3  Further Assurances.  Upon the terms and subject to the conditions hereof
each of the parties hereto shall execute such documents and other instruments
and take such further actions as may be reasonably required to carry out the
provisions hereof and consummate the Transaction contemplated hereby (prior to,
at or after the Closing).  Each of the parties hereto shall use their [†] to
consummate the Transaction as soon as practicable following the date hereof.

ARTICLE 9 CONDITIONS TO CLOSING

9.1  Conditions to Each Party’s Obligation.  The obligations of Acquiror and the
Seller to consummate the Transaction are subject to the satisfaction on or prior
to the Closing Date of the following conditions:

(a)All Authorizations and Orders of, declarations and filings with, and notices
to any Governmental Entity required to permit the consummation of the
Transactions shall have been obtained or made and shall be in full force and
effect.

(b)No temporary restraining order, preliminary or permanent injunction or other
order preventing the consummation of the Transaction shall be issued by any
Governmental Entity of competent jurisdiction and shall be in effect.  No Law
shall have been enacted which makes the consummation of the Transaction illegal.

9.2  Conditions to Obligations of Acquiror.  The obligations of Acquiror to
effect the Transaction are subject to the satisfaction (or waiver by Acquiror in
its sole discretion) of the following further conditions:

(a)The representations and warranties of the Seller set forth in this Agreement
shall have been true and correct at and as of the date hereof and shall be true
and correct at and as of the Closing Date as if made at and as of the Closing
Date.

(b)There shall not have occurred since the date of this Agreement any event,
occurrence or change that has had or would reasonably be expected to have,
individually or in the aggregate, a Compound Material Adverse Effect.

(c)No action, proceeding or litigation brought by any Governmental Entity of
competent jurisdiction shall be pending or threatened before any court or other
Governmental Entity seeking to (i) prevent consummation of the Transaction,
(ii) affect adversely the right of Acquiror to control the Compound; or
(iii) restrain or prohibit Acquiror’s ownership of the Purchased Assets.  No
such Order shall be in effect.

(d)Seller shall have delivered to Acquiror duly executed Transaction Documents.

(e)Seller shall have delivered the items required by it pursuant to Section 3.2
hereof.

9.3  Conditions to Obligation of the Seller.  The obligation of the Seller to
effect the Transaction is subject to the satisfaction of the following further
conditions (or waiver by the Seller Parties to which the condition relates):

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(a)The representations and warranties of Acquiror set forth in this Agreement
that are [†] shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, and the representations and warranties that are [†] shall have
been true and correct in all [†] respects at and as of the date hereof and shall
be true and correct in all [†] respects at and as of the Closing Date as if made
at and as of the Closing Date, except to the extent that such representations
and warranties refer specifically to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date.

(b)Acquiror shall have performed in all [†] respects all obligations required to
be performed by it under this Agreement at or prior to the Closing Date.

9.4  Frustration of Closing Conditions.  None of the parties hereto may rely on
the failure of any condition set forth in this Article 9 to be satisfied if such
failure was caused by such party’s failure to act in good faith or to use its
[†] to cause the Closing to occur.

ARTICLE 10 INDEMNIFICATION

10.1            By the Seller.  To the extent provided in this Article 10,
following the Closing, the Seller, shall indemnify Acquiror, its successors and
assigns, and its officers, directors, employees, stockholders and agents (each,
an “Indemnified Acquiror Party”) and hold each Indemnified Acquiror Party
harmless from and against:

(a)[†]:

(i)  [†]

(ii) [†]

(b)[†].

10.2            By Acquiror.  From and after the Closing Date, to the extent
provided in this Article 10, Acquiror shall indemnify the Seller, its successors
and assigns, and its officers, directors, employees, stockholders and agents
(each, an “Indemnified Seller Party”) and hold each Indemnified Seller Party
harmless from and against:

(a)[†]:

(i)  [†]

(ii) [†]

(b)[†].

 

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10.3            Limitation of Liability.  EXCEPT [†], NEITHER PARTY WILL BE
LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOST BUSINESS OR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR OTHER SPECIAL DAMAGES SUFFERED
BY THE OTHER PARTY OR ITS AFFILIATES ARISING OUT OF OR RELATED TO THIS AGREEMENT
FOR ALL CAUSES OF ACTION OF ANY KIND (INCLUDING TORT, CONTRACT, NEGLIGENCE,
STRICT LIABILITY, INDEMNITY AND BREACH OF WARRANTY) EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS SUCH DAMAGES ARE PAYABLE TO A
THIRD PARTY IN CONNECTION WITH A CLAIM BY SUCH THIRD PARTY THAT IS INDEMNIFIABLE
HEREUNDER.

10.4            Procedure for Claims.  A Party that intends to claim
indemnification under this Article 10 (the “Indemnitee”) shall promptly notify
the other Party (the “Indemnitor”) in writing of the assertion or the
commencement of any Action by a Third Party (a “Third Party Claim”) and will
provide the Indemnitor such information with respect thereto that the Indemnitor
may reasonably request.  The Indemnitor shall be entitled to control and appoint
lead counsel for such defense, in each case at its expense.  If the Indemnitor
shall assume the control of the defense of any Third Party Claim in accordance
with the provisions, the Indemnitor shall obtain the prior consent of the
Indemnitee (which shall not be unreasonably withheld) before entering into any
settlement of such Third Party Claim.  The failure to deliver written notice to
the Indemnitor within a reasonable time after the commencement of any action
with respect to a Third Party Claim shall not relieve the Indemnitor of its
obligations under this Article 10 unless the delay or failure is materially
prejudicial to its ability to defend such action.  The Indemnitee under this
Section 10.4 shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action with respect to a Third Party
Claim covered by this indemnification.

10.5            [†]. [†].

10.6            Survival.  The Parties hereto agree that their respective
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing for a period of [†].

ARTICLE 11 MISCELLANEOUS

11.1            Notices.  Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed given: (a) on the date established by the sender as
the date of actual personal delivery; (b) on the date delivered by a private
courier as established by the sender by evidence obtained from the courier;
(c) on the date sent by facsimile, with confirmation of transmission, if sent
during normal business hours of the recipient, if not, then on the [†]; or
(d) on the [†] after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid.  Such communications, to be valid, must be
addressed as follows:

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If to Acquiror, to:

1st Order Pharmaceuticals

5511 NC Highway 902

Pittsboro, NC 27312

Attn: Chief Executive Officer

Facsimile: (919) 542-5421

Telephone: (919) 812-8119

With a copy to:

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, NC 27607

Attn: Thomas A. Allen

Facsimile: (919) 781-4865

If to Seller, to:

[†]

With a required copy to:

[†]

or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party.  If
more than one method for sending notice as set forth above is used, the earliest
notice date established as set forth above shall control.

11.2            Amendments and Waivers.

(a)Any provision of this Agreement may be amended or waived if, and only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by Acquiror and the Seller.

(b)No failure or delay by any party in exercising any right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

(c)To the maximum extent permitted by Law, (i) no waiver that may be given by a
party shall be applicable except in the specific instance for which it was given
and (ii) no notice to or demand on one party shall be deemed to be a waiver of
any obligation of such party or the right of the party giving such notice or
demand to take further action without notice or demand.

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11.3            Successors and Assigns.  This Agreement may not be assigned by
any party hereto without the prior written consent of the other parties;
provided, that Acquiror may assign any of its rights and obligations under this
Agreement to any Affiliate of Acquiror, so long as Acquiror shall remain liable
for its obligations hereunder.  Subject to the foregoing, all of the terms and
provisions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective executors, heirs, personal
representatives, successors and assigns.

11.4            Governing Law; Venue.  This Agreement and the exhibits and
schedules hereto shall be governed by and interpreted and enforced in accordance
with the Laws of [†], without giving effect to any choice of Law or conflict of
Laws rules or provisions (whether of [†] or any other jurisdiction) that would
cause the application of the Laws of any jurisdiction other than [†].  Any legal
proceeding relating to this Agreement or the enforcement of any provision of
this Agreement may be brought or otherwise commenced only in any state or
federal court located in [†].  Each party to this Agreement: (i) irrevocably and
unconditionally consents and submits to the exclusive jurisdiction and venue of
the state and federal courts located in [†]; (ii) agrees that each state and
federal court located in [†] shall be deemed to be a convenient forum; and
(iii) agrees not to assert (by way of motion, as a defense or otherwise), in any
such legal proceeding commenced in any state or federal court located in [†],
any claim that such party is not subject personally to the jurisdiction of such
court, that such legal proceeding has been brought in an inconvenient forum,
that the venue of such legal proceeding is improper or that this Agreement or
the subject matter of this Agreement may not be enforced in or by such court.

11.5            Counterparts.  This Agreement may be executed in any number of
counterparts, and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument.  This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto.  The
parties agree that the delivery of this Agreement may be effected by means of an
exchange of facsimile or other electronic signatures.

11.6            Third Party Beneficiaries.  No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder, except that: (a) in the case of Article 10 hereof, the
Indemnified Acquiror Parties or the Indemnified Seller Parties are intended
third party beneficiaries of such sections and shall have the right to enforce
such sections in their own names.

11.7            Entire Agreement.  This Agreement and the documents, instruments
and other agreements specifically referred to herein or delivered pursuant
hereto set forth the entire understanding of the parties hereto with respect to
the Transaction.  All exhibits and schedules referred to herein are intended to
be and hereby are specifically made a part of this Agreement.  Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement, other than the Confidentiality Agreement which shall continue in full
force and effect in accordance with its terms except as terminated or modified
in accordance with Section 3.2 hereof.

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11.8            Captions.  All captions contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.

11.9            Severability.  Any provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

11.10          Specific Performance.  Acquiror and Seller agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed by them in accordance with the terms hereof and that each
party shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at Law or equity.

11.11          Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF A PARTY
HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT.

11.12          Interpretation.

(a)           The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term and vice
versa, and words denoting either gender shall include both genders as the
context requires.  Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.

(b)            The terms “hereof”, “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.

(c)            When a reference is made in this Agreement to an Article,
Section, paragraph, Exhibit or Schedule, such reference is to an Article,
Section, paragraph, Exhibit or Schedule to this Agreement unless otherwise
specified.

(d)            References to “dollars” or “$” are references to United States
dollars.

(e)            The word “include”, “includes”, and “including” when used in this
Agreement shall be deemed to be followed by the words “without limitation”,
unless otherwise specified.

(f)            A reference to any party to this Agreement or any other agreement
or document shall include such party’s predecessors, successors and permitted
assigns.

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(g)            Reference to any Law means such Law as amended, modified,
codified, replaced or reenacted, and all rules and regulations promulgated
thereunder.

(h)            The parties have participated jointly in the negotiation and
drafting of this Agreement.  Any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any
party by virtue of the authorship of this Agreement shall not apply to the
construction and interpretation hereof.

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Asset Purchase Agreement to be executed by their duly
authorized representatives as of the date first written above.

1st ORDER PHAMACEUTICALS, INC.

By: /s/ Christopher S. Crean

Name: Christopher S. Crean

Title: President & CSO

 

VALEANT PHARMACEUTICALS LUXEMBOURG S.A.R.L

By: [†]

Name: [†]

Title: [†]

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Seller Schedule 4.3(a)

Section 1.  Intellectual Property

 

Jones Day
Reference

Country

Title

App.
Date

App.
No.

Pub
Date

Pub
No.

Issue
Date

Patent
No.

Status

[†]

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*Current Law Firm Contact:

John E. Thomas, Counsel

Harter Secrest & Emery

1600 Bausch & Lomb Place

Rochester, NY 14604-2711

Telephone:  [OMITTED]

Email:  [OMITTED]

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Section 2.  VRX621698 Study Reports and Raw Data

ELECTRONIC FILES

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

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ARCHIVED RAW DATA FILES

 

ASI Barcode

Study Number

Report Title

Format

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

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Section 3.  Drug Substance Material (All material has been moved to [†])

Lot/Batch

Mnumber

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Storage

Storage Facility prior to [†]

Comment

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Seller Schedule 4.3(b)  

Section 1. In bound Licenses

[†]

 

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Seller Schedule 4.3(c)  

Section 1. Out-bound Licenses

[†]

 

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Seller Schedule 4.3(e)  

Section 1. Status of Actions with Applications pending in the USPTO and other
Governmental Entity

Jones Day
Reference

Country

Title

App.
Date

App.
No.

Pub
Date

Pub
No.

Status

Outstanding Actions

[†]

[†]

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Section 2.  Scheduled Actions that are required to be taken by Seller within [†]
of Closing Date with respect to Compound Registered Items

[†]

Section 3. Compound Intellectual Property that Seller has abandoned, cancelled,
forfeited or relinquished or Seller has not taken any action nor failed to take
any action during the [†] ([†]) [†] prior to the date of this Agreement.

Jones Day
Reference

Country

Title

Application
Date

Application
No.

Pub
Date

Pub
No.

Issued
Date

Patent
No.

Status

[†]

[†]

[†]

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Seller Schedule 4.3(f)  

Section 1. Material Restrictions; Third Party Payments

[†]

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

Exhibit B

Form of Payoff Letter

 

 

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

[DATE]

1st Order Pharmaceuticals Inc.

[Address]

[Address]

Attn: [                 ]

Re: Pay-Off Letter

Dear [                 ]:

Reference is made to the Loan Agreement dated as of [•] ([as the same may from
time to time have been amended, restated, or otherwise modified,] the “Loan
Agreement”), the Promissory Note dated as of as of [•] ([as the same may from
time to time have been amended, restated, or otherwise modified,] the “Note”),
and any related loan documents (together with the Loan Agreement and the Note,
the “Loan Documents”), in each case by and among 1st Order Pharmaceuticals,
Inc., a Delaware corporation (the “Borrower”) and [•] (the “Lender[s]”), and the
loans contemplated thereby (the “Loans”).  Capitalized terms used and not
defined in this letter shall have the respective meanings given them in the Loan
Agreement.

Borrower has entered into that certain Asset Purchase Agreement by and among
Borrower and Xenon Pharmaceuticals Inc., a corporation continued under the
federal laws of Canada (“Xenon”), dated [•] (the “Asset Purchase
Agreement”).  Pursuant to the terms of the Asset Purchase Agreement, Borrower
has agreed to sell to Xenon, and Xenon has agreed to purchase from Borrower, all
of Borrower’s right, title and interest in and to the Purchased Assets (as
defined in the Asset Purchase Agreement).

Borrower has advised Lender that, in connection with the Asset Purchase
Agreement, Xenon intends to repay all amounts due and owing by Borrower under
the Loan Documents and has requested that Lender provide Borrower with
appropriate pay-off amounts for the principal, interest, and other amounts owing
by Borrower to Lender under the Loan Documents (such amounts, collectively, the
“Obligations”).  The pay-off amounts for Borrower as of April [•], 2017 (the
“Computation Date”) under the Loan Documents are as follows (collectively,
together with any additional interest accruing after the Computation Date that
must be repaid by Borrower, the “Pay-Off Amount”):

Principal:

$[                  ]

Interest:

$[                  ]

Fees:

$[                  ]

Total Amount Owing:

$[                  ]

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

From and after the Computation Date and until 5:00 pm Pacific time on the date
of the Lender[‘s] receipt of the Pay-Off Amount, interest shall continue to
accrue on the unpaid principal amount at the rate set forth in the Loan
Documents.  The per diem accrual of interest on the unpaid principal amount is
$[ ].  Upon request of Borrower, the Lender[s] shall provide Borrower with a
revised figure for the amount of interest to be paid as a part of the Pay-Off
Amount.  The foregoing accrued interest amount assumes no change in the
operative interest rates after the date hereof.

The Borrower shall pay or cause to be paid to the Lender[s] the Pay-Off Amount,
at the Borrower’s cost and expense, by federal funds wire transfer the Pay-Off
Amount (in immediately available funds) as follows (the “Release Condition”):

[LENDER’S NAME AND LENDER’S ADDRESS]

ABA No.: [ABA NUMBER]

For credit to: 1ST ORDER PHARMACEUTICALS, INC.

Re: [                             ]

Account No.: [ACCOUNT NUMBER]

Upon the occurrence of the Release Condition, (a) the Loans shall be paid in
full and all other indebtedness of the Borrower under the Loan Documents shall
be satisfied in full, (b) any commitments under the Loan Documents shall be
terminated, and the Lender[s] shall have no further obligation to make any Loans
or any other obligations, duties or responsibilities in connection with the Loan
Documents, (c) all the security interests, mortgages, liens, pledges, charges
and other encumbrances in favor of the Lender[s] to secure the Obligations shall
be automatically released with no further action on the Borrower’s part, (d) all
guaranties supporting the Loan Documents shall be released with no further
action on the Borrower’s part, (e) all of the other respective obligations of
each of the Borrower, or any of their subsidiaries or affiliates under the Loan
Documents shall be released with no further action on the Borrower’s part and
(f) the Loan Documents shall be terminated, canceled and of no further force and
effect; provided that, the Borrower shall remain liable for any other provisions
of the Loan Documents which by their terms survive the payment of the Loans.

In consideration of the payment in full of the Obligations and upon the
occurrence of the Release Condition, the Lender[s], hereby agree[s] to promptly
deliver to the Borrower, in each case at the expense of the Borrower, the
following: (a) [all certificates delivered to the Lender[s] representing stock
pledged by the Borrower in favor of the Lender[s]under the Loan Documents
together with related stock powers delivered to the Lender[s],] (b) all chattel
paper and other instruments or documents delivered to the Lender pursuant to the
Loan Documents, (c) Uniform Commercial Code releases and/or terminations and
other terminations and intellectual property releases in form acceptable for
recording, terminating all of the Lenders’ liens and security interests in the
collateral, (d) releases, discharges and satisfactions of all mortgages in favor
of the Lender[s]in form and substance satisfactory to the Borrower, (e) all
other collateral in the actual physical possession of the Lender[s] and
(f) reassignments of all assignments in favor of the Lender[s] in form and
substance satisfactory to the Borrower.

The Lender[s] agree[s] that the occurrence of the Release Condition constitutes
payment in full of all of the liabilities and obligations of the Borrower and
its respective affiliates, directors, managers, officers, members, stockholders,
successors and assigns (collectively, the “Released Parties”) to the Lender[s],
including any and all fees, expenses, reimbursements and other liabilities and
obligations on behalf of Borrower or any of its affiliates on or prior to the
date hereof.  The Lender[s] further waive[s] any notice requirements under the
Loan Documents, including Section 5(e) of the Loan Agreement.

2

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Upon the occurrence of the Release Condition the Lender[s] and any affiliates of
the Lender[s] knowingly and voluntarily waive[s], remise[s], release[s] and
forever discharge[s] each of the Released Parties from any and all liabilities
and obligations in respect of the Loans and the Loan Documents, whether known or
unknown and whether absolute or contingent.

Upon the occurrence of the Release Condition, the Lender[s] agree[s] to procure,
deliver or execute and deliver to the Borrower, from time to time, all further
releases, termination statements, certificates, instruments and documents, each
in form and substance satisfactory to the Borrower, and take any other actions,
as may be reasonably requested by the Borrower or which are required to evidence
the consummation of the payoff contemplated hereby, in each case at the expense
of the Borrower (including attorneys’ fees and expenses).

Upon the occurrence of the Release Condition, the Lender[s] hereby authorize[s]
the Borrower, or any other party on behalf of the Borrower, to prepare and file
termination statements, intellectual property releases and other instruments and
documents evidencing the consummation of the payoff contemplated hereby and the
aforementioned termination and release.

This letter may be executed in multiple counterparts and by facsimile signature,
each of which shall be deemed an original and all of which together shall
constitute one instrument.

[Signature page follows]

 

3

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Very truly yours,

[LENDER NAME]

By

Name:

Title:

ACKNOWLEDGED AND CONSENTED TO BY:

1ST ORDER PHARMACEUTICALS, INC.

By

Name:

Title:

 

 

Signature page to Pay-Off Letter

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

SCHEDULES TO ASSET PURCHASE AGREEMENT

Schedule 1.59 – Transferred Technology

VRX621698 Study Reports and Raw Data
ELECTRONIC FILES

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

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[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

[†]

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[†]

 

ARCHIVED RAW DATA FILES

1OP Box

Study Number

Report Title

Format

1OP-1

[†]

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1OP-2

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1OP-3

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[†]

[†]

[†]

1OP-6

[†]

[†]

[†]

1OP-7

[†]

[†]

[†]

1OP-8

[†]

[†]

[†]

1OP-9

[†]

[†]

[†]

1OP-10

[†]

[†]

[†]

1OP-11

[†]

[†]

[†]

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Drug Substance Material

 

Lot/Batch

Quantity

Sent to Ricerca

Last Storage

Details

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Schedule 4 - Seller Disclosure Schedule

This Seller Disclosure Schedule is delivered pursuant to that certain Asset
Purchase Agreement (the “Agreement”), dated as of April 25, 2017, by and between
1st Order Pharmaceuticals, Inc., a Delaware corporation and Xenon
Pharmaceuticals Inc., a corporation continued under the federal laws of Canada.
All capitalized terms used and not otherwise defined herein have the meanings
ascribed thereto in the Agreement.

Any disclosure hereunder shall not be deemed to be an admission or
acknowledgment by the Seller that such information is material to, or outside
the ordinary course of business of, the Seller. Nothing herein constitutes an
admission of liability. Nothing in this Seller Disclosure Schedule is intended
to broaden the scope of any representation or warranty contained in the
Agreement or to create any covenant. Any disclosure made in one section of this
Disclosure Schedule is deemed to be a disclosure in each other section of this
Disclosure Schedule, whether or not specifically mentioned in such other
section, to the extent that it is reasonably apparent from the disclosure that
such disclosure is applicable to such other section.

The sections of the Seller Disclosure Schedule are numbered to correspond to the
applicable section of the Agreement. The Seller Disclosure Schedules set forth,
among other things, items the disclosure of which is necessary or appropriate
either in response to an express disclosure requirement contained in a provision
of the Agreement or as an exception to one or more representations or warranties
contained in the corresponding section of the Agreement.

Schedule 4.3 - No Conflict; Authorizations.

None.

4.6 - Non-cGMP API

The following APIs were not manufactured in accordance with GMPs:

 

Lot/Batch

Quantity

Sent to Ricerca

Last Storage

Details

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

4.7(a) - Seller Registered IPR

The following is a complete and accurate list of all Seller Registered IPR:

 

Part of
Grant
Back
License

Brinks Gilson Leoni Reference

Country

Title

App. Date

App.
No.

Pub Date

Pub No.

Issued Date

Patent No.

Status

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Part of
Grant
Back
License

Brinks Gilson Leoni Reference

Country

Title

App. Date

App.
No.

Pub Date

Pub No.

Issued Date

Patent No.

Status

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

4.7(b) - Fees Payable; Abandoned IP

As further described below, certain of the following Transferred IPR (i)
requires that actions be taken within [†] following the Closing Date, or (ii)
was abandoned:

 

Brinks
Gilson
Leoni
Docket

Category

Action Date

Country

App.
No.

Patent
No.

Comments

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

Brinks
Gilson
Leoni
Docket

Category

Action Date

Country

App.
No.

Patent
No.

Comments

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

[†]

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

[†]

[†]

[†]

[†]

 

 

[†]

4.7(g) - Assignments of Seller Registered IPR

See Schedule 4.7(b) for assignments that have not yet been recorded.

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION

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

 

4.7(j) - Inbound Licenses

[†].

4.7(k) - Outbound Licenses

[†]

4.7(l) - Restrictions/Royalties on Acquiror

[†].

4.7(p) - Services to Governmental Entities

[†]

4.8 - Seller Contracts

4.8(a):

[†]

 

[†] DESIGNATES PORTIONS OF THIS DOCUMENT THAT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE COMMISSION