Exhibit 10.25
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE
SUCH OMISSIONS
ASSET PURCHASE AGREEMENT
between
SCHERING CORPORATION
As SELLER
and
OPKO HEALTH, INC.
As PURCHASER
Dated as of October 12, 2009

 

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TABLE OF CONTENTS

                      Page   SECTION 1. DEFINITIONS     1      
 
       
1.1
 
Definitions
    1  
1.2
 
Other Definitional Provisions
    6      
 
        SECTION 2. PURCHASE AND SALE     7      
 
       
2.1
 
Transfer of Purchased Asset
    7  
2.2
 
Excluded Asset
    7  
2.3
 
Assumed Liabilities
    7  
2.4
 
Excluded Liabilities
    8  
2.5
 
Technical Transfer Services
    8  
2.6
 
Licenses
    9  
2.7
 
Payments
    10  
2.8
 
Purchase Price Allocation
    10  
2.9
 
Risk of Loss
    10  
2.10
 
Closing
    10  
2.11
 
Transactions at Closing
    11      
 
        SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER     12      
 
       
3.1
 
Organization
    12  
3.2
 
Due Authorization
    12  
3.3
 
No Conflicts; Enforceability
    12  
3.4
 
Title; Condition; Assets
    12  
3.5
 
Intellectual Property
    12  
3.6
 
Litigation
    13  

     (i)     

 

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                      Page  
3.7
 
Consents
    13  
3.8
 
Taxes
    13  
3.9
 
Compliance with Laws
    13  
3.10
 
Regulatory Filings
    13  
3.11
 
Clinical Trials
    13  
3.12
 
Contracts
    13  
3.13
 
NK-1 Records
    14  
3.14
 
Brokers, Etc.
    14  
3.15
 
Disclaimer
    14      
 
        SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER     15      
 
       
4.1
 
Organization
    15  
4.2
 
Due Authorization
    15  
4.3
 
Sufficiency of Purchase
    15  
4.4
 
No Conflicts; Enforceability
    15  
4.5
 
Litigation
    15  
4.6
 
Consents
    16  
4.7
 
Financing
    16  
4.8
 
Brokers, Etc.
    16  
4.9
 
Independent Investigation
    16  
4.10
 
Efforts to Commercialize
    17      
 
        SECTION 5. COVENANTS PRIOR TO CLOSING     17      
 
       
5.1
 
Required Approvals and Consents; Cooperation
    17  
5.2
 
Notification
    17  
5.3
 
Certification
    17  
5.4
 
Cooperation
    18  

     (ii)     

 

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                      Page  
5.5
 
Further Assurances; Further Documents
    18  
5.6
 
Intellectual Property
    18      
 
        SECTION 6. CONDITIONS TO CLOSING     18      
 
       
6.1
 
Conditions Precedent to Obligations of Purchaser and Seller
    18  
6.2
 
Conditions Precedent to Purchaser’s Obligation
    19  
6.3
 
Conditions Precedent to Seller’s Obligations
    19      
 
        SECTION 7. OTHER COVENANTS     20      
 
       
7.1
 
Confidentiality
    20  
7.2
 
Publicity
    22  
7.3
 
Availability of Records
    22  
7.4
 
Regulatory Matters
    23  
7.5
 
Tax Matters
    23  
7.6
 
Post-Closing Cooperation
    23  
7.7
 
Limited Covenant Not to Sue
    23  
7.8
 
Periodic Reporting
    23  
7.9
 
Rescission
    23  
7.10
 
Additional Information
    24  
7.11
 
Supply
    24      
 
        SECTION 8. SURVIVAL AND INDEMNIFICATION     24      
 
       
8.1
 
Survival of Representations
    24  
8.2
 
Indemnification by Seller
    24  
8.3
 
Indemnification of Purchaser
    25  
8.4
 
Procedures
    25  
8.5
 
Certain Limitations on Indemnification Obligations
    26  
8.6
 
Sole Remedy
    26  

     (iii)     

 

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                      Page  
8.7
 
Limitation on Liability
    27      
 
        SECTION 9. MISCELLANEOUS     27      
 
       
9.1
 
Assignment; Binding Effect
    27  
9.2
 
No Third Party Beneficiaries
    27  
9.3
 
Expenses
    27  
9.4
 
Notices
    27  
9.5
 
Governing Law
    28  
9.6
 
Dispute Resolution
    28  
9.7
 
Injunctive Relief
    29  
9.8
 
Termination
    29  
9.9
 
Effect of Termination
    30  
9.10
 
Amendments; Entire Agreement
    30  
9.11
 
Waiver
    30  
9.12
 
Severability
    30  
9.13
 
Schedules
    30  
9.14
 
Construction
    30  
9.15
 
Headings
    30  
9.16
 
Counterparts
    30  

     (iv)     

 

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LIST OF EXHIBITS**

          Exhibit A   -  
Bill of Sale and Assignment and Assumption Agreement
       
 
Exhibit B   -  
NK-1 Drug Substance
       
 
Exhibit C   -  
NK-1 Patents
       
 
Exhibit D   -  
Patent Assignment Agreement

LIST OF SCHEDULES**

          Schedule 2.5   -  
Technical Transfer Services
       
 
Schedule 2.11   -  
Asset Transfer Schedule
       
 
Schedule 7.10   -  
Key Rolapitant Employee List

**   The Exhibits and Schedules to the Asset Purchase Agreement have been
omitted from this filing. The Company agrees to furnish supplementally copies of
the omitted attachments to the Commission upon request.

     (v)     

 

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ASSET PURCHASE AGREEMENT
     THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of October 12,
2009 (the “Execution Date”) is entered into by and between Schering Corporation,
a New Jersey corporation having a business address at 2000 Galloping Hill Road,
Kenilworth, New Jersey 07033 (“Seller”); and OPKO Health, Inc., a Delaware
corporation having a business address at 4400 Biscayne Boulevard, Miami, Florida
33137 (“Purchaser”). Seller and Purchaser are sometimes referred to,
individually, as a “Party” and, collectively, as the “Parties.”
PRELIMINARY STATEMENTS
     A. In connection with the merger of Merck & Co., Inc. and Schering-Plough
Corporation, (the “Merger”), Schering-Plough Corporation is required by the
United States Federal Trade Commission (“FTC”) pursuant to the Consent Order to
divest certain assets related to its NK-1 Program (as defined in Section 1).
     B. In order to comply with the FTC’s Consent Order (as defined in
Section 1), Seller has decided to sell certain assets and transfer certain
liabilities of the NK-1 Program to Purchaser pursuant to this Agreement and the
Parties hereto intend that this Agreement be interpreted in a manner that is
consistent with the terms and remedial purposes of the Consent Order.
     C. Purchaser has determined that the purchase of certain assets and
assumption of certain liabilities associated with the NK-1 Program is consistent
with and in furtherance of the business strategies of the Purchaser. Therefore,
Purchaser desires to purchase such assets and assume such liabilities from
Seller, on the terms and conditions set forth in this Agreement.
     D. In accordance with these recitals, the purpose of this Agreement is to
sell and transfer to Purchaser the Purchased Assets, and license the know-how of
Seller, that it used in the NK-1 Program for the purpose of Purchaser conducting
the NK-1 Program in substantially the manner as conducted by Seller prior to
Closing.
     NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants, agreements and provisions set forth in this Agreement and
in the BSAA Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties agree as follows:
SECTION 1.
DEFINITIONS
     1.1 Definitions. All capitalized terms used in this Agreement shall have
the meanings specified in this Section or elsewhere in this Agreement, as
applicable. The following terms shall have the meanings set forth below for the
purposes of this Agreement:
          “Action” means any claim, action, suit, arbitration, inquiry, audit,
proceeding or investigation by or before any Governmental Authority.
          “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by, or is under direct or
indirect common control with, such Person. For purposes of this definition, a
Person shall be deemed, in any event, to control another Person if it owns or
controls, directly or indirectly, more than fifty percent (50%) of the voting
equity of the other Person or has the power to direct or cause the direction of
the management of the other Person, whether through ownership of voting
securities or otherwise.

-1-

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          “Agreement” has the meaning set forth in the introductory paragraph of
this Agreement.
          “Assets” of any Person means all assets and properties of any kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, cash equivalents,
accounts and notes receivable, chattel paper, documents, instruments, general
intangibles, equipment, inventory, goods and intellectual property.
          “Assumed Liabilities” has the meaning set forth in Section 2.3.
          “Basket Amount” has the meaning set forth in Section 8.5.
          “BSAA Agreement” means the Bill of Sale and Assignment and Assumption
Agreement executed by Seller and Purchaser in substantially the form of
Exhibit B.
          “Business Day” means any day other than a Saturday, a Sunday or any
day on which banks are authorized or required to be closed in the United States.
          “Closing Date” has the meaning set forth in Section 2.10.
          “Closing” means the closing of the purchase and sale of the Purchased
Assets and assignment and assumption of the Assumed Liabilities contemplated by
this Agreement.
          “Code” means the United States Internal Revenue Code of 1986, as
amended.
          “Confidential Information” has the meaning set forth in Section 7.1.2.
          “Confidentiality Agreement” means that certain Secrecy Agreement,
dated as of August 4, 2009, between Seller and Purchaser, respectively.
          “Consent Order” or “Decision and Order” means a written order issued
by the FTC requiring Schering-Plough Corporation to divest certain assets
related to its NK-1 Program in order for it to obtain regulatory clearance from
the United States antitrust agencies to complete the Merger.
          “Control” or “Controlled by” means, with respect to intellectual
property, the ability of a Party (collectively with its Affiliate(s)), whether
by ownership, license or otherwise, to grant a license or sublicense.
          “Encumbrance” means any security interest, pledge, hypothecation,
mortgage, lien or encumbrance.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
          “Excluded Assets” means any Assets whether or not relating to the NK-1
Compounds or NK-1 Program, other than the Purchased Assets.

-2-

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          “Excluded Liabilities” has the meaning set forth in Section 2.4.
          “Execution Date” has the meaning set forth in the introductory
paragraph of this Agreement.
          “FTC” has the meaning set forth in the Preliminary Statements.
          “GAAP” means United States generally accepted accounting principles.
          “Governmental Authority” means any nation or government, any
provincial, state, regional, local or other political subdivision thereof, any
supranational organization of sovereign states, and any entity, department,
commission, bureau, agency, authority, board, court, official or officer,
domestic or foreign, exercising executive, judicial, regulatory or
administrative functions of or pertaining to government, whether foreign or
domestic, whether federal, state, provincial, municipal or other.
          “Indemnified Party” has the meaning set forth in Section 8.4.
          “Indemnifying Party” has the meaning set forth in Section 8.4.
          “IRS” means the Internal Revenue Service of the United States.
          “Knowledge” means the actual knowledge of Seller.
          “Law” means each provision of any currently existing federal,
provincial, state, local or foreign law, statute, ordinance, order, code, rule
or regulation, promulgated or issued by any Governmental Authority, as well as
any judgments, decrees, injunctions or agreements issued or entered into by any
Governmental Authority specifically with respect to Seller.
          “Liability” means, collectively, any indebtedness, guaranty,
endorsement, claim, loss, damage, deficiency, cost, expense, obligation or
responsibility, fixed or unfixed, known or unknown, choate or inchoate,
liquidated or unliquidated, secured or unsecured, direct or indirect, matured or
unmatured, or absolute, contingent or otherwise, including any product
liability.
          “Losses” means, with respect to any claim or matter, all losses,
expenses, obligations and other Liabilities or other damages (whether absolute,
accrued, contingent, fixed or otherwise, or whether known or unknown, or due or
to become due or otherwise), diminution in value, monetary damages, fines, fees,
penalties, interest obligations, deficiencies, losses and expenses (including
amounts paid in settlement, interest, court costs, costs of investigators, fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation).
          “Material Adverse Effect” means any change or effect that is
materially adverse to the NK-1 Program, the Purchased Assets and/or the Assumed
Liabilities, taken as a whole, but shall exclude any change, effect or
circumstance resulting or arising from: (a) the announcement of or consummation
of the transactions contemplated by this Agreement and the BSAA Agreement,
and/or the Merger, (b) events, circumstances, changes or effects that generally
affect the industries in which Seller operates, (c) general economic or
political conditions, or events, circumstances, changes or effects affecting the
securities markets generally, (d) any changes in Law, and/or (e) any
circumstance, change or effect that results from any action taken pursuant to or
in accordance with this Agreement, the BSAA Agreement or at the request of
Purchaser.

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          “Merger” has the meaning set forth in the Preliminary Statements.
          “NK-1 Compounds” means the neurokinin-1 (NK-1) receptor antagonists
SCH **** (Rolapitant) and SCH ****, or any product containing such compounds.
          “NK-1 Drug Substance” means the amounts of active pharmaceutical
ingredient (API) and formulated drug substance for the NK-1 Compounds set forth
in Exhibit B.
          “NK-1 Intellectual Property” means collectively, the NK-1 Know-How and
NK-1 Patents. ****.
          “NK-1 Know-How” means the know-how that is exclusively used for the
NK-1 Program, including any and all specifications, processes, designs, plans,
trade secrets, ideas, concepts, inventions, manufacturing, engineering and other
manuals and drawings, standard operating procedures, formulae, flow diagrams,
toxicological, biological, physical, analytical, safety, stability, supply,
selection, constitution, or use of any raw material, quality assurance, quality
control and clinical data, technical information or research records. For the
sake of clarity, none of the foregoing information shall be included in NK-1
Know-How to the extent that such information is covered by any claim of any
Patent.
          “NK-1 Patents” means the Patents and patent applications which are set
forth on Exhibit C, including all patents and patent applications, and all
additions, divisions, continuations, continuations-in-part, provisionals,
continued prosecution applications, substitutions, reissues, extensions,
registrations and renewals of any of the foregoing which have any claims
covering the manufacture, distribution, marketing, promoting, offering for sale
and selling of the NK-1 Compounds as of the Closing Date and are reasonably
necessary or useful for the conduct of the NK-1 Program.
          “NK-1 Program” means Seller’s program for the commercialization of the
NK-1 Compounds, including but not limited to their research, development,
manufacture, marketing and sale, as conducted by Seller as of or prior to the
Closing Date.
          “NK-1 Records” means, to the extent permitted by Law, all records or
recorded information relating exclusively to the NK-l Compounds or NK-1 Program,
including, but not limited to, Regulatory Filings, clinical trial master files,
final and draft clinical protocols, stability studies, laboratory books, batch
records, strategic or marketing studies, and internal analyses, that are in
Seller’s possession or control as of the Closing Date, provided, however, that:
(a) in each case, Retained Information and Retained Intellectual Property
contained in any such records shall continue to be owned by the Seller and
licensed to Purchaser in accordance with the provisions of Section 2.6.1 and may
be otherwise used and exploited by such Seller in compliance with this
Agreement; (b) Seller may retain: (i) a copy of any such records to the extent
necessary for Tax, accounting, legal or regulatory purposes, (ii) all books,
documents, records and files: (A) prepared in connection with or relating to the
Transactions, including bids received from other parties and strategic,
financial or Tax analyses relating to the divestiture of the Purchased Assets,
the Assumed Liabilities, the NK-l Compounds and the NK-1 Program, including,
without limitation, any attorney work-product, attorney-client communication or
other items protected by privilege relating to the outlicensing process or
divestiture of the NK-1 Compounds; or (B) maintained by Seller and/or its
representatives, agents or licensees in connection with their respective Tax,
legal, regulatory or reporting requirements; and (c) with respect to any
attorney work product, attorney-client communications and other items protected
by privilege, Seller and Purchaser shall enter into agreements such that the
transfer of such materials to Purchaser would not destroy or impair such
privileges.

-4-

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          “Party” or “Parties” has the meaning set forth in the introductory
paragraph of this Agreement.
          “Permitted Encumbrances” means (a) statutory liens for current Taxes
of Seller not yet due and payable or Taxes of Seller being contested in good
faith by appropriate proceedings, and (b) mechanics’, carriers’, workers’,
repairers’ and other similar liens arising or incurred in the ordinary course of
business relating to obligations as to which there is no default on the part of
Seller or the validity or amount of which is being contested in good faith by
appropriate proceedings, or pledges, deposits or other liens securing the
performance of bids, trade contracts, leases or statutory obligations (including
workers’ compensation, unemployment insurance or other social security
legislation.
          “Person” means any individual, corporation, partnership, joint
venture, limited liability company, trust or unincorporated organization or
Governmental Authority.
          “Prime Rate” means the rate of interest from time to time at the prime
commercial lending rate to the most creditworthy customers by a bank of national
standing agreed by the Parties.
          “Purchase Price” has the meaning set forth in Section 2.7.
          “Purchased Assets” means, collectively, the NK-1 Drug Substance, the
Regulatory Filings, the NK-1 Patents and the NK-1 Records.
          “Purchaser Proprietary Information” has the meaning set forth in
Section 7.1.2.
          “Purchaser” has the meaning set forth in the introductory paragraph of
this Agreement.
          “Purchaser Registrations” means the permits, approvals, licenses,
franchises or authorizations, including the Regulatory Filings, from any
Governmental Authority that relate to the testing, manufacture, distribution,
marketing, promoting, offering for sale and selling of the NK-1 Compounds that
are necessary for the conduct of the NK-1 Program which are granted to Purchaser
or Purchaser’s Affiliate by any Governmental Authority after the Closing Date.
          “Regulatory Filings” means (a) (i) the Investigational New Drug
Applications (INDs) having numbers IND **** and IND ****, filed by Seller with
the United States Food and Drug Administration (“FDA”) for the NK-1 Compounds,
and (ii) any counterparts of such INDs in any other country in the Territory,
and (b) all supplements and amendments that may be filed with respect to any
filings described in the preceding clause (a).

-5-

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          “Representatives” means, with respect to any Person, the directors,
managers, employees, independent contractors, agents or consultants of such
Person.
          “Retained Information” means the records prepared and maintained by
Seller or its Affiliates including, without limitation, laboratory books, batch
records, stability studies, strategic or marketing studies, internal analyses
and regulatory files (including correspondence with Governmental Authorities)
and any and all memoranda or other documents prepared by Seller or its
Affiliates related to the NK-1 Compounds, the NK-1 Program, or manufacture or
distribution of the NK-1 Compounds, but which are not exclusive to the NK-1
Program, that are in Seller’s possession or control prior to or as of the
Closing Date.
          “Retained Intellectual Property” means, collectively, the know-how and
patents, other than NK-1 Intellectual Property, owned or controlled by Seller
relating to the NK-1 Compounds or NK-l Program.
          “SEC” means the United States Securities and Exchange Commission.
          “Seller Disclosure Schedule” means the disclosure schedules delivered
by Seller to Purchaser in connection with this Agreement (it being expressly
agreed that disclosure of any item or matter under any Section in such Seller
Disclosure Schedule, or in attachments thereto, and documents referred to in
such Seller Disclosure Schedule, shall be deemed disclosure for all purposes of
Section 3).
          “Seller Proprietary Information” has the meaning set forth in
Section 7.1.2.
          “Seller” has the meaning set forth in the introductory paragraph of
this Agreement.
          “Tax” or “Taxes” means any and all taxes, assessments, levies,
tariffs, duties or other charges or impositions in the nature of a tax (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Authority.
          “Tax Return” means any report, return (including any information
return), claim for refund, election, estimated Tax filing or payment, request
for extension, document, declaration or other information or filing required to
be supplied to any Governmental Authority with respect to Taxes, including
attachments thereto and amendments thereof.
          “Territory” means the entire world.
          “Third Party Claim” has the meaning set forth in Section 8.4.
          “Third Party(ies)” means any Person other than the Parties or their
respective Affiliates.
          “Transactions” means the transactions contemplated by this Agreement
and the BSAA Agreement.
     1.2 Other Definitional Provisions.

-6-

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          1.2.1 When a reference is made in this Agreement to a Section, Exhibit
or Schedule, such reference is to a Section of, or an Exhibit or Schedule to,
this Agreement unless otherwise indicated.
          1.2.2 The terms defined in the singular has a comparable meaning when
used in the plural, and vice versa.
          1.2.3 Words of one gender include the other gender.
          1.2.4 References to a Person are also to its successors and permitted
assigns.
          1.2.5 The term “dollars” and “$” means United States dollars.
          1.2.6 The word “including” means “including without limitation” and
the words “include” and “includes” have corresponding meanings.
SECTION 2.
PURCHASE AND SALE
     2.1 Transfer of Purchased Assets. On the Closing Date, on the terms and
subject to the conditions contained in this Agreement and in consideration of
the Purchase Price paid to Seller by Purchaser, Seller will sell, convey,
transfer and assign to Purchaser, and Purchaser will purchase and acquire from
Seller, all of Seller’s right, title and interest in and to the Purchased
Assets.
     2.2 Excluded Assets. Except as specifically provided in this Agreement, the
Parties acknowledge and agree that Seller is not selling, conveying,
transferring, delivering or assigning any rights whatsoever to the Excluded
Assets to Purchaser, and Purchaser is not purchasing, taking delivery of or
acquiring any rights whatsoever to the Excluded Assets from Seller. Without
limiting the foregoing, Purchaser expressly acknowledges it is not acquiring any
rights to the Retained Intellectual Property and the Retained Information other
than the licenses thereto granted in Section 2.6.
     2.3 Assumed Liabilities. On the Closing Date, Purchaser shall assume and
pay, perform or otherwise discharge, in accordance with their respective terms
and subject to the respective conditions thereof, the following Liabilities
(collectively, the “Assumed Liabilities”):
          2.3.1 any Liability, obligation and commitment that Purchaser has
expressly assumed or agreed to assume under this Agreement;
          2.3.2 any Liability arising out of or relating to any NK-1 liability,
breach of warranty or similar claim for injury to person or property due to the
use or misuse of the NK-1 Compounds or the Purchased Assets, to the extent such
Liabilities arise out of or are attributable to acts, omissions or events
occurring after the Closing; and
          2.3.3 any other Liability, obligation and commitment of whatever kind
and nature relating to the NK-1 Program, the NK-1 Compounds, the Purchased
Assets, or the ownership, sale or lease of any of the Purchased Assets, to the
extent such Liabilities arise out of or are attributable to acts, omissions or
events occurring after the Closing.

-7-

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          2.3.4 Purchaser’s obligations under this Section 2.3 shall not be
subject to offset or reduction by reason of any actual or alleged breach of any
representation, warranty or covenant contained in this Agreement or the BSAA
Agreement or any right or alleged right to indemnification under this Agreement
or the BSAA Agreement.
     2.4 Excluded Liabilities. Seller shall retain and shall be responsible for
paying, performing and discharging when due, and Purchaser shall not assume or
have any responsibility for, the following Liabilities (the “Excluded
Liabilities”):
          2.4.1 any Liability, obligation and commitment that Seller has
expressly assumed or agreed to assume under this Agreement;
          2.4.2 any Liabilities exclusively relating to or arising out of the
Excluded Assets; and
          2.4.3 any Liabilities relating to the NK-1 Program, the NK-1
Compounds, the Purchased Assets, or otherwise with respect to the operation of
Seller’s business, to the extent such Liabilities arose or relate to
circumstances or facts which occurred prior to Closing; and
          2.4.4 Seller’s obligations under this Agreement.
     2.5 Technical Transfer Services.
          2.5.1 Within ten (10) days of the Execution Date, the Parties shall
form a technical transfer team (the “Technical Team”), who shall coordinate and
oversee the transfer of the Purchased Assets and the transfer to Purchaser of
all NK-1 Know How, NK-1 Records, Retained Information, and all technical
information and support reasonably necessary to enable Purchaser to assume
responsibility for the development, testing and manufacture of the NK-1
Compounds as practiced by Seller prior to the Execution Date. The Technical Team
shall consist of representatives from each of Purchaser and Seller or their
designees.
          2.5.2 Promptly following the Closing, Seller shall, with input from
the Technical Team, commence the transfer of all technical information and
support reasonably necessary to enable Purchaser to assume responsibility for
the development, testing and manufacture of the NK-l Compounds (the “Technical
Transfer Services”), including the Technical Transfer Services to be provided by
Seller to Purchaser as set forth in Schedule 2.5. In connection with the
foregoing, Seller shall provide Purchaser (and/or Purchaser’s designee), at
Seller’s expense:
               (a) The reasonable assistance of its then current employees and
reasonable access to its other internal resources to provide Purchaser with a
reasonable level of technical assistance and consultation in connection with the
transfer of the NK-1 Program to Purchaser; and

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               (b) copies of all production outlines, standard testing
requirements, standard operating procedures, technology, documents, data, or
other information that constitutes the NK-1 Know-How.
          2.5.3 Additional Services. At any time within **** after the Closing,
Purchaser may, upon reasonable notice, request Seller to provide additional
transition services, and Seller shall use reasonable efforts to provide such
services on mutually agreeable terms and conditions.
          2.5.4 Term of Technical Transfer Services. The term of the Technical
Transfer Services to be provided pursuant to this Section shall commence on the
Closing Date and shall continue until the completion of all Technical Transfer
Services, provided that such term shall not extend longer than **** after the
Closing Date or until Seller has fully transferred to Purchaser all of the
assets subject to this Agreement, whichever is later. Upon the **** anniversary
of the Closing Date, or the date by which Seller has fully transferred to
Purchaser all of the assets subject to this Agreement, whichever is later, the
Technical Team shall be disbanded and for an additional **** period thereafter,
Seller shall make former Technical Team members (or currently employed personnel
comparably knowledgeable in the relevant functional areas) available to
Purchaser to respond to Purchaser’s questions about the Purchased Assets, NK-l
Know-How, Retained Information or Retained Intellectual Property.
     2.6 Licenses.
          2.6.1 In partial consideration of the Purchase Price, Seller hereby
grants to Purchaser a royalty-free, paid-up, irrevocable, transferable and
sublicensable license in the Territory, under the NK-1 Know-How, Retained
Information and Retained Intellectual Property solely to research, develop,
make, have made, use, have used, offer for sale, sell, and import the NK-1
Compounds in and into the Territory (the “License”). Such License shall be
exclusive (even as to Seller).
          2.6.2 For the avoidance of doubt, Seller shall have the right to use
the Retained Information and Retained Intellectual Property for all purposes in
the Territory other than for the conduct of the NK-l Program or to research,
develop, make, have made, use, have used, offer for sale, sell, or import the
NK-l Compounds in and into the Territory.
          2.6.3 The NK-1 Know-How, Retained Information and Retained
Intellectual Property shall continue to be owned by Seller and licensed to
Purchaser only in accordance with this Section 2.6. All rights to the NK-1
Know-How, Retained Information and Retained Intellectual Property not expressly
granted by Seller pursuant to this Section 2.6 are hereby reserved by Seller.
          2.6.4 Purchaser hereby grants to Seller a royalty-free, paid-up,
irrevocable, transferable and sublicensable exclusive license in the Territory
under the NK-1 Patents to research, develop, make, have made, use, have used,
offer for sale, sell, and import products for veterinary purposes. The license
shall exclude, however, all rights to use the NK-l Patents to make, have made,
use, have used, offer for sale, sell or import any product containing the NK-1
Compounds. For the avoidance of doubt, Purchaser shall have the sole right to
control and enforce the NK-l Patents.

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     2.7 Payments.
          2.7.1 Purchase Price. In addition to any other amounts due under this
Agreement, in consideration of the sale, assignment, conveyance, and license of
the Purchased Assets and the License under Section 2, Purchaser shall assume the
Assumed Liabilities and pay to Seller in accordance with Section 2.11.2, by wire
transfer of immediately available funds directly to an account designated by
Seller, the sum of Two Million Dollars ($2,000,000) (the “Purchase Price”).
          2.7.2 Development Milestone Payments. Purchaser shall make the
following one time development milestone payments to Seller upon the achievement
of the indicated milestone event regarding any New Drug Application (“NDA”)
filed by Purchaser with the U.S. FDA for an NK-1 Compound:
               (a) **** Million Dollars ($****) upon **** for an NK-1 Compound;
and
               (b) **** Million Dollars ($****) **** for an NK-1 Compound.
               (c) In the event that Purchaser, within **** years after the
Closing, **** in any country of the Territory **** to one or both of the NK-1
Compounds to a Third Party (other than in respect of the transfer or sale of all
or substantially all of Purchaser’s Assets), Purchaser **** for such license,
sale or transfer, provided however, that Purchaser shall not be ****; provided
however, that in the event that Purchaser, within **** after the Closing, ****
to one or both of the NK-1 Compounds to a Third Party, Purchaser shall ****
above to Seller at such time as, in the case of 2.7.2(a), an NDA is submitted
for an NK-l Compound, and in the case of 2.7.2(b), an NDA is approved for an
NK-1 Compound.
     2.8 Purchase Price Allocation. Within sixty (60) days of the Closing Date,
Purchaser and Seller shall agree on the form of a schedule detailing the
Purchase Price allocation (the “Purchase Price Allocation”) as determined by
Purchaser in accordance with Section 1060 of the Code and the Treasury
Regulations. Purchaser shall provide Seller with a draft of the Purchase Price
Allocation after the Closing Date for Seller’s review and comments. Purchaser
and Seller agree, unless otherwise required pursuant to a “determination” within
the meaning of Section 1313(a) of the Code, to be bound by the Purchase Price
Allocation, to file all Tax Returns (including IRS Form 8594 and any
supplemental or amended IRS Form 8594) in accordance with the Purchase Price
Allocation, and not to take any position inconsistent with the Purchase Price
Allocation in the course of any audit, examination, other administrative or
judicial proceeding.
     2.9 Risk of Loss. Until the Closing, any loss of or damage to the Purchased
Assets from fire, flood, casualty or any other similar occurrence shall be the
sole responsibility of Seller. As of the Closing, title to the Purchased Assets
shall be transferred to Purchaser. After the Closing Date, Purchaser shall bear
all risk of loss associated with the Purchased Assets and shall be solely
responsible for procuring adequate insurance to protect the Purchased Assets
against any such loss.
     2.10 Closing. Unless this Agreement shall have been terminated, on the
terms and subject to the conditions of this Agreement, the Closing shall take
place at the offices of Schering Corporation, 2000 Galloping Hill Road,
Kenilworth, New Jersey 07033, unless the Parties otherwise agree, on the date
following the satisfaction or waiver of all of the conditions set forth in
Section 6 (the “Closing Date”). The Parties will exchange (or cause to be
exchanged) at the Closing the funds, agreements, instruments, certificates and
other documents, and do, or cause to be done, all of the things respectively
required of each Party as specified in Section 2.11.

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     2.11 Transactions at Closing. At the Closing, subject to the terms and
conditions of this Agreement:
          2.11.1 Seller’s Actions and Deliveries. Seller shall deliver or cause
to be delivered to Purchaser:
               (a) executed counterparts of the BSAA Agreement to which the
Seller or an Affiliate of Seller is a party;
               (b) a certificate of a duly authorized officer of Seller
certifying as to the matters set forth in Sections 6.2.1 and 6.2.2;
               (c) such Purchased Assets designated to be delivered on the
Closing Date in accordance with the plan agreed upon by the Parties pursuant to
Schedule 2.11 (the “Asset Transfer Schedule”); and
               (d) such other documents and instruments as may be reasonably
necessary to effect or evidence the Transactions.
          2.11.2 Purchaser’s Actions and Deliveries. Purchaser shall deliver or
cause to be delivered to Seller:
               (a) the Purchase Price in full by wire transfer of immediately
available funds directly to the bank account designated by Seller in a written
notice to Purchaser prior to the Closing;
               (b) executed counterparts of the BSAA Agreement to which
Purchaser or an Affiliate of Purchaser is a party;
               (c) a certificate of a duly authorized officer of Purchaser
certifying as to the matters set forth in Sections 6.3.1 and 6.3.2; and
               (d) such other documents and instruments as may be reasonably
necessary to effect or evidence the Transactions.

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SECTION 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
     Except as set forth in Schedule 3, Seller hereby represents and warrants to
Purchaser, as of the Closing Date, as follows:
     3.1 Organization. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state of New Jersey. Seller has all
requisite corporate power and authority to own, lease and operate, as
applicable, the Purchased Assets.
     3.2 Due Authorization. Seller has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the BSAA Agreement, and the execution and delivery of this Agreement and the
BSAA Agreement and the performance of all of its obligations under this
Agreement and the BSAA Agreement has been duly authorized by Seller.
     3.3 No Conflicts; Enforceability. The execution, delivery and performance
of this Agreement and the BSAA Agreement by Seller (1) are not prohibited or
limited by, and will not result in the breach of or a default under, any
provision of the certificate of incorporation or bylaws of Seller, (2) do not
conflict with any Law applicable to Seller, and (3) do 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 obligations under, create in any
party the right to terminate, modify or cancel, or require any notice, consent
or waiver under, any material agreement or instrument binding on Seller or any
applicable order, writ, injunction or decree of any court or Governmental
Authority to which Seller is a party or by which Seller is bound or to which any
of its Assets is subject. This Agreement and the BSAA Agreement have been duly
executed and delivered by Seller, and constitute the legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as enforceability may be limited or affected by
applicable bankruptcy, insolvency, moratorium, reorganization or other laws of
general application relating to or affecting creditors’ rights generally.
     3.4 Title; Condition; Assets. Seller owns the Purchased Assets free and
clear of all Encumbrances other than the Permitted Encumbrances, and upon
consummation of the transactions contemplated hereby, Purchaser will acquire
good and marketable title to the Purchased Assets, free and clear of all
Encumbrances other than the Permitted Encumbrances. The Purchased Assets and the
NK-1 Intellectual Property constitute substantially all of the assets used by
Seller in connection with the NK-1 Program, and are sufficient for Purchaser to
conduct the NK-1 Program in substantially the manner as conducted by Seller
prior to Closing. The NK-1 Drug Substance identified for clinical use in
Exhibit B hereto (i) have been manufactured in accordance with cGMP,
(ii) conform in all material respects to their specifications and are fit for
use in clinical trials pursuant to FDA guidelines and requirements, and (iii) do
not include any items with an expiration date or of a quality or quantity not
usable through the clinical trials for the NK-1 Compounds.
     3.5 Intellectual Property.
          ****

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     3.6 Litigation. As of the Closing Date, there is no Action pending or, to
Seller’s Knowledge, threatened, and, to Seller’s Knowledge, there is no claim,
governmental investigation or administrative action pending or threatened as to
Seller (or to Seller’s Knowledge, any Third Party) related to the NK-1
Compounds, NK-1 Program or the Transactions.
     3.7 Consents. Except for the consent of the FTC, no notice to, filing with,
authorization of, exemption by, or consent of, any Person, including any
Governmental Authority, is required for Seller to consummate the Transactions.
     3.8 Taxes. There are no liens for Taxes on the Purchased Assets.
     3.9 Compliance with Laws. To Seller’s Knowledge, Seller has conducted the
NK-1 Program in compliance with all applicable Laws, and the Regulatory Filings
were filed in compliance with applicable Laws.
     3.10 Regulatory Filings.
          3.10.1 Seller or its Affiliates are the sole and exclusive owners of
the Regulatory Filings.
          3.10.2 Seller has not received any written or, to Seller’s Knowledge,
other notice of proceedings from a Governmental Authority alleging that the NK-1
Compounds or any of the Purchased Assets or the ownership, manufacturing,
operation, storage, warehousing, handling and/or testing of any NK-1 Compound is
in violation of any applicable Law and such violation has not been remedied,
except for such violations that would not reasonably be expected to have a
Material Adverse Effect.
          3.10.3 Seller has completed and filed all reports required by the
applicable Governmental Authority in order to maintain the Regulatory Filings,
except where failure to file such reports would not have a Material Adverse
Effect or any significant impact on the validity or maintainability of the
Regulatory Filings.
     3.11 Clinical Trials. To Seller’s Knowledge, the clinical trials, animal
studies and other preclinical tests conducted by or on behalf of the Seller
under the NK-1 Program were, and if still pending, are, being conducted in all
material respects in accordance with all experimental protocols, informed
consents, procedures and controls of the Seller and applicable FDA requirements
including, but not limited to, good clinical practice and good laboratory
practice regulations. Neither the Seller nor its Affiliates have received any
written notice from the FDA or any other Governmental Authority requiring the
termination or suspension of any animal study, preclinical study or clinical
trial conducted by or on behalf of the Seller or its Affiliates.
     3.12 Contracts. Except for confidentiality agreements that were put in
place with Third Parties interested in evaluating the NK-1 Program, neither
Seller nor any of its Affiliates is a party to any contract, agreement or
understanding (other than this Agreement) relating to the Purchased Assets or
the NK-1 Program.

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     3.13 NK-1 Records. To the Knowledge of Seller, the NK-1 Records are all of
the records and recorded information exclusively related to the NK-1 Program.
     3.14 Brokers, Etc. No broker, investment banker, agent, finder or other
intermediary acting on behalf of Seller or under the authority of Seller, is or
will be entitled to any broker’s or finder’s fee or any other commission or
similar fee directly or indirectly in connection with any of the Transactions.
     3.15 Disclaimer.
          3.15.1 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 3:
               (a) SELLER, AND ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR
REPRESENTATIVES, DOES NOT MAKE OR HAS NOT MADE ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, WRITTEN OR ORAL, AT LAW OR IN EQUITY, IN RESPECT
OF THE PURCHASED ASSETS, ASSUMED LIABILITIES, THE NK-1 COMPOUNDS, THE NK-1
INTELLECTUAL PROPERTY OR THE NK-1 PROGRAM, INCLUDING ANY IMPLIED REPRESENTATION
OR WARRANTY WITH RESPECT TO (I) MERCHANTABILITY, NON-INFRINGEMENT, SUITABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE, (II) THE CONDUCT OF THE NK-1 PROGRAM BY
PURCHASER AFTER THE CLOSING IN ANY MANNER OTHER THAN AS USED AND OPERATED BY
SELLER OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF THE NK-1 PROGRAM AFTER
THE CLOSING;
               (b) SELLER OR ANY OF ITS RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES OR REPRESENTATIVES WILL NOT HAVE OR BE SUBJECT TO ANY LIABILITY OR
INDEMNIFICATION OBLIGATION TO PURCHASER OR TO ANY OTHER PERSON RESULTING FROM
THE DISTRIBUTION TO PURCHASER, ITS AFFILIATES OR REPRESENTATIVES OF, OR
PURCHASER’S USE OF, ANY INFORMATION RELATING TO THE NK-1 PROGRAM, AND ANY
INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO PURCHASER, WHETHER ORALLY
OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL “DATA ROOMS,” FACE-TO-FACE
PRESENTATIONS, FUNCTIONAL “BREAK-OUT” DISCUSSIONS, RESPONSES TO QUESTIONS
SUBMITTED ON BEHALF OF PURCHASER OR IN ANY OTHER FORM IN EXPECTATION OF THE
TRANSACTIONS. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY
DISCLAIMED; AND
          3.15.2 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 3,
SELLER’S INTEREST IN THE PURCHASED ASSETS AND THE NK-1 PROGRAM ARE BEING
TRANSFERRED THROUGH THE SALE OF THE PURCHASED ASSETS “AS IS, WHERE IS, WITH ALL
FAULTS,” AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY
KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE
PURCHASED ASSETS, NK-1 PROGRAM AND THE PROSPECTS (FINANCIAL OR OTHERWISE), RISKS
AND OTHER INCIDENTS OF THE PURCHASED ASSETS AND NK-1 PROGRAM.

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SECTION 4.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Purchaser represents and warrants to Seller, as of the Closing Date, as
follows:
     4.1 Organization. Purchaser is a corporation duly organized and validly
existing and in good standing under the laws of Delaware. Purchaser has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on the NK-1 Program as now being conducted.
     4.2 Due Authorization. Purchaser has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the BSAA Agreement, and the execution and delivery of this Agreement and the
BSAA Agreement and the performance of all of its obligations under this
Agreement and under the BSAA Agreement have been duly authorized by Purchaser
and, to the extent required by Law, contract or otherwise, its stockholders.
     4.3 Sufficiency of Purchaser. Purchaser is a viable competitor in the
research, development, marketing and sale of pharmaceutical products such as the
NK-1 Compounds. Purchaser has, or is able to secure access to, the expertise and
financial resources to develop and commercialize the NK-1 Compounds in the
Territory following the Closing Date.
     4.4 No Conflicts; Enforceability.
          4.4.1 The execution, delivery and performance of this Agreement and
the BSAA Agreement by Purchaser (1) are not prohibited or limited by, and will
not result in the breach of or a default under, any provision of the certificate
of incorporation or bylaws of Purchaser, (2) do not conflict with any Law
applicable to Purchaser and (3) do 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 obligations under, create in any party the
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any material agreement or instrument binding on Purchaser or any
applicable order, writ, injunction or decree of any court or Governmental
Authority to which Purchaser is a party or by which Purchaser is bound or to
which any of its Assets is subject, except for such prohibition, limitation,
default, notice, filing, permit, authorization, consent, approval, conflict
breach or default which would not prevent or delay consummation by Purchaser of
the Transactions.
          4.4.2 This Agreement and the BSAA Agreement have been duly executed
and delivered by Purchaser, and constitute the legal, valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with their
respective terms, except as enforceability may be limited or affected by
applicable bankruptcy, insolvency, moratorium, reorganization or other laws of
general application relating to or affecting creditors’ rights generally.
     4.5 Litigation. There is no Action pending or, to Purchaser’s knowledge,
threatened, directly or indirectly involving Purchaser (or to Purchaser’s
knowledge, any Third Party) that would prohibit, hinder, delay or otherwise
impair Purchaser’s ability to perform its obligations under this Agreement or
under the BSAA Agreement, including the assumption of the Assumed Liabilities,
would affect the legality, validity or enforceability of this Agreement or the
BSAA Agreement, or prevent or delay the consummation of the Transactions.

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     4.6 Consents. Except for the requisite filings as may be necessary as a
result of any facts or circumstances relating solely to the Seller, no notice
to, filing with, authorization of, exemption by, or consent of, any Person,
including any Governmental Authority, is required for Purchaser to consummate
the Transactions.
     4.7 Financing. Purchaser has sufficient immediately available funds to pay,
in cash, the Purchase Price and all other amounts payable pursuant to this
Agreement and the BSAA Agreement or otherwise necessary to consummate all the
Transactions. Upon the consummation of the Transactions (a) Purchaser will not
be insolvent, (b) Purchaser will not be left with unreasonably small capital,
(c) Purchaser will not have incurred debts beyond its ability to pay such debts
as they mature and (d) the capital of Purchaser will not be impaired.
     4.8 Brokers, Etc. No broker, investment banker, agent, finder or other
intermediary acting on behalf of Purchaser or under the authority of Purchaser
is or will be entitled to any broker’s or finder’s fee or any other commission
or similar fee directly or indirectly in connection with any of the
Transactions.
     4.9 Independent Investigation.
          4.9.1 In making the decision to enter into this Agreement and the BSAA
Agreement and to consummate the Transactions, Purchaser has conducted its own
independent investigation, review and analysis of the Purchased Assets, Assumed
Liabilities, the NK-1 Compounds and NK-1 Program, which investigation, review
and analysis was done by Purchaser and its Affiliates and Representatives.
Purchaser acknowledges that it and its Representatives have been provided
adequate access to the personnel, properties, premises and records of the NK-1
Program for such purpose. In entering into this Agreement and the BSAA
Agreement, Purchaser acknowledges that Purchaser and its Affiliates have relied
solely upon the aforementioned investigation, review and analysis and not on any
factual representations or opinions of Seller or its respective Representatives
(except the specific representations and warranties of Seller set forth in
Section 3).
          4.9.2 Purchaser hereby acknowledges and agrees that (l) other than the
representations and warranties made in Section 3, none of Seller or its
respective Affiliates, or any of its respective Representatives make or have
made any representation or warranty, express or implied, at law or in equity,
with respect to the Purchased Assets, Assumed Liabilities and NK-1 Program,
including as to (i) merchantability or fitness for any particular use or
purpose, (ii) the operation of the NK-l Program by Purchaser after the Closing
in any manner other than as used and operated by Seller or (iii) the probable
success or profitability of the NK-l Compounds or NK-l Program after the
Closing, and (2) none of Seller or its respective Affiliates nor any of their
respective Representatives will have or be subject to any Liability or
indemnification obligation to Purchaser or to any other Person resulting from
the distribution to Purchaser, its Affiliates or Representatives of, or
Purchaser’s use of, any information relating to the NK-1 Program, including any
information, documents or material made available to Purchaser, whether orally
or in writing, in certain electronic and physical “data rooms,” face-to-face
presentations, functional “break-out” discussions, responses to questions
submitted on behalf of Purchaser or in any other form in expectation of the
Transactions.

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     4.10 ****
SECTION 5.
COVENANTS PRIOR TO CLOSING
     5.1 Required Approvals and Consents; Cooperation.
          5.1.1 As soon as reasonably practicable after the Execution Date, the
Parties shall make all filings required to be made in order to consummate the
Transactions.
          5.1.2 Purchaser, including its Affiliates, as applicable, shall as
promptly as practicable after the Execution Date (i) prepare and furnish all
necessary information and documentation (including furnishing all information
requested by any Governmental Authorities) and make presentations to the FTC,
(ii) take all other actions that may be necessary to demonstrate to the FTC that
Purchaser is an acceptable purchaser of the Purchased Assets and that Purchaser
will effectively compete in the marketplace using the Purchased Assets (and
Seller shall use its reasonable efforts to assist Purchaser in taking such
actions) and (iii) otherwise to do whatever is necessary, proper or advisable to
assist and cooperate with Seller in obtaining necessary consents, approvals or
orders of all Governmental Authorities necessary to consummate the Transactions
(on the terms and conditions of this Agreement and the BSAA Agreement) and the
Merger. Purchaser shall keep Seller apprised of the status of any inquiries made
of Purchaser or its Affiliates by the FTC or any other Governmental Authorities,
including their respective staffs, with respect to this Agreement (or any part
hereof) and the Transactions (or any part hereof) and, to the extent possible,
permit Seller (and its counsel) to attend any meetings between Purchaser
(including its counsel) and the FTC and communicate with Seller in advance of
any communications or correspondence with the FTC. Without limiting the
generality of the undertakings pursuant to this Section, Purchaser agrees to
assist and cooperate with Seller if it contests and resists any Action seeking
to have imposed any order, decree, judgment, injunction, ruling or other order
(whether temporary, preliminary or permanent) that would materially delay,
restrain, enjoin or otherwise prohibit consummation of the Transactions. The
provisions of this Section 5.2 shall also be applicable to any request for
information from other Governmental Authorities in connection with the NK-l
Program.
     5.2 Notifications. Between the Execution Date and the Closing Date, each of
Seller and Purchaser shall promptly notify the other Party in writing of any
fact, change, condition, circumstance or occurrence or nonoccurrence of any
event of which it is aware that will or is reasonably likely to result in any of
the conditions set forth in Section 6 becoming incapable of being satisfied;
provided, however, that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available hereunder to the
Party receiving such notice.
     5.3 Certification. ****Purchaser has provided to Seller prior to the
Execution Date.

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     5.4 Cooperation. Purchaser understands that Seller is entering into this
Agreement to comply with the Consent Order and that Purchaser and the
Transaction are subject to the prior approval of the FTC pursuant to the Consent
Order. Purchaser agrees and warrants that it will cooperate in good faith with
Seller in its efforts to obtain such approvals. Purchaser will supply all
information and take such other actions as Seller may reasonably require in
connection with Seller’s request for FTC approval of Purchaser and the
Transactions.
     5.5 Further Assurances; Further Documents.
          5.5.1 Commencing on the Execution Date, each of the Parties shall use
its commercially reasonable efforts, in the most expeditious manner practicable,
(i) to satisfy or cause to be satisfied all the conditions precedent that are
set forth in Section 6, as applicable to each of them, (ii) to cause the
Transactions to be consummated, and (iii) without limiting the generality of the
foregoing, to obtain all consents and authorizations of Third Parties and to
make all filings with, and give all notices to, Third Parties that may be
necessary or reasonably required on its part in order to consummate the
Transactions.
          5.5.2 Each of Purchaser and Seller shall, and shall cause its
respective Affiliates to, at the request of another Party, execute and deliver
to such other Party all such further instruments, assignments, assurances and
other documents as such other Party may reasonably request in connection with
the carrying out of this Agreement and the Transactions.
     5.6 Intellectual Property.
          5.6.1 Until the Closing, Seller shall preserve intact the Purchased
Assets and maintain and protect its interests in each item of the NK-1 Patents.
Seller further warrants to Purchaser that all application and renewal fees,
costs, charges, taxes and other steps required for the maintenance or protection
of the NK-1 Patents arising prior to the Closing Date will be duly paid in a
timely manner and to Seller’s Knowledge there are no currently outstanding
patent office response final deadlines or expiration dates in relation to the
NK-1 Patents that arise after the Execution Date and prior to December 31, 2009.
          5.6.2 Seller shall execute the short-form patent assignment document
attached hereto as Exhibit D upon Closing. For one hundred eighty (180) days
after the Closing Date, Seller shall further execute and deliver to Purchaser
all other documents and instruments, to be prepared by Purchaser, as Purchaser
reasonably requests, in order for Purchaser to prosecute, perfect, record and/or
enforce any of the rights that are granted to it under this Agreement, promptly
after requested by Purchaser. If Purchaser is unable, after making reasonable
inquiry, to obtain Seller’s signature on any such documents, then if and only if
such documents are reasonably necessary due to Seller having previously been the
assignee of record on the NK-1 Patents, Seller hereby appoints Purchaser as
Seller’s attorney-in-fact for the sole purpose of executing and delivering such
documents, which appointment is coupled with an interest.
SECTION 6.
CONDITIONS TO CLOSING
     6.1 Conditions Precedent to Obligations of Purchaser and Seller. The
respective obligations of Purchaser and Seller to consummate the Transactions on
the Closing Date are subject to the satisfaction or waiver (in accordance with
Section 9.9) at or prior to the Closing Date of the following conditions:

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          6.1.1 Litigation. No preliminary or permanent injunction or other
order has been issued by any court or by any other Governmental Authority which
enjoins, restrains, prohibits or makes illegal pursuant to applicable Law the
Transactions on the Closing Date.
          6.1.2 Merger, FTC Consent. The Merger shall have been completed and
Purchaser shall have been approved by the FTC as an acceptable purchaser of the
NK-1 Program and any consent or approval of the Transaction by the FTC shall
have been obtained.
          6.1.3 Consents. All other consents and approvals of any other
Governmental Authorities, if any, necessary to permit consummation of the
Transactions shall have been obtained.
     6.2 Conditions Precedent to Purchaser’s Obligation. Purchaser’s obligations
to consummate the Transactions shall be subject to the fulfillment of each of
the following additional conditions, any one or more of which may be waived, at
Purchaser’s sole discretion, in writing by Purchaser:
          6.2.1 Representations and Warranties. Each of the representations and
warranties of Seller contained in Section 3 shall be true and correct as of the
Execution Date and as of the Closing Date as though made on and as of the
Closing Date; provided, however, that the condition in this Section shall be
deemed satisfied so long as any failure of such representations and warranties
to be true and correct has not, individually or in the aggregate had a Material
Adverse Effect.
          6.2.2 Performance. Seller shall have performed and complied in all
material respects with each of the covenants, agreements and obligations Seller
is required to perform under this Agreement on or before the Closing.
          6.2.3 Officer’s Certificate. Purchaser shall have received a
certificate executed by a duly elected, qualified and acting officer of each
Seller certifying to the satisfaction of the conditions set forth in
Sections 6.2.1 and 6.2.2.
          6.2.4 The BSAA Agreement. Seller shall have duly executed and
delivered to Purchaser the BSAA Agreement.
     6.3 Conditions Precedent to Seller’s Obligations. Seller’s obligation to
consummate the Transactions shall be subject to the fulfillment of each of the
following additional conditions, any one or more of which may be waived, at
Seller’s sole discretion, in writing by Seller:
          6.3.1 Representations and Warranties. Each of the representations and
warranties of Purchaser contained in Section 4 shall be true and correct as of
the Execution Date and as of the Closing Date as though made on and as of the
Closing Date.

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          6.3.2 Performance. Purchaser shall have performed and complied in all
material respects with each of the covenants, agreements and obligations
Purchaser is required to perform under this Agreement on or before the Closing.
          6.3.3 Officer’s Certificate. Seller shall have received a certificate
executed by a duly elected, qualified and acting officer of Purchaser certifying
to the satisfaction of the conditions set forth in Sections 6.3.1 and 6.3.2.
          6.3.4 The BSAA Agreement. Purchaser shall have duly executed and
delivered the BSAA Agreement to Seller.
SECTION 7.
OTHER COVENANTS
     7.1 Confidentiality.
          7.1.1 Seller and Purchaser acknowledge that they may and have received
confidential or proprietary information of the other Party in connection with
the due diligence and consummation of the Transactions and have entered into the
Confidentiality Agreement which sets forth the Parties’ rights and
responsibilities with respect to the Confidential Information disclosed by the
respective Parties. Upon the Execution Date, the Confidentiality Agreement shall
expire and be of no further force and effect and the obligations set forth in
the Confidentiality Agreement shall be superseded by the terms of this Section,
provided, however, such expiration of the Confidentiality Agreement shall in no
way prejudice or adversely affect Seller’s or Purchaser’s ability to seek
damages, or any other remedy available to Seller or Purchaser, as appropriate,
with respect to a violation by such other Party (or its Affiliates or
Representatives) of the Confidentiality Agreement prior to the Execution Date.
          7.1.2 “Confidential Information” shall include know-how, scientific
information, clinical data, efficacy and safety data, adverse event information,
formulas, methods and processes, specifications, pricing information and other
terms and conditions of sales, customer information, NK-1 Program plans, and all
other intellectual property relating to Seller’s and Purchaser’s NK-1 Program,
and such other confidential and proprietary information which has been provided
to the other Party in contemplation of the Transactions, including information
exchanged prior to the Execution Date. Confidential Information disclosed by
Seller in connection with the Transactions is hereinafter referred to as “Seller
Proprietary Information” and Confidential Information disclosed by Purchaser in
connection with the Transactions is hereinafter referred to as “Purchaser
Proprietary Information”. From and after the Closing Date, Purchaser Proprietary
Information shall also include all Confidential Information exclusively
concerning the NK-1 Program, the Purchased Assets and the Assumed Liabilities
disclosed by Seller to Purchaser.
          7.1.3 From and after the Execution Date, all Purchaser Proprietary
Information (including Confidential Information exclusively concerning the NK-1
Program, the Purchased Assets and the Assumed Liabilities disclosed by Seller to
Purchaser) shall be used by Seller and its Affiliates solely as required to
perform its obligations, exercise or enforce their rights under this Agreement
(or the BSAA Agreement), or comply with applicable Law, and for no other
purpose. Seller shall not disclose, or permit the disclosure of, any of the
Purchaser Proprietary Information to any Person except those Persons to whom
such disclosure is necessary to permit Seller to perform its obligations,
exercise or enforce its rights under this Agreement (or the BSAA Agreement), or
comply with applicable Law. Seller shall treat, and will cause its Affiliates
and the directors, officers, employees, agents, representatives and advisors of
Seller or any of its Affiliates to treat, the Purchaser Proprietary Information
as confidential, using the same degree of care as Seller normally employs to
safeguard its own confidential information from unauthorized use or disclosure,
but in no event less than a reasonable degree of care.

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          7.1.4 From and after the Execution Date, all Seller Proprietary
Information (which shall not include Confidential Information exclusively
concerning the NK-1 Program, the Purchased Assets and the Assumed Liabilities
disclosed by Seller to Purchaser), shall be used by Purchaser solely as required
to perform its obligations, exercise or enforce its rights under this Agreement
(or the BSAA Agreement), or comply with applicable Law, and for no other
purpose. Purchaser shall not disclose, or permit the disclosure of, any of the
Seller Proprietary Information to any Person except those Persons to whom such
disclosure is necessary to permit Purchaser to perform its obligations, exercise
or enforce its rights under this Agreement (or the BSAA Agreement), or comply
with applicable Law. Purchaser shall treat, and will cause its Affiliates and
the directors, officers, employees, agents, representatives and advisors of
Purchaser or any of their Affiliates to treat, the Seller Proprietary
Information as confidential, using the same degree of care as Purchaser normally
employs to safeguard its own confidential information from unauthorized use or
disclosure, but in no event less than a reasonable degree of care.
          7.1.5 Purchaser acknowledges and agrees, that Seller (and its
Affiliates) may retain one (1) or more copies of all or part of the
documentation (including written or electronic records, files, manuals, filings,
etc.), including any Purchaser Proprietary Information contained in such
documentation, that Seller delivered to Purchaser as part of the Purchased
Assets, in accordance with the provisions of and solely for the purposes set
forth in this Section 7.1.
          7.1.6 In the event either Party is requested pursuant to, or required
by, applicable Law to disclose any of the other Party’s Confidential Information
(i.e., Seller Proprietary Information or Purchaser Proprietary Information, as
applicable), it will notify the other Party in a timely manner so that such
Party may seek a protective order or other appropriate remedy or, in such
Party’s sole discretion, waive compliance with the confidentiality provisions of
this Agreement. Each Party will co-operate in all reasonable respects, in
connection with any reasonable actions to be taken for the foregoing purpose. In
any event, the Party requested or required to disclose such Confidential
Information may furnish it as requested or required pursuant to applicable Law
(subject to any such protective order or other appropriate remedy) without
liability under this Agreement, provided that such Party furnishes only that
portion of the Confidential Information which such Party is advised by a
reasoned opinion of its counsel is legally required, and such Party exercises
reasonable efforts to obtain reliable assurances that confidential treatment
will be accorded such Confidential Information.

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     7.2 Publicity. The Parties shall jointly agree upon the necessity and
content of any press release in connection with the Transactions. Any other
publication, news release or other public announcement by a Party relating to
this Agreement or to the performance under this Agreement shall first be
reviewed and consented to in writing by the other Party; provided, however, that
notwithstanding any contrary term contained in the Confidentiality Agreement,
(i) any disclosure that is required by Law as advised by the disclosing Party’s
counsel may be made without the prior written consent of the other Party and
(ii) any Party may issue a press release or public announcement if the contents
of such press release or public announcement have previously been made public
other than through a breach of this Agreement by the issuing Party, without the
prior written consent of the other Party. To the extent practicable, the
disclosing Party shall give at least three (3) Business Days advance notice of
any such legally required disclosure to the other Party, and such other Party
may provide any comments on the proposed disclosure during such period and if
not practicable, such lesser practicable period, if any. Notwithstanding any
contrary term contained in the Confidentiality Agreement, to the extent that
either Party determines that it or the other Party is required to file or
register this Agreement, a summary thereof or a notification thereof to comply
with the requirements of an applicable stock exchange or any Governmental
Authority, including without limitation the SEC, such Party shall give at least
three (3) Business Days advance written notice of any such required disclosure
to the other Party. Prior to making any such filing, registration or
notification, the Parties shall consult with respect thereto regarding
confidentiality. The Parties shall cooperate, each at its own expense, in such
filing, registration or notification, including without limitation such
confidential treatment request, and shall execute all documents reasonably
required in connection therewith.
     7.3 Availability of Records. After the Closing, in connection with Tax
matters, governmental contracts, litigation or potential litigation, each as it
relates to the NK-1 Compounds, NK-1 Program, Purchased Assets or Assumed
Liabilities, Seller, on the one hand, and Purchaser, on the other hand, shall
make available to the other Party and its Affiliates and Representatives during
normal business hours when reasonably requested, all NK-1 Records and Retained
Information in its possession and shall preserve all such information, records
and documents until the later of: (i) **** after the Closing; (ii) the
expiration of all statutes of limitations for assessing or collecting Taxes for
periods ending on or prior to the Closing and periods including the Closing
Date, including extensions thereof applicable to Seller or Purchaser; or
(iii) the required retention period under any applicable Laws for all such
information, records or documents (it being understood that the Parties shall
not be required to provide any Tax Returns to any Person, other than as required
by applicable Laws). Purchaser and Seller shall also make available to each
other during normal business hours, when reasonably requested, personnel
responsible for preparing or maintaining information, records and documents, in
connection with Tax matters, governmental contracts, litigation or potential
litigation, each as it relates to the NK-1 Compounds, NK-1 Program, Purchased
Assets or Assumed Liabilities prior to the Closing Date (with respect to Seller)
or from and after the Closing Date (with respect to Purchaser), including
product liability and general insurance liability.

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     7.4 Regulatory Matters.
          7.4.1 From and after the Closing Date, Purchaser, ****, shall be
responsible for taking all actions, paying all fees (if any) and conducting all
communication with the appropriate Governmental Authority required by Law in
respect of the Regulatory Filings, including preparing and filing all reports
(including adverse events) with the appropriate Governmental Authority.
          7.4.2 From and after the Closing, Purchaser, ****, shall be
responsible for taking all actions and conducting all communication with
Governmental Authorities with respect to NK-1 Compounds sold pursuant to the
Regulatory Filings, including responding to all complaints in respect thereof,
including complaints related to tampering or contamination, and investigating
all complaints and adverse events with respect to NK-1 Compounds sold pursuant
to the Regulatory Filings.
     7.5 Tax Matters. Purchaser shall be solely responsible for all sales, use,
transfer and other related taxes, if any, arising out of the transfer by the
Seller and its Affiliates of the Purchased Assets to Purchaser pursuant to this
Agreement, provided that Purchaser shall not be responsible for any tax payable
on any income or gain of Seller. Seller and Purchaser shall cooperate in
preparing and timely filing all Tax Returns and other documentation relating to
such Transfer Taxes as may be required by applicable Tax Law.
     7.6 Post-Closing Cooperation. Purchaser and Seller shall cooperate with
each other, and shall cause their officers, employees, agents, auditors, and
representatives to cooperate with each other, for a period necessary to fulfill
the Term of Technical Transfer Services as described in Section 2.5.4 of this
Agreement, to ensure the orderly transition of the NK-I Program from Seller to
Purchaser and to minimize any disruption to the NK-l Program, including without
limitation reasonable assistance in connection with Purchaser’s efforts to
conduct development work under the Regulatory Filings.
     7.7 ****. Seller, its successors and assigns, covenants to Purchaser that:
****.
     7.8 Periodic Reporting. Purchaser shall submit to the FTC and to any
interim trustee appointed pursuant to the Consent Order any and all periodic
reports required by Purchaser pursuant to the Consent Order.
     7.9 Rescission. In the event that the Merger is completed pursuant to a
provisional consent decree with the FTC and the FTC subsequently withdraws or
conditions its final approval of such provisional consent decree in a manner
which requires the rescission of this Agreement as a condition of its final
approval of such provisional consent decree, Seller shall have the right to
require that the Transactions be rescinded and this Agreement be terminated. If
Seller elects to rescind the Transactions (i) Seller shall refund to Purchaser
the Purchase Price plus interest from the Closing Date to the date of rescission
at a floating rate equal to the Prime Rate, (ii) Seller shall promptly reimburse
Purchaser for reasonable out-of-pocket expenses incurred by Purchaser in
connection with this Agreement, the Transactions, and the NK-1 Program, and
(iii) Purchaser shall (at Seller’s expense) promptly take all necessary steps to
return title to and possessions of the Purchased Assets to Seller. The benefits
and liabilities attributable to ownership and operation of the Purchased Assets
from and after the Closing Date to the date of rescission, if any, shall accrue
to the Purchaser.

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     7.10 Additional Information. ****
     7.11 Supply. ****
          (iv) Purchaser hereby grants to Seller a royalty-free, non-exclusive,
transferable and sublicensable license to NK-1 Intellectual Property, Retained
Information and Retained Intellectual Property solely for the purpose of and to
the **** Rolapitant NK-l Compound ****; and
          (v) Purchaser hereby agrees to promptly provide to Seller copies of
such NK- 1 Records or other Confidential Information **** the Rolapitant NK-l
Compound for Purchaser hereunder. Purchaser further agrees that Seller’s use of
such NK-l Records or other Confidential Information **** hereunder shall not be
the basis for any claim of a breach of the confidentiality provisions hereunder
or under the terms of the Consent Order.
          ****.
SECTION 8.
SURVIVAL AND INDEMNIFICATION
     8.1 Survival of Representations. The representations and warranties
contained in this Agreement, the certificates delivered by Seller and Purchaser
pursuant to Section 2.11.1(b) and 2.11.2(c), respectively, shall survive the
Closing and remain in full force and effect until the **** anniversary of the
Closing Date; provided, however, that if notice of any claim for indemnification
pursuant to Section 8.2 or Section 8.3 shall have been given prior to the first
anniversary of the Closing Date, the relevant representations and warranties
shall survive for purposes of such claim until such time as such claim is
finally resolved.
     8.2 Indemnification by Seller. Seller shall indemnify Purchaser and its
Affiliates and their respective, officers, directors, employees, stockholders,
agents and Representatives against, and hold them harmless from, any Losses, to
the extent arising from:
          8.2.1 any breach of any representation or warranty of Seller contained
in this Agreement or the certificate delivered by Seller pursuant to
Section 2.11.1(b);
          8.2.2 any breach of any covenant of Seller contained in this
Agreement;
          8.2.3 any Excluded Liabilities; and
          8.2.4 any fees, expenses or other payments incurred or owed by Seller
to any brokers, financial advisors or comparable other Persons retained or
employed by it in connection with the Transactions.

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     8.3 Indemnification by Purchaser. Purchaser shall indemnify Seller and its
Affiliates and their respective officers, directors, employees, stockholders,
agents and Representatives against, and agrees to hold them harmless from, any
Losses, to the extent arising from:
          8.3.1 any breach of any representation or warranty of Purchaser
contained in this Agreement or the certificate delivered by Purchaser pursuant
to Section 2.11.2(c);
          8.3.2 any breach of any covenant of Purchaser contained in this
Agreement;
          8.3.3 any Assumed Liability; and
          8.3.4 any fees, expenses or other payments incurred or owed by
Purchaser to any brokers, financial advisors or other comparable Persons
retained or employed by it in connection with the Transactions.
     8.4 Procedures. In order for a Party (the “Indemnified Party”) to be
entitled to any indemnification provided for under this Agreement in respect of,
arising out of or involving a claim made by any Person against the Indemnified
Party (a “Third Party Claim”), such Indemnified Party must notify the
indemnifying party (the “Indemnifying Party”) in writing (and in reasonable
detail) of the Third Party Claim within fifteen (15) Business Days after receipt
by such Indemnified Party of notice of the Third Party Claim; provided, however,
that failure to give such notification shall not affect the indemnification
provided under this Agreement except to the extent the Indemnifying Party shall
have been actually prejudiced as a result of such failure (except that the
Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give such notice). Thereafter,
the Indemnified Party shall deliver to the Indemnifying Party, within five
(5) Business Days’ after the Indemnified Party’s receipt thereof, copies of all
notices and documents (including court papers) received by the Indemnified Party
relating to the Third Party Claim.
          8.4.1 If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. If the Indemnifying Party assumes such defense, the
Indemnified Party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party, it being understood that the Indemnifying Party shall
control such defense. The Indemnifying Party shall be liable for the reasonable
fees and expenses of counsel employed by the Indemnified Party for any period
during which the Indemnifying Party has not assumed the defense thereof (other
than during any period in which the Indemnified Party shall have failed to give
notice of the Third Party Claim as provided above). If the Indemnifying Party
chooses to defend or prosecute a Third Party Claim, all Indemnified Parties
shall cooperate in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the Indemnifying Party’s request) the provision
to the Indemnifying Party of records and information that are reasonably
relevant to such Third Party Claim, and making employees and Representatives
available on a mutually convenient basis to provide additional information and
explanation of any material provided under this Agreement or other matters
reasonably related to such Third Party Claim. Whether or not the Indemnifying
Party assumes the defense of a Third Party Claim, the Indemnified Party shall
not admit any liability with respect to, or settle, compromise or discharge,
such Third Party Claim without the Indemnifying Party’s prior written consent
(which consent shall not be unreasonably withheld). If the Indemnifying Party
assumes the defense of a Third Party Claim, the Indemnified Party shall agree to
any settlement, compromise or discharge of a Third Party Claim that the
Indemnifying Party may recommend and that by its terms obligates the
Indemnifying Party to pay the full amount of the Losses in connection with such
Third Party Claim, which releases the Indemnified Party completely in connection
with such Third Party Claim and that would not otherwise materially adversely
affect the Indemnified Party.

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          8.4.2 In the event any Indemnified Party should have a claim against
any Indemnifying Party under Section 8.2 or 8.3 that does not involve a Third
Party Claim being asserted against or sought to be collected from such
Indemnified Party, the Indemnified Party shall deliver notice of such claim with
reasonable promptness to the Indemnifying Party, but in any event not later than
fifteen (15) Business Days after the Indemnified Party determines that it has or
could have a claim to indemnification under this Agreement, stating the amount
of Loss, if known, and method of computation thereof, and containing a specific
reference to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises. The failure by any Indemnified Party so to
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
indemnification obligation that it may have to such Indemnified Party under
Section 8.2 or 8.3, as applicable, except to the extent that the Indemnifying
Party is prejudiced by such failure. If the Indemnifying Party disputes that it
has an indemnification obligation with respect to such claim, the Indemnifying
Party shall deliver notice of such dispute with reasonable promptness and the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute for a period of thirty (30) days
following the receipt by the Indemnified Party of such dispute notice. If the
Indemnified Party and the Indemnifying Party have not resolved such dispute
during such time period through good faith negotiations, such dispute shall be
resolved by litigation in an appropriate court of competent jurisdiction or
other mutually agreeable non-judicial dispute resolution mechanism.
     8.5 Certain Limitations on Indemnification Obligations. ****
     8.6 Sole Remedy. Except as otherwise specifically provided in this
Agreement or in the BSAA Agreement, each of the Parties acknowledge and agree
that its sole and exclusive remedy after the Closing with respect to any and all
claims and causes of action under or that are reasonably related to this
Agreement, the Transactions, the NK-1 Program, the Purchased Assets and the
Assumed Liabilities (other than claims of, or causes of action arising from,
fraud, other tortious acts, or relating to breaches of covenants requiring
performance after the Closing Date) shall be pursuant to the indemnification
provisions set forth in this Section 8. In furtherance of the foregoing, each of
the Parties hereby waives, from and after the Closing, to the fullest extent
permitted under applicable Law, any and all rights, claims and causes of action
under or that are reasonably related to this Agreement, the Transactions, the
NK-1 Program, the Purchased Assets and the Assumed Liabilities (other than
claims of, or causes of action arising from, fraud, other tortious acts, or
relating to breaches of covenants requiring performance after the Closing Date)
it may have against any other Party arising under or based upon any applicable
Law or arising under or based upon common law or otherwise (except pursuant to
the indemnification provisions set forth in Section 8.2 or 8.3, as applicable).

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     8.7 Limitation on Liability. EXCEPT WITH RESPECT TO THIRD PARTY CLAIMS, THE
INDEMNIFICATION OBLIGATIONS OF THE PARTIES SHALL NOT EXTEND TO INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING NK-1 PROGRAM INTERRUPTION, LOST
PROFITS, LOSS OF USE, DAMAGE TO GOODWILL OR LOSS OF THE NK-1 PROGRAM.
SECTION 9.
MISCELLANEOUS
     9.1 Assignment; Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and assigns;
provided, however, that neither party may assign this Agreement without the
prior written consent of the other party hereto, except that either party may
assign its rights and obligations under this Agreement to an Affiliate without
such consent.
     9.2 No Third Party Beneficiaries. This Agreement is solely for the benefit
of the Parties and their respective Affiliates and no provision of this
Agreement shall be deemed to confer upon any Third Parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
     9.3 Expenses. Except as otherwise specified in this Agreement, and
regardless of whether or not the Transactions are consummated, each Party shall
bear its own expenses with respect to the Transactions.
     9.4 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) when received, if delivered personally, (b) when
transmitted, if telecopied (which is confirmed), (c) upon receipt, if sent by
registered or certified mail (postage prepaid, return receipt requested) and
(d) the day after it is sent, if sent for next-day delivery to a domestic
address by overnight mail or courier, to the Parties at the following addresses:
          If to Seller, to:

        Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033
Attn: Senior Vice President, Business Development
Facsimile: 908-298-7044

          with a copy sent concurrently to:

        Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033
Attn: Group Vice President & Associate General Counsel,
Global Human Pharmaceuticals
Facsimile: 908-298-7303

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          If to Purchaser, to:

        OPKO Health, Inc.
4400 Biscayne Blvd.
Miami, FL 33137 Attn: Jamie Freedman, Executive Vice President of R&D and
Business Development
Facsimile: 305-575-6444

          With a copy sent concurrently to:

        OPKO Health, Inc.
4400 Biscayne Blvd.
Miami, FL 33137
Attn: Kate Inman, Deputy General Counsel
Facsimile: 305-575-4140

     provided, however, that if any Party shall have designated a different
address by notice to the others, then to the last address so designated.
     9.5 Governing Law. This Agreement (including any claim or controversy
arising out of or relating to this Agreement) shall be governed by the laws of
the State of Delaware without regard to conflict of law principles.
     9.6 Dispute Resolution.
          9.6.1 The Parties shall attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by negotiation between
executives who have authority to settle the controversy and who are at a higher
level of management than the persons with direct responsibility for
administration of this Agreement. Any Party may give the other Parties written
notice of any dispute not resolved in the normal course of business. Within ten
(10) days after delivery of the notice, the receiving Party shall submit to the
other Party a written response. The notice and response shall include: (a) a
statement of that Party’s position and a summary of arguments supporting that
position, and (b) the name and title of the executive who will represent that
Party and of any other person who will accompany the executive. Within thirty
(30) days after delivery of the initial notice, the executives of both Parties
shall meet at a mutually acceptable time and place, and thereafter as often as
they reasonably deem necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one Party to the other Party will be
honored. All negotiations pursuant to this Section are confidential and shall be
treated as compromise and settlement negotiations for purposes of applicable
rules of evidence.
          9.6.2 Except for disputes concerning non-payment of a development
milestone payment when due (which are not subject to the remainder of this
Section 9.6), if a dispute has not been resolved by negotiation as provided in
Section 9.6.1 within forty-five (45) days after delivery of the initial notice
of negotiation, or if the parties failed to meet within thirty (30) days after
delivery, the Parties shall endeavor to settle the dispute by mediation under
the CPR Mediation Procedure then currently in effect, provided, however, that if
one Party fails to participate in the negotiation as provided in this Section,
the other Party can initiate mediation prior to the expiration of the forty-five
(45) day period. Unless otherwise agreed, the Parties will select a mediator
from the CPR Panels of Distinguished Neutrals.

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          9.6.3 Each Party will bear its own cost of mediation, including any
counsel fees; provided, however, the cost charged by any independent Third Party
mediator will be shared equally by the Parties. In the mediation, each Party
shall be represented by a business person fully authorized to negotiate and
settle the dispute and may also be represented by counsel.
          9.6.4 Any dispute which has not been resolved by mediation as provided
in Section 9.6.2 within forty-five (45) days after initiation of the mediation
procedure shall be finally resolved by arbitration in accordance with the CPR
Rules for Non-Administered Arbitration then currently in effect by a sole
arbitrator; provided, however, that if one Party fails to participate in either
the negotiation or mediation as provided in Section 9.6.1 or 9.6.2, the other
Parties can commence arbitration prior to the expiration of the time periods set
forth above. The arbitration shall be governed by the Federal Arbitration Act, 9
U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrator(s)
may be entered by any court having jurisdiction thereof.
     9.7 Injunctive Relief. Notwithstanding anything to the contrary in this
Agreement, either Party will have the right to seek temporary injunctive relief
in any court of competent jurisdiction as may be available to such Party under
the laws and rules applicable in such jurisdiction with respect to any matters
arising out of the other Party’s performance of its obligations under this
Agreement. Either Party agrees that in the event the other Party institutes an
appropriate Action seeking injunctive/equitable relief for specific performance
under this Agreement, the Party seeking such relief shall not be required to
provide the other Party with service of process of a complaint and summons under
the procedures set forth in any non-United States judicial process or system.
Under such circumstances, the Party seeking such relief need only provide the
other Party with two copies of a true, correct and lawfully issued summons and
complaint, via overnight mail (next day delivery).
     9.8 Termination. Without prejudice to other remedies which may be available
to the Parties by Law or this Agreement, this Agreement may be terminated at any
time prior to the Closing Date:
          9.8.1 by the mutual written consent of the Parties;
          9.8.2 by the Purchaser by written notice to the Seller if the Closing
has not occurred on or prior to **** after the Execution Date, provided that the
failure of the Closing to occur by such date is not attributable in whole or in
part to a failure of the Purchaser to fulfill any of its obligations under this
Agreement;
          9.8.3 by any Party, by written notice to the other Parties if a court
of competent jurisdiction or governmental, regulatory or administrative agency
or commission shall have issued an order, decree or ruling or taken any other
action, in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement, and such order, decree, ruling
or other action shall have become final and nonappealable; or

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          9.8.4 by any Party, if the FTC shall have disapproved of this
Agreement or the Parties hereto at any time.
     9.9 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 9.8, this Agreement shall forthwith become null and void and
there shall be no liability on the part of any Party, or any Party’s Affiliates,
with respect to this Agreement, except that such a termination shall not
preclude any party from suing any other party for breach of this Agreement. The
following Sections shall survive any termination of this Agreement: Section 1,
Section 7.1, Section 7.2, Section 7.3 and Section 9.2 which shall remain in full
force and effect.
     9.10 Amendments; Entire Agreement. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
all of the Parties. This Agreement, the BSAA Agreement and the Confidentiality
Agreement contain the entire agreement of the Parties with respect to the
Transactions, superseding all negotiations, prior discussions and preliminary
agreements made prior to the Closing Date.
     9.11 Waiver. The failure of any Party to enforce any condition or part of
this Agreement at any time shall not be construed as a waiver of that condition
or part, nor shall it forfeit any rights to future enforcement thereof.
     9.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, such
determination shall not affect the enforceability of any others or of the
remainder of this Agreement.
     9.13 Schedules. Purchaser agrees that any disclosure by Seller in any
Schedule attached to this Agreement shall not establish any threshold of
materiality or concede the materiality of any matter or item disclosed.
     9.14 Construction. The language in all parts of this Agreement shall be
construed, in all cases, according to its fair meaning. The Parties acknowledge
that each Party and its counsel have reviewed and revised this Agreement and
that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be employed in the interpretation
of this Agreement.
     9.15 Headings. The headings of the Sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part of this
Agreement.
     9.16 Counterparts. This Agreement may be executed manually or by facsimile
by the Parties, in any number of counterparts, each of which shall be considered
one and the same agreement and shall become effective when a counterpart of this
Agreement shall have been signed by each of the Parties and delivered to the
other Party.

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IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be
executed by their respective duly authorized representatives as of the date
first above written.

            SCHERING CORPORATION
      By:           Name:           Title:        

            OPKO HEALTH, INC.
      By:           Name:           Title:        

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