Prepared by MerrillDirect





EXHIBIT
10.48B











ASSET
PURCHASE AGREEMENT


between:


SHAMAN PHARMACEUTICALS, INC.,

A Delaware corporation;


and


METABOLEX, INC.,

A Delaware corporation











Dated
as of March 16, 2001


























ASSET
PURCHASE AGREEMENT


             THIS ASSET
PURCHASE AGREEMENT is entered into as of
March 16, 2001, by and between SHAMAN PHARMACEUTICALS, INC.,
a Delaware corporation (the “Seller”) and METABOLEX, INC., a
Delaware corporation (the “Purchaser”). 
Certain capitalized terms used in this Agreement are defined in Exhibit A.


RECITALS


             A.         The Seller wishes to provide for the
sale of certain assets of the Seller to the Purchaser on the terms set forth in
this Agreement.


AGREEMENT


             The parties to this Agreement,
intending to be legally bound, agree as follows:


1.          SALE OF ASSETS; RELATED TRANSACTIONS


             1.1        Sale of Assets.  The Seller
shall cause to be sold, assigned, transferred, conveyed and delivered to the
Purchaser, at the Closing (as defined below), good and valid title to the
Assets (as defined below), free of any Encumbrances, on the terms and subject
to the conditions set forth in this Agreement. 
For purposes of this Agreement, “Assets” shall mean:


             (a)         a hard and/or electronic copy of all data,
information and records relating to Seller’s Diabetes Program that is contained
in Seller’s 4D Database;


             (b)         all of Seller’s laboratory notebooks and records
relating to Seller’s Diabetes Program and all intellectual property therein,
including, without limitation, copyrights, know-how and trade secrets;


             (c)         Seller’s entire inventory of all materials from
plants and all plants related to the Diabetes Program including, but not
limited to the items listed on Exhibit B attached hereto; and


             (d)         a license to all data, information and records
described in Section 1.1 (a) above, as set forth in Section 8.4 below.


             1.2        Purchase Price.  As
consideration for the sale of the Assets to the Purchaser, the Purchaser agrees
to pay to the Seller and aggregate of Two Hundred Thousand Dollars ($200,000),
payable as follows:


             (a)         On the date that Seller files a motion with the
Bankruptcy Court for approval of the Transactions, Purchaser shall transfer via
wire to the account of Seller the sum of Ten Thousand Dollars ($10,000.00) in
cash as good faith money for the Transactions (the “Initial Payment”).


             (b)         at the Closing, the Purchaser shall pay to the
Seller, in cash via check or wire transfer, One Hundred Ninety Thousand Dollars
($190,000.00).


             1.3        Liabilities.  At the
Closing, the Purchaser shall assume no Liability of the Seller.


             1.4        Sales Taxes.  The Seller
shall bear and pay, and shall reimburse the Purchaser and the Purchaser’s
affiliates for, any sales taxes, use taxes, transfer taxes, documentary
charges, recording fees or similar taxes, charges, fees or expenses that may
become payable in connection with the sale of the Assets to the Purchaser or in
connection with any of the other Transactions.


             1.5        Closing.


             (a)         The closing of the sale of the Assets to the
Purchaser (the “Closing”) shall take place at 10:00 a.m. on the later of (i)
March 27, 2001 or (ii) the eleventh
calendar day following entry by the Bankruptcy Court of a proper final,
non-appealable order approving the Transactions (including, for this purpose,
an order complying with 11 U.S.C. § 363(m)), which order is not stayed within
ten (10) days of entry thereof, in a form satisfactory to the Purchaser (the
“Approval Order”); or (iii) on such date as the Purchaser may designate in a
written notice delivered to the Seller; provided,
however, that if any condition set forth in Section 5 has not
been satisfied as of the date designated by the Purchaser, then the Purchaser
may, at its election, unilaterally postpone the Scheduled Closing Time by up to
thirty (30) days.  For purposes of this
Agreement, “Scheduled Closing Time” shall mean the time and date as of which
the Closing is required to take place pursuant to this Section 1.5(a); and
“Closing Date” shall mean the time and date as of which the Closing actually
takes place.


             (b)         At the Closing:


             (i)         the Seller shall execute and deliver to the
Purchaser such bills of sale, endorsements, assignments and other documents as
may (in the reasonable judgment of the Purchaser or its counsel) be necessary
or appropriate to assign, convey, transfer and deliver to the Purchaser good
and valid title to the Assets free of any Encumbrances;



             (ii)        the Purchaser shall pay to the Seller One Hundred Ninety Thousand Dollars
($190,000.00) in cash as contemplated by Section 1.2(b);



             (iii)       the Seller shall execute and deliver to the Purchaser a certificate (the
“Closing Certificate”) setting forth the representations and warranties of the
Seller that (A) each of the representations and warranties made by the
Seller in this Agreement was accurate in all respects as of the date of this
Agreement, (B) except as expressly set forth in the Closing Certificate,
each of the representations and warranties made by the Seller in this Agreement
is accurate in all respects as of the Closing Date as if made on the Closing
Date, (C) each of the covenants and obligations that the Seller is required
to have complied with or performed pursuant to this Agreement at or prior to
the Closing has been duly complied with and performed in all respects, and
(D) except as expressly set forth in the Closing Certificate, each of the
conditions set forth in Sections 5.3 and 5.4 has been satisfied in all
respects; and



             (iv)        the Seller shall execute and deliver to the Purchaser an Amendment to the
License and Sale Agreement , as described in the Letter Agreement (the
“Amendment”).



2.          REPRESENTATIONS AND WARRANTIES OF THE SELLER.


             The Seller represents and warrants,
to and for the benefit of the Indemnitees, as follows:


             2.1        Due Organization.  The Seller
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.  The
Seller is not required to be qualified, authorized, registered or licensed to
do business as a foreign corporation in any jurisdiction other than the
jurisdictions listed in Part 2.1 of the Disclosure Schedule.  The Seller is in good standing as a foreign
corporation in each of the jurisdictions listed in Part 2.1 of the Disclosure
Schedule.


             2.2        Assets.


             (a)         Part 2.2(a)(i) of the Disclosure Schedule sets
forth, with respect to each Asset owned by the Seller and registered with any
Governmental Body or for which an application has been filed with any
Governmental Body, (i) a brief description of such Asset, and (ii) the names of
the jurisdictions covered by the applicable registration or application.  Part 2.2(a)(ii) of the Disclosure Schedule
identifies and provides a brief description of each Asset.  Part 2.2(a)(iii) of the Disclosure Schedule
identifies and provides a brief description of, and identifies any ongoing
royalty or payment obligations with respect to, each Asset that is licensed or
otherwise made available to the Seller by any Person, and identifies the
Contract under which such Asset is being licensed or otherwise made available
to the Seller.  The Seller has good and
valid title to all of the Assets, free and clear of all Encumbrances.  The Seller has a valid right to use, license
and otherwise exploit all Assets. 
Except as set forth in Part 2.2(a)(iii) of the Disclosure Schedule, the
Seller has not developed jointly with any other Person any Asset with respect
to which such other Person has any rights. 
Except as set forth in Part 2.2(a)(iv) of the Disclosure Schedule, there
is no Contract pursuant to which any Person has any right (whether or not
currently exercisable) to use, license or otherwise exploit any Asset.


             (b)         The Seller has taken reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
all Assets.  Without limiting the
generality of the foregoing, except as set forth in Part 2.2(b) of the
Disclosure Schedule, (i) each current or former employee of the Seller who is
or was involved in, or who has contributed to, the creation or development of
any Asset has executed and delivered to the Seller an agreement (containing no
exceptions to or exclusions from the scope of its coverage) that assigns
ownership of any intellectual property related to such creation or development
to the Seller, and (ii) each current and former consultant and independent
contractor to the Seller who is or was involved in, or who has contributed to,
the creation or development of any Asset has executed and delivered to the
Seller an agreement (containing no exceptions to or exclusions from the scope
of its coverage) that assigns ownership of any intellectual property related to
such creation or development to the Seller. 
No current or former employee, officer, director, stockholder,
consultant or independent contractor has any right, claim or interest in or
with respect to any Asset.


             (c)         To the best of the knowledge of the Seller, none of
the Assets infringes, misappropriates or conflicts with any Proprietary Asset
owned or used by any other Person and the Seller has never received any notice
or other communication (in writing or otherwise) of any such actual, alleged,
possible or potential infringement, misappropriation or unlawful or
unauthorized use.  To the best of the
knowledge of the Seller no other Person is infringing, misappropriating or
making any unlawful or unauthorized use of, and no Proprietary Asset owned or
used by any other Person infringes or conflicts with, any of the Assets.


             (d)         The Seller has not (i) licensed any of the Assets to
any Person on an exclusive basis, or (ii) entered into any covenant not to
compete or Contract limiting or purporting to limit the ability of the Seller
to exploit fully any of the Assets.


             2.3        Compliance with Legal Requirements.
  Except as
set forth in Part 2.3 of the Disclosure Schedule: (a) the Seller is in
full compliance with each Legal Requirement that is applicable to it or to the
ownership or use of any of the Assets; (b) the Seller has at all times been in
full compliance with each Legal Requirement that is or was applicable to it or
to the ownership or use of any of  the
Assets; (c) no event has occurred, and no condition or circumstance exists,
that might (with or without notice or lapse of time) constitute or result
directly or indirectly in a violation by the Seller of, or a failure on the
part of the Seller to comply with, any such Legal Requirement; and (d) the
Seller has not received, at any time, any notice or other communication (in
writing or otherwise) from any Governmental Body or any other Person regarding
(i) any actual, alleged, possible or potential violation of, or failure to
comply with, any such Legal Requirement, or (ii) any actual, alleged, possible
or potential obligation on the part of the Seller to undertake, or to bear all
or any portion of the cost of, any cleanup or any remedial, corrective or
response action of any nature.  The
Seller has delivered to the Purchaser an accurate and complete copy of each
report, study, survey or other document to which the Seller has access that
addresses or otherwise relates to the compliance of the Seller with, or the
applicability to the Seller of, any such Legal Requirement. To the best of the
knowledge of the Seller, no Governmental Body has proposed or is considering
any Legal Requirement that, if adopted or otherwise put into effect,
(i) may have an adverse effect on the Assets or on the ability of the
Seller to comply with or perform any covenant or obligation under any of the
Transactional Agreements, or (ii) may have the effect of preventing,
delaying, making illegal or otherwise interfering with any of the Transactions.


             2.4        Governmental Authorizations. 
Part 2.4 of the Disclosure Schedule identifies each Governmental
Authorization held by the Seller that is necessary for the use of the
Assets.  The Seller has delivered to the
Purchaser accurate and complete copies of all of the Governmental Authorizations
identified in Part 2.4 of the Disclosure Schedule, including all renewals
thereof and all amendments thereto. 
Each Governmental Authorization identified or required to be identified
in Part 2.4 of the Disclosure Schedule is valid and in full force and
effect.  Except as set forth in
Part 2.4 of the Disclosure Schedule: (i) the Seller is and has at all
times been in full compliance with all of the terms and requirements of each
such Governmental Authorization identified or required to be identified in
Part 2.4 of the Disclosure Schedule; (ii) no event has occurred, and no
condition or circumstance exists, that might (with or without notice or lapse
of time) (A) constitute or result directly or indirectly in a violation of
or a failure to comply with any term or requirement of any such Governmental
Authorization identified or required to be identified in Part 2.4 of the
Disclosure Schedule, or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, termination or modification
of any such Governmental Authorization identified or required to be identified
in Part 2.4 of the Disclosure Schedule; (iii) the Seller has never
received any notice or other communication (in writing or otherwise) from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible or potential violation of or failure to comply with any term or
requirement of any such Governmental Authorization, or (B) any actual,
proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination or modification of any such Governmental
Authorization; and (iv) all applications required to have been filed for the
renewal of the Governmental Authorizations required to be identified in
Part 2.4 of the Disclosure Schedule have been duly filed on a timely basis
with the appropriate Governmental Bodies, and each other notice or filing
required to have been given or made with respect to such Governmental
Authorizations has been duly given or made on a timely basis with the
appropriate Governmental Body.  The
Governmental Authorizations identified in Part 2.4 of the Disclosure
Schedule constitute all of the Governmental Authorizations necessary to
permit the Seller to own and use the Assets in the manner in which they are
currently owned and used and in the manner in which they are proposed to be
owned and used.


             2.5        Proceedings; Orders.  Except for
current proceedings before the Bankruptcy Court, there is no pending
Proceeding, and no Person has threatened to commence any Proceeding: (i) that
involves the Seller or that otherwise relates to or might  affect any of the Assets (whether or not the
Seller is named as a party thereto); or (ii) that challenges, or that may have
the effect of preventing, delaying, making illegal or otherwise interfering
with, any of the Transactions.  Except
for current proceedings before the Bankruptcy Court, no event has occurred, and
no claim, dispute or other condition or circumstance exists, that might
directly or indirectly give rise to or serve as a basis for the commencement of
any such Proceeding. Except as set forth in Part 2.5 of the Disclosure
Schedule, no Proceeding has ever been commenced by or against the Seller. The
Seller has delivered to the Purchaser accurate and complete copies of all
pleadings, correspondence and other written materials (to which the Seller has
access) that relate to the Proceedings identified in Part 2.5 of the
Disclosure Schedule. There is no Order to which the Seller, or any of the
Assets, is subject; and no other Related Party is subject to any Order that relates
to the Seller’s business or to any of the Assets.  There is no proposed Order that, if issued or otherwise put into
effect, (i) may have an adverse effect on the ability of the Seller to
comply with or perform any covenant or obligation under any of the
Transactional Agreements, or (ii) may have the effect of preventing,
delaying, making illegal or otherwise interfering with any of the Transactions.


             2.6        Authority; Binding Nature Of
Agreements.  Subject to the Approval Order,
the Seller has the absolute and unrestricted right, power and authority to
enter into and to perform its obligations under each of the Transactional
Agreements to which it is or may become a party; and the execution, delivery
and performance by the Seller of the Transactional Agreements to which it is or
may become a party have been duly authorized by all necessary action on the
part of the Seller and its stockholders, board of directors and officers.  This Agreement constitutes the legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms.  Upon the
execution of each of the other Transactional Agreements at the Closing, each of
such other Transactional Agreements to which the Seller is a party will
constitute the legal, valid and binding obligation of the Seller and will be
enforceable against the Seller in accordance with its terms.


             2.7        Non-Contravention; Consents. 
Subject to
the Approval Order, neither the execution and delivery of any of the
Transactional Agreements, nor the consummation or performance of any of the
Transactions, will directly or indirectly (with or without notice or lapse of
time):


             (a)         contravene, conflict with or result in a violation
of, or give any Governmental Body or other Person the right to challenge any of
the Transactions or to exercise any remedy or obtain any relief under, any
Legal Requirement or any Order to which any of the Seller, or any of the
Assets, is subject;



             (b)         cause the Purchaser or any affiliate of the
Purchaser to become subject to, or to become liable for the payment of, any
Tax;



             (c)         cause any of the Assets to be reassessed or revalued
by any taxing authority or other Governmental Body;



             (d)         contravene, conflict with or result in a violation
of any of the terms or requirements of, or give any Governmental Body the right
to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental
Authorization that is to be included in the Assets or is held by the Seller or
any employee of the Seller; or



             (e)         result in the imposition or creation of any
Encumbrance upon or with respect to any of the Assets.



Except
for the requirements of the Bankruptcy Court in connection with the Approval
Order, the Seller is not, nor will be required to make any filing with or give
any notice to, or to obtain any Consent from, any Person in connection with the
execution and delivery of any of the Transactional Agreements or the
consummation or performance of any of the Transactions.


             2.8        Brokers.  The Seller has not agreed or
become obligated to pay, or has not taken any action that might result in any
Person claiming to be entitled to receive, any brokerage commission, finder’s
fee or similar commission or fee in connection with any of the Transactions.


             2.9        Full Disclosure.  None of the
Transactional Agreements contains or will contain any untrue statement of fact;
and none of the Transactional Agreements omits or will omit to state any fact
necessary to make any of the representations, warranties or other statements or
information contained therein not misleading. 
All of the information set forth in the Disclosure Schedule, and all
other information regarding the Seller and the Assets that has been furnished
to the Purchaser or any of the Purchaser’s Representatives by the Seller or by
any Representative of the Seller, is accurate and complete in all respects.


3.          REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.


             The Purchaser represents and
warrants, to and for the benefit of the Seller, as follows:


             3.1        Authority; Binding Nature Of
Agreements.  The Purchaser has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under each of the Transactional Agreements to which it is or may
become a party; and the execution, delivery and performance by the Purchaser of
the Transactional Agreements to which it is or may become a party have been
duly authorized by all necessary action on the part of the Seller and its
stockholders, board of directors and officers. 
This Agreement constitutes the legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with its
terms.  Upon the execution of each of
the other Transactional Agreements at the Closing, each of such other
Transactional Agreements to which the Purchaser is a party will constitute the
legal, valid and binding obligation of the Purchaser and will be enforceable
against the Purchaser in accordance with its terms.


4.          PRE-CLOSING
COVENANTS OF THE SELLER.


             4.1        Access And Investigation.  The Seller
shall ensure that, at all times during the Pre-Closing Period: (a) the Seller
and its Representatives provide the Purchaser and its Representatives with
reasonable access to the Seller’s Representatives, personnel and assets and to
all existing books, records, Tax Returns, work papers and other documents and
information relating to the Assets; (b) the Seller and its Representatives
provide the Purchaser and its Representatives with such copies of existing
books, records, Tax Returns, work papers and other documents and information relating
to the Assets as the Purchaser may request in good faith; and (c) the Seller
and its Representatives compile and provide the Purchaser and its
Representatives with such additional financial, operating and other data and
information relating to the Assets as the Purchaser may request in good faith.


             4.2        Filings and Consents.  The Seller
shall ensure that: (a) all filings, notices and Consents required to be made,
given and obtained in order to consummate the Transactions are made, given and
obtained on a timely basis; and (c) during the Pre–Closing Period, the
Seller and its Representatives cooperate with the Purchaser and with the
Purchaser’s Representatives, and prepare and make available such documents and
take such other actions as the Purchaser may request in good faith, in
connection with any filing, notice or Consent that the Purchaser is required or
elects to make, give or obtain.


             4.3        Notification; Updates to
Disclosure Schedule.  During the
Pre-Closing Period, the Seller shall promptly notify the Purchaser in writing
of: (a) the discovery by the Seller of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a Breach of any representation or warranty made
by the Seller in this Agreement; (b) any event, condition, fact or circumstance
that occurs, arises or exists after the date of this Agreement and that would
cause or constitute a Breach of any representation or warranty made by the
Seller in this Agreement if (i) such representation or warranty had been
made as of the time of the occurrence, existence or discovery of such event,
condition, fact or circumstance, or (ii) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement; (c) any Breach of any covenant or obligation of the Seller; and (d)
any event, condition, fact or circumstance that may make the timely
satisfaction of any of the conditions set forth in Section 5 impossible or
unlikely.  If any event, condition, fact
or circumstance that is required to be disclosed pursuant to this Section 4.3
requires any change in the Disclosure Schedule, or if any such event,
condition, fact or circumstance would require such a change assuming the
Disclosure Schedule were dated as of the date of the occurrence, existence or
discovery of such event, condition, fact or circumstance, then the Seller shall
promptly deliver to the Purchaser an update to the Disclosure Schedule
specifying such change.  No such update
shall be deemed to supplement or amend the Disclosure Schedule for the purpose
of (i) determining the accuracy of any representation or warranty made by
the Seller in this Agreement or in the Closing Certificate, or
(ii) determining whether any of the conditions set forth in Section 5
has been satisfied.


             4.4        No Negotiation.  Except as
required by the Bankruptcy Court in connection with the Approval Order, the
Seller shall ensure that, during the Pre-Closing Period, neither the Seller,
nor any Representative of the Seller, directly or indirectly:  (a) solicits or encourages the
initiation of any inquiry, proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction; (b) participates in
any discussions or negotiations with, or provides any non-public information
to, any Person (other than the Purchaser) relating to any proposed  Acquisition Transaction; or
(c) considers the merits of any unsolicited inquiry, proposal or offer
from any Person (other than the Purchaser) relating to any Acquisition
Transaction.


             4.5        Best Efforts.  During the
Pre-Closing Period, the Seller shall use its Best Efforts to cause the
conditions set forth in Section 5 to be satisfied on a timely basis.


             4.6        Confidentiality.  The Seller
shall ensure that after the date of this Agreement, Seller maintains the
confidentiality of all data, information and records referred to in Section
1.1(a) and makes no disclosure of any nature of such data, information or
records to any Person.  Notwithstanding
the foregoing, Seller may use the data, information and records referred to in
Section 1.1(a) solely in connection with uses for Dietary Supplements (as such
term is used in the License and Sale Agreement).


             4.7        Acceptance of Overbid; Right to
Respond


             (a)         Until the earlier of March 9, 2001, or any earlier
date on which Purchaser advises Seller in writing that Purchaser is terminating
all negotiations regarding the Transactions, Seller shall not, unless otherwise
instructed by the Bankruptcy Court: (i) consider any offer from any third party
for a transaction similar to the Transactions for less than $220,000; (ii)
consider any offer from any third party involving the a transaction similar to
the Amendment for less than $220,000; or (iii) consider any offer from any
third party involving the sale of the Assets for less than $220,000.


             (b)         If Seller receives any offer from any third party
involving either or both of the Amendment and the sale of the Assets that meets
the criteria set forth in Section 4.7(a), Seller shall promptly notify the
Purchaser and describe the terms of such offer to Purchaser and Purchaser shall
have the right to make a counteroffer that exceeds the first such third party
offer by at least ten percent (10%).  In
the event there are any offers subsequent to the Purchaser’s counteroffer (a
“Subsequent Offer”), Purchaser shall have the right to make a counteroffer that
exceeds such Subsequent offer by any amount. 
Seller, unless legally precluded by the Bankruptcy Court, shall within
ten (10) business days, or if legally precluded as promptly thereafter as
possible, accept the most recent 
counteroffer made by Purchaser. 
Such accepted counteroffer shall otherwise be subject to the terms and
conditions of the Letter Agreement.


             (c)         If Seller accepts any offer from any third party
involving either or both of (i) the assignment of rights under the License and
Sale Agreement, or (ii) the sale of the Assets that meets the criteria set
forth in Section 4.7(a), and Purchaser does not make a counteroffer, Seller
will reimburse Purchaser for its expenses incurred in good faith in negotiating
for and pursuing this Letter Agreement and the Transactions, including without
limitation reasonable attorneys’ and advisers’ fees, up to an amount not to
exceed Twenty Thousand Dollars ($20,000).


             4.8        Protection of Assets.  As soon as
possible following the date of this Agreement, Seller shall segregate the
Assets and maintain the Assets in a secure location until the Closing.  Seller shall not distribute, copy or otherwise
reproduce the Assets in any way prior to the Closing.


5.          CONDITIONS PRECEDENT TO THE PURCHASER’S OBLIGATION TO CLOSE.


             The Purchaser’s obligation to
purchase the Assets and to take the other actions required to be taken by the
Purchaser at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by the
Purchaser, in whole or in part, in writing):


             5.1        Accuracy Of Representations.  All
of the
representations and warranties made by the Seller in this Agreement (considered
collectively), and each of said representations and warranties (considered
individually), shall have been accurate in all material respects as of the date
of this Agreement, and shall be accurate in all material respects as of the
Scheduled Closing Time as if made at the Scheduled Closing Time, without giving
effect to any update to the Disclosure Schedule.


             5.2        Performance Of Obligations


             (a)         Each of the documents referred to in Sections
1.5(b)(i), 1.5(b)(iii) and 1.5(b)(iv) shall have been executed by each of the
parties thereto and delivered to the Purchaser.


             (b)         All of the covenants and obligations that  the Seller is required to
comply with or to
perform at or prior to the Closing (considered collectively), and each of said
covenants and obligations (considered individually), shall have been duly
complied with and performed in all material respects.


             5.3        Consents.  Each of the Consents identified
in Part 2.7 of the Disclosure Schedule shall have been obtained and shall
be in full force and effect.


             5.4        Additional Documents.  Purchaser
shall have received such other documents as the Purchaser may request in good
faith for the purpose of (i) evidencing the accuracy of any representation
or warranty made by the Seller, (ii) evidencing the compliance by the
Seller with, or the performance by the Seller of, any covenant or obligation
set forth in this Agreement, (iii) evidencing the satisfaction of any
condition set forth in this Section 5, or (iv) otherwise facilitating
the consummation or performance of any of the Transactions.


             5.5        No Proceedings.  Since the
date of this Agreement, there shall not have been commenced or threatened
against the Purchaser, or against any Person affiliated with the Purchaser, any
Proceeding (a) involving any material challenge to, or seeking material
damages or other material relief in connection with, any of the Transactions,
or (b) that may have the effect of preventing, delaying, making illegal or
otherwise interfering with any of the Transactions.


             5.6        No Prohibition.  Neither the
consummation nor the performance of any the Transactions will, directly or
indirectly (with or without notice or lapse of time), contravene or conflict
with or result in a violation of, or cause the Purchaser or any Person
affiliated with the Purchaser to suffer any adverse consequence under, any
applicable Legal Requirement or Order.


             5.7        Approval Order.  The Seller
will have received the Approval Order.


             5.8        No Encumbrances.  The Seller
shall provide evidence that is reasonably satisfactory to the Purchaser, that
any Encumbrance related to the Assets has been released or terminated and is of
no further force or effect.


6.          TERMINATION


             6.1        Termination Events.  This
Agreement may be terminated prior to the Closing:


             (a)         by the Purchaser for any or no reason prior to the
entry by the Bankruptcy Court of the Approval Order;



             (b)         by the Purchaser at or after the Scheduled Closing
Time if any condition set forth in Section 5 has not been satisfied by the
Scheduled Closing Time; or



             (c)         by the Purchaser if the Closing has not taken place
on or before April 26, 2001 (other than as a result of any failure on the part
of the Purchaser to comply with or perform its covenants and obligations under
this Agreement).



             6.2        Termination Procedures.  If the
Purchaser wishes to terminate this Agreement pursuant to Section 6.1, the
Purchaser shall deliver to the Seller a written notice stating that the
Purchaser is terminating this Agreement and setting forth a brief description
of the basis on which the Purchaser is terminating this Agreement.


             6.3        Effect Of Termination.  If this
Agreement is terminated pursuant to Section 6.1, all further obligations
of the parties under this Agreement shall terminate; provided, however,
that:  (a) no party shall be relieved of
any obligation or other Liability arising from any Breach by such party of any
provision of this Agreement; (b) the parties shall, in all events, remain bound
by and continue to be subject to the provisions set forth in Section 9;
and (c) the Seller shall, in all events, remain bound by and continue to be
subject to Section 4.6.


             6.4        Nonexclusivity Of Termination
Rights.  The termination rights provided
in Section 6.1 shall not be deemed to be exclusive.  Accordingly, the exercise by any party of
its right to terminate this Agreement pursuant to Section 6.1 shall not be
deemed to be an election of remedies and shall not be deemed to prejudice, or
to constitute or operate as a waiver of, any other right or remedy that such
party may be entitled to exercise (whether under this Agreement, under any
other contract, under any statute, rule or other Legal Requirement, at common
law, in equity or otherwise).


             6.5        Payment upon Termination.  If (i) on
or before March 16, 2001, the Bankruptcy Court does not issue the Approval
Order, (ii) Seller at any time prior to March 9, 2001 fails to perform under
that certain Letter Agreement by and between the Seller and the Purchaser dated
February 13, 2001 (the “Letter Agreement”), or (iii) Seller accepts a
third-party offer pursuant to Section 4.7 hereof, the Initial Payment will be
returned to Purchaser immediately, and in any event within three (3) business
days upon Purchaser’s request.  If Purchaser
terminates the Letter Agreement or this Agreement for any reason other than
(i), (ii) or (iii) herein, the Seller shall retain the Initial Payment  as good faith money.


7.          INDEMNIFICATION, ETC


             7.1        Survival Of Representations And
Covenants.


             (a)         The representations, warranties, covenants and
obligations of each party to this Agreement shall survive (without
limitation):  (i) the Closing and the
sale of the Assets to the Purchaser; (ii) any sale or other disposition of any
or all of the Assets by the Purchaser; and (iii) the death or dissolution of
any party to this Agreement.  For the
purposes of this Section 7, all of said representations, warranties, covenants
and obligations shall remain in full force and effect and shall survive for one
(1) year from the Closing.


             (b)         The representations, warranties, covenants and
obligations of the Seller, and the rights and remedies that may be exercised by
the Indemnitees, shall not be limited or otherwise affected by or as a result
of any information furnished to, or any investigation made by or any knowledge
of, any of the Indemnitees or any of their Representatives.


             (c)         For purposes of this Agreement, each statement or
other item of information set forth in the Disclosure Schedule or in any update
to the Disclosure Schedule shall be deemed to be a representation and warranty
made by the Seller in this Agreement.


             7.2        Indemnification By The Seller.


             (a)         The Seller shall hold harmless and indemnify each of
the Indemnitees from and against, and shall compensate and reimburse each of
the Indemnitees for, any Damages that are directly or indirectly suffered or
incurred by any of the Indemnitees or to which any of the Indemnitees may
otherwise become subject at any time (regardless of whether or not such Damages
relate to any third–party claim) and that arise directly or indirectly
from or as a direct or indirect result of, or are directly or indirectly
connected with:


             (i)         any Breach of any of the representations or
warranties made by the Seller in this Agreement (without giving effect to any
update to the Disclosure Schedule) or in the Closing Certificate or any of the
other Transactional Agreements;



             (ii)        any Breach of any representation, warranty, statement, information or
provision contained in the Disclosure Schedule or in any other document
delivered or otherwise made available to the Purchaser or any of its
Representatives by or on behalf the Seller or any Representative of the Seller;



             (iii)       any Breach of any covenant or obligation of the Seller contained in any
of the Transactional Agreements;



             (iv)        any Liability of the Seller or of any Related Party;



             (v)         any Liability to which the Purchaser or any of the
other Indemnitees may become subject and that arises directly or indirectly
from or relates directly or indirectly to (A) any product produced or sold
or any services performed by or on behalf of the Seller,  or (B)  any failure to comply with any
bulk transfer law or similar Legal Requirement in connection with any of the
Transactions;



             (vi)        any Proceeding relating directly or indirectly to any Breach, alleged
Breach, Liability or matter of the type referred to in clause “(i),” “(ii),”
“(iii),” “(iv),” or “(v)” above (including any Proceeding commenced by any
Indemnitee for the purpose of enforcing any of its rights under this
Section 7).



             (b)         Subject to Section 7.2(c), the Seller shall not
be required to make any indemnification payment pursuant to Section 7.2(a)(i)
for any Breach of the representations and warranties made by them in this
Agreement or in the Closing Certificate until such time as the total amount of
all Damages (including the Damages arising from such Breach and all other
Damages arising from any other Breaches of any representations or warranties)
that have been directly or indirectly suffered or incurred by any one or more
of the Indemnitees, or to which any one or more of the Indemnitees has or have
otherwise become subject, exceeds $10,000. 
(If the total amount of such Damages exceeds the $10,000, the
Indemnitees shall be entitled to be indemnified against and compensated and reimbursed
for the entire amount of such Damages, and not merely the portion of such
Damages exceeding $10,000.)


             (c)         The limitation on the indemnification obligations
of  the Seller that is set forth in
Section 7.2(b) shall not apply to any Breach arising directly or
indirectly from any circumstance of which the Seller had knowledge on or prior
to the Closing Date.


             (d)         The maximum liability of the Seller pursuant to this
Section 7.2 shall be set at Two Hundred Thousand Dollars ($200,000.00).


             7.3        Nonexclusivity Of
Indemnification Remedies.  The
indemnification remedies and other remedies provided in this Section 7
shall not be deemed to be exclusive. 
Accordingly, the exercise by any Person of any of its rights under this
Section 7 shall not be deemed to be an election of remedies and shall not
be deemed to prejudice, or to constitute or operate as a waiver of, any other
right or remedy that such Person may be entitled to exercise (whether under
this Agreement, under any other Contract, under any statute, rule or other
Legal Requirement, at common law, in equity or otherwise).


             7.4        Defense Of Third Party Claims. 
In the
event of the assertion or commencement by any Person of any claim or Proceeding
(whether against the Purchaser, against any other Indemnitee or against any
other Person) with respect to which the Seller may become obligated to
indemnify, hold harmless, compensate or reimburse any Indemnitee pursuant to
this Section 7, the Purchaser shall have the right, at its election, to
designate the Seller  to assume the
defense of such claim or Proceeding at the sole expense of the Seller.  If the Purchaser so elects to designate the
Seller to assume the defense of any such claim or Proceeding:


             (a)         The Seller shall proceed to defend such claim or
Proceeding in a diligent manner with counsel satisfactory to the Purchaser;



             (b)         the Purchaser shall make available to the Seller any
non-privileged documents and materials in the possession of the Purchaser that
may be necessary to the defense of such claim or Proceeding;



             (c)         the Seller shall keep the Purchaser informed of all
material developments and events relating to such claim or Proceeding;



             (d)         the Purchaser shall have the right to participate in
the defense of such claim or Proceeding;



             (e)         the Seller shall not settle, adjust or compromise
such claim or Proceeding without the prior written consent of the Purchaser;
and



             (f)         the Purchaser may at any time (notwithstanding the
prior designation of the Seller to assume the defense of such claim or
Proceeding) assume the defense of such claim or Proceeding.



If
the Purchaser does not elect to designate the Seller to assume the defense of
any such claim or Proceeding (or if, after initially designating the Seller to
assume such defense, the Purchaser elects to assume such defense), the
Purchaser may proceed with the defense of such claim or Proceeding on its
own.  If the Purchaser so proceeds with
the defense of any such claim or Proceeding on its own:


             (i)         all expenses relating to the defense of such claim
or Proceeding (whether or not incurred by the Purchaser) shall be borne and
paid exclusively by  the Seller;



             (ii)        the Seller shall make available to the Purchaser any documents and
materials in the possession or control of the Seller that may be necessary to
the defense of such claim or Proceeding;



             (iii)       the Purchaser shall keep the Seller informed of all material developments
and events relating to such claim or Proceeding; and



             (iv)        the Purchaser shall have the right to settle, adjust or compromise such
claim or Proceeding with the consent of the Seller; provided, however, that the Seller shall not unreasonably
withhold such consent.



             7.5        Exercise Of Remedies By
Indemnitees Other Than Purchaser.  No
Indemnitee (other than the Purchaser or any successor thereto or assign
thereof) shall be permitted to assert any indemnification claim or exercise any
other remedy under this Agreement unless the Purchaser (or any successor
thereto or assign thereof) shall have consented to the assertion of such
indemnification claim or the exercise of such other remedy.


8.          CERTAIN POST-CLOSING COVENANTS.


             8.1        Further Actions.  From and
after the Closing Date,  the Seller
shall cooperate with the Purchaser and the Purchaser’s affiliates and
Representatives, and shall execute and deliver such documents and take such
other actions as the Purchaser may reasonably request, for the purpose of
evidencing the Transactions and putting the Purchaser in possession, control
and perfection of title to such Assets. 
Seller hereby irrevocably nominates, constitutes and appoints the
Purchaser as the true and lawful attorney-in-fact of the Seller (with full
power of substitution) effective as of the Closing Date, and hereby authorizes
the Purchaser, in the name of and on behalf of the Seller, to execute, deliver,
acknowledge, certify, file and record any document, to institute and prosecute
any Proceeding and to take any other action (on or at any time after the
Closing Date) that the Purchaser may deem appropriate for the purpose of
(i) collecting, asserting, enforcing or perfecting any claim, right or
interest of any kind that is included in or relates to any of the Assets,
(ii) defending or compromising any claim or Proceeding relating to any of
the Assets, or (iii) otherwise carrying out or facilitating any of the
Transactions.  The power of attorney
referred to in the preceding sentence is and shall be coupled with an interest
and shall be irrevocable, and shall survive the dissolution or insolvency of
the Seller.


             8.2        Publicity.  The Seller
shall ensure that, on and at all times after the Closing Date: (a) no press
release or other publicity concerning any of the Transactions is issued or
otherwise disseminated by or on behalf of the Seller without the Purchaser’s
prior written consent; (b) other than as Seller reasonably deems necessary in
connection with its bankruptcy proceedings or disclosure obligations to the
Securities and Exchange Commission, the Seller continue to keep the terms of
this Agreement and the other Transactional Agreements strictly confidential;
and (c) other than as Seller deems reasonably necessary in connection with its
bankruptcy proceedings or disclosure obligations to the Securities and Exchange
Commission, the Seller keep strictly confidential, and the Seller shall not use
or disclose to any other Person, any non–public document or other
information that relates directly or indirectly to the business of the Seller,
the Purchaser or any affiliate of the Purchaser.


             8.3        Confidentiality.  Except as
required by law, the Seller shall ensure that after the Seller transfers the
Assets to the Purchaser, Seller maintains the confidentiality of all data,
information and records referred to in Section 1.1(a) and makes no disclosure
of any nature of such data, information or records to any Person.  Notwithstanding the foregoing, Seller may
use the data, information and records referred to in Section 1.1(a) solely in
connection with uses for Dietary Supplements (as such term is used in the
License and Sale Agreement).


             8.4        License.  Effective immediately and
automatically upon the Closing of the Transactions, Seller grants to Purchaser
the worldwide, royalty-free, fully paid, exclusive, perpetual, irrevocable,
fully sublicensable license under all copyrights and other rights in the data,
information and records referred to in Section 1.1(a) to reproduce, distribute,
perform, prepare derivative works of and use the same for all purposes other
than uses for Dietary Supplements (as such term is used in the License and Sale
Agreement), except as permitted by the License and Sale Agreement and as
provided for in Section 1.4 of the Amendment.


9.          MISCELLANEOUS PROVISIONS.


             9.1        Further Assurances.  Each party
hereto shall execute and/or cause to be delivered to each other party hereto
such instruments and other documents, and shall take such other actions, as
such other party may reasonably request (prior to, at or after the Closing) for
the purpose of carrying out or evidencing any of the Transactions.


             9.2        Fees and Expenses.  Each party
shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of the Transactional
Agreements.


             9.3        Attorneys’ Fees.  If any
legal action or other legal proceeding relating to any of the Transactional
Agreements or the enforcement of any provision of any of the Transactional
Agreements is brought against any party to this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys’ fees, costs and
disbursements (in addition to any other relief to which the prevailing party
may be entitled).


             9.4        Notices.  Any notice or other
communication required or permitted to be delivered to any party under this
Agreement shall be in writing and shall be deemed properly delivered, given and
received when delivered (by hand, by registered mail, by courier or express
delivery service or by facsimile) to the address or facsimile telephone number
set forth beneath the name of such party below (or to such other address or
facsimile telephone number as such party shall have specified in a written
notice given to the other parties hereto):


	if to the Seller:	 
	 	Shaman
  Pharmaceuticals, Inc.
	 	213 East Grand Avenue
	 	South San Francisco,
  CA  94080
	 	Attn: Lisa Conte
	 	Facsimile: (650)
  873-8367
	 	 
	with notice to:	 
	 	Farella Braun &
  Martell LLP
	 	Russ Building, 30th
  Floor
	 	235 Montgomery Street
	 	San Francisco, CA  94104
	 	Attn: Dean Gloster
	 	Facsimile: (415)
  954-4480
	 	 
	 	 
	if to the Purchaser:	 
	 	Metabolex, Inc.
	 	3876 Bay Center Place
	 	Hayward, CA  94545
	 	Attn:  President
	 	Facsimile: (510)
  293-9090
	 	 
	with notice to:	 
	 	Cooley Godward LLP
	 	Five Palo Alto Square
	 	3000 El Camino Real
	 	Palo Alto, CA  94306
	 	Attn: Barclay Kamb
	 	Facsimile: (650)
  849-7400







 


             9.5        Time Of The Essence.  Time is of
the essence of this Agreement.


             9.6        Headings.  The underlined headings
contained in this Agreement are for convenience of reference only, shall not be
deemed to be a part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this Agreement.


             9.7        Counterparts.  This
Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.


             9.8        Governing Law; Venue.


             (a)         This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of
California (without giving effect to principles of conflicts of laws) and,
prior to confirmation of Seller’s plan of reorganization, all disputes with respect
to this Agreement will be resolved by the Bankruptcy Court.


             (b)         Any legal action or other legal proceeding relating
to this Agreement or the enforcement of any provision of this Agreement may be
brought or otherwise commenced in any state or federal court located in the
County of Santa Clara, California.  Each
party to this Agreement:


             (i)         expressly and irrevocably consents and submits to
the jurisdiction of each state and federal court located in the County of Santa
Clara, California (and each appellate court located in the State of California)
in connection with any such legal proceeding;



             (ii)        agrees that each state and federal court located in the County of Santa
Clara, California shall be deemed to be a convenient forum; and



             (iii)       agrees not to assert (by way of motion, as a defense or otherwise), in
any such legal proceeding commenced in any state or federal court located in
the County of Santa Clara, California, any claim that such party is not subject
personally to the jurisdiction of such court, that such legal proceeding has
been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Agreement or the subject matter of this Agreement may not
be enforced in or by such court.



             (c)         The Seller agrees that, if any Proceeding is
commenced against any Indemnitee by any Person in or before any court or other
tribunal anywhere in the world, then such Indemnitee may proceed against the
Seller in or before such court or other tribunal with respect to any indemnification
claim or other claim arising directly or indirectly from or relating directly
or indirectly to such Proceeding or any of the matters alleged therein or any
of the circumstances giving rise thereto.


             (d)         Nothing in this Section 9.8 shall be deemed to limit
or otherwise affect the right of any Indemnitee to commence any legal
proceeding against the Seller in any forum or jurisdiction.


             9.9        Successors And Assigns; Parties
In Interest.


             (a)         This Agreement shall be binding upon:  the Seller and its successors
and assigns
(if any); and the Purchaser and its successors and assigns (if any).  This Agreement shall inure to the benefit
of:  the Seller; the Purchaser; the
other Indemnitees (subject to Section 7.5); and the respective successors
and assigns (if any) of the foregoing.


             (b)         The Purchaser may freely assign any or all of its
rights under this Agreement (including its indemnification rights under
Section 7), in whole or in part, to any other Person without obtaining the
consent or approval of any other Person. 
The Seller shall not be permitted to assign any of his or its rights or
delegate any of his or its obligations under this Agreement without the
Purchaser’s prior written consent.


             (c)         Except for the provisions of Section 7 hereof,
none of the provisions of this Agreement is intended to provide any rights or
remedies to any Person other than the parties to this Agreement and their
respective successors and assigns (if any). 
Without limiting the generality of the foregoing, (i) no employee of the
Seller shall have any rights under this Agreement or under any of the other
Transactional Agreements, and (ii) no creditor of the Seller shall have any
rights under this Agreement or any of the other Transactional Agreements.


             9.10     Remedies
Cumulative; Specific Performance.  The rights
and remedies of the parties hereto shall be cumulative (and not
alternative).  The Seller agrees that:
(a) in the event of any Breach or threatened Breach by the Seller of any
covenant, obligation or other provision set forth in this Agreement, the
Purchaser shall be entitled (in addition to any other remedy that may be
available to it) to (i) a decree or order of specific performance or
mandamus to enforce the observance and performance of such covenant, obligation
or other provision, and (ii) an injunction restraining such Breach or
threatened Breach; and (b) neither the Purchaser nor any other Indemnitee shall
be required to provide any bond or other security in connection with any such
decree, order or injunction or in connection with any related action or
Proceeding.


             9.11     Waiver.


             (a)         No failure on the part of any Person to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the
part of any Person in exercising any power, right, privilege or remedy under
this Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.


             (b)         No Person shall be deemed to have waived any claim
arising out of this Agreement, or any power, right, privilege or remedy under
this Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such Person; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.


             9.12     Amendments.  This
Agreement may not be amended, modified, altered or supplemented other than by
means of a written instrument duly executed and delivered on behalf of the
Purchaser and the Seller.


             9.13     Severability.  In the
event that any provision of this Agreement, or the application of any such provision
to any Person or set of circumstances, shall be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this Agreement,
and the application of such provision to Persons or circumstances other than
those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall continue
to be valid and enforceable to the fullest extent permitted by law.


             9.14     Entire Agreement.  The
Transactional Agreements set forth the entire understanding of the parties
relating to the subject matter thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter thereof.


             9.15     Knowledge.  For
purposes of this Agreement, a Person shall be deemed to have “knowledge” of a
particular fact or other matter if any Representative of such Person has
knowledge of such fact or other matter.


             9.16     Survival Of Covenants. 
Notwithstanding anything to the contrary herein, the covenants and
obligations of each party to this Agreement shall survive (without
limitation):  (i) the Closing and the
sale of the Assets to the Purchaser; (ii) any sale or other disposition of any
or all of the Assets by the Purchaser; and (iii) the death or dissolution of
any party to this Agreement.  All of
said covenants and obligations shall remain in full force and effect and shall
survive for one year following the Closing.


             9.17     Construction.


             (a)         For purposes of this Agreement, whenever the context
requires:  the singular number shall
include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; the feminine gender shall include the masculine
and neuter genders; and the neuter gender shall include the masculine and
feminine genders.


             (b)         The parties hereto agree that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction or interpretation of
this Agreement.


             (c)         As used in this Agreement, the words “include” and
“including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation.”


             (d)         Except as otherwise indicated, all references in this
Agreement to “Sections” and “Exhibits” are intended to refer to Sections of
this Agreement and Exhibits to this Agreement.


             The parties to this Agreement have
caused this Agreement to be executed and delivered as of March 16, 2001


	SHAMAN PHARMACUETICALS, INC.
	  A Delaware corporation
	 
	By:   /s/ Steven King


	Steven King, Chief
  Operating Officer
	 
	METABOLEX, INC.,
	  A Delaware corporation
	 
	By:   /s/ Thomas Glaze


	Thomas Glaze
	President and Chief
  Executive Officer












EXHIBIT A


CERTAIN
DEFINITIONS


             For purposes of the Agreement
(including this Exhibit A):


             Acquisition Transaction.  “Acquisition Transaction” shall mean any
transaction involving the sale or other disposition of all or any portion of
the Assets.


             Agreement.  “Agreement” shall mean the Asset Purchase
Agreement to which this Exhibit A is attached (including the Disclosure
Schedule), as it may be amended from time to time.


             Bankruptcy Court.  “Bankruptcy
Court”  shall mean the U.S. Bankruptcy
Court, Northern District of California.


             Best Efforts.  “Best Efforts” shall mean the efforts that a
prudent Person desiring to achieve a particular result would use in order to
ensure that such result is achieved as expeditiously as possible.


             Breach.  There shall be deemed to be a “Breach” of a
representation, warranty, covenant, obligation or other provision if there is
or has been (a) any inaccuracy in or breach (including any inadvertent or
innocent breach) of, or any failure (including any inadvertent failure) to
comply with or perform, such representation, warranty, covenant, obligation or
other provision, or (b) any claim (by any Person) or other circumstance
that is inconsistent with such representation, warranty, covenant, obligation
or other provision; and the term “Breach” shall be deemed to refer to any such
inaccuracy, breach, failure, claim or circumstance.


             Consent.  “Consent” shall mean any approval, consent,
ratification, permission, waiver or authorization (including any Governmental
Authorization).


             Contract.  “Contract” shall mean any written, oral,
implied or other agreement, contract, understanding, arrangement, instrument,
note, guaranty, indemnity, representation, warranty, deed, assignment, power of
attorney, certificate, purchase order, work order, insurance policy, benefit plan,
commitment, covenant, assurance or undertaking of any nature.


             Damages.  “Damages” shall include any loss, damage,
injury, decline in value, lost opportunity, Liability, claim, demand,
settlement, judgment, award, fine, penalty, Tax, fee (including any legal fee,
expert fee, accounting fee or advisory fee), charge, cost (including any cost
of investigation) or expense of any nature.


             Diabetes
Program.  “Diabetes Program” shall mean means Seller’s
program for the development of compounds and extracts isolated or prepared from
only such plant materials as are listed on Exhibit B, as pharmaceuticals or
nutritionals for prevention, treatment of, or use in connection with human
diseases in the Metabolic Disease Field.


             Disclosure Schedule.  “Disclosure Schedule” shall mean the
schedule (dated as of the date of the Agreement) delivered to the Purchaser on
behalf of the Seller, a copy of which is attached to the Agreement and
incorporated in the Agreement by reference.


             Encumbrance.  “Encumbrance” shall mean any lien, pledge,
hypothecation, charge, mortgage, security interest, encumbrance, equity, trust,
equitable interest, claim, preference, right of possession, lease, tenancy,
license, encroachment, covenant, infringement, interference, Order, proxy,
option, right of first refusal, preemptive right, community property interest,
legend, defect, impediment, exception, reservation, limitation, impairment,
imperfection of title, condition or restriction of any nature (including any
restriction on the transfer of any asset, any restriction on the receipt of any
income derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).


             Entity.  “Entity” shall mean any corporation
(including any non–profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
cooperative, foundation, society, political party, union, company (including
any limited liability company or joint stock company), firm or other
enterprise, association, organization or entity.


             Governmental Authorization.  “Governmental Authorization” shall mean any:
(a) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or
authorization issued, granted, given or otherwise made available by or under
the authority of any Governmental Body or pursuant to any Legal Requirement; or
(b) right under any Contract with any Governmental Body.


             Governmental Body.  “Governmental Body” shall mean any: (a)
nation, principality, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or quasi–governmental
authority of any nature (including any governmental division, subdivision,
department, agency, bureau, branch, office, commission, council, board,
instrumentality, officer, official, representative, organization, unit, body or
Entity and any court or other tribunal); (d) multi–national organization
or body; or (e) individual, Entity or body exercising, or entitled to exercise,
any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.


             Indemnitees.  “Indemnitees” shall mean the following
Persons: (a) the Purchaser; (b) the Purchaser’s current and future affiliates;
(c) the respective Representatives of the Persons referred to in clauses “(a)”
and “(b)” above; and (d) the respective successors and assigns of the Persons
referred to in clauses “(a)”, “(b)” and “(c)” above.


             Legal Requirement.  “Legal Requirement” shall mean any federal,
state, local, municipal, foreign or other law, statute, legislation,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Body.


             Liability.
 “Liability” shall mean any debt,
obligation, duty or liability of any nature (including any unknown,
undisclosed, unmatured, unaccrued, unasserted, contingent, indirect,
conditional, implied, vicarious, derivative, joint, several or secondary
liability), regardless of whether such debt, obligation, duty or liability
would be required to be disclosed on a balance sheet prepared in accordance
with generally accepted accounting principles and regardless of whether such
debt, obligation, duty or liability is immediately due and payable.


             License and Sale Agreement.  “License
and Sale Agreement” shall mean that certain License and Sale Agreement by and
between the Seller and the Purchaser, dated August 10, 1999.


             Metabolic Disease Field.  “Metabolic
Disease Field” means diabetes, insulin resistance, and syndrome X (including
lipid lowering as related to syndrome X).


             Order.  “Order” shall mean any: (a) order, judgment,
injunction, edict, decree, ruling, pronouncement, determination, decision,
opinion, verdict, sentence, subpoena, writ or award issued, made, entered,
rendered or otherwise put into effect by or under the authority of any court,
administrative agency or other Governmental Body or any arbitrator or
arbitration panel; or (b) Contract with any Governmental Body entered into in
connection with any Proceeding.


             Person.  “Person” shall mean any individual, Entity
or Governmental Body.


             Pre–Closing Period.  “Pre–Closing Period” shall mean the
period from the date of the Agreement through the Closing Date.


             Proceeding.  “Proceeding” shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding and any informal
proceeding), prosecution, contest, hearing, inquiry, inquest, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Body or any arbitrator or
arbitration panel.


             Proprietary Asset.  “Proprietary Asset” shall mean any patent,
patent application, trademark (whether registered or unregistered and whether
or not relating to a published work), trademark application, trade name,
fictitious business name, service mark (whether registered or unregistered),
service mark application, copyright (whether registered or unregistered),
copyright application, maskwork, maskwork application, trade secret, know–how,
customer list, franchise, system, computer software, invention, design,
blueprint, engineering drawing, proprietary product, technology, proprietary right
or other intellectual property right or intangible asset.


             Related Party.  Each of the following shall be deemed to be
a “Related Party”: (a) each individual who is, or who has at any time been, an
officer of the Seller; (b) each member of the family of each of the individuals
referred to in clause “(a)” above; and (c) any Entity (other than the Seller)
in which any one of the individuals referred to in clauses “(a)” and “(b)”
above holds or held (or in which more than one of such individuals collectively
hold or held), beneficially or otherwise, a controlling interest or a material
voting, proprietary or equity interest.


             Representatives.  “Representatives” shall mean officers,
directors, employees, agents, attorneys, accountants, advisors and representatives.


             Seller Proprietary Asset.  “Seller Proprietary Asset” shall mean any
Proprietary Asset  owned by or licensed
to the Seller or otherwise used by the Seller.


             Seller’s 4D Database.  “Seller’s 4D Database” shall mean the
Seller’s relational 4th Dimension database that contains information
and records relating to Seller’s Diabetes Program.


             Tax.  “Tax” shall mean any tax (including any
income tax, franchise tax, capital gains tax, estimated tax, gross receipts
tax, value–added tax, surtax, excise tax, ad valorem tax, transfer tax,
stamp tax, sales tax, use tax, property tax, business tax, occupation tax,
inventory tax, occupancy tax, withholding tax or payroll tax), levy,
assessment, tariff, impost, imposition, toll, duty (including any customs duty),
deficiency or fee, and any related charge or amount (including any fine,
penalty or interest), that is, has been or may in the future be
(a) imposed, assessed or collected by or under the authority of any
Governmental Body, or (b) payable pursuant to any tax–sharing
agreement or similar Contract.


             Tax Return.  “Tax Return” shall mean any return
(including any information return), report, statement, declaration, estimate,
schedule, notice, notification, form, election, certificate or other document
or information that is, has been or may in the future be filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection or payment of
any Tax or in connection with the administration, implementation or enforcement
of or compliance with any Legal Requirement relating to any Tax.


             Transactional Agreements.  “Transactional Agreements” shall mean: (a)
the Agreement; (b) the Amendment to that certain License and Sale Agreement by
and between the Seller and the Purchaser, dated August 10, 1999 ; and (c) the
Closing Certificate.


             Transactions.  “Transactions” shall mean (a) the
execution and delivery of the respective Transactional Agreements, and
(b) all of the transactions contemplated by the respective Transactional
Agreements, including: (i) the sale of the Assets by the Seller to the
Purchaser in accordance with the Agreement; and (ii) the performance by the
Seller and the Purchaser of their respective obligations under the Transactional
Agreements, and the exercise by the Seller and the Purchaser of their
respective rights under the Transactional Agreements.










Exhibit B


 










TABLE
OF CONTENTS


 


1.          Sale
of Assets; Related Transactions


1.1        Sale of Assets



1.2        Purchase Price



1.3        Liabilities



1.4        Sales Taxes



1.5        Closing



2.          Representations and Warranties of the
Seller


2.1        Due Organization



2.2        Assets



2.3        Compliance with Legal Requirements



2.4        Governmental Authorizations



2.5        Proceedings; Orders



2.6        Authority; Binding Nature Of Agreements



2.7        Non–Contravention; Consents



2.8        Brokers



2.9        Full Disclosure



3.          Representations and Warranties of the
Purchaser


3.1        Authority; Binding Nature Of Agreements



4.          Pre–Closing Covenants of the
Seller


4.1        Access And Investigation



4.2        Filings and Consents



4.3        Notification; Updates to Disclosure
Schedule



4.4        No Negotiation



4.5        Best Efforts



4.6        Confidentiality



4.7        Acceptance of Overbid; Right to Respond



4.8        Protection of Assets



5.          Conditions Precedent to the
Purchaser’s Obligation to Close


5.1        Accuracy Of Representations



5.2        Performance Of Obligations



5.3        Consents



5.4        Additional Documents



5.5        No Proceedings



5.6        No Prohibition



5.7        Approval Order



6.          Termination


6.1        Termination Events



6.2        Termination Procedures



6.3        Effect Of Termination



6.4        Nonexclusivity Of Termination Rights



6.5        Payment upon Termination



7.          Indemnification,
Etc


7.1        Survival Of Representations And Covenants



7.2        Indemnification By The Seller



7.3        Nonexclusivity Of Indemnification
Remedies



7.4        Defense Of Third Party Claims



7.5        Exercise Of Remedies By Indemnitees
Other Than Purchaser



8.          Certain Post-Closing Covenants


8.1        Further Actions



8.2        Publicity



8.3        Confidentiality



8.4        License



9.          Miscellaneous Provisions


9.1        Further Assurances



9.2        Fees and Expenses



9.3        Attorneys’ Fees



9.4        Notices



9.5        Time Of The Essence



9.6        Headings



9.7        Counterparts



9.8        Governing Law; Venue



9.9        Successors And Assigns; Parties In
Interest



9.10      Remedies Cumulative; Specific Performance



9.11      Waiver



9.12      Amendments



9.13      Severability



9.14      Entire Agreement



9.15      Knowledge



9.16      Survival Of Covenants



9.17      Construction