exh10_1assetpurchaseagree.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    


    ______________________________________________________________________________

    


    


    ASSET PURCHASE AGREEMENT

     

    


     

    BY
AND BETWEEN

     

    CRABTREE
ACQUISITION CO, LLC,

     

    ATHEROGENICS,
INC.

     

    AND

     

    KING
& SPALDING LLP

     

    MARCH
17, 2009

    


    


    


    


    ______________________________________________________________________________

    


    


    


    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF CONTENTS

     

     

     

      



      
        	
                1.

              	
                DEFINITIONS.

              	
                1

              
	 	 	 
	
                1.1.

              	
                DEFINITIONS

              	
                1

              
	
                1.2.

              	
                CROSS
      REFERENCES

              	
                3

              
	 	 	 
	
                2.

              	
                PURCHASE
      AND SALE

              	
                4

              
	 	 	 
	
                2.1.

              	
                PURCHASE
      AND SALE

              	
                4

              
	
                2.2.

              	
                EXCLUDED
      ASSETS

              	
                5

              
	
                2.3.

              	
                ASSUMED
      LIABILITIES

              	
                6

              
	
                2.4.

              	
                EXCLUDED
      LIABILITIES

              	
                7

              
	
                2.5.

              	
                ASSIGNMENT
      OF CONTRACTS AND RIGHTS.

              	7
	
                2.6.

              	
                PURCHASE
      PRICE; ALLOCATION OF PURCHASE PRICE.

              	8 
      
	
                2.7.

              	
                GOOD
      FAITH DEPOSIT.

              	
                9

              
	
                2.8.

              	
                CLOSING

              	
                9

              
	
                2.9.

              	
                DELIVERIES
      BY SELLER

              	
                9

              
	
                2.10.

              	
                DELIVERIES
      BY PURCHASER

              	
                10

              
	 	 	 
	
                3.

              	
                REPRESENTATIONS
      AND WARRANTIES OF SELLER

              	
                10

              
	 	 	 
	
                3.1.

              	
                ORGANIZATION

              	
                10

              
	
                3.2.

              	
                CORPORATE
      AUTHORIZATION

              	
                11

              
	
                3.3.

              	
                GOVERNMENTAL
      AUTHORIZATION

              	
                11

              
	
                3.4.

              	
                NONCONTRAVENTION

              	
                11

              
	
                3.5.

              	
                REQUIRED
      CONSENTS

              	
                11

              
	
                3.6.

              	
                LITIGATION

              	
                11

              
	
                3.7.

              	
                COMPLIANCE
      WITH LAWS AND COURT ORDERS

              	
                11

              
	
                3.8.

              	
                SUFFICIENCY
      OF AND TITLE TO THE PURCHASED ASSETS.

              	
                12

              
	
                3.9.

              	
                INTELLECTUAL
      PROPERTY RIGHTS.

              	
                12

              
	
                3.10.

              	
                ENVIRONMENTAL
      COMPLIANCE

              	
                13

              
	
                3.11.

              	
                NO
      OTHER AGREEMENTS TO SELL ASSETS

              	
                14

              
	
                3.12.

              	
                CERTAIN
      FEES

              	
                14

              
	
                3.13.

              	
                “AS
      IS” TRANSACTION

              	
                14

              
	 	 	 
	
                4.

              	
                REPRESENTATIONS
      AND WARRANTIES OF PURCHASER

              	
                15

              
	 	 	 
	
                4.1.

              	
                ORGANIZATION

              	
                15

              
	
                4.2.

              	
                AUTHORIZATION

              	
                15

              
	
                4.3.

              	
                GOVERNMENTAL
      AUTHORIZATION

              	
                15

              
	
                4.4.

              	
                NONCONTRAVENTION

              	
                15

              
	
                4.5.

              	
                FINANCING

              	
                15

              
	
                4.6.

              	
                LITIGATION

              	
                16

              
	
                4.7.

              	
                CERTAIN
      FEES

              	
                16

              
	 	 	 
	
                5.

              	
                PRE-CLOSING
      COVENANTS OF SELLER

              	
                16

              
	 	 	 
	
                5.1.

              	
                CONDUCT
      OF THE BUSINESS

              	
                16

              
	
                5.2.

              	
                ACCESS
      TO INFORMATION

              	
                17

              
	
                5.3.

              	
                INSURANCE;
      RISK OF LOSS

              	
                17

              
	
                5.4.

              	
                NOTICES
      OF CERTAIN EVENTS

              	
                17

              
	 	 	 
	
                6.

              	
                PRE-CLOSING
      COVENANTS OF PURCHASER

              	
                18

              
	 	 	 
	
                6.1.

              	
                CONFIDENTIALITY

              	
                18

              
	
                6.2.

              	
                ACCESS

              	
                18

              
	
                6.3.

              	
                INSURANCE

              	
                18

              
	
                6.4.

              	
                ADEQUATE
      ASSURANCE

              	
                18

              


      

       

      
        
          
          

        

        
          
          

          i

        

        
          
          

        

         

      

      
        	 	 	 
	
                7.

              	
                PRE-CLOSING
      COVENANTS OF PURCHASER AND SELLER

              	
                19

              
	 	 	 
	
                7.1.

              	
                EFFORTS;
      FURTHER ASSURANCES

              	
                19

              
	
                7.2.

              	
                CERTAIN
      FILINGS

              	
                19

              
	
                7.3.

              	
                PUBLIC
      ANNOUNCEMENTS

              	
                19

              
	
                7.4.

              	
                BID
      PROCEDURES MOTION AND SALE MOTION.

              	
                19

              
	
                7.5.

              	
                NOTICES

              	
                21

              
	 	 	 
	
                8.

              	
                TAX
      MATTERS.

              	
                21

              
	 	 	 
	
                8.1.

              	
                TAX
      COOPERATION

              	
                21

              
	
                8.2.

              	
                TRANSFER
      TAXES

              	
                21

              
	
                8.3.

              	
                PROPERTY
      TAXES

              	
                21

              
	
                8.4.

              	
                APPORTIONMENT

              	
                21

              
	 	 	 
	
                9.

              	
                EMPLOYEE
      MATTERS

              	
                22

              
	 	 	 
	
                9.1.

              	
                EMPLOYEES
      AND OFFERS OF EMPLOYMENT

              	
                22

              
	
                9.2.

              	
                EMPLOYEE
      RECORDS

              	
                22

              
	
                9.3.

              	
                EMPLOYEE
      PLANS

              	
                22

              
	
                9.4.

              	
                WORKERS’
      COMPENSATION

              	
                22

              
	 	 	 
	
                10.

              	
                CLOSING
      CONDITIONS

              	
                23

              
	 	 	 
	
                10.1.

              	
                CONDITIONS
      TO OBLIGATIONS OF PURCHASER AND SELLER

              	
                23

              
	
                10.2.

              	
                CONDITIONS
      TO OBLIGATIONS OF PURCHASER

              	
                23

              
	
                10.3.

              	
                CONDITIONS
      TO OBLIGATIONS OF SELLER

              	
                23

              
	 	 	 
	
                11.

              	
                SURVIVAL;
      INDEMNIFICATION

              	
                24

              
	 	 	 
	
                11.1.

              	
                SURVIVAL

              	
                24

              
	
                11.2.

              	
                INDEMNIFICATION

              	
                24

              
	 	 	 
	
                12.

              	
                TERMINATION

              	
                24

              
	 	 	 
	
                12.1.

              	
                GROUNDS
      FOR TERMINATION

              	
                24

              
	
                12.2.

              	
                EFFECT
      OF TERMINATION

              	
                25

              
	
                12.3.

              	
                EXPENSES

              	
                25

              
	
                12.4.

              	
                EXCLUSIVE
      REMEDIES

              	
                25

              
	 	 	 
	
                13.

              	
                MISCELLANEOUS.

              	
                25

              
	 	 	 
	
                13.1.

              	
                NOTICES

              	
                25

              
	
                13.2.

              	
                WAIVERS

              	
                26

              
	
                13.3.

              	
                SUCCESSORS
      AND ASSIGNS

              	
                26

              
	
                13.4.

              	
                GOVERNING
      LAW

              	
                27

              
	
                13.5.

              	
                JURISDICTION.

              	
                27

              
	
                13.6.

              	
                WAIVER
      OF JURY TRIAL

              	
                27

              
	
                13.7.

              	
                THIRD
      PARTY BENEFICIARIES

              	
                28

              
	
                13.8.

              	
                ENTIRE
      AGREEMENT; AMENDMENTS; COUNTERPARTS

              	
                28

              
	
                13.9.

              	
                CAPTIONS,
      INTERPRETATION

              	
                28

              


      

      

                                                                       

     

     

    
 

    



    
      
         


      

      
         


        ii

      

      
         


      

    


    ASSET
PURCHASE AGREEMENT

    


    


    THIS ASSET PURCHASE AGREEMENT
dated as of March 16, 2009 (this “Agreement”) is
entered into by and between Crabtree Acquisition Co, LLC, a Delaware limited
liability company (“Purchaser”),
AtheroGenics, Inc., a Georgia corporation (“Seller”), and solely
for the purposes of Section 2.7, King & Spalding LLP, a Georgia limited
liability partnership (“Seller's
Counsel”).  Purchaser and Seller are sometimes individually
referred to in this Agreement as a “Party” and
collectively as the “Parties.”

     

    RECITALS:

     

    WHEREAS, Seller is a
pharmaceutical company engaged in the business of developing and commercializing
pharmaceutical products that treat diabetes and diabetes-related disorders,
cardiovascular and inflammatory diseases (the “Business”);

     

    WHEREAS, Seller desires to
sell, transfer, convey, assign and deliver the Purchased Assets (as defined
below) and to assign the Assumed Liabilities (as defined below), and Purchaser
desires to purchase, take delivery of, and assume such Purchased Assets and
Assumed Liabilities, upon the terms and subject to the conditions set forth
herein;

     

    WHEREAS, Seller is a debtor
and debtor-in-possession in a Chapter 11 bankruptcy case that is pending in the
United States Bankruptcy Court for the Northern District of Georgia, Atlanta
Division (the “Bankruptcy Court”),
under Case No. 08-78200 (the “Bankruptcy Case”);
and

     

    WHEREAS, the transactions
contemplated by this Agreement (the “Transactions”) will
be consummated pursuant to a Sale Order (as defined below) to be entered in the
Bankruptcy Case under Sections 105, 363, 365 and other applicable provisions of
the Bankruptcy Code (as defined below), and the Transactions and this Agreement
are subject to the approval of the Bankruptcy Court.

     

    NOW, THEREFORE, in consideration of
the foregoing and the mutual agreements, covenants, representations, warranties,
and promises set forth herein, and in order to prescribe the terms and
conditions of such purchase and sale, intending to be legally bound, the Parties
agree as follows:

     

    1. Definitions.

     

    1.1. Definitions.  The
following terms, as used herein, have the following meanings:

     

    (a) “Affiliate” means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by, or under common control with, such other Person.

     

    (b) “Bankruptcy Code”
means Title 11 of the United States Code (11 U.S.C. §101 et seq.), as
amended.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) “Business Day” means a
day other than Saturday, Sunday or other day on which commercial banks in
Atlanta, Georgia are authorized or required by law to close.

     

    (d) “Claim” means a
“claim" as defined in Section 101 of the Bankruptcy Code.

     

    (e) “Closing Date” means
the date of the Closing.

     

    (f) “Code” means the
Internal Revenue Code of 1986, as amended.

     

    (g) "Confidentiality
Agreement" means the Confidentiality Agreement dated November 12, 2008,
executed by or on behalf of Purchaser and Seller.

     

    (h) “Cure Costs” means all
amounts that must be paid and all obligations that otherwise must be satisfied,
including pursuant to Sections 365(b)(1) (A) and (B) of the Bankruptcy Code, in
connection with the assumption and/or assignment of the Assumed Contracts,
Chapter 11 Licenses and Intellectual Property Rights to Purchaser as provided
herein.

     

    (i) “Intellectual Property
Right” means any trademark, service mark, trade name, invention (whether
patented or not), U.S. or foreign patent, pending patent application in the U.S.
or foreign jurisdictions, any continuation, divisional or equivalent thereof,
trade secret, copyright, know-how (including any registrations or applications
for registration of any of the foregoing), license agreement (to the extent such
license agreement is transferable) or any other similar type of proprietary
intellectual property right owned by, subject to assignment to, or controlled by
Seller.

     

    (j) “Knowledge of Seller”
or any other similar knowledge qualification in this Agreement means all facts
actually known by the following individuals:  Joseph M. Gaynor, Jr.,
Mark P. Colonnese and Russell M. Medford.

     

    (k) “Lien” means, with
respect to any property or asset, any mortgage, lien, pledge, charge, security
interest or other encumbrance in respect of such property or asset.

     

    (l) “Material Adverse
Effect” means a material adverse effect on the Business and the Purchased
Assets, taken as a whole, excluding any such effect to the extent resulting from
or arising in connection with (i) the Transactions or the public announcement
thereof, (ii) changes or conditions affecting the industry generally in which
Seller operates, (iii) changes in economic, regulatory or political conditions
generally, (iv) changes resulting from the commencement or continuation of the
Bankruptcy Case, (v) actions taken by the Seller pursuant to (or as contemplated
by) orders entered by the Bankruptcy Court in the Bankruptcy Case, or (vi)
changes or conditions affecting the availability, terms or pricing of credit or
equity financing.

     

    (m) “Permitted Liens”
means Liens for Taxes, assessments and similar charges that are not yet due or
are being contested in good faith.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (n) “Person” means an
individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

     

    (o) “Petition Date” means
October 15, 2008.

     

    (p) “Pre-Closing Tax
Period” means (i) any Tax period ending on or before the Closing Date,
and (ii) with respect to a Tax period that commences before but ends after the
Closing Date, the portion of such period up to and including the Closing
Date.

     

    (q) “Property Taxes” means
all real property Taxes, personal property Taxes and similar ad valorem
obligations levied with respect to the Purchased Assets for any Taxable
period.

     

    (r) “Tax” means (i) any
tax, governmental fee or other like assessment or charge of any kind whatsoever
(including withholding on amounts paid to or by any Person), together with any
interest, penalty, addition to tax or additional amount imposed by any
governmental authority (a “Taxing Authority”)
responsible for the imposition of any such tax (domestic or foreign), or (ii)
liability for the payment of any amounts of the type described in (i) as a
result of being party to any agreement or any express or implied obligation to
indemnify any other Person.

     

    1.2. Cross
References.  Each of the following terms is defined in the
Section set forth opposite such term:

     

    
      	
              Term

            	
              Section

            
	
              Accounts
      Receivable

            	
              2.1(e)

            
	
              Acquired
      Intellectual Property Right

            	
              2.1(g)

            
	
              Agreement

            	
              Preamble

            
	
              Apportioned
      Obligations

            	
              8.3

            
	
              Assignment
      and Assumption Agreement

            	
              2.9(a)

            
	
              Assumed
      Contracts

            	
              2.1(c)

            
	
              Assumed
      Liabilities

            	
              2.3

            
	
              Bankruptcy
      Case

            	
              Recitals

            
	
              Bankruptcy
      Court

            	
              Recitals

            
	
              Business

            	
              Recitals

            
	
              Chapter
      11 Contracts

            	
              2.1(c)

            
	
              Chapter
      11 Licenses

            	
              2.1(d)

            
	
              Closing

            	
              2.8

            
	
              COBRA
      Beneficiaries

            	
              9.3(b)

            
	
              COBRA
      Coverage

            	
              9.3(b)

            
	
              End
      Date

            	
              12.1(e)

            
	
              Environmental
      Laws

            	
              3.10(d)

            
	
              Excluded
      Assets

            	
              2.2

            
	
              Excluded
      Liabilities

            	
              2.4

            
	
              Good
      Faith Deposit

            	
              2.7
      (a)

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              Hazardous
      Materials

            	
              3.10(e)

            
	
              Inventory

            	
              2.1(a)

            
	
              Party

            	
              Preamble

            
	
              Parties

            	
              Preamble

            
	
              Post-Closing
      Tax Period

            	
              8.3

            
	
              Post-Petition
      Contracts

            	
              2.1(b)

            
	
              Purchase
      Price

            	
              2.6(a)

            
	
              Purchased
      Assets

            	
              2.1

            
	
              Purchaser

            	
              Preamble

            
	
              Required
      Consents

            	
              3.5

            
	
              Restricted
      Purchased Asset

            	
              2.5(c)

            
	
              Sale
      Motion

            	
              7.4(a)

            
	
              Sale
      Order

            	
              7.4(a)

            
	
              Seller

            	
              Preamble

            
	
              Seller's
      Counsel

            	
              Preamble

            
	
              Taxing
      Authority

            	
              1.1(v)

            
	
              Transactions

            	
              Recitals

            
	
              Transfer
      Taxes

            	
              8.2

            
	
              Transferred
      Employees

            	
              9.1(a)

            
	
              Transferred
      Employees' Employment Date

            	
              9.4

            


    

    


    2. Purchase and
Sale

     

    2.1.            Purchase and
Sale.  Subject to the terms and conditions set forth in this
Agreement, at the Closing, Seller agrees to sell, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, acquire and accept from Seller, all
right, title and interest of Seller as of the Closing Date in and to the
following assets, properties and rights (the “Purchased Assets”),
to the extent owned, held or primarily used in the conduct of the Business, free
and clear of all Liens and Claims (other than Permitted Liens and the Assumed
Liabilities) and to the extent that such assets are not excluded pursuant to
Section
2.2:

     

    (a) all
inventory (including raw materials, work in process, and finished goods) and
supplies, including all experimental drug products, placebos, comparator drug
products, retained plasma samples, and stability samples (collectively, the
“Inventory”);

     

    (b) all
contracts, agreements, leases, commitments, and orders of Seller, in each case
executed or entered into after the Petition Date and all contracts, agreements,
leases, commitments, and orders of Seller entered into from and after the date
of this Agreement and prior to Closing and, in each case, including those that
are set forth on Schedule 2.1(b)
(collectively, the “Post-Petition
Contracts”);

     

    (c) the
executory contracts and unexpired leases of Seller that were executed or entered
into on or prior to the Petition Date and that are set forth on Schedule 2.1(c) (the
“Chapter 11
Contracts”; the Post-Petition Contracts and the Chapter 11 Contracts are
referred to collectively as the “Assumed
Contracts”);

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (d) all
transferable licenses, permits or other governmental authorizations of Seller
(“Chapter 11
Licenses”);

     

    (e) except as
provided in Section 2.2(i), all accounts receivable (the “Accounts
Receivable”);

     

    (f) all
machinery, equipment (including computer and office equipment, office supplies
and laboratory equipment), furniture, furnishings, and other items of tangible
personal property, including the items listed on Schedule
2.1(f);

     

    (g) all
Intellectual Property Rights, including the items listed on Schedule 2.1(g) (the
"Acquired Intellectual
Property Rights");

     

    (h) all
research and development records and reports, product stability protocols and
data, clinical protocols, case report forms (including case report forms for
individual patients), statistical plans, clinical study reports and analyses,
regulatory records, investigational new drug (ind) application documentation,
correspondence with investigators and regulators, and related
materials;

     

    (i) all
books, records, files and papers of Seller relating to the Business or the
Purchased Assets, excluding employee records of Seller's employees that are not
Transferred Employees; and

     

    (j) except as
provided in Section
2.2(b), all insurance claims arising from or relating to the Purchased
Assets prior to the Closing Date, and all claims of Seller against third parties
relating to the Purchased Assets, whether choate or inchoate, known or unknown,
contingent or non contingent.

     

    2.2. Excluded
Assets.  Notwithstanding any other provision of this Agreement
to the contrary, the Purchased Assets shall not include any assets, properties
or rights not specifically identified in Section 2.1, including the following
(the “Excluded
Assets”):

     

    (a) all of
Seller’s cash and cash equivalents on hand (including all undeposited checks)
and in banks or other financial institutions and all of Seller’s short-term
investments, including commercial paper, corporate notes and government agency
notes;

     

    (b) all
preference claims, fraudulent transfer claims, avoidance actions or other causes
of action, whether arising under the Bankruptcy Code or otherwise, and the
proceeds thereof, including actions available to Sellers under Section 510 or
under any of Sections 542 through 553 of the Bankruptcy Code, of whatever kind
or nature, and whether asserted or unasserted;

     

    (c) the
minute books and organizational documents of Seller;

     

    (d) any
unexpired lease or executory contract that is identified on Schedule 2.2(d) or
that is not identified in this Agreement as an Assumed Contract;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (e) all
insurance policies relating to the Business and all claims arising under such
policies prior to the Closing, and all credits, premium refunds, proceeds,
causes of action or rights thereunder, in each case, other than those claims
arising prior to Closing that arise from or relate to the Purchased
Assets;

     

    (f) all
rights of Seller arising under this Agreement or in connection with the
Transactions;

     

    (g) any
Purchased Asset sold or otherwise disposed of pursuant to Section 5.1(b) prior
to the Closing Date;

     

    (h) any Tax
refund or reimbursement due to Seller or its Affiliates and relating to the
Business;

     

    (i) all
accounts, notes and other receivables and amounts owed to the Seller by any one
or more of Seller’s Affiliates or employees;

     

    (j) all
utility deposits, security deposits and other deposits of any kind or nature
whatsoever;

     

    (k) all
fixtures currently owned or leased by Seller; and

     

    (l) Employee
records of any Seller employee who is not a Transferred Employee.

     

    At any
time prior to Closing, Purchaser may, in its sole discretion, by written notice
to Seller, elect not to acquire and assume one or more Purchased
Assets.  In such event, the applicable schedule, if any, shall be
deemed to be amended without further action by either Party and such Purchased
Assets shall be considered Excluded Assets for all purposes
hereunder.

     

    2.3. Assumed
Liabilities.  Upon the terms and subject to the conditions of
this Agreement, Purchaser agrees, effective at the time of the Closing, to
assume, pay, perform and discharge, promptly when payment or performance is due
or required, the following liabilities and obligations of Seller or the Business
(the “Assumed
Liabilities”):

     

    (a) all
liabilities and obligations of Seller related to or arising under the Assumed
Contracts, Chapter 11 Licenses and Intellectual Property Rights from and
after the Closing;

     

    (b) all Cure
Costs;

     

    (c) all
Apportioned Obligations of Purchaser;

     

    (d) any and
all costs and expenses necessary in connection with providing “adequate
assurance of future performance” with respect to the Assumed Contracts (as
contemplated by Section 365 of the Bankruptcy Code);

     

    (e) all
Transfer Taxes; and

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (f) all
liabilities relating to or arising from the operation of the Business or the
ownership of the Purchased Assets by Purchaser from and after the Closing,
including all amounts due and owing to foreign patent agents with respect to
services provided from and after the Closing.

     

    From and
after the Closing, Purchaser shall indemnify the Seller with respect to any
claims or liabilities relating to, and hold the Seller harmless from, the
Assumed Liabilities.

     

    2.4. Excluded
Liabilities.  Notwithstanding any other provision of this
Agreement to the contrary, Purchaser is assuming only the Assumed Liabilities
and is not assuming any other liability or obligation of Seller of whatever
nature, whether presently in existence or arising hereafter.  All such
other liabilities and obligations shall be retained by and remain obligations
and liabilities of Seller (all such liabilities and obligations not being
assumed being herein referred to as the “Excluded
Liabilities”).

     

    2.5. Assignment of Contracts and
Rights.

     

    (a) To the
maximum extent permitted by the Bankruptcy Code, the Assumed Contracts and
Intellectual Property Rights shall be assumed by Seller and assigned to
Purchaser at the Closing pursuant to Sections 105, 363 and/or 365 of the
Bankruptcy Code.  Notwithstanding any other provision of this
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign any Purchased Asset or any right thereunder if an attempted assignment,
without the consent of a third party, would constitute a breach or in any way
adversely affect the rights of Purchaser or Seller thereunder.

     

    (b) If
required by applicable law or the terms thereof to validly assign any Assumed
Contract or Intellectual Property Right without breach or violation thereof,
Seller agrees to use commercially reasonable efforts to obtain the consent of
each other party to any such Assumed Contract or Intellectual Property Right
prior to the Closing; provided, however, that no modification of any such
Assumed Contract or Intellectual Property Right shall be made without
Purchaser's prior written consent and the form of the consent to assignment
shall be subject to the prior written approval of Purchaser (which shall not be
withheld unreasonably).

     

    (c) If there
are any Required Consents that have not yet been obtained (or otherwise are not
in full force and effect) as of the Closing, in the case of each Assumed
Contract or Intellectual Property Right as to which such Required Consent was
not obtained (or otherwise are not in full force and effect) (each, a "Restricted Purchased
Asset"), Purchaser may, but shall not be required to, waive the closing
conditions as to any such Required Consent and either:  (i) elect to
have Seller continue to use its commercially reasonable efforts to obtain the
Required Consent; or (ii) elect to have Seller retain that Restricted Purchased
Asset and all liabilities arising therefrom or relating thereto (without any
adjustment to the Purchase Price).  If Purchaser elects to have Seller
continue its commercially reasonable efforts to obtain any Required Consent and
the Closing occurs, notwithstanding this Agreement, neither this Agreement nor
the Assignment and Assumption Agreement nor any other document related to the


    
      
        
        

      

      
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      consummation
of the transactions contemplated by this Agreement shall constitute a sale,
assignment, assumption, transfer, conveyance or delivery or an attempted sale,
assignment, assumption, transfer, conveyance or delivery of any Restricted
Purchased Asset, and following the Closing, the parties shall use their
respective commercially reasonable efforts, and cooperate with each other, to
obtain the Required Consent relating to each Restricted Purchased Asset as
quickly as practicable; provided, however, that the payment of money by
Purchaser shall not be required in connection therewith.  Prior to the
obtaining of such Required Consents, the parties shall cooperate with each other
in any reasonable and lawful arrangements designed to provide to Purchaser the
benefits of use of any and all Restricted Purchased Asset for their respective
terms (or any right or benefit arising thereunder, including the enforcement for
the benefit of Purchaser of any and all rights of Seller against a third party
thereunder).  When a Required Consent for the sale, assignment,
assumption, transfer, conveyance and delivery of a Restricted Purchased Asset is
obtained, Seller shall promptly assign, transfer, convey and deliver such
Restricted Purchased Asset to Purchaser, and Purchaser shall assume the
obligations under such Restricted Purchased Asset assigned to Purchaser from and
after the date of assignment to Purchaser pursuant to an assignment and
assumption agreement substantially similar in terms and conditions set forth in
the Assignment and Assumption Agreement (which agreement the Parties shall
prepare, execute and deliver in good faith at the time of such transfer, all at
no additional cost to Purchaser).

    

     

    2.6.            Purchase Price; Allocation
of Purchase Price.

     

    (a) In
addition to the assumption of the Assumed Liabilities, in consideration for the
sale, transfer and delivery of the Purchased Assets, at the Closing, Purchaser
shall deliver to Seller Two Million Dollars ($2,000,000.00) (the “Purchase Price”) by
wire transfer of immediately available federal funds to a bank account (or
accounts) as shall be designated in writing no later than one (1) day prior to
the Closing Date by Seller to Purchaser, which amount shall be reduced by the
amount of the Good Faith Deposit disbursed to Seller as a credit against the
Purchase Price in accordance with Section 2.7(b)(i).

     

    (b) Purchaser and Seller agree that the Purchase Price, applicable Assumed
Liabilities and other relevant items shall be allocated in accordance with
Section 1060 of the Code and the regulations thereunder and Schedule 2.6 hereof
(such schedule to be determined jointly by Purchaser and Seller prior to
Closing).  Purchaser and Seller each agrees to provide the other
promptly with any other information required to complete Schedule
2.6.  Such allocation shall be binding on Purchaser and Seller
for all purposes including the reporting of gain or loss and determination of
basis for income tax purposes, and each of the parties hereto agrees that it
will file a statement (on IRS Form 8594 or other applicable form) setting forth
such allocation with its federal and applicable state income tax returns and
will also file such further information or take such further actions as may be
necessary to comply with the Treasury Regulations that have been promulgated
pursuant to Section 1060 of the Code and similar applicable state laws and
regulations.

     

    
      
        
        

      

      
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    2.7.            Good Faith
Deposit.

     

    (a) Simultaneously
with the execution of this Agreement, Purchaser shall deposit with Seller’s
Counsel cash in immediately available federal funds by wire transfer to an
account or accounts designated by Seller’s Counsel, an amount equal to Two
Hundred Thousand Dollars ($200,000.00) (the “Good Faith Deposit”),
to be held in escrow by Seller's Counsel in a non-interest bearing account until
applied as provided in Section 2.7(b).

     

    (b) Seller's
Counsel shall deliver the Good Faith Deposit to the Seller only upon the
happening of any of the following:  (i) at the Closing as a credit
against the Purchase Price, or (ii) upon the termination of this Agreement
pursuant to Section 12.1(h) by Seller due to any of the conditions of Section
10.3 not being satisfied.  Seller's Counsel shall return the Good
Faith Deposit to Purchaser if the Agreement is terminated pursuant to Sections
12.1(a), (b), (c), (d), (e), (f) or (i), or if the Agreement is terminated
pursuant to Section 12.1(g) by Purchaser due to any of the conditions of Section
10.2 not being satisfied.

     

    2.8.            Closing.  Subject
to the satisfaction of the conditions set forth in Section 10 (other than those
requiring a delivery, or the taking of other action, at the Closing), the
closing (the “Closing”) of the
purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities shall take place at the offices of King & Spalding LLP, 1180
Peachtree Street, Atlanta, Georgia, on the third (3rd)
Business Day following entry of the Sale Order or at such other time or place as
Purchaser and Seller may agree.  The Closing shall be effective at
12:01 a.m. (local time in Atlanta, Georgia) on the Closing
Date.

     

    2.9. Deliveries by
Seller.  At the Closing, Seller will deliver or cause to be
delivered to Purchaser (unless delivered previously) the following:

     

    (a) a Bill of
Sale, Assignment and Assumption Agreement substantially in the form attached
hereto as Exhibit
A (the “Assignment and Assumption
Agreement”), duly executed by Seller;

     

    (b) a
recordable assignment of all patents and patent applications that constitute
Acquired Intellectual Property Rights, duly executed by Seller;

     

    (c) a copy of
the Sale Order, certified by the clerk of the Bankruptcy Court;

     

    (d) a copy of
each Required Consent;

     

    (e) a
certificate duly executed by the Seller certifying as to the matters set forth
in Section 10.2;

     

    (f) a
certificate duly executed by Seller acknowledging delivery by Purchaser of the
items set forth in Section 2.10;

     

    
      
        
        

      

      
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    (g) evidence
of the releases of any and all Liens on the Purchased Assets (other than
Permitted Liens and Assumed Liabilities), each in form and substance
satisfactory to Purchaser in its reasonable discretion; and

     

    (h) all other
documents, instruments and writings reasonably requested by Purchaser to be
delivered by Seller at or prior to the Closing pursuant to this
Agreement.

     

    2.10. Deliveries by
Purchaser.  At the Closing, Purchaser will deliver or cause to
be delivered to Seller (unless previously delivered) the following:

     

    (a) the
Purchase Price less the Good Faith Deposit;

     

    (b) the
Assignment and Assumption Agreement, duly executed by Purchaser;

     

    (c) a
Certificate of Good Standing of Purchaser issued by the Secretary of State of
the State of Delaware dated within thirty (30) calendar days of the Closing
Date;

     

    (d) a copy of
resolutions adopted by the manager of Purchaser authorizing and approving the
execution and delivery of this Agreement and all agreements and other documents
and instruments contemplated hereby and thereby and the consummation of the
transactions contemplated hereby and thereby, certified to be true, complete,
correct and in full force and effect as of the Closing Date by the Secretary of
Purchaser;

     

    (e) a copy of
the certificate of formation of Purchaser, including all amendments thereto,
certified by the Secretary of State of the State of Delaware dated as of a date
within thirty (30) days of Closing and certified as true, complete and correct
and in full force and effect as of the Closing Date by the Secretary of
Purchaser, and a copy of the limited liability company agreement of Purchaser,
including all amendments thereto, certified as true, complete and correct and in
full force and effect as of the Closing Date by the Secretary of
Purchaser;

     

    (f) a
certificate duly executed by the Secretary of Purchaser certifying as to the
matters set forth in Section 10.3;

     

    (g) a
certificate duly executed by Purchaser acknowledging delivery by Seller of the
items set forth in Section 2.9; and

     

    (h) all other
documents, instruments and writings reasonably requested by Seller to be
delivered by Purchaser at or prior to the Closing pursuant to this
Agreement.

     

    3. Representations
and Warranties of Seller.  Subject to the terms, conditions and
limitations set forth in this Agreement, Seller hereby represents and warrants
to Purchaser as follows:

     

    3.1. Organization.  Seller
is a corporation validly existing under the laws of the State of Georgia, and
Seller has the corporate power and authority to own, lease and operate the
Purchased Assets and to carry on in all material respects the Business as now
being conducted.

     

    
      
        
        

      

      
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    3.2. Corporate
Authorization.  The execution, delivery and performance by
Seller of this Agreement and the consummation of the Transactions are within
Seller’s corporate powers and have been duly authorized by all necessary action
on the part of Seller.  Subject to entry by the Bankruptcy Court of
the Sale Order in the Bankruptcy Case, this Agreement constitutes a valid and
binding agreement of Seller that is enforceable in accordance with its
terms.

     

    3.3. Governmental
Authorization.  Except as disclosed in Schedule 3.3, the execution,
delivery and performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby by Seller require no action by or in respect
of, or filing with, any governmental body, agency or official other than (a)
consents, approvals or authorizations of, or declarations or filings with, the
Bankruptcy Court, and (b) any such action or filing as to which the failure to
make or obtain would not have a Material Adverse Effect.

     

    3.4. Noncontravention.  Subject
to entry by the Bankruptcy Court of the Sale Order in the Bankruptcy Case, the
execution, delivery and performance by Seller of this Agreement and the
consummation of the Transactions do not and will not (a) violate Seller’s
articles or certificate of incorporation, as amended, or bylaws, (b) assuming
compliance with the matters referred to in Section 3.3, materially violate any
applicable law, rule, regulation, judgment, injunction, order or decree, (c)
except as to matters which would not reasonably be expected to have a Material
Adverse Effect, constitute a default under, violation of or give rise to any
right of termination, cancellation or acceleration of any right or obligation or
to a loss of any benefit relating to any Purchased Asset to which Seller is
entitled under any provision of any agreement or other instrument binding upon
Seller except for breaches and defaults referred to in Section 365(b)(2) of the
Bankruptcy Code, (d) result in the creation or imposition of any Lien on any
Purchased Asset (other than Liens that will be released at or prior to Closing
by virtue of entry of the Sale Order), or (e) cause Purchaser to become subject
to, or to become liable for the payment of, any Tax or other liability that is
not an Assumed Liability.

     

    3.5. Required
Consents.  Except for consents, approvals or authorizations of,
or declarations or filings with, the Bankruptcy Court, and except as otherwise
set forth on Schedule
3.5 (the “Required Consents”),
there is no agreement or other instrument binding upon Seller requiring a
consent or other action by any Person as a result of the execution, delivery and
performance of this Agreement, except such consents or actions as would not,
individually or in the aggregate, have a Material Adverse Effect if not received
or taken by the Closing Date.

     

    3.6. Litigation.  Except
as disclosed in Schedule 3.6, as of the date
hereof, there is no action, suit, investigation or proceeding pending against,
or to the Knowledge of Seller, threatened against or affecting, the Purchased
Assets before any court or arbitrator or any governmental body, agency or
official which is reasonably likely to have a Material Adverse Effect or which
in any manner challenges or seeks to prevent, enjoin, alter or materially delay
the Transactions.

     

    3.7. Compliance with Laws and
Court Orders.  To the Knowledge of Seller, Seller is not in
violation of any law, rule, regulation, judgment, injunction, order or decree
applicable to the Purchased Assets or the conduct of the Business, except for
violations which would not reasonably be expected to have a Material Adverse
Effect.

     

    
      
        
        

      

      
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    3.8. Sufficiency of and Title to
the Purchased Assets.

     

    (a) The
Purchased Assets constitute all of the material property and assets owned, held
or primarily used in the conduct of the Business (other than the Excluded
Assets).

     

    (b) Seller
has good title to all of the Purchased Assets.  Upon the Sale Order
having been entered by the Bankruptcy Court and in accordance with the terms of
the Sale Order, (i) subject to Section 2.5, Seller
will have complete and unrestricted power and the unqualified right to sell,
convey, assign, transfer and deliver the Purchased Assets to Purchaser, and (ii)
the Assignment and Assumption Agreement to be executed by Seller and delivered
to Purchaser at the Closing shall be valid and binding obligations of Seller,
enforceable in accordance with its terms and shall effectively vest in Purchaser
good and marketable title to the Purchased Assets, free and clear of all Liens
and Claims other than Assumed Liabilities and Permitted Liens.

     

    3.9. Intellectual Property
Rights.  Except as set forth on Schedule
3.9:

     

    (a) Schedule 2.1(g)
contains a complete and accurate list of all of the Intellectual Property Rights
owned (in whole or in part) or licensed by Seller which are being acquired by
Purchaser.  To the Seller’s Knowledge, all of the Acquired
Intellectual Property Rights listed on Schedule 2.1(g) are
in good standing and, to the extent applicable, are duly authorized, validly
issued and enforceable and have not been cancelled.

     

    (b) Seller is
the owner or exclusive licensee of all right, title and interest in and to each
of the Acquired Intellectual Property Rights, free and clear of all Liens (other
than Permitted Liens), except as such rights may be limited as set forth on
Schedule
3.9(b).  To the Seller’s Knowledge, Seller's conduct of the
Business does not infringe any of the intellectual property assets or other
proprietary right of any Person.  Except as set forth on Schedule 3.9(b),
(i) there are no licenses now outstanding or other rights granted to any
Person with respect to any of the Acquired Intellectual Property Rights;
(ii) Seller is not a party to any contract or agreement with respect to any
of the Acquired Intellectual Property Rights; and (iii)  Seller has not
received any written notice or other written communication asserting that Seller
has infringed, misappropriated or otherwise made any unlawful or unauthorized
use of any of its Acquired Intellectual Property Rights, and, to Seller's
Knowledge, there is no basis for any such claim.  To Seller's
Knowledge, no third party is infringing any of Seller's rights in any of its
Acquired Intellectual Property Rights.  

     

    (c) Upon
consummation of the transactions contemplated by this Agreement, Purchaser shall
receive Seller’s complete right, title and interest in and to all tangible and
intangible property rights existing in the Acquired Intellectual Property
Rights.  

     

    (d) Seller is
not in default with respect to any order, writ, judgment, award, injunction or
decree of any governmental entity or regulatory authority or 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        
     arbitrator applicable to the Acquired
Intellectual Property Right or Seller's activities in connection
therewith.

    

     

    (e) Seller
has not agreed to indemnify any Person against any charge of infringement or
other violation with respect to any of the Acquired Intellectual Property
Rights.

     

    (f) Seller
has the right, which is non-terminable and not subject to expiration or
revocation, to develop, license, control, regulate the use of or otherwise
exploit the Acquired Intellectual Property Rights without any valid legal or
equitable claim by, or payment or other obligation owing to, or required consent
from, any Person.

     

    3.10. Environmental
Compliance.  Except as set forth on Schedule
3.10:

     

    (a) Seller
has obtained and is in material compliance with all permits, approvals, licenses
and authorizations required under any Environmental Laws to operate the
Business.  Seller has not received any written notice or been cited
for any violation or potential violation of any such permit, approval, license
or authorization by any governmental entity that would result in material
liability.

     

    (b) Seller is
in material compliance, and has at all times complied in all material respects,
with all Environmental Laws, and Seller has not received any written notice or
been cited for any violation or potential violation of any such Environmental
Laws.  To Seller’s Knowledge, no capital expenditures by Seller or
Purchaser (following the Closing Date) shall be required to establish or
maintain compliance with any applicable Environmental Laws.  To
Seller’s Knowledge, there is no pending investigation, civil, criminal or
administrative action, written notice or demand letter, notice of violation or
other proceeding by any governmental entity with respect to ground or surface
water, soil or air contamination, the storage, treatment, release,
transportation or disposal of Hazardous Materials.  Seller has not
received any written notice or other written communication concerning any past,
present or future events, actions or conditions which may give rise to any
liability of Seller or Purchaser (following the Closing Date) relating to the
presence of Hazardous Materials on any real property owned or leased by
Seller.  Seller has no agreement with any governmental entity relating
to any such environmental matter or any environmental or Hazardous Materials
cleanup.

     

    (c) As used
in this Agreement, "Environmental Laws"
shall mean all federal, state, local and foreign laws and regulations relating
to pollution or protection of human health or the environment (including ambient
air, surface, water, ground water, land surface or subsurface strata), including
laws and regulations relating to emissions, discharges, releases or threatened
releases of Hazardous Materials or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.

     

    (d) As used
in this Agreement, "Hazardous Materials"
means any pollutants, contaminants, by-products, wastes, dangerous, toxic or
hazardous substances, constituents, compounds or chemicals (including petroleum
or any by-products or 

     

    
      
        
        

      

      
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          fractions
thereof, any form of natural gas, lead, asbestos and asbestos-containing
materials, polychlorinated biphenyls ("PCBs"), radon and
other pesticides, explosives, flammables, corrosives and urea formaldehyde foam)
that

          are regulated
by, or may form the basis of liability under, any Environmental Law and includes
the meanings of all such terms in or under any Environmental
Law.

    

     

    3.11. No Other Agreements to Sell
Assets.  Seller has no obligation, absolute or contingent, to
any Person (other than Purchaser) to sell any of the Purchased Assets, or to
effect any merger, consolidation or other reorganization of Seller, or to enter
into any agreement with respect thereto.

     

    3.12. Certain
Fees.  Except for the fees and expenses of Merriman, Curhan,
Ford & Co., Seller has not incurred
any liability for any investment banking fees, financial advisory fees,
brokerage fees, finders’ fees, or other similar fees in connection with this
Agreement or the Transactions.  Purchaser shall have no responsibility
to satisfy any liability of the Seller for any of the fees described in this
Section
3.12.

     

    3.13. “AS IS”
TRANSACTION.  PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT,
NOTWITHSTANDING THE REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN THIS
SECTION 3, THE CONSENT OF A PARTY TO THE CLOSING SHALL CONSTITUTE A WAIVER BY
SUCH PARTY OF ANY CONDITIONS TO CLOSING NOT SATISFIED AS OF THE CLOSING DATE,
AND FOLLOWING CLOSING SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE PURCHASED ASSETS,
INCLUDING INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE
PURCHASED ASSETS, THE PHYSICAL CONDITION OF ANY PROPERTY COMPRISING A PART OF
THE PURCHASED ASSETS OR WHICH IS THE SUBJECT OF ANY LEASE OR CONTRACT TO BE
ASSIGNED TO PURCHASER AT THE CLOSING, THE ENVIRONMENTAL CONDITION OR ANY OTHER
MATTER RELATING TO THE PHYSICAL CONDITION OF ANY REAL PROPERTY OR IMPROVEMENTS,
THE ZONING OF ANY SUCH REAL PROPERTY OR IMPROVEMENTS, THE VALUE OF THE PURCHASED
ASSETS (OR ANY PORTION THEREOF), THE TRANSFERABILITY OF THE PURCHASED ASSETS,
THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY OF ANY ASSUMED LIABILITIES, THE
TITLE OF THE PURCHASED ASSETS (OR ANY PORTION THEREOF), THE MERCHANTABILITY OR
FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF THE PURCHASED ASSETS
FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE
PURCHASED ASSETS OR ANY PORTION THEREOF.  WITHOUT IN ANY WAY LIMITING
THE FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE
PURCHASED ASSETS.  PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER HAS
CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL CONDITION
OF THE PURCHASED ASSETS AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE
PURCHASED ASSETS AS PURCHASER DEEMED NECESSARY OR APPROPRIATE AND THAT IN
PROCEEDING WITH ITS ACQUISITION OF THE 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        
PURCHASED
ASSETS, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN
SECTION 3, PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS
AND INVESTIGATIONS.  ACCORDINGLY, UPON THE CLOSING DATE, PURCHASER
WILL ACCEPT THE PURCHASED ASSETS AT THE CLOSING “AS IS,” “WHERE IS,” AND “WITH
ALL FAULTS.”  

    

     

    4. Representations
and Warranties of Purchaser.  Purchaser represents and warrants
to Seller as follows:

     

    4.1. Organization.  Purchaser
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all company powers and
all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted.

     

    4.2. Authorization.  The
execution, delivery and performance by Purchaser of this Agreement and the
consummation of the Transactions are within the company powers of Purchaser and
have been duly authorized by all necessary action on the part of
Purchaser.  This Agreement constitutes a valid and binding agreement
of Purchaser that is enforceable in accordance with its terms.

     

    4.3. Governmental
Authorization.  The execution, delivery and performance by
Purchaser of this Agreement and the consummation of the Transactions by
Purchaser require no action by or in respect of, or filing with, any
governmental body, agency or official other than (i) consents, approvals or
authorizations of, or declarations or filings with, the Bankruptcy Court, and
(ii) any such action or filing as to which the failure to make or obtain would
not have a material adverse effect on the Purchaser or its ability to close the
Transactions.

     

    4.4.            Noncontravention.  Neither
the execution and delivery of this Agreement nor the consummation of the
Transactions will (a) conflict with or result in any breach of any provision of
the articles or certificate of incorporation of Purchaser; (b) require any
filing with, or the obtaining of any permit, authorization, consent or approval
of, any governmental entity; (c) violate, conflict with or result in a default
(or any event which, with notice or lapse of time or both, would constitute a
default) under, or give rise to any right of termination, cancellation or
acceleration under, any of the terms, conditions or provisions of any note,
mortgage, other evidence of indebtedness, guarantee, license, agreement, lease
or other contract, instrument or obligation to which Purchaser is a party or by
which Purchaser or any of its assets may be bound; or (d) violate any law,
order, injunction or decree applicable to Purchaser, excluding from the
foregoing clauses (b), (c) and (d) such requirements, violations, conflicts,
defaults or rights (i) which would not materially and adversely affect the
ability of Purchaser to consummate the Transactions, or (ii) which become
applicable as a result of any acts or omissions by, or the status of or any
facts pertaining to, Seller.

     

    4.5.            Financing.  Purchaser
has sufficient cash, available lines of credit or other sources of immediately
available funds to enable it to make payment of the Purchase Price and any other
amounts to be paid by it hereunder.

     

    
      
        
        

      

      
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    4.6. Litigation.  There
is no action, suit, investigation or proceeding pending against or, to the
knowledge of Purchaser, threatened against or affecting Purchaser before any
court or arbitrator or any governmental body, agency or official which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
Transactions.

     

    4.7. Certain
Fees.  Purchaser has not employed any broker, finder,
investment banker, or other intermediary or incurred any liability for any
investment banking fees, financial advisory fees, brokerage fees, finders’ fees,
or other similar fees in connection with this Agreement or the
Transactions.

     

    4.8. Inspections; No Other
Representations.  Purchaser is an informed and sophisticated
purchaser, and has engaged expert advisors, experienced in the evaluation and
purchase of properties and assets such as the Purchased Assets and assumption of
liabilities such as the Assumed Liabilities as contemplated
hereunder.  Purchaser acknowledges that Seller has given Purchaser
complete and open access to the key employees, documents and facilities of the
Business.  Purchaser acknowledges and agrees that the Purchased Assets
are being sold on an “as is, where is” basis and Purchaser agrees to accept the
Purchased Assets and the Assumed Liabilities in the condition they are in on the
Closing Date based on its own inspection, examination and determination with
respect to all matters and without reliance upon any express or implied
representations or warranties of any nature made by or on behalf of or imputed
to Seller, except as expressly set forth in this Agreement.  Without
limiting the generality of the foregoing, Purchaser acknowledges that Seller
makes no representation or warranty with respect to (i) any projections,
estimates or budgets delivered to or made available to Purchaser of future
revenues, future results of operations (or any component thereof), future cash
flows or future financial condition (or any component thereof) of the Business
or the future prospects or operations of the Business or (ii) any other
information or documents made available to Purchaser or its counsel, accountants
or advisors with respect to the Business, except as expressly set forth in this
Agreement.

     

    5. Pre-Closing
Covenants of Seller.  Seller agrees that:

     

    5.1.            Conduct of the
Business.  Except as may be required by the Bankruptcy Court,
except for the consequences resulting from the commencement and continuation of
the Bankruptcy Case, and except as may be required or contemplated by this
Agreement, from the date hereof until the sooner of the Closing Date or the date
of termination of this Agreement, Seller shall use its commercially reasonable
efforts to conduct the Business in the ordinary course consistent with past
practice, to preserve and protect the Acquired Intellectual Property Rights and
other Purchased Assets, and to preserve intact the business organizations and
relationships with third parties (including suppliers) and to keep available the
services of the present employees of the Business at their current levels of
compensation.  Without limiting the generality of the foregoing, from
the date hereof until the sooner of the Closing Date or the date of termination
of this Agreement, except (i) as disclosed on Schedule 5.1, (ii) as may be
required by the Bankruptcy Court, (iii) for the consequences resulting from the
commencement and continuation of the Bankruptcy Case, or (iv) as may be required
or contemplated by this Agreement, Seller will not:

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (a) with
respect to the Business acquire a material amount of assets from any other
Person;

     

    (b) sell,
lease, license or otherwise dispose of any material Purchased Assets except (i)
pursuant to existing contracts or commitments disclosed to Purchaser prior to
the date of this Agreement, (ii) in the ordinary course consistent with past
practice, or (iii) subject to Section 7.4, in connection with a higher or better
bid for the Purchased Assets;

     

    (c) agree or
commit to do any of the foregoing; or

     

    (d) take any
action that would reasonably be expected to cause the failure of any condition
contained in Section 10.2 (other than actions taken by Seller in connection with
the discharge of its fiduciary duties during the Bankruptcy Case).

     

    5.2.            Access to
Information.  From the date hereof until the earlier of the
Closing Date or the date of termination of this Agreement, Seller shall
reasonably afford, and shall cause its officers, employees, attorneys and other
agents to reasonably afford, to Purchaser and its counsel, accountants and other
representatives, access (at reasonable times during normal business hours) to
officers and other employees of the Business for the purposes of evaluating the
Business and all properties, books, accounts, records and documents of, or
relating to, the Business, subject to the terms of the Confidentiality
Agreement.  All access to the officers, employees, properties, books,
accounts, records and/or documents of the Business shall be arranged on behalf
of Seller by Michael Margolis or John Chambers from Merriman, Curhan, Ford &
Co.

     

    5.3. Insurance; Risk of
Loss.  Any loss or damage to the Purchased Assets from fire,
theft or other casualty or cause, reasonable wear and tear excepted, prior to
the Closing, shall be the responsibility of Seller, and Seller shall bear the
risk of loss with respect thereto.  If, prior to the Closing, all or
any material part of the Purchased Assets are damaged by fire, theft or other
casualty or by any other cause whatsoever, reasonable wear and tear excepted,
Seller shall promptly give Purchaser written notice of such
damage.  In the event of any such damage, Purchaser shall have the
option to:  (a) require Seller to convey the Purchased Assets on
the Closing Date to Purchaser in a damaged condition and to assign to Purchaser
all of Seller's right, title and interest in and to any claims Seller may have
under any insurance policies covering the Purchased Assets (with a credit for
any deductible amount); or (b) terminate this Agreement.

     

    5.4.     Notices of Certain
Events.  Seller shall promptly notify Purchaser of, and provide
copies of, if applicable:

     

    (a) any
notice or other written communication from any Person alleging that the consent
of such Person is or may be required in connection with the consummation of the
Transactions;

     

    (b) any
material written communication from any governmental or regulatory agency or
authority in connection with or relating to the Transactions;

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (c) any
written communication sent to or received from the United States Food and Drug
Administration and relating to the Purchased Assets;

     

    (d) any
failure of Seller to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by Seller
hereunder; and

     

    (e) the
commencement of any actions, suits, investigations or proceedings relating to
Seller or the Business that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 3.6.

     

    6. Covenants
of Purchaser.  Purchaser agrees that:

     

    6.1.            Confidentiality.  Prior
to the Closing Date and after any termination of this Agreement, the
Confidentiality Agreement shall remain in full force and
effect.  After the Closing has occurred, the Confidentiality Agreement
shall be terminated to the extent relating to the Purchased Assets, Assumed
Liabilities and the employees of Seller, and shall, with respect to any of the
Excluded Assets and Excluded Liabilities, remain in full force and
effect.

     

    6.2.            Access.  On
and after the Closing Date, upon reasonable advance notice, Purchaser will
afford promptly to Seller and its agents, at Seller's expense, reasonable access
during normal business hours to the properties, books and records acquired from
Seller and Purchaser's employees, auditors and counsel to the extent necessary
for financial reporting and accounting matters, employee benefits matters, the
preparation and filing of any Tax returns, reports or forms, the preparation and
filing of reports and other documents with the Securities and Exchange
Commission, the defense of any Tax audit, claim or assessment, the
reconciliation of Claims in the Bankruptcy Case, to permit Seller to determine
any matter relating to its rights and obligations hereunder, or any other
reasonable business purpose related to the Excluded Assets or Excluded
Liabilities; provided, however, that any
such access by Seller shall not unreasonably interfere with the conduct of the
business of Purchaser; provided, further, at the
request of Purchaser, Seller shall execute (on its behalf and on behalf of its
agents and representatives) a reasonable confidentiality agreement in connection
with being provided such access.

     

    6.3. Insurance.  To
the extent that any insurance policies of Seller or any of its Affiliates cover
any loss, liability, claim, damage or expense relating to any Purchased Assets
and such insurance policies continue after the Closing to permit claims to be
made thereunder with respect to events occurring prior to the Closing, Purchaser
shall cooperate with Seller in submitting and pursuing such claims.

     

    6.4. Adequate
Assurance.  In connection with the entry of the Approval Order,
Purchaser shall take any and all reasonable actions needed to provide “adequate
assurance of future performance” with respect to the Assumed Contracts and any
Intellectual Property Rights pursuant to Section 365 of the Bankruptcy
Code.

     

    6.5. Required
Consents.  Purchaser shall use its commercially reasonable
efforts to obtain the Required Consents as soon as possible and, in any event,
prior to the End 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        
Date;
provided, however, that the foregoing shall not require the Purchaser to pay
money or agree to terms less economically advantageous to
Purchaser.

    

     

    7. Pre-Closing
Covenants of Purchaser and Seller.  Purchaser and Seller agree
that:

     

    7.1. Efforts; Further
Assurances.  Subject to the terms and conditions of this
Agreement, Purchaser and Seller will use their respective commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement; provided, however, Seller shall
be entitled to take such actions as are required in connection with the
discharge of its fiduciary duties during the Bankruptcy Case (including
soliciting higher or better offers for the Purchased Assets).  Seller
and Purchaser agree to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be necessary
or desirable in order to vest in Purchaser good title to the Purchased Assets or
to evidence the assumption by Purchaser of the Assumed Liabilities.

     

    7.2. Certain
Filings.  Seller and Purchaser shall cooperate with one another
(i) in determining whether any action by or in respect of, or filing with, any
governmental body, agency, official or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
Assumed Contracts or Acquired Intellectual Property Rights, in connection with
the consummation of the Transactions, and (ii) in taking such actions or making
any such filings, furnishing information required in connection therewith and
seeking timely to obtain any actions, consents, approvals or
waivers.

     

    7.3.     Public
Announcements.  Purchaser shall not make any public
announcements or statements concerning the Transactions without the prior
written consent of Seller.  Purchaser acknowledges and agrees that
Seller may provide copies of this Agreement to parties in interest in the
Bankruptcy Case and to those parties to whom Seller determines it is necessary
to provide copies in connection with soliciting higher or better bids for the
Purchased Assets or as otherwise necessary in connection with the Bankruptcy
Case.  Seller also shall be entitled to file a copy of this Agreement
with the Bankruptcy Court or as otherwise required by law.

     

    7.4.      Bid Procedures Motion
and Sale Motion.

     

    (a) On or
before the date of execution of this Agreement, Seller will file: a motion (the
"Procedures/Sale
Motion") seeking (i) at an initial, interim, hearing, the entry of an
order (the “Bid
Procedures Order”), in a form and substance reasonably acceptable to
Purchaser, (A)  establishing notice, bidding, and sale procedures
(collectively, the "Bid Procedures") to
be used in connection with the sale of Seller’s non-cash assets; (B) approving
the Bid Protections (as defined below); and (C) setting a hearing (the “Sale Hearing”) to
consider the sale of the Seller’s assets to the party who submitted the highest
or best offer for the assets pursuant to the Bid Procedures; and (ii) at the
Sale Hearing, the entry of an order (the “Sale Order”), in form
and substance acceptable to the Purchaser, authorizing and approving the sale of
the Purchased Assets to Purchaser or to the party who submitted the highest or
best offer for the Purchased 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        
Assets
(the "Sale
Order").  The Seller shall use its commercially reasonable
efforts to obtain the entry by the Bankruptcy Court of the Bid Procedures Order
no later than March 20, 2009, and entry by the Bankruptcy Court of the Sale
Order no later than March 27, 2009.

    

     

    (b) The
Procedures/Sale Motion shall seek approval of, and the Bid Procedures Order
shall approve, Bid Procedures that are in the form and substance reasonably
satisfactory to Purchaser.  In particular, the Bid Procedures shall
provide that, to be a qualified bid, an initial overbid for the Purchased Assets
shall be in cash in an amount equal to not less that the sum of (i) the Purchase
Price, (ii) the Bid Protections, and (iii) $100,000.00.

     

    (c) The Bid
Procedures Order shall provide that the Purchaser shall be entitled to receive
from the Seller (i) a fee in an amount equal to $200,000.00 (the "Break-Up Fee"), plus
(ii) the reimbursement of Purchaser's actual, reasonable, out-of-pocket expenses
incurred in connection with Purchaser’s due diligence investigation and the
negotiation and execution of this Agreement and the other documents contemplated
hereby in an amount that does not exceed $200,000.00 (the "Reimbursement
Amount; the Break-Up
Fee and the Reimbursement Amount are referred to collectively as the “Bid Protections”);
provided, however, the Bid
Protections shall be due and payable to Purchaser only in the event that (A)
Seller consummates a sale of the Purchased Assets to a party (other than
Purchaser) who submits a higher or better offer for the Purchased Assets
pursuant to the Bid Procedures, and (B) this Agreement shall not have been
terminated by Seller due to a material breach by Purchaser.  The Bid
Procedures Order shall provide that any payment of the Bid Protections shall be
deemed to be an administrative expense, with priority over any and all claims of
the kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code.  The Bid Procedures Order shall provide for such super-priority
administrative expense rights in form and substance satisfactory to
Purchaser.

     

    (d) Purchaser
and the Seller shall cooperate in good faith with filing and prosecuting, on an
expedited basis, the Procedures/Sale Motion and obtaining entry of the Bid
Procedures Order and the Sale Order, and the Seller shall deliver to Purchaser
prior to filing, and as early in advance as is practicable to permit adequate
and reasonable time for Purchaser and its counsel to review and comment upon,
copies of all proposed pleadings, motions, notices, statements, schedules,
applications, reports and other papers to be filed by the Seller in connection
with the Procedures/Sale Motion and the relief requested therein.

     

    (e) Seller
and Purchaser shall each use commercially reasonable efforts, and shall
cooperate, assist and consult with each other, to secure the entry of the Sale
Order; provided, however, Seller shall
be entitled to take such actions as may be required in connection with the
discharge of its fiduciary duties in the Bankruptcy Case (including soliciting
higher or better offers for the Purchased Assets).  The Seller shall
provide Purchaser with any information provided to any prospective buyers not
previously provided to Purchaser.  The Seller shall promptly notify
Purchaser of any written proposal received by the Seller with respect to a
competing transaction, and the 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        
      Seller shall communicate to
Purchaser the material terms of any written proposal which it may receive with
respect to any competing transaction.

    

     

    7.5.            Notices.  If
at any time (i) Purchaser becomes aware of any material breach by Seller of any
representation, warranty, covenant or agreement contained herein and such breach
is capable of being cured by Seller, or (ii) Seller becomes aware of any breach
by Purchaser of any representation, warranty, covenant or agreement contained
herein and such breach is capable of being cured by Purchaser, the Party
becoming aware of such breach shall promptly notify the other Party, in
accordance with Section 13.1, in writing of such breach.  Upon such
notice of breach, the breaching Party shall have ten (10) days to cure such
breach prior to the exercise of any remedies in connection
therewith.

     

    8. Tax
Matters.

     

    8.1.            Tax
Cooperation.  Purchaser and Seller agree to furnish or cause to
be furnished to each other, upon request, as promptly as practicable, such
information and assistance relating to the Business and the Purchased Assets
(including access to books and records) as is reasonably necessary for the
preparation and filing of all Tax returns, the making of any election relating
to Taxes, the preparation for any audit by any Taxing Authority, and the
prosecution or defense of any claim, suit or proceeding relating to any
Tax.  Seller and Purchaser shall cooperate with each other in the
conduct of any audit or other proceeding relating to Taxes involving the
Purchased Assets or the Business.

     

    8.2. Transfer
Taxes.   In the event that any sales, use, transfer,
stamp, recording or other similar taxes, fees or charges (the “Transfer Taxes”) are
assessed at Closing or at any time thereafter on the transfer of any Purchased
Assets, then in each instance such Transfer Taxes incurred as a result of the
Transactions shall be paid by Purchaser.  Purchaser and Seller shall
cooperate in providing each other with any appropriate resale exemption
certifications and other similar documentation.

     

    8.3. Property
Taxes.  All Property Taxes for a Tax period which includes (but
does not end on) the Closing Date (collectively, the “Apportioned
Obligations”) shall be apportioned between Seller, on the one hand, and
Purchaser, on the other hand, based on the number of days of such Tax period
included in the Pre-Closing Tax Period and the number of days of such Tax period
after the Closing Date (with respect to any such Tax period, the “Post-Closing Tax
Period”).  Seller shall be liable for the proportionate amount
of such Property Taxes that is attributable to the Pre-Closing Tax Period, and
Purchaser shall be liable for the proportionate amount of such Property Taxes
that is attributable to the Post-Closing Tax Period.

     

    8.4. Apportionment.  Apportioned
Obligations or Transfer Taxes shall be timely paid, and all applicable filings,
reports and returns shall be filed, as provided by applicable
law.  The paying Party shall be entitled to reimbursement from the
non-paying Party in accordance with Section 8.2 or 8.3, as the case may
be.  Upon payment of any such Apportioned Obligation or Transfer Tax,
the paying Party shall present a statement to the non-paying Party setting forth
the amount of reimbursement to which the paying Party is entitled under Section
8.2 or 8.3, as the case may be, together with such supporting evidence as is
reasonably necessary to calculate the amount to be reimbursed.  The
non-paying Party shall 

    
      
        
        

      

      
        21

        
          

        

      

      
        
        
make such
reimbursement promptly but in no event later than ten (10) days after the
presentation of such statement.  Any payment not made within such time
shall bear interest at the rate per annum equal to the rate of interest
announced by JPMorgan Chase, N.A. from time to time as its base rate in New York
City. 

    

     

    9. Employee
Matters.

     

    9.1. Employees and Offers of
Employment.

     

    (a) As of the
Closing Date, Purchaser shall have no obligation to offer employment to any or
all of the employees of the Seller.  The Purchaser intends to retain
certain of the employees of the Seller and the Purchaser shall have the right,
in its sole discretion, to hire employees of the Seller who are employed in
connection with the Business on such terms and conditions as Purchaser shall
determine in its discretion (such employees, the "Transferred
Employees"), with such employment to commence on or after the Closing
Date.

     

    (b) Seller
has advised Purchaser that based on its decision to discontinue operations,
Seller has informed its employees that Seller is ceasing substantially all
operations except for those necessary to operate or sell the Excluded
Assets.  Seller has further advised Purchaser that it intends to
terminate those employees who it considers to not be necessary to the foregoing
operations.  In such event, Seller covenants to Purchaser that it will
pay such terminated employees in full for all earned wages and other benefits
accrued through the date of termination, and Seller covenants to continue to pay
those employees who are not terminated in full for all earned wages and other
benefits unless and to the extent directed otherwise by the Bankruptcy
Court.

     

    9.2. Employee
Records.  Purchaser shall maintain employee records of the
Transferred Employees for a period of not less than four (4) years and during
that period will afford Seller reasonable access to such records during
Purchaser's normal business hours.  Purchaser shall maintain the
confidentiality of such records and limit access thereto in a manner consistent
with Purchaser's treatment of its employee records. 

     

    9.3. Employee
Plans.  The Purchaser shall not be responsible or liable for
any payments required under the terms of any employee benefit plan or health and
welfare plan maintained by Seller.

     

    9.4.            Workers’
Compensation.  Seller shall be liable for all workers’
compensation claims arising out of injuries with an identifiable date of
occurrence sustained by Seller’s employees prior to the Closing
Date.  Purchaser shall be liable for all workers’ compensation claims
arising out of injuries with an identifiable date of occurrence, sustained by
Transferred Employees, if any, on and after the dates Purchaser hires them
(hereinafter, “Transferred Employees’
Employment Date”), including injuries sustained by a Transferred Employee
on or after the Transferred Employees’ Employment Date that are aggravations,
exacerbations or re-injuries of medical conditions or diagnoses resulting from
injuries that were sustained before the Transferred Employees’ Employment
Date.  Notwithstanding any other provision of this Agreement, all
workers’ compensation claims must be asserted in accordance 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        
with the
terms and conditions of applicable workers’ compensation policies and this
Section 9.4 shall not enlarge or modify any employee’s right to assert such a
claim.

    

     

    10. Closing
Conditions.

     

    10.1. Conditions to Obligations of
Purchaser and Seller.  The obligations of Purchaser and Seller
to consummate the Closing are subject to the satisfaction of the following
conditions:

     

    (a) The
Bankruptcy Court shall have entered the Sale Order in the Bankruptcy Case,
authorizing the Transactions and approving this Agreement and the ancillary
agreements contemplated hereby under Sections 105(a), 363 and 365 of the
Bankruptcy Code, in form and substance reasonably acceptable to Seller and
Purchaser (including a finding that Purchaser is a “good faith” purchaser within
the meaning of Section 363(m) of the Bankruptcy Code and waiving any stay that
would otherwise be applicable pursuant to Bankruptcy Rules 6004(g) or 6006(d)
and finding that neither the Purchaser nor the Seller are entering into the
Transactions fraudulently and the Purchaser is not liable for any debts of the
Seller as a successor under federal or State law or under any other legal
theory), and as of the Closing Date the Sale Order shall not be stayed, shall be
in full force and effect, and shall not have been vacated or
reversed.

     

    (b) No
injunction, stay or similar order or decree, issued by any court, tribunal or
governmental entity, shall be in effect that restrains, enjoins, stays or
prohibits the consummation of the Transactions.

     

    10.2. Conditions to Obligations of
Purchaser.  The obligation of Purchaser to consummate the
Closing is subject to the satisfaction (or waiver by Purchaser) of the following
further conditions:

     

    (a) Seller
shall have performed in all material respects all of its obligations hereunder
required to be performed by Seller on or prior to the Closing Date; 

     

    (b) the
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respect at and as of the Closing Date, as if
made at and as of such date (or to the extent such representations and
warranties speak as of an earlier date, they shall be true and correct in all
material respects as of such earlier date); and

     

    (c) Seller
shall have taken all reasonable steps, as of the Closing Date, to prepare the
Business for any scheduled meetings with the United States Food and Drug
Administration.

     

    10.3. Conditions to Obligations of
Seller.  The obligation of Seller to consummate the Closing is
subject to the satisfaction (or waiver by Seller) of the following further
conditions:

     

    (a) Purchaser
shall have performed in all material respects all of its obligations hereunder
required to be performed by it on or prior to the Closing Date, and

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b) the
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date, as if
made at and as of such date (or to the extent such representations and
warranties speak as of an earlier date, they shall be true and correct in all
material respects as of such earlier date).

     

    11. Survival;
Indemnification.

     

    11.1. Survival.  The
(a) representations and warranties of Seller, and (b) covenants and
agreements of Seller that by their terms are to be performed before Closing,
contained in this Agreement or in any certificate or other writing delivered in
connection herewith, shall be extinguished by and shall not survive the
Closing.  The covenants and agreements of Seller contained herein that
by their terms are to be performed after Closing shall survive the Closing for
such terms.

     

    11.2. Indemnification.  Each of Purchaser and Seller agrees to indemnify
the other with respect to any investment banking fees, financial advisory fees,
brokerage fees, finders’ fees, or other similar fees which are alleged to be due
and payable with respect to the Transactions and which are asserted as a result
of the actions of the indemnifying party.  There shall be no
post-Closing indemnification of Purchaser by Seller with respect to any matter
not set forth in this Section 11.2.

     

    12. Termination.

     

    12.1. Grounds for
Termination.  This Agreement may be terminated at any time
prior to the Closing:

     

    (a) by mutual
written agreement of Seller and Purchaser;

     

    (b) by
Purchaser if the Bid Procedures Order is not entered by March 23,
2009;

     

    (c) by
Purchaser or Seller if the Sale Order is not entered by March 31,
2009;

     

    (d) by
Purchaser, if Seller receives any written communication from the United States
Food and Drug Administration that casts substantial doubt on its approval of any
pending or potential submission, including a protocol for a clinical trial,
relating to the Business.

     

    (e) by Seller
or Purchaser, if the Closing shall not have been consummated on or before April
10, 2009 (the “End
Date”), unless the Party seeking termination is in breach of its
obligations hereunder;

     

    (f) by Seller
or Purchaser, if any condition set forth in Section 10.1 is not satisfied, and
such condition is incapable of being satisfied by the End Date;

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (g) by
Purchaser, if any condition set forth in Section 10.2 has not been satisfied,
and such condition is incapable of being satisfied by the End Date;

     

    (h) by
Seller, if any condition set forth in Section 10.3 has not been satisfied, and
such condition is incapable of being satisfied by the End Date; or

     

    (i) by
Seller, if Seller executes a definitive agreement with a third party (other than
Purchaser) for the acquisition of all or substantially all the Purchased Assets
that represents a “higher or better” offer for the Purchased
Assets.

     

    The Party
desiring to terminate this Agreement pursuant to this Section 12.1 (other than
pursuant to Section 12.1(a)) shall give notice of such termination to the other
Party in accordance with Section 13.1.

     

    12.2. Effect of
Termination.  If this Agreement is terminated as permitted by
Section 12.1, such termination shall be without liability of any Party (or any
stockholder, member, director, manager, officer, employee, agent, consultant or
representative of such Party) to the other Party to this Agreement except as
expressly provided in Section 2.7 and Section 7.4.  The provisions of
Sections 2.7, 6.1, 7.4, 11.2, 12.2, 12.3, 12.4, 13.1, 13.4, 13.5, 13.6, 13.9 and
13.10 shall survive any termination hereof pursuant to
Section 12.1.

     

    12.3. Expenses.  Except
as otherwise provided herein, all costs and expenses incurred in connection with
this Agreement shall be paid by the Party incurring such cost or
expense.

     

    12.4. Exclusive
Remedies.  Effective as of Closing, Purchaser waives
irrevocably any rights and Claims Purchaser may have against Seller, whether in
law or in equity, relating to (i) any breach of representation, warranty,
covenant or agreement contained herein and occurring on or prior to the Closing,
or (ii) the Purchased Assets, Assumed Liabilities or the Business; provided, however, the
covenants contained herein that relate to the post-Closing period shall continue
in accordance with their terms and are not waived.  Purchaser and
Seller acknowledge and agree that if this Agreement is terminated pursuant to
Section 12.1, the provisions of Section 12.2 set forth the sole and
exclusive remedies of the Parties.

     

    13. Miscellaneous.

     

    13.1. Notices.  All
notices, requests and other communications to any Party hereunder shall be in
writing (including facsimile transmission) and shall be given,

     

    if to
Purchaser, to:

     

    Crabtree
Acquisition Co, LLC

    28161 N.
Keith Dr.

    Lake
Forest, IL 60045-4528

    attn: Mr.
Jack Schuler, President

    Fax:
_____________________

    


    with a
copy to:

    


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    Harry
Gonso, Esq.

    ICE
MILLER, LLP

    One
American Square, Suite 3100

    Indianapolis,
IN 46282

    Fax:
(317) 236-2122

    


    if to
Seller, to:

    


    AtheroGenics,
Inc.

    8995
Westside Parkway

    Alpharetta,
Georgia  30004

    Attention:  Joseph
M. Gaynor, Jr.

    Fax:  678-336-2501

    


    with a
copy to:

    


    King
& Spalding LLP

    1180
Peachtree Street

    Atlanta,
Georgia  30309

    Attention:
Paul Ferdinands, Esq.

    Fax:
404-572-5129

    


    If to
Seller's Counsel, to:

    


    King
& Spalding LLP

    1180
Peachtree Street

    Atlanta,
Georgia  30309

    Attention:
Paul Ferdinands, Esq.

    Fax:
404-572-5129

    


    All such
notices, requests and other communications shall be deemed received on the date
of receipt by the recipient thereof if received prior to 5:00 p.m. in the place
of receipt and such day is a Business Day in the place of
receipt.  Otherwise, any such notice, request or communication shall
be deemed not to have been received until the next succeeding Business Day in
the place of receipt.

     

    13.2. Waivers.  No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

     

    13.3. Successors and
Assigns.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns (including, in the case of Seller, any Chapter 7 trustee or liquidating
agent or other representative appointed under a confirmed plan); provided, however, that no
Party may assign, delegate or 

     

    
      
        
        

      

      
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otherwise
transfer any of its rights or obligations under this Agreement without the
written consent of the other Party.  The foregoing notwithstanding,
the Purchaser may assign, delegate or otherwise transfer any or all of its
rights and obligations under this Agreement to a wholly-owned subsidiary without
the written consent of the Seller.

    

     

    13.4. Governing
Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Georgia and any applicable
provisions of the Bankruptcy Code, without regard to the principles of conflicts
of law that would provide for application of another law.

     

    13.5. Jurisdiction.  

     

    (a) Prior to
the closing of the Bankruptcy Case, except as otherwise expressly provided in
this Agreement, the Parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Transactions shall be brought exclusively
in the Bankruptcy Court, and each of the Parties hereby irrevocably consents to
the jurisdiction of the Bankruptcy Court (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in the Bankruptcy Court or that any such suit, action or proceeding which is
brought in the Bankruptcy Court has been brought in an inconvenient
forum.  Process in any such suit, action or proceeding may be served
on any Party anywhere in the world, whether within or without the jurisdiction
of the Bankruptcy Court.  Without limiting the foregoing, each Party
agrees that service of process on such Party as provided in Section 13.1 shall
be deemed effective service of process on such Party.

     

    (b) Upon the
closing of the Bankruptcy Case, except as otherwise expressly provided in this
Agreement, the Parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Transactions may be brought in any court
having subject matter jurisdiction over such suit, action or proceeding, and
that any cause of action arising out of this Agreement shall be deemed to have
arisen from a transaction of business in the State of Georgia, and each of the
Parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding
may be served on any Party anywhere in the world, whether within or without the
jurisdiction of any such court.  Without limiting the foregoing, each
Party agrees that service of process on such Party as provided in Section 13.1
shall be deemed effective service of process on such Party.

     

    13.6. Waiver of Jury
Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        
PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS.

    

     

    13.7. Third Party
Beneficiaries.  No provision of this Agreement is intended to
confer upon any Person other than the Parties hereto any rights or remedies
hereunder.

     

    13.8. Entire Agreement;
Amendments; Counterparts.  This Agreement (including the
Schedules and Exhibits hereto) and the Confidentiality Agreement set forth the
entire agreement among the Parties with respect to the subject matter hereof and
may be amended only by a writing executed by Purchaser and
Seller.  This Agreement may be executed in counterparts, each of which
when taken together shall constitute an original.  This Agreement
shall become effective when each Party hereto shall have received a counterpart
hereof signed by the other Party hereto.

     

    13.9. Captions,
Interpretation.  The captions contained in this Agreement are
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.  Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.”  In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of authorship of
any provisions of this Agreement.

     

    13.10. Disclosure
Schedules.  The Parties acknowledge and agree that (i) the
Schedules to this Agreement may include certain items and information solely for
informational purposes for the convenience of Purchaser, and (ii) the disclosure
by Seller of any matter in the Schedules shall not be deemed to constitute an
acknowledgement by Seller that the matter is required to be disclosed by the
terms of this Agreement or that the matter is material.  If any
Schedule discloses an item or information, the matter shall be deemed to have
been disclosed in all other Schedules, notwithstanding the omission of an
appropriate cross reference to such other Schedules.

     

    [Signatures
on Following Page]

     


    
      
         


      

      
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    IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

     

    


    CRABTREE ACQUISITION CO,
LLC

    


    


    


    By: 
/s/JACK W.
SCHULER                                                               

    


    Name: 
Jack W.
Schuler                                                              

    


    Title:                                                                

    


    


    


    ATHEROGENICS,
INC.

    


    


    By: 
/s/MARK P.
COLONNESE                                                              

    


    Name: 
Mark P.
Colonnese                                                               

    


    Title: 
EVP Commercial Operations and
CFO                                                                

    


    


    KING
& SPALDING LLP

    Solely
for the purposes of Section 2.7

    


    


    By: 
/s/PAUL
FERDINANDS                                                            

    


    Name: 
Paul
Ferdinands                                                              

    


    Title: 
Partner                                                               

    


    


    



    
      
         


      

      
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