##### 



Exhibit 10.3
 The confidential portions of this exhibit have been filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities and Exchange Act of 1934, as amended.
REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.
    ASSET PURCHASE AGREEMENT
 by and between
SYNTHON PHARMACEUTICALS, INC.
 and
JDS PHARMACEUTICALS, LLC
relating to
 Purchase Of PEXEVA® Product Line
 Dated October 17, 2005




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##### 



TABLE OF CONTENTS
 Page1.
    
    Definitions
    
    
    12.
    
    Purchase and Sale of Purchased Assets
    
    
    62.1.
    
    
    Purchase and Sale
    
    
    62.2.
    
    
    Inventory
    
    
    62.3.
    
    
    Retained Assets
    
    
    72.4.
    
    
    Delivery of Know-How
    
    
    72.5.
    
    
    Contracts and NDA
    
    
    72.6.
    
    
    Patent License
    
    
    72.7.
    
    
    Right to Use Equipment and Machinery
    
    
    73.
    
    Purchase Price
    
    
    83.1.
    
    
    Payments of Purchase Price
    
    
    83.2.
    
    
    Purchase Price Adjustment for Inventory
    
    
    83.3.
    
    
    Purchase Price Adjustment for Distribution Channel Inventory
    
    
    83.4.
    
    
    Additional Fee
    
    
    94.
    
    Representations and Warranties of Synthon
    
    
    114.1.
    
    
    Organization; Standing
    
    
    114.2.
    
    
    Authorization; Binding Effect
    
    
    114.3.
    
    
    No Conflict; Consents
    
    
    114.4.
    
    
    Title to Purchased Assets; Liens and Encumbrances
    
    
    114.5.
    
    
    Claims; Litigation
    
    
    114.6.
    
    
    Product Intellectual Property
    
    
    114.7.
    
    
    Contracts
    
    
    134.8.
    
    
    Legal and Regulatory Compliance; Specifications
    
    
    134.9.
    
    
    Financial and Other Information
    
    
    144.10.
    
    
    Inventory
    
    
    144.11.
    
    
    Environmental Representation
    
    
    144.12.
    
    
    Employment Matters
    
    
    154.13.
    
    
    Full Disclosure
    
    
    155.
    
    Representations and Warranties of JDS
    
    
    155.1.
    
    
    Organization; Standing
    
    
    155.2.
    
    
    Authorization; Binding Effect
    
    
    165.3.
    
    
    No Conflict; Consents
    
    
    165.4.
    
    
    No Violation; Litigation or Regulatory Action
    
    
    165.5.
    
    
    Availability of Financing
    
    
    165.6.
    
    
    Disclosure
    
    
    165.7.
    
    
    Hart-Scott-Rodino Compliance
    
    
    16
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Page6.
    
    Covenants of Synthon and JDS
    
    
    166.1.
    
    
    Access
    
    
    166.2.
    
    
    Notice by Synthon; Statements by Synthon Representatives
    
    
    176.3.
    
    
    Chargebacks, Rebates and Returns
    
    
    176.4.
    
    
    Manufacturing Agreements
    
    
    196.5.
    
    
    Stability Programs; Complaints
    
    
    196.6.
    
    
    Safety Data
    
    
    206.7.
    
    
    Transition Services
    
    
    206.8.
    
    
    Regulatory Matters
    
    
    206.9.
    
    
    Offers of Employment
    
    
    216.10.
    
    
    Conduct Pending Closing
    
    
    216.11.
    
    
    Financial Statements
    
    
    216.12.
    
    
    Insurance
    
    
    226.13.
    
    
    Synthon Covenant Regarding the Trademarks
    
    
    226.14.
    
    
    Retained Asset Dispositions
    
    
    226.15.
    
    
    Prohibition on Assignment
    
    
    227.
    
    Closing
    
    
    227.1.
    
    
    Time and Place
    
    
    227.2.
    
    
    Conditions Precedent to JDSs Obligations
    
    
    227.3.
    
    
    Conditions Precedent to Synthons Obligations
    
    
    237.4.
    
    
    Deliveries at Closing
    
    
    248.
    
    Confidentiality and Cooperation; Non-Competition
    
    
    258.1.
    
    
    Confidential Information
    
    
    258.2.
    
    
    Confidentiality Obligation
    
    
    258.3.
    
    
    Cooperation
    
    
    258.4.
    
    
    Non-Competition
    
    
    269.
    
    Further Assurances
    
    
    2610.
    
    Indemnification; Insurance
    
    
    2610.1.
    
    
    Indemnification Obligations of the Parties
    
    
    2610.2.
    
    
    Limitations on Indemnification Liability
    
    
    2710.3.
    
    
    Procedure for Indemnification
    
    
    2710.4.
    
    
    Representation
    
    
    2811.
    
    Survival of Indemnification Obligations and Covenants
    
    
    2812.
    
    Dispute Resolution
    
    
    2812.1.
    
    
    Negotiation
    
    
    2812.2.
    
    
    Arbitration
    
    
    2812.3.
    
    
    Interim Relief
    
    
    28
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Page13.
    
    Termination
    
    
    2813.1.
    
    
    Termination
    
    
    2813.2.
    
    
    Survival
    
    
    2914.
    
    Specific Performance
    
    
    2915.
    
    Assignment
    
    
    2916.
    
    Choice of Law
    
    
    2917.
    
    Notices
    
    
    2918.
    
    Miscellaneous
    
    
    3018.1.
    
    
    Entire Agreement
    
    
    3018.2.
    
    
    Amendment and Modification
    
    
    3018.3.
    
    
    Severability
    
    
    3018.4.
    
    
    Non-Disclosure
    
    
    3018.5.
    
    
    Brokerage Indemnity
    
    
    3018.6.
    
    
    Execution; Facsimile Signatures
    
    
    30
 Schedule 1A & 1B
    
    
    
    Licensed PatentsSchedule 1C
    
    
    
    PatentsSchedule 1D
    
    
    
    Manufacturing AgreementsSchedule 1E
    
    
    
    Inventory CostsSchedule 1F
    
    
    
    Equipment and MachinerySchedule 3.3(a)
    
    
    
    Intentionally DeletedSchedule 3.3(c)
    
    
    
    Intentionally DeletedSchedule 4
    
    
    
    ExceptionsSchedule 4.6(a)
    
    
    
    Product Intellectual PropertySchedule 4.7
    
    
    
    ContractsSchedule 4.10
    
    
    
    Inventory As of September 30, 2005Schedule 4.12
    
    
    
    Employment MattersSchedule 6.3(f)
    
    
    
    Synthon Returned Goods PolicySchedule 7.2(f)
    
    
    
    Synthon Consents and ApprovalsSchedule 7.3(e)
    
    
    
    JDS Consents and ApprovalsExhibit A
    
    
    
    Form of Transition Services AgreementExhibit B
    
    
    
    Form of Pledge and Security AgreementExhibit C
    
    
    
    Form of LicenseExhibit D
    
    
    
    Form of Supply AgreementExhibit E
    
    
    
    Form of Guaranty
 iii




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##### 



ASSET PURCHASE AGREEMENT
 ASSET PURCHASE AGREEMENT Agreement th SYNTHON PHARMACEUTICALS, INC. Synthon JDS
PHARMACEUTICALS, LLC nd st JDS
 R E C I T A L S:
 ®
 Section 1, Purchased Assets
 NOW, THEREFORE,
 Definitions .
 Additional Fee Section 3.4 (a)
 Additional Fee Aggregate Minimum Section 3.4
(d)
 Additional Fee Credit Section 3.4 (f)
 Additional Fee Expiration Date
 Additional Fee Period
 Affiliate
 1




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##### 



API
 Average Selling Price
 Average Wholesaler Inventory Section 3.3(a)
 Chargebacks
 Closing Section 7.1
 Closing Date Section 7.1
 Closing Wholesaler Inventory Section 3.3(b)
 Confidential Information Section 8.1
 Contracts Schedule 4.7
 Credits
 Damages Section 10.1
 Dollars $
 Encumbrance
 Environmental Law Section 4.11
 ERISA ERISA Plans Section 4.12
 FDA
 Federal Program Section 6.3(d)
 2




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##### 



Financial Data Section 4.9
 Indemnifying Party Section 10.1(c)
 Indemnitee Section 10.1(c)
 Inventory
 Inventory Cost Schedule 1E
 JDS Know-How
 Know-How JDS Know-How
 Law
 Licensed Patents
 Schedule 1A and
Schedule 1B
 Schedule 1A and Schedule 1B
 3




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##### 



Manufacturing Agreements Schedule
1D
 Marketing Authorization
 Marketing Information Section 4.9
 Marketing Materials and Data
 NDA
 Net Sales
 Patents
 Schedule 1C
 4




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##### 



Schedule 1C
 Product ® ®
 Product Intellectual Property
 Purchase Price Section 3.1
 Purchased Assets Section 2.6 Section 2.2 Schedule 1F Section
2.7
 Quarter
 Regulatory Authority
 Retained Assets
 5




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##### 



Security Agreement Section 3.1(b)
 Specifications Section 4.8
 Supply Agreement Exhibit D
 Territory
 Threshold Loss Amount Section 10.2(a)
 Trademarks Schedule 4.6(a)
 Transition Period
 Transition Services
 Transition Services Agreement Exhibit
A
 United States
 US GAAP
 Purchase and Sale of Purchased Assets .
 Purchase and Sale
 Inventory
 6




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##### 



Section 3.1 Section 3.2
 Retained Assets
 Delivery of Know-How
 Contracts and NDA
 Patent License Exhibit C
 Right to Use Equipment and Machinery Schedule 1E
 7




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##### 



Purchase Price .
 Payments of Purchase Price . Purchase Price
 Sections 3.2 and 3.3
 Exhibit B
   Purchase Price Adjustment for Inventory Section
3.1(a)
 Purchase Price Adjustment for Distribution Channel Inventory Section 3.2
 8




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##### 



Section 3.1(a)
   Section 3.1 Section 3.2
 Additional Fee
 Section 3.1
    9




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##### 



Section 3.4(b)
 Section 3.2 Section 3.4(b) Section 3.4(d)
  Adjustments upon Transfer
 10




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##### 



Representations and Warranties of Synthon . Schedule 4 (Exceptions)
 Organization; Standing
 Authorization; Binding Effect
 No Conflict; Consents
 Title to Purchased Assets; Liens and Encumbrances
 Claims; Litigation Schedule 4.12
 Product Intellectual Property
 Schedule 4.6(a)
 11




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##### 



Schedule 4.6(a)) Schedule 4.6(a)
  Schedule 4
   12




---



##### 



Contracts Schedule 4.7 Schedule 4.7
 Legal and Regulatory Compliance; Specifications. Specifications
  13




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##### 



Financial and Other Information. Financial Data Marketing Information
 Section 4.9
 Inventory Schedule 4.10
 Environmental Representation
 Environmental Law
 14




---



##### 



Employment Matters
 Schedule 4.12 Schedule 4.12 Section 6.9
  Full Disclosure
 Representations and Warranties of JDS .
 Organization; Standing
 15




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##### 



Authorization; Binding Effect
 No Conflict; Consents
 No Violation, Litigation or Regulatory Action
 Availability of Financing Section 3.1(a)
 Disclosure
 Hart-Scott-Rodino Compliance
 Covenants of Synthon and JDS .
 Access
 16




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##### 



Notice by Synthon; Statements by Synthon Representatives
 Chargebacks, Rebates and Returns
 Chargebacks and Credits
 Unidentified Claims
 17




---



##### 



Medicaid Information
 Medicaid Rebates for Products Section 6.3(c)
 Federal Government Pricing Programs Federal Programs
 18




---



##### 



Recalls Sections 10.1 or 10.2
 Product Returns Schedule 4.10 Schedule 4.10 Schedule 4.10
 Cooperation
 Contracts
 Stability Programs; Complaints
 19




---



##### 



Safety Data
 Transition Services
 Regulatory Matters
 Responsibility for the Product
 Transfer of NDA
    Communications with Regulatory Agencies
 20




---



##### 



Additional Information
 Offers of Employment Schedule 4.12
 Conduct Pending Closing
   Financial Statements
 Insurance
 21




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##### 



Synthon Covenant Regarding the Trademarks
 Retained Asset Dispositions
 Prohibition on Assignment Section 3.5
 Closing .
 Time and Place Closing Closing Date
 Conditions Precedent to JDSs Obligations
 Representations and Warranties True on the Closing Date; No Adverse Change
 Compliance with Agreement Section 7.4(a)
 Absence of Litigation
 Transition Services Agreement, Security Agreement & Guaranty
 22




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##### 



Manufacturing Agreements Exhibit D
 Consents and Approvals Schedule 7.2(f)
 Promotion Agreements
 Conditions Precedent to Synthons Obligations
 Representations and Warranties True on the Closing Date
 Compliance with Agreement Section 7.4(b)
 Absence of Litigation
 Transition Services Agreement and Security Agreement
 Consents and Approvals Schedule 7.3(e)
 23




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##### 



Deliveries at Closing
 Synthon Deliveries
          Deliveries by JDS
 Section 3.1(a) Sections 3.2 and 3.3
     24




---



##### 



Confidentiality and Cooperation; Non-Competition .
 Confidential Information Confidential
Information
 Confidentiality Obligation
 Cooperation
 Section 8.3(a)
 25




---



##### 



Noncompetition
 Further Assurances .
 Indemnification; Insurance .
 Indemnification Obligations of the Parties
 Damages
  26




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##### 



Indemnifying Party Indemnitee
 Limitations on Indemnification Liability
 Section 10.1 Threshold Loss Amount Section 10.2
 Section
6.3
 Procedure for Indemnification Section 10.1 Section 10.1 Section 10.3
 27




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##### 



Representation Section 10
 Survival of Indemnification Obligations and Covenants .
 Dispute Resolution .
 Negotiation
 Arbitration Section 12.1 Section 12.2
 Interim Relief
 Termination .
 Termination
 28




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##### 



Survival
   Specific Performance . Section 8.1 Section 8.2
 Assignment . Section 3.5
 Choice of Law .
 Notices .
 If to JDS:
    
    JDS Pharmaceuticals, LLC122 East 42nd Street, 41st FloorNew York, New York 10168Facsimile No.: (212) 682-1946With a copy to:
    
    Dornbush Schaeffer Strongin & Weinstein, LLP747 Third AvenueNew York, NY 10017Attn: Herschel S. Weinstein, Esq.Facsimile No.: (212) 753-7673
 29




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##### 



If to Synthon:
    
    Synthon Pharmaceuticals, Ltd.9000 Development DriveResearch Triangle Park, NC 27709Attn: President & CEOFacsimile No.: (919) 493-6104With a copy to:
    
    Hutchison+Mason3110 Edwards Mill Road, Suite 100Raleigh, North Carolina 27612Attn: Fred D. Hutchison, Esq.Facsimile No.: (919) 829-9696
 Miscellaneous .
 Entire Agreement
 Amendment and Modification
 Severability
 Non-Disclosure
 Brokerage Indemnity
 Execution; Facsimile Signatures
  30




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##### 



IN WITNESS WHEREOF,
 JDS PHARMACEUTICALS, LLCBy:
    /s/ Michael SatowName:
    Michael SatowTitle:
    Chief Operating Officer SYNTHON PHARMACEUTICALS, INC.By:
    /s/ Peter van StraelenName:
    Peter van StraelenTitle:
    President and Chief Operating Officer 31