Converted by EDGARwiz



CONFIDENTIAL INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







EXHIBIT 10.1







ASSET PURCHASE AGREEMENT

by and among

PAR
PHARMACEUTICAL, INC.




QOL MEDICAL, LLC

and, solely with respect to certain provisions,

THE MEMBERS OF QOL

dated as of March 31, 2009








NY663381v.16






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION




TABLE OF CONTENTS

Page

1.

Purchase
and Sale of Assets

1

1.1

Purchase
and Sale of Assets.

1

1.2

Grant
of License.

1

1.3

Grant
of Sublicense.

2

1.4

Retention
of Excluded Assets; Certain Documentation.

2

2.

Assumption
of Liabilities

2

2.1

Assumption
of Assumed Liabilities.

2

2.2

Excluded
Liabilities.

2

3.

Purchase
Price and Payment.

2

3.1

Purchase
Price.

2

3.2

Allocation
of Purchase Price.

3

3.3

Payment
of Sales, Use and Other Taxes.

3

4.

Closing

3

4.1

Time
and Place.

3

4.2

Deliveries
at Closing.

4

5.

Representations
and Warranties of Seller.

4

5.1

Organization,
Etc.

4

5.2

Authority
of Seller.

5

5.3

Consents
and Approvals.

5

5.4

Non-Contravention.

5

5.5

Litigation;
Compliance with Applicable Laws.

6

5.6

Financial
Information.

6

5.7

Contracts.

6





- i
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION




5.8

Title
to Acquired Assets.

7

5.9

Regulatory
Issues.

8

5.10

Product
Intellectual Property.

8

5.11

Tax
Matters.

9

5.12

No
Material Adverse Effect.

10

5.13

Brokers.

10

5.14

Disclaimer
of Other Representations and Warranties.

10

6.

Representations
and Warranties of Buyer.

10

6.1

Corporate
Organization.

10

6.2

Authority
of Buyer.

10

6.3

Consents
and Approvals.

11

6.4

Non-Contravention.

11

6.5

Brokers.

11

7.

Covenants
of the Parties

11

7.1

Conduct
of the Business.

11

7.2

Continued
Due Diligence.

12

7.3

Notices
of Certain Events; Continuing Disclosure.

12

7.4

Exclusive
Dealings.

13

7.5

Reasonable
Best Efforts.

13

7.6

Cooperation
and Transition.

13

7.7

Public
Announcements.

14

7.8

Bulk
Sales.

14

7.9

NDC
Numbers; Marketing Materials.

14

7.10

Regulatory
Matters.

15

7.11

Post-Closing
Orders and Payments.

16





- ii
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION




7.12

Rebates;
Government Price Reporting Obligations.

16

7.13

Insurance.

16

7.14

Sales
Tax Certificate.

17

7.15

Further
Assurances.

17

7.16

Product
Returns.

17

7.17

Cooperation
relating to Non-Indemnifiable Claims.

18

7.18

Release
of Liens of Company Creditors.

18

8.

Conditions
to the Obligations of Seller.

18

8.1

Agreements
and Conditions.

18

8.2

Representations
and Warranties.

18

8.3

No
Legal Proceedings.

18

8.4

Officer’s
Certificate.

19

8.5

Secretary’s
Certificate.

19

8.6

Purchase
Price.

19

8.7

Ancillary
Agreements.

19

8.8

Sales
Tax Certificate.

19

9.

Conditions
to the Obligations of Buyer.

19

9.1

Agreements
and Conditions.

19

9.2

Representations
and Warranties.

19

9.3

No
Legal Proceedings.

19

9.4

Officer’s
Certificate.

20

9.5

Secretary’s
Certificate.

20

9.6

Ancillary
Agreements.

20

9.7

Certificates
of Status.

20

9.8

Consents.

20





- iii
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION




9.9

Liens.

20

9.10

Restrictive
Contracts.

20

9.11

Standstill
Agreement.

20

9.12

Consummation
of MDRNA Transaction.

20

9.13

Authorization
Letters from DMF Holders.

20

9.14

Wholesaler
Inventories.

21

9.15

Returns
Report.

21

10.

Indemnification.

21

10.1

Termination
of Representations and Warranties.

21

10.2

Indemnification
Obligations of Seller.

21

10.3

Indemnification
Obligations of Buyer.

21

10.4

Procedures
for Indemnification; Defense.

22

10.5

Limitations.

23

11.

Termination
and Abandonment.

24

11.1

Methods
of Termination.

24

11.2

Procedure
upon and Effect of Termination.

24

12.

Non-Competition;
Confidentiality.

24

12.1

Non-Competition.

24

12.2

No-Competing
Interests.

25

12.3

Non-Disruption.

25

12.4

Confidentiality.

25

12.5

Remedies
for Breach.

25

13.

Miscellaneous

25

13.1

Notices.

25

13.2

Entire
Agreement.

27





- iv
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION




13.3

Waiver.

27

13.4

Amendment.

27

13.5

Third
Party Beneficiaries.

27

13.6

Assignment;
Binding Effect.

27

13.7

Headings.

28

13.8

Severability.

28

13.9

Governing
Law.

28

13.10

Consent
to Jurisdiction and Forum Selection.

28

13.11

Expenses.

28

13.12

Counterparts.

28

14.

Definitions.

28

14.1

Defined
Terms.

28

14.2

Construction
of Certain Terms and Phrases.

38

14.3

Disclosure
Schedules.

38








- v
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION




ANNEXES

Annex 1 –
Non-Competition Provisions

Annex
2 – Certain Provisions Applicable to QOL Members


EXHIBITS

Exhibit A – Form of
Seller Letter to FDA

Exhibit B – Form of
Buyer Letter to FDA

Exhibit C – Form of
Assignment and Assumption Agreement

Exhibit D – Form of
Escrow Agreement

Exhibit E – Form of
Patent Assignment 

Exhibit F – Form of
Trademark Assignment

SCHEDULES

		
	
Schedule 1.3
	
Sublicense

	
Schedule 5.3(a)
	
Seller Governmental Consents

	
Schedule 5.3(b)
	
Seller Third Party Consents

	
Schedule 5.4
	
Non-Contravention

	
Schedule 5.5(a)
	
Litigation

	
Schedule 5.6
	
Financial Information

	
Schedule 5.7(b)(i)
	
Restrictive Contracts

	
Schedule 5.7(b)(ii)
	
Assumed Contracts

	
Schedule 5.8
	
Liens

	
Schedule 5.9(b)
	
Regulatory Issues

	
Schedule 5.9(c)
	
Improvements to Manufacturing Process

	
Schedule
5.10(c)
	
Trademarks

	
Schedule
5.10(d)
	
Annuities,
Maintenance Fees and Renewals

	
Schedule 6.3
	
Buyer Governmental Consents

	
Schedule 7.6(c)(i)
	
Restrictive Contracts to Amend or Terminated Before
Closing

	
Schedule 7.6(c)(ii)
	
Restrictive Contracts to Amend or Terminated After
Closing

	
Schedule 9.9
	
Liens, Etc. to be Released at Closing

	
Schedule 14.1(a)
	
Inventory

	
Schedule 14.1(b)
	
Certain Product Intellectual
Property













- vi
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







ASSET PURCHASE AGREEMENT

This
Asset Purchase Agreement (this “Agreement”) is made and entered into as
of March 31, 2009, by and among Par Pharmaceutical, Inc., a Delaware corporation
(“Buyer”), QOL Medical, LLC, a Delaware limited liability company
(“Seller”), and the members of Seller who are signatories to this
Agreement (each, a “QOL Member”), it being understood that Trevor Blake
and Edwin Hernandez have entered into this Agreement only with respect to
Annex 1 and Annex 2 and the other QOL Members have entered into
this Agreement only with respect to Annex 2. Buyer, Seller and the QOL
Members are sometimes referred to in this Agreement individually as a
“Party” and collectively as the “Parties”.

RECITALS

WHEREAS,
Seller is the holder of certain Regulatory Approvals relating to NascobalTM
(cyanocobalamin, USP), both nasal spray and gel forms (as further defined
herein, the “Product”); and

WHEREAS,
Seller desires to sell the Regulatory Approvals and certain related assets and
rights related to the Product to Buyer, and Buyer desires to purchase the
 such assets and rights from Seller.

AGREEMENT

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:




1.

Purchase
and Sale of Assets

1.1

Purchase
and Sale of Assets.

  Subject
to the terms and conditions of this Agreement, at the Closing, Seller shall
sell, transfer, convey, assign and deliver, or cause to be sold, transferred,
conveyed, assigned and delivered, to Buyer, and Buyer shall purchase, acquire
and accept from Seller, all of Seller’s right, title and interest in and to the
Acquired Assets for the consideration set forth in Section 3.  At and
subsequent to the Closing, the Seller shall perform all obligations required of
Seller under this Agreement.

1.2

Grant
of License.

(a)

Effective
upon the Closing, Seller hereby grants to Buyer and its Affiliates a
royalty-free, fully paid-up, perpetual, exclusive, transferable (only to a
transferee of ownership of the Product), sub-licensable, world-wide and
irrevocable license to use in connection with the making, having made, selling,
having sold, using, and importing the 





- 1
-






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







Product
and any component thereof, any and all intellectual property rights currently
existing as of the Closing and owned by Seller to the extent not included in
Product Intellectual Property (including tooling and equipment specifications)
that are necessary for Buyer’s making, having made, selling, having sold, using
and importing of the Product and any component thereof as it is being done
currently or currently contemplated by or on behalf of Seller (the “Other
IP”).  The Parties hereby acknowledge and agree that (i) no license
rights, other than those explicitly granted by Seller under this Section 1.2(a),
are implicitly granted to Buyer with respect to the Other IP, and (ii) Seller
expressly reserves all of its other rights with respect to the Other IP.

(b)

Subject
to license granted in Section 1.2(a), all Other IP and the confidential
information therein are and will remain the exclusive property or rights of the
Seller, whether or not specifically recognized or perfected under the laws of
the jurisdiction in which the Product is being made, sold, used or imported.
 Buyer shall treat the confidential information embodied therein in the
same manner it treats it own confidential information.  

1.3

Grant
of Sublicense.

  Effective
upon the Closing, Seller hereby grants a sublicense to Buyer and its Affiliates
on terms and conditions set forth on Schedule 1.3.

1.4

Retention
of Excluded Assets; Certain Documentation.

  From
and after the Closing, Seller shall retain all of its right, title and interest
in and to the Excluded Assets and Seller may retain, for legal and regulatory
purposes only, an archival copy of all Assumed Contracts, Books and Records,
Marketing Materials and other documents or materials conveyed hereunder.

2.

Assumption
of Liabilities

2.1

Assumption
of Assumed Liabilities.

  Subject
to the terms and conditions of this Agreement, as of the Closing Date, Buyer
agrees to assume, satisfy, perform, pay and discharge the Assumed
Liabilities.

2.2

Excluded
Liabilities.

  Seller
shall retain and remain solely responsible for, and shall satisfy, perform, pay
and discharge when due, any and all Excluded Liabilities.

3.

Purchase
Price and Payment.

3.1

Purchase
Price.

(a)

Purchase
Price.  Buyer shall pay Fifty-Four Million Five Hundred Thousand
Dollars ($54,500,000.00), subject to adjustment as set forth herein (the
“Purchase Price”) and assume the Assumed Liabilities at Closing.





-
2 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(b)

Payments
of Purchase Price.  At the Closing, Buyer shall make the following
payments:

(i)

the
Final Payoff Amount to the Company Creditors in accordance with the Payoff
Letter;

(ii)

Two
Million Dollars ($2,000,000.00) (the “Escrow Amount”) deposited by Buyer
in an escrow account designated by the Escrow Agent (the “Escrow
Account”) to be held in and disbursed from the Escrow Account in accordance
with the terms of the Escrow Agreement, which amount shall be subject to
reduction for indemnity claims in accordance with Section 10.2 and the Escrow
Agreement; and

(iii)

Fifty-Two
Million, Five Hundred Thousand Dollars ($52,500,000.00) minus the Final Payoff
Amount, to Seller.

(c)

Escrow
Release Date.  On the date one day after the date that is twenty-four
(24) months following the Closing Date (such date, the “Escrow Release
Date”), the Escrow Agent shall disburse to the Seller the amounts remaining
in the Escrow Account, including any interest earned on the Escrow Amount,
subject to any claim notice pursuant to Section 10.4 delivered to the Seller
prior to 5:00 P.M. Eastern Standard Time on the Escrow Release Date (and any
subsequent resolution of any disputes as provided in Section 10).

(d)

Payment
of Funds.  All payments due to Seller pursuant to this Section 3.1
shall be paid by wire transfer of immediately available funds to accounts
designated in writing by Seller at least two (2) Business Days prior to the
Closing Date.

3.2

Allocation
of Purchase Price.

  Within
sixty (60) days after the Closing Date, Seller and Buyer shall agree in good
faith on an allocation of the Purchase Price and all other capitalized costs
among the Acquired Assets in accordance Section 1060 of the Code and the
Treasury Regulations thereunder (and any state, local or foreign law, as
applicable) (the “Tax Allocation”); provided, that Buyer and
Seller agree that the Inventory and the non-compete provisions contained herein
shall be valued at no more than $2,000,000 in the aggregate.  Each of the
Parties agrees to report (and to cause its Affiliates to report) the
transactions contemplated by this Agreement in a manner consistent with Section
1060 of the Code and the Treasury Regulations thereunder (and any state, local
or foreign law, as applicable) and with the terms of this Agreement, including
the Tax Allocation, and agrees not to take any position inconsistent therewith
in any Tax Return (including IRS Form 8594), in any Tax refund claim, in any
litigation or otherwise. 

3.3

Payment
of Sales, Use and Other Taxes.

  Seller
shall be solely responsible for all sales, use, transfer, value added, gross
receipts and other similar Taxes, if any, arising out of the sale by Seller of
the Acquired Assets to Buyer pursuant to this Agreement, except for any
recording fees due at the time of recording the assignments of any of the
Acquired Assets.  Seller, as required by applicable Law, shall timely file
or cause to be filed all necessary documents with respect to Taxes that are the
Seller’s 





-
3 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







obligation.
 Buyer shall be responsible for all recording fees due in connection with
recording the assignment of any of the Acquired Assets from Seller to Buyer.
 In addition, all personal property, ad valorem or other similar Taxes
(other than and excluding income Taxes) levied with respect to the Acquired
Assets for a taxable period which includes (but does not end on) the Closing
Date shall be apportioned between Buyer and Seller based on the number of days
included in such period through (and which includes) the Closing Date and the
number of days included in such period after the Closing Date, and Buyer and
Seller shall cooperate fully, as and to the extent reasonably requested by the
other Party, in connection with the filing of Tax Returns with respect to Taxes
addressed in this Section 3.3.

4.

Closing

4.1

Time
and Place.

  The closing of the sale and transfer of the Acquired
Assets, to be effective at 12:01 A.M. Eastern Standard Time on the Closing Date
(the “Closing”), will take place at the offices of Buyer’s special
counsel, K&L Gates LLP, located at 599 Lexington Avenue, New York, NY 10022,
or at another place designated by Buyer, on the second (2nd) Business
Day following the date on which all of the conditions to each Party’s
obligations under Sections 8 and 9 have been satisfied or (if permitted) waived,
or at such other time, date and/or place as mutually agreed to by the Parties
hereto (such date of the Closing being hereinafter referred to as the
“Closing Date”).  

4.2

Deliveries
at Closing.

(a)

Closing
Deliveries by Seller.  At the Closing, Seller shall deliver or cause to
be delivered: (i) immediately following the Closing to the FDA, a letter duly
executed by Seller notifying the FDA of transfer of Seller’s rights to the
Regulatory Approvals to Buyer, the form of which is attached hereto as
Exhibit A; (ii) to Buyer, (A) physical possession of the Inventory by
means of instruction to the third party in possession of the Inventory to ship
the Inventory to the location designated by Buyer; (B) an electronic copy of the
Seller NDA’s; (C) the Assumed Contracts; (D) the Assignment and Assumption
Agreement and other instruments of assignment, conveyance and transfer as are
necessary to effect and confirm the sale, transfer, conveyance, and assignment
of the Acquired Assets and the assumption of the Assumed Liabilities, and the
other Ancillary Agreements, each duly executed by Seller; and (E) correct and
complete reports as set forth in Sections 9.14 and 9.15.  On or before the
Closing Date, Seller shall commence shipment, to be received by Buyer no later
than seven (7) Business Days after the Closing Date, of the Regulatory
Approvals, Marketing Materials and the Books and Records to the location
selected by Buyer. 

(b)

Closing
Deliveries by Buyer.  At the Closing, Buyer shall deliver or cause to
be delivered to Seller, the Assignment and Assumption Agreement and other
instruments of assignment, conveyance and transfer as are necessary to effect
and confirm the sale, transfer, conveyance, and assignment of the Acquired
Assets and the assumption of the Assumed Liabilities, and the other Ancillary
Agreements to which the Buyer will become party, each duly executed by Buyer.
 Upon receipt of the Seller NDAs in hardcopy form from Seller, 





-
4 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







Buyer
shall deliver to the FDA a letter duly executed by Buyer notifying the FDA of
the assumption by Buyer of the Regulatory Approvals, the form of which is
attached hereto as Exhibit B.

5.

Representations
and Warranties of Seller.

  Seller
represents and warrants to Buyer as of the date of this Agreement and as of the
Closing Date, subject to such exceptions as are specifically disclosed in the
Disclosure Schedules supplied by Seller to Buyer and dated as of the date of
this Agreement, as follows:

5.1

Organization,
Etc.

  Seller
is a limited liability company duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite power and
authority to own its assets and carry on its business as currently conducted by
it.  Seller has full limited liability company power and authority to
conduct its business and is duly qualified and in good standing in each
jurisdiction where such qualification is required, except for any jurisdiction
where failure to be so qualified and/or in good standing would not reasonably be
expected to materially impair or delay Seller’s ability to perform its
obligations hereunder.

5.2

Authority
of Seller.

  Seller
has all necessary entity power and authority to enter into this Agreement and
the Ancillary Agreements to which it shall become a party and to carry out the
transactions contemplated hereby and thereby.  The execution, delivery and
performance by Seller of its obligations under this Agreement and the Ancillary
Agreements to which it shall become a party have been duly and validly
authorized and no additional limited liability company or member authorization
or consent is required in connection with the execution, delivery and
performance by Seller of this Agreement or the Ancillary Agreements to which it
shall become a party.  This Agreement and the Ancillary Agreements to which
it shall become a party have been (or will be) duly and validly executed and
delivered by Seller and, when executed and delivered by the QOL Members and the
Buyer, will constitute a legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors rights generally, and (b)
as limited by general principles of equity.

5.3

Consents
and Approvals.

(a)

Except
as set forth on Schedule 5.3(a), no consents, waivers, approvals, Orders
or authorizations of, or registrations, declarations or filings with, any
Governmental or Regulatory Authority (“Seller Governmental Consents”) are
required by or with respect to Seller in connection with the execution and
delivery by Seller of this Agreement or the Ancillary Agreements to which it
shall become a party or the performance of its obligations hereunder or
thereunder.





-
5 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(b)

Except
as set forth on Schedule 5.3(b), no consents, waivers, approvals, or
authorizations of, or notices to, any third party (other than a Governmental or
Regulatory Authority) (“Seller Third Party Consents”, and together with
Seller Governmental Consents, the “Seller Consents”) are required by or
with respect to Seller in connection with the execution and delivery by Seller
of this Agreement or the Ancillary Agreements to which it shall become a party
or the performance of its obligations hereunder or thereunder. 

5.4

Non-Contravention.

  Except
as set forth on Schedule 5.4, the execution and delivery by Seller of
this Agreement and the Ancillary Agreements to which it shall become a party
does not, and the performance by Seller of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby will not:

(a)

conflict
with or violate any provisions of the organizational documents of Seller;

(b)

assuming
the receipt of the Seller Consents, conflict with or result in a violation or
breach of any term or provision of any Law applicable to Seller or the Acquired
Assets; or

(c)

assuming
the receipt of the Seller Consents, conflict with or result in a breach or
default (or an event that, with notice or lapse of time or both, would
constitute a breach or default) under, or termination of, any Assumed
Contract.

5.5

Litigation;
Compliance with Applicable Laws.

(a)

Except
as set forth on Schedule 5.5(a), there is no claim, action, suit,
investigation or proceeding pending against (or to the Knowledge of Seller any
basis therefor), or to the Knowledge of Seller, threatened against or affecting,
any Acquired Asset, or the transactions contemplated hereby before any court or
arbitrator or any governmental body, agency, official or authority.

(b)

Except
as set forth on Schedule 5.5(b), (i) Seller has not received any notice
from any other Person challenging its ownership of or right to use any Product
Intellectual Property and (ii) there has not been any, and there are no, product
liability suits, claims, actions, proceedings or, to the Knowledge of Seller,
investigations pending or, to the Knowledge of Seller, threatened against
Seller, relating to the Product.

(c)

Except
as set forth on Schedule 5.5(c), Seller is and has been in compliance in
all material respects with all Laws applicable to the Acquired Assets (excluding
the Legacy IP).  The foregoing shall not apply to matters concerning
infringement or misappropriation of intellectual property rights, which are the
subject of Section 5.10.

5.6

Financial
Information.





-
6 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







  Schedule
5.6 sets forth for the unaudited 2008 calendar year and the unaudited two
(2)-month period ending on February 28, 2009, Seller’s gross sales of the
Product and related Rebates (by category) and returns received and reserved for,
all of which, except as noted on Schedule 5.6, were prepared in
accordance with United States generally accepted accounting principles
(“GAAP”), applied on a basis consistent with Seller’s past practices,
subject to routine year-end adjustments (such as routine cutoff adjustments) and
provided, that Rebates are estimated by period (as the actual amounts are
not known until some time after the ends of the respective periods) in
accordance with GAAP applied on a basis consistent with Seller’s past practices.
 Also included on Schedule 5.6 are monthly reports generated by
Seller’s service provider, Integrated Commercialization Solutions, Inc.
(“ICS”), which reports reflect correct and complete Product returns data
(detailing number of units and dollar amounts) for October 2008 through February
2009; provided, that inaccuracies in such reports that in the aggregate
amount to less than $10,000 shall not constitute a breach of this representation
and warranty.

5.7

Contracts.

(a)

For
purposes of this Agreement, “Restrictive Contract” means the following,
other than Assumed Contracts:

(i)

any
material customer, client, licensing or supply Contract related to any of the
Acquired Assets; 

(ii)

any
Contract containing any covenant or provision that materially limits, curtails
or restricts the ability of Seller to make use of or transfer any Acquired
Assets;

(iii)

any
non-competition agreement or any other agreement or obligation that limits or
purports to limit in any respect the manner in which, or the geographic areas in
which, the Product may be developed, manufactured or sold;

(iv)

any
partnership, joint venture or strategic alliance (or any contract substantially
similar to any of the foregoing)  to which any Acquired Asset is
subject;

(v)

any
Contract pursuant to which any third party has any material right with respect
to any Acquired Asset or the Product; or 

(vi)

any
commitment or agreement to enter into any of the foregoing.

(b)

Schedule
5.7(b)(i) sets forth a correct and complete list of the Restrictive
Contracts and Schedule 5.7(b)(ii) sets forth a correct and complete list
of Assumed Contracts.  Seller has heretofore delivered or made available
(via Seller’s online data room) to Buyer a correct and complete copy of each
contract required to be listed on Schedule 5.7(b)(i) and Schedule
5.7(b)(ii), together with any and all amendments and supplements thereto.






-
7 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(c)

Each
of the Assumed Contracts is valid, binding and in full force and effect and is
enforceable in all respects in accordance with its terms by Seller, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by general principles of equity.  Except as
set forth on Schedule 5.3(a) or Schedule 5.3(b), no approval,
consent or waiver of any Person is needed in order that any Assumed Contract
continue in full force and effect following the consummation of the transactions
contemplated by this Agreement.  Seller is not in material default under
any Assumed Contract, nor does any condition exist that, with notice or lapse of
time or both, would constitute a material default thereunder by Seller.  To
the Knowledge of Seller, no other party to any Assumed Contract is in material
default thereunder, nor does any condition exist that with notice or lapse of
time, or both, would constitute a material default by any such other party
thereunder.  Seller has not received any notice of breach or default with
respect to any Assumed Contract, which breach has not been cured, or granted to
any third party any rights, adverse or otherwise, that would constitute a
material breach of any Assumed Contract, and Seller has not received any notice
of termination or cancellation under any Assumed Contract.

5.8

Title
to Acquired Assets.

  Subject
to the disclosures provided in Schedule 5.8, Seller has good and
marketable title to, or a valid, enforceable and transferable interest in, the
Acquired Assets (except that with respect to Product Intellectual Property other
than the Patents and Trademarks, Seller has a valid and enforceable right to use
such Product Intellectual Property), free and clear of all mortgages, security
interests, charges, encumbrances, liens, assessments, title defects, pledges,
licenses and encroachments (“Liens”); provided, that the
representations and warranties in this Section 5.8 shall not apply to Legacy IP
that Seller has not used in connection with the Product.  The foregoing
representations shall not apply to matters concerning infringement or
misappropriation of intellectual property rights, which are the subject of
Section 5.10.

5.9

Regulatory
Issues.

(a)

Since
October 17, 2005, Seller has filed or caused to be filed all notices and reports
required by a Governmental or Regulatory Authority in connection with the
Regulatory Approvals (other than those not yet due), including any such annual
reports filed in accordance with FDA regulations; provided, that the
foregoing representation and warranty shall not be interpreted as a
representation and warranty that Seller’s raw material suppliers have filed all
notices and reports required to be made by such suppliers.  Since October
17, 2005, Seller has not received:  (i) any FDA Form 483’s relating to the
Product; (ii) any FDA Notices of Adverse Findings relating to the Product; or
(iii) any warning letters from the FDA concerning the Product.  Since
October 17, 2005, the Product has not been the subject of a product recall,
market withdrawal or replacement required by any Governmental or Regulatory
Authority or initiated by the Seller (other than routine replacements or refunds
with respect to expired product and the voluntary discontinuation of sales of
Nascobal Gel in 2006).

(b)

Schedule
5.9(b) sets forth a true and complete list of all (i) adverse drug
experiences, (ii) material events and matters concerning or affecting safety of
the 





-
8 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







Product
brought to the attention of Seller and (iii) complaints brought to the
attention of Seller with respect to the Product, whether related to safety,
manufacturing, stability or otherwise, in each case, since October 17, 2005.
 

(c)

Except
as set forth on Schedule 5.9(c), Seller has not, during the twelve
(12)-month period prior to the date hereof, designed, and, to the Knowledge of
Seller, has no immediate intention of designing, any material improvements to
the manufacturing process related to the Product. 

(d)

Since
October 17, 2005, Seller has complied with all obligations arising from or
related to any commitments to or requirements of any Governmental or Regulatory
Authority pursuant to any agreement entered into between Seller and such
Governmental or Regulatory Authority and involving the Product.

5.10

Product
Intellectual Property.

(a)

Other
than as alleged in connection with the Litigation Matter, to the Knowledge of
Seller, no third party is infringing the Patents or Trademarks or
misappropriating the trade secrets within the Product Intellectual Property
(excluding the Legacy IP).

(b)

Seller’s
development, manufacture and sale of the Product and its use of the Product
Intellectual Property  in connection therewith within the United States and
South Korea as of the date hereof and as of the Closing Date has not and does
not infringe, nor is such development, manufacture or sale of the Product or use
of the Product Intellectual Property as of the date hereof and as of the Closing
Date the result of any misappropriation of, any intellectual property rights of
any other Person.  Except as disclosed on Schedule 5.10(b), there
have been no claims asserted against Seller alleging that Seller’s development,
manufacture or sale of the Product or Seller’s use of the Product Intellectual
Property in such countries infringes or is the result of any misappropriation of
any intellectual property rights of any other Person.  

(c)

Schedule
5.10(c) sets forth a correct and complete list of all Trademarks (including
registration numbers and jurisdictions of registrations), domain names and a
scanned copy of the Trade Dress used in the marketing of the Product, other than
“QOL” and any derivation thereof.

(d)

Since
October 17, 2005 with respect to the Trademarks and since June 12, 2007 with
respect to the Patents, (i) Seller has paid all annuities and maintenance fees
and filed all renewals due as of the date hereof and Schedule 5.10(d)
sets forth such annuities, maintenance fees and renewals due before May 31, 2009
in respect of the issued Patents and the Trademarks, and (ii) except as set
forth on Schedule 5.10(d), in no instance has the eligibility of any
issued Patent or Trademark, or any application that has been filed by Seller
with respect to any Patent or Trademark, for protection under applicable Law
been forfeited to the public domain by omission of any required notice or any
other action or inaction of Seller.

5.11

Tax
Matters.





-
9 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(a)

Seller
has filed or caused to be filed on a timely basis all Tax Returns that it was
required to file.  All such Tax Returns are true, correct and complete in
all material respects.  All Taxes relating to the Acquired Assets that are
due and payable have been timely paid in full.  There is no Tax deficiency
that could result in any lien on the Product or any of the Acquired Assets or in
a claim against Buyer as transferee or owner of the Acquired Assets.  There
are no “bulk sales” provisions relating to Taxes that Buyer or Seller must
comply with that could result in a Lien on the Acquired Assets or could result
in the imposition of a Tax liability on Buyer.  Seller has collected and
remitted (or shall remit) all sales and use Taxes as required by Law in each
local jurisdiction in which it does business.  

(b)

Seller
has not waived (and is not subject to a waiver of) any statute of limitations in
respect of the payment or assessment of Taxes and has not agreed to any
extension of time with respect to any Tax assessment or deficiency (other than
with respect to limitation periods that have since expired).

(c)

Seller
is not a party to any agreement extending the time within which to file any Tax
Return.  There is no dispute or claim concerning any Tax Liability of
Seller relating to any Acquired Asset either (i) claimed or raised by any taxing
authority or (ii) otherwise known to Seller.  No claim has been made by a
jurisdiction in which Seller does not file Tax Returns that Seller is or may be
subject to Tax relating to any Acquired Asset by that jurisdiction and no taxing
authority in such a jurisdiction has made any inquiry regarding such
matters.

(d)

Seller
is not obligated in connection with the Acquired Assets to pay the Taxes of
another person by contract, as transferee, as successor, or otherwise.

(e)

Seller
is not a “retailer” in accordance with the Laws of Kentucky, and Buyer will not
be subject to successor liability for any Tax resulting from the purchase of the
Acquired Assets located in Kentucky.

5.12

No
Material Adverse Effect.

  There
has been no Material Adverse Effect since December 1, 2008.

5.13

Brokers.

  Seller
has not retained any broker in connection with the transactions contemplated
hereunder.  Buyer has no, and will have no, obligation to pay any brokers,
finders, investment bankers, financial advisors or similar fees in connection
with this Agreement or the transactions contemplated hereby by reason of any
action taken by or on behalf of Seller.

5.14

Disclaimer
of Other Representations and Warranties.

  Except as expressly set forth in this Article 5, Seller
makes no representation or warranty, express or implied, at law or in equity, in
respect of any of its assets (including the Acquired Assets and the Assumed
Liabilities), liabilities or operations, including 





-
10 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







with
respect to merchantability or fitness for any particular purpose, and any such
other representations or warranties are hereby expressly disclaimed.
 

6.

Representations
and Warranties of Buyer.

  Buyer
represents and warrants to Seller as of the date of this Agreement and as of the
Closing Date, subject to such exceptions as are specifically disclosed in the
Disclosure Schedules supplied by Buyer to Seller and dated as of the date of
this Agreement, as follows:

6.1

Corporate
Organization.

  Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of Delaware and has all requisite power and authority to own its assets and
carry on its business as currently conducted by it.  Buyer is duly
authorized to conduct its business and is in good standing in each jurisdiction
where such qualification is required, except for any jurisdiction where failure
to so qualify could not reasonably be expected to materially impair or delay
Buyer’s ability to perform its obligations hereunder.

6.2

Authority
of Buyer.

  Buyer
has all necessary power and authority to enter into this Agreement and the
Ancillary Agreements to which it shall become a party and to carry out the
transactions contemplated hereby and thereby.  The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Agreements to which it
shall become a party have been duly and validly authorized and no additional
corporate authorization or consent is required in connection with the execution,
delivery and performance by Buyer of this Agreement or the Ancillary Agreements
to which it shall become a party.  This Agreement and the Ancillary
Agreements to which it shall become a party have been (or will be) duly and
validly executed and delivered by Buyer and, when executed and delivered by
Seller and the QOL Members, will constitute a legal, valid and binding
obligation of Buyer enforceable against it in accordance with its terms except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights
generally, and (b) as limited by general principles of equity.

6.3

Consents
and Approvals.

  Except
as set forth on Schedule 6.3, no consents, waivers, approvals, Orders or
authorizations of, or registrations, declarations or filings with, any
Governmental or Regulatory Authority are required by Buyer (“Buyer
Governmental Consents”) in connection with the execution and delivery by
Buyer of this Agreement or the Ancillary Agreements to which it shall become a
party or the performance of its obligations hereunder or thereunder.

6.4

Non-Contravention.

  The
execution and delivery by Buyer of this Agreement and the Ancillary Agreements
to which it shall become a party does not, and the performance by it of its 





-
11 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby will not:

(a)

conflict
with or violate any provision of the organizational documents of Buyer; or

(b)

assuming
the receipt of all Buyer Governmental Consents, conflict with or result in a
violation or breach of any term or provision of any Law applicable to
Buyer.

6.5

Brokers.

  Buyer
has not retained any broker in connection with the transactions contemplated
hereunder.  Neither Seller nor any QOL Member has, and will not have, any
obligation to pay any brokers, finders, investment bankers, financial advisors
or similar fees in connection with this Agreement or the transactions
contemplated hereby by reason of any action taken by or on behalf of Buyer.


7.

Covenants
of the Parties

7.1

Conduct
of the Business.

  From
the date hereof until the Closing Date, (a) Seller shall (i) conduct its
business with respect to the Product and the Acquired Assets only in the
ordinary course, consistent with past practices and reasonable industry
standards, (ii) continue to conduct the Litigation Matter in a diligent manner
and (iii) maintain all Regulatory Documentation as current and timely, as
required by the FDA or other Governmental or Regulatory Authority, and (b)
Seller shall not without the consent of the Buyer (which consent shall not be
unreasonably withheld, delayed or conditioned): 

(i)

sell,
lease, license or otherwise dispose of the Acquired Assets except (A) pursuant
to existing contracts or commitments and (B) the sale of the inventory in the
ordinary course of business consistent with past practices;

(ii)

terminate
or amend any agreement set forth on Schedule 5.7(b)(i) or Schedule
5.7(b)(ii) other than as contemplated by Section 7.6(c) or enter into any
agreement or arrangement that would, if in effect as of the date hereof,
otherwise be required to be set forth on such Schedule other than purchase
orders in the ordinary course of business;

(iii)

engage
in any special promotional activities and/or special discounts with respect to
the Product;

(iv)

(A)
take or agree or commit to take any action that would make any representation
and warranty made by Seller under this Agreement on the date hereof inaccurate
in any respect at, or as of any time prior to, the Closing Date or (B) omit or
agree or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time; or





-
12 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(v)

settle
or agree to settle any claim, suit, action or other proceeding relating to the
Product or the Acquired Assets or file any motions or serve or respond to any
discovery requests in the Litigation Matter; or

(vi)

agree
or commit to do any of the foregoing.

7.2

Continued
Due Diligence.

  From
the date hereof until the Closing Date, Seller shall (a) give Buyer, its
counsel, financial advisors, financing sources, auditors and other authorized
representatives full access to the offices, properties, books and records of
Seller related to the Product and the Acquired Assets, (b) furnish to Buyer, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Product and
the Acquired Assets as such Persons may reasonably request and (c) instruct the
employees, counsel and financial advisors of Seller to cooperate with Buyer in
its investigation of the Product and the Acquired Assets.  No investigation
by Buyer pursuant to this Section 7.2 shall affect any representation or
warranty given by Seller hereunder or any of Buyer’s rights under this
Agreement.

7.3

Notices
of Certain Events; Continuing Disclosure.

(a)

Seller
shall promptly notify Buyer of:

(i)

any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated by
this Agreement or otherwise asserting or claiming any rights with respect to the
Product or the Acquired Assets;

(ii)

any
notice or other communication from any Governmental or Regulatory Authority
relating to the Product or the Acquired Assets; and

(iii)

any
actions, suits, claims, investigations or proceedings commenced or, to the
Knowledge of Seller, threatened against, or relating to or involving or
otherwise against or affecting the Product or the Acquired Assets or that relate
to the consummation of the transactions contemplated by this Agreement.

(b)

Until
the Closing Date, Seller and Buyer shall have the continuing obligation promptly
to advise the other party with respect to any matter hereafter arising or
discovered that, if existing or known at the date of this Agreement, would have
been required to be set forth or described in a Disclosure Schedule to this
Agreement (including adding new Disclosure Schedules to include the matters that
are an exception to a representation or warranty but for which no Schedule is
currently provided), or that constitutes a breach or prospective breach of this
Agreement; provided, that except as indicated in this Section 7.3(b), no
such supplemental disclosure will be deemed to cure any breach as of the date of
this Agreement of any representation or warranty contained herein.  If
Seller supplements its Disclosure Schedules between the date hereof and the
Closing Date pursuant to this Section 7.3(b) and such matters so disclosed would
cause the condition set forth in Section 9.2 not to be 





-
13 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







met,
then, notwithstanding anything herein to the contrary, Buyer shall have the
option to elect either:  (i) to terminate this Agreement in accordance with
Section 11.1; or (ii) to proceed to close the transactions contemplated by this
Agreement, in which event Seller shall have no liability whatsoever with respect
to such matters and such disclosure shall be deemed to cure any
misrepresentation or breach of warranty that might have otherwise existed under
this Agreement by reason of the failure to have disclosed such items as of the
date hereof.

7.4

Exclusive
Dealings.

  From
the date hereof until the earlier of the Closing Date and the termination of
this Agreement in accordance with its terms, Seller and each QOL Member shall
not, and shall cause Seller’s directors, officers, employees, agents, Affiliates
not to, directly or indirectly, solicit or initiate the submission of proposals
from, or solicit, encourage, entertain or enter into any arrangement, agreement,
letter of intent or understanding with, or engage in any negotiations with, or
furnish any information to, any Person, other than Buyer or any
representative(s) or agent(s) thereof, with respect to any encumbrance or the
direct or indirect acquisition of the Acquired Assets or any material portion
thereof (including any proposed acquisition of Seller), except in connection
with the sale of inventory in the ordinary course consistent with Seller’s past
practice.  Should Seller, any QOL Member or any of their respective
Affiliates or representatives, during such period, receive any offer or inquiry
relating to any such encumbrance or acquisition, or obtain information that such
an offer is likely to be made, Seller shall provide the Buyer with immediate
written notice thereof.

7.5

Reasonable
Best Efforts.

  Each
Party shall use its Reasonable Best Efforts to take, or cause to be taken, all
action, or to do, or cause to be done, all things necessary, proper or advisable
under applicable Laws to consummate and make effective the transactions
contemplated by this Agreement and to cause the conditions to the obligations of
the Parties to consummate the transactions contemplated hereby to be satisfied
(but not waived), including obtaining all consents and approvals of all Persons
and Governmental or Regulatory Authorities and removing any injunctions or other
impairments or delays that are necessary, proper or advisable to the
consummation of the transactions contemplated by this Agreement.

7.6

Cooperation
and Transition.

(a)

Subject
to Section 7.10, each Party shall cooperate with the other in preparing and
filing all notices, applications, submissions, reports and other instruments and
documents (including post-Closing new drug application supplements or annual
reports necessary for Buyer to manufacture, market, distribute and sell the
Product in the United States and South Korea) that are necessary, proper or
advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement.  Without limiting the
generality of the foregoing, Seller shall use commercially reasonable efforts to
cooperate with Buyer in respect of Buyer’s efforts to obtain any consents and
approvals of any Governmental or Regulatory Authority required for Buyer to be
able to own and operate the Acquired Assets in the United States and South
Korea, including providing data and information related to the 





-
14 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







Regulatory
Approvals, Regulatory Documentation and the Product upon request of any
Governmental or Regulatory Authority in the United States and South Korea.

(b)

The
Parties shall cooperate to complete the transition of any applicable support
services from Seller and its service providers to Buyer and its service
providers at or as soon as practicable following the Closing Date.
 Notwithstanding the foregoing, the Parties shall cooperate to agree upon
terms for the provision by Seller and/or its service providers of any transition
services required by Buyer until such services have been transitioned to Buyer
and its service providers, including, if and as applicable, product supply
provisions.

(c)

Seller
shall cause (i) all Restrictive Contracts listed on Schedule 7.6(c)(i) to
be terminated or amended to remove any application or effect with respect to the
Acquired Assets at no cost to Buyer prior to the Closing Date and (ii) all
Restrictive Contracts listed on Schedule 7.6(c)(ii) to be terminated or
amended to remove any application or effect with respect to the Acquired Assets
at no cost to Buyer as soon as reasonably practicable after the Closing
Date.

(d)

Seller
shall cause Ventiv Commercial Services, LLC to cease detailing the Product as of
the Closing Date and thereafter.  Upon receipt of the acknowledgement of
the filing of the renewal application for the Nascobal trademark registered in
Japan as Registration # 4190179 and issued on March 18, 1998, Seller shall cause
the assignment of such trademark by MDRNA
Inc. (formerly Nastech Pharmaceutical Company, Inc.) to Seller to be filed with
the appropriate Governmental and Regulatory Authority in Japan. 

7.7

Public
Announcements.

  Buyer
and Seller each agrees that, prior and subsequent to the Closing, it and its
representatives and members shall keep the terms of this Agreement confidential
and shall not disclose such information to any other Person (except as necessary
to carry out the express terms of this Agreement or to the extent such
information becomes public information or generally available to the public
through no fault of such Party or its Affiliates) without the prior written
consent of the other Party (which shall not be unreasonably withheld), unless
such Party reasonably believes that disclosure is required to be made under
applicable Law or the requirements of a national securities exchange or another
similar regulatory body (in which event such Party shall, upon request of any
non-disclosing Party, exercise its Reasonable Best Efforts to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded to the information so disclosed).

7.8

Bulk
Sales.

  Buyer
hereby waives compliance by Seller with the provisions of any so-called “bulk
transfer law” of any jurisdiction in connection with the sale of the Acquired
Assets to Buyer.  Seller will indemnify Buyer against, and pay and
reimburse Buyer for, any and all costs, Liabilities and obligations that may be
asserted by third parties against Buyer as a result of noncompliance with any
such bulk transfer law.





-
15 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







7.9

NDC
Numbers; Marketing Materials.

(a)

Buyer
may use Seller’s labeling, including Seller’s National Drug Code number (“NDC
Number”) for the Product existing as of the date hereof (the “Current NDC
Number”) and Corporate Names, to sell or sample any lots of the Product in
Inventory.  Buyer shall apply for and initiate applicable processes to
obtain and establish its own NDC Number for the Product.  

(b)

Buyer
shall notify Seller reasonably in advance of the date it expects to cease sales
of Product using the Current NDC Number (the “NDC Number Termination
Date”).  Seller shall not discontinue the Current NDC Number prior to
the NDC Number Termination Date.  Following the NDC Number Termination
Date, Seller shall discontinue the use of the Current NDC Number other than with
respect to Rebates, allowances and adjustments for Product sold prior to the
Closing Date; provided, however, that Seller shall (i) not seek
from any customer any type of cross-referencing of Buyer’s NDC Numbers with any
of Seller’s products and (ii) provide Buyer with draft notifications to any of
Seller’s customers regarding the use or discontinued use of such numbers by
Seller prior to such notifications being disseminated to the customers. 

(c)

Buyer
may use any Marketing Materials included in the Acquired Assets following
Closing; provided that Buyer uses its own name on such materials and
completely removes all Corporate Names from, or completely covers all Corporate
Names on, such materials (except as provided in Section 7.9(a) above).

7.10

Regulatory
Matters.

(a)

On
the Closing Date, Seller shall transfer the Regulatory Documentation to
Buyer.

(b)

Subject
to Section 7.10(a), from and after the Closing, Buyer, at its cost, shall be
solely responsible and liable for (i) taking all actions, paying all fees and
conducting all communication with the appropriate Governmental or Regulatory
Authority required by Law in respect of the Regulatory Approvals or the
Regulatory Documentation, including preparing and filing all reports (including
adverse drug experience reports) with the appropriate Governmental or Regulatory
Authority, (ii) taking all actions and conducting all communication with third
parties in respect of the Product (whether sold before or after Closing),
including responding to (A) complaints in respect thereof, including complaints
related to tampering or contamination, and (B) all medical information requests,
and (iii) investigating all complaints and adverse drug experiences in respect
of the Product (whether sold before or after Closing).  From the Closing
Date and for three (3) years thereafter, Buyer shall (1) provide a copy of any
annual report with respect to the Product and filed with the FDA by Buyer and
(2) provide Seller with a copy of any 15-day reportable adverse drug experience
reports that are identified with a lot number for Product sold by Seller before
the Closing Date within two (2) Business Days after Buyer’s submission thereof
to the FDA.  From and after the Closing Date, Seller shall provide Buyer
with prompt written notice (within two Business Days) in the that event Seller
becomes aware of any complaints, medical information requests, investigations or






-
16 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







adverse
drug experiences in respect of the Product and shall cooperate with Buyer in
investigating and responding thereto.

(c)

Seller
shall prepare the annual report in respect of the Product due April 1, 2009 (the
“Filing Deadline”) and shall use commercially reasonably efforts to file
such report prior to the Closing Date, but in all events shall file such report
no later than the Filing Deadline, and shall provide Buyer with copies of the
same; provided, however, that if the Closing occurs prior to the
Filing Deadline and Seller has not filed the report prior to Closing, Seller
shall provide such report to Buyer at the Closing.

7.11

Post-Closing
Orders and Payments.

  From
and after 12:01 A.M. Eastern Daylight Savings Time on the day of the Closing
Date, (a) Seller will promptly deliver to Buyer any payments received by Seller
from third parties for Product purchased by the third parties from Buyer on or
after the Closing Date, and refer all inquiries it receives with respect to the
Product, to Buyer or its designee and (b) Buyer will promptly deliver to Seller
any payments received by Buyer from third parties for the Products purchased by
third parties from Seller or its Affiliates prior to the Closing Date.  To
the extent Seller receives any collections of amounts due Buyer resulting from
sales of Product by Buyer on or after the Closing Date, Seller shall promptly
(but in no event beyond 10 days) forward such payments to Buyer (and in the
event any of such receipts are inadvertently deposited by Seller, Seller shall
promptly pay all such amounts over to Buyer).  To the extent Buyer receives
any collections of amounts resulting from sales of Product by Seller prior to
the Closing Date, Buyer shall promptly (but in no event beyond ten (10) days)
forward such payments to Seller (and in the event any of such receipts are
inadvertently deposited by Buyer, Buyer shall promptly (but in no event beyond
ten (10) days) pay all such amounts over to Seller).  

7.12

Rebates;
Government Price Reporting Obligations.

(a)

Seller
shall be responsible for and pay all Rebates relating to Product sold by Seller
before the Closing.  Buyer shall be responsible for and pay all Rebates
relating to Product sold by Buyer after the Closing. 

(b)

Buyer
and Seller shall provide each other with all information relating to the Product
and the prices thereof that the other Party reasonably requires in order to
comply with the foregoing and the applicable rules and regulations relating to
Medicaid rebates, including State supplemental Medicaid rebates and will
cooperate with each other in settlement (and reimbursement to each other if
applicable) of any Rebates owed by one party that were set off against accounts
receivable of the other party in error by a customer or other third party.

7.13

Insurance.

  On
or prior to the Closing Date, Seller shall obtain product liability “tail” or
“continuum” insurance policy that covers the Product for a four-year period with
coverage levels not less than $10 million.  Seller shall cause Buyer
to be named as an additional insured thereunder and shall provide Buyer with
written proof of such insurance to Buyer at the Closing 





-
17 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







and
upon request.  Buyer agrees to maintain its own insurance policies with
respect to the Buyer’s ownership, development, manufacture, sale and
distribution of the Product and any other uses of the Acquired Assets.
 Buyer and Seller shall cooperate in seeking insurance coverage with
respect to any matter for which such coverage may be available.

7.14

Sales
Tax Certificate.

  On
or prior to the Closing Date, Buyer shall deliver to Seller either (a) the
Multistate Tax Commissions “Uniform Sales & Use Tax Certificate –
Multijurisdiction,” or (b) a Kentucky “Resale Certificate,” Form 51A105 (either
(a) or (b) the “Sales Tax Certificate”).  

7.15

Further
Assurances.

(a)

On
and after the Closing, Seller shall from time to time, at the request of Buyer,
execute and deliver, or cause to be executed and delivered, such other
instruments of conveyance and transfer and take such other actions as Buyer may
reasonably request, in order to more effectively consummate the transactions
contemplated hereby and to vest in Buyer good and marketable title to the
Acquired Assets (including assistance in the acquiring possession or control of
any of the Acquired Assets).

(b)

On
and after the Closing, Buyer shall from time to time, at the request of Seller,
take such actions as Seller may reasonably request, in order to more effectively
consummate the transactions contemplated hereby, including Buyer’s assumption of
the Assumed Liabilities.

7.16

Product
Returns.

(a)

The
Seller and Buyer have negotiated regarding responsibility for returns received
following the Closing with respect to Product sold by Seller prior to the
Closing Date and Seller and Buyer have resolved all issues relating to
responsibility for returns through an agreed-upon reduction in the Purchase
Price (which adjustment has been taken into account in the Purchase Price
contained herein).  In exchange for such Purchase Price reduction, Buyer
has agreed to accept all responsibility for the handling, processing and payment
of all returns of Product received on or after the Closing Date, but excluding
Product returns received by or on behalf of Seller before the Closing Date but
not yet fully processed, irrespective of whether such Product was sold by Seller
prior to the Closing or by Buyer after the Closing.  Seller shall forward
to Buyer any claims or notices it receives on or after the Closing Date from
third parties regarding Product returns.  As Seller and Buyer have each
made their own estimates of the potential returns for Product sold prior to the
Closing that will ultimately be returned after the Closing, Buyer shall not have
any obligation to Seller if actual returns are less than the Purchase Price
adjustment agreed upon by the parties and Seller shall not have any obligation
to Buyer if actual returns are greater than the Purchase Price adjustment agreed
upon by the parties.  On the Closing Date, Buyer and Seller shall jointly
instruct, in writing, (a) McKesson Corp. (“McKesson”) and Cardinal Health
Inc. (“Cardinal”) and other customers identified by the Parties
(collectively, the “Wholesalers”) to send all future Product returns to a
third party designated by Buyer and (b) ICS to return to each Wholesaler all
Product returns sent 





-
18 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







on
or after the Closing Date by such Wholesaler.  In the event any amounts
relating to returns of Product made after the Closing are deducted from amounts
due Seller from third parties within thirty (30) days of the Closing Date,
Seller shall bill Buyer for such amounts, accompanied by an accounting, and the
reimbursement from Buyer shall be due within ten (10) days of receipt of such
billings.  On the Closing Date, Seller shall obtain from ICS and deliver to
Buyer in Microsoft Excel format (i) a full lot expiration file relating to
Product sold prior to the Closing Date and (ii) a full shipping history of
Product sold prior to the Closing Date, including invoice date (i.e.,
shipping date), NDC Number, lot number, customer, quantity and price. 

7.17

Cooperation
relating to Non-Indemnifiable Claims.

  In
the event that Seller or Buyer (“Defending Party”) becomes party to any
suit, claim, action or proceeding initiated by a third party that relates to any
Acquired Asset and Damages (if any) relating to such matter would not be
indemnifiable under Section 10, the other party shall cooperate in connection
therewith to the extent that it  possesses records and information relating
to such Acquired Asset and shall use commercially reasonable efforts to make
available personnel and provide such testimony and access to  such records
and information as may be reasonably requested by Defending Party in connection
therewith at the sole cost of the Defending Party.  In the event that Buyer
requests Seller to remain a party to the Litigation Matter or the court requires
Seller remain a party to the Litigation Matter, (a) Buyer shall pay all of
Seller’s fees, costs and expenses incurred in connection with the Litigation
Matter, provided, that Seller uses Buyer’s legal counsel and Buyer
controls the Litigation Matter, and (b) Seller shall cooperate with Buyer in
connection with the Litigation Matter.

7.18

Release
of Liens of Company Creditors.

  Prior
to the Closing, Seller shall cause to be delivered to Buyer a payoff letter (the
“Payoff Letter”) from the Company Creditors, which letter shall specify
the aggregate amount required to be paid in order to obtain the release of the
security interests of the Company Creditors in all of the Acquired Assets and
payment instructions on the projected Closing Date.  The Payoff Letter
shall be in a form reasonably satisfactory to Buyer and will include customary
undertakings to release in full, upon receipt of payment the amounts reflected
in such Payoff Letter, any and all Liens securing the Company Indebtedness
related to such Payoff Letter and to authorize Seller and Buyer to terminate all
UCC financing statements filed by the Company Creditors against Seller without
signature of the Company Creditors.  Within two (2) Business Days after the
Closing, Seller shall file all UCC termination statements that are necessary to
terminate such UCC financing statements.

8.

Conditions
to the Obligations of Seller.

  The
obligation of Seller to effect the transactions contemplated hereby is subject
to the satisfaction (or waiver by Seller), at or before the Closing, of each of
the following conditions:

8.1

Agreements
and Conditions.





-
19 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







  On
or before the Closing Date, Buyer shall have complied with and duly performed,
in all material respects, all agreements and covenants on its part to be
complied with and performed pursuant to or in connection with this Agreement on
or before the Closing Date.

8.2

Representations
and Warranties.

  The
representations and warranties of Buyer contained in this Agreement qualified as
to materiality shall be true and correct in all respects, and those not so
qualified shall be true and correct in all material respects, as of the Closing
Date (except that any representation and warranty made as of a specified date
shall continue to be true and correct on and as of such date).

8.3

No
Legal Proceedings.

  No
court or governmental suit, action or proceeding shall have been instituted or
overtly threatened to restrain or prohibit the transactions contemplated
hereby.

8.4

Officer’s
Certificate.

  Seller
shall have received a certificate dated the Closing Date and executed by an
authorized officer of Buyer to the effect that the conditions set forth in
Sections 8.1, 8.2 and 8.3 shall have been satisfied.

8.5

Secretary’s
Certificate.

  Seller
shall have received a certificate, dated the Closing Date and executed by the
Secretary of Buyer, certifying the incumbency and signatures of the officers of
Buyer authorized to act on behalf of Buyer in connection with the transactions
contemplated hereby and attaching and certifying as true and complete copies of
the resolutions duly adopted by the Board of Directors of Buyer authorizing and
approving the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.

8.6

Purchase
Price.

  Buyer
shall have delivered the Purchase Price in accordance with Section 3.1.

8.7

Ancillary
Agreements.

  Seller
shall have received the Ancillary Agreements, duly executed and delivered by
Buyer.

8.8

Sales
Tax Certificate.

  Seller
shall have received a copy of the Sales Tax Certificate. 




9.

Conditions
to the Obligations of Buyer.





-
20 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







  The
obligation of Buyer to effect the transactions contemplated hereby is subject to
the satisfaction (or waiver by Buyer), at or before the Closing, of the
following conditions:

9.1

Agreements
and Conditions.

  On
or before the Closing Date, Seller shall have complied with and duly performed,
in all material respects, all agreements and covenants on their part to be
complied with and performed pursuant to or in connection with this Agreement on
or before the Closing Date.

9.2

Representations
and Warranties.

  The
representations and warranties of Seller and the QOL Members contained in this
Agreement qualified as to materiality or Material Adverse Effect and those
contained in Section 5.9 shall be true and correct in all respects, and those
not so qualified shall be true and correct in all material respects, as of the
Closing Date (except that any representation and warranty made as of a specified
date shall continue to be true and correct on and as of such date).

9.3

No
Legal Proceedings.

  No
court or governmental suit, action or proceeding shall have been instituted or
overtly threatened to restrain or prohibit the transactions contemplated hereby
and, as of the Closing Date, there will be no court or governmental action or
proceeding pending or threatened against or affecting Seller, the Product or the
Acquired Assets that involves a demand for any judgment or Liability, whether or
not covered by insurance, that could reasonably be expected to have a Material
Adverse Effect.

9.4

Officer’s
Certificate.

  Buyer
shall have received a certificate dated the Closing Date and executed by a duly
elected officer of Seller to the effect that the conditions set forth in
Sections 9.1, 9.2 and 9.3 shall have been satisfied.

9.5

Secretary’s
Certificate.

  Buyer
shall have received a certificate, dated the Closing Date and executed by the
Secretary of Seller, certifying the incumbency and signatures of the officers of
Seller authorized to act on behalf of Seller in connection with the transactions
contemplated hereby and attaching and certifying as true and complete copies of
(a) the resolutions duly adopted by the Members of Seller authorizing and
approving the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby and (b) Seller’s organizational documents, all as may have been amended
up through the Closing Date.

9.6

Ancillary
Agreements.





-
21 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







  Buyer
shall have received the Ancillary Agreements, duly executed and delivered by the
Parties thereto (other than Buyer).

9.7

Certificates
of Status.

  Buyer
shall have received a certificate from the Secretary of State of the State of
Delaware, stating that Seller has filed its most recent annual reports, has not
filed a certificate of dissolution or withdrawal and is in good standing in such
jurisdiction.

9.8

Consents.

  All
Seller Consents set forth on Schedule 5.3(a) and Schedule 5.3(b)
shall have been obtained and delivered to the Buyer.

9.9

Liens.

  Seller
shall have delivered satisfactory evidence that all Liens set forth on
Schedule 9.9 shall be discharged at or prior to Closing.

9.10

Restrictive
Contracts.

  Buyer
shall have received evidence reasonably satisfactory to it that all Restrictive
Contracts set forth on Schedule 7.6(c)(i) have been, at no cost to Buyer,
either irrevocably terminated or amended to remove any application or effect
with respect to the Product or the Acquired Assets.

9.11

Standstill
Agreement.

  Buyer,
Seller, Velos Global Limited (“Velos”) and ANU Global Limited
(“ANU”) shall have entered into the Standstill Agreement.

9.12

Consummation
of MDRNA
Transaction.

  All
conditions to the Closing of the MDRNA
Transaction shall have been satisfied or waived and the parties to the MDRNA Transaction shall be prepared to close such
transaction concurrently with the Closing under this Agreement. 

9.13

Authorization
Letters from DMF Holders.

  Buyer
shall have received (a) a copy of the revised Letters of Access from the holders
of the Drug Master Files relating to the Product, which letters authorize Buyer
to incorporate by reference into the Seller NDAs the specific information
contained in such Drug Master Files or (b) evidence reasonably satisfactory to
Buyer that each holder of a Drug Master File relating to the Product does not
object to providing such revised Letter of Access.

9.14

Wholesaler
Inventories.





-
22 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







  Buyer
shall have received evidence reasonably satisfactory to it that the inventory
levels of the Product held by each of McKesson and Cardinal and on behalf of
Seller do not exceed a twenty-one (21)-day supply on hand as of a date no more
than five (5) Business Days prior to the Closing Date.

9.15

Returns
Report.

  Buyer
shall have received a report dated as of the day before the Closing Date showing
Product returns received by or on behalf of Seller, as reported by ICS,
(detailing number of units and dollar amounts) for the month that includes the
Closing Date for the portion of such month up to the Business Day before the
Closing Date. 

10.

Indemnification.

10.1

Termination
of Representations and Warranties.

  All
representations, warranties and covenants (other the covenant in Section 12.4)
of Seller and Buyer contained herein or made pursuant hereto shall survive the
Closing Date and shall remain operative and in full force and effect for a
period of thirty-six (36) months following the Closing Date and shall then
terminate and be of no further effect; provided, however, that any
indemnity claim with respect to such representations, warranties and covenants
shall survive the time(s) that they would otherwise terminate with respect to
claims of which written notice in reasonable specificity has been given as
provided in this Agreement prior to such termination.  Subject to Section
14.3, any limitation or qualification set forth in any one representation and
warranty contained in Sections 5 and 6 and Annexes 1 and 2 shall not limit or
qualify any other representation and warranty contained in such Section or
Annex.  Each representation and warranty included in this Agreement is
independent and shall be interpreted without regard to any other representation
or warranty contained herein (including any more inclusive representation or
warranty).

10.2

Indemnification
Obligations of Seller.

  Subject
to the exclusions and limitations in Sections 10.1 and 10.5, from and after the
Closing, Seller shall indemnify, reimburse, defend and hold harmless Buyer, its
Affiliates, and their respective officers, directors, employees, agents,
successors and assigns (the “Buyer Indemnified Parties”) from and against
any and all costs, losses, Liabilities, damages, lawsuits, deficiencies, claims,
fines, penalties, interest and expenses (including fees and disbursements of
attorneys actually incurred) (collectively, “Damages”), incurred by a
Buyer Indemnified Party arising out of, or resulting from (a) any breach of any
covenant or agreement of Seller in this Agreement, (b) the breach of any
representation or warranty made by Seller in this Agreement, (c) the failure of
Seller to pay, perform and discharge any Excluded Liabilities, and (d) the
enforcement by the Buyer Indemnified Parties of their rights under this Section
10.2.

10.3

Indemnification
Obligations of Buyer.

  From
and after the Closing, Buyer shall indemnify, defend and hold harmless Seller,
its Affiliates and their respective officers, directors, employees, agents, 





-
23 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







successors
and assigns (the “Seller Indemnified Parties”) from and against any and
all Damages incurred by a Seller Indemnified Party arising out of, or resulting
from (a) any breach of any covenant or agreement of Buyer herein, (b) the breach
of any representation or warranty made by Buyer in this Agreement, (c) the
failure of Buyer to assume, pay, perform and discharge any Assumed Liabilities
and (d) the enforcement by the Seller Indemnified Parties of their rights under
this Section 10.3.

10.4

Procedures
for Indemnification; Defense.

(a)

If
any Party (the “Indemnitee”) receives notice of any claim or the
commencement of any action or proceeding with respect to which any other Party
(or Parties) is obligated to provide indemnification (the “Indemnifying
Party”) pursuant to Sections 10.2 or 10.3, the Indemnitee shall give the
Indemnifying Party written notice thereof promptly following the Indemnitee’s
receipt of such notice.  Such notice shall describe the claim in reasonable
detail and shall indicate the amount (estimated if appropriate) of the Damages
that have been or may be sustained by the Indemnitee.  The failure to so
provide such notice shall not affect the Indemnifying Party’s obligations
hereunder, unless to the extent such Party is materially prejudiced as a result
thereof.  

(b)

Provided
that the Indemnitee undertakes and pursues such conduct and control in a
reasonable and diligent manner, the Indemnitee shall have the right to conduct
and control, through counsel of its choosing, the defense, compromise or
settlement of any third party claim, action or suit against such Indemnitee as
to which indemnification will be sought by such Indemnitee hereunder, and in any
such case the Indemnifying Party shall cooperate in connection therewith and
shall furnish such records, information and testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested by the Indemnitee in connection therewith.  The
Indemnifying Party may participate, through counsel chosen by it and at its own
expense, in the defense of any such claim, action or suit as to which the
Indemnitee has so elected to conduct and control the defense thereof.  The
Indemnitee shall be entitled to pay, compromise or settle any such claim, action
or suit, with or without the consent of the Indemnifying Party, unless the
Indemnitee is acting unreasonably or in bad faith (reasonableness with respect
to a settlement or compromise shall be based upon all the facts and
circumstances of the third party claim).  Notwithstanding the foregoing,
(i) if the Indemnitee fails to conduct and control the defense, compromise or
settlement of any such matter in a reasonable and diligent matter, the
Indemnifying Parties shall have the right, upon written notice to the
Indemnitee, to take control of such defense at its sole cost and (ii) on or
before the date that is six (6) months from the date that the Indemnitee gave
notice to the Indemnifying Party of a claim or commencement  of an action
or proceeding under Section 10.4(a), the Indemnifying Party shall give written
notice to the Indemnitee either (A) acknowledging that such claim, action or
proceeding is indemnifiable under this Agreement, in which case, subject to the
limitations set forth in Section 10.5, it shall pay to the Indemnitee within two
(2) Business Days all Damages previously incurred by the Indemnitee in respect
of such claim, action or proceeding and shall directly pay all other Damages of
the Indemnitee in connection with such claim, action or proceeding within the
time period that such payment is due or (B) denying or reserving its right to
deny that such claim, action or
proceeding is indemnifiable under this Agreement, in which case the Indemnifying
Party shall no longer be 





-
24 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







entitled
to participate in the defense of any such claim, action or proceeding;
provided, that the foregoing shall not in any way limit the Indemnitee’s
right to commence an action or proceeding against the Indemnifying Party seeking
indemnification under this Agreement.  Seller’s failure to give written
notice in accordance with the previous sentence shall be deemed a notice denying
or reserving its rights to deny that such claim, action or proceeding is
indemnifiable under this Agreement.

10.5

Limitations.

(a)

Subject
to Section 10.4, notwithstanding any provision contained in this Agreement or in
any Ancillary Agreement (other than the Escrow Agreement), or in any schedule,
certificate, instrument, agreement or document delivered in connection herewith
or therewith to the contrary, in no event shall the Seller be liable for (i) any
claim for Damages under this Agreement or under any Ancillary Agreement (other
than the Escrow Agreement), or in any schedule, certificate, instrument,
agreement or document delivered in connection herewith or therewith until such
time as all Damages suffered by all Buyer Indemnified Parties hereunder that are
otherwise indemnifiable under this Agreement or under any Ancillary Agreement
(other than the Escrow Agreement), or in any schedule, certificate, instrument,
agreement or document delivered in connection herewith or therewith shall exceed
a threshold of * * * * in the aggregate (the “Deductible”), after which
point only claims in excess of the Deductible shall be recoverable and (ii) all
indemnification obligations of Seller in respect of Damages under this Agreement
or under any Ancillary Agreement (other than the Escrow Agreement), or in any
schedule, certificate, instrument, agreement or document delivered in connection
herewith or therewith shall not in the aggregate exceed * * * * (the “Claims
Limitation”), which amounts shall be paid first from the Escrow Account;
provided, however, that the Deductible and the Claims Limitation
shall not apply * * * *.  For purposes of clarity, the Deductible shall not
reduce Seller’s indemnification obligation hereunder to less than * * * *.

(b)

The
amount of any Damages for which indemnification is provided under this Article X
shall be (i) reduced by any amounts actually received by the Indemnitee under
insurance policies with respect to such Damages and (ii) deemed adjustments to
the Purchase Price.

(c)

Seller
agrees that its and all Seller Indemnified Parties’ sole and exclusive remedies
at law or in equity for Damages for any matters arising from this Agreement, the
Ancillary Agreements (other than the Escrow Agreement) and any schedule,
certificate, instrument, agreement or document delivered pursuant hereto or
thereto shall be the rights to indemnification set forth in this Article X.
 Buyer agrees that its and all Buyer Indemnified Parties’ sole and
exclusive remedies at law and in equity for Damages for any matters relating to
or arising from this Agreement (other than injunctive relief under Section 12
and Annexes 1 and 2) the Ancillary Agreements (other than the Escrow Agreement)
and any schedule, certificate, instrument, agreement or document delivered
pursuant hereto or thereto shall be the rights to indemnification set forth in
this Article X.  





-
25 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(d)

Buyer
shall look first to the Escrow Account for recovery for Damages subject to
indemnification hereunder until such time as the Escrow Amount is exhausted by
claims or distributed to the Seller.

(e)

Neither
Buyer nor Seller shall be liable to the other for punitive damages in connection
with direct claims against the other (i.e., claims other than those
asserted by a third party).  Buyer and Seller acknowledge and agree that
punitive damages awarded in connection with a third party claim that is
indemnifiable hereunder are direct damages of the Indemnitee and are fully
recoverable hereunder subject to the limitations above.

11.

Termination
and Abandonment.

11.1

Methods
of Termination.

  The
transactions contemplated herein may be terminated or abandoned at any time
prior to the Closing:

(a)

by
mutual written agreement of Seller and Buyer; 

(b)

by
Seller if any of the conditions set forth in Section 8 shall have become
incapable of fulfillment and shall not have been waived by Seller;

(c)

by
Buyer if any of the conditions set forth in Section 9 shall have become
incapable of fulfillment and shall not have been waived by Buyer; or 

(d)

by
either Seller or Buyer if the Closing shall not have occurred by April 10, 2009;
provided that the terminating Party is not then in material breach of its
representations, warranties, or obligations hereunder.

11.2

Procedure
upon and Effect of Termination.

  In
the event of termination and abandonment under Section 11.1, written notice
thereof shall forthwith be given to the other Party and the transactions,
conveyances, and other actions contemplated by this Agreement shall be
terminated and abandoned, without further action by the Parties;
provided, that no Party shall be relieved of any Damages occurring or
sustained as a result of a breach of any of such Party’s representations,
warranties, covenants or agreements contained herein.  Notwithstanding any
termination of this Agreement, the provisions of Section 7.7 and 13 and this
Section 11.2 shall survive.

12.

Non-Competition;
Confidentiality.

12.1

Non-Competition.

  Seller
acknowledges that (a) Buyer would not have entered into this Agreement but for
the agreements and covenants contained in this Section 12 and (b) the agreements
and covenants contained in this Section 12 are essential to protect the value
and goodwill of the Acquired Assets.  To induce Buyer to enter into this
Agreement, Seller hereby 





-
26 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







agrees
that, following the Closing Date and for a period of three (3) years thereafter
(the “Restricted Period”), without the prior consent of Buyer, it shall
not, directly or indirectly, own, manage, operate, join, control or participate
in the ownership, management, operation or control of, or be employed or
retained by, render services to, provide financing (equity or debt) or advice
to, or otherwise be connected in any manner with any business that at any time
markets, sells, commercializes or develops or manufactures for sale or
distribution (or takes any other action related to any of the foregoing) any
pharmaceutical product that contains vitamin B12 to treat B12 deficiencies or
maintain B12 levels, anywhere in the world; provided, however,
that nothing contained herein shall prevent the purchase or ownership by Seller
of less than three (3%) percent of the outstanding equity securities of any
class of securities of a company registered under Section 12 of the Securities
and Exchange Act of 1934, as amended.

12.2

No-Competing
Interests.

  Seller
hereby represents and warrants to Buyer that it does not have any ownership or
other interest in any business that markets, sells, commercializes or develops
or manufactures for sale or distribution (or takes any other action related to
any of the foregoing) any pharmaceutical product that contains vitamin B12 to
treat B12 deficiencies or maintain B12 levels, anywhere in the world.
 Seller hereby represents and warrants to Buyer that, from and after the
Closing, neither it nor any of its Affiliates has or shares with Seller any
ownership or other interest in any Acquired Asset.

12.3

Non-Disruption.

  During
the Restricted Period, neither Seller nor Buyer shall intentionally, directly or
indirectly, interfere with, disrupt or attempt to disrupt any present (including
the relationships included in the Acquired Assets) relationship, contractual or
otherwise, between the other Party, on the one hand, and any of such other
Party’s customers, contractees, suppliers or employees, on the other hand.
 For clarification purposes,
the selling of competitive products by Seller (if permitted by Section 12.1) or
Buyer shall not constitute a violation of the provisions of this Section
12.3.

12.4

Confidentiality.

  From
and after the Closing Date, Seller shall not, at any time, directly or
indirectly, communicate, disclose or disseminate any Confidential Information to
a third party in any manner whatsoever, except disclosure to its personal
financial, tax or legal advisors, lenders and members, and as may be required
under legal process by subpoena or other court order; provided, that
Seller takes reasonable steps to provide Buyer with sufficient prior written
notice in order to contest such requirement or order.

12.5

Remedies
for Breach.

  Seller
and Buyer each acknowledges and agrees that: (a) the other Party would be
irreparably injured in the event of its breach of any of the obligations under
Section 1.2 or this Article 12; (b) monetary damages would not be an adequate
remedy for such breach; (c) the other Party shall be entitled (without the need
to post any bond) to injunctive relief, in 





-
27 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







addition
to any other remedy that it may have, in the event of any such breach; and (d)
the existence of any claims that it may have against the other Party, whether
under this Agreement, any Ancillary Agreement or otherwise, shall not be a
defense to (or reason for the delay of) the enforcement by the other Party
 of any of its rights or remedies under Section 1.2 or this Article
12.

13.

Miscellaneous

13.1

Notices.

  All
notices, requests, demands and other communications that are required or may be
given pursuant to the terms of this Agreement shall be in writing and shall be
delivered personally, sent by facsimile transmission, delivered by a recognized
overnight courier or express mail service for next Business Day delivery (and
requiring proof or delivery or receipt) or posted in the United States mail by
registered or certified mail, with postage pre-paid, return receipt requested,
and shall be deemed given when so delivered personally, sent by facsimile
transmission with electronic confirmation of receipt (if receipt is before 5:00
p.m. local time on a Business Day, and otherwise it shall be deemed given on the
subsequent Business Day), the next day after delivered to such overnight courier
or express mail service or three (3) Business Days after the date of mailing, as
follows:  

If
to Buyer to:

Par
Pharmaceutical, Inc
300 Tice Boulevard
Woodcliff Lake, NJ 07677
Attn:
 General Counsel
Tel. No.:  201-802-4215
Fax No.:
 201-802-4225

With
copies to (which shall not constitute notice):

K&L
Gates LLP
599 Lexington Avenue
New York, NY  10022
Attn:
 Whitney John Smith, Esq.
Tel. No.:  212-536-3930
Fax No.:
 212-536-3901

If
to Seller or to a QOL Member, to:

QOL
Medical, LLC
5400 Carillon Point
Kirkland, WA 98033
Attn: Edwin
Hernandez
Tel. No.:  866-469-3773
Fax No.:  775-640-2736





-
28 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







With
copies to (which shall not constitute notice):

William
Bryant

325
Five Acre Road

Alpharetta,
GA 30004

Tel.
No.:  678-366-9382

Fax
No.:  678-669-2265




And
to:

Jones Day

1420 Peachtree Street, N. E.

Suite 800, 

Atlanta, GA 30309

Attn: Milford B. Hatcher, Jr. Esq.

Tel. No.: 404-521-3939

Fax No.: 404-581-8330




And to:

PELICAN
MEDICAL, LLC
P.O. Box 6359
Vero Beach, FL  32961
Attn: Derick
Cooper
Tel No.:772-231-3715
Fax No.:772-365-3375

And
to:

Ballast
Point Ventures, L.P.

880
Carillon Parkway

St.
Petersburg, FL 33716

Attn:
 Drew Graham

Tel.
 No.: 727-567-1500

Fax
No.: 727-567-1515




Any Party may, by notice given in accordance with the provisions
of this Section 13.2 to the other Parties, designate another address or
individual for receipt of notices hereunder.

13.2

Entire
Agreement.

  This
Agreement (and all annexes, exhibits and schedules attached hereto and the
Ancillary Agreements and all other documents delivered in connection herewith)
contains the sole and entire agreement between the Parties with respect to the
subject matter hereof and supersedes all prior discussions and agreements
between the Parties with respect to the subject matter hereof.





-
29 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







13.3

Waiver.

  Any
term or condition of this Agreement may be waived at any time by the Party that
is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition.  No waiver by either Party of any term or
condition of this Agreement, in any one or more instances, shall be deemed to be
or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.  All remedies, either under this
Agreement or by law or otherwise afforded, will be cumulative and not
alternative.

13.4

Amendment.

  This
Agreement may be amended, supplemented or modified only by a written instrument
duly executed by each Party.

13.5

Third
Party Beneficiaries.

  The
terms and provisions of this Agreement are intended solely for the benefit of
each Party and its respective successors or permitted assigns and it is not the
intention of the Parties to confer third party beneficiary rights upon any other
Person, except as provided in Sections 10.2 and 10.3 and Annex 2.

13.6

Assignment;
Binding Effect.

  This
Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and assigns.  This Agreement may not
be assigned or transferred (by merger or otherwise) by Seller or any QOL Member
without the prior written consent of Buyer.  Any transfer in violation of
this Section 13.6 shall be null and void.   Buyer may assign or
delegate any or all rights or obligations hereunder without the consent of
Seller or any QOL Member; provided that Buyer shall remain liable for any
such obligations assigned.

13.7

Headings.

  The
headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.

13.8

Severability.

  If
in any jurisdiction any term or provision hereof is determined to be invalid or
unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, (b) any such invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction, and (c) the invalid or unenforceable term or provision shall, for
purposes of such jurisdiction, be deemed replaced by a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.





-
30 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







13.9

Governing
Law.

  This
Agreement and the legal relations among the parties shall be governed by and
construed in accordance with the laws of the State of New York (without giving
effect to the conflict of laws thereof other than Section 5-1401 of the New York
General Obligations Law).  

13.10

Consent
to Jurisdiction and Forum Selection.

  The
Parties hereby consent to the jurisdiction of the federal and New York State
courts located in Manhattan (NYC) and agree that service of process by certified
mail, return receipt requested, shall, in addition to any other methods
permitted by applicable Law, constitute personal service for all purposes. 

EACH
OF THE PARTIES IRREVOCABLY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED
ON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE ANCILLARY AGREEMENTS.

13.11

Expenses.

  Except
as otherwise expressly provided in this Agreement, each Party shall pay its own
expenses and costs incidental to the preparation of this Agreement and to the
consummation of the transactions contemplated hereby.

13.12

Counterparts.

  This
Agreement may be executed in any number of counterparts and by facsimile or
other electronic transmission, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.

14.

Definitions.




14.1

Defined
Terms.

  As
used in this Agreement, the following defined terms have the meanings described
below:

“Acquired
Assets” means all properties, assets and rights owned, licensed or leased by
Seller of whatever kind and nature, tangible or intangible, primarily related to
the Product, including the following: 

(a)

the
Regulatory Approvals;





-
31 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(b)

the
Books and Records;

(c)

the
Marketing Materials;

(d)

the
Product Intellectual Property;

(e)

the
Assumed Contracts;

(f)

all
causes of action arising out of or related to the Product or any Acquired Asset
or infringement thereof, including the Litigation Matter;

(g)

all
prepayments made to third parties with respect to the Product, including any
unused prepayments to Patheon, Inc. in connection with the contemplated
technology transfer of Product manufacturing to Patheon, Inc.;

(h)

the
Inventory; and

(i)

any
and all tooling specific to the manufacture of the Product that is owned by
Seller; 

provided,
however, that Acquired Assets do not include licenses or continuing
contractual rights pursuant to (A) that certain Asset Purchase Agreement, dated
as of October 14, 2005, by and between Seller and Questcor Pharmaceuticals, Inc.
(“Questcor”), (B) that certain Clarification Agreement, dated as of
September 23, 2005, by and between MDRNA
Inc. (formerly Nastech Pharmaceutical Company, Inc.) (“MDRNA”) and Seller, (C) that certain Asset
Purchase Agreement, dated as of June 16, 2003, by and between MDRNA and Questcor, together with the Assignment
Agreement, dated as of October 14, 2005, by and between Questcor and Seller, or
(D) that certain Amended and Restated Supply Agreement, dated as of October 14,
2005, by and between MDRNA and Seller.

“Affiliate” means, with respect to any Person, any Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified.

“Agreement”
has the meaning set forth in the preamble to this Agreement.

“Ancillary
Agreements” means the Escrow Agreement, the Assignment and Assumption
Agreement, the Trademark Assignment Agreement, the Patent Assignment Agreement,
the Standstill Agreement and any other agreement, certificate or document
between the Parties and executed or delivered pursuant to or in connection with
the Closing hereunder.

“ANU”
has the meaning set forth in Section 9.11.

“Assets
and Properties” of any Person means all assets and properties of any kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, 





-
32 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







cash
equivalents, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory, goods and
intellectual property.

“Assignment and Assumption Agreement” means the Bill of
Sale and Assignment and Assumption Agreement, dated the Closing Date, between
Seller and Buyer, substantially in the form of Exhibit C.

“Assumed
Contract” means each Contract designated as an Assumed Contract on the list
of Contracts set forth on Schedule 5.7(b)(ii), excluding any Excluded
Rights under any such Contract.

“Assumed
Liabilities” means (a) all Liabilities and obligations under or pursuant to
the Assumed Contracts arising or relating to periods after the Closing Date, (b)
all Liabilities and obligations relating to recalls or product liability claims
or threatened claims or injuries caused by Product manufactured, marketed, sold
or delivered by Buyer after the Closing, except to the extent that such Product
was included in Inventory and was defective when delivered by Seller to Buyer
hereunder, (c) Product returns for sales of Product made by Seller prior to, or
by Buyer after, the Closing in accordance with Section 7.16, and (d) all costs,
expenses and claims associated with the continuation of the Litigation Matter
after the Closing, but excluding the costs and expenses incurred by Seller after
the Closing Date associated with a prompt dismissal of Seller from the
Litigation Matter; provided, however, if either the court does not
permit Seller to be dismissed promptly from such matter or Buyer requests Seller
to continue as a party to such matter, Assumed Liabilities shall include all
attorney’s fees and all other costs and expenses of Seller thereafter related to
the Litigation Matter, provided, that Seller uses Buyer’s legal counsel
and Buyer controls the Litigation Matter.

“Books
and Records” means all files, documents, instruments, papers, books and
records (including all technological, scientific, chemical, biological,
pharmacological, toxicological, developmental, distribution, marketing,
regulatory or other materials and information) owned by Seller and relating
primarily to the Product, including any pricing lists, customer lists, vendor
lists, financial data, items set forth on Schedule 5.9(b),
 Regulatory Documentation, clinical data, safety data, litigation
materials, adverse claims or demands, investigation information or files,
Trademark registration certificates, Trademark renewal certificates, and other
documentation relating primarily to the Product or any Acquired Asset, but
excluding any such items (a) to the extent that any applicable Law prohibits
their transfer and (b) to the extent such items are included in the definition
of “Marketing Materials”.  The Parties acknowledge and agree that (i) to
the extent that any books and records contain information of the above nature
that relates primarily to the Product but also relates secondarily to any
product other than the Product, Seller shall provide to Buyer the originals of
such books and records and keep a copy; provided, however, that
some or all of the information therein relating to any product other than the
Product may be redacted to delete such information and (ii) to the extent that
any books and records contain information of the above nature that relates
primarily to any product other than the Product relates secondarily to the
Product, Seller shall provide to Buyer copies of such books and records;
provided, however, that some or all of the information therein
relating to any product other than the Product may be redacted to delete such
information.





-
33 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







“Business
Day” means a calendar day other than Saturday, Sunday or any other calendar
day on which banks located in New York are authorized or obligated to close.

“Buyer”
has the meaning set forth in the preamble to this Agreement.

“Buyer
Governmental Consents” has the meaning set forth in Section 6.3.

“Buyer
Indemnified Parties” has the meaning set forth in Section 10.2(a).

“Cardinal”
has the meaning set forth in Section 7.16.

“Claims
Limitation” has the meaning set forth in Section 10.5(b).

“Closing”
has the meaning set forth in Section 4.1.

“Closing
Date” means the date that the Closing actually occurs as provided in Section
4.1.

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

“Company
Creditors” means FCC, LLC and Full Circle Partners, LP.

“Company
Indebtedness” means the indebtedness and other obligations of the Company
for amounts owing under that certain Loan and Security Agreement, by and among
Seller and the Company Creditors, dated November 30, 2007, and the other Loan
Documents (as defined therein).

“Confidential
Information” means any and all information (oral or written) relating
exclusively to  the Product or any Acquired Asset  including to the
extent exclusively related to the Product, the terms of this Agreement,
information relating to the Product Intellectual Property, the Marketing
Materials, the Regulatory Documentation, pricing techniques, procurement and
sales activities and procedures, proprietary information, business methods and
strategies (including acquisition strategies), customer and supplier lists, data
processing reports, customer sales analyses, invoice, price lists or
information, and information pertaining to any lawsuits or governmental
investigation, except such information that is in the public domain (such
information not being deemed to be in the public domain merely because it is
embraced by more general information that is in the public domain) other than as
a result of a breach of any of the provisions.

“Contract”
means any and all legally binding commitments, contracts, purchase orders,
leases, licenses, security agreements or other agreements, whether written or
oral.

“Corporate
Names” means all NDC numbers of Seller and all Trademarks owned by, licensed
to, controlled by or used by Seller, whether or not registered, including the
name “QOL”, but excluding the Trademarks of the Product.

“Current
NDC Number” has the meaning set forth in Section 7.9(a).





-
34 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







“Damages”
has the meaning set forth in Section 10.2(a).

“Deductible”
has the meaning set forth in Section 10.5(a).

“Defending
Party” has the meaning set forth in Section 7.17.

“Escrow
Account” has the meaning set forth in Section 3.1(b)(i).

“Escrow
Agent” means TD Bank, National Association.

“Escrow
Agreement” means the Escrow Agreement by and among Buyer, Seller and the
Escrow Agent, substantially in the form attached as Exhibit D.

“Escrow
Amount” has the meaning set forth in Section 3.1(b)(i).

“Escrow
Release Date” has the meaning set forth in Section 3.1(c).

“Excluded
Assets” means all Assets and Properties of Seller other than the Acquired
Assets.  It is specifically noted that Seller’s accounts receivable and
cash collected by Seller with respect to Products (or any other products of
Seller) sold prior to Closing and, subject to Section 7.13, any prepayments with
respect to Seller’s insurance policies are Excluded Assets.

“Excluded
Liabilities” means all Liabilities of Seller other than the Assumed
Liabilities.

“Excluded
Rights” means, with respect to any Assumed Contract, any rights of any
Seller Indemnified Party to seek and obtain defense and indemnification
thereunder from any indemnifying party pursuant to the terms and conditions of
the applicable Assumed Contract based on any Damages incurred by any Seller
Indemnified Party, whether prior to, on or after the Closing Date, that (a) are
attributable to occurrences and circumstances arising prior to the Closing, and
(b) are otherwise subject, prior to the Closing, to an obligation of defense or
indemnity by any indemnifying party.

“FDA”
means the United States Food and Drug Administration and any successor agency
thereto.

“Filing
Deadline” has the meaning set forth in Section 5.10(c).

“Final
Payoff Amount” means the amounts necessary to obtain the release of the
Liens of the Company Creditors in the Acquired Assets as provided in the Payoff
Letter.

“GAAP”
has the meaning set forth in Section 5.6.

“Governmental or Regulatory Authority”
means any court, tribunal, arbitrator, authority, agency, commission, official
or other instrumentality of the United States or South Korea, or any
supra-national organization, state, county, city or other political subdivision
thereof.





-
35 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







“ICS”
has the meaning set forth in Section 5.6

“Indemnifying
Party” has the meaning set forth in Section 10.4(a).

“Indemnitee”
has the meaning set forth in Section 10.4(a).

“Inventory”
means all finished, work in progress and raw material inventory of Product owned
as of the Closing by Seller, whether held at a location or facility of Seller
(or of any other Person on behalf of Seller), or in transit to or from Seller
(or any such other Person), as all set forth on Schedule 14.1(a), which
shall be updated by Seller as of the Closing Date, excluding lot numbers 8002,
8003 and 8004.

“Knowledge
of Seller” means facts or other information actually known by either of the
two senior managers of Seller or which a prudent individual in such position
could be expected to discover in the course of conducting a reasonably
comprehensive investigation of the relevant subject matter.

“Law”
means any federal, state or local law, statute or ordinance, or any rule,
regulation, or published guidelines or pronouncements having the effect of law
promulgated by any Governmental or Regulatory Authority.

“Legacy
IP” means, to the extent not included on Schedule 14.1(b), (a) all
data, information and methods associated at any time with the Product and its
ingredients but not found in the Regulatory Documentation, (b) all data and
methods associated at any time with testing of the Product and its ingredients
but not found in the Regulatory Documentation, (c) all formulations of the
Product that in the past have been used in the manufacture of the Product, and
(d) all methods of manufacturing that in the past have been used in
manufacturing the Product, in each case, to the extent owned or controlled by
Seller.

“Liability”
means any liability (whether known or unknown, asserted or unasserted, absolute
or contingent, accrued or unaccrued, liquidated or unliquidated, and due or to
become due), including any liability for Taxes.

“Liens”
has the meaning set forth in Section 5.8.

“Litigation
Matter” means the suit styled QOL Medical, LLC v. Fleming & Company,
Pharmaceuticals, Case No. 3:2009cv00001, filed on January 2, 2009 in the
Southern District Court of California.

“Marketing
Materials” means all market research, marketing plans and strategies, media
plans, advertising, branding, messages, form letters, sales force training
materials, advertising, promotional and marketing data, advertising and
promotional materials and literature, in each case developed by or on behalf of
Seller with respect solely to the Product; provided, that “Marketing
Materials” shall exclude the labeling of the Product, which shall be deemed part
of the Regulatory Approvals.





-
36 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







“Material
Adverse Effect” means a material development with respect to the Product and
the Acquired Assets that, taken as a whole, materially threatens the ability of
Buyer to manufacture, market or sell the Product or have the Product
manufactured (other than the financial condition of MDRNA Inc. (formerly Nastech Pharmaceutical
Company, Inc.)), marketed or sold or otherwise threatens the commercial
viability of the Product; provided, that none of the following shall be
deemed to constitute a Material Adverse Effect: any adverse change, event,
development, or effect arising from or relating to (a) general business or
economic conditions, including such conditions related to the business of
Seller, (b) national or international political or social conditions, including
the engagement by the United States in hostilities, whether or not pursuant to
the declaration of a national emergency or war, or the occurrence of any
military or terrorist attack upon the United States, or any of its territories,
possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, (c) financial,
banking, or securities markets (including any disruption thereof and any decline
in the price of any security or any market index), (d) changes in United States
generally accepted accounting principles or (e) the taking of any action
expressly required by this Agreement and Ancillary Agreements, in each case, so
long as the Product and the Acquired Assets, taken as a whole, are not
disproportionately affected thereby.

“McKesson”
has the meaning set forth in Section 7.16.

“MDRNA Transaction” means the transactions
described in that certain Asset Purchase Agreement by and between MDRNA Inc. (formerly Nastech Pharmaceutical
Company, Inc.) and Buyer, dated as of the date hereof.

“McKesson”
has the meaning set forth in Section 7.16.

“NDC”
means the unique identifying number assigned to a drug product, including the
labeler code, product code and package code, in connection with the drug listing
requirements of section 510(j) of the Federal Food, Drug, and Cosmetic Act and
applicable FDA rules and regulations.

“NDC
Number” has the meaning set forth in Section 7.9(a).

“NDC
Number Termination Date” has the meaning set forth in Section 8.9(b).

“Order”
means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary or
final).

“Party”
or “Parties” has the meaning set forth in the preamble.

“Patents” means United States Patents Nos. 7,229,636 and
7,404,489, United States Patent Applications Nos. 12/079,875 and 12/142,240 and
international patent application No. PCT/US06/024685 as well as (a) any
continuations, continuations in part, divisional, national phase application or
foreign counterpart of any of the foregoing (including all patents issuing
thereon), (b) the rights to any and all extensions, and supplementary protection
certificates related to all of the foregoing and (c) the right to file for any
and all extensions, 





-
37 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







exclusivities, and supplementary protection certificates that may
appertain to any and all of the foregoing.

“Patent Assignment” means the Patent Assignment, dated the
Closing Date, between Seller and Buyer, substantially in the form of Exhibit
E.

“Payoff Letter” has the meaning set forth in Section
7.18.

“Person”
means any natural person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority.

“Product”
means the pharmaceutical products that were approved pursuant to the Seller NDAs
prior to Closing. 

“Product
Intellectual Property” means 

(a)

the
items set forth on Schedule 14.1(b);

(b)

the
Legacy IP;

(c)

the
technology, trade secrets, know-how, and other proprietary information,
including any such chemical, pharmacological, toxicological, pharmaceutical,
physical, analytical, safety, efficacy, bioequivalency, quality assurance,
quality control and clinical data, that is owned by Seller and related primarily
to Product or the manufacture, validation, packaging, release testing, stability
or shelf life of the Product, including any such information contained or
embodied in the product formulations, research records, product specifications,
manufacturing, engineering and other manuals and drawings, standard operating
procedures, flow diagrams, annual product reviews, process validation reports,
analytical method validation reports, specifications for stability trending and
process controls, testing and reference standards for impurities in and
degradation of the Product, technical data packages, chemical and physical
characterizations, dissolution test methods and results, formulations for
administration, clinical trial reports, regulatory communications, regulatory
filings and data generated in connection with the testing of the Product, and
labeling;  

(d)

the
Trademarks; and

(e)

the
Patents.  

Additionally,
the Product Intellectual Property shall include the right to file for, maintain,
and enforce any available intellectual property protection or rights that may
pertain to any individual item within the Product Intellectual Property.

“Purchase
Price” shall have the meaning set forth in Section 3.1(a).

“QOL
Members” has the meaning set forth in the preamble.





-
38 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







“Reasonable
Best Efforts” means such prompt, substantial and reasonably persistent
efforts as a prudent Person desirous of achieving a result would use in similar
circumstances; provided that the Parties shall be required to expend only
such efforts and  resources to achieve such results as are commercially
reasonable in similar circumstances without the requirement of any action or
expenditure that is clearly disproportionate or clearly unduly burdensome.

“Rebate”
means any rebate, discount, reimbursement, administrative fee, chargeback or
other payment payable pursuant to (a) state Medicaid, Medicare or other state
and governmental pharmaceutical assistance programs, including with respect to
any program of the U.S. Department of Veterans Affairs or (b) Contracts between
Seller or Buyer and managed care organizations (including pharmacy benefit
management companies, health plans and insurance companies) or other customers,
in each case relating to utilization or sale of the Product during any
particular period.

“Regulatory
Approvals” means (a) the Seller NDAs and (b) all current manufacturing and
marketing authorizations and regulatory approvals relating to the manufacturing
or marketing of the Product outside of the United States, to the extent that
Seller has ownership or control thereof or rights thereto (including all
additions, supplements, extensions and modifications thereto and the official
regulatory files relating thereto).

“Regulatory
Documentation” means (a) registrations or applications for, or other filings
or submissions with respect to, the Regulatory Approvals to the extent made by
Seller or in the possession or control of Seller, including reports, data and
other written materials filed by Seller or in the possession or control of
Seller as part of or referenced in, the Regulatory Approvals, and the Seller’s
risk management plan (or any other risk management plan in the possession or
control of Seller) with respect to the Product, (b) any other filings or
submissions with respect to the Product made by (or in the possession or control
of) Seller with any Governmental or Regulatory Authority other than the FDA, (c)
compliance documentation, including complaint history, compliance history
(including any field alerts, market withdrawals and recalls), pharmacovigilance,
requests for additional scientific information with respect to the Product,
manufacturing change controls, process/lab investigations, stability protocols
and test data and product development packages and (d) written communications,
and written summaries and minutes of other communications, with the FDA or other
Governmental or Regulatory Authorities to the extent relating to any of the
foregoing, in each case, that are owned by Seller or in the possession or
control of Seller as of the Closing Date.

“Restrictive
Contract” has the meaning set forth in Section 5.7(a).

“Restricted
Period” has the meaning set forth in Section 12.1.

“Sales
Tax Certificate” has the meaning set forth in Section 7.14.

“Seller”
has the meaning set forth in the preamble to this Agreement.

“Seller
Consents” has the meaning set forth in Section 5.3(b).





-
39 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







“Seller
Governmental Consents” has the meaning set forth in Section 5.3(a).

“Seller
NDAs” means New Drug Application #21-642, New Drug Application #19-722 and
Investigative New Drug Application #25,696 filed pursuant to Section 505(b) of
the Federal Food, Drug, and Cosmetic Act, including all periods of exclusivity
awarded or attached thereto, and applicable FDA rules and regulations for
marketing authorization within the United States (including all additions,
supplements, extensions and modifications thereto and the official regulatory
files relating thereto).




“Seller
Third Party Consents” has the meaning set forth in Section 5.3(b).

“Seller
Indemnified Parties” has the meaning set forth in Section 10.2(b).

“Standstill Agreement” means the Standstill Agreement,
dated as of March 31, 2009, by and among Buyer, Seller, Velos and ANU.

“Tax”
or “Taxes” means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A
Code), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, recording, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or
not.

“Tax
Allocation” has the meaning set forth in Section 3.2.

“Tax
Return” means any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
or Regulatory Authority in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Law relating to any
Tax.  

“Trade
Dress” means the current packaging and labeling of the Product as currently
approved by the FDA.

“Trademark”
means those items listed on Schedule 5.10(c) and all goodwill associated
therewith.

“Trademark Assignment” means the Trademark Assignment,
dated the Closing Date, between Seller and Buyer, substantially in the form of
Exhibit F.

“Velos” has the meaning set forth in Section 9.11.

“Wholesalers”
has the meaning set forth in Section 7.16.

14.2

Construction
of Certain Terms and Phrases.





-
40 -






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(a)

When
the context in which words are used in this Agreement indicates that such is the
intent, words used in the singular shall have a comparable meaning when used in
the plural, and vice versa; pronouns stated in the masculine, feminine or neuter
shall include each other gender.

(b)

The
section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the Parties and shall not in any way
affect the meaning or interpretation of this Agreement.

(c)

The
term “including” is not limiting and means “including, without limitation.”

(d)

Unless
otherwise expressly provided herein, (i) references to agreements (including
this Agreement) and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are disclosed to Buyer, (ii) references
to any statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such
statute or regulation, except that for purposes of determining the accuracy of
any representation and warranty, such reference shall only be to such statute or
regulation as in effect on the date the representation and warranty was made and
(iii) references to “Sections,” “Schedules”, “Exhibits” or “Annexes” are to
sections, schedules, exhibits or annexes, as applicable, of this
Agreement.

14.3

Disclosure
Schedules.

  The
schedules referred to herein and delivered pursuant to and attached to this
Agreement (collectively, “Disclosure Schedules”) are integral parts of
this Agreement.  The disclosure of an item on a particular Disclosure
Schedule as an exception to a specific representation or warranty will be deemed
adequately disclosed as an exception with respect to all other representations
or warranties, notwithstanding the presence or absence of an appropriate cross
reference thereto, to the extent that the relevance of such item to such other
representations or warranties is reasonably apparent on the face of such item
and such item describes the relevant facts in reasonable detail.  Without
limiting the generality of the foregoing, the mere listing, or inclusion of a
copy, of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein, unless the representation
or warranty is being made as to the existence of the document or other item
itself.  Seller is responsible for preparing and arranging the Disclosure
Schedules corresponding to the lettered and numbered sections of Section 5.
 

[Signature Page Follows]





-
41 -









CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







IN
WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date
first above written.

BUYER

PAR PHARMACEUTICAL, INC.

By: /s/ John A. MacPhee

Name:  John A. MacPhee

Title:   President, Strativa Pharmaceuticals, a division


      of Par Pharmaceutical,
Inc.

SELLER

QOL MEDICAL, LLC

By: /s/ Edwin B. Hernandez

Name: Edwin B. Hernandez

Title:  Chief Operating Officer





42

NY666325v.5






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







IN
WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date
first above written.

QOL
MEMBER

For
purposes of Annexes 1 and 2 only.




/s/ Trevor Blake

Trevor Blake







QOL
MEMBER

For
purposes of Annexes 1 and 2 only.




/s/ Edwin Hernandez

Edwin Hernandez











43

NY666325v.5






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







IN
WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date
first above written.  

QOL
MEMBER

For
purposes of Annex 2 only.

BALLAST POINT VENTURES L.P.

By: Ballast Point Venture Partners, L.P., its general partner

By: RJ Ventures, LLC, its general partner

By:

/s/ Drew Graham

Name: Drew Graham

Title:  Managing Member




QOL
MEMBER

For
purposes of Annex 2 only.

BALLAST POINT VENTURES E.F., LP

By: Ballast Point Venture Partners, L.P., its general partner

By: RJ Ventures, LLC, its general partner

By:

/s/ Drew Graham

Name: Drew Graham

Title:  Managing Member




QOL
MEMBER

For
purposes of Annex 2 only.

H III PRIVATE EQUITY, LLC

By:/s/ James A. Haskin, III

Name:  James A. Haskin, III

Title:   Managing Member





44

NY666325v.5






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







IN
WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date
first above written.  

QOL
MEMBER

For
purposes of Annex 2 only.

PELICAN
MEDICAL, LLC

By:/s/ Frederick E. Cooper

Name: Frederick E. Cooper

Title:   Manager




QOL
MEMBER

For
purposes of Annex 2 only.

CONIFER PARTNERS I, LLC

By: /s/ C.Bradford Jackson

Name:  C. Bradford Jackson

Title:  President, Southwest Asset Advisors, Inc. 

Member Manager, Conifer Advisors, LLC

Member Manager, Conifer Partners I, LLC

















45

NY666325v.5






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







Annex 1




NON-COMPETITION PROVISIONS




This
Annex 1 is part of the Asset Purchase Agreement, dated March __, 2009 (the
“Purchase Agreement”), by and among Par Pharmaceutical, Inc., a Delaware
corporation (“Buyer”), QOL Medical, LLC, a Delaware limited liability
company (“Seller”), and the members of Seller who are signatories to the
Purchase Agreement (each, a “QOL Member”).  Buyer, Seller and the
QOL Members are sometimes referred to in this Agreement individually as a
“Party” and collectively as the “Parties”.  Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement. 




ARTICLE I

NON-COMPETITION; REMEDY

Section
1.1

Non-Competition.
 Trevor Blake and Edwin Hernandez each acknowledges with respect solely to
himself that (a) Buyer would not have entered into the Purchase Agreement but
for the agreements and covenants contained in this Article 1 and (b) the
agreements and covenants contained in this Article 1 are essential to protect
the value and goodwill of the Acquired Assets.  To induce Buyer to enter
into the Purchase Agreement, Mr. Blake and Mr. Hernandez each separately hereby
agrees that, following the Closing Date and for a period of three (3) years
thereafter (the “Restricted Period”), without the prior consent of Buyer, he
shall not, directly or indirectly, own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be
employed or retained by, render services to, provide financing (equity or debt)
or advice to, or otherwise be connected in any manner with any business that at
any time markets, sells, commercializes or develops or manufactures for sale or
distribution (or takes any other action related to any of the foregoing) any
pharmaceutical product that contains vitamin B12 to treat B12 deficiencies or
maintain B12 levels, anywhere in the world; provided, however,
that nothing contained herein shall prevent (i) the purchase or ownership by Mr.
Blake or Mr. Hernandez of less than three (3%) percent of the outstanding equity
securities of any class of securities of a company registered under Section 12
of the Securities and Exchange Act of 1934, as amended or (ii) the employment or
provision of services by Mr. Blake or Mr. Hernandez with a third party which
markets, sells, commercializes or develops or manufactures for sale or
distribution pharmaceutical products that contain vitamin B12 to treat B12
deficiencies or maintain B12 levels, provided that such products
constitute less than 15% of such third party’s business and neither Mr. Blake
nor Mr. Hernandez takes any part in the efforts of such third party with respect
to such products.

Section
1.2

No
Competing Interests.  Mr. Blake and Mr. Hernandez each hereby
represents and warrants to Buyer with respect to himself only that he does not
have any ownership or other interest in any business that markets, sells,
commercializes or develops or manufactures for sale or distribution (or takes
any other action related to any of the foregoing) any pharmaceutical product
that contains vitamin B12 to treat B12 deficiencies or maintain B12 levels,
anywhere in the world. Mr. Blake and Mr. Hernandez each with respect to himself
only hereby represents and warrants to Buyer that neither he nor any of his
Affiliates has or shares 





46

NY666321v.1






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







with
Seller any ownership or other interest in any Acquired Asset (other than
indirectly through membership interest in the Seller).

Section
1.3

Remedies
for Breach.  Mr. Blake and Mr. Hernandez each acknowledges and agrees
with respect to himself only that: (a) Buyer would be irreparably injured in the
event of a breach by him of any of the obligations imposed on him under this
Article 1; (b) monetary damages would not be an adequate remedy for such breach
by him; (c) Buyer shall be entitled (without the need to post any bond) to
injunctive relief, in addition to any other remedy that it may have, in the
event of any such breach; and (d) the existence of any claims that he may have
against Buyer, whether under this Agreement, any Ancillary Agreement or
otherwise, shall not be a defense to (or reason for the delay of) the
enforcement by Buyer of any of their rights or remedies under this Article
1.

Section
1.4

Separate
Obligations.  For avoidance of doubt, all covenants and obligations
contained in this Annex 1 are separate and distinct with respect to Mr. Blake
and Mr. Hernandez and neither undertakes (nor shall he be liable for breaches
with respect to) any covenants or obligations with respect to the other person.
 Buyer shall look solely to the person to with the breach relates with
respect to any breach of any covenant or obligation by Mr. Blake or Mr.
Hernandez under this Annex 1.

[Remainder of Page Intentionally Left Blank]








47

NY666321v.1









CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







Annex 2




CERTAIN PROVISIONS APPLICABLE TO QOL MEMBERS




This
Annex 2 is part of the Asset Purchase Agreement, dated March __, 2009 (the
“Purchase Agreement”), by and among Par Pharmaceutical, Inc., a Delaware
corporation (“Buyer”), QOL Medical, LLC, a Delaware limited liability
company (“Seller”), and the members of Seller who are signatories to the
Purchase Agreement (each, a “QOL Member”).  Buyer, Seller and the
QOL Members are sometimes referred to in this Agreement individually as a
“Party” and collectively as the “Parties”.  Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement. 




ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE QOL
MEMBERS

Each
of the QOL Members represents and warrants, solely with respect to himself or
itself and not with respect to any other QOL Member or the Seller, to Buyer as
of the date of the Purchase Agreement and as of the Closing Date, as
follows:

Section
2.1

Capacity;
Authority; Organization; Good Standing; Power.

  

(a)

In
the case of a QOL Member who is an individual, such QOL Member has the legal
capacity to execute and deliver this Agreement and to perform the obligations
required of it under this Annex 2.  In the case of a QOL Member that is an
entity, (i) such QOL Member is duly organized, validly existing and, to extent
applicable, in good standing under the Laws of the jurisdiction under which it
was formed, and has all requisite entity power and authority to enter into this
Agreement  and to perform the obligations required of it under this Annex
2, and (ii) the execution and delivery by such QOL Member of this Agreement and
the performance of its obligations under this Annex 2, have been duly authorized
by all necessary action on the part of such QOL Member, and such QOL Member has
all necessary entity power with respect thereto.

(b)

This
Agreement has been duly executed and delivered by such QOL Member and the
obligations imposed on him or it in this Annex 2 are  the valid and binding
obligations of such QOL Member, enforceable against him/it in accordance with
 the terms of this Annex 2, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors rights generally, and (ii) as limited by
general principles of equity.

Section
2.2

Non-Contravention.

  The
execution and delivery by such QOL Member of this Agreement does not, and the
performance by him/it of his/its obligations under this Annex 2 will not:

(a)

conflict
with or violate any provisions of the organizational documents of such QOL
Member, if applicable; or





48






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION







(b)

conflict
with or result in a violation or breach of any term or provision of any Law
applicable to such QOL Member or the property or assets of such QOL Member.

Section
2.3

Disclaimer
of Other Representations and Warranties.

  Except
as expressly set forth in this Article 1, no QOL Member makes any representation
or warranty, express or implied, at law or in equity, in respect of any of its
or Seller’s assets (including, without limitation, the Acquired Assets and the
Assumed Liabilities), liabilities or operations, including, without limitation,
with respect to merchantability or fitness for any particular purpose, and any
such other representations or warranties are hereby expressly disclaimed.
 

ARTICLE III

COVENANTS

Section
3.1

Non-Disruption.

  Following
the Closing Date and for a period of three (3) years thereafter (the
“Restricted Period”), each QOL Member, with respect only to himself or
itself, agrees that he or it shall not intentionally, directly or indirectly,
interfere with, disrupt or attempt to disrupt any present(including the present
relationships included in the Acquired Assets) relationship, contractual or
otherwise, between the Buyer, on the one hand, and any of its customers,
contractees, suppliers or employees, on the other hand.  For clarification
purposes, the selling of competitive products by such QOL Member shall not
constitute a violation of the provisions of this Section 12.3.

Section
3.2

Confidentiality.

  From
and after the Closing Date, each QOL Member, with respect only to himself or
itself, agrees that he or it shall not, at any time communicate, disclose or
disseminate any Confidential Information to a third party in any manner
whatsoever, except disclosure to their personal financial, tax or legal
advisors, lenders and (for any QOL Member that is an entity) its owners or
partners and as may be required under legal process by subpoena or other court
order; provided, that such Party takes reasonable steps to provide Buyer
with sufficient prior written notice in order to contest such requirement or
order.

Section
3.3

Remedies
for Breach.

Each
QOL Member acknowledges and agrees with respect solely to himself or itself and
with respect solely to the covenants of such QOL Member (and not with respect to
the covenants of any other QOL Member) that: (a) Buyer would be irreparably
injured in the event of a breach by such QOL Member of any of the obligations of
such QOL Member under this Article 2; (b) monetary damages would not be an
adequate remedy for such breach; (c) Buyer shall be entitled (without the need
to post any bond) to injunctive relief, in addition to any other remedy that it
may have, in the event of any such breach by such QOL Member; and (d) the
existence of any claims that any QOL Member may have against Buyer, whether
under this Agreement, any Ancillary Agreement or otherwise, shall not be a
defense to (or reason for the delay of) the enforcement by Buyer of any of its
rights or remedies under this Article 2.

14.4

ARTICLE
III





49






CONFIDENTIAL
INFORMATION OMITTED

(TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION)

ASTERISKS DENOTE SUCH OMMISSION










SEPARATE OBLIGATIONS; SURVIVAL

Section
3.1

For
avoidance of doubt, all representations, warranties, covenants and obligations
contained in this Annex 2 are separate and distinct with respect to each QOL
Member and no QOL Member undertakes (nor shall he or it be liable for breaches
with respect to) any representations, warranties, covenants or obligations with
respect to any other QOL Member.  Buyer shall look solely to the individual
QOL Member to which the breach relates with respect to any breach of any
representation, warranty, covenant or obligation by such QOL Member.

Section
3.2

All
representations, warranties and covenants of each QOL Member contained in this
Annex 2 shall survive the Closing Date and shall remain operative and in full
force and effect for a period of thirty-six (36) months following the Closing
Date and shall then terminate and be of no further effect; provided,
however, that (a) any claims with respect to breach of such
representations, warranties and covenants shall survive the time(s) that the
representation, warranty or covenant would otherwise terminate with respect to
claims of which written notice in reasonable specificity has been given as
provided in the Agreement prior to such termination and (b) the covenant
contained in Section 2.2 shall survive the Closing Date until the Confidential
Information covered by Section 2.2 enters the public domain (such information
not being deemed to be in the public domain merely because it is embraced by
more general information that is in the public domain) other than as a result of
a breach of Section 2.2.











50