Document:

Exhibit 10.1

    
      

    

    Exhibit
      10.1

     

    ASSET
      PURCHASE AGREEMENT

    

    THIS
      ASSET PURCHASE AGREEMENT (the
      “Agreement”) is made and entered into as of this the 24th day of February, 2006,
      by and between [i] KENTUCKY
      BIOPROCESSING, lNC.,
      a
      Kentucky limited liability company (“Buyer”),
      and
      [ii] collectively, each of LARGE
      SCALE BIOLOGY CORPORATION, a
      Delaware corporation and debtor-in-possession and LARGE
      SCALE BIOPROCESSING, lNC.,a
      Delaware corporation and debtor-in-possession (collectively, “Seller”).
      Buyer
      and Seller are each a “Party”
and
      collectively, the “Parties.”

    

    Recitals

    

    Seller
      [i] is the owner of the Real Property, as defined below, [ii] owns and
      operates the Facility, as defined below, on such Real Property, and
      [iii] owns the Equipment and the Intellectual Property, both as defined
      below. The Acquired Assets, as defined below, are used or useful in the conduct
      of Seller’s Business.

    

    Seller
      filed a voluntary petition (the “Petition”)
      for
      reorganization relief pursuant to Chapter 11 of Title 11 of the United
      States Code, 11 U.S.C. § 101 et seq.
      as
      amended (the “Bankruptcy
      Code”),
      in
      the United States Bankruptcy Court for the Eastern District of California
      (the “Bankruptcy
      Court”)
      on
      January 9, 2006 (the “Filing
      Date”)
      under
      Case Nos. 06-20046 and 06-20047 (collectively, the “Bankruptcy
      Case”).
      Seller has operated the Business in the ordinary and usual course as a
      debtor-in-possession (as defined in § 1101 of the Bankruptcy Code) as
      authorized by §§ 1107 and 1108 of the Bankruptcy Code since the Filing
      Date.

    

    Pursuant
      to § 363 of the Bankruptcy Code and the Order of the Bankruptcy Court
      approving this sale, Seller is selling the Acquired Assets free and clear of
      all
      Liens, except as expressly provided herein.

    

    
      	 	
              1.

            	
              DEFINITIONS.

            

    

    

    1.1.    “Acquired
      Assets”
means
      all of the assets used or useful at the Facility and in the operation of the
      Business as was conducted by Seller on a pre-Petition basis, including, without
      limitation:

    

    
      	 	
              [A]

            	
              the
                Real Property;

            

    

    

    
      	 	
              [B]

            	
              the
                Equipment;

            

    

    

    [C]   all
      of
      Seller’s other tangible personal property located at the Facility or on the Real
      Property (including, without limitation, the master seed stock for Nicotiana
      benthamiana
      and
Nicotiana
      excelsiana
      ),
      except the Excluded Assets;

    

    [D]   the
      Intellectual Property Rights, and rights thereunder, remedies against
      infringements thereof, and rights to protection of interests therein under
      the
      laws of all jurisdictions;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    [E]   franchises,
      approvals, permits, licenses, orders, registrations, certificates, variances,
      and similar rights obtained from governments and governmental agencies, to
      the
      extent transferable under applicable Legal Requirements;

    

    [F]   any
      and
      all supplier lists, product service records, equipment and parts lists,
      operating records, operating, safety and maintenance manuals, engineering design
      plans, blueprints and as-built plans, specifications, engineering drawings,
      procedures and similar items of Seller relating specifically to the Acquired
      Assets, including customer lists, and other customer correspondence relating
      to
      the Business, any environmental compliance and regulatory information, all
      regulatory filings and other books and records provided or utilized by Seller
      in
      connection with the operation of the Business; including files, documents,
      correspondence, lists, plats, architectural plans, drawings, and specifications,
      creative materials, advertising and promotional materials, studies, reports,
      and
      other printed or written materials, to the extent available to
      Seller;

    

    [G]   any
      employee records relating to those individuals Buyer intends to employ as of
      the
      Closing;

    

    [H]   any
      and
      all prepaid expenses and customer advances or deposits relating to the
      Business;

    

    [I]    Seller’s
      Owensboro telephone and telecopy numbers;

    

    [J]    all
      insurance benefits, including rights and proceeds, arising from or relating
      to
      the Acquired Assets prior to the Closing; and

    

    1.2.         
      “Advances”
has
      the
      meaning set forth in Section 2.4.[A].
      

    

    1.3.         
      "Affiliate"
      of a
      Person means a Person, directly or indirectly, controlling, controlled by or
      under common control with the first Person by or through the possession,
      directly or indirectly, or the exercise of the power to direct or cause the
      direction of the management policies of a Person, including by the direct or
      beneficial ownership of voting securities or voting rights, contract or
      otherwise.

    

    1.4.         
      “Avoidance
      Actions”
means
      any claim or cause of action created upon the filing of the Bankruptcy Case
      for
      the avoidance of any pre-petition transfer of Property of the Estate or the
      Debtor pursuant to 11 U.S.C. §§ 544, 547, 548, 550, and
      551.

    

    
      	 	
              1.5.

            	
              “Bankruptcy
                Case”
                has the meaning set forth in the recitals
                above.

            

    

    

    
      	 	
              1.6.

            	
              “Bankruptcy
                Code”
                has the meaning set forth in the recitals
                above.

            

    

    

    
      	 	
              1.7.

            	
              “Bankruptcy
                Court”
                has the meaning set forth in the recitals
                above.

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    1.8.          “Bankruptcy
      Rules”
means
      the Federal Rules of Bankruptcy Procedure 1001-9036, and all rules adopted
      by
      the Bankruptcy Court, including, without limitation, any local
      rules.

    

    1.9.          “Business”
means
      the business of contract manufacturing of plant made proteins for third parties
      not affiliated with Seller that was conducted or engaged in by Seller at the
      Facility and on the Real Property on a pre-Petition basis.

    

    1.10.        “Business
      Day”
means
      a
      day other than a Saturday, Sunday or other day on which commercial banks are
      authorized or required to close under the laws of the United States or the
      Commonwealth of Kentucky.

    

    1.11.        
      “Buyer-
      Indemnified Parties”
has
      the
      meaning set forth in Section 10.1.

    

    1.12.       
      “Claims”
means
      any action, cause of action, demand, claim, Proceeding or
      investigation.

    

    
      	 	
              1.13.

            	
              “Closing”
                has the meaning set forth in Section 2.5
                below.

            

    

    

    
      	 	
              1.14.

            	
              “Closing
                Date”
                has the meaning set forth in Section 2.5
                below.

            

    

    

    
      	 	
              1.15.

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

            

    

    

    1.16.       
      “Disclosure
      Letter”
shall
      mean that certain Disclosure Letter delivered to Buyer by the Seller
      simultaneously with the execution of this Agreement the purpose of which is
      to
      disclose certain matters related to this Agreement.

    

    1.17.       
      “Environmental,
      Health and Safety Requirements”
means
      all Legal Requirements concerning health and safety, and pollution or protection
      of the environment, including without limitation all those relating to the
      presence, use, production, generation, management, handling, transportation,
      treatment, storage, disposal, distribution, labeling, testing, processing,
      discharge, release, threatened release, control, cleanup, response to or
      remediation of any hazardous materials, hazardous substances, hazardous waste,
      solid waste, petroleum or petroleum products, pollutant, contaminant or other
      regulated material or substance.

    

    1.18.       
      “Environmental,
      Health and Safety Liabilities”
means
      any cost, claims, damages, expense, liability, obligation or other
      responsibility arising from under any Environmental, Health and Safety
      Requirements or any Environmental Laws.

    

    1.19.       
      “Environmental
      Laws”
has
      the
      meaning set forth in Section 3.19
      below.

    

    1.20.       
      “Equipment”
means
      those certain fixtures, machinery and equipment located at or in the Facility
      or
      on the Real Property, as more particularly described in Exhibit 1.20.

    

    1.21.        “Estate”
means
      the estate created by the filing of the Bankruptcy Case on the Filing Date,
      pursuant to 11 U.S.C. § 541.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.22.       
      “Excluded
      Assets”
means
      those assets listed on Schedule
      1.1(c)
      attached
      hereto.

    

    1.23.       
      “Facility”
means,
      collectively, the manufacturing facility of approximately 30,000 square feet,
      a
      greenhouse complex of approximately 22,000 square feet and agricultural lands
      used or useful in the Business, all located on the Real Property.

    

    1.24.       
      “Filing
      Date”
has
      the
      meaning set forth in the recitals above.

    

    1.25.       
      “GAAP”
means
      United States generally accepted accounting principles as in effect from time
      to
      time.

    

    1.26.       
      “Governmental
      Entity”
means
      any federal, state, municipal or local court, legislature, governmental agency,
      commission or regulatory authority or instrumentality.

    

    1.27.       
      “Income
      Tax”
means
      any federal, state, local, or foreign income tax, including any interest,
      penalty, or addition thereto, whether disputed or not.

    

    1.28.       
      “Intellectual
      Property Rights”
means
      the intellectual property rights granted in and more particularly described
      in
      the licenses annexed hereto as Exhibit 2.6.

    

    1.29.       
      “Knowledge”
an
      individual will be deemed to have “Knowledge” of a particular fact or other
      matter if:

    

    [A]         
      such
      individual is actually aware of such fact or other matter; or

    

    [B]          
      a
      prudent
      individual could be expected to discover or otherwise become aware of such
      fact
      or other matter in the course of conducting a reasonably comprehensive
      investigation concerning the existence of such fact or other
      matter.

    

    Seller
      will be deemed to have “Knowledge” of a particular fact or other matter if any
      individual who is currently serving as a director, officer, partner, executor,
      or trustee of Seller (or in any similar capacity) has, or at any time had,
      Knowledge of such fact or other matter.

    

    1.30.      
      “Legal
      Requirements”
shall
      mean any international, foreign, federal, state, local, municipal,
      administrative or other constitution, law, ordinance, common law, regulations,
      statute, treaty or Governmental Entity order, decree, ruling, charge or other
      restriction.

    

    1.31.       
      “Liens”
means
      any claim, pledge, option, charge, hypothecation, easement, security interest,
      right-of-way, encroachment, mortgage, deed of trust, covenant, restriction,
      reservation, agreement of record or other encumbrance.

    

    
      	 	
              1.32.

            	
              “LOI”
                has the meaning set forth in Section 2.4.[A].

            

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    1.33.       
      “Order”
means
      an order in form and substance acceptable to Buyer entered by the Bankruptcy
      Court in the Bankruptcy Case which approves this Agreement.

    

    1.34.      
       “Party”
and
      “Parties”
have
      the meaning set forth in the preface above.

    

    1.35.      
      “Permits”
shall
      mean any and all licenses, franchises, permits, certificates, consents or other
      authorization or approval granted, given or otherwise made available by or
      under
      the authority of any Governmental Entity or pursuant to any Legal
      Requirement.

    

    1.36.       
      “Permitted
      Encumbrance”
means:
      i) Liens
      for real estate Taxes that are not yet due or payable; ii) any
      laws, regulations or ordinances (including zoning) adopted or imposed by a
      Governmental Entity; iii) all
      easements, rights of way, covenants and restrictions, in each case of record;
      and [D] as to any lease, any Lien encumbering, attaching to or otherwise
      affecting solely the interest of the lessor thereunder and not the interest
      of
      the lessee thereunder; provided that the lien holder (except under [A] above)
      has executed a non-disturbance agreement in favor of Seller or
      Buyer.

    

    1.37.       
      “Person”
means
      an individual, a partnership, a corporation, an association, a joint stock
      company, a trust, a joint venture, an unincorporated organization, other entity
      or a Governmental Entity (or any department, agency, or political subdivision
      thereof).

    

    
      	 	
              1.38.

            	
              “Petition”
                has the meaning set forth in the recitals
                above.

            

    

    

    
      	 	
              1.39.

            	
              “Post-Petition
                Loan”
                has the meaning set forth in Section 8.3.[A].

            

    

    

    1.40.       
      “Proceeding”
means
      any action, arbitration, audit, hearing, investigation, litigation, or suit
      (whether civil, criminal, administrative, investigative or informal) commenced,
      brought, conducted, or heard by or before, or otherwise involving any
      Governmental Entity or arbitrator.

    

    1.41.       
      “Property
      of the Estate”
has
      the
      meaning assigned to it under 11 U.S.C. § 541.

    

    1.42.       
      “Purchase
      Price”
has
      the
      meaning set forth in Section 2.2
      below.

    

    1.43.
         “Real
      Property”
means
      the real property commonly known as 3700 AirPark Drive, Owensboro, Kentucky
      42301 and more particularly described on Exhibit 1.43
      attached
      hereto, together with all buildings, structures, improvements and fixtures
      located thereon, and all easements and other rights and interests appurtenant
      thereto.

    

    1.44.       
      “Seller”
has
      the
      meaning set forth in the preface above.

    

    1.45.       
      “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 Code § 59A), custom
      duties, capital stock, franchise, profits, withholding, social security (or
      similar), unemployment, disability, real property, intangible property, personal
      property, sales, use, transfer, registration, value added, alternative or add-on
      minimum, estimated, or other government tax or charge of any kind whatsoever,
      including any interest, penalty, or addition thereto, whether disputed or
      not.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    1.46.       
      “Tax
      Return”
means
      any return, declaration, report, claim for refund, or information return or
      statement relating to Taxes, including any schedule or attachment thereto,
      and
      including any amendment thereof.

    

    1.47.       
      “Threatened”
shall
      mean with respect to a claim, Proceeding, dispute, or other matter that a demand
      or statement has been made (orally or in writing) or notice has been given
      (orally or in writing), or another event has occurred or other circumstances
      exist, that would lead a prudent Person to conclude that such a claim,
      Proceeding, dispute, or other matter is likely to be asserted, commenced, taken
      or otherwise pursued in the future.

    

    1.48.       
      “Transaction
      Documents”
shall
      mean this Agreement, the License Agreements, the general warranty deed to be
      delivered by Seller at Closing, and all other agreements, certificates, bills
      of
      sale and other documents to be executed and delivered by any Party in connection
      with the consummation of the transactions contemplated by this
      Agreement.

    

    1.49.       
      “Transfer
      Taxes”
shall
      have the meaning specified in Section 6.5
      below.

    
      

      
        	 	
                2.

              	
                BASIC
                  TRANSACTION.

              

      

    

    

    2.1.         
      Purchase
      and Sale of Assets.
      On and
      subject to the terms and conditions of this Agreement, Buyer agrees to purchase
      from Seller, and Seller agrees to sell, assign, transfer, convey and deliver
      to
      Buyer, all of the Acquired Assets at the Closing for the consideration specified
      below in this Section 2.

    

    2.2.         
      Purchase
      Price.
      Buyer
      agrees to pay to Seller an amount equal to Six Million Four Hundred Thousand
      Dollars ($6,400,000) (the “Purchase
      Price”),
      adjusted as contemplated by Section 2.4.
      The
      Purchase Price shall be delivered at Closing via wire transfer of immediately
      available funds from Buyer to Seller.

    

    2.3.         
      Deposit.
      Within
      the later of seven (7) days after execution and delivery of this Agreement
      or
      [four (4)] court days prior to the sale hearing in the Bankruptcy Court, the
      Buyer shall pay to the Seller by wire transfer of immediately available funds
      to
      the Sweeney Lev Attorney Trust Account an initial deposit in an amount equal
      to
      Two Hundred Fifty Thousand Dollars ($250,000.00), less the amount of any
      Advances made by Buyer pursuant to Section 2.5 [A] hereof (“Initial Deposit”).
      Within twenty-four (24) hours after Bankruptcy Court approval of Buyer as the
      winning bidder, Buyer shall pay to the Seller by wire transfer of immediately
      available funds to the Sweeney Lev Attorney Trust Account an additional deposit
      equal to Two Hundred Fifty Thousand Dollars ($250,000.00) (the “Second Deposit”)
      (collectively the Initial Deposit and the Second Deposit are referred to as
      the
“Deposit”).
      The
      Parties agree that the Deposit (and Advances adjusted as provided in Section
      8.3
      [A]) shall be refunded to the Buyer if this Agreement is terminated pursuant
      to
      Section 8.1 or 8.2; otherwise the Deposit shall be nonrefundable. At the
      Closing, the Deposit shall be applied toward payment of the Purchase Price
      and
      the remaining Purchase Price shall be payable at the Closing in the manner
      provided in Sections 2.3 and 2.5.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    2.4.         
      Closing
      Adjustments.
      The
      Purchase Price shall be adjusted at the Closing as follows:

    

    [A]          
      The
      Purchase Price shall be reduced by the amount equal to the sum of all advance
      payments made by Buyer to the Sweeney Lev Attorney Trust Account (each an
“Advance”
and
      collectively, the “Advances”)
      pursuant to Section 2 of that certain Letter of Intent between Buyer and
      Seller, dated January 13, 2006 (the “LOI”)
      and
      approved by the Bankruptcy Court on January 20, 2006.

    

    [B]          
      If
      Buyer
      assumes any of Seller’s payment or expense reimbursement obligations under that
      certain Loan Agreement by and between Seller and Kentucky Technology Inc.,
      a
      Kentucky corporation, dated December 17, 2004, then the Purchase Price will
      be
      lowered by the payment or expense reimbursement amount assumed by
      Buyer.

    

    [C]         
       The
      Purchase Price shall be adjusted for real estate taxes and assessments, which
      shall be pro rated as of the Closing Date on the basis of the latest available
      rates and valuations furnished for the Real Property by the taxing authorities.
      Further, all water, sewer and other utility bills that are required by the
      utility operators to be paid current in order to allow Buyer to open an account
      in Buyer’s name for such utility shall be pro rated as of the Closing
      Date.

    

    2.5.         
      The
      Closing.
      The
      closing of the transactions contemplated by this Agreement
      (the “Closing”)
      shall
      take place at the offices of Wyatt, Tarrant & Combs, LLP, 500 West
      Jefferson Street, Louisville, Kentucky 40202, as soon as reasonably possible
      after the Bankruptcy Court approves of Buyer as the winning bidder and not
      more
      than five (5) days after such date (the “Closing
      Date”),
      provided,
      however,
      that
      the Closing Date shall be no later than April 10, 2006.

    

    2.6.        
      Deliveries
      at the Closing.
      At the
      Closing, iv) Seller
      will deliver to Buyer the various certificates, instruments, and documents
      referred to in Section 7.1
      below;
v) Buyer
      will deliver to Seller the various certificates, instruments, and documents
      referred to in Section 7.2
      below;
vi) Seller
      will execute, acknowledge (if appropriate), and deliver to Buyer such
      instruments of sale, transfer, conveyance, and assignment as Buyer and its
      counsel reasonably may request (including, without limitation, a general
      warranty deed transferring the Real Property); vii) Buyer
      will execute, acknowledge (if appropriate), and deliver to Seller an assumption
      and such other instruments of assumption as Seller and its counsel reasonably
      may request; viii) Seller
      will execute and deliver to Buyer both of the Intellectual Property License
      Agreements substantially in the form attached hereto as Exhibit 2.6.[E]
      (the
“License
      Agreements”)
      (and,
      if any patents are being assigned to Buyer at the Closing, any patent assignment
      documents reasonably required by Buyer), and ix) Buyer
      will deliver to Seller the Purchase Price specified in Section 2.2
      above.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    2.7.         
      Allocation
      of Purchase Price.
      At the
      Closing, Buyer shall deliver an allocation of the Purchase Price which shall
      be
      mutually agreed to and attached as Exhibit 2.7
      and
      shall be binding upon Buyer and Seller for all federal and state income tax
      purposes such that Buyer and Seller shall each file their federal and state
      income tax returns on the basis of such allocation and neither Buyer nor Seller
      shall take a tax position inconsistent with such allocation.

    

    
      	 	
              3.

            	
              REPRESENTATIONS
                AND WARRANTIES OF SELLER.
                

            

    

    

    [A]          
      The
      Buyer
      specifically acknowledges and agrees to the following with respect to the
      representations and warranties of the Seller: The Buyer has conducted its own
      due diligence investigations of the Acquired Assets or has waived its right
      to
      conduct such due diligence.

    

    [B]         
       Except
      as provided in Section 10, the Buyer will not have any recourse against the
      Seller or against any of the officers or directors of the Seller in the event
      any of the representations and warranties made herein or deemed made are untrue
      as at any time of expression thereof; and the only remedy for a breach of such
      representations and warranties shall be the Buyer’s option, under certain
      circumstances, not to close in accordance with and subject to the limitations
      in
      Sections 7.1 and 8.2 hereof.

    

    [C]          
      If
      information provided in any section of the Disclosure Letter attached hereto
      and
      made a part hereof is applicable to any other sections of the Disclosure Letter,
      then such information shall be deemed to have been provided with respect to
      all
      such sections.

    

    Seller
      represents and warrants to Buyer that the statements contained in this
      Section 3
      are
      correct and complete as of the date of this Agreement and will be correct and
      complete as of the Closing Date (as though made then and as though the Closing
      Date were substituted for the date of this Agreement throughout this
      Section 3),
      except
      as set forth in the Disclosure Letter. The Disclosure Letter will be arranged
      in
      paragraphs corresponding to the lettered and numbered paragraphs contained
      in
      this Section 3.

    

    
      	 	
              3.1.

            	
              [intentionally
                deleted]

            

    

    

    3.2.          Organization
      of Seller.
      Seller
      is a corporation duly organized, validly existing, and in good standing under
      the laws of the State of Delaware.

    

    3.3.         
      Authorization
      of Transaction.
      Subject
      to the entry of an Order of the Bankruptcy Court, in form and substance
      acceptable by the Buyer, approving the sale of the Acquired Assets, Seller
      has
      full power and authority (including full corporate power and authority) to
      execute and deliver the Transaction Documents and to perform its obligations
      thereunder. Without limiting the generality of the foregoing, subject to the
      entry of the Order, the board of directors of Seller has duly authorized the
      execution, delivery, and performance of each of the Transaction Documents by
      Seller. Subject to the entry of the Order, each of the Transaction Documents
      constitutes the valid and legally binding obligation of Seller, enforceable
      against it in accordance with the terms and conditions of such
      agreement.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    3.4        
       Noncontravention.
      Subject
      to the entry of the Order, no filing with, and no permit, authorization, consent
      or approval of, any Governmental Entity or other third party is necessary for
      the consummation by Seller of the transactions contemplated by this Agreement
      and the License Agreements. Subject to the entry of the Order, neither the
      execution and the delivery of this Agreement or the License Agreements, nor
      the
      consummation of the transactions contemplated hereby and thereby, will
x) violate
      any Legal Requirement to which Seller is subject or any provision of the
      certificate of incorporation or bylaws of Seller, or xi) conflict
      with, result in a breach of, constitute a default under, result in the
      acceleration of, create in any party the right to accelerate, terminate, modify,
      or cancel, or require any notice under any agreement, contract, lease, license,
      instrument, or other arrangement to which Seller is a party or by which it
      is
      bound or to which any of its assets is subject (or result in the imposition
      of
      any Lien upon any of its assets).

    

    
      	 	
              3.5.

            	
              Title
                to Properties; Encumbrances; Sufficiency of Assets.

            

    

    

    [A]         
      As
      of the
      Closing, Seller shall transfer to Buyer [i] via a general warranty deed good
      and
      valid record and marketable title to the Real Property, free and clear of any
      and all Liens, pursuant to 11 U.S.C. § 363 provided that the Real
      Property may be subject to the Permitted Encumbrances, and [ii] via a bill
      of
      sale good and valid marketable title to all of the Acquired Assets, other
      than the Real Property, free and clear of any and all Liens, pursuant to
      11 U.S.C. § 363. Neither Predictive Diagnostics, Inc., an
      affiliate of Seller, nor any other Affiliate of Seller, has any interest or
      right to any of the Acquired Assets.

    

    [B]          
      The
      Acquired Assets [i] constitute all of the assets, tangible and intangible,
      of any nature whatsoever, necessary and sufficient to operate the Business
      in
      the manner operated by Seller pre-Petition, and [ii] include all of the
      operating assets of Seller related to the Business on a pre-Petition basis.
      

    

    [C]          
      The
      Facility and other buildings, plants, and structures that are part of the
      Acquired Assets are structurally sound and are in good operating condition
      and
      repair (normal wear and tear excepted), and are adequate for the Business as
      previously conducted by Seller and the Facility and other buildings, plants,
      and
      structures is in need of maintenance or repairs except for ordinary, routine
      maintenance and repairs that are not material in nature or cost. The Equipment
      is in good operating condition and repair, normal wear and tear excepted, and
      none of the Equipment is in need of maintenance or repairs except for ordinary,
      routine maintenance and repairs that are not material in cost.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    [D]          
      The
      Intellectual Property Rights constitute all of the intellectual property
      necessary and sufficient to operate the Business in the manner operated by
      Seller on a pre-Petition basis.

    

    3.6.         
      No
      Accounts Receivable.
      Seller
      has no accounts receivable
      relating
      to the Business.

    

    3.7.         
      Books
      and Records.
      The
      books of account and other financial records, information and data of Seller
      and
      its subsidiaries related to the Facility, all of which have been made available
      to Buyer, are correct in all material respects and represent actual, bona fide
      transactions and have been maintained in accordance with sound business
      practices, including the maintenance of an adequate system of internal
      controls.

    

    
      	 	
              3.8.

            	
              Compliance
                with Legal Requirements; Permits.

            

    

    

    [A]         
      Except
      as
      set forth in Section 3.8.[A]
      of the
      Disclosure Letter: (1) Seller
      is and has been in compliance in all material respects with each Legal
      Requirement and Permit applicable to it or to the conduct of the Business or
      the
      ownership or use of any of the Acquired Assets; (2) no
      event has occurred or circumstance exists that (with or without notice or lapse
      of time) (x) may constitute or result in a violation by Seller of, or a failure
      on the part of Seller to comply with, any Legal Requirement or Permit related
      to
      the Business or the Acquired Assets in any material respect or (y) may give
      rise
      to any obligation on the part of Seller to undertake, or to bear all or any
      portion of the cost of, any remedial action of any nature; and (3) Seller
      has not received any notice or other communication from any Governmental Entity
      or any other Person regarding (x) any actual, alleged, possible or potential
      violation of, or failure to comply with, any Legal Requirement or Permit related
      to the Business or the Acquired Assets, or (y) any actual, alleged, possible
      or
      potential obligation on the part of Seller to undertake, or to bear all or
      any
      portion of the cost of, any remedial action of any nature.

    

    [B]          
      Section 3.8.[B]
      of the
      Disclosure Letter sets forth all of the material Permits necessary to permit
      Seller to lawfully conduct and operate the Business and to permit Seller to
      use
      the Acquired Assets in the manner in which they were used immediately prior
      to
      the filing of the Petition. All such Permits are currently in full force and
      effect. All applications required to have been filed for the renewal of the
      Permits listed or required to be listed in Section 3.8.[B]
      of the
      Disclosure Letter have been duly filed on a timely basis with the appropriate
      Governmental Entities, and all other filings required to have been made with
      respect to such Permits have been duly made on a timely basis with the
      appropriate Governmental Entities.

    

    
      	 	
              3.9.

            	
              Legal
                Proceedings; Orders.

            

    

    

    [A]         
      Except
      for the Bankruptcy Case and as set forth in Section 3.9[A] of the Disclosure
      Letter, there is no pending or Threatened Proceeding: (4) that
      has been commenced by or against Seller related to the Business or the Acquired
      Assets; or (5) that
      challenges, or may have the effect of preventing, delaying, making illegal
      or
      interfering with any of the transactions contemplated by this
      Agreement.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    [B]          
      Except
      for the Bankruptcy Case, as it relates to the Business: (6) there
      is no Order to which Seller, the Business or any of the Acquired Assets are
      subject; (7) no
      officer, director, agent or employee of Seller is subject to any Order that
      prohibits such officer, director, agent or employee from engaging in or
      continuing any conduct, activity or practice relating to the Business;
(8) Seller
      is, and at all times has been, in full compliance with all of the terms and
      requirements of each Order related to the Business or the Acquired Assets to
      which it, or any of the Acquired Assets, is or has been subject; and
(9) Seller
      has not received at any time any notice or other communication from any
      Governmental Entity or any other Person regarding any actual, alleged, possible
      or potential violation of, or failure to comply with, any term or requirement
      of
      any Order related to the Business or the Acquired Assets to which Seller, or
      any
      of the Acquired Assets, is or has been subject.

    

    
      	 	
              3.10.

            	
              Taxes.

            

    

    

    [A]         
      Except
      as
      set forth in Section 3.11[A] of the Disclosure Letter, Seller has filed all
      Tax
      Returns that it was required to file. All such Tax Returns were correct and
      complete in all respects. All Taxes owed by Seller (whether or not shown on
      any
      Tax Return) have been paid. The Seller is not currently the beneficiary of
      any
      extension of time within which to file any Tax Return. No claim has been made
      by
      any Governmental Entity in a jurisdiction where Seller does not file Tax Returns
      that Seller may be subject to taxation by that jurisdiction. There are no
      security interests on any of the Acquired Assets that arose in connection with
      the failure (or alleged failure) to pay any Tax.

    

    [B]         
      Except
      as
      set forth in Section 3.10[B] of the Disclosure Letter, Seller has withheld
      and
      paid all Taxes required to have been withheld and paid in connection with
      amounts paid or owing to any employee, independent contractor, creditor,
      stockholder, or other third party.

    

    
      	 	
              3.11.

            	
              Employees.

            

    

    

    [A]         
      Except
      as
      set forth in Section 3.11[A] of the Disclosure Letter, to the Knowledge of
      Seller, no officer, director, agent, employee, consultant or contractor of
      Seller is bound by any contract, agreement or understanding that purports to
      limit the ability of such officer, director, agent, employee, consultant or
      contractor (10) to
      engage in or continue or perform any conduct, activity, duties or practice
      relating to the Business for Buyer or (11) to
      assign to Seller or to any other Person any rights to any invention,
      improvement, or discovery. No former or current employee of Seller is a party
      to, or is otherwise bound by, any contract, agreement or understanding that
      in
      any way adversely affected, affects or will affect the ability of Seller or
      Buyer to conduct the Business as carried on by Seller prior to the filing of
      the
      Petition.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    [B]          
      Except
      as
      set forth in Section 3.11[B] of the Disclosure Letter, to the knowledge of
      Seller, no employees of Seller are owed any wages, as defined by Kentucky
      Revised Statute 376.150 et
      seq.

    

    3.12.       
      Labor
      Disputes; Compliance.
      As it
      relates to the Business and the Acquired Assets:

    

    [A]         
      Except
      as
      set forth in Section 3.12[A] of the Disclosure Letter, Seller has complied
      in
      all material respects with all Legal Requirements relating to employment
      practices, terms and conditions of employment, equal employment opportunity,
      nondiscrimination, immigration, wages, hours, benefits, collective bargaining
      and other requirements, the payment of social security and similar taxes and
      occupational safety and health and is not liable for the payment of any taxes,
      fines, penalties or other amounts, however designated, for failure to comply
      with, or a breach of, any of the foregoing Legal Requirements.

    

    [B]          
      Except
      as
      set forth in Section 3.12[B] of the Disclosure Letter, Seller has not been,
      and
      is not now, a party to any collective bargaining agreement or other labor
      contract. There is not pending or to the Seller’s Knowledge, threatened against
      or affecting Seller any Proceeding relating to the alleged violation of any
      Legal Requirement pertaining to labor relations or employment matters, including
      any charge or complaint filed with the National Labor Relations Board, the
      Equal
      Employment Opportunity Commission or any other Governmental Entity, and there
      is
      no organizational activity or other labor dispute against or affecting Seller
      or
      the Facility.

    

    
      	 	
              3.13.

            	
              Intellectual
                Property Rights.

            

    

    

    [A]         
      Section 3.13.[A]
      of the
      Disclosure Letter contains a complete and accurate list of all the intellectual
      property rights of Seller related to or otherwise used or useful in the
      operation of the Business as conducted by Seller on a pre-Petition basis. Seller
      has delivered to Buyer accurate and complete copies of all registration,
      applications for registration, contracts, agreements, licenses or understandings
      relating to the Intellectual Property Rights. There are no outstanding and,
      to
      Seller’s Knowledge, no Threatened Proceedings, disputes or disagreements with
      respect to any such registration, applications for registration, contract,
      agreement, license or understanding. 

    

    [B]          
      Seller
      is
      the owner or licensee of all right, title and interest in and to such
      Intellectual Property Rights, free and clear of any and all Liens, and has
      the
      right to use without payment to a third party all of such Intellectual Property
      Rights.

    

    [C]          
      The
      Intellectual Property Rights (12) are
      currently in compliance in all material respects with all Legal Requirements,
      (13) are
      valid and enforceable, (14) do
      not infringe upon any intellectual property or other proprietary right of any
      other Person, and (15) to
      Seller’s Knowledge, has not been challenged or Threatened in any way and are not
      currently being infringed upon by any other Person. None of the products
      manufactured or sold as part of the Business, nor any process or know-how used
      in the Business, infringes or is alleged to infringe upon any intellectual
      property or other proprietary right of any other Person. 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    [D]          
      Seller
      has taken all reasonable precautions to protect the secrecy, confidentiality
      and
      value of all trade secrets used or useful in the Business and has an absolute
      right to use such trade secrets. Such trade secrets are not part of the public
      knowledge or literature and, to Seller’s Knowledge, have not been used, divulged
      or appropriated either for the benefit of any Person or to the detriment of
      Seller. To Seller’s Knowledge, no such trade secret is subject to any adverse
      claim or has been challenged or Threatened in any way or infringes any
      intellectual, property or other proprietary right of any other
      Person.

    

    [E]          
      At
      the
      Closing, Seller and Buyer will each execute and deliver the License Agreements
      attached hereto as Exhibit
      2.5[E].
      It is
      imperative to the Parties that the License Agreements and the licenses granted
      thereunder be binding upon any purchaser of the underlying patents, the Debtor,
      the Debtor in Possession, the Estate and any trustee appointed to administer
      the
      Estate. Accordingly, the Seller agrees to require that any purchaser of the
      patents being licensed pursuant to the License Agreements execute and deliver
      each of the License Agreements as a party thereto. 

    

    
      	 	
              3.14.

            	
              No
                Contracts.
                

            

    

    

    Except
      as
      set forth in Section 3.14 of the Disclosure Letter, there are no contracts,
      agreements, leases, licenses, understandings and arrangements related to the
      Business. There are not any written warranties, guaranties and/or other similar
      undertakings with respect to contractual performance by Seller related to the
      Business or the Acquired Assets.

    

    
      	 	
              3.15.

            	
              Insurance.

            

    

    

    [A]         
      Section 3.15.[A]
      of the
      Disclosure Letter lists all insurance policies of Seller relating to the
      Business, the Acquired Assets and employees of Seller engaged in the Business
      prior to the Closing Date. All such insurance policies (16) are
      outstanding and enforceable, (17) are
      issued by one or more financially sound and reputable insurers, (18) taken
      together, provide adequate insurance coverage for the Acquired Assets and the
      operations of the Business, and (19) are
      sufficient for compliance with all Legal Requirements and any Contract to which
      Seller is a party. Seller has paid all premiums due, and has otherwise performed
      all of its obligations, under each such insurance policy, and Seller has given
      notice to the applicable insurer of all claims that may be insured
      thereby.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    [B]          
      Except
      as
      set forth in Section 3.15[B] of the Disclosure Letter, Seller has not received
      (20) any
      refusal of coverage or any notice that a defense will be afforded with
      reservation of rights, or (21) any
      notice of cancellation or any other indication that any policy of insurance
      is
      no longer in full force or effect or that the issuer of any policy of insurance
      is not willing or able to perform its obligations thereunder.

    

    3.16.        Related
      Party Transactions.
      No
      member of the immediate family of any officer or director of Seller is directly
      or indirectly interested in any Contract relating to the Business.

    

    3.17.       
      Financial
      Statements.
      Seller
      has delivered to Buyer an unaudited schedule of cash operating cost as it
      relates to the Facility for calendar year 2005 (the “Cost Schedule”). Seller
      prepared the Cost Schedule in good faith and, to Seller’s Knowledge, the Cost
      Schedule is accurate in all material respects.

    

    3.18.       
      Absence
      of Undisclosed Liens.
      The
      sale contemplated herein shall be free and clear of all Liens, except Permitted
      Encumbrances, pursuant to 11 U.S.C. § 363.

    

    3.19.       
      Environmental
      Matters.
      Seller
      has not received written notice from any Governmental Entity, nor does Seller
      have any Knowledge that it or the Acquired Assets is not in compliance in all
      material respects with all Permits and with all Environmental, Health and Safety
      Requirements and with all other applicable federal, state and local laws and
      regulations in effect on the date hereof relating to pollution or the
      environment, including, but not limited to the Comprehensive Environmental
      Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq., the Resource
      Conservation and Recovery Act, 42 U.S.C. 6901 et seq., the Clean Water Act,
      33
      U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
      and all other laws and regulations relating to emissions, spills, leaks,
      discharges, releases or threatened releases of any “hazardous substance,” “solid
      waste” or “hazardous waste,” as defined therein, as well as relating to any
      other regulated substance or material, pollutant, contaminant, petroleum and
      petroleum products, natural gas or synthetic gas, special nuclear or by-product
      material, as defined by the Atomic Energy Act of 1954, 42 U.S.C.
§ 3011 et seq., and the regulations promulgated thereto and “hazardous
      chemicals”, as defined in 29 C.F.R. Part 1910 or otherwise relating to
      the manufacture, possession, distribution, use, treatment, storage, disposal,
      transport or handling of such material (such laws and regulations being
      hereinafter referred to as “Environmental
      Laws”).
      To
      Seller’s Knowledge, Seller is not in violation of and has never been charged
      with, convicted of investigated for any violation, or is in violation of any
      Environmental Laws by any Governmental Entity with respect to the Acquired
      Assets or the Business. There are no known Environmental, Health and Safety
      Liabilities and no known environmental condition exists on any portion of the
      Acquired Assets that would likely give rise to any Environmental, Health and
      Safety Liabilities or a material claim that Seller is in violation of any
      Environmental Laws.

    

    3.20.       
      Subsidiaries.
      Seller
      has no subsidiaries or other affiliates which own, use or control any of the
      Acquired Assets, except the Intellectual Property Rights.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    3.21.       
      Business. Prior
      to
      the filing of the Petition, Seller’s business at the Facility and on the Real
      Property included the contract manufacturing of plant made proteins for third
      parties not affiliated with Seller, including, without limitation, the
      extraction, production and processing of plant made proteins.

    

    3.22.       
      Disclosure.
      No
      representation or warranty of Seller in this Agreement and no statement
      contained in any certificate or other instrument furnished or to be furnished
      to
      Buyer hereunder contains or will contain any untrue statement of material fact
      or omits or will omit to state any material fact necessary to make the
      statements herein or therein, in light of the circumstances in which they were
      made, not misleading. Promptly after becoming aware of the same, Seller shall
      supplement or amend the Disclosure Letter with respect to any matter hereafter
      arising which, if existing, occurring or known by them at the date of this
      Agreement would have been required to be set forth or described in the
      Disclosure Letter and shall provide prompt written notice to Buyer regarding
      the
      same.

    

    
      	 	
              4.

            	
              REPRESENTATIONS
                AND WARRANTIES OF BUYER.
                

            

    

    

    Buyer
      represents and warrants to Seller that the statements contained in this
      Section 4
      are
      correct and complete as of the date of this Agreement and will be correct and
      complete as of the Closing Date (as though made then and as though the Closing
      Date were substituted for the date of this Agreement throughout this
      Section 4).

    

    4.1.          
      Organization
      of Buyer.
      Buyer
      is a limited liability company duly organized, validly existing, and in good
      standing under the laws of the Commonwealth of Kentucky.

    

    4.2.          
      Authorization
      of Transaction.
      Buyer
      has full limited liability company power and authority to execute and deliver
      this Agreement and to perform its obligations hereunder. This Agreement
      constitutes the valid and legally binding obligation of Buyer, enforceable
      in
      accordance with its terms and conditions.

    

    4.3.         
      Noncontravention.
      Subject
      to the entry of the Order, no filing with, and no permit, authorization, consent
      or approval of, any Governmental Entity is necessary for the consummation by
      Buyer of the transactions contemplated by this Agreement. Subject to the entry
      of the Order neither the execution and the delivery of this Agreement, nor
      the
      consummation of the transactions contemplated hereby, will xii)
      violate
      any Legal Requirement to which Buyer is subject or any provision of its articles
      of incorporation or bylaws or xiii)
      conflict
      with, result in a breach of, constitute a default under, result in the
      acceleration of, create in any party the right to accelerate, terminate, modify,
      or cancel, or require any notice under any agreement, contract, lease, license,
      instrument, or other arrangement to which Buyer is a party or by which it is
      bound or to which any of its assets is subject.

    

    4.4.         
      Overbid
      Procedures.
      Buyer
      acknowledges that the sale of Acquired Assets pursuant to this Agreement is
      subject to overbids and an auction at the hearing to be conducted by the
      Bankruptcy Court and the Sale Procedures approved by the Bankruptcy
      Court.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    5.            
      PRE-CLOSING
      COVENANTS.
      The
      Parties agree as follows with respect to the period between the date hereof
      and
      the Closing.

    

    5.1.         
      General.  Each
      of the Parties will use its reasonable efforts to take all action and to do
      all
      things necessary in order to consummate and make effective the transactions
      contemplated by this Agreement (including satisfaction, but not waiver, of
      the
      closing conditions set forth in Section 7
      below).

    

    5.2.        
       Notices
      and Consents.
      Each of
      the Parties will give any notices to, make any filings with, and use its
      reasonable best efforts to obtain any authorizations, consents, and approvals
      of
      Governmental Entities as required by applicable Legal Requirements.

    

    5.3.        
       Operation
      of Business.
      Seller
      shall, from the date hereof through and until the Closing, use commercially
      reasonable efforts to maintain and preserve the pre-Petition condition, value
      and goodwill of the Acquired Assets and the Business. Seller shall not operate
      the Business or use the Acquired Assets without Buyer’s prior written
      approval.

    

    5.4.        
       Full
      Access.
      Seller
      will permit representatives of Buyer to have full access at all reasonable
      times
      to the Facility and the Acquired Assets, as well as to all books, records
      (including tax records), contracts, and documents of or pertaining to the
      Business or the Acquired Assets. Seller will promptly furnish Buyer with such
      financial and operating data and other information with respect to the Business
      and the Acquired Assets as Buyer may from time to time reasonably request.
      

    

    5.5.        
       Notice
      of Developments.
      Each
      Party will give prompt written notice to the other Party of any material adverse
      development causing a breach of any of its own representations and warranties.
      No disclosure by any Party pursuant to this Section 5.5,
      however, shall be deemed to amend or supplement the Disclosure Letter or to
      prevent or cure any misrepresentation or breach of warranty.

    

    5.6.        
       Matters
      Related to the Bankruptcy Case.
      Without
      Buyer’s permission or unless authorized by the Bankruptcy Court, Seller will not
      sell, assign, mortgage or encumber any of the Acquired Assets, incur any
      indebtedness, or enter into or reject executory contracts or leases of real
      property or of personal property related to the Acquired Assets. Seller will
      not
      object to, settle, dismiss, or compromise any claim related to the Business
      or
      the Acquired Assets without Buyer’s written consent and if Buyer directs Seller
      to file an objection to any claim or to dispute the amount of any claim, Seller
      will be obligated to do so and will file such objection in Seller’s
      name.

    

    
      	 	
              6.

            	
              ADDITIONAL
                COVENANTS.

            

    

    

    6.1.       
       Submission
      for Court Approval.
      As
      promptly as practicable after the date hereof, Seller and Buyer shall jointly
      prepare and Seller shall submit xiv) this
      Agreement and xv) a
      motion to approve this Agreement, subject to the applicable overbid procedures,
      and the Order granting such motion. Buyer shall cooperate with Seller in
      obtaining the Order, and Seller shall use its reasonable best efforts to obtain
      the Order and shall deliver to Buyer copies of pleadings, motions, notices,
      statements, schedules, applications, reports and other papers to be filed with
      the Bankruptcy Court relating to the process of the confirmation of the plan
      of
      reorganization.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    6.2.        
       Adequate
      Assurances.
      Buyer
      covenants and agrees to cooperate with Seller in connection with the furnishing
      information pertaining to the satisfaction of the requirement of adequate
      assurances of future performances as required under § 365(f)(2)(B) of the
      Bankruptcy Code.

    

    6.3.        
       No
      Employees.
      Seller
      has already terminated or will terminate prior to the Closing all of the
      employees previously involved in the Business. Buyer shall not be obligated
      to
      hire any of Seller’s former employees and, if such offers are made, nothing
      herein shall obligate Buyer to employ any of Seller’s employees for any
      particular length of time following the Closing. 

    

    6.4.        
       Further
      Assurances.
      Subject
      to the terms and conditions of this Agreement and to any order of the Bankruptcy
      Court or any applicable provision of the Bankruptcy Code, each of the Parties
      hereto shall use commercially reasonable efforts to take, or cause to be taken,
      all action, and to do, or cause to be done, all things reasonably necessary,
      proper or advisable under applicable Legal Requirements to consummate and make
      effective the sale of the Acquired Assets in accordance with this Agreement,
      including using commercially reasonable efforts to ensure timely satisfaction
      of
      the conditions precedent to each party’s obligations hereunder. Neither Seller,
      on the one hand, nor Buyer, on the other hand, shall, without the prior written
      consent of the other party, take any action which would reasonably be expected
      to prevent or materially impede, interfere with or delay the transactions
      contemplated by this Agreement. From time to time on or after the Closing Date,
      Seller shall, at its own expense, execute and deliver such documents to Buyer
      as
      Buyer may reasonably request in order to more effectively vest in Buyer Seller’s
      title to the Acquired Assets. From time to time after the date hereof, Buyer
      shall, at its own expense, execute and deliver such documents to Seller as
      Seller may reasonably request in order to more effectively consummate the sale
      of the Acquired Assets in accordance with this Agreement. Neither the foregoing
      nor any other provision of this Agreement shall in any way impact or alter,
      or
      impose any standard of review upon, or be deemed to do any of the same, with
      respect to any determination or decision to be made by Buyer in its sole
      discretion with respect to the conditions set forth in Section 7.1
      hereof
      as expressly set forth therein.

    

    6.5.        
       Transfer
      Taxes.
      All
      excise, sales, use, transfer, value added, registration, stamp, recording,
      documentary, conveyance, franchise, property, transfer, gains and similar taxes,
      levies, charges and recording, filing and other fees (collectively,
“Transfer
      Taxes”)
      incurred in connection with the transactions contemplated by this Agreement,
      if
      any, shall be paid by Seller. Seller shall, at its own expense, timely pay
      and
      file all necessary tax returns and other documentation with respect to all
      such
      Transfer Taxes and, if required by applicable Legal Requirements, Buyer shall
      join in the execution of any tax returns and other documentation at Seller’s
      request.

    

    6.6.        
       Due
      Diligence Responses.
      Seller
      shall promptly respond in writing to the due diligence requests or inquiries
      made in writing by Buyer or its representatives.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    6.7.        
       Business
      Monitoring.
      On and
      after the date hereof until the Closing, Seller shall permit Buyer to have
      at
      least one representative on site at the Facility. Such representative shall
      be
      permitted to inspect the premises and monitor the operations of the Business.
      Seller shall cooperate in good faith with Buyer and use its reasonable efforts
      to prevent the occurrence of any acts which could be adverse to Buyer’s
      operation of the Business after the Closing.

    

    
      	 	
              6.8.

            	
              Non-competition.

            

    

    

    [A]         
      Except
      to
      the extent of the rights retained by Seller as the “Licensor” pursuant to
      Section 2.3 of the Biomanufacturing License Agreement annexed hereto as
Exhibit
      2.6
      (which
      is incorporated herein by reference), from the Closing Date through the date
      which is seven (7) years from the Closing Date, Seller and its successors and
      assigns and each of their Affiliates shall not, without the prior written
      consent of Buyer, engage directly or indirectly in a Competitive Business
      Activity (as defined below) anywhere in the world. The term “Competitive
      Business Activity” shall mean (i) engaging in, controlling or managing the
      contract manufacturing business described by and within the scope of the
      exclusive license granted to Buyer or Licensee pursuant to Section 2.2 of the
      Biomanufacturing License Agreement; or (ii) acquiring or having a controlling
      ownership interest in any entity that directly competes with the contract
      manufacturing business described by and within the scope of the exclusive
      license granted to Buyer or Licensee pursuant to Section 2.2 of the
      Biomanufacturing License Agreement.

    

    [B]          
      If
      a
      final judgment of a court or tribunal of competent jurisdiction determines
      that
      any term or provision contained in subsection [A] above is invalid or
      unenforceable, then the parties agree that the court or tribunal will have
      the
      power to reduce the scope, duration or geographic area of the term or provision,
      to delete specific words or phrases or to replace any invalid or unenforceable
      term or provision with 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. This Section 6.8 will be enforceable as so modified after
      the
      expiration of the time within which the judgment may be appealed. This Section
      6.8 is reasonable and necessary to protect and preserve Buyer’s legitimate
      business interests and the value of the Acquired Assets and to prevent any
      unfair advantage conferred on Seller.

    

    [C]          
      If
      Seller
      breaches or threatens to breach any of the foregoing covenants, Buyer will
      be
      entitled to seek and receive injunctive relief in any court of competent
      jurisdiction, without the requirement of posting any bond, in addition to any
      other remedies that may be available to it under applicable Legal Requirements.
      The Parties agree that the foregoing restrictions are reasonable and necessary
      to protect and preserve the goodwill of the Business acquired by Buyer and
      preserve the confidentiality of information which the Parties agree should
      be
      maintained confidential.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    [D]         
      Nothing
      herein shall prohibit Seller from engaging in the activities or business within
      the scope of rights retained by Seller as the “Licensor” under Section 2.3 of
      the Biomanufacturing License Agreement.

    

    
      	 	
              7.

            	
              CONDITIONS
                TO OBLIGATION TO CLOSE.

            

    

    

    7.1.         
      Conditions
      to Obligation of Buyer.
      The
      obligation of Buyer to consummate the transactions to be performed by it in
      connection with the Closing is subject to satisfaction of the following
      conditions:

    

    [A]         
      the
      Bankruptcy Court shall have approved and entered the Order in form and substance
      satisfactory to Buyer and no party shall have properly filed a Notice of Appeal
      and obtained an order staying the effect of the Order pending appeal; the Order
      and all orders related thereto shall have been entered in accordance with all
      applicable provisions of the Bankruptcy Code and Bankruptcy Rules after proper,
      timely, and adequate notice to all parties entitled to notice pursuant to all
      applicable provisions of the Bankruptcy Code and Bankruptcy Rules unless
      otherwise directed by order of the Bankruptcy Court; the sale shall be under
      11 U.S.C. § 363 and the Buyer shall be afforded all protections
      provided therein including but not limited to 11 U.S.C. § 363(m); the Order
      or the Findings of Fact and Conclusions of Law made by the Bankruptcy Court
      in
      connection therewith shall include (i) a finding that the Buyer is a good faith
      purchaser for purposes of the provisions of 11 U.S.C. § 363(m); (ii) a
      finding that there are no material duties remaining to be performed by Seller
      in
      relation to the Intellectual Property Rights to be acquired by Buyer and (iii)
      a
      conclusion that the licenses conveyed to Buyer pursuant to the License
      Agreements attached hereto as Exhibit
      2.5(E)
      are
      non-executory contracts.

    

    [B]         
      each
      of
      the consents identified required to be obtained by any Legal Requirement shall
      have been obtained from the Governmental Entities and other third parties,
      as
      applicable, on terms and conditions satisfactory to Buyer in its sole
      discretion, and shall be in full force and effect;

    

    [C]           Buyer
      shall have received and approved a survey of the Real Property (with such survey
      to be obtained at Buyer’s expense) and said survey shall disclose (1) that
      there are no gaps contained within the Real Property and (2) that
      there are no unrecorded easements, discrepancies, or conflicts in boundary
      lines, shortages in areas or encroachments. Buyer shall have received and
      approved all environmental reports (with such reports to be obtained at Buyer’s
      expense) it deems necessary to evaluate the Real Property in a form and
      substance satisfactory to it in its sole discretion;

    

    [D]          
      there
      shall not be any injunction, judgment, order, decree or ruling in effect
      preventing consummation of any of the transactions contemplated by this
      Agreement;

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    [E]          
      Buyer
      shall have obtained financing of the Purchase Price which is acceptable to
      Buyer
      in its sole discretion;

    

    [F]          
      Buyer
      shall have obtained the approval of its board of managers and of its sole
      member, Owensboro Medical Health System, Inc.;

    

    [G]          
      on
      or
      before the Closing Date, there shall not have occurred since January 20, 2006,
      any material adverse change in the Acquired Assets or in the condition of Seller
      (financial or otherwise), nor any destruction or significant change to any
      of
      the Acquired Assets, whether or not insured (Seller shall be obligated to give
      Buyer notice of any of the same as soon as possible after the occurrence
      thereof);

    

    [H]          
      the
      representations and warranties of Seller set forth in Section 3
      above
      shall be true and correct in all material respects at and as of the Closing
      Date;

    

    [I]            
      Seller
      shall have performed and complied with all of its covenants hereunder in all
      material respects through the Closing; and

    

    [J]           
      Seller
      shall have delivered to Buyer (3) all
      closing deliverables required of Seller under this Agreement, and (4) a
      certificate to the effect that each of the conditions specified above in
      Sections 7.1 [B], [D], [G], [H] and [I] is satisfied in all
      respects.

    

    Buyer
      may
      waive any condition specified in this Section 7.1
      if it
      executes a writing so stating at or prior to the Closing.

    

    7.2.         
      CONDITIONS
      TO OBLIGATION OF SELLER.
      The
      obligation of Seller to consummate the transactions to be performed by it in
      connection with the Closing is subject to satisfaction of the following
      conditions:

    

    [A]         
      the
      Bankruptcy Court shall have approved this Agreement and entered the Order as
      described in Section 7.1[A] above and no party has properly filed a Notice
      of
      Appeal and obtained an order staying the effect of the Order pending
      appeal;

    

    [B]          
      there
      shall not be any injunction, judgment, order, decree or ruling in effect
      preventing consummation of any of the transactions contemplated by this
      Agreement;

    

    [C]          
      the
      representations and warranties set forth in Section 4
      above
      shall be true and correct in all material respects at and as of the Closing
      Date;

    

    [D]         
      Buyer
      shall have performed and complied with all of its covenants hereunder in all
      material respects through the Closing;

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    [E]          
      Buyer
      shall have delivered to Seller (5) all
      closing deliverables required of Buyer under this Agreement, and (6) a
      certificate to the effect that each of the conditions specified above in
      Section 7.2.[B]-[D]
      is
      satisfied in all respects;

    

    Seller
      may waive any condition specified in this Section 7.2
      if
      Seller executes a writing so stating at or prior to the Closing.

    

    
      	 	
              8.

            	
              TERMINATION.

            

    

    

    
      	 	
              8.1.

            	
              Permitted
                Termination.

            

    

    

    [A]          This
      Agreement may, prior to or at the Closing, be terminated by mutual written
      consent of Seller and Buyer.

    

    [B]          
      If
      the
      conditions set forth in Section 7.1
      have not
      been met on or prior to the Closing, Buyer may terminate this Agreement by
      written notice to Seller.

    

    [C]          
      If
      the
      conditions set forth in Section 7.2
      have not
      been met on or prior to the Closing, Seller may terminate this Agreement by
      written notice to Buyer.

    

    8.2.         
      Termination
      Upon Default.
      If the
      conditions set forth in Sections 7.1.[G],
      [H] and
[I]
      are not
      met on or before the Closing, Buyer may terminate this Agreement by written
      notice to Seller and Seller shall pay to Buyer as allowed administrative expense
      claims pursuant to § 503 of the Bankruptcy Code Buyer’s actual
      out-of-pocket expenses (including without limitation, reasonable attorneys’ fees
      and expenses) incurred in connection with this Agreement, as determined by
      the
      Bankruptcy Court upon properly noticed motion by Buyer.

    

    
      	 	
              8.3.

            	
              Post-Petition
                Loan.

            

    

    

    [A]         
      If
      the
      Closing does not occur, the
      sum
      of all Advances in excess of $50,000,
      shall
      constitute a
      post-petition
      loan
      from
      Buyer
      to
Seller
      pursuant
      to 11 U.S.C. § 364(c), which shall
      (7) bear
      interest at the rate of 10%
      per
      annum until paid, (8) be
      payable in full from and upon the sale of the Acquired Assets to a party other
      than Buyer, and (9) be
      secured by a security interest and lien on the Acquired Assets which
      shall be
      senior in priority to all other liens, mortgages, security interests and
      encumbrances other than such liens, mortgages, security interests and
      encumbrances that are valid, enforceable and perfected on the Filing
      Date
      (the “Post-Petition
      Loan”).
      To the
      extent the value of the Acquired Assets are insufficient to satisfy in full
      the
      repayment of the Post-Petition
      Loan,
      the
      Buyer shall be entitled to an administrative expense under 11 U.S.C.
§ 503(b)
      in an
      amount equal to the unsecured portion of the Post-Petition Loan,
      which
      shall have priority over any and all administrative expenses of the kind
      specified in 11 U.S.C. § 503(b) or 11 U.S.C. § 507(b).

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    [B]          
      With
      respect to the security interest and lien granted pursuant to this
      Section 8.3,
      the
      Order of the Bankruptcy Court approving the LOI shall be sufficient and
      conclusive evidence of the priority perfection and validity of the security
      interests and/or liens granted herein or therein without the necessity of
      filing, recording or serving any financing statements, mortgages or other
      documents which may otherwise be required under federal or state law in any
      jurisdiction, or the taking of any other action to validate or perfect such
      security interests and/or liens granted to Buyer.

    

    9.           
       SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES; SURVIVAL OF AGREEMENTS AND
      COVENANTS. Except
      for those representations and warranties with respect to which written notice
      of
      a breach has been given prior to their expiration, the representations and
      warranties of the Parties contained in this Agreement shall terminate at the
      earlier of (i) the termination of this Agreement in accordance with Article
      8
      hereof or (ii) the final approval of the Seller’s plan of reorganization by the
      Bankruptcy Court. The agreements or covenants contained in this Agreement (or
      any schedule or attachment hereto) that contemplate or provide for actions
      to be
      taken or obligations in effect after the Closing or termination of this
      Agreement, as the case may be, shall survive in accordance with their terms
      and
      to the extent so contemplated; all other covenants and agreements shall not
      survive the Closing.

    

    
      	 	
              10.

            	
              INDEMNIFICATION.

            

    

    

    10.1.       
      Indemnification
      by Seller.
      Subject
      to the limitations of Section 10.2, Seller shall indemnify and hold Buyer and
      its officers, directors and affiliates (the “Buyer
      Indemnified Parties”),
      harmless against all claims, losses, liabilities, damages, deficiencies, costs
      and expenses, including reasonable attorneys’ fees and expenses of investigation
      and defense (hereinafter individually a “Loss”
and
      collectively, “Losses”)
      incurred or suffered by the Buyer Indemnified Parties, or any of them, directly
      or indirectly, as a result of xvi)
      any
      material breach or inaccuracy of a representation or warranty of Seller
      contained in the Transaction Documents, xvii) Environmental,
      Health and Safety Liabilities, xviii) any
      failure by Seller to perform or comply with any covenant contained in the
      Transaction Documents, xix) any
      liability that Seller may have to any Person that may be asserted against any
      of
      the Buyer Indemnified Parties, xx) the
      ownership, operation and use, as applicable, of the Acquired Assets or the
      Business prior to the Closing, and xxi)
      any and
      all acts or omissions by Seller prior to the Closing.

    

    
      	 	
              10.2.

            	
              Certain
                Limitations on Section 10.1.

            

    

    

    [A]         
      As
      to any
      breach or inaccuracy of a representation or warranty of Seller contained in
      this
      Agreement which is discovered by Buyer during the period of time beginning
      on
      the date hereof and ending on the Closing, Buyer’s only remedy pursuant to this
      Section 10 shall be to opt not to close in accordance with and subject to the
      limitations in Sections 7.1 and 8.2 hereof.

    

    [B]          As
      to any
      Loss incurred by Buyer Indemnified Parties which is discovered by Buyer
      Indemnified Parties during the period of time between Closing and the effective
      date of Seller’s plan of reorganization as approved by the Bankruptcy Court,
      Buyer Indemnified Parties shall have the indemnity rights set forth in Section
      10.1 above and shall have the right to move the Bankruptcy Court for allowance
      of such claim pursuant to 11 U.S.C. § 503(b)(1)(A). In the event no
      plan of reorganization is approved, the Buyer Indemnified Parties may move
      the
      Court for allowance of a claim for any loss discovered by the Buyer Indemnified
      Parties after Closing as an administrative expense to be paid according to
      the
      priorities established by the Bankruptcy Code.

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    [C]          
      Regardless
      of the foregoing clauses [A] and [B] , nothing in this Agreement shall limit
      the
      ability of Buyer Indemnified Parties to recover from Seller and its officers
      and
      directors for fraud or intentional misrepresentation.

    

    10.3.       
      Indemnification
      by Buyer.
      Buyer
      shall indemnify and hold Seller and its officers, directors and affiliates
      (the “Seller
      Indemnified Parties”),
      harmless against all Losses incurred or suffered by the Seller Indemnified
      Parties, or any of them, directly or indirectly, as a result of xxii) any
      breach or inaccuracy of a representation or warranty of Buyer contained in
      the
      Transaction Documents, xxiii) any
      failure by Buyer to perform or comply with any covenant contained in the
      Transaction Documents, and xxiv) the
      ownership, operation and use, as applicable, of the Acquired Assets or the
      Business after the Closing.

    

    10.4.        Certain
      Limitations on Section 10.3.

    

    [A]         
      As
      to any
      Loss incurred by Seller Indemnified Parties which is discovered by Seller
      Indemnified Parties after the Closing, Seller Indemnified Parties shall have
      the
      indemnity rights set forth in Section 10.3 above.

    

    [B]          
      Nothing
      in this Agreement shall limit the ability of Seller Indemnified Parties to
      recover from Buyer and its officers, managing members and directors or voting
      members for fraud or intentional misrepresentation.

    
      

      
        	 	
                11.

              	MISCELLANEOUS.

      

    

    

    11.1.       
      Press
      Releases and Public Announcements.
      No
      Party shall issue any press release or make any public announcement relating
      to
      the subject matter of this Agreement prior to the Closing without the prior
      written approval of the other Party; provided, however, that any Party may
      make
      any public disclosure it believes in good faith is required by applicable Legal
      Requirements or any listing or trading agreement concerning its publicly-traded
      securities (in which case the disclosing Party will use its reasonable best
      efforts to advise the other Party prior to making the disclosure).

    

    11.2.       
      No
      Third-Party Beneficiaries.
      This
      Agreement shall not confer any rights or remedies upon any person other than
      the
      Parties and their respective successors and permitted assigns.

    

    11.3.       
      Entire
      Agreement.
      This
      Agreement (including the exhibits, schedules and Disclosure Letter referred
      to
      herein) constitutes the entire agreement between the Parties and supersedes
      any
      prior understandings, agreements, or representations by or between the Parties,
      written or oral, to the extent they related in any way to the subject matter
      hereof.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    11.4.        Successions
      and Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of the Parties named
      herein and their respective successors and permitted assigns and any trustee
      appointed under the Bankruptcy Code. No Party may assign either this Agreement
      or any of its rights, interests, or obligations hereunder without the prior
      written approval of the other Party; provided that the Buyer may assign all
      or
      part of its rights and obligations with respect to the Acquired Assets to one
      or
      more of its Affiliates.

    

    11.5.       
      Risk
      of Loss.
      Seller
      shall bear all risk of loss with respect to the Acquired Assets prior to the
      Closing Date. Seller agrees to continue to carry or cause to be carried to
      the
      Closing Date the insurance coverage which is presently carried relating to
      the
      Acquired Assets as set forth on Section 3.15
      of the
      Disclosure Letter.

    

    11.6.       
      Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which together will constitute one and the same
      instrument. The exchange of copies of this Agreement and of signature pages
      by
      facsimile transmission will constitute effective execution and delivery of
      this
      Agreement as to the parties and may be used in lieu of the original Agreement
      for all purposes. Signatures of the parties transmitted by facsimile will be
      deemed to be their original signatures for any purpose whatsoever.

    

    11.7.       
      Headings.
      The
      section headings contained in this Agreement are inserted for convenience only
      and shall not affect in any way the meaning or interpretation of this
      Agreement.

    

    11.8.       
      Notices.
      All
      notices, requests, demands, claims, and other communications hereunder will
      be
      in writing. Any notice, request, demand, claim, or other communication hereunder
      shall be deemed duly given if (and then two Business Days after) it is sent
      by
      registered or certified mail, return receipt requested, postage prepaid, and
      addressed to the intended recipient as set forth below:

    

    
      	 	
              If
                to Seller:

            	
              If
                to Buyer:

            

      	 	 	 

    

    
      	 	
              Large
                Scale Biology Corporation

            	
              Kentucky
                BioProcessing, Inc.

            

    

    
      	 	
              3333
                Vaca Valley Parkway

            	
              811
                E. Parrish Avenue

            

    

    
      	 	
              Vacaville,
                CA 95688

            	
              Owensboro,
                Kentucky 42303

            

    

    
      	 	
              Attn:
                Robert Erwin, Chairman of the Board

            	
              Attn:
                Jeffrey Barber, President and CEO

            

    

    
      	 	
              Facsimile:
                (707) 469-3917

            	
              Facsimile:
                (270) 688-2124

            

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
      	 	
              Copy
                to:

            	
              Copy
                to:

            

      	 	 	 

    

    
      	 	
              Sweeney
                Lev, LLC

            	
              Wyatt,
                Tarrant & Combs, LLP

            

    

    
      	 	
              460
                Bloomfield Avenue, Suite 200

            	
              500
                West Jefferson Street

            

    

    
      	 	
              Montclair,
                NJ 07042

            	
              Louisville,
                Kentucky 40202-2898

            

    

    
      	 	
              Attn:
                Gerald B. Sweeney

            	
              Attn:
                Franklin K. Jelsma, Esq.

            

    

    
      	 	
              Facsimile:
                973-509-1074

            	
              Facsimile:
                (502) 589-0309

            

    

    

    

    Any
      Party
      may send any notice, request, demand, claim, or other communication hereunder
      to
      the intended recipient at the address set forth above, using any other means
      (including personal delivery, expedited courier, messenger service, telecopy,
      ordinary mail, or electronic mail), but no such notice, request, demand, claim,
      or other communication shall be deemed to have been duly given unless and until
      it actually is received by the intended recipient. Any Party may change the
      address to which notices, requests, demands, claims, and other communications
      hereunder are to be delivered by giving the other Party notice in the manner
      herein set forth.

    

    11.9.       
      Governing
      Law; Exclusive Jurisdiction.
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws of the Commonwealth of Kentucky without giving effect (to the extent
      permitted by law) to any choice or conflict of law provision or rule (whether
      of
      the Commonwealth of Kentucky or any other jurisdiction) that would cause the
      application of the laws of any jurisdiction other than the Commonwealth of
      Kentucky. Any action or proceeding seeking to enforce any provision of, or
      based
      on any right arising out of, this Agreement or any other Transaction Document
      may only be brought in a court sitting in the Commonwealth of Kentucky, County
      of Daviess, City of Owensboro or if it has or can acquire jurisdiction, the
      United States District Court for the Western District of Kentucky, and each
      Party hereby irrevocably consents to the jurisdiction of such courts (and of
      the
      appropriate appellate courts) in any such action or proceeding and waives any
      objection to venue laid therein. Process in any action or proceeding referred
      to
      in the preceding sentence may be served on a Party anywhere in the
      world.

    

    11.10.     
      Amendments
      and Waiver.
      No
      amendment of any provision of this Agreement shall be valid unless the same
      shall be in writing and signed by Buyer and Seller. No waiver by any Party
      of
      any default, misrepresentation, or breach of warranty or covenant hereunder,
      whether intentional or not, shall be deemed to extend to any prior or subsequent
      default, misrepresentation, or breach of warranty or covenant hereunder or
      affect in any way any rights arising by virtue of any prior or subsequent such
      occurrence.

    

    11.11.      
      Severability.
      Any
      term or provision of this Agreement that is invalid or unenforceable in any
      situation in any jurisdiction shall not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction.

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    11.12.      
      Expenses.
      Except
      as provided in Section 8.2,
      each of
      Buyer and Seller, will bear its own costs and expenses (including fees and
      expenses of attorneys, accountants, finders, financial advisors and other
      professionals) incurred in connection with this Agreement and the transactions
      contemplated hereby.

    

    11.13.      
      Construction.
      The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement. In the event an ambiguity or question of intent or interpretation
      arises, this Agreement shall be construed as if drafted jointly by the Parties
      and no presumption or burden of proof shall arise favoring or disfavoring any
      Party by virtue of the authorship of any of the provisions of this Agreement.
      Any reference to any federal, state, local, or foreign statute or law shall
      be
      deemed also to refer to all rules and regulations promulgated thereunder, unless
      the context requires otherwise. The word “including” shall mean including
      without limitation.

    

    11.14.       Time
      of Essence.
      Time is
      of essence to the performance of each and every material obligation of the
      Parties under this Agreement.

    

    11.15.      
      Incorporation
      of Exhibits and Schedules.
      The
      Disclosure Letter and the exhibits and schedules identified in this Agreement
      are incorporated herein by reference and made a part hereof.

    

    11.16      
      No
      Other Representations.
      BUYER
      HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
      IN
      THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 3 AS MODIFIED BY THE
      DISCLOSURE SCHEDULES, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
      EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE ACQUIRED ASSETS,
      THE FACILITY OR THE BUSINESS.

    

    

    

    [END
      OF
      TEXT; SIGNATURE PAGE FOLLOWS]

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Parties hereto have executed this Agreement as of the date first above
      written.

    

    
      	 	
              “Buyer”

            
	 	 	 
	 	
              KENTUCKY
                BIOPROCESSING, LLC

            
	 	 	 
	 	 	 
	 	
              By:
                

            	 /s/
              Jeffrey Barber
	 	 	
              Jeffrey
                Barber, President

            
	 	 	 
	 	
              “Seller”

            
	 	 	 
	 	
              LARGE
                SCALE BIOLOGY CORPORATION

            
	 	 	 
	 	 	 
	 	
              By:
                

            	 /s/
              Robert L. Erwin
	 	
              Name:
                

            	 Robert
              L. Erwin
	 	
              Title:
                

            	 Chairman
              of the Board
	 	 	 
	 	 	 
	 	
              LARGE
                SCALE BIOPROCESSING, INC.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	 /s/
              Robert L. Erwin
	 	
              Name:
                

            	 Robert
              L. Erwin
	 	
              Title:
                

            	 Chairman
              of the Board

    

    

    

    GUARANTY

    

    By
      signing below, Owensboro Medical Health System, Inc., a Kentucky non-profit
      corporation, hereby guarantees the payment obligations of Kentucky
      BioProcessing, LLC under the Asset Purchase Agreement set forth above and,
      as
      the sole member of Buyer, confirms its approval of the Asset Purchase
      Agreement.

    

    
      	 	
              OWENSBORO
                MEDICAL HEALTH SYSTEM, INC.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	 /s/
              Jeffrey Barber
	 	 	
              Jeffrey
                Barber, President and CEO

            
	 	 	 
	 	
              Date:
                February 24, 2006

            

    

     

    27Exhibit 4.17

    
      

    

     

    Exhibit
      4.17

    EQUITY
      ONE, INC.

    

    ISSUER,

     

    THE

     

    GUARANTORS

    SET
      FORTH ON THE SIGNATURE PAGES ATTACHED HERETO

     

    AND

     

    SUNTRUST
      BANK, AS

     

    TRUSTEE

     

    —————————————————

     

    SUPPLEMENTAL
      INDENTURE NO. 8

     

    DATED
      AS OF DECEMBER 30, 2005

     

    —————————————————

     

    GUARANTEE
      OF SENIOR DEBT SECURITIES

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      SUPPLEMENTAL
        INDENTURE NO. 8,
        dated
        as of December 30, 2005 (this “Supplemental
        Indenture”),
        among
Equity
        One, Inc.,
        a
        corporation duly organized and existing under the laws of the State of Maryland
        (the “Company”),
        each
        of the Guarantors
        set
        forth on the signature pages attached hereto (the “Guarantors”),
        and
SunTrust
        Bank (formerly
        known as SunTrust Bank, Atlanta), a Georgia banking corporation duly organized
        and existing under the laws of the State of Georgia, as Trustee (the
“Trustee”).

      

      R
        E C I T A L S

      

      WHEREAS,
        the
        Company, as successor by merger to IRT Property Company, and the Trustee
        have
        heretofore entered into an Indenture dated as of September 9, 1998 (the
“Original
        Indenture”
and
        as
        amended, supplemented or otherwise modified through the date hereof, the
        “Indenture”),
        which
        has been filed with the Securities and Exchange Commission under the Securities
        Act of 1933, as amended, as an exhibit to the Company’s Registration Statement
        on Form S-3 (Registration No. 333-106909), providing for the issuance from
        time
        to time of senior debt securities of the Company (“Securities”);

      

      WHEREAS,
        the
        Guarantors will provide the guaranty herein set forth (the “Guaranty”)
        of the
        Obligations (as defined herein);

      

      WHEREAS,
        Sections 901(6) and 901(10) of the Indenture permit the Company and the Trustee
        to enter into indentures supplemental thereto without the consent of any
        Holder
        of Securities to evidence the Guaranty of each Guarantor and to make any
        change
        to the Indenture, provided that such change does not adversely affect the
        interests of the Holders of Securities of any series or any related coupons
        in
        any material respect;

      

      WHEREAS,
        each
        Guarantor has determined that its execution, delivery and performance of
        this
        Supplemental Indenture directly benefits, and are within the purposes and
        best
        interests of, the Guarantor;

      

      WHEREAS,
        the
        Board of Directors of the Company has duly adopted resolutions authorizing
        the
        Company to execute and deliver this Supplemental Indenture and the Board
        of
        Directors (or equivalent governing body) of each Guarantor has duly adopted
        resolutions authorizing such Guarantor to execute and deliver this Supplemental
        Indenture; and

      

      WHEREAS,
        all
        other conditions and requirements necessary to make this Supplemental Indenture,
        when duly executed and delivered, a valid and binding agreement in accordance
        with its terms and for the purposes herein expressed, have been performed
        and
        fulfilled.

      

      NOW,
        THEREFORE, THIS INDENTURE WITNESSETH:

      

      For
        and
        in consideration of the premises and other good and valuable consideration,
        the
        receipt and sufficiency of which is hereby acknowledged, the Company and
        each
        Guarantor agrees as follows:

      

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

      

       

      ARTICLE
        ONE

      DEFINITIONS

      

      SECTION
        1.1.  Definitions.
        For all
        purposes of this Supplemental Indenture, except as otherwise expressly provided
        for or unless the context otherwise requires: 

      

      (a)  capitalized
        terms used but not defined herein shall have the respective meanings assigned
        to
        them in the Indenture; 

      

      (b)  all
        references herein to Articles and Sections refer to the corresponding Articles
        and Sections of this Supplemental Indenture; and 

      

      (c)  as
        used
        herein the following terms have the following meanings:

      

      “Guaranteed
        Securities”
means
        all Securities issued under the Indenture as of the date hereof.

      

      “Obligations”
means
        (x) all payment and performance obligations of the Company (i) under the
        Indenture with respect to the Guaranteed Securities, (ii) under the Guaranteed
        Securities and (iii) as a result of the issuance of the Guaranteed Securities
        and (y) the obligation to pay an amount equal to the amount of any and all
        damages which the Trustee and the Holders, or any of them, may suffer by
        reason
        of a breach by either the Company or any other obligor of any obligation,
        covenant or undertaking under (i) the Indenture with respect to the Guaranteed
        Securities or (ii) the Guaranteed Securities.

      

      ARTICLE
        TWO

      GUARANTY

      

      SECTION
        2.1.
        Guaranty.
        Each
        Guarantor hereby unconditionally guarantees to the Trustee and the Holders
        full
        and prompt payment and performance when due, whether at maturity, by
        acceleration or otherwise, of all Obligations. Each Obligation shall rank
        pari
        passu with each other Obligation.

      

      SECTION
        2.2.
        Obligations
        Several.
        Regardless of whether any proposed Guarantor or any other Person or Persons
        is,
        are or shall become in any other way responsible to the Trustee and the Holders,
        or any of them, for or in respect of the Obligations or any part thereof,
        and
        regardless of whether or not any Person or Persons now or hereafter responsible
        to the Trustee and the Holders, or any of them, for the Obligations or any
        part
        thereof, whether under the Guaranty or otherwise, shall cease to be so liable,
        each Guarantor hereby declares and agrees that the Guaranty provided thereby
        is
        and shall continue to be a several obligation (as well as a joint one), shall
        be
        a continuing guaranty and shall be operative and binding on such Guarantor.
        Each
        Guarantor hereby agrees that it will not exercise any rights which it may
        acquire by way of subrogation under the Guaranty, by any payment made hereunder
        or otherwise, unless and until all of the Obligations shall have been paid
        in
        full. If any amount shall be paid to any Guarantor on account of such
        subrogation rights at any time when all of the Obligations shall not have
        been
        paid in full, such amount shall be held in trust for the benefit of the Trustee
        and the Holders and shall forthwith be paid to the Trustee to be credited
        and
        applied upon the Obligations, whether matured or unmatured, in accordance
        with
        the terms of the Indenture, but subject to the provisions of Section
2.7
        hereof.

      

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

      

       

      SECTION
        2.3.
        Guaranty
        Final.
        Upon
        the execution and delivery of this Supplemental Indenture by the parties
        hereto,
        this Supplemental Indenture shall be deemed to be finally executed and delivered
        by the parties hereto and shall not be subject to or affected by any promise
        or
        condition affecting or limiting any Guarantor’s liability, and no statement,
        representation, agreement or promise on the part of the Trustee, the Holders,
        the Company, or any of them, or any officer, employee or agent thereof, unless
        contained herein forms any part of this Supplemental Indenture or has induced
        the making hereof or shall be deemed in any way to affect any Guarantor’s
        liability hereunder. The Guarantors’ obligations hereunder shall remain in full
        force and effect until all Obligations shall have been paid in
        full.

      

      SECTION
        2.4. Dealings
        With the Company.
        The
        Company, the Trustee and the Holders, or any of them, may, from time to time,
        without exonerating or releasing any Guarantor in any way under the Guaranty,
        (i) take such further or other security or securities for the Obligations
        or any
        part thereof as the Trustee and the Holders, or any of them, may deem proper,
        consistent with the Indenture, or (ii) release, discharge, abandon or otherwise
        deal with or fail to deal with any Guarantor of the Obligations or any security
        or securities therefor or any part thereof now or hereafter held by the Trustee
        and the Holders, or any of them, as the Trustee and the Holders, or any of
        them,
        may deem proper, consistent with the Indenture, or (iii) consistent with
        the
        Indenture, amend, modify, extend, accelerate or waive in any manner any of
        the
        provisions, terms, or conditions of the Indenture and the Guaranteed Securities,
        all as the Company, the Trustee and the Holders, or any of them, may consider
        expedient or appropriate in their sole discretion. Without limiting the
        generality of the foregoing, or of Section 2.5
        hereof,
        it is understood that the Company, the Trustee and the Holders, or any of
        them,
        may, without exonerating or releasing any Guarantor, give up, or modify or
        abstain from perfecting or taking advantage of any security for the Obligations
        and accept or make any compositions or arrangements, and realize upon any
        security for the Obligations when, and in such manner, as the Trustee and
        the
        Holders, or any of them, may deem expedient, consistent with the Indenture,
        all
        without notice to any Guarantor.

      

      SECTION
        2.5. Guaranty
        Unconditional.
        Each
        Guarantor acknowledges and agrees that no change in the nature or terms of
        the
        Obligations, the Indenture or the Guaranteed Securities, or other agreements,
        instruments or contracts evidencing, related to or attendant with the
        Obligations (including any novation), nor any determination of lack of
        enforceability thereof, shall discharge all or any part of the liabilities
        and
        obligations of such Guarantor pursuant to the Guaranty; it being the purpose
        and
        intent of the Guarantors, the Company, the Trustee and the Holders that the
        covenants, agreements and all liabilities and obligations of the Guarantors
        hereunder are absolute, unconditional and irrevocable under any and all
        circumstances. Without limiting the generality of the foregoing, each Guarantor
        agrees that until each and every one of the covenants and agreements of this
        Supplemental Indenture is fully performed, such Guarantor’s undertakings
        hereunder shall not be released, in whole or in part, by any action or thing
        which might, but for this Section 2.5,
        be
        deemed a legal or equitable discharge of a surety or guarantor, or by reason
        of
        any waiver or omission of the Company, the Trustee and the Holders, or any
        of
        them, or their failure to proceed promptly or otherwise, or by reason of
        any
        action taken or omitted by the Company, the Trustee and the Holders, or any
        of
        them, whether or not such action or failure to act varies or increases the
        risk
        of, or affects the rights or remedies of, such Guarantor or by reason of
        any
        further dealings among the Company, the Trustee and the Holders, or any of
        them,
        or any other guarantor or surety, and each Guarantor hereby expressly waives
        and
        surrenders any defense to its liability hereunder, or any right of counterclaim
        or offset of any nature or description which it may have or which may exist
        based upon, and shall be deemed to have consented to, any of the foregoing
        acts,
        omissions, things, agreements or waivers.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      SECTION
        2.6.
        Bankruptcy.
        Each
        Guarantor agrees that upon the bankruptcy or winding up or other distribution
        of
        assets of the Company or any Subsidiary of the Company (other than such
        Guarantor) or of any other Guarantor or surety or guarantor for the Obligations,
        the rights of the Trustee and the Holders, or any of them, against such
        Guarantor shall not be affected or impaired by the omission of the Trustee
        or
        the Holders, or any of them, to prove its or their claim, as appropriate,
        or to
        prove its or their full claim, as appropriate, and the Trustee and the Holders
        may prove such claims as they see fit and may refrain from proving any claim
        and
        in their respective discretion they may value as they see fit or refrain
        from
        valuing any security held by the Trustee and the Holders, or any of them,
        without in any way releasing, reducing or otherwise affecting the liability
        to
        the Trustee and the Holders of such Guarantor. If acceleration of the time
        for
        payment of any amount payable by the Company under the Indenture or the
        Guaranteed Securities of any series is stayed upon the insolvency, bankruptcy
        or
        reorganization of the Company, all such amounts otherwise subject to
        acceleration under the terms of the Indenture or the Guaranteed Securities
        of
        that series shall nonetheless be payable by each Guarantor hereunder forthwith
        on demand by the Trustee made at the written request of the Holders of not
        less
        than 25% in principal amount of the outstanding Guaranteed Securities of
        that
        series. If at any time any payment of the principal of or interest on any
        Guaranteed Security or any other amount payable by the Company under the
        Indenture is rescinded or must be otherwise restored or returned upon the
        insolvency, bankruptcy or reorganization of the Company, any other Guarantor
        or
        otherwise, the Guarantors’ obligations hereunder with respect to such payment
        shall be reinstated as though such payment had been due but not made at such
        time.

      

      SECTION
        2.7. Application
        of Payments.
        The
        Trustee hereby acknowledges and agrees, and each Holder shall be deemed to
        hereby acknowledge and agree, that to the extent any of the Existing Senior
        Obligations (as defined below) is then in default, any funds, payments, claims
        or distributions (the “Guaranty
        Proceeds”)
        actually received hereunder shall be made available for distribution equally
        and
        ratably (based on the principal amounts then outstanding) among (a) the holders
        of the Obligations and (b) the holders of the Existing Senior Obligations.
        For
        purposes hereof, “Existing
        Senior Obligations”
shall
        mean Debt for borrowed money owed or guaranteed in connection with any unsecured
        and non-subordinated Debt for borrowed money of the Company or the Guarantor
        (aa) issued in offerings registered under the Securities Act of 1933, as
        amended
        or in placements exempt from registration pursuant to Rule 144A or Regulation
        S
        thereunder, or (bb) otherwise incurred, which is, in either case, outstanding
        on
        the date hereof or incurred hereafter in accordance with the Indenture
        (including, without limitation, the Debt of the Company incurred in connection
        with the Credit Agreement dated as of February 7, 2003, as amended or
        supplemented from time to time, among the Company, Wells Fargo Bank, National
        Association, as Administrative Agent under the Credit Agreement, and the
        lenders
        named therein, and certain other lenders party thereto from time to time).
        This
        Section 2.7
        shall
        not apply to any payments, funds, claims or distributions received by the
        Trustee or any Holder directly or indirectly from the Company or any other
        Person other than from the Guarantors hereunder. Each Guarantor acknowledges
        and
        agrees with the Trustee and each Holder as follows:

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (a)  to
        the
        extent any Guaranty Proceeds are distributed to the holders of the Existing
        Senior Obligations, the Obligations shall not be deemed reduced by any such
        distribution (other than a distribution made in respect of the Guaranteed
        Securities), and the Guarantors will continue to make payments pursuant to
        the
        Guaranty until such time as the Obligations have been paid in full after
        taking
        into effect any distributions of Guaranty Proceeds to the holders of Existing
        Senior Obligations;

      

      (b)  nothing
        contained herein shall be deemed to limit, modify or alter the rights of
        the
        Trustee and the Holders or be deemed to subordinate the Obligations to the
        Existing Senior Obligations, nor give to any holder of Existing Senior
        Obligations any rights of subrogation;

      

      (c)  nothing
        contained herein shall be deemed for the benefit of any holders of Existing
        Senior Obligations nor shall anything be construed to impose on the Trustee
        or
        any Holder any fiduciary duties, obligations or responsibilities to the holders
        of the Existing Senior Obligations; and

      

      (d)  the
        Guaranty is for the sole benefit of the Trustee and the Holders and their
        respective successors and assigns, and any amounts received by the Trustee
        and
        the Holders, or any of them, from whatever source and applied toward the
        payment
        of the Obligations shall be applied in such order of application as is set
        forth
        in the Indenture, if any.

      

      SECTION
        2.8. Waivers
        by Guarantors.
        Each
        Guarantor hereby expressly waives: (a) notice of acceptance of the
        Guaranty, (b)  notice of the existence or creation of all or any of the
        Obligations, (c) presentment, demand, notice of dishonor, protest, and all
        other notices whatsoever, (d) all diligence in collection or protection of
        or realization upon the Obligations or any part thereof, any obligation
        hereunder, or any security for any of the foregoing and (e) all rights of
        subrogation, indemnification, contribution and reimbursement against the
        Company, all rights to enforce any remedy the Trustee and the Holders, or
        any of
        them, may have against the Company, and any benefit of, or right to participate
        in, any collateral or security now or hereinafter held by the Trustee and
        the
        Holders, or any of them, in respect of the Obligations, even upon payment
        in
        full of the Obligations. Any money received by any Guarantor in violation
        of
        this Section 2.8
        shall be
        held in trust by such Guarantor for the benefit of the Trustee and the Holders.
        If a claim is ever made upon the Trustee and the Holders, or any of them,
        for
        the repayment or recovery of any amount or amounts received by any of them
        in
        payment of any of the Obligations and the Trustee or the Holders repays all
        or
        part of such amount by reason of (a) any judgment, decree, or order of any
        court
        or administrative body having jurisdiction over the Trustee or the Holders
        or
        any of its or their property, or (b) any good faith settlement or compromise
        of
        any such claim effected by the Trustee or the Holders with any such claimant,
        including the Company, then in such event each Guarantor agrees that any
        such
        judgment, decree, order, settlement, or compromise shall be binding upon
        such
        Guarantor, notwithstanding any revocation hereof or the cancellation of any
        promissory note or other instrument evidencing any of the Obligations, and
        such
        Guarantor shall be and remain obligated to the Trustee and the Holders hereunder
        for the amount so repaid or recovered to the same extent as if such amount
        had
        never originally been received thereby.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      SECTION
        2.9.
        Remedies
        Cumulative.
        No
        delay by the Trustee and the Holders, or any of them, in the exercise of
        any
        right or remedy shall operate as a waiver thereof, and no single or partial
        exercise by the Trustee and the Holders, or any of them, of any right or
        remedy
        shall preclude other or further exercise thereof or the exercise of any other
        right or remedy. No action by the Trustee and the Holders, or any of them,
        permitted hereunder shall in any way impair or affect the Guaranty. For the
        purpose of the Guaranty, the Obligations shall include, without limitation,
        all
        Obligations of the Company to the Trustee and the Holders, notwithstanding
        any
        right or power of any third party, individually or in the name of the Company
        or
        any other Person, to assert any claim or defense as to the invalidity or
        unenforceability of any such Obligation, and no such claim or defense shall
        impair or affect the obligations of any Guarantor hereunder.

      

      SECTION
        2.10.
        Miscellaneous.
        The
        Guaranty is a guaranty of payment and not of collection. In the event of
        a
        demand upon any Guarantor under the Guaranty, such Guarantor shall be held
        and
        bound to the Trustee and the Holders directly as debtor in respect of the
        payment of the amounts hereby guaranteed. All reasonable costs and expenses,
        including attorneys’ fees and expenses, incurred by the Trustee and the Holders,
        or any of them, in obtaining performance of or collecting payments due under
        the
        Guaranty shall be deemed part of the Obligations guaranteed hereby. The
        provisions of the Guaranty are for the benefit of the Trustee and the Holders
        and may not be relied upon or enforced by any other Person and, as to
        enforcement, may only be enforced in accordance with this Supplemental Indenture
        and the Indenture.

      

      SECTION
        2.11.
        Benefit
        to Guarantor.
        Each
        Guarantor expressly represents and acknowledges that the issuance and sale
        of
        the Guaranteed Securities under the Indenture has been, and will be, of direct
        interest, benefit and advantage to such Guarantor.

      

      SECTION
        2.12. Solvency.
        Each
        Guarantor expressly represents and warrants that as of the date hereof and
        after
        giving effect to the transactions contemplated by the Indenture (a) the capital
        of such Guarantor will not be unreasonably small to conduct its business;
        (b) such Guarantor will not have incurred debts, or have intended to incur
        debts, beyond its ability to pay such debts as they mature; and (c) the present
        fair salable value of the assets of such Guarantor is greater than the amount
        that will be required to pay its probable liabilities (including debts) as
        they
        become absolute and matured. For purposes of this Section 2.12,
        “debt”
means
        any liability on a claim, and “claim”
means
        (x) the right to payment, whether or not such right is reduced to judgment,
        liquidated, unliquidated, fixed, contingent, matured, unmatured, undisputed,
        legal, equitable, secured or unsecured, or (y) the right to an equitable
        remedy
        for breach of performance if such breach gives rise to a right to payment,
        whether or not such right to an equitable remedy is reduced to judgment,
        fixed,
        contingent, matured, unmatured, undisputed, secured or
        unsecured.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      SECTION
        2.13.
        Additional
        Guarantors; Release of Guarantors.
        Any
        Subsidiary of the Company or any other entity may become a party to this
        Guaranty by executing and delivering a Supplemental Indenture providing for
        a
        guaranty of the Obligations under the terms of this Article Two, provided
        that
        such Supplemental Indenture conforms to the requirements of Article Nine
        of the
        Indenture. Under certain circumstances, a Guarantor may be released by the
        Trustee of its obligations under this Guaranty. Each other Guarantor consents
        and agrees to any such releases and agrees that no such release shall affect
        its
        obligations hereunder, except as to the Guarantor so released.

      

      SECTION
        2.14. Contribution
        Agreement.
        To the
        extent that any Guarantor shall, under the Guaranty, make a payment (a
“Guarantor
        Payment”)
        of a
        portion of the Obligations, then, without limiting its rights of subrogation
        against the Company, such Guarantor shall be entitled to contribution and
        indemnification from, and be reimbursed by, each of the other Guarantors
        and the
        Company (each of the foregoing referred to herein individually as a
“Contributing
        Party”
and
        collectively as the “Contributing
        Parties”)
        in an
        amount, for each such Contributing Party, equal to a fraction of such Guarantor
        Payment, the numerator of which fraction is such Contributing Party’s Allocable
        Amount (as defined below) and the denominator of which is the sum of the
        Allocable Amounts of all of the Contributing Parties.

      

      As
        of any
        date of determination, the “Allocable
        Amount”
of
        each
        Contributing Party shall be equal to the maximum amount of liability which
        could
        be asserted against such Contributing Party hereunder with respect to the
        applicable Guarantor Payment without (i) rendering such Contributing Party
        “insolvent” within the meaning of Section 101(31) of the Federal Bankruptcy Code
        (the “Bankruptcy
        Code”)
        or
        Section 2 of either the Uniform Fraudulent Transfer Act (the “UFTA”)
        or the
        Uniform Fraudulent Conveyance Act (the “UFCA”),
        (ii)
        leaving such Contributing Party with unreasonably small capital, within the
        meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA or
        Section 5 of the UFCA, or (iii) leaving such Contributing Party unable to
        pay
        its debts as they become due within the meaning of Section 548 of the Bankruptcy
        Code or Section 4 of the UFTA or Section 6 of the UFCA or in any case, any
        successor to the Bankruptcy Code or any such section thereof or any successor
        to
        the UFTA or the UFCA or any such sections thereof.

      

      This
        Section 2.14
        is
        intended only to define the relative rights of the Contributing Parties,
        and
        nothing set forth in this Agreement is intended to or shall impair the
        obligations of the Guarantors, jointly and severally, to pay any amounts,
        as and
        when the same shall become due and payable in accordance with the terms of
        the
        Guaranty. 

      

      The
        parties hereto acknowledge that the rights of contribution and indemnification
        hereunder shall constitute assets in favor of each Guarantor to which such
        contribution and indemnification is owing.

      

      This
        Section 2.14
        shall
        continue in full force and effect and may not be terminated or otherwise
        revoked
        by any Contributing Party until all of the Guaranteed Obligations shall have
        been indefeasibly paid in full (in lawful money of the United States of America)
        and discharged and the Indenture and Guaranteed Securities shall have been
        terminated. 

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      SECTION
        2.15.
        NO
        NOVATION.
        THE
        PARTIES DO NOT INTEND THIS SUPPLEMENTAL INDENTURE, NOR THE TRANSACTIONS
        CONTEMPLATED HEREBY, TO BE, AND THIS SUPPLEMENTAL INDENTURE AND THE TRANSACTIONS
        CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OR WAIVER OF
        ANY OF
        THE OBLIGATIONS OWING BY ANY GUARANTOR OF ANY OBLIGATIONS UNDER OR IN CONNECTION
        WITH ANY GUARANTY IN EXISTENCE AS OF THE DATE OF THIS SUPPLEMENTAL
        INDENTURE.

      

      ARTICLE
        THREE

      MISCELLANEOUS
        PROVISIONS

      

      SECTION
        3.1.
        Ratification
        of Indenture.
        Except
        as expressly modified or amended hereby, the Indenture continues in full
        force
        and effect and is in all respects confirmed and preserved.

      

      SECTION
        3.2.
        Governing
        Law.
        This
        Supplemental Indenture shall be governed by and construed in accordance with
        the
        laws of the State of Georgia. This Supplemental Indenture is subject to the
        provisions of the Trust Indenture Act of 1939, as amended and shall, to the
        extent applicable, be governed by such provisions.

      

      SECTION
        3.3.
        Counterparts.
        This
        Supplemental Indenture may be executed in any number of counterparts, each
        of
        which so executed shall be deemed to be an original, but all such counterparts
        shall together constitute but one and the same instrument.

      

      SECTION
        3.4.
        Notices.
        Any
        notice required or permitted hereunder or under the Indenture to be given
        or
        made to the Company or a Guarantor shall be given or made in writing and
        mailed,
        first class postage prepaid, (i) to the Company or (ii) to such Guarantor
        care
        of the Company, at the address of the Company set forth below its signature
        hereon, or at any other address previously furnished in writing to the Trustee
        and the Company by such Guarantor, with a copy to the Company given or made
        in
        accordance with Section 105 of the Indenture.

      

      SECTION
        3.5.
        Successors
        and Assigns.
        This
        Supplemental Indenture shall be binding upon the Company and each Guarantor,
        and
        their respective successors and assigns and inure to the benefit of the
        respective successors and assigns of the Trustee and the
        Holders.

      

      SECTION
        3.6.
        Time
        of the Essence.
        Time is
        of the essence with regard to the Company’s and the Guarantors’ performance of
        their respective obligations hereunder.

      

      SECTION
        3.7.
        Rights
        of Holders Limited.
        Notwithstanding anything herein to the contrary, the rights of Holders with
        respect to this Supplemental Indenture and the Guaranty shall be limited
        in the
        manner and to the extent the rights of Holders are limited under the Indenture
        with respect to the Indenture and the Securities. 

      

      SECTION
        3.8. Rights
        and Duties of Trustee.
        The
        rights and duties of the Trustee shall be determined by the express provisions
        of the Original Indenture and, except as expressly set forth in this
        Supplemental Indenture, nothing in this Supplemental Indenture shall in any
        way
        modify or otherwise affect the Trustee’s rights and duties thereunder. The
        Trustee makes no representation or warranty as to the validity of this
        Supplemental Indenture and, except insofar as relates to the validity hereof
        with respect to the Trustee specifically, the Trustee shall not be liable
        in
        connection therewith. The Trustee makes no representation or warranty, express
        or implied, as to the accuracy or completeness of any information contained
        in
        any offering or disclosure document related to the sale of the Securities,
        except for such information that specifically pertains to the Trustee itself,
        or
        any information incorporated therein by reference.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      SECTION
        3.9. Amendment
        and Waiver.
        This
        Supplemental Indenture shall not be amended unless such amendment (i) complies
        with the terms of the Indenture, (ii) is in writing and (iii) is executed
        by
        each of the parties hereto. No alteration or waiver of this Supplemental
        Indenture or of any of its terms, provisions or conditions shall be binding
        upon
        the parties against whom enforcement is sought unless made in writing and
        signed
        by an authorized officer of such party or its general partner, as
        applicable.

      

      SECTION
        3.10. Conflicts.
        In the
        event of any conflict between the terms of this Supplemental Indenture and
        the
        terms of the Indenture, the terms of this Supplemental Indenture shall
        control.

      

      [Signatures
        on Next Page]

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have caused this Supplemental Indenture to be duly executed
        by
        their respective officers hereunto duly authorized, all as of the day and
        year
        first written above.

       

      
        
          	 	
                  EQUITY
                    ONE, INC., Issuer

                
	 	 
	 	
                  By:

                	
                  /s/
                    Chaim Katzman

                
	 	
                  Name:

                	
                  Chaim
                    Katzman

                
	 	
                  Title:

                	
                  Chairman
                    and Chief Executive Officer

                
	 	 	 
	 	 	
                  Address:

                
	 	 	
                  1600
                    N.E. Miami Gardens Drive

                
	 	 	
                  Miami,
                    Florida 33179

                
	 	 	
                  Attention:
                    Chief Financial Officer

                
	 	 	 
	 	 	 
	 	
                  GUARANTORS
                    

                
	 	 
	 	
                  Equity
                    One Realty & Management SE, Inc.

                
	 	
                  Equity
                    One (Louisiana Portfolio) LLC

                
	 	
                  Equity
                    One (Quincy Project) LLC

                
	 	
                  Equity
                    One (Sunlake) Inc.

                
	 	
                  Equity
                    (Texas Holdings) One GP LLC

                
	 	
                  Equity
                    One (Young Circle) Inc.

                
	 	
                  Louisiana
                    Holding Corp.

                
	 	
                  Equity
                    One (Northeast Portfolio) Inc.

                
	 	
                  Equity
                    One (Southeast Portfolio) Inc.

                
	 	 	 
	 	
                  By:

                	
                  /s/
                    Chaim Katzman

                
	 	 	
                  Chaim
                    Katzman

                
	 	 	
                  President

                
	 	 	 
	 	 	 
	 	
                  Equity
                    (Texas) One Creekside LP

                
	 	 
	 	
                  By:
                    Equity (Texas Holdings) One GP LLC, its general partner

                
	 	 
	 	
                  By:

                	
                  s/
                    Chaim Katzman

                
	 	 	
                  Chaim
                    Katzman

                
	 	 	
                  President

                

        

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

      

       

      
        
          	 	
                  Equity
                    (Texas) One Creekside Phase II LP

                
	 	 
	 	
                  By:
                    Equity (Texas Holdings) One GP LLC, its general partner

                
	 	 
	 	
                  By:

                	
                  s/
                    Chaim Katzman

                
	 	 	
                  Chaim
                    Katzman

                
	 	 	
                  President

                
	 	 	 
	 	 	 
	 	
                  Equity
                    (Texas) One Desoto LP

                
	 	 
	 	
                  By:
                    Equity (Texas Holdings) One GP LLC, its general partner

                
	 	 
	 	
                  By:

                	
                  s/
                    Chaim Katzman

                
	 	 	
                  Chaim
                    Katzman

                
	 	 	
                  President

                
	 	 	 
	 	 	 
	 	
                  Equity
                    (Texas) One Village Center LP

                
	 	 
	 	
                  By:
                    Equity (Texas Holdings) One GP LLC, its general partner

                
	 	 
	 	
                  By:

                	
                  s/
                    Chaim Katzman

                
	 	 	
                  Chaim
                    Katzman

                
	 	 	
                  President

                
	 	 	 
	 	 	 
	 	
                  Equity
                    (Texas) One Westgate Phase III LP

                
	 	 
	 	
                  By:
                    Equity (Texas Holdings) One GP LLC, its general partner

                
	 	 
	 	
                  By:

                	
                  s/
                    Chaim Katzman

                
	 	 	
                  Chaim
                    Katzman

                
	 	 	
                  President

                

        

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

       

      
        	 	
                SUNTRUST
                  BANK, as Trustee

              
	 	 
	 	
                By:

              	
                George
                  Hogan

              
	 	
                Name:

              	
                George
                  Hogan

              
	 	
                Title:

              	
                Vice
                  President

              

      

       

       

      12

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