Document:

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                                                                EXHIBIT 10(ii)

                                                                EXECUTION COPY

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                           ASSET PURCHASE AGREEMENT

                                 BY AND AMONG

                          K-V PHARMACEUTICAL COMPANY,

                        CYTYC PRENATAL PRODUCTS, CORP.

                                      AND

                                 HOLOGIC, INC.

                         DATED AS OF JANUARY 16, 2008

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                                                 TABLE OF CONTENTS

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                                                                                                               Page

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ARTICLE I. DEFINITIONS............................................................................................1

         Section 1.1       Defined Terms..........................................................................1
         Section 1.2       Construction of Certain Terms and Phrases.............................................12

ARTICLE II. PURCHASE AND SALE OF ASSETS..........................................................................13

         Section 2.1       Grant of Exclusive License............................................................13
         Section 2.2       Purchase, Sale and Transfer of Assets.................................................13
         Section 2.3       Excluded Assets.......................................................................14
         Section 2.4       Retention of Copies...................................................................14
         Section 2.5       Assignability and Consents............................................................14

ARTICLE III. ASSUMPTION OF LIABILITIES...........................................................................15

         Section 3.1       Assumption of Liabilities.............................................................15

ARTICLE IV. PURCHASE PRICE, PAYMENT, REIMBURSEMENT OF EXPENSES AND TRANSFER......................................17

         Section 4.1       Initial Payment of Purchase Price.....................................................17
         Section 4.2       Additional Payments, Reimbursement of Expenses and Transfer of Assets.................17
         Section 4.3       Allocation of Purchase Price..........................................................18
         Section 4.4       Sales, Use and Other Taxes............................................................19
         Section 4.5       Tax Withholding.......................................................................19
         Section 4.6       Risk of Loss..........................................................................19
         Section 4.7       Subsidiaries..........................................................................19

ARTICLE V. CLOSING AND TRANSFER DATE.............................................................................19

         Section 5.1       Time and Place of Closing.............................................................19
         Section 5.2       Deliveries at Closing.................................................................20
         Section 5.3       Time and Place of Transfer Date.......................................................20
         Section 5.4       Transfer Date Deliveries..............................................................20

ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF THE SELLER.........................................................21

         Section 6.1       Organization, Etc.....................................................................22
         Section 6.2       Authority of the Seller...............................................................22
         Section 6.3       Consents and Approvals................................................................22
         Section 6.4       Non-Contravention.....................................................................23
         Section 6.5       Contracts.............................................................................23

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         Section 6.6       Intellectual Property Rights..........................................................23
         Section 6.7       Litigation............................................................................26
         Section 6.8       Permits; Compliance with Law..........................................................26
         Section 6.9       Gestiva Inventory.....................................................................27
         Section 6.10      Suppliers.............................................................................28
         Section 6.11      Absence of Certain Changes or Events..................................................28
         Section 6.12      Title to Assets; Sufficiency of Assets................................................29
         Section 6.13      Disclosure............................................................................29
         Section 6.14      Taxes.................................................................................30
         Section 6.15      Competing Business....................................................................31
         Section 6.16      Unlawful Payments.....................................................................31
         Section 6.17      Brokers...............................................................................31

ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR......................................................31

         Section 7.1       Corporate Organization................................................................32
         Section 7.2       Authority of the Acquiror.............................................................32
         Section 7.3       Non-Contravention.....................................................................32
         Section 7.4       Litigation............................................................................32
         Section 7.5       Brokers...............................................................................33

ARTICLE VIII. COVENANTS OF THE PARTIES...........................................................................33

         Section 8.1       Operation of the Gestiva Business.....................................................33
         Section 8.2       Reasonable Efforts....................................................................35
         Section 8.3       Access; Confidentiality...............................................................37
         Section 8.4       Public Announcements; Confidentiality.................................................39
         Section 8.5       Regulatory Matters....................................................................39
         Section 8.6       Covenant Not to Compete...............................................................41
         Section 8.7       Further Assurances....................................................................43
         Section 8.8       No Solicitation.......................................................................43
         Section 8.9       Insurance.............................................................................43
         Section 8.10      Tax Matters...........................................................................44
         Section 8.11      Employee Matters......................................................................46

ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF THE PARTIES FOR THE CLOSING.........................................46

         Section 9.1       Seller's Conditions to Closing........................................................46
         Section 9.2       Acquiror's Obligations to Closing.....................................................46

ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF THE PARTIES FOR THE TRANSFER DATE....................................47

         Section 10.1      Seller's Obligations for the Transfer Date............................................47
         Section 10.2      Acquiror's Obligations for the Transfer Date..........................................48

ARTICLE XI. INDEMNIFICATION......................................................................................49

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         Section 11.1      Survival of Representations, Warranties, Covenants, Etc...............................49
         Section 11.2      Indemnification.......................................................................49
         Section 11.3      Limitations...........................................................................53
         Section 11.4      Conflict with other Provisions........................................................54

ARTICLE XII. TERMINATION.........................................................................................54

         Section 12.1      Methods of Termination................................................................54
         Section 12.2      Procedure upon Termination............................................................55
         Section 12.3      Termination Fee.......................................................................56

ARTICLE XIII. MISCELLANEOUS......................................................................................56

         Section 13.1      Notices...............................................................................56
         Section 13.2      Entire Agreement......................................................................57
         Section 13.3      Waiver................................................................................57
         Section 13.4      Amendment.............................................................................58
         Section 13.5      Third Party Beneficiaries.............................................................58
         Section 13.6      Assignment; Binding Effect............................................................58
         Section 13.7      Headings..............................................................................58
         Section 13.8      Severability..........................................................................58
         Section 13.9      Governing Law.........................................................................58
         Section 13.10     Expenses..............................................................................59
         Section 13.11     Counterparts..........................................................................59
         Section 13.12     Remedies..............................................................................59

Exhibit A-Form of Assumption and Assignment Agreement
Exhibit B-Form of Bill of Sale
Exhibit C-Form of Trademark Assignment Agreement
Exhibit D-Form of FDA Transfer Letters
Exhibit E-Form of License Agreement

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                           ASSET PURCHASE AGREEMENT

                  This Asset Purchase Agreement (this "AGREEMENT") is made and
entered into as of January 16, 2008, by and among K-V Pharmaceutical Company,
a Delaware corporation (the "ACQUIROR"), Cytyc Prenatal Products Corp., a
Delaware corporation (the "SELLER") and solely for purposes of Section 8.6 and
                                                               -----------
ARTICLE XI, Hologic, Inc., a Delaware corporation ("PARENT").
----------

                                   RECITALS

                  WHEREAS, Seller is engaged in researching, manufacturing,
developing, marketing, and selling Gestiva;

                  WHEREAS, on the Closing Date (as defined herein), Seller
will, by the terms of this Agreement, conditionally sell the Purchased Assets
(as defined herein) to Acquiror and grant to Acquiror an exclusive license to
use the Gestiva Intellectual Property (as defined herein) during the period
between the Closing Date and the Transfer Date (as defined herein).

                  WHEREAS, on the Transfer Date, Seller will, by the terms of
this Agreement, transfer to Acquiror all of the Purchased Assets; and

                  WHEREAS, Acquiror has agreed to assume the Assumed
Liabilities on the Transfer Date on the terms and subject to the conditions
set forth herein.

                                   AGREEMENT

                  NOW, THEREFORE, in consideration of the premises, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

                                  ARTICLE I.

                                  DEFINITIONS

                  Section 1.1 Defined Terms. As used in this Agreement, the
                              -------------
following defined terms shall have the meanings specified below:

                  "ACCOUNTANTS" has the meaning set forth in Section 8.10(h).
                                                             ---------------

                  "AAA" has the meaning set forth in Section 11.2(f)(ii).
                                                     -------------------

                  "ACQUIROR" has the meaning set forth in the preamble to this
Agreement.

                  "ACQUIROR MATERIAL ADVERSE EFFECT" means any Effect that,
individually or in the aggregate, has had or would be reasonably expected to
have a material adverse effect on (i) the Acquiror's ability to consummate the
transactions contemplated hereby in accordance with the terms and conditions
hereof or (ii) on the business, assets (including intangible assets), results
of

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operations, liabilities (contingent or otherwise) or conditions (financial or
otherwise) of the Acquiror.

                  "ACTION OR PROCEEDING" means any action, suit, claim,
proceeding, arbitration, dispute, Order, inquiry, hearing, assessment with
respect to fines or penalties or litigation (whether civil, criminal,
administrative or investigative) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental or Regulatory Authority.

                  "ADDITIONAL PURCHASE PRICE AMOUNT" has the meaning set forth
in Section 4.2(b).
   --------------

                  "AFFILIATE" means, with respect to any Person, any other
Person which Controls, is Controlled by or is under common Control with such
Person.

                  "AGREEMENT" has the meaning set forth in the preamble
hereto.

                  "API" means the 17 alpha-hydroxyprogesterone caproate active
pharmaceutical ingredient.

                  "APPLICABLE PERIOD" has the meaning set forth in Section
                                                                   -------
8.6(a).
------

                  "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment
and Assumption Agreement substantially in the form attached hereto as Exhibit A.
                                                                      ---------

                  "ASSUMED CONTRACTS" means the Gestiva Contracts set forth on
Schedule 1.1(a) and any Contracts entered into by Seller or its Affiliates
---------------
from the date hereof to the Transfer Date in accordance with Section 8.1(b)(iv)
                                                             ------------------
to the extent relating solely to Gestiva or the Purchased Assets.

                  "ASSUMED LIABILITIES" has the meaning set forth in Section
                                                                     -------
3.1(a).
------

                  "BILL OF SALE" means the Bill of Sale conveying the
Purchased Assets from the Seller to the Acquiror as of the Transfer Date,
substantially in the form attached hereto as Exhibit B.
                                             ---------

                  "BUSINESS DAY" means a day other than Saturday, Sunday or
any day on which commercial banks located in New York are authorized or
obligated by Law to close.

                  "CHARTER DOCUMENTS" has the meaning set forth in Section 6.1.
                                                                   -----------

                  "CLOSING" has the meaning set forth in Section 5.1.
                                                         -----------

                  "CLOSING DATE" has the meaning set forth in Section 5.1.
                                                              -----------

                  "CODE" means the Internal Revenue Code of 1986, as amended.

                  "COMPETING PRODUCT" has the meaning set forth in Section
                                                                   -------
8.6(a).
------

                  "COMPLETE RESPONSE" has the meaning set forth in Section
                                                                   -------
4.2(a).
------

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                   "CONFIDENTIALITY AGREEMENT" means the Confidentiality
Agreement, dated as October 30, 2007, by and between Parent and Acquiror.

                  "CONTRACTS" means any and all written or legally binding
oral commitments, contracts, purchase orders, sales orders, leases, subleases,
licenses, easements, commitments, arrangements, undertakings, evidence of
indebtedness, security or pledge agreements or other agreements.

                  "CONTROL" means:

                  (a) ownership (directly or indirectly) of at least fifty
percent (50%) of the shares or stock entitled to vote for the election of
directors in the case of a company or corporation; or

                  (b) the ability otherwise to direct and control (whether
directly or indirectly through one or more intermediaries) the actions of a
Person.

                  "DAMAGES" has the meaning set forth in Section 11.2(a).
                                                         ---------------

                  "DEFAULT" means (i) a breach, default or violation, (ii) the
occurrence of an event that with or without the passage of time or the giving
of notice, or both, would constitute a breach, default or violation or cause
an Encumbrance to arise or (iii) with respect to any Contract, the occurrence
of an event that with or without the passage of time or the giving of Notice,
or both, would constitute a change of control or give rise to a right of
termination, modification, renegotiation, acceleration, cancellation, or a
right to receive Damages or a payment of penalties.

                  "DESIGNATED ACQUIROR SUBSIDIARY" shall have the meaning set
forth in Section 4.7.
         -----------

                  "EFFECT" means any state of facts, change, development,
event, occurrence, effect or condition.

                  "ENCUMBRANCE" means any claim, mortgage, pledge, assessment,
security interest, option, deed of trust, lease, lien, levy, license,
restriction on transferability, defect in title, charge or other encumbrance
of any kind, whether voluntarily incurred or arising by operation of Law or
any conditional sale or title retention agreement or other agreement to give
any of the foregoing in the future.

                  "ENVIRONMENTAL LAWS" means any federal, state, local or
non-U.S. Law and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree, judgment,
stipulation, injunction, permit, authorization, policy, opinion, or agency
requirement, in each case having the force and effect of Law, relating to the
pollution, protection, investigation or restoration of the environment or
health and safety as affected by the environment or natural resources,
including those relating to the use, handling, presence, transportation,
treatment, storage, disposal, release, threatened release or discharge of
Hazardous Materials or noise, odor, wetlands, pollution or contamination.

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                  "ERISA AFFILIATE" means any entity which is (or at any
relevant time was) a member of a "controlled group of corporations" with,
under "common control" with, or a member of an "affiliated service group"
with, Seller, as defined in Section 414(b), (c), (m) or (o) of the Code, or
under "common control" with Seller, within the meaning of Section 4001(b)(1)
of ERISA.

                  "EXCLUDED ASSETS" has the meaning set forth in Section 2.3.
                                                                 -----------

                  "EXCLUDED LIABILITIES" has the meaning set forth in Section
                                                                      -------
3.1(b).
------

                  "EXCLUDED TAX LIABILITY" has the meaning set forth in
Section 3.1(b)(iii).
-------------------

                  "FDA" means the United States Food and Drug Administration
or any successor thereto.

                  "FDA ACT" means the U.S. Food, Drug and Cosmetic Act of
1938, as it may be superseded or amended from time to time.

                  "FDA TRANSFER LETTERS" has the meaning set forth in Section
                                                                      -------
8.2(e).
------

                  "GESTIVA" means the pharmaceutical product containing the
API described in NDA #21-945.

                  "GESTIVA BOOKS AND RECORDS" means all books, records, files,
documents, data, information and correspondence related to the Gestiva
Business which are owned by the Parent, the Seller or their Subsidiaries,
including, without limitation, all records with respect to supply sources; all
pre-clinical, clinical and process data and reports relating to research or
development of products or of any materials used in the research, development,
use, testing, manufacture, marketing or sale of products, including all raw
data relating to clinical trials of products, all case report forms relating
thereto and all statistical programs developed (or modified in a manner
material to the use or function thereof) to analyze clinical data; all market
research data, market intelligence reports and statistical programs (if any)
used for marketing and sales research; promotional, advertising and marketing
materials, sales forecasting models, medical education materials, sales
training materials, web site content and advertising and display materials;
all records, including vendor and supplier lists, manufacturing records,
sampling records, standard operating procedures and batch records, related to
the manufacturing process; all data contained in laboratory notebooks relating
to products or relating to their biological, physiological, mechanical or
formula properties; all adverse experience reports and files related thereto
(including source documentation) and all periodic adverse experience reports
and all data contained in electronic data bases relating to periodic adverse
experience reports; all analytical and quality control data; all written
correspondence with the FDA; and written records relating to the regulatory
filings with the FDA or its foreign counterparts, including, but not limited
to, the Gestiva FDA Submission. Notwithstanding the foregoing, the Gestiva
Books and Records shall exclude any books, records, files, documents, data,
information and correspondence relating to human resources or employees of the
Parent, the Seller and their Subsidiaries and in the case of any books,
records, files, documents, data, information and correspondence also relating
to the other businesses or assets of the Parent, the Seller and their
Subsidiaries, the Seller shall have the right to exclude or redact the same
with respect to such other businesses and assets.

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                  "GESTIVA BUSINESS" means the research, development,
regulatory approval, manufacture, distribution, marketing, sale and promotion
of Gestiva, and to the extent applicable, Gestiva Product Improvements in each
case as conducted by the Parent, the Seller and their Subsidiaries.

                  "GESTIVA CONTRACTS" means all (i) Contracts pursuant to
which Seller or its Affiliates purchases any materials from any third party
for use in connection with the development, testing or manufacture of Gestiva,
all of which Contracts in effect on the date hereof are set forth on Schedule
                                                                     --------
1.1(a), (ii) Contracts relating to any pre-clinical or clinical trial
------
involving Gestiva, all of which Contracts in effect on the date hereof are set
forth on Schedule 1.1(a), (iii) Contracts constituting material transfer
         ---------------
agreements involving the transfer of Gestiva, all of which Contracts in effect
on the date hereof are set forth on Schedule 1.1(a), (iv) Contracts relating
                                    ---------------
to the marketing of Gestiva or educational matters relating to Gestiva, all of
which Contracts in effect on the date hereof are set forth on Schedule 1.1(a),
                                                              ---------------
(v) Contracts relating to the supply or manufacture of Gestiva or Gestiva
Product Improvements, all of which Contracts in effect on the date hereof are
set forth on Schedule 1.1(a), (vi) Contracts constituting confidentiality
             ---------------
agreements involving Gestiva or Gestiva Intellectual Property, including
non-compete or non-solicitation agreements with employees, independent
contractors or agents of Seller with third parties, (vii) Contracts involving
any royalty, licensing, partnering or similar arrangement involving Gestiva or
Gestiva Intellectual Property, all of which Contracts in effect on the date
hereof are set forth on Schedule 1.1(a), (viii) Contracts pursuant to which
                        ---------------
any services are provided to Seller or its Affiliates with respect to Gestiva,
including consultation agreements, all of which Contracts in effect on the
date hereof are set forth on Schedule 1.1(a), and (ix) Contracts pursuant to
                             ---------------
which any third party collaborates with Seller or its Affiliates in the
performance of research or development of Gestiva, all of which Contracts in
effect on the date hereof are set forth on Schedule 1.1(a).
                                           ---------------

                  "GESTIVA COPYRIGHTS" means all copyrightable works and
copyrights, and any registrations, applications, and renewals in connection
therewith worldwide, if any, including moral rights, website content, and
other rights of authorship and exploitation in each case as set forth on
Schedule 1.1(b) of the Seller Disclosure Schedule.
---------------

                  "GESTIVA FDA SUBMISSIONS" means, collectively, the Gestiva
Pre-IND and Gestiva NDA.

                  "GESTIVA GOVERNMENTAL PERMITS" means all authorizations,
licenses, permits, certificates, approvals, exemptions, consents,
confirmations, orders, registrations, product registrations, concessions,
franchises, waivers and clearances of a Governmental or Regulatory Authority
(including all authorizations under the FDA Act, the Public Health Services
Act, the Controlled Substances Act and the regulations of the FDA and the
United States Drug Enforcement Agency promulgated thereunder) necessary for
the Seller to carry on the Gestiva Business as it is being conducted as of the
date hereof.

                  "GESTIVA INTELLECTUAL PROPERTY" means (i) the Gestiva
Copyrights, (ii) the Gestiva Patent Rights, (iii) the Gestiva Know-How, (iv)
the Gestiva Trademarks, (v) the rights to exclude others from appropriating
any of the foregoing, including the rights to sue for and remedies against
past, present and future infringements of any or all of the foregoing and
rights of priority

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and protection of interests therein and (vi) any other proprietary,
intellectual property and other rights relating to any or all of the foregoing
anywhere in the world.

                  "GESTIVA PRE-IND" means the Pre-IND #68,108, as filed as of
the date hereof of this Agreement, and all documents, data, analyses, files
related thereto, in each case as may be updated in accordance with this
Agreement.

                  "GESTIVA INVENTORY" means all inventories of Gestiva in
existence as of the Transfer Date, together with all bulk active
pharmaceutical ingredient, all other raw materials, components, parts, work in
process and packaging materials owned by the Parent, the Seller or any of
their Subsidiaries as of the Transfer Date for use in the operation of the
Gestiva Business. For clarity, Gestiva Inventory shall exclude raw materials,
components, parts, work in process and packaging materials not specific to
Gestiva.

                  "GESTIVA KNOW-HOW" means any and all Gestiva Manufacturing
Know-How and other Know-How that is currently owned or used under license by
the Parent, the Seller or any of their Subsidiaries related to Gestiva or the
Gestiva Product Improvements as of the Transfer Date. For the sake of clarity,
none of the foregoing information shall be included in Gestiva Know-How to the
extent that such information is covered by any claim of any Gestiva Patent
Rights.

                  "GESTIVA MANUFACTURING KNOW-HOW" means any Know-How or other
information relating to the manufacture of Gestiva or Gestiva Product
Improvements owned or used under license by the Parent, the Seller or their
Subsidiaries, including without limitation the identity, amounts and assurance
quality of ingredients, the manufacturing processes and controls,
specifications, technology, inventions, assays, quality control and testing
procedures, Know-How and trade secrets used, held for use, or intended to be
used in or necessary to manufacture, formulate, test and package Gestiva for
use, sale, marketing and distribution as of the Transfer Date. For sake of
clarity, none of the foregoing information shall be included in the Gestiva
Manufacturing Know-How to the extent that such information is covered by any
claim of any Gestiva Patent Rights.

                  "GESTIVA NDA" means NDA # 21-945 as filed as of the date of
this Agreement, and all documents, data, analyses, and files related thereto,
in each case as may be updated in accordance with this Agreement.

                  "GESTIVA NDA APPROVAL" means approval of the Gestiva NDA by
the FDA allowing for the initiation of marketing and sale of Gestiva in the
United States for the prevention of preterm delivery in woman with a history
of a prior preterm delivery or any other similar treatment.

                  "GESTIVA NDA APPROVAL DATE" means the date upon which the
FDA issues to the Seller written notice of the Gestiva NDA Approval.

                  "GESTIVA PATENT RIGHTS" means those Patent Rights owned or
used under license by the Parent, the Seller or their Subsidiaries listed on
Schedule 1.1(c), together with all registrations, applications and renewals
---------------
thereof, and any other Patent Rights that are owned or used under license by
the Parent, the Seller or any of their Subsidiaries and that would be

                                      6

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infringed by the manufacture, sale, offer to sell or importation of Gestiva or
any Gestiva Product Improvement.

                  "GESTIVA PRODUCT IMPROVEMENT" means (to the extent
applicable) any: (i) line extension of Gestiva, (ii) new indication of
Gestiva, (iii) composition of matter or article of manufacture consisting
essentially of 17 alpha-hydroxyprogesterone caproate, (iv) pharmaceutical
combination containing 17 alpha-hydroxyprogesterone caproate and another
active ingredient, (v) new formulations comprising of 17
alpha-hydroxyprogesterone caproate and/or (vi) compositions of matter or
articles of manufacture constituting any of the foregoing or components
thereof.

                  "GESTIVA PRODUCT REGISTRATIONS" means (i) the exemptions,
approvals or registrations which have been received by the Parent, the Seller
or any of their Subsidiaries as of the date of this Agreement, or which are
received by the Parent, the Seller or any of their Subsidiaries after the date
of this Agreement but before the Transfer Date, for the manufacturing,
testing, investigation, sale, use, distribution and/or marketing of Gestiva or
a Gestiva Product Improvement (including any NDAs or INDs) and (ii) all
dossiers, reports, data and other written materials filed as part of or
referenced in any applications for such approvals or registrations, or
maintained by the Parent, the Seller or any of their Subsidiaries and relating
to such approvals or registrations.

                  "GESTIVA TRADEMARKS" means all trademarks, trade names,
product names, trade dress, service marks, logos and slogans set forth on
Schedule 1.1(d), in each case, whether registered or unregistered, including
---------------
all common law rights, registrations and applications for registrations for
any of the foregoing, and all internet domain names, and all registrations,
applications and renewals thereof and the goodwill associated therewith.

                  "GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, department, ministry,
official or other instrumentality of the United States or other country, or
any supra-national organization, or any foreign or domestic, state, county,
city or other political subdivision.

                  "HAZARDOUS MATERIALS" means (i) any petroleum, petroleum
products, byproducts or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (ii) any
chemical, material or other substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any Environmental
Law.

                  "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, together with any rules or regulations promulgated
thereunder.

                  "IND" means (i) an Investigational New Drug Application, as
defined in the FDA Act and the regulations promulgated thereunder, which is
required to be filed with the FDA before beginning clinical testing of a
product in human subjects, or any successor application or procedure, (ii) all
supplements and amendments that may be filed with respect to the foregoing and
(iii) all international equivalents of the foregoing.

                  "INDEMNIFICATION CLAIM NOTICE" has the meaning set forth in
Section 11.2(c).
---------------

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                  "INDEMNIFIED PARTY" has the meaning set forth in Section
                                                                   -------
11.2(c).
-------
                  "INDEMNITEES" has the meaning set forth in Section 11.2(c).
                                                             ---------------

                  "INITIAL GESTIVA INVENTORY" means the release and shipment
of no fewer than 15,000 5-milliliter vials of finished Gestiva suitable for
commercial sale by the Acquiror.

                  "INITIAL PURCHASE PRICE AMOUNT" has the meaning set forth in
Section 4.1.
-----------

                  "JOINT INTEGRATION COMMITTEE" means a committee of
representatives comprised of two (2) members selected by the Acquiror from its
senior executives and two (2) members selected by the Seller from its senior
executives; each having responsibility at the respective party for the
development of Gestiva. Each party will give the other written notification
concerning its executives nominated to serve on the Joint Integration
Committee. Either party may replace either of its members on the Joint
Integration Committee with an equivalent senior executive by providing written
notice of the change to the other party.

                  "KNOW-HOW" means any proprietary or nonproprietary
information directly related to the manufacture, preparation, development
(both research and clinical), or commercialization of a product, including,
without limitation, product specifications, processes, product designs, plans,
trade secrets (including, without limitation, user information, customer and
supplier lists, and related information, business and marketing plans, any
other financial, marketing and business data), ideas, concepts, inventions,
formulae, chemical, pharmacological, toxicological, pharmaceutical, physical,
analytical, stability, safety, quality assurance, quality control and clinical
information, technical information, research information, and all other
confidential or proprietary technical and business information, whether or not
embodied in any documentation or other tangible materials, but in no event
shall the definition of "Know-How" include information properly in the public
domain.

                  "KNOWLEDGE" with respect to (i) the Seller means the actual
knowledge of Robb Hesley, Catherine Williams, Mary Eckstein, Lynn Jones, Tom
Umbel, Howard Doran, Tony Kingsley and Mark Casey (whose positions and
operational responsibilities are listed on Schedule 1.1(e) hereto), following
                                           ---------------
reasonable inquiry and (ii) the Acquiror means the knowledge of the officers,
directors or senior managers, following reasonable inquiry.

                  "LAW" means any federal, state, local or foreign law,
statute, code or ordinance, or any rule or regulation promulgated by any
Governmental or Regulatory Authority.

                  "LIABILITY" means any direct or indirect liability,
obligation, claim, deficiency, guarantee or commitment of any kind or nature
(whether known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, or due or to become due),
including any liability for Taxes.

                  "LIABILITY CAP" means $750,000 until the Seller receives
payment of the NDA Milestone Payment pursuant to Section 4.2(a), if ever, and
                                                 --------------
thereafter shall be $950,000, until the Seller receives payment of the
Additional Purchase Price Amount pursuant to Section 4.2(b), if ever, and
                                             --------------
thereafter shall be $8,200,000.

                                      8

<PAGE>
<PAGE>

                  "LIABILITY THRESHOLD" has the meaning set forth in Section
                                                                     -------
11.3(a).
-------
                  "LICENSE AGREEMENT" has the meaning set forth in Section
                                                                   -------
2.1.
---
                  "NDA" means (i) a New Drug Application for any product, as
appropriate, requesting permission to place a drug on the market in accordance
with 21 C.F.R. Part 314, and all supplements or amendments filed pursuant to
the requirements of the FDA, including all documents, data and other
information concerning a product which are reasonably necessary for FDA
approval to market a product in the United States and (ii) all international
equivalents of the foregoing.

                  "NDA MILESTONE PAYMENT" has the meaning set forth in Section
                                                                       -------
4.2(a).
------
                  "NON-ASSIGNABLE ASSET" has the meaning set forth in Section
                                                                      -------
2.5(a).
------
                  "NO-SHOP PERIOD" has the meaning set forth in Section 8.8.
                                                                -----------

                  NOTICE" with respect to a party means notice actually
received by an officer, director or senior manager of the Seller, in the case
of the Seller, or of the Acquiror, in the case of the Acquiror, in each case
with responsibility in the relevant area, or delivered in accordance with the
terms of the document, Law or Order pursuant to which such notice was given.

                  "OBJECTION NOTICE" has the meaning set forth in Section
                                                                  -------
11.2(f)(i).
----------
                  "ORDER" means any writ, judgment, decree, injunction or
similar order, including consent orders, of any Governmental or Regulatory
Authority (in each such case whether preliminary or final).

                  "ORDINARY COURSE OF BUSINESS" means an action or activity
that is consistent in nature, scope and magnitude with the past practices of
the Seller and its Affiliates with respect to the Gestiva Business.

                  "PARENT" has the meaning set forth in the preamble to this
Agreement.

                  "PATENT RIGHTS" means any invention disclosure, patent
application (including any provisionals, divisionals, continuations,
continuations-in-part (to the extent claiming subject matter invented on or
before the Transfer Date) and substitutions thereof), patents issuing from or
granted upon such invention disclosure or patent application (including
patents of addition (to the extent claiming subject matter invented on or
before the Transfer Date) and substitutions thereof), reissues, extensions,
reexaminations, renewal applications, supplemental patent certificates or any
confirmation patent or registration patent) and all foreign counterparts of
any of the foregoing.

                  "PERMITTED ENCUMBRANCES" means with respect to the Seller:
(i) statutory liens of landlords, liens of carriers, warehousepersons,
mechanics and material persons or similar liens incurred or arising in the
ordinary course of business, none of which materially detracts from the value
or materially impairs the use of the asset or property subject thereto, or
materially impairs the operations of the Parent, the Seller or any of their
Subsidiaries, (ii) liens incurred or deposits

                                      9

<PAGE>
<PAGE>

made in connection with workers' compensation, unemployment insurance and
other similar types of social security programs or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return of money bonds and similar
obligations, in each case in the ordinary course of business, consistent with
past practice, (iii) encumbrances which do not interfere with the ordinary
conduct of business of the Seller and do not materially detract from the value
of the underlying asset, (iv) liens for Taxes, assessments and governmental
charges not yet due and payable and (v) non-exclusive end-user licenses
entered in the ordinary course of business.

                  "PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company, proprietorship,
joint venture, other business organization, trust, entity, union, association
or Governmental or Regulatory Authority.

                  "PERSONNEL" has the meaning set forth in Section 6.6(l).
                                                           --------------

                  "POST-TRANSFER TAX PERIOD" means any Tax Period beginning
after the Transfer Date and the portion of any Straddle Period beginning after
the Transfer Date.

                  "PRE-TRANSFER TAX PERIOD" means any Tax Period ending on or
before the Transfer Date and the portion of any Straddle Period ending on the
Transfer Date.

                   "PURCHASE PRICE" has the meaning set forth in Section 4.2(b).
                                                                 --------------

                  "PURCHASED ASSETS" has the meaning set forth in Section 2.2.
                                                                  -----------

                  "REGISTERED GESTIVA INTELLECTUAL PROPERTY" means all Gestiva
Intellectual Property that has been registered, filed, certified or otherwise
perfected or recorded with or by any Governmental or Regulatory Authority,
including all Gestiva Patent Rights.

                  "REIMBURSABLE EXPENSES" means any (i) all out-of-pocket
expenses incurred by the Parent, the Seller or their Subsidiaries, between
January 1, 2008 and the Transfer Date, in conducting the Gestiva Business in
the Ordinary Course of Business, including in seeking to obtain and obtaining
the Gestiva NDA Approval as required pursuant to Section 8.5 hereof, in
                                                 -----------
accordance with the budget set forth on Schedule 1.1(f) or as approved by the
                                        ---------------
Joint Integration Committee or otherwise incurred in accordance with Section
                                                                     -------
8.1(b)(i), other than any expenses, including salary and benefits, related to
---------
the continued employment of any employee of the Parent, the Seller or their
Subsidiaries, (ii) all out-of-pocket expenses incurred by the Parent, the
Seller or their Subsidiaries, between January 1, 2008 and the Transfer Date,
under the Assumed Contracts pursuant to the terms in effect on the date hereof
or otherwise entered into or amended as permitted by Section 8.1(b)(iv), (iii)
all out-of-pocket expenses incurred by the Parent, the Seller or their
Subsidiaries in the Ordinary Course of Business in respect of the Gestiva
Governmental Permits that are Purchased Assets to the extent relating to the
operation or conduct of the Gestiva Business during the period beginning on
January 1, 2008 and ending on the Transfer Date, and (iv) the expenses set
forth on Schedule 1.1(g), in each of the cases of clauses (i)-(iv) without
         ---------------
duplication of expenses.

                  "RELATED AGREEMENTS" means the (i) Trademark Assignment
Agreement, Bill of Sale, Assignment and Assumption Agreement and duly executed
and attested assignments of

                                      10

<PAGE>
<PAGE>

transfer, or such other instruments of conveyance as may be required by Law,
sufficient to permit the proper recordation of transfer of title ownership in
all Registered Gestiva Intellectual Property owned by the Seller from the
Parent, the Seller or their Subsidiaries to Acquiror in accordance with this
Agreement, (ii) the Transition Services Agreement and (iii) the License
Agreement.

                  "RESTRICTED TERRITORY" shall mean world-wide.

                  "RETAINED DOCUMENTS" shall have the meaning set forth in
Section 2.4.
-----------

                  "SELLER" has the meaning set forth in the preamble to this
Agreement.

                  "SELLER DISCLOSURE SCHEDULE" has the meaning set forth in
the preamble to ARTICLE VI.
                ----------

                  "SELLER GOVERNMENTAL CONSENTS" has the meaning set forth in
Section 6.3(a).
--------------

                  "SELLER MATERIAL ADVERSE EFFECT" means any Effect that,
individually or in the aggregate, (i) has had or would reasonably be expected
to have a material adverse effect on the Purchased Assets taken as a whole or
(ii) could reasonably be expected to materially impair or delay the ability of
the Seller to perform its obligation hereunder; provided, however, that none
of the following shall be deemed in themselves, either alone or in
combinations, to constitute, and none of the following shall be taken into
account in determining whether there has been, or will be, a Seller Material
Adverse Effect: (A) any Effect relating to general economic conditions in the
United States or foreign economies in any locations where the Seller and its
Affiliates have material operations relating to the Gestiva Business except to
the extent such Effect disproportionately affects the Seller and its
Affiliates, (B) any Effect attributable to conditions that generally affect
the industries in which the Seller and its Affiliates participate relating to
the Gestiva Business except to the extent such Effect disproportionately
affects the Seller and its Affiliates, taken as a whole and (C) any Effect
that results from actions taken by the Seller as required by this Agreement or
at the written direction of the Acquiror.

                  "SELLER THIRD PARTY CONSENTS" has the meaning set forth in
Section 6.3(b).
--------------

                  "STRADDLE PERIOD" means any Tax period beginning on or
before the date hereof and ending after the Transfer Date.

                  "SUBSIDIARY" of a Person means any entity Controlled by that
Person.

                  "SURVIVAL PERIOD" shall have the meaning set forth in
Section 11.1.
------------

                  "TAXES" means all of the following in connection with the
operations of the Gestiva Business or the transactions contemplated hereby:
(i) any net income, alternative or add-on minimum, gross income, gross
receipts, sales, use, value added, ad valorem, transfer, franchise, profits,
license, excise, severance, stamp, occupation, payroll, employment,
withholding, social security, unemployment, disability, registration, premium,
property, environmental, windfall profits, capital stock, customs duty, or
other tax, governmental fee or other like assessment imposed by any
governmental, regulatory or administrative entity or

                                      11

<PAGE>
<PAGE>

agency responsible for the imposition of any such tax (domestic or foreign)
including any interest, penalty or addition thereon, whether disputed or not,
(ii) any Liability for the payment of any amounts of the type described in (i)
as a result of being a member of any affiliated, consolidated, combined,
unitary or other group for any Tax Period and (iii) any Liability for the
payment of any amounts of the type described in (i) or (ii) as a result of any
express or implied obligation to indemnify any other Person.

                  "TAX PERIOD" means any period prescribed by any Governmental
or Regulatory Authority for which a Tax Return is required to be filed or a
Tax is required to be paid or measured.

                  "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.

                  "TERMINATION DATE" has the meaning set forth in Section
                                                                  -------
12.1(b).
-------
                  "THIRD PARTY CLAIM" has the meaning set forth in Section
                                                                   -------
11.2(d).
-------
                  "TRADEMARK ASSIGNMENT AGREEMENT" means the Trademark
Assignment Agreement to be dated as of the Transfer Date by and between the
Acquiror and Seller, substantially in the form attached hereto as Exhibit C.
                                                                  ---------

                  "TRANSFER DATE" shall have the meaning set forth in Section
                                                                      -------
5.3.
---
                  "TRANSFER TAXES" has the meaning set forth in Section 4.4.
                                                                -----------

                  "TRANSITION SERVICES AGREEMENT" means the Transition
Services Agreement, by and between the Acquiror and the Seller, in a form to
be mutually agreed upon by the Acquiror and the Seller.

                  "TREASURY REGULATIONS" means the Treasury regulations
promulgated under the Code.

                  Section 1.2 Construction of Certain Terms and Phrases.
                              -----------------------------------------
Unless the context of this Agreement otherwise requires: (i) words of any
gender include each other gender, (ii) words using the singular or plural
number also include the plural or singular number, respectively, (iii) the
terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Agreement, (iv) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement, (v) the term "or" has, except
where otherwise indicated, the inclusive meaning represented by the phrase
"and/or" and (vi) the term "including" means "including without limitation."
Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified.

                                      12

<PAGE>
<PAGE>

                                 ARTICLE II.

                          PURCHASE AND SALE OF ASSETS

                  Section 2.1 Grant of Exclusive License. Subject to the terms
                              --------------------------
and conditions set forth in this Agreement, Seller grants to Acquiror an
exclusive paid-up, royalty-free, worldwide license to use Gestiva Intellectual
Property during the period beginning on the Closing Date and ending on the
earlier to occur of (i) the date this Agreement is terminated pursuant to
Section 12.1 and (ii) the Transfer Date, pursuant to the terms and conditions
------------
of the License Agreement attached hereto as Exhibit E (the "License
                                            ---------       -------
Agreement"). Notwithstanding the foregoing, the Seller shall retain all rights
---------
to use the Gestiva Intellectual Property to the extent necessary to enable the
Seller to perform its obligations under this Agreement.

                  Section 2.2 Purchase, Sale and Transfer of Assets. Upon the
                              -------------------------------------
terms and subject to the conditions set forth in this Agreement, on the
Closing Date, Seller shall, or cause its Affiliates to, conditionally sell,
convey and assign to the Acquiror, and the Acquiror shall conditionally
purchase and acquire from Seller and its Affiliates, all of Seller's and its
Affiliates' right, title and interest in and to all of the following assets,
free and clear of all Encumbrances (collectively, the "PURCHASED ASSETS"),
provided, however, that notwithstanding the foregoing, the conditions to the
conditional sale, conveyance and assignment of the Purchased Assets shall only
be satisfied and the Purchased Assets shall only be transferred and delivered
by the Seller or its Affiliates to the Acquiror upon the Transfer Date (as
defined herein):

                           (a) the Assumed Contracts;

                           (b) all Gestiva Books and Records;

                           (c) all Gestiva Inventory, excluding such Gestiva
Inventory Acquiror elects to exclude as designated by Acquiror in writing
prior to the Closing Date;

                           (d) all Gestiva Intellectual Property;

                           (e) all Gestiva Product Registrations, excluding
the Gestiva FDA Submissions;

                           (f) all Gestiva Product Improvements;

                           (g) all Gestiva Governmental Permits, to the extent
legally transferable, excluding the Gestiva FDA Submissions;

                           (h) the Gestiva FDA Submissions (unless earlier
transferred pursuant to Section 8.5);
                        -----------

                           (i) any other assets owned by the Seller or its
Affiliates related to the research (including all pre-clinical and clinical
studies), development, manufacture, formulation, use, distribution, marketing,
sale and promotion of Gestiva and/or Gestiva Product Improvements, including
but not limited to, any equipment and tangible property related thereto;

                                      13

<PAGE>
<PAGE>

                           (j) all customer and supplier relationships,
goodwill and other intangible assets associated with the Gestiva Business;

                           (k) all claims, causes of action or rights to
collect, including for past, present or future infringement, misappropriation
or violation of Gestiva Intellectual Property rights;

                           (l) all rights related to or arising out of or
under any express or implied warranties from suppliers relating to the Gestiva
Business; and

                           (m) all rights, claims and credits (including all
guarantees, warranties, indemnities and similar rights and all refunds,
credits and claims for refunds or credits relating to Taxes incurred during
the Post-Transfer Tax Period), in favor of Seller or any of its Affiliates or
any of their respective employees to the extent relating to any Purchased
Asset or any Assumed Liability.

                  Section 2.3 Excluded Assets. Notwithstanding anything to the
                              ---------------
contrary contained in this Agreement, from and after each of the Closing Date
and the Transfer Date, the Seller and its Affiliates shall retain all of their
respective rights, title and interest in their assets and properties other
than the Purchased Assets (the "EXCLUDED ASSETS").

                  Section 2.4 Retention of Copies. From and after the Transfer
                              -------------------
Date, the Seller may retain, at its expense, one archival copy of all
documents or materials conveyed hereunder which do not contain or otherwise
consist of, in whole or in part, the Assumed Contracts or the Gestiva Books
and Records (the "RETAINED DOCUMENTS"); provided that access to such Retained
Documents shall be restricted to the Seller's legal counsel and such employees
of the Seller who have a "need to know" such information for conducting the
operations of Seller and its Affiliates following the Transfer Date; provided,
further, that no such operations shall include, directly or indirectly, the
Gestiva Business or otherwise conflict with or result in a breach of Section
8.6 hereof. In addition, from and after the Transfer Date, the Seller may
retain, at its expense, one archival copy of all Assumed Contracts and the
Gestiva Books and Records, in each case, which the Seller in good faith
determines it is reasonably likely to need access to in connection with
performing its rights and obligations under this Agreement. Access to such
Assumed Contracts and Gestiva Books and Records shall be restricted to the
Seller's legal counsel and such employees of the Seller who have a "need to
know" such information in connection therewith and from and after the Transfer
Date and shall be kept strictly confidential by Seller and its Affiliates and
not used for any other purpose. Upon final performance of its rights and
obligations hereunder, Seller shall destroy or deliver any such copies of such
Assumed Contracts and Gestiva Books and Records to Acquiror.

                  Section 2.5 Assignability and Consents.
                              --------------------------

              (a) Notwithstanding anything to the contrary contained in this
Agreement, if the sale, conveyance, assignment, transfer or delivery or
attempted sale, conveyance, assignment, transfer or delivery to the Acquiror
of any Purchased Asset is (i) prohibited by any applicable Law or (ii) would
require any authorizations, approvals, consents or waivers from a Person other
than Seller or any Affiliate of Seller and such authorizations, approvals,
consents or waivers shall not have

                                      14

<PAGE>
<PAGE>

been obtained prior to the Transfer Date (each, a "NON-ASSIGNABLE ASSET"), in
either case, the transactions contemplated on the Transfer Date shall proceed
(subject to the parties rights under ARTICLE X), but the Transfer Date shall
                                     ---------
not constitute the sale, conveyance, assignment, transfer or delivery of such
Non-Assignable Asset, and this Agreement shall not constitute a sale,
conveyance, assignment, transfer or delivery of such Non-Assignable Asset
unless and until such authorization, approval, consent or waiver is obtained.
After the Transfer Date, the Seller shall continue to use commercially
reasonable efforts to obtain any Seller Third Party Consent, and the Seller
shall cooperate with the Acquiror in any such commercially reasonable
arrangement, including performance by the Seller as agent if commercially
reasonable to the Seller, and, in such case, the Acquiror shall be liable to
the Seller in a fashion equivalent to what the Acquiror's Liabilities would be
under the Non-Assignable Asset if it were assigned. The Seller shall promptly
pay over to the Acquiror the net amount (after expenses and taxes) of all
payments received by it in respect of all Non-Assignable Assets.

              (b) Once authorization, approval or waiver of or consent for the
sale, conveyance, assignment, transfer or delivery of any such Non-Assignable
Asset not sold, conveyed, assigned, transferred or delivered at the Closing is
obtained, the Seller shall convey, assign, transfer and deliver such
Non-Assignable Asset to the Acquiror at no additional cost to the Acquiror.
Notwithstanding anything to the contrary contained in this Agreement, the
Acquiror shall not assume any Liabilities with respect to a Non-Assignable
Asset until it has been assigned to the Acquiror.

                                 ARTICLE III.

                           ASSUMPTION OF LIABILITIES

                  Section 3.1 Assumption of Liabilities.
                              -------------------------

              (a) Upon the terms and subject to the conditions set forth in
this Agreement, as of the Transfer Date, the Acquiror agrees to assume,
satisfy, perform, pay and discharge each of the following Liabilities (the
"ASSUMED LIABILITIES"):

                  (i)    all Liabilities of the Parent, the Seller or any of
their Subsidiaries under the Assumed Contracts (in the case of an Assumed
Contract requiring third party consent to assignment, where such consent has
been obtained), but only to the extent such Liabilities arise from and after
the Transfer Date; and

                  (ii)   all Liabilities with respect to the Gestiva
Governmental Permits that are Purchased Assets to the extent relating to the
operation or conduct of the Gestiva Business by or on behalf of the Acquiror
from and after the Transfer Date, excluding the Gestiva NDA (subject to
Section 8.5).
------------
              (b) Notwithstanding anything contained in this Agreement to the
contrary, from and after the Closing Date and the Transfer Date, the Seller
shall retain all of the following Liabilities ("EXCLUDED LIABILITIES"):

                                      15

<PAGE>
<PAGE>

                  (i)    any Liability incurred by the Seller in accordance
with Section 8.5 in obtaining the Gestiva NDA Approval (subject to the
     -----------
reimbursement right set forth in Section 4.2(c));
                                 --------------

                  (ii)   all accounts payable and other similar Liabilities of
the Seller and its Subsidiaries;

                  (iii)  any Liability for (A) Taxes of Seller, (B) all other
Taxes relating to the Gestiva Business or the Purchased Assets attributable to
any Pre-Transfer Tax Period and (C) Taxes of any other Person for which Seller
is liable pursuant to any Agreement, by Law or otherwise ("EXCLUDED TAX
LIABILITY");

                  (iv)   all Liabilities of the Parent, the Seller and their
Subsidiaries arising out of any product liability, intellectual property
infringement, breach of warranty or similar claim for injury to person or
property or any other claim related to the Purchased Assets or Gestiva arising
prior to the Transfer Date (including all proceedings relating to any such
Liabilities);

                  (v)    all Liabilities of the Parent, the Seller and their
Subsidiaries arising out of government seizures, field corrections,
withdrawals or recalls of Gestiva manufactured, transferred or sold prior to
the Transfer Date, which are claimed prior to, on or after the Transfer Date;

                  (vi)   all Liabilities of the Parent, the Seller and their
Subsidiaries with respect to any litigation or other claims related to Gestiva
or the Purchased Assets to the extent arising from any event, circumstance or
condition occurring or alleged to have occurred prior to the Transfer Date;

                  (vii)  any Liability of the Seller related to any product or
service of the Seller or any of its Affiliates, other than Gestiva (subject to
Section 3.1(a));
--------------

                  (viii) any Liability or obligation of the Parent, the Seller
or any of their Subsidiaries (A) arising out of any actual or alleged breach
by the Parent, the Seller or any of their Subsidiaries of, or nonperformance
by the Parent, the Seller or any of their Subsidiaries under, any Assumed
Contract prior to the Transfer Date or (B) accruing under any Assumed Contract
prior to the Transfer Date, including any accrued patent and other
intellectual property license fees and liabilities;

                  (ix)   any Liability of the Seller to the extent arising out
of (A) any suit, action or proceeding pending or, to the Knowledge of the
Seller, threatened as of the Transfer Date, with respect to claims which arise
from facts, events or circumstances occurring prior to the Transfer Date, or
(B) any actual or alleged violation by the Seller or any of its Affiliates of
any Law applicable to the Seller or any of its Affiliates;

                  (x) any Liability of the Parent, the Seller or their
Subsidiaries that relates to any Excluded Asset;

                  (xi)   any Liability of the Parent, the Seller or any of
their Subsidiaries or ERISA Affiliates under or relating to (A) any employee
benefit plan, or relating to wages,

                                      16

<PAGE>
<PAGE>

bonuses, payroll, vacation, sick leave, workers' compensation, unemployment
benefits, pension benefits, employee stock option or profit-sharing plans,
health care plans or benefits, phantom stock, deferred compensation or other
similar plan or arrangement, or any other employee plans or benefits of any
kind, in each case, which the Parent, the Seller or any of their Subsidiaries
or ERISA Affiliates has entered into, maintains or administers or has
maintained or administered, to which the Parent, the Seller or any of their
Subsidiaries or ERISA Affiliates contributes or has contributed or is or has
been required to contribute, or under or with respect to which the Parent, the
Seller or any of their ERISA Affiliates has or may have any Liability and (B)
any actual or alleged violation by the Parent, the Seller or any of their
Affiliates of any equal employment or employment discrimination laws;

                  (xii)  any Liability under Environmental Laws arising out of
or relating to the operation or conduct of the business of the Parent, the
Seller or their Subsidiaries or the use or ownership of the Purchased Assets,
in each case, before the Transfer Date;

                  (xiii) any Liability of the Seller to any of its Affiliates;
and

                  (xiv)  any other Liability of Seller or any of its
Subsidiaries or Affiliates that is not specifically listed as an Assumed
Liability under Section 3.1(a) (including any Liability to the extent
                --------------
resulting from the ownership, use, operation or maintenance of the Purchased
Assets by or on behalf of Seller prior to the Transfer Date, or the operation
or conduct of the business of the Parent, the Seller or their Subsidiaries, by
or on behalf of the Seller prior to the Transfer Date).

                                 ARTICLE IV.

        PURCHASE PRICE, PAYMENT, REIMBURSEMENT OF EXPENSES AND TRANSFER

                  Section 4.1 Initial Payment of Purchase Price. As
                              ---------------------------------
consideration for the agreements of the parties hereunder, at the Closing, the
Acquiror shall pay to Seller an aggregate amount equal to the sum of
$7,500,000 (the "INITIAL PURCHASE PRICE AMOUNT").

The Initial Purchase Price Amount shall be payable in cash by wire transfer of
immediately available funds to an account designated by Seller to Acquiror in
writing at least two (2) Business Days prior to Closing.

                  Section 4.2 Additional Payments, Reimbursement of Expenses
                              ----------------------------------------------
                  and Transfer of Assets.
                  ----------------------

              (a) Upon the earlier to occur of (i) the Seller's receipt of
written communication from the FDA acknowledging the FDA's receipt of a
"Complete Response" from Seller relating to the FDA's October 20, 2006
Approvable Letter and that such response contains all necessary elements
required by the FDA to proceed with their review of such "Complete Response"
(the "COMPLETE RESPONSE"), or (ii) receipt of the Gestiva NDA Approval,
Acquiror shall pay to Seller, within five (5) Business Days thereafter,
$2,000,000 in cash (the "NDA MILESTONE PAYMENT").

                                      17

<PAGE>
<PAGE>

              (b) Subject to the terms and conditions of this Agreement
(including the conditions to the Transfer Date set forth in Article X), on the
                                                            ---------
Transfer Date, the Acquiror shall pay to the Seller the sum of $72,500,000 in
accordance with Section 5.4(b) (such amount being the "ADDITIONAL PURCHASE
                --------------
PRICE AMOUNT" and together with the Initial Purchase Price Amount, the
"PURCHASE PRICE"), the NDA Milestone Payment (if not yet paid pursuant to
Section 4.2(a)) and any Reimbursable Expenses not yet reimbursed to the Seller
--------------
pursuant to the terms of this Agreement in accordance with Section 5.4(b). For
                                                           --------------
avoidance of doubt, the Transfer Date shall not occur and the Additional
Purchase Price Amount shall not be payable by the Acquiror prior to the
occurrence of each of the following conditions (which are in addition to the
conditions set forth in Article X): (i) the Gestiva NDA Approval Date, (ii)
                        ---------
the transfer by the Seller to the Acquiror of the Gestiva FDA Submissions and
all rights associated therewith pursuant to Section 8.5, (iii) the transfer of
                                            -----------
the Gestiva Books and Records to the offices of Brown Rudnick Berlack Israels
LLP, at One Financial Center, Boston Massachusetts 02111, at least five (5)
days prior to the Transfer Date, provided however, such transfer shall not
limit the rights of Acquiror set forth in Section 8.3(a) and (iv) the receipt
                                          --------------
by the Acquiror of the Initial Gestiva Inventory.

              (c) The Acquiror shall reimburse the Seller for any Reimbursable
Expenses as may be submitted by the Seller on a monthly basis, such
reimbursement to be made within ten (10) Business Days of the Acquiror's
receipt of evidence documenting the Seller's incurrence of such Reimbursable
Expenses, which documentation shall include an itemization of such expenses in
reasonable detail and specificity.

              (d) All payments paid to the Seller pursuant to this Section 4.2,
                                                                   -----------
shall be by wire transfer of immediately available funds to an account
designated by the Seller at least two (2) Business Days prior to the date on
which such payment is required to be paid.

                  Section 4.3 Allocation of Purchase Price. The Purchase Price
                              ----------------------------
shall be allocated among the Purchased Assets in accordance with Section 1060
of the Code and the Treasury Regulations promulgated thereunder, and the
Acquiror and the Seller agree to (a) be bound by the allocation, (b) act in
accordance with the allocation in the preparation of financial statements and
filing of all Tax Returns (including, without limitation, filing Internal
Revenue Service Form 8594 with their United States federal income Tax Return
for the taxable year that includes the Transfer Date) and in the course of any
Tax audit, Tax review or Tax litigation relating thereto, and (c) take no
position and cause their Affiliates to take no position inconsistent with the
allocation for income Tax purposes, including United States federal and state
income Tax and foreign income Tax, unless otherwise required pursuant to a
"determination" within the meaning of Section 1313(a) of the Code. The
Acquiror shall after consultation with the Seller initially determine and send
written Notice to the Seller of the allocation of the Purchase Price within
thirty (30) days after the Transfer Date. The Seller will be deemed to have
accepted such allocation unless it provides written Notice of disagreement to
the Acquiror within twenty (20) Business Days after the receipt of the
Acquiror's Notice of allocation. If the Seller provides such Notice of
disagreement to the Acquiror, then the parties shall proceed in good faith to
determine the allocation in dispute. If, within ten (10) days after the
Acquiror receives the Seller's Notice of disagreement, the parties have not
reached agreement, then the Accountants shall be engaged to determine the
final allocation in dispute. Not later than thirty (30) days prior to the
filing of their respective Internal Revenue Service Forms 8594 relating to
this transaction, each party shall deliver to the other party a copy of its
Internal Revenue Service Form 8594.

                                      18

<PAGE>
<PAGE>

                  Section 4.4 Sales, Use and Other Taxes. All transfer,
                              --------------------------
documentary, sales, use, valued-added, gross receipts, stamp, registration or
other similar transfer taxes incurred in connection with the transfer and sale
of the Purchased Assets as contemplated by the terms of this Agreement,
including all recording or filing fees, notarial fees and other similar costs
of Closing or similar costs arising on the Transfer Date, that may be imposed,
payable, collectible or incurred ("TRANSFER TAXES") shall be timely paid by
the Seller. The Seller will, at its own expense, file all necessary Tax
Returns and other documentation with respect to any such Transfer Taxes and
shall file such Tax Returns within the time prescribed by applicable law, and
the Acquiror will join in the execution of any such Tax Returns and other
documentation. The Seller shall provide the Acquiror with evidence
satisfactory to Acquiror that such transfer Taxes have been timely paid by the
Seller.

                  Section 4.5 Tax Withholding. Acquiror shall be entitled to
                              ---------------
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to Seller such amounts as Acquiror is required to deduct and
withhold under the Code, any Tax Law or any other Law with respect to the
making of such payment. To the extent that amounts are so withheld by
Acquiror, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Seller in respect of whom such deduction
and withholding was made by Acquiror.

                  Section 4.6 Risk of Loss. Until the Transfer Date, the
                              ------------
Seller shall bear the risk of any loss or damage to the Purchased Assets from
fire, casualty or any other occurrence. Following the Transfer Date, Acquiror
shall bear the risk of any loss or damage to the Purchased Assets from fire,
casualty or any other occurrence.

                  Section 4.7 Subsidiaries. Acquiror shall, upon ten (10)
                              ------------
Business Days prior written notice to Seller, have the right to designate one
or more of its wholly-owned direct or indirect Subsidiaries (each, a
"DESIGNATED ACQUIROR SUBSIDIARY") to purchase all or any of the Purchased
Assets or assume all or any of the Assumed Liabilities so long as Acquiror
shall remain liable for all of its liabilities and obligations hereunder and
under the Related Agreements; provided, however, that Acquiror shall not be
permitted to make such a designation if such designation would, or would
reasonably be expected to, (i) result in any material costs, or any material
liabilities, to the Seller or its Subsidiaries, (ii) materially delay or
prevent the consummation of the transactions contemplated hereby, (iii)
materially adversely affect the obtaining of consents and approvals in
connection with the transactions contemplated hereby (or require that material
consents and approvals be resolicited) or (iv) otherwise cause the conditions
to the Transfer Date set forth in ARTICLE X hereof to not be satisfied.
                                  ---------

                                  ARTICLE V.

                           CLOSING AND TRANSFER DATE

                  Section 5.1 Time and Place of Closing. Unless this Agreement
                              -------------------------
is earlier terminated pursuant to ARTICLE XII, the closing (the "CLOSING") of
                                  -----------
the transactions contemplated by this Agreement to be consummated on the
Closing shall take place as promptly as practicable, but in no event later
than five (5) Business Days following satisfaction or waiver

                                      19

<PAGE>
<PAGE>

of the conditions set forth in ARTICLE IX, at 9:00 a.m., Pacific Standard
                               ----------
time, at the offices of Latham & Watkins LLP, 650 Town Center Drive 20th
Floor, Costa Mesa, California 92626, unless another time or place shall be
agreed to by the parties (the "CLOSING DATE").

                  Section 5.2 Deliveries at Closing.
                              ---------------------

              (a) Closing Deliveries by the Seller. At the Closing, the Seller
                  --------------------------------
shall deliver or cause to be delivered to the Acquiror:

                  (i)    all forms, certificates and other documents referred
to in Section 8.10(d);
      ---------------

                  (ii)   an original of the License Agreement, executed by the
Seller; and

                  (iii)  the certificates and other matters described in
ARTICLE IX.
----------

              (b) Closing Deliveries by the Acquiror. At the Closing, the
                  ----------------------------------
Acquiror will deliver or cause to be delivered to the Seller:

                  (i)    the Initial Purchase Price Amount in immediately
available funds by wire transfer to an account or accounts that shall have
been designated by the Seller not less than two (2) Business Days prior to the
Closing Date; and

                  (ii)   the certificates and other matters described in
ARTICLE IX.
----------

                  Section 5.3 Time and Place of Transfer Date. Unless this
                              -------------------------------
Agreement is earlier terminated pursuant to ARTICLE XII, the transfer and sale
                                            -----------
of the Purchased Assets and Assumed Liabilities shall take place as promptly
as practicable, but in no event later than five (5) Business Days following
the satisfaction or waiver of the conditions set forth in Articles X, at 9:00
                                                          ----------
a.m., Pacific Standard time, at the offices of Latham & Watkins LLP, 650 Town
Center Drive 20th Floor, Costa Mesa, California 92626, unless another time or
place shall be agreed to by the parties (the "TRANSFER DATE").

                  Section 5.4 Transfer Date Deliveries
                              ------------------------

              (a) Transfer Date Deliveries by the Seller. On the Transfer
                  --------------------------------------
Date, the Seller shall deliver to the Acquiror:

                  (i)    an unredacted, fully executed copy of each of the
Assumed Contracts;

                  (ii)   written evidence (including duly executed UCC-3 forms,
as applicable) that all Encumbrances related to the Purchased Assets, if any,
have been released;

                  (iii)  written evidence of the receipt of all Seller
Governmental Consents set forth on Section 6.3(a) of the Seller Disclosure
                                   --------------
Schedule and Seller Third Party Consents set forth on Section 6.3(b) of the
                                                      --------------
Seller Disclosure Schedule;

                  (iv)   an original of each Related Agreement (excluding the
License Agreement and, if previously executed pursuant to Section 8.5(b), the
                                                          --------------
Transition Services Agreement)

                                      20

<PAGE>
<PAGE>

executed by the Seller and copies of all documents required to be delivered by
the Seller pursuant thereto;

                  (v)    written evidence (including duly executed UCC-3 forms,
as applicable) that all Encumbrances related to the Purchased Assets, if any,
have been released;

                  (vi)   the Gestiva Books and Records;

                  (vii)  the FDA Transfer Letters, unless previously delivered
pursuant to Section 8.5(b);
            --------------

                  (viii) the certificates and other matters described in
ARTICLE X; and
---------

                  (ix)   such other instruments or documents, in form and
substance reasonably acceptable to the Seller and the Acquiror, as may be
necessary to effect the Acquiror's assumption of the Assumed Liabilities and
the Assumed Contracts.

              (b) Transfer Date Deliveries by the Acquiror. On the Transfer
                  ----------------------------------------
Date, the Acquiror shall deliver to the Seller

                  (i)    an original of each of the Related Agreements
(excluding the License Agreement and, if previously executed pursuant to
Section 8.5(b), the Transition Services Agreement) executed by the Acquiror,
--------------
and copies of all documents required to be delivered by the Acquiror pursuant
thereto;

                  (ii)   the certificates and other matters described in
ARTICLE X;
---------

                  (iii)  such other instruments or documents, in form and
substance reasonably acceptable to the Seller and the Acquiror, as may be
necessary to effect the Acquiror's assumption of the Assumed Liabilities and
the Assumed Contracts; and

                  (iv)   the Additional Purchase Price Amount, the NDA
Milestone Payment (if not yet paid pursuant to Section 4.2(a)) and any
                                               --------------
Reimbursable Expenses owed to the Seller pursuant to the terms of this
Agreement in immediately available funds by wire transfer to an account or
accounts that shall have been designated by the Seller to the Acquiror not
less than two (2) Business Days prior to the Transfer Date.

              (c) Further Deliveries of the Seller. At or promptly following
                  --------------------------------
the Transfer Date, but in no event later than ten (10) days thereafter, the
Seller shall deliver or cause to be delivered to Acquiror any other Purchased
Asset which was not delivered to Acquiror on the Transfer Date.

                                 ARTICLE VI.

                 REPRESENTATIONS AND WARRANTIES OF THE SELLER

                                      21

<PAGE>
<PAGE>

                  Subject to the such exceptions as are disclosed in the
disclosure schedule supplied by the Seller to the Acquiror dated as of the
date hereof (the "SELLER DISCLOSURE SCHEDULE"), which Seller Disclosure
Schedule identifies the Section (or, if applicable, subsection) to which such
exception relates (provided, however, that such disclosure shall also apply to
particular matters represented or warranted in other Sections and subsections
to the extent that it is readily apparent from the text of such disclosure),
the Seller represents and warrants to the Acquiror as follows:

                  Section 6.1 Organization, Etc. The Seller is duly
                              ------------------
incorporated, validly existing and in good standing under the laws of Delaware
and has all requisite power and authority to own its assets, including the
Purchased Assets. The Seller is duly authorized to conduct its business and is
in good standing in each jurisdiction where such qualification is required to
own the Purchased Assets or conduct its business as it is now being conducted,
except where the failure to be so qualified or in good standing would not be
reasonably expected to have a Seller Material Adverse Effect. The certificate
of incorporation, bylaws or other similar governing instruments and
organizational documents (the "CHARTER DOCUMENTS") of the Seller that have
been delivered to the Acquiror on or prior to the date hereof are effective
under applicable Laws and are current, correct and complete.

                  Section 6.2 Authority of the Seller. The Seller has all
                              -----------------------
necessary corporate power and authority and has taken all corporate actions
necessary to enter into this Agreement, to execute and deliver the Related
Agreements to which it is or will be a party and carry out the transactions
contemplated hereby and by the Related Agreements to which it is or will be a
party. The board of directors of the Seller has taken all action required by
Law and the Charter Documents of the Seller to duly authorize (i) the
execution and delivery of this Agreement and the Related Agreements to which
it is or will be a party and (ii) the consummation of the transactions
contemplated hereby and by the Related Agreements to which it is or will be a
party. No other corporate proceedings on the part of the Seller are necessary
to authorize this Agreement and Related Agreements and the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by the Seller and, when executed and delivered by the
Acquiror, will constitute a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms. When executed and
delivered by the Seller, each Related Agreement will constitute a legal, valid
and binding obligation of the Seller enforceable against it in accordance with
its terms. Notwithstanding the matters set forth in this Section 6.2, the
                                                         -----------
enforceability of this Agreement and the Related Agreements may be limited by
principles of public policy, the rules of law governing specific performance,
injunctive relief or other equitable remedies, and by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.

                  Section 6.3 Consents and Approvals.
                              ----------------------

              (a) Schedule 6.3(a) of the Seller Disclosure Schedule sets forth
                  ---------------
a complete and accurate list (the "SELLER GOVERNMENTAL CONSENTS") of all
consents, waivers, approvals, Orders, permits or authorizations of, or
registrations, notifications, declarations, payments or filings with, any
Governmental or Regulatory Authority that are required by or with respect to
the Seller in connection with the execution and delivery of this Agreement and
the Related Agreements by the Seller or the performance of its obligations
thereunder.

                                      22

<PAGE>
<PAGE>

              (b) Schedule 6.3(b) of the Seller Disclosure Schedule sets forth
                  ---------------
a complete and accurate list (the "SELLER THIRD PARTY CONSENTS") of all
material consents, waivers, approvals, or authorizations of, or notices to,
any third party (other than a Governmental or Regulatory Authority) that are
required by or with respect to the Seller in connection with the execution and
delivery of this Agreement and the Related Agreements by the Seller or the
performance of its obligations hereunder and thereunder.

                  Section 6.4 Non-Contravention. The execution and delivery by
                              -----------------
the Seller of this Agreement and the Related Agreements does not, and the
performance by Seller of its obligations under this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby will not:

              (a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Charter Documents of the Seller;

              (b) assuming the receipt of all consents, waivers, approvals,
Orders, permits or authorizations of Governmental and Regulatory Authorities,
and the termination or expiration of any waiting periods thereunder (set forth
in Schedule 6.4(b) of the Seller Disclosure Schedule) required to be obtained
   ---------------
by the Seller and the making of all registrations, notifications, declarations
or filings with Governmental and Regulatory Authorities, and the termination
or expiration of any waiting periods thereunder (set forth in Schedule 6.4(b)
                                                              ---------------
of the Seller Disclosure Schedule) required to be made by or with respect to
the Seller, conflict with or result in a violation or breach of any term or
provision of any Law applicable to the Seller, the Gestiva Business or the
Purchased Assets; or

              (c) conflict with or result in (i) a Default under, (ii) the
loss of any benefit under or (iii) the creation of any Encumbrance on any of
the Purchased Assets (including any Assumed Contract).

                  Section 6.5 Contracts. The Assumed Contracts are valid,
                              ---------
binding and in full force and effect. Except as set forth on Schedule 6.5(a)
                                                             ---------------
of the Seller Disclosure Schedule, the Seller and, to the Knowledge of the
Seller, any other party thereunder, has performed all obligations required to
be performed by such party under the Assumed Contracts and is not (with or
without the lapse of time or the giving of notice, or both) in material breach
or default under any Assumed Contract and, to the Knowledge of the Seller, no
other party to any Assumed Contract is (with or without the lapse of time or
the giving of notice, or both) in material breach or default thereunder. The
Seller has not received any notice of the intention of any party to terminate
any Assumed Contract. Complete and correct copies of all written Assumed
Contracts and amendments thereto have been made available to Acquiror, and
summaries of any oral Assumed Contracts have been provided to the Acquiror. No
Contracts other than the Assumed Contracts and the rights of Seller under the
Related Agreements are used, held for use, or intended to be use in or
necessary to the conduct of the Gestiva Business.

                  Section 6.6 Intellectual Property Rights.
                              ----------------------------

              (a) The Gestiva Intellectual Property set forth in Schedule 6.6(a)
                                                                 ---------------
of the Seller Disclosure Schedule constitutes all of the Gestiva Copyrights,
Gestiva Patent Rights and Gestiva

                                      23

<PAGE>
<PAGE>

Trademarks. As of the Closing Date and Transfer Date, the Seller has or its
Subsidiaries have a valid and enforceable right to use or will be the sole and
exclusive owners of all of the Gestiva Intellectual Property set forth on
Schedule 6.6(a) of the Seller Disclosure Schedule.
---------------

              (b) To the Knowledge of the Seller, the operation of the Gestiva
Business, as has been and is now being conducted, does not presently infringe
or constitute a misappropriation of any registered or unregistered patents,
trademarks, copyrights, trade secrets or other proprietary rights of any
Person and neither the Parent, the Seller, nor any of their Subsidiaries
thereof, has received any written notice from any Person, or has Knowledge of,
any actual or threatened claim or assertion to the contrary or of any facts or
alleged facts which are likely to serve as the basis for any such claim or
assertion.

              (c) With respect to all Gestiva Intellectual Property that
consists of Registered Gestiva Intellectual Property or is subject to an
application for copyright registration, mask work registration, or trademark
or service mark registration, Schedule 6.6(c) sets forth a list of all
                              ---------------
jurisdictions in which such Registered Gestiva Intellectual Property is issued
or registered, and all patent, registration and/or application numbers. Any
registration, maintenance and renewal fees due in connection with the Gestiva
Intellectual Property set forth in Schedule 6.6(c) have been paid in a timely
                                   ---------------
manner and all necessary documents and certificates in connection with such
Gestiva Intellectual Property have, for the purposes of maintaining such
Gestiva Intellectual Property, been filed in a timely manner with the relevant
Governmental or Regulatory Authorities.

              (d) To the Knowledge of the Seller, the Gestiva Intellectual
Property set forth on Schedule 6.6(a) of the Seller Disclosure Schedule is
                      ---------------
free and clear of all Encumbrances other than Permitted Encumbrances and no
Person other than the Parent, the Seller or their Subsidiaries, including any
current or former employee or consultant of the Parent, the Seller or their
Subsidiaries, has any proprietary, commercial or other interest in any of the
Gestiva Intellectual Property. There are no existing agreements, options,
commitments, or rights with, of or to any Person to acquire or obtain any
rights to, any of the Gestiva Intellectual Property set forth on Schedule 6.6(a)
                                                                 ---------------
of the Seller Disclosure Schedule.

              (e) To the Knowledge of the Seller, the Seller or its Affiliates
have the unrestricted right to assign, transfer and/or grant to the Acquiror
all rights in the Gestiva Intellectual Property that are being assigned,
transferred and/or granted to the Acquiror under this Agreement and the
Related Agreements, in each case free of any rights or claims of any Person
and without payment of any royalties, license fees or other amounts to any
Person. To the Knowledge of the Seller, the consummation of this Agreement and
the other transactions contemplated hereby does not and will not infringe or
misappropriate any Gestiva Intellectual Property or any intellectual property
of any other Person.

              (f) To the Knowledge of the Seller, there is no unauthorized
use, violation, misappropriation or infringement of any of the Gestiva
Intellectual Property by any Person.

              (g) There are no Actions or Proceedings (including any
inventorship challenges) pending or, to the Knowledge of the Seller,
threatened, with respect to any of the Gestiva Intellectual Property nor have
any such Actions or Proceedings been brought during the past

                                      24

<PAGE>
<PAGE>

three (3) years.

              (h) Solely as it relates to Gestiva or a Gestiva Product
Improvement, the Seller has not entered into any Contract (i) granting any
Person the right to bring infringement actions with respect to, or otherwise
to enforce rights with respect to, any of the Gestiva Intellectual Property,
or (ii) expressly agreeing to indemnify any Person against any charge of
infringement of any of the Gestiva Intellectual Property.

              (i) The Seller has not entered into any Contract granting any
Person the right to control the prosecution of any of the Gestiva Patent
Rights.

              (j) None of the Gestiva Trademarks are or have been the subject
of any opposition, cancellation, abandonment or similar proceeding, and
neither the Parent, the Seller, nor any of their Subsidiaries, has received
any written notice from any Person, or has Knowledge, of any actual or
threatened claim or assertion to the contrary, or of any facts or alleged
facts which are likely to serve as a basis for any such claim or assertion.

              (k) Except for the License Agreement or as set forth on Schedule
                                                                      --------
6.6(k) of the Seller Disclosure Schedule, the Seller has not granted any
------
licenses under or to any of the Gestiva Intellectual Property or entered into
any distribution or marketing arrangements with respect to any Gestiva
Intellectual Property or Gestiva. The Seller has not granted any licenses
under or to any of the Gestiva Intellectual Property or entered into any
distribution or marketing arrangements with respect to any Gestiva
Intellectual Property or Gestiva.

              (l) All Gestiva Know-How that would otherwise constitute a trade
secret has been the subject of reasonable measures to maintain its secrecy.
All former and current employees, independent contractors, members of
management and key personnel of the Parent, the Seller or their Subsidiaries
with access to such trade secrets or similar confidential information,
including all former and current employees, agents, consultants and
independent contractors who have contributed to or participated in the
conception and development of material Gestiva Intellectual Property
(collectively, "PERSONNEL"), have executed and delivered to Seller a
proprietary information agreement restricting such person's right to disclose
or use for unauthorized purposes such trade secrets or information. All such
former and current Personnel (i) who are or were employees of Seller have
executed a written "work-for-hire" agreement with Seller that, in accordance
with all applicable Laws, has accorded the Seller full, effective, exclusive
and original ownership of all Gestiva Intellectual Property rights therein and
thereby arising and (ii) who were or are not employees of Seller have executed
appropriate instruments of assignment in favor of Seller as assignee that have
conveyed to Seller full, effective and exclusive ownership of all Gestiva
Intellectual Property rights therein and thereby arising. No former or current
Personnel have any claim against Seller in connection with such person's
involvement in the conception and development of any Gestiva Intellectual
Property except for such claims that, individually or in the aggregate, do not
have, have not had and could not reasonably be expected to have a Seller
Material Adverse Effect, and no such claim has been asserted or is threatened
in writing, or to Seller's Knowledge, orally.

              (m) No licensing fees, royalties, profit participations, or
other payments are due or payable by the Parent, the Seller or any of their
Subsidiaries in connection with Gestiva

                                      25

<PAGE>
<PAGE>

Intellectual Property, other than maintenance fees.

                  Section 6.7 Litigation. Schedule 6.7 of the Seller
                              ----------  ------------
Disclosure Schedule sets forth a list as of the date hereof of each pending
or, to the Knowledge of the Seller, threatened suit, claim, action, proceeding
or investigation, arising out of the conduct of the Gestiva Business or
against or affecting any Purchased Assets or Assumed Liability. Except as set
forth in Schedule 6.7 of the Seller Disclosure Schedule, none of the suits,
         ------------
claims, actions, proceedings or investigations listed in Schedule 6.7 of the
                                                         ------------
Seller Disclosure Schedule as to which there is at least a reasonable
possibility of adverse determination would have, if so determined,
individually or in the aggregate, a Seller Material Adverse Effect. Except as
set forth in Schedule 6.7 of the Seller Disclosure Schedule, neither the
             ------------
Seller nor any of its Affiliates are a party or subject to or in Default under
any Order applicable to the conduct of the Gestiva Business, any Purchased
Assets or any Assumed Liability, and there are no outstanding Orders of any
Governmental or Regulatory Authority that apply to the Purchased Assets that
restricts the manufacture, use or sale of Gestiva, the ownership, disposition
or use of the Purchased Assets by the Seller or the conduct of the Gestiva
Business by the Seller, in each case, in any material respect.

                  Section 6.8 Permits; Compliance with Law.
                              ----------------------------

              (a) Schedule 6.8 of the Seller Disclosure Schedule sets forth a
                  ------------
true and complete list of all Gestiva Governmental Permits. The Seller is in
possession of all Gestiva Governmental Permits and all Gestiva Governmental
Permits are valid and in full force and effect.

              (b) The Gestiva Business has been and is currently conducted by
the Seller and its Subsidiaries in material compliance with all Gestiva
Governmental Permits and applicable Law by which the Gestiva Business, Gestiva
or any Purchased Asset is bound.

              (c) No Governmental or Regulatory Authority has notified the
Seller or any of its Subsidiaries in writing that the Gestiva Business or the
Purchased Assets were or are in material violation of any Law or Required
Permit or the subject of any investigation in any jurisdiction where the
Gestiva Business is conducted.

              (d) No Governmental or Regulatory Authority has notified the
Parent, the Seller or any of their Subsidiaries of any facts or circumstances
which would lead to any suspension, loss of or material modification to any
Required Permit or refusal by a Governmental or Regulatory Authority to renew
or accept for filing any Required Permit on terms less advantageous,
individually or in the aggregate, to the Parent, the Seller and their
Subsidiaries than the terms of those Gestiva Governmental Permits currently in
force.

              (e) (i)    All applications, submissions, information, claims,
reports and statistics, and other data derived therefrom, utilized as the
basis for or submitted in connection with any and all requests for a Required
Permit of the FDA or other Governmental or Regulatory Authority relating to
the Purchased Assets, when submitted to the FDA or other Governmental or
Regulatory Authority were true, complete and correct in all material respects
as of the date of submission and any legally necessary or required updates,
changes, corrections or modifications to such applications, submissions,
information, claims, reports or statistics have been submitted to FDA and
other Governmental or Regulatory Authority.

                                      26

<PAGE>
<PAGE>

                  (ii)   To the Knowledge of the Seller or its Affiliates, all
pre-clinical and clinical trials conducted by the Parent, the Seller or any of
their Subsidiaries with regard to Gestiva or the Purchased Assets have been
conducted in material compliance with experimental protocols, procedures and
controls pursuant to accepted professional scientific standards and all
applicable Laws promulgated by the FDA relating thereto, including without
limitation the FDA Act and its applicable implementing regulations at 21
C.F.R. Parts 50, 54, 56 and 312, as amended.

                  (iii)  There are no investigations, audits, actions or other
proceedings of a Governmental or Regulatory Authority pending with respect to
a violation by the Parent, the Seller or any of their Subsidiaries of the FDA
Act or other applicable Law that would reasonably be expected to result in
administrative, civil or criminal liability, and, to the Knowledge of the
Seller, there are no facts or circumstances existing that would reasonably be
expected to serve as a basis for such an investigation, audit, action or other
proceeding, in each case with respect to Gestiva, the Purchased Assets, the
Assumed Liabilities or the Gestiva Business.

                  (iv)   No Governmental or Regulatory Authority has commenced
or threatened in writing to initiate any action to withdraw the Gestiva
Product Registrations or request the recall of Gestiva, or commenced or
threatened to initiate any action to enjoin production of Gestiva at any
facility, nor have the Parent, the Seller or any of their Subsidiaries
received any notice to such effect and, there are no grounds for such action.

                  (v)    To the Knowledge of the Seller, none of the officers of
the Seller, have been disqualified or debarred by the FDA for any purpose, or
have been charged with or convicted under United States federal Law for
conduct relating to the development or approval or otherwise relating to the
regulation of any drug product under the Generic Drug Enforcement Act of 1992,
the FDA Act or any other similar Law or have made an untrue statement of a
material fact to any Governmental or Regulatory Authority with respect to
Gestiva (whether in any submission to such Governmental or Regulatory
Authority or otherwise), or failed to disclose a material fact required to be
disclosed to any Governmental or Regulatory Authority with respect to Gestiva.
Neither the Seller nor any of its Subsidiaries are the subject of any pending
or threatened investigation in respect of the Seller of any of its
Subsidiaries or its products, by the FDA pursuant to its "Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities" Final Policy
set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments
thereto.

              (f) None of Parent, Seller or any of their Subsidiaries are,
directly or indirectly, engaged in the research, review or development, at any
stage, of any product which contains the API, including any and all dosage
forms, modifications, prototypes, formulas, or strengths of the API. In
addition, none of Parent, Seller nor any of their Subsidiaries is, directly or
indirectly, engaged in the research, review or development of any product
which is intended to treat the Gestiva indication.

                  Section 6.9 Gestiva Inventory. All of the Gestiva Inventory
                              -----------------
(i) will be as of the Transfer Date, free of any material defect or deficiency
and (ii) was produced or manufactured in accordance with the specifications
for Gestiva as set forth in the applicable Gestiva Product Registrations and
in compliance with applicable Law. The Seller at Closing, and upon delivery

                                      27

<PAGE>
<PAGE>

of the Gestiva Inventory on the Transfer Date, as applicable, will have good
and marketable title to the Gestiva Inventory free and clear of any
Encumbrances. As of immediately prior to the Transfer Date, none of the
Gestiva Inventory has been sold commercially and all prior human uses thereof
have been subject to appropriate exemptions.

                  Section 6.10 Suppliers. All of the suppliers to the Gestiva
                              ----------
Business since January 1, 2006 and all Contracts with any such supplier
currently in effect are set forth on Schedule 6.10 and Schedule 1.1(a). None
                                     -------------     ---------------
of such suppliers has given the Parent, the Seller or any of their
Subsidiaries notice terminating, canceling or threatening to terminate or
cancel any Contract or relationship with the Parent, the Seller or any of
their Subsidiaries relating to the Gestiva Business. To the Knowledge of the
Seller, such suppliers are manufacturing and otherwise operating in compliance
with applicable FDA requirements with respect to the products and materials
supplied to Seller.

                  Section 6.11 Absence of Certain Changes or Events.
                               ------------------------------------

              (a) Except as set forth on Schedule 6.11(a) of the Seller
                                         ----------------
Disclosure Schedule, since December 31, 2006, there has not been a Seller
Material Adverse Effect.

              (b) Except as set forth in Schedule 6.11(b) of the Seller
                                         ----------------
Disclosure Schedule, since April 2, 2007 to the date of this Agreement, and to
the Knowledge of the Seller during the period between December 31, 2006 and
April 1, 2007, the Seller has conducted and did conduct the Gestiva Business
in the Ordinary Course of Business, and the Seller has not, with respect to
the Gestiva Business or any of the Purchased Assets:

                  (i)    subjected any of the Purchased Assets to any
Encumbrances other than Permitted Encumbrances (subject to Section 6.12(a));
                                                           ---------------

                  (ii)   sold, transferred, leased, subleased, licensed,
sublicensed or otherwise disposed of, to any third party, any Purchased Assets
or assets used in or necessary for the conduct of the Gestiva Business;

                  (iii)  entered into any Assumed Contract or accelerated,
cancelled, modified or terminated any Assumed Contract except in connection
with any renewal thereof in the Ordinary Course of Business;

                  (iv)   surrendered, revoked or otherwise terminated any
Gestiva Governmental Permits, except in connection with any renewal or
reissuance thereof;

                  (v)    incurred Assumed Liabilities, other than in the
Ordinary Course of Business;

                  (vi)   waived, released or assigned any rights, which rights,
but for such waiver, release or assignment, would have been classified as
Purchased Assets, other than in the Ordinary Course of Business;

                                      28

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<PAGE>

                  (vii)  experienced any damage, destruction or casualty loss
(whether or not covered by insurance) with respect to any Purchased Asset
other than as a result of ordinary wear and tear, where applicable;

                  (viii) delayed or postponed the payment of any Assumed
Liability; or

                  (ix)   with respect to the Purchased Assets or the Gestiva
Business, made any election or change to any election in respect to Taxes,
adopted or changed any accounting method in respect to Taxes, entered into any
Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or
settled or compromised on any claim, notice, audit report or assessment in
respect of Taxes, consented to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes, changed any
annual Tax accounting period, filed any amended Tax Return, or surrendered any
right to claim a Tax refund; or

                  (x)    agreed, whether in writing or otherwise, to do any of
the foregoing, except as expressly contemplated by this Agreement.

                  Section 6.12 Title to Assets; Sufficiency of Assets.
                               --------------------------------------

              (a) Except as set forth on Schedule 6.12(a) of the Seller
                                         ----------------
Disclosure Schedule, as of the Closing Date, the Seller has and, at the
Transfer Date the Seller will deliver to Acquiror, good and valid title to or,
in the case of licensed assets, a valid and binding license to the Purchased
Assets free and clear of all Encumbrances (except that as of the Closing Date
the Purchased Assets may have been subject to any Permitted Encumbrances).
Except as set forth on Schedule 6.12(a) of the Seller Disclosure Schedule, no
                       ----------------
Subsidiary or other Affiliate of the Seller owns, beneficially or of record,
or has any rights, title or interest in, to or under any Purchased Asset, and
there are no employees of any Subsidiary of the Seller employed in the Gestiva
Business or who perform tasks that are necessary for the operation of the
Gestiva Business.

              (b) The Purchased Assets (together with the rights of the
Acquiror and its Affiliates under the Related Agreements) constitute all of
the assets, Contracts, Gestiva Governmental Permits , rights and services
required for the continued operation of the Gestiva Business by the Acquiror
as conducted by the Seller during the past twelve (12) months.

              (c) Each item of equipment which is a Purchased Asset is in good
operating condition for the purposes for which it is currently being used,
subject to ordinary wear and tear and is free from any material defect.

              (d) During the twelve (12) calendar month period prior to the
date hereof, the Seller has not experienced any out-of-stock or back-order
situation with respect to the Gestiva Business.

                  Section 6.13 Disclosure. The Seller has made available and
                               ----------
disclosed to Acquiror all material information in the possession of the Seller
concerning the safety, efficacy, side effects or toxicity of Gestiva (in
animals or humans), derived from any pre-clinical or clinical use, studies,
investigations or tests of Gestiva (in animals or humans) conducted by

                                      29

<PAGE>
<PAGE>

Seller in all indications for Gestiva that has been submitted to the FDA or
studied by the Seller, whether or not determined to be attributed to Gestiva.

                  Section 6.14 Taxes. As of the date hereof and as of the
                               -----
Transfer Date:

              (a) To the extent that such action relates to the Purchased
Assets or the Gestiva Business, (i) the Seller has, and its Affiliates have,
duly and timely filed (or caused to be filed) with the appropriate taxing
authorities all Tax Returns required to be filed through the date hereof, and
(ii) all such Tax Returns filed are complete and accurate in all material
respects. All Taxes owed by the Seller in respect of the Gestiva Business
(whether or not shown on any Tax Return) have been paid. Neither the Seller
nor any of its Affiliates are currently the beneficiary of any extension of
time within which to file any Tax Return with respect to the Purchased Assets
or the Gestiva Business.

              (b) There are no liens for Taxes (other than for current Taxes
not yet due and payable) on any of the Purchased Assets.

              (c) No deficiencies for Taxes have been claimed, proposed or
assessed by any taxing or other Governmental Authority against the Seller or
its Subsidiaries with respect to the Purchased Assets or the Gestiva Business,
and there are no pending or, to the Knowledge of the Seller, threatened
audits, investigations, disputes or claims or other actions for or relating to
any Liability for Taxes with respect to the Purchased Assets or the Gestiva
Business, and there are no matters under discussion with any Governmental or
Regulatory Authorities, or known to the Parent, the Seller or their
Subsidiaries, with respect to Taxes that are likely to result in an additional
Liability for Taxes with respect to the Purchased Assets or the Gestiva
Business. The Seller has delivered or made available to Acquiror complete and
accurate copies of all examination reports and statements of deficiencies
assessed against or agreed to by the Parent, the Seller or their Subsidiaries
since December 31, 2003 with respect to the Purchased Assets or the Gestiva
Business. With respect to the Purchased Assets or the Gestiva Business,
neither the Parent, the Seller nor any of their Subsidiaries have waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

              (d) There are no Tax-sharing agreements or similar arrangements
(including indemnity arrangements) with respect to or involving the Purchased
Assets or the Gestiva Business, and after the Transfer Date, the Purchased
Assets and the Gestiva Business shall not be bound by any such Tax-sharing
agreements or similar arrangements or have any Liability thereunder for
amounts due in respect of periods prior to the Transfer Date.

              (e) The Parent, the Seller and their Subsidiaries have withheld
and paid, and will withhold and pay prior to the Transfer Date, all Taxes
concerning the Gestiva Business 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.

              (f) Neither the Parent, the Seller nor any of their Subsidiaries
(i) has consented at any time under former Section 341(f)(1) of the Code to
have the provisions of former Section 341(f)(2) of the Code apply to any
disposition of the Purchased Assets; (ii) has acquired or owns Purchased
Assets that directly or indirectly secure any debt, the interest on which is
tax exempt

                                      30

<PAGE>
<PAGE>

under Section 103(a) of the Code; or (iii) has made any of the foregoing
elections or is required to apply any of the foregoing rules under any
comparable foreign, state or local Tax Law.

              (g) The Seller is not a "foreign person" as defined in Section
1445(f)(3) of the Code. The transactions contemplated herein are not subject
to the tax withholding provisions of Section 3406 of the Code or of Subchapter
A of Chapter 3 of the Code or of any other provision of law.

              (h) None of the Purchased Assets is "tax-exempt use property"
within the meaning of Section 168(h) of the Code.

              (i) None of the Purchased Assets is property that is required to
be treated as being owned by any other Person pursuant to the so-called safe
harbor lease provisions of former Section 168(f)(8) of the Code or any
comparable provision of state law.

                  Section 6.15 Competing Business. None of the Parent, the
                               ------------------
Seller, nor any of their Subsidiaries, are (i) with the exception of Gestiva,
developing or considering engaging in the development of a pharmaceutical
product for the prevention of preterm birth or (ii) in discussion with a
potential acquisition target or a potential acquirer of the Parent, the Seller
or any of their Subsidiaries that is, to the knowledge of the Seller,
developing or considering engaging in the development of a pharmaceutical
product for the prevention of preterm birth.

                  Section 6.16 Unlawful Payments. None of the Parent, the
                               -----------------
Seller, nor any of their Subsidiaries, or to the Knowledge of the Seller, any
officer, director, employee, agent, Affiliate, representative of the Parent,
the Seller or any of their Subsidiaries has made, directly or indirectly, any
bribe or kickback, illegal political contribution, payment from corporate
funds which was incorrectly recorded on the books and records of the Parent,
the Seller or any of their Subsidiaries, unlawful payment from corporate funds
to governmental or municipal officials in their individual capacities for the
purpose of affecting their action or the actions of the jurisdiction which
they represent to obtain favorable treatment in securing business or licenses
or to obtain special concessions of any kind whatsoever, or illegal payment
from corporate funds to obtain or retain any business.

                  Section 6.17 Brokers. The Acquiror has no, and will have no,
                               -------
obligation to pay any brokers (including real estate brokers), finders,
investment bankers, financial advisors or similar fees in connection with this
Agreement or the transactions contemplated hereby by reason of any action
taken by or on behalf of the Parent, the Seller or any of their Subsidiaries.

                                 ARTICLE VII.

                REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

                  Subject to the such exceptions as are disclosed in the
disclosure schedule supplied by the Acquiror to the Seller dated as of the
date hereof (the "ACQUIROR DISCLOSURE SCHEDULE"), which Acquiror Disclosure
Schedule identifies the Section (or, if applicable, subsection) to which such
exception relates (provided, however, that such disclosure shall also apply to
particular matters represented or warranted in other Sections and subsections
to the extent that it is readily apparent from the text of such disclosure),
the Acquiror represents and warrants to the Seller as follows:

                                      31

<PAGE>
<PAGE>

                  Section 7.1 Corporate Organization. The Acquiror is duly
                              ----------------------
incorporated, validly existing and, where applicable, in good standing under
the laws of Delaware and has all requisite power and authority to own its
assets and carry on its business as currently conducted by it. The Acquiror is
duly authorized to conduct its business and is in good standing in each
jurisdiction where such qualification is required, except where the failure to
be so qualified or in good standing would not be reasonably expected to have
an Acquiror Material Adverse Effect. The Charter Documents of the Acquiror are
effective under the applicable Laws and are current, correct and complete.

                  Section 7.2 Authority of the Acquiror. The Acquiror has all
                              -------------------------
necessary power and authority and has taken all corporate actions necessary to
enter into this Agreement and to carry out the transactions contemplated
hereby. The board of directors of the Acquiror has taken all action required
by Law and its Charter Documents to authorize the execution and delivery by
the Acquiror of this Agreement and the Related Agreements to which the
Acquiror is or will be a party and the consummation of the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by the Acquiror and, when executed and delivered by the
Seller, will constitute a legal, valid and binding obligation of the Acquiror
enforceable against it in accordance with its terms. When executed and
delivered by the Acquiror, each Related Agreement to which the Acquiror is or
will be a party will constitute a legal, valid and binding obligation of the
Acquiror enforceable against it in accordance with its terms. Notwithstanding
the matters set forth in this Section 7.2, the enforceability of this
                              -----------
Agreement and the Related Agreements may be limited by principles of public
policy and the rules of law governing specific performance, injunctive relief,
other equitable remedies, or bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally.

                  Section 7.3 Non-Contravention. The execution and delivery by
                              -----------------
the Acquiror of this Agreement and each of the Related Agreements does not,
and the performance by it of its obligations under this Agreement and each of
the Related Agreements and the consummation of the transactions contemplated
hereby and thereby will not:

              (a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Charter Documents of the Acquiror;

              (b) assuming the receipt of all consents, waivers, approvals,
Orders or authorizations of Governmental and Regulatory Authorities required
to be obtained by the Acquiror and the making of all registrations,
declarations or filings with Governmental and Regulatory Authorities required
to be made by the Acquiror, conflict with or result in a violation or breach
of any term or provision of any Law applicable to the Acquiror; or

              (c) conflict with or result in a Default under any Contract to
which the Acquiror is a party or by which the Acquiror or any of its assets is
bound.

                  Section 7.4 Litigation. There are no Actions or Proceedings
                              ----------
pending, or to the Knowledge of the Acquiror, threatened, against Acquiror in
connection with (i) this Agreement or any Related Agreement or (ii) the
transactions contemplated by this Agreement. The Acquiror is not subject to
any Order that could reasonably be expected to result in an Acquiror Material
Adverse Effect.

                                      32

<PAGE>
<PAGE>

                  Section 7.5 Brokers. The Seller has no, and will have no,
                              -------
obligation to pay any brokers, finders, investment bankers, financial advisors
or similar fees in connection with this Agreement or the transactions
contemplated hereby by reason of any action taken by or on behalf of the
Acquiror or any of its Affiliates.

                                 ARTICLE VIII.

                           COVENANTS OF THE PARTIES

                  Section 8.1 Operation of the Gestiva Business.
                              ---------------------------------

              (a) Between the date of this Agreement and the Transfer Date,
except as expressly permitted by this Agreement, or as otherwise directed in
writing by the Acquiror, the Seller shall conduct the Gestiva Business only in
the Ordinary Course of Business in substantially the same manner as previously
conducted (including with respect to research and development efforts,
manufacturing and capital expenditures) (it being acknowledged that after the
Closing Date the Acquiror will be solely responsible for, and the Seller will
reasonably cooperate with the Acquiror in, conducting all marketing and
promotional activities with respect to the Gestiva Business prior to the
Transfer Date; provided, that neither the Seller nor Parent, nor any of their
respective Subsidiaries, shall be obligated to provide the Acquiror access to
any employee for such purposes other than Robb Hesley), and use its
commercially reasonable efforts to keep intact the Purchased Assets, and
preserve the relationships of the Seller with customers, suppliers, licensors,
licensees, distributors, regulatory authorities and other Persons, in each
case, who are material to the Gestiva Business. Without limiting the
generality of the foregoing, from the date of this Agreement to the Transfer
Date, the Seller shall:

                  (i)    use its commercially reasonable efforts to keep
available the services of the current employees and consultants in the Gestiva
Business;

                  (ii)   confer with the Acquiror, where reasonably practicable,
prior to implementing material operational decisions relating to the Gestiva
Business;

                  (iii) keep in full force and effect, without amendment
(except in connection with any renewal thereof in the Ordinary Course of
Business), all material rights relating to the Purchased Assets and the
Gestiva Business;

                  (iv)   comply in all material respects with all requirements
of Law and contractual obligations, in each case applicable to the Purchased
Assets and operation of the Gestiva Business;

                  (v)    maintain all Gestiva Books and Records;

                  (vi)   maintain the Purchased Assets in good operating order
and condition, reasonable wear and tear excepted;

                                      33

<PAGE>
<PAGE>

                  (vii)  not waive, release or assign any rights, which rights,
but for such waiver, release or assignment, would have been classified as
Purchased Assets;

                  (viii) not fail to maintain its existing insurance coverage
to the extent relating to the Gestiva Business in all material respects in
effect as of the date hereof; and

                  (ix)   upon any damage, destruction or loss of any material
Purchased Asset, apply any and all insurance proceeds received with respect
thereto to the prompt repair, replacement and restoration thereof to the
condition of such Purchased Asset before such event or, if required, to such
other (better) condition as may be required by applicable Law.

              (b) Without limiting the generality of the lead-in paragraph of
Section 8.1(a), and except as set forth in Schedule 8.1(b) of the Seller
--------------                             ---------------
Disclosure Schedule or as otherwise expressly permitted by the terms of this
Agreement, from the date of this Agreement to the Transfer Date, without the
prior written consent of the Acquiror (which shall not be unreasonably
withheld), the Seller shall not:

                  (i)    Without the prior approval of the Joint Integration
Committee, (A) incur or obligate itself to incur any liability in excess of
$25,000 unless such liability is set forth on the budget set forth as Schedule
                                                                      --------
1.1(g) hereto, which budget may be amended from time to time upon the mutual
------
written consent of the parties hereto or (B) make any non-monetary decision
that could reasonably be expected to result in a significant economic adverse
impact on the Gestiva Business following the Closing Date;

                  (ii)   subject any Purchased Assets to any Encumbrances other
than a Permitted Encumbrance;

                  (iii)  sell, transfer, lease, sublease, license or otherwise
dispose of or grant any option or rights in, to or under any Purchased Assets;

                  (iv)   enter into any Contract that would have been required
to be set forth on Schedule 1.1(a) of the Seller Disclosure Schedule if such
                   ---------------
Contract had existed as of the date hereof, or terminate, extend or amend any
Assumed Contract set forth in Schedule 1.1(a) of the Seller Disclosure
                              ---------------
Schedule;

                  (v)    abandon or terminate any clinical trials relating to
Gestiva (other than for safety concerns or in accordance with the terms of
existing agreements with respect to such clinical trials) or terminate,
withhold or delay the Seller's support of clinical trials sponsored by
clinical investigators with respect to Gestiva;

                  (vi)   commence, sponsor or commit to participate in any
clinical trials or investigator sponsored trials with respect to Gestiva or
provide any clinical grants with respect to Gestiva;

                  (vii)  abandon any patents or patent filings or any
litigation seeking to enforce the Seller's interest in any Gestiva
Intellectual Property used, or contemplated to be used, in the conduct of the
Gestiva Business;

                                      34

<PAGE>
<PAGE>

                  (viii) take any action that would, or that could reasonably
be expected to, result in any of the conditions to the purchase and sale of
the Purchased Assets set forth in ARTICLE X not being satisfied;
                                  ---------

                  (ix)   to the extent that doing so would relate to the
Purchased Assets or the Gestiva Business, make any election or change to any
election in respect to Taxes, adopt or change any accounting method in respect
to Taxes, enter into any Tax allocation agreement, Tax sharing agreement, Tax
indemnity agreement or closing agreement, settle or compromise on any claim,
notice, audit report or assessment in respect of Taxes, consent to any
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes, change any annual Tax accounting period, file
any amended Tax Return, or surrender any right to claim a Tax refund; or

                  (x)    agree, whether in writing or otherwise, to do any of
the foregoing set forth in clauses (i) through (ix) above.

                  Section 8.2 Reasonable Efforts.
                              ------------------

              (a) Subject to Section 8.2(b), and following the date hereof,
                             --------------
each of the parties hereto shall use its commercially reasonable efforts to
take, or cause to be taken, all action, or to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to consummate and
make effective the transactions contemplated by this Agreement and the Related
Agreements and to cause the conditions to the obligations of the other party
hereto to consummate the transactions contemplated hereby to be satisfied at
the Closing and as of the Transfer Date as provided herein, including
obtaining all consents and approvals of all Persons and Governmental or
Regulatory Authorities and removing any injunctions or other Encumbrances on
the Purchased Assets, impairments or delays the obtaining or removal of which
are necessary, proper or advisable to the consummation of the transactions
contemplated by this Agreement and the Related Agreements. The parties hereto
shall cooperate with each other in connection with the taking of all actions
referenced in the preceding sentence, including providing (i) such reasonable
assistance as the other party may request in connection with its preparation
of any required filings or submissions and (ii) copies of all such filings and
submissions to the non-filing party and its advisors prior to filing or
submission and, if requested, to accept all reasonable additions, deletions or
changes suggested in connection therewith. The Seller and the Acquiror shall
have the right to review in advance, and, to the extent practicable, each
shall consult the other on, all the information relating to the Seller or the
Acquiror, as the case may be, that appears in any filing made with, or written
materials submitted to, any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement (including any
filing contemplated by this Section 8.2(a)). The Seller and the Acquiror may,
                            --------------
as each deems reasonably advisable and necessary, designate any competitively
sensitive information provided to the other under this section as "outside
counsel only." Such information shall be given only to outside counsel of the
recipient. In addition, the Seller and the Acquiror may redact any information
from such documents shared with the other party or its counsel that is not
pertinent to the subject matter of the filing or submission or pertaining to
the transactions contemplated by this Agreement.

              (b) The Acquiror and the Seller shall each: (i) promptly take
all actions necessary to

                                      35

<PAGE>
<PAGE>

make the filing required of such party or any of its Affiliates under the HSR
Act within five (5) Business Days after the date hereof, (ii) comply at the
earliest practicable date with any request for additional information or
documentary material received by such party or any of its Affiliates from the
Federal Trade Commission or the Antitrust Division of the Department of
Justice pursuant to the HSR Act and (iii) cooperate with the other party in
connection with any filing under the HSR Act and in connection with resolving
any investigation or other inquiry concerning the transactions contemplated
under this Agreement commenced by either the Federal Trade Commission or the
Antitrust Division of the Department of Justice or state attorneys general.
Each of the Seller, on one hand, and the Acquiror, on the other hand, shall be
responsible for its own legal fees for preparing its portion of the HSR Act
filings. For the avoidance of doubt, the Acquiror and the Seller shall share
equally any required filing fees under the HSR Act.

              (c) In furtherance and not in limitation of the other covenants
of the parties contained herein, each party shall use commercially reasonable
efforts to resolve such objections, if any, as may be asserted with respect to
the consummation of the transactions contemplated hereby under any antitrust
Law. If any administrative, judicial or legislative Action or Proceeding is
instituted (or threatened to be instituted) challenging the sale and purchase
of any of the Purchased Assets or any other transaction as violative of any
antitrust Law, each party shall cooperate and use commercially reasonable
efforts to contest and resist any such Action or Proceeding, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other Order that is in effect and that restricts, prevents or prohibits
consummation at the Closing of the sale and purchase of the Purchased Assets
or any other transaction contemplated under this Agreement; provided, however,
that nothing in this Agreement shall require the Acquiror or its Subsidiaries
to commit to any divestitures, licenses or hold separate or similar
arrangements with respect to its assets, the Purchased Assets or the Assumed
Liabilities or otherwise agree to any limitation on conduct of business
arrangements (including the Gestiva Business), whether as a condition to
obtaining any approval from a Governmental and Regulatory Authority or any
other Person for any other reason.

              (d) Each party shall promptly inform the other parties of any
material communication received by such party from the Federal Trade
Commission or the Antitrust Division of the Department of Justice regarding
any of the transactions contemplated under this Agreement. Each party shall
advise the other party promptly of any understandings, undertakings or
agreements that such party proposes to make or enter into with the Federal
Trade Commission or the Antitrust Division of the Department of Justice in
connection with the transactions contemplated under this Agreement.

              (e) The Seller shall, (i) to the extent practicable include the
Acquiror in any substantive discussions with the FDA regarding any Gestiva
Product Registration, (ii) if reasonably requested by the Acquiror, upon
reasonable notice, attend meetings or conference calls involving the Acquiror
or one of its Subsidiaries and the FDA related to any of the foregoing and
(iii) cooperate with Acquiror by submitting the FDA transfer letters,
substantially in the form of Exhibit D hereto (the "FDA TRANSFER LETTERS") to
                             ---------
the FDA on the Transfer Date or sooner pursuant to the provision set forth in
Section 8.5(b), in order to have the FDA transfer all Gestiva Product
--------------
Registrations to one of Acquiror's Subsidiaries or to Acquiror at such time as
requested by the Acquiror. Notwithstanding the foregoing, without the prior
written approval of

                                      36

<PAGE>
<PAGE>

the Seller, which shall not be unreasonably withheld, the Acquiror shall not
directly initiate correspondence with or meet with the FDA regarding Gestiva,
the Gestiva Product Registration or any matter relating to the Gestiva
Business.

              (f) Notwithstanding anything in this Agreement to the contrary,
the Acquiror shall not be required to expend money, commence any litigation or
offer or grant any accommodation (financial or otherwise) to any third party
in connection with obtaining any consent, substitution, approval or amendment
required to be obtained by the Seller in order to assign or transfer any
Purchased Asset to the Acquiror. In the event any such consent, substitution,
approval or amendment is not obtained prior to the Transfer Date, the Seller
shall continue to use commercially reasonable best efforts to obtain such
consent, waiver or approval after the Transfer Date.

                  Section 8.3 Access; Confidentiality.
                              -----------------------

              (a) From the date hereof until the Transfer Date, the Seller
shall permit the Acquiror and its representatives to have reasonable access,
during regular business hours and upon reasonable advance notice, to all the
personnel, properties, Contracts relating to Gestiva, the Purchased Assets or
the Assumed Liabilities, Tax Returns, the Gestiva Books and Records, the
Assumed Liabilities or the Gestiva Business, and the Seller shall furnish
promptly to the Acquiror such information in the Seller's possession
concerning the Purchased Assets, the Assumed Liabilities or the Gestiva
Business as the Acquiror may reasonably request; provided, however, that any
such access shall be conducted in a manner as not to unreasonably interfere
with the operation of the Gestiva Business. The Seller shall instruct its
respective employees, counsel and financial advisors to provide reasonable
cooperation to the Acquiror in its investigation of the Gestiva Business.

              (b) From and after the Closing, the Seller shall implement
procedures to keep confidential, and cause its officers, directors, employees,
representatives, agents and advisors to keep confidential, all information
relating to the Purchased Assets, Assumed Liabilities and Gestiva Business,
except as required by Law and except for information which was in the public
domain or was publicly known prior to the Closing or which becomes generally
available to the public after the Closing Date other than as a result of a
disclosure by the Seller or its officers, directors, employees,
representatives, agents and advisors. The Seller shall not disseminate any
such information other than to those employees of the Seller who have a
business need to access such information (i) in connection with the
preparation of the Seller's accounting records, (ii) in connection with the
preparation of any Tax Returns or with any Tax audits or (iii) in connection
with any suit, claim, action, proceeding or investigation relating to the
Purchased Assets, the Assumed Liabilities or the Gestiva Business. The Seller
shall not use or cause or permit its officers, directors, employees,
representatives and advisors to use any such information after the Closing for
any purpose whatsoever, other than in implementation of this Agreement.
Effective upon Closing, upon written request of the Acquiror, from time to
time, the Seller shall (at the Acquiror's sole cost and expense) use
reasonable efforts to enforce the Seller's rights with respect to the use and
maintenance of confidential information relating to the Gestiva Business under
all confidentiality agreements between the Seller and any other third party.
The Seller shall not waive or release its rights under such confidentiality
agreements with respect to the use and maintenance of such confidential
information with respect to the Gestiva Business.

                                      37

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<PAGE>

              (c) Between the date hereof and the Transfer Date, information
disclosed to the Acquiror pursuant to this Agreement (including in the Seller
Disclosure Schedule) shall be held as Confidential Information (as defined in
the Confidentiality Agreement) and shall be subject to the Confidentiality
Agreement.

              (d) Following the Transfer Date, for so long as such information
is retained by the Seller (which shall be for a period of at least five (5)
years), the Seller shall permit the Acquiror and its authorized
representatives to have reasonable access and duplicating rights during normal
business hours, upon reasonable prior notice, to the Seller and its books,
records and personnel solely to the extent relating to the Purchased Assets,
the Assumed Liabilities or the Gestiva Business, to the extent such access may
reasonably be required: (i) in connection with the preparation of the
Acquiror's accounting records or with any audits thereof, (ii) in connection
with any suit, claim, action, proceeding or investigation relating to the
Purchased Assets, the Assumed Liabilities or the Gestiva Business or (iii) in
connection with any required regulatory filing relating to the Purchased
Assets, the Assumed Liabilities or the Gestiva Business; provided that the
Acquiror shall reimburse the Seller promptly for all reasonable and necessary
out-of-pocket costs and expenses incurred by the Seller in connection with any
such request. Notwithstanding the foregoing, the Seller need not disclose to
the Acquiror any information: (i) relating to pricing or other matters that
are highly sensitive if (I) providing such portions of documents or
information, in the good faith opinion of the Seller's counsel, would
reasonably be expected to result in a violation of antitrust laws and (II) the
Seller designates such information as "outside counsel and retained experts
only" and discloses such information to Acquiror's outside counsel and
retained experts; or (ii) which the Seller is prohibited from disclosing by
applicable Law. If any material is withheld by the Seller pursuant to the
immediately preceding sentence, the Seller shall inform the Acquiror as to the
general nature of what is being withheld. The Seller may redact such portions
of such books and records that do not relate to the Purchased Assets, the
Assumed Liabilities or the Gestiva Business.

              (e) Following the Transfer Date, for so long as such information
is retained by Acquiror (which shall be for a period of at least five (5)
years), the Acquiror shall permit the Seller and its authorized
representatives to have reasonable access and duplicating rights during normal
business hours, upon reasonable prior notice, to the Acquiror and the Gestiva
Books and Records and the employees of the Acquiror or its Subsidiaries, to
the extent that such access may reasonably be required: (i) in connection with
the preparation of the Seller's accounting records or with any audits thereof,
(ii) in connection with any suit, claim, action, proceeding or investigation
with an adverse third party relating to the Purchased Assets, the Assumed
Liabilities or the Gestiva Business or (iii) in connection with any required
regulatory filing relating to the Purchased Assets the Assumed Liabilities or
the Gestiva Business; provided that the Seller shall reimburse the Acquiror
promptly for all reasonable and necessary out-of-pocket costs and expenses
incurred by the Acquiror in connection with any such request. Notwithstanding
the foregoing, the Acquiror need not disclose to the Seller any information:
(A) relating to pricing or other matters that are highly sensitive if (I)
providing such portions of documents or information, in the opinion of the
Acquiror's counsel, might reasonably result in a violation of antitrust laws
and (II) the Acquiror designates such information as "outside counsel and
retained experts only" and discloses such information to the Seller's outside
counsel and retained experts or (B) which the Acquiror is prohibited from
disclosing by applicable Law. If any material is withheld by the Acquiror
pursuant to the immediately preceding sentence, the

                                      38

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<PAGE>

Acquiror shall inform the Seller as to the general nature of what is being
withheld. The Acquiror may redact such portions of such Gestiva Books and
Records that do not relate to the Purchased Assets, the Assumed Liabilities or
the Gestiva Business.

                  Section 8.4 Public Announcements; Confidentiality. Except as
                              -------------------------------------
otherwise required by applicable Law or applicable stock exchange
requirements, prior to the Transfer Date, neither the Acquiror nor the Seller
shall, and each of them shall cause their respective Affiliates,
representatives and agents not to, issue or cause the publication of any press
release or public announcement with respect to the transactions contemplated
by this Agreement without the express prior written approval of the other
party, which approval shall not be unreasonably withheld or delayed; provided,
that after the Seller or the Acquiror has issued a press release announcing
the execution of this Agreement (the "INITIAL PRESS RELEASE") each of the
Seller and the Acquiror may make any public statement in response to questions
by the press, analysts, investors or those attending industry conferences or
financial analyst calls, or issue press releases, so long as any such public
statement or press release is not inconsistent with prior public disclosures,
press releases or public statements approved by the other party pursuant to
this Section 8.4 and which do not reveal non-public information about the
     -----------
other party. The parties acknowledge that the Acquiror intends to disclose
certain financial projections regarding Gestiva with its Initial Press
Release.

                  Section 8.5 Regulatory Matters.
                              ------------------

              (a) Until the Gestiva NDA Approval Date, the Seller shall
control the prosecution of the Gestiva NDA before the FDA as described in this
Section 8.5. Unless and until the Acquiror notifies the Seller otherwise in
-----------
accordance with Section 8.5(b), the Seller shall use its commercially
                --------------
reasonable efforts, at its expense, subject to the reimbursement provisions of
Section 4.2(c), to obtain Gestiva NDA Approval as soon as practicable. In
--------------
connection therewith, the Seller shall continue to be the party of record with
respect to the Gestiva NDA and, following the Closing, shall keep the Acquiror
fully informed with respect to the prosecution of the Gestiva NDA and (i)
promptly provide to the Acquiror or its designee any material written
correspondence from the FDA with respect thereto and (ii) no later than two
(2) Business Days prior to the submission thereof provide to the Acquiror or
its designee any proposed written correspondence to the FDA with respect
thereto, including copies of any and all underlying data to accompany any such
correspondence. Following the Closing, the Seller shall consider in good faith
any comments of the Acquiror or its designee with respect to such
correspondence and including any reasonable comments proposed by the Acquiror
provided, however, that the Seller shall have the right to determine the final
form of any such correspondence, provided such determination is made in good
faith. Following the Closing, the Seller shall also notify the Acquiror of any
pre-scheduled meetings during which the Seller reasonably expects to discuss
matters material to the Gestiva NDA (including any pre-scheduled telephonic
discussions during which the Seller reasonably expects to discuss matters
material to the Gestiva NDA) with the FDA, and the Acquiror or its designee
shall have the right to participate in such meetings and any internal
pre-meetings with respect thereto. Following the Closing until the Gestiva NDA
Approval Date, the Seller shall use any and all Purchased Assets solely and to
the extent necessary for carrying out the Seller's right hereunder to
prosecute the Gestiva NDA and obtain the Gestiva NDA Approval. Without
limiting any other obligation of the Acquiror under this Agreement, the
Acquiror shall cooperate with the Seller in the Seller's efforts to obtain
Gestiva

                                      39

<PAGE>
<PAGE>

NDA Approval, including providing to the Seller all relevant data, information
and material reasonably requested by the Seller which the Seller shall not
disclose to any third Person or use except solely and to the extent necessary
for prosecuting the Gestiva NDA and obtaining the Gestiva NDA Approval.

              (b) Prior to Gestiva NDA Approval, upon the mutual consent of
the Seller and the Acquiror following discussion between the parties, the
Seller shall promptly assign to the Acquiror the Gestiva NDA and all related
files, which assignment shall be effected by the Seller submitting the FDA
Transfer Letters to the FDA. The Seller shall cooperate with Acquiror in
obtaining the assignment and shall take all actions reasonably requested by
Acquiror necessary, proper or advisable to effectuate the assignment.
Thereafter, the Acquiror shall (i) be the party of record with respect to the
Gestiva NDA and (ii) use commercially reasonable efforts, at its expense, to
obtain Gestiva NDA Approval as soon as practicable. In connection therewith,
the Acquiror shall keep the Seller reasonably informed with respect to the
prosecution of the Gestiva NDA and consider in good faith the Seller's
comments with respect thereto and include any reasonable comments proposed by
the Seller. Without limiting any other obligation of the Seller under this
Agreement, the Seller shall cooperate with the Acquiror in the Acquiror's
efforts to obtain the Gestiva NDA Approval, including providing to the
Acquiror all relevant data, information and material reasonably requested by
the Acquiror which the Acquiror shall not disclose to any third Person or use
except solely and to the extent necessary for prosecuting the Gestiva NDA and
obtaining the Gestiva NDA Approval. The Seller agrees and acknowledges that,
following the Closing, the Acquiror shall have the right to use any and all
materials of Seller, whether or not such materials are Purchased Assets,
solely and to the extent necessary for carrying out the Acquiror's right
hereunder to prosecute the Gestiva NDA and obtain the Gestiva NDA Approval if
the Seller and Acquiror consent to the assignment of the Gestiva FDA
Submissions as provided in this Section 8.5(b). In the event that the parties
                                --------------
transfer the Gestiva NDA to the Acquiror pursuant to this Section 8.5(b), the
                                                          --------------
parties shall concurrently execute and deliver the Transition Services
Agreement.

              (c) Unless previously assigned to the Acquiror pursuant to
Section 8.5(b), on the Transfer Date, the Seller shall transfer and assign to
--------------
the Acquiror (A) the Gestiva FDA Submissions (including all associated rights)
together with (B) all files related thereto. Thereafter, the Acquiror shall
have all rights and responsibilities with respect to such Gestiva FDA
Submissions. The foregoing transfer and assignment shall be effected by the
Seller submitting the FDA Transfer Letters to the FDA.

              (d) From and after the transfer by the Seller to the Acquiror of
each Gestiva Product Registration held by the Seller or any of its
Subsidiaries pursuant to the terms hereof, except as required by applicable
Law, the Acquiror shall be solely responsible and liable for (i) taking all
actions, paying all fees and conducting all communication with the appropriate
Governmental or Regulatory Authority required by Law in respect of such
Gestiva Product Registration, including preparing and filing all reports
(including adverse drug experience reports) and responding to and answering
all questions and complaints requested by the appropriate Governmental or
Regulatory Authority, (ii) taking all actions and conducting all communication
with third parties in respect of Gestiva manufactured, tested, used or
distributed pursuant to such Gestiva Product Registration (whether
manufactured, tested, used or distributed before or after transfer of such
Gestiva Product Registration), including responding to all complaints in
respect thereof,

                                      40

<PAGE>
<PAGE>

including complaints related to tampering or contamination, and (iii)
investigating all complaints and adverse drug experiences in respect of
Gestiva manufactured, tested, used or distributed pursuant to such Gestiva
Product Registration (whether manufactured, tested, used or distributed before
or after transfer of such Gestiva Product Registration, as set forth in
Section 8.5(e) below). It is understood and agreed that Seller shall be
responsible for all foregoing obligations listed in this Section 8.5(d) prior
to the transfer of the Gestiva Product Registrations and shall use
commercially reasonable efforts to timely and appropriately fulfill such
obligations.

              (e) From and after the transfer of the Gestiva FDA Submissions,
the Acquiror shall be responsible for the investigation, analysis and
reporting to the FDA of any adverse experience report or complaint in
connection with the Product received by either the Acquiror or the Seller from
any source (including any patient, health care professional or other customer
of the Gestiva Business), regardless of whether the Product involved in any
such adverse experience report or complaint was manufactured, tested, used or
distributed by the Seller or Acquiror. The Seller shall use its commercially
reasonable efforts to report to the Acquiror any adverse experience report or
complaint received by the Seller relating to the Product after the Closing
within four (4) business days and in no event later than four (4) Business
Days, after receipt of such adverse experience report or complaint by the
Seller. The Seller shall reasonably cooperate with the Acquiror in connection
with the investigation and analysis of all adverse experience reports or
complaints that relate to the period before the date of the assignment of the
Gestiva FDA Submissions. It is understood and agreed that the Seller shall be
responsible for all foregoing obligations listed in this Section 8.5(e) prior
                                                         --------------
to the transfer of the Gestiva FDA Submissions and shall use commercially
reasonable efforts to timely and appropriately fulfill such obligations.

                  Section 8.6 Covenant Not to Compete.
                              -----------------------

              (a) The Parent and Seller understand that Acquiror shall be
entitled to protect and preserve the going concern value of the Gestiva
Business following the Closing to the extent permitted by Law and that the
Acquiror would not have entered into this Agreement absent the provisions of
this Section 8.6 and, therefore, for the period from the date hereof until
     -----------
seven (7) years following the Closing Date with respect to a 17-P Competing
Product and ten (10) years following the Closing Date with respect to a
Preterm Delivery Competing Product (the "APPLICABLE PERIOD"), neither the
Parent nor Seller, nor any of their Subsidiaries, nor their respective
successors or assigns, nor, any of its or their respective Affiliates (which
term, for purposes of this Section 8.6, shall not be deemed to include
                           -----------
stockholders of Parent in such capacity), shall directly or indirectly,
engage, license or assist another to engage in the research, marketing,
manufacturing, distribution or sale of any Competing Product anywhere in the
Restricted Territory. As used herein, a "17-P COMPETING PRODUCT" means any
product that contains 17 alpha-hydroxyprogesterone caproate or any other form
of progesterone; a "PRETERM DELIVERY COMPETING PRODUCT" means any product that
contains 17 alpha-hydroxyprogesterone caproate, or any other form of
progesterone, and that is marketed, promoted, or sold for the prevention of
preterm delivery and a "COMPETING PRODUCT" means any 17-P Competing Product
and any Preterm Delivery Competing Product.

              (b) If a court determines that the foregoing restrictions are
too broad or otherwise unreasonable under applicable Law, including with
respect to time or space, the court is hereby requested and authorized by the
parties to revise the foregoing restriction to include the

                                      41

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<PAGE>

maximum restrictions allowable under applicable Law. Each of the parties
acknowledges, however, that this Section 8.6 has been negotiated by the
                                 -----------
parties and that the Restricted Territory and the Applicable Period are
reasonable in light of the circumstances pertaining to the parties.

              (c) Notwithstanding any other provision of this Agreement, it is
understood and agreed that the remedy of indemnity payments pursuant to
ARTICLE XI and other remedies at law would be inadequate in the case of any
----------
breach of the covenants contained in Section 8.6, and, accordingly, the
                                     -----------
Acquiror shall be entitled to equitable relief, including the remedy of
specific performance, with respect to any breach or attempted breach of such
covenants.

              (d) Notwithstanding the foregoing, if the Parent or the Seller
or any of their Subsidiaries signs a definitive agreement with respect to a
merger or acquisition pursuant to which the Parent or the Seller or any of
their Subsidiaries would acquire rights (other than residual financial rights)
in a Competing Product at any time during the Applicable Period relating to
such Competing Product, then the Parent or the Seller or their Affiliates or
Subsidiaries, as applicable, shall have six (6) months from the closing of
such definitive agreement to divest itself of such rights in the Competing
Product and, during such six (6) month period, the manufacture, developing,
marketing, distributing, and/or sale of such Competing Product shall not be in
violation of this Section 8.6. In the case of divestiture under the preceding
                  -----------
sentence, such divestiture can occur by either (x) an outright sale of all
rights in the Competing Product to a third party or (y) an out-license to an
unaffiliated third party of the right to make, have made, use, sell, offer for
sale and import such Competing Product; provided, however, that the Parent and
the Seller and their Subsidiaries may only retain residual financial rights to
such Competing Product and must not exercise or have the ability to exercise
any role or influence in any manner over the performance of any clinical
trials with respect to such Competing Product, or the sale, offering for sale
or other promotion of such Competing Product. The Parent or Seller shall
provide Acquiror with reasonable advance notice of any such sale contemplated
by this Section 8.6(d) and an opportunity to bid on the divested asset.

              (e) If solely due to the fault of the Acquiror, the parties have
not given effect to the Transfer Date within five (5) Business Days following
the satisfaction or waiver of the conditions set forth in Article X, and the
                                                          ---------
Seller has demonstrated to the reasonable satisfaction of the Acquiror that it
is fully prepared to consummate the transactions and matters to be consummated
on the Transfer Date, including (i) transferring to the Acquiror the Gestiva
FDA Submissions and all rights associated therewith pursuant to Section 8.5,
                                                                -----------
(ii) executing and delivering the Related Agreements and other documents and
materials to be delivered on the Transfer Date, and (iii) delivering to the
Acquiror the Initial Gestiva Inventory, the provisions of this Section 8.6
                                                               -----------
shall cease to apply until such time as the Acquiror has made the deliveries
required by Section 5.4(b), including the Additional Purchase Price Amount.
            --------------

              (f) For the avoidance of doubt, if any Person acquires Control
of the Parent, whether by stock purchase, merger, consolidation or other
business combination, the provision of this Section 8.6 shall not apply to
                                            -----------
such acquiror or its Affiliates if such Competing Product is researched,
marketed, manufactured, distributed or sold without, directly or indirectly,
the assistance of, the resources of, the employees of, or assets of Parent,
the Seller and their Subsidiaries in existence immediately prior to such
acquisition; provided, however, notwithstanding this Section 8.6(f), the
restrictions set forth in this Section 8.6 shall continue to
                               -----------

                                      42

<PAGE>
<PAGE>

apply to the Parent, the Seller and their Subsidiaries following such
transaction.

                  Section 8.7 Further Assurances.
                              ------------------

              (a) On and after the Transfer Date, the Seller shall from time
to time, at the reasonable request of the Acquiror, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such further
conveyances, notices and assumptions and such other instruments, and take such
other actions as the Acquiror may reasonably request, in order to more
effectively consummate the transactions contemplated hereby and to transfer
fully to the Acquiror good and marketable title to the Purchased Assets and
all of the titles, rights, interests, remedies, powers and privileges intended
to be conveyed under this Agreement and the Related Agreements (including
assistance in the collection or reduction to possession of any of the
Purchased Assets).

              (b) On and after the Transfer Date, the Acquiror shall from time
to time, at the reasonable request of the Seller, take such actions as the
Seller may reasonably request, in order to more effectively consummate the
transactions contemplated hereby, including the Acquiror's assumption of the
Assumed Liabilities and to conduct the Gestiva Business as contemplated by
this Agreement and the Related Agreements.

                  Section 8.8 No Solicitation. From the date of this Agreement
                              ---------------
until the earlier to occur of (i) the Transfer Date or (ii) the termination of
this Agreement in accordance with ARTICLE XII (the "NO-SHOP PERIOD"), the
                                  -----------
Seller shall not, nor shall it permit any of its Subsidiaries to, nor shall it
authorize or permit any of its directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to, directly or
indirectly, (I) solicit, initiate or encourage any Other Bid (as defined
below), (II) enter into any agreement with respect to any Other Bid or (III)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Other Bid. In the event that the Seller
(or any of its Subsidiaries) receives any Other Bid, the Seller shall promptly
advise the Acquiror of such proposal. As used in this Section 8.8, "OTHER BID"
means any proposal for a sale, spin-off or other disposition or similar
transaction involving the Gestiva Business or any of the Purchased Assets,
other than the transactions contemplated by this Agreement. For the avoidance
of doubt, "OTHER BID" shall not mean any proposal relating to any merger,
consolidation, business combination or similar transaction involving twenty
five percent (25%) or more of the total outstanding voting equity securities
of the Parent.

                  Section 8.9 Insurance. In the event that prior to the
                              ---------
Transfer Date any Purchased Asset suffers any damage, destruction or other
loss as a result of a casualty event, the Seller shall, after the Transfer
Date, (i) promptly pay to the Acquiror all insurance proceeds received by the
Seller with respect to such damage, destruction or other loss, less any
proceeds applied to the physical restoration of such asset, and (ii) assign to
the Acquiror all rights of the Seller against third parties (other than
against its insurance carriers) with respect to any causes of action, whether
or not litigation has commenced as of the Transfer Date, in connection with
such damage, destruction or other loss; provided, however, that the proceeds
of such insurance shall be subject to (and recovery thereon shall be reduced
by the amount of) any applicable

                                      43

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<PAGE>

deductibles and co-payment provisions or any payment or reimbursement
obligations of the Seller in respect thereof.

                  Section 8.10 Tax Matters.
                               -----------

              (a) Books & Records; Cooperation. The Acquiror, on one hand, and
                  ----------------------------
the Seller, on the other hand, agree to furnish or cause to be furnished to
the other, upon request, as promptly as practicable, such information and
assistance relating to the Purchased Assets or the Gestiva Business,
including, without limitation, access to books and records, as is reasonably
necessary for the filing of all Tax Returns by the Acquiror or the Seller, the
making of any election relating to Taxes, the preparation for any audit by any
taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Taxes. The Seller shall retain all books and
records with respect to Taxes pertaining to the Purchased Assets or the
Gestiva Business, for a period of at least six (6) years following the
Transfer Date. At the end of such period, the Seller shall provide the
Acquiror with at least ten (10) days prior written notice before transferring,
destroying or discarding any such books and records, during which period the
Acquiror can elect to take possession, at its own expense, of such books and
records. The Acquiror, on one hand, and the Seller, on the other hand, shall
cooperate fully with the other in the conduct of any audit, litigation or
other proceeding relating to Taxes involving the Purchased Assets or the
Gestiva Business. The Acquiror, on one hand, and the Seller, on the other
hand, further agree, upon request, to use their commercially reasonable
efforts prior to the Transfer Date, and for a period of three (3) years
following the Transfer Date, to obtain any certificate or other document from
any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but
not limited to, with respect to the transactions contemplated hereby). Any
information obtained pursuant to this Section 8.10(a) shall be kept strictly
                                      ---------------
confidential, except as may be otherwise necessary in connection with the
filing of Tax Returns, claims for a Tax refund or in conducting any audit,
examination or other proceeding in respect of Taxes.

              (b) Allocation of Taxes. Except as otherwise provided in Section
                  -------------------                                  -------
4.4 hereof relating to Transfer Taxes, the Seller shall be responsible for and
---
shall promptly pay when due all Taxes levied with respect to the Purchased
Assets or the Gestiva Business attributable to the Pre-Transfer Tax Period.
All Taxes levied with respect to the Purchased Assets or the Gestiva Business
for the Straddle Period shall be apportioned between the Pre-Transfer Tax
Period and the Post-Transfer Tax Period, as follows:

                  (i)    in the case of any Taxes other than Taxes based upon
or related to income or receipts, the portion allocable to the Pre-Transfer Tax
Period shall be deemed to be the amount of such Tax for the entire Straddle
Period multiplied by a fraction the numerator of which is the number of days
in the Tax period ending on the Transfer Date and the denominator of which is
the number of days in the entire Straddle Period, and

                  (ii)   in the case of any Tax based upon or related to income
or receipts, the portion allocable to the Pre-Transfer Tax Period shall be
deemed equal to the amount which would be payable if the relevant Straddle
Period ended on the Transfer Date.

                                      44

<PAGE>
<PAGE>

Upon receipt of any bill for such Taxes relating to the Purchased Assets or
the Gestiva Business, the Acquiror, on one hand, and the Seller, on the other
hand, shall present a statement to the other setting forth the amount of
reimbursement to which each is entitled under this Section 8.10 together with
                                                   ------------
such supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other
within ten (10) days after delivery of such statement. In the event that the
Acquiror or the Seller shall make any payment for which it is entitled to
reimbursement under this Section 8.10, the applicable party shall make such
                         ------------
reimbursement promptly but in no event later than ten (10) days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement.

              (c) Notices. The Seller shall promptly notify the Acquiror in
                  -------
writing upon its receipt of notice of any pending or threatened federal,
state, local or foreign Tax audits or assessments relating to the income,
properties or operations of Seller that reasonably may be expected to relate
to the Purchased Assets or the Gestiva Business.

              (d) At the Closing and on the Transfer Date (prior to payment of
the Additional Purchase Price), the Seller shall deliver to the Acquiror a
duly executed and acknowledged Internal Revenue Service Form W-9 and a duly
executed and acknowledged non-foreign status FIRTPA certificate prepared
pursuant to Treasury Regulation Section 1.1445-2(b)(2) in a form satisfactory
to the Acquiror.

              (e) Any payments made to any Indemnified Party pursuant to this
Agreement shall constitute an adjustment of the consideration paid for the
Purchased Assets for Tax purposes and shall be treated as such by the Acquiror
and the Seller on their Tax Returns to the extent permitted by Law.

              (f) At the Closing and on the Transfer Date (prior to payment of
the Additional Purchase Price), the Seller shall deliver to the Acquiror a
duly executed bulk sales and/or Tax clearance certificate or certificates as
required by applicable Law or as reasonably requested by Acquiror.

              (g) Except as otherwise provided in this Agreement, each Party
(or their respective Affiliates) shall be responsible for and shall pay all
Taxes payable on any payments made to such Party by the other Party (or their
respective Affiliates).

              (h) Any dispute, controversy, or claim between Seller, on the
one hand, and Acquiror, on the other hand, arising out of or relating to the
provisions of this Agreement that relates to Taxes that cannot be resolved by
negotiations between Seller and Acquiror shall be submitted to a mutually
agreed-upon independent public accounting firm (the "ACCOUNTANTS") for
resolution. The Accountants shall control the proceedings related to the
dispute resolution and may request such evidence and information as it deems
necessary. The resolution reached by the Accountants shall be binding on the
Seller and Acquiror and their respective affiliates. The expenses of the
Accountants shall be borne equally by Seller, on the one hand, and Acquiror,
on the other hand.

                                      45

<PAGE>
<PAGE>

                  Section 8.11 Employee Matters. Notwithstanding the
                               ----------------
provisions of the Confidentiality Agreement or any existing Gestiva Contracts,
between the date of this Agreement and the Transfer Date, Acquiror shall have
the right, after consultation with and the prior approval of the Seller (which
approval shall not be unreasonably withheld), to contact the employees and
consultants of Seller currently performing services for the Gestiva Business
or whose work primarily relates to the Gestiva Business (each, a "Business
Employee"), and to discuss the possible employment or consultancy of such
employees by the Acquiror from and after the Transfer Date.

                                  ARTICLE IX.
                     CONDITIONS TO THE OBLIGATIONS OF THE
                            PARTIES FOR THE CLOSING

                  Section 9.1 Seller's Conditions to Closing. The obligation
                              ------------------------------
of the Seller to effect the Closing is subject to the satisfaction (or waiver
by the Seller), at or before the Closing, of each of the following conditions:

              (a) The representations and warranties of the Acquiror contained
in ARTICLE VII of this Agreement shall be true and correct in all material
   -----------
respects (without giving effect to any "materiality", "material adverse
effect" or "Acquiror Material Adverse Effect" qualifiers set forth therein) at
and as of the Closing Date as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case, as of such earlier
date) and the Acquiror shall have performed in all material respects all
agreements and covenants required by this Agreement or any Related Agreements
to be performed by it prior to or on the Closing Date. The Seller shall have
received a certificate as to satisfaction of the conditions set forth in this
Section 9.1(a) dated as of the Closing Date and executed by a duly authorized
--------------
officer of the Acquiror.

              (b) No Orders prohibiting the transactions contemplated hereby
shall have been instituted and not settled or otherwise terminated. No Law
shall have been enacted, entered, promulgated or enforced by any Governmental
or Regulatory Authority that is in effect and has the effect of making the
purchase and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale. The waiting period (including any
extensions thereof) applicable to the consummation of the transactions
contemplated by this Agreement required pursuant to the HSR Act shall have
expired or been terminated.

              (c) The Acquiror shall have delivered or caused to be delivered
to the Seller each of the documents, materials and funds as specified in
Section 5.2(b).
--------------

              (d) No Acquiror Material Adverse Effect shall have occurred.

                  Section 9.2 Acquiror's Obligations to Closing. The
                              ---------------------------------
obligation of the Acquiror to effect the Closing is subject to the
satisfaction (or waiver by the Acquiror), at or before the Closing, of each of
the following conditions:

              (a) The representations and warranties of the Seller contained
in ARTICLE VI of this Agreement shall be true and correct in all material
   ----------
respects (without giving effect to any "materiality", "material adverse
effect" or "Seller Material Adverse Effect" qualifiers set forth

                                      46

<PAGE>
<PAGE>

therein) at and as of the Closing Date as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case, as
of such earlier date) and the Seller shall have performed in all material
respects all agreements and covenants required by this Agreement or any
Related Agreements to be performed by it prior to or on the Closing Date. The
Acquiror shall have received a certificate as to satisfaction of the
conditions set forth in this Section 9.2(a) dated as of the Closing Date and
                             --------------
executed by a duly authorized officer of the Seller.

              (b) No Orders prohibiting the transactions contemplated hereby
shall have been instituted and not settled or otherwise terminated. No Law
shall have been enacted, entered, promulgated or enforced by any Governmental
or Regulatory Authority that is in effect and has the effect of making the
purchase and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale. The waiting period (including any
extensions thereof) applicable to the consummation of the transactions
contemplated by this Agreement required pursuant to the HSR Act shall have
expired or been terminated.

              (c) No Seller Material Adverse Effect shall have occurred.

              (d) The Seller shall have delivered or caused to be delivered to
the Acquiror each of the documents and materials specified in Section 5.2(a).
                                                              --------------

              (e) There shall not be pending any action, litigation or
proceeding by any Governmental or Regulatory Authority seeking to (i) prohibit
or restrain the transactions contemplated by this Agreement or (ii) seeking to
impose or confirm limitations on the ability of Acquiror or any of its
Subsidiaries to effectively exercise full rights of ownership of the Gestiva
Business or the Purchased Assets after the Closing.

                                  ARTICLE X.

      CONDITIONS TO THE OBLIGATIONS OF THE PARTIES FOR THE TRANSFER DATE

                  Section 10.1 Seller's Obligations for the Transfer Date. The
                               ------------------------------------------
obligation of the Seller to effect the transactions contemplated on the
Transfer Date is subject to the satisfaction (or waiver by the Seller), at or
before the Transfer Date, of each of the following conditions:

              (a) The representations and warranties of the Acquiror contained
in ARTICLE VII of this Agreement shall be true and correct in all respects
   -----------
(without giving effect to any "materiality", "material adverse effect" or
"Acquiror Material Adverse Effect" qualifiers set forth therein) at and as of
the Transfer Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case, as of such earlier date),
except where the failure of such representations and warranties to be true and
correct (without giving effect to any "materiality", "material adverse effect"
or "Acquiror Material Adverse Effect" qualifiers set forth therein) would not,
individually or in the aggregate, result in an Acquiror Material Adverse
Effect, and the Acquiror shall have performed in all material respects all
agreements and covenants required by this Agreement or any Related Agreements
to be performed by it prior to or on the Transfer Date. The Seller shall have
received a certificate as to satisfaction of the conditions set forth in this
Section 10.1(a) dated as of the Transfer Date and executed by a duly
---------------

                                      47

<PAGE>
<PAGE>

authorized officer of the Acquiror.

              (b) No Orders prohibiting the transactions contemplated hereby
shall have been instituted and not settled or otherwise terminated. No Law
shall have been enacted, entered, promulgated or enforced by any Governmental
or Regulatory Authority that is in effect and has the effect of making the
purchase and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale.

              (c) The Acquiror shall have delivered or caused to be delivered
to the Seller each of the documents, materials and funds specified in Section
                                                                      -------
5.4(b).
------

              (d) The Gestiva NDA Approval shall have occurred.

                  Section 10.2 Acquiror's Obligations for the Transfer Date.
                               --------------------------------------------
The obligation of the Acquiror to effect the transactions contemplated on the
Transfer Date is subject to the satisfaction (or waiver by the Acquiror), at
or before the Transfer Date, of each of the following conditions:

              (a) The representations and warranties of the Seller contained
in ARTICLE VI of this Agreement shall be true and correct in all respects
   ----------
(without giving effect to any "materiality", "material adverse effect" or
"Seller Material Adverse Effect" qualifiers set forth therein) at and as of
the Transfer Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case, as of such earlier date),
except where the failure of such representations and warranties to be true and
correct (without giving effect to any "materiality", "material adverse effect"
or "Seller Material Adverse Effect" qualifiers set forth therein) would not,
individually or in the aggregate, result in a Seller Material Adverse Effect,
and the Seller shall have performed in all material respects all agreements
and covenants required by this Agreement or any Related Agreements to be
performed by it prior to or on the Transfer Date. The Acquiror shall have
received a certificate as to satisfaction of the conditions set forth in this
Section 10.2(a) dated as of the Transfer Date and executed by a duly
---------------
authorized officer of the Seller.

              (b) No Orders prohibiting the transactions contemplated hereby
shall have been instituted and not settled or otherwise terminated. No Law
shall have been enacted, entered, promulgated or enforced by any Governmental
or Regulatory Authority that is in effect and has the effect of making the
purchase and sale of the Purchased Assets illegal or otherwise prohibiting the
consummation of such purchase and sale.

              (c) All Seller Governmental Consents set forth on Section 6.3 of
                                                                -----------
the Seller Disclosure Schedule shall have been obtained or made.

              (d) The Acquiror shall have received all Seller Third Party
Consents and all Gestiva Governmental Permits necessary to effect the
transactions contemplated by this Agreement and the Related Agreements (which
shall include the consents and permits set forth on Section 6.3(b) and Section
                                                    --------------     -------
6.8 of the Seller Disclosure Schedule, excluding the Gestiva FDA Submissions).
---

              (e) There shall not be pending any action, litigation or
proceeding by any Governmental or Regulatory Authority seeking to (i) prohibit
or restrain the transactions

                                      48

<PAGE>
<PAGE>

contemplated by this Agreement or (ii) seeking to impose or confirm
limitations on the ability of Acquiror or any of its Subsidiaries to
effectively exercise full rights of ownership of the Gestiva Business or the
Purchased Assets after the Transfer Date.

              (f) The Acquiror shall have received the Initial Gestiva
Inventory.

              (g) The Seller shall have delivered or caused to be delivered to
the Acquiror each of the documents and materials specified in Section 5.4(a).
                                                              --------------

              (h) The Gestiva NDA Approval shall have occurred.

                                 ARTICLE XI.

                                INDEMNIFICATION

                  Section 11.1 Survival of Representations, Warranties,
                               ----------------------------------------
Covenants, Etc. The representations and warranties of the parties contained in
---------------
ARTICLE VI and ARTICLE VII hereof and in the Related Agreements (if any) shall
----------     -----------
survive the Closing until twenty-one (21) months after the Closing Date;
provided, however, that the representations and warranties of the Seller in
Section 6.2, Section 6.12 and Section 6.14 hereof shall survive the Closing
-----------  ------------     ------------
until sixty (60) days following the expiration of the applicable statute of
limitations (with extensions) with respect to the matters addressed in such
sections. The period of time a representation or warranty survives the Closing
pursuant to the preceding sentence shall be the "SURVIVAL PERIOD" with respect
to such representation or warranty. The covenants and agreements of the
parties hereto contained herein shall survive in accordance with their
respective terms. So long as an Indemnified Party gives an Indemnification
Claim Notice for such claim on or before the expiration of the applicable
Survival Period, such Indemnified Party shall be entitled to pursue its rights
to indemnification under Section 11.2(a) or Section 11.2(b) hereof, as
                         ---------------    ---------------
applicable. In the event notice of any claim for indemnification under Section
                                                                       -------
11.2(a) or Section 11.2(b) hereof shall have been given within the applicable
-------    ---------------
Survival Period and such claim has not been finally resolved by the expiration
of such Survival Period, the representations and warranties that are the
subject of such claim shall survive the end of the Survival Period of such
representations or warranties until such claim is finally resolved, but such
representations and warranties shall only survive with respect to such
asserted claim.

                  Section 11.2 Indemnification.
                               ---------------

              (a) By the Seller. Subject to Section 11.1 and Section 11.3,
                  -------------             ------------     ------------
from and after the Closing, the Seller shall indemnify, reimburse, defend and
hold harmless the Acquiror, its Affiliates and their respective officers,
directors, employees, agents, successors and assigns from and against any and
all costs, losses, Liabilities, damages, fines, penalties, interest,
judgments, lawsuits, deficiencies, claims, expenses (including reasonable fees
and disbursements of attorneys and other professionals, including third party
consultants) (collectively, "DAMAGES") incurred in connection with, arising
out of, resulting from or incident to (i) any breach of, or inaccuracy in, any
representation or warranty of the Seller set forth in this Agreement, any
Related Agreement or any certificate of the Seller delivered to Acquiror at
the Closing or the Transfer Date, (ii) the failure to perform any covenant or
agreement of the Seller set forth in the

                                      49

<PAGE>
<PAGE>

Agreement or in any of the Related Agreements, (iii) any Excluded Asset, (iv)
any Excluded Liability (including, but not limited to, any Excluded Tax
Liability); and (v) the fraud or willful misconduct of the Seller.

              (b) By the Acquiror. Subject to Section 11.1 and Section 11.3,
                  ---------------             ------------     ------------
from and after the Closing, the Acquiror shall indemnify, defend and hold
harmless the Seller, its Affiliates and their respective officers, directors,
employees, agents, successors and assigns from and against any and all Damages
incurred in connection with, arising out of, resulting from or incident to (i)
any breach or inaccuracy in any representation or warranty of the Acquiror set
forth in this Agreement, any Related Agreement or any certificate of the
Acquiror delivered to the Seller at Closing or the Transfer Date, (ii) the
failure to perform any covenant or agreement of the Acquiror set forth in this
Agreement or in any of the Related Agreements, (iii) any Assumed Liabilities;
and (iv) the fraud or willful misconduct of the Acquiror.

              (c) Procedure for Claims. The Indemnified Party shall give the
                  --------------------
indemnifying party prompt written notice (an "INDEMNIFICATION CLAIM NOTICE")
of any Damages or discovery of fact upon which such Indemnified Party intends
to base a request for indemnification under Section 11.2(a) or Section
                                            ---------------    -------
11.2(b). Failure to give any such Indemnification Claim Notice shall not
-------
constitute a waiver of any right to indemnification or reduce in any way the
indemnification available hereunder, except to the extent the indemnifying
party demonstrates that such failure to notify has materially prejudiced the
indemnifying party. Each Indemnification Claim Notice must contain a
description of the claim and the nature and amount of such Damages (to the
extent that the nature and amount of such Damages are known at such time). The
Indemnified Party shall furnish promptly to the indemnifying party copies of
all papers and official documents received in respect of any Damages. All
indemnification claims in respect of a party, its Affiliates or their
respective directors, officers, employees and agents (collectively, the
"INDEMNITEES" and each an "INDEMNITEE") shall be made solely by such party to
this Agreement (the "INDEMNIFIED PARTY").

              (d) Third Party Claims. The obligations of an indemnifying party
                  ------------------
under this Section 11.2(d) with respect to Damages arising from claims of any
           ---------------
third party that are subject to indemnification as provided for Section 11.2(a)
                                                                ---------------
or Section 11.2(b) (a "THIRD PARTY CLAIM") shall be governed by and be
   ---------------
contingent upon the following additional terms and conditions:

                  (i)    Subject to Section 11.2(d)(iii) and Section
                                    --------------------     -------
11.2(d)(iv), at its option, the indemnifying party may assume the defense of
-----------
any Third Party Claim by giving written Notice to the Indemnified Party within
ten (10) days after the indemnifying party's receipt of an Indemnification
Claim Notice, provided, however, that prior to assuming control of the defense
of such Third Party Claim the indemnifying party shall agree that the
indemnifying party shall be obligated to indemnify the Indemnified Party and
hold the Indemnified Party harmless from and against any and all Damages
caused by or arising out of any settlement of such Third Party Claim or any
judgment in connection with such Third Party Claim when and only if it is
finally determined that such Indemnified Party is entitled to indemnification
pursuant to Section 11.2. Upon assuming the defense of a Third Party Claim,
            ------------
the indemnifying party may appoint as lead counsel in the defense of the Third
Party Claim any legal counsel selected by the indemnifying party; provided,
however, that such counsel is reasonably acceptable to the Indemnified Party,
provided, further, that in the event that (i) a conflict of interest arises
between the indemnifying

                                      50

<PAGE>
<PAGE>

party and the Indemnified Party such that such legal counsel cannot represent
both the indemnifying party and the Indemnified Party or (ii) the Indemnitee
has been advised in writing by counsel that there may be one or more legal
defenses available to the Indemnitee that are different from or in addition to
that of the indemnifying party, the Indemnified Party may retain its own legal
counsel at the expense of the indemnifying party and the indemnifying party
and its counsel shall cooperate with the Indemnified Party and its counsel, as
may be reasonably requested. Except as set forth above, should the
indemnifying party assume the defense of a Third Party Claim, the indemnifying
party shall not be liable to the Indemnified Party or any other Indemnitee for
any legal expenses subsequently incurred by such Indemnified Party or other
Indemnitee in connection with the analysis, defense or settlement of the Third
Party Claim.

                  (ii)   Without limiting Section 11.2(d)(i), any Indemnitee
                                          ------------------
shall be entitled to participate in, but not control, the defense of such
Third Party Claim and to employ counsel of its choice for such purpose;
provided, however, that such employment shall be at the Indemnitee's sole cost
and expense, except as described in Section 11.2(d)(i), unless (A) the
                                    ------------------
employment thereof has been specifically authorized by the indemnifying party
in writing, or (B) the indemnifying party has failed to assume the defense and
employ counsel in accordance with Section 11.2(d)(i) (in which case the
                                  ------------------
Indemnified Party shall control the defense).

                  (iii)  With respect to any Damages relating solely to the
payment of money damages in connection with a Third Party Claim and that will
not result in the Indemnitee's or the Indemnified Party's becoming subject to
injunctive or other relief or otherwise adversely affect the business or
reputation of the Indemnitee in any manner, and as to which the indemnifying
party shall have acknowledged in writing the obligation to indemnify the
Indemnitee hereunder, the indemnifying party shall have the sole right to
consent to the entry of any judgment, enter into any settlement or otherwise
dispose of such Damages, on such terms as the indemnifying party, in its sole
discretion, shall deem appropriate, provided that, as a result of or in
connection with any such settlement each Indemnitee or Indemnified Party shall
receive a full release with respect to such claim and such settlement would
not otherwise adversely affect the business or reputation of the Indemnitee.
The indemnifying party shall not be liable for any settlement or other
disposition of Damages by an Indemnitee or Indemnified Party that is reached
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld. If the indemnifying party chooses to defend or
prosecute any Third Party Claim, no Indemnitee or Indemnified Party shall
admit any liability with respect to, or settle, compromise or discharge, any
Third Party Claim without the prior written consent of the indemnifying party,
which consent shall not be unreasonably withheld.

                  (iv)   Notwithstanding the foregoing, the indemnifying party
shall not be entitled to assume the defense of any Third Party Claim (and
shall be liable for the reasonable fees and expenses of counsel incurred by
the Indemnified Party in defending such Third Party Claim) if the Third Party
Claim seeks an order, injunction or other equitable relief or relief for other
than money damages against the Indemnified Party that the Indemnified Party
reasonably determines cannot be separated from any related claim for money
damages. If such equitable relief or other relief portion of the Third Party
Claim can be so separated from that for money damages, the indemnifying party
shall be entitled to assume the defense of the portion relating to money
damages, subject to the provisions of this Section 11.2(d).
                                           ---------------

                                      51

<PAGE>
<PAGE>

                  (v)    Regardless of whether the indemnifying party chooses
to defend or prosecute any Third Party Claim, the Indemnified Party and the
indemnifying party shall, and shall cause each other Indemnitee or Affiliate
of the indemnifying party, as applicable, to, cooperate in the defense or
prosecution thereof and shall furnish such records, information and testimony,
provide such witnesses and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested in connection
therewith. Such cooperation shall include access during normal business hours
afforded to the indemnifying party or Indemnified Party, as applicable, to,
and reasonable retention by each such Person of, records and information that
are reasonably relevant to such Third Party Claim, and making each such Person
and other employees and agents available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder, and the indemnifying party shall reimburse each such Person for all
its reasonable out-of-pocket expenses in connection therewith.

              (e) Other Claims. In the event any Indemnified Party has a claim
                  ------------
against any indemnifying party under Section 11.2(a) or Section 11.2(b) that
                                     ---------------    ---------------
does not involve a Third Party Claim being asserted against or sought to be
collected from such Indemnified Party, the Indemnified Party shall deliver an
Indemnification Claim Notice regarding such claim with reasonable promptness
to the indemnifying party. The failure by any Indemnified Party so to notify
the indemnifying party shall not relieve the indemnifying party from any
liability that it may have to such Indemnified Party under Section 11.2(a) or
                                                           ---------------
Section 11.2(b), except to the extent that the indemnifying party demonstrates
---------------
that such failure to notify has materially prejudiced the indemnifying party.
If the indemnifying party does not notify the Indemnified Party within twenty
(20) Business Days following its receipt of such notice that the indemnifying
party disputes its liability to the Indemnified Party under Section 11.2(a) or
                                                            ---------------
Section 11.2(b), such claim specified by the Indemnified Party in such notice
---------------
shall be conclusively deemed a Liability of the indemnifying party under
Section 11.2(a) or Section 11.2(b) and the indemnifying party shall pay the
---------------    ---------------
amount of such Liability to the Indemnified Party on demand or, in the case of
any notice in which the amount of the claim (or any portion thereof) is
estimated, on such later date when the amount of such claim (or such portion
thereof) becomes finally determined.

              (f) Resolution of Conflicts and Claims.
                  ----------------------------------

                  (i)    If the indemnifying party objects in writing to any
claim for indemnification made by an Indemnified Party in any Indemnification
Claim Notice (an "OBJECTION NOTICE"), the indemnifying party and the
Indemnified Party shall attempt in good faith to agree upon the rights of the
respective parties with respect to each of such claims and shall provide
information to the other party (as reasonably requested) related to the issues
set forth in the Objection Notice. If the indemnifying party and the
Indemnified Party should so agree, a memorandum setting forth such agreement
shall be prepared and signed by both parties.

                  (ii)   If no such agreement is reached after good faith
negotiation, either the indemnifying party or the Indemnified Party may demand
mediation of the dispute, unless the amount of the damage or loss is at issue
in a pending action or proceeding involving a Third Party Claim, in which
event mediation shall not be commenced until such amount is ascertained or
both parties agree to mediation. In any such mediation, indemnifying party and
the Indemnified Party agree to employ a mediator from the American Arbitration
Association (the

                                      52

<PAGE>
<PAGE>

"AAA") to assist them in reaching resolution of such dispute according to the
Commercial Mediation Rules of the AAA. The mediator shall be a corporate
attorney mutually selected by the Acquiror and Seller. The fees and expenses
of the mediator shall be shared equally by indemnifying party and the
Indemnified Party. If, after mediation efforts, the indemnifying party and the
Indemnified Party should agree as to all or a portion of a claim, a memorandum
setting forth such agreement shall be prepared and signed by both parties. If
after reasonable efforts, and over a period of sixty (60) calendar days, the
parties are unable to reach agreement on such dispute utilizing the mediator,
the parties shall be permitted to proceed with any other remedy available to
such party.

              (g) Effect of Investigation or Knowledge. Any claim by the
                  ------------------------------------
Acquiror or its Affiliates or any of their respective directors, officers,
employees or agents for indemnification shall not be adversely affected by any
investigation by or opportunity to investigate afforded to the Acquiror, nor
shall such a claim be adversely affected by the Acquiror's Knowledge on or
before the Transfer Date of any breach of the type specified in this Section
                                                                     -------
11.2 or of any state of facts that may give rise to such a breach. The waiver
----
of any condition based on the accuracy of any representation or warranty, or
on the performance of or compliance with any covenant or obligation, will not
adversely affect the right to indemnification, payment of Damages or other
remedy based on such representations, warranties, covenants or obligations.

              (h) Interpretation. For purposes of Section 11.2(a) and Section
                  --------------                  ---------------     -------
11.2(b), in determining whether a breach of a representation, warranty,
-------
covenant or agreement has occurred, all materiality qualifiers in such
representation, warranty, covenant or agreement (i.e. "material," "material
adverse effect," "Seller Material Adverse Effect," "Acquiror Material Adverse
Effect" or similar phrase), if any, shall be disregarded for purposes of
making such determination and shall be determined as if such representation,
warranty, covenant or agreement were made without such materiality
qualification and (ii) Damages incurred or suffered by an Indemnified Party
arising out of any breach of any representation, warranty, covenant or
agreement shall be determined without deduction on account of any materiality,
Seller Material Adverse Effect or Acquiror Material Adverse Effect
qualification contained in any representation, warranty, covenant or agreement
giving rise to the claim for indemnification hereunder.

                  Section 11.3 Limitations.
                               -----------

              (a) Except for representations, warranties and covenants
relating to Taxes or any Damages arising from or related to the Excluded Tax
Liabilities or fraud, in no event shall the Seller or the Acquiror be liable
for any Damages pursuant to Section 11.2(a) or Section 11.2(b), as applicable,
                            ---------------    ---------------
unless and until the aggregate amount of all such Damages exceeds $150,000
(the "LIABILITY THRESHOLD"), in which case the Seller or the Acquiror, as
applicable, shall be liable for all such Damages in excess of the Liability
Threshold, and then not for any Damages in excess of the Liability Cap for all
claims made under such Section 11.2(a) or Section 11.2(b), as applicable, in
                       ---------------    ---------------
the aggregate; provided, however, that for purposes of claims made by the
Acquiror under Section 11.2(a)(iii), Section 11.2(a)(iv) or Section 11.2(a)(v),
               --------------------  -----------------------------------------
the Seller shall be liable for all Damages suffered by the Acquiror without
regard to the Liability Threshold or Liability Cap; provided, further, that
for purposes of claims made by the Seller under Section 11.2(b)(iii) or
                                                --------------------
Section 11.2(b)(iv) or for claims made by the Seller relating to the
-------------------
Acquiror's breach of its payment obligations in Section 4.1 or Section 4.2,
                                                -----------    -----------
the Acquiror shall be liable for all

                                      53

<PAGE>
<PAGE>

Damages suffered by the Seller without regard to the Liability Threshold or
Liability Cap.

              (b) The amount of any Damages recoverable by a party under
Section 11.2 shall be reduced by: (i) the amount of any insurance proceeds
------------
actually paid to the Indemnified Party or Indemnitee, as applicable, relating
to such claim (net cost of recovery) and (ii) any recoveries actually received
by the Indemnified Party from third parties pursuant to indemnification or
otherwise with respect thereto (net of cost of recovery).

              (c) Following the Closing, the indemnification expressly
provided in this Article XI (except for indemnification claims arising out of
                 ----------
the fraud or willful misconduct of either party) shall be the sole and
exclusive remedy for any breach of representation or warranty by the parties
hereto under this Agreement or any Related Agreement, except to the extent
such indemnification is held by a court of competent jurisdiction to be
ineffective or unenforceable.

              (d) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE
INDEMNIFICATION OBLIGATIONS OF THE PARTIES HERETO SHALL NOT EXTEND TO
CONSEQUENTIAL OR PUNITIVE DAMAGES.

                  Section 11.4 Conflict with other Provisions. To the extent
                               ------------------------------
that any provision in this ARTICLE XI conflicts with any provision of this
                           ----------
Agreement relating to Taxes (including, but not limited to, the provisions of
Section 8.10(b)), the other provisions of this Agreement relating to Taxes,
---------------
and not the provisions of this ARTICLE XI, shall govern.
                               ----------

                                 ARTICLE XII.

                                  TERMINATION

                  Section 12.1 Methods of Termination. This Agreement may be
                               ----------------------
terminated:

              (a) at any time prior to the Transfer Date, by mutual written
agreement of the Seller and the Acquiror;

              (b) at any time by either the Seller or the Acquiror, if the
Closing shall not have occurred by March 31, 2008 or if the Transfer Date has
not occurred by the second (2nd) anniversary of the Closing Date (the relevant
date being referred to herein as the "TERMINATION DATE"); provided, however,
that the right to terminate the Agreement pursuant to this Section 12.1(b)
                                                           ---------------
shall not be available to a party if such party's failure to perform in all
material respects any of their obligations under this Agreement or any Related
Agreement results in the failure of the Closing to occur by such time;

              (c) at any time prior to the Transfer Date by either the Seller
or the Acquiror, if there shall be in effect any Law that prohibits the
Closing or the consummation of the transactions contemplated at the Transfer
Date or if such transactions would violate any non-appealable Order, issued by
a competent Governmental Entity, that permanently restrains, enjoins or
prohibits the consummation of the transactions contemplated by this Agreement;

                                      54

<PAGE>
<PAGE>

              (d) at any time prior to the Closing Date by either the Seller
or the Acquiror (as the non-breaching party), if the other party has breached
any material representation, warranty, covenant or agreement hereunder, such
breach causes any condition to Closing hereunder as set forth in ARTICLE IX to
                                                                 ----------
not be satisfied, such breach has not been waived by the non-breaching party,
and the breach has not been cured within a period of thirty (30) days
following the terminating party's written notice of such breach and the
breaching party is diligently proceeding to cure such breach during such
period, unless such breach is not capable of cure, in which event the
non-breaching party may terminate immediately;

              (e) at any time prior to the Transfer Date by either the Seller
or the Acquiror (as the non-breaching party), if the other party has breached
any material representation, warranty, covenant or agreement hereunder, such
breach causes any condition to the transfer of the Purchased Assets and
Assumed Liabilities on the Transfer Date set forth in ARTICLE X to not be
                                                      ---------
satisfied, such breach has not been waived by the non-breaching party, and the
breach has not been cured within a period of thirty (30) days following the
terminating party's written notice of such breach and the breaching party is
diligently proceeding to cure such breach during such period, unless such
breach is not capable of cure, in which event the non-breaching party may
terminate immediately;

              (f) at any time prior to the Transfer Date by Acquiror, if there
shall has been any materially adverse changes to the FDA requirements
necessary for Seller to submit a Complete Response amendment filing pursuant
to the Manual of Policies and Procedures 6020.4, or any successor manual of
policies and procedures;

              (g) at any time prior to the Closing Date by the Acquiror, if a
Seller Material Adverse Effect shall have occurred since the date of this
Agreement;

              (h) at any time prior to the Transfer Date by the Acquiror, if
the FDA requires (i) any additional clinical studies to be conducted prior to
the Gestiva NDA Approval Date for the approval of Gestiva or (ii) any
additional studies to be conducted following the Gestiva NDA Approval Date
which shall be materially more expensive or time consuming than the studies
set forth on Schedule 12.1(h), such schedule to be mutually agreed upon by the
             ----------------
parties in good faith prior to the Closing Date; or

              (i) at any time prior to the Transfer Date by the Acquiror, if
the FDA (i) revokes or rejects Gestiva's orphan drug exclusivity, (ii)
reinstates approval of a previously approved product containing the API or
(iii) approves an ANDA or NDA which relies, in whole or in part, upon a
previously approved product containing the API as the reference drug.

                  Section 12.2 Procedure upon Termination. In the event of
                               --------------------------
termination of this Agreement under Section 12.1, written Notice thereof shall
                                    ------------
forthwith be given to the other party, and the transactions contemplated by
this Agreement shall be terminated and abandoned, without further action by
the parties hereto. If this Agreement is terminated as provided herein:

              (a) each party, if requested, will redeliver all documents, work
papers and other material received from of the other party and its Affiliates
relating to the transactions contemplated hereby, whether so obtained before
or after the execution hereof, to the party

                                      55

<PAGE>
<PAGE>

furnishing the same; and

              (b) no party hereto and none of their respective directors,
officers, stockholders or Affiliates shall have any further liability or
obligation to any other party to this Agreement, other than Section 12.2, and
                                                            ------------
ARTICLE XIII; provided, however, that nothing in this Section 12.2(b) shall
------------                                          ---------------
prejudice any rights, claims, or causes of action that may have accrued
hereunder or with respect hereto prior to the date of such termination,
including for breach of this Agreement (whether based upon the termination or
otherwise).

                  Section 12.3 Termination Fee. In the event of termination of
                               ---------------
this Agreement by the Acquiror pursuant to Section 12.1(d) or Section 12.1(e),
                                           ---------------    ---------------
the Seller shall pay to the Acquiror an amount equal to the Initial Purchase
Price Amount and the NDA Milestone Payment, to the extent such payments were
previously made by the Acquiror, and shall pay an additional amount to the
Acquiror equal to all Reimbursable Expenses paid by the Acquiror to the Seller
hereunder. All payments under this Section 12.3 will be made within five (5)
                                   ------------
Business Days from the termination of this Agreement.

                                 ARTICLE XIII.

                                 MISCELLANEOUS

                  Section 13.1 Notices. All Notices, requests and other
                               -------
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally against written receipt or by
facsimile transmission with answer back confirmation or mailed (postage
prepaid by certified or registered mail, return receipt requested) or by
nationally recognized overnight courier that maintains records of delivery to
the parties at the following addresses or facsimile numbers:

                  If to the Acquiror to:

                           K-V Pharmaceutical Company
                           2503 S. Hanley Road
                           St. Louis, Missouri 63144
                           Facsimile:  (314) 645-4705
                           Attention:  Vice President, Business Development
                                       General Counsel

                  With copies to:

                           Latham & Watkins LLP
                           650 Town Center Drive. 20th Floor
                           Costa Mesa, California 92626
                           Facsimile:  (714) 755-8290
                           Attention:  Charles K. Ruck, Esq.
                                       Kevin B. Espinola, Esq.

                  If to the Seller to:

                                      56

<PAGE>
<PAGE>

                           Hologic, Inc.
                           35 Crosby Drive
                           Bedford, Massachusetts 01730-1401
                           Facsimile: (781) 280-0669
                           Attention:  Mark Casey

                  With copies to:

                           Brown Rudnick Berlack Israels LLP
                           One Financial Center
                           Boston, Massachusetts 02111
                           Facsimile:  (617) 856-8201
                           Attention:  Philip J. Flink, Esq.

All such Notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 13.1, be deemed given
                                              ------------
upon receipt, (ii) if delivered by facsimile to the facsimile number as
provided in this Section 13.1, be deemed given upon receipt by the sender of
                 ------------
the answer back confirmation and (ii) if delivered by mail in the manner
described above or by overnight courier to the address as provided in this
Section 13.1, be deemed given upon receipt (in each case regardless of whether
------------
such Notice, request or other communication is received by any other Person to
whom a copy of such Notice, request or other communication is to be delivered
pursuant to this Section 13.1). Any party from time to time may change its
                 ------------
address, facsimile number or other information for the purpose of Notices to
that party by giving Notice specifying such change to the other party hereto
in accordance with the terms of this Section 13.1.
                                     ------------

                  Section 13.2 Entire Agreement. This Agreement (and all
                               ----------------
Exhibits and Schedules attached hereto and all other documents delivered in
connection herewith) supersedes all prior discussions and agreements, both
oral and written, among the parties with respect to the subject matter hereof
and contains the sole and entire agreement among the parties hereto with
respect to the subject matter hereof. Further, the parties agree and
acknowledge that the Confidentiality Agreement shall remain in effect until,
but shall terminate effective as of, the Transfer Date.

                  Section 13.3 Waiver. Any term or condition of this Agreement
                               ------
may be waived at any time by the party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a written
instrument duly executed by or on behalf of the party waiving such term or
condition. No waiver by any party hereto of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as
a waiver of the same or any other term or condition of this Agreement on any
future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not in the alternative.

                                      57

<PAGE>
<PAGE>

                  Section 13.4 Amendment. This Agreement may be amended,
                               ---------
supplemented or modified only by a written instrument mutually agreed upon and
duly executed by each party hereto.

                  Section 13.5 Third Party Beneficiaries. The terms and
                               -------------------------
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns and it is not the
intention of the parties to confer third party beneficiary rights upon any
other Person, except as achieved through the indemnification clause set forth
in Section 11.2.
   ------------

                  Section 13.6 Assignment; Binding Effect. Neither this
                               --------------------------
Agreement nor any rights, interests or obligations hereunder shall be
transferred, assigned or delegated by any party hereto without the prior
written consent of the other party hereto and any attempt to make any such
transfer assignment or delegation without such consent shall be null and void;
provided, however, that (i) without the consent of the Acquiror, the Seller
may (in whole or in part) transfer, assign and delegate its rights, interests
and obligations to one or more of its Affiliates or to one or more banks or
other lenders providing financing to the Seller or its Affiliates from time to
time, (ii) without the consent of the Seller, the Acquiror may (in whole or in
part) transfer, assign and delegate its rights, interests and obligations to
any Affiliate of the Acquiror (including pursuant to Section 4.7 hereof), and
                                                     -----------
(iii) without the consent of the Seller, the Acquiror may transfer and assign
its rights to indemnity, in whole or in part, to any purchaser of all or
substantially all of the Gestiva Business; provided, further, this Agreement
is binding upon, inures to the benefit of and is enforceable by the parties
hereto and their respective successors and permitted assigns and no transfer,
assignment or delegation shall limit, affect or discharge the assignor's
obligations hereunder. In addition, notwithstanding the foregoing, either
party hereto may assign this Agreement, without the prior written consent of
the other party hereto, to a Person that succeeds to all or substantially all
of such party's business or assets related to this Agreement, whether by sale,
merger, operation of law or otherwise, provided that such assignee or
transferee agrees in writing to be bound by the terms and conditions of this
Agreement.

                  Section 13.7 Headings. The headings used in this Agreement
                               --------
have been inserted for convenience of reference only and do not define or
limit the provisions hereof.

                  Section 13.8 Severability. If any provision of this
                               ------------
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (iii) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom, and (iv) in
lieu of such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar to the terms of such illegal, invalid or unenforceable
provision as may be possible and reasonably acceptable to the parties herein.

                  Section 13.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
                               -------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF

                                      58

<PAGE>
<PAGE>

DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. ALL DISPUTES UNDER, OR
PERTAINING TO, THIS AGREEMENT SHALL BE RESOLVED EXCLUSIVELY IN THE STATE OR
FEDERAL COURTS OF THE STATE OF MISSOURI.

                  Section 13.10 Expenses. Except as otherwise provided in this
                                --------
Agreement, each party hereto shall pay its own expenses and costs incidental
to the preparation of this Agreement and to the consummation of the
transactions contemplated hereby.

                  Section 13.11 Counterparts. This Agreement may be executed
                                ------------
in any number of counterparts and by facsimile, each of which will be deemed
an original, but all of which together will constitute one and the same
instrument. A facsimile copy shall be a sufficient proof of signature, without
it being necessary to produce the original copy.

                  Section 13.12 Remedies. Except as otherwise provided in
                                --------
Section 11.3(c), any and all remedies herein expressly conferred upon a party
shall be deemed cumulative with and not exclusive of any other remedy
conferred hereby, or by law or equity upon such party, and the exercise by a
party of any one remedy shall not preclude the exercise of any other remedy.
The parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, this being in addition to any other remedy to
which the parties are entitled at law or in equity.

                        [SIGNATURES ON FOLLOWING PAGE]

                                      59

<PAGE>
<PAGE>

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

                                  ACQUIROR:

                                  K-V PHARMACEUTICAL COMPANY,
                                  a Delaware corporation

                                  By: /s/ Thomas J. Brya
                                     ----------------------------------------

                                  Name:   Thomas J. Brya
                                       --------------------------------------

                                  Title: VP, Commercial Growth and Strategies
                                        -------------------------------------

                                  SELLER:

                                  CYTYC PRENATAL PRODUCTS, CORP.,
                                  a Delaware corporation

                                  By: /s/ Glenn P. Muir
                                     ----------------------------------------

                                  Name:    Glenn P. Muir
                                       --------------------------------------

                                  Title: Executive Vice President
                                        -------------------------------------

                                  PARENT (SOLELY FOR PURPOSES OF SECTION 8.6
                                  AND ARTICLE XI):

                                  HOLOGIC, INC.,
                                  a Delaware corporation

                                  By: /s/ Thomas J. Umbel
                                     ----------------------------------------

                                  Name:   Thomas J. Umbel
                                       --------------------------------------

                                  Title: Sr. VP Bus. Dev.
                                        -------------------------------------

                                      60EXHIBIT 10.1
                                                                    ------------

                       ASSETS SALE AND PURCHASE AGREEMENT

                                  by and among:

                        WESTERN POWER & EQUIPMENT CORP.,
                             a Delaware corporation

                        WESTERN POWER & EQUIPMENT CORP.,
                              an Oregon corporation

                                       and

                         CNH DEALER HOLDING COMPANY LLC,
                      a Delaware limited liability company

                            Dated as of June __, 2008

<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I DEFINITIONS.........................................................1

ARTICLE II SALE AND PURCHASE OF ASSETS AND ASSUMPTION OF
CERTAIN LIABILITIES...........................................................5

  2.1   SALE AND PURCHASE OF ASSETS...........................................5

  2.2   EXCLUDED ASSETS.......................................................7

  2.3   ASSUMPTION OF LIABILITIES.............................................7

  2.4   CONSIDERATION FOR ASSET PURCHASE; HOLDBACK............................8

  2.5   ADJUSTMENTS TO PURCHASE PRICE.........................................9

  2.6   SCHEDULES............................................................10

  2.7   CLOSING..............................................................10

  2.8   DELIVERY TO BUYER....................................................10

  2.9   DELIVERY TO SELLERS..................................................11

  2.10  REQUIRED CONSENTS....................................................12

  2.11  FURTHER ASSURANCE....................................................12

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS........................12

  3.1   CORPORATE STATUS.....................................................12

  3.2   AUTHORIZATION........................................................13

  3.3   CONSENTS AND APPROVALS...............................................13

  3.4   FINANCIAL DISCLOSURES................................................13

  3.5   TITLE TO PURCHASED ASSETS AND RELATED MATTERS........................13

  3.6   REAL PROPERTY LEASES.................................................14

  3.7   ACCOUNTS.............................................................15

  3.8   INVENTORY............................................................15

  3.9   CONTRACTS............................................................15

  3.10  LEGAL PROCEEDINGS....................................................15

  3.11  EMPLOYEES............................................................16

  3.12  ENVIRONMENTAL MATTERS................................................16

  3.13  FINDER'S FEES........................................................17

  3.14  TAXES................................................................17

  3.15  INTENTIONALLY DELETED................................................18

                                       -i-
<PAGE>

  3.16  AFFILIATED TRANSACTIONS..............................................18

  3.17  BENEFITS PLANS.......................................................18

  3.18  OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES.....................19

  3.19  DISCRIMINATION, WORKERS COMPENSATION AND OCCUPATIONAL
        SAFETY AND HEALTH....................................................20

  3.20  INTENTIONALLY DELETED................................................20

  3.21  LABOR DISPUTES; UNFAIR LABOR PRACTICES...............................20

  3.22  INSURANCE POLICIES...................................................20

  3.23  PRODUCT WARRANTIES...................................................20

  3.24  COMPLIANCE WITH LAWS; LICENSES AND PERMITS...........................20

  3.25  PRODUCT SAFETY AUTHORITIES...........................................20

  3.26  INTENTIONALLY DELETED................................................21

  3.27  FULL DISCLOSURE......................................................21

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER...........................21

  4.1   ORGANIZATIONAL STATUS................................................21

  4.2   AUTHORIZATION........................................................21

  4.3   CONSENTS AND APPROVALS...............................................21

ARTICLE V COVENANTS OF SELLERS...............................................22

  5.1   OPERATION OF THE BUSINESS............................................22

  5.2   ACCESS...............................................................22

  5.3   INSURANCE AND MAINTENANCE OF THE PURCHASED ASSETS....................22

  5.4   EMPLOYEES............................................................23

  5.5   FULFILLMENT OF CONDITIONS............................................23

  5.6   NOTIFICATION OF CERTAIN MATTERS......................................23

  5.7   NEW LEASE............................................................23

  5.8   NON-COMPETITION......................................................23

  5.9   USE OF NAME..........................................................24

ARTICLE VI COVENANTS OF BUYER................................................24

  6.1   FULFILLMENT OF CONDITIONS............................................24

  6.2   EMPLOYEES............................................................25

  6.3   PRO RATA SHARE OF PREPAID RENT AND LEASE EXPENSES....................25

  6.4   ACCOUNTS.............................................................25

                                      -ii-
<PAGE>

ARTICLE VII FURTHER COVENANTS................................................25

  7.1   CONFIDENTIALITY......................................................25

  7.2   COMMERCIALLY REASONABLE EFFORTS......................................26

  7.3   EXPENSES.............................................................26

  7.4   TRANSFER TAXES.......................................................26

  7.5   RECEIPT OF PAYMENTS POST-CLOSING.....................................26

  7.6   TERMINATION OF DEALER AGREEMENTS AND RELEASE OF CLAIMS...............27

ARTICLE VIII CONDITIONS PRECEDENT TO THE TRANSACTIONS........................27

  8.1   CONDITIONS TO EACH PARTY'S OBLIGATIONS...............................27

  8.2   CONDITIONS TO OBLIGATIONS OF BUYER...................................27

  8.3   CONDITIONS TO OBLIGATIONS OF SELLERS.................................29

ARTICLE IX INDEMNIFICATION...................................................30

  9.1   BY SELLERS...........................................................30

  9.2   BY BUYER.............................................................31

  9.3   PROCEDURE FOR CLAIMS.................................................31

  9.4   THIRD PARTY CLAIMS...................................................31

  9.5   HOLDBACK.............................................................32

  9.6   SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS................33

ARTICLE X TERMINATION........................................................33

10.1    GROUNDS FOR TERMINATION..............................................33

10.2    EFFECT OF TERMINATION................................................34

ARTICLE XI PUBLIC ANNOUNCEMENTS..............................................35

ARTICLE XII CONTENTS OF AGREEMENT, AMENDMENT, PARTIES IN INTEREST,
ASSIGNMENT, ETC..............................................................35

ARTICLE XIII INTERPRETATION..................................................35

ARTICLE XIV NOTICES..........................................................36

ARTICLE XV GOVERNING LAW; CONSENT TO JURISDICTION; CONSENT TO
SERVICE OF PROCESS...........................................................37

ARTICLE XVI COUNTERPARTS.....................................................38

ARTICLE XVII SEVERABILITY....................................................38

                                      -iii-
<PAGE>

EXHIBITS

Exhibit A   List of Acquired Locations
Exhibit B   Form of Bill of Sale
Exhibit C   Form of Assignment and Assumption

SCHEDULES

2.1(a)      Leases
2.1(b)      Fixed Assets
2.1(c)(i)   New Equipment Inventory
2.1(c)(ii)  Used and Rental Equipment Inventory
2.1(c)(iii) Parts Inventory
2.1(d)      Customer Deposits, Rent Deposits, Prepaid Items
2.1(e)(i)   Accounts, Notes, Other Receivables Under 90 Days
2.1(e)(ii)  Accounts, Notes, Other Receivables Over 90 Days
2.1(f)      Assigned Contracts
2.1(g)      Assigned Permits
2.1(j)      Intellectual Property
2.1(k)      Work Orders in Process
2.3(a)(ii)  Scheduled Liabilities
2.4         Purchase Price
2.5         Inventory
3.3(a)      Required Consents
3.4         Financial Disclosures
3.5         Title Exceptions
3.7         Adjustments to Accounts
3.8         Consignment/Materials
3.9         Defaults, etc. Under Assigned Contracts
3.10(a)     Pending Litigation
3.10(b)     Claims
3.11(a)     Employees; Collective Bargaining Agreements
3.11(b)     Indebtedness to Employees
3.12        Environmental
3.14        Taxes
3.16        Affiliated Transactions
3.17(a)     Benefit Plans
3.17(c)     Determination Letters
3.18        Employee Claims
3.19        Workers Compensation Claims
3.21        Labor Disputes/Unfair Labor Practices
3.22        Insurance Policies
3.23        Product Warranties
3.24        Compliance with Laws, Licenses, Permits
6.2         Vacation/Sick Leave
8.2(f)      Creditors

                                      -iv-
<PAGE>

                       ASSETS SALE AND PURCHASE AGREEMENT

            THIS ASSETS SALE AND PURCHASE AGREEMENT is made effective as of June
__, 2008, by and among WESTERN POWER & EQUIPMENT CORP., a Delaware corporation
(the "Parent"), WESTERN POWER & EQUIPMENT CORP., an Oregon corporation and a
wholly owned subsidiary of the Parent ("WPE"), and CNH DEALER HOLDING COMPANY
LLC ("Buyer"), a Delaware limited liability company which is a wholly-owned
subsidiary of CNH America, LLC ("CNH"). The Parent and WPE are hereinafter
sometimes referred to individually as a "Seller" and collectively as "Sellers."
Certain terms are used herein as defined below in Article I or elsewhere in this
Agreement.

                                   BACKGROUND

            WPE desires to sell, and Buyer desires to purchase, the Purchased
Assets (as such term is defined in Section 2.1) and, as part of such sale and
purchase, Buyer is willing to assume certain obligations and liabilities of WPE
as set forth herein.

                                   WITNESSETH

            NOW, THEREFORE, in consideration of the respective covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

            For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to below
(such terms, as well as any other terms defined elsewhere in this Agreement,
shall be equally applicable to both the singular and plural forms of the terms
defined).

            "Accounts" is defined in Section 2.1(e).

            "Acquired Locations" means the WPE branch locations identified on
Exhibit "A" attached hereto and made a part hereof.

            "Adjustment Amount" is defined in Section 2.5(b).

            "Affiliates" means, with respect to a particular party, persons or
entities controlling, controlled by or under common control with that party,
including but not limited to any members, officers, directors and majority-owned
entities of that party and of its other Affiliates.

            "Agreement" means this Agreement and the exhibits and schedules
hereto.

            "Assigned Contracts" means those Contracts of WPE (other than the
Leases) assigned to and assumed by the Buyer pursuant to Section 2.1(f) hereof.

<PAGE>

            "Assigned Permits" is defined in Section 2.1(g).

            "Assumed Liabilities" is defined in Section 2.3(a).

            "Benefit Plan" is defined in Section 3.17(a).

            "Business" means WPE's business of selling, renting, repairing and
maintaining construction equipment and related parts manufactured by Buyer or
one of WPE's other suppliers at the Acquired Locations.

            "Charter Documents" means an entity's certificate of organization or
formation, certificate or articles of incorporation, certificate defining the
rights and preferences of securities, articles of organization, limited
liability company or operating agreement, general or limited partnership
agreement, certificate of limited partnership, joint venture agreement, by-laws
or similar document governing the entity.

            "Claim" means any allegation, claim, action, cause of action,
lawsuit or other legal proceeding, whether at law, in equity or before any
governmental agency or arbitrator, for damages, costs, losses or expenses
incurred by any person as a result of any actions or failure to act by any
party, or its officers, directors, employees or agents.

            "Closing" means the closing of the Transactions.

            "Closing Date" is defined in Section 2.6.

            "CNH Capital" means CNH Capital America LLC, a Delaware limited
liability company.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Contract" means any written or oral contract, agreement, lease,
instrument or other commitment that is binding on any Person or its property
under applicable law.

            "Court Order" means any judgment, decree, injunction, order,
directive or ruling of any federal, state, local or foreign court or
governmental or regulatory body or authority, whether in the United States or in
any other jurisdiction, that is binding on any Person or its property under
applicable law.

            "Damages" is defined in Section 9.1.

            "Default" means (i) a breach, default or violation or (ii) the
occurrence of an event that with the passage of time or the giving of notice, or
both, would constitute a breach, default or violation.

            "Disclosure Schedules" is defined in Section 2.6.

            "Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.

                                       -2-
<PAGE>

            "Environmental Condition" is defined in Section 3.12(b).

            "Environmental Law" is defined in Section 3.12(a).

            "Environmental Liabilities" means, without limitation, all
liabilities, losses, claims, debts, assessments, deficiencies, charges, demands,
fines, penalties, costs, expenses, damages, natural resource damages, reasonable
fees and disbursements of counsel, costs of Remedial Action, liens or other
claims against property or improvements thereon for work, labor or services
performed with respect thereto or other obligations of any kind, character or
description (whether absolute, contingent, matured, liquidated, unliquidated,
accrued, known, unknown, direct, indirect, derivative or otherwise) that pertain
or relate, in whole or in part, to an Environmental Condition.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor thereto.

            "Excluded Assets" is defined in Section 2.2.

            "Excluded Liabilities" is defined in Section 2.3(b).

            "Fixed Assets" is defined in Section 2.1(b).

            "GAAP" means U.S. generally accepted accounting principles, applied
on a consistent basis.

            "Governmental Body" means any federal, state, local or foreign
government entity or any court, administrative or regulatory agency or
commission or other governmental authority or agency.

            "Hazardous Substances" is defined in Section 3.12.

            "Holdback Amount" is defined in Section 2.4(c).

            "Holdback Period" is defined in Section 9.5.

            "Indemnification Obligations" is defined in Section 9.5.

            "Indemnified Party" is defined in Section 9.3.

            "Indemnitor" is defined in Section 9.3.

            "Inventory" is defined in Section 2.1(c).

            "Knowledge" means the actual knowledge of the respective party or
parties, as the case may be, after reasonable inquiry, as well as knowledge that
a reasonable prudent individual in a similar position would be likely to have.
In the case of either Seller, "Knowledge" shall mean the knowledge of Dean
McLain, Mark Wright or Douglas Wiles, including their actual knowledge and
knowledge attributed to them under the foregoing standard.

            "Leases" is defined in Section 2.1(a).

                                       -3-
<PAGE>

            "Legal Requirement" means any statute, law, ordinance, regulation,
order, governmental permit or rule of any federal, state, local, foreign or
other governmental agency or body or of any other type of regulatory body,
whether in the United States or in any other jurisdiction, including but not
limited to those covering food and drug, environmental, energy, safety, health,
transportation, bribery, recordkeeping, zoning, employment, antidiscrimination,
antitrust, wage and hour, and price and wage control matters.

            "Liability" means any direct or indirect liability, indebtedness,
obligation, expense, claim, loss, damage, deficiency, guaranty or endorsement of
or by any Person, absolute or contingent, accrued or unaccrued, due or to become
due, liquidated or unliquidated.

            "Litigation" means any lawsuit, action, arbitration, administrative
or other proceeding, criminal prosecution or governmental investigation or
inquiry.

            "Material Adverse Change" with respect to any Person means any
material adverse change in the business, properties, results of operations,
condition (financial or otherwise), liquidity, products, competitive position,
customers and customer relations.

            "Material Adverse Effect" means any effect which has resulted in, or
is reasonably likely to result in, a Material Adverse Change.

            "Ordinary Course" or "ordinary course of business" means the
ordinary course of business of a Person that is consistent with such Person's
past practices.

            "Person" means any natural person, limited liability company,
corporation, partnership, proprietorship, association, trust or other legal
entity.

            "Purchased Assets" is defined in Section 2.1.

            "Remedial Action" is defined in Section 3.12.

            "Required Consents" is defined in Section 3.3.

            "Scheduled Liabilities" is defined in Section 2.3(a)(ii).

            "Taxes" means all taxes, charges, fees, levies, or other like
assessments, including income, gross receipts, ad valorem, value added, premium,
excise, real property, personal property, windfall profit, sales, use, transfer,
license, withholding, employment, payroll, stamp, occupation , premium, custom
duties, severance and franchise taxes imposed by a Governmental Body; and shall
include any interest, fines, penalties, assessments, or additions to tax
resulting from, attributable to, or incurred in connection with any such Taxes
or any contest or dispute thereof.

            "Termination Date" is defined in Section 10.1(b).

            "Transaction Documents" means this Agreement and the other
agreements and documents among the parties contemplated hereby and thereby.

                                       -4-
<PAGE>

            "Transactions" means the transactions contemplated by the
Transaction Documents.

            "WPE Financial Disclosures" is defined in Section 3.4.

                                   ARTICLE II

                           SALE AND PURCHASE OF ASSETS
                      AND ASSUMPTION OF CERTAIN LIABILITIES

            2.1 SALE AND PURCHASE OF ASSETS. Subject to the terms and conditions
of this Agreement, at the Closing Sellers shall sell, transfer, convey, assign
and deliver to Buyer, free and clear of all Encumbrances or Liabilities (other
than the Assumed Liabilities and Encumbrances that secure the Assumed
Liabilities) and with no impairments of title, and Buyer shall purchase, acquire
and accept from Sellers, all the right, title and interest of Sellers in and to
the following assets to the extent such assets are associated with the Acquired
Locations and the Ordinary Course operation of the Business (collectively, the
"Purchased Assets"):

                        (a) Leases. All rights and interests under the real
estate leases relating to the Acquired Locations, as described on Schedule
2.1(a) (including all exhibits and amendments thereto, the "Leases");

                        (b) Fixed Assets. All machinery, equipment, computer
hardware, tools, vehicles (other than vehicles included in Inventory),
furniture, furnishings, leasehold improvements and fixtures (to the extent owned
by WPE), office and shop supplies and other tangible personal property located
at the Acquired Locations, in transit thereto or in the possession of any bailee
and used in the Ordinary Course of the Business at the Acquired Locations, as
more fully described on Schedule 2.1(b) (the "Fixed Assets"), as adjusted
pursuant to Section 2.5; provided further, that for purposes of the Section 2.5
adjustments, the following criteria will be applied in valuing the Fixed Assets:
(1) office and shop supplies will be sold to Buyer for a total of $16,000; (2)
service, parts and sales manuals will be sold to Buyer for a total of $16,000;
(3) leasehold improvements will be sold to Buyer for their net book value at
Closing Date; and (4) all other Fixed Assets shall be valued at fair market
replacement value, taking into consideration age and condition;

                        (c) Inventory. The (i) new equipment inventory listed on
Schedule 2.1(c)(i), (ii) used and rental equipment inventory listed on Schedule
2.1(c)(ii), and (iii) parts inventory listed on Schedule 2.1(c)(iii), as
adjusted pursuant to Section 2.5 (collectively, the "Inventory"); provided
further, that for purposes of the Section 2.5 adjustments, the following
criteria will be applied in valuing the Inventory: (1) new equipment will valued
at dealer net price, minus all applicable discount programs, plus freight,
assembly, and reasonable handling costs; (2) discounts will be allowed for
demonstration hours or use; (3) where applicable, normal hourly use rates will
apply, as set forth in CNH's "Schedule of Terms and Discounts;" (4) where normal
hourly use rates are not applicable, reasonable depreciation will be applied by
Buyer, subject to adjustment as provided in Section 2.5 hereof; (5) WPE will
make reasonable efforts to return all equipment inventory that is competitive
with CNH equipment to the original manufacturer prior to Closing; (6) all
unreturned competitive inventory will be acquired by Buyer at its liquidation
value; (7) equipment owned by WPE but rented to or otherwise in use by Arizona
Pacific

                                       -5-
<PAGE>

Materials LLC (an Affiliate of WPE) will be deemed Excluded Assets, and
will not be acquired by Buyer; (8) used and rental equipment will be sold at a
price based on fair market wholesale value; (9) parts with a turn within the
past twenty-four (24) months will be sold to Buyer at current dealer net less
all-applicable dealer discounts; (10) parts without a turn for more than
twenty-four (24) months will be sold at current dealer net less 50%; and (11)
WPE will make reasonable efforts to return all parts inventory that is
competitive with CNH equipment to the original manufacturer prior to closing,
provided that all unreturned competitive parts will be purchased by Buyer at the
prices specified above;

                        (d) Prepaid Items. The customer deposits, rent deposits
and other prepaid items relating to the Purchased Assets or the Acquired
Locations, listed on Schedule 2.1(d) ("Prepaid Items"), as adjusted pursuant to
Section 2.5;

                        (e) Accounts. The accounts, notes and other receivables
listed on Schedule 2.1(e)(i) (accounts 60 days and under) and Schedule
2.1(e)(ii) (accounts over 60 days, discounted as hereinafter provided), as
adjusted pursuant to Section 2.5 (the "Accounts"); provided further, that for
purposes of the Section 2.5 adjustments, the following criteria will be applied
in valuing the Accounts: (1) accounts 60 days and under will be valued at 100%
of face amount; (2) accounts over 60 days but under 121 days will be valued at
75% of face amount; and (3) accounts over 120 days will be valued at zero
(subject to the provisions of Section 6.4);

                        (f) Assigned Contracts. All rights under the Contracts,
including distributor agreements, capital leases, collective bargaining
agreements, security agreements, mortgages, agreements with customers (including
without limitation purchase orders, preventive maintenance agreements, rental
agreements, and recourse and buy-back contracts and obligations), vehicle
leases, computer leases, mobile telephone agreements, and software licenses, and
including without limitation any and all liens or security interests associated
with any of the foregoing rights, to the extent relating to the Purchased Assets
or the Acquired Locations and identified on Schedule 2.1(f) (collectively, the
"Assigned Contracts");

                        (g) Assigned Permits. Any governmental permits or
licenses, to the extent assignable, relating exclusively to the Acquired
Locations and identified on Schedule 2.1(g) (the "Assigned Permits");

                        (h) Causes of Action. All causes of action, demands,
rights against third parties and choses in action arising out of occurrences
before or after the Closing, including without limitation all rights under
express or implied warranties, and all other intangible rights and assets,
relating exclusively to the Purchased Assets, the Acquired Locations or the
Assumed Liabilities;

                        (i) Books and Records. The books and records of WPE,
including all service, parts and sales manuals, personnel files, data, plans and
recorded knowledge, including customer and supplier lists, equipment maintenance
and warranty information, all correspondence with any customers, suppliers,
employees or governmental entities relating to the Business, sales and pricing
data, and any other reports, marketing studies, plans and documents relating to
the Business, in whatever form, including without limitation electronic
databases, and whether held by Sellers or stored on behalf of Sellers by third
parties, directly and exclusively related to any of

                                       -6-
<PAGE>

the foregoing (provided that Sellers may retain copies of all of the foregoing
and the originals of personnel and other records Sellers are required by law to
retain in their possession or are necessary or desirable to be retained for
their ongoing business, regulatory compliance, the maintenance of their
corporate franchises, or for archival purposes);

                        (j) Intellectual Property. The intellectual property of
WPE listed on Schedule 2.1(j);

                        (k) Service Work Orders in Process. The rights to
accrued but unbilled obligations arising out of the service work orders listed
on Schedule 2.1(k) (the "Work Orders in Process"), as adjusted pursuant to
Section 2.5; provided further, that for purposes of the Section 2.5 adjustments,
the following criteria will be applied in valuing the Work Orders in Process:
(1) unbilled customer repair labor will be sold to Buyer at 60% of normal
customer hourly rate; and (2) internal repair labor will be sold to Buyer at the
various mechanics' hourly rates; and

                        (l) Other Necessary Assets. All other assets and
property owned by WPE and necessary for the operation of the Business in the
Ordinary Course.

            2.2 EXCLUDED ASSETS. Sellers shall not sell, transfer, convey,
assign or deliver, and shall retain, any and all assets whatsoever other than
the Purchased Assets (the "Excluded Assets").

            2.3 ASSUMPTION OF LIABILITIES.

                        (a) At the Closing, Buyer shall assume, and shall agree
to pay and discharge when due, only those Liabilities of WPE that are set forth
below, subject to the further limitations hereinafter set forth (collectively
the "Assumed Liabilities"):

                                    (i) All Liabilities of WPE under the Leases,
the Assigned Contracts and the Assigned Permits, arising after the Closing Date;
and

                                    (ii) The Liabilities listed on Schedule
2.3(a)(ii) (the "Scheduled Liabilities"), subject to adjustment as provided in
Section 2.5.

                        (b) Buyer shall not be deemed to assume or to be
otherwise liable, and Sellers will be responsible for, any Liabilities relating
to the Business other than the Assumed Liabilities (the "Excluded Liabilities").
The Excluded Liabilities include without limitation: (i) all amounts outstanding
under any and all indebtedness for borrowed money, including lines of credit,
letters of credit, notes payable and loans payable or deferred compensation,
except to the extent included in the Scheduled Liabilities and expressly assumed
by Buyer; (ii) all Environmental Liabilities that arise out of or result from
events occurring or conditions existing on or prior to the Closing Date; (iii)
all product liability or claims for injury to any person or property that relate
to equipment or parts sold or maintenance or repairs made to equipment or parts
by WPE on or prior to the Closing Date; (iv) all Tax Liabilities of WPE,
including any such Liabilities of WPE related to consummation of the
Transactions and any Liabilities of WPE for Taxes of another Person (but not
including transfer taxes that are Buyer's responsibility under Section 7.4 of
this Agreement); (v) any Liabilities arising out of WPE's violation or failure
to comply with any Legal Requirement or any Court Order; (vi) except as provided
in Section 6.3 with respect to

                                       -7-
<PAGE>

accrued vacation and sick leave, any Liability arising under or relating to any
Benefit Plans or any person's employment or termination of employment with
either Seller; (vii) any deductibles, self-insured retentions or retrospective
rating plans connected with any insurance policy of WPE; and (viii) any fees,
costs and expenses incurred in connection with this Agreement and the
Transactions.

            2.4 CONSIDERATION FOR ASSET PURCHASE; HOLDBACK. Subject to the terms
and conditions of this Agreement, the consideration (the "Purchase Price") for
the purchase of the Purchased Assets shall be as follows:

                        (a) The following amounts payable in cash at Closing
(subject to the Hold-Back):

                                    (i) $13,488,500 for new equipment Inventory
(subject to adjustment as provided in Section 2.5); plus

                                    (ii) $3,181,249 for parts Inventory (subject
to adjustment as provided in Section 2.5); plus

                                    (iii) $7,707,293 for used and rental
equipment Inventory (subject to adjustment as provided in Section 2.5); plus

                                    (iv) An amount representing reimbursement of
the security deposits with respect to the Leases, as identified in Schedule
2.1(a), plus the amount of any additional prepaid items identified in Schedule
2.1(d) (subject to adjustment as provided in Section 2.5); plus

                                    (v) $2,829,665 for Fixed Assets (subject to
adjustment as provided in Section 2.5), which includes an aggregate of $32,000
for (A) office and shop supplies and (B) service, parts and sales manuals and
literature; plus

                                    (vi) $3,893,634 for the Accounts (subject to
adjustment as provided in Section 2.5); plus

                                    (vii) An amount representing reimbursement
for labor costs related to Work Orders in Process as reflected on Schedule
2.1(k) (subject to adjustment as provided in Section 2.5); minus

                                    (viii) The aggregate dollar amount of the
Scheduled Liabilities (subject to adjustment as provided in Section 2.5); minus

                        (b) An amount equal to the aggregate of all amounts paid
by Buyer (at Buyer's option) directly to creditors of WPE to discharge
Encumbrances on the Purchased Assets in accordance with payoff letters delivered
to Buyer as provided in Section 8.2(f) hereof, including without limitation
repayment of WPE's debt to CNH Capital, which payments shall be deemed made for
the benefit of WPE; minus

                                       -8-
<PAGE>

                        (c) An amount equal to $1,000,000 (the "Holdback
Amount"), to be held by the Buyer to pay any Adjustment Amount owed to the Buyer
as provided in Section 2.5 hereof, and to satisfy any Indemnification
Obligations of the Sellers as provided in Section 9.5 hereof, in the declining
amounts for the respective periods and otherwise on the terms and conditions set
forth in Section 9.5; plus

                        (d) The assumption of the Assumed Liabilities.

            2.5 ADJUSTMENTS TO PURCHASE PRICE.

                        (a) Schedule 2.1(b) (Fixed Assets), Schedule 2.1(c)(i)
(equipment Inventory), Schedule 2.1(c)(ii) (used and rental equipment
Inventory), Schedule 2.1(c)(iii) (parts Inventory), Schedule 2.1(e)(i) and
Schedule 2.1(e)(ii) (Accounts) and Schedule 2.3(a)(ii) (Scheduled Liabilities)
attached to this Agreement as executed and delivered by the parties (together,
the "Interim Purchase Price Schedules") show the Fixed Assets, the Inventory,
the Accounts and the Scheduled Liabilities as of the effective dates set forth
therein. On or before that date which is three (3) business days prior to the
Closing Date (or such other date as the parties may agree in writing), Buyer
shall prepare and deliver to Sellers up-dated Purchase Price Schedules showing
the Fixed Assets, the Inventory, the Accounts and the Scheduled Liabilities as
of the then most recent date for which data is available (the Interim Purchase
Price Schedules, adjusted as aforesaid, are hereinafter referred to as the
"Closing Schedules"), using the valuation methodologies as set forth in Section
2.1 hereof. Sellers shall cooperate with Buyer to assist in the preparation of
the Closing Schedules. The Closing Schedules as prepared by Buyer shall be used
for purposes of calculating the Purchase Price payable on the Closing Date as
provided in Section 2.4 hereof, but shall be subject to further post-closing
adjustment as provided in Section 2.5(b) hereof.

                        (b) Within thirty (30) calendar days after the Closing
Date, Buyer shall prepare and deliver to Sellers (i) amended schedules, listing
(A) the actual Fixed Assets, Inventory, Accounts and Scheduled Liabilities
transferred to or assumed by Buyer, and (B) the actual value of Prepaid Items
and Work Orders in Process as of the Closing Date (the "Amended Schedules"),
using the valuation methodologies as set forth in Section 2.1 hereof, and (ii) a
statement showing an adjustment amount (the "Adjustment Amount") equal to the
net of change in the aggregate value of the Fixed Assets, the Inventory, the
Accounts, the Prepaid Items and the Work Orders in Process, net of the Scheduled
Liabilities, as determined based on the Amended Schedules, from such value as
determined based on the Closing Schedules. If the Adjustment Amount is a
negative amount, then the Purchase Price shall be reduced by such amount. If the
Adjustment Amount is a positive amount, then the Purchase Price shall be
increased by such amount.

                        (c) Sellers shall have ten (10) calendar days to review
the Adjustment Amount as determined by Buyer pursuant to subsection (b) hereof
and to notify Buyer of their agreement or disagreement thereto, provided that,
if Sellers fail to so notify Buyer within such 10-day period they shall be
deemed to have agreed with the Adjustment Amount determined by Buyer in all
respects. If Sellers agree (or are deemed to have agreed) with the Adjustment
Amount as determined by Buyer, then within five (5) calendar days following the
end of the aforesaid 10-day period, or if earlier, within five (5) calendar days
of Sellers notifying Buyer of

                                       -9-
<PAGE>

such agreement, Buyer shall pay WPE the Adjustment Amount if such amount is a
positive number, and Sellers shall pay Buyer the Adjustment Amount if such
amount is a negative number. Sellers' obligation to pay the Adjustment Amount
(if any) shall be satisfied by deducting the Adjustment Amount from the Holdback
Amount as provided in Section 9.5 hereof.

                        (d) If Sellers disagree with Buyer's calculation of the
Adjustment Amount, then Sellers and Buyer shall have fifteen (15) calendar days
following the date Sellers send the notice of disagreement provided for in
subsection (c) hereof to resolve such issues. If any issues remain unresolved
after that period of time, the parties will, within five (5) calendar days,
submit the dispute for resolution to an independent financial consulting firm
(the "Arbiter") for review and resolution of all matters that are in dispute,
based on the valuation methodologies as set forth in Section 2.1 hereof. The
Arbiter shall be a mutually acceptable nationally recognized independent
financial consulting firm agreed upon by Buyer and Sellers in writing. Buyer and
Sellers will use reasonable efforts to cause the Arbiter to render a decision
resolving the matters in dispute within fifteen (15) calendar days after the
submission of such matters to the Arbiter or such longer period as the parties
may mutually agree upon in writing. Buyer and Sellers agree that the
determination of the Arbiter (the "Determination") shall be final and binding
upon Buyer and Sellers (absent manifest error). Promptly following issuance of
the Determination, the Adjustment Amount will be calculated in accordance with
the Determination, and Sellers shall pay Buyer the Adjustment Amount if such
amount is a negative number, and Buyer shall pay WPE the Adjustment Amount if
such amount is a positive number. Sellers' obligation to pay the Adjustment
Amount (if any) shall be satisfied by deducting the Adjustment Amount from the
Holdback Amount as provided in Section 9.5 hereof. The fees, costs and expenses
of the Arbiter shall be borne equally by Sellers and Buyer.

            2.6 SCHEDULES. The Schedules to this Agreement other than the
Interim Purchase Price Schedules, the Closing Schedules and the Amended
Schedules are referred to herein as the "Disclosure Schedules." This Agreement
may be executed and delivered by the parties, and shall be binding upon them in
accordance with and subject to its terms and conditions, notwithstanding the
fact that the Disclosure Schedules are not attached to this Agreement at the
time of such execution and delivery. Sellers shall prepare and deliver to Buyer
the Disclosure Schedules as soon as practicable following the execution and
delivery of this Agreement, but in any event on or before that date which is ten
(10) business days prior to the Closing Date (or such other date as the parties
may agree in writing). The obligation of Buyer to consummate the Transactions
shall be subject to its review and approval of the form and content of the
Disclosure Schedules, as provided in Section 8.2 hereof. Once approved by Buyer,
the Disclosure Schedules shall be attached to this Agreement and made a part
hereof.

            2.7 CLOSING. Unless this Agreement shall have been terminated and
the Transactions abandoned pursuant to Article X, and subject to the conditions
to the Transactions set forth in Article VIII, the Closing shall take place as
promptly as practicable after satisfaction or waiver of such conditions but in
any event by that date which is sixty (60) days following the date of this
Agreement, at 10:00 AM local time, at the offices of Buyer's counsel, unless the
parties hereto agree in writing to another date, time or place. The date on
which the Closing occurs is referred to herein as the "Closing Date."

            2.8 DELIVERY TO BUYER. At the Closing, Sellers shall deliver to
Buyer:

                                      -10-
<PAGE>

                        (a) a duly executed Bill of Sale in the form attached
hereto as Exhibit "B" (the "Bill of Sale");

                        (b) a duly executed Assignment and Assumption Agreement
in the form attached hereto as Exhibit "C (the "Assignment and Assumption
Agreement");

                        (c) duly executed assignment and assumption agreements
with respect to each of the Leases in form and substance satisfactory to Buyer;

                        (d) duly executed estoppel certificates with respect to
each of the Leases, in form and substance satisfactory to Buyer;

                        (e) duly executed instruments of assignment and
assumption and other instruments where required to transfer any Purchased
Assets;

                        (f) executed copies of each of the Required Consents
referred to in Schedule 3.3(a), except to the extent waived by Buyer and
Sellers;

                        (g) all business records and other documents containing
or relating to the Purchased Assets (or otherwise make such records and
documents available to Buyer);

                        (h) all such other endorsements, assignments and
instruments as, in the reasonable opinion of Buyer or its counsel, are necessary
to vest in Buyer good and marketable title to the Purchased Assets;

                        (i) the New Lease, as required by Section 5.7 hereof;

                        (j) the Non-Competition Agreement of Dean McLain, as
required by Section 5.8(d) hereof;

                        (k) the Release, as required by Section 7.6 hereof;

                        (l) possession of the Purchased Assets, free and clear
of all Encumbrances; and

                        (m) all other previously undelivered documents required
to be delivered by Sellers to Buyer at or prior to the Closing in connection
with the Transactions, including those contemplated by Article VIII.

            2.9 DELIVERY TO SELLERS. At the Closing, Buyer shall deliver to
Sellers:

                        (a) a duly executed Assignment and Assumption Agreement;

                        (b) assignment and assumption agreements with respect to
each of the Leases;

                        (c) duly executed instruments of assignment and
assumption and other instruments where required to effect Buyer's assumption of
the Assumed Liabilities;

                                      -11-
<PAGE>

                        (d) payment by wire transfer, in immediately available
funds, of the Purchase Price as provided in Section 2.4;

                        (e) the Release, as required by Section 7.6 hereof;

                        (f) such other certificates, documents and instruments
as may reasonably be requested by Sellers to carry out the purposes or intent of
this Agreement; and

                        (g) all previously undelivered documents required
hereunder to be delivered by Buyer to Sellers at or prior to the Closing,
including those contemplated by Article VIII.

            2.10 REQUIRED CONSENTS. Sellers shall use their commercially
reasonable efforts to obtain the Required Consents on or before the Closing Date
and Buyer shall use its commercially reasonable efforts to assist Sellers in
obtaining the Required Consents. If and to the extent Sellers are unable to
obtain any Required Consents by the Closing Date, Buyer may waive the closing
condition as to any such Required Consents and elect to have Sellers continue
using their commercially reasonable efforts to obtain such consents after the
Closing Date, in which event the affected Purchased Assets and/or Assigned
Contracts will be held by Sellers in trust for Buyer and shall be performed by
Buyer in the name of Sellers and all benefits and obligations derived thereunder
(except as otherwise provided in the Transaction Documents) shall be for the
account of Buyer, until such time as the applicable Required Consents are
obtained. Where entitlement of Buyer to such Purchased Assets and/or Assigned
Contracts hereunder is not recognized by any third party, Sellers shall, at the
request of Buyer, enforce in a reasonable manner, at the cost of and for the
account of Buyer, any and all rights of Sellers against such third party.

            2.11 FURTHER ASSURANCE. After the Closing: (a) Sellers shall from
time to time, at the request of Buyer and without further cost or expense to
Sellers, execute and deliver such other instruments of conveyance and transfer
and take such other actions as Buyer may reasonably request in order to more
effectively consummate the Transactions and to vest in Buyer good and marketable
title to the Purchased Assets; and (b) Buyer shall from time to time, at the
request of Sellers and without further cost to Buyer, execute and deliver such
other instruments of assumption and take such other actions as Sellers may
reasonably request in order to more effectively consummate the Transactions and
to confirm the assumption by Buyer of the Assumed Liabilities. Nothing in this
Section 2.10 shall be construed to require Buyer to pay Sellers any additional
consideration for the Purchased Assets.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLERS

            Sellers hereby jointly and severally represent and warrant to Buyer
that the following statements contained in this Article III are true and correct
and complete as of the date of this Agreement and will be true, correct and
complete as of the Closing Date:

            3.1 CORPORATE STATUS. Each of the Sellers is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction under which it was incorporated. Each Seller, as applicable, has
all requisite corporate power and authority to own, lease and use

                                      -12-
<PAGE>

the Purchased Assets and conduct the Business as now conducted. Each of the
Sellers is qualified to do business as a foreign corporation and is in good
standing in any jurisdiction where it is required to be so qualified, except
where the failure to so qualify would not have a Material Adverse Effect.
Sellers have made available to Buyer true and complete copies of the certificate
of incorporation and bylaws of each Seller, in each case as amended to date.

            3.2 AUTHORIZATION. Each of the Sellers has the requisite power and
authority to execute and deliver the Transaction Documents to which it is or
will be a party and to perform its obligations under such of the Transaction
Documents to which it is a party. Such execution, delivery and performance by
the Sellers has been duly authorized by all necessary corporate action,
including approval by the respective Boards of Directors of the Sellers, as
required by the laws of the jurisdiction under which the Sellers are
incorporated. The Transaction Documents executed on or before the date hereof
constitute, and the Transaction Documents to be executed after the date hereof
will constitute, valid and binding obligations of the Sellers, enforceable
against each such party in accordance with their respective terms, except as
enforceability may be restricted, limited or delayed by applicable bankruptcy or
other laws affecting creditors' rights generally, and except as enforceability
may be subject to general principles of equity.

            3.3 CONSENTS AND APPROVALS. (a) Except for the consents and filings
specified in Schedule 3.3(a) (the "Required Consents"), or consents the failure
of which to obtain would not have a Material Adverse Effect, neither the
execution and delivery by either Seller of the Transaction Documents to which it
is or will be a party, nor the performance of the Transactions to be performed
by either Seller, will (i) violate or require any filing, consent or approval or
constitute a Default under (x)any Legal Requirement, pending filing with any
Governmental Body, or Court Order to which a Seller is subject, (y) the Charter
Documents of either Seller or (z) any Contract, Assigned Permit or other
document to which a Seller is a party or to which any of the Business, the
Purchased Assets or the Acquired Locations may be subject; (ii) result in the
creation or imposition of any Encumbrance on any Purchased Asset; or (iii)
prevent the consummation of the Transactions.

                        (b) Except as provided in Section 3.3(a) hereof, no
consent, waiver, approval, order, permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of Sellers in connection with the execution and delivery of this
Agreement or any Transaction Documents, or on the part of Sellers in connection
with the consummation of the Transactions or the performance or compliance by
Sellers with any of the provisions hereof or thereof.

            3.4 FINANCIAL DISCLOSURES. In connection with the Transactions,
Sellers have delivered to Buyer's representative, Navigant Capital Advisors,
certain financial data and other disclosures with respect to the Business as set
forth on Schedule 3.4 (referred to herein as the "WPE Financial Disclosures").
The WPE Financial Disclosures have been prepared from the books and records of
WPE in accordance with GAAP, present accurately the assets, liabilities and
results of operations of WPE as of the dates thereof and for the periods stated
therein, and accurately present in all material respects the financial condition
of WPE and the Business.

            3.5 TITLE TO PURCHASED ASSETS AND RELATED MATTERS. Except as set
forth on Schedule 3.5, WPE has good and marketable title to, or valid leasehold
interests in, all of the

                                      -13-
<PAGE>

Purchased Assets, free from any Encumbrances (other than the Assumed Liabilities
and Encumbrances that secure the Assumed Liabilities). The use of the Purchased
Assets is not subject to any Encumbrances (other than those specified in the
preceding sentence), and such use does not materially encroach on the property
or rights of anyone else. The Purchased Assets, the Assumed Liabilities and the
Acquired Locations constitute all property and property rights now used or
necessary for the conduct of the Business in the manner and to the extent
presently conducted by WPE.

            3.6 REAL PROPERTY LEASES. (a) WPE has delivered to Buyer true,
correct and complete copies of the Leases. With respect to the Leases, and
except as reflected in Schedule 2.1(a), the Leases have not been modified or
amended by any written or oral agreement and are in full force and effect and
are valid and subsisting; neither WPE nor any person on behalf of WPE has
received any notice of cancellation or termination from any landlord under any
of the Leases; WPE is not in Default under the terms of any of the Leases; to
WPE's Knowledge, no lessor under any of the Leases is in Default under the terms
of any such Leases; the current monthly rentals under each of the Leases is
correctly set forth in Schedule 2.1(a), and WPE has paid its monthly rental,
additional rent and all other monetary obligations due under each of the Leases
through the last day of the month of this Agreement; the commencement dates and
expiration dates of each of the Leases are correctly set forth in Schedule
2.1(a); no ongoing dispute exists with any landlord concerning the payment of
rent or WPE's performance of any of its obligations under the Leases; WPE has
not assigned or otherwise transferred its rights under any of the Leases, nor
has WPE sublet or permitted any other person to occupy all or any portion of the
leased premises; the amount of any security deposit made by or on behalf of WPE
under each of the Leases is correctly set forth on Schedule 2.1(a); and any
renewal option of WPE under the Leases, including the renewal rent, is correctly
set forth on Schedule 2.1(a). Each Lease constitutes the sole and entire
agreement between the lessor thereunder and WPE respecting the premises leased
thereunder. WPE is the lessee of the leasehold estate purported to be granted by
each Lease, and its possession thereof has not been disturbed, nor has any claim
been asserted against it adverse to its rights in such leasehold estate.

                        (b) To WPE's Knowledge, none of the leasehold
improvements installed by WPE or its representatives at any of the Acquired
Locations contravenes any zoning ordinance, building code, use or occupancy
restriction, or other administrative regulation or violates any restrictive
covenant or other agreement to which the applicable property is bound, or any
provision of law, the effect of which in any material respect would interfere
with or prevent the continued use of the applicable property for the purposes
for which it is now being used by WPE or would materially affect the value
thereof to Buyer for similar use. To WPE's Knowledge, all of the Acquired
Locations, buildings, fixtures and improvements thereon are in good operating
condition and repair (subject to normal wear and tear).

                        (c) To WPE's Knowledge, there are no pending or
threatened condemnation or similar proceedings affecting any Acquired Location
or any part thereof. The improvements on the Acquired Locations are served by
gas, electricity, water, sewage and waste disposal and other utilities adequate
to operate the improvements located thereon. To WPE's Knowledge, the buildings
and other facilities located on the Acquired Locations are free of any patent
and latent structural or engineering defects.

                                      -14-
<PAGE>

            3.7 ACCOUNTS. Subject to applicable reserves, all Accounts are, and
all Accounts subsequently accruing in connection with conduct of the Business on
or prior to the Closing Date will be, (a) receivables arising in the Ordinary
Course, (b) valid, genuine and enforceable, (c) to WPE's Knowledge, subject to
no defenses, set-offs or counterclaims and (d) current and collectible in the
ordinary course, taking into account the acknowledged discounting provided for
in Section 2.1(e) of this Agreement. Except as set forth on Schedule 3.7, no
agreement for deduction, free goods, discount or other deferred price or
quantity adjustment has been made with respect to any such receivables.

            3.8 INVENTORY. Schedules 2.1(c)(i), (ii), (iii) and (iv) and the
descriptions of the Inventory contained therein are complete and accurate in all
material respects, subject to adjustment as provided in Section 2.5 hereof.
Except as set forth in Schedule 3.8, neither Seller holds, in connection with
the Business, any materials on consignment or have title to any materials in the
possession of others.

            3.9 CONTRACTS.

                        (a) Each of the Assigned Contracts is in full force and
effect and is a valid and binding obligation of WPE and, to Sellers' Knowledge,
the other parties thereto in accordance with its terms and conditions, except as
such enforceability may be limited by (a) bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditors' rights generally and (b)
equitable principles of general applicability (whether considered in a
proceeding at law or in equity). Neither Seller nor any person on behalf of
Sellers has received any notice of cancellation or termination of any of the
Assigned Contracts, and to Sellers' Knowledge, no Assigned Contract is subject
to any dispute and WPE is not in Default under any Assigned Contract. Except as
disclosed in Schedule 3.9, Sellers have no Knowledge of any Default by any other
party under any Assigned Contract. To Sellers' Knowledge, no event has occurred
which, and neither the execution of this Agreement nor the Closing hereunder do
or will constitute or result in, a Default under or a violation of any Assigned
Contract by either Seller or any other party to such Assigned Contract or would
cause the acceleration of any obligation of any party thereto or the creation of
an Encumbrance upon any Purchased Asset. Sellers have made available to Buyer a
true, complete and accurate copy of each written Assigned Contract and none of
the Assigned Contracts has been modified or amended in any respect, except as
otherwise disclosed to Buyer in Schedule 3.9.

                        (b) To Sellers' Knowledge, except for the Assigned
Contracts or as set forth in Schedule 3.9, neither Seller is a party to or
otherwise obligated in connection with the Business under any contract or
commitment, whether written or oral, not made in the Ordinary Course of the
Business.

            3.10 LEGAL PROCEEDINGS. (a) Except as disclosed in Schedule 3.10(a),
there is no Litigation that is pending or, to the Knowledge of Sellers,
threatened against or related to the Business, the Acquired Locations or the
Purchased Assets. There are no judgments, orders, decrees or awards entered
against either Seller related to the Business or the Purchased Assets. There is
no asserted claim, action or proceeding now pending or, to the Knowledge of
Sellers, threatened before any court, grand jury, administrative or regulatory
body, Governmental Body, arbitration or mediation panel or similar body
involving either Seller which will or may

                                      -15-
<PAGE>

reasonably be expected to prevent or hamper the consummation of the Transactions
or have a Material Adverse Effect on the Business.

                        (b) Except as disclosed in Schedule 3.10(b), neither
Seller has received notice or information as to any claim or allegation of
personal injury, death, or property or economic damages, any claim for punitive
or exemplary damages, any claim for contribution or indemnification, or any
claim for injunctive relief in connection with any product manufactured, sold or
distributed by, or in connection with any service provided by, WPE in connection
with the Business, which will or may reasonably be expected to have a Material
Adverse Effect on the Business. Schedule 3.10(b) accurately and completely
describes all such claims of which Sellers have Knowledge, together in each case
with the date such claim was made, the amount claimed, the disposition or status
of such claim (including settlement or judgment amount). WPE has had at all
times and currently has in full force and effect insurance of the type and
amount adequate to cover all claims of the sort described in this Section.

            3.11 EMPLOYEES. (a) Schedule 3.11(a) accurately identifies, as of
the date of this Agreement, the following information as to each employee of WPE
at the Acquired Locations: name, title, whether on leave of absence or layoff
status, accrued 2008 vacation, accrued 2008 sick leave, and annualized
compensation. Except as set forth on Schedule 3.11(a), there are no collective
bargaining agreements covering any of the employees at the Acquired Locations.

                        (b) Except as set forth in Schedule 3.11(b): (i) WPE is
not indebted in connection with the Business to any employee of WPE except for
amounts due as normal salaries, wages, employee benefits and bonuses and in
reimbursement of ordinary expenses; and (ii) no employee of WPE is indebted to
WPE except for advances for ordinary business expenses.

            3.12 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 3.12:

                        (a) The Acquired Locations, while leased by WPE, have
been operated and are currently in compliance in all material respects with all
Legal Requirements concerning or relating to industrial hygiene or the
protection of health, safety and/or the environment and/or governing the use,
handling, generation, treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling or Release of Hazardous
Materials, whether now existing or subsequently amended or enacted (collectively
referred to as "Environmental Laws"), including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss.9601 as amended ("CERCLA"), the Resource Conservation and Recovery Act, 42
U.S.C. ss.6901 et seq., as amended ("RCRA"), the Federal Water Pollution Act, 33
U.S.C. ss.1251 et seq., as amended, the Clean Air Act, 42 U.S.C. ss.7401 et
seq., as amended ("Clean Air Act"), the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. ss.136 et seq., as amended, the Occupational Safety
and Health Act of 1970, 29 U.S.C. ss.651 et seq., as amended ("OSHA"), and the
Safe Drinking Water Act, 42 U.S.C. ss.300 et seq., as amended, or regulations
promulgated thereunder, and all applicable state and local environmental laws;

                        (b) Neither Seller has received any claims, notices,
demand letters or requests for information alleging any violation under
Environmental Law and there are no judicial,

                                      -16-
<PAGE>

administrative or other actions, suits or proceedings pending, nor, to Sellers'
Knowledge, are there any investigations or conditions on, about, beneath or
arising from any of the Acquired Locations, which might, now or at any time in
the future, under any Environmental Law, (A) give rise to any Environmental
Liabilities or the imposition of a statutory lien upon Buyer or WPE, or (B)
require any Response, Removal or Remedial Action (as those terms are defined
below) or any other action, including, without limitation, reporting,
monitoring, cleanup or contribution by WPE (collectively, an "Environmental
Condition");

                        (c) To Sellers' Knowledge, WPE has not Released any
Hazardous Substances (as defined below) at or from the Acquired Locations.

                        (d) To Sellers' Knowledge, none of the following exists
at any Acquired Location: (1) underground storage tanks or sumps, (2)
asbestos-containing material in any friable and damaged form or condition, (3)
materials or equipment containing polychlorinated biphenyls, or (4) landfills,
surface impoundments or disposal areas.

                        (e) Except as disclosed in Schedule 3.12, there has been
no environmental investigation, study, audit, test, review or other analysis
conducted by or on behalf of either Seller (or by a third party of which either
Seller has Knowledge) in relation to operations of either Seller at an Acquired
Location.

As used in this Agreement:

                                    (i) the terms "Release," "Response,"
"Removal" and "Remedial Action" shall have the meanings ascribed to them in
Sections 101(22)-101(25) of CERCLA;

                                    (ii) The term "Hazardous Substances" or
"Hazardous Substance" shall mean any substance regulated under any of the
Environmental Laws, including, without limitation, any substance which is: (A)
petroleum, asbestos or asbestos-containing material, urea formaldehyde or
polychlorinated biphenyls; (B) a "hazardous substance," "pollutant" or
"contaminant" (as defined in Sections 101(14), and (33) of CERCLA or the
regulations designated pursuant to Section 102 of CERCLA), including any
element, compound, mixture, solution or substance that is or may be designated
pursuant to Section 102 of CERCLA; (C) listed in the United States Department of
Transportation Hazardous Material Tables, 49 C.F.R. ss.172.101; (D) defined,
designated or listed as a "Hazardous Waste" pursuant to the RCRA or (E) listed
as a "Hazardous Air Pollutant" under Section 112 of the Clean Air Act.

            3.13 FINDER'S FEES. No Person retained by Sellers or any of its
Affiliates is or will be entitled to any commission or finder's or similar fee
in connection with the negotiation or consummation of the Transactions.

            3.14 TAXES.

                        (a) All Tax and information returns and reports
("Returns") required to be filed by WPE on or prior to the Closing Date with
respect to Taxes have been or will be properly and timely filed.

                                      -17-
<PAGE>

                        (b) All amounts required to be shown on each of such
Returns have been paid or will be paid when due by WPE.

                        (c) Except as disclosed in Schedule 3.14, to Sellers'
knowledge, there are no grounds for the assertion or assessment of any Taxes
against WPE, the Purchased Assets or the Business other than those reflected or
reserved against on the WPE Financial Disclosures.

                        (d) Neither the Purchased Assets nor the Business are,
and neither will be, encumbered by any Encumbrances arising out of any unpaid
Taxes and there are no grounds for the assertion or assessment of any
Encumbrances against the Purchased Assets or the Business in respect of any
Taxes.

                        (e) The transactions contemplated by this Agreement will
not give rise to (i) the creation of any Encumbrances against the Purchased
Assets or the Business in respect of any Taxes, (ii) the assertion of any
additional Taxes against the Purchased Assets or the Business or (iii) the
imposition on Buyer of any liability for Taxes payable by Sellers with respect
to conduct of the Business on or prior to the Closing Date.

                        (f) Except as disclosed in Schedule 3.14, there is no
action or proceeding or unresolved claim for assessment or collection, pending
or threatened, by, or present or expected dispute with, any Governmental Body
for assessment or collection from any of the Sellers of any Taxes of any nature
affecting the Purchased Assets or the Business.

                        (g) Except as disclosed in Schedule 3.14, there is no
extension or waiver of the period for assertion of any Taxes against the Sellers
affecting the Purchased Assets or the Business.

                        (h) None of the Purchased Assets or Assumed Liabilities
will constitute a partnership, joint venture, or other arrangement or contract
that could be treated as a partnership for federal income tax purposes.

                        (i) None of the Purchased Assets are tax-exempt use
property within the meaning of Section 168(h) of the Code.

                        (j) None of the Purchased Assets are subject to a tax
indemnification agreement.

            3.15 INTENTIONALLY DELETED.

            3.16 AFFILIATED TRANSACTIONS. Except as disclosed in Schedule 3.16,
no director, officer, employee or affiliate of either Seller, is a party to any
agreement, Contract, commitment or other form of transaction or arrangement with
Sellers in connection with the Business or has any interest in any property used
by or in connection with the Business.

            3.17 BENEFITS PLANS.

                        (a) As used in this Agreement, "Benefit Plan" means any
employee benefit plan within the meaning of Section 3(3) of ERISA, and any other
plan, program, agreement,

                                      -18-
<PAGE>

arrangement, policy, contract, commitment, written or oral, statutory or
contractual, that provides for compensation or benefits, including, but not
limited to, any deferred compensation, executive compensation, bonus, or
incentive plan, any cafeteria plan or any holiday or vacation plan or practice,
with respect to which WPE has or has had in the one year period preceding the
date hereof any obligation or liability or which are or were in the one year
period preceding the date hereof maintained, contributed to or sponsored by WPE
for the benefit of any current or former employee, officer or director of WPE.
Schedule 3.17(a) sets forth a list of all Benefit Plans. With respect to each
Benefit Plan, Sellers have made available to Buyer a true and complete copy of
each such Benefit Plan (including all amendments thereto) and a true and
complete copy of each material document (including all amendments thereto)
prepared in connection with each such Benefit Plan including, without
limitation, (i) a copy of each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications, and (iii) a copy
of the most recent favorable determination letter referred to in Section 3.17(c)
(if any).

                        (b) None of the Benefit Plans is a plan that is or has
ever been subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of
the Code. None of the Benefit Plans is a "multiemployer plan" as defined in
Section 3(37) of ERISA.

                        (c) Except as set forth on Schedule 3.17(c), each
Benefit Plan or trust which is intended to be qualified or exempt from taxation
under Section 401(a), 401(k) or 501(a) of the Code has received a favorable
determination letter from the IRS that it is so qualified or exempt, and nothing
has occurred since the date of such determination letter that would adversely
affect the qualified or exempt status of any Benefit Plan or related trust.

                        (d) There has been no amendment to, written
interpretation of, or announcement (whether or not written) by either Seller
relating to, or change in employee participation or coverage under, any Benefit
Plan that would increase materially the expense of maintaining such Benefit Plan
above the level of the expense incurred in respect thereto for the most recent
fiscal year ended prior to the date hereof.

                        (e) No employee or former employee of WPE will become
entitled to any bonus, retirement, severance, job security or similar benefit or
enhanced such benefit (including acceleration of vesting or exercise of an
incentive award) as a result of the consummation of the Transactions
contemplated by this Agreement, other than as provided for in Section 5.4.

            3.18 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES. Except as set
forth on Schedule 3.18, no present or former employee of WPE in connection with
the Business has given written notice to either Seller of, and to Sellers'
Knowledge there is no valid basis for, any claim against either Seller or the
Purchased Assets (whether under law, any employment agreement or otherwise) on
account of or for (a) overtime pay, other than overtime pay for the current
payroll period, (b) wages or salary (excluding current bonus, accruals and
amounts accruing under "employee benefit plans," as defined in Section 3(3) of
ERISA) for any period other than the current payroll period, (c) vacation, time
off or pay in lieu of vacation or time off, other than that earned in respect of
the current fiscal year, or (d) any violation of any law relating to minimum
wages or maximum hours of work.

                                      -19-
<PAGE>

            3.19 DISCRIMINATION, WORKERS COMPENSATION AND OCCUPATIONAL SAFETY
AND HEALTH. To Sellers' Knowledge, no person or party (including government
agencies of any kind) has any valid claim, or valid basis for any action or
proceeding, against Sellers or the Purchased Assets arising out of any law
relating to discrimination in employment or employment practices or occupational
safety and health standards in connection with WPE's operation of the Business.
Neither Seller has received any written notice from any Governmental Body
alleging a violation of occupational safety or health standards. Except as set
forth in Schedule 3.19, there are no pending workers compensation claims
involving Sellers in connection with the Business and there have never been any
workers compensation claims against either Seller in connection with the
Business relating to the use or existence of asbestos in any of Sellers'
products. WPE has delivered to Buyer a true, correct and complete list of all
workers compensation claims against WPE in connection with the Business while
operated by WPE.

            3.20 INTENTIONALLY DELETED.

            3.21 LABOR DISPUTES; UNFAIR LABOR PRACTICES. Except as set forth in
Schedule 3.21, there is neither pending nor, to the Knowledge of Sellers,
threatened any labor dispute, strike or work stoppage in connection with the
Business which affects or which reasonably may be expected to affect Sellers,
the Business, the Purchased Assets or the Assumed Liabilities.

            3.22 INSURANCE POLICIES. Set forth in Schedule 3.22 is a list of all
insurance policies and bonds in force covering or relating to the properties,
operations or personnel of the Business.

            3.23 PRODUCT WARRANTIES. Set forth in Schedule 3.23 are the standard
forms of product warranties and guarantees used by Sellers in connection with
the Business (other than standard forms provided by Case for Case products) and
copies of all other product warranties and guarantees given or made in
connection with the Business. No oral product warranties or guarantees have been
made containing terms less favorable to Sellers than the terms of the forms of
product warranties and guarantees set forth in Schedule 3.23. To Sellers'
Knowledge, no person or party (including, but not limited to, government
agencies of any kind) has any valid claim, or valid basis for any action or
proceeding, against Sellers under any law relating to unfair competition, false
advertising or other similar claims arising out of product warranties,
guarantees, specifications, manuals or brochures or other advertising materials
used by Sellers in connection with the Business.

            3.24 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Except as disclosed
in Schedule 3.24, Sellers have to their Knowledge complied with and are not in
Default under or in violation of any applicable Legal Requirement, or the
provisions of any franchise or license. WPE holds all licenses or permits
required to conduct the Business as presently conducted by it, and each such
license or permit is valid, in full force and effect, and listed in Schedule
2.1(g), and neither the execution of this Agreement nor the Closing do or will
constitute or result in a Default under or violation of any such permit or
license.

            3.25 PRODUCT SAFETY AUTHORITIES. WPE has not been required to file
any notification or other report with or provide written information or oral
presentation to any government agency or product safety standards group
concerning actual or potential defects or hazards with respect to any product
manufactured, sold or distributed by WPE in connection with the

                                      -20-
<PAGE>

Business, and to Sellers' Knowledge there exist no valid grounds for the recall
of any such product.

            3.26 INTENTIONALLY DELETED.

            3.27 FULL DISCLOSURE. No representation or warranty of Sellers
herein and no statement, information or certificate furnished or to be furnished
by or on behalf of Sellers pursuant hereto or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein or therein not misleading.

                                   ARTICLE IV

                     REPRESENTATIONS AND WARRANTIES OF BUYER

            Buyer hereby represents and warrants to Sellers that the following
statements contained in this Article IV are true and correct and complete as of
the date of this Agreement and will be true, correct and complete as of the
Closing Date:

            4.1 ORGANIZATIONAL STATUS. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite power and authority to purchase the Purchased
Assets. Buyer is qualified to do business and is in good standing as a foreign
entity in any jurisdiction where it is required to be so qualified, except where
the failure to so qualify would not have a material adverse effect on Buyer's
ability to perform its obligations under this Agreement. Buyer has made
available to Sellers true and complete copies of the Charter Documents of Buyer.

            4.2 AUTHORIZATION. Buyer has the requisite power and authority to
execute and deliver the Transaction Documents to which it is or will be a party
and to perform its obligations under such of the Transaction Documents to which
it is a party. Such execution, delivery and performance by Buyer has been duly
authorized by all necessary limited liability company action. The Transaction
Documents executed on or before the date hereof constitute, and the Transaction
Documents to be executed after the date hereof will constitute, valid and
binding obligations of Buyer, enforceable against Buyer, as the case may be, in
accordance with their terms, except as enforceability may be restricted, limited
or delayed by applicable bankruptcy or other laws affecting creditors' rights
generally, and except as enforceability may be subject to general principles of
equity.

            4.3 CONSENTS AND APPROVALS. Except as herein provided, neither the
execution and delivery by Buyer of the Transaction Documents to which it is or
will be a party, nor the performance of the Transactions to be performed by
Buyer, violate or will require any filing, consent or approval or constitute a
Default under (a) any Legal Requirement, pending filing with any Governmental
Body, or Court Order to which Buyer is subject, (b) the Charter Documents of
Buyer or (c) any Contract, government permit or other document to which Buyer is
a party or by which the properties or other assets of Buyer may be subject.

                                      -21-
<PAGE>

                                   ARTICLE V

                              COVENANTS OF SELLERS

            5.1 OPERATION OF THE BUSINESS. From the date hereof through the
Closing Date, WPE will conduct the Business at the Acquired Locations in the
Ordinary Course, and will make commercially reasonable efforts to maintain its
relationships and goodwill with licensors, suppliers, distributors, customers,
landlords, employees, agents and others having business relationships with
either Seller in connection with the Business, maintain in inventory quantities
of raw materials, component parts, work in process, finished goods and other
supplies and materials in such manner and in such amounts as are consistent with
past practices, and shall refrain from the following actions in furtherance of
and in addition to such restriction (except as contemplated by this Agreement)
without the prior written consent of Buyer, which shall not be unreasonably
withheld: (i) encumbering, selling or otherwise disposing of any Purchased
Assets other than in the Ordinary Course; (ii) entering into any Contract,
waiving any right or otherwise incurring any Liability with respect to the
Purchased Assets or the Acquired Locations, other than in the Ordinary Course;
(iii) accelerating or discounting any Account other than in the Ordinary Course;
(iv) modifying or amending in any material respect or terminating any Assigned
Contract; (v) terminating or closing any Acquired Location; (vi) causing or
permitting to occur any event, occurrence or omission which, individually or
together with other matters, could reasonably be expected to have a Material
Adverse Effect; (vii) taking any action that would cause any of the
representations and warranties made by Sellers in this Agreement not to remain
true and correct or any of the conditions set forth in this Agreement not to be
satisfied; (viii) settling, releasing or forgiving any claim or litigation or
waiving any right thereto that relates to any of the Purchased Assets or the
Assumed Liabilities, but excluding any such claim or right that relates solely
to any Excluded Asset or Excluded Liability; (ix) other than in the Ordinary
Course, (a) materially increasing compensation or other benefits payable to any
employee of WPE or (b) entering into any employment or other similar agreement
or arrangement providing for compensation or benefits of any kind, or (ix)
initiating or participating in any discussions or negotiations to do, or
entering into any agreement to do, any of the foregoing.

            5.2 ACCESS. Sellers shall give Buyer and its accountants, counsel
and other representatives reasonable access (subject to providing reasonable
notice and subject further to being under the supervision and direction of WPE
personnel if requested by WPE and subject further to such personnel complying
with the confidentiality provisions of this Agreement), without unreasonably
interfering with business operations, to all properties, books, Contracts and
records of Sellers related to the Purchased Assets or the Acquired Locations and
shall furnish to Buyer all such documents, records and information as Buyer
shall from time to time reasonably request.

            5.3 INSURANCE AND MAINTENANCE OF THE PURCHASED ASSETS. From the date
hereof through the Closing Date, WPE shall continue to maintain its existing
insurance policies on property owned or leased by it in connection with the
Business and maintain and service the Purchased Assets at its own expense in a
manner consistent with past practice.

                                      -22-
<PAGE>

            5.4 EMPLOYEES. Sellers shall provide Buyer with reasonable access to
any employees at the Acquired Locations for purpose of discussing potential
future employment. After the Closing Date, upon the reasonable request of Buyer
and to the extent permitted by applicable Legal Requirements and subject to the
confidentiality provisions of this Agreement, Sellers shall make available to
Buyer any records in their possession with respect to former WPE employees hired
by Buyer. To the extent any WPE employee at the Acquired Locations is entitled
under WPE's existing policies to receive bonus compensation for any periods
prior to and through the Closing Date, WPE shall be responsible for and shall
pay to such employees, promptly following the Closing Date, the full amount of
such accrued bonus compensation (subject to normal withholding requirements).

            5.5 FULFILLMENT OF CONDITIONS. Sellers shall use commercially
reasonable efforts to fulfill the conditions specified in Article VIII to the
extent that the fulfillment of such conditions is within their control. The
foregoing obligation includes (a) the execution and delivery of the Transaction
Documents and (b) taking or refraining from such actions as may be necessary to
fulfill such conditions (including conducting WPE's business in such manner that
on the Closing Date the representations and warranties of Sellers contained
herein shall be accurate as though then made, except as contemplated by the
terms hereof).

            5.6 NOTIFICATION OF CERTAIN MATTERS. Between the date of this
Agreement and the Closing, either Seller shall give prompt notice to Buyer of
(a) the occurrence or failure to occur of any event of which either of them has
Knowledge, which occurrence or failure would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect any time from the date hereof through the
Closing Date and (b) any failure of either Seller to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that such disclosure shall not be deemed to cure
any breach of a representation, warranty, covenant or agreement or to satisfy
any condition.

            5.7 NEW LEASE. With respect to WPE's corporate headquarters facility
in Vancouver, Washington, Sellers shall cause the landlord for the facility (an
Affiliate of Sellers) to terminate the existing lease and enter into a new lease
of the facility with Buyer, to be effective on and as of the Closing Date (the
"New Lease"). The new lease will be for a term of six (6) months at a monthly
rental rate equal to $14,000 per month.

            5.8 NON-COMPETITION.

                        (a) Sellers agree that for a term of five (5) years
after the Closing Date (the "Restricted Period"), neither they nor any of their
Affiliates will: (i) engage, directly or indirectly, whether by itself or in
partnership or in conjunction with any other person, firm, association,
syndicate or corporation, as principal, agent, shareholder, employee, consultant
or in any other manner whatsoever, in any business activity competitive with the
Business as constituted on the date hereof; or (ii) at any time during the
Restricted Period, directly or indirectly induce or attempt to influence any
customer or supplier of Buyer to terminate its relationship with Buyer or to
enter into any relationship with any competitor of Buyer; or (iii) at any time
during the Restricted Period, induce or attempt to influence any employee or
contractor of Buyer to terminate a relationship with Buyer, or (iv) at any time
during the Restricted Period,

                                      -23-
<PAGE>

without the prior written consent of Buyer, induce or attempt to influence any
employee of Buyer to enter into any employment or contractual relationship with
Sellers or any other person or entity.

                        (b) Sellers agrees that any violation of any of the
covenants in this Section 5.8 would cause substantial and irreparable injury to
Buyer, whereupon Buyer may seek to have Sellers enjoined from any breach or
threatened breach thereof in addition to, but not in limitation of, any other
rights or remedies to which Buyer is or may be entitled to at law or in equity
or under this Agreement.

                        (c) Sellers agree that the limitations set forth above
are reasonable in time and geographic scope, and if any provision hereof is held
invalid or unenforceable, the remainder shall nevertheless remain in full force
and effect. In particular, Sellers agree that if any court of competent
jurisdiction shall determine that the duration or geographical limit of the
foregoing non-competition covenant is invalid or unenforceable, it is the
intention of Sellers and Buyer that it shall not be terminated thereby but shall
be deemed to have been amended to the extent required to render it valid and
enforceable, such amendment to apply only with respect to the jurisdiction of
the court making such adjudication. Sellers acknowledge that the Purchase Price
and the agreements of Buyer set forth in this Agreement constitute good and
valid consideration for the covenants set forth in this Section 5.8.

                        (d) In order to more fully protect the interests of
Buyer, and as a condition to Buyer's agreement to acquire the Purchased Assets,
Sellers shall cause Dean McLain to execute and deliver to Buyer at Closing a
Non-Competition Agreement containing provisions comparable in all material
respects to the provisions of this Section 5.8.

            5.9 USE OF NAME. Buyer shall have the exclusive (in respect of the
operation of a dealership), royalty-free right and license to use the name
"Western Power" and associated logos for a transition period of one hundred
eighty (180) days following the Closing, to allow for the orderly removal of the
name from signage, invoices and other assets used in the operation of the
Acquired Locations and the Purchased Assets. Nothing contained in this Section
5.9 shall prohibit WPE from using the name "Western Power" in connection with
sales of products that are not competitive with CNH products from any facility
currently maintained by WPE but not included in the Acquired Locations.

                                   ARTICLE VI

                               COVENANTS OF BUYER

            6.1 FULFILLMENT OF CONDITIONS. From the date hereof to the Closing,
Buyer shall use commercially reasonable efforts to fulfill the conditions
specified in Article VIII to the extent that the fulfillment of such conditions
is within its control and to cooperate with the Sellers as reasonably required
to obtain the Required Consents. The foregoing obligation includes (a) the
execution and delivery of the Transaction Documents and (b) taking or refraining
from such actions as may be necessary to fulfill such conditions.

                                      -24-
<PAGE>

            6.2 EMPLOYEES. As of the Closing Date, Buyer shall offer employment
(to be effective the day after the Closing Date) to substantially all of the
non-management employees of WPE at all the Acquired Locations who are not on
leave of absence (disability or otherwise) and in connection therewith shall
credit those employees who accept such offers of employment with the unused
vacation time or sick leave accrued by them (in accordance with WPE's policies)
during their employment with WPE, to the extent expressly identified on Schedule
6.2. Notwithstanding the foregoing, Buyer shall have the right not to offer
employment to any employee of WPE if Buyer determines, in its sole discretion,
that it would not be appropriate or desirable to retain such employee. Sellers
represent and warrant to Buyer that Schedule 6.2 correctly identifies all
vacation time and sick leave accrued and unused by the aforesaid employees.
Nothing contained in this Section 6.2 shall be deemed an undertaking by Buyer to
continue WPE's policies with respect to vacation time or sick leave, it being
understood and agreed that Buyer may initiate policies that differ from WPE's.

            6.3 PRO RATA SHARE OF PREPAID RENT AND LEASE EXPENSES. In addition
to the Purchase Price, Buyer shall pay to WPE at the Closing its pro rata share
(based on their respective periods of occupancy) of all prepaid rent and other
prepaid expenses under the Leases.

            6.4 ACCOUNTS6.5 . In addition to the Purchase Price, Buyer shall pay
to WPE, at the end of the Holdback Period (as defined in Section 9.5 hereof), an
amount equal to ninety percent (90%) of all cash payments actually received by
Buyer during the Holdback Period that are attributable to accounts identified on
Schedule 2.1(e)(ii) as being over 120 days old on and as of the Closing Date
(provided such payments are expressly designated by the payor as a payment in
satisfaction of such an over-120 days account), minus (a) any out-of-pocket
costs of collection of such accounts, and (b) any Indemnification Obligations
that remain unsatisfied from the Holdback Amount as provided in Section 9.5.
Buyer shall make commercially reasonable efforts, in accordance with its
ordinary practices, to collect such accounts during the six (6) month period
following the Closing Date, provided that "reasonable efforts" shall not include
initiating any collection action. Nothing contained in this Section 6.4 is
intended to modify or otherwise affect the absolute assignment of title to such
accounts to Buyer. Sellers shall not have the right to take any action to
collect such accounts following the Closing Date, and expressly covenant and
agree with Buyer that they and their representatives will refrain from taking
any such action. Buyer's payment obligations under this Section 6.4 shall
survive through the end of the Holdback Period.

                                   ARTICLE VII

                                FURTHER COVENANTS

            7.1 CONFIDENTIALITY. Prior to the Closing and for two years from any
termination of this Agreement, all parties to this Agreement shall hold, and
shall use commercially reasonable efforts to cause the Affiliates, officers,
directors, employees, accountants, counsel, consultants, advisors and agents of
such Person to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, and except as may be
required to enforce the Transaction Documents or to defend any claims arising
thereunder, the terms contained in the Transaction Documents as well as all
confidential documents and information concerning the other Person furnished in
connection with the Transactions, except to the extent

                                      -25-
<PAGE>

that such information can be shown to have been (a) previously known on a
nonconfidential basis, (b) in the public domain through no fault of such Person,
(c) later acquired from sources other than such Person as long as, to the
Knowledge of such Person, such sources are not subject to a contractual or
fiduciary duty of confidentiality with respect to such information or (d)
required to be disclosed pursuant to operation of law or legal process,
governmental regulation or court order, provided that such Person will inform
the other parties thereof and reasonably cooperate with the other parties (at no
cost to such Person) in contesting such request or order and in obtaining
appropriate protection orders; provided that such Person may disclose such
information to its respective officers, directors, shareholders, employees,
accountants, counsel, consultants, advisors and agents in connection with the
Transactions as long as such Persons are informed of the confidential nature of
such information and are directed to treat such information confidentially. The
obligation of each Person to hold any such information in confidence shall be
satisfied if it exercises the same care with respect to such information as it
would take to preserve the confidentiality of its own similar information. If
this Agreement is terminated, each party shall, and shall use commercially
reasonable efforts to cause the officers, directors, employees, accountants,
counsel, consultants, advisors and agents of such Person to, destroy or deliver
to the other parties all documents and other materials, and all copies thereof,
obtained by such Person or on its behalf in connection with this Agreement that
are subject to such confidence.

            7.2 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party shall use commercially reasonably
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable Legal
Requirements to consummate the Transactions, including the execution and
delivery of any additional instruments necessary to consummate the Transactions.

            7.3 EXPENSES. Whether or not the Closing occurs, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring the costs or expenses.

            7.4 TRANSFER TAXES. Buyer shall be responsible for, pay, indemnify
and hold harmless the Sellers from, (a) any transfer, motor vehicle
registration, and documentary taxes and fees imposed with respect to instruments
of conveyance required to effect the Transactions; and (b) any sales, use,
gains, excise and other transfer or similar taxes on the transfer of the
Purchased Assets contemplated hereunder (collectively, the "Transfer Taxes").
Sellers shall execute and deliver to Buyer at the Closing any certificates or
other documents as the Buyer may reasonably request to perfect any exemption
from any such Transfer Tax.

            7.5 RECEIPT OF PAYMENTS POST-CLOSING. After the Closing Date,
Sellers and Buyer will reasonably cooperate to assist each other in directing
customers and other third parties to make payments (in satisfaction of Accounts
or otherwise) to the account of the party to which such payments are properly
allocated under the terms of this Agreement. If and to the extent that, after
the Closing, either party receives any payment of funds which should have been
directed to the account of the other party as aforesaid, the party in receipt of
such payment will hold such funds in trust for the other party and will promptly
(but in any event within seven (7) days following receipt) remit the funds to
such other party; provided, however, that any amount payable by a party under
this Section 7.5 may be netted against any payment obligation owed to

                                      -26-
<PAGE>

such party by the other party, to the extent the other party has acknowledged
such off-setting payment obligation in writing.

            7.6 TERMINATION OF DEALER AGREEMENTS AND RELEASE OF CLAIMS. At the
Closing, Buyer shall cause CNH to execute and deliver to the Sellers and the
Sellers shall execute and deliver to CNH, an agreement in form and substance
mutually satisfactory to the parties thereto, terminating the construction
equipment sales and service agreement in effect by and between WPE and CNH,
effective as of the Closing Date, and containing a release by the Sellers of any
and all claims they may have against CNH, CNH Capital and their respective
Affiliates, arising out of or related to such distribution agreements or
otherwise, and containing a release by CNH of any and all claims it may have
against WPE arising out of or related to such sales and service agreement (the
"Release").

                                  ARTICLE VIII

                    CONDITIONS PRECEDENT TO THE TRANSACTIONS

            8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to consummate the Transactions shall be subject to the
fulfillment at or prior to the Closing of the following conditions:

                        (a) Approval of Transactions by Sellers. Sellers shall
have delivered to Buyer a Secretary's Certificate as evidence that the
respective Boards of Directors and shareholders of WPE and the Parent previously
approved and adopted the Transactions in accordance with their respective
Charter Documents and the laws of the jurisdictions under which they were
incorporated and that such approvals have not been revoked, modified, amended or
rescinded and are still in full force and effect.

                        (b) Approval of Transactions by Buyer. Buyer shall have
obtained all necessary approvals of the Transactions from its executive
management and its Board of Directors or other governing body, and such
approvals shall not have been revoked, modified, amended or rescinded.

                        (c) Governmental Approvals. All approvals and consents
from Governmental Bodies (if any) required to consummate the Transactions shall
have been obtained.

                        (d) No Governmental Order or Legal Requirement. There
shall not be in effect any order, decree or injunction (whether preliminary,
final or appealable) of a United States federal or state court of competent
jurisdiction, and no Legal Requirement shall have been enacted or promulgated by
any governmental authority or agency, that prohibits consummation of the
Transactions.

            8.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the Transactions shall be subject to the satisfaction or waiver, on
or before the Closing, of each of the following conditions:

                        (a) Representations and Warranties True. The
representations and warranties of Sellers contained herein shall be true and
correct at and as of the date hereof and at and as of

                                      -27-
<PAGE>

the Closing as though such representations and warranties were made again at and
as of the Closing, except for changes contemplated by this Agreement.

                        (b) Performance. Sellers shall have performed and
complied in all material respects with the covenants and agreements contained in
this Agreement required to be performed or complied with by them on or prior to
the Closing.

                        (c) Consents and Approvals. Sellers shall have obtained
all the Required Consents.

                        (d) Due Diligence. Buyer shall have completed its due
diligence review of the Business to its satisfaction.

                        (e) Disclosure Schedules. Sellers shall have prepared
and delivered to Buyer the Disclosure Schedules and Buyer shall have approved
the form and content thereof.

                        (f) Discharge of Encumbrances. Sellers shall have
delivered to Buyer all releases, discharges and other instruments or documents,
duly executed or otherwise authorized in writing by the applicable creditors of
WPE listed in Schedule 8.2(f), to terminate, release and forever discharge all
security interests or liens with respect to the Purchased Assets and to effect
the transfer of the Purchased Assets to Buyer free and clear of all Encumbrances
as required by this Agreement; or, in the alternative, duly executed payoff
letters from such creditors showing the amounts to be paid to satisfy the
applicable Encumbrance (stating any applicable per diem payoff amount),
expressly authorizing the termination, release and discharge of the Encumbrance
upon payment of such payoff amount, and agreeing to execute and deliver to Buyer
any necessary release, discharge or other instrument or document and to
otherwise cooperate with Buyer to effect such termination, release and
discharge.

                        (g) Absence of Litigation. No action, suit, proceeding,
arbitration, investigation or inquiry, whether civil, criminal or
administrative, shall have been commenced against Sellers or any of their
Affiliates with respect to or affecting the Transactions or any aspect thereof
or affecting the Business, the Purchased Assets or the Acquired Locations which
would have a Material Adverse Effect on the Business, the Purchased Assets or
the Acquired Locations.

                        (h) Other Documents. Buyer shall have received executed
copies of all Transaction Documents to which Sellers are parties to the extent
that they shall not have been received on or prior to the Closing. Buyer shall
have received all other documents required under the terms of any of the
Transaction Documents and any other documents reasonably requested on or prior
to the Closing Date.

                        (i) Certificates. Sellers shall have furnished to Buyer
certificates of an officer of each of Sellers, dated the Closing Date,
certifying compliance as of the Closing with the conditions set forth in
paragraphs (a) and (b) of this Section 8.2.

                        (j) Material Adverse Change. There shall not have been
or occurred any Material Adverse Change in respect of the Business, the
Purchased Assets or the Acquired Locations.

                                      -28-
<PAGE>

                        (k) Damage or Destruction.

                                    (i) If, on or before the Closing Date, any
of the Acquired Locations is damaged or destroyed by fire or other cause,
Sellers shall notify Buyer thereof within ten (10) days after the occurrence of
such damage or destruction.

                                    (ii) If such damage or destruction effects a
Material Portion (as defined below) of any individual Acquired Location, Buyer
shall within twenty (20) days after receipt of Seller's notification, elect
either to (a) exclude the particular parcel from the Purchased Assets to be
transferred on the Closing Date and the Purchase Price shall be adjusted by an
amount allocated to such Acquired Location as mutually agreed by the parties, or
(b) terminate this Agreement if the loss of the particular Acquired Location
would have a Material Adverse Effect.

                                    (iii) If the above referenced time periods
overlap with the Closing Date, Buyer may, at Buyer's option, delay the Closing
Date until the expiration of Buyer's election period described in subsection
(ii) above.

                                    (iv) For purposes hereof, the term "Material
Portion" means any portion or portions of an Acquired Location that collectively
constitutes more than twenty percent (20%) of the rentable square footage of
such Acquired Location or, with regard to any Acquired Location, that materially
and adversely affects Buyer's intended use of such Acquired Location.

                                    (v) Condemnation. If, on or prior to the
Closing Date, any proceeding (judicial, administrative or otherwise), which
shall relate to the proposed taking of all or a Material Portion of any Acquired
Location by condemnation or eminent domain or any action in the nature of
eminent domain, is commenced or threatened, Sellers shall timely give Buyer
notice of such occurrence and Buyer shall, within twenty (20) days after receipt
of such notice, elect either (i) to exclude the particular Acquired Location
from the Purchased Assets and the Purchase Price shall be adjusted by the amount
allocated to such Acquired Location as mutually agreed by the parties, or (ii)
terminate this Agreement if the loss of the particular Acquired Location would
have a Material Adverse Effect. If the above referenced time periods overlap
with the Closing Date, Buyer may, at Buyer's option, delay the Closing Date
until the expiration of Buyer's election period described above.

            8.3 CONDITIONS TO OBLIGATIONS OF SELLERS. The obligations of Sellers
to consummate the Transactions shall be subject to the satisfaction or waiver,
on or before the Closing, of each of the following conditions:

                        (a) Representations and Warranties True. The
representations and warranties of Buyer contained herein shall be true and
correct at and as of the date when made and at and as of the Closing as though
such representations and warranties were made again at and as of the Closing,
except for changes contemplated by this Agreement.

                        (b) Performance. Buyer shall have performed and complied
in all material respects with the covenants and agreements contained in this
Agreement required to be performed or complied with by it on or prior to the
Closing.

                                      -29-
<PAGE>

                        (c) Consents and Approvals. Buyer shall have obtained
all governmental and third party consents and approvals necessary to consummate
the Transactions.

                        (d) Other Documents. Sellers shall have received
executed copies of all Transaction Documents to which Buyer is a party to the
extent that they shall not have been received prior to the Closing. Sellers
shall have received all other documents required under the terms of any of the
Transaction Documents and any other documents reasonably requested on or prior
to the Closing Date.

                        (e) Certificates. Buyer shall have furnished to Sellers
a certificate of its duly authorized officer, dated the Closing Date, certifying
compliance as of the Closing with the conditions set forth in paragraphs (a) and
(b) of this Section 8.3.

                        (f) Release of Guaranty. Effective upon the Closing of
the Transactions, Buyer shall have caused CNH and CNH Capital to release Dean
McLain, a principal of Sellers, from his obligations to CNH and CNH Capital
under his personal guaranty of the Liabilities of WPE, other than any Liability
expressly identified by CNH Capital as continuing in effect after the Closing,
and except to the extent that at any time any payment by or on behalf of WPE is
rescinded, avoided or rendered void as a preferential transfer, impermissible
set-off, fraudulent conveyance or must otherwise be returned or disgorged by CNH
or CNH Capital upon the insolvency, bankruptcy or reorganization of either of
the Sellers or otherwise. The latter exception shall continue in effect through
the final expiration of all applicable statutes of limitation.

                                   ARTICLE IX

                                 INDEMNIFICATION

            9.1 BY SELLERS. After the Closing Date, Sellers shall jointly and
severally indemnify and hold harmless Buyer and each Affiliate and agent of
Buyer ("Buyer Indemnified Parties") from and against any Damages that any such
indemnified party may sustain, suffer or incur and that result from, arise out
of, or relate to (i) any breach of any representation, warranty, covenant or
agreement of either Seller contained in any Transaction Document; (ii) any
Environmental Liabilities arising out of or resulting from events occurring or
conditions existing on or prior to the Closing Date or any Tax Liability of WPE,
including any such Liabilities of WPE related to consummation of the
Transactions or any Liability of WPE for Taxes of another Person (but not
including Transfer Taxes that are Buyer's responsibility under Section 7.4 of
this Agreement); and (iii) any Excluded Liability or any obligation, debt or
liability of the Sellers that does not arise out of or relate to the Business,
whether arising before, on or after the Closing Date. As used in this Article
IX, the term "Damages" shall include (A) all losses, damages (excluding
consequential damages), judgments, awards, penalties and settlements; (B) all
demands, claims, suits, actions, causes of action, proceedings and assessments,
whether or not ultimately determined to be valid; and (C) all costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated or arbitrated matter), penalties, court costs and reasonable fees and
expenses of attorneys and expert witnesses) of investigating, defending or
enforcing any of the foregoing or of enforcing this Agreement.

                                      -30-
<PAGE>

            9.2 BY BUYER(a) . After the Closing Date, Buyer shall indemnify and
hold harmless Sellers and each Affiliate and agent thereof ("Seller Indemnified
Party") from and against any Damages that any such Seller Indemnified Party may
sustain, suffer or incur and that result from, arise out of or relate to(i) any
breach of any representation, warranty, covenant or agreement of Buyer contained
in any Transaction Document; or (ii) all Claims against any Seller Indemnified
Party arising out of Buyer's operation of the Purchased Assets from and after
the Closing or with respect to any Assumed Liability.

            9.3 PROCEDURE FOR CLAIMS. A party seeking indemnification under this
Article IX (an "Indemnified Party") shall give prompt notice in writing of the
Claim for Damages and a brief explanation of the basis thereof to the party
alleged to be responsible for indemnification hereunder (an "Indemnitor"). The
Indemnitor shall promptly pay the Indemnified Party any amount due under this
Article IX. The Indemnified Party may pursue whatever legal remedies may be
available for recovery of the Damages claimed from any Indemnitor. In
determining the amount of any Damages in this Article IX, materiality qualifiers
contained in any representation, warranty or covenant will be disregarded.

            9.4 THIRD PARTY CLAIMS. An Indemnified Party shall give any
Indemnitor prompt written notice of the institution by a third party of any
actions, suits or other administrative or judicial proceedings if the
Indemnified Party would be entitled to claim indemnification under this Article
IX in connection with any such action, suit or other proceeding. The Indemnitor
shall, provided that it gives notice within ten (10) business days of receipt of
notice from the Indemnified Party, have the option of assuming the defense of
such action with counsel reasonably satisfactory to such Indemnified Party (and
such costs of defense shall be included in Damages with respect to such claim).
In this regard, Gersten Savage LLP shall be deemed reasonably satisfactory to
such Indemnified Party. The Indemnified Party shall be entitled to participate
in any such defense with separate counsel at its own expense; provided, however,
that if, in the reasonable opinion of counsel to the Indemnified Party, a
non-waivable conflict exists between the Indemnified Party and the Indemnitor
that would make the failure to have such separate representation either
unethical or illegal, the reasonable cost of such separate representation shall
be paid by the Indemnitor. If an Indemnitor assumes the defense of such an
action, (x) no compromise or settlement thereof may be effected by the
Indemnitor without the Indemnified Party's consent (which shall not be
unreasonably withheld, conditioned or delayed) unless (i) there is no finding or
admission of any violation of a Legal Requirement or any violation of the rights
of any person and no effect on any such claims that may be made against the
Indemnified Party and (ii) the sole relief provided is monetary damages that are
paid in full by the Indemnitor and (y) the Indemnitor shall have no liability
with respect to any compromise or settlement thereof effected by the Indemnified
Party that would involve a payment by the Indemnitor of Damages without its
consent (which shall not be unreasonably withheld, conditioned or delayed). If
notice is given to an Indemnitor of the commencement of any Action pursuant
hereto and it does not, within ten (10) business days after the Indemnitor's
notice is received, give notice to the Indemnified Party of its election to
assume the defense, the Indemnitor shall be bound by any determination made in
such action or any commercially reasonable compromise or settlement thereof
effected by the Indemnified Party. Any failure to give prompt notice under this
Section 9.4 shall not bar an Indemnified Party's right to claim indemnification
under this Article IX, except to the extent that an Indemnitor shall have been
harmed by such failure. Notwithstanding anything to the contrary set forth in
this Section 9.4, in

                                      -31-
<PAGE>

the event that the third party claim is covered by insurance and the insurance
policy provides for procedures other than those set forth herein as a condition
to coverage, the procedures set forth in the insurance policy shall supersede
those set forth herein to the extent that they are inconsistent with those set
forth herein.

            9.5 HOLDBACK In addition to any Adjustment Amount owed by the
Sellers under Section 2.5 hereof, the Buyer shall be entitled to set-off against
the Holdback Amount the amount of any indemnification obligations owed to the
Buyer by the Sellers under the provisions of Section 9.1 hereof (each
individually an "Indemnification Obligation" and, collectively, the
"Indemnification Obligations"), and to retain such amount in full or partial
satisfaction of such Indemnification Obligations, free and clear of any and all
rights or claims of Sellers or Persons claiming through Sellers. The Buyer shall
give the Sellers written notice (an "Indemnification Notice") of the aggregate
amount of any outstanding Indemnification Obligations to be set-off against the
Holdback Amount (including, in the case of a claim that has arisen but remains
unliquidated, a good faith estimate of the reasonably foreseeable maximum amount
of the applicable Indemnification Obligation), on or before the last day of each
of the following three periods: (i) the period from the Closing Date through
that date which is ninety (90) days following the Closing Date (or if later,
that date which is five (5) calendar days following a final determination of the
Adjustment Amount under the provisions of Section 2.5 hereof) (the "Initial
Holdback Period");(ii) the period from the end of the Initial Holdback Period
through December 31, 2008 (the "Second Holdback Period"); and (iii) the period
from January 1, 2009 through that date which is two hundred and seventy (270)
days following the Closing Date (the "Final Holdback Period" and, collectively
with the Initial Holdback Period and the Second Holdback Period, the "Holdback
Period"). During the Holdback Period, the Holdback Amount outstanding from time
to time (after deducting any set-offs and payments made under the provisions of
Section 2.5 and this Section 9.5) shall bear interest at a fixed rate per annum
equal to the "Prime Rate," as published by the WALL STREET JOURNAL on the
Closing Date, plus one percent (1%) ("Interest"). Any accrued and unpaid
Interest shall be paid to WPE, in immediately available funds, on each of the
three (3) payment dates set forth below.

            The Holdback Amount will be released to WPE in three (3) tranches,
as and to the extent provided below:

                        (a) At the end of the Initial Holdback Period, the Buyer
shall deduct from the Holdback Amount (i) any Adjustment Amount owed by the
Sellers under section 2.5 hereof, plus (ii) the amount of any Indemnification
Obligations accrued through such date. If and to the extent, after making such
deductions, the remaining Holdback Amount exceeds $666,666, then, in addition to
any Interest payable as hereinbefore provided, the Indemnification Notice shall
be accompanied by payment to WPE, in immediately available funds, of such excess
amount;

                        (b) At the end of the Second Holdback Period, the Buyer
shall deduct from the Holdback Amount the amount of any Indemnification
Obligations accrued through such date (other than Indemnification Obligations
previously satisfied under clause (a) above). If and to the extent, after making
such deduction, the remaining Holdback Amount exceeds $333,333, then, in
addition to any Interest payable as hereinbefore provided, the Indemnification
Notice shall be accompanied by payment to WPE, in immediately available funds,
of such excess amount;

                                      -32-
<PAGE>

                        (c) At the end of the Final Holdback Period, the Buyer
shall deduct from the Holdback Amount the amount of any Indemnification
Obligations accrued through such date (other than Indemnification Obligations
previously satisfied under clauses (a) or (b) above). If and to the extent,
after making such deduction, any portion of the Holdback Amount remains, then,
in addition to any Interest payable as hereinbefore provided, the
Indemnification Notice shall be accompanied by payment to WPE, in immediately
available funds, of such remaining portion; provided, however, that if a claim
or claims for indemnification arise under the provisions of Section 9.1 prior to
the expiration of the Holdback Period, then the portion of the Holdback Amount
that would be necessary to satisfy such claims (as determined by Buyer in good
faith) shall not be paid until such claims have been fully and finally resolved,
after which that portion (if any) not applied to the satisfaction of the claims,
plus any accrued and unpaid Interest thereon, shall be paid to WPE.

            By way of example, if at the end of the Initial Holdback Period the
Sellers owe the Buyer an Adjustment Amount of $200,000 and Indemnification
Obligations of $50,000, then those amounts will be satisfied from the Holdback
Amount, leaving a net Holdback Amount of $750,000, of which $83,334 (plus
Interest) will be paid to WPE on that date. By way of further example, if at the
end of the Initial Holdback Period the Sellers owe the Buyer an Adjustment
Amount of $200,000 and Indemnification Obligations of $350,000, then those
amounts will be satisfied from the Holdback Amount, leaving a net Holdback
Amount of $450,000, and no payment (other than Interest) will be made to WPE on
that date.

            Any dispute between the Sellers and the Buyer with respect to the
amount of any Indemnification Obligation claimed by the Buyer as hereinbefore
provided shall be resolved by arbitration in Chicago, Illinois by the American
Arbitration Association in accordance with its Commercial Arbitration Rules then
existing, provided that discovery as provided for under the Illinois Rules of
Civil Procedure shall be available to all parties to the arbitration. This
agreement to arbitrate is specifically enforceable and the arbitration award
will be final and judgment may be entered upon it in any court having
jurisdiction over the subject matter of the dispute, absent manifest error.
Arbitration shall be held within 90 days after notice of dispute is provided to
the Buyer by the Sellers. The prevailing party shall be awarded their reasonable
attorney fees incurred in the arbitration. Nothing in this Section 9.5 shall be
construed to require the Sellers and the Buyer to arbitrate any disputes other
than those disputes expressly provided for herein.

            9.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants of the parties in this Agreement or
any other Transaction Document shall survive the Closing.

                                    ARTICLE X

                                   TERMINATION

            10.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing Date:

                        (a) By mutual written consent of Buyer and Sellers;

                                      -33-
<PAGE>

                        (b) By either Buyer or Sellers, if the Closing has not
occurred by that date which is sixty (60) days following the date of this
Agreement (such date, as it may be extended from time to time by the written
agreement of Buyer and Sellers, is referred to herein as the "Termination
Date"); provided, however, that the right to terminate this Agreement under this
paragraph (b) of Section 10.1 shall not be available to a party if such failure
to close results from such party breaching any of its covenants, representations
or warranties in this Agreement;

                        (c) By Sellers if Buyer shall have breached any of its
covenants hereunder in any material respect or if the representations and
warranties of Buyer contained in this Agreement shall not be true and correct,
except for such changes as are contemplated by this Agreement, in all material
respects, and in either event, if such breach is subject to cure, Buyer has not
cured such breach within ten (10) business days of Sellers' notice of an intent
to terminate;

                        (d) By Buyer if Sellers shall have breached any of their
covenants hereunder in any material respect or if the representations and
warranties of Sellers contained in this Agreement shall not be true and correct,
except for such changes as are contemplated by this Agreement, in all material
respects, and in either event, if such breach is subject to cure, Sellers have
not cured such breach within ten (10) business days of Buyer's notice of an
intent to terminate;

                        (e) By Buyer if any of the conditions set forth in
Sections 8.1 or 8.2 have not been met by that date which is sixty (60) days
following the date of this Agreement or earlier become incapable of fulfillment;

                        (f) By Sellers if any of the conditions set forth in
Sections 8.1 or 8.3 have not been met by that date which is sixty (60) days
following the date of this Agreement or earlier become incapable of fulfillment;
or

                        (g) By Sellers or Buyer if there shall be in effect a
final nonappealable order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence).

            10.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 10.1, the agreements contained in Sections 7.1, 7.3 and this Section
10.2 and Article XI shall survive the termination hereof, but the rights and
obligations of the parties hereunder will otherwise terminate. In addition,
either party may pursue any further legal or equitable remedies that may be
available to it if such termination is based on a breach by the other party.

                                      -34-
<PAGE>

                                   ARTICLE XI

                              PUBLIC ANNOUNCEMENTS

            Buyer and Sellers will consult with each other before issuing any
press release or making any public statement with respect to this Agreement and
the Transactions and, except as may be required by applicable law or stock
exchange regulations, will not issue any such press release or make any such
public statement without the written consent of the other party.

                                   ARTICLE XII

                        CONTENTS OF AGREEMENT, AMENDMENT,
                      PARTIES IN INTEREST, ASSIGNMENT, ETC.

            This Agreement and the Transaction Documents referred to herein
together embody the entire agreement and understanding of the parties concerning
the subject matter contained herein, and supersedes any and all prior agreements
and understandings between the parties, whether written or oral. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of either party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. No provision of this Agreement may be
waived, modified or otherwise changed by any means, including, without
limitation, any course of dealing, course of performance or trade usage, or oral
evidence of any nature, except pursuant to a writing executed by the party
against which enforcement of such waiver, modification or change is sought. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties hereto. No
party hereto shall assign this Agreement or any right, benefit or obligation
hereunder, except that (a) Buyer shall have the right to assign any of its
rights and obligations hereunder to an Affiliate or other third party, and (b)
WPE may assign its right to receive any amounts payable to WPE under this
Agreement, including, but not limited to, under Sections 2.4, 2.5(c), 6.3, 6.4,
and 9.5 hereof, to Rockmore Investment Master Fund, Ltd., individually and as
agent for the senior secured noteholders identified in that certain Securities
Purchase Agreement dated as of June 8, 2005, as amended (collectively,
"Rockmore"), pursuant to an assignment agreement in form and substance
reasonably satisfactory to Buyer's counsel. Rockmore shall not by such
assignment acquire any rights in or to such payments greater than or otherwise
different from the rights of WPE. There are no intended third party
beneficiaries (including without limitation Rockmore) under this Agreement.

                                  ARTICLE XIII

                                 INTERPRETATION

            Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, (b) "or"
has the inclusive meaning frequently identified with the phrase "and/or" and (c)
"including" has the inclusive meaning frequently identified with the phrase "but
not limited to" or "without limitation." The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or

                                      -35-
<PAGE>

affect the construction of this Agreement or the interpretation thereof in any
respect. Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified. Each accounting term used herein that is
not specifically defined herein shall have the meaning given to it under GAAP.
Unless otherwise expressly stated, all dollars specified in this Agreement shall
be in United States dollars. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

                                   ARTICLE XIV

                                     NOTICES

            All notices that are required or permitted hereunder shall be in
writing and shall be sufficient if personally delivered or sent by mail,
facsimile message or national overnight courier or other delivery service,
provided that notice by facsimile message shall only be effective if confirmed
by at least one other method of notification provided for herein. Any notices
shall be deemed given upon the earlier of the date when received at, or the
third day after the date when sent by registered or certified mail or the day
after the date when sent by national overnight courier to, the address or fax
number set forth below, unless such address or fax number is changed by notice
to the other party hereto:

            If to Buyer:

            Case Construction Equipment
            621 State Street
            Racine, WI  53402
            Attention:  James Hasler, Vice President, Sales & Marketing NA
            Telephone Number:  262-636-6395
            Fax Number:  262-636-6002

            with a copy to:

            Duane, Morris LLP
            30 South 17th Street
            Philadelphia, PA 19103-7396
            Attention:  John F. Horstmann, Esquire
            Telephone Number:  215-979-1504
            Fax Number:  215-979-1020

                                      -36-
<PAGE>

            If to Sellers:

            Western Power & Equipment Corp.
            6407-B N.E. 117th Avenue
            Vancouver, WA 98662
            Attention:  Dean McLain, President
            Telephone Number: 360-253-2346 (ext. 109)
            Fax Number:  360-_______________

            with a copy to:

            Gersten Savage LLP
            600 Lexington Avenue, 9th Floor
            New York, NY  10022-0018
            Attention:  Jay Kaplowitz, Esquire
            Telephone Number:  212-752-9700

                                   ARTICLE XV

      GOVERNING LAW; CONSENT TO JURISDICTION; CONSENT TO SERVICE OF PROCESS

                        (a) This Agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois, without regard to its
provisions concerning conflict of laws. Each of the parties hereto irrevocably
appoints each and every of its officers as its attorneys upon whom may be
served, by regular or certified mail at the address set forth in Article XIV
hereof, any notice, process or pleading in any action or proceeding against it
arising out of or in connection with this Agreement; and each hereby further
agrees that any action or proceeding against it may be commenced and maintained
in any court within the State of Illinois by service of process on any such
officer, and that the courts of the State of Illinois shall have jurisdiction
with respect to the subject matter hereof and the parties hereto.
Notwithstanding the foregoing, any party in its absolute discretion may also
initiate proceedings in the courts of any other jurisdiction in which the other
party may be found or in which any of its properties may be located.

                        (b) THE PARTIES ACKNOWLEDGE THAT THEY HAVE EACH
IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO A JURY TRIAL WITH REGARD TO ANY
DISPUTE OR CLAIM ARISING UNDER THIS AGREEMENT.

                        (c) Each party hereby consents to process being served
by the other party to this Agreement in any suit, action or proceeding by the
mailing of a copy thereof in accordance with the provisions of Article XIV.

                                      -37-
<PAGE>

                                   ARTICLE XVI

                                  COUNTERPARTS

            This Agreement may be executed in two or more counterparts, each of
which shall be binding as of the date first written above, and all of which
shall constitute one and the same instrument. Each such copy shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart. A facsimile copy of an
executed original of this Agreement shall have the same force and effect as an
executed original.

                                  ARTICLE XVII

                                  SEVERABILITY

            The invalidity of any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clause or sections
contained in this Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted. If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -38-
<PAGE>

            IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first written above.

                      WESTERN POWER & EQUIPMENT CORP., a Delaware corporation

                      By: /s/ Dean McLain
                          -----------------------------
                          Name: Dean McLain
                                -----------------------
                          Title: President
                                 ----------------------

                      WESTERN POWER & EQUIPMENT CORP., an Oregon corporation

                      By: /s/ Dean McLain
                          -----------------------------
                          Name: Dean McLain
                                -----------------------
                          Title: President
                                 ----------------------

                      CNH DEALER HOLDING COMPANY LLC,
                      a Delaware limited liability company

                      By: /s/ James E. McCullough
                          -----------------------------
                          Name: James E. McCullough
                                -----------------------
                          Title: Chairman
                                 ----------------------

<PAGE>

                                    EXHIBIT A

                           LIST OF ACQUIRED LOCATIONS

1.          2535 Ellis Street, Redding, CA 96001

2.          1751 Bell Avenue, Sacramento, CA 95838

3.          1041 S. Pershing Avenue, Stockton, CA 95206

4.          1455 Glendale Avenue, Sparks, NV 89431

5.          1745 NE Columbia Blvd., Portland, OR 97211

6.          1655 NE Silverton Road, Salem, OR 97303

7.          2702 West Valley Hwy., North, Auburn, WA 98001

8.          15111 Smokey Point Blvd., Marysville, WA 98271

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