Document:

Acquisition Agreement by and among Cell Therapeutics, Inc. and Cephalon, Inc.

 EXHIBIT 10.1 
  
 EXECUTION COPY 
  
 ACQUISITION AGREEMENT 
  
 by and among 
  
 CELL THERAPEUTICS, INC., 
  
 CTI TECHNOLOGIES, INC. 
  
  
 and 
  
 CEPHALON, INC. 
  
 Dated as of June 10, 2005 

 TABLE OF CONTENTS 
  

							
	 	  	Page

	ARTICLE I       DEFINITIONS	  	1
				
	 	  	Section 1.1.	    	Certain Defined Terms	  	1
				
	 	  	Section 1.2.	    	Other Interpretive Provisions	  	10
		
	ARTICLE II     PURCHASE AND SALE	  	11
				
	 	  	Section 2.1.	    	Purchased Assets	  	11
				
	 	  	Section 2.2.	    	Excluded Assets	  	12
				
	 	  	Section 2.3.	    	Assumed Liabilities	  	13
				
	 	  	Section 2.4.	    	Excluded Liabilities	  	13
		
	ARTICLE III     PURCHASE PRICE; CLOSING	  	15
				
	 	  	Section 3.1.	    	Purchase Price	  	15
				
	 	  	Section 3.2.	    	Estimated Purchase Price	  	15
				
	 	  	Section 3.3.	    	Valuation Date Statement and Actual Purchase Price	  	16
				
	 	  	Section 3.4.	    	Additional Consideration	  	17
				
	 	  	Section 3.5.	    	Allocation of Purchase Price	  	20
				
	 	  	Section 3.6.	    	Closing	  	20
		
	ARTICLE IV     REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANIES	  	24
				
	 	  	Section 4.1.	    	Organization; Authority	  	24
				
	 	  	Section 4.2.	    	No Conflict	  	25
				
	 	  	Section 4.3.	    	Governmental Consents and Approvals	  	25
				
	 	  	Section 4.4.	    	Ownership of Shares; Capitalization; Subsidiaries	  	25
				
	 	  	Section 4.5.	    	Financial Statements	  	26
				
	 	  	Section 4.6.	    	No Undisclosed Liabilities	  	26
				
	 	  	Section 4.7.	    	Absence of Changes	  	26
				
	 	  	Section 4.8.	    	Litigation	  	27
				
	 	  	Section 4.9.	    	Compliance with Laws	  	27
				
	 	  	Section 4.10.	    	Permits	  	27
				
	 	  	Section 4.11.	    	Environmental Matters	  	27
				
	 	  	Section 4.12.	    	Material Contracts	  	28
				
	 	  	Section 4.13.	    	Intellectual Property	  	29
				
	 	  	Section 4.14.	    	Insurance	  	30

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	    	 	  	Page

	 	  	Section 4.15.	    	Properties and Assets	  	30
				
	 	  	Section 4.16.	    	Sufficiency of Assets	  	31
				
	 	  	Section 4.17.	    	Regulatory Matters	  	31
				
	 	  	Section 4.18.	    	Accounts Receivable; Inventories	  	33
				
	 	  	Section 4.19.	    	Employees and Related Agreements; ERISA.	  	33
				
	 	  	Section 4.20.	    	Product Liability	  	35
				
	 	  	Section 4.21.	    	Customers and Suppliers	  	36
				
	 	  	Section 4.22.	    	Brokers	  	36
		
	ARTICLE V     REPRESENTATIONS AND WARRANTIES OF PURCHASER	  	36
				
	 	  	Section 5.1.	    	Organization; Authority	  	36
				
	 	  	Section 5.2.	    	No Conflict	  	37
				
	 	  	Section 5.3.	    	Governmental Consents and Approvals	  	37
				
	 	  	Section 5.4.	    	Private Placement	  	37
				
	 	  	Section 5.5.	    	Litigation	  	38
				
	 	  	Section 5.6.	    	Brokers	  	38
		
	ARTICLE VI     ADDITIONAL AGREEMENTS	  	38
				
	 	  	Section 6.1.	    	Conduct of Business by the Companies	  	38
				
	 	  	Section 6.2.	    	Access to Information	  	40
				
	 	  	Section 6.3.	    	Confidentiality	  	41
				
	 	  	Section 6.4.	    	Regulatory Authorizations	  	41
				
	 	  	Section 6.5.	    	Third Party Consents: Assignment of Contracts	  	42
				
	 	  	Section 6.6.	    	Further Action	  	42
				
	 	  	Section 6.7.	    	Contact with Customers and Suppliers	  	44
				
	 	  	Section 6.8.	    	Use of Seller’s Intellectual Property	  	44
				
	 	  	Section 6.9.	    	Inter-company Accounts and Agreements	  	45
				
	 	  	Section 6.10.	    	Insurance	  	45
				
	 	  	Section 6.11.	    	Preserve Accuracy of Representations and Warranties; Notice of Developments	  	46
				
	 	  	Section 6.12.	    	Accounts Receivable	  	46
				
	 	  	Section 6.13.	    	Acquisition Proposals	  	46

  

 -ii- 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	    	 	  	Page

	 	  	Section 6.14.	    	Employee Matters	  	47
		
	ARTICLE VII     NON-COMPETE	  	49
				
	 	  	Section 7.1.	    	Covenant Not to Compete or Solicit Business	  	49
		
	ARTICLE VIII     TAX MATTERS	  	50
				
	 	  	Section 8.1.	    	Definitions	  	50
				
	 	  	Section 8.2.	    	Tax Representations	  	51
				
	 	  	Section 8.3.	    	Tax Covenants	  	52
				
	 	  	Section 8.4.	    	Tax Sharing	  	54
				
	 	  	Section 8.5.	    	Cooperation on Tax Matters	  	54
				
	 	  	Section 8.6.	    	Tax Indemnification by Seller	  	55
				
	 	  	Section 8.7.	    	Purchase Price Adjustment	  	57
				
	 	  	Section 8.8.	    	Allocation of Taxes for Straddle Period; Apportioned Obligations	  	57
				
	 	  	Section 8.9.	    	Survival of Obligations	  	57
				
	 	  	Section 8.10.	    	Set-Off	  	57
		
	ARTICLE IX     CONDITIONS TO CLOSING	  	58
				
	 	  	Section 9.1.	    	Conditions to Obligations of Sellers and Purchaser	  	58
				
	 	  	Section 9.2.	    	Additional Condition to Obligations of Sellers	  	58
				
	 	  	Section 9.3.	    	Additional Conditions to Obligations of Purchaser	  	59
		
	ARTICLE X     TERMINATION AND WAIVER	  	60
				
	 	  	Section 10.1.	    	Termination	  	60
				
	 	  	Section 10.2.	    	Effect of Termination	  	60
				
	 	  	Section 10.3.	    	Waiver	  	61
		
	ARTICLE XI     INDEMNIFICATION	  	61
				
	 	  	Section 11.1.	    	Survival of Representations and Warranties	  	61
				
	 	  	Section 11.2.	    	Indemnification	  	61
				
	 	  	Section 11.3.	    	Procedures	  	62
				
	 	  	Section 11.4.	    	Settlement of Indemnity Claims	  	64
				
	 	  	Section 11.5.	    	Calculation of Damages	  	65
				
	 	  	Section 11.6.	    	Exclusivity	  	65
				
	 	  	Section 11.7.	    	Set-Off	  	65

  

 -iii- 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	Page

	 	  	Section 11.8.	    	Adjustment to Purchase Price	  	66
				
	 	  	Section 11.9.	    	Tax Matters	  	66
		
	ARTICLE XII     MISCELLANEOUS	  	66
				
	 	  	Section 12.1.	    	Expenses	  	66
				
	 	  	Section 12.2.	    	Notices	  	66
				
	 	  	Section 12.3.	    	Public Announcements	  	67
				
	 	  	Section 12.4.	    	Severability	  	67
				
	 	  	Section 12.5.	    	Disclosure Schedule	  	67
				
	 	  	Section 12.6.	    	Entire Agreement	  	68
				
	 	  	Section 12.7.	    	Assignment	  	68
				
	 	  	Section 12.8.	    	No Third Party Beneficiaries	  	68
				
	 	  	Section 12.9.	    	Amendment	  	68
				
	 	  	Section 12.10.	    	Governing Law	  	68
				
	 	  	Section 12.11.	    	Waiver of Jury Trial	  	68
				
	 	  	Section 12.12.	    	Counterparts and Facsimile Signature	  	69
				
	 	  	Section 12.13.	    	Rules of Construction	  	69
				
	 	  	Section 12.14.	    	Bulk Transfer Law	  	69

  

 -iv- 

			
	Exhibits	  	 
		
	Exhibit A	  	Form of Transition Services Agreement
		
	Exhibit B	  	Form of Assumption Agreement
		
	Exhibit C	  	Form of Bill of Sale
		
	Schedules	  	 
		
	Schedule 1.1A	  	Agreed Accounting Principles
		
	Schedule 1.1B	  	Inventory Valuation Amount
		
	Schedule 2.2	  	Excluded Contracts
		
	Schedule 5.3	  	Purchaser Governmental Consents

  

 -v- 

 ACQUISITION AGREEMENT 
  
 ACQUISITION AGREEMENT, dated as of June 10, 2005 (as amended, restated, supplemented or otherwise modified from time
to time, this “Agreement”), among Cell Therapeutics, Inc., a Washington corporation (“CTI”), CTI Technologies, Inc., a Nevada corporation and a wholly owned subsidiary of CTI (“Nevada” and together
with CTI, “Sellers”), and Cephalon, Inc., a Delaware corporation (“Purchaser”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, CTI, Nevada, Cell Therapeutics (UK) Limited, a United Kingdom corporation (“UK”) and PolaRx Biopharmaceuticals, Inc., a Delaware corporation (“PolaRx”), are engaged in
developing, manufacturing, marketing, supporting, licensing, distributing and selling TRISENOX at various locations in the United States and other countries (the “Business”): 
  
 WHEREAS, Sellers wish to divest themselves of the Business;

  
 WHEREAS, certain operations of the Business are
conducted, and certain assets thereof are owned, (i) by PolaRx and UK, and (ii) directly by Sellers; 
  
 WHEREAS, CTI owns all of the issued and outstanding capital stock of PolaRx (the “PolaRx Shares”); 
  
 WHEREAS, CTI owns all of the issued and outstanding share capital of
UK (the “UK Shares,” and together with the PolaRx Shares, the “Shares”); and 
  
 WHEREAS, contemporaneously with the Closing, CTI and Purchaser shall enter into a transition services agreement in the form attached as Exhibit
A hereto (the “Transition Services Agreement”); 
  
 NOW, THEREFORE, in consideration of the foregoing and the respective agreements, covenants, representations and warranties hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Section 1.1. Certain Defined
Terms. Unless the context otherwise requires, the following terms, when used in this Agreement, shall have the respective meanings specified below: 
  
 “Accounts Receivable Amount” shall mean the sum of (i) Accounts Receivable (CTI); (ii) Accounts Receivable (CTIT); and (iii) Accounts
Receivable (CTUK), each as reflected in the Valuation Date Statement, which amounts set forth in the Valuation Date Statement shall reflect the application of the Agreed Accounting Principles, except that for purposes of calculating the 

 amount of the “Reserve for Returns” included in such amounts, an amount equal to 3.5% of the gross accounts
receivable (without reflecting any accounts receivable credits) shall be used rather than the actual Reserve for Returns reflected on the books of the Business. 
  

“Action” shall mean any claim, action, charge, complaint, suit, litigation, arbitration, grievance, inquiry, proceeding, hearing,
audit, examination or investigation (including any civil, criminal, administrative, investigative or appellate proceeding) by or before any Governmental Authority or duly appointed arbitration authority. 
  
 “Affiliate” shall mean, with respect to any specified
Person, any other Person, that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. 
  
 “After-Tax Basis” means, with respect to any amount which is to be paid hereunder on an “After-Tax
Basis,” an amount which, after subtraction of the amount of all federal, state and non-U.S. Taxes payable by the recipient thereof as a result of the receipt or accrual of such payment, and after taking into account (i) the increase in federal,
state and non-U.S. Taxes (including estimated Taxes) payable by such recipient for all affected taxable years as a result of the event or occurrence giving rise to such payment (the “Indemnified Event”), and (ii) the reduction in
federal, state and non-U.S. Taxes (including estimated Taxes) payable by the recipient for all taxable years ending on or before the end of the taxable year in which such payment is made, shall be sufficient as of the date of payment to compensate
the recipient for such Indemnified Event. 
  
 “Agreed
Accounting Principles” means GAAP as used in preparation of the Reference Statement, subject to the deviations from GAAP and the other principles set forth in Schedule 1.1A. 
  
 “Agreed Adjustments” shall have the meaning specified in
Section 3.3(b). 
  
 “Agreement” shall have
the meaning specified in the preamble to this Agreement. 
  
 “AML” shall have the meaning specified in Section 3.4. 
  
 “API” means the active pharmaceutical ingredient related to the Business. 
  
 “APL” shall have the meaning specified in Section 3.4. 
  
 “Apportioned Obligations” shall have meaning specified in Section 8.1. 
  
 “Assets” shall have the meaning specified in Section
2.1. 
  
 “Assumed Liabilities” shall have the
meaning specified in Section 2.3. 
  
 “Assumption
Agreement” means the Assumption Agreement in the form attached as Exhibit B hereto. 
  

 2 

 “Benefit Plan” means a “pension plan” (as defined in Section 3(2) of ERISA, a
“welfare plan” (as defined in Section 3(1) of ERISA), or any other written or oral bonus, profit sharing, retirement, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, restricted
stock, stock appreciation right, holiday pay, vacation, retention, severance, medical, dental, vision, disability, death benefit, sick leave, fringe benefit, personnel policy, insurance, employment, consulting, or other similar plan, arrangement,
agreement or understanding, in each case established or maintained by either of the Sellers, with respect to the Business, or either of the Companies, or as to which the Sellers, with respect to the Business, or the Companies have contributed or
otherwise may have any liability or obligation. 
  
 “Bill of Sale” means the Bill of Sale in the form attached as Exhibit C hereto. 
  
 “Business” shall have the meaning specified in the recitals to this Agreement. 
  
 “Business Day” shall mean any day that is not a Saturday, a
Sunday or other day on which banks are required or authorized by Law to be closed in New York City. 
  
 “Claim” shall have the meaning specified in Section 11.3(a). 
  
 “Closing” shall have the meaning specified in Section 3.6(a). 
  
 “Closing Date” shall have the meaning specified in
Section 3.6(a). 
  
 “Code” shall have the
meaning specified in Section 8.1. 
  
 “Companies” shall mean UK and PolaRx. 
  
 “Company Group” shall have the meaning specified in Section 8.1. 
  
 “Company Foreign Benefit Plan” shall have the meaning specified in Section 4.19. 
  
 “Company Plans” shall have the meaning specified in
Section 4.19. 
  
 “Competitive Business”
means the development, manufacture or sale of (i) any arsenic-based compound for the treatment of cancer in humans or animals or (ii) any other compound for the treatment of APL. 
  
 “Confidential Information” shall have the meaning specified in Section 6.3. 
  
 “Confidentiality Agreement” shall mean the Confidential
Disclosure Agreement, dated as of June 23, 2004, by and between CTI and Purchaser. 
  
 “Contaminant” shall mean any waste, pollutant, hazardous or toxic substance or waste, including petroleum or petroleum-based substances, regulated as such under Environmental Laws. 
  

 3 

 “Contract” shall mean any written or oral agreement, contract, subcontract, lease,
instrument, note, option, purchase order, license or sublicense or other commitment or undertaking of any nature. 
  
 “CTI” shall have the meaning specified in the preamble to this Agreement. 
  
 “Damages” shall have the meaning specified in Section 11.2. 
  
 “Development Milestone” shall have the meaning specified in
Section 3.4. 
  
 “Development Milestone
Payment” shall have the meaning specified in Section 3.4. 
  
 “Disagreement Notice” shall have the meaning specified in Section 8.3(b)(i). 
  
 “Disclosure Schedule” shall mean any Disclosure Schedule delivered by Sellers to Purchaser, dated as of the date hereof, and forming a
part of this Agreement. 
  
 “Dollars” and the
sign “$” shall each mean lawful money of the United States of America. 
  
 “Encumbrance” shall mean any security interest, pledge, hypothecation, mortgage, lien, charge, encumbrance, adverse claim, preference, priority, preferential arrangement, option, right of first
refusal, conditional sale or title retention agreement, easement, encroachment, defect of title, indenture, right of way, deed of trust, lease, security agreement, covenant or restriction of any kind, excluding non-exclusive licenses of, and
non-exclusive covenants not to sue with respect to, Intellectual Property. 
  
 “Environmental Law” shall mean all Laws derived from or relating to all non-U.S., federal, state and local laws or regulations relating to or addressing the environment, health or safety. 

 
 “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended through the date hereof. 
  
 “Estimated Purchase Price” shall have the meaning specified in Section 3.2. 
  
 “Estimated Valuation Date Accounting Statement” shall have the meaning specified in Section 3.2. 
  
 “Exchange Act” shall have the meaning specified in
Section 6.6(e). 
  
 “Excluded Liabilities”
shall have the meaning specified in Section 2.4. 
  
 “Excluded Trademarks” shall have the meaning specified in Section 2.2. 
  
 “FDA” shall mean the U.S. Food and Drug Administration. 
  

 4 

 “FDCA” shall mean the Federal Food, Drug and Cosmetic Act and the rules and regulations
promulgated thereunder. 
  
 “Financial
Statements” shall have the meaning specified in Section 4.5. 
  
 “Financing Agreement” shall mean the Financing Agreement dated as of December 21, 2004 among Sellers, PolaRx and PharmaBio Development, Inc., a North Carolina corporation, as amended. 
  
 “GAAP” shall mean United States generally accepted
accounting principles and practices as in effect from time to time. 
  
 “Governmental Authority” shall mean any national, federal, state, provincial, municipal, local, foreign or other government, governmental, regulatory or administrative authority, agency, political subdivision,
instrumentality, self regulatory organization or commission or any court, tribunal or other judicial or arbitral body. 
  
 “Governmental Order” shall mean any order, writ, judgment, award, injunction, decree, stipulation, or determination of any Governmental
Authority or any award in an arbitration proceeding. 
  
 “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. 
  
 “Indemnified Party” shall have the meaning specified in Section 11.3(a). 
  
 “Indemnifying Party” shall have the meaning specified in
Section 11.3(a). 
  
 “Independent Accounting
Firm” shall have the meaning specified in Section 3.3(c). 
  
 “Intellectual Property” shall mean any trademark, service mark, trade name, mask work, domain name, invention (whether or not reduced to practice) patent, trade secret, know-how or copyright
(including any registrations or applications for registration of any of the foregoing) or any other similar type of intellectual property right. 
  
 “Inventory Valuation Amount” shall mean valuation of inventory included in the Assets in accordance with Schedule 1.1B.

  
 “Knowledge” shall mean, (a) with respect to
Sellers, the actual knowledge, after reasonable inquiry under the circumstances, of the officers of Sellers, and (b) with respect to Purchaser, the actual knowledge, after reasonable inquiry under the circumstances, of the officers of Purchaser.

  
 “Law” shall mean any statute, law, treaty,
ordinance, regulation, rule, code, order or other requirement enacted, entered or promulgated by any Governmental Authority. 
  
 “Leased Real Property” shall mean the real property presently leased by or subject to an agreement to lease or sublease or other use or
occupancy agreement (a) by either of the Companies as tenant, or (b) by either Seller or any of its Subsidiaries as tenant that is used primarily in the Business. 
  

 5 

 “Liabilities” shall mean any and all debts, liabilities and obligations, whether accrued
or fixed, absolute or contingent, matured or unmatured or determined or determinable (including unasserted claims, whether known or unknown). 
  
 “Licensed Intellectual Property” shall mean all third party Intellectual Property (i) licensed to Sellers and used primarily in the
Business or related to TRISENOX or (ii) licensed to the Companies. 
  
 “Material Adverse Effect” shall mean any change in the Business that is materially adverse to (a) the Business, operations, net assets, results of operations, condition (financial or otherwise) of the Business taken as a
whole, or (b) Sellers’ ability to consummate the Transactions; provided, however, that no change resulting from or arising out of the announcement of this Agreement or the pendency of the Transactions shall be taken into account
in determining whether there has been or will be a Material Adverse Effect. 
  
 “Material Contracts” shall have the meaning specified in Section 4.12(a). 
  
 “MDS” shall have the meaning specified in Section 3.4. 
  
 “MM” shall have the meaning specified in Section 3.4. 
  
 “Nevada” shall have the meaning specified in the recitals to
this Agreement. 
  
 “Non-U.S. Section 338
Election” shall have the meaning specified in Section 8.3(g)(ii). 
  
 “Permits” shall have the meaning specified in Section 4.10. 
  
 “Permitted Encumbrances” shall mean (a) such of the following as to which no enforcement, collection, execution, levy or foreclosure
proceeding shall have been commenced: (i) liens for Taxes and other governmental assessments, charges or levies not yet delinquent, or the validity of which are being contested in good faith; (ii) liens imposed by Law, such as materialmen’s,
mechanics’ carriers’, workmen’s and repairmen’s liens and other similar liens for amounts not yet delinquent, or the validity of which are being contested in good faith; or (iii) other liens or imperfections on property which do
not adversely affect title to, detract from the value of, or impair the existing use of, the property affect by such lien or imperfection. 
  
 “Person” shall mean any individual, partnership, firm, corporation, limited liability company, joint venture, association, trust,
unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended through the date hereof. 
  
 “PharmaBio” shall mean PharmaBio Development, Inc., a North
Carolina corporation. 
  
 “PolaRx” shall have the
meaning specified in the recitals to this Agreement. 
  

 6 

 “PolaRx Inter-Company Licenses” shall have the meaning specified in Section
6.9(b). 
  
 “PolaRx Merger Agreement” shall
have the meaning specified in Section 2.4(xiii). 
  
 “PolaRx Shares” shall have the meaning specified in the recitals to this Agreement. 
  
 “Post-Closing Tax Period” shall have the meaning specified in Section 8.1. 
  
 “Pre-Closing Tax Period” shall have the meaning specified in
Section 8.1. 
  
 “Preliminary Accounting
Statement” shall have the meaning specified in Section 3.3(a). 
  
 “Preliminary Purchase Price” shall have the meaning specified in Section 3.3(a). 
  
 “Preliminary Valuation Date Statement” shall have the meaning specified in Section 3.3(a). 
  
 “Proteasome Amendment” mean an amendment among Purchaser and
CTI Europe to the Collaboration and License Agreement, dated as of May 2, 2002, as amended on July 31, 2004 and May 2, 2005, which amendment will be dated as of the date hereof and effective as of the Closing Date. 
  
 “Proteasome Rights” means the worldwide rights held by CTI
with respect to the research, development and commercialization of compounds that inhibit the Proteasome Protease for uses in oncology. 
  
 “Purchaser” shall have the meaning specified in the preamble to this Agreement. 
  
 “Purchaser Ancillary Agreements” means all agreements,
instruments and documents being or to be executed and delivered by Purchaser under this Agreement or in connection herewith. 
  
 “Reference Statement” shall mean the unaudited statement of assets and liabilities of the Business dated as of March 31, 2005, a copy of
which is set forth in Section 4.5 of the Disclosure Schedule. 
  
 “Reference Statement Date” shall mean March 31, 2005. 
  
 “Registered IP” shall have the meaning specified in Section 4.13(d). 
  
 “Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration
of a Contaminant into the indoor or outdoor environment or into or out of any Seller Property, including the movement of Contaminants through or in the air, soil, surface water, groundwater or Seller Property. 
  
 “Representatives” shall have the meaning specified in
Section 6.2. 
  
 “Return” shall have the
meaning specified in Section 8.1. 
  

 7 

 “Return Adjustment Amount” means $1,262,342. 
  
 “Sales Milestone” shall have the meaning specified in
Section 3.4(b). 
  
 “Sales Milestone
Payment” shall have the meaning specified in Section 3.4(b). 
  
 “Section 338(h)(10) Election” has the meaning set forth in Section 8.3(g)(i). 
  
 “Section 338 Taxes” shall mean any income Taxes imposed on CTI, UK or PolaRx as a result of the Section 338(h)(10) Election, Non-U.S.
Section 338 Election or any elections under state, local or other Tax law that are required to be made or deemed to have been made as a result of the Section 338(h)(10) Election or Non-U.S. Section 338 Election. 
  
 “Seller Ancillary Agreements” means all agreements,
instruments and documents being or to be executed and delivered by either Seller under this Agreement or in connection herewith. 
  
 “Sellers” shall have the meaning specified in the preamble to this Agreement. 
  
 “Seller Information” shall have the meaning specified in
Section 6.6(b). 
  
 “Seller Marks” shall
have the meaning specified in Section 6.8(b)(i). 
  
 “Seller Plans” shall have the meaning specified in Section 4.19. 
  
 “Seller Property” means any real or personal property, plant, building, facility, structure, underground storage tank, equipment or unit,
or other asset owned, leased or operated by (i) CTI or Nevada and used in the Business, or (ii) UK or PolaRx. 
  
 “Shares” shall have the meaning specified in the recitals to this Agreement. 
  
 “Sloan-Kettering Agreement” shall mean the License Agreement
dated as of May 24, 1999 between PolaRx and Sloan-Kettering Institute for Cancer Research. 
  
 “Sloan-Kettering Royalty Amount” means the amount calculated as (i) (A) the Net Sales (as defined in the Sloan-Kettering Agreement) by Sellers and their Affiliates from January 1, 2005 through the
Valuation Date in Dollars (calculated using the average exchange rate in effect during the period from January 1, 2005 through the Valuation Date for non-Dollar denominated sales) less (B) (1) the aggregate amount listed on the Valuation Date
Statement under the line items “Accounts Receivable (CTI),” “Accounts Receivable (CTIT)” and “Accounts Receivable (CTUK) divided by (2) .95 multiplied by (ii) .02 less (iii) the aggregate amount
of royalties paid by Seller and their Affiliates to the Sloan-Kettering Institute for Cancer Research from January 1, 2005 through the Valuation Date pursuant to Section 4.1(a) of the Sloan-Kettering Agreement on account of Net Sales made from
January 1, 2005 through the Valuation Date. 
  
 “Software” shall have the meaning set forth in Section 4.13(c). 
  
 “Statement of Net Product Sales” shall have the meaning specified in Section 4.5. 
  

 8 

 “Straddle Period” shall have the meaning specified in Section 8.1. 
  
 “Straddle Period Returns” shall have the meaning specified
in Section 8.3(b)(i). 
  
 “Subsidiary”
shall mean, with respect to any Person, any other corporation, limited liability company, general or limited partnership, unincorporated association or other business entity of which (i) if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof, or which that Person or one or more Subsidiaries of that Person serves as general partner. 
  
 “Tax” shall have the meaning specified in Section
8.1. 
  
 “Tax Asset” shall have the meaning
specified in Section 8.1. 
  
 “Tax
Benefit” shall have the meaning specified in Section 8.6(b). 
  
 “Taxing Authority” shall have the meaning specified in Section 8.1. 
  
 “Third Party Claims” shall have the meaning specified in Section 11.3(c). 
  
 “Transaction Agreements” shall mean this Agreement and the
Transition Services Agreement. 
  
 “Transactions”
shall mean the transactions contemplated by this Agreement and the other Transaction Agreements. 
  
 “Transferred Intellectual Property” shall mean the Intellectual Property (i) owned by either Seller and primarily used in the Business or
relating to TRISENOX or (ii) owned by either Company, in each case, other than the Excluded Trademarks, which Transferred Intellectual Property shall be listed on Section 4.13(b) of the Disclosure Schedule. 
  
 “Transfer Taxes” shall have the meaning specified in
Section 8.1. 
  
 “Transition Services
Agreement” shall have the meaning set forth in the recitals to this Agreement. 
  
 “Treasury Regulations” shall have the meaning specified in Section 8.1. 
  
 “TRISENOX” shall mean Trisenox (arsenic trioxide) in any and all dosage forms or formulations and for any human or animal use.

  
 “UK” shall have the meaning specified in the
recitals to this Agreement. 
  

 9 

 “UK Lease” means the License for Use of Desk and Office Furniture between Gainsobrough
Business Centres Limited and Cell Therapeutics (UK) Ltd, dated December 10, 2004. 
  
 “UK Shares” shall have the meaning specified in the recitals to this Agreement. 
  
 “Valuation Date” shall mean the close of business on the last Business Day prior to the Closing Date. 
  
 “Valuation Date Statement” has the meaning specified in
Section 3.3(b). 
  
 “Valuation Date Working Capital
Amount” shall mean the sum of (i) the Accounts Receivable Amount and (ii) Prepaid Expense (CTI) as reflected in the Valuation Date Statement less, the sum of the following accounts: (i) Accounts Payable (CTI), (ii) Accounts Payable (CTUK),
(iii) Accrued Expense (CTI) and (iv) Accrued Expense (CTUK), in each case, as reflected in the Valuation Date Statement, except that Accrued Expense (CTI) shall not include any amounts accrued with respect to royalty payments to be paid pursuant to
Section 4.1(a) of the Sloan-Kettering Agreement for Net Sales (as defined in the Sloan-Kettering Agreement) made from January 1, 2005 through the Valuation Date. 
  
 “Waxman Agreement” shall mean the License Agreement effective as of May 24, 1999 between the Samuel Waxman
Cancer Research Foundation and PolaRx. 
  
 “Worldwide Net
Sales” shall mean the gross amount invoiced for the supply or sale of TRISENOX by Purchaser or its Affiliates to unaffiliated third parties (calculated in Dollars or, with respect to non-Dollar denominated sales, using the average exchange
rate in effect during the applicable period for non-Dollar denominated sales), and less the following amounts to the extent deducted from or on such invoice or absorbed or accrued or reserved by Purchaser or its Affiliates in accordance with GAAP:
(i) customary quantity, trade and/or cash discounts, chargebacks, anticipated returns, allowances, wholesaler inventory management fees, rebates (including any and all federal, state or local government rebates, e.g. Medicaid rebates) and price
adjustments allowed or given; and (ii) sales and other excise taxes and duties directly related to the sale, to the extent such items are included in the gross invoice price. 
  
 Section 1.2. Other Interpretive Provisions. With reference to this Agreement, unless otherwise specified herein, the
following interpretive provisions shall apply: 
  
 (a) the
meanings of defined terms are equally applicable to the singular and plural forms of such defined terms; 
  
 (b) the words “herein,” “hereto,” “hereof and “hereunder” and words of similar import shall
refer to this Agreement as a whole and not to any particular provision hereof; 
  
 (c) Article, Section, Exhibit and Schedule references are references to the Articles, Sections, Exhibits and Schedules of this Agreement; 
  
 (d) the term “including” is by way of example and not limitation; and 
  

 10 

 (e) section headings herein are included for convenience of reference only and shall not affect the
interpretation of this Agreement. 
  
 ARTICLE II 

 
 PURCHASE AND SALE 
  
 Section 2.1. Purchased Assets. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date, Sellers shall sell, transfer, assign, convey and deliver to Purchaser, and Purchaser shall purchase from Sellers, on a going concern basis, free and clear of all Encumbrances (except for Permitted
Encumbrances), all of the assets and properties of Sellers or their Affiliates (including the Companies) of every kind and description, wherever located, real, personal or mixed, tangible or intangible, used primarily in connection with the Business
as the same shall exist on the Closing Date (herein collectively called the “Assets”), including all right, title and interest of Sellers in, to and under: 
  
 (i) all of the assets reflected on the Reference Statement, except those disposed of or converted into cash after the
Reference Statement Date in the ordinary course of business; 
  
 (ii) all notes and accounts receivable generated by the Business; 
  
 (iii) all raw materials, supplies, work-in-process, finished goods and other materials included in the inventory of Sellers with respect to the Business; 
  
 (iv) the Permits listed in Section 4.10 of the Disclosure Schedule; 
  
 (v) the personal property leases listed in Section 4.15(c) of the
Disclosure Schedule; 
  
 (vi) the Transferred Intellectual
Property; 
  
 (vii) all other proprietary or confidential
information used primarily in the Business but only to the extent related to the Business; 
  
 (viii) the agreements, contracts, licenses, sublicenses, assignments and indemnities listed in Section 4.13(b) of the Disclosure Schedule; 
  
 (ix) the Contracts listed or described in Section 4.12 of the Disclosure Schedule; 
  
 (x) to the extent permitted by Law, all books and records (including all
data and other information stored on discs, tapes or other media) of Sellers to the extent relating (but solely to the extent relating) to the assets, properties, business and operations of the Business, including sales, advertising and marketing
materials and customer lists; 
  

 11 

 (xi) the capital stock of each of the Companies and all minute books and other corporate records
relating to the Companies; 
  
 (xii) to the extent transferable
and to the extent permitted by Law, all telephone, telex and telephone facsimile numbers and other directory listings and domain names utilized by Sellers primarily in connection with the Business, including the domain name www.trisenox.com
and the telephone number 1-800-TRISENOX; and 
  
 (xiii) the
compounding vessels and other dedicated product contact filling equipment described in item 2 of Section 4.15(b) of the Disclosure Schedule. 
  
 Section 2.2. Excluded Assets. Notwithstanding the provisions of Section 2.1, the Assets shall not include the following (herein referred to
as the “Excluded Assets”): 
  
 (i) any cash,
bank deposits and cash equivalents; 
  
 (ii) the name “Cell
Therapeutics” or any related or similar trade names, trademarks, service marks or logos to the extent the same incorporate the name “Cell Therapeutics”, the figure depicted on Section 2.2 of the Disclosure Schedule or any
variation thereof (the “Excluded Trademarks”) or any variation thereof; 
  
 (iii) all Software; 
  
 (iv)
Sellers’ rights, claims or causes of action against third parties relating to the assets, properties, business or operations of Sellers with respect to the Business which might arise in connection with the discharge by Sellers of the Excluded
Liabilities; 
  
 (v) all contracts of insurance of Sellers;

  
 (vi) the real estate leases with respect to, and the
leasehold improvements on, the Leased Real Property; 
  
 (vii)
except as provided in Section 2.1(xiii), the machinery, equipment, vehicles, furniture and other personal property listed or referred to in Section 4.15(b) of the Disclosure Schedule; 
  
 (viii) all corporate minute books and stock transfer books and the corporate
seal of Sellers; 
  
 (ix) Sellers’ rights under the leases,
agreements, contracts and commitments listed in Schedule 2.2; 
  
 (x) any of Seller’s ERISA Plans or Seller’s Non-ERISA Plans; and 
  
 (xi) all refunds of any Tax for which either Seller is liable pursuant to Article VIII. 
  

 12 

 Section 2.3. Assumed Liabilities. On the Closing Date, Purchaser shall deliver to Sellers the
Assumption Agreement pursuant to which Purchaser shall assume and agree to discharge the following obligations and liabilities of Sellers in accordance with their respective terms and subject to the respective conditions thereof: 
  
 (i) all Liabilities of Sellers with respect to the Business reflected in
the Valuation Date Statement as a Dollar amount and limited to such Dollar amount; 
  
 (ii) all Liabilities of Sellers to be paid or performed after the Closing Date under (i) the Material Contracts, (ii) the leases, contracts and other agreements with respect to the Business not required by the terms
of Section 4.12 to be listed in the Disclosure Schedules and (iii) the leases, contracts and other agreements entered into by Sellers with respect to the Business after the date hereof consistent with the terms of this Agreement, except (A)
in each case, to the extent such Liabilities, but for a breach or default by Sellers, would have been paid, performed or otherwise discharged on or prior to the Closing Date or to the extent the same arise out of any such breach or default and (B)
in each case, to the extent such Liabilities would be required to be reflected on a balance sheet as of the Valuation Date with respect to the Assets prepared in accordance with Agreed Accounting Principles and were not so reflected in the Valuation
Date Statement and not taken into account as a deduction in determining Valuation Date Working Capital in connection with the determination of the Purchase Price pursuant to Section 3.3; 
  
 (iii) all Liabilities in respect of Taxes for which Purchaser is liable
pursuant to Article VIII; 
  
 (iv) all Liabilities of CTI
or any of its Affiliates under Section 1.4(f) of the PolaRx Merger Agreement arising after the Closing Date; and 
  
 (v) any obligations with respect to any return claim or other obligations to replace any products manufactured, distributed or sold by CTI or Nevada with
respect to the Business or by UK or PolaRx, in each case, prior to the Closing Date. 
  
 All of the foregoing liabilities and obligations to be assumed by Purchaser hereunder (excluding any Excluded Liabilities) are referred to herein as the “Assumed Liabilities.” 
  
 Section 2.4. Excluded Liabilities. Purchaser shall not assume or be
obligated to pay, perform or otherwise discharge any Liability of Sellers not expressly assumed by Purchaser pursuant to the Assumption Agreement (all such Liabilities not being assumed being herein called the “Excluded
Liabilities”) and, notwithstanding anything to the contrary in Section 2.3, none of the following shall be Assumed Liabilities for purposes of this Agreement: 
  
 (i) any Liabilities in respect of Taxes for which Sellers are liable pursuant to Article VIII; 
  
 (ii) any payables and other Liabilities of Sellers with respect to the
Business to any other business unit of Sellers or any of Sellers’ Affiliates; 
  

 13 

 (iii) any costs and expenses incurred by Sellers incident to its negotiation and preparation of this
Agreement and its performance and compliance with the agreements and conditions contained herein; 
  
 (iv) any Liabilities in respect of any Excluded Assets; 
  
 (v) any Liabilities in respect of the lawsuits, claims, suits, proceedings or investigations set forth in Section 4.8 of the Disclosure Schedule;

  
 (vi) any Liabilities arising from the failure of Sellers to
comply with the provisions of any applicable bulk sales or bulk transfer laws; 
  
 (vii) accrued Liabilities of any kind required to be reflected on the Valuation Date Statement prepared in accordance with Agreed Accounting Principles which were not reflected thereon as a dollar amount; 

 
 (viii) any Liabilities related to, or arising from (i) the occupancy,
operation, use or control of any of the Seller Property prior to the Closing Date or (ii) the operation of the Business prior to the Closing Date, in each case incurred or imposed by any Environmental Law, including Liabilities related to, or
arising from, any Release of any Contaminant on, at or from (A) the Seller Property, including all facilities, improvements, structures and equipment thereon, surface water thereon or adjacent thereto and soil or groundwater thereunder, or any
conditions whatsoever on, under or in the vicinity of such real property or (B) any real property or facility owned by a third Person to which Contaminants generated by the Business were sent prior to the Closing Date; 
  
 (ix) any product liability or claims for injury to person or property,
regardless of when made or asserted, relating to the ownership, possession or use of any products manufactured, utilized in clinical trials, sold or distributed by or on behalf of CTI or Nevada with respect to the Business or by or on behalf of UK
or PolaRx, in each case, prior to the Closing Date; 
  
 (x) any
recalls on or after the Closing Date mandated by any Governmental Authority of TRISENOX with respect to any products manufactured, distributed or sold by CTI or Nevada with respect to the Business or by UK or PolaRx, in each case, prior to the
Closing Date; 
  
 (xi) all Liabilities of Sellers, the Companies
or their Affiliates under the Financing Agreement; 
  
 (xii) all
Liabilities under Section 4.1(b) of the Sloan-Kettering Agreement arising as a result of this Agreement, consummation of the transactions contemplated hereby or any other event occurring on or prior to the Closing Date; 
  
 (xiii) except as set forth in Section 2.3(iv), all Liabilities of
Sellers, the Companies or their Affiliates under the Agreement and Plan of Merger dated as of January 7, 2000 among Sellers and PolaRx, as amended on March 6, 2003 (the “PolaRx Merger Agreement”) including, without limitation, any
Liabilities owed to former shareholders of PolaRx; 
  

 14 

 (xiv) all Liabilities of Sellers for any royalties under the Waxman Agreement relating to patents issued
prior to the Closing Date accruing with respect to sales made prior to the Closing Date; and 
  
 (xv) all Liabilities of Sellers or their Affiliates (including, with respect to periods prior to the Closing Date, the Companies) under or with respect to any compensation or employee benefit plans, programs or
agreements, or otherwise arising in connection with the employment or pay practices of Sellers or their Affiliates (including, with respect to periods prior to the Closing Date, the Companies). 
  
 ARTICLE III 
  
 PURCHASE PRICE; CLOSING 
  
 Section 3.1. Purchase Price. The purchase price for the Assets (the
“Purchase Price”) shall be determined in accordance with Section 3.3 and shall be equal to: 
  
 (i) $69,500,000, plus 
  
 (ii) the Inventory Valuation Amount; minus 
  
 (iii) the Return Adjustment Amount; minus 
  
 (iv) the Sloan-Kettering Royalty Amount; plus  
  
 (v) the amount by which the Valuation Date Working Capital Amount exceeds $1,020,045; or minus 
  
 (vi) the amount by which the Valuation Date Working Capital Amount is less
than $1,020,045. 
  
 Section 3.2. Estimated Purchase Price.
No later than three (3) business days prior to the Closing Date, CTI shall deliver to Purchaser a statement (the “Estimated Valuation Date Accounting Statement”) setting forth CTI’s good faith estimate of the Purchase Price
(the “Estimated Purchase Price”), the Inventory Valuation Amount, the Sloan-Kettering Royalty Amount and the Valuation Date Working Capital Amount and setting forth in reasonable detail the assets and liabilities of the Business as
of the Valuation Date anticipated, based on the most recent available financial information, to be reflected on the Valuation Date prepared in accordance with Agreed Accounting Principles. The Estimated Valuation Date Accounting Statement shall be
certified by CTI’s chief financial officer. The Purchase Price shall thereafter be determined as provided in Section 3.3. 
  

 15 

 Section 3.3. Valuation Date Statement and Actual Purchase Price. 
  
 (a) No later than sixty (60) days after the Closing Date, CTI shall (i)
prepare in accordance with Agreed Accounting Principles, a statement of assets and liabilities as of the Valuation Date (the “Preliminary Valuation Date Statement”), (ii) determine the Purchase Price in accordance with the
provisions of this Agreement (the “Preliminary Purchase Price”), the Inventory Valuation Amount, the Sloan-Kettering Royalty Amount and the Valuation Date Working Capital Amount, and (iii) deliver to Purchaser the Preliminary
Valuation Date Statement and a certificate of CTI’s chief financial officer setting forth the Preliminary Purchase Price, the Inventory Valuation Amount, the Sloan-Kettering Royalty Amount and the Valuation Date Working Capital Amount (the
“Preliminary Accounting Statement”). Purchaser shall cooperate with Seller and its accountants to the extent reasonably required to enable CTI to prepare the Preliminary Accounting Statement in accordance with this Agreement.

  
 (b) Purchaser may dispute one or more of the items set forth
in the Preliminary Accounting Statement by notifying CTI in writing within forty-five (45) days after its receipt of the Preliminary Accounting Statement thereof, but only on the basis that such item was not prepared in accordance with the Agreed
Accounting Principles or is mathematically inaccurate. During such 45-day period, and until the Valuation Date Statement and the Purchase Price are finally determined, employees of Purchaser and its accountants shall be entitled to access to
CTI’s and its accountants’ work papers prepared in connection with the preparation of the Preliminary Accounting Statement and shall be entitled to review and discuss such work papers with CTI and its accountants. Any notice delivered in
accordance with Section 3.3(b) shall specify in reasonable detail the nature of any disagreement so asserted. If Purchaser does not so notify CTI within such period, the Preliminary Valuation Date Statement and the Preliminary Purchase Price
shall be final, binding and conclusive on the parties as the “Valuation Date Statement” and the Purchase Price, respectively. If Purchaser does so notify CTI, Purchaser and CTI and their respective accountants shall attempt to
resolve by written agreement (“Agreed Adjustments”) any differences as to the Preliminary Accounting Statement and, in the event CTI and Purchaser so resolve such differences, the Preliminary Valuation Date Statement and the
Purchase Price set forth in the Preliminary Accounting Statement as adjusted by the Agreed Adjustments shall be final and binding as the Valuation Date Statement and the Purchase Price, respectively, but shall not limit the representations,
warranties, covenants and agreements of the parties set forth elsewhere in this Agreement (except to the extent any Damages related to a breach of such representations, warranties, covenants or agreements would be duplicative of amounts payable
pursuant to this Section 3.3). 
  
 (c) If Purchaser and CTI
are unable to reach a resolution with respect to all of the items specified in a notice provided pursuant to Section 3.3(b) within twenty (20) days after receipt by CTI of such notice, then either party may submit the items remaining in
dispute for resolution to Deloitte & Touche, LLP (the “Independent Accounting Firm”), which shall, within twenty (20) days after such submission or such longer period as the Independent Accounting Firm may reasonably require,
determine and report to Purchaser and CTI upon such remaining disputed items (based solely on the presentations of Purchaser and CTI as to whether any disputed matter has been determined in a manner consistent with Agreed Accounting Principles and
this Agreement), and such determination shall be final, binding and conclusive on the parties 
  

 16 

 hereto. The Preliminary Valuation Date Statement and the Preliminary Purchase Price, after giving effect to any Agreed
Adjustments and to the resolution of the disputed matters by the Independent Accounting Firm, shall be the Valuation Date Statement and the Purchase Price, respectively, for purposes of this Agreement, but shall not limit the representations,
warranties, covenants and agreements of the parties set forth elsewhere in this Agreement (except to the extent any Damages related to a breach of such representations, warranties, covenants or agreements would be duplicative of amounts payable
pursuant to this Section 3.3). The parties hereto shall make available to Purchaser, CTI and, if applicable, the Independent Accounting Firm, such books, records and other information (including work papers) as any of the foregoing may
reasonably request to prepare or review the Preliminary Accounting Statement or any matters submitted to the Independent Accounting Firm. The fees and disbursements of the Independent Accounting Firm shall be allocated between Purchaser and CTI in
such manner that Purchaser shall be responsible for that portion of the fees and expenses equal to such fees and expenses multiplied by a fraction the numerator of which is the aggregate dollar value of disputed items submitted to the Independent
Accounting Firm that are resolved against Purchaser (as finally determined by the Independent Accounting Firm) and the denominator of which is the total dollar value of the disputed items so submitted, and CTI shall be responsible for the remainder
of such fees and expenses. 
  
 (d) Following the determination of
the Purchase Price pursuant to this Section 3.3, if (i) the Purchase Price exceeds the Estimated Purchase Price, Purchaser shall pay Seller (A) the amount by which the Purchase Price exceeds the Estimated Purchase Price and (B) with interest
thereon as calculated pursuant to Section 3.3(e), and (ii) if the Purchase Price is less than the Estimated Purchase Price, Seller shall pay Purchaser (A) the amount by which the Purchase Price is less than the Estimated Purchase Price and
(B) interest thereon as calculated pursuant to Section 3.3(e), in each case, within five (5) business days after the Purchase Price is finally determined. 
  
 (e) The party making the payment pursuant to Section 3.3(d) shall pay interest thereon to the other party for the
period from the Closing Date to the date of payment at the Prime Rate as published in The Wall Street Journal, Eastern Edition, on the Closing Date. Payment of such amounts and interest thereon shall be made by wire transfer in immediately
available funds to such account or accounts as are designated in writing by the party entitled to receive such payment no later than the second Business Day prior to the date on which such payment is due. 
  
 Section 3.4. Additional Consideration. (a) In addition to the Purchase
Price, upon the Business attaining the development milestones set forth below (each, a “Development Milestone” and collectively, the “Development Milestones”), Purchaser shall promptly notify CTI of achievement of
any Development Milestone and shall become obligated to pay to CTI the respective amounts set forth below on the terms set forth below (each, a “Development Milestone Payment” and collectively, the “Development Milestone
Payments”). 
  
 (i) $10 million in cash payable within
30 days of receipt of final FDA approval of TRISENOX for first line treatment of acute promyelocytic leukemia (“APL”); 
  

 17 

 (ii) $10 million in cash payable within 30 days of receipt of final FDA approval of TRISENOX for
treatment of myelodysplastic syndrome (“MDS”); 
  
 (iii) $10 million in cash payable within 30 days of receipt of final FDA approval of TRISENOX for treatment of multiple myeloma (“MM”); and 
  
 (iv) $10 million in cash payable within 30 days of receipt of final FDA approval of TRISENOX for treatment of acute myeloid
leukemia (“AML”). 
  
 (b) (i) In addition to the
Purchase Price, upon the Business attaining the sales milestones set forth below (each, a “Sales Milestone” and collectively, the “Sales Milestones”), Purchaser shall notify CTI of achievement of any Sales Milestone
and shall become obligated to pay to CTI the respective amounts set forth below, in each case on the terms set forth below (each, a “Sales Milestone Payment” and collectively, the “Sales Milestone Payments”):

  
 (1) $5 million in cash when Worldwide Net
Sales in any period of four consecutive calendar quarters exceed $40 million; 
  
 (2) $10 million in cash when Worldwide Net Sales in any period of four consecutive calendar quarters exceed $50 million; 
  
 (3) $5 million in cash when Worldwide Net Sales in a period
of four consecutive calendar quarters exceed $60 million; 
  
 (4) $10 million in cash when Worldwide Net Sales in any period of four consecutive calendar quarters exceed $75 million; 
  
 (5) $10 million in cash when Worldwide Net Sales in any period of four consecutive calendar quarters exceed $100 million; 
  
 (6) $10 million in cash when Worldwide Net Sales in any
four consecutive calendar quarter period exceed $150 million; and 
  
 (7) $10 million in cash when Worldwide Net Sales in any four consecutive calendar quarter period exceed $200 million. 
  
 CTI shall only be eligible to receive a single payment for each Sales Milestone described in clauses (1) through (7) above, but may receive more than one Sales Milestone
Payment with respect to a single four consecutive quarter period as a result of the Worldwide Net Sales attained in a single four consecutive quarter period. If any calendar quarter is included in a four calendar quarter period with respect to which
one or more Sales Milestones are achieved, then the Worldwide Net Sales for that calendar quarter may not be counted to achieve a Sales Milestone with respect to any other subsequent four calendar quarter period. 
  
 (ii) Purchaser will provide to CTI, within forty-five (45) days after the
end of each calendar quarter, commencing at the end of the first calendar quarter ending after the Closing Date, a report setting forth in reasonable detail a calculation of the Worldwide Net Sales 
  

 18 

 for the calendar quarter (the “Purchaser Sales Milestone Report”). If CTI does not object to the
Purchaser Sales Milestone Report within thirty (30) Business Days of receipt thereof the Purchaser Sales Milestone Report or upon such earlier time as CTI shall provide written notice that it concurs with the Purchaser Sales Milestone Report, such
Report shall become final and binding as the “Final Sales Milestone Report” and shall be used to calculate the Sales Milestone Payments. If CTI delivers notice to Purchaser objecting to the Purchaser Sales Milestone Report within
such 30-Business Day period the Purchaser Sales Milestone Report shall be submitted to the Independent Accounting Firm which shall conduct an audit thereof within twenty (20) Business Days after such submission or such longer period as the
Independent Accounting Firm may reasonably require (which audit shall be limited to the calculation of Worldwide Net Sales in accordance with the terms hereof (it being understood that such audit shall not cover, and the Independent Accounting Firm
shall not pass upon, the appropriateness of the Purchaser’s adjustments to gross sales under GAAP) and the mathematical accuracy of the calculation contained in the Purchaser Sales Milestone Report). The determination of the Independent
Accounting Firm shall be final, binding and conclusive on Purchaser and CTI and the Purchaser Sales Milestone Report, as adjusted by the determination of the Independent Accounting Firm, shall be the Final Sales Milestone Report. The fees and
disbursements of the Independent Accounting Firm shall be paid by CTI unless the adjustments to the Purchaser Sales Milestone Report determined to be made by the Independent Accounting Firm would cause an additional Sales Milestone to be met that
would not have been met under the calculation of Worldwide Net Sales contained in the Purchaser Sales Milestone Report, in which case the fees and disbursements of the Independent Accounting Firm shall be paid by Purchaser. 
  
 (iii) All Sales Milestone Payments shall be calculated on the basis of the
Final Sale Milestone Reports and shall be made no later than the later of (A) 60 days after the end of the four consecutive calendar quarter period in which the applicable Sales Milestone giving rise to any Sales Milestone Payment(s) is met and (B)
three (3) Business Days after the date on which Final Sales Milestone Reports for each of the calendar quarters in the applicable four consecutive calendar quarter period are deemed to be completed. 
  
 (c) All Development Milestone Payments and Sales Milestone Payments shall be
made by wire transfer of immediately available funds to such account or accounts as are designated in writing by CTI, which designation shall be made no later than the second Business Day after Sellers receive written notice that they have become
entitled to receive such payment. 
  
 (d) On and after the Closing
Date, the control of the Business shall rest with Purchaser and Sellers shall have no right to object to the manner in which the Business is conducted after the Closing Date, Purchaser shall have complete discretion with respect to all decisions
related to the Assets, including decisions relating to the research, development, manufacture, marketing, pricing and distribution of TRISENOX, and shall have no obligation to conduct clinical trials related to, or otherwise pursue regulatory
approvals of, any indication for TRISENOX or otherwise take any action to protect, attain or maximize any payment to be received by Sellers pursuant to this Section 3.4. Purchaser shall have no obligation to follow any business plan of
Sellers or be legally bound by any such plan and shall have no obligation to consult with Sellers with respect to the Business. Without limiting the foregoing, Purchaser agrees that, upon the written request of CTI, representatives of Purchaser and
CTI shall meet (in 
  

 19 

 person or telephonically) on such date and at such location as shall be agreed upon by Purchaser and CTI to discuss the
research, development and marketing of TRISENOX (including clinical trade strategy and regulatory approval strategies); provided, that Purchaser shall not be obligated to cause its representatives to attend such a meeting more than twice in
any calendar year and shall not be obligated to cause its representatives to attend such a meeting after the second anniversary of the Closing. 
  
 Section 3.5. Allocation of Purchase Price. No later than thirty (30) Business Days following the Closing Date, Sellers shall submit to Purchaser in
writing the allocation of the Purchase Price among all of the Assets in accordance with the provisions of Section 1060 of the Code and the regulations promulgated thereunder (the “Allocation Notice”). Purchaser shall be deemed to
have accepted the Allocation Notice, and it shall be deemed final, unless Purchaser provides written notice of disagreement to Sellers within thirty (30) Business Days of receipt of the Allocation Notice (a “Disagreement Notice”).
If Purchaser provides a Disagreement Notice, Sellers and Purchaser shall negotiate in good faith to resolve the differences. If the disagreements cannot be resolved within ten (10) Business Days of CTI’s receipt of the Disagreement Notice,
Purchaser and Sellers shall engage the Independent Accounting Firm to resolve the differences. The independent accounting firm will be requested to resolve the dispute and determine the correct allocation in accordance with Section 1060 of the Code,
and issue its report within ten (10) Business Days of its engagement in writing to Purchaser and Sellers (the “Accounting Report”), or such longer period as the accounting firm may require. One half of the fees of the independent
accounting firm shall be borne by Purchaser, and one half of such fees shall be borne by Sellers. Neither Purchaser nor Sellers shall take a position on any Tax return, before any governmental Tax agency or in a judicial proceeding that is
inconsistent with the Allocation Notice, if final, or the Accounting Report, except as required by law. To the extent required by Section 1060 of the Code, the Allocation Notice or Accounting Report, as appropriate, will be revised to reflect any
adjustment to the Purchase Price. 
  
 Section 3.6. Closing.

  
 (a) Upon the terms and subject to the conditions of this
Agreement, the sale and purchase of the Assets contemplated by this Agreement shall take place at a closing (the “Closing”) to be held at O’Melveny & Myers LLP, 275 Battery Street, Suite 2600, San Francisco, California
94111, on such date and at such time as Sellers and Purchaser may mutually agree, which date shall be as soon as practicable, and in any event no later than three (3) Business Days, after the satisfaction or valid waiver of the conditions set forth
in Article IX that are capable of being satisfied prior to the Closing (the day on which the Closing takes place being referred to herein as the “Closing Date”). 
  
 (b) Subject to the satisfaction or waiver of the conditions set forth in Article IX, at Closing Purchaser shall pay
CTI an amount equal to the Estimated Purchase Price by wire transfer of immediately available funds to such account or accounts as are designated in writing by CTI no later than the second Business Day prior to the Closing Date. 
  
 (c) Subject to satisfaction or waiver of the conditions set forth in
Article IX, at Closing Purchaser shall deliver to Sellers the following: 
  
 (i) a copy of Purchaser’s Certificate of Incorporation certified as of a recent date by the Secretary of State of the State of Delaware; 
  

 20 

 (ii) a certificate of good standing of Purchaser issued as of a recent date by the Secretary of State of
the State of Delaware; 
  
 (iii) a certificate of the secretary
or an assistant secretary of Purchaser, dated the Closing Date, in form and substance reasonably satisfactory to Sellers, as to (i) no amendments to the Certificate of Incorporation of Purchaser since a specified date; (ii) the by-laws of Purchaser;
(iii) the resolutions of the Board of Directors of Purchaser authorizing the execution, delivery and performance of this Agreement and the Purchaser Ancillary Agreements and the transactions contemplated hereby and thereby; and (iv) the incumbency
and signatures of the officers of Purchaser executing this Agreement and any Purchaser Ancillary Agreement; 
  
 (iv) the Assumption Agreement duly executed by Purchaser; 
  
 (v) the certificate of Purchaser contemplated by Section 9.2(c) duly executed by an authorized officer of Purchaser; and 
  
 (vi) the Transition Services Agreement duly executed by Purchaser; and

  
 (vii) a certificate of resale for each state in which
inventory included in the Assets is held reflecting such inventory held in the state. 
  
 (d) Subject to the satisfaction or waiver of the conditions set forth in Article IX, at Closing Sellers shall deliver to Purchaser the following: 
  
 (i) a copy of CTI’s Articles of Incorporation certified as of a recent date by the Secretary of State of the State of
Washington; 
  
 (ii) a copy of Nevada’s Articles of
Incorporation certified as of a recent date by the Secretary of State of the State of Nevada; 
  
 (iii) the common seal (if any), statutory books and other record books of UK written up to (but not including) the Closing Date, the certificate of incorporation and any certificate on change of name of UK and a copy
of the Memorandum and Articles of Association of UK (duly certified by any director or the secretary as being true, complete and up to date) 
  
 (iv) a copy of the Certificate of Incorporation of PolaRx certified as of a recent date by the Secretary of State of the State of Delaware; 

 
 (v) a certificate of good standing of CTI issued as of a recent date by
the Secretary of State of the State of Washington; 
  
 (vi) a
certificate of good standing of Nevada issued as of a recent date by the Secretary of State of the State of Nevada; 
  

 21 

 (vii) a certificate of good standing of PolaRx issued as of a recent date by the Secretary of State of
the State of Delaware; 
  
 (viii) a certificate of the secretary
or assistant secretary of CTI, dated the Closing Date, in form and substance satisfactory to Purchaser, as to (i) no amendments to the Articles of Incorporation of CTI since a specified date; (ii) the by-laws of CTI; (iii) the resolutions of the
Board of Directors of CTI authorizing the execution, delivery and performance of this Agreement and the Seller Ancillary Agreements to which CTI is a party and the transactions contemplated hereby and thereby; and (iv) the incumbency and signatures
of the officers of CTI executing this Agreement and any Seller Ancillary Agreement to which CTI is a party; 
  
 (ix) a certificate of the secretary or assistant secretary of Nevada, dated the Closing Date, in form and substance satisfactory to Purchaser as to (i)
no amendment to the Articles of Incorporation of Nevada since a specified date; (ii) the by-laws of Nevada; (iii) the resolutions of the Board of Directors of Nevada authorizing the execution, delivery and performance of this Agreement and the
Seller Ancillary Agreements to which Nevada is a party and the transactions contemplated hereby and thereby; and (iv) the incumbency and signatures of the officers of Nevada executing this Agreement and any Seller Ancillary Agreement to which Nevada
is a party; 
  
 (x) a certificate of the secretary or assistant
secretary of PolaRx, dated the Closing Date, in form and substance satisfactory to Purchaser, as to (i) no amendment to the Certificate of Incorporation of PolaRx since a specified date; and (ii) the by-laws of PolaRx; 
  
 (xi) an opinion of O’Melveny & Myers LLP, counsel to Sellers in
form and substance reasonably satisfactory to Purchaser; 
  
 (xii) the Bill of Sale duly executed by the Sellers; 
  
 (xiii) the certificates contemplated by Section 9.3(c) and (e), duly executed by an authorized officer of each of CTI and Nevada; 
  
 (xiv) stock certificates evidencing all outstanding capital stock of PolaRx, duly endorsed in blank or accompanied by stock powers duly executed in
blank; 
  
 (xv) all consents, waivers or approvals obtained by
Sellers with respect to the Assets or the consummation of the Transactions; 
  
 (xvi) the resignations of each officer and director of PolaRx; 
  
 (xvii) resignation letters in the agreed form from each of the directors and officers of UK, in each case acknowledging that he/she has no claims against
UK whether for loss of office or otherwise; 
  

 22 

 (xviii) an unqualified letter of resignation from the auditors of UK, in the form prescribed by Section
394 of the Companies Act of 1985, accompanied by a written confirmation that such auditors have no claims for unpaid fees or expenses; 
  
 (xix) the Transition Services Agreement duly executed by CTI; 
  
 (xx) a share purchase agreement in a form mutually agreeable to CTI and Purchaser duly executed by CTI in favor of Purchaser (or persons nominated by
Purchaser), the share certificates for the UK Shares in the name of CTI (or duly executed lost certificate indemnities, in the agreed form, in respect thereof) and a duly executed original of any power of attorney under which the transfer is
executed; 
  
 (xxi) assignments, in recordable form with respect
to each registered copyright, issued patent, registered trademark and pending application for the registration or issuance of any copyrights, patent rights and trademarks included in the Assets, duly executed by Sellers and in form supplied by
Purchaser; 
  
 (xxii) evidence of (A) the termination of the
PolaRx Inter-Company Licenses and (B) Sellers’ compliance with Sections 6.9(c) and 6.9(d); 
  
 (xxiii) UCC-3 termination statements releasing all security interests of PharmaBio or any of its Affiliates with respect to the Assets; and 

 
 (xxiv) such other bills of sale, assignments and other instruments of
transfer or conveyances as Purchaser may reasonably request or as may be otherwise necessary to evidence and effect the sale, assignment, transfer, conveyance and delivery of the Assets to Purchaser, in each case in such form supplied by Purchaser
in forms reasonably acceptable to Sellers; and 
  
 (xxv) a
certified copy of the minutes of a duly held meeting of the board of directors of UK at which the following resolutions were duly passed: (A) to approve the registration of the transfer of the UK Shares subject to such transfer being duly stamped
for the United Kingdom Stamp Duty; (B) to accept the resignations of the directors, officers and auditors referred to in clauses (xviii) and (xix) above; and (C) to appoint such persons as Cephalon may specify prior to Closing as directors and
officers of UK with effect from Closing; 
  
 (xxvi) powers of
attorney in the agreed form in respect of the exercise of the rights attaching to the UK Shares pending registration of the transfer of the UK Shares; and 
  
 (xxvii) a certified copy of the minutes of a duly held meeting of the board of directors of CTI authorizing the sale of the UK Shares and the execution
of this Agreement and any other documents to be executed by it on Closing in connection therewith. 
  
 In addition to the above deliveries, Sellers shall take all steps and actions as Purchaser may reasonably request or as may otherwise be necessary to put Purchaser in actual possession or control of the Assets.

  

 23 

 ARTICLE IV 
  

REPRESENTATIONS AND WARRANTIES 
 OF
SELLERS AND THE COMPANIES 
  
 As an inducement to Purchaser to
enter into this Agreement, Sellers hereby jointly and severally represent and warrant to Purchaser that, except as set forth in the Disclosure Schedule: 
  
 Section 4.1. Organization; Authority. 
  
 (a) CTI is a corporation duly organized, validly existing and in good standing under the laws of Washington. Nevada is a corporation duly organized and
validly existing under the laws of Nevada. Each of the Sellers is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which the ownership or leasing of the Assets or the conduct of the
Business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect. UK is a corporation duly organized, validly existing and in good standing under the laws of the United Kingdom. PolaRx is a
corporation duly organized, validly existing and in good standing under the laws of Delaware. Each of the Companies is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which the ownership
or leasing of the Assets or the conduct of the Business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect. Each of the Sellers and the Companies has all necessary corporate power and
authority to own or lease the Assets owned or leased by it and to conduct the Business as currently conducted by it. The Companies are not presently, and have not been, engaged in any business activity other than the Business. 
  
 (b) Each of the Sellers has all necessary corporate power and authority to
execute, deliver and perform this Agreement and each of the Seller Ancillary Agreements to which it is a party. The execution, delivery and performance of this Agreement and each Seller Ancillary Agreement to which it is a party by each Seller and
the consummation by each of CTI and Nevada of the Transactions have been duly and validly authorized by the Board of Directors of CTI and the Board of Directors and sole stockholder of Nevada no other corporate proceedings on the part of either CTI
or Nevada or their respective Boards of Directors or stockholders are necessary to consummate the Transactions. This Agreement has been duly and validly executed and delivered by each of CTI and Nevada and constitutes the legal, valid and binding
obligation of each such party, enforceable against such party in accordance with its terms, except as such enforceability may be subject to the laws of general application relating to bankruptcy, insolvency, and the relief of debtors and rules of
law governing specific performance, injunctive relief, or other equitable remedies. Upon execution and delivery by CTI and Nevada of each Seller Ancillary Agreement to which is it a party, each such Seller Ancillary Agreement will constitute the
legal, valid and binding obligation of each such party, enforceable against such party in accordance with its terms, except as such enforceability may be subject to the laws of general application relating to bankruptcy, insolvency, and the relief
of debtors and rules of law governing specific performance, injunctive relief, or other equitable remedies. 
  

 24 

 Section 4.2. No Conflict. Assuming compliance with the notification requirements of the HSR Act
and any applicable foreign antitrust regulations and the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions identified in Section 4.2 of the Disclosure Schedule, neither the execution and
delivery of this Agreements or the Seller Ancillary Agreements nor the consummation of any of the Transactions do or will, directly or indirectly (with or without notice or lapse of time or both), (a) contravene, conflict with, or result in a
violation of or the creation of any Encumbrance (excluding any Permitted Encumbrance) upon any of the Assets under (i) any provision of the charter or bylaws (or similar organizational documents) of Sellers or the Companies, (ii) any resolution
adopted by the board of directors or the stockholders of Sellers or the Companies; (iii) any Law to which Sellers, the Companies or the Assets is subject or bound or (iv) any Governmental Order to which Sellers, the Companies or the Assets is
subject; (b) contravene, conflict with, or result in a violation of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance (excluding a Permitted Encumbrance) on any of the Assets or any of the assets of the Companies pursuant to any Material
Contract or any other material permit or authorization to which Sellers or the Companies is a party or is bound or to which the Assets are subject; or (c) result in the creation of any Encumbrance (other than restrictions on transfer under
applicable state, provincial and federal securities Laws and Permitted Encumbrances) on any of the Shares, except, in the case of (a)(iii), as would not reasonably be expected to have a Material Adverse Effect. 
  
 Section 4.3. Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and the Seller Ancillary Agreements and the consummation of the Transactions by Sellers does not and will not require any consent, approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority or any other Person, except (a) the notification requirements of the HSR Act and (b) pursuant to any applicable foreign antitrust regulations. 
  
 Section 4.4. Ownership of Shares; Capitalization; Subsidiaries. 
  
 (a) Seller owns of record the PolaRx Shares, free and clear of all
Encumbrances (other than restrictions on transfer under applicable state, provincial and federal securities Laws). 
  
 (b) Seller owns of record the UK Shares, free and clear of all Encumbrances (other than restrictions on transfer under applicable state, provincial and
federal securities Laws). 
  
 (c) The authorized capital stock of
UK consists of 100 ordinary shares, nominal value £1 per share, of which 100 are issued and outstanding and all of which are held by Seller and are validly issued, fully paid and nonassessable and free of preemptive rights. The UK Shares
constitute all of the issued and outstanding shares of capital stock of UK. 
  
 (d) The authorized capital stock of PolaRx consists of 100 shares of common stock, $.001 par value per share, of which 100 shares are issued and outstanding and all of which are held by Seller and are validly issued,
fully paid and nonassessable and free of preemptive rights. The PolaRx Shares constitute all of the issued and outstanding shares of capital stock of PolaRx. 
  

 25 

 (e) Except as set forth above there are not outstanding any (i) securities of either Company convertible
into or exchangeable or exercisable for, shares of capital stock or for share equity securities of such Company, (ii) options, warrants or other rights to acquire from either Company any shares of capital stock or equity securities or securities
convertible into or exchangeable or exercisable for shares of capital stock or equity securities of such Company, or (iii) bonds, debentures, notes or other indebtedness or securities of either Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on which stockholders of such Company may vote. 
  
 (f) True and complete copies of (i) the articles of association and by-laws of UK and (ii) the certificate of incorporation and by-laws of PolaRx, each as
amended to date, have been delivered to Purchaser. 
  
 (g) Neither
of the Companies has any Subsidiaries. 
  
 Section 4.5.
Financial Statements. Section 4.5 of the Disclosure Schedule sets forth (i) an unaudited statement of assets and liabilities of the Business as of the fiscal quarter ended March 31, 2005 and an unaudited statement of assets and
liabilities of the Business as of the fiscal year ended December 31, 2004 and (ii) statements of net product sales (each, a “Statement of Net Product Sales”) of Trisenox for the three month period ending March 31, 2005 and for the
year ended December 31, 2004 (collectively, the “Financial Statements”). Except as set forth therein, the Financial Statements (a) in the case of the Statements of Net Product Sales, has been prepared to reflect the consolidated net
product sales of the Business for the applicable periods; (b) are in accordance with and based upon the books and records of the Sellers and the Companies; and (c) reflect account balances calculated in accordance with GAAP, consistently applied,
and fairly present in all material respects the financial position and results of operations of the Business (including the Companies) as of dates presented and for the periods then ended. 
  
 Section 4.6. No Undisclosed Liabilities. Neither the Companies nor the
Business is subject to any Liabilities required to be disclosed on a balance sheet prepared in accordance with GAAP, consistently applied, other than (a) Liabilities adequately reflected or reserved against on the Reference Statement, and (b)
Liabilities of the same nature as those set forth in the Reference Statement incurred since the Reference Statement Date in the ordinary course of business consistent with past practice. 
  
 Section 4.7. Absence of Changes. 
  
 (a) Since the Reference Statement Date, there has occurred no Material Adverse Effect. 
  
 (b) Since the Reference Statement Date, neither Sellers nor the Companies has
taken any action that would constitute a violation of Section 6.1(b) were such action to be taken after the execution of this Agreement. 
  

 26 

 Section 4.8. Litigation. There are no Actions by or against Sellers relating to the Business or by
or against the Companies, or affecting any of the assets of the Business (including the Assets), pending, or to the Knowledge of Sellers, threatened. As of the date hereof, none of Sellers nor any of their Subsidiaries (including the Companies), nor
any of their respective assets or properties (including the Assets), is subject to any Governmental Order, nor, to the Knowledge of Sellers, are there any such Governmental Orders threatened to be imposed by any Governmental Authority. As of the
date hereof, no Action is pending or, to the Knowledge of Sellers, threatened, which seeks to delay or prevent the consummation of, or which could reasonably be expected to materially adversely affect Sellers’ ability to consummate, the
Transactions. 
  
 Section 4.9. Compliance with Laws.
Sellers and the Companies are conducting the Business in all material respects in accordance with all Laws and Governmental Orders applicable to the Business or the assets of the Business (including the Assets), and neither of the Sellers and
neither of the Companies is in violation of any such Law or Governmental Order in any material respect. 
  
 Section 4.10. Permits. Each of Sellers and each of the Companies owns, holds or possesses all permits, licenses, franchises, privileges, approvals
and other authorizations from any Governmental Authority which are necessary to entitle it to own or lease, operate and use the Assets owned by it and to carry on and conduct the Business as currently conducted by it (collectively, the
“Permits”). Section 4.10 of the Disclosure Schedule sets forth a list of each material Permit. None of the Sellers or the Companies is in violation of or default under any material Permit. Each of the Sellers and the
Companies has fulfilled and performed its obligations under each material Permit, and no event has occurred or condition or state of facts exists which constitutes or, after notice or lapse of time or both, would constitute a breach of or default
under any such material Permit or which permits or, after notice or lapse of time or both, would permit revocation or termination of any such material Permit. As of the date hereof, to the Knowledge of Sellers, no notice of cancellation, of default
or of any dispute concerning any Permit, or of any event, condition or state of facts described in the preceding sentence, has been received by Sellers or the Companies. Each of the Permits is valid, subsisting and in full force and effect and may
be assigned and transferred to Purchaser in accordance with this Agreement and will continue in full force and effect after the consummation of the Transactions, in each case without (x) the occurrence of any breach, default or forfeiture of rights
thereunder, or (y) the consent, approval or act of, or the making of any filing with, and Governmental Authority. 
  
 Section 4.11. Environmental Matters. The operations of the Business comply in all material respects with all applicable Environmental Laws and to
the Knowledge of the Sellers, no circumstances or conditions exist that may prevent or interfere with such compliance in the future. Neither Seller, with respect to the Business, nor either Company is subject to any judicial or administrative
proceeding, order, judgment, decree or settlement alleging or addressing a violation of or liability under any Environmental Law. The Business is not required to have any Permits under Environmental Laws, other than those applicable to the conduct
of business in the ordinary course. Except as set forth on Schedule 4.11, no Contaminant has been generated, transported, used, disposed, stored or treated by Sellers with respect to the Business or by the Companies, and there has been no
Release of Contaminant by Sellers with respect to the Business or either of the Companies. 
  

 27 

 Section 4.12. Material Contracts. 
  
 (a) For purposes hereof, the term “Material Contracts” shall mean the following Contracts to which any of
the Sellers or the Companies is a party or is otherwise bound: 
  
 (i) Contracts for the purchase by the Business or the Companies of goods or services from suppliers or service providers, including any consignment, distributor, dealer, manufacturer’s representative, sales agency, advertising
representative or advertising or public relations contract, in each case involving annual payments by the Business in excess of $25,000 in fiscal year 2004 or which Sellers reasonably expect will involve payments of more than $25,000 in fiscal year
2005 or which extends beyond 2009; 
  
 (ii) Contracts for the
purchase by customers from the Business of goods or services involving annual payments in excess of $25,000 in fiscal year 2004 or which Sellers reasonably expect will involve payments related to the Business of more than $25,000 in fiscal year 2005
or which extends beyond 2009; 
  
 (iii) Contracts relating to the
incurrence of indebtedness for borrowed money by the Business or the Companies or the guaranteeing or securing by or of the Business or the Companies of any obligation for borrowed money (including letters of credit), except in the ordinary course
in connection with accounts payable; 
  
 (iv) leases, installment
and conditional sale agreements, having annual rentals or payments in excess of $25,000 relating to the Business or the Companies, and other Contracts affecting the ownership by, leasing of, title to, use of, or any leasehold or other interest in,
any personal property used primarily in the Business; 
  
 (v)
joint venture Contracts relating to the Business or the Companies, or other Contracts relating to the Business or the Companies creating a similar legal relationship; 
  
 (vi) Contracts that prohibit the Business from competing with any Person in any geographic area or from soliciting
customers or from hiring or retaining any Person; 
  
 (vii)
Contracts relating to Licensed Intellectual Property, provided in each case (A) annual payments or receipts of greater than $25,000 were attributable to the Business pursuant to such Contract in fiscal year 2004, or (B) such Contract is
otherwise material to the operation of the Business; 
  
 (viii)
Contracts relating to Software excluding non-customized software that is commercially available or subject to “shrink-wrap” and “clip-through” license agreements and primarily used in the conduct of the Business; 
  

 28 

 (ix) any guarantee of the obligations of customers, suppliers, officers, directors, employees,
Affiliates or others in connection with, or relating to, the Business; 
  
 (x) any Contract not otherwise described in this Section 4.12 that is material to the conduct of the Business as currently conducted, or that is not entered into in the ordinary course of business. 
  
 (b) Section 4.12 of the Disclosure Schedule sets forth a complete list
of all Material Contracts to which either of the Sellers or either of the Companies is party or by which they are bound. Each Material Contract constitutes a valid and binding obligation of the parties thereto and is in full force and effect and may
be transferred to Purchaser pursuant to this Agreement and will continue in full force and effect thereafter, in each case without breaching the terms thereof or resulting in the forfeiture or impairment of any rights thereunder and without the
consent, approval or act of, or the making of any filing with, any other party. Sellers and the Companies have fulfilled and performed their respective obligations under each of the Material Contracts and none of the Sellers or the Companies has
violated or breached, or committed any default under, any Material Contract; and, to the Knowledge of Sellers, no other Person has violated or breached, or committed any default under, and no condition or state of facts exists which, with the
passage of time or the giving of notice or both, would constitute such a default or breach by Sellers, the Companies or any such third party under, any Material Contract. Since the Reference Statement Date, neither of the Sellers and neither of the
Companies has received any written notice alleging any actual or possible violation or breach of, or default under, any Material Contract. Neither of the Companies is a party to or bound by any Contract that is not primarily related to the Business.

  
 (c) No amounts are due pursuant to Article 4 of the Waxman
Agreement with respect to patents issued on or before the date hereof. No amounts are due, or will become due, in connection with this Agreement and the consummation of the Transactions under Section 4.1(b) of the Sloan-Kettering Agreement.

  
 Section 4.13. Intellectual Property. 
  
 (a) Section 4.13(a) of the Disclosure Schedule lists the material
Licensed Intellectual Property. 
  
 (b) Section 4.13(b) of
the Disclosure Schedule lists the Transferred Intellectual Property. 
  
 (c) There is no software owned by or licensed to Sellers and used primarily with respect to the Business or owned by or licensed to the Companies, excluding non-customized software that is commercially available or subject to
“shrink-wrap” and “clip-through” license agreements (the “Software”). 
  
 (d) Section 4.13 (d) of the Disclosure Schedule sets forth a list of all registrations and applications for registration included in the
Transferred Intellectual Property or Licensed Intellectual Property (“Registered IP”). All such Registered IP is in good standing, is in material compliance with formal legal requirements and is not subject to any unpaid 

 

 29 

 maintenance fees or taxes or actions falling due within ninety (90) days after the Closing Date. There are no
proceedings, challenges or claims known to Sellers before any court, tribunal (including the United States Patent and Trademark Office or equivalent authority anywhere in the world) related to any such Registered IP. 
  
 (e) Sellers or the Companies own all right, title and interest in and to all
of the Transferred Intellectual Property. 
  
 (f) Sellers and the
Companies have taken reasonable steps that are required to protect the rights of Sellers and the Companies in confidential information and trade secrets of Sellers and the Companies in the Transferred Intellectual Property and Licensed Intellectual
Property. 
  
 (g) No proceedings are pending, or to the Knowledge
of Sellers, threatened and no claims have been received by Sellers or their Subsidiaries within the previous two (2) years that the operation of the Business has violated, infringed or misappropriated any Intellectual Property of any other Person.

  
 (h) The operation of the Business as conducted by Sellers and
their Subsidiaries does not violate, infringe or misappropriate the Intellectual Property of any other Person. Within the previous two (2) years, no written claim of invalidity of any Intellectual Property used in the Business has been made by any
other Person. 
  
 (i) As of the date of this Agreement, (i) there
is no outstanding Governmental Order applicable to Sellers or their Subsidiaries, (ii) there are no proceedings pending, and (iii) there is no agreement to which either Sellers or any of their Subsidiaries is a party, restricting, or that would
restrict the use of the Transferred Intellectual Property by Sellers or any of their Subsidiaries (including the Companies) with respect to the Business or restricting the licensing of the Transferred Intellectual Property by Sellers or any of their
Subsidiaries (including the Companies) to any Person. 
  
 (j) To
the Knowledge of Sellers, no Person is violating, infringing, diluting or misappropriating the Transferred Intellectual Property. 
  
 Section 4.14. Insurance. Sellers have provided to Purchaser true and complete copies of all policies of insurance maintained by Sellers or the
Companies with respect to the properties and assets of the Business, or true and complete summaries of the material terms of such insurance policies. All such policies are in full force and effect and Sellers and the Companies have complied in all
material respects with the provisions of such policies. 
  
 Section 4.15. Properties and Assets. 
  
 (a)
Except for the Leased Real Property that is subject to the UK Lease, there is no Leased Real Property leased or subleased by Sellers and used primarily in connection with the Business and there is no Leased Real Property leased or subleased by the
Companies. Neither of the Sellers with respect to the Business nor the Companies (i) owns any real property or (ii) is a party to or is bound by any Contract for the purchase or sale of real property. 
  

 30 

 (b) Section 4.15(b) of the Disclosure Schedule contains a list of all machinery, equipment,
vehicles, furniture and other tangible personal property owned by Sellers and used primarily in connection with the Business or owned by the Companies. 
  
 (c) Section 4.15(c) of the Disclosure Schedule contains a list and description of each lease or other agreement or right, whether written or oral
(showing in each case the annual rental, the expiration date thereof and a brief description of the property covered), under which either Seller is lessee of, or holds or operates, any machinery, equipment, vehicle or other tangible personal
property owned by a third Person and used primarily in connection with the Business or either of the Companies are lessee of, or hold or operate, any machinery, equipment, vehicle or other tangible personal property owned by a third Person.

  
 (d) Sellers have good and marketable title to, or in the case
of any leased property included in the Assets have valid leasehold interests in, all Assets, free and clear of any Encumbrance, other than Permitted Encumbrances. Upon delivery to Purchaser of the Bill of Sale and other instruments of transfer
contemplated by Section 3.6(d), Sellers will thereby transfer to Purchaser good and marketable title to the Assets, free and clear of all Encumbrances, other than Permitted Encumbrances. 
  
 (e) PolaRx has good title to, or in the case of leased property and assets
has valid leasehold interests in, all of its physical assets, free and clear of any Encumbrances, other than Permitted Encumbrances. UK has good title to, or in the case of leased property and assets, has valid leasehold interests in, all of its
physical assets free and clear of any Encumbrances, other than Permitted Encumbrances. 
  
 Section 4.16. Sufficiency of Assets. Except for the assets to be provided to Purchaser pursuant to the Transition Services Agreement, the Assets collectively include all the assets primarily used in the
Business and all of the assets necessary to conduct the Business as currently conducted. 
  
 Section 4.17. Regulatory Matters. 
  
 (a) TRISENOX has been and is being manufactured, distributed and marketed in compliance with all applicable requirements under the FDCA and any similar Law, including those relating to investigational use, premarket
approval, good manufacturing practices, labeling, advertising, record keeping, and the filing of adverse event reports and compliance with other postmarketing obligations, including obligations to conduct phase 4 studies as specified in the
pertinent FDA approval letter(s). Neither the Sellers nor any of their Subsidiaries has received any formal or informal notice or other communication from the FDA or any other Governmental Authority including a warning or untitled letter, (A)
contesting the premarket approval labeling, or promotion (including advertising, promotional labeling, and sampling) of, TRISENOX or (B) otherwise alleging any violation or appearance of any violation of any Law by the Sellers or any of their
Subsidiaries relating to TRISENOX. 
  
 (b) No TRISENOX product has
been recalled, withdrawn, suspended or discontinued by the Sellers or any of their Subsidiaries in the United States or outside the United States (whether voluntarily or otherwise) since January 1, 2000. No proceedings in the United 
  

 31 

 States or outside of the United States (whether completed or pending) seeking the recall, withdrawal, suspension or
seizure of any TRISENOX product or premarket approvals or marketing authorizations are pending, or to the Knowledge of Sellers, threatened, against the Sellers or any of their Subsidiaries, nor have any such proceedings been pending at any time
since January 1, 2000. 
  
 (c) To the extent that a biological
license application, new drug application, investigational new drug application or similar state or foreign regulatory application has been approved for TRISENOX, Sellers and their Subsidiaries are in substantial compliance with 21 U.S.C. sec. 355
and applicable FDA implementing regulations, including 21 C.F.R. Parts 312 or 314, and similar Laws and all terms and conditions of such applications. Sellers and their Subsidiaries, and the officers, employees or agents of Sellers or such
Subsidiaries have included in the application for TRISENOX, where required, the certification described in 21 U.S.C. sec. 335a(k)(1) or any similar Law, and such certification and such list was in each case true and accurate in all material respects
when made and remain true and accurate in all material respects. In addition, Sellers and their Subsidiaries are in substantial compliance with all applicable registration and listing requirements set forth in 21 U.S.C. sec. 360 and 21 C.F.R. Part
207 and all similar Laws with respect to TRISENOX. 
  
 (d) Each
article of TRISENOX manufactured and/or distributed by Sellers or any of their Subsidiaries is not adulterated within the meaning of 21 U.S.C. sec. 351 (or similar Law) or misbranded within the meaning of 21 U.S.C. sec. 352 (or similar Law), and is
not a product that is in violation of 21 U.S.C. sec. 355 (or similar Law). 
  
 (e) Neither Sellers nor any of their Subsidiaries, nor any officers, employees or agents of Sellers or any of their Subsidiaries has with respect to TRISENOX made an untrue statement of a material fact or fraudulent
statement to the FDA or other Governmental Authority, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority, or committed an act, made a statement, or failed to make a statement that, at the time
such disclosure was made, could reasonably be expected to provide a basis for the FDA or any other Governmental Authority to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set
forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy and to the Knowledge of Sellers neither Sellers nor any of their Subsidiaries, nor any officer, employee or agent of Sellers or any of their Subsidiaries is the subject,
officially or otherwise, of any pending or threatened investigation by any Governmental Authority under such policy or under the Federal Anti-Kickback Statute or the Civil False Claims Act or any regulations promulgated thereunder. Neither Sellers
nor any of their Subsidiaries, nor any officer, employee or agent of Sellers or any of their Subsidiaries, has been convicted of any crime or engaged in any conduct with respect to TRISENOX for which debarment is mandated by 21 U.S.C. sec. 335a(a)
or any similar Law or authorized by 21 U.S.C. sec. 335a(b) or any similar Law. 
  
 (f) To Sellers’ Knowledge, all pre-clinical and clinical investigations conducted or sponsored by it with respect to TRISENOX have been and are being conducted in material compliance with all recommendations of
the FDA and all applicable laws, rules, regulations and guidelines, including good laboratory practices, investigational new drug 
  

 32 

 requirements, good clinical practice requirements (including informed consent and institutional review boards designed to
ensure the protection of the rights and welfare of human subjects), and federal and state laws restricting the use and disclosure of individually identifiable health information. To Sellers’ Knowledge, neither Sellers nor any of their
Subsidiaries have received any information that would reasonably be expected to lead to denial by the FDA of any future application by Purchaser for approval of TRISENOX for the treatment of APL, MDS, MM or AML, subject to successful completion of
ongoing and future trials disclosed to Purchaser and the results thereof. 
  
 (g) As of the date hereof, Seller is not aware that any Governmental Authority is considering issuing any Talk Paper or other public statement, pursuant to 21 U.S.C. sec. 375 or otherwise, questioning the safety or
risk-benefit ratio of TRISENOX, or requesting or directing that the official labeling for TRISENOX be revised to include additional or strengthened warning or other risk information. 
  
 Section 4.18. Accounts Receivable; Inventories. 
  
 (a) All accounts receivable of Sellers with respect to the Business (including all accounts receivable of the Companies)
have arisen from bona fide transactions by Sellers or the Companies in the ordinary course of the Business. To the Knowledge of Sellers, all accounts receivable reflected in the Reference Statement are good and collectible in the ordinary course of
business at the aggregate recorded amounts thereof, net of any applicable allowance for doubtful accounts reflected in the Reference Statement. 
  
 (b) The inventories of Sellers with respect to the Business (including the inventories of the Companies) (in each case, including raw materials, supplies,
work-in-process, finished goods and other materials) (i) are in good, merchantable and useable condition, (ii) are reflected in the Reference Date Balance Sheet at the lower of cost or market in accordance with GAAP, consistently applied and will be
reflected in the Valuation Date Statement at the lower of cost or market in accordance with GAAP (subject to the deviations from GAAP and the other principles set forth in Schedule 1.1A), consistently applied, and (iii) other than any failure
to be saleable in the ordinary course of business solely as a result of the age of finished goods inventory, are, in the case of finished goods, of a quality saleable in the conduct of the Business and, in the case of all other inventories are of a
quality useable in the conduct of the Business. Section 4.18 of the Disclosure Schedule sets forth a list of places where material inventories of the Business were located as of March 31, 2005. 
  
 Section 4.19. Employees and Related Agreements; ERISA. 
  
 (a) Section 4.19(a) of the Disclosure Schedule sets forth a list of
each Benefit Plan, and identifies each Benefit Plan that is sponsored or maintained by either of the Companies, or pursuant to which either of the Companies has any obligation or liability (“Company Plans”), and each Benefit Plan
that is sponsored or maintained by either of the Sellers, or pursuant to which either of the Sellers has any obligation or liability (“Seller Plans”). 
  
 (b) None of the Sellers or the Companies has ever maintained any employee pension benefit plan with respect to the Business
that is subject to Section 302 or Title IV of 
  

 33 

 ERISA or Section 412 of the Code, or has ever been required to contribute to, or had any liability or obligation under,
any “multiemployer plan” (as such term is defined in Section 3(37) of ERISA) with respect to the Business. 
  
 (c) Sellers have delivered or made available to Purchaser, with respect to each Seller Plan, either a true and correct copy of each such plan or a summary
plan description or other comparable summary of such plan. 
  
 (d)
Each Benefit Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS that such Plan is so qualified under the Code; and no circumstance exists which might cause such Plan to cease
being so qualified. 
  
 (e) Each Company Plan complies, and has
been administered to comply, with all applicable Laws, and there has been no notice issued by any Governmental Authority questioning or challenging such compliance, and there are no actions, suits or claims (other than routine claims for benefits)
pending or, to the Knowledge of Seller, threatened involving any such plan or the assets of any such plan. 
  
 (f) None of the Sellers or the Companies have any obligations under any Benefit Plans or otherwise to provide health or death benefits to or in respect of
former employees of either Seller or either of the Companies with respect to the Business, except as specifically required by the continuation requirements of Part 6 of Title I of ERISA. 
  
 (g) None of the Sellers, with respect to the Business, or the Companies have any liability of any kind whatsoever, whether
direct, indirect, contingent or otherwise, on account of (i) any violation of the health care requirements of Part 6 of Title I of ERISA or Section 4980B of the Code, (ii) under Section 502(i) or Section 502(l) of ERISA or Section 4975 of the Code,
(iii) under Section 302 of ERISA or Section 412 of the Code or (iv) under Title IV of ERISA. 
  
 (h) Section 4.19(h) of the Disclosure Schedule contains: (i) a list of all employees of the Companies or Sellers whose work is primarily related to the Business as of the date of this Agreement, indicating each
such employee’s length of service, current title, the entity with which such employee is employed and, if inactive, the reason for and commencement date of such employee’s inactive status and expected date of return; (ii) the then current
annual compensation of, and a description of the fringe benefits (other than those generally available to employees of Sellers or the Companies) provided by Sellers or the Companies to any such employees; (iii) a list of all present employees of
Sellers with respect to the Business or the Companies; (iv) a list of any increase, effective on or after January 1, 2005, in the rate of compensation of any employees or commission salespersons if such increase exceeds 10% of the previous annual
salary of such employee or commission salesperson; and (v) a list of all substantial changes in job assignments of, or arrangements with, or promotions or appointments of, any employees or commission salespersons whose compensation as of January 1,
2005 was in excess of $25,000 per annum. 
  

 34 

 (i) (i) To the Knowledge of Sellers, the Business is not involved in any transaction or other situation
with any employee, officer, director or Affiliate of either Seller or either of the Companies which may be generally characterized as a “conflict of interest”, including direct or indirect interests in the business of competitors,
suppliers or customers of the Business, and (ii) there are no situations with respect to the Business which involved or involve (A) the use of any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to
political activity; (B) the making of any direct or indirect unlawful payments to government officials or others from corporate funds or the establishment or maintenance of any unlawful or unrecorded funds; (C) the violation of the Foreign Corrupt
Practices Act of 1977; or (D) the receipt of any illegal discounts or rebates or any other violation of the antitrust laws. 
  
 (j) Sellers and the Companies have complied in respect of the Business with all applicable Laws relating to wages, hours, discrimination in employment and
collective bargaining and are not liable for any arrears of wages or any Taxes or penalties for failure to comply with any of the foregoing. Neither Sellers nor the Companies are subject to any collective bargaining agreements covering employees
employed in the Business. Neither Sellers nor the Companies are parties to, or are adversely affected by or, to Sellers’ Knowledge, threatened with, any dispute or controversy with or with respect to any current or former employee or other
service provider, with a union or with respect to unionization or collective bargaining involving the employees of Sellers or the Companies with respect to the Business. Neither Sellers, with respect to the Business, nor the Companies are adversely
affected by any dispute or controversy with a union or with respect to unionization or collective bargaining involving any supplier or customer of Sellers, with respect to the Business, or the Companies. No union organizing or election activities
involving any non-union employees of Sellers, with respect to the Business, or the Companies have occurred since January 1, 2004 or, to the Knowledge of Seller, are threatened as of the date hereof. 
  
 (k) With respect to each Company Plan not subject to United States law (a
“Company Foreign Benefit Plan”), (i) the fair market value of the assets of each funded Company Foreign Benefit Plan, the liability of each insurer for any Company Foreign Benefit Plan funded through insurance or the reserve shown
on the consolidated financial statements of the Sellers or the Companies for any unfunded Company Foreign Benefit Plan, together with any accrued contributions, is sufficient to procure or provide for the projected benefit obligations, as of the
Closing, with respect to all current and former participants in such plan based on reasonable, country specific actuarial assumptions and valuations and no transaction contemplated by this Agreement shall cause such assets or insurance obligations
or book reserve to be less than such projected benefit obligations; and (ii) each Company Foreign Benefit Plan has complied with all applicable Laws. 
  
 Section 4.20. Product Liability. There have been no Product Liability Claims (as defined below) made against, or with respect to which payments
have been made by or on behalf of, Sellers or their Subsidiaries during the past three fiscal years with respect to TRISENOX. To Sellers’ Knowledge, there are no design or manufacturing defects in TRISENOX manufactured, utilized in clinical
trials or sold by Sellers or their Subsidiaries. For purposes of this Section 4.20, the term “Product Liability Claim” shall mean any claim arising out of any injury to an 
  

 35 

 individual or property as a result of the ownership, possession, or use of TRISENOX manufactured, utilized in clinical
trials, sold or distributed by or on behalf of Sellers or their Subsidiaries. 
  
 Section 4.21. Customers and Suppliers. Copies of the forms of purchase order for inventory and other supplies and sales contracts for active pharmaceutical ingredients or finished goods used by Sellers and the
Companies with respect to the Business have been previously delivered by Sellers to Purchaser. Except as set forth in Section 4.21 of the Disclosure Schedule, as of the date hereof there exists no actual or threatened (in writing)
termination, cancellation or limitation of, or any modification or change in, the business relationship of either Seller or either of the Companies with any customer or group of customers whose purchases individually or in the aggregate are material
to the operations of the Business, or with any supplier or group of suppliers whose sales individually or in the aggregate are material to the operations of the Business, and, to the Knowledge of Sellers, there exists no present or future condition
or state of facts or circumstances involving customers, suppliers or sales representatives which Sellers can now reasonably foresee would materially adversely affect the Business or prevent the conduct of the Business after the consummation of the
transactions contemplated by this Agreement in essentially the same manner in which it has heretofore been conducted. 
  
 Section 4.22. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection
with the Transactions based upon any agreement, arrangement or understanding made by or on behalf of Sellers or the Companies, other than CIBC World Markets, whose fee shall be paid by CTI. 
  
 ARTICLE V 
  
 REPRESENTATIONS AND WARRANTIES OF PURCHASER 
  
 As an inducement to Sellers to enter into this Agreement, Purchaser hereby represents and warrants to Sellers as follows:

  
 Section 5.1. Organization; Authority. 
  
 (a) Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which the ownership or leasing of its assets or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement and to consummate the Transactions. 
  
 (b) Purchaser has all necessary corporate power and authority to execute,
deliver and perform this Agreement and each of the Purchaser Ancillary Agreements. The execution, delivery and performance of this Agreement and the Purchaser Ancillary Agreements by Purchaser and the consummation by Purchaser of the Transactions
have been duly and validly authorized by all necessary corporate action on the part of Purchaser and no other corporate proceedings on the part of Purchaser are necessary to consummate the Transactions. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes the 
  

 36 

 legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as
such enforceability may be subject to the laws of general application relating to bankruptcy, insolvency, and the relief of debtors and rules of law governing specific performance, injunctive relief, or other equitable remedies. Upon execution and
delivery by Purchaser of each Purchaser Ancillary Agreement, each such Purchaser Ancillary Agreement will constitute the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as such
enforceability may be subject to the laws of general application relating to bankruptcy, insolvency, and the relief of debtors and rules of law governing specific performance, injunctive relief, or other equitable remedies. 
  
 Section 5.2. No Conflict. Assuming compliance with the notification
requirements of the HSR Act and any applicable foreign antitrust regulations, neither the execution and delivery of this Agreement or the Purchaser Ancillary Agreements nor the consummation of any of the Transactions do or will, directly or
indirectly (with or without notice or lapse of time or both), (a) contravene, conflict with, or result in a violation of or the creation of any Encumbrance (excluding any Permitted Encumbrance) upon any of the assets of Purchaser under (i) any
provision of the certificate of incorporation or bylaws of Purchaser, (ii) any resolution adopted by the board of directors or the stockholders of Purchaser; (iii) any Law to which Purchaser or its assets is subject or is bound or (iv) any
Governmental Order to which Purchaser or its assets is subject or is bound; or (b) contravene, conflict with, or result in a violation of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance (excluding a Permitted Encumbrance) on any of
the assets of Purchaser pursuant to any material Contract to which Purchaser is a party or by which Purchaser or its properties or assets is bound or affected, except, in the case of (a)(iii), that would not reasonably be expected to have a material
adverse effect on Purchaser’s ability to consummate the Transactions. 
  
 Section 5.3. Governmental Consents and Approvals. The execution, delivery and performance of the Transaction Agreements and the consummation of the Transactions by Purchaser does not and will not require any
consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority, except (a) as described in Schedule 5.3, and (b)(i) the notification requirements of the HSR Act, and (ii) pursuant to
any applicable foreign antitrust regulations. 
  
 Section 5.4.
Private Placement. 
  
 (a) Purchaser understands that (i)
the offering and sale of the Shares under this Agreement is intended to be exempt from the registration requirements of the United States Securities Act of 1933, as amended, and any applicable foreign securities Law, and (ii) there is no existing
public or other market for the Shares and there can be no assurance that Purchaser will be able to sell or dispose of the Shares. 
  

 37 

 (b) Purchaser is acquiring the Shares for its own account solely for the purpose of investment and not
with a view to, or for offer or sale in connection with, any distribution thereof. 
  
 (c) Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Shares, and Purchaser is capable of bearing the
economic risks of such investment, including a complete loss of their investment in the Shares. 
  
 (d) Purchaser understands that it may not sell or dispose of any of the Shares without registration or qualification under applicable United States
federal or foreign securities Laws, except pursuant to any exemption from such registration or qualification available under such Laws. 
  
 (e) Purchaser has been given the opportunity to ask questions of, and receive answers from Sellers concerning the Transactions, the Shares and other
related matters. 
  
 Section 5.5. Litigation. No Action is
pending or, to the Knowledge of Purchaser, threatened, which seeks to delay or prevent the consummation of, or which could reasonably be expected to materially adversely affect Purchaser’s ability to consummate, the Transactions. 
  
 Section 5.6. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon any agreement, arrangement or understanding made by or on behalf of Purchaser. 
  
 ARTICLE VI 
  
 ADDITIONAL AGREEMENTS 
  
 Section 6.1. Conduct of Business by the Companies. 
  
 (a) Except (i) as set forth on Section 6.1 of the Disclosure
Schedule, (ii) as expressly permitted, required or contemplated by this Agreement, or (iii) as approved or consented to in writing by Purchaser, during the period commencing on the date hereof and ending on the Closing Date, Sellers will, and will
cause the Companies to, conduct the Business in the ordinary course and consistent with past practice and in material compliance with all Laws applicable to the Business. 
  
 (b) Except (i) as set forth on Section 6.1 of the Disclosure Schedule, (ii) as expressly permitted, required or
contemplated by this Agreement, or (iii) as approved or consented to in writing by Purchaser, during the period commencing on the date hereof and ending on the Closing Date, Sellers will not, and will cause the Companies not to, do any of the
following: 
  
 (1) amend the articles of
incorporation or bylaws of the Companies; 
  

 38 

 (2) (A) declare, set aside, make or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) with respect to the capital stock of the Companies, except for a dividend or other distribution by a Company to Sellers or their respective Subsidiaries in connection with the transfer of cash held
by such Company to Sellers, or (B) split, combine or reclassify any of the capital stock of the Companies or issue or authorize or propose the issuance of any other securities of the Companies in respect of, in lieu of or in substitution for shares
of their capital stock; 
  
 (3) authorize for
issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (A) any capital stock of, or other equity or voting interest in, the Companies, or (B) any securities convertible into, exchangeable for, or evidencing the right to
subscribe for or acquire either (i) any capital stock of, or other equity or voting interest in the Companies, or (ii) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any capital stock of, or
other equity or voting interest in, the Companies; 
  
 (4) cause the Business (including the Companies) to incur or assume any indebtedness for borrowed money or guarantee any such indebtedness; 
  
 (5) permit any of the assets of the Business (including the Assets) to become subject to any Encumbrance, other than Permitted
Encumbrances; 
  
 (6) sell, lease, assign,
distribute or otherwise dispose of any of the assets of the Business (including the Assets), except for the disposition of inventory or minor amounts of personal property and obsolete assets sold or otherwise disposed of for fair value in the
ordinary course of business consistent with past practice; 
  
 (7) acquire or agree to acquire by merging or consolidating with, or by purchasing the assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other
business organization or division thereof, in the case of the Sellers, with respect to the Business, or otherwise acquire or agree to acquire any assets for the Business which are material, individually or in the aggregate, to the Business;

  
 (8) incur any capital expenditure which
individually is in excess of $25,000 or is in excess of $75,000 in the aggregate and which would be an Assumed Liability; 
  
 (9) (A) modify or amend in any material manner any Material Contract, (B) terminate any Material Contract, except (i) in accordance with
its terms or (ii) as required by this Agreement; (C) enter into any Material Contract or any Contract which cannot be assigned to Purchaser or may not be so assigned as a matter of Law; or (D) enter into any Contract for the purchase or lease of
real property; 
  

 39 

 (10) cancel any debts owed to or claims held with respect to the Business (including the
settlement of any claims or litigation) other than in the ordinary course of the Business consistent with past practice; 
  
 (11) accelerate or delay collection of any notes or accounts receivable generated by the Business in advance of or beyond their regular
due dates or the dates when the same would have been collected in the ordinary course of the Business consistent with past practice; 
  
 (12) delay or accelerate payment of any account payable or other liability of the Business beyond or in advance of its due date or the
date when such liability would have been paid in the ordinary course of the Business consistent with past practice; 
  
 (13) allow the levels of raw materials, supplies, work-in-process, finished goods or other materials included in the inventory of the
Business to vary in any material respect from the levels customarily maintained in the Business; 
  
 (14) make any change in the compensation of the employees of the Business or in any employee benefit plan, program or agreement covering
such employees, other than changes made in accordance with normal compensation practices and consistent with past compensation practices or as required by applicable Laws; 
  
 (15) prepare or file any Return inconsistent with past practice or, on any such Return, take and position,
make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Returns in prior periods (including positions, elections or methods which would have the effect of
deferring income to periods for which Purchaser is liable pursuant to Article VIII or accelerating deductions to periods for which either Seller is liable pursuant to Article VIII); or 
  
 (16) agree to do any of the foregoing. 
  
 (c) Notwithstanding anything to the contrary in this Agreement, between the
date hereof and the Closing Date, the Companies shall be permitted to transfer to Sellers any Seller Information that is in the possession of such Company (without retaining a copy thereof). 
  
 Section 6.2. Access to Information. Subject to the terms of the
Confidentiality Agreement, from the date hereof until the Closing, upon reasonable notice, Sellers and the Companies shall, and shall cause their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, counsel,
accountants, investment bankers or representatives (collectively, their “Representatives”) to, afford the Representatives of Purchaser reasonable access, during normal business hours, to the offices, properties, plants, other
facilities and books and records of or relating to the Business and to those Representatives of Sellers and the Companies who have knowledge relating to the Business and shall furnish to Purchaser or its Representatives such additional information
concerning the Assets, the Companies and the Business as shall be reasonably requested, including all such information as shall be necessary to 
  

 40 

 enable Purchaser or its Representatives to verify the accuracy of the representations and warranties contained in this
Agreement, to verify that the covenants of Sellers contained in this Agreement have been complied with and to determine whether the conditions set forth in Article IX have been satisfied; provided, however, that Purchaser and
their Representatives shall not unreasonably interfere with the business and operations of the Business. No investigation made by Purchaser or its Representatives hereunder shall affect the representations and warranties of Sellers hereunder.

  
 Section 6.3. Confidentiality. The Confidentiality
Agreement shall continue in full force and effect, and survive the execution and delivery of this Agreement, the Closing and the consummation of the Transactions and/or the termination of this Agreement. The parties hereby agree that the term
“Confidential Information,” as used in the Confidentiality Agreement, shall include all exhibits, schedules, certificates and other documents executed or delivered in connection with the execution of the Transaction Agreements and
the consummation of the Transactions. With respect to Purchaser, the term “Confidential Information” shall not apply to information relating to the Business after the Closing but shall continue to apply after the Closing to any other
Confidential Information. 
  
 Section 6.4. Regulatory
Authorizations. 
  
 (a) Each of the Sellers and the Purchaser
shall use commercially reasonable efforts to obtain all authorizations, consents, orders and approvals of all Governmental Authorities that may be or become necessary for the consummation of the Transactions, and shall cooperate with each other in
promptly seeking to obtain all such authorizations, consents, orders and approvals; provided, that Sellers shall not make any agreement or understanding affecting the Assets or the Business as a condition of obtaining any such authorization,
consent, order or approval without the prior written consent of Purchaser. 
  
 (b) Each of the Sellers and the Purchaser shall make appropriate filings pursuant to the HSR Act with respect to the Transactions promptly after the date hereof. Each of Purchaser, on the one hand, and the Companies
and Sellers, on the other hand, shall promptly (a) supply the others with any information which may be required in order to effectuate such filings and (b) supply any additional information which reasonably may be required by any Governmental
Authority under the HSR Act to the extent provided by applicable Laws. Except as prohibited by Law and subject to the Confidentiality Agreement, Purchaser, on the one hand, and Sellers and the Companies, on the other hand, shall consult with each
other prior to taking any substantive position with respect to the filings under the HSR Act in discussions with or filing to be submitted to any Governmental Authority, shall permit the other to review and discuss in advance, and consider in good
faith the views of the other in connection with, any analyses, presentations, briefs, arguments, memoranda and proposals to be submitted to any Governmental Authority with respect to filings under the HSR Act, and shall coordinate with the other in
preparing and exchanging such information and promptly provide the other (and its counsel) with copies of all filings, presentations or submissions (and a summary of any oral presentations) made by such party with any Governmental Authority relating
to this Agreement under the HSR Act; provided that with respect to any such filing, presentation or submission, each of Purchaser, on the one hand, and the Companies and Sellers, on the other hand, need not 
  

 41 

 supply the other (or its counsel) with copies (or, in case of oral presentations, a summary) to the extent that any Law
applicable to such party requires such party or its Subsidiaries to restrict or prohibit access to any such properties or information. 
  
 (c) Each party hereto shall make any required filings pursuant to foreign antitrust regulations with respect to the Transactions promptly after the date
hereof and will cooperate with the other party in connection therewith. 
  
 (d) Each party warrants that all filings by it pursuant to or relating to the HSR Act will be, as of the date filed, true and accurate and in accordance with the requirements of the HSR Act. In no event shall Purchaser be required to (A)
sell or otherwise dispose of, hold separate or agree to sell or dispose of, any Assets, any other assets, categories of assets or businesses of Purchaser, its subsidiaries or the Companies, (B) terminate existing relationships, contractual rights or
obligations or (C) amend or terminate existing licenses or other intellectual property agreements or enter into new licenses or other intellectual property agreements to avoid, prevent or terminate any action by any Governmental Authority which
would restrain, enjoin or otherwise prevent consummation of the Transactions. 
  
 Section 6.5. Third Party Consents: Assignment of Contracts. Sellers shall, and shall cause the Companies to, use commercially reasonable efforts to obtain all such third party consents that are required in
connection with the consummation of the Transactions; provided that none of Sellers, the Purchaser nor any of their respective Affiliates shall be required to pay any fee or make any payment to obtain any such consent; and provided,
further that Sellers shall not, and shall cause the Companies not to, make any agreement or understanding affecting the Assets or the Business as a condition for obtaining any such consents except with the prior written consent of Purchaser.
Purchaser shall cooperate with and assist Sellers in obtaining such consents. 
  
 Section 6.6. Further Action. 
  
 (a) Subject to Sections 6.4 and 6.5, each of the parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable
under applicable Law, and execute and deliver such documents and other papers, as may reasonably be required to carry out the provisions of this Agreement and the other Transaction Agreements and consummate and make effective the Transactions, and
to vest in Purchaser good and valid title to the Shares and the Assets. In the case of licenses, certificates, approvals, authorizations, agreements, contracts, leases, easements and other commitments included in the Assets (a) which cannot be
transferred or assigned effectively without the consent of third parties which consent has not been obtained prior to the Closing, Sellers shall cooperate with Purchaser at its request in endeavoring to obtain such consent promptly, and if any such
consent is unobtainable, to use its commercially reasonable efforts to secure to Purchaser the benefits thereof in some other manner, or (b) which are otherwise not transferable or assignable, Sellers shall use their commercially reasonable efforts
jointly with Purchaser to secure to Purchaser the benefits thereof in some other manner (including the exercise of the rights of Sellers thereunder); provided, however, that nothing herein shall relieve Sellers of their obligations
under Section 6.5. Notwithstanding anything in 
  

 42 

 this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any license, certificate,
approval, authorization, agreement, contract, lease, easement or other commitment included in the Assets if an attempted assignment thereof without the consent of a third party thereto would constitute a breach thereof. 
  
 (b) Without limiting the foregoing, in the event that at any time or from
time to time after the Closing and prior to the third anniversary thereof, Purchaser or its Affiliates (including the Companies) shall possess any information belonging to or concerning Sellers or their Affiliates that is not used in the operation
of the Business (such information, the “Seller Information”), Purchaser shall promptly transfer, or cause to be transferred, such Seller Information to Sellers (without retaining a copy thereof). Prior to such transfer, Purchaser
and their Affiliates shall hold such Seller Information in confidence and not disclose such Seller Information to any Person or utilize such Seller Information for any purpose. Seller Information shall include written, graphical or machine-readable
information that relates to trade secrets, product plans, software and business plans, litigation, agreements with third parties, customer and supplier information and data stored electronically. Purchaser and their Affiliates shall use commercially
reasonable efforts to cooperate with Sellers to identify any Seller Information that is in the possession of Purchaser or any of their Affiliates. 
  
 (c) For a period of six years after the Closing Date, Sellers and their Representatives shall have reasonable access to all of the books and records of
Sellers with respect to the Business transferred to Purchaser hereunder to the extent that such access may reasonably be required by Seller in connection with matters relating to or affected by the operations of the Business prior to the Closing
Date. Such access shall be afforded by Purchaser upon receipt of reasonable advance notice and during normal business hours. Sellers shall be solely responsible for any costs or expenses incurred by them pursuant to this Section 6.6(c). If
Purchaser shall desire to dispose of any of such books and records prior to the expiration of such six-year period, Purchaser shall, prior to such disposition, give Sellers a reasonable opportunity, at Sellers’ expense, to segregate and remove
such books and records as Sellers may select. 
  
 (d) For a period
of six years after the Closing Date, Purchaser and its Representatives shall have reasonable access to all of the books and records relating to the Business which Sellers or any of their Affiliates may retain after the Closing Date. Such access
shall be afforded by Sellers and their Affiliates upon receipt of reasonable advance notice and during normal business hours. Purchaser shall be solely responsible for any costs and expenses incurred by it pursuant to this Section 6.6(d). If
Sellers or any of their Affiliates shall desire to dispose of any of such books and records prior to the expiration of such six-year period, Sellers shall, prior to such disposition, give Purchaser a reasonable opportunity, at Purchaser’s
expense, to segregate and remove such books and records as Purchaser may select. 
  
 (e) Sellers shall, and shall use reasonably best efforts to cause Grant Thornton LLP to, cooperate with and provide to Purchaser and its Representatives access to accounting records and such other financial and
business information of CTI with respect to the Business as may be required in connection with the preparation of the pro forma and historical financial statements or information relating to the Business which are required to be filed by Purchaser
with Governmental Authorities pursuant to applicable Law, including without limitation, the 
  

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), and to the officers and employees of
Sellers for purposes of responding to questions concerning the Business and such financial and other information (including work papers). Such access shall be afforded by Sellers upon reasonable advance notice and during normal business hours. At
the request of Purchaser, CTI shall use reasonable best efforts to cause Grant Thornton LLP to (i) audit or perform such other procedures as appropriate with respect to the financial statements of the Business (the “GT Procedures”)
for the periods for which financial statements or information is required to be filed by Purchaser with the Securities and Exchange Commission pursuant to the Exchange Act and, (ii) provide to Purchaser and its representatives access to its work
papers used in connection with such GT Procedures. The fees and expenses of Grant Thornton LLP relating to the GT Procedures shall be paid by Purchaser and any other fees or expenses of Grant Thornton LLP incurred pursuant to this Section
6.6(e) shall be paid by CTI . 
  
 Section 6.7. Contact with
Customers and Suppliers. Purchaser and its Representatives shall contact and communicate with the employees, customers, suppliers, licensees and licensors of the Business in connection with the Transactions and the Business only with the prior
written consent of CTI (or its designee, as evidenced by a writing delivered to Purchaser by Seller), which consent may be conditioned upon a designee of Seller being present at any such meeting or conference. 
  
 Section 6.8. Use of Seller’s Intellectual Property. 

 
 (a) Notwithstanding anything to the contrary contained in this Agreement,
it is expressly agreed that Purchaser is not purchasing, acquiring or otherwise obtaining, and the Companies will not be entitled to retain following the Closing Date, any right, title or interest in any Intellectual Property (other than the
Intellectual Property included in the Assets) owned by Sellers as of the Closing Date, including without limitation, any trademarks or logos employing Sellers’ names or any part or variation of such names or anything confusingly similar
thereto. 
  
 (b) As soon as practicable, and in any event within
six months after the Closing, Purchaser shall: 
  
 (i) remove
“Cell Therapeutics” or any other similar mark and any other trademark, design or logo previously or currently used by Sellers, other than those included in the Transferred Intellectual Property (the “Seller Marks”), from
all buildings, signs and vehicles of Purchaser, and from all other assets of the Companies and all the Assets (except those Assets described in Section 6.8(c)); and 
  
 (ii) cease using the Seller Marks in electronic databases, web sites, product instructions and other materials, printed or
otherwise, except as permitted in Section 6.8(c). 
  
 (c)
For a period of six (6) months after Closing, Purchaser may use the Seller Marks on any TRISENOX packaging that is included in the Assets as of the Closing Date in any electronic databases, web sites, product instructions and other materials,
printed or otherwise containing depictions of such packaging; provided, that, with respect to any finished goods inventory included in the Assets, Purchaser may use the Seller Marks for a period of twelve (12) months after Closing. 
  

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 (d) As soon as practicable after the Closing and no later than sixty (60) days, Purchaser shall cease
using the Seller Marks in all invoices, letterhead, and business cards. 
  
 (e) Purchaser acknowledge and agree that Seller and its Affiliates are the exclusive owners of the Seller Marks and all goodwill attached thereto. Except as set forth in this Section 6.8, the Transaction Agreements do not give
Purchaser the right to use the Seller Marks and Purchaser agrees not to use any trademarks, service marks, trade names or logos that are substantially similar to the Seller Marks. Purchaser will use Seller Marks as specified by Seller policy, a copy
of which has been provided to Purchaser. Purchaser agree not to attempt to register the Seller Marks nor to register anywhere in the world a mark the same as or substantially similar to the Seller Marks. Seller hereby grants Purchaser and its
Affiliates a royalty-free right to use the Seller Marks to the extent provided in this Section 6.8. 
  
 (f) In no event shall Purchaser advertise or hold itself out as CTI (or an Affiliate of CTI or otherwise associated with CTI) after the Closing Date.

  
 (g) For purposes of this Section 6.8, references to
“Seller” shall mean Seller, together with its Subsidiaries, and references to “Purchaser” shall mean Purchaser, together with their Subsidiaries (including the Companies). 
  
 Section 6.9. Inter-company Accounts and Agreements. 
  
 (a) Effective at the Closing, (i) all inter-company (i.e. between the
Companies, on one hand, and Sellers or their Affiliates (other than the Companies), on the other hand) loans, receivables and payables shall be satisfied or cancelled, and (ii) all agreements and commitments, whether written, oral or otherwise,
which are solely between the Companies, on the one hand, and Sellers or their Affiliates (other than the Companies), on the other hand, shall be terminated and of no further effect, in each case without any further action or liability on the part of
the parties thereto. With respect to any inter-company debt as to which UK is the obligor, prior to the Closing, such debt shall be converted to ordinary shares of UK, credited as fully paid. 
  
 (b) On or prior to the Closing Date, Sellers shall terminate the
Cross-License Agreement dated as of December 13, 2002 among CTI, Nevada and PolaRx, the Sublicense Agreement dated as of December 13, 2002 among CTI, Nevada and PolaRx and the License Agreement dated as of October 3, 2001 among CTI, Nevada and
PolaRx (collectively, the “PolaRx Inter-Company Licenses”). 
  
 (c) On or prior to the Closing Date, Sellers shall cause the Companies to assign and transfer to CTI or one of its Affiliates (other than the Companies) all leases to which either Company is a party relating to the
Leased Real Property. 
  
 Section 6.10. Insurance. From the
date hereof until the Closing Date, Sellers shall keep in effect the insurance policies currently maintained by Sellers and the Companies with respect to the Business or replacement insurance policies with comparable coverage. Effective as of the
Closing Date, such insurance policies shall cease to cover the Business (including the Companies and the Assets). 
  

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 Section 6.11. Preserve Accuracy of Representations and Warranties; Notice of Developments.

  
 (a) From the date of this Agreement through the Closing Date,
each party will refrain from taking any action that would render any representation or warranty of such party contained herein inaccurate as of the Closing Date. Each party shall give prompt notice to the other parties (i) if any representation or
warranty by such party contained in this Agreement shall have become untrue or inaccurate, (ii) of any failure of such party to comply with or satisfy any covenant, in each case such that the conditions to closing set forth in Section 9.2(b)
or Section 9.2(c), in the case of Purchaser, or Section 9.3(b) or Section 9.3(c), in the case of Sellers or the Companies, would not be satisfied and (iii) of any action, suit or proceeding that may be instituted or threatened
against such party to restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement. In addition, from the date of this Agreement through the Closing Date, Sellers shall notify Purchaser of (x) any notice
or other communication from any third party alleging that the consent of such third party is or may be required in connection with the Transactions, (y) any material default by Sellers or the Companies under any Material Contract or event, with
notice or lapse of time or both, would become such a default on or prior to the Closing Date and of which Sellers have Knowledge and (z) any Material Adverse Effect. No disclosure by Sellers pursuant to this Section 6.11(a) shall be deemed to
prevent or cure any misrepresentation, breach of warranty or breach of covenant. 
  
 (b) Sellers may, from time to time prior to the Closing Date, supplement or amend the Disclosure Schedule. Notwithstanding the foregoing, no such supplemental disclosure shall prevent Purchaser from exercising their
rights (i) to indemnification for any breaches of representations or warranties pursuant to Article XI or Article VIII, (ii) not to close the transactions contemplated by this Agreement pursuant to the condition set forth in Section
9.3(a), or (iii) to terminate this Agreement pursuant to the termination right set forth in Section 10.1(c), to the extent provided therein, in each case, without giving effect to any such supplement or amendment. 
  
 Section 6.12. Accounts Receivable. 
  
 (a) If, after the Closing Date, either Seller shall receive any remittance
from any account debtors with respect to the Receivables, such Seller shall endorse such remittance to the order of Purchaser and forward it to Purchaser promptly, but in any event within five (5) Business Days, following receipt thereof, together
with reasonably detailed information specifying the identity of the account debtor and the Receivable to which the payment relates. 
  
 Section 6.13. Acquisition Proposals. Sellers will not, and will not authorize or permit any officer, director or employee of Sellers or any
Affiliate of Sellers (including the Companies) or authorize any investment banker, attorney, accountant or other representative retained by Sellers or any Affiliate of Sellers to, directly or indirectly, solicit or encourage, or furnish information
with respect to the Business or the Proteasome Rights or engage in any discussions with any Person in connection with, any proposal for the acquisition of all or a substantial 
  

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 portion of the Business, the shares of the Companies or the Proteasome Rights, other than as contemplated by this
Agreement. Sellers will promptly cease or cause to be terminated any existing activities or discussions with any Person with respect to any of the foregoing. 
  
 Section 6.14. Employee Matters. 
  
 (a) Effective immediately after the Closing, Purchaser (which for purposes of this Section may include any of Purchaser’s Affiliates) shall make an
offer of employment to each of the employees of Sellers listed on Section 6.14(a) of the Disclosure Schedule (“Business Employees”), which offer shall be conditioned upon, among other things, (A) the execution of any agreements
which Purchaser requires of new employees as a condition of employment, including any confidentiality, non-competition, non-solicitation, intellectual property or other similar agreement and (B) to the extent permitted by applicable Law, background
checks, drug screening tests and physicals which Purchaser requires of new employees as a condition of employment. Sellers shall use their reasonable best efforts to cause all of the Business Employees to commence employment with Purchaser on the
Closing Date. 
  
 (b) For purposes of determining eligibility to
participate and vesting under any employee benefit plan of Purchaser, Business Employees who (i) become employees of Purchaser and actually perform services for Purchaser on the Closing Date or (ii) are on an approved leave of absence with Sellers
as of the Closing Date but commence active employment with Purchaser within twelve (12) weeks after the Closing Date (collectively, “Transferring Employees”) shall receive service credit for service with Sellers or their Affiliates
to the same extent such credit was granted under Sellers’ comparable employee benefit plans. 
  
 (c) Notwithstanding anything set forth herein to the contrary, (i) nothing in this Agreement shall create any obligation on the part of Purchaser to
continue the employment of any employee for any period following the Closing Date and (ii) nothing in this Agreement shall preclude Purchaser from altering, amending or terminating any of its employee benefit plans, or the participation of any of
its employees in such plans, at any time. 
  
 (d) To the extent
permitted by Purchaser’s employee benefit plans, all Transferring Employees who are eligible to participate in such plans as of the Closing Date, taking into account any service credited pursuant to Section 6.14(b), shall commence such
participation on the Closing Date. To the extent permitted by Purchaser’s medical plans, each Transferring Employee shall receive credit under such plans for all amounts paid during the current calendar year under Sellers’ medical plans
toward applicable deductible amounts and out-of-pocket maximums, provided that Purchaser receives either from Sellers or the Transferring Employee all data required by Purchaser as evidence of such paid amounts. 
  
 (e) With respect to each Business Employee, Sellers shall retain the
obligation and liability for any workers’ compensation or similar workers’ protection claims with respect to any such individual, whether incurred prior to, on or after the Closing Date which are the result of an injury or illness
originating prior to the Closing Date. Sellers shall retain, pay, perform and discharge, and Purchaser shall not assume or be obligated to pay, perform or discharge, any liability or obligation under any employee benefit plan of either Sellers or
their Affiliates (including, with respect to periods prior to the Closing Date, the Companies). 
  

 47 

 (f) Without limiting the foregoing, Sellers shall honor all commitments made by Sellers or any of their
Affiliates to Business Employees with respect to (i) tuition assistance for any semester that has begun prior to the Closing Date, and (ii) adoption assistance applied for prior to the Closing Date. 
  
 (g) Subject to requirements of applicable Laws, Sellers shall transfer to
Purchaser on the Closing Date complete copies of the personnel records of Transferring Employees. 
  
 (h) Purchaser shall have no liabilities: (i) related to the employees of Sellers who do not become employed by Purchaser; (ii) related to Transferring
Employees to the extent such liability arises from any action, event or course of conduct prior to the Closing Date; or (iii) to the extent such liability arises under or relates to any Seller Plans. 
  
 (i) Purchaser shall not have responsibility for any severance or termination
pay obligations or damages for wrongful dismissal, including, without limitation, obligations arising under the common law, incurred with respect to any period of employment prior to the Closing Date or with respect to any termination of employment
by or with Sellers or any of their Affiliates. Sellers shall reimburse Purchaser for 100% of the severance costs incurred by Purchaser with respect to Transferring Employees whose employment is terminated by Purchaser without cause prior to the
three-month anniversary of the Closing Date; provided, however, that the amount of the reimbursement by Sellers pursuant to this Section 6.14(i) shall be limited to $350,000. 
  
 (j) Sellers shall be responsible for satisfying the “continuation
coverage” requirements under Section 4980B of the Code, Part 6 of Title I of ERISA and any applicable comparable state law (“COBRA Coverage”) with respect to (i) each Transferring Employee (and any dependent) who is eligible for COBRA
coverage due to his or her termination of employment with Sellers, (ii) each employee of Sellers who is not a Transferring Employee (and any dependent) and (iii) each former employee of Sellers (and any dependent) who is entitled to COBRA coverage.

  
 (k) Sellers shall pay or cause to be paid from funds provided
by them to each Business Employee, not later than the next regular payroll date following the Closing Date, any salary or wages which shall have accrued as of the Closing Date with respect to such employee. Sellers shall pay or cause to be paid from
funds provided by them to each Business Employee any bonus compensation accrued as of the Closing Date to which such employee may be entitled as a result of his or her participation in a bonus plan of Sellers or their Affiliates, in accordance with
the terms and conditions of such plan (except that it shall not be a condition to such payment, or the accrual of the amount payable, that such employee remain an employee of Sellers or their Affiliates after the Closing Date) and in the time frame
normally called for by such plan. 
  

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 (l) Sellers and their Affiliates, including the Companies, shall comply with all notice and other
requirements under the Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”) and any regulations promulgated thereunder, and any similar laws with respect to actions taken by Sellers or their Affiliates on or
prior to the Closing Date. Subject to applicable Law, in the event that, prior to the Closing Date, there is any employee employed by Sellers or their Affiliates with respect to the Business whose employment is terminated, whose work hours are
reduced, who is laid off or who otherwise experiences an “employment loss,” within the meaning of the WARN Act (each, an “Affected Employee”), Sellers shall promptly notify Purchaser of (i) each Affected Employee’s
name, site of employment, date of employment loss and nature of employment loss and (ii) the total number of employees at each site of employment listed in response to clause (i) immediately prior to the ninety (90) day period ending on the Closing
Date. Subject to applicable Law, Sellers shall provide such additional information, which shall be true and accurate in all respects, that is reasonably requested by Purchaser with respect to current and former employees employed by Sellers with
respect to the Business or the Companies, and shall, at Purchaser’s request and in the manner reasonably directed by Purchaser, provide, or assist Purchaser in providing, notice to some or all employees employed by Sellers with respect to the
Business or the Companies in accordance with the WARN Act. 
  
 (m)
Sellers and their Affiliates shall waive any non-competition, non-solicitation, confidentiality and any other restrictions that would otherwise limit the scope of any Business Employee’s services to Purchaser. 
  
 ARTICLE VII 
  
 NON-COMPETE 
  
 Section 7.1. Covenant Not to Compete or Solicit Business. 

 
 (a) In furtherance of the sale of the Assets and the Business to
Purchaser hereunder by virtue of the transactions contemplated hereby and more effectively to protect the value and goodwill of the Assets and the Business so sold, Sellers hereby jointly and severally covenant and agree that, for a period ending on
the second anniversary of the Closing Date, neither Seller nor any of their respective Affiliates will : 
  
 (i) directly or indirectly (whether as principal, agent, independent contractor, partner or otherwise) own, manage, operate, control, participate in,
perform services for, or otherwise carry on, any Competitive Business anywhere in the world (it being understood by the parties hereto that the Business is not limited to any particular region of world and that the Business may be engaged in
effectively from any location in the world); 
  
 (ii) induce or
attempt to persuade any distributor, agent, supplier or customer of the Business to terminate such distributor, agency or business relationship in order to enter into any such relationship on behalf of any other business organization in competition
with the Business; 
  

 49 

 provided, however, that nothing set forth in this Section 7.1 shall prohibit Sellers or their Affiliates from
owning not in excess of 5% in the aggregate of any class of capital stock of any corporation if such stock is publicly traded and listed on any national or regional stock exchange or on the Nasdaq national market. Sellers also jointly and severally
covenant and agree that from and after the Closing Date neither of them will, nor will permit any of its respective Affiliates to, divulge or make use of any trade secrets or other confidential information of the Business other than to disclose such
secrets and information to Purchaser or its Affiliates. 
  
 (b) If
either Seller or any Affiliate of either Seller violates any of its obligations under this Section 7.1, Purchaser may proceed against it in law or in equity for such damages or other relief as a court may deem appropriate. Sellers acknowledge
that a violation of this Section 7.1 may cause Purchaser irreparable harm which may not be adequately compensated for by money damages. Sellers therefore agree that in the event of any actual or threatened violation of this Section
7.1, Purchaser shall be entitled, in addition to other remedies that it may have, to a temporary restraining order and to preliminary and final injunctive relief against such Seller or such Affiliate of Sellers to prevent any violations of this
Section 7.1, without the necessity of posting a bond. The prevailing party in any action commenced under this Section 7.1 shall also be entitled to receive reasonable attorneys’ fees and court costs. It is the intent and
understanding of each party hereto that if, in any action before any court or agency legally empowered to enforce this Section 7.1, any term, restriction, covenant or promise in this Section 7.1 is found to be unreasonable and for that
reason unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such court or agency. 
  
 ARTICLE VIII 
  
 TAX MATTERS 
  
 Section 8.1. Definitions. The following terms, as used herein, have the following meanings: 
  
 “Apportioned Obligations” shall mean all real property
Taxes, personal property Taxes and similar ad valorem obligations levied with respect to the Assets for a Tax period which includes (but does not begin or end on) the Closing Date. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
  
 “Company Group” means any “affiliated group” (as
defined in Section 1504(a) of the Code without regard to the limitations contained in Section 1504(b) of the Code) that, at any time on or before the Closing Date, includes or has included either of the Companies or any predecessor of or successor
to either of the Companies (or another such predecessor or successor), or any other group of corporations that, at any time on or before the Closing Date, files or has filed Returns on a combined, consolidated or unitary basis with either of the
Companies or any predecessor of or successor to either of the Companies (or another such predecessor or successor). 
  

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 “Post-Closing Tax Period” means any Tax period beginning after the Closing Date and,
with respect to a Straddle Period, the portion of such Straddle Period beginning after the Closing Date. 
  
 “Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date and, with respect to a Straddle Period, the portion of
such Straddle Period ending at the close of the Closing Date. 
  
 “Return” shall mean any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax. 
  
 “Straddle
Period” means any Tax period that begins on or before the Closing Date and ends after the Closing Date. 
  
 “Tax” means (i) any tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to,
withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority (domestic or foreign) responsible for the imposition of any such tax (a “Taxing
Authority”) and (ii) any liability for the payment of any amount of the type described in the immediately preceding clause (i) as a result of either of the Companies or any predecessor of or successor to either of the Companies being or
having been a member of a Company Group, as a successor, or as a result of any obligation of either of the Companies under any Tax sharing arrangement or Tax indemnity arrangement. 
  
 “Tax Asset” means any net operating loss, net capital loss, investment tax credit, foreign tax credit,
charitable deduction or any other credit or tax attribute that could be carried forward or back to reduce Taxes (including, without limitation, deductions and credits related to alternative minimum Taxes) and losses or deductions deferred by
applicable Tax Law. 
  
 “Taxing Authority” shall
have the meaning specified above under the definition of “Tax”. 
  
 “Transfer Taxes” means all transfer, documentary, sales, use, value-added, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with the
Transactions (including any real property transfer Tax and any similar Tax). 
  
 “Treasury Regulations” means the regulations promulgated by the U.S. Treasury Department pursuant to the Code. 
  

Section 8.2. Tax Representations. Sellers jointly and severally represent and warrant to Purchaser that, except as set forth in the Disclosure
Schedule: 
  
 (a) All material Returns required to be filed with
any Taxing Authority by, or with respect to, the Companies, the Business or the Assets have been timely filed; none of the Companies, Sellers or any of their Affiliates or any Company Group is currently the beneficiary of any extension of time
within which to file any Return relating to either of the Companies, the Business or the Assets; none of the Companies, any Company Group or Sellers or any of their 
  

 51 

 Affiliates has waived or been requested to waive any statute of limitations in respect of Taxes owed by either of the
Companies or in respect Taxes associated with the Business or the Assets, which waiver is currently in effect; neither of the Companies or any predecessor of or successor to either of the Companies (or another such predecessor or successor) has been
a member of any Company Group other than each Company Group of which it is a member as of the date hereof; all Tax sharing arrangements and Tax indemnity arrangements relating to either of the Companies (other than this Agreement) will terminate
prior to the Closing Date and neither of the Companies will have any liability thereunder on or after the Closing Date; there are no material liens for Taxes upon the assets of either of the Companies or the Business, or on the Assets, except liens
relating to current Taxes not yet due; all material Taxes which the Companies, or Sellers and their Affiliates (including from employees of the Business for income Taxes, social security and other payroll Taxes), are required by law to withhold or
to collect for payment have been duly withheld and collected, and either paid to the appropriate Governmental Authority, set aside in accounts for such purpose, or accrued, reserved against and entered upon the books of the Business; and to the
Knowledge of Sellers, there is no Action or audit now proposed or pending against or with respect to the Companies, the Business or the Assets in respect of any Tax. 
  
 Section 8.3. Tax Covenants. 
  

(a) Except as provided in this Agreement or as consented to in writing by either Seller (which consent shall not be unreasonably withheld or delayed),
Purchaser hereby covenants that it will not and will not cause or permit the Companies or any Affiliate of Purchaser (i) to take any action on the Closing Date (but after the Closing) other than in the ordinary course of business, including but not
limited to the distribution of any dividend or the effectuation of any redemption, that could give rise to any Tax liability or reduce any Tax Asset of the Sellers or any of their Affiliates or give rise to any loss of the Sellers or any of their
Affiliates under this Agreement, (ii) to make or change any Tax election, amend any Return or take any Tax position on any Return, take any action or enter into any transaction, merger or restructuring that in any such case results in any increased
Tax liability or reduction of any Tax Asset of Sellers or any of their Affiliates in respect of any Pre-Closing Tax Period, or (iii) carry back any Tax Asset of either of the Companies to a Pre-Closing Tax Period. 
  
 (b) (i) Sellers shall timely file or cause to be timely filed when due
(taking into account all extensions properly obtained) all Returns that are required to be filed by or with respect to the Companies, the Business or the Assets for any Pre-Closing Tax Period (other than Returns of the Companies for Straddle Periods
(“Straddle Period Returns”)), and in each case Sellers shall remit or cause to be remitted any Taxes due in respect of such Returns, and (ii) Purchaser shall timely file or cause to be timely filed when due (taking into account all
extensions properly obtained) all other Returns that are required to be filed by or with respect to either of the Companies, the Business or the Assets, and Purchaser shall remit or cause to be remitted any Taxes due in respect of such Returns. The
Purchaser shall deliver the Straddle Period Returns to Seller no later than thirty (30) days prior to its due date for timely filing, for Seller’s review and approval. Seller shall be deemed to have approved a Straddle Period Return unless
Seller delivers to the Purchaser within ten (10) days of receipt of such Straddle Period Return, a written notice of disagreement (“Disagreement Notice”) that sets forth the items of 
  

 52 

 disagreement. The parties shall negotiate in good faith to resolve the differences. If no resolution is reached within
ten (10) days of the receipt by the Purchaser of the Disagreement Notice, the items of disagreement shall be submitted to a nationally recognized independent accounting firm mutually acceptable to the parties for resolution. The independent
accounting firm will accept Seller’s position so long as the accounting firm believes such position is more likely than not the correct position. The determination of the independent accountant shall be final and binding for purposes of this
Agreement. Purchaser shall not file an amended Return for or with respect to either of the Companies, the Business or the Assets for any Pre-Closing Tax Period without Sellers’ prior written consent. 
  
 (ii) Sellers or Purchaser, as the case may be, shall reimburse the other
party the Taxes for which Seller or Purchaser is liable pursuant to this Article VIII but which are remitted in respect of any Return to be filed by the other party pursuant to this Section 8.3(b) upon the written request of the party
entitled to reimbursement setting forth in detail the computation of the amount owed by Sellers or Purchaser, as the case may be, but in no event earlier than 10 days prior to the due date for paying such Taxes. All Returns which Sellers are
required to file or cause to be filed in accordance with this Section 8.3(b) and all Straddle Period Returns shall be prepared and filed in a manner consistent with past practice and, on such Returns, no position shall be taken, election made
or method adopted that is inconsistent with positions taken, elections made or methods used in preparing and filing similar Returns in prior periods (including, but not limited to, positions, elections or methods which would have the effect of
deferring income to periods for which Purchaser is liable under this Article VIII or accelerating deductions to periods for which Sellers are liable under this Article VIII). 
  
 (c) Purchaser shall promptly pay or cause to be paid to Sellers all refunds
of Taxes for which Sellers are liable under this Article VIII and any interest thereon received by Purchaser, any Affiliate of Purchaser or the Companies. If, in lieu of receiving any such refund, either of the Companies reduces a Tax
liability with respect to a Post-Closing Tax Period or increases a Tax Asset that can be utilized in a Post-Closing Tax Period, Purchaser shall promptly pay or cause to be paid to Seller the amount of such reduction in Tax liability or the amount of
any benefit resulting from such increase in Tax Assets, as the case may be. The benefit resulting from an increase in a Tax Asset shall be calculated on the same basis as applicable to Tax Benefits pursuant to Section 8.6(b). 
  
 (d) Sellers shall promptly pay or cause to be paid to Purchaser all refunds
of Taxes for which Purchaser is liable under this Article VIII and any interest thereon received by Sellers or any of their Affiliates attributable to the Companies. If, in lieu of receiving any such refund, Sellers or any of their Affiliates
reduce a Tax liability with respect to a Pre-Closing Tax Period or increase a Tax Asset that can be utilized in a Pre-Closing Tax Period, Sellers shall promptly pay or cause to be paid to Purchaser the amount of such reduction in Tax liability or
the amount of any benefit resulting from such increase in Tax Assets, as the case may be. The benefit resulting from an increase in a Tax Asset shall be calculated on the same basis as applicable to Tax Benefits pursuant to Section 8.6(b).

  
 (e) All Transfer Taxes shall be borne and paid one-half by
Purchaser and one-half by Sellers, and each party will, at its own expense, file all necessary Returns and other 
  

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 documentation required to be filed by it with respect to all such Transfer Taxes, and, if required by applicable Law, the
other party will, and will cause its Affiliates to, join in the execution of any such Returns and other documentation. The Parties shall use commercially reasonable efforts to cooperate to minimize any such Transfer Taxes by utilizing remote
electronic transmission or “load and leave” procedures. 
  
 (f) Purchaser hereby agrees to indemnify Sellers, their Affiliates and their respective directors, officers and employees against any and all Damages (as defined in Section 11.2) incurred or suffered by any such Person arising out of
(i) any Excluded Taxes (as defined in Section 8.6(a)), (ii) any Tax incurred or suffered by Sellers or any of their Affiliates, arising out of a breach by Purchaser of any other covenant or agreement contained in this Article VIII and
(iii) any Tax imposed on either of the Companies for any Post-Closing Tax Period. Sellers agree to give prompt notice to Purchaser of the assertion of any claim, or the commencement of any Action, in respect of which indemnity may be sought under
this Section 8.3(f). Purchaser may participate in any such Action at their own expense and the parties hereto shall cooperate in the defense or prosecution thereof. 
  
 (g) (i) At the request of Purchaser, CTI and Purchaser shall make a joint election for PolaRx under Section 338(h)(10) of
the Code and under any applicable similar provisions of state or local law with respect to the purchase of the PolaRx Shares (the “Section 338(h)(10) Election”). Sellers represent that PolaRx is a member of Sellers’
“selling consolidated group” (as such term is defined in Section 338(h)(10)(B) of the Code). 
  
 (ii) Purchaser shall be entitled to make, at its sole option, an election under Section 338 of the Code for UK (the “Non-U.S. Section 338
Election”). 
  
 (iii) If a Section 338(h)(10) Election
and/or a Non-U.S. Section 338 Election is made, Sellers and Purchaser agree to allocate that portion of the Purchase Price allocated to the PolaRx Shares under Section 3.5 of this Agreement among the assets of PolaRx (in the case of a Section
338(h)(10) Election) and that portion of the Purchase Price allocated to the UK Shares under Section 3.5 of this Agreement among the assets of UK (in the case of a Non-U.S. Section 338 Election), in each case as set forth under applicable
Treasury Regulations. Neither Sellers, Purchaser nor any of their respective Affiliates shall file any Return or other document or otherwise take, or agree to take, any position on any Return which is inconsistent with the allocation determined
pursuant to this Section 8.3(g)(iii) and Section 3.5 unless otherwise required by law, and shall not to take, or cause to be taken, any action that would be inconsistent with or prejudice any Section 338(h)(10) Election or Non-U.S.
Section 338 Election. 
  
 Section 8.4. Tax Sharing.
Any and all existing Tax sharing agreements between the Companies or either of the Companies and any member of any Company Group shall be terminated as of the Closing Date. After such date none of the Companies, Sellers nor any Affiliates of Sellers
shall have any further rights or liabilities thereunder. This Agreement shall be the sole Tax sharing agreement relating to the Companies for all Pre-Closing Tax Periods. 
  
 Section 8.5. Cooperation on Tax Matters. Purchaser and Sellers agree to furnish or cause to be furnished to each
other, upon request, as promptly as practicable, such information (including access to books and records) and assistance relating to the Companies, the Business 
  

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 and the Assets as is reasonably necessary for the filing of any Return, for the preparation for any audit, and for the
prosecution or defense of any claim, suit or proceeding relating to any proposed adjustment. Purchaser and Sellers agree to retain or cause to be retained all books and records pertinent to the Companies, the Business and the Assets until the
applicable period for assessment under applicable Law (giving effect to any and all extensions or waivers) has expired, and to abide by or cause the abidance with all record retention agreements entered into with any Taxing Authority. Purchaser
agrees to give Sellers reasonable notice prior to transferring, discarding or destroying any such books and records relating to Tax matters and, if Sellers so request, Purchaser shall allow Sellers to take possession of such books and records.
Purchaser and Sellers shall cooperate with each other in the conduct of any audit or other proceedings involving the Companies, the Business and the Assets for any Tax purposes and each shall execute and deliver such powers of attorney and other
documents as are necessary to carry out the intent of this subsection. Purchaser shall not make any payment of Taxes with respect to any audit or other proceedings involving either of the Companies, the Business or the Assets for any Pre-Closing Tax
Period without Sellers’ prior written consent. 
  
 Section
8.6. Tax Indemnification by Seller. 
  
 (a) Sellers hereby
agree to jointly and severally indemnify Purchaser, its Affiliates and their respective directors, officers and employees against any and all Damages (as defined in Section 11.2) incurred or suffered by any such Person arising out of (i) all Taxes
attributable to the Business or the Assets, or imposed on Sellers or either of the Companies, or for which the Sellers or either of the Companies may otherwise be liable, in each case relating to a Pre-Closing Tax Period (including, without
limitation, any obligations to contribute to the payment of a Tax determined on a consolidated, combined or unitary basis), (ii) all Taxes imposed on either of the Companies, or for which either of the Companies may otherwise be liable, as a result
of being or having been a member of a Company Group (including, without limitation, Taxes for which either of the Companies may be liable pursuant to Treas. Reg. § 1.1502-6 or similar provisions of state, local or foreign law as a result of
having been a member of a Company Group and any Taxes resulting from either of the Companies ceasing to be a member of a Company Group), (iii) any Tax liability arising under Subpart F of the Code attributable to income recognized in a Pre-Closing
Tax Period, (iv) all Section 338 Taxes, (v) any breach by Sellers of any representation or warranty contained in this Article VIII, and (vi) any failure by Sellers to perform or comply with any of their respective covenants or agreements in each
case to be performed or complied with by Sellers pursuant to this Article VIII; provided, however, that Sellers shall have no liability for the payment of any Damages attributable to or resulting from any of the matters described in Section 8.3(a)
hereof or for any Tax liability arising under Subpart F of the Code attributable to income recognized in a Post-Closing Tax Period (items described in this proviso, the “Excluded Taxes”); and provided, further, that Sellers shall be
obligated to make payments to Purchaser pursuant to this Section 8.6 only to the extent that the cumulative amount that would otherwise be payable by Sellers pursuant to this Section 8.6 (notwithstanding this proviso) exceeds the aggregate amount of
the provisions for Tax liabilities of the Companies reflected on the Valuation Date Statement. 
  
 (b) If Sellers’ indemnification obligation under this Section 8.6 arises in respect of an adjustment which makes allowable to Purchaser, any of their Affiliates or, effective 
  

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 upon the Closing, the Companies, any deduction, amortization, exclusion from income or other allowance (a “Tax
Benefit”) which would not, but for such adjustment, be allowable, then any payment by Sellers to Purchaser shall be an amount equal to (x) the amount otherwise due but for this subsection (b), minus (y) the present value of the Tax Benefit
multiplied by the maximum federal, provincial or state or local, as the case may be, corporate Tax rate in effect at the time the relevant adjustment is made or, in the case of a credit, by one hundred percent (100%). The present value referred to
in the preceding sentence shall be determined using a discount rate equal to 8% and assuming that the Tax Benefit will be used at the earliest date or dates allowable by applicable Law and calculating such Tax Benefit as if Purchaser or any other
Indemnified Party had no other deductions, losses or credits for the applicable period. Notwithstanding anything in this Agreement to the contrary, Sellers’ indemnification obligation under this Section 8.6 shall not be reduced or
affected by any Tax Benefit received by Purchaser or any of its Affiliates as a direct or indirect result of any Section 338(h)(10) Election or Non-U.S. Section 338 Election having been made. 
  
 (c) Any payment by Sellers pursuant to this Article VIII shall be made
not later than thirty (30) days after receipt by Sellers of written notice from Purchaser stating that Damages have been suffered by Purchaser, any of their Affiliates or, effective upon the Closing, the Companies, and the amount thereof and of the
indemnity payment requested. 
  
 (d) If any claim or demand for
Taxes in respect of which indemnity may be sought pursuant to this Section 8.6 is asserted in writing against Purchaser, any of their Affiliates or, effective upon the Closing, the Companies, Purchaser shall notify Sellers of such claim or
demand within ten (10) days of receipt thereof, or such earlier time that would allow Sellers to timely respond to such claim or demand, and shall give Sellers such information with respect thereto as Sellers may reasonably request;
provided, however, that failure to comply with this provision shall not affect Purchaser’s right to indemnification hereunder except to the extent such failure materially impairs Sellers’ ability to contest any such claim
or demand. Sellers may discharge, at any time, its indemnification obligation under this Section 8.6 by paying to Purchaser the amount payable pursuant to this Section 8.6. Sellers may, at their own expense, participate in and, upon
notice to Purchaser, assume the defense of any such claim or demand (including any Tax audit); provided, however, that Sellers shall have no right to represent either of the Companies’ interests in any Tax audit or administrative
or court proceeding unless Sellers shall have first notified Purchaser in writing of Sellers’ intention to do so and shall have agreed with Purchaser in writing that, as between Purchaser and Sellers, Sellers shall be liable for any Taxes that
result from such audit or proceeding to the extent such Taxes relate to a Pre-Closing Tax Period. If Sellers assume such defense, Sellers shall have the sole discretion as to the conduct of such defense and Purchaser shall have the right (but not
the duty) to participate in the defense thereof and to employ counsel, at their own expense, separate from the counsel employed by Sellers. Whether or not Sellers choose to defend or prosecute any claim, all of the parties hereto shall cooperate in
the defense or prosecution thereof. 
  
 (e) Sellers shall not be
liable under this Section 8.6 for any settlements effected without the consent of Sellers, or resulting from any claim or demand with respect to which Sellers were not notified pursuant to Section 8.6(d) to the extent any Seller was
actually prejudiced. 
  

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 Section 8.7. Purchase Price Adjustment. Any amount paid by Sellers or Purchaser under this
Article VIII shall be made on an After-Tax Basis (but only to the extent not already taken into account in computing Damages payable under this Article VIII), and to the extent such payment can be properly so characterized under
applicable Tax Law, shall be treated as an adjustment to the Purchase Price. 
  
 Section 8.8. Allocation of Taxes for Straddle Period; Apportioned Obligations. 
  
 (a) For purposes of this Article VIII, whenever it is necessary to determine the liability for Taxes of either of the Companies for a Straddle
Period or the allocation of Tax liability arising under Subpart F of the Code between a Pre-Closing Tax Period and Post-Closing Tax Period, such determination shall be made by assuming that the Straddle Period or applicable Tax period, as the case
may be, consisted of two taxable years or periods, one which ended at the close of the Closing Date and the other which began at the beginning of the day following the Closing Date, and items of income, gain, deduction, loss or credit of such
Company for the Straddle Period, or the Tax liability arising under Subpart F of the Code, shall be allocated between such two taxable years or periods on a “closing of the books basis” by assuming that the books of such Company were
closed at the close of the Closing Date, provided, however, that exemptions, allowances or deductions that are calculated on an annual basis, such as the deduction for depreciation, shall be apportioned between such two taxable years
or periods on a daily basis. 
  
 (b) All Apportioned Obligations
shall be apportioned between Seller and Purchaser based on the number of days of such taxable period included in the Pre-Closing Tax Period and the number of days of such taxable period included in the Post-Closing Tax Period. Seller shall be liable
for the proportionate amount of such taxes that is attributable to the Pre-Closing Tax Period, and Purchaser shall be liable for the proportionate amount of such taxes that is attributable to the Post-Closing Tax Period. 
  
 (c) Apportioned Obligations shall be timely paid, and all applicable filings,
reports and returns shall be filed, as provided by applicable Law. The paying party shall be entitled to reimbursement from the non-paying party in accordance with Section 8.8(a). Upon payment of any such Apportioned Obligation, the paying
party shall present a statement to the non-paying party setting forth the amount of reimbursement to which the paying party is entitled under Section 8.8(a) together with such supporting evidence as is reasonably necessary to calculate the
amount to be reimbursed. The non-paying party shall make such reimbursement promptly but in no event later than ten (10) days after the presentation of such statement. Any payment not made within such time shall bear interest at a rate per annum
equal to the Prime Rate as published in The Wall Street Journal, Eastern Edition, in effect from time to time, for each day until paid. 
  
 Section 8.9. Survival of Obligations. Notwithstanding anything to the contrary in this Agreement, the obligations of the parties set forth in this
Article VIII shall be unconditional and absolute and shall remain in effect without limitation as to time. 
  
 Section 8.10. Set-Off. Purchaser shall have the right (but shall not be obligated to) to set-off against, and reduce the amounts otherwise payable
in respect of, the Development 
  

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 Milestone Payments and the Sales Milestone Payments any Damages for which Purchaser or any Affiliate, director, officer
or employee of Purchaser is entitled to be reimbursed pursuant to this Article VIII. If any Damages for which Purchaser or any Affiliate, director, officer or employee of Purchaser is entitled to be indemnified pursuant to this Article VIII is not
satisfied by set-off against the Development Milestone Payments or the Sales Milestone Payments, such indemnification payment shall be made by Sellers in cash. 
  

ARTICLE IX 
  
 CONDITIONS TO CLOSING 
  
 Section 9.1. Conditions to Obligations of Sellers and Purchaser. The obligations of Sellers and Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or
prior to the Closing, of each of the following conditions: 
  
 (a) Regulatory Approvals. Any waiting period (and any extension thereof) under the HSR Act applicable to the Transactions shall have expired or shall have been terminated. 
  
 (b) No Governmental Order. No Governmental Authority shall have (i) enacted, issued, promulgated, enforced or entered
any Law or Governmental Order which is in effect and has the effect of making the Transactions illegal or otherwise restraining or prohibiting the consummation of the Transactions or (ii) instituted or threatened any Action to restrain or prohibit
or otherwise challenge the legality or validity of the Transactions. 
  
 (c) Governmental Approvals. The parties shall have received all approvals and actions of or by Governmental Authorities which are necessary to consummate the Transaction, which are required to be obtained prior to Closing by
applicable Law or which are necessary to prevent a Material Adverse Effect. 
  
 Section 9.2. Additional Condition to Obligations of Sellers. The obligations of Sellers to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the
Closing, of each of the following conditions: 
  
 (a)
Representations and Warranties of Purchaser. The representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same force and effect as if made as of
the Closing Date (other than such representations and warranties as are made as of another date, which shall have been true and correct as of such other date). 
  

(b) Compliance with Covenants. The covenants and agreements contained in this Agreement to be complied with by Purchaser on or before the
Closing Date shall have been complied with in all material respects. 
  
 (c) Purchaser’s Certificate. Purchaser shall have delivered to Sellers a certificate executed by an authorized officer of Purchaser to the effect that each of the conditions specified in clauses (a) and (b) of this Section
9.2 is satisfied in all respects. 
  

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 (d) Other Transaction Agreements. Purchaser shall have executed and delivered to Sellers the
Transition Services Agreement. 
  
 (e) Proteasome
Amendment. Purchaser shall have executed and delivered to CTI the Proteasome Amendment. 
  
 Section 9.3. Additional Conditions to Obligations of Purchaser. The obligations of Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the
Closing, of each of the following additional conditions: 
  
 (a)
Representations and Warranties of Sellers. The representations and warranties of Sellers contained in this Agreement shall be true and correct in all material respects as of the Closing Date with the same force and effect as if made as of the
Closing Date (other than such representations and warranties as are made as of another date, which shall have been true and correct as of such other date). 
  
 (b) Compliance with Covenants. The covenants and agreements contained in this Agreement to be complied with by Sellers on or before the Closing
Date shall have been complied with in all material respects. 
  
 (c) Sellers’ Certificate. Sellers shall have delivered to Purchaser a certificate executed by an authorized officer of each Seller to the effect that each of the conditions specified in clauses (a) and (b) of this Section
9.3 is satisfied in all respects. 
  
 (d) Other Transaction
Agreements. CTI and Nevada shall have executed and delivered to Purchaser the Transition Services Agreement. 
  
 (e) No Material Adverse Effect. Between the date hereof and the Closing Date, there shall have been (i) no Material Adverse Effect, (ii) no
material adverse federal or state legislative or regulatory change affecting the Business or its products or services, and (iii) no material damage to the Assets by fire, flood, casualty, act of God or other cause, regardless of insurance coverage
for such damage, and there shall have been delivered to Purchaser a certificate to such effect, dated the Closing Date, executed by an authorized officer of each Seller. 
  
 (f) Consents. Sellers shall have received consents, in form and substance reasonably satisfactory to Purchaser, to
the Transaction from the other parties to all contracts, leases, agreements and permits to which either of the Sellers is a party of by which Sellers or any of the Assets are affected and which are specified in Section 9.3(f) of the
Disclosure Schedule or are otherwise necessary to prevent a Material Adverse Effect. 
  
 (g) Termination of Financing. There shall have been placed into escrow pursuant to the terms of the Financing Agreement an amount sufficient to repay in full all obligations of Sellers and PolaRx pursuant to
the Financing Agreement and PharmaBio shall have released all security interests for the benefit of PharmaBio or its Affiliates relating to the Assets. 
  

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 (h) Proteasome Amendment. The Proteasome Amendment shall have become effective. 
  
 (i) Employees. Each person employed by either of the Companies shall
have terminated such employment and immediately thereafter become employed by either of the Sellers under terms of employment substantially the same as those in effect with the Companies. 
  
 (j) Leased Real Property. The UK Lease shall have been assigned to CTI or one of its Affiliates (other than the
Companies) and CTI and its Affiliates shall have released the Companies of any further liabilities with respect to the UK Lease. 
  
 ARTICLE X 
  
 TERMINATION AND WAIVER 
  
 Section 10.1. Termination. 
  
 (a) This Agreement may be terminated at any time prior to the Closing by the mutual written consent of the parties hereto; 
  
 (b) by Sellers or by Purchaser, if the Closing shall not have occurred by September 30, 2005; provided, however, that the right to terminate
this Agreement under this Section 10.1 (b) shall not be available to any party if such party’s action or failure to act shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date
and such action or failure to act constitutes a breach of this Agreement; 
  
 (c) by Purchaser, by giving written notice to Sellers in the event either of the Sellers is in breach of any representation, warranty or covenant contained in this Agreement, and such breach individually or in the
combination with any other such breach, (i) would cause the conditions set forth in Section 9.3(a) or (b) not to be satisfied and (ii) is not cured within fifteen (15) days following delivery by Purchaser to Sellers of written notice
of such breach; 
  
 (d) by either Seller, by giving written notice
to Purchaser in the event that Purchaser is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) would cause the conditions set forth in Section 9.2(a) or (b) not to be satisfied and
(ii) is not cured within fifteen (15) days following delivery by such Seller to Purchaser of written notice of such breach; or 
  
 (e) by Purchaser or Sellers, if a Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law or Governmental Order which
is then in effect and has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions and which is final and non-appealable. 
  
 Section 10.2. Effect of Termination. In the event of termination of this Agreement as provided in Section
10.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except (i) Section 6.3, Section 12.1, Section 12.9 and Section 12.10 shall survive any termination
hereof pursuant to Section 10.1, and (ii) that nothing herein shall relieve any party from liability for any intentional breach of this Agreement. 
  

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 Section 10.3. Waiver. 
  
 (a) Sellers may (i) extend the time for the performance of any of the obligations or other acts of Purchaser to be performed
pursuant to this Agreement before or after the Closing, or (ii) waive any inaccuracies in the representations and warranties of Purchaser contained in this Agreement. Any such extension or waiver shall be valid only if set forth in an instrument in
writing signed by Sellers. 
  
 (b) Purchaser may (i) extend the
time for the performance of any of the obligations or other acts of Sellers to be performed pursuant to this Agreement before or after the Closing, or (ii) waive any inaccuracies in the representations and warranties of Sellers contained in this
Agreement. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by Purchaser. 
  
 (c) Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. 
  
 ARTICLE XI 
  
 INDEMNIFICATION 
  
 Section 11.1. Survival of Representations and Warranties. The representations and warranties of the parties contained in this Agreement shall
survive the Closing until the lapse of a period of eighteen (18) months from the Closing Date; provided that the representations and warranties contained in Sections 4.1, 4.4, 4.15(d), 4.15(e), 4.22,
5.1 and 5.7 of this Agreement shall survive the Closing indefinitely and the representations and warranties contained in Article VIII of this Agreement shall survive the Closing until expiration of the statute of limitations
applicable to the matters covered thereby (giving effect to any waiver, mitigation or extension thereof). The covenants and agreements contained in this Agreement shall survive the Closing indefinitely. Notwithstanding the preceding sentence, if
notice of an alleged inaccuracy or breach of any representation or warranty in respect of which indemnity may be sought under this Agreement shall have been given to the party against whom such indemnity may be sought prior to the time such
representation or warranty would otherwise terminate pursuant to this Section 11.1, then such representation or warranty shall not be deemed to terminate pursuant to this Section 11.1 until the liability of the Indemnifying Party shall
have been determined pursuant to this Article XI and the Indemnifying Party shall have reimbursed the Indemnified Party for all Damages in accordance with this Article XI. 
  
 Section 11.2. Indemnification. 
  
 (a) Indemnification by Sellers. Sellers hereby indemnify Purchaser, its Affiliates and their respective directors,
officers and employees against any and all damage, loss, 
  

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 liability, judgment, fine, penalty, charge and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys’ fees and expenses) (“Damages”) incurred or suffered by any such Person arising out of (i) any breach by Sellers of any representation or warranty contained in this Agreement (other than
any representation or warranty contained in Article VIII of this Agreement), (ii) any failure by Sellers to perform or comply with any of their respective covenants or agreements in each case to be performed or complied with by Sellers
pursuant to this Agreement or any Seller Ancillary Agreement (other than any covenant or agreement made or to be performed pursuant to Article VIII of this Agreement), and (iii) any Excluded Liability; provided that with respect to
indemnification by Sellers for any misrepresentations or breaches pursuant to clause (i) of Section 11.2(a), (x) Sellers shall not be liable for such misrepresentations or breaches (other than misrepresentations or breaches of Sections
4.1, 4.4, 4.15(d), 4.15(e) or 4.22, as to which this proviso shall not apply) unless the aggregate amount of Damages with respect to such breaches exceed $500,000, at which time Sellers shall be responsible for the
amount of Damages in excess of $500,000, and (y) Sellers’ maximum aggregate liability for all such misrepresentations or breaches pursuant to clause (i) of Section 11.2(a) (other than misrepresentations or breaches of Sections
4.1, 4.4, 4.15(d), 4.15(e) or 4.22, as to which this proviso shall not apply) shall not exceed $21 million. 
  
 (b) Indemnification by Purchaser. Purchaser hereby indemnifies Sellers, their Affiliates and their respective directors, officers and employees
against any and all Damages incurred or suffered by any such Person arising out of (i) any breach by Purchaser of any representation or warranty contained in this Agreement, (ii) any failure by Purchaser to perform or comply with any of its
covenants or agreements in each case to be performed or complied with by Purchaser pursuant to this Agreement or any Purchaser Ancillary Agreement (other than any covenant or agreement made or to be performed pursuant to Article VIII of this
Agreement), and (iii) any Assumed Liability; provided that with respect to indemnification by Purchaser for any misrepresentations or breaches pursuant to clause (i) of Section 11.2(b), (x) Purchaser shall not be liable for such
misrepresentations or breaches (other than misrepresentations or breaches of Sections 5.1 or 5.7, as to which this proviso shall not apply) unless the aggregate amount of Damages with respect to such breaches exceed $500,000, at which
time Purchaser shall be responsible for the amount of Damages in excess of $500,000, and (y) Purchaser’s maximum aggregate liability for all such misrepresentations or breaches pursuant to clause (i) of Section 11.2(b) (other than
misrepresentations or breaches of Sections 5.1 or 5.7, as to which this proviso shall not apply) shall not exceed $21 million. 
  
 Section 11.3. Procedures. 
  
 (a) The Person seeking indemnification under Section 11.2 (the “Indemnified Party”) agrees to give prompt notice to the party
against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any claim for indemnification under this Article XI (a “Claim”) describing in reasonable detail the facts giving rise to the
Claim and including (if known) the amount of, or method of computation of the amount of the Claim and a reference to the provision of this Agreement or any other agreement or instrument executed hereunder in connection with which the Claim is based.
The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the Indemnifying Party and then only with respect to such

  

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 prejudice. The Indemnifying Party may make a written objection to any Claim, which objection shall be delivered to the
Indemnified Party within thirty (30) days after notice of the Claim is delivered to the Indemnifying Party. The Indemnifying Party and the Indemnified Party shall attempt in good faith to resolve any Claim to which an objection is made. If such
parties are able to resolve any such Claim, they shall prepare and sign a written agreement setting forth such agreement. The Indemnifying Party shall pay to the applicable Indemnified Party by wire transfer of immediately available funds to an
account designated by such Indemnified Party the agreed-upon amount of the Damages as set forth in the agreement. 
  
 (b) If the Indemnifying Party and the Indemnified Party are unable to resolve a Claim to which an objection has been made within thirty (30) days (as such
period may be extended by mutual agreement between the Indemnifying Party and the Indemnified Party), the amount of Damages to which an Indemnified Party shall be entitled shall be determined: (i) by the written agreement between the Indemnified
Party and the Indemnifying Party; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which the Indemnified Party and the Indemnifying Party shall agree. The judgment or decree of a court shall
be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or when all appeals taken shall have been finally determined. 
  
 (c) Any obligation to provide indemnification hereunder with respect to any Claim asserted by any third party (a
“Third Party Claim”), except with respect to Tax proceedings, which shall be governed by Article VIII, shall be subject to the following terms and conditions: 
  
 (i) Within twenty (20) days after receipt of notice of a Third Party Claim, the Indemnifying Party shall give written
notice to the Indemnified Party stating whether it disputes the Third Party Claim and whether it will defend against such Third Party Claim; provided, that if the Indemnifying Party elects to assume the defense against such Third Party Claim,
such notice shall contain the written acknowledgement and agreement that, if such Third Party Claim shall be adversely determined, the Indemnifying Party has an obligation to provide indemnification pursuant to this Article XI. The
Indemnifying Party shall be entitled, at its sole cost and expense, subject to the foregoing and to Section 11.4, to assume and control the defense, compromise, settlement and investigation of such Third Party Claim, including the management
of any proceeding relating thereto, and to employ and engage counsel reasonably acceptable to the Indemnified Party. Notwithstanding the foregoing, the Indemnified Party shall be entitled to retain control of the defense of such Third Party Claim
with counsel of its own choice (and the Indemnifying Party shall be entitled to participate in the defense of such Third Party Claim, at its sole cost and expense and through counsel of its own choice) if Indemnifying Party fails to acknowledge in
writing its obligation to indemnify the Indemnified Party with respect to such Third Party Claim or if such Third Party Claim involves (w) a claim for an injunction against any business or operations of the Indemnified Party, (x) a criminal
proceeding, action, indictment, allegation or investigation, (y) any Intellectual Property of the Business, or (z) any customer of the Business that was one of the Business’s top 5 customers by revenue for the 12 months prior to the date of
such Claim or that is reasonably expected to be one of the Business’s top 5 customers by revenue for the 12 months following the date of such Claim, and the Purchaser reasonably believes that the prosecution or defense of such Third Party Claim
could materially 
  

 63 

 and adversely affect the Purchaser’s relationship with such customer. The Indemnified Party shall at all times have
the right to fully participate in the defense of any Third Party Claim at its own cost and expense directly or through counsel; provided, however, that if the named parties to a proceeding include both the Indemnifying Party and the
Indemnified Party and the Indemnified Party has been advised by counsel that (i) representation of both parties by the same counsel would be inappropriate under applicable standards of professional conduct or (ii) there may be one or more legal or
equitable defenses available to it that are different from or additional to those available to the Indemnifying Party, then, in either case, the Indemnified Party shall be entitled to retain its own counsel at the cost and expense of the
Indemnifying Party (except that the Indemnifying Party shall not be obligated to pay the fees and expenses of more than one separate counsel for all Indemnified Parties, taken together). Notwithstanding the foregoing, the Indemnified Party, during
the period the Indemnifying Party is determining whether to elect to assume the defense of a matter covered by this Section 11.3, may take such reasonable actions as it deems necessary to preserve any and all rights with respect to the
matter, without such actions being construed as a waiver of the Indemnified Party’s rights to defense and indemnification under this Agreement. 
  
 (ii) If the Indemnifying Party exercises the right to undertake the defense and investigation of any such Third Party Claim as provided in Section
11.3(c)(i), then (x) the Indemnified Party agrees to cooperate with the Indemnifying Party in such efforts and make available to the Indemnifying Party all witnesses, records, materials and information in the Indemnified Party’s possession,
under its control or to which it may have access as may be reasonably requested by the Indemnifying Party, and (y) the Indemnifying Party will keep the Indemnified Party reasonably informed of the progress of the defense of any such Third Party
Claim. If the Indemnifying Party fails to undertake the defense and investigation of any such Third Party Claim as provided in Section 11.3(c)(i), including conducting a good faith and diligent defense, or if the Indemnified Party retains
control of the defense of such Third Party Claim as provided in Section 11.3(c)(i), then (x) the Indemnified Party against which such Third Party Claim has been asserted shall have the right to undertake the defense, compromise, settlement
and investigation of such Third Party Claim on behalf of, and at the cost and expense of and for the account and risk of, the Indemnifying Party, (ii) the Indemnifying Party agrees to cooperate with the Indemnified Party in such efforts and make
available to the Indemnified Party all witnesses, records, materials and information in the Indemnifying Party’s possession, under its control or to which it may have access as may be reasonably requested by the Indemnified Party, and (iii) the
Indemnified Party will keep the Indemnifying Party reasonably informed of the progress of the defense of any such Third Party Claim. 
  
 Section 11.4. Settlement of Indemnity Claims. The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which
written consent shall not be unreasonably withheld or delayed) pay, compromise or settle any Third Party Claim. The Indemnified Party shall not, without the prior written consent of the Indemnifying Party (which written consent shall not be
unreasonably withheld or delayed), pay, compromise or settle any such Third Party Claim. 
  

 64 

 Section 11.5. Calculation of Damages. 
  
 (a) The amount of any Damages payable under Section 11.2 by the
Indemnifying Party shall be net of any amounts recovered or recoverable by the Indemnified Party under applicable insurance policies (net of any premium increase) or from any other Person alleged to be responsible therefor. If the Indemnified Party
receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse
the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party, net of any premium increase, with respect to
applicable insurance policies, and net of expenses incurred by such Indemnified Party in collecting such amount. 
  
 (b) The Indemnifying Party shall not be liable under Section 11.2 for any (i) Damages relating to any matter to the extent that there is included
in the Valuation Date Statement a specific liability or reserve relating to such matter or (ii) incidental, special, consequential or punitive Damages, except that the Indemnifying Party shall be liable for incidental, special, consequential or
punitive Damages to the extent such Damages result from a Third Person Claim for incidental, special, consequential or punitive Damages. 
  
 Section 11.6. Exclusivity. Without limiting the rights or remedies that cannot be waived as a matter of law and injunctive and provisional relief
(including specific performance) and except as specifically set forth in this Agreement (including Article VIII), after the Closing, the provisions of this Article XI will provide the sole and exclusive remedy for any
misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the Transactions. 
  
 Section 11.7. Set-Off. Purchaser shall have the right to (but shall not be obligated to) set-off against, and reduce the amounts otherwise payable
in respect of, the Development Milestone Payments and the Sales Milestone Payments any Damages for which Purchaser or any Affiliate, director, officer or employee of Purchaser have been determined to be entitled to be reimbursed pursuant to this
Article XI by (i) written agreement of the Indemnified Party and the Indemnifying Party, (ii) a judgment or decree of any court of competent jurisdiction (whether or not deemed final in accordance with Section 11.5(b)) or (iii) any
other means to which the Indemnified Party and the Indemnifying Party shall agree; provided, that if any amount is set-off pursuant to this Section 11.8 on the basis of Damages determined pursuant to clause (ii) above and the amount of
such Damages is reduced at the time that a judgment or decree of a court of competent jurisdiction is deemed final with respect to the applicable Claim pursuant to Section 11.3(b), then within three (3) Business Days of the final judgment or
decree with respect to such Claim, Purchaser shall pay to Sellers the difference between the amount that was previously set-off and the amount of Damages, if any, to which the Indemnified Party was deemed to be entitled in the final judgment or
decree plus interest from the date of set-off to the date of payment at the Prime Rate as published in The Wall Street Journal, Eastern Edition, on the date of the final judgment or decree; provided, further, that if the Damages
with respect to such Claim are determined by a final judgment or decree to be greater than the Damages previously set-off, 
  

 65 

 Purchaser shall be entitled to set-off the amount of such excess pursuant to this Section 11.8. If any Damages for
which Purchaser or any Affiliate, director, officer or employee of Purchaser is entitled to be indemnified pursuant to this Article XI is not satisfied by set-off against the Development Milestone Payments or the Sales Milestone Payments,
such indemnification payment shall be made by Sellers in cash. 
  
 Section 11.8. Adjustment to Purchase Price. Any payment by Purchaser or Sellers under this Article XI shall be made on an After-Tax Basis, and to the extent such payment can be properly so characterized under applicable Tax
Law, shall be treated by the parties as an adjustment to the Purchase Price. 
  
 Section 11.9. Tax Matters. Notwithstanding anything to the contrary in this Agreement, all matters relating to Taxes shall be governed by the provisions of Article VIII. 
  
 ARTICLE XII 
  
 MISCELLANEOUS 
  
 Section 12.1. Expenses. Except for filing fees payable in connection
with the HSR Act and any additional foreign antitrust filings, which shall be paid by Purchaser, and except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with the Transactions shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred. 
  
 Section 12.2. Notices. All notices, requests, demands, claims and other communications under this Agreement shall be
in writing. Any notice, request, demand, claim or other communication shall be deemed duly given (a) two (2) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, (b) one (1) Business Day after it
is sent for next Business Day delivery via a reputable nationwide overnight courier service, or (c) on the date sent after transmission by facsimile with written confirmation, in each case to the intended recipient as set forth below (or at such
other address for a party hereto as shall be specified in a notice given in accordance with this Section 12.2): 
  
 If to Purchaser, to: 
  
 Cephalon, Inc. 
 41 Moores Road 
 P.O. Box 4011 
 Frazer, PA 19355 

Attention: General Counsel 
 Telecopy:
(610) 738-6258 
  
 with a copy to: 
  
 Sidley Austin Brown & Wood LLP 
 10 S. Dearborn 
 Bank One Plaza 
 Chicago, IL 60603 
 Attention: Pran Jha, Esq.

 Telecopy: (312) 853-7036 
  

 66 

 If to Sellers, to: 
  
 Cell Therapeutics Inc. 
 501 Elliott Avenue West, 
 Suite 400 
 Seattle, WA 98119 
 Attention: General Counsel 
 Telecopy: (206) 272-4397 
  
 with a copy to: 
  
 O’Melveny & Myers LLP 
 Embarcadero
Center West 
 275 Battery Street, Suite 2600 
 San Francisco, CA 94111 
 Attention: Michael J. Kennedy, Esq. 
 Telecopy: (415) 984-8701 
  
 Section 12.3. Public Announcements. No party shall issue any press release or public announcement relating to the Transaction Agreements or the
Transactions without the prior written approval of the other parties; provided, however, that Sellers, on the one hand, or Purchaser, on the other hand, may make any public disclosure such party believes in good faith is required by
applicable Law, regulation or stock market rule (in which case the disclosing party shall use reasonable efforts to consult the other parties and provide them with a copy of the proposed disclosure prior to making the disclosure). 
  
 Section 12.4. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the
Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the Transactions are consummated as originally contemplated to the greatest extent possible. 
  
 Section 12.5. Disclosure Schedule. (a) The Disclosure Schedule may
include items or information which Sellers are not required to disclose under the Agreement. Disclosure of such items or information shall not affect (directly or indirectly) the interpretation of this Agreement or the scope of the disclosure
obligation of Sellers under this Agreement. Inclusion of information in the Disclosure Schedule shall not be construed as an admission that such information is material to Sellers or the Companies. 
  

 67 

 (b) A matter, document or item referred to, set forth or described in one part of the Disclosure Schedule
shall be deemed to be disclosed under another part of the Disclosure Schedule, to the extent such matter, document or item may apply, only if (i) a cross reference to such other part of the Disclosure Schedule is made, or (ii) it is reasonably
apparent that the disclosed matter, document or item would relate to such other part of the Disclosure Schedule. 
  
 Section 12.6. Entire Agreement. The Transaction Agreements and the Exhibits and Schedules hereto (including the Disclosure Schedule) and thereto
constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements, covenants, representations, warranties, undertakings and understandings, written or oral, among the parties hereto
with respect to the subject matter hereof; provided, however, that the Confidentiality Agreement shall continue to have force and effect as provided in Section 6.3. 
  
 Section 12.7. Assignment. This Agreement may not be assigned prior to Closing by Sellers on the one hand, or
Purchaser on the other, by operation of law or otherwise without the express written consent of such other party, except that the rights of Purchaser hereunder may be assigned, in whole or in part, prior to Closing, without the consent of Sellers,
to any corporation or limited liability company all of the outstanding capital stock or membership interests of which are owned or controlled by Purchaser; provided that Purchaser shall not be released from any of its obligations hereunder by reason
of such assignment. Following the Closing, either party may assign any of its rights hereunder, but no such assignment shall relieve it of its obligations hereunder. 
  
 Section 12.8. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of
the parties hereto and their permitted assigns and nothing herein, whether express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. 
  
 Section 12.9. Amendment. This Agreement may
not be amended, restated, supplemented or otherwise modified except by an instrument in writing signed by the parties hereto. 
  
 Section 12.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
WASHINGTON. 
  
 Section 12.11. Waiver of Jury Trial. EACH
OF THE PARTIES HERETO WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES HERETO EACH HEREBY AGREES
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES 
  

 68 

 HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 
  
 Section 12.12. Counterparts and Facsimile Signature. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement. This Agreement may be executed by facsimile signature. 
  
 Section 12.13. Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. 
  
 Section 12.14. Bulk Transfer Law. Purchaser waives compliance with the
provisions of any applicable bulk sales of bulk transfer law applicable to the Transaction. 
  
 [Remainder of page intentionally left blank] 
  

 69 

 IN WITNESS WHEREOF, each party hereto has executed, or caused its duly authorized officer(s) to execute,
this Agreement as of the date first written above. 
  

			
	CELL THERAPEUTICS, INC.
		
	By:	 	 /s/ James A. Bianco

	Name:	 	James A. Bianco
	Title:	 	President & Chief Executive Officer
	
	CTI TECHNOLOGIES, INC.
		
	By:	 	 /s/ James A. Bianco

	Name:	 	James A. Bianco
	Title:	 	President
	
	CEPHALON, INC.
		
	By:	 	 /s/ J. Kevin Buchi

	Name:	 	J. Kevin Buchi
	Title:	 	Sr. Vice President & Chief Financial Officer

  
 [Signature
page to Acquisition Agreement] 
  

 70 

 EXHIBIT A 
  

FORM OF TRANSITION SERVICES AGREEMENT 
  
 BETWEEN 
  
 CELL THERAPEUTICS, INC. 
  
 AND 
  
 CEPHALON, INC.

  
                     , 2005 

 Table of Contents 
  

							
	 	 	 	  	Page

	ARTICLE I	 	DEFINITIONS	  	A-1
			
	ARTICLE II	 	TRANSITION SERVICE SCHEDULES	  	A-2
				
	        Section 2.1.	 	 	  	Services	  	A-2
				
	        Section 2.2.	 	 	  	Schedules	  	A-2
			
	ARTICLE III	 	SERVICES	  	A-2
				
	        Section 3.1.	 	 	  	Services Generally	  	A-2
				
	        Section 3.2.	 	 	  	Service Limitations	  	A-3
				
	        Section 3.3.	 	 	  	Exceptions to Obligations	  	A-3
				
	        Section 3.4.	 	 	  	Additional Services	  	A-3
			
	ARTICLE IV	 	TERM	  	A-3
			
	ARTICLE V	 	COMPENSATION	  	A-4
				
	        Section 5.1.	 	 	  	Charges for Services	  	A-4
				
	        Section 5.2.	 	 	  	Payment Terms	  	A-4
				
	        Section 5.3.	 	 	  	Taxes	  	A-5
			
	ARTICLE VI	 	GENERAL OBLIGATIONS; STANDARD OF CARE	  	A-5
				
	        Section 6.1.	 	 	  	Performance Standards	  	A-5
				
	        Section 6.2.	 	 	  	Disclaimer of Warranties	  	A-5
				
	        Section 6.3.	 	 	  	Transitional Nature of Services; Changes	  	A-5
				
	        Section 6.4.	 	 	  	Responsibility for Errors; Delays	  	A-5
				
	        Section 6.5.	 	 	  	Good Faith Cooperation; Consents	  	A-6
			
	ARTICLE VII	 	TERMINATION	  	A-6
				
	        Section 7.1.	 	 	  	Termination	  	A-6
				
	        Section 7.2.	 	 	  	Survival	  	A-6
				
	        Section 7.3.	 	 	  	User Identifications, Passwords	  	A-6
			
	ARTICLE VIII	 	EMPLOYEES	  	A-6
			
	ARTICLE IX	 	PROVIDER PROPERTY	  	A-7
			
	ARTICLE X	 	RELATIONSHIP BETWEEN THE PARTIES	  	A-7
			
	ARTICLE XI	 	SUBCONTRACTORS	  	A-7
			
	ARTICLE XII	 	INTELLECTUAL PROPERTY	  	A-8
				
	        Section 12.1.	 	 	  	Allocation of Rights	  	A-8
				
	        Section 12.2.	 	 	  	Existing Ownership Rights Unaffected	  	A-8

  

 i 

 Table of Contents 
 (continued) 
  

							
	 	 	 	  	 	  	Page

	 ARTICLE XIII
	 	LIMITATION OF LIABILITY	  	A-8
			
	 ARTICLE XIV
	 	FORCE MAJEURE	  	A-8
			
	 ARTICLE XV
	 	DISPUTE RESOLUTION	  	A-8
				
	         Section 15.1.
	 	 	  	Dispute Resolution	  	A-8
				
	         Section 15.2.
	 	 	  	Continuity of Service and Performance	  	A-8
			
	 ARTICLE XVI
	 	MISCELLANEOUS	  	A-9
				
	         Section 16.1.
	 	 	  	Construction	  	A-9
				
	         Section 16.2.
	 	 	  	No Third Party Beneficiaries	  	A-9
				
	         Section 16.3.
	 	 	  	Entire Agreement	  	A-9
				
	         Section 16.4.
	 	 	  	Counterparts and Facsimile Signature	  	A-9
				
	         Section 16.5.
	 	 	  	Headings	  	A-9
				
	         Section 16.6.
	 	 	  	Notices	  	A-10
				
	         Section 16.7.
	 	 	  	Governing Law; Exclusive Jurisdiction	  	A-11
				
	         Section 16.8.
	 	 	  	Amendments and Waivers	  	A-11
				
	         Section 16.9.
	 	 	  	WAIVER OF JURY TRIAL	  	A-11
				
	         Section 16.10.
	 	 	  	Termination	  	A-12
				
	         Section 16.11.
	 	 	  	Severability	  	A-12

  

 ii 

 TRANSITION SERVICES AGREEMENT 
  
 Transition Services Agreement (this “Agreement”), dated as of
                    , 2005, by and between Cell Therapeutics, Inc., a Washington corporation (“CTI”), and Cephalon, Inc., a Delaware
corporation (“Purchaser”). 
  
 RECITALS

  
 WHEREAS, CTI, CTI Technologies, Inc., a Nevada corporation
(“Nevada”) and Purchaser, have entered into an Acquisition Agreement, dated as of the date hereof (the “Acquisition Agreement”), pursuant to which Purchaser will purchase the Business. Capitalized terms used, but
not otherwise defined herein, shall have the meaning specified in the Acquisition Agreement. 
  
 WHEREAS, for the periods provided herein, in order to facilitate the orderly and effective separation of the Business from CTI’s corporate group, Purchaser desires to receive from CTI and/or one or more of its
Affiliates certain services, which services require assets or employees of CTI and/or one or more of its Affiliates, after the Closing Date (which Closing Date shall be the effective date of this Agreement (the “Effective Date”)).

  
 NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth below, the Parties hereto agree as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 For the purpose of this Agreement, the following capitalized terms shall have the following meanings: 
  
 “Agreement” shall have the meaning set
forth in the preamble to this Agreement. 
  
 “Acquisition Agreement” shall have the meaning set forth in the recitals to this Agreement. 
  
 “Additional Services” shall have the meaning set forth in Section 3.4. 
  
 “CTI” shall have the meaning set forth in
the preamble to this Agreement. 
  
 “Documentation” shall mean the manuals and other documentation provided by the Provider to a Receiving Party in connection with the Services, including any items listed and described in the relevant Transition Service
Schedule hereto. 
  
 “Effective
Date” shall have the meaning set forth in the recitals to this Agreement. 
  
 “Expiration Date” shall have the meaning set forth in Article IV. 
  
 “Force Majeure” shall have the meaning set
forth in Article XIV. 
  

 A-1 

 “Party” means either: (i) CTI or (ii) Purchaser. 
  
 “Provider” shall mean CTI or one or more of
its Affiliates providing a Service hereunder. 
  
 “Purchaser” shall have the meaning set forth in the preamble to this Agreement. 
  
 “Receiving Party” shall mean Purchaser or one or more of its Affiliates. 
  
 “Service(s)” shall have the meaning set
forth in Section 2.1. 
  
 “Taxes” shall have the meaning set forth in Section 5.3. 
  
 “Transition Service Schedules” shall mean Schedule 1, Schedule 2 and any other schedule that may be added
to this Agreement pursuant to Section 3.4. 
  
 ARTICLE II

 TRANSITION SERVICE SCHEDULES 
  
 Section 2.1. Services. Subject to the terms and conditions of this Agreement, beginning on the Effective Date and continuing until the Expiration
Date, CTI, either directly or indirectly through one or more of its Affiliates, shall provide to Purchaser those services described in the Transition Service Schedules (the “Services”). The Transition Service Schedules shall be
considered part of this Agreement and are incorporated herein by reference. 
  
 Section 2.2. Schedules. The Parties shall set forth in each Transition Service Schedule, among other things, the time period during which the Service will be provided if different from the term of this
Agreement determined pursuant to Article IV hereof; a summary of the Service to be provided; a description of the Service; and the estimated charge, if any, for the Service (if priced on a basis other than as set forth in Section 5.1
hereof) and any other terms applicable thereto. Notwithstanding the foregoing, the Parties acknowledge and agree that it may not be practicable to describe each Service in detail and that, therefore, a Service, when generally agreed upon by the
Parties will be provided and paid for in accordance with the applicable terms of this Agreement even where such Service is not described in detail in a Schedule. 
  
 ARTICLE III 
 SERVICES 
  
 Section 3.1. Services
Generally. Except as otherwise provided herein, for the term determined pursuant to Article IV hereof, the Providers shall provide or cause to be provided to the Receiving Party the Service(s) described herein and in the Transition
Service Schedule(s) attached hereto, as well as training to employees of Receiving Party in order to facilitate the transition of the Services to employees of Receiving Party as soon as reasonably practicable after the date hereof. The Designated
Representatives identified in the Transition Service Schedules shall meet no less than monthly to discuss the Services and the timing of transition of the Services to employees of Receiving Party. 
  

 A-2 

 Section 3.2. Service Limitations. 
  
 (a) Except as provided in a Transition Service Schedule for a specific Service: (a) a Provider shall not be required to
provide the Services except to the extent and at the locations such Services were provided prior to the Effective Date and (b) the Services will be available only for purposes of conducting the Business substantially in the manner it was conducted
prior to the Effective Date. 
  
 (b) Except as provided in
Section 6.5(a), nothing in this Agreement shall require CTI or any of its Affiliates, as the case may be, to obtain any additional licenses, systems, personnel or operations to provide or comply with the obligations set forth in this
Agreement; provided, that CTI and its Affiliates shall maintain the licenses, systems, personnel or operations as in existence as of the date hereof, or shall replace any such licenses, systems, personnel or operations which shall be terminated
after the date hereof with substantially similar licenses, systems, personnel or operations to the extent necessary to provide or comply with the obligations set forth in this Agreement. 
  
 (c) Notwithstanding anything to the contrary in this Agreement, Purchaser acknowledges and agrees that the Services shall
not be resold, transferred or otherwise be used in any way other than in the ordinary course of the Business. 
  
 Section 3.3. Exceptions to Obligations. The only exceptions to the obligations of a Provider to provide the Services as contemplated hereby are if
(a) the Provider cannot provide such Services due to causes which are outside of its reasonable control as determined under Article XIV, (b) providing the Services would be prohibited by law, regulation or court order, (c) subject to
Section 6.5(a), providing the Services would require the Provider to use a third party’s intellectual property in a manner for which the Provider is not licensed or (d) providing the Services would require the Provider to maintain the
employment of existing employees that would otherwise be terminated for cause. 
  
 Section 3.4. Additional Services. From time to time after the Effective Date, the Parties may identify and mutually agree upon additional Services that Provider will provide to a Receiving Party in accordance
with the terms of this Agreement (the “Additional Services”). At such time, the Parties shall negotiate in good faith additional Transition Service Schedules for such Additional Services pursuant to Article II. 
  
 ARTICLE IV 
 TERM 
  
 The term of this Agreement shall commence on the Effective Date and shall remain in effect until six months after the Effective Date (the “Expiration Date”), unless earlier terminated under Article VII;
provided, however, that if, within the thirty day period prior to the Expiration Date the Receiving Party, with respect to one or more Services, notifies CTI that the Receiving Party, despite having exercised its commercially
reasonable best efforts, cannot obtain from a third party or provide itself a particular Service after the six month anniversary of the Effective Date (an “Extended Service Requirement”), then with respect to such Extended Service
Requirement, the Provider shall provide that Service until the nine-month anniversary of the 
  

 A-3 

 Effective Date, or for such shorter period of time (which shall be no less than 30 days) as Receiving Party may specify.
This Agreement may be extended by the Parties in writing, either in whole or with respect to one or more of the Services; provided, however, that such extension shall only apply to the specific Services for which the Agreement was
extended. The Parties shall be deemed to have extended this Agreement with respect to a specific Service if the Transition Service Schedule for such Service specifies a completion date beyond the aforementioned Expiration Date. The Parties may agree
on an earlier expiration date respecting a specific Service by specifying such date on the Transition Service Schedule for that Service. Services shall be provided up to and including the date set forth in the applicable Transition Service Schedule,
subject to earlier termination as provided herein. 
  
 ARTICLE V

 COMPENSATION 
  
 Section 5.1. Charges for Services. The Receiving Party shall pay to the Provider $125 per hour (the “Hourly Charge”) for each hour
recorded by a CTI employee, Affiliate, consultant, or subcontractor for each Service provided, or the charges otherwise set forth on a Transition Service Schedule, plus, in any and all cases, 5% as an addition to such Hourly Charge for a Service
provided between 91 and 120 days after the Effective Date and plus 10% as an addition to such Hourly Charge for a Service provided 121 days or more after the Effective Date. In the case of Additional Services pursuant to Section 3.4, the
Receiving Party shall pay to the Provider such charges as the parties shall mutually agree and set forth on the Transition Service Schedules for each of the Services listed therein (unless a particular Schedule explicitly provides that no charge
will be made). In addition, the Receiving Party shall also pay the Provider any direct third-party costs associated with providing a service, such as travel lodging. As soon as practicable after the total number of hours expended in any calendar
month exceeds (i) 2,490 for Services provided pursuant to Schedule 1 hereto or (ii) 1,725 for Services provided pursuant to Schedule 2 hereto, the Provider shall promptly provide notice to Receiving Party of such fact. As soon as practicable after
such notice is received by Receiving Party, authorized representatives of Provider and Receiving Party shall meet to discuss further provision of Services during such calendar month. Unless Receiving Party approves the expenditure of additional
hours, the Provider shall be entitled to cease providing Services (but only for the balance of such calendar month) if the continued provision of Services would cause the total number of hours expended in any calendar month to exceed (i) in the case
of Services to be provided pursuant to Schedule 1, 3,322 hours, and (ii) in the case of Services to be provided pursuant to Schedule 2, 2,301 hours. 
  
 Section 5.2. Payment Terms. Provider shall send to the Receiving Party monthly invoices showing charges pursuant to this Agreement for the specific
Services provided to such Receiving Party. Such invoices shall be accompanied by reasonable documentation or other reasonable explanation supporting such charges. Invoices shall be due and payable within 20 days after receipt and shall be paid in
U.S. dollars, and shall be made without set off of any kind. Late payments shall bear interest at the greater of ten percent (l0%) or the maximum rate allowed by law. 
  

 A-4 

 Section 5.3. Taxes. Charges do not include any sales, use, excise, personal property, customs
duty, withholding, value-added or similar tax, fee or assessment applicable to any of the transactions contemplated hereunder, including without limitation the license, use and/or possession of intellectual property hereunder
(“Taxes”). The Receiving Party shall be liable for and shall pay any and all such Taxes and related charges, however designated, excluding taxes based solely on the Provider’s net income. If any such Taxes are paid by the
Provider, the Receiving Party shall reimburse the Provider promptly after written notice from the Provider. 
  
 ARTICLE VI 
 GENERAL OBLIGATIONS; STANDARD OF CARE 
  
 Section 6.1. Performance Standards. A Provider shall use commercially
reasonable efforts to provide Services in accordance with the policies, procedures and practices in effect before the Effective Date and shall exercise the same care and skill as it exercises in performing similar services for itself. In performing
its responsibilities hereunder, CTI will cause each Provider to accord the Receiving Party the same priority as it provides itself and its Affiliates under comparable circumstances. Without limiting the generality of the foregoing, in the provision
of Services, CTI shall cause each Provider to not discriminate against the Receiving Party or any of its Affiliates solely because Receiving Party or one of its Affiliates is the recipient of such Services. CTI shall cause each Provider to provide
Services to the Receiving Party at substantially the same levels of quality, efficiency and volume as they had been provided to the Business prior to the date hereof. The Receiving Party shall provide sufficient resources and timely decisions,
approvals and acceptances in order that the Providers may accomplish their respective obligations hereunder in a timely manner. 
  
 Section 6.2. Disclaimer of Warranties. EXCEPT AS SET FORTH HEREIN, NO PARTY TO THIS AGREEMENT MAKES ANY WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, BUSINESS CONTINUITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICES, SOFTWARE OR OTHER DELIVERABLES PROVIDED BY IT HEREUNDER. 
  
 Section 6.3. Transitional Nature of Services; Changes. The Parties
acknowledge the transitional nature of the Services and that the Provider may make changes from time to time in the manner of performing such Services if the Provider is making similar changes in performing similar services for itself;
provided that the Provider furnishes to the Receiving Party reasonable advanced written notice regarding such changes. 
  
 Section 6.4. Responsibility for Errors; Delays. Except for Damages arising out of the gross negligence or willful misconduct of the Provider or its
Affiliates in the provision of Services, the Provider’s sole responsibility to the Receiving Party with respect to Services are as follows: 
  
 (a) for errors or omissions in Services, shall be to furnish correct information, payment and/or adjustment in the Services, at no additional cost or
expense; provided, the 
  

 A-5 

 Receiving Party must promptly advise the Provider of any such error or omission of which it becomes aware after having
used reasonable efforts to detect any such errors or omissions in accordance with the standard of care set forth in Section 6.1; and 
  
 (b) for failure to deliver any Service shall be to use reasonable efforts, subject to Section 3.3, to make the Services available and/or to resume
performing the Services as promptly as reasonably practicable. 
  
 Section 6.5. Good Faith Cooperation; Consents. (a) The Parties will use good faith efforts to cooperate with each other in all matters relating to the provision and receipt of Services. Such cooperation shall include exchanging
information and performing reconciliations and adjustments Unless otherwise provided in the relevant Transition Services Schedule, the costs of obtaining any third party consents, licenses, sublicenses or approvals shall be borne by the Receiving
Party for the relevant Services. 
  
 (b) The Parties will maintain
in accordance with their standard document retention procedures, documentation supporting the information relevant to cost calculations contained in the Transition Service Schedules and cooperate with each other in making such information available
as needed in the event of a tax audit, whether in the United States or any other country. 
  
 ARTICLE VII 
 TERMINATION 
  
 Section 7.1. Termination. Subject to Article IV hereof, a Receiving Party may terminate this Agreement, either
with respect to all or with respect to any one or more of the Services provided to it hereunder (including with respect to any Extended Service Requirement), for any reason or for no reason, at any time upon thirty (30) days prior written notice to
Provider. 
  
 Section 7.2. Survival. Articles 5 and
7.3 of this Agreement shall survive termination for the applicable statutes of limitations. Article XV shall survive termination of this Agreement. Notwithstanding the foregoing, in the event of any termination with respect to one or
more, but less than all Services, this Agreement shall continue in full force and effect with respect to any Services not terminated. 
  
 Section 7.3. User Identifications, Passwords. The Parties shall use good faith efforts at the termination or expiration of this Agreement or any
specific Service to ensure that all copies of user identifications and passwords that provide any Party with access to another Party’s premises or equipment are canceled or destroyed. 
  
 ARTICLE VIII 
 EMPLOYEES 
  
 From the date hereof through the day following termination of this Agreement, Receiving Party may offer employment to any employees of Providers listed on any Transition Service Schedules (the “Employees”) as may be selected by
Receiving Party in its sole 
  

 A-6 

 discretion; provided, however, that the Receiving Party shall have given CTI at least five days notice of its intention
to make an offer and the terms and provisions thereof with respect to the relevant employee. Providers shall use commercially reasonable efforts to cooperate with Receiving Party and the Employee so notified to communicate such offer and to effect
an orderly transfer to Receiving Party of any Employees whom accept Receiving Party’s offer of employment. 
  
 ARTICLE IX 
 PROVIDER PROPERTY 
  
 During the term of this Agreement, Providers shall make available for use by
the Business Employees (as defined in the Acquisition Agreement) and the Employees who accept Receiving Party’s offer of employment pursuant to Article VIII of this Agreement, any personal property of Providers (including laptop
computers, vehicles and office equipment) that were used by such Business Employees or Employees prior to the Effective Date. 
  
 ARTICLE X 
 RELATIONSHIP BETWEEN THE
PARTIES 
  
 The relationship between the Parties established
under this Agreement is that of independent contractors and no Party shall be deemed an employee, agent, partner, or joint venturer of or with the other. Provider will be solely responsible for any employment-related taxes, insurance premiums or
other employment benefits respecting its personnel’s performance of Services under this Agreement. Each Receiving Party agrees to grant to the Provider’s personnel reasonable access to sites, systems and information as necessary for the
Provider to perform its obligations hereunder. Each Party’s personnel shall agree to obey any and all security regulations and other published policies of the other Party relevant to the provision or receipt of the Services. 
  
 ARTICLE XI 
 SUBCONTRACTORS 
  
 A Provider may engage a subcontractor to perform all or any portion of its duties under this Agreement provided that any such subcontractor agrees in writing to be bound by confidentiality obligations, and provided
further that the Provider remains responsible for the performance of such subcontractor. As used in this Agreement, “subcontractor” will mean any individual, partnership, corporation, firm, association, unincorporated organization, joint
venture, trust or other entity engaged to perform hereunder. 
  

 A-7 

 ARTICLE XII 
 INTELLECTUAL PROPERTY 
  
 Section 12.1. Allocation of Rights. This Agreement and the performance of this Agreement will not affect the ownership of any intellectual property rights. 
  
 Section 12.2. Existing Ownership Rights Unaffected. No Party will gain, by virtue of this agreement, any rights of
ownership of copyrights, patents, trade secrets, trademarks or any other intellectual property rights owned by the other. 
  
 ARTICLE XIII 
 LIMITATION OF LIABILITY

  
 IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY
FOR ANY LOST PROFITS, LOSS OF DATA, LOSS OF USE, BUSINESS INTERRUPTION OR OTHER SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES. 
  
 ARTICLE XIV 
 FORCE MAJEURE

  
 Each Party will be excused for any failure or delay in
performing any of its obligations under this Agreement, other than the obligations to make payments pursuant to Article V hereof for services rendered, if such failure or delay is caused by Force Majeure. “Force Majeure”
means any act of God or the public enemy, any accident, explosion, fire, storm, earthquake, flood, or any other circumstance or event beyond the reasonable control of such Party. 
  
 ARTICLE XV 
 DISPUTE RESOLUTION 
  
 Section 15.1. Dispute
Resolution. Any dispute under this Agreement shall be handled in accordance with the dispute resolution procedures set forth in Article XI of the Acquisition Agreement. 
  
 Section 15.2. Continuity of Service and Performance. Unless otherwise agreed in writing, the Parties will continue to
provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this Article XII with respect to all matters not subject to such dispute, controversy or claim;
provided, however, that the Provider shall have no obligation to continue to provide any Services if it has not been timely paid the undisputed portion of any invoice previously delivered to the Receiving Party. 
  

 A-8 

 ARTICLE XVI 
 MISCELLANEOUS 
  
 Section
16.1. Construction. 
  
 (a) The language used in this
Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. 
  
 (b) Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. 
  
 (c) When reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or Section of this Agreement, unless otherwise indicated. Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The Parties hereto agree that they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

  
 Section 16.2. No Third Party Beneficiaries. This
Agreement shall be binding upon and inure solely to the benefit of the Parties hereto and their permitted assigns and nothing herein, whether express or implied, is intended to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement. 
  
 Section 16.3. Entire Agreement. This Agreement and the Exhibits and Schedules hereto constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior
agreements, covenants, representations, warranties, undertakings and understandings, written or oral, among the parties hereto with respect to the subject matter hereof. 
  
 Section 16.4. Counterparts and Facsimile Signature. This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when executed shall be deemed an original but all of which together shall constitute one and the same agreement. This Agreement may be executed by facsimile signature.

  
 Section 16.5. Headings. The section headings contained
in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 
  

 A-9 

 Section 16.6. Notices. All notices, requests, demands, claims, and other communications hereunder
shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given (a) two (2) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, (b) one (1)
business day after it is sent for next business day delivery via a reputable nationwide overnight courier service or (c) on the date sent after transmission by facsimile with written confirmation, in each case to the intended recipient as set forth
below (or at such other address for a party hereto as shall be specified in a notice given in accordance with this Section 16.6): 
  
 If to CTI: 
  
 Cell Therapeutics, Inc. 
 501 Elliott Avenue
West, Suite 400 
 Seattle, Washington 98119 
 Attention: General Counsel 
 Telecopy: (206) 272-4397 
  
 Copies to: 
  
 O’Melveny & Myers LLP 
 275 Battery Street, Suite 2600 
 San
Francisco, CA 94111 
 Attention: Michael J. Kennedy, Esq. 
 Telecopy: (415) 984-8701 
  

 A-10 

 If to Purchaser: 
  
 Cephalon, Inc. 
 41 Moores Road 
 P.O. Box 4011 
 Frazer, PA 19355 
 Attention: Martin Reeves 
 Telecopy: (610) 738-6723 
  
 Copy to: 
  
 Sidley Austin Brown & Wood LLP

 10 S. Dearborn Street 
 Bank
One Plaza 
 Chicago, IL 60603 
 Attention: Pran Jha 
 Telecopy: (312) 853-7036 
  
 Section 16.7. Governing Law; Exclusive Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON. 
  
 Section 16.8. Amendments and Waivers. The Parties may mutually amend any provision of this Agreement. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by both of the
Parties. No waiver of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Party giving such waiver. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. 
  
 Section 16.9. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES HERETO EACH HEREBY AGREES THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY. 
  

 A-11 

 Section 16.10. Termination. This Agreement may be terminated by mutual consent of the Parties or
as provided in Article VII. 
  
 Section 16.11.
Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible. 
  
 [SIGNATURES ON FOLLOWING PAGE] 
  

 A-12 

 IN WITNESS WHEREOF, each of the Parties has caused this Transition Services Agreement to be executed on
its behalf by its officers thereunto duly authorized on the day and year first above written. 
  

			
	CELL THERAPEUTICS, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	CEPHALON, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 [Signature
Page to Transition Services Agreement] 
  

 A-13 

 Exhibit B 
  
 Form of Assumption Agreement 
  
 ASSUMPTION AGREEMENT (this “Agreement”) is made effective as of
                    , 2005 by and among Cell Therapeutics, Inc., a Washington corporation (“CTI”), CTI Technologies, Inc., a
Nevada corporation (“Nevada” and together with CTI, “Sellers”), and Cephalon, Inc., a Delaware corporation (“Purchaser”). The parties hereto hereby agree as follows: 
  
 WHEREAS, Sellers and Purchaser entered into an Acquisition Agreement
dated as of June 10, 2005 (the “Acquisition Agreement”), pursuant to which Sellers agreed to sell, convey, transfer, assign and deliver, or cause to be sold, conveyed, transferred, assigned and delivered, to Purchaser all of
Sellers’ right, title and interest in and to the Assets (as defined in the Acquisition Agreement), in each case all upon the terms and subject to the conditions set forth in the Acquisition Agreement. Terms not otherwise defined herein shall
have the meanings set forth in the Acquisition Agreement. 
  
 1.
Assumption of Liabilities. For and in consideration of the transfer by Sellers to Purchaser of the Assets, all upon the terms and subject to the conditions set forth in the Acquisition Agreement, Sellers do hereby irrevocably convey, transfer
and assign to Purchaser all of the Assumed Liabilities, and Purchaser does hereby irrevocably assume from Sellers and does hereby agree to pay, perform, discharge or settle (subject to applicable defenses and setoffs) all of the Assumed Liabilities,
provided, however, as to any lease, contract, agreement, permit or other authorization included in the Assets which cannot be sold, transferred, assigned, conveyed or delivered effectively without the consent of a third party, which consent has not
been obtained, this Agreement shall be of no force or effect until such requisite consent is obtained, whereupon this Agreement shall become of full force and effect with respect thereto. 
  
 2. Miscellaneous Provisions 
  

(a) Further Assurances. At any time and from time to time after the date hereof, at either Seller’s request and without further
consideration therefor, Purchaser shall execute and deliver to such Seller such other instruments of assumption, provide such materials and information and take such other actions, as the parties and their respective counsel shall deem reasonably
necessary to more effectively assume from Sellers the Assumed Liabilities. 
  
 (b) Conflict with Acquisition Agreement. Sellers and Purchaser hereby acknowledge and agree that the provisions of this Agreement shall not limit the full force and effect of the terms and provisions of the
Acquisition Agreement, and that in the event of a conflict between the terms and provisions of this Agreement and the terms and provisions of the Acquisition Agreement, the terms and provisions of the Acquisition Agreement, shall prevail, govern and
control in all respects without limitation. 
  
 (c) Amendments;
Waiver. The terms, provisions and conditions of this Agreement may be amended only by agreement in writing of all parties. No waiver of any provision nor consent to any exception to the terms of this Agreement or any agreement contemplated
hereby will be effective unless in writing and signed by the party to be bound and 
  

 B-1 

 then only to the specific purpose, extent and instance so provided. No failure on the part of any party to exercise or
delay in exercising any right hereunder will be deemed a waiver thereof, nor will any single or partial exercise preclude any further or other exercise of such or any other right. 
  
 (d) Descriptive Headings. The descriptive headings of the sections and subsections of this Agreement are for
convenience only and do not constitute a part of this Agreement. 
  
 (e) Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. This Agreement may be executed by facsimile signature. 
  
 (f) Successors and Assigns. This Agreement shall be enforceable against the successors and assigns of Sellers and Purchaser (as the case may be),
and shall inure to the benefit of the successors and assigns of Sellers and Purchaser (as the case may be). 
  
 (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON.

  
 (h) Representation by Counsel; Interpretation. The
parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such agreement or document. The provisions of this Agreement will be interpreted in a reasonable manner to effect the intent of the parties hereto. 
  
 (i) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the assumption of the
Assumed Liabilities is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the assumption of the Assumed Liabilities is consummated as originally contemplated to the greatest extent
possible. 
  

 B-2 

 IN WITNESS WHEREOF, Sellers and Purchaser have caused this Agreement to be duly executed as of the
day and year first above written. 
  

							
	CELL THERAPEUTICS, INC.	 	CEPHALON, INC.
				
	By:	 	  

	 	By:	 	  

	Name:	 	  

	 	Name:	 	  

	Title:	 	  

	 	Title:	 	  

			
	CTI TECHNOLOGIES, INC.	 	 	 	 
				
	By:	 	  

	 	 	 	 
	Name:	 	  

	 	 	 	 
	Title:	 	  

	 	 	 	 

  

 B-3 

 Exhibit C 
  
 Form of Bill of Sale 
  

BILL OF SALE (this “Bill of Sale”) is made effective as of
                    , 2005 by and among Cell Therapeutics, Inc., a Washington corporation (“CTI”), CTI Technologies, Inc., a
Nevada corporation (“Nevada” and together with CTI, the “Sellers”), and Cephalon, Inc., a Delaware corporation (“Purchaser”). The parties hereto hereby agree as follows: 
  
 BACKGROUND 
  
 WHEREAS, Sellers and Purchaser entered into an Acquisition Agreement
dated as of June 10, 2005 (the “Acquisition Agreement”), pursuant to which Sellers agreed to sell, convey, transfer, assign and deliver, or cause to be sold, conveyed, transferred, assigned and delivered, to Purchaser all of
Sellers’ right, title and interest in and to the Assets, in each case all upon the terms and subject to the conditions set forth in the Acquisition Agreement. 
  
 1. Sale. Sellers do hereby sell, convey, transfer, assign and deliver to Purchaser, and Purchaser does hereby
purchase, acquire and accept from Sellers, all of Sellers’ right, title and interest in and to the Assets, free and clear of any and all Encumbrances, other than Permitted Encumbrances, provided, however, as to any lease, contract, agreement,
permit or other authorization included in the Assets which cannot be sold, transferred, assigned, conveyed or delivered effectively without the consent of a third party, which consent has not been obtained, this Bill of Sale shall be of no force or
effect until such requisite consent is obtained, whereupon this Bill of Sale shall become of full force and effect with respect thereto. 
  
 2. Representations. The representations, warranties, agreements and indemnities of Seller with respect to the Assets set forth in the Acquisition
Agreement will continue in effect to the extent provided therein and will not be deemed to be amended, modified, terminated or superseded by or merged with this Bill of Sale. 
  
 3. Miscellaneous Provisions. 
  
 (a) Further Assurances. At any time and from time to time after the date hereof, at Purchaser’s request and
without further consideration therefor, Sellers shall execute and deliver to Purchaser such other deeds, bills of sale, endorsements, assignments and other good and sufficient instruments of conveyance and assignment as the parties and their
respective counsel shall deem reasonably necessary to vest in Purchaser all right, title and interest in, to and under the Assets. 
  
 (b) Conflict with Acquisition Agreement. Sellers and Purchaser hereby acknowledge and agree that the provisions of this Bill of Sale shall not
limit the full force and effect of the terms and provisions of the Acquisition Agreement, and that in the event of a conflict between the terms and provisions of this Bill of Sale and the terms and provisions of the Acquisition Agreement, the terms
and provisions of the Acquisition Agreement shall prevail, govern and control in all respects without limitation. 
  

 C-1 

 (c) Amendments; Waiver. The terms, provisions and conditions of this Bill of Sale may be amended
only by agreement in writing of all parties. No waiver of any provision nor consent to any exception to the terms of this Bill of Sale or any agreement contemplated hereby will be effective unless in writing and signed by the party to be bound and
then only to the specific purpose, extent and instance so provided. No failure on the part of any party to exercise or delay in exercising any right hereunder will be deemed a waiver thereof, nor will any single or partial exercise preclude any
further or other exercise of such or any other right. 
  
 (d)
Descriptive Headings. The descriptive headings of the sections and subsections of this Bill of Sale are for convenience only and do not constitute a part of this Bill of Sale. 
  
 (e) Counterparts. This Bill of Sale may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. This Bill of Sale may be executed by facsimile signature. 
  
 (f) Successors and Assigns. This Bill of Sale shall be enforceable
against the successors and assigns of Sellers and Purchaser (as the case may be), and shall inure to the benefit of the successors and assigns of Sellers and Purchaser (as the case may be). 
  
 (g) Governing Law. THIS BILL OF SALE SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON. 
  
 (h) Representation by Counsel; Interpretation. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Bill of Sale and, therefore, waive the application
of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. The provisions of this Bill of Sale will be interpreted in
a reasonable manner to effect the intent of the parties hereto. 
  
 (i) Severability. If any term or other provision of this Bill of Sale is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Bill of Sale shall nevertheless remain in
full force and effect so long as the economic or legal substance of the sale of Assets is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this Bill of Sale so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the sale of Assets is consummated as originally
contemplated to the greatest extent possible. 
  

 C-2 

 IN WITNESS WHEREOF, Sellers and Purchaser have caused this Bill of Sale to be duly executed as of
the day and year first above written. 
  

							
	CELL THERAPEUTICS, INC.	 	CEPHALON, INC.
				
	By:	 	  

	 	By:	 	  

	Name:	 	  

	 	Name:	 	  

	Title:	 	  

	 	Title:	 	  

			
	CTI TECHNOLOGIES, INC.	 	 	 	 
				
	By:	 	  

	 	 	 	 
	Name:	 	  

	 	 	 	 
	Title:	 	  

	 	 	 	 

  

 C-3Amendment No. 1 to Loan and Security Agreement

 Exhibit 4.7 
  

AMENDMENT NO. 1 
 TO

 LOAN AND SECURITY AGREEMENT 
  
 THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into this 4th day of May, 2005, by and between STRATEX
NETWORKS, INC., a Delaware corporation (“Borrower”), and SILICON VALLEY BANK (“Bank”). Capitalized
terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below). 
  
 RECITALS 
  
 A. Borrower and Bank have entered into that certain Amended and Restated Loan and Security Agreement dated as of January 21, 2004 (the
“Loan Agreement”), pursuant to which Bank agreed to extend and make available to Borrower certain advances of money. 
  
 B. Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this Amendment, Bank is willing
to amend the Loan Agreement as of April 30, 2005. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in
consideration of the foregoing Recitals and intending to be legally bound, the parties hereto agree as follows: 
  
 1. AMENDMENTS TO LOAN AGREEMENT. 
  
 1.1 Section 2.1.5 (Term Loan). A new
Section 2.1.5(d) is hereby added as follows: 
  
 “(d) Borrower shall maintain at all times a Borrowing Base in an amount equal to not less than 50% of the then outstanding Term Advances.” 
  

1.2 Section 6.2 (Financial Statements, Reports, Certificates). A new Section 6.2(c) is hereby added as follows:

  
 “(c) Borrower shall allow Bank to audit
the Collateral at Borrower’s reasonable expense, with such audits to be conducted no more often than every six (6) months unless an Event of Default has occurred and is continuing.” 
  
 1.3 Section 6.2 (Financial Statements, Reports,
Certificates). Section 6.2(a) is hereby amended by inserting the following at the end of clause (ii) in the fourth line thereof: “, and agings of accounts payable and accounts receivable, international and domestic, sorted by due
date”. 
  
 1.4 Section 6.6
(Depository Accounts). Section 6.6 is hereby amended by adding the following to the end of the section: “All of Borrower’s day to day banking accounts 

 
and primary operating accounts must be maintained with Bank not later than September 30, 2005.” 
  
 1.5 Section 6.7 (Financial Covenants). Section
6.7(b) is hereby amended to read in its entirety as follows: 
  
 “Liquidity Coverage. A ratio of (1) unrestricted cash and Cash Equivalents plus (i) short-term, marketable securities of Borrower, minus (ii) outstanding Cash Management Services, and
minus (iii) the FX Reserve divided by (2) the aggregate amount of the Obligations, of not less than 1.00 to 1.00 as measured at the last day of each calendar month that is not also a quarter end, and not less than 1.25 to 1.00 as
measured at the last day of each quarter.” 
  
 1.6 Section 6.8 (Further Assurances). Section 6.8 is hereby amended to read in its entirety as follows: 
  
 “Borrower will execute any further instruments and take further action as Bank reasonably requests to effect the purposes of this
Agreement, including executing and delivering and causing any applicable depositary bank, securities intermediary or commodity intermediary at or with which any Deposit Account, Securities Account, or Commodity Account (collectively, the
“Collateral Accounts”) is maintained to execute and deliver a Control Agreement with respect to such Collateral Accounts as is necessary for Bank to obtain control (within the meaning of the applicable provision of the Code)
over such Collateral Accounts that hold, in the aggregate, assets valued in an amount equal to 50% times the outstanding Obligations.” 
  
 1.7 Section 13 (Definitions). A new definition of “Borrowing Base” is inserted in its proper alphabetical order as
follows: 
  
 “Borrowing
Base” consists of Accounts arising in the ordinary course of Borrower’s business, as determined by Bank on a case-by-case basis, and may include 75% of all Accounts of United States and Canadian account debtors due within 90 days
(two years if under an accepted invoice or documented promissory note); 50% of all Accounts of foreign account debtors due within 150 days (two years if under an accepted invoice or documented promissory note); and 100% of Accounts supported by
letters of credit. 
  
 1.8 Section 13
(Definitions). The definition of “Committed Revolving Line” is hereby amended to read in its entirety as follows: “is $35,000,000 minus the aggregate outstanding principal amount of all Term Advances.” 
  
 1.9 Section 13 (Definitions). The definition
of “Revolving Maturity Date” is hereby amended to read in its entirety as follows: “is April 30, 2007.” 
  
 1.10 Section 13 (Definitions). The definition of “Tangible Net Worth” is amended and restated in its entirety as
follows: 
  
 “Tangible Net
Worth” is, on any date, the Consolidated Total Assets of Borrower and its Subsidiaries minus (a) any amounts attributable to reserves not already deducted from assets; (b) restricted cash; and (c) Consolidated Total Liabilities
and plus (x) non-cash related restructuring charges with respect to vacated building lease obligations occurring after December 1, 2003; and (y) as of the quarter ending March 31, 2005, non-cash reserves of $2,500,000. 

 2. COMPLIANCE CERTIFICATE. A new form of Compliance
Certificate, attached hereto as Exhibit A, hereby replaces the existing form attached as Exhibit D to the Loan Agreement. 
  
 3. BORROWER’S REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants that: 
  
 (a)
immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing; 
  
 (b) Borrower has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the
Loan Agreement, as amended by this Amendment; 
  
 (c) the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to Bank on the Closing Date remain true, accurate and complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect; 
  
 (d) the execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized by all necessary corporate action on
the part of Borrower; and 
  
 (e) this
Amendment has been duly executed and delivered by the Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights. 
  
 4. LIMITATION. The amendments set forth in this Amendment shall be limited precisely as written and shall not
be deemed (a) to be a waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Bank may now have or may have in the future under
or in connection with the Loan Agreement or any instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to
hereby, or to any waiver of any of the provisions thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect. 
  
 5. EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of all the following conditions
precedent: 
  
 5.1 Amendment.
Borrower and Bank shall have duly executed and delivered this Amendment to Bank. 

 5.2 Payment of Amendment Fee. Borrower shall have paid Bank an amendment
fee equal to $60,000.00. 
  
 5.3
Payment of Bank Expenses. Borrower shall have paid all Bank Expenses (including all reasonable attorneys’ fees and reasonable expenses) incurred through the date of this Amendment. 
  
 6. COUNTERPARTS. This Amendment
may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of
this Amendment. 
  
 7.
INTEGRATION. This Amendment and any documents executed in connection herewith or pursuant hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all
prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Amendment; except that any
financing statements or other agreements or instruments filed by Bank with respect to Borrower shall remain in full force and effect. 
  
 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAW. 
  
 [Signature page follows.] 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first
written above. 
  

									
	BORROWER:	 	 	 	 STRATEX NETWORKS, INC.
 a Delaware corporation

					
	 	 	 	 	 	 	 	 	/S/    CARL A. THOMSEN
	 	 	 	 	 	 	 Printed Name:
	 	 Carl A. Thomsen

	 	 	 	 	 	 	 Title:
	 	 Senior Vice President

	 	 	 	 	 	 	 	 	 Chief Financial Officer and Secretary

					
	 	 	 	 	 	 	 	 	/S/    CAROL A. GOUDEY
	 	 	 	 	 	 	 Printed Name:
	 	 Carol A. Goudey

	 	 	 	 	 	 	 Title:
	 	 Corporate Treasurer and Assistant Secretary

			
	BANK:	 	 	 	SILICON VALLEY BANK
					
	 	 	 	 	 	 	 	 	/S/    TOM SMITH
	 	 	 	 	 	 	 Printed Name:
	 	 Tom Smith

	 	 	 	 	 	 	 Title:
	 	 Senior Relationship Manager

  
 EXHIBIT A

  
 COMPLIANCE CERTIFICATE 
  

					
	 TO:
	  	 SILICON VALLEY BANK
 3003 Tasman Drive
 Santa Clara, CA 95054
	  	 Date:

			
	 FROM:
	  	STRATEX NETWORKS, INC.	  	 

  
 The undersigned Responsible Officer of
Stratex Networks, Inc. (“Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement dated January 21, 2004, between Borrower and Bank (as amended, the “Agreement”), (i)
Borrower is in complete compliance for the period ending                      with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the undersigned Responsible Officer certifies that Borrower (x) has complied with Section 6.4 of the Agreement with respect to
payment of taxes of Borrower and its Subsidiaries and (y) does not have any legal actions pending or threatened against Borrower or any of its Subsidiaries which Borrower has not previously notified in writing to Bank pursuant to Section 6.2 of
the Agreement. Attached are the required financial reports and calculation of financial covenants supporting the certification. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. 
  
 Please indicate compliance status by circling Yes/No under “Complies” or “Occurrences” columns. 
  

					
	 Reporting Covenant

	  	 Required

	  	Complies

	 A/R and A/P agings
	  	Monthly within 30 days	  	Yes        No
	 Form 10-Q + CC
	  	Quarterly within 5 days of filing with SEC	  	Yes        No
	 Form 10-K + CC
	  	Annually within 5 days of filing with SEC	  	Yes        No
			
	 	  	 	  	Occurrences*

	 IP Infringements
	  	Prompt	  	Yes        No
	 Material Litigation
	  	Prompt	  	Yes        No

  

								
	 Financial Covenant

	  	 Required

	  	Actual

	  	Complies

	 Minimum Tangible Net Worth
 (Quarterly)
	  	$60,000,000 plus 25% of net income, as determined in accordance with GAAP, for such quarter and all preceding quarters since December 31, 2003 (exclusive of losses)	  	$	            	  	Yes        No
				
	 Minimum Liquidity Ratio
 (Monthly)
	  	1.00:1.00	  	 	        :1.00	  	Yes        No
				
	 (Quarterly)
	  	1.25:1.00	  	 	 	  	 

  

	*	If yes, attached is a summary of the Material Litigation or IP Infringements not previously disclosed by Borrower. 

									
	 Sincerely,
	 	 	 	BANK USE ONLY
				
	Stratex Networks, Inc.	 	 	 	Received by:	 	 
	 By:
	 	 	 	 	 	 	 	AUTHORIZED SIGNER
	 Name:
	 	 	 	 	 	 Date:
	 	 
	 Title:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 Verified:
	 	 
	 	 	 	 	 	 	 	 	AUTHORIZED SIGNER
	 	 	 	 	 	 	 Date:
	 	 
				
	 	 	 	 	 	 	 Compliance Status: Yes    No

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