Document:

Exhibit 10.5

 

CONFIDENTIAL
PROVISIONS REDACTED

 

ASSET
PURCHASE AGREEMENT

 

BY AND BETWEEN

 

PDL
BIOPHARMA, INC.,

a Delaware
corporation

 

and

 

EKR
THERAPEUTICS, INC.,

a Delaware
corporation

 

Dated as of February 4,
2008

 

CONFIDENTIAL TREATMENT REQUESTED

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1 DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  “Accounts Payable”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  “Accounts Receivable”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.3

  	
  “Affiliate”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.4

  	
  “Agreement”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.5

  	
  “Assets”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.6

  	
  “Assumed Contracts”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.7

  	
  “Assumed Liabilities”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.8

  	
  “Books and Records”

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.9

  	
  “Business”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.10

  	
  “Business Employee”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.11

  	
  “Buyer”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.12

  	
  “Buyer Indemnitee(s)”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.13

  	
  “Cardene”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.14

  	
  “Cardene Drug Product”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.15

  	
  “Cardene IV”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.16

  	
  “Cardene Packaged Product”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.17

  	
  “Cardene [****]* Product”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.18

  	
  “Cardene Product Inventory”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.19

  	
  “Cardene SR”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.20

  	
  “Claim”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.21

  	
  “Clinical Data”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.22

  	
  “Clinical Trial”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.23

  	
  “Clinical Trial Materials”

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.24

  	
  “Clinical Trial Study Reports”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.25

  	
  “Closing”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.26

  	
  “Closing Date”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.27

  	
  “Confidential Information”

  	
  3

  	
   

  
							

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.28

  	
  “Confidentiality Agreement”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.29

  	
  “Copyrights”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.30

  	
  “[****]*”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.31

  	
  “Customer Orders”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.32

  	
  “CV Products”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.33

  	
  “Drug Products”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.34

  	
  “Effective Date”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.35

  	
  “Employee Benefit Plans”

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.36

  	
  “Escrow Agent”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.37

  	
  “Escrow Agreement”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.38

  	
  “Escrow Amount”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.39

  	
  “Excluded Assets”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.40

  	
  “Excluded Liabilities”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.41

  	
  “FDA”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.42

  	
  “FD&C Act”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.43

  	
  “GAAP”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.44

  	
  “Governmental Entity”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.45

  	
  “HSR”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.46

  	
  “HSR Filings”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.47

  	
  “IND”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.48

  	
  “Initial FDA Approval”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.49

  	
  “Initial Purchase Price”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.50

  	
  “Intellectual Property

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.51

  	
  “Knowledge”

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.52

  	
  “Liabilities”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.53

  	
  “Licensed IP Rights”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.54

  	
  “Litigation Cooperation Agreement”

  	
  5

  	
   

  
							

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.55

  	
  “Marketed Products”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.56

  	
  “Marketing and Promotional Documents”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.57

  	
  “Material Adverse Change” and “Material Adverse
  Effect”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.58

  	
  “Milestone and Revenue Payments”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.59

  	
  “Milestone Payments”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.60

  	
  “Net Sales”

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.61

  	
  “Net Sales Adjustments”

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.62

  	
  “NDA”

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.63

  	
  “Non Product-Specific Manufacturing Information”

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.64

  	
  “Packaging Inventory”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.65

  	
  “Packaged Products”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.66

  	
  “Patents”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.67

  	
  “[****]*”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.68

  	
  “Product Inventory”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.69

  	
  “Product-Specific Manufacturing Information”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.70

  	
  “Product Specifications”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.71

  	
  “Purchase Price”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.72

  	
  “Raw Materials and WIP”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.73

  	
  “Registrations”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.74

  	
  “Research and Development Materials”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.75

  	
  “Retavase”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.76

  	
  “Retavase Drug Product”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.77

  	
  “Retavase Packaged Product”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.78

  	
  “Retavase Product Inventory”

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.79

  	
  “Revenue Payments”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.80

  	
  “SEC”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.81

  	
  “Seller”

  	
  8

  	
   

  
							

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

iii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.82

  	
  “Seller Indemnitees”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.83

  	
  “[****]*”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.84

  	
  “Sun Litigation”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.85

  	
  “Survival Date”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.86

  	
  “Tangible Assets”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.87

  	
  “Tax” and “Taxes”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.88

  	
  “Territory”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.89

  	
  “Third Party Consents”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.90

  	
  “Trade Secrets”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.91

  	
  “Trademarks”

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.92

  	
  “Trademark Registrations”

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.93

  	
  “Transition Services Agreement”

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.94

  	
  “Ularitide”

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.95

  	
  “Worldwide Safety Reports”

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 TRANSFER OF ASSETS;
  LICENSE AND SUBLICENSE

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Purchase and Sale of Assets

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  Patents

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  Licensed IP Rights

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  Trademark Registrations

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
  Copyrights

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
  Registrations

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)

  	
  Product-Specific Manufacturing Information

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (g)

  	
  Non Product-Specific Manufacturing Information

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (h)

  	
  Research and Development Materials

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Marketing and Promotional Documents

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (j)

  	
  Worldwide Safety Reports

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (k)

  	
  Clinical Data

  	
  11

  	
   

  
								

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

iv

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (l)

  	
  Tangible Assets

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (m)

  	
  Domain Names

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (n)

  	
  Product Inventory

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (o)

  	
  Raw Materials and WIP

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (p)

  	
  Assumed Contracts

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (q)

  	
  Clinical Trial Materials

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (r)

  	
  Clinical Trial Study Reports

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (s)

  	
  Sun Litigation

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (t)

  	
  Books and Records

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (u)

  	
  Customer Orders

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (v)

  	
  Packaging Inventory

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (w)

  	
  Other Intellectual Property

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Excluded Assets

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Assumed Liabilities

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Excluded Liabilities

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Risk of Loss

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  Taxes

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Third-Party Consents

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 CONSIDERATION

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Purchase Price

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Method of Payment

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Revenue Payments; Reports

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Accounting

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Records; Audits

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  Late Payments

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.7

  	
  Allocation of Purchase Price

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 CLOSING

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Closing

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Actions at Closing

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  Deliveries by Seller at Closing

  	
  20

  	
   

  
								

 

CONFIDENTIAL TREATMENT REQUESTED

 

v

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  Deliveries by Buyer at Closing

  	
  21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 EMPLOYMENT MATTERS

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Employees

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 REPRESENTATIONS AND
  WARRANTIES OF SELLER

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Organization and Authority

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  No Violation or Conflict

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Consents and Approvals

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  Assumed Contracts

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
  Title to Assets

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.6

  	
  Intellectual Property

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.7

  	
  Regulatory Status of Marketed Products

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.8

  	
  Product Net Sales

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.9

  	
  Violations of Law

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.10

  	
  Litigation

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.11

  	
  Employees

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.12

  	
  Taxes

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.13

  	
  Customers and Suppliers

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.14

  	
  Inventory; Raw Materials and WIP

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.15

  	
  Clinical Trials

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.16

  	
  Absence of Change

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.17

  	
  No Undisclosed Liabilities

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.18

  	
  Sufficiency

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.19

  	
  Brokers and Finders

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.20

  	
  No Implied Warranty

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 REPRESENTATIONS AND
  WARRANTIES OF BUYER

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Organization and Authority

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  No Conflict or Violation

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Consents and Approvals

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  Cash Resources

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5

  	
  Litigation

  	
  32

  	
   

  
								

 

CONFIDENTIAL
TREATMENT REQUESTED

 

vi

 

	
   

  	
   

  	
   

  	
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  7.6

  	
  Brokers and Finders

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.7

  	
  Buyer Due Diligence

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 PRE-CLOSING COVENANTS

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Governmental Filings

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Conduct of Business

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  No Solicitation

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Access

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  [****]*

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Payment of Certain Expenses

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Transition Services Agreement

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 CONDITIONS TO CLOSING

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Conditions to Obligations of Buyer

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Conditions to Obligations of Seller

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 POST-CLOSING
  COVENANTS

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Further Assurances

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Transfer of Registrations; Interim Responsibility

  	
  39

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Communication With Agencies

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Adverse Experience Reporting

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.5

  	
  Medical Inquiries

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.6

  	
  Non-Use of Trademarks

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.7

  	
  Documents

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.8

  	
  Governmental Inspections

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.9

  	
  Intellectual Property Maintenance

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.10

  	
  Insurance

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.11

  	
  Federal Supply Schedule

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.12

  	
  Promotion, Marketing and Labeling

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.13

  	
  Payments from Third Parties

  	
  43

  	
   

  
							

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

vii

 

	
   

  	
   

  	
   

  	
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  10.14

  	
  Product Returns, Chargebacks and Rebates

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.15

  	
  Bulk Transfer Laws

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.16

  	
  Non-Competition

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11 CONFIDENTIALITY

  	
  45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Confidentiality

  	
  45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.2

  	
  Publicity

  	
  46

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12 TERM AND TERMINATION

  	
  46

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Termination

  	
  46

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.2

  	
  Effect of Termination

  	
  47

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.3

  	
  Effectiveness of Termination

  	
  47

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13 INDEMNIFICATION

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Survivability of Representations and Warranties

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Indemnification by Buyer

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Indemnification by Seller

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Claims

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  Assertion of Claims

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.6

  	
  Payment of Claims; Limitation on Indemnification

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Limitation; Exclusivity

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14 MISCELLANEOUS

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  Survival of Covenants and Agreements

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.2

  	
  No Third Party Beneficiaries

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.3

  	
  Force Majeure

  	
  50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.4

  	
  Governing Law; Jurisdiction; Dispute Resolution and
  Arbitration

  	
  50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.5

  	
  Severability

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.6

  	
  Entire Agreement

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.7

  	
  Amendment

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.8

  	
  Notices

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.9

  	
  Assignment

  	
  52

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.10

  	
  No Agency

  	
  52

  	
   

  
							

 

CONFIDENTIAL TREATMENT
REQUESTED

 

viii

 

	
   

  	
   

  	
   

  	
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  14.11

  	
  Construction

  	
  52

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.12

  	
  Payment of Expenses

  	
  53

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.13

  	
  Counterparts

  	
  53

  	
   

  
							

 

CONFIDENTIAL
TREATMENT REQUESTED

 

ix

 

LIST OF
EXHIBITS, ATTACHMENT AND SCHEDULES

 

EXHIBITS

 

	
  Exhibit A

  	
  General Assignment and Bill of Sale

  
	
  Exhibit B

  	
  Assignment and Assumption Agreement

  
	
  Exhibit C

  	
  Patent Assignment Agreement

  
	
  Exhibit D

  	
  Trademark Assignment Agreement

  
	
  Exhibit E

  	
  Domain Name Assignment Agreement

  
	
  Exhibit F

  	
  Transition Services Agreement

  
	
  Exhibit G

  	
  Third Party Assignment of Assumed Contracts

  
	
  Exhibit H

  	
  Escrow Agreement

  
	
  Exhibit I

  	
  Litigation Cooperation Agreement

  
	
  Exhibit J

  	
  Form of Third Party Notification
  Letter

  

 

ATTACHMENTS

 

	
  Attachment 1.70(a)

  	
  Product Specifications for bulk active
  pharmaceutical ingredients for each CV Product

  
	
  Attachment 1.70(b)

  	
  Product Specifications for Drug Products

  
	
  Attachment 2.1(a)

  	
  List of Patents

  
	
  Attachment 2.1(b)

  	
  List of Licensed IP Rights

  
	
  Attachment 2.1(c)

  	
  List of Trademark Registrations

  
	
  Attachment 2.1(e)

  	
  List of Registrations

  
	
  Attachment 2.1(l)

  	
  List of Tangible Assets

  
	
  Attachment 2.1(m)

  	
  List of Domain Names

  
	
  Attachment 2.1(p)

  	
  List of Assumed Contracts

  
	
  Attachment 4.2(a)

  	
  List of Third Party Consents

  
	
  Attachment 5.1(a)

  	
  Business Employees

  

 

DISCLOSURE SCHEDULES

 

CONFIDENTIAL
TREATMENT REQUESTED

 

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase
Agreement (this “Agreement”) is entered into as of February 4, 2008
(the “Effective Date”) between PDL BioPharma, Inc., a Delaware
corporation (“Seller”) and EKR Therapeutics, Inc., a Delaware
corporation (“Buyer”).

 

RECITALS

 

A.            Seller is engaged in the business
(the “Business”) of developing, selling, marketing and supporting its
Cardene IV®, Cardene SR®, Retavase® and
Ularitide products (the “CV Products”).

 

B.            Seller desires to sell, transfer and
assign to Buyer, and Buyer wishes to acquire, all right, title and interest in
and to the CV Products and certain assets related to the operation of the
Business, in exchange for consideration consisting of cash and the assumption
of certain Liabilities related to the Business, pursuant to the terms and
conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties to this Agreement agree
as follows:

 

ARTICLE
1

 

DEFINITIONS

 

1.1           “Accounts Payable”
shall mean all obligations of Seller or any of its Affiliates with respect to
accounts payable and notes payable, including without limitation, those created
or arising in respect of the Business.

 

1.2           “Accounts
Receivable” shall mean all of Seller’s trade accounts receivable, and all
notes receivable or evidences of indebtedness payable to Seller created or
arising in respect of the sale of the Marketed Products.

 

1.3           “Affiliate”
with respect to any party shall mean any entity that is directly or indirectly
controlling, controlled by or under common control with such party.

 

1.4           “Agreement”
shall have the meaning given in the Preamble.

 

1.5           “Assets”
shall have the meaning given in Article 2.

 

1.6           “Assumed
Contracts” shall have the meaning given in Section 2.1(p).

 

1.7           “Assumed
Liabilities” shall have the meaning given in Section 2.3.

 

1.8           “Books and
Records” shall mean all pricing lists, customer correspondence (excluding
e-mail and other electronic correspondence not readily available in hard copy)
and 

 

CONFIDENTIAL
TREATMENT REQUESTED

 

1

 

other books and records, in any form, used solely and specifically with
respect to the CV Products by Seller or any of Seller’s Affiliates.

 

1.9           “Business”
shall have the meaning given in the Recitals.

 

1.10         “Business Employee”
shall have the meaning given in Section 5.1(a).

 

1.11         “Buyer” shall
have the meaning given in the Preamble.

 

1.12         “Buyer
Indemnitee(s)” shall have the meaning given in Section 13.3.

 

1.13         “Cardene”
shall mean Cardene IV and Cardene SR.

 

1.14         “Cardene Drug
Product” shall mean labeled or unlabelled vials containing the active
pharmaceutical ingredient nicardipine hydrochloride.

 

1.15         “Cardene IV”
shall mean each presentation of any pharmaceutical preparation (including
formulation changes and production intermediates) containing the pharmaceutical
product known as “Cardene IV” containing the active ingredient nicardipine
hydrochloride, whether registered, marketed or in development by Seller, as of
the Closing Date.

 

1.16         “Cardene Packaged
Product” shall mean Cardene in the Product Inventory purchased by Buyer
hereunder that is packaged and labeled for sale to the end user.

 

1.17         “Cardene [****]* Product”
shall mean any formulation of Cardene IV [****]*.

 

1.18         “Cardene Product
Inventory” shall mean all inventory owned by Seller or its Affiliates of
bulk active pharmaceutical ingredient nicardipine hydrochloride, Cardene
Packaged Product and Cardene Drug Product, in existence as of the Closing.

 

1.19         “Cardene SR”
shall mean each presentation of any pharmaceutical preparation (including
formulation changes and production intermediates) containing the pharmaceutical
product known as “Cardene SR” containing the active ingredient nicardipine
hydrochloride, whether registered, marketed or in development by Seller, as of
the Closing Date.

 

1.20         “Claim” shall
have the meaning given in Section 13.4.

 

1.21         “Clinical Data”
shall have the meaning given in Section 2.1(k).

 

1.22         “Clinical Trial”
shall mean a clinical trial conducted by or on behalf of Seller or its
Affiliates, or pursuant to any Assumed Contract, in each case in which the
product Ularitide is administered to a human.

 

1.23         “Clinical Trial
Materials” shall mean the product Ularitide and the placebo for this
product manufactured by or on behalf of Seller or its Affiliates for use in
preclinical studies 

 

* Certain information on this page has been omitted and filed
separately with the Sec. Confidential treatment has been requested with respect
to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

2

 

or Clinical Trials, whether in bulk, formulated or finished form and
whether in existence on the Effective Date or manufactured between the
Effective Date and Closing Date.

 

1.24         “Clinical Trial
Study Reports” shall mean all reports or summaries of all data, records and
documents resulting from the Clinical Trials for the product Ularitide.

 

1.25         “Closing”
shall have the meaning given in Section 4.1.

 

1.26         “Closing Date”
shall have the meaning given in Section 4.1.

 

1.27         “Confidential
Information” shall have the meaning ascribed to it in the Confidentiality
Agreement.

 

1.28         “Confidentiality
Agreement” shall mean that certain Mutual Confidentiality Agreement between
Buyer and Seller dated August 28, 2007.

 

1.29         “Copyrights”
shall have the meaning set forth in Section 2.1(d).

 

1.30         “[****]*” shall mean
product returns, charge-backs, rebates or Medicaid, Medicare or other
reimbursements, or similar claims, with respect to [****]*sold by Seller or its
Affiliates for which [****]*.

 

1.31         “Customer Orders”
shall mean orders for Packaged Product from customers of Seller or any of
Seller’s Affiliates.

 

1.32         “CV Products”
shall have the meaning given in the Recitals.

 

1.33         “Drug Products”
shall mean Cardene Drug Product and Retavase Drug Product.

 

1.34         “Effective Date”
shall mean the date first set forth in the opening paragraph of this Agreement.

 

1.35         “Employee Benefit
Plans” shall mean any employee benefit plan, program, policy, practices,
agreement or other arrangement providing benefits to any current or former
employee, officer or director of Seller or its Affiliates or any beneficiary or
dependent thereof that is sponsored or maintained by Seller or its Affiliates
or to which Seller or its Affiliates contributes or is obligated to contribute,
whether or not written, including without limitation any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA, any
employee pension benefit plan within the meaning of Section 3(2) of
ERISA (whether or not such plan is subject to ERISA) and any written
employment, severance, retention, termination, change in control, consulting,
retirement, bonus or other incentive compensation, stock purchase, stock
option, stock award or other equity-based compensation, leave of absence,
lay-off, cafeteria, health, accident, disability, workman’s compensation or
other insurance, vacation or other employee benefit agreement, plan or policy
(other than any governmental program), and any 

 

* Certain information on this page has been omitted and filed
separately with the SEC. Confidential treatment has been requested with respect
to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

3

 

related trust, as to which Seller has or may have any obligation or
liability, contingent or otherwise.

 

1.36         “Escrow Agent”
shall have the meaning set forth in Section 3.2.

 

1.37         “Escrow Agreement”
shall have the meaning set forth in Section 3.2.

 

1.38         “Escrow Amount”
shall have the meaning set forth in Section 3.1(c).

 

1.39         “Excluded Assets”
shall have the meaning given in Section 2.2.

 

1.40         “Excluded
Liabilities” shall have the meaning given in Section 2.4.

 

1.41         “FDA” shall
mean the United States Food and Drug Administration, or any successor agency or
entity thereto that may be established hereafter.

 

1.42         “FD&C Act”
shall mean the U.S. Federal Food, Drug and Cosmetics Act, 21 USC § 321 et
seq, as amended.

 

1.43         “GAAP” shall
mean the United States generally accepted accounting principles in effect from
time to time, consistently applied.

 

1.44         “Governmental
Entity” shall mean any court, tribunal, arbitrator, authority, agency,
commission, regulatory, official or other instrumentality of the government of
the United States or of any foreign country, any state or any political
subdivision of any such government (whether state, provincial, county, city,
municipal or otherwise).

 

1.45         “HSR” shall
mean the United States Hart-Scott-Rodino Antitrust Improvements Act of l976, as
amended, and related rules.

 

1.46         “HSR Filings”
shall have the meaning given in Section 8.1.

 

1.47         “IND” shall
mean, with respect to each CV Product, the investigational new drug application
identified on Attachment 2.1(e) hereto.

 

1.48         “Initial FDA
Approval” shall mean the first issuance by the FDA of a written approval
that [****]*.

 

1.49         “Initial Purchase
Price” shall have the meaning given in Section 3.1(a).

 

1.50         “Intellectual
Property shall mean (i) Patents; (ii) Licensed IP Rights; (iii) Trademarks
and Trademark Registrations; (iv) Copyrights; and (v) Trade Secrets.

 

1.51         “Knowledge” shall
mean, whenever any representation or warranty is made by Seller or Buyer “to
the Knowledge” of the Seller or Buyer, (i) the actual knowledge of the 

 

* Certain information on this page has been omitted and filed
separately with the SEC. Confidential treatment has been requested with respect
to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

4

 

officers of the Seller or Buyer, respectively, and (ii) the
knowledge that any such person referenced in clause (i) hereof, as a
prudent business person, would have obtained in the usual course of the
performance of his or her professional responsibilities to such party.

 

1.52         “Liabilities”
shall mean liabilities of any kind or nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown, liquidated or unliquidated,
including but not limited to any liabilities for claims of product liability,
personal injury or death, liability in tort or contract (including unripened
liabilities due to past actions or sales), indebtedness, and any FDA or other
Governmental Entity action or notification, and all costs and expenses
(including reasonable attorneys’ fees), incurred in connection with the defense
of any such claims.

 

1.53         “Licensed IP
Rights” shall have the meaning given in Section 2.1(b).

 

1.54         “Litigation
Cooperation Agreement” shall mean the agreement between Buyer and Seller,
substantially in the form attached hereto as Exhibit I, pursuant to
which Buyer assumes control of all aspects of the Sun Litigation, Seller agrees
to assist Buyer as required, at Buyer’s expense, in such Sun Litigation, and
Buyer agrees to indemnify Seller with respect to Seller’s post-Closing
assistance in such litigation.

 

1.55         “Marketed Products”
shall mean Cardene IV, Cardene SR and Retavase.

 

1.56         “Marketing and
Promotional Documents” shall have the meaning given in Section 2.1(i).

 

1.57         “Material Adverse
Change” and “Material Adverse Effect” shall mean any event or situation
that has a material adverse change or effect, respectively, on the operations,
assets, Liabilities, results of operations, cash flows or financial condition,
or relations with material customers or material suppliers, of the Business,
taken as a whole, other than any such change or effect resulting from or
arising in connection with (i) [****]*.

 

1.58         “Milestone and
Revenue Payments” shall have the meaning given in Section 3.1(b).

 

1.59         “Milestone
Payments” shall have the meaning given in Section 3.1(b).

 

1.60         “Net Sales”
shall mean, the gross invoiced sales amount of the Cardene [****]* Product
or any Ularitide product, as applicable, [****]*, and in each case less the
following items (“Net Sales Adjustments”) as applicable to the Cardene
[****]* Product or the Ularitide product, as applicable, to the extent such
items are reasonable and customary under industry practices and [****]*and are
consistent in application with [****]*:

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

5

 

(a)           actual
credits or allowances granted upon returns, rejections or recalls (due to
spoilage, damage, expiration of useful life or otherwise), retroactive price
reductions, or billing corrections during the accounting period in which such
sales are recorded;

 

(b)           invoiced
freight, postage, shipping and insurance, handling, export fees or tariffs,
customs expenses and other transportation costs actually incurred by Buyer;

 

(c)           credits
or allowances actually granted including, without limitation, quantity, cash
and other trade discounts (collectively, “Credits”), provided, however,
Credits shall not include any credit, allowance or discount given with respect
to the sale of the [****]*;

 

(d)           taxes
(including, without limitation, sales, value-added or excise taxes, but
excluding income taxes imposed on the income of Buyer or its Affiliates and
withholding taxes imposed on amounts payable to Buyer or its Affiliates),
tariffs, customs duties, surcharges and other governmental charges incurred in
connection with the production, sale, transportation, delivery, use,
exportation or importation of CV Products that are incurred at time of sale or
are directly related to the sale;

 

(e)           discounts,
refunds, rebates, charge backs, fees, credits or allowances (including, without
limitation, amounts incurred in connection with government-mandated rebate and
discount programs, third party rebates and charge backs, hospital buying
group/group purchasing organization administration fees and managed care
organization rebates) actually deducted from payment of invoices by customers
or paid to customers during the accounting period in which such sales are
recorded, offset by any such amounts that had been deducted from invoices or
paid to customers in error and have been paid back to Buyer; and

 

(f)            distribution
fees and sales commissions to third parties, actually paid or incurred at the
time of sale and which effectively reduce the selling price,

 

all
in accordance with standard allocation procedures, allowance methodologies and
accounting methods consistently applied. 
For the avoidance of doubt, the transfer of any Cardene [****]* Product
by Buyer or its Affiliates to another Affiliate of Buyer for purposes of sale
to an independent third party shall not be considered a sale; in such cases,
Net Sales shall be determined based on the gross invoiced sales by such
Affiliate to an independent third party, less the Net Sales Adjustments allowed
under this Section.

 

1.61         “Net Sales
Adjustments” shall have the meaning given in Section 1.60.

 

1.62         “NDA” shall
mean, with respect to each CV Product, the new drug application identified on Attachment 2.1(e) hereto.

 

1.63         “Non
Product-Specific Manufacturing Information” shall have the meaning given in
Section 2.1(g).

 

* Certain information on this page has been omitted and filed
separately with the SEC. Confidential treatment has been requested with respect
to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

6

 

1.64         “Packaging
Inventory” shall have the meaning given in Section 2.1(v).

 

1.65         “Packaged Products”
shall mean Cardene Packaged Product and Retavase Packaged Product.

 

1.66         “Patents”
shall have the meaning given in Section 2.1(a).

 

1.67         “[****]* shall mean
the [****]*

 

1.68         “Product Inventory”
shall mean Cardene Product Inventory and Retavase Product Inventory.

 

1.69         “Product-Specific
Manufacturing Information” shall have the meaning given in Section 2.1(f).

 

1.70         “Product
Specifications” shall mean the specifications for bulk active
pharmaceutical ingredients for the respective Marketed Products, and for the
respective Drug Products, as set forth in Attachments 1.70(a) and (b),
respectively.

 

1.71         “Purchase Price”
shall have the meaning given in Section 3.1.

 

1.72         “Raw Materials and
WIP” shall mean all of the raw materials and work in progress owned by
Seller or its Affiliates for use in the manufacture of the CV Products, in
existence as of the Closing.

 

1.73         “Registrations”
shall have the meaning given in Section 2.1(e).

 

1.74         “Research and
Development Materials” shall have the meaning given in Section 2.1(h).

 

1.75         “Retavase”
shall mean each presentation of any pharmaceutical preparation (including
formulation changes and production intermediates) containing the active
pharmaceutical ingredient reteplase, whether registered, marketed or in
development by Seller or its Affiliates, as of the Closing Date.

 

1.76         “Retavase Drug
Product” shall mean labeled or unlabelled vials containing the active
pharmaceutical ingredient reteplase.

 

1.77         “Retavase Packaged
Product” shall mean Retavase in the Product Inventory purchased by Buyer
hereunder that is packaged and labeled for sale to the end user.

 

1.78         “Retavase Product
Inventory” shall mean all of the inventory owned by Seller or its
Affiliates of bulk active pharmaceutical ingredient reteplase, Retavase
Packaged Product and Retavase Drug Product, in existence as of the Closing.

 

* Certain information on this page has been omitted and filed
separately with the SEC. Confidential treatment has been requested with respect
to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

7

 

1.79         “Revenue Payments”
shall have the meaning given in Section 3.1(b).

 

1.80         “SEC” shall
mean the United States Securities and Exchange Commission.

 

1.81         “Seller” shall
have the meaning given in the Preamble.

 

1.82         “Seller
Indemnitees” shall have the meaning given in Section 13.2.

 

1.83         “[****]* shall mean
the [****]*.

 

1.84         “Sun Litigation”
shall mean all rights relating to the patent infringement lawsuit in the United
States District Court for the District of New Jersey (New Jersey Court) filed
by Seller against Sun Pharmaceutical Industries Ltd. (“Sun”) seeking,
among other things, to enjoin Sun’s infringement of Seller’s United States
Patent Number 5,164,405, titled “Nicardipine pharmaceutical composition for
parenteral administration” and to stay any sale of Sun’s Abbreviated New Drug
Application product until at least the expiration of such patent, a related
lawsuit filed by Seller in United States District Court for the Eastern
District of Michigan, and all other related litigation between Seller and Sun,
and any claims and counterclaims associated therewith.

 

1.85         “Survival Date”
shall have the meaning given in Section 13.1.

 

1.86         “Tangible Assets”
shall have the meaning given in Section 2.1(l).

 

1.87         “Tax” and “Taxes”
shall mean all present or future taxes, charges, fees, levies, or other
assessments including, without limitation, income, excise, property, value
added, real estate, sales, use, payroll, employment, unemployment, transfer,
social security, alternative, add-on minimum and franchise taxes imposed by any
federal, state, county, or local government, or a subdivision or agency
thereof.  Such term shall include any
interest, penalties, or additions payable in connection with such taxes,
charges, fees, levies, duties, or other assessments.

 

1.88         “Territory” (i) for
Cardene shall mean the United States of America and its possessions and
territories; (ii) for Retavase shall mean Canada and the United States of
America and its possessions and territories; and (iii) for Ularitide shall
mean worldwide.

 

1.89         “Third Party
Consents” shall have the meaning given in Section 6.4.

 

1.90         “Trade Secrets”
shall mean all technology, trade secrets and other confidential information,
know-how, proprietary processes, formulae, algorithms, models, and
methodologies that are related to the Business.

 

1.91         “Trademarks”
shall mean all trademarks, service marks, trade names, names, slogans,
taglines, logos, design marks, trade dress, product designs, and product
packaging, 

 

* Certain information on this page has been omitted and filed
separately with the SEC. Confidential treatment has been requested with respect
to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

8

 

including all applications for and registrations of the foregoing, and
including those at common law that are related to the CV Products.

 

1.92         “Trademark
Registrations” shall have the meaning given in Section 2.1(c).

 

1.93         “Transition
Services Agreement” shall mean the transition services agreement to be
entered into by Buyer and Seller, at the request of Buyer as contemplated in Section 8.7,
whereby Seller shall, for fees specified therein, provide to Buyer certain
services relating to the transition of the Business.

 

1.94         “Ularitide”
shall mean each presentation of any pharmaceutical preparation (including
formulation changes and production intermediates) containing the active
pharmaceutical ingredient urodilatin, whether registered, marketed or in
development by Seller or its Affiliates, as of the Closing Date.

 

1.95         “Worldwide Safety
Reports” shall have the meaning given in Section 2.1(j).

 

ARTICLE
2

 

TRANSFER OF ASSETS; LICENSE AND
SUBLICENSE

 

2.1           Purchase and Sale
of Assets.  Subject to the terms and
conditions of this Agreement, Seller shall sell, transfer, assign, convey,
deliver, license or sublicense, as specified below, to Buyer, or shall cause to
be sold, transferred, assigned, conveyed, delivered, licensed or sublicensed,
as specified below, to Buyer, and Buyer shall acquire all of Seller’s right,
title and interest in and to the properties and assets of Seller identified in
this Section 2.1 (collectively, the “Assets”).

 

(a)           Patents.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to the patent filings related to the CV Products listed in Attachment
2.1(a), and any patents of addition, re-examinations, reissues, extensions,
granted supplementary protection certifications, substitutions, confirmations,
registrations, revalidations, revisions, additions and the like, of or to said
patents and any and all divisionals, continuations and continuations-in-part, and
any patents issuing therefrom, as well as any patent applications related
thereto (collectively, the “Patents”). 
Seller hereby retains a royalty-free right and license, including the
right to sublicense, under the Patents, solely to the extent necessary for, and
solely for the purposes of, performing Seller’s obligations under this
Agreement and the Transition Services Agreement and only until the completion
of Seller’s obligations hereunder and thereunder.

 

(b)           Licensed IP
Rights.  Upon Closing, Seller shall
transfer, assign, convey and deliver, or shall cause to be sold, transferred,
assigned, conveyed and delivered to Buyer, all of Seller’s rights under all
patents, know-how and other intellectual property rights which Seller has a
right under contract to use and which are used in the Business and those
intellectual property rights contained in the license agreements included as
part of the Assumed Contracts or as otherwise set forth on Attachment 2.1(b),
but subject to any restrictions and obligations in 

 

CONFIDENTIAL
TREATMENT REQUESTED

 

9

 

such license agreements (the “Licensed IP Rights”).  Seller hereby retains a royalty-free right
and license under the Licensed IP Rights for use in the Business, solely to the
extent necessary for, and solely for the purposes of, performing Seller’s
obligations under this Agreement and the Transition Services Agreement, and
only until the completion of Seller’s obligations hereunder and thereunder.

 

(c)           Trademark Registrations.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to all Trademarks used in the Business and as set forth on Attachment
2.1(c), together with (i) all common law rights to the Trademarks, (ii) the
goodwill of the Business symbolized by the Trademarks, (iii) all causes of
actions, claims and demands or other rights for, or arising from any infringement,
dilution, unfair competition, or other violation, including past infringement,
dilution, unfair competition, or other violation, of the Trademarks, and (iii) all
rights corresponding thereto throughout the world (the “Trademark
Registrations”).

 

(d)           Copyrights.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to registered and unregistered copyrights, including all related
registrations, applications and common law rights, in any labels, product
marketing materials or other copyrighted works related to the CV Products (the
“Copyrights”).

 

(e)           Registrations.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to the regulatory files and approvals, registrations and governmental
authorizations, each NDA, each IND, compliance notices, licenses and permits,
and any applications to the FDA or the comparable foreign law or bodies in
effect or pending at the Closing Date, and all materials and information
relating to the FDA and other Governmental Entity approvals for the CV Products
as set forth on Attachment 2.1(e), and all information contained therein
(collectively, the “Registrations”).

 

(f)            Product-Specific
Manufacturing Information.  Upon
Closing, Seller shall sell, transfer, assign, convey and deliver, or shall
cause to be sold, transferred, assigned, conveyed and delivered to Buyer all of
Seller’s rights, title and interest in and to all of Seller’s manufacturing
information (the “Product-Specific Manufacturing Information”) used
solely and exclusively in the Business. 
Seller shall retain a non-exclusive license to use Product-Specific
Manufacturing Information, solely for purposes of fulfilling its obligations
under this Agreement and the Transition Services Agreement, and only until
completion of Seller’s obligations hereunder and thereunder.

 

(g)           Non
Product-Specific Manufacturing Information. 
Upon Closing, Seller shall grant, or shall cause to be granted to Buyer,
a perpetual, paid up, irrevocable, royalty-free, non-exclusive license, with
the right to sublicense, to use, only in the Business, any manufacturing
information that is used by Seller both in the Business and also in other
business activities of Seller (the “Non-Product Specific Manufacturing
Information”).  Seller shall retain a
non-exclusive license to use Non-Product-Specific Manufacturing Information in
other business activities of Seller.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

10

 

(h)           Research and Development Materials.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, (i) originals of all documents and
electronically stored information (excluding e-mails or other electronic
correspondence not readily available in hard copy) to the extent related to the
research and development of the CV Products that are owned or controlled by
Seller or its Affiliates and any of their respective agents, and
(ii) copies of all other documents and electronically stored information
(excluding e-mails or other electronic correspondence not readily available in
hard copy) to the extent related to the research and development of the CV
Products (the “Research and Development Materials”).  After Closing, Seller shall retain a right to
use the Research and Development Materials, solely for purposes of fulfilling
its obligations under this Agreement and the Transition Services Agreement, and
only until completion of Seller’s obligations hereunder and thereunder.

 

(i)            Marketing and Promotional
Documents.  Upon Closing, Seller
shall sell, transfer, assign, convey and deliver, or shall cause to be sold,
transferred, assigned, conveyed and delivered to Buyer, all marketing and
promotional documents and information (including electronic information, but
excluding e-mails or other electronic correspondence not readily available in
hard copy) related to the CV Products existing on the Closing Date, owned by
Seller or its Affiliates, such as customer lists, marketing and promotional
plans, documents and materials, material contained on Seller’s internet sites, field force training manuals and materials, and the like,
solely to the extent relating exclusively to the Business (the “Marketing
and Promotional Documents”).  Buyer’s
use of the Marketing and Promotional Documents shall be subject to Section 10.12.

 

(j)            Worldwide Safety Reports.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all worldwide safety reports in the possession
or control of Seller or its Affiliates with respect to the CV Products in
existence as of the Closing (the “Worldwide Safety Reports”).

 

(k)           Clinical Data.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all clinical data related to the CV Products
and which is contained in Seller’s databases or otherwise in Seller’s
possession or control (the “Clinical Data”).

 

(l)            Tangible Assets.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, certain tangible assets, as listed in Attachment
2.1(l) (the “Tangible Assets”).

 

(m)          Domain Names.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to the domain names used primarily in the Business and listed in Attachment
2.1(m) (collectively, the “Domain
Names”).

 

(n)           Product Inventory.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, the Product Inventory.

 

CONFIDENTIAL TREATMENT REQUESTED

 

11

 

(o)           Raw Materials and WIP.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, the Raw Materials and WIP.

 

(p)           Assumed Contracts.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all rights and benefits of Seller in existence
as of the Closing Date or arising after the Closing Date under the contracts
listed in Attachment 2.1(p) (the “Assumed Contracts”),
including any rights to Intellectual Property. 
The Assumed Contracts shall be deemed to include all purchase orders and
change orders related thereto.

 

(q)           Clinical Trial Materials.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to the Clinical Trial Materials.

 

(r)            Clinical Trial Study Reports.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s rights, title and interest in
and to the Clinical Trial Study Reports.

 

(s)           Sun Litigation.  Upon Closing, Seller shall sell, transfer, assign,
convey and deliver, or shall cause to be sold, transferred, assigned, conveyed
and delivered to Buyer, all of Seller’s rights relating to the Sun Litigation,
including, without limitation, all documents and information and other things
gathered or produced by any party in relation thereto.

 

(t)            Books and Records.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver, or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer all Books and Records.

 

(u)           Customer Orders.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all of Seller’s right, title and interest in
all unfilled orders for the CV Products, including without limitation, all
unfilled Customer Orders as of the Closing Date (i.e. Customer Orders to the
extent that (i) the Packaged Products at issue have not been shipped to
the applicable customer as of the Closing Date and (ii) Buyer (rather than
Seller or any of its Affiliates) would be paid by the applicable customer after
shipment by Buyer following the Closing Date), a list of which shall be
provided to Buyer within [****]* after the Closing Date.

 

(v)           Packaging Inventory.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer, all packaging material for the Marketed
Products, including all package labels and product inserts used in connection
with the Marketed Products owned or controlled by Seller or its Affiliates as
of the Closing (the “Packaging Inventory”).

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

12

 

(w)          Other Intellectual Property.  Upon Closing, Seller shall sell, transfer,
assign, convey and deliver or shall cause to be sold, transferred, assigned,
conveyed and delivered to Buyer all of Seller’s rights, title and interest in
and to the Trade Secrets and other intellectual property not hereto forth
assigned that are used solely in the Business.

 

2.2           Excluded Assets.  Buyer hereby acknowledges that Seller is not
transferring hereunder any assets, rights or interests of Seller or its
Affiliates not specifically set forth in Section 2.1 (collectively,
the “Excluded Assets”), including, without limitation:

 

(a)           any contracts or agreements with any
third party that are not Assumed Contracts or identified in Section 2.1(b);

 

(b)           any assets or rights used in the
research, development, manufacture, control, packaging or release, marketing or
sale of products other than the CV Products, excluding such assets or rights of
Seller or its Affiliates that were used primarily in, or were otherwise
necessary for the conduct of, the Business on the Effective Date that are
either (i) Assets (transferred to Buyer pursuant to Section 2.1)
or (ii) are covered in Section 10.1(a);

 

(c)           any assets or rights, including,
without limitation, technical information 
and intellectual property, that are not used exclusively in the Business
and are used in other business activities of Seller, excluding such assets or
rights of Seller or its Affiliates that were used primarily in, or were
otherwise necessary for the conduct of, the Business on the Effective Date that
are either (i) Assets (transferred to Buyer pursuant to Section 2.1)
or (ii) are covered in Section 10.1(a);

 

(d)           equipment, computer software, and
computer hardware, except as listed on Attachment 2.1(b) or Attachment
2.1(l);

 

(e)           all Accounts Receivable arising on or
prior to the Closing Date; and

 

(f)            corporate records (financial
statements, formation documents, stock records, board resolutions and minutes,
and the like).

 

2.3           Assumed Liabilities.  Buyer shall assume and agree to honor, pay
and discharge when due only the following Liabilities of Seller (the “Assumed Liabilities”), and no
others:

 

(a)           all Liabilities of Seller under the
Assumed Contracts, but only to the extent such Liabilities arise from any
event, circumstance or condition occurring after the Closing Date;

 

(b)           all Liabilities of Seller under the
Registrations to be performed after the Closing Date, but only to the extent
such Liabilities relate to any event, circumstances or conditions occurring
after the Closing Date;

 

(c)           all Liabilities relating to the Sun
Litigation, other than (i) Liabilities that arise as a result of actions
taken or omitted by Seller and its Affiliates on or prior to the Closing Date
(unless taken or omitted with the consent of Buyer), and (ii) all fees,
costs and expenses incurred by or on behalf of Seller or any of its Affiliates
with respect to the Sun Litigation on or 

 

CONFIDENTIAL TREATMENT REQUESTED

 

13

 

prior to the Closing Date
(including attorneys’ fees);

 

(d)           all other Liabilities (other than
Excluded Liabilities) arising out of the conduct of the Business or arising out
of or related to the Assets, but in each case solely to the extent such
Liabilities are incurred or relate to events, circumstances, conditions,
actions or activities occurring after the Closing Date, including, without
limitation, any product liability, product warranty, product return,
charge-back, rebate or Medicaid, Medicare or other reimbursements, or similar
claim, related to the CV Products sold after the Closing Date;

 

(e)           all [****]*

 

(f)            all Liabilities relating to Taxes
attributable to ownership of the Assets and operation of the Business during
periods beginning after the Closing Date, but not including, for the avoidance
of doubt, Taxes that are payable after the Closing Date relating to taxable
periods, or portions thereof, ending on or prior to the Closing Date,
determined, in the case of any period that includes but does not end on the
Closing Date, on a pro rata per diem basis; and

 

(g)           all costs and expenses incurred after
the Closing Date in connection with or related to the[****]*, including without
limitation, any and all work or agreements related thereto, and the
[****]*relating to the [****]*, [****]*.

 

2.4           Excluded Liabilities.  Except for the Assumed Liabilities, Buyer
shall not assume by virtue of this Agreement or the transactions contemplated
hereby, and shall have no liability for, any Liabilities of Seller or any of
its Affiliates (including, without limitation, those related to the Business)
of any kind, character or description whatsoever (the “Excluded Liabilities”).  Seller shall discharge in a timely manner or
shall make adequate provision for all of the Excluded Liabilities that affect
the Business, Assets or Assumed Liabilities, provided that Seller shall have
the ability to contest, in good faith, any such claim of liability asserted in
respect thereof by any person or entity. 
Excluded Liabilities shall include, without limitation:

 

(a)           all Taxes (other than Taxes that are
Assumed Liabilities) including those that result from or have accrued in
connection with the operation of the Business on or prior to the Closing Date;

 

(b)           any Liability or obligation of Seller
of any nature owed to any employees, directors, former employees, agents or
independent contractors, whether or not employed by Buyer after the Closing,
that (A) arises out of or relates to the employment or service provider
relationship between Seller or its Affiliates (or any predecessor in interest)
and any such individual(s) (including, but not limited to, claims for
compensation, discrimination, harassment, or retaliation and any Liability
under Seller’s Employee Benefit Plans); or (B) arises out of or relates to
events, circumstances or conditions occurring on or prior to the Closing Date
(including the transactions contemplated by this Agreement);

 

(c)           all Accounts Payable arising on or
prior to the Closing Date;

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

14

 

(d)           Liabilities of Seller under the
Assumed Contracts that were incurred, arose or became payable on or prior to
the Closing Date;

 

(e)           all Liabilities of Seller and its
Affiliates under the Registrations, to be performed, or which relate to any
event, circumstance or condition occurring, on or prior to the Closing Date;

 

(f)            all Liabilities with respect to
accrued expenses incurred on or prior to the Closing in connection with the CV
Products or the Business;

 

(g)           all Liabilities arising out of claims
of third parties for damage or injury suffered as the result of defective
products sold or manufactured on or prior to the Closing Date;

 

(h)           all Liabilities incurred (i) up
through the Closing Date and (ii) after the Closing Date [****]*, in
connection with or related to the [****]*, including without limitation the
[****]* and of any and all work and agreements relating thereto, and the
[****]* relating the [****]*; and

 

(i)            Liabilities of Seller and its
Affiliates relating to or arising under this Agreement.

 

2.5           Risk of Loss.  All risk of loss with respect to the Assets
(whether or not covered by insurance) shall be on Seller or its Affiliates up
to the time of Closing, whereupon such risk of loss shall pass to Buyer.

 

2.6           Taxes.  All applicable sales, transfer, documentary,
use, stamp, filing, recording, conveyance, excise, mortgage, documentary
recording taxes and other similar taxes and fees that may be levied on the
sale, assignment, transfer or delivery of the Assets to be sold and transferred
as provided in this Agreement shall be borne by the parties equally.  The parties shall cooperate with each other
and use commercially reasonable efforts to minimize such Taxes.

 

2.7           Third-Party Consents.  To the extent that any Assumed Contract,
Intellectual Property or Registration is not assignable without the consent of
another party, this Agreement shall not constitute an assignment or an
attempted assignment thereof if such assignment or attempted assignment would
constitute a breach thereof or a default thereunder.  Seller and Buyer shall each use commercially
reasonable efforts to obtain the consent of [****]*, to the extent required,
for the assignment of any Assumed Contracts to which it is a party.  Seller shall use its commercially reasonable
efforts to obtain any and all consents necessary for the effective assignment
to and assumption by Buyer of the Assumed Contracts, the Intellectual Property,
the Registrations and the Assumed Liabilities, including the Third Party
Consents set forth on Attachment 4.2(a) hereto and the consents set
forth on Schedule 6.3 of the Disclosure Schedule.  All such consents shall be in writing and
executed counterparts thereof shall be delivered promptly to Buyer.  If any such consent shall not be obtained,
Seller shall cooperate with Buyer in any reasonable arrangement designed to
provide for Buyer the benefits intended to be assigned 

 

* Certain
information on this page has been omitted and filed separately with the
Sec. Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

15

 

to Buyer under
the relevant Assumed Contract, Intellectual Property or Registration, including
enforcement at the cost and for the account of Buyer of any and all rights of
Seller against the other party thereto arising out of the breach or
cancellation thereof by such other party or otherwise.  If and to the extent that such arrangement
cannot be made, Buyer shall have no obligation pursuant to Section 2.3
or otherwise with respect to any such Assumed Contract, Intellectual Property
or Registration.  The provisions of this Section 2.7
shall not affect the right of Buyer not to consummate the transactions
contemplated by this Agreement if the condition to its obligations hereunder
contained in Section 9.1 has not been fulfilled.

 

ARTICLE
3

 

CONSIDERATION

 

3.1           Purchase Price.  As full consideration of Seller’s sale,
transfer, assignment, conveyance, delivery, license or sublicense of the Assets
to Buyer, Buyer will assume the Assumed Liabilities and pay and deliver or
cause to be paid and delivered to Seller, in the manner set forth in this
Section, an aggregate purchase price (the “Purchase Price”) equal to the
sum of the Initial Purchase Price set forth in Section 3.1(a) and
the Milestone and Revenue Payments, if applicable, set forth in Section 3.1(b).

 

(a)           Initial Purchase Price.  On the Closing Date, Buyer shall pay Seller
Eighty Five Million United States Dollars ($85,000,000) (the “Initial
Purchase Price”), less the Escrow Amount.

 

(b)           Milestone and Revenue Payments.  In addition to the payment made by Buyer
pursuant to Section 3.1(a), after the Closing Date, Buyer shall
make the following non-refundable cash payments to Seller, in each case,
subject to the satisfaction of the respective milestones:

 

i.              Cardene [****]* Product
Approval Milestone Payment.  Twenty
Five Million United States Dollars ($25,000,000) shall become payable upon
Buyer’s receipt of the Initial FDA Approval, such payment to be made promptly,
and in no event later than [****]*, after receipt of such approval.

 

ii.             Revenue Milestone
Payments.

 

(1)            Thirty Million United States Dollars
($30,000,000) payable to Seller if and when the Net Sales of the Cardene [****]*
Product in any twelve consecutive month period, calculated as of the end of
each calendar month, first exceed Eighty Million United States Dollars
($80,000,000).

 

(2)            Thirty Million United States Dollars
($30,000,000) payable to Seller if and when the Net Sales of the Cardene
[****]* Product in any twelve consecutive 

 

* Certain information on
this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

16

 

month period, calculated
as of the end of each calendar month, first exceed One Hundred Fifty Million
United States Dollars ($150,000,000).

 

(3)           Each payment pursuant to subsections
(1) and (2) shall, if applicable, be made promptly, but no later than
[****]*, following the occurrence of the relevant milestone.

 

The milestone payments under subsections
(i) and (ii) of this Section 3.1(b) are collectively
referred to as “Milestone Payments”.

 

iii.            Other Revenue Payments.  Buyer shall pay to Seller, on a [****]* basis
as provided in Section 3.3, (A) an amount equal to ten percent
(10%) of the Net Sales of the Cardene [****]* Product from sales occurring
after the Closing Date and prior to the earlier to occur of
(i) December 31, 2014 and (ii) the [****]*, and (B) on a
country-by-country basis, an amount equal to five (5%) of the Net Sales of any
Ularitide product from sales occurring after the Closing Date and prior to the
later to occur of (i) the expiration of the applicable exclusivity period
in such country, and (ii) the expiration of the last Patent covering
Ularitide in such country.  The payments
under this subsection iii of Section 3.1(b) are referred to as
“Revenue Payments” and Revenue Payments and Milestone Payments are
collectively referred to as “Milestone and Revenue Payments”.

 

(c)           Deposit in Escrow.  At Closing, Buyer shall deliver cash from the
Initial Purchase Price in the amount of Six Million United States Dollars
($6,000,000) (the “Escrow Amount”) to the Escrow Agent pursuant to the
Escrow Agreement, to be held and disbursed upon and subject to all of the terms
and conditions set forth therein.

 

3.2           Method of Payment.  The payments to be made pursuant to Section 3.1
shall be made by wire transfer in immediately available funds as follows:

 

(a)           delivery of the Initial Purchase
Price, less the Escrow Amount, to such account as Seller shall have designated
to Buyer in writing not less than two (2) business days prior to the
Closing Date, and any such payment shall be deemed to have been paid when
recorded in the proper account;

 

(b)           delivery to Wells Fargo Bank,
National Association (the “Escrow Agent”) of the Escrow Amount in
accordance with the wire transfer instructions of the Escrow Agent delivered to
Buyer in writing not less than two (2) business days prior to the Closing
Date.  The Escrow Amount shall be held in
escrow by the Escrow Agent pursuant to the terms of an escrow agreement in
substantially the form of Exhibit H attached hereto (the “Escrow
Agreement”) in order to provide a source for the payment of any
[****]*.  The Escrow Agreement shall
provide for the release of any remaining escrow funds to Seller [****]* from
the Closing Date [****]*; and

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

17

 

(c)           delivery of the Milestone and Revenue
Payments to such account as Seller shall have designated to Buyer in writing
not less than two (2) business days prior to the Closing Date (or such
other account as designated by Buyer after Closing delivered pursuant to the
notice provision herein).

 

3.3           Revenue Payments; Reports.  Buyer shall pay to Seller, [****]*, any
Revenue Payments that become due.  Such
payments will be accompanied by a report containing the following information
as it pertains to the [****]* just ended:

 

(a)           the gross sales of the Cardene
[****]* Product (in the aggregate and separately stated for each selling
party);

 

(b)           the computation of the Net Sales of
Cardene [****]* Product actually received by Buyer based on the U.S. dollar
value determined in (a) above, including an accounting of any Net Sales
Adjustments from the gross sales to arrive at the Net Sales amount, and the
exchange rates used for converting foreign currency to U.S. dollars in
accordance with Section 3.4 hereof;

 

(c)           the computation of earned Revenue
Payments; and

 

(d)           such other information necessary to
confirm the Revenue Payments payable pursuant to Section 3.1(b)(iii) as
Seller may reasonably request.

 

If no earned Revenue Payments are due for a
[****]*, Buyer will so report.  At the
end of the [****]* in which the Revenue Payments are no longer due, Buyer will
provide to Seller a final written report that complies in all respects with
this Section 3.3.  Buyer will
require each Affiliate and sublicensee to make appropriate reports to Buyer in
a timely manner to enable Buyer to comply with this Section 3.3.  Buyer shall provide Seller a similar report
containing the information in subsections (a) and (b) above upon
payment of the Milestone Payments.

 

3.4           Accounting.  The Net Sales used for computing the Revenue
Payments payable to Seller by Buyer will be computed in U.S. dollars.  If Buyer or an Affiliate or a sublicensee
sells any Cardene [****]* Product for currency other than U.S. currency, for purposes
of calculating the earned Revenue Payments payable to Seller, Buyer will
determine the Net Sales for the Cardene [****]* Product in such currency and
then convert the Net Sales into its equivalent in U.S. currency using the
average New York foreign exchange selling rate for such currency for the month
in which such sale is reported, as published by The Wall Street Journal.  If such rate is not so published, the
conversion will be at the average selling rate for such currency for the month
in which such sale is reported, as published by a leading New York, New York
bank chosen by Buyer and reasonably acceptable to Seller (such acceptance not
to be unreasonably withheld, delayed or conditioned).

 

3.5           Records; Audits.  Buyer shall keep, and shall cause its
Affiliates and third party sublicensees to keep, full and accurate records and
books of account containing all particulars that may be necessary for the
purpose of calculating Net Sales.  Such
records and books of account, with all necessary supporting data, shall be kept
by Buyer (or its Affiliates or 

 

* Certain
information on this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

18

 

sublicensees)
at its place of business or at another location under Buyer’s control for the
[****]* next following the end of the calendar year to which each shall
pertain.  Upon written request from Seller,
and in no event more than (i) [****]* and (ii) [****]* of the Closing
Date thereafter, Buyer shall permit an independent nationally recognized
accounting firm selected by Seller and reasonably acceptable to Buyer, which
acceptance shall not be unreasonably withheld, delayed or conditioned, to have
access after reasonable advance notice ([****]*) and during normal business
hours to such records and books of account as may be reasonably necessary to
verify the accuracy of the Buyer’s reports of Net Sales as provided
herein.  Notwithstanding the preceding
sentence, Seller may make additional requests if Seller in good faith believes
that there is reasonable cause to make such additional requests based on
findings in prior reports.  All such
verifications shall be conducted at the expense of Seller.  In the event any such audit concludes that
adjustments should be made in Seller’s favor, Seller shall provide to Buyer a
complete copy of the accountant’s written report reflecting such
adjustments.  Buyer shall have the right
to dispute such adjustments in good faith by providing written notice of such
dispute to Seller within thirty (30) days of the date on which the applicable
written report is received by Buyer.  Any
dispute shall be resolved in accordance with the provisions of Section 14.4.  Buyer shall pay the amounts, if any, finally
determined to be due (plus accrued interest thereon, from the date originally
due, at the annual rate announced by the Bank of America (or any successor) as
its prime rate in effect on the date that such payment was first due [****]*
promptly, and in no event later than thirty (30) days after the date Buyer
receives Seller’s accounting firm’s written report or the dispute is resolved
in accordance with Section 14.4, as the case may be.  The fees charged by the accounting firm shall
be paid by [****]* unless the audit (or final resolution, if applicable)
reflects that adjustments in favor of [****]* for the [****]* or more of the
aggregate amount paid or payable by [****]* to [****]* during the period, in
which case [****]* shall pay the reasonable fees and expenses charged by such
accounting firm, promptly after receipt of the invoice for such audit.  Seller agrees that all information subject to
review under this Section 3.5 is Confidential Information of Buyer
and that it shall cause its accounting firm to retain all such information
subject to the confidentiality restrictions set forth in this Agreement.

 

3.6           Late Payments.  Any payment owed under this Agreement that is
not paid on or before the date that is [****]* following the date on which such
payment becomes due pursuant to this Agreement shall accrue interest, to the
extent permitted by law, at the annual rate announced by Bank of America (or
its successor) as its prime rate in effect on the date that such payment was
first due [****]* until the date on which such payment is made.

 

3.7           Allocation of Purchase Price.  Prior to Closing, Buyer and Seller will make
reasonable efforts to agree on an allocation of the Initial Purchase Price (and
any Assumed Liabilities properly included for tax purposes) among the Assets in
a manner that is consistent with the principles of Section 1060 of the
Internal Revenue Code of 1986, as amended (or any successor provision of any future
tax law, or any comparable provision of state, local or foreign tax law).  If the parties are able to agree to an
allocation of the Initial Purchase Price pursuant to 

 

* Certain
information on this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

19

 

the preceding
sentence, Buyer and Seller will (i) act in accordance with such allocation
in the preparation and filing of all Tax returns (including the preparation and
filing of IRS Form 8594), (ii) take no position inconsistent with the
allocation for all Tax purposes, and (iii) allocate any post-Closing
payments made pursuant to Sections 3.1 or 3.3 consistent with the
methodology used in such allocation.  In
the event that such allocation is disputed by any taxing authority, the party
receiving notice of the dispute shall promptly notify the other party hereto
and shall forward to such other party copies of all correspondence with such
taxing authority in respect of such disputed allocation.

 

ARTICLE
4

 

CLOSING

 

4.1           Closing.  The Closing of the sale, transfer,
assignment, conveyance, delivery, license or sublicense of the Assets to Buyer,
and the consummation of the other transactions contemplated hereby shall be
held at the offices of Seller (the “Closing”) as promptly as
practicable, but no later than the date five (5) business days after all
conditions (other than the respective delivery obligations of the parties)
hereto have been satisfied or waived, or at such other time or date as may be
agreed to by the parties to this Agreement (the “Closing Date”).  The Closing shall have deemed to have
occurred on 11:59 pm on the Closing Date.

 

4.2           Actions at Closing.  At the Closing, sale, transfer, assignment,
conveyance, delivery, license or sublicense of the Assets to Buyer will be
effected by Seller pursuant to such good and sufficient instruments of
conveyance, transfer and assignment as shall be necessary to transfer to Buyer
good and valid title to the Assets.

 

(a)           Deliveries by Seller at Closing.  The purchase of the Assets by Buyer in
accordance with the terms of this Agreement are subject to Seller’s delivery to
Buyer at the Closing of the following instruments, documents, agreements and
certificates:

 

i.              the General Assignment and Bill of
Sale substantially in the form attached hereto as Exhibit A (the “Bill
of Sale”), duly executed by Seller;

 

ii.             a counterpart of the Assignment and
Assumption Agreement substantially in the form attached hereto as Exhibit B
(the “Assignment and Assumption Agreement”), duly executed by Seller;

 

iii.            the Patent Assignment Agreement
substantially in the form attached hereto as Exhibit C (the “Patent
Assignment Agreement”), duly executed by Seller;

 

iv.            the Trademark Assignment Agreement
substantially in the form attached hereto as Exhibit D (the “Trademark
Assignment Agreement”), duly executed by Seller;

 

v.             the Domain Name Assignment
Agreement substantially in the form attached hereto as Exhibit E
(the “Domain Name Assignment Agreement”), duly executed by Seller;

 

CONFIDENTIAL TREATMENT REQUESTED

 

20

 

vi.            a
counterpart of the Transition Services Agreement, substantially in the form
attached hereto as Exhibit F, duly executed by Seller;

 

vii.           the
Third Party Consents listed in Attachment 4.2(a), in substantially the
form attached hereto as Exhibit G, signed by an authorized
representative of each of the consenting parties to such agreements, and such
Third Party Consents (a) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived, and (b) shall be in full
force and effect;

 

viii.          a
counterpart of the Escrow Agreement, , substantially in the form attached
hereto as Exhibit H, duly executed by Seller and Escrow Agent;

 

ix.            a
counterpart of the Litigation Cooperation Agreement, duly executed by Seller;

 

x.             such
other documents and agreements as may be necessary to effect the transactions
contemplated by this Agreement;

 

xi.            a
certificate executed by a duly authorized officer of Seller certifying that (i) each
of the representations and warranties of Seller set forth in Article 6
of this Agreement that is qualified by materiality is true and correct in all
respects, (ii) each of such representations and warranties that is not so
qualified is true and correct in all material respects, in each case, as of the
Closing Date as though made on and as of the Closing Date or, in the case of
representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date, except that any such
representation or warranty made as of a specified date shall only need to have
been true and correct on and as of such date, and (iii) all of the terms,
covenants and conditions of this Agreement to be complied with and performed by
Seller, at or prior to the Closing have been duly complied with and performed
in all material respects;

 

xii.           a
certificate of the Secretary of Seller, in form and substance reasonably
satisfactory to Buyer, as to the authenticity and effectiveness of the actions
of the board of directors of Seller authorizing this Agreement and the
transactions contemplated in this Agreement;

 

xiii.          evidence,
in form and substance reasonably satisfactory to Buyer, that Seller has fully
paid all fees, costs and expenses payable pursuant to Section 8.6;

 

xiv.          for
each NDA identified and each IND identified on Attachment 2.1(e), a
letter from Seller to the FDA, in form and substance reasonably satisfactory to
Buyer, stating that all rights with respect to the respective application have
been transferred to Buyer as of the Closing Date; and

 

xv.           a certification as to Seller’s non-foreign status in
accordance with U.S. Treasury Regulations Section 1.1445-2(b)(2).

 

(b)           Deliveries
by Buyer at Closing.  The sale of the
Assets by Seller in accordance with the terms of this Agreement are subject to
Buyer’s delivery to Seller (unless 

 

CONFIDENTIAL TREATMENT REQUESTED

 

21

 

noted
otherwise) at the Closing of the following instruments, agreements and
certificates:

 

i.              the
Initial Purchase Price, less the Escrow Amount;

 

ii.             evidence
of payment of the Escrow Amount to the Escrow Agent;

 

iii.            a
counterpart of the Assignment and Assumption Agreement, duly executed by Buyer;

 

iv.            a
counterpart of the Transition Services Agreement, duly executed by Buyer;

 

v.             a
counterpart of the Escrow Agreement, duly executed by Buyer and Escrow Agent;

 

vi.            a
counterpart of the Litigation Cooperation Agreement, duly executed by Buyer;

 

vii.           a
certificate executed by a duly authorized officer of Buyer certifying that (i) each
of the representations and warranties of Buyer set forth in Article 7
of this Agreement that is qualified by materiality is true and correct in all
respects, (ii) each of such representations and warranties that is not so
qualified is true and correct in all material respects, in each case, as of the
Closing Date as though made on and as of the Closing Date or, in the case of
representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date, except that any such
representation or warranty made as of a specified date shall only need to have
been true and correct on and as of such date, and (iii) all of the terms,
covenants and conditions of this Agreement to be complied with and performed by
Buyer, at or prior to the Closing have been duly complied with and performed in
all material respects;

 

viii.          a
certificate of the Secretary of Buyer, in form and substance reasonably
satisfactory to Seller, as to the authenticity and effectiveness of the actions
of the board of directors (and shareholders, if applicable) of Buyer
authorizing this Agreement and the transactions contemplated in this Agreement.

 

ARTICLE 5

 

EMPLOYMENT
MATTERS

 

5.1           Employees.

 

(a)           Notwithstanding
the provisions of the Confidentiality Agreement, Buyer shall have the right
prior to Closing to contact the employees of Seller currently employed in the
Business, who are identified on Attachment 5.1(a) (each, a “Business
Employee”), and to discuss possible terms of employment with such Business
Employees and Buyer may make offers of employment, contingent on the Closing,
to any of such Business Employees in its discretion.  Buyer shall deliver to Seller a list of the
Business Employees to whom Buyer has or intends to make offers of employment
(each, an “Identified Employee”) at least fifteen (15) days prior to 

 

CONFIDENTIAL TREATMENT REQUESTED

 

22

 

the date of the
Closing.  The Seller shall use reasonable
best efforts to cooperate with Buyer to facilitate the hiring of the Identified
Employees.  Seller and its Affiliates
shall not make competing offers of employment to the Identified Employees and
shall, for a period of [****]* from the Closing Date, refrain from, directly or
indirectly, employing, engaging or seeking to employ or engage any Identified
Employee that has been hired by Buyer, unless such employee (i) has
resigned voluntarily at least [****]* prior to such employment or engagement
(without any solicitation from Seller or any of its Affiliates) or has been
terminated by Buyer after the Closing Date or (ii) responds to any general
media solicitation of employment or engagement by the Seller or its Affiliate.  Notwithstanding the
foregoing, nothing in this Agreement shall constitute a commitment of Buyer to
continue the employment of any Identified Employee for any period following the
Closing Date, nor limit the right of Seller or its Affiliates to change any
terms or conditions of employment of any employed Identified Employee following
the Closing Date.

 

(b)           Prior
to the Closing Date, or as promptly as possible thereafter, and not
withstanding any otherwise applicable Employee Benefit Plan, Seller shall take
such actions, to be in effect as of the Closing Date or as promptly as possible
thereafter, as are necessary to cause all Identified Employees who accept
offers of employment from Buyer (the “Hired Employees”) to be paid, on a
pro-rata basis, any earned sales incentive compensation and other comparable
pay for the period of employment ending on the date of termination of
employment (including, without limitation, the applicable bonuses for 2007 that
would otherwise have been payable pursuant to any Seller Employee Benefit Plan,
to the extent that such bonuses have not been paid prior to Closing), as well
as any accrued vacation pay, sick leave, or other payroll entitlements.  Seller shall waive any notice requirements or
other conditions applicable to any Hired Employee in connection with such
employee’s termination of his or her employment with Seller.

 

(c)           Seller shall take all
action necessary to give any notification required by the Worker Adjustment and
Retraining Notification Act (“WARN”), comply with any requirements of
the Consolidated Omnibus Budget Reconciliation Act of 1985 and pay any and all
severance, vacation, paid time off, unpaid wages, unpaid bonuses, unpaid
commissions or other sums that may be due to Business Employees in connection
with their termination of employment with Seller, if any, or otherwise pursuant
to the terms of any of Seller’s employee benefit plan.  Buyer shall provide to Seller in a timely
manner any information reasonably necessary to determine whether an Identified
Employee has been offered employment in a comparable position and such other
information as is reasonably necessary for Seller to comply with its
obligations, if any, under WARN or any similar state law, rule or
regulation with respect to Seller’s termination of the employment of any
Business Employees.

 

* Certain information on
this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

23

 

ARTICLE 6

 

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

Subject to the exceptions and disclosures listed in the Disclosure
Schedule (including the attachments and exhibits thereto) Seller represents and
warrants to Buyer as follows:

 

6.1           Organization
and Authority.  Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with full corporate power and authority to
execute and consummate this Agreement, and such other instruments, agreements
and transactions as may be contemplated hereunder and thereunder.  Seller has all requisite corporate power and
authority and all authorizations, licenses, permits and certifications
necessary to carry on the Business as now being conducted and to own, lease and
operate the Assets.  Seller is qualified
as a foreign corporation to do business in every jurisdiction in which the
nature of its business or its ownership of property requires it to be qualified
and in which the failure to be so qualified would have a Material Adverse
Effect.  All corporate acts and other
proceedings required to be taken by or on the part of Seller to authorize
Seller to execute, deliver and perform this Agreement and such other
instruments, agreements and transactions as may be contemplated hereunder, have
been duly and properly taken, and no further action on the part of Seller or
its stockholders is necessary.  This
Agreement has been duly executed and delivered by Seller and constitutes legal,
valid and binding obligations of Seller enforceable in accordance with its
terms, except as such enforceability may be subject to or limited by (i) applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and (ii) the rules governing
the availability of specific performance, injunctive relief or other equitable
remedies and general principles of equity, regardless of whether considered in
a proceeding in law or equity.

 

6.2           No
Violation or Conflict.  The execution
and delivery by Seller of this Agreement and such other instruments, agreements
and transactions as may be contemplated hereunder, and the consummation by
Seller of the transactions contemplated hereby and thereunder will not (i) violate
any law, statute, rule or regulation or judgment, order, writ, injunction
or decree of any Governmental Entity applicable to Seller, or (ii) materially
conflict with, result in any material breach of, or constitute a material
default (or an event which with notice or lapse of time or both would become a
material default) under the Certificate of Incorporation or bylaws of Seller or
any agreement to which Seller is a party, (iii) materially interfere with
Seller’s performance of its obligations hereunder, or (iv) result in the
creation or imposition of any lien or encumbrance on Seller or the Assets, and
to the Knowledge of Seller, there are currently no proceedings pending before,
or threatened by, any Governmental Entity that could reasonably be expected to
result in the adoption, amendment or issuance of any law, statute, rule or
regulation or judgment, order, writ, injunction or decree materially adverse to
the Assets or the Business.

 

6.3           Consents
and Approvals.  Except as set forth
in Schedule 6.3 of the Disclosure Schedule, no notice to, declaration,
filing or registration with, or authorization, consent or approval of, or
permit from, any Governmental Entity, or any other person or entity, is
required to be made or obtained by Seller in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, except with respect to the HSR Filings and
any declarations, filings, registrations, authorizations, consents, 

 

CONFIDENTIAL TREATMENT REQUESTED

 

24

 

approvals or
permits which if not obtained or made have not had and would not reasonably be
expected to have individually or in the aggregate a Material Adverse Effect or
materially interfere with Seller’s performance of its obligations hereunder.

 

6.4           Assumed
Contracts.  Seller has made available
to Buyer complete and correct copies of the Assumed Contracts and any
amendments, modifications and supplements thereto.  All the Assumed Contracts are in full force
and effect and are valid, binding and enforceable in accordance with their
terms by and against Seller, except as such enforceability may be subject to or
limited by (i) applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting the enforcement of creditors’ rights
generally; and (ii) the rules governing the availability of specific
performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in law
or equity; provided that there may be Assumed Contracts that have expired by
their terms, but contain surviving rights or Liabilities that will be assumed
by Buyer.  Except as set forth in Schedule
6.4(a) of the Disclosure Schedule, neither Seller nor, to the
Knowledge of Seller, any other party to such Assumed Contract is, or has
received notice that it is, in violation or breach of or default under any such
Assumed Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Assumed Contract) in any
material respect.  Schedule 6.4(b) of
the Disclosure Schedule sets forth a list of all Assumed Contracts which
require the consent or waiver of any party to such Assumed Contracts, to the
Assignment of such Assumed Contract as a result of the transactions contemplated
hereby (the “Third Party Consents”).

 

6.5           Title
to Assets.  Upon the consummation of
the transactions contemplated under this Agreement, Buyer will obtain good,
valid and marketable title to all the Assets, free and clear of any and all
liens, encumbrances, charges, claims, pledges, or security interests of any
kind (including those of secured parties). 
Except as set forth in Schedule 6.5 of the Disclosure Schedule,
Seller beneficially owns all of the right, title or other interests to be
transferred to Buyer hereunder with respect to all the Assets, and none of the
Assets is leased, rented, licensed, or otherwise not owned by Seller.  The transactions contemplated hereby
constitute the sale and assignment of substantially all of Seller’s business
relating to the CV Products.

 

6.6           Intellectual
Property.

 

(a)           Attachment
2.1.  Attachment 2.1 sets
forth a complete and accurate list of all of the following throughout the world
granted to, applied for, owned or licensed by Seller in relation to the CV
Products: (i) Patents; (ii) Licensed IP Rights; (iii) Trademarks
and Trademark Registrations; and (iv) Domain Names.  Such list includes, where applicable, the
record owner, jurisdiction and registration and/or application number, and date
issued (or filed) for each of the foregoing. 
The inventorship of the Patents and patent applications within
Intellectual Property other than the Licensed IP Rights (the “Owned IP
Rights”) is true and correct as of the Effective Date.

 

(b)           Title.  Except as otherwise stated on Attachment
2.1, Seller is the sole and exclusive owner of all Owned IP Rights and has
the right to use the Licensed IP Rights as set forth in the applicable Assumed
Contracts.  Seller has the right to
assign to Buyer the Intellectual Property required to be assigned to Buyer
under this Agreement, subject to obtaining the third party consents listed in Attachment
4.2(a).  The Intellectual Property
was either (i) developed by employees of Seller within the scope of their
employment; (ii) developed by independent 

 

CONFIDENTIAL TREATMENT REQUESTED

 

25

 

contractors who have
vested all rights in and to such Intellectual Property to Seller pursuant to
written agreements (such as by assignment or work-made-for-hire provisions); or
(iii) obtained by Seller from a third party via a written agreement that
transferred all rights in the Owned IP Rights to Seller or granted Seller a
license to the Licensed IP Rights, as applicable.  No current or former director, officer, or
employee of Seller or its Affiliates (or, to the Knowledge of Seller, any of
its predecessors in interest) will, after giving effect to the transactions
contemplated herein, own or retain any rights to use, and will not have any
claim with respect to any Intellectual Property.  No royalties, honoraria or other fees are
currently due and payable to any third parties for the use of or the right to
use any (i) Owned IP Rights; or (ii) except as set forth in the
Assumed Contracts, Licensed IP Rights.

 

(c)           All
Rights Transferred.  After the
consummation of the transactions contemplated herein, Buyer will own all
rights, title, and interest in and to or have a valid written license to use
all Intellectual Property and the patents included within the Licensed IP Rights,
subject to obtaining the Third Party Consents, on the same terms and conditions
as Seller enjoyed immediately prior to such transactions.  Except for the Third Party Consents, there is
no law, contract or arrangement that would prevent Seller from assigning all
licenses and rights required to be assigned under this Agreement.

 

(d)           Sufficiency
of Title.  Seller is the sole and
exclusive owner of or has valid right to use pursuant to a written signed
agreement, free and clear of all liens with respect to Owned IP Rights and, to
the Knowledge of Seller, free and clear of all liens with respect to Licensed
IP Rights.  To the Knowledge of Seller,
the Intellectual Property constitutes all of the material intellectual property
assets used in or necessary for the conduct of the Business as conducted by
Seller as of the Effective Date.  The
Owned IP Rights, and, to the Knowledge of Seller, the Licensed IP Rights,
currently used in the Business, are in each case subsisting, in full force and
effect, and have not been cancelled, expired, been abandoned, or otherwise
terminated, and payment of all renewal and maintenance fees in respect of the
Owned IP Rights, and, to the Knowledge of Seller, the Licensed IP Rights, and
all filings related thereto, have been duly made.  Seller has been diligent in prosecuting all
applications pending as of the Effective Date related to Owned IP Rights.

 

(e)           Non-infringement.  To
the Knowledge of Seller, the
manufacture, sale and distribution of each CV Product as conducted as of the
Effective Date does not infringe upon, misappropriate, violate or
constitute the unauthorized use of (either directly or indirectly, such as
through contributory infringement or inducement to infringe) any intellectual
property rights of any third party in
the relevant portion of the Territory for such CV Product.

 

(f)            Pending
Claims.  Except as set forth in Schedule
6.6(f) of the Disclosure Schedule, there are no pending or, to the
Knowledge of Seller, threatened claims, suits, arbitrations or other adversarial
proceedings before any court, agency, arbitral tribunal, or registration
authority in any jurisdiction in the applicable Territory challenging Seller’s
ownership or use of any Intellectual Property, or the validity, enforceability,
or registrability of any Owned IP Rights or, to the Knowledge of Seller, any
Licensed IP Rights.

 

(g)           Third
Party Infringement.  Except as set
forth in Schedule 6.6(g) of the Disclosure Schedule, to the
Knowledge of Seller, no third party in any Territory in which Intellectual
Property rights have been granted, is misappropriating, infringing, diluting or

 

CONFIDENTIAL TREATMENT REQUESTED

 

26

 

violating any Owned IP
Rights, or to the Knowledge of Seller, any Licensed IP Rights, and no claims,
suits, arbitrations or other adversarial claims have been brought or, to the
Knowledge of Seller, threatened against any third party by Seller.

 

(h)           Settlements.  Except as set forth in Schedule 6.6(h) of
the Disclosure Schedule, there are no settlement agreements, coexistence
agreements, consents, licenses, assignments, security agreements, judgments,
consent decrees or judicial or administrative decisions relating to Owned IP
Rights, or to the Knowledge of Seller, the Licensed IP Rights.

 

(i)            Confidentiality.  Seller has taken commercially reasonable
measures to protect the confidentiality of its Trade Secrets and Confidential
Information, including requiring its employees with access to such Trade
Secrets and Confidential Information and other parties having access thereto to
execute written non-disclosure agreements. 
To the Knowledge of Seller, none of the Trade Secrets or Confidential
Information have been disclosed or authorized to be disclosed to any third
party other than pursuant to a non-disclosure agreement.  To the Knowledge of Seller, no third party to
any non-disclosure agreement with Seller is in breach, violation or default
thereof.

 

(j)            Employee
Cooperation.  Each present or past
employee, officer, consultant or any other person who participated on behalf of
Seller in the development of any of the CV Products or any of the Intellectual
Property has executed a valid and enforceable agreement with Seller that (i) conveys
any and all right, title and interest in and to all Intellectual Property
developed by such Person in connection with such Person’s employment or
contract to Seller, (ii) requires such Person, during and after the term
of employment or contract, to cooperate with Seller in the prosecution of any
patent applications filed in connection with such Intellectual Property, (iii) establishes
a representation and covenant by such Person that no process, technique,
innovation or other work product provided to Seller is or will be derived from
or otherwise constitute the proprietary information of a prior employer or
contractor, in contravention of any prior confidentiality agreement, and (iv) obligates
such Person to keep any Confidential Information of Seller confidential both
during and after the term of the employment or contract.  To the Knowledge of Seller, no employee or
consultant of Seller is in violation of any laws or regulations relating to
Intellectual Property applicable to such employee or consultant, or any term of
any employment agreement, confidentiality agreement, patent or invention
disclosure agreement or other contract relating to the relationship of such
employee or consultant with Seller or any prior employer or client, as the case
may be.

 

(k)           Notices.  As of the Effective Date, Seller has not
received any notice (including, without limitation, any [****]*) pursuant to
[****]* by and between Seller and [****]*, as such agreement may be amended
from time to time, and to the Knowledge of Seller as of the Effective Date,
there are no facts or circumstances that could reasonably be expected to result
in any such notice.

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

27

 

(l)            Registrations;
Regulatory Matters.  All
Registrations held by Seller with respect to the CV Products are listed on Attachment
2.1(e).  The Registrations are owned
exclusively by Seller.  To Seller’s
Knowledge, all of the Registrations are valid and in full force and effect as
of the Effective Date.  The Registrations
(i) are in the name of Seller; and (ii) except as set forth in Schedule
6.6(l) of the Disclosure Schedule, constitute all licenses, permits,
approvals, qualifications, authorizations or requirements of any Governmental
Entity in the applicable Territory necessary to manufacture and sell the
Marketed Products in the applicable Territory. 
Seller has furnished Buyer with access to a complete copy of the NDA,
including all amendments and supplements thereto.  Each of the Registrations has been approved
by the FDA or other relevant Governmental Entity, as the case may be, and each
of the Registrations is in good standing with the FDA or other relevant
Governmental Entity, as the case may be. 
There is no action or proceeding by any Governmental Entity pending or,
to the Knowledge of Seller as of the Closing Date, threatened seeking the revocation
or suspension of any Registration relating to the manufacture or sale of the
Marketed Products in the applicable Territory.

 

6.7           Regulatory
Status of Marketed Products.  Except
as set forth on Schedule 6.7 of the Disclosure Schedule, there have been
no recalls, withdrawals, or market replacements of the Marketed Products in the
applicable Territory in the past [****]*.

 

6.8           Product
Net Sales.  Seller’s net sales of
each of the Marketed Products as set forth on Schedule 6.8 of the Disclosure
Schedule, for the periods specified therein, are accurate and were
determined in accordance with GAAP.

 

6.9           Violations
of Law.  The utilization of the
Assets and the conduct of the Business by Seller and its Affiliates and their
respective agents and employees do not violate any applicable law, governmental
specification, authorization or requirement or any decree, judgment, order or
similar restriction binding on the Seller or any of its Affiliates in any
material respect.  Seller has not
received notice of any Governmental Entity investigation, claim or proceeding
concerning compliance matters relating to the CV Products or the Business, or
the business practices of Seller or any of its Affiliates or any of their
respective agents or employees, including without limitation business practices
related to the pricing, promotion and manufacturing of the Marketed Products.

 

6.10         Litigation.  Neither the Assets nor the Business is the
subject of any outstanding judgment, order, writ, injunction or decree of any
court, arbitrator or administrative or Governmental Entity limiting,
restricting or affecting the Assets or the Business in any material
aspect.  Except as set forth on Schedule
6.10 of the Disclosure Schedule, there are no claims, suits, proceedings
pending or, to the Knowledge of Seller, threatened in writing against Seller or
any of its Affiliates or any of their respective agents or employees with
respect to the Assets, Business or transactions contemplated in this Agreement.

 

6.11         Employees.  Except as set forth in Schedule 6.11 of
the Disclosure Schedule, the Business Employees listed in Attachment 5.1(a) are
all the employees of Seller whose efforts and responsibilities are material to
the Business.  As of the Effective Date,
to the Knowledge of Seller, no Business Employee and no group of Business Employees
has any plans to terminate his or her employment with Seller.  To the Knowledge of Seller, Seller and its
Affiliates have complied with all laws relating to the employment of labor,
including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining and the payment of social security and 

 

* Certain information on this page has been omitted and filed
separately with the SEC.  Confidential
treatment has been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

28

 

other taxes. 
Seller and its Affiliates have no material labor relations problem
pending relating to the Business Employees and their labor relations relating
to the Business Employees are satisfactory. 
There are no workers’ compensation claims pending against Seller or its
Affiliates relating to a Business Employee nor is Seller or its Affiliates
aware of any facts that would give rise to such a claim.  To the Knowledge of Seller, no Business
Employee is subject to any secrecy or non-competition agreement or any other
agreement or restriction of any kind that would impede in any way the ability
of such employee to carry out fully all activities of such employee in
furtherance of the Business.  With
respect to each Employee Benefit Plan (i) Seller and its Affiliates have
complied and are now in compliance with all laws and regulations applicable to
such Employee Benefit Plans and (ii) each Employee Benefit Plan has been
administered in all material respects in accordance with its terms.  Attachment 5.1(a) lists, as of
the date set forth on such attachment, each Business Employee and the position,
title, remuneration (including any scheduled salary or remuneration increases),
date of employment and accrued vacation pay of each such Business Employee.

 

6.12         Taxes.  As of the Effective Date, there are no, and,
at the Closing, there will not be, any liens for Taxes accrued upon the
Assets.  Any and all Taxes related to the
Assets or the Business, to the extent payable prior to the Closing, have been
or will be paid by Seller prior to the Closing. 
No jurisdiction (whether within or without the United States) in which
the Seller or any Affiliate of Seller has not filed a specific Tax Return with
respect to the Assets or the Business has asserted that the Seller or such
Affiliate is required to file such Tax Return in such jurisdiction.  Seller and each Affiliate of Seller has
complied (and until the Closing Date will comply) with all applicable laws,
rules, and regulations relating to the payment and withholding of Taxes
relating to the Assets or the Business (including withholding and reporting
requirements under Code §§3401 through 3406, 6041 and 6049 and similar
provisions under any other laws) and has, within the time and in the manner
prescribed by law, withheld from employee wages and paid over to the proper
governmental authorities all required amounts.

 

6.13         Customers
and Suppliers.  Schedule 6.13 of
the Disclosure Schedule lists the [****]* largest customers and suppliers
of Seller relating to each of the Marketed Products for the fiscal years ended December 31,
2006 and December 31, 2007 and sets forth opposite the name of each such
customer or supplier the approximate percentage of gross sales attributable
from such customers or cash payments attributable to such suppliers, and unit
sales for each such customer, for each such period.  Since December 31, 2006, no customer or
supplier listed on Schedule 6.13 of the Disclosure Schedule has advised
in writing that it will stop or materially decrease the rate of business done
with Seller except for changes in the ordinary course of Seller’s business.

 

6.14         Inventory;
Raw Materials and WIP.  The Product
Inventory, Raw Materials and WIP relating to the Marketed Products consist of
items of a quality and quantity usable and, with respect to finished goods
only, salable at Seller’s normal profit levels, in each case, in the ordinary
course of the business.  Seller’s
inventory of finished goods generated by the Business is not slow-moving as
determined in accordance with past practices, obsolete or damaged and is 

 

* Certain
information on this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

29

 

merchantable
and fit for its particular use.  Seller
has on hand or has ordered and expects timely delivery of such quantities of
Raw Materials and has on hand such quantities of WIP and Product Inventory as
are reasonably required to timely fill current orders on hand with respect to
the Marketed Products which require delivery within [****]* and to maintain the
manufacture and shipment of products at its normal level of operations. Schedule
6.14(a) of the Disclosure Schedule contains a materially complete and
accurate summary of the Product Inventory, Raw Materials and WIP relating to
each of the Marketed Products as of December 31, 2007.  Since January 1, 2007, sales of the
Marketed Products by Seller to its distributors, licensees and wholesalers were
made consistent with past practices and were not the result of any special or
extraordinary sales efforts or promotions by Seller or such distributors,
licensees and wholesalers.  The level of
inventory of the Marketed Products held by Seller’s distributors, licensees and
wholesalers is consistent with practice in effect during calendar year 2007
and, on the Closing Date, will not exceed a level that would be reasonably
expected to be sold in the ordinary course of business, consistent with past
practice, during calendar year 2007, within [****]*thereof.  Seller has no reason to believe that such
inventory will be subject to returns, discounts or charge-backs that, in the
aggregate, are materially worse than those experienced during calendar year
2007.  Schedule 6.14(b) of the
Disclosure Schedule lists all of the Packaging Inventory owned by Seller as
of the Effective Date.

 

6.15         Clinical Trials.

 

(a)           Schedule
6.15(a) of the Disclosure Schedule is an accurate and complete list of
all Clinical Trials initiated by Seller prior to the Effective Date.  To Seller’s Knowledge, the Clinical Trials
were conducted in material compliance with Good Clinical Practice, the
reporting of adverse events, the filing of reports and security promulgated by
the FDA and similar regulations promulgated by other Governmental Entities as
applicable to such trials.  For the
purposes of this Section 6.15, “Good Clinical Practice”
means current good clinical practice pursuant to the FD&C Act and the
relevant U.S. regulations in Title 21 of the U.S. Code of Federal Regulations
(including Parts 11, 50, 54, 56, 312, 314 and 601).

 

(b)           Other
than as disclosed on Schedule 6.15(b) of the Disclosure Schedule,
during the Clinical Trials, there have been no deaths or serious adverse
events.

 

(c)           Seller
has not received any written notices or other written correspondence from the
FDA or any other Governmental Entity requiring the termination or suspension of
any Clinical Trials.

 

6.16         Absence
of Change.  Except as disclosed in Schedule
6.16 of the Disclosure Schedule, except for the execution and delivery of
this Agreement and the transactions to take place pursuant hereto on or prior to
the Closing Date, since September 30, 2007 there has not been any Material
Adverse Change, or any event or development which, individually or together
with other such events, could reasonably be expected to result in a Material
Adverse Change.  Without limiting the
foregoing, except as disclosed in Schedule 6.16 of the Disclosure Schedule,
there has not occurred, between September 30, 2007 and the date hereof,
any physical damage, destruction or other casualty loss (whether or not covered
by insurance) affecting any of the 

 

* Certain information on this page has been omitted and filed
separately with the SEC.  Confidential
treatment has been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

30

 

assets of Seller or its Affiliates used or
held for use in the conduct of the Business in an aggregate amount [****]*.

 

6.17         No
Undisclosed Liabilities.  There are
no Liabilities against, relating to or affecting the Business or any of the
Assets, other than Liabilities (i) incurred in the ordinary course of
business consistent with past practice, (ii) under the Assumed Contracts,
or (iii) which, individually or in the aggregate, are not material to the
condition of the Business.

 

6.18         Sufficiency.  The Assets and Buyer’s rights under this
Agreement constitute all of the material assets that are necessary for Buyer to
operate the Business as of and after the Closing Date in substantially the same
manner as the Business was operated by Seller (and Seller’s Affiliates) on the
Effective Date.

 

6.19         Brokers
and Finders.  Except as set forth in Schedule
6.19 of the Disclosure Schedule, Seller has not employed any broker or
finder or incurred any Liability for any brokerage fee, commission or finder’s
fee in connection with the transactions contemplated by this Agreement.

 

6.20         No
Implied Warranty.  THE
REPRESENTATIONS AND WARRANTIES GIVEN HEREIN BY SELLER ARE IN LIEU OF ANY
IMPLIED WARRANTIES WHICH MAY OTHERWISE BE APPLICABLE BECAUSE OF THE
PROVISIONS OF THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATUTE, INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.  Seller makes no
representation or warranty with respect to (i) any forecasts, projections,
estimates or budgets delivered or made available to Buyer of future revenues,
future results of operations (or any component thereof), future cash flows or
future financial condition (or any component thereof) of the Business or (ii) any
other information or documents made available to Buyer or its counsel,
accountants or advisors with respect to the Business, except as expressly set
forth in this Agreement or the exhibits hereto; provided, that Seller
does represent and warrant that it has neither intentionally provided or made
available to Buyer any untrue information, nor intentionally omitted any
material fact or information regarding the Assets, the Product or the Business
or any of the other matters dealt with in this Article 6 relating
to Seller or the transactions contemplated by this Agreement.

 

ARTICLE 7

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

7.1           Organization
and Authority.  Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  Buyer has
full corporate power and authority to execute and deliver this Agreement and
such other instruments, agreements and transactions as may be contemplated
hereunder, and to perform its obligations hereunder and thereunder.  All corporate acts and other proceedings
required to be taken by or on 

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

31

 

the part of Buyer to authorize Buyer to
execute, deliver and perform this Agreement and such other instruments,
agreements and transactions as may be contemplated hereunder, have been duly
and properly taken, and no further action on the part of Buyer or its
stockholders is necessary.  This
Agreement has been duly executed and delivered by Buyer and constitutes the
legal, valid and binding obligation of Buyer enforceable in accordance with its
terms, except as such enforceability may be subject to or limited by (i) applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and (ii) the rules governing
the availability of specific performance, injunctive relief or other equitable
remedies and general principles of equity, regardless of whether considered in
a proceeding in law or equity, regardless of whether considered in a proceeding
in law or equity.

 

7.2           No
Conflict or Violation.  The execution
and delivery by Buyer of this Agreement and such other instruments, agreements
and transactions as may be contemplated hereunder and the consummation by Buyer
of the transactions contemplated hereby and thereunder will not (i) violate
any law, statute, rule or regulation or judgment, order, writ, injunction
or decree of any Governmental Entity applicable to Buyer, or (ii) materially
conflict with, result in any material breach of, or constitute a material
default (or an event which with notice or lapse of time or both would become a
material default) under the Certificate of Incorporation or bylaws of Buyer or
any agreement to which Buyer is a party, or (iii) materially interfere
with Buyer’s performance of its obligations hereunder.

 

7.3           Consents
and Approvals.  Except as set forth
in Schedule 7.3, no notice to, declaration, filing or registration with,
or authorization, consent or approval of, or permit from, any Governmental
Entity, or any other person or entity, is required to be made or obtained by
Buyer in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, except
with respect to the HSR Filings and except for declarations, filings,
registrations, authorizations, consents, approvals or permits which if not
obtained or made have not had and would not reasonably be expected to have
individually or in the aggregate a material adverse effect on Buyer or
materially interfere with Buyer’s performance of its obligations hereunder.

 

7.4           Cash
Resources.  Buyer has, prior to the
execution of this Agreement, delivered to Seller, true and complete copies of
written commitments of third parties to provide Buyer with the financing (in
the form of both equity and debt) required
for Buyer’s acquisition of the Business hereunder.  Subject to the funding of the funds set forth
in the written commitments, in each case, in accordance with and subject to
their terms and conditions, Buyer will have at Closing cash in an amount
sufficient to pay the Purchase Price at the Closing and any and all fees and
expenses relating to the transactions contemplated under this Agreement and
specifically acknowledges Seller has entered into this Agreement in reliance
upon this representation.

 

7.5           Litigation.  There are no actions, suits, proceedings or
claims pending or, to the Knowledge of Buyer, threatened in writing concerning
Buyer or any of its Affiliates with respect to the transactions contemplated in
this Agreement.

 

7.6           Brokers
and Finders.  Except as set forth in Schedule
7.6, Buyer has not employed any broker or finder or incurred any Liability
for any brokerage fee, commission or finder’s fee in connection with the
transactions contemplated by this Agreement.

 

CONFIDENTIAL TREATMENT REQUESTED

 

32

 

7.7           Buyer
Due Diligence.  Buyer is experienced,
and/or has engaged expert advisors experienced in the evaluation and purchase
of property and assets such as the Assets contemplated hereunder.  Buyer has undertaken such investigation and
has been provided with and has evaluated such documents and information as it
has deemed necessary to permit it to make an informed and intelligent decision
with respect to the execution, delivery and performance of this Agreement.

 

ARTICLE 8

PRE-CLOSING
COVENANTS

 

8.1           Governmental
Filings.  Buyer and Seller shall
cooperate in promptly undertaking all filings required to be filed with any
Governmental Entity in connection with the transfer of Assets and other rights
under this Agreement and to cooperate with one another as reasonably necessary
to accomplish the foregoing, including, but not limited to, the filings
required of both parties pursuant to the HSR (such filings sometimes being
referred to in this Agreement as the “HSR Filings”), and the filing of
any additional information as required with respect to such HSR Filings as soon
as practicable after receipt of request therefor from the United States Federal
Trade Commission.  All  filing  fees related to the
HSR Filings shall be [****]*.

 

8.2           Conduct
of Business.  During the period on
and from the Effective Date through and including the Closing Date, Seller will
conduct the Business only in the ordinary course consistent with past
practices, unless Buyer shall otherwise agree in writing.  Without limiting the generality of the
foregoing,

 

(a)           Seller
will:

 

i.              use
commercially reasonable efforts to (i) keep available (subject to
dismissals and retirements in the ordinary course of business consistent with
past practice) the services of the Business Employees, (ii) maintain the
good will of wholesalers, customers, suppliers, lenders and other persons and
entities to whom Seller sells goods or provides services or with whom Seller
otherwise has significant business relationships in connection with the
Business, and (iii) continue all current sales, marketing and promotional
activities relating to the Business;

 

ii.             except
to the extent required by applicable law, (i) cause the Books and Records
to be maintained in the usual, regular and ordinary manner, and (ii) not
permit any material change in any pricing, investment, accounting, financial
reporting, inventory, credit, allowance or Tax practice or policy of Seller or
its Affiliates that would adversely affect the Business, the Assets or the
Assumed Liabilities;

 

iii.            comply,
in all material respects, with all laws and orders applicable to the Business
and promptly following receipt thereof give Buyer copies of any 

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

33

 

notice received from any Governmental Entity or any
other person or entity alleging any violation of any such law or order;

 

iv.            work diligently and in good faith to
complete, as promptly as reasonably practicable, the application to be
submitted to the FDA to obtain the Initial FDA Approval, such application to be
in form and substance reasonably satisfactory to Buyer; provided, if
Seller completes such application prior to the Closing Date and the application
is in form and substance reasonably satisfactory to Buyer, then Seller will
promptly file such application with the FDA;

 

v.             work diligently and in good faith to [****]*
and any and all work and agreements
relating thereto and [****]* related
thereto; and

 

vi.            promptly provide to Buyer written notice of (i) any
formal action taken, or non-privileged communication made, by Seller or any
other party to the Sun Litigation in connection therewith, and (ii) Seller’s
filing of any citizen’s petition or issuance of any other response in
connection with the [****]* and,
in the case of this subclause (ii), shall not make any such filing or issue any
such response without the prior written consent of Buyer.

 

(b)           Seller
will refrain from:

 

i.              entering
into, amending, modifying, terminating (partially or completely), granting any
waiver under or giving any consent with respect to any Assumed Contract or any
Registration;

 

ii.             violating,
breaching or defaulting under, in any material respect, or taking or failing to
take any action that (with or without notice or lapse of time or both) would
constitute a material violation or breach of, or default under, any term or
provision of any Assumed Contract or any Registration;

 

iii.            waiving
any right of Seller under any Liability of or owing to Seller in connection
with the Business, other than in the ordinary course of business consistent
with past practice;

 

iv.            engaging
in any transaction with respect to the Business with any officer, director or
Affiliate of Seller, either outside the ordinary course of business consistent
with past practice or other than on an arm’s-length basis; and

 

v.             entering
into any agreement to do or engage in any of the foregoing.

 

8.3           No
Solicitation.  Seller will not (and
it will use its best efforts to assure that its officers, directors, employees,
agents and affiliates do not on its behalf) (a) take any action to solicit,
initiate, seek, or affirmatively support any inquiry, proposal or offer from,
any 

 

*
Certain information on this page has been omitted and filed separately
with the SEC.  Confidential treatment has
been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

34

 

corporation, partnership, person or other
entity or group (other than Buyer) relating to any acquisition of the Business
or any of the Assets, other than the marketing, sale and distribution of
Product Inventory and use of Raw Materials in the ordinary course consistent
with past practices (any such proposed transaction being a “Third Party
Acquisition”); or (b) participate in any discussions or negotiations
with, or provide any non-public information to, any corporation,
partnership, person or other entity or group (other than Buyer) relating to any
proposed Third Party Acquisition.  Seller
shall immediately terminate any such negotiations in progress as of the Effective
Date.  In no event will Seller accept or
enter into an agreement concerning any such Third Party Acquisition prior to
the termination of the Agreement pursuant to Article 12.  Notwithstanding this provision, nothing
herein shall be deemed to in any way restrict or limit the right of Seller to
engage in discussions, negotiations, furnishing of information or any other
activities relating to or in support of transactions involving the acquisition
or sale of Seller and/or any other product lines or businesses of Seller other
than the Business or the Assets, so long as this Agreement shall remain in full
force and effect and shall remain binding on the parties hereto.

 

8.4           Access.  During the period from the Effective Date and
continuing until the Closing, upon reasonable advance notice received from
Buyer and at Buyer’s expense, Seller shall (i) afford Buyer, its financing
sources and their representatives reasonable access to, during regular business
hours, or furnish Buyer, its financing sources and its representatives with
copies of, documents used solely and specifically with respect to the Assets or
the CV Products as Buyer may reasonably request, and (ii) otherwise
cooperate and assist with Buyer’s and its financing source’s investigation of
the Assets and the CV Products as Buyer may reasonably request.

 

8.5           [****]*

 

8.6           Payment
of Certain Expenses.  Seller shall,
on or prior to the Closing Date, pay in full any and all fees, cost and
expenses incurred or accrued with respect to the Sun Litigation (including
attorneys’ fees) through the Closing and shall provide Buyer with evidence
reasonably satisfactory to Buyer that all such amounts have been paid.

 

8.7           Transition
Services Agreement.  Seller and Buyer
shall enter into the Transition Services Agreement on the Closing Date, in
substantially the same form and on substantially the same terms as set forth in
Exhibit F, pursuant to which Seller will provide to Buyer the
transition services requested by it, which services may include, without
limitation, regulatory, supply chain management, intellectual property and
other services.

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

35

 

ARTICLE 9

CONDITIONS
TO CLOSING

 

9.1           Conditions
to Obligations of Buyer.  All
obligations of Buyer hereunder are, at the option of Buyer, subject to the
conditions precedent that (all
or any of which may be waived by Buyer, in whole or in part), at the Closing:

 

(a)           All
consents, approvals and actions of, filings with and notices to any
Governmental Entity necessary to permit Buyer and Seller to perform their
obligations under this Agreement and to consummate the transactions
contemplated hereby (a) shall have been duly obtained, made or given, (b) shall
be in form and substance reasonably satisfactory to Buyer, (c) shall not
be subject to the satisfaction of any condition that has not been satisfied or
waived and (d) shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental Entity necessary for
the consummation of the transactions contemplated by this Agreement, including
under the HSR, shall have occurred.

 

(b)           There
shall not be in effect on the Closing Date any order or law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or which could reasonably be
expected to otherwise result in a Material Adverse Effect and there shall not
be pending or threatened on the Closing Date any action or proceeding in,
before or by any Governmental Entity which could reasonably be expected to result
in the issuance of any such order or the enactment, promulgation or deemed
applicability to Buyer or the transactions contemplated by this Agreement of
any such law.

 

(c)           Seller
shall have furnished to Buyer all deliverables set forth in Section 4.2(a),
and shall have performed and complied with, in all material respects, each
agreement, covenant and obligation required by this Agreement to be so
performed or complied with by Seller at or before Closing.

 

(d)           Each
of the representations and warranties of Seller set forth in this Agreement
that is qualified by materiality shall be true and correct in all respects, and
each of such representations and warranties that is not so qualified shall be
true and correct in all material respects, in each case, as of the Closing Date
as though made on and as of the Closing Date or, in the case of representations
and warranties made as of a specified date earlier than the Closing Date, on
and as of such earlier date.

 

(e)           The
level of inventory of the Marketed Products held by Seller’s distributors,
licensees and wholesalers on the Closing Date shall not exceed a level that
would be reasonably expected to be sold in the ordinary course of business,
consistent with past practice during the calendar year 2007, [****]*.

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

36

 

(f)            If Buyer shall have complied in all respects
with its obligations under Section 8.5(a), and Buyer shall have taken all material action
that is within its reasonable control and required
by it pursuant to the terms of the written commitments of third parties
referred to in Section 7.4 and the definitive agreements entered
into in connection therewith, then it shall be a condition to Buyer’s
obligations under this Agreement that it shall have obtained financing on terms
substantially similar to those set forth in the commitment letters referred to
in Section 7.4 and in an amount sufficient to pay the Initial
Purchase Price at Closing.

 

9.2           Conditions
to Obligations of Seller.  All
obligations of Seller hereunder are, at the option of Seller, subject to the conditions
precedent that (all or any of
which may be waived by Seller, in whole or in part), at the Closing:

 

(a)           All
consents, approvals and actions of, filings with and notices to any
Governmental Entity necessary to permit Buyer and Seller to perform their
obligations under this Agreement and to consummate the transactions
contemplated hereby (a) shall have been duly obtained, made or given, (b) shall
be in form and substance reasonably satisfactory to Seller, (c) shall not
be subject to the satisfaction of any condition that has not been satisfied or
waived and (d) shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental Entity necessary for
the consummation of the transactions contemplated by this Agreement, including
under the HSR, shall have occurred.

 

(b)           There
shall not be in effect on the Closing Date any order or law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement and there shall not be pending
or threatened on the Closing Date any action or proceeding in, before or by any
Governmental Entity which could reasonably be expected to result in the
issuance of any such order or the enactment, promulgation or deemed
applicability to Seller or the transactions contemplated by this Agreement of
any such law.

 

(c)           Buyer
shall have furnished to Seller all deliverables set forth in subsections
(i)-(iv),  (vi),  (viii) and (ix) of Section 4.2(b),
and shall have performed and complied with, in all material respects, each
agreement, covenant and obligation required by this Agreement to be so
performed or complied with by Buyer at or before Closing.

 

(d)           Each
of the representations and warranties of Buyer set forth in this Agreement that
is qualified by materiality shall be true and correct in all respects, and each
of such representations and warranties that is not so qualified shall be true
and correct in all material respects, in each case, as of the Closing Date as
though made on and as of the Closing Date or, in the case of representations
and warranties made as of a specified date earlier than the Closing Date, on
and as of such earlier date.

 

CONFIDENTIAL TREATMENT REQUESTED

 

37

 

ARTICLE 10

POST-CLOSING COVENANTS

 

10.1         Further
Assurances.

 

(a)           At
any time or from time to time after Closing, at Buyer’s reasonable request and
without further consideration, Seller shall execute and deliver to Buyer such
other instruments of sale, transfer, conveyance, assignment and confirmation,
provide such materials and information and take such other actions as Buyer may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to Buyer, and to confirm Buyer’s title to, all of the Assets,
and, to the full extent permitted by law, to put Buyer in actual possession and
operating control of the Business and the Assets and to assist Buyer in
exercising all rights with respect thereto, and otherwise to cause Seller to
fulfill its obligations under this Agreement. 
Without limiting the foregoing, (i) if, on or prior to the [****]*
of the Closing Date, either Buyer or Seller becomes aware that an asset or
property of Seller or its Affiliates that was used solely or primarily in, or
that was necessary for the conduct of, the Business on the Effective Date, was
not sold, transferred, assigned, conveyed and delivered to Buyer on the Closing
Date, then (A) if such asset or property was used solely in the Business
on the Effective Date, Seller shall promptly sell, transfer, assign, convey and
deliver such asset or property to Buyer, or (B) if such asset or property
was used primarily in, or was otherwise necessary for the conduct of, the
Business on the Effective Date, Seller shall either promptly sell, transfer,
assign, convey and deliver such asset or property to Buyer, or make such asset
or property available to Seller under a perpetual, paid-up, irrevocable,
royalty-free, non-exclusive license, with the right to sublicense, in each case
without any additional consideration being due to Seller, and (ii) in the
event that any Affiliate of Seller has any right, title or interest in any
Asset (or any other asset used in the Business that would otherwise be an Asset
if owned by Seller), then Seller shall cause such Affiliate to transfer and
assign all such right, title and interest to Buyer.

 

(b)           Effective
on the Closing Date, Seller hereby constitutes and appoints Buyer the true and
lawful attorney of Seller, with full power of substitution, in the name of
Seller or Buyer, but on behalf of and for the benefit of Buyer: (i) to
demand and receive from time to time any and all Assets and to make
endorsements and give receipts and releases for and in respect of the same and
any part thereof; (ii) to institute, prosecute, compromise and settle any
and all actions or proceedings that Buyer may deem proper in order to collect,
assert or enforce any claim, right or title of any kind in or to the Assets; (iii) to
defend or compromise any or all actions or proceedings in respect of any of the
Assets; and (iv) to do all such acts and things in relation to the matters
set forth in the preceding clauses (i) through (iii) as Buyer shall
deem desirable.  Seller hereby
acknowledges that the appointment hereby made and the powers hereby granted are
coupled with an interest and are not and shall not be revocable by it in any
manner or for any reason.  Seller shall
deliver to Buyer at Closing an acknowledged power of attorney to the foregoing
effect executed by Seller.  Buyer shall
indemnify and hold harmless Seller from any and all Losses caused by or arising
out of any breach of law by Buyer in its exercise of such power of attorney.

 

(c)           Seller
agrees to cooperate with Buyer in enforcing any rights Seller may have,
contractual or otherwise, which Seller may retain after the Closing Date and
which may relate to the Assets and/or the Business; provided, however,
such enforcement must include a claim for damages attributable to post-Closing
periods.  Seller agrees to appoint Buyer
as its 

 

* Certain information on
this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

38

 

agent, with full
authority to enforce such rights, and agrees to join in any litigation to the
extent deemed necessary by Buyer to protect Buyer’s interest in the Assets
and/or the Business.  Buyer shall have
the right to sue for and recover past, present and future damages resulting
from Seller’s retained rights; provided, however, such suit must
include a claim for damages attributable to post-Closing periods.  To the extent such damages can be attributed
to damages occurring before the Closing Date, Buyer shall, to the extent
recovered by Buyer, pay to Seller the portion of any total recovery minus costs
of litigation attributable to such damages. 
Seller shall make available to Buyer any of its employees, officers, and
directors as requested by Buyer during the course of litigation.  Seller shall promptly cooperate with Buyer at
Buyer’s request in gathering information and in responding to any discovery or
other obligation of Buyer in preparation for or during the conduct of
litigation.  Subject to the allocation of
costs of litigation stated above, Buyer shall, with respect to the services
provided by Seller on Buyer’s request under this Section 10.1(c),
pay Seller’s expenses and indemnify Seller consistent with the provisions of Section 4
and Section 5 of the Litigation Cooperation Agreement.  Seller shall promptly deliver copies of
all proprietary, inventions, confidentiality and similar agreements 
between Seller and any Business Employee, as well as such other agreements
that Buyer may reasonably request from time to time for purposes of
exercising its rights under this Section 10.1(c), including,
without limitation, agreements with past or present employees, agents or
representatives.

 

10.2         Transfer
of Registrations; Interim Responsibility.

 

(a)           Promptly
after the Closing Date, Seller shall (i) send letters to the FDA and other
Governmental Entities indicating that the Registrations are transferred to
Buyer and that Buyer is the new owner of the Registrations as of the Closing
Date and (ii) provide to Buyer a copy of said letters.

 

(b)           Promptly
after the Closing Date, the parties will cooperate in transferring the
Registrations to Buyer.  The target date
for the transfer shall be agreed upon by the parties, but shall not be later
than [****]* from the Closing Date.  Prior to the Closing, the parties will agree
upon procedures to ensure a smooth transition from Seller to Buyer of all of
the activities required to be undertaken by the Registration(s) holder,
including adverse experience reporting, quarterly and annual reports to FDA,
handling and tracking of complaints, sample tracking, and communication with
health care professionals and customers which shall be specified in the
Transition Services Agreement or an amendment thereto.  Within [****]* after the Closing Date, Seller
will forward to Buyer a complete copy of the Registrations for the CV Products,
as well as copies of all correspondence with, and periodic and other reports
(including adverse event reports and the underlying data) to, regulatory
authorities in the applicable Territory. 
Seller will cooperate with Buyer to ensure a smooth transition of the
activities contemplated hereby, and in obtaining the cooperation of Seller and
its distributors and licensees of the CV Products with the transfer of adverse
experience reporting obligations from Seller to Buyer.

 

* Certain information on
this page has been omitted and filed separately with the SEC.  Confidential treatment has been requested with
respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

39

 

(c)           Until
the Registrations have been transferred to Buyer, Seller shall be responsible
for maintaining them, at Seller’s sole cost and expense.  After such transfer, Buyer will assume all
responsibility for the Registrations, at Buyer’s sole cost and expense.  Each party shall cooperate with the other in
making and maintaining all regulatory filings that may be necessary in
connection with the execution, delivery and performance of this Agreement.

 

10.3         Communication
With Agencies.  Until the
Registrations are transferred to Buyer, Seller shall have responsibility for
all communications with the FDA relating to the CV Products, and Seller will
promptly provide Buyer with copies of all communications from the FDA with
respect to the CV Products and/or the manufacture thereof, and Seller shall
consult with Buyer and reflect the Buyer’s reasonable requests regarding all
communications to the FDA with respect to the CV Products and/or the
manufacture thereof, prior to making such communication with the FDA.  After such transfer has been completed, Buyer
shall have responsibility for all such communication it sends to or receives
from any Governmental Entity in the applicable Territory concerning the CV
Products.

 

10.4         Adverse
Experience Reporting.

 

(a)           Until
the Registrations are transferred to Buyer, Seller shall be responsible for the
adverse experience and safety reporting for the CV Products in compliance with
the requirements of the FD&C Act and the regulations promulgated
thereunder.  After the Registrations are
transferred to Buyer, Buyer shall assume such responsibility.  Buyer and Seller agree to meet promptly after
the Closing Date to determine mutually agreeable reporting procedures to
communicate the information as required under this Section 10.4.

 

(b)           On
or before the Closing Date, Seller shall provide Buyer with a summary of the
information relating to the investigation and reporting of adverse experiences
regarding the CV Products and all appropriate information that is relevant to
the safe use of the CV Products as of the Closing Date.

 

(c)           After
the Closing Date and until the Registrations are transferred to Buyer, Buyer
agrees to promptly submit to Seller all adverse drug experience information and
customer complaints brought to the attention of Buyer with respect to the CV
Products, as well as any material events and matters concerning or affecting
the safety or efficacy of the CV Products. 
Such information or customer complaints shall be forwarded to Seller to
the attention of:

 

CONFIDENTIAL TREATMENT REQUESTED

 

40

 

	
  Name:

  	
  [****]*

  
	
  Title:

  	
  Medical Director, Drug Safety

  
	
  Address:

  	
  1400 Seaport Blvd

  
	
   

  	
  Redwood City, CA 94063

  
	
  Facsimile:

  	
  650-454-1403

  
	
  Drug safety mailbox:

  	
  drugsafety@pdl.com

  

 

(d)           After
the Registrations have been transferred to Buyer, Seller shall assist Buyer
with the provision of data relating to adverse experiences for the CV Products
after such transfer to Buyer. 
Additionally, after the transfer of the Registrations to Buyer, Seller
shall provide Buyer with all adverse drug experience information and customer
complaints brought to the attention of Seller with respect to the CV Products,
as well as any material events and matters concerning or affecting the safety
or efficacy of the CV Products, via facsimile to the attention of:

 

	
  Name:

  	
  [****]*

  
	
  Title:

  	
  Director of Regulatory Affairs

  
	
  Address:

  	
  7 East Frederick Place

  
	
   

  	
  Cedar Knolls, NJ 07927

  
	
  E-mail:

  	
  [****]*

  

 

10.5         Medical
Inquiries.  Promptly after the
Registrations have been transferred to Buyer, Buyer shall assume all
responsibility for all correspondence and communication with physicians and
other health care professionals and customers in the applicable Territory
relating to the CV Products.  After the
Closing Date, Buyer and Seller shall work together towards an orderly
transition of the responsibility for all correspondence and communication with
health care professionals and customers in the applicable Territory relating to
the CV Products.  Seller shall continue
to be responsible for such correspondence and communication under the direction
of Buyer until the Registrations have been transferred to Buyer.  Buyer shall keep such records and make such
reports as shall be reasonably necessary to document such communications in
compliance with all applicable regulatory requirements.  After transfer of responsibility to Buyer
pursuant to this Article 10, Seller shall, except in the case of
medical emergency, refer all questions relating to the CV Products raised by
health care professionals and customers to Buyer for its response.

 

10.6         Non-Use
of Trademarks.  Buyer covenants that,
except as expressly permitted in this Agreement, Buyer shall not use in any
manner any trademark of Seller (other than the Trademarks listed in Attachment
2.1(c) and transferred to Buyer pursuant to this Agreement).

 

10.7         Documents.  Seller will permit Buyer, its financing
sources and their duly authorized representatives access during normal business
hours (upon written notice to Seller) to contracts and other data relating to
the Business, the Assets conveyed and assumed at the Closing to the extent
copies of such items were not delivered to Buyer.  Buyer will permit Seller and its 

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

41

 

duly authorized representatives access during
normal business hours (upon written notice to Buyer) to all contracts and other
data relating to the Assets conveyed and assumed at the Closing to the extent
originals of such items were delivered to Buyer.  Such access by Buyer, Seller or such other
person, as the case may be, shall be allowed until the later to occur of the
expiration of the statute of limitations for the imposition of Tax with respect
to the years to which such data pertain, or seven years from the year to which
such data pertain, provided that such access shall not unduly interfere with
the business and affairs of the party or applicable Affiliate permitting such
access.  Buyer will cooperate with
Seller, and Seller will cooperate with Buyer, with respect to any Tax
examinations, audits, contests or other Tax proceedings, relating to the
Business.  The party requesting
assistance hereunder shall reimburse the other party for reasonable expenses
incurred in providing such assistance.

 

10.8         Governmental
Inspections.  For a period of [****]*
following the Closing Date each party shall advise the other party of any
governmental visits to, or written or oral inquiries about, any facilities (to
the extent such visit relates to, or the results thereof could affect the
manufacture or supply of, the CV Products) or procedures for the manufacture,
storage or handling of the CV Products, or the marketing, selling, promotion or
distribution of any of the CV Products, promptly after any such visit or
inquiry (or in advance, for any scheduled visits).  During this period, each party shall promptly
furnish to the other party any report or correspondence issued by or provided
to a Governmental Entity in connection with such visit or inquiry, purged only
of Confidential Information of such party wholly unrelated to the other party’s
activities under this Agreement and any information that is unrelated to the CV
Products.  Each party shall permit the
relevant Governmental Entity to inspect its facilities in connection with the
activities contemplated by this Agreement.

 

10.9         Intellectual
Property Maintenance.  Following the
Closing, Buyer will have the sole right (but not the obligation) to file,
prosecute and maintain, at its sole cost and expense any patent applications,
Patents, Trademark Registrations and Domain Names that cover or relate to the
CV Products.  Following the Closing,
Buyer shall be responsible for recording the assignment of the assigned
Patents, Domain Names and Trademark Registrations with the U.S. Patent and
Trademark Office and other authorities or entities as it deems appropriate, at
its own cost and expense (including any attorney fees and filing fees).  Seller shall fully cooperate with Buyer, as
and to the extent reasonably requested by Buyer after the Closing Date, at
Buyer’s sole cost and expense, to secure any further registration of, or to enforce
or defend, any Patents, Trademarks, Registrations, Domain Names or other
intellectual property rights related to the CV Products for the benefit of
Buyer and to execute assignments and any other documents to effect the transfer
of such Patents, Trademarks, Registrations, Domain Names or other intellectual
property rights related to the CV Products to Buyer.

 

10.10       Insurance.  As of the Closing Date, the coverage under
all insurance policies related to the Assets and the Business shall continue in
force only for the benefit of Seller, and not for the benefit of Buyer, the
Assets or the Business.  As of the
Closing Date, Buyer agrees to 

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

42

 

arrange for its own insurance policies with
respect to the Assets and Buyer’s conduct of the Business.

 

10.11       Federal
Supply Schedule.  Buyer shall within five
(5) business days after the Closing Date, add the Marketed Products to its
Federal Supply Schedule.

 

10.12       Promotion,
Marketing and Labeling.  Promptly
after the Registrations have been transferred to Buyer and subject to
applicable regulatory approvals, all Buyer advertising and promotional
materials for the Marketed Products shall identify Buyer as the marketer of the
Marketed Products in the applicable Territory, in such form as Buyer shall
determine.  Promptly after the
Registrations have been transferred to Buyer, Buyer shall make such changes in
the package insert, Marketed Products labeling and packaging as may be required
to reflect Buyer as the marketer of the Marketed Products in the applicable
Territory, including making all required FDA and any other regulatory filings
in connection therewith.  Promptly after
the Registrations have been transferred to Buyer, Seller shall file with the
FDA a notice that Buyer is the marketer and distributor of the Marketed
Products in the applicable Territory.  To
the extent that the FDA requests additional information or meetings regarding
Buyer’s responsibilities as marketer and distributor of the Marketed Products
in the applicable Territory, Buyer shall respond to the FDA at its own expense
and through its own personnel.  Seller is
not required to change the Marketed Products’ labeling or package insert, or
packaging for the Drug Products or the Packaged Products.  With respect to the Product Inventory
purchased by Buyer hereunder, Buyer shall be permitted (i) until [****]*
in the case of the [****]* other than [****]*, (ii) until [****]* in the
case of [****]*, and (iii) until [****]* in the case of the [****]* to
sell Marketed Products from the Product Inventory as labeled and packaged prior
to the Closing Date, without regard to whether such Marketed Products
references Seller or includes any intellectual property rights Seller has in
Trademarks that may be included on the labels and packaging but not conveyed to
Buyer pursuant to this Agreement, provided that all such Product Inventory
shall be held, maintained, distributed and sold in accordance with the
Registrations and all applicable laws. 
Without the prior written approval from Seller, which approval shall not
be unreasonably withheld or delayed, Buyer shall not use or distribute any
marketing, promotional or advertising copy related to the [****]* has been
transferred to Buyer; provided, however, that nothing herein shall require
any approval from Seller for Buyer to issue invoices for, and collect
revenues from, sales of the [****]* from and after the Closing Date.

 

10.13       Payments
from Third Parties.  As soon as
reasonably practicable after the Closing Date but not more than [****]*
thereafter, Seller will provide Buyer with a list of all of the customers and
wholesalers purchasing the Marketed Products from Seller, and Seller and Buyer
shall notify those customers and wholesalers that Buyer has acquired all of
Seller’s right, title and interest in and to the marketing and sale of the
Marketed Products in the applicable Territory and all payments with respect to
the sale of the Marketed Products after the Closing Date should be paid
directly to Buyer at its designated account. 
Seller and Buyer shall notify customers and wholesalers using the third
party notification letter substantially in the form attached hereto as Exhibit J.  In the event that, on or after the Closing
Date, either party shall receive any payments 

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

43

 

or other funds due to the other party, then
the party receiving such funds shall promptly forward such funds to the proper
party.  The parties acknowledge and agree
there is no right of offset regarding such payments and a party may not
withhold funds received from third parties for the account of the other party
in the event there is a dispute regarding any other issue under this
Agreement.  Buyer and Seller shall each
keep, and shall cause its respective Affiliates and third party sublicensees to
keep, full and accurate records and books of account containing all particulars
that may be necessary for the purpose of determining any amounts that may be
payable to the other party hereunder, and shall afford each other with access
to books and records and with audit and other rights consistent with the rights
set forth in Section 3.5 of this Agreement.

 

10.14       Product
Returns, Chargebacks and Rebates. 
Except as otherwise provided in the Transition Services Agreement, Buyer
shall assume responsibility for handling all returns of the CV Products sold by
or for Seller prior to the Closing Date in accordance with Seller’s normal
return policies and procedures.  Any
returns received directly by Seller after the Closing Date shall be forwarded
to Buyer’s designated facility for handling of the returned CV Products and
processing of customer credits.  Notwithstanding
the foregoing, [****]* shall be responsible for [****]* and [****]* shall be
financially responsible for all such chargebacks and rebates related to the CV
Products sold after the Closing Date.

 

10.15       Bulk Transfer Laws.  Buyer hereby waives compliance by Seller with
the provisions of any so-called “bulk transfer law” of any jurisdiction in
connection with the sale of the Assets to Buyer.  Seller shall indemnify and hold Buyer
harmless from, against and in respect of (and shall reimburse Buyer for) any
and all liabilities that may be asserted by third parties against Buyer as a
result of noncompliance with any such bulk transfer law.

 

10.16       Non-Competition.

 

(a)            Except
as otherwise permitted or required under this Agreement or the Transition Services
Agreement, Seller shall, from Closing until [****]* from the Closing Date,
refrain from, either alone or in conjunction with any other person or entity,
directly or indirectly through Affiliates controlled by Seller, develop, or plan to develop, any other drug
candidate or product that, directly or indirectly, reasonably could be
expected to be competitive with the Business; provided, however,
that

 

i.              any
third party that sells  drug candidates or products that, directly
or indirectly, compete with the Business, may merge with or otherwise acquire
Seller, or all or substantially all of Seller’s assets, and continue to sell
such competing drug candidates and products; and

 

ii.             such
combined entity or third party may thereafter merge with or otherwise acquire
any other third party (or all or substantially all of such third party’s
assets) that sells  drug candidates or products that, directly
or indirectly, compete with a different aspect of the Business, and continue to
sell such drug candidates and products.

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

44

 

(b)           The
parties recognize that the laws and public policies of various states and
jurisdictions may differ as to the validity and enforceability of covenants
similar to those set forth in this Section. 
It is the intention of the parties that the provisions of this Section be
enforced to the fullest extent permissible under the laws and policies of each
jurisdiction in which enforcement may be sought, and that the unenforceability
(or the modification to conform to such laws or policies) of any provisions of
this Section shall not render unenforceable, or impair, the remainder of
the provisions of this Section. 
Accordingly, if any provision of this Section shall be determined
to be invalid or unenforceable, such invalidity or unenforceability shall be
deemed to apply only with respect to the operation of such provision in the
particular jurisdiction in which such determination is made and not with
respect to any other provision or jurisdiction.

 

(c)           The
parties acknowledge and agree that any remedy at law for any breach of the
provisions of this Section would be inadequate, and Seller hereby consents
to the granting by any court of an injunction or other equitable relief,
without the necessity of actual monetary loss being proved, in order that the breach
or threatened breach of such provisions may be effectively restrained.

 

ARTICLE 11

CONFIDENTIALITY

 

11.1         Confidentiality.  Following the Effective Date, the
Confidentiality Agreement will remain in full force and effect in accordance
with its terms, except as otherwise modified by this Agreement, and all
Confidential Information previously or hereafter disclosed from time to time in
the course of the performance of this Agreement, shall be held in confidence by
the other party pursuant to the Confidentiality Agreement, except as permitted
under this Agreement or as necessary to carry out the activities contemplated
hereby.  Notwithstanding anything to the
contrary herein, obligations of the parties under this Agreement are several
and not joint with the intention that each party be responsible for their own
actions and the actions of their respective representatives and not for actions
of any of the other parties hereto. 
Neither party shall, without the prior written consent of the other
party, use the Confidential Information of the other party for any purpose
other than performing its obligations or exercising its rights under this
Agreement.  Each party shall disclose the
Confidential Information of the other party only to its directors, employees,
consultants, vendors, financing sources and clinicians under written agreements
of confidentiality at least as restrictive as those set forth in this
Agreement, who have a need to know such information in connection with such
party performing its obligations or exercising its rights under this Agreement;
provided, however, Buyer shall be severally responsible for any
breach of this Agreement or the confidentiality agreement between Buyer and
such third party or its representatives, and Buyer agrees, at its sole expense,
to take all reasonable measures to restrain such third parties and its
representatives from prohibited or unauthorized disclosure or use of the
Confidential Information. 
Notwithstanding the foregoing, no provision of this Agreement shall be
construed so as to preclude such disclosure of Confidential Information as may
be inherent in or reasonably necessary to the securing from any Governmental
Entity of any necessary approval or license related to the CV Products, to the
obtaining of patents.  Following the
Closing, (i) the confidentiality restrictions contained herein 

 

CONFIDENTIAL TREATMENT REQUESTED

 

45

 

and in the Confidentiality Agreement will not
apply to Buyer’s use of documents and information concerning the Business
(except to the extent that such documents and information contain information
related to Seller’s other business or the Excluded Assets), the Assets or the
Assumed Liabilities, and (ii) any information related to the Business
(excluding information related to Seller’s other business or the Excluded
Assets), the Assets or the Assumed Liabilities shall be considered Confidential
Information of Buyer for the purposes of this Agreement and the Confidentiality
Agreement.  Upon the termination of this
Agreement, and upon the written request of the other party, each party shall
promptly return to the other party all copies and embodiments of the
Confidential Information of such other party, subject to the retention by each
party’s legal department of one complete copy for archival purposes.

 

11.2         Publicity.  No party to this Agreement shall originate
any publicity, news release or other public announcement, written or oral,
whether relating to this Agreement or the existence of any arrangement between
the parties, without the prior written consent of the other party whether named
in such publicity, news release or other public announcement or not, except
where such publicity, news release or other public announcement is required by
law; provided, that in such event, the party issuing same shall still be
required to consult with the other party whether named in such publicity, news
release or public announcement or not, a reasonable time prior to its release
to allow the other party to comment thereon and, after its release, shall
provide the other party with a copy thereof. 
If either party, based on the advice of its counsel, determines that
this Agreement, or any of the other documents executed in connection herewith,
must be filed with the SEC, then such party, prior to making any such filing,
shall provide the other party and its counsel with a redacted version of this
Agreement (or any other related documents) which it intends to file, and will
give due consideration to any comments provided by the other party or its
counsel and use reasonable efforts to ensure the confidential treatment by the
SEC of those sections specified by the other party or its counsel.  Notwithstanding the foregoing, Buyer’s
financing sources or other professional advisors may publish “tombstones” or
other customary announcements relating to the purchase financing and the
transactions contemplated hereby.

 

ARTICLE 12

TERM
AND TERMINATION

 

12.1         Termination.

 

This Agreement may be terminated prior to the Closing:

 

(a)           By
Buyer, upon written notice (A) at any time prior to Closing, if Seller
shall have failed to comply in any material respect with any of its obligations
in this Agreement, and such failure shall be continuing, or if any one or more
of the representations or warranties of Seller contained in this Agreement (i) that
is qualified by materiality shall prove to be inaccurate in any respect or (ii) that
is not so qualified shall prove to be inaccurate in any material respect; provided,
however, that Buyer shall give Seller thirty (30) days to cure any such
failure to so comply or to remedy any such inaccuracy under this Agreement; or (B) at
Closing, if any of the conditions precedent to the performance of Buyer’s
obligations at the Closing under Article 9 shall not have been
fulfilled (unless the failure results primarily from Buyer’s breach of any
representation, warranty, covenant or agreement contained this Agreement); provided,
however, 

 

CONFIDENTIAL TREATMENT REQUESTED

 

46

 

that in the event that Buyer shall desire to terminate
this Agreement as a result of the failure of the accuracy of a representation
or warranty at the Closing, Buyer shall be required to give Seller prior notice
that it intends to terminate this Agreement as a result of such inaccuracy, and
Seller shall have a reasonable period of time, not to exceed thirty (30) days,
to cure such inaccuracies.

 

(b)           By
Seller, upon written notice (A) at any time prior to Closing, if Buyer
shall have failed to comply in any material respect with any of its obligations
in this Agreement and such failure shall be continuing, or if any one or more
of the representations or warranties of Buyer contained in this Agreement (i) that
is qualified by materiality shall prove to be inaccurate in any respect or (ii) that
is not so qualified shall prove to be inaccurate in any material respect; provided,
however, that Seller shall give Buyer thirty (30) days to cure any such
failure to so comply or any such inaccuracy under this Agreement; or (B) at
the Closing, if any of the conditions precedent to the performance of its
obligations at the Closing under Article 9 shall not have been
fulfilled (unless the failure results primarily from Seller’s breach of any
representation, warranty, covenant or agreement contained this Agreement); provided,
however, that in the event that Seller shall desire to terminate this
Agreement as a result of the failure of the accuracy in any material respect of
a representation or warranty at the Closing, Seller shall be required to give
Buyer prior notice that it intends to terminate this Agreement as a result of
such inaccuracy and Buyer shall have a reasonable period of time, not to exceed
thirty (30) days, to cure such inaccuracies.

 

(c)           By
either party if the Closing shall not have occurred on or before March 31,
2008, provided, that such date shall be extended to June 30, 2008
in the event the waiting period under the HSR is extended, restarted or renewed
beyond the initial 30-day period, unless such failure to close is primarily the
result of the breach of any representations, warranties, covenants or
agreements contained in this Agreement by the party seeking to terminate.  Notwithstanding the foregoing, in the event
the Closing shall not have occurred on or before May 1, 2008 and the
[****]*, Buyer may terminate this Agreement on or after May 1, 2008, provided,
that Buyer, prior to May 1, 2008, shall have used its best efforts to
obtain [****]*.

 

12.2         Effect
of Termination.  In the event of
termination of this Agreement prior to the Closing, in accordance with its
terms:  (i) each party will
redeliver all documents, work papers and other material of any other party
relating to the transactions contemplated hereby, whether so obtained before or
after the Effective Date, to the party furnishing the same; (ii) the
provisions of Article 11 shall continue in full force and effect;
and (iii) no party hereto shall have any Liability or further obligation
to any other party to this Agreement, except for willful breach.

 

12.3         Effectiveness
of Termination.  Termination under
this Article 12 shall not become effective so long as the alleged
grounds for termination are in dispute and the matter(s) at issue have
been submitted for resolution pursuant to this Agreement.

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

47

 

ARTICLE 13

INDEMNIFICATION

 

13.1         Survivability
of Representations and Warranties. 
The representations and warranties made in Articles 6 and 7
or any instrument delivered pursuant to this Agreement shall not survive after
the Closing Date; provided, however, that the representations and
warranties of Seller in Sections 6.5 and 6.6 shall survive until
[****]* (the “Survival Date”).

 

13.2         Indemnification
by Buyer.  Buyer indemnifies and
holds harmless Seller, and any of its directors, officers, employees,
Affiliates, controlling persons, agents and representatives (the “Seller
Indemnitees”) from and against any Liabilities (a) to the extent such
Liabilities relate to the Assumed Liabilities, (b) arising from Buyer’s
breach of or non-performance of any covenant or agreement under this Agreement
or any instrument delivered pursuant to this Agreement, or (c) arising
from the conduct of the Business after the Closing.

 

13.3         Indemnification
by Seller.  Seller indemnifies and
holds harmless Buyer, and any of its directors, officers, employees,
Affiliates, controlling persons, agents and representatives (the “Buyer
Indemnitees”) from and against any Liabilities (a) to the extent such
Liabilities relate to the Excluded Liabilities, (b) arising from Seller’s
breach of or non-performance of any covenant or agreement under this Agreement
or any instrument delivered pursuant to this Agreement, (c) arising from
the conduct of the Business on or prior to the Closing, or (d) arising
from any breach of the representations or warranties of Seller contained in Section 6.6
(Intellectual Property).  [****]* shall
have no obligations with respect to any [****]*.

 

13.4         Claims.  Any Buyer Indemnitee or Seller Indemnitee
claiming it may be entitled to indemnification under this Article 13
(the “Indemnified Party”) shall give prompt notice to the other party
(the “Indemnifying Party”) of each matter, action, cause of action,
claim, demand, fact or other circumstances upon which a claim for
indemnification (a “Claim”) under this Article 13 may be
based.  Such notice shall contain, with
respect to each Claim, such facts and information as are then reasonably
available, the specific basis for indemnification hereunder, together with the
amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith.  Failure to
give prompt notice of a Claim hereunder shall not affect the Indemnifying
Party’s obligations under this Section, except to the extent the Indemnifying
Party is prejudiced by such failure.

 

13.5         Assertion
of Claims.  No claim shall be brought
under Sections 13.2, 13.3 or 13.4 hereof unless the Buyer
Indemnitees, or any of them, or the Seller Indemnitees, or any of them, as the
case may be, at any time prior to the applicable Survival Date, provide Buyer
or Seller, as the case may be, with written notice of the existence of any such
claim, reasonably specifying the nature and basis of such claim and the amount
thereof, to the extent known; provided, that, the failure so to provide
such notice to Buyer or Seller, as the case may be, will not relieve Buyer or
Seller, as the case may be, from any Liability which they may have to the Buyer
Indemnitees or 

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

48

 

the Seller Indemnitees, as the case may be,
under this Agreement or otherwise, except to the extent that Buyer or Seller,
as the case may be, reasonably demonstrates that such failure results in the
loss or compromise of any rights or defenses of Buyer or Seller, as the case
may be, and that Buyer or Seller, as the case may be, were not otherwise aware
of such action or claim.  Upon the giving
of such written notice as aforesaid, the Buyer Indemnitees, or any of them, or
the Seller Indemnitees, or any of them, as the case may be, shall have the
right to commence legal proceedings prior or subsequent to the Survival Date
for the enforcement of their rights under Sections 13.2, 13.3 or 13.4
hereof, as the case may be.

 

13.6         Payment
of Claims; Limitation on Indemnification. 
Notwithstanding anything to the contrary in Sections 13.3 or 13.4,
any Liability under Section 13.3(d) shall limited as follows:
[****]*.

 

13.7         Limitation;
Exclusivity.  No Claim shall be made
or have any validity unless the Indemnified Party shall have given written
notice of such Claim to the Indemnifying Party. 
If full recovery under any such Claim is not had within [****]* of such
written notice, arbitration, pursuant to Section 14.4, must be
commenced within thirty (30) days following the end of such [****]* or such
Claim shall be invalidated.  This Article 13
provides the exclusive means by which a party may assert Claims against the
other party and Section 14.4 provides the exclusive means by which
a party may bring actions against the other party with respect to any breach by
the other party of its indemnification obligations under this Article 13.

 

ARTICLE 14

MISCELLANEOUS

 

14.1         Survival
of Covenants and Agreements.  The
covenants and agreements contained in Sections 2.1, 2.2, 2.3
and 2.4 shall survive Closing [****]*. 
All other covenants and agreements herein shall survive Closing until
[****]* the last date on which such covenant or agreement is to be performed
or, if no such date is specified [****]*. 
Any covenant or agreement that would otherwise terminate in accordance
with the above will continue to survive if a notice of a Claim shall have been
timely given under Article 13 on or prior to such termination date,
until the related claim for indemnification has been satisfied or otherwise
resolved as provided in Article 13.

 

14.2         No
Third Party Beneficiaries.  Nothing
in this Agreement, express or implied, is intended to or shall (i) confer
on any person other than the parties hereto (and Buyer Indemnitees and Seller
Indemnitees referred to herein) and their respective successors or assigns any
rights (including third party beneficiary rights), remedies, obligations or
liabilities under or by reason of this Agreement, or (ii) constitute the
parties hereto as partners or as participants in a joint venture.  This Agreement shall not provide third
parties with any remedy, claim, liability, reimbursement, cause of action or
other right in excess of those existing without reference to the terms of this
Agreement.  No third party shall have any
right, independent of any right which 

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

49

 

may exist irrespective of this Agreement,
under or granted by this Agreement, to bring any suit at law or equity for any
matter governed by or subject to the provisions of this Agreement.

 

14.3         Force
Majeure.  If the performance by
either party of any obligation under this Agreement is prevented, restricted,
interfered with or delayed by reason of any cause beyond the reasonable control
of the party liable to perform, unless conclusive evidence to the contrary is
provided, the party so affected shall, upon giving written notice to the other
party, be excused from such performance to the extent of such prevention,
restriction, interference or delay, provided that the affected party shall use
its reasonable efforts to avoid or remove such causes of non-performance and
shall continue performance with the utmost dispatch whenever such causes are
removed.  When such circumstances arise,
the parties shall discuss what, if any, modification of the terms of this
Agreement may be required in order to arrive at an equitable solution.

 

14.4         Governing
Law; Jurisdiction; Dispute Resolution and Arbitration.  This Agreement shall be deemed to have been
made in the State of California and its form, execution, validity, construction
and effect shall be determined in accordance with the laws of the State of
California, without giving effect to the principles of conflicts of law
thereof.  Disputes arising out of,
relating to or in connection with this Agreement, or in relations between the
parties with respect to the subject matter hereof, for any reason or under any circumstances,
will be finally settled by a single arbitrator in a binding arbitration in
accordance with the Judicial Arbitration and Mediation Services (“JAMS”)
Comprehensive Arbitration Rules and Procedures (the “JAMS Rules”).  Upon receipt of written notice of the
existence of a dispute by one party hereto to the other, the parties shall,
within thirty (30) days conduct a meeting of one or more senior executives of
each party, with full settlement authority, in an attempt to resolve the
dispute.  Each party shall make available
appropriate personnel to meet and confer with the other party reasonably within
the thirty-day period.  Upon the
expiration of the thirty-day period, or upon the termination of discussions between
the senior executives, either party may elect arbitration of any dispute by
written notice to the other (the “Arbitration Notice”).  The arbitration shall be held in San
Francisco, California before one (1) arbitrator from JAMS having
substantial experience as a jurist and mediator with significant disputes in
the biotechnology and/or pharmaceuticals industry selected by the mutual
agreement of the Buyer and the Seller; provided, however, that if
such parties cannot agree on an arbitrator within thirty (30) days of the
Arbitration Notice, either party may request JAMS select the arbitrator, and
JAMS shall select an arbitrator pursuant to the procedure set out by the JAMS
rules, provided, however, that the arbitrator selected be a former judge with
at least fifteen (15) years experience addressing as a jurist and/or mediator
significant disputes in the biotechnology and or pharmaceutical industry.  The arbitration shall be administered by JAMS
pursuant to its AAA Rules.  Judgment on
the arbitration award may be entered in any court having jurisdiction.  The arbitrator may, in the arbitration award,
allocate for payment by the non-prevailing party all or part of the costs of
the arbitration, including fees of the arbitrator and the reasonable attorneys’
fees and costs incurred by the prevailing party.  This Section shall not preclude the
parties from seeking provisional remedies in aid of arbitration from a court of
appropriate jurisdiction.  In respect of
any actions for injunctive or other equitable relief hereunder, any action or
proceeding may be brought against any party in the state and federal courts
located in the city of San Francisco, California and each of the parties
consents to the jurisdiction of such courts in any such action or proceeding
and waives any objection to venue laid therein.

 

CONFIDENTIAL TREATMENT REQUESTED

 

50

 

14.5         Severability.  If any provision of this Agreement is held by
a court of competent jurisdiction to be invalid or unenforceable, it shall be
modified, if possible, to the minimum extent necessary to make it valid and
enforceable or, if such modification is not possible, such provision shall be
stricken and the remaining provisions shall remain in full force and effect;
provided, however, that if a provision is stricken so as to significantly alter
the economic arrangements of this Agreement, the party adversely affected may
terminate this Agreement upon [****]* prior written notice to the other
party.  If any of the terms or provisions
of this Agreement is in conflict with any applicable statute or rule of
law in any jurisdiction, then such term or provision shall be deemed
inoperative in such jurisdiction to the extent of such conflict and the parties
will renegotiate the affected terms and conditions of this Agreement to resolve
any inequities.

 

14.6         Entire
Agreement.  This Agreement and the
ancillary transaction documents to be executed and delivered pursuant to this
Agreement are intended to define the full extent of the legally enforceable
undertakings and representations of the parties hereto, and no promise or
representation, written or oral, which is not set forth explicitly in this
Agreement or such ancillary transaction documents is intended by either party
to be legally binding; provided, however, in the event this Agreement
terminates, the Confidentiality Agreement shall continue in full force and
effect pursuant to its terms.  Each of
the parties acknowledge that in deciding to enter into this Agreement and to
consummate the transaction contemplated hereby none of them has relied upon any
statements or representations, written or oral, other than those explicitly set
forth in this Agreement.

 

14.7         Amendment.  This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
both parties that specifically refers to this Agreement.

 

14.8         Notices.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed effectively
given:  (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed facsimile, (iii) five
(5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. 
All communications shall be sent to the respective parties at the
addresses set forth below (or at such other addresses as shall be specified by
notice given in accordance with this Section):

 

	
  If to
  Seller:

  	
  PDL
  BioPharma, Inc.

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  1400 Seaport
  Boulevard

  
	
   

  	
  Redwood
  City, CA 94063

  
	
   

  	
  Facsimile:
  650-454-1468

  
	
   

  	
  E-mail: Francis.Sarena@pdl.com

  

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

51

 

	
  with a copy
  to:

  	
  DLA Piper US
  LLP

  
	
  (not to
  constitute notice)

  	
  Attention:
  Howard Clowes

  
	
   

  	
  153 Townsend
  Street, Suite 800

  
	
   

  	
  San
  Francisco, CA 94107-1957

  
	
   

  	
  Facsimile:
  415- 659-7410

  
	
   

  	
  E-mail: howard.clowes@dlapiper.com

  
	
   

  	
   

  
	
  If to Buyer:

  	
  EKR
  Therapeutics, Inc.

  
	
   

  	
  Attention:
  Richard DeSimone

  
	
   

  	
  7 East
  Frederick Place

  
	
   

  	
  Cedar
  Knolls, NJ 07927

  
	
   

  	
  Facsimile:
  +1 (866) 620-6848

  
	
   

  	
  E-mail: r.desimone@ekrtx.com

  
	
   

  	
   

  
	
  with a copy
  to:

  	
  Milbank, Tweed, Hadley & McCloy LLP

  
	
  (not to constitute notice)

  	
  Attention: Robert S. Reder, Esq.

  
	
   

  	
  One Chase Manhattan Plaza

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Facsimile No.: +1 (212) 822-5680

  
	
   

  	
  E-mail: RReder@milbank.com

  

 

14.9         Assignment.  This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective successors and assigns, but this Agreement shall not be
assignable by either party hereto without the express written consent of the
other party hereto which will not be unreasonably withheld, provided, however,
that Buyer may merge or consolidate with, or assign any or all of its rights,
interests and obligations hereunder to, a direct or indirect wholly-owned
subsidiary of Buyer, provided that no such merger, consolidation or assignment
shall relieve Buyer of its obligations hereunder, [****]*.

 

14.10       No
Agency.  It is understood and agreed
that each party shall have the status of an independent contractor under this
Agreement and that nothing in this Agreement shall be construed as
authorization for either party to act as agent for the other.  Neither party shall incur any Liability for
any act or failure to act by employees of the other party.

 

14.11       Construction.

 

(a)           This
Agreement has been prepared jointly and shall not be strictly construed against
either party.

 

(b)           For
purposes of this Agreement, whenever the context requires:  the singular number shall include the plural,
and vice versa; the masculine gender shall include the feminine and neuter
genders; the feminine gender shall include the masculine and neuter genders;
and the neuter gender shall include the masculine and feminine genders.

 

* Certain information on this page has been
omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

52

 

(c)            Except
as otherwise indicated, all references in this Agreement to “Articles,”
“Sections,” “Exhibits” and “Schedules” are intended to refer to Articles and
Sections and Exhibits and Schedules to this Agreement.

 

(d)           The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

14.12       Payment
of Expenses.  Except as otherwise set
forth in this Agreement or in the Transition Services Agreement, all costs and
expenses associated with this Agreement and the transactions contemplated
thereby, including the fees of counsel and accountants, shall be borne by the
party incurring such expenses.

 

14.13       Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. 
Any executed counterpart delivered by facsimile or other means of
electronic transmission shall be deemed an original for all purposes.

 

[Remainder of page intentionally left
blank; signature page follows]

 

CONFIDENTIAL TREATMENT REQUESTED

 

53

 

IN WITNESS WHEREOF, the parties, through
their authorized officers, have duly executed this as of the date first written
above.

 

 

	
   

  	
   

  	
  PDL BioPharma, Inc.,

  	
   

  
	
   

  	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ L.
  Patrick Gage

  
	
   

  	
   

  	
  Name: 

  	
  L. Patrick
  Gage

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Andrew
  Guggenhime

  
	
   

  	
   

  	
  Name: 

  	
  Andrew Guggenhime

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President and

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EKR Therapeutics, Inc.,

  	
   

  
	
   

  	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Howard Weisman

  
	
   

  	
   

  	
  Name:

  	
  Howard Weisman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chairman and Chief Executive 

  	
   

  
	
   

  	
   

  	
   

  	
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Richard DeSimone

  
	
   

  	
   

  	
  Name:

  	
  Richard DeSimone

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
							

 

 

SIGNATURE PAGE

ASSET PURCHASE AGREEMENT

 

CONFIDENTIAL TREATMENT  REQUESTEDExhibit 10.6

 

CONFIDENTIAL PROVISIONS REDACTED

 

ASSET PURCHASE AGREEMENT

 

BY AND BETWEEN

 

PDL BIOPHARMA, INC.,

a Delaware corporation

 

and

 

GMN, INC.,

a Delaware corporation

 

Dated as of February 21, 2008

 

CONFIDENTIAL TREATMENT REQUESTED

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 TRANSFER OF ASSETS;
  LICENSE AND SUBLICENSE

  	
  9

  
	
   

  	
  2.1

  	
  Purchase
  and Sale of Assets

  	
  9

  
	
   

  	
  2.2

  	
  Excluded
  Assets

  	
  10

  
	
   

  	
  2.3

  	
  Assumed
  Liabilities

  	
  10

  
	
   

  	
  2.4

  	
  Excluded
  Liabilities

  	
  11

  
	
   

  	
  2.5

  	
  Risk
  of Loss

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 CONSIDERATION

  	
  11

  
	
   

  	
  3.1

  	
  Purchase
  Price

  	
  11

  
	
   

  	
  3.2

  	
  Method
  of Payment

  	
  11

  
	
   

  	
  3.3

  	
  Allocation
  of Purchase Price

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 CLOSING

  	
  12

  
	
   

  	
  4.1

  	
  Closing

  	
  12

  
	
   

  	
  4.2

  	
  Actions
  at Closing

  	
  12

  
	
   

  	
  4.3

  	
  Prorations

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 REPRESENTATIONS AND
  WARRANTIES OF SELLER

  	
  16

  
	
   

  	
  5.1

  	
  Organization
  and Authority

  	
  16

  
	
   

  	
  5.2

  	
  No
  Violation or Conflict

  	
  17

  
	
   

  	
  5.3

  	
  Consents
  and Approvals

  	
  17

  
	
   

  	
  5.4

  	
  Assumed
  Contracts

  	
  17

  
	
   

  	
  5.5

  	
  Compliance
  with Legal Requirements; Governmental Authorizations

  	
  18

  
	
   

  	
  5.6

  	
  Legal
  Proceedings; Orders

  	
  20

  
	
   

  	
  5.7

  	
  Environmental
  Matters

  	
  20

  
	
   

  	
  5.8

  	
  Title
  to Assets; Real Property, Equipment and Supplies

  	
  21

  
	
   

  	
  5.9

  	
  Sufficiency
  of Assets

  	
  22

  
	
   

  	
  5.10

  	
  Condition
  of Tangible Personal Property

  	
  22

  
	
   

  	
  5.11

  	
  Supplies

  	
  22

  
	
   

  	
  5.12

  	
  Trade
  Secrets

  	
  23

  
	
   

  	
  5.13

  	
  Brokers
  and Finders

  	
  23

  
	
   

  	
  5.14

  	
  No
  Implied Warranty

  	
  23

  
	
   

  	
  5.15

  	
  Condition
  of Facilities

  	
  23

  
	
   

  	
  5.16

  	
  Disclosure

  	
  24

  
	
   

  	
  5.17

  	
  Product
  Liability

  	
  24

  
	
   

  	
  5.18

  	
  Suppliers

  	
  24

  
	
   

  	
  5.19

  	
  Employees

  	
  24

  
	
   

  	
  5.20

  	
  Insurance

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 REPRESENTATIONS AND
  WARRANTIES OF BUYER

  	
  25

  
	
   

  	
  6.1

  	
  Organization
  and Authority

  	
  25

  
	
   

  	
  6.2

  	
  No
  Conflict or Violation

  	
  25

  

 

CONFIDENTIAL TREATMENT REQUESTED

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  6.3

  	
  Consents
  and Approvals

  	
  25

  
	
   

  	
  6.4

  	
  Cash
  Resources

  	
  26

  
	
   

  	
  6.5

  	
  Seller’s
  Records

  	
  26

  
	
   

  	
  6.6

  	
  Environmental
  Governmental Authorizations

  	
  26

  
	
   

  	
  6.7

  	
  Litigation

  	
  26

  
	
   

  	
  6.8

  	
  Brokers
  and Finders

  	
  26

  
	
   

  	
  6.9

  	
  Buyer
  Due Diligence

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 PRE-CLOSING COVENANTS

  	
  27

  
	
   

  	
  7.1

  	
  Governmental
  Filings

  	
  27

  
	
   

  	
  7.2

  	
  Conduct
  of Operations

  	
  27

  
	
   

  	
  7.3

  	
  Obtaining
  Necessary Consents and Lease Extensions

  	
  27

  
	
   

  	
  7.4

  	
  No
  Solicitation

  	
  28

  
	
   

  	
  7.5

  	
  Access

  	
  28

  
	
   

  	
  7.6

  	
  Title
  Insurance

  	
  29

  
	
   

  	
  7.7

  	
  Inspections

  	
  30

  
	
   

  	
  7.8

  	
  Employees

  	
  31

  
	
   

  	
  7.9

  	
  Bulk
  Transfer Laws

  	
  32

  
	
   

  	
  7.10

  	
  Brokers
  and Finders

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 CONDITIONS TO CLOSING

  	
  32

  
	
   

  	
  8.1

  	
  Conditions
  to Obligations of Buyer

  	
  32

  
	
   

  	
  8.2

  	
  Conditions
  to Obligations of Seller

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 POST-CLOSING COVENANTS

  	
  34

  
	
   

  	
  9.1

  	
  Further
  Assurances

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 CONFIDENTIALITY

  	
  34

  
	
   

  	
  10.1

  	
  Confidentiality

  	
  34

  
	
   

  	
  10.2

  	
  Publicity

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11 TERM AND TERMINATION

  	
  35

  
	
   

  	
  11.1

  	
  Termination

  	
  35

  
	
   

  	
  11.2

  	
  [****]*

  	
  36

  
	
   

  	
  11.3

  	
  Consequences
  of Termination

  	
  36

  
	
   

  	
  11.4

  	
  Effectiveness

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12 INDEMNIFICATION

  	
  36

  
	
   

  	
  12.1

  	
  Survivability
  of Representations and Warranties

  	
  36

  
	
   

  	
  12.2

  	
  Indemnification
  by Buyer

  	
  37

  
	
   

  	
  12.3

  	
  Indemnification
  by Seller

  	
  37

  
	
   

  	
  12.4

  	
  Claims

  	
  37

  

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  12.5

  	
  Assertion
  of Claims

  	
  38

  
	
   

  	
  12.6

  	
  Payment
  of Claims; Limitation on Indemnification

  	
  38

  
	
   

  	
  12.7

  	
  Limitation;
  Exclusivity

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13 MISCELLANEOUS

  	
  38

  
	
   

  	
  13.1

  	
  No
  Third Party Beneficiaries

  	
  38

  
	
   

  	
  13.2

  	
  Governing
  Law; Jurisdiction; Dispute Resolution and Arbitration

  	
  39

  
	
   

  	
  13.3

  	
  Severability

  	
  39

  
	
   

  	
  13.4

  	
  Entire
  Agreement

  	
  40

  
	
   

  	
  13.5

  	
  Amendment

  	
  40

  
	
   

  	
  13.6

  	
  Notices

  	
  40

  
	
   

  	
  13.7

  	
  Assignment

  	
  41

  
	
   

  	
  13.8

  	
  No
  Agency

  	
  41

  
	
   

  	
  13.9

  	
  Construction

  	
  41

  
	
   

  	
  13.10

  	
  Payment
  of Expenses

  	
  42

  
	
   

  	
  13.11

  	
  Counterparts

  	
  42

  
							

 

CONFIDENTIAL TREATMENT REQUESTED

 

iii

 

LIST OF EXHIBITS, ATTACHMENT AND SCHEDULES

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  General
  Assignment and Bill of Sale

  
	
  Exhibit B

  	
  Limited
  Warranty Deed

  
	
  Exhibit C

  	
  Assignment
  and Assumption Agreement

  
	
  Exhibit D

  	
  Lease
  Assignment and Assumption Agreement

  
	
  Exhibit E

  	
  Note
  Assignment

  
	
  Exhibit F

  	
  Clinical
  Drug Substance Supply Agreement

  
	
  Exhibit G

  	
  Transition Services Agreement

  
	
  Exhibit H

  	
  Form of Third Party Consent

  
	
   

  	
   

  
	
  ATTACHMENTS

  	
   

  
	
   

  	
   

  
	
  Attachment 1.30

  	
  Environmental Governmental Authorizations

  
	
  Attachment 1.52

  	
  Knowledge Employees

  
	
  Attachment 2.1(d)

  	
  Equipment

  
	
  Attachment 2.1(e)

  	
  List of Assumed Contracts

  
	
  Attachment 4.2(a)

  	
  List of Third Party Consents

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule 5.3

  	
  Seller’s Required Consents

  
	
  Schedule 5.4(a)

  	
  Status of Assumed Contracts

  
	
  Schedule 5.4(b)

  	
  Third Party Consents

  
	
  Schedule 5.4(c)

  	
  Compliance with Contracts/Leases

  
	
  Schedule 5.5(a)

  	
  Compliance with Legal Requirements

  
	
  Schedule 5.5(b)

  	
  Governmental Authorizations

  
	
  Schedule 5.6(a)

  	
  Proceedings

  
	
  Schedule 5.6(b)

  	
  Orders

  
	
  Schedule 5.7

  	
  Environmental Matters

  
	
  Schedule 5.8(a)

  	
  Tangible Personal Property

  
	
  Schedule 5.8(d)(i)

  	
  Description of Real Property

  
	
  Schedule 5.8(d)(ii)

  	
  Title to Real Property

  
	
  Schedule 5.9

  	
  Sufficiency of Assets

  
	
  Schedule 5.10

  	
  Ownership of Tangible Personal Property

  
	
  Schedule 5.12

  	
  Employee Inventions, etc.

  
	
  Schedule 5.13

  	
  Seller’s Brokers

  
	
  Schedule 5.18

  	
  Suppliers

  
	
  Schedule 5.19

  	
  Operations Employees

  
	
  Schedule 6.3

  	
  Buyer’s Required Consents

  
	
  Schedule 6.8

  	
  Buyer’s Brokers

  
	
  Schedule 7.8(a)

  	
  Seller’s Retained Employees

  

 

CONFIDENTIAL TREATMENT REQUESTED

 

iv

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”) is entered into
as of February 21, 2008 (the “Effective Date”) between PDL
BioPharma, Inc., a Delaware corporation (“Seller”), and GMN, Inc., a Delaware corporation
(“Buyer”), a wholly owned subsidiary of Genmab A/S, a corporation
existing under the laws of Denmark.

 

RECITALS

 

A.            Seller is engaged in, among other
businesses, the Operations.

 

B.            Seller desires to
sell, transfer and assign to Buyer, and Buyer wishes to acquire, all right,
title and interest in and to the Assets, in exchange for consideration
consisting of cash and the assumption of certain Liabilities related to the
Assets, pursuant to the terms and conditions set forth in this Agreement.

 

C.            Concurrently with the execution and delivery of this
Agreement, Buyer and Seller are executing and delivering that certain Clinical
Drug Substance Supply Agreement in the form attached hereto as Exhibit F,
to be effective as of the Closing Date.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties to this
Agreement agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1           “3750 Lease” means that certain Lease Agreement
between St. Paul Properties, Inc., as landlord, and Seller, as tenant,
dated March 7, 1996, as amended February 28, 1999 and September 12,
2003 covering approximately 2,034 square feet of space at premises known as
3750 Annapolis Lane, Plymouth, MN 55447.

 

1.2           “3850 Lease” means that certain Lease Agreement
between St. Paul Properties, Inc., as landlord, and Seller, as tenant,
dated May 31, 2001 covering approximately 27,259 square feet of space at
premises known as 3850 Annapolis Lane, Plymouth, MN 55447.

 

1.3           “Affiliate” with respect to any party shall mean
any entity that is directly or indirectly controlling, controlled by or under
common control with such party.

 

1.4           “Agreement” shall have the meaning given in the
preamble above.

 

1.5           “Arbitration Notice” shall have the meaning given in Section 13.2.

 

1.6           “Assets” shall have the meaning given in Section 2.1.

 

CONFIDENTIAL TREATMENT REQUESTED

 

 

1.7           “Assignment and Assumption
Agreement”
shall have the meaning given in Section 4.2(a)(iv).

 

1.8           “Assumed Contracts” shall have the meaning given in Section 2.1(e).

 

1.9           “Assumed Liabilities” shall have the meaning given in Section 2.3.

 

1.10         “[****]*” shall have the meaning given in Section 11.2.

 

1.11         “Buyer Indemnitees” shall have the meaning given in Section 12.3.

 

1.12         “Buyer Notice Deadline” shall have the meaning given in Section 7.7(a).

 

1.13         “Buyer Termination Deadline” shall have the meaning given in Section 7.7(b).

 

1.14         “Claim” shall have the meaning given in Section 12.4.

 

1.15         “Clinical Drug Substance
Supply Agreement” shall mean the agreement entered into by Buyer and Seller effective
as of the Closing Date relating to manufacture and supply of certain products.

 

1.16         “Closing” and “Closing
Date”
shall have the respective meanings given in Section 4.1.

 

1.17         “Confidential Information” shall have the meaning ascribed to it
in the Confidentiality Agreement.

 

1.18         “Confidentiality Agreement” shall mean that certain Mutual
Confidentiality Agreement between Buyer and Seller dated November 13,
2007, as amended.

 

1.19         “Consent” means any approval, consent,
ratification, waiver or other authorization.

 

1.20         “Contemplated Transactions” shall mean the transactions
contemplated by this Agreement, including all transactions contemplated by the
other agreements contemplated by this Agreement.

 

1.21         “Contract” means any agreement, contract, lease,
covenant, promise or undertaking (whether written or oral and whether express
or implied).

 

1.22         “Cure Notice Deadline” shall have the meaning given in Section 7.6.

 

1.23         “Current Survey” shall mean an ALTA Non-Topographical
Survey prepared by a surveyor approved by Seller and licensed to perform
surveying work in the State of Minnesota certified to Buyer and the Title
Company and with such other certification as may be reasonably

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

2

 

required by Title
Company, meeting the minimum detail standard requirements adopted by ALTA in
2005.

 

1.24         “Development Agreement” shall have the meaning given in Section 2.1(e).

 

1.25         “Effective Date” shall have the meaning given in the
preamble above.

 

1.26         “Encumbrance” means any charge, claim, community or
other marital property interest, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of way, easement, encroachment,
servitude, right of first option, right of first refusal or similar
restriction, including any restriction on use, voting (in the case of any
security or equity interest), transfer, receipt of income or exercise of any
other attribute of ownership.

 

1.27         “Environment” means soil, land surface or subsurface
strata, surface waters (including navigable waters and ocean waters),
groundwater, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life and any other environmental medium or
natural resource.

 

1.28         “Environmental Cure Notice
Deadline”
shall have the meaning given in Section 7.7(b).

 

1.29         “Environmental Cure Response
Notice”
shall have the meaning given in Section 7.7(b).

 

1.30         “Environmental Governmental
Authorizations” shall mean the permits described in Attachment 1.30.

 

1.31         “Environmental Inspections” shall have the meaning given in Section 7.5.

 

1.32         “Environmental Laws” means any Legal Requirement that
requires or relates to:

 

(a)           advising
appropriate authorities, employees or the public of intended or actual Releases
of pollutants or hazardous substances or materials, violations of discharge
limits or other prohibitions and the commencement of activities, such as
resource extraction or construction, that could have significant impact on the
Environment;

 

(b)           preventing
or reducing to acceptable levels the Release of pollutants or hazardous
substances or materials into the Environment;

 

(c)           reducing
the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated;

 

(d)           assuring
that products are designed, formulated, packaged and used so that they do not
present unreasonable risks to human health or the Environment when used or
disposed of;

 

(e)           protecting
resources, species or ecological amenities;

 

CONFIDENTIAL TREATMENT REQUESTED

 

3

 

(f)            reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful substances;

 

(g)           cleaning
up pollutants that have been Released, preventing the Threat of Release or
paying the costs of such clean up or prevention; or

 

(h)           making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets;

 

Environmental Laws include, but are not limited to, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the Clean Water Act, the Clean Air Act,
the Toxic Substances and Control Act, and the Federal Insecticide, Fungicide,
and Rodenticide Act.

 

1.33         “Environmental Remediation” shall mean the cure or correction of an
Environmental Remediation Obligation to the levels required by Environmental
Laws applicable to the Real Property.

 

1.34         “Environmental Remediation
Obligation”
shall have the meaning given in Section 7.7(b).

 

1.35         “Environmental Remediation
Obligation Notice” shall have the meaning given in Section 7.7(b).

 

1.36         “Excluded Assets” shall have the meaning given in Section 2.2.

 

1.37         “Excluded
Liabilities”
shall have the meaning given in Section 2.4.

 

1.38         “Facilities” shall mean the Real Property, the
Leased Properties and the biologic manufacturing facilities thereon.

 

1.39         “Governmental Authorization” means any Consent, license,
registration or permit issued, granted, given or otherwise made available by or
under the authority of any Governmental Entity or pursuant to any Legal Requirement.

 

1.40         “Governmental Entity”  shall
mean any court, tribunal, arbitrator, authority, agency, commission,
department, bureau, board, including any board of fire underwriters, fire
insurance rating organization, regulatory body, official or other instrumentality
of the government of the United States or of any foreign or multinational body,
any state or any political subdivision of any such government or body (whether
state, provincial, county, city, municipal or otherwise) or any other
governmental, public or quasi-public authority.

 

1.41         “Hazardous Substances” shall mean any material, waste,
chemical, compound, substance, mixture, or byproduct that is identified,
defined, designated, listed, restricted or otherwise regulated under
Environmental laws as a “hazardous constituent,” “hazardous substance,” “hazardous
material,” “extremely hazardous material,” 
“restricted hazardous waste,” “hazardous waste,” “acutely hazardous
waste,” “hazardous waste constituent,” “infectious 

 

CONFIDENTIAL TREATMENT REQUESTED

 

4

 

waste,” “medical waste,” “biohazardous
waste,” “extremely hazardous waste,” pollutant,”  “toxic pollutant,” “toxic waste”, “toxic
substance” or “contaminant,” or any other names intended to identify substances
by reason of properties that are deleterious to the Environment, natural
resources or public health or safety including by reason of, without
limitation, ignitability, corrosiveness, reactivity, carcinogenicity, toxicity,
and reproductive toxicity. The term Hazardous Substance shall include, without
limitation, the following:  (i) a “Hazardous
Substance,” “Hazardous Material,” “Hazardous Waste,” or “Toxic Substance” under
the Comprehensive Environmental Response, Compensation and Liability Act  of 1980, 42 U.S.C. Section 9601, et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101,
et seq. or the Solid Waste Disposal Act, 42 U.S.C. Section 6901, et seq.,
including any regulations promulgated thereunder, as any of the foregoing may
be amended; (ii)  “Oil” or a “Hazardous Substance” under Section 311
of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321, as may
be amended; as well as petroleum and any other hydrocarbonic substance,
fraction, distillate or by-product; (iii) mold; (iv) asbestos and any
asbestos containing material, urea formaldehyde and
polychlorinated biphenyls; and/or (v) a substance that, due to its characteristics or
interaction with one or more other materials, wastes, chemicals, compounds,
substances, mixtures, or byproducts, damages or threatens to damage the
Environment, natural resources or public health or safety, or is required by
any law or public entity to be remediated, including remediation which such law
or public entity requires in order for property to be put to any lawful
purpose.

 

1.42         “HSR” shall mean the United States
Hart-Scott-Rodino Antitrust Improvements Act of l976, as amended, and rules thereunder.

 

1.43         “HSR Filings” shall have the meaning given in Section 7.1.

 

1.44         “Identified Employee” shall have the meaning given in Section 7.8(a).

 

1.45         “Indemnified Party” shall have the meaning given in Section 12.4.

 

1.46         “Indemnifying Party” shall have the meaning given in Section 12.4.

 

1.47         “Inspection Notice Deadline” shall have the meaning given in Section 7.7(a).

 

1.48         “Inspection Response Notice” shall have the meaning given in Section 7.7(a).

 

1.49         “Intellectual Property Assets” shall have the meaning given in Section 5.12(a).

 

1.50         “JAMS” shall have the meaning given in Section 13.2.

 

1.51         “JAMS Rules” shall have the meaning given in Section 13.2

 

1.52         “Knowledge” shall mean, whenever any representation
or warranty is made hereunder “to the Knowledge of” a party or to a party’s
Knowledge, (i) with respect to Seller, the actual knowledge of (A) any
officer of Seller or any employee of Seller listed on Attachment 1.52 or
(B) with respect to Buyer, the officers of Buyer and (ii) the
knowledge that any such person referenced in clause (i) hereof, as a
prudent business person, would have obtained in the usual course of the
performance of his or her professional responsibilities to such party.

 

CONFIDENTIAL TREATMENT REUQESTED

 

5

 

1.53         “Lease Assignment Agreement” shall have the meaning given in Section 4.2(a)(v).

 

1.54         “Leased Properties” shall mean the facilities subject to
the Leases.

 

1.55         “Leases” means, collectively, the 3750 Lease and
the 3850 Lease.

 

1.56         “Legal Requirement” means any requirement imposed by any
constitution, law, ordinance, principle of common law, code, regulation,
statute, treaty or order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Entity or arbitrator.

 

1.57         “Liability” or “Liabilities” shall mean liabilities or obligations
of any kind or nature, primary or secondary, direct or indirect, absolute or
contingent, known or unknown, disputed or undisputed, liquidated or
unliquidated, including but not limited to any liabilities for claims of
product liability, personal injury or death, liability in tort or contract
(including unripened liabilities due to past actions, failures to act or
sales), indebtedness, and any U.S. Food and Drug Administration or other
Governmental Entity action or notification, and all costs and expenses
(including reasonable attorneys’ fees), incurred in connection with the defense
of any such claims.

 

1.58         “Limited Warranty Deed” shall have the meaning
given in Section 4.2(a)(ii).

 

1.59         “Material Adverse Effect” with respect to any Person shall mean
any event or situation that has a material adverse change or effect,
respectively, on: [****]*.

 

1.60         “Minimum Assessment Agreement” shall have the meaning given in Section 2.1(e).

 

1.61         “Note” shall mean the Tax Increment Revenue
Note Series 2007 made by The Brooklyn Park Economic Development Authority,
dated August 1, 2007.

 

1.62         “Note Assignment” shall have the meaning given
in Section 4.2(a)(v).

 

1.63         “Operations” shall mean the biologic manufacturing
operations conducted by Seller at the Facilities.

 

1.64         “Operations Employee” shall have the meaning given in Section 5.19.

 

1.65         “Order” shall mean any order, injunction,
judgment, decree, ruling, assessment or arbitration award of any Governmental
Entity or arbitrator.

 

1.66         “Ordinary Course of Business” shall mean an action taken by a Person
will be deemed to have been taken in the Ordinary Course of Business only if
that action:

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

6

 

(a)           is recurring and consistent in nature, scope and magnitude
with the past practices of such Person and occurs in the normal day to day
operations of such Person; and

 

(b)           does not require authorization by the board of directors or
shareholders of such Person (or by any Person or group of Persons exercising
similar authority) and does not require any other separate or special
authorization of any nature.

 

1.67         “Permitted Encumbrances” shall mean the Encumbrances set forth
on Schedule 5.8(d)(ii) and
as defined in Section 7.6 herein.

 

1.68         “Person” shall mean an individual, limited or
general partnership, corporation (including any non-profit corporation),
business trust, limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture, estate,
organization, labor union or other entity or a Governmental Entity.

 

1.69         “Proceeding” shall mean any action, arbitration,
audit, hearing, investigation, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, whether
public or private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Entity, private judge, tribunal or
arbitrator(s).

 

1.70         “Product-Related Inventory” shall mean the
resin, media, master cell banks, working cell bank, stability pools and retains
and clinical supplies, including work in progress and finished goods used in
the production of the “Products” (as such term is defined in the Clinical Drug
Substance Supply Agreement).

 

1.71         “Property Condition” shall have the meaning
given in Section 6.9.

 

1.72         “Purchase Price” shall have the meaning given in Section 3.1.

 

1.73         “Real Property” shall mean the parcel of land located
in the City of Brooklyn Park, Minnesota and described in Schedule 5.8(d), together with all buildings, structures,
improvements and fixtures situated thereon, all right, title and
interest of Seller, if any, in and to the land lying in the bed of any street
or highway in front of or adjoining said parcel of land to the center line
thereof and to any unpaid award for any taking by condemnation or any damage to
said parcel of land by reason of a change of grade of any street or highway, and all privileges, rights, easements,
rights of way, appurtenances thereon and thereto, including mineral, air and
development rights appurtenant thereon and thereto.

 

1.74         “Real Property Inspection” shall have the meaning given in Section 7.5.

 

1.75         “Release” means any release, spill, emission,
leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal,
discharge, dispersal, leaching or migration on or into the Environment or into
or out of any property.

 

1.76         “Response Notice” shall have the meaning given in Section 7.6.

 

1.77         “Retained Lease” shall have the meaning given
in Section 7.3.

 

CONFIDENTIAL TREATMENT REQUESTED

 

7

 

1.78         “SEC” shall mean the United States Securities
and Exchange Commission.

 

1.79         “Seller Contract” shall mean any Contract (a) under
which Seller has or may acquire any rights or benefits; (b) under which
Seller has or may become subject to any obligation or liability; or (c) by
which Seller or any of the Assets is or may become bound.

 

1.80         “Seller Indemnitees” shall have the meaning given in Section 12.2.

 

1.81         “Seller’s Records” shall mean those certain agreements,
plans, documentation and information concerning the Facilities, including all
environmental reports, compliance audits, notices of violations and responses
thereto, as well as all agency correspondence pertaining to compliance with
Environmental Laws or an Environmental Remediation Obligation on the Real
Property, in Seller’s possession or control but excluding Environmental
Governmental Authorizations.

 

1.82         “Settlement Statement” shall have the meaning
given in Section 4.3(h).

 

1.83         “Software” means the software or firmware, if any,
embedded in any Tangible Personal Property and documentation related thereto or
associated therewith, except for any software licensed to Seller installed on
any computer (including servers and other information technology hardware) or
electronic communication devices (e.g., Blackberries) included in the Tangible
Personal Property.

 

1.84         “Supplies” shall mean, collectively, (i) all
inventory of Seller of raw materials, repair stock, parts, pallets and supplies
wherever located or in transit for use or consumption in the Operations but
excluding Product-Related Inventory; (ii) all assignable warranties and
licenses issued to Seller in connection with the Supplies; and (iii) any
assignable claims, credits and rights of recovery with respect to the Supplies.

 

1.85         “Tangible Personal Property” means all machinery, equipment, tools,
furniture, office equipment, computer hardware, supplies, materials, vehicles
and other items of tangible personal property (other than Product-Related
Inventory) of every kind owned or leased by Seller (whether or not carried on
Seller’s books) used in the Operations and located at the Facilities and all
maintenance records and other documents relating thereto.

 

1.86         “Third Party Acquisition” shall have the meaning given in Section 7.4.

 

1.87         “Third Party Consents” shall have the meaning given in Section 5.4(b).

 

1.88         “Threat of Release” means a reasonable likelihood of a
Release that may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.

 

1.89         “Threshold Amount” shall have the meaning given in Section 12.6(a).

 

1.90         “Title Commitment” shall have the meaning given in Section 7.6.

 

CONFIDENTIAL TREATMENT REQUESTED

 

8

 

1.91         “Title Company” shall mean First American Title
Insurance Company or such other reputable title insurance company authorized to
transact business in the State of Minnesota as may be selected by Buyer.

 

1.92         “Title Exceptions” shall have the meaning given in Section 7.6.

 

1.93         “Title Objections” shall have the meaning given in Section 7.6.

 

1.94         “Trade Secrets” shall have the meaning given in Section 2.1(i).

 

1.95         “Transition Services
Agreement”
shall mean the agreement entered into by Buyer and Seller as of the Closing
Date, whereby (i) Buyer shall, for fees specified therein, provide certain
services to Seller, including, continued development of ongoing life cycle
management projects and continued assistance and support of a Seller-sponsored
clinical trial, and information technology and administrative services, to the
extent and for the periods of time and at the costs as specified therein, and (ii) Seller
shall, for fees specified therein, provide certain services to Buyer, including
information technology and administrative services, to the extent and for the
periods of time and at the costs as specified therein.

 

1.96         “Unsatisfactory Condition” shall have the meaning given in Section 7.7(a).

 

1.97         “Unsatisfactory Inspection
Notice”
shall have the meaning given in Section 7.7(a).

 

1.98         “WARN” shall have the meaning given in Section 7.8(c).

 

ARTICLE 2

TRANSFER OF ASSETS; LICENSE AND
SUBLICENSE

 

2.1           Purchase and Sale of Assets.  Subject to the terms and conditions of this
Agreement, Seller shall sell, transfer, assign, convey, or deliver, as
specified below, to Buyer, and Buyer shall acquire all of Seller’s right, title
and interest in and to the property and assets of Seller identified in this Section 2.1
(collectively, the “Assets”):

 

(a)           Real Property.  Seller’s fee ownership interest in the Real
Property.

 

(b)           Leased Real Property.  Seller’s leasehold or other non-fee ownership
interest in the Leased Properties, including any security deposit(s) being
held for benefit of Seller by any lessor.

 

(c)           Governmental Authorizations. Seller’s
interest in all transferable Governmental Authorizations owned by Seller or
used in or necessary for the operation of the Assets.

 

CONFIDENTIAL TREATMENT REQUESTED

 

9

 

(d)           Equipment. The Tangible Personal
Property, including, without limitation, the items of equipment each having a
book value in excess of [****]* listed in Attachment 2.1(d).

 

(e)           Assumed Contracts.  All rights and benefits of Seller in
existence as of the Closing Date arising after the Closing Date under the
contracts listed in Attachment 2.1(e) (the “Assumed Contracts”),
including but not limited to that certain Contract for Private Development by
and between the Brooklyn Park Economic Development Authority and Seller, dated October 31,
2002 (the “Development Agreement”) and that certain Assessment Agreement
and Assessor’s Certificate by and between Brooklyn Park Development Authority
and Seller, dated February 8, 2005 (the “Minimum Assessment Agreement”),
all transferable statutory, express or implied construction warranties
applicable to the improvements on the Real Property and all transferable
express or implied warranties from manufacturers, sellers or lessors of any
item or component part of any Tangible Personal Property.

 

(f)            Supplies.  The Supplies.

 

(g)           Note. 
All of Seller’s interest as “Owner” under the Note, in accordance with Section 7
of the Note pertaining to Registration and transfer.

 

(h)           Books and Records.  Any documentation related to
operation of the Facilities (excluding documentation relating solely to the
manufacture of any specific product), including standard operating procedures,
equipment manuals, historical supply cost data, maintenance records, vendor
supply lists and current inventories of supplies.

 

(i)            Trade Secrets.  Know-how, trade secrets, confidential or
proprietary information, Software, technical information, data, process
technology, plans, designs, drawings and blue prints that are related to the
Operations (excluding any of same relating to the manufacture of any specific
product) (collectively, “Trade Secrets”).

 

2.2           Excluded Assets.  Buyer hereby acknowledges that Seller is not
selling, transferring, assigning, conveying or delivering under this Agreement
any assets, rights or interests of Seller (collectively, the “Excluded
Assets”) not listed or described in Section 2.1, including any assets
or rights used in the research, development, manufacture, control, packaging or
release, marketing or sale of Seller’s products, and the Product-Related
Inventory.

 

2.3           Assumed Liabilities.  Buyer shall assume and agree to honor, pay
and discharge when due the following Liabilities of Seller (the “Assumed Liabilities”):

 

(a)           all Liabilities of Seller under the Assumed
Contracts, but only to the extent such Liabilities arise from any event,
circumstance or condition occurring after the Closing Date; and

 

(b)           all Liabilities of Seller for the Leased
Properties (including all costs of preparing the Leased Real Properties for
return to the landlord upon the expiration or termination

 

* Certain information on this page has been omitted and filed
separately with the SEC.  Confidential
treatment has been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

10

 

of the lease,
which shall be deemed to arise after the Closing Date), but only to the extent
such Liabilities arise from any event, circumstances or condition occurring
after the Closing Date; and

 

(c)           all Liabilities of
Seller under contracts with third parties providing utility services to the
Facilities.

 

2.4           Excluded Liabilities.  Seller hereby acknowledges that Buyer is not
assuming hereunder any Liabilities (collectively, the “Excluded Liabilities”)
not specifically set forth in Section 2.3, including, without limitation,
those Liabilities expressly set forth below:

 

(a)           any Liability or
obligation of Seller of any nature owed to, or on behalf or for the benefit of,
any employees, directors, former employees, agents or independent contractors,
whether or not employed by Buyer after the Closing, that arises out of or
relates to (A) the employment or service provider relationship between
Seller and any such Person(s) (including, but not limited to, claims for
compensation, discrimination, harassment, or retaliation, or rights or other
interest in any health, welfare, retirement or other benefit plan); or (B) 
events or conditions occurring on or before the Closing Date (including the
transactions contemplated by this Agreement);

 

(b)           Liabilities arising out
of any injury to individuals or property as a result of the ownership,
possession or use of the Assets or the Operations, including without limitation
the manufacture, administration or other use of any “Product” (as such term is
defined in the Clinical Drug Substance Supply Agreement), prior to the Closing
Date or the administration or other use after the Closing Date of any Product
manufactured prior to the Closing Date, except to the extent attributable to
the gross negligence or willful misconduct of Buyer;

 

(c)           all accounts payable of
Seller arising prior to the Closing Date; and

 

(d)           Liabilities of Seller
relating to or arising under this Agreement.

 

2.5           Risk of Loss.  All risk of loss with respect to the Assets
(whether or not covered by insurance) shall be on Seller up to the time of
Closing, whereupon such risk of loss shall pass to Buyer.

 

ARTICLE 3

CONSIDERATION

 

3.1           Purchase Price.  On the Closing Date, in consideration of
Seller’s sale of the Assets to Buyer, Buyer will assume the Assumed Liabilities
and pay to Seller an aggregate purchase price in the amount equal to Two
Hundred Forty Million United States Dollars ($240,000,000) (the “Purchase
Price”).

 

3.2           Method of Payment.  The payment to be made by Buyer pursuant to Section 3.1,
as adjusted by the closing prorations and other cost allocations for both Buyer
and Seller set forth in this Agreement, as shown on the Settlement Statement,
shall be made by wire transfer in immediately available funds to the proper
account of the Title Company (as identified by the Title Company) on the
Closing Date.  Buyer and Seller shall coordinate with each other and the
Title Company to agree to wiring deadlines such that Buyer will initiate the
wire to the Title 

 

CONFIDENTIAL TREATMENT REQUESTED

 

11

 

Company at an
early enough time for the Title Company to wire the funds into an account
identified by the Seller in time for Seller to earn overnight interest on such
funds as of the Closing Date (i.e., so that the funds do not remain un-invested
overnight immediately following Closing). 
Provided Buyer has met any previously agreed to wiring deadline (as
evidenced by a Fed Wire Reference Number with the appropriate time stamp),
Buyer shall have no liability for any delays in the transmittal of the wire
from the Title Company to the Seller or the receipt or investment of the funds
by the Seller’s designated depository account representative (except to the
extent such delay is caused by Buyer’s action).

 

3.3           Allocation of
Purchase Price.  Prior to Closing,
Buyer and Seller will make reasonable efforts to agree on an allocation of the
Purchase Price among the Assets in a manner that is consistent with the
principles of Section 1060 of the Internal Revenue Code of 1986, as
amended (or any successor provision of any future tax law, or any comparable
provision of state, local or foreign tax law). 
Buyer and Seller will (i) act in accordance with the allocation in
the preparation of financial statements and the preparation and filing of all
tax returns (including the preparation and filing of IRS Form 8594) and (ii) take
no position inconsistent with the allocation for all tax purposes.  In the event that such allocation is disputed
by any taxing authority, the party receiving notice of the dispute shall
promptly notify the other party hereto and shall forward to such other party
copies of all correspondence with such taxing authority in respect of such
disputed allocation.

 

ARTICLE 4

CLOSING

 

4.1           Closing.  The Closing of the sale of the Assets and the
consummation of the other transactions contemplated by this Agreement shall be
held at the offices of Seller at the Real Property (the “Closing”) as
promptly as practicable, but no later than the date five (5) business days
after all conditions (other than the respective delivery obligations of the
parties) hereto have been satisfied or waived, or at such other place, time or
date as may be agreed to by the parties to this Agreement (the “Closing Date”).

 

4.2           Actions at Closing.  At the Closing, transfer of the Assets to
Buyer will be effected by Seller pursuant to such good and sufficient
instruments of conveyance, transfer and assignment as shall be necessary to
transfer to Buyer good and valid title to the Assets.

 

(a)           Deliveries by Seller
at Closing. The purchase of the Assets by Buyer in accordance with the
terms of this Agreement are subject to Seller’s delivery to Buyer at the
Closing of the following instruments, documents, agreements and certificates:

 

(i)            the General Assignment
and Bill of Sale substantially in the form attached hereto as Exhibit A,
duly executed by Seller;

 

(ii)           the limited warranty
deed for the Real Property substantially in the form attached hereto as Exhibit B
(the “Limited Warranty Deed”), duly executed by Seller;

 

(iii)          the Assignment and
Assumption Agreement substantially in the form attached hereto as Exhibit C
(the “Assignment and Assumption Agreement”), duly executed by Seller;

 

CONFIDENTIAL TREATMENT REQUESTED

 

12

 

(iv)          a Lease Assignment and
Assumption Agreement for each of the Leased Properties substantially in the
form attached hereto as Exhibit D (the “Lease Assignment and
Assumption Agreement”), duly executed by Seller;

 

(v)           the Note Assignment
Agreement substantially in the form attached hereto as Exhibit E
(the “Note Assignment”), duly executed by Seller;

 

(vi)          the Transition Services
Agreement substantially in the form attached hereto as Exhibit G,
duly executed by Seller;

 

(vii)         all of the Third Party
Consents in substantially the form attached hereto as Exhibit H
signed by the parties set forth in Attachment 4.2(a), including the
consent of the landlord under the Leases to the assignment thereof to Buyer;

 

(viii)        a FIRPTA Certificate
containing such information as is required by I.R.C. § 1445(b)(2) and its
regulations;

 

(ix)           an Affidavit of Title
or such affidavits as the Title Company shall reasonably require indicating
that on the Closing Date there are no outstanding, unsatisfied judgments, tax
liens or bankruptcies against or involving Seller or the Real Property; that
there has been no skill, labor or material furnished to the Real Property for
which payment has not been made or for which mechanics’ liens could be filed;
and that there are no other unrecorded interests in the Real Property;

 

(x)            a Well Certificate if
required by Minnesota Statutes, Chapter 1031;

 

(xi)           a Sewer System
Certificate if required by Minnesota Statutes, §115.55;

 

(xii)          a Certificate of
Occupancy for the Real Property;

 

(xiii)         an Amendment to the
Confidentiality Agreement, duly executed by Seller;

 

(xiv)        a certificate executed by
a duly authorized officer of Seller certifying that (i) each of the
representations and warranties of Seller set forth in Article 5 was true
and correct in all material respects as of the Effective Date and as of the
Closing Date, and (ii) all of the terms, covenants and conditions of this
Agreement to be complied with and performed by Seller, at or prior to the
Closing have been duly complied with and performed in all material respects;
and

 

(xv)         a certificate of the
Secretary of Seller, in form and substance reasonably satisfactory to Buyer, as
to the authenticity and effectiveness of the actions of the board of directors
of Seller authorizing this Agreement and the transactions contemplated in this
Agreement; and identifying the name and title and bearing the signatures of the
Persons authorized by Seller to execute and deliver this Agreement and the
other Agreements and instruments contemplated hereby;

 

CONFIDENTIAL TREATMENT REQUESTED

 

13

 

(xvi)        a certificate of good
standing of Seller, also attesting to payment of all applicable taxes by
Seller, issued by the Secretaries of State of the States of Delaware and
Minnesota, dated within [****]* of the Closing;

 

(xvii)       possession of the
Facilities in the condition required by this Agreement, and the keys and/or
electronic access cards and security codes therefor; and

 

(xviii)      any other documents required
by this Agreement to be delivered by Seller or as may be deemed necessary by
Buyer’s counsel or the Title Company to effect the transactions contemplated by
this Agreement.

 

(b)           Deliveries by Buyer
at Closing.  The sale of the Assets
by Seller in accordance with the terms of this Agreement are subject to Buyer’s
delivery to Seller (unless noted otherwise) at the Closing of the following
instruments, agreements and certificates:

 

(i)            the Purchase Price, as
adjusted for prorations as provided herein.

 

(ii)           the Lease Assignment
and Assumption Agreement, duly executed by Buyer;

 

(iii)          the Assignment and
Assumption Agreement, duly executed by Buyer;

 

(iv)          the Transition Services
Agreement, duly executed by Buyer;

 

(v)           an Amendment to the
Confidentiality Agreement, duly executed by Buyer;

 

(vi)          a Certificate of Real
Estate Value as required by MSA §272.115 executed by Buyer;

 

(vii)         a certificate executed by
a duly authorized officer of Buyer certifying that (i) each of the
representations and warranties of Buyer set forth in Article 6 was true
and correct in all material respects as of the Effective Date and as of the
Closing Date, and (ii) all of the terms, covenants and conditions of this
Agreement to be complied with and performed by Buyer, at or prior to the
Closing have been duly complied with and performed in all material respects;

 

(viii)        a certificate of the
Secretary of Buyer, in form and substance reasonably satisfactory to Seller, as
to the authenticity and effectiveness of the actions of the board of directors
(and shareholders, if applicable) of Buyer authorizing this Agreement and the
transactions contemplated in this Agreement; and identifying the name and title
and bearing the signatures of the Persons authorized by Buyer to execute and
deliver this Agreement and the other Agreements and instruments contemplated
hereby;

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

14

 

(ix)           any funds required by
the Settlement Statement which are not appropriately an adjustment to the
Purchase Price; and

 

(x)            any other document
required by this Agreement to be delivered by Buyer or as may be deemed
necessary by Seller’s counsel or the Title Company to effect the transactions
contemplated by this Agreement.

 

4.3           Prorations.  The following are to be apportioned as of the
Closing Date:

 

(a)           Utility Charges.  Buyer shall set up new utility accounts
(telephone, steam, electricity, gas) and arrange for existing utilities to be
switched over to such accounts as of the Closing Date.  Seller shall pay all charges for utilities used
through the date prior to the Closing Date. Upon confirmation from each utility
that such deposits are assignable to Buyer, Buyer will pay to Seller at Closing
the amount of any utility deposit(s) made by Seller, and Seller will
assign to Buyer all of its right, title and interest in and to the applicable
deposit(s) relating thereto.  Buyer
will be responsible for the cost of all utilities used on or after the Closing
Date.

 

(b)           Lease Payments and
Security Deposits.  Amounts for all
rents due or paid under the Leases shall be apportioned as of the Closing
Date.  Upon the confirmation from each
Lessor under the Leases that it is holding a security deposit, Buyer will pay
to Seller at Closing the amount of any such security deposit(s) made by
Seller, and Seller will assign to Buyer all of its right, title and interest in
an to any such security deposit(s).

 

(c)           Other Apportionments.  Amounts payable under the Assumed Contracts,
payments actually made to Seller under the Note, annual or periodic permit
and/or inspection fees with respect to Governmental Authorizations that are
assignable and, in fact, assigned to Buyer at the Closing, fuel oil, if any, at
the most recent cost thereof on the basis of a reading performed by the
supplier thereof on the day preceding the Closing and amounts for  Property operation and maintenance expenses
and other recurring costs to be assumed by Buyer and prepaid by Seller will be
apportioned as of the Closing Date.

 

(d)           Title Insurance.  Buyer shall pay the premium for title
insurance and the Title Company charges for the examination of title to the
Real Property and direct administrative closing costs.

 

(e)           Survey.  [****]* shall pay the cost up to a
[****]* of obtaining the Current Survey, which shall be certified to [****]*
and the Title Company.

 

(f)            Recording; Other.  [****]* shall pay the costs of recording the
Limited Warranty Deed and all applicable real estate transfer taxes imposed by
any Governmental Entity, including without limitation, the state deed tax.  Payment of all other costs incurred in
connection with the transfer of the Real Property contemplated by this
Agreement shall be [****]* in accordance with the custom of commercial real
estate transactions consummated in Hennepin County, as reasonably determined by
the Title Company.

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

15

 

(g)           Real Estate Taxes
and Special Assessments.  General
real estate taxes and personal property taxes which were or should have been
due and payable in all calendar years ending prior to the Closing Date will be
paid by Seller and shall remain the responsibility of Seller.  General real estate taxes and personal
property taxes due and payable in the calendar year in which the Closing Date
occurs will be prorated by Seller and Buyer on a calendar year basis as of the
Closing Date, with the Seller being responsible for the period up to and
including the Closing Date.  General real
estate taxes and personal property taxes due and payable in all calendar years
commencing after the Closing Date will be paid by Buyer.  All special assessments levied or
constituting a lien against the Real Property as of the Closing Date will be
paid [****]*.  Buyer shall assume the
obligation to pay any special assessments levied subsequent to the Closing
Date.

 

(h)           Settlement Statement.  Title Company shall prepare a preliminary
Closing settlement statement and shall deliver such statement to Buyer and
Seller for approval no less than [****]* prior to the Closing Date (as
approved, the “Settlement Statement”). Upon Closing, the Title Company
shall disburse funds in accordance with the approved Settlement Statement.

 

(i)            Post-Closing
Reconciliation.   Seller and Buyer
hereby agree that if the Closing shall occur before a new real estate tax rate
is fixed or for any other reason any of the foregoing prorations cannot be
calculated accurately as of the Closing Date, then the same shall be estimated
(based on current information then known, such as the most recent tax rate
applied to the latest assessed valuation) for the purposes of Closing and
within [****]* after the Closing Date, or as soon as sufficient information is
available to permit the parties to effectively calculate such prorations,
either party owing the other party a sum of money based on such subsequent
calculations shall pay such sum to the other party within [****]* after such
calculations.

 

(j)            Survival.  The provisions of this Section 4.3 shall
survive [****]*.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF
SELLER

 

Subject to the exceptions and disclosures
listed in the Schedules attached to this Agreement (which modify, vary and
qualify certain of the representations and warranties contained in this Article 5),
Seller represents and warrants to Buyer as of the Effective Date
as follows:

 

5.1           Organization and
Authority.  Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full corporate power and authority to execute and
consummate this Agreement, and such other instruments, agreements and
transactions as may be contemplated hereunder and thereunder.  Seller has all requisite corporate power and
authority and all authorizations, licenses, permits and certifications
necessary to carry on the Operations as now being conducted and to own, lease
and operate the Assets.  Seller is
qualified as a foreign corporation to do business in every jurisdiction in
which the nature of its business or its ownership of property requires it to be
qualified and in which the failure to be so qualified would have a Material
Adverse Effect.  All corporate acts and
other proceedings required to be taken by or on the part of Seller to authorize
Seller to execute, deliver

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

16

 

and perform
this Agreement and such other instruments, agreements and transactions as may
be contemplated hereunder or to consummate the Contemplated Transactions, have
been duly and properly taken.  Seller is
not required to obtain stockholder consent (i) to authorize Seller to
execute, deliver and perform this Agreement and such other instruments,
agreements and transactions as may be contemplated hereunder or (ii) to
consummate the Contemplated Transactions. This Agreement has been duly executed
and delivered by Seller and constitutes legal, valid and binding obligations of
Seller enforceable in accordance with its terms, except as such enforceability
may be subject to or limited by (i) applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting the enforcement of creditors’
rights generally and (ii) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in law
or equity.

 

5.2           No Violation or
Conflict.  The execution and delivery
by Seller of this Agreement and such other instruments, agreements and
transactions as may be contemplated hereunder, and the consummation by Seller
of the Contemplated Transactions will not (i) violate any judgment, order,
writ, injunction or decree of any Governmental Entity or, to Seller’s
Knowledge, law, statute, rule or regulation or applicable to Seller, or (ii) conflict
with, result in any breach of, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under the Certificate
of Incorporation or bylaws of Seller or any agreement to which Seller is a
party, except for such violations, conflicts, breaches or defaults which
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect on Seller.

 

5.3           Consents and
Approvals.  Except as set forth in Schedule
5.3, no notice to, declaration, filing or registration with, or
authorization, consent or approval of, or permit from, any Governmental Entity,
or any other Person, is required to be made or obtained by Seller in connection
with the execution, delivery and performance of this Agreement and the
consummation of the Contemplated Transactions, except with respect to the HSR
Filing and any declarations, filings, registrations, authorizations, consents,
approvals or permits which if not obtained or made have not had and would not
reasonably be expected to have individually or in the aggregate a Material
Adverse Effect on Seller or materially interfere with Buyer’s performance of
its obligations under the Clinical Drug Substance Supply Agreement or the
Transition Services Agreement.

 

5.4           Assumed
Contracts.

 

(a)           Seller has made
available to Buyer true, complete and correct copies of all contracts material
to the Operations and the Assets (excluding contracts related solely to the
manufacture of specific products of Seller), including, without limitation, the
Assumed Contracts.  Except as set forth
in Schedule 5.4(a), all the Assumed Contracts are in full force and
effect and are valid, binding and enforceable in accordance with their terms by
and against Seller, except as such enforceability may be subject to or limited
by (i) applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting the enforcement of creditors’ rights generally; and (ii) the
rules governing the availability of specific performance, injunctive
relief or other equitable remedies and general principles of equity, regardless
of whether considered in a proceeding in law or equity.

 

CONFIDENTIAL TREATMENT REQUESTED

 

17

 

(b)           Schedule 5.4(b) sets forth a
list of the Leases and all Assumed Contracts which require the consent or
waiver of any party to the assignment of such Assumed Contract as a result of
the Contemplated Transactions (the “Third Party Consents”) and, except
as set forth in Schedule 5.4(b), all the Assumed Contracts are fully
assignable by Seller and will be assigned to Buyer at the Closing.

 

(c)           Except as set forth in Schedule 5.4(c):

 

(i)            Seller is, and at all times since January 1,
2004, has been, in compliance with all applicable terms and requirements of
each Lease, the Development Agreement and the Minimum Assessment Agreement;

 

(ii)           each other Person that has or had any
obligation or Liability under any Lease, the Development Agreement or the
Minimum Assessment Agreement, is, and at all times since January 1, 2004,
has been, in full compliance with all applicable terms and requirements of such
Lease, the Development Agreement and the Minimum Assessment Agreement;

 

(iii)          no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene, conflict with or
result in a breach of, or give Seller or other Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or modify, any Lease;

 

(iv)          no event has occurred or circumstance exists
under or by virtue of any Seller Contract that (with or without notice or lapse
of time) would cause the creation of any Encumbrance affecting any of the
Assets; and

 

(v)           Seller has not given to or received from any
other Person, at any time since January 1, 2004, any notice or other
communication (whether oral or written) regarding any actual, alleged, possible
or potential violation or breach of, or default under, any Lease, the
Development Agreement and the Minimum Assessment Agreement.

 

(d)           Seller is in material compliance with all
applicable terms and requirements of each Assumed Contract and no event has
occurred or circumstance exists that (with or without notice or lapse of time)
may contravene, conflict with or result in a breach of, or give Seller or other
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or payment under, or to cancel,
terminate or modify any of the Assumed Contracts.  There are no renegotiations of, attempts to
renegotiate or outstanding rights to renegotiate any material amounts paid or
payable by Seller under current or completed Assumed Contracts with any Person
having the contractual or statutory right to demand or require such
renegotiation and no such Person has made written demand for such
renegotiation.

 

5.5           Compliance
with Legal Requirements; Governmental Authorizations.

 

(a)           Except as set forth in Schedule 5.5(a):

 

(i)            Seller is, and at all times since January 1,
2002, has been, in material compliance with each Legal Requirement (other than
Legal Requirements with respect 

 

CONFIDENTIAL TREATMENT REQUESTED

 

18

 

to Environmental Laws) that is or was applicable to the Operations or
the ownership or use of any of the Assets;

 

(ii)           no event has occurred or circumstance exists
that (with or without notice or lapse of time) (A) may constitute or
result in a violation by Seller of, or a failure on the part of Seller to
comply with, any Legal Requirement with respect to the Assets or the Operations
(other than Legal Requirements with respect to Environmental Laws) or (B) may
give rise to any obligation on the part of Seller to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature with respect
to the Assets or the Operations (other than any Governmental Remediation
Obligation); and

 

(iii)          Seller has not received, at any time since January 1,
2002, any notice or other communication (whether oral or written) from any
Governmental Entity or any other Person regarding (A) any actual, alleged,
possible or potential violation of, or failure to comply with, any Legal
Requirement with respect to the Assets or the Operations (other than Legal
Requirements with respect to Environmental Laws) or (B) any actual,
alleged, possible or potential obligation on the part of Seller to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature
with respect to the Assets or the Operations (other than any Governmental
Remediation Obligation).

 

(b)           Schedule 5.5(b) contains a
complete and accurate list of each Governmental Authorization that is held by
Seller or relating to the Operations or the Assets. Each Governmental
Authorization listed or required to be listed in Schedule 5.5(b) is
valid and in full force and effect. Except as set forth in Schedule 5.5(b):

 

(i)            Each such Governmental Authorization is
transferable to Buyer and Seller is, and at all times since January 1,
2002, has been, in material compliance with all of the terms and requirements
of each Governmental Authorization identified or required to be identified in Schedule
5.5(b);

 

(ii)           no event has occurred or circumstance exists
that may (with or without notice or lapse of time) (A) constitute or
result directly or indirectly in a violation of or a failure to comply with any
term or requirement of any Governmental Authorization listed or required to be
listed in Schedule 5.5(b) or (B) result directly or indirectly
in the revocation, withdrawal, suspension, cancellation or termination of, or
any modification to, any Governmental Authorization listed or required to be
listed in Schedule 5.5(b);

 

(iii)          Seller has not received, at any time since January 1,
2002, any notice or other communication (whether oral or written) from any
Governmental Entity or any other Person regarding (A) any actual, alleged,
possible or potential violation of or failure to comply with any term or
requirement of any Governmental Authorization listed or required to be listed
in Schedule 5.5(b) or (B) any actual, proposed, possible or
potential revocation, withdrawal, suspension, cancellation, termination of or
modification to any Governmental Authorization listed or required to be listed
in Schedule 5.5(b); and

 

(iv)          all applications required to have been filed
for the renewal of the Governmental Authorizations listed or required to be
listed in Schedule 5.5(b) have been duly 

 

CONFIDENTIAL TREATMENT REQUESTED

 

19

 

filed on a timely basis with the appropriate Governmental Entities, and
all other filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
Governmental Entities.

 

To Seller’s Knowledge, the Governmental
Authorizations listed in Schedule 5.5(b) collectively constitute
all of the Governmental Authorizations necessary to permit Seller to lawfully
conduct the Operations in the manner in which it currently conducts such
Operations and to permit Seller to own and use the Assets in the manner in
which it currently owns and uses the Assets and to permit Buyer to perform its
obligations under the Clinical Drug Substance Supply Agreement and the
Transition Services Agreement.

 

5.6           Legal
Proceedings; Orders.

 

(a)           Except as set forth in Schedule 5.6(a),
there is no pending or, to Seller’s Knowledge, threatened Proceeding:

 

(i)            by or against Seller or that otherwise
relates to or may affect the Operations of, or any of the Assets owned or used
by, Seller; or

 

(ii)           that challenges, or that may have the effect
of preventing, delaying, making illegal or otherwise interfering with, any of
the Contemplated Transactions.

 

To Seller’s Knowledge, no event has occurred
or circumstance exists that could reasonably be likely to give rise to or serve
as a basis for the commencement of any such Proceeding. Seller has delivered to
Buyer copies of all pleadings, correspondence and other documents relating to
each Proceeding listed in Schedule 5.6(a).

 

(b)           Except as set forth in Schedule 5.6(b):

 

(i)            there is no Order, nor in the past has
there been any Order, to which Seller, the Operations or any of the Assets is
subject; and

 

(ii)           no manager, officer, director, agent or
employee of Seller is subject to any Order that prohibits such manager,
officer, director, agent or employee from engaging in or continuing any
conduct, activity or practice relating to the Operations of Seller.

 

5.7           Environmental Matters.  Except as described in Schedule 5.7:

 

(a)           To Seller’s Knowledge, Seller is, and at all
times has been, in full compliance with, and has not been and is not in
violation of or liable under, any Environmental Law.  Seller has no basis to expect, nor has any
other Person for whose conduct it is or may be held to be responsible received,
any actual or threatened Order, notice or other communication from (i) any
Governmental Entity or private citizen acting in the public interest or (ii) any
prior owner or operator of any Facilities, of any actual or potential violation
or failure to comply with any Environmental Law or of any actual or threatened
obligation to undertake or bear the cost of any Environmental Remediation
Obligation with respect to the Facilities or other property or asset at or to
which Hazardous Substances were transported, treated, stored, handled,
transferred, disposed, recycled or received.

 

CONFIDENTIAL TREATMENT REQUESTED

 

20

 

(b)           There are no pending or, to Seller’s
Knowledge, threatened claims, Encumbrances, or other restrictions of any nature
arising under or pursuant to any Environmental Law with respect to the
Facilities.

 

(c)           Seller does not have any Knowledge of or any
basis to expect, nor has Seller received, any citation, directive, inquiry,
notice, Order, summons, warning or other communication that relates to
Hazardous Substances or any alleged, actual, or potential violation or failure
to comply with any Environmental Law or of any alleged, actual, or potential
obligation to undertake or bear the cost of any Liabilities with respect to the
Facilities or any other property to which Hazardous Substances were
transported, treated, stored, handled, transferred, disposed, recycled or
received.

 

(d)           Seller is not responsible for any
Environmental Remediation Obligation with respect to any property geologically
or hydrologically adjoining the Facilities.

 

(e)           To Seller’s Knowledge, there are no
Hazardous Substances present on or in the Environment at the Facilities or any
property geologically or hydrologically adjoining the Facilities which have not
been remediated except for any residual contamination related to remediation
approved by the Minnesota Pollution Control Agency.

 

5.8           Title
to Assets; Real Property, Equipment and Supplies.

 

(a)           Schedule 5.8(a) sets forth a
description of all Tangible Personal Property. 
Except as set forth on Schedule 5.8(a), Seller has good, valid
and marketable title to all the Assets other than the Real Property free and
clear of all Encumbrances and Seller warrants that, at the Closing, all the
Assets other than the Real Property shall be free and clear of all
Encumbrances, and Seller shall sell, assign, transfer, convey and deliver good,
valid and marketable title to the Assets other than the Real Property at
Closing, free and clear of any and all, Encumbrances.  Except as set forth in Schedule 5.8(a),
Seller beneficially owns all of the right, title or other interests to be transferred
to Buyer hereunder with respect to all the Assets, and none of the Assets other
than Leased Properties is leased, rented, licensed, or otherwise not owned by
Seller.

 

(b)           Seller has not received any written notice
that remains uncured from any Governmental Entity alleging that any part of the
Real Property is in violation of any zoning, building, health, fire,
environmental or other similar statute, ordinance, regulation or code.  Seller has not received any written notice of
any pending or threatened (and, to Seller’s Knowledge, there are no threatened)
eminent domain, condemnation or other governmental taking of the Real Property
or any part thereof. Seller has not received written notice from its insurance
carriers, lenders, any board of fire underwriters or any Governmental Entity
that any repairs, replacements or alterations are required to be made to the
Real Property which have not been made.

 

(c)           Other than this Agreement, Seller has not
entered into any purchase contracts, options or any other agreements of any
kind, written or oral, formal or informal, choate or inchoate, recorded or
unrecorded, whereby any Person other than Buyer has acquired, or has any basis
to assert, any right to purchase or acquire an interest in, lease, sublease,
license 

 

CONFIDENTIAL TREATMENT REQUESTED

 

21

 

or otherwise use or occupy the Real Property or any of the
Facilities.  There are no parties in
possession of any portion of the Real Property or any of the Facilities other
than Seller.

 

(d)           Schedule 5.8(d)(i) contains a
legal description of the Real Property. 
Except as set forth in Schedule 5.8(d)(ii), Seller represents,
but does not warrant, to Seller’s Knowledge that (i) Seller has good,
valid and marketable title to all the Real Property free and clear of all
Encumbrances other than Encumbrances shown on the Title Report; and (ii) no
part of any improvement or structure located on the Real Property encroaches on
any real property not included in the Real Property, and there are no
buildings, structures, fixtures or other improvements situated on adjoining
property which encroach on any part of the Real Property.  True copies of any current surveys, abstract,
title commitments and title opinions in Seller’s possession and all policies of
title insurance currently in force and in the possession of Seller with respect
to the Real Property have been made available to Buyer.

 

(e)           Other than the Leases, there are no other
material real property leases under which Seller is a lessee or lessor and that
relate to the Assets.  The Leases are in
full force and effect and have not been modified or amended.  All rents and sums payable by Seller under the
Leases are currently paid and shall be current at Closing, and Seller has no
notice of any default or threatened default by Seller or any lessor under the
Leases.  There is no action or proceeding
instituted against Seller by any lessor presently pending in any court, no
security deposits other than those set forth in the Leases, and to Seller’s
Knowledge, no leasing commissions are due or owing with respect to the Leases.

 

(f)            Seller has delivered to Buyer true, correct
and complete copies of Seller’s Records and the Environmental Governmental
Authorizations.  To Seller’s Knowledge,
no Proceeding has been commenced regarding the Facilities since January 1,
2002.

 

5.9           Sufficiency of Assets.  Except as set forth in Schedule 5.9,
the Assets (a) constitute all of the assets, tangible and intangible, of
any nature whatsoever, necessary to conduct the Operations in the manner
presently conducted by Seller other than information technology assets located
in and operated out of Seller’s Redwood City, California offices and (b) include
all of the operating assets of Seller (i) used to conduct the Operations
and located at the Facilities other than the Excluded Assets and (ii) necessary
to permit Buyer to perform its obligations under the Clinical Drug Substance
Supply Agreement and the Transition Services Agreement.

 

5.10         Condition of Tangible Personal Property.  Each item of Tangible Personal Property is in
good repair and good operating condition, ordinary wear and tear excepted, is
suitable for immediate use in the Ordinary Course of Business.  No item of Tangible Personal Property is in
need of repair or replacement other than as part of routine maintenance in the
Ordinary Course of Business. Except as disclosed in Schedule 5.10, all
Tangible Personal Property used in the Operations is owned by and in the
possession of Seller.

 

5.11         Supplies.  All items included in the Supplies consist of
a quality and quantity usable in the Ordinary Course of Business of
Seller.  Supplies now on hand were
purchased in the Ordinary Course of Business of Seller.  The quantities of each item of Supplies
(whether raw 

 

CONFIDENTIAL TREATMENT REQUESTED

 

22

 

materials, supplies or work-in-process) are not excessive but are
reasonable in the present circumstances of Seller and the Operations.

 

5.12         Trade Secrets.  Seller is the owner or licensee of all right,
title and interest in and to each of the Trade Secrets, free and clear of all
Encumbrances, and has the right to use without payment to a third party all of
the Trade Secrets and to assign them to Buyer at the Closing. Except as set
forth in Schedule 5.12, all former and current employees of Seller
employed with respect to the Operations have executed written Contracts with
Seller that assign to Seller all rights to any inventions, improvements,
discoveries or information relating to the Operations. Seller has taken all
reasonable precautions to protect the secrecy, confidentiality and value of all
Trade Secrets (including the enforcement by Seller of a policy requiring each
Employee or contractor to execute proprietary information and confidentiality
agreements substantially in Seller’s standard form, and all current and former
Employees and contractors of Seller have executed such an agreement).  No Trade Secrets were developed, in whole or
in part, with full- or partial-funding from a Governmental Entity, including,
without limitation, to the United States Government, or any agency thereof or
in efforts with other entities receiving full or partial-funding from a
Governmental Entity or any agency thereof.

 

5.13         Brokers and Finders.  Except as set forth in Schedule 5.13,
Seller has not employed any broker or finder or incurred any Liability for any
brokerage fee, commission, finder’s fee or other compensation in connection
with the transactions contemplated by this Agreement.

 

5.14         No Implied Warranty.  THE REPRESENTATIONS AND WARRANTIES GIVEN
HEREIN BY SELLER ARE IN LIEU OF ANY IMPLIED WARRANTIES WHICH MAY OTHERWISE
BE APPLICABLE BECAUSE OF THE PROVISIONS OF THE UNIFORM COMMERCIAL CODE OR
ANY OTHER STATUTE, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  EXCEPT FOR THOSE COVENANTS, REPRESENTATIONS
AND WARRANTIES THAT ARE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY DOCUMENT
EXECUTED AND DELIVERED BY SELLER IN CONNECTION WITH THE CLOSING, SELLER MAKES,
AND HAS MADE, NO (AND BUYER ACKNOWLEDGES THAT NO ONE ACTING OR PURPORTING TO
ACT ON SELLER’S BEHALF, INCLUDING, WITHOUT LIMITATION, BROKER, HAS MADE, OR
MAKES, ANY) COVENANT, REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) AS TO ANY
ASPECT WHATSOEVER OF OR RELATING TO THE FACILITIES OR SELLER’S RECORDS,
INCLUDING, WITHOUT LIMITATION, AS TO THE SUITABILITY OF THE FACILITIES OR AS TO
THE PHYSICAL CONDITION THEREOF FOR ANY PURPOSE WHATSOEVER.

 

5.15         Condition of Facilities.

 

(a)           To Seller’s Knowledge, use of the Facilities
for the various purposes for which it is presently being used is permitted as
of right under all applicable zoning legal requirements and is not subject to “permitted
nonconforming” use or structure classifications.  To Seller’s Knowledge, the Facilities located
on the Real Property are in compliance with all applicable Legal Requirements,
including those pertaining to zoning, building and the disabled,

 

CONFIDENTIAL TREATMENT REQUESTED

 

23

 

are in good repair and in good condition, ordinary wear and tear
excepted.  The Facilities located on the
Real Property have direct vehicular access to a public road or has access to a
public road via a permanent, irrevocable, appurtenant easement benefiting the
Real Property, are supplied with public or quasi-public utilities and other
services appropriate for the operation of the Facilities located thereon and
are not located within any flood plain or area subject to wetlands regulation
or any similar restriction. To Seller’s Knowledge, there is no existing or
proposed plan to modify or realign any street or highway or any existing or
proposed eminent domain or other condemnation proceeding that would result in
the taking of all or any part of any Facilities or that would prevent or hinder
the continued use of any of the Facilities as heretofore used in the conduct of
the Operations or the performance of Buyer’s obligations under the Clinical
Drug Substance Supply Agreement or the Transition Services Agreement.

 

(b)           Seller has not received written notice that
Seller’s use or occupancy of the Facilities violates any Legal Requirement,
covenant, condition or restriction that encumbers any of the Facilities, or
that any of the Facilities is subject to any restriction for which any
authorization or certification of any Governmental Entity necessary to the
current use thereof have not been obtained.

 

5.16         Disclosure.  No representation or warranty or other
statement made by Seller in this Agreement or otherwise in connection with the
Contemplated Transactions contains any untrue statement of a material fact or
omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.

 

5.17         Product Liability.  Seller does not have any Liability (and, to
Seller’s Knowledge, there is no basis for any present or future Proceeding
against it giving rise to any Liability) arising out of any injury to
individuals or property as a result of the ownership, possession or use of the
Assets or the Operations.

 

5.18         Suppliers.  Except as disclosed in Schedule 5.18,
Seller is not or has not been engaged in any material dispute with any of its
Suppliers.  Seller has not received any
actual notice or has any reason to believe that any of its Suppliers will not
sell to Buyer services, products, equipment or goods after the Closing Date on
terms and conditions substantially similar to those currently in effect,
subject only to general and customary price increases. Seller has adequate
sources of supply for its business as now and proposed to be conducted. Except
as disclosed in Schedule 5.18, Seller is not dependent on a supplier
that is the sole supplier of any goods and services it requires to operate the
Assets.

 

5.19         Employees.  Schedule 5.19 contains a complete and
accurate list of the names, titles, current annual base salary and target
annual bonus of each of Seller’s employees at the Facilities employed as of the
Effective Date (each, an “Operations Employee”), including a complete
and accurate list of all employment agreements, letters or other agreements
(including noncompetition agreements) with respect to the Operations
Employees.  Each Operations Employee is
currently employed by, and has not entered into any severance or termination
agreement with, Seller.  No Operations
Employee has accepted an agreement (whether or not in writing) with Seller to
continue or to commence employment with Seller following the Closing.  No Operations Employee is currently engaged
in negotiations intended or likely to result in employment with Seller to
continue or to commence employment with Seller following Closing.

 

CONFIDENTIAL TREATMENT REQUESTED

 

24

 

To Seller’s Knowledge, the Operations
Employees are not debarred or suspended under 21 U.S.C. §335a(a) or (b).

 

5.20         Insurance. Seller has not been refused
any fire, liability, product liability, workmen’s compensation, health or other
forms of insurance, including performance bonds with respect to any aspect of
the Operations or the ownership or use of the Assets or, since January 1,
2002, has had any claims denied by its insurers.  There are no pending claims against Seller
with respect to any aspect of the Operations or the ownership or use of the
Assets as to which insurers are defending under a reservation of rights or have
denied liability and, to Seller’s Knowledge, no condition exists or events have
occurred since January 1, 2002 which could reasonably be expected to
result in any such claim.

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF
BUYER

 

6.1           Organization and Authority.  Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.  Buyer has full corporate power
and authority to execute and deliver this Agreement and such other instruments,
agreements and transactions as may be contemplated hereunder, and to perform
its obligations hereunder and thereunder. 
All corporate acts and other proceedings required to be taken by or on
the part of Buyer to authorize Buyer to execute, deliver and perform this
Agreement and such other instruments, agreements and transactions as may be
contemplated hereunder, have been duly and properly taken.  This Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid and binding obligation of
Buyer enforceable in accordance with its terms, except as such enforceability
may be subject to or limited by (i) applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting the enforcement of creditors’
rights generally and (ii) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in law
or equity, regardless of whether considered in a proceeding in law or equity.

 

6.2           No Conflict or Violation.  The execution and delivery by Buyer of this
Agreement and such other instruments, agreements and transactions as may be
contemplated hereunder and the consummation by Buyer of the Contemplated
Transactions will not (i) to Buyer’s Knowledge, violate any law, statute, rule or
regulation or judgment, order, writ, injunction or decree of any Governmental
Entity, or (ii) conflict with, result in any breach of, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under the Certificate of Incorporation or bylaws of Buyer or, to Buyer’s
Knowledge, any agreement to which Buyer is a party, except for such violations,
conflicts, breaches or defaults which individually or in the aggregate have not
had and would not reasonably be expected to have a Material Adverse Effect on
Buyer.

 

6.3           Consents and Approvals.  No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from,
any Governmental Entity, or any other Person, is required to be made or
obtained by Buyer in connection with the execution, delivery and performance of
this Agreement and the consummation of the Contemplated Transactions, except
with respect to the HSR Filing and the Environmental Governmental
Authorizations listed 

 

CONFIDENTIAL TREATMENT REQUESTED

 

25

 

in Schedule 6.3, except for declarations, filings,
registrations, authorizations, consents, approvals or permits which if not
obtained or made have not had and would not reasonably be expected to have
individually or in the aggregate a Material Adverse Effect on Buyer.

 

6.4           Cash Resources.  Buyer has cash and/or readily available
financing in an amount sufficient to pay the Purchase Price at the Closing and
any and all fees and expenses relating to the transactions contemplated under
this Agreement and specifically acknowledges Seller has entered into this
Agreement in reliance upon this representation. 
Buyer acknowledges that obtaining financing shall not be a condition to
Closing.

 

6.5           Seller’s Records.  Buyer acknowledges that Seller has heretofore
delivered to Buyer (or has made available to Buyer for review and copying)
copies of Seller’s Records.

 

6.6           Environmental Governmental Authorizations.  Buyer acknowledges that Seller has previously
delivered, or made available, to Buyer copies of certain Environmental
Governmental Authorizations.

 

6.7           Litigation.  There are no actions, suits, proceedings or
claims pending or, to the Knowledge of Buyer, threatened in writing concerning
Buyer or any of its Affiliates with respect to the transactions contemplated in
this Agreement.

 

6.8           Brokers and Finders.  Except as set forth in Schedule 6.8,
Buyer has not employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finder’s fee in connection with the transactions
contemplated by this Agreement.

 

6.9           Buyer Due Diligence.  Buyer is experienced, and/or has engaged
expert advisors experienced in the evaluation and purchase of property and
assets such as the Assets contemplated hereunder.  Buyer acknowledges that prior to Closing it
will have had the opportunity, pursuant to Section 7.5, to inspect the
Facilities and observe the physical characteristics and condition of the
Facilities and any and all other matters, as to, concerning or with respect to
any matter whatsoever relating to the Facilities or this Agreement or of
concern to Buyer (“Property Condition”), including: title; the
environmental condition of the Facilities (including the presence or absence of
Hazardous Substances in, on or about the Facilities, notwithstanding the
issuance of letters of closure, no further action or liability assurance by the
various federal, state or local agencies and offices); water, soil, pest and
geological conditions of the Facilities the financial condition of the
Facilities; the suitability of the Facilities or any and all activities and/or
uses which may be conducted thereon; the compliance of or by the Facilities
with any and all laws, rules, ordinances or regulations of any applicable
governmental authority or body (including environmental, building codes, and
the status of any development or use rights respecting the Facilities); the
habitability, merchantability, marketability, profitability or fitness for a
particular purpose of the Facilities; or the physical condition of the
improvements, including construction defects, deferred maintenance or other
adverse physical conditions or defects. Buyer further acknowledges and agrees
that except for any representations, warranties or agreement made by Seller
herein, neither Seller nor any Person acting or purporting to act on Seller’s
behalf has made any representation, warranty or agreement, express or implied,
by or on behalf of Seller as to any matters concerning a Property
Condition.  Buyer hereby acknowledges,
agrees and represents that, except as otherwise provided in this Agreement, the
Facilities are to

 

CONFIDENTIAL TREATMENT REQUESTED

 

26

 

be purchased, conveyed and accepted by Buyer at the Closing in their
present condition, “AS IS”, “WHERE IS” AND WITH ALL FAULTS, and that no patent
or latent defect or deficiency in a Property Condition, whether or not known or
discovered (other than the fraud of Seller), shall affect the rights of either
Seller or Buyer hereunder, nor shall the Purchase Price be reduced as a
consequence thereof.  Upon Closing,
except as otherwise provided in this Agreement, Buyer will acquire the
Facilities solely on the basis of its own physical and financial examinations,
review and inspections and the title insurance protection afforded by the owner’s
title policy. Upon Closing, Buyer shall assume the risk that Property
Conditions may not have been revealed by Buyer’s investigations.

 

ARTICLE 7

PRE-CLOSING COVENANTS

 

7.1           Governmental Filings.  Buyer and Seller shall cooperate in promptly
undertaking all filings required to be filed with any Governmental Entity in
connection with the transfer of Assets and other rights under this Agreement
and to cooperate with one another as reasonably necessary to accomplish the
foregoing, including, but not limited to, the filings required of both parties
pursuant to the HSR (such filings sometimes being referred to in this Agreement
as the “HSR Filings”), and the filing of any additional information as
required with respect to such HSR Filings as soon as practicable after receipt
of request therefor from the United States Federal Trade Commission.  The filing fees associated with all HSR
Filings shall be [****]*.

 

7.2           Conduct of Operations.  During the period on and from the Effective
Date through and including the Closing Date, Seller shall maintain the
Facilities in substantially the same condition as exist as of the Effective
Date, maintain the same insurance coverages on the Facilities currently in
effect and operate the Assets in a manner reasonably determined in Seller’s
discretion as prudent to prevent damage to, or deterioration of, the Facilities
and to comply in all material respects with applicable legal requirements and
all applicable permits and approvals.

 

7.3           Obtaining Necessary Consents and Lease
Extensions.  Seller shall use its
commercially reasonable efforts to obtain any and all consents necessary for
the effective assignment to and assumption by Buyer of the Assumed Contracts
and Assumed Liabilities, including the Third Party Consents and the consents
set forth on Schedule 5.3. 
Further, Seller agrees not to (i) terminate the employment or
reduce the salary on other benefits of any Operations Employee or remove any
Tangible Personal Property included in the Assets from any of the Facilities
prior to the Closing without the prior written consent of Buyer except for
immaterial quantities of supplies in the ordinary course of Business, except as
otherwise required pursuant to Section 7.8(c), or (ii) to modify or
amend any Assumed Contracts or enter into any new contracts unless the same is
terminable without penalty by Seller and by Buyer upon not more than thirty
(30) days’ notice.  Buyer shall cooperate
with Seller to obtain Third Party Consents for the assignment and assumption of
the Leased Properties.  In addition,
Buyer and Seller shall use commercially reasonable efforts to cause St. Paul
Properties, Inc., as landlord under the 3750 Lease and the 3850 Lease, to
[****]*.  Buyer and Seller shall use
commercially reasonable efforts to amend each Lease and that certain Lease
Agreement between St. Paul Properties, Inc., 

 

* Certain information on this page has been omitted and filed
separately with the SEC.  Confidential
treatment has been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

27

 

as landlord, and Seller, as tenant, dated February 10, 1992, as
amended (the “Retained Lease”), to [****]*.  All such consents shall be in writing and
executed counterparts thereof shall be delivered promptly to Buyer.  To the extent (x) Buyer wishes to pursue
a transfer of any of the Environmental Governmental Authorizations, and (y) such
Environmental Governmental Authorizations are transferable, then Seller shall
reasonably cooperate with, and assist Buyer in effectuating such transfer,
including the filing of any forms with the relevant Governmental Entity that
may be necessary to secure approval of such transfer by such Governmental
Entity.

 

7.4           No Solicitation. Seller will not (and
it will cause its officers, directors, employees, agents and Affiliates not to)
(a) take any action to solicit, initiate, seek, or affirmatively support
any inquiry, proposal or offer from, any corporation, partnership, Person or
group (other than Buyer) relating to any acquisition of the Assets, (any such
proposed transaction being a “Third Party Acquisition”); or (b) participate
in any discussions or negotiations with, or provide any non-public information
to, any corporation, partnership, Person or group (other than Buyer) relating
to any proposed Third Party Acquisition. 
In no event will Seller accept or enter into an agreement concerning any
such Third Party Acquisition prior to the termination of this Agreement
pursuant to Article 11. 
Notwithstanding this provision, nothing herein shall be deemed to in any
way restrict or limit the right of Seller to engage in discussions,
negotiations, furnishing of information or any other activities relating to or
in support of transactions involving the acquisition or sale of Seller and/or
any other product lines or businesses of Seller other than the Assets, so long
as this Agreement shall remain in full force and effect and shall remain
binding on the parties hereto.

 

7.5           Access.  During the period from the Effective Date and
continuing until the Closing, upon reasonable advance notice received from
Buyer and at Buyer’s expense, Seller shall (i) afford Buyer and its
representatives reasonable access to the Facilities, during regular business
hours, for the purposes of making, at Buyer’s expense, (A) engineering,
architectural, title, zoning, survey, and other similar studies that Buyer
reasonably deems necessary or desirable in connection with the transaction
contemplated hereby (the “Real Property Inspections”) and (B) environmental
investigations, assessments or studies of the Real Property and all related
reports and correspondence (the “Environmental Inspections”), and (ii) otherwise
cooperate and assist with Buyer’s investigation of the Assets as Buyer may
reasonably request. Buyer shall coordinate with Seller to minimize any
interference with the operations of Seller that may be caused by any Real
Property Inspection and Environmental Inspection.  Buyer will obtain (or ensure that its agents,
consultants and contractors, as applicable, will obtain) public liability and
property damage insurance insuring against any liability arising out of any
entry, tests or investigations of the Property pursuant to the provisions hereof.  Buyer will provide to Seller, upon request, a
certificate of insurance evidencing Buyer’s or Buyer’s agents’, consultants’
and/or contractors’, as applicable, procurement of a commercial general
liability insurance policy as required herein prior to or simultaneous with
their conducting any physical inspection of the Facilities.  Such insurance shall be in the amount of
[****]* combined single limit for injury to or death of one or more
persons in an occurrence, and for damage to tangible property (including loss
of use) in an occurrence.  The
aforementioned insurance coverage may 

 

* Certain information on this page has been omitted and filed
separately with the SEC.  Confidential
treatment has been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

28

 

be obtained under a blanket policy carried by Buyer or its agents,
consultants or contractors, as the case may be. 
In conducting any inspections, investigations or tests of the Property,
Buyer and its agents and representatives shall: (i)  not unreasonably
interfere with the operation and maintenance of the Property; (ii) not
perform any invasive or destructive testing or sampling and not otherwise
damage any part of the Property or any personal property; (iii) not injure
Seller or its agents, guests, invitees, contractors or employees; (iv) comply
with all applicable laws; (v) promptly pay when due the costs of all
tests, investigations, and examinations done with regard to the Property; (vi) not
permit any liens to attach to the Property by reason of the exercise of its
rights hereunder; (vii) repair any damage to the Property resulting
directly or indirectly from any such inspection or tests; (viii) not
reveal or disclose prior to Closing any information obtained by Buyer prior to
Closing concerning the Property or documents related thereto, except as may be
otherwise required by law, and (ix) not cause the Release of any Hazardous
Substance discovered through any such inspection nor exacerbate any existing
Release of Hazardous Substance discovered through such inspection.  Buyer shall afford Seller the opportunity to
have a representative of Seller present to accompany the parties undertaking
such evaluations, inspections, tests and other investigations of the physical
condition of the Property.  If this
Agreement is terminated, Buyer shall restore the Property to the condition in
which it was found by Buyer.  Buyer’s
obligation to restore the Property shall survive any termination of this
Agreement.

 

7.6           Title Insurance. Schedule 5.8(d)(i) sets
forth a description of the Real Property. 
Buyer has ordered from the Title Company a title insurance search and
commitment for a title insurance policy (the “Title Commitment”), setting
forth the status of title to the Real Property and any defects in or exceptions
or objections to title (“Title Exceptions”).  No later than ten (10) business days
after Buyer’s receipt of the Survey and Title Commitment, Buyer shall notify
Seller of any Title Exceptions disclosed by the Title Commitment (or the
Current Survey) which are not Permitted Encumbrances and are objectionable to
Buyer (“Title Objections”).  Each
Title Exception not objected to shall be deemed a Permitted Encumbrance.  Upon receipt of a Title Objection, Seller may
notify Buyer by written notice (the “Response Notice”), not later than
five (5) business days after receipt of the Title Objection (the “Cure
Notice Deadline”) that either (i) Seller agrees to cure, at Seller’s
expense, all Title Objections prior to Closing, or (ii) Seller does not
intend to cure such Title Objections.  A
title defect shall be deemed cured if Title Company deletes reference to the
item constituting the title defect as an encumbrance and exception to the Title
Company’s insurance coverages without additional or special premium.  If Seller declines to cure the Title
Objections prior to Closing, Buyer may terminate this Agreement by written
notice delivered to Seller within five (5) business days after receipt of
the Response Notice and Seller shall reimburse Buyer for all of its costs and
expenses incurred in connection with the due diligence, the negotiation of the
letter of intent between Seller and Buyer dated January 24, 2008 and this
Agreement (including the negotiation of all associated agreements and all
actions performed as part of this Agreement). 
Such termination shall be Buyer’s sole remedy.  If Buyer does not terminate this Agreement,
such Title Objections shall be deemed Permitted Encumbrances; provided,
however, that if such a Title Objection can be cured by the payment of money
only, Buyer’s shall have the option at the Closing to deduct from the Purchase
Price the amount of money necessary, in the opinion of the Title Company, to
cure the Title Objection, which amount may include such other sums as may be
deemed necessary of desirable by the Title Company.

 

CONFIDENTIAL TREATMENT REQUESTED

 

29

 

7.7           Inspections.

 

(a)           Promptly after receipt of any report
pertaining to any Real Property Inspection which identifies (i) any
failure of the Facilities to comply with any Legal Requirement or (ii) any
defect in the physical condition of the Facilities, including construction
defects or deferred maintenance, where the cost to correct or cure such
defective physical condition could, in the opinion of Buyer’s engineering
consultants, exceed [****]* (in either case, an “Unsatisfactory
Condition”), then, Buyer promptly shall deliver a copy of such report and
written notice to Seller (the “Unsatisfactory Inspection Notice”)
setting forth in reasonable detail conditions and, if available, a good faith
estimate of the likely costs to remedy the Unsatisfactory Condition.  Upon receipt of an Unsatisfactory Inspection Notice,
Seller may notify Buyer by written notice (the “Inspection Response Notice”),
not later than five (5) business days after receipt of the Unsatisfactory
Inspection Notice (the “Inspection Notice Deadline”) that either (i) Seller
agrees to cure such conditions prior to the Closing or (ii) Seller does
not intend to cure such conditions prior to the Closing.  If Seller does not provide an Inspection
Response Notice to Buyer by the Inspection Notice Deadline, Seller shall be
deemed to have agreed to cure such conditions prior to the Closing.  If Seller provides an Inspection Response
Notice that Seller does not intend to cure such conditions prior to the
Closing, Buyer may notify Seller by written notice, not later than five (5) business
days after the Inspection Notice Deadline (the “Buyer Notice Deadline”)
that Buyer is terminating this Agreement, whereupon Seller shall reimburse
Buyer for its costs and expenses incurred in connection with the due diligence,
the negotiation of the letter of intent between Seller and Buyer dated January 24,
2008 and this Agreement (including the negotiation of all associated agreements
and all actions performed as part of this Agreement). If Buyer does not
terminate this Agreement by Buyer Notice Deadline or fails to respond by Buyer
Notice Deadline, Buyer shall be deemed to have accepted Seller’s response (or
deemed response) in the Inspection Response Notice.  Effective as of Closing, provided that Seller
has effected the cure of all conditions Seller agreed to cure in the Inspection
Response Notice, Buyer shall be deemed to have accepted the Real Property “as-is”
as of the Closing Date and to have waived and released any claims against
Seller with respect thereto except as otherwise provided in this
Agreement.  Notwithstanding the
foregoing, a circumstance or condition which constitutes an Environmental
Remediation Obligation under Section 7.7(b) shall not constitute an
Unsatisfactory Condition.

 

(b)           Buyer shall use commercially reasonable
efforts to obtain a Phase I Environmental Site Assessment of the Facilities
promptly, and in all events, prior to the Closing Date.  Promptly after receipt of any report
pertaining to any Environmental Inspection which identifies any Hazardous Substance
that is or is suspected of being located at, on, under or migrating to or from
the Real Property that requires or may require remediation under any applicable
Environmental Laws (an “Environmental Remediation Obligation”), then,
Buyer promptly shall deliver a copy of such report and written notice to Seller
(the “Environmental Remediation Obligation Notice”) setting forth in
reasonable detail the basis for and any evidence of an actual or suspected
Environmental Remediation Obligation, and, if available, a good faith estimate
of the likely costs associated with such Environmental Remediation (as defined
herein) or with any further Environmental Inspections, such as a Phase II
Environmental Site 

 

* Certain information on this page has been omitted and filed
separately with the SEC.  Confidential
treatment has been requested with respect to the omitted portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

30

 

Assessment, needed to investigate further any suspected Environmental
Remediation Obligation(s).  Upon receipt
of an Environmental Remediation Obligation Notice, Seller may notify Buyer by
written notice (the “Environmental Cure Response Notice”), not later
than five (5) business days after receipt of the Environmental Remediation
Obligation Notice (the “Environmental Cure Notice Deadline”) that either
(i) Seller agrees to conduct an Environmental Remediation of such
Environmental Remediation Obligation and conduct such further Environmental
Inspections as may be necessary to determine whether or not each suspected
Environmental Remediation Obligation is, in fact, an Environmental Remediation
Obligation and, upon the determination of the environmental consultant
reasonably acceptable to Buyer performing such further Environmental
Inspections that one or more additional Environmental Remediation Obligations
exist that Seller agrees to conduct an Environmental Remediation of such
additional Environmental Remediation Obligations, or (ii) Seller does not
intend to conduct an Environmental Remediation of such Environmental
Remediation Obligation or any further Environmental Inspections. If Seller does
not provide an Environmental Cure Response Notice to Buyer by the Environmental
Cure Notice Deadline, Seller shall be deemed to have agreed to conduct an Environmental
Remediation of such Remediation Obligation and to conduct such further
Environmental Inspections and, upon the determination of said environmental
consultant reasonably that one or more additional Environmental Remediation
Obligations exist, to conduct an Environmental Remediation of such additional
Environmental Remediation Obligations. If Seller provides an Environmental Cure
Response Notice that Seller does not intend to conduct an Environmental
Remediation of such Remediation Obligation, Buyer may notify Seller by written
notice, not later than five (5) business days after the Environmental Cure
Notice Deadline (the “Buyer Termination Deadline”) that Buyer is
terminating this Agreement, whereupon Seller shall reimburse Buyer for its
costs and expenses incurred in connection with the due diligence, the
negotiation of the letter in intent between Seller and Buyer dated January 24,
2008 and this Agreement (including the negotiation of all associated agreements
and all actions performed as part of the Agreement). If Buyer does not
terminate this Agreement by Buyer Termination Deadline or fails to respond by
Buyer Termination Deadline, Buyer shall be deemed to have accepted Seller’
response (or deemed response) in the Environmental Cure Response Notice.  If Seller provides an Environmental Cure
Response Notice that Seller intends to conduct an Environmental Remediation of
such Remediation Obligation and to conduct such further Environmental
Inspections and, upon the determination of said environmental consultant
reasonably that one or more additional Environmental Remediation Obligations
exist, to conduct an Environmental Remediation of such additional Environmental
Remediation Obligations, then Seller and Buyer on or before the Closing Date
shall negotiate and enter into a remediation agreement to accomplish the
requirements of this Section 7.7(b). 
Effective as of Closing, Buyer shall be deemed to have accepted all
matters requiring Environmental Remediation expressly disclosed in the
Environmental Inspection and Seller’s Reports, and to have waived and released
any claims against Seller with respect thereto except as provided for in this
Agreement and the remediation agreement.

 

7.8           Employees.

 

(a)           Buyer shall have the right prior to Closing
to contact and to discuss possible terms of employment with all of the
Operations Employees, except the Seller’s
Retained Employees listed on Schedule 7.8(a).  Buyer anticipates offering all or
substantially all the Operations Employees the opportunity to become employees
of Buyer in positions comparable to

 

CONFIDENTIAL TREATMENT REQUESTED

 

31

 

those they
currently hold with Seller, effective immediately after the Closing.  Buyer shall deliver to Seller a list of the
Operations Employees to whom Buyer has or intends to make offers of employment
(each, an “Identified Employee”) at least fifteen (15) days prior to the
date of the Closing.

 

(b)           Other than those Seller’s Retained Employees listed on Schedule
7.8(a), Seller shall terminate the employment of all Operations
Employees who are offered employment by Buyer, effective immediately prior to
the Closing.  Seller shall take all
action necessary to give any notification required by the Worker Adjustment and
Retraining Notification Act (“WARN”), United States Code, title 29, Section 2101
and Section 116L.976 of the Minnesota Statutes Annotated, comply with any
requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 and
pay any and all severance, vacation, paid time off, unpaid wages, unpaid
bonuses, unpaid commissions or other sums that may be due to Operations
Employees in connection with their termination of employment with Seller, if
any, or otherwise pursuant to the terms of any of Seller’s employee benefit
plan.  Buyer shall provide to Seller in a
timely manner any information reasonably necessary to determine whether an
Identified Employee has been offered employment in a comparable position and
such other information as is reasonably necessary for Seller to comply with its
obligations, if any, under WARN or any similar state law, rule or
regulation with respect to Seller’s termination of the employment of any
Operations Employees.  Seller will not
exercise any right it may have under any agreement between Seller and any
Operations Employee to prevent any such Operations Employee from accepting an
offer of employment from Buyer or providing services to Buyer, and Seller will
not otherwise enforce any restrictive covenants that would adversely effect the
employment of or services provided by such Operations Employees on behalf of
Buyer.  Seller shall not for a period of
[****]* after the Closing Date (i) induce, persuade or attempt to induce
or persuade any employee, consultant or other personnel of Buyer at the
Facilities or any former employee of Seller at the Facilities to reduce,
terminate, restrict or otherwise alter his or employment relationship with
Buyer; or (ii) solicit, hire, offer to hire, entice away or engage the
services of any employee, consultant or other personnel  of Buyer at the Facilities or any former
employee of Seller at the Facilities.

 

7.9           Bulk Transfer Laws.  Seller shall comply with the provisions of
any applicable so-called “bulk transfer law” of any jurisdiction in connection
with the sale of the Assets to Buyer.

 

7.10         Brokers and Finders.  Seller agrees to pay to each Person named on Schedule
5.13 a commission pursuant to separate agreement and Buyer agrees to pay to
each Person named on Schedule 6.8 a commission pursuant to separate
agreement.  The provisions of this Section 7.10
shall survive the Closing or other termination of this Agreement.

 

ARTICLE 8

CONDITIONS TO CLOSING

 

8.1           Conditions to
Obligations of Buyer.  All
obligations of Buyer hereunder are, at the option of Buyer, subject to the
conditions precedent (all or any of which may be waived by Buyer, in whole or
in part) that, at the Closing:

 

* Certain
information on this page has been omitted and filed separately with the
SEC.  Confidential treatment has been
requested with respect to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

32

 

(a)           The waiting period or
periods required under the HSR, if applicable, shall have expired or shall have
been terminated.

 

(b)           Seller shall have
furnished to Buyer all deliverables set forth in Section 4.2(a), including
the Lease Assignment and Assumption Agreement.

 

(c)           The representations and
warranties of Seller set forth in Article 5 hereof shall be true and
correct in all material respects at and as of the Closing Date as though then
made, except that any such representation or warranty made as of a specified
date (other than the date hereof) shall only need to have been true on and as
of such date.

 

(d)           The [****]*.

 

(e)           The Environmental
Governmental Authorizations, if any, necessary in order for Buyer to perform
its obligations under the Clinical Drug Substance Supply Agreement and the
Transition Services Agreement [and identified as conditions to Closing on Schedule
6.3] shall have been issued in the name of Buyer by the respective
Governmental Entity Issuers thereof.

 

(f)            All of the covenants
and obligations that Seller is required to perform or to comply with pursuant
to this Agreement at or prior to the Closing (considered collectively), and
each of these covenants and obligations (considered individually), shall have
been duly performed and complied with in all material respects.

 

(g)           Buyer shall have
obtained the Phase I Environmental Site Assessment in accordance with Section 7.7(b) herein.

 

(h)           Buyer shall have
obtained a fully enforceable policy of title insurance insuring Buyer’s title to
the Real Property in accordance with Section 7.6 herein.

 

8.2           Conditions to
Obligations of Seller.  All
obligations of Seller hereunder are, at the option of Seller, subject to the
conditions precedent (all or any of which may be waived by Seller, in whole or
in part) that, at the Closing:

 

(a)           The waiting periods
required under the HSR, if applicable, shall have expired or shall have been
terminated.

 

(b)           Buyer shall have
furnished to Seller all deliverables set forth on Section 4.2(b).

 

(c)           The representations and
warranties of Buyer set forth in Article 6 hereof shall be true and
correct in all material respects at and as of the Closing Date as though then
made, except that any such representation or warranty made as of a specified
date (other than the date hereof) shall only need to have been true on and as
of such date.

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

33

 

ARTICLE 9

POST-CLOSING COVENANTS

 

9.1           Further Assurances.  The parties agree to execute, acknowledge and
deliver such further instruments, and to do all such other reasonable acts, as
may be necessary or appropriate in order to carry out the purposes and intent
of this Agreement, including those acts necessary or useful to satisfy the
Closing conditions specified in Sections 8.1 and 8.2.  Each party shall bear its own costs and
expenses associated with fulfilling its obligations as set forth in this Article 9,
except for such fees as provided for in the Transition Services Agreement.

 

ARTICLE 10

CONFIDENTIALITY

 

10.1         Confidentiality.  Each party has disclosed, and may hereafter
from time to time in the course of the performance of this Agreement disclose,
Confidential Information to the other party. 
Each party shall hold in confidence all Confidential Information of the
other party and shall take all reasonable steps to prevent disclosure to, or
use of the Confidential Information of the other party by, any third party,
except as permitted under this Agreement or as necessary to carry out the
activities contemplated hereby.  Further,
neither party shall, without the prior written consent of the other party, use
the Confidential Information of the other party for any purpose other than
performing its obligations or exercising its rights under this Agreement or in
connection with the Contemplated Transactions. 
Each party shall disclose the Confidential Information of the other
party only to its directors, employees, consultants, vendors and clinicians
under written agreements of confidentiality at least as restrictive as those
set forth in this Agreement or comparable assurances of confidentiality, who
have a need to know such information in connection with such party performing
its obligations or exercising its rights under this Agreement or in connection
with the Contemplated Transactions.  No
provision of this Agreement shall be construed so as to preclude such
disclosure of Confidential Information as may be inherent in or reasonably
necessary to the securing from any Governmental Entity of any necessary
approval or license related to the Assets. 
Upon the termination of this Agreement, and upon the written request of
the other party, each party shall promptly return to the other party all copies
and embodiments of the Confidential Information of such other party, subject to
the retention by each party’s legal department of one complete copy for
archival purposes and except, with respect to Buyer, to the extent that Buyer
has acquired such Confidential Information at Closing pursuant to Section 2.1(i) hereof;
which Confidential Information shall, effective as of the Closing, become the
Confidential Information of Buyer for all purposes of this Agreement and the
Confidentiality Agreement.

 

10.2         Publicity.  No party to this Agreement shall originate
any publicity, news release or other public announcement, written or oral,
whether relating to this Agreement or the existence of any arrangement between
the parties, without the prior written consent of the other party whether named
in such publicity, news release or other public announcement or not, except
where such publicity, news release or other public announcement is required by
law or by the rules or regulations of any stock exchange on which any
security of Seller or Buyer is listed for trading (“Stock Exchange”); provided
that in such event, the party issuing same shall still be required to consult
with the other party whether named in such publicity, news release or public
announcement or not, a reasonable time prior to its release to allow the other
party to comment 

 

CONFIDENTIAL
TREATMENT REQUESTED

 

34

 

thereon and,
after its release, shall provide the other party with a copy thereof.  Each party shall use commercially reasonable
efforts to provide reasonable advance notice of and to respond to and cooperate
with the other party in connection with any such publicity.  If the party whose comments are solicited
fails to comment within [****]* days from the initial consultation with respect
to any pending disclosure (or such shorter period of time as may be necessary
for the party proposing to issue such publicity or its Affiliates to avoid a
violation of any applicable Legal Requirement or any rule or regulation of
any Stock Exchange). The other party shall be free to issue its publicity, news
release or other public announcement.  If
either party, based on the advice of its counsel, determines that this
Agreement, or any of the other documents executed in connection herewith, must
be filed with the SEC or any Stock Exchange, then such party, prior to making
any such filing, shall provide the other party and its counsel with a redacted
version of this Agreement (or any other related documents) which it intends to
file, and will give due consideration to any comments provided by the other
party or its counsel and use reasonable efforts to ensure the confidential
treatment by the SEC or any applicable Stock Exchange of those sections
specified by the other party or its counsel.

 

ARTICLE 11

TERM AND TERMINATION

 

11.1         Termination.  This Agreement may be terminated prior to the
Closing:

 

(a)           By Buyer, upon written
notice (i) at any time prior to Closing, if Seller shall have failed to
comply in any material respect with any of its obligations in this Agreement,
and such failure shall be continuing, or pursuant to any other termination
right of Buyer set forth specifically in this Agreement, or if any one or more
of the representations or warranties of Seller contained in this Agreement
shall prove to have been inaccurate in any material respect when made; provided,
however, Buyer shall give Seller thirty (30) days to cure any such
failure to so comply or to remedy any such inaccuracy under this Agreement; or (ii) at
Closing, if any of the conditions precedent to the performance of Buyer’s
obligations at the Closing under Article 7 or Article 8 shall not have
been fulfilled (unless the failure results primarily from Buyer’s breach of any
representation, warranty, covenant or agreement contained this Agreement); provided,
however, that in the event that Buyer shall desire to terminate this
Agreement as a result of the failure of the accuracy in any material respect of
a representation or warranty at the Closing, Buyer shall be required to give
Seller prior notice that it intends to terminate this Agreement as a result of
such inaccuracy and Seller shall have a reasonable period of time, not to
exceed thirty (30) days, to cure such inaccuracies.

 

(b)           By Seller, upon written
notice (i) at any time prior to Closing, if Buyer shall have failed to
comply in any material respect with any of its covenants or agreements
contained in this Agreement and such failure shall be continuing, or pursuant
to any other termination right or Seller specifically set forth in this
Agreement, or if any one or more of the representations or warranties of Buyer
contained in this Agreement shall prove to have been inaccurate in any material
respect when made; provided, however, Seller shall give Buyer
thirty (30) days to cure any such failure to so comply or any such inaccuracy
under this Agreement; or 

 

* Certain information on this page
has been omitted and filed separately with the SEC.  Confidential treatment has been requested
with respect to the omitted portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

35

 

(ii) at
the Closing, if any of the conditions precedent to the performance of its
obligations at the Closing under Article 7 or Article 8 shall not
have been fulfilled (unless the failure results from Seller’s breach of any
representation, warranty, covenant or agreement contained this Agreement); provided,
however, that in the event that Seller shall desire to terminate this
Agreement as a result of the failure of the accuracy in any material respect of
a representation or warranty at the Closing, Seller shall be required to give
Buyer prior notice that it intends to terminate this Agreement as a result of
such inaccuracy and Buyer shall have a reasonable period of time, not to exceed
thirty (30) days, to cure such inaccuracies.

 

(c)           By either party if the
Closing shall not have occurred on or before April 30, 2008, provided that
such date shall be extended to the extent necessary under the circumstances in
the event the waiting period under the HSR is extended, restarted or renewed
beyond the initial 30-day period, or the Title Commitment and Current Survey
have not been received by Buyer and Seller or a dispute exists in connection
with any matter described in Section 7.7 hereof, unless such failure to
close is primarily the result of the breach of any representations, warranties,
covenants or agreements contained in this Agreement by the party seeking to
terminate.

 

11.2         [****]*.

 

11.3         Consequences
of Termination.  In the event of
termination of this Agreement prior to the Closing in accordance with its terms
(rather than for willful breach of this Agreement):  (i) each party will redeliver all
documents, work papers and other material of any other party relating to the
Contemplated Transactions, whether so obtained before or after the Effective
Date, to the party furnishing the same; (ii) the provisions of Article 10
shall continue in full force and effect; and (iii) no party hereto shall
have any Liability or further obligation to any other party to this Agreement;
provided that if this Agreement is terminated pursuant to Section 11.1(a)(i) hereof,
Seller shall reimburse Buyer for all of its costs and expenses incurred in
connection with the due diligence, the negotiation of the letter of intent
between Seller and Buyer dated January 24, 2008 and this Agreement
(including the negotiation of all associated agreements and all actions
performed as part of this Agreement); provided further that if this Agreement
is terminated pursuant to Section 11.1(b)(i) hereof, Buyer shall
reimburse Seller for all of its costs and expenses incurred in connection with
the due diligence, the negotiation of the letter of intent between Seller and
Buyer dated January 24, 2008 and this Agreement (including the negotiation
of all associated agreements and all actions performed as part of this
Agreement).

 

11.4         Effectiveness.
Termination under this Article 11 shall not become effective so long as
the alleged grounds for termination are in dispute and the matter(s) at
issue have been submitted for resolution pursuant to this Agreement.

 

ARTICLE 12

INDEMNIFICATION

 

12.1         Survivability
of Representations and Warranties. 
The representations and warranties made in Articles 5 and 6 or any
instrument delivered pursuant to this Agreement 

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

36

 

survive the Closing Date
and the consummation of the Contemplated Transactions for a period of [****]*; provided,
however, that:

 

(a)           Seller’s
representations and warranties set forth in Sections [****]* shall survive
[****]*;

 

(b)           Seller’s
representations and warranties set forth in Sections [****]*, and Buyer’s
representations and warranties set forth in Sections [****]* shall survive
[****]*;

 

(c)           Sellers’
representations and warranties set forth in Section [****]* will survive
the Closing Date for a period [****]*, including Governmental Entities, with
respect to matters addressed in such Section; and

 

(d)           Seller’s
representations and warranties set forth in [****]*.

 

12.2         Indemnification by
Buyer.  Buyer indemnifies and holds
harmless Seller, and any of its directors, officers, employees, Affiliates,
controlling persons, agents and representatives (the “Seller Indemnitees”)
from and against any Liabilities (a) to the extent such Liabilities relate
to the Assumed Liabilities, (b) arising from Buyer’s breach of this
Agreement or any instrument delivered pursuant to this Agreement, (c) arising
from the arising from the breach of any representation or warranty made by
Buyer in this Agreement, or (d) third party Claims arising from the
conduct of Buyer’s business at the Facilities after the Closing Date (other
than third party Claims arising under the Clinical Drug Substance Supply
Agreement).

 

12.3         Indemnification by
Seller.  Seller indemnifies and holds
harmless Buyer, and any of its directors, officers, employees, Affiliates,
controlling persons, agents and representatives (the “Buyer Indemnitees”)
from and against any Liabilities (a) to the extent such Liabilities
constitute Excluded Liabilities, (b) arising from Seller’s breach of this
Agreement or any instrument delivered pursuant to this Agreement, (c) arising
from the breach of any representation or warranty made by Seller in this
Agreement, or (d) third party Claims arising from the conduct of the
Operations prior to the Closing Date.

 

12.4         Claims.  Any Buyer Indemnitee or Seller Indemnitee
claiming that it may be entitled to indemnification under this Article 12
(the “Indemnified Party”) shall give prompt notice to the other party
(the “Indemnifying Party”) of each matter, action, cause of action,
claim, demand, fact or other circumstances upon which a claim for
indemnification (a “Claim”) under this Article 12 may be
based.  Such notice shall contain, with
respect to each Claim, such facts and information as are then reasonably
available, the specific basis for indemnification hereunder, together with the
amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith.  Failure to
give prompt notice of a Claim hereunder shall not affect the Indemnifying Party’s
obligations under this Article, except to the extent the Indemnifying Party is
prejudiced by such failure.  If a Claim
relates to a Proceeding brought against an Indemnified Party by a third party,
the Indemnifying Party shall immediately upon

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL
TREATMENT REQUESTED

 

37

 

receipt of notice of such claim, assume the defense of such claim with
counsel reasonably by acceptable to the Indemnified Party.

 

12.5         Assertion of Claims.  No claim shall be brought under Sections 12.2
or 12.3 unless Buyer Indemnitees, or any of them, or Seller Indemnitees, or any
of them, as the case may be, at any time prior to the expiration of the
applicable representation or warranty (as provided in Section 12.1),
provide Buyer or Seller, as the case may be, with written notice of the
existence of any such claim, specifying the nature and basis of such claim and
the amount thereof, to the extent known; provided, that, the failure so to
provide such notice to Buyer or Seller, as the case may be, will not relieve
Buyer or Seller, as the case may be, from any Liability which they may have to
Buyer Indemnitees or Seller Indemnitees, as the case may be, under this
Agreement or otherwise, except to the extent that Buyer or Seller, as the case
may be, reasonably demonstrates that such failure results in the loss or
compromise of any rights or defenses of Buyer or Seller, as the case may be,
and that Buyer or Seller, as the case may be, was not otherwise aware of such
action or claim.  Upon the giving of such
written notice as aforesaid, Buyer Indemnitees, or any of them, or Seller
Indemnitees, or any of them, as the case may be, shall have the right to
commence legal proceedings prior or subsequent to the applicable survival date
for the enforcement of their rights under Sections 12.2 or 12.3, as the case may
be.

 

12.6         Payment
of Claims; Limitation on Indemnification.

 

(a)           Notwithstanding anything to the contrary in
Sections 12.2 or 12.3, any Liability under Section 12.2(c) and Section 12.3(c),
respectively, shall be limited as follows: [****]*.

 

(b)           The aggregate maximum Liability of Seller or
Buyer to the other party under [****]*.

 

12.7         Limitation; Exclusivity.  No Claim shall be made or have any validity
unless the Indemnified Party shall have given written notice of such Claim to
the Indemnifying Party.  If full recovery
under any such Claim is not had within [****]* of such written notice,
arbitration, pursuant to Section 13.2, must be commenced within thirty
(30) days following the end of such [****]* period or such Claim shall be
invalidated.  This Article 12
provides the exclusive means by which a party may assert Claims against the
other party, other than Claims based on fraud or willful misconduct, and Section 13.2
provides the exclusive means by which a party may bring actions against the
other party with respect to any breach by the other party of its obligations
under this Agreement.

 

ARTICLE 13

MISCELLANEOUS

 

13.1         No Third Party Beneficiaries.  Nothing in this Agreement, express or
implied, is intended to or shall (i) confer on any Person other than the
parties hereto (and Buyer Indemnitees and Seller Indemnitees referred to in)
and their respective successors or assigns any rights (including third party
beneficiary rights), remedies, obligations or liabilities under or by reason 

 

* Certain information on this page has
been omitted and filed separately with the SEC. 
Confidential treatment has been requested with respect to the omitted
portions.

 

CONFIDENTIAL TREATMENT REQUESTED

 

38

 

of this Agreement, or (ii) constitute the parties hereto as
partners or as participants in a joint venture. 
This Agreement shall not provide third parties with any remedy, claim,
liability, reimbursement, cause of action or other right in excess of those
existing without reference to the terms of this Agreement.  No third party shall have any right,
independent of any right which may exist irrespective of this Agreement, under
or granted by this Agreement, to bring any suit at law or equity for any matter
governed by or subject to the provisions of this Agreement.

 

13.2         Governing Law; Jurisdiction; Dispute
Resolution and Arbitration.  This
Agreement shall be deemed to have been made in the State of Minnesota and its
form, execution, validity, construction and effect shall be determined in
accordance with the laws of the state of Minnesota, without giving effect to
the principles of conflicts of law thereof. 
Disputes arising out of, relating to or in connection with this
Agreement, or in relations between the parties with respect to the subject
matter hereof, for any reason or under any circumstances, will be finally
settled by a single arbitrator in a binding arbitration in accordance with the
Judicial Arbitration and Mediation Services (“JAMS”) Comprehensive
Arbitration Rules and Procedures (the “JAMS Rules”).  Upon receipt of written notice of the
existence of a dispute by one party hereto to the other, the parties shall,
within thirty (30) days conduct a meeting of one or more senior executives of
each party, with full settlement authority, in an attempt to resolve the
dispute.  Each party shall make available
appropriate personnel to meet and confer with the other party reasonably within
the 30-day period.  Upon the expiration
of the 30-day period, or upon the termination of discussions between the senior
executives, either party may elect arbitration of any dispute by written notice
to the other (the “Arbitration Notice”). 
The  arbitration shall be held in
Minneapolis, Minnesota before one (1) arbitrator from JAMS having
substantial experience as a jurist and mediator with significant disputes in
the biotechnology and/or pharmaceuticals industry selected by the mutual
agreement of Buyer and Seller; provided, however, that if such
parties cannot agree on an arbitrator within thirty (30) days of the
Arbitration Notice, either party may request JAMS select the arbitrator, and
JAMS shall select an arbitrator pursuant to the procedure set out by the JAMS
Rules, provided, however, that the arbitrator selected be a former judge with
at least  fifteen (15) years
experience  addressing as a jurist and/or
mediator significant disputes in the biotechnology and or pharmaceutical
industry.  The arbitration shall be
administered by JAMS pursuant to its AAA Rules. 
Judgment on the arbitration award may be entered in any court having
jurisdiction.  The arbitrator may, in the
arbitration award, allocate for payment by the non-prevailing party all or part
of the costs of the arbitration, including fees of the arbitrator and the
reasonable attorneys’ fees and costs incurred by the prevailing party.  This Section shall not preclude the
parties from seeking provisional remedies in aid of arbitration from a court of
appropriate jurisdiction.  In respect of
any actions for injunctive or other equitable relief hereunder, any action or
proceeding may be brought against any party in the state and federal courts
located in the city of Minneapolis, Minnesota and each of the parties consents
to the jurisdiction of such courts in any such action or proceeding and waives
any objection to venue laid therein.

 

13.3         Severability.  If any provision of this Agreement is held by
a court of competent jurisdiction to be invalid or unenforceable, it shall be
modified, if possible, to the minimum extent necessary to make it valid and
enforceable or, if such modification is not possible, such provision shall be
stricken and the remaining provisions shall remain in full force and
effect.  If any of the terms or
provisions of this Agreement is in conflict with any applicable statute or rule of
law in any jurisdiction, then such term or provision shall be deemed
inoperative in such 

 

CONFIDENTIAL TREATMENT REQUESTED

 

39

 

jurisdiction to the extent of such conflict and the parties will
renegotiate the affected terms and conditions of this Agreement to resolve any
inequities.

 

13.4         Entire Agreement.  This Agreement and the ancillary transaction
documents to be executed and delivered pursuant to this Agreement are intended
to define the full extent of the legally enforceable undertakings and
representations of the parties hereto, and no promise or representation,
written or oral, which is not set forth explicitly in this Agreements or such
ancillary transaction documents is intended by either party to be legally
binding; provided, however, in the event this Agreement
terminates, the Confidentiality Agreement shall continue in full force and
effect pursuant to its terms.  Each party
acknowledges that in deciding to enter into this Agreement and to consummate
the transaction contemplated hereby it has not relied upon any statements or
representations, written or oral, other than those explicitly set forth in this
Agreement.

 

13.5         Amendment.  This Agreement may not be amended, supplemented
or otherwise modified except by an instrument in writing signed by both parties
that specifically refers to this Agreement.

 

13.6         Notices.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed effectively
given:  (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed facsimile, (iii) five
(5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. 
All communications shall be sent to the respective parties at the
addresses set forth below (or at such other addresses as shall be specified by
notice given in accordance with this Section):

 

CONFIDENTIAL TREATMENT REQUESTED

 

40

 

	
  If to Seller:

  	
  If to Buyer:

  
	
   

  	
   

  
	
  PDL BioPharma, Inc.

  	
  GMN, Inc.

  
	
  Attention: General Counsel

  	
  Attention: President

  
	
  1400 Seaport Boulevard

  	
  c/o Genmab, Inc.

  
	
  Redwood City, CA 94063

  	
  457 North Harrison Street

  
	
  Facsimile:
  650-454-1468

  	
  Princeton, NJ 08540

  
	
  E-mail:
  Francis.Sarena@pdl.com

  	
  Facsimile: +1 609-430-2482

  
	
   

  	
  E-mail:
  TLH@Genmab.com

  
	
   

  	
   

  
	
  with a copy to: (not to constitute notice)

  	
  with a copy to: (not to constitute notice)

  
	
   

  	
   

  
	
  DLA Piper US LLP

  	
  Lisa Drakeman, President

  
	
  Attention: Howard Clowes

  	
  Genmab A/S

  
	
  153 Townsend Street, Suite 800

  	
  c/o Genmab, Inc.

  
	
  San Francisco, CA 94107-1957

  	
  457 North Harrison Street

  
	
  Facsimile:415-659-7410

  	
  Princeton, NJ 08540

  
	
  E-mail:
  howard.clowes@dlapiper.com

  	
  Facsimile: +1 609-430-2482

  

 

13.7         Assignment.  This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective successors and assigns, but this Agreement shall not be
assignable by either party hereto without the express written consent of the
other party hereto which will not be unreasonably withheld.

 

13.8         No Agency.  It is understood and agreed that each party
shall have the status of an independent contractor under this Agreement and
that nothing in this Agreement shall be construed as authorization for either
party to act as agent for the other. 
Neither party shall incur any Liability for any act or failure to act by
employees of the other party.

 

13.9         Construction.

 

(a)           This Agreement has been prepared jointly and
shall not be strictly construed against either party.

 

(b)           For purposes of this Agreement, whenever the
context requires:  the singular number
shall include the plural, and vice versa; the masculine gender shall include
the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.

 

(c)           Except as otherwise indicated, all
references in this Agreement to “Articles,” “Sections,” “Exhibits,” “Schedules”
and “Attachments” are intended to refer to Articles and Sections of and
Exhibits, Schedules and Attachments to this Agreement.

 

(d)           The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.

 

CONFIDENTIAL TREATMENT REQUESTED

 

41

 

13.10       Payment of Expenses.  Except as otherwise set forth in this
Agreement, all costs and expenses associated with this Agreement and the
Contemplated Transactions, including the fees of counsel and accountants, shall
be borne by the party incurring such expenses.

 

13.11       Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. 
Any executed counterpart delivered by facsimile or other means of
electronic transmission shall be deemed an original for all purposes.

 

[Remainder of page intentionally left
blank; signature page follows]

 

CONFIDENTIAL TREATMENT REQUESTED

 

42

 

IN WITNESS WHEREOF, the parties, through their authorized officers,
have duly executed this as of the date first written above.

 

 

	
  PDL BioPharma, Inc.,

  	
   

  	
  GMN, Inc.,

  
	
  a Delaware corporation

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ L. Patrick Gage

  	
   

  	
  By: 

  	
  /s/ Torben Lund-Hansen

  
	
  Name:   L.
  Patrick Gage

  	
   

  	
  Name:        Torben
  Lund-Hansen

  
	
  Title:      Chief
  Executive Officer

  	
   

  	
  Title:           President

  
	
   

  	
   

  	
   

  
					

 

	
  By: 

  	
  /s/ 

  	
  Andrew Guggenhime

  	
   

  	
   

  
	
  Name:

  	
  Andrew Guggenhime

  	
   

  	
   

  
	
  Title:

  	
  Senior Vice President and Chief 

  Financial Officer

  	
   

  	
   

  

 

 

SIGNATURE PAGE

ASSET PURCHASE AGREEMENT

 

CONFIDENTIAL TREATMENT REQUESTED

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