Document:

exv10w1

 

Exhibit 10.1

certain
material (indicated by an asterisk) has been omitted from this
document pursuant to a request
for confidential treatment. the omitted material has been filed separately with the securities and exchange
commission

 

 

EXECUTION COPY

PRODUCT ACQUISITION AGREEMENT

by and between

VALEANT PHARMACEUTICALS NORTH AMERICA

(as buyer)

and

INTERMUNE, INC.

(as seller)

 

 

November 28, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I -
	 	DEFINITIONS	 	 	1	 
	Section 1.1.
	 	Defined Terms	 	 	 1	 
	Section 1.2.
	 	Construction	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE II -
	 	THE TRANSACTION	 	 	12	 
	 
	 	 	 	 	 	 
	Section 2.1.
	 	Transfer of Purchased Assets and Inventory.	 	 	12	 
	Section 2.2.
	 	Excluded Assets.	 	 	13	 
	Section 2.3.
	 	Assumed Liabilities	 	 	14	 
	Section 2.4.
	 	Excluded Liabilities.	 	 	14	 
	Section 2.5.
	 	Purchase Price and Inventory Cost	 	 	14	 
	Section 2.6.
	 	Risk of Loss	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE III -
	 	REPRESENTATIONS AND WARRANTIES OF SELLER	 	 	16	 
	 
	 	 	 	 	 	 
	Section 3.1.
	 	Organization and Authority	 	 	16	 
	Section 3.2.
	 	Title to Purchased Assets and Inventory	 	 	16	 
	Section 3.3.
	 	Consents; No Violations.	 	 	16	 
	Section 3.4.
	 	Regulatory Approvals.	 	 	17	 
	Section 3.5.
	 	Compliance with Laws and Litigation.	 	 	17	 
	Section 3.6.
	 	No  Material Adverse Change.	 	 	17	 
	Section 3.7.
	 	Contracts.	 	 	18	 
	Section 3.8.
	 	Inventory and Returns.	 	 	18	 
	Section 3.9.
	 	Tax Matters	 	 	19	 
	Section 3.10.
	 	Intellectual Property.	 	 	19	 
	Section 3.11.
	 	Product Records	 	 	21	 
	Section 3.12.
	 	Brokers, Finders, etc.	 	 	21	 
	Section 3.13.
	 	Financial Statements.	 	 	21	 
	Section 3.14.
	 	Insurance.	 	 	21	 
	Section 3.15.
	 	Sufficiency	 	 	22	 
	Section 3.16.
	 	Government Multi-Product Contracts.	 	 	22	 
	Section 3.17.
	 	Regulatory Compliance	 	 	22	 
	Section 3.18.
	 	Product Registrations.	 	 	24	 
	Section 3.19.
	 	No Other Warranties	 	 	25	 
	Section 3.20.
	 	Adequacy of Disclosure	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE IV -
	 	REPRESENTATIONS AND WARRANTIES OF BUYER	 	 	25	 
	 
	 	 	 	 	 	 
	Section 4.1.
	 	Organization and Authority	 	 	25	 
	Section 4.2.
	 	Consents; No Violations.	 	 	26	 
	Section 4.3.
	 	Brokers, Finders, etc.	 	 	26	 
	Section 4.4.
	 	Financing	 	 	26	 
	Section 4.5.
	 	Litigation	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE V -
	 	COVENANTS OF SELLER PRIOR TO CLOSING	 	 	26	 
	 
	 	 	 	 	 	 
	Section 5.1.
	 	Access to Information	 	 	26	 
	Section 5.2.
	 	Conduct of the Product Business.	 	 	27	 
	Section 5.3.
	 	Required Approvals and Consents	 	 	27	 
	Section 5.4.
	 	Notice of Default	 	 	27	 
	Section 5.5.
	 	No Negotiation	 	 	27	 
	Section 5.6.
	 	Reasonable Best Efforts	 	 	27	 
	Section 5.7.
	 	Transition Activities.	 	 	27	 

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	Section	 	 	 	Page
	 
	ARTICLE VI -
	 	COVENANTS OF BUYER PRIOR TO CLOSING	 	 	28	 
	 
	 	 	 	 	 	 
	Section 6.1.
	 	Required Approvals and Consents	 	 	28	 
	Section 6.2.
	 	Notice of Default	 	 	28	 
	Section 6.3.
	 	Reasonable Best Efforts	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE VII -
	 	CLOSING AND TERMINATION	 	 	28	 
	 
	 	 	 	 	 	 
	Section 7.1.
	 	Closing	 	 	28	 
	Section 7.2.
	 	Conditions Precedent to Obligations of Buyer and Seller	 	 	29	 
	Section 7.3.
	 	Conditions Precedent to Buyer’s Obligations	 	 	29	 
	Section 7.4.
	 	Conditions Precedent to Seller’s Obligations	 	 	30	 
	Section 7.5.
	 	Closing Deliveries.	 	 	31	 
	Section 7.6.
	 	Termination	 	 	32	 
	Section 7.7.
	 	Procedure and Effect of Termination	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE VIII -
	 	CERTAIN OTHER  COVENANTS	 	 	33	 
	 
	 	 	 	 	 	 
	Section 8.1.
	 	HSR Filings	 	 	33	 
	Section 8.2.
	 	Inventory Cost Adjustment	 	 	33	 
	Section 8.3.
	 	Product Returns, Rebates and Chargebacks	 	 	35	 
	Section 8.4.
	 	Transitional Trademark License.	 	 	37	 
	Section 8.5.
	 	Customer Billing	 	 	38	 
	Section 8.6.
	 	Covenant Not To Compete	 	 	39	 
	Section 8.7.
	 	Cooperation.	 	 	39	 
	Section 8.8.
	 	Clinical Trials	 	 	39	 
	Section 8.9.
	 	Employees	 	 	39	 
	Section 8.10.
	 	Tax Matters.	 	 	40	 
	Section 8.11.
	 	Notice to Customers	 	 	41	 
	Section 8.12.
	 	Assistance in Supply of Product	 	 	41	 
	Section 8.13.
	 	Adverse Experience Reports	 	 	41	 
	Section 8.14.
	 	Regulatory Matters.	 	 	41	 
	Section 8.15.
	 	Differentiation of Product	 	 	42	 
	Section 8.16.
	 	[***]	 	 	42	 
	Section 8.17.
	 	Books and Records	 	 	43	 
	Section 8.18.
	 	Non-Exclusive License	 	 	43	 
	Section 8.19.
	 	Assistance Regarding Required SEC Financial Disclosures	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE IX -
	 	INDEMNIFICATION	 	 	44	 
	 
	 	 	 	 	 	 
	Section 9.1.
	 	Survival of Representations and  Warranties	 	 	44	 
	Section 9.2.
	 	Indemnification.	 	 	44	 
	Section 9.3.
	 	Indemnification Procedures.	 	 	46	 
	Section 9.4.
	 	Limitations.	 	 	48	 
	Section 9.5.
	 	Right of Setoff	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE X -
	 	MISCELLANEOUS PROVISIONS	 	 	48	 
	 
	 	 	 	 	 	 
	Section 10.1.
	 	Confidentiality and Publicity.	 	 	48	 
	Section 10.2.
	 	Notices	 	 	50	 
	Section 10.3.
	 	Modification; Waiver	 	 	51	 
	Section 10.4.
	 	Expenses	 	 	51	 
	Section 10.5.
	 	Entire Agreement	 	 	51	 
	Section 10.6.
	 	Assignment	 	 	51	 
	Section 10.7.
	 	Third Parties	 	 	52	 
	Section 10.8.
	 	Waiver	 	 	52	 
	Section 10.9.
	 	Severability	 	 	52	 
	Section 10.10.
	 	Governing Law	 	 	52	 

 

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

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	Section	 	 	 	Page
	 
	Section 10.11.
	 	Headings	 	 	52	 
	Section 10.12.
	 	Execution in Counterparts	 	 	52	 
	Section 10.13.
	 	Force Majeure	 	 	52	 
	Section 10.14.
	 	Relationship of the Parties	 	 	53	 
	Section 10.15.
	 	Arbitration	 	 	53	 

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PRODUCT ACQUISITION AGREEMENT

     This PRODUCT ACQUISITION AGREEMENT (as amended from time to time, the “Agreement”),
dated November 28, 2005 (the “Execution Date”), is made and entered into by and between
VALEANT PHARMACEUTICALS NORTH AMERICA, a Delaware corporation (the “Buyer”), and INTERMUNE,
INC., a Delaware corporation (the “Seller”). Buyer and Seller are sometimes collectively
referred to herein as the “Parties” and separately as a “Party.”

RECITALS

     WHEREAS, Seller is a biopharmaceutical company focused on developing and commercializing
innovative therapies in hepatology and pulmonology;

     WHEREAS, Buyer is a global, research-based, specialty pharmaceutical company that discovers,
develops, manufactures and markets pharmaceutical products, primarily in the areas of neurology,
dermatology and infectious disease;

     WHEREAS, Seller has determined that the sale of certain products and product related rights at
this time is consistent with its current business strategy;

     WHEREAS, Buyer has determined that the acquisition of those certain products and product
related rights at this time is consistent with its current business strategy; and

     WHEREAS, Seller desires to sell such products and product related rights to Buyer, and Buyer
desires to purchase such products and product related rights from Seller, on the terms and
conditions set forth herein.

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

ARTICLE I — DEFINITIONS

     Section 1.1. Defined Terms. For the purposes of this Agreement, the following words
and phrases shall have the following meanings whether in the singular or the plural:

     “Affiliate” shall mean any Person which controls, is controlled by, or is under common
control with the applicable Person. For purposes of this definition, “control” shall mean: (a) in
the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the
stock or shares (or such lesser percentage which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction) entitled to vote for the election of directors or
otherwise having the power to vote on or direct the affairs of such Person; and (b) in the case of

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non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the
equity interest or the power to direct the management and policies of such non-corporate entities.

     “AGHC Trial” shall mean the AGHC-002 (IND #11,599) Phase 2, randomized, dose-ranging, open
label study of safety and tolerability of consensus interferon-alpha (CIFN) plus interferon
gamma-1b (IFN-y 1b) with or without Ribavirin (RBV) in the treatment of patients with chronic
Hepatitis C who are nonresponders to pegylated-interferon-a (2a or 2b) plus RBV.

     “Agreement” shall have the meaning set forth in the first paragraph of this Agreement.

     “Amgen” means Amgen Inc.

     “Amgen Agreements” means the Amgen License Agreement, Amgen Assignment, Assumption and
Consent Agreement, and Amgen Quality Agreement.

     “Amgen Assignment, Assumption and Consent Agreement” means the Assignment, Assumption
and Consent Agreement, dated June 15, 2001, by and among Amgen, InterMune, and Yamanouchi Europe,
B.V.

     “Amgen Consent” means that certain consent, in the form agreed upon by Buyer and
Seller on or prior to the date hereof, to be executed by Amgen, Buyer and Seller pursuant to which
Amgen consents to Seller assigning to Buyer the Amgen Agreements.

     “Amgen License Agreement” shall mean that certain License and Commercialization
Agreement, dated June 15, 2001, by and between Amgen, Inc. and Seller, as amended from time to
time, including but not limited to that certain Amendment No. 1, dated April 24, 2002, that certain
Amendment Number 2, dated December 31, 2004, and that certain Amendment No. Three, dated January
13, 2005.

     “Amgen License Rights” shall mean all of the rights of Seller, including but not
limited to Seller’s rights as licensee and sublicensee, under the Amgen License Agreement.

     “Amgen Quality Agreement” means the Quality Agreement, dated March 22, 2002, between
Amgen and Seller.

     “Ancillary Agreements” shall have the meaning set forth in Section 7.3(g).

     “Applicable Law” shall mean all applicable provisions of all statutes, laws, rules,
regulations, administrative codes, ordinances, decrees, orders, decisions, guidance documents,
injunctions, awards, judgments, and permits and licenses of or from Governmental Authorities
relating to or governing the use or regulation of the subject item, including, where applicable,
Tax Law.

     “Asset Acquisition Statement” shall have the meaning set forth in Section
8.10(a).

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     “Assumed Liabilities” shall mean the Liabilities set forth in Section 2.3.

     “Basket” shall have the meaning set forth in Section 9.4(a).

     “BI Austria” means Boehringer Ingelheim Austria GmbH.

     “BI Austria Agreement” means that certain Data Transfer, Clinical Trial and Market
Supply Agreement, dated November 3, 2005, by and between BI Austria and Seller, as amended from
time to time

     “Bill of Sale” shall have the meaning set forth in Section 7.5(a)(i).

     “BLA” means the application for Infergen prepared pursuant to applicable FDA
Regulations and filed with the FDA for authorization to market Infergen within the United States.

     “Business Day” means a day, which is not a Saturday, a Sunday, or a statutory holiday
in the United States.

     “Buyer” shall have the meaning set forth in the first paragraph of this Agreement.

     “Buyer Indemnitee” shall have the meaning set forth in Section 9.2(a).

     “Buyer Labeling” means the printed labels, labeling and packaging materials, including
printed carton, container labels and package inserts, used by Buyer and bearing Buyer’s name for,
or in connection with, packaging of Infergen.

     “Buyer Losses” shall have the meaning set forth in Section 9.2(a).

     “Buyer Proprietary Information” shall have the meaning set forth in Section
10.1(b).

     “Buyer’s Closing Certificate” shall have the meaning set forth in Section
7.4(c).

     “Cap” shall have the meaning set forth in Section 9.4(a).

     “Cardinal Health Acknowledgement” means that certain written acknowledgement from
Cardinal Health, in form and substance reasonably acceptable to Buyer, pursuant to which Cardinal
Health shall acknowledge and agree to continue to provide to Seller, for the benefit of Buyer,
through ninety days following the Closing, the same services, including but not limited to
inventory storage, distribution, accounts payable and accounts receivable services, at the same
cost as Cardinal Health is currently providing to Seller under that certain Distribution Services
Agreement, dated January 15, 1999.

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     “Chargeback Claims” shall have the meaning set forth in Section 8.3(d).

     “Clinical Trials” shall mean, collectively, the IRHC-001 Trial, the IRHC-002 Trial,
the IRHC-003 Trial, and the IST Trials.

     “Clinical Trial Inventory” shall mean the pharmaceutical products listed on
Schedule 1.1, being the pharmaceutical products held in inventory, estimated as of [***],
by Seller for use by Seller in the Clinical Trials and transferred to Buyer on the Closing Date in
accordance with Section 2.1(d); provided, however, that Clinical Trial Inventory shall not
include such amounts of pharmaceutical products as required by Seller to complete the AGHC
Trial. 

     “Closing” shall have the meaning set forth in Section 7.1.

     “Closing Date” shall have the meaning set forth in Section 7.1.

     “Closing Payment” shall have the meaning set forth in Section 2.5(a).

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

     “Confidentiality Agreement” shall have the meaning set forth in Section 10.1.

     “Contract” shall mean any agreement, contract, lease, consensual obligation, promise,
or undertaking (whether written or oral), to which Seller is a party that relates exclusively to
the Product, the Product Business, the Purchased Assets, or the Assumed Liabilities, or which are
necessary for the conduct of the Product Business as conducted by the Seller.

     “Effective Time” shall have the meaning set forth in Section 7.1.

     “Encumbrance” shall mean claims, security interests, liens, pledges, charges, escrows,
options, proxies, rights of first refusal, preemptive rights, mortgages, hypothecations,
assessments, prior assignments, title retention agreements, conditional sales agreements,
indentures, deeds of trust, leases, levys or security agreements of any kind whatsoever imposed
upon the subject property or item.

     “Estimated Inventory Cost” shall have the meaning set forth in Section
8.2(b).

     “Estimated Inventory Statement” shall have the meaning set forth in Section
8.2(a).

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

     “Excluded Assets” shall mean all assets and properties of Seller, other than the
Purchased Assets, Other Intellectual Property, Inventory (subject to the Inventory Cap), and
Clinical Trial Inventory.

 

			
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     “Excluded Intellectual Property” shall mean all Intellectual Property owned or
controlled by Seller other than the Product Intellectual Property and the Other Intellectual
Property.

     “Excluded Liabilities” shall mean all Liabilities or obligations of Seller (other than
the Assumed Liabilities), including any obligation or Liability of Seller created as a result of
this Agreement and those items set forth on Schedule 2.4(a).

     “FDA” means the United States Food and Drug Administration.

     “FSS” shall have the meaning set forth in Section 8.3(d).

     “Government Multi-Product Contracts” means all written contracts or agreements by
which Seller dispenses Infergen through a government agency, together with other pharmaceutical
products of Seller.

     “Governmental Authority” means the government of the applicable country in the
Territory and any state, province, municipality or other political subdivision thereof or therein,
or any court, tribunal, agency, department, board, instrumentality, authority or commission
(including regulatory and administrative bodies) of any of the foregoing.

     “HSR Act” shall mean the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

     “Indemnification Claim Notice” shall have the meaning set forth in Section
8.2(b).

     “Indemnified Party” shall have the meaning set forth in Section 8.2(b).

     “Indemnifying Party” shall have the meaning set forth in Section 8.2(b).

     “Indemnitee(s)” shall mean either a Buyer Indemnitee or Seller Indemnitee, as the case
may be.

     “Infergen” shall mean the finished pharmaceutical product containing interferon
alfacon-1 in the formulation sold by Seller under the trademark Infergen® prior to the Closing.

     “Instruments of Transfer” shall mean such instruments and documents in addition to the
Ancillary Agreements that are necessary pursuant to Applicable Law to effectuate and consummate the
transactions contemplated hereby, including, bills of sale, assumption agreements, assignment and
assumption of contracts and other conveyance documents in the forms agreed-upon in good faith by
the Parties.

     “Intellectual Property” shall mean all domestic and foreign (i) trademarks, trademark
registrations, trademark applications, service marks, service mark registrations, service mark
applications, business marks, brand names, trade names, trade dress, names, logos and slogans,
internet domains and URLs, and all goodwill associated therewith; (ii) patents, patent rights,

-5-

 

provisional patent applications, patent applications, designs, registered designs, registered
design applications, industrial designs, industrial design applications and industrial design
registrations, including any and all divisions, continuations, continuations in part, extensions,
substitutions, renewals, registrations, revalidations, reexaminations, reissues or additions,
including supplementary certificates of protection, of or to any of the foregoing items; (iii)
copyrights, copyright registrations, copyright applications, original works of authorship fixed in
any tangible medium of expression, including literary works (including all forms and types of
computer software, including all source code, object code, firmware, development tools, files,
records and data, and all documentation related to any of the foregoing), musical, dramatic,
pictorial, graphic and sculptured works; (iv) trade secrets, technology, discoveries and
improvements, know how, proprietary rights, formulae, confidential and proprietary information,
technical information, techniques, inventions, designs, drawings, procedures, processes, models,
formulations, manuals and systems, whether or not patentable or copyrightable, including all
biological, chemical, biochemical, toxicological, pharmacological and metabolic material and
information and data relating thereto and formulation, clinical, analytical and stability
information and data which have actual or potential commercial value and are not available in the
public domain; and (v) all other intellectual property or proprietary rights, in each case whether
or not subject to statutory registration or protection.

     “Inventory” shall mean the Infergen owned or controlled by Seller for Seller’s
marketing and sale in the Territory, which (i) are in finished dosage form, including Seller’s
trade dress, (ii) are of a quality usable and salable in the ordinary course of business, (iii)
comprise unsold lots, and (iv) as of the Closing Date, have at least two-thirds of their shelf life
remaining. For the avoidance of doubt, for purposes of this Agreement, unless otherwise expressly
stated herein, the term “Inventory” shall not include (and, among other things, Buyer shall not be
required to purchase pursuant hereto) the Clinical Trial Inventory or any Infergen which does not
satisfy all of the foregoing conditions. For the avoidance of doubt, for purposes of this
Agreement, the term “Inventory” shall include Infergen held in inventory by Seller and acquired by
Seller from Amgen under Purchase Order No. 6273; provided, that such Infergen otherwise
satisfies all of the conditions of subparagraphs (i)-(iv) above and is subject to the Inventory
Cap, all as otherwise provided in this Agreement.

     “Inventory Cap” shall have the meaning set forth in Section 2.1(b).

     “Inventory Cost” shall have the meaning set forth in Section 8.2(b).

     “Inventory Statement” shall have the meaning set forth in Section 8.2(b).

     “IP Assignment” shall have the meaning set forth in Section 7.5(a)(i).

     “IRHC-001 Trial” means the randomized, open-label, phase III investigational research
study (identified as IRHC-001) designed by and initiated by Seller as of the date hereof to
evaluate the safety and efficacy of daily administration of Infergen plus ribavirin versus no

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treatment in patients infected with the hepatitis C virus (HCV) who have not responded to
previous combination therapy with pegylated interferon alfa plus ribavirin.

     “IRHC-002 Trial” means the randomized, open-label phase III investigational research
study (identified as IRHC-002) designed by and initiated by Seller as of the date hereof to
evaluate the safety and efficacy of two dose levels of daily Infergen plus ribavirin in patients
infected with the hepatitis C virus (HCV) who failed to achieve virologic response after previous
pegylated interferon alfa plus ribavirin therapy and during at least 24 weeks of no treatment in
the IRHC-001 Trial.

     “IRHC-003 Trial” means the single arm study of daily Infergen plus ribavirin in
patients infected with the hepatitis C virus (HCV) as designed and presented in the briefing
package prepared and submitted to FDA on September 22, 2005 in
connection with a meeting with
the Division of Antiviral Drug Products held on October 24, 2005.

     “IRS” means the United States Internal Revenue Service.

     “IST Trials” means all investigator-sponsored trials with respect to Infergen as set
forth on Section 3.17(j) of the Seller Disclosure Schedule.

     “Knowledge of the Buyer” or “to Buyer’s Knowledge” or any similar such statement shall
mean that an executive officer or director of Buyer, or a key employee of Buyer directly involved
on behalf of Buyer in the transactions contemplated herein, either (i) has or had actual knowledge
of a fact or matter, or (ii) could reasonably be expected to have become aware of the fact or
matter had he or she conducted a reasonable investigation regarding the accuracy of the subject
representation or warranty.

     “Knowledge of the Seller” or “to Seller’s Knowledge” or any similar such statement
shall mean that an executive officer or director of Seller, or a key employee of Seller directly
involved in the Product Business, either (i) has or had actual knowledge of a fact or matter, or
(ii) could reasonably be expected to have become aware of the fact or matter had he or she
conducted a reasonable investigation regarding the accuracy of the subject representation or
warranty.

     “Liability” shall mean, collectively, any indebtedness, guaranty, endorsement, claim,
loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or
unknown, choate or inchoate, liquidated or unliquidated, secured or unsecured, direct or indirect,
matured or unmatured, or absolute, contingent or otherwise, including any product liability.

     “Material Adverse Change” means any change, event or occurrence that has, or has had,
or is reasonably likely to have, a Material Adverse Effect; provided, however, that
for purposes hereof, the commencement of, threatened commencement of, or announced intention to
commence any action or investigation of the Product Business prior to the Closing by the
U.S.

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Department of Justice, the Office of the Inspector General, or any other Governmental
Authority shall constitute a Material Adverse Change.

     “Material Adverse Effect” means a material adverse effect upon (i) the business,
financial condition or results of operations of the Product Business or the Purchased Assets, or
(ii) the ability of a Party to consummate the transactions contemplated by this Agreement, other
than (a) any change, effect, event or condition that arises from changes in general economic
conditions or conditions affecting the pharmaceutical industry generally, or (b) such changes,
events or conditions resulting from the announcement of, or the consummation of, the transactions
contemplated hereby.

     “Material Consents” shall have the meaning set forth in Section 7.3(c).

     “Nektar Agreements” means the (i) Development, Licensing and Manufacturing Agreement
dated as of June 20, 2002 by and between Seller and Nektar Therapeutics (successor-in-interest to
Shearwater Corporation) and (ii) Collaborative Research Agreement dated as of December 19, 2001 by
and between Seller and Nektar Therapeutics (successor-in-interest to Shearwater Corporation).

     “[***]” shall have the meaning set forth in Section 8.16(a).

     “[***]” shall have the meaning set forth in Section 8.16(a).

     “[***]” shall have the meaning set forth in Section 8.16(b).

     “Other Intellectual Property” shall mean the Intellectual Property listed on
Schedule 2.1(c), being that certain Intellectual Property owned by Seller as of the
Execution Date that is not included within the Purchased Assets but that will be conveyed to Buyer
as of the Effective Time in accordance with Section 2.1(c).

     “Party” or “Parties” shall have the meaning set forth in the first paragraph
of this Agreement.

     “Permitted Encumbrances” means (i) the Encumbrances and exceptions set forth in
Section 3.2 of the Seller Disclosure Schedule, and (ii) liens imposed by any Governmental
Authority for Taxes not yet due and payable, or for Taxes that Seller is contesting in good faith.

     “Person” shall mean any natural person, corporation, unincorporated organization,
partnership, association, joint stock company, joint venture, limited liability company, trust or
government, or any agency or political subdivision of any government, or any other entity.

     “Prime Rate” shall mean the rate of interest that Citibank N.A. lists as its prime
lending rate on the last day of the applicable calendar quarter, or if such rate is not available,
the prime

 

			
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lending rate listed in the New York City, USA version of The Wall Street Journal on the last
day of the applicable calendar quarter.

     “Product” shall mean any finished pharmaceutical product containing interferon
alphacon-1, including Infergen.

     “Product Business” shall mean the manufacturing, using, developing, promoting,
selling, offering to sell, or importing of Infergen for sale in the Territory as currently being
conducted by Seller; provided, however, that Product Business shall not include the development of
Infergen in combination with Actimmune.

     “Product Copyrights” means, as owned, licensed or controlled by Seller and exclusively
related to the Product Business, the copyrights (whether or not registered) and registrations and
applications for registration or renewals thereof, including all derivative works, moral rights,
renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter
provided by law, regardless of the medium of fixation or means of expression, and all goodwill
associated therewith listed on Section 3.10(b)(iii) of the Seller Disclosure Schedule.

     “Product Domains” means, as owned, licensed or controlled by Seller and exclusively
related to the Product Business, the internet domains and URLs in the Territory, listed on
Section 3.10(b)(iv) of the Seller Disclosure Schedule.

     “Product Intellectual Property” shall mean the Amgen License Rights, Product
Copyrights, Product Domains, Product Know-How, Product Patents, Product Trademarks, and Product
Trade Dress, listed on Sections 3.10(b)(i) to (iv) of the Seller Disclosure
Schedule.

     “Product Know How” means, as owned, licensed or controlled by Seller and exclusively
related to the Product Business, including as developed in connection with the Clinical Trials, the
research and development information, validation methods and procedures, unpatented inventions,
know-how, trade secrets, technical or other data or information, or other materials, methods,
procedures, processes, materials, developments or technology, including all biological, chemical,
clinical, manufacturing and other information or data, other than such know-how which is or becomes
the subject of a patent or of a provisional or filed patent application.

     “Product Patents” means, as owned, licensed or controlled by Seller and exclusively
related to the Product Business, the patents, patent applications, provisional patent applications
and similar instruments (including any and all substitutions, divisions, continuations,
continuations-in-part, reissues, renewals, extensions, reexaminations, patents of addition,
supplementary protection certificates, inventors’ certificates, pediatric data package exclusivity
extensions, divisions, re-filings, continuations and continuations-in-part thereof, or the like) as
well as any foreign equivalents thereof (including certificates of invention and any applications
therefor), listed on Section 3.10(b)(i) of the Seller Disclosure Schedule.

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     “Product Records” shall mean all files, documents, instruments, papers, books and
records owned or controlled by Seller, whether in electronic or tangible form, to the extent
relating to the Product Business, including any pricing lists, customer lists, vendor lists,
financial data, research and development files, marketing materials (if any), regulatory files,
adverse event reports and files, clinical studies and all documentation relating to the Product
Intellectual Property, but excluding any such items to the extent that any Applicable Law prohibits
their transfer. Notwithstanding the foregoing, prior to delivering or making the Product Records
available to Buyer, Seller shall be entitled to redact from the Product Records any information
that does not relate exclusively to the Product Business.

     “Product Registrations” shall mean all applications (including the BLA), new drug
applications, abbreviated new drug applications, new drug submissions, and any comparable
applications and submissions, together with any and all supplements or modifications or amendments
thereto, whether existing, pending, withdrawn or in draft form, together with all correspondence to
or from any Governmental Authority with respect thereto, prepared and submitted to any Governmental
Authority in the Territory with respect to Infergen.

     “Product Returns” shall have the meaning set forth in Section 8.3(a).

     “Product Trade Dress” means, as owned, licensed or controlled by Seller, the trade
dress, logos and designs exclusively related to the Product Business, listed on Section
3.10(b)(ii) of the Seller Disclosure Schedule.

     “Product Trademarks” means, as owned, licensed or controlled by Seller and exclusively
related to the Product Business, the trademarks, service marks, logos, slogans and trade names
(whether or not registered), in the Territory, including all variations, derivations, combinations,
registrations and applications for registration or renewals of the foregoing and all goodwill
associated therewith, listed on Section 3.10(b)(ii) of the Seller Disclosure Schedule.

     “Promotional Materials” shall mean, to the extent exclusively related to the Product
Business, all advertising, promotional, selling and marketing materials in written or electronic
form existing as of the Closing and owned or controlled and in the possession of Seller.

     “Purchased Assets” shall mean, collectively, the Contracts, Regulatory Approvals,
Promotional Materials, Product Records and the Product Intellectual Property.

     “Purchase Price” shall have the meaning set forth in Section 2.5.

     “Regulatory Approvals” shall mean, as exclusively related to Infergen in the Territory
and/or Seller’s operation of the Product Business, all material permits, licenses, certificates,
approvals, Product Registrations, filings and authorizations issued by any Governmental Authority
to Seller or its representatives.

     “Returns” means all returns (including information returns), declarations, reports,
statements, schedules, notices, forms, declarations and other documents or information filed with

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or submitted to, or required under a Tax Law to be filed with or submitted to a Governmental
Authority in respect of Taxes or any Tax Law relating to any Tax (and “Return” means any
one of the foregoing Returns).

     “Schedules” shall refer to the schedules to this Agreement which are hereby
incorporated by reference into this Agreement.

     “Seller” shall have the meaning set forth in the first paragraph of this Agreement.

     “Seller Disclosure Schedule” shall have the meaning set forth in the first paragraph
of Article III.

     “Seller Indemnitee” shall have the meaning set forth in Section 9.2(b).

     “Seller Losses” shall have the meaning set forth in Section 9.2(b).

     “Seller Marks” shall mean all Trademarks and trade dress owned, licensed or controlled
by Seller, aside from the Product Trademarks and Product Trade Dress, that are used in connection
with the Product Business and the Assumed Liabilities as of the Execution Date.

     “Seller Proprietary Information” shall have the meaning set forth in Section
10.1(c).

     “Seller’s Closing Certificate” shall have the meaning set forth in Section
7.3(e).

     “Statement of Allocation” shall have the meaning set forth in Section
8.10(a).

     “[***]” means, in an [***], the [***]with [***] by both [***] at [***].

     “Taxes” means, with respect to the Territory, all federal, state, local, foreign and
other income, net income, gross income, gross receipts, sales, use, ad valorem, transfer, capital
stock, franchise, profits, license, service, add on or alternative minimum tax, occupancy,
withholding, payroll, fringe benefits, employment, employees’ income withholding, foreign or
domestic withholding, unemployment, disability, excise, severance, stamp, value added, occupation,
premium, property (including, real property and personal property taxes and any assessments,
special or otherwise), environmental, windfall profits, customs, duties or other taxes, fees,
assessments, levies, tariffs, or charges of any kind that are in the nature of a tax, together
with any interest and any penalties, additions to tax or additional amounts with respect thereto
(and “Tax” means any one of the foregoing Taxes).

     “Tax Law” means, with respect to the Territory, a statute, law, regulation or
administrative rule or judicial opinion enacted, issued or
promulgated for the determination,
imposition, assessment or collection of any Tax.

 

			
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     “Termination Notice” shall have the meaning set forth in Section 8.16(c).

     “Territory” means the United States of America, Canada and their respective
territories and possessions.

     “Third Party” shall mean any Person other than Buyer or Seller, or an Affiliate of
either of them.

     “Trademarks” means all trademarks, service marks, logos, slogans and trade names
(whether or not registered), in the Territory, including all variations, derivations, combinations,
registrations and applications for registration or renewals of the foregoing and all goodwill
associated therewith.

     “Transfer Taxes” shall have the meaning set forth in Section 8.10(b).

     “Treasury Regulations” shall mean the income tax regulations issued under the Code.

     “Valid Claim” shall mean shall mean a claim in any (i) unexpired and issued patent in
the Product Patents rights that has not been (a) held permanently revoked, unenforceable or invalid
by a final unappealable decision of a court or government agency of competent jurisdiction over
such claim or (b) admitted to be invalid or unenforceable through disclaimers, consent decrees or
otherwise, or (ii) pending patent application in the Product Patents rights that has been on file
with the applicable patent office for not more than five (5) years and for which there has been
reasonably consistent activity to advance to issuance of a patent.

     Section 1.2. Construction. Unless the context of this Agreement otherwise requires:
(a) words of any gender include each other gender; (b) “dollars” refers to U.S. dollars; (c) words
using the singular or plural number also include the plural or singular number, respectively; (d)
the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire
Agreement; (e) the terms “Article,” “Section” or “Exhibit” refer to the specified Article, Section
or Exhibit of this Agreement; and (f) the term “including” or any variation thereof means
“including without limitation” or any variation thereof and shall not be construed to limit any
general statement which it follows to the specific or similar items or matters immediately
following it, unless otherwise expressly stated.

ARTICLE II — THE TRANSACTION

     Section 2.1. Transfer of Purchased Assets, Inventory, Other Intellectual Property and
Clinical Trial Inventory.

            (a) Purchase and Sale of Purchased Assets. At the Effective Time, on the terms and
subject to the conditions hereof and in reliance upon the representations, warranties and covenants
contained herein and in consideration of the Purchase Price paid to Seller by Buyer, Seller will
sell, convey, transfer, assign and deliver to the Buyer, and the Buyer will purchase, take delivery
of and acquire from Seller, all of Seller’s right, title and interest in and to the Purchased
Assets.

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               (b) Purchase and Sale of Inventory. At the Effective Time, on the terms and subject
to the conditions hereof and in reliance upon the representations, warranties and covenants
contained herein and in consideration of the Inventory Cost paid to Seller by Buyer, Seller will
sell, convey, transfer, assign and deliver to the Buyer, and the Buyer will purchase and acquire
from Seller, all of Seller’s right, title and interest in and to the Inventory; provided, however,
Buyer shall only be required to purchase up to $6.5 million of Inventory hereunder (the
“Inventory Cap”) and Seller shall retain all Inventory (other than the Clinical Trial
Inventory) in excess of the Inventory Cap.

               (c) Transfer of Other Intellectual Property. At the Effective Time, on the terms and
subject to the conditions hereof, Seller shall convey, transfer, assign and deliver to Buyer, at no
additional cost to Buyer, and Buyer shall acquire from Seller, all of Seller’s rights, title, and
interest in and to the Other Intellectual Property. Notwithstanding the foregoing, Buyer hereby
grants Seller a non-exclusive, fully paid-up and royalty free license to the Other Intellectual
Property solely for activities permitted by Section 8.6 of this Agreement. If Buyer elects
to prosecute the Other Intellectual Property, Buyer will assume responsibility for such prosecution
and will promptly provide Seller with copies of official prosecution correspondence and provide
Seller with reasonable time to consider and comment upon prosecution strategy, such comments to be
considered by Buyer in good faith. In the event Buyer decides to abandon any patent or patent
application included in the Other Intellectual Property, Buyer will give Seller at least thirty
(30) days prior written notice to decide whether or not Seller wishes to assume responsibility for
such patent or patent application, in which case Buyer shall assign and transfer such patent or
patent application back to Seller.

               (d) Transfer of Clinical Trial Inventory. At the Effective Time, on the terms and
subject to the conditions hereof, Seller shall convey, transfer, assign and deliver to Buyer, at no
additional cost to Buyer, and Buyer shall acquire from Seller, all of Seller’s rights, title, and
interest in and to the Clinical Trial Inventory. On the weekend immediately preceding the Closing
Date, Seller shall temporarily halt the use of pharmaceutical products to be used by Seller in the
Clinical Trials, in order to allow Seller to conduct a review of those of its locations at which
pharmaceutical products used by Seller in the Clinical Trials are located in order to determine the
exact quantities of Clinical Trials Inventory that will be transferred to Buyer hereunder, and
Seller shall provide Buyer with an itemized list of the Clinical Trials Inventory the next Business
Day.

     Section 2.2. Excluded Assets.

               (a) Excluded Assets. The Parties acknowledge and agree that Seller is not selling,
conveying, transferring, delivering, assigning any rights whatsoever to the Excluded Assets to
Buyer, and Buyer is not purchasing, taking delivery of or acquiring any rights whatsoever to the
Excluded Assets from Seller.

               (b) Excluded Intellectual Property. Buyer expressly acknowledges it is not acquiring
any rights whatsoever to the Excluded Intellectual Property, including the “InterMune” name or any
variations and derivatives thereof and any other logos or trademarks of Seller not included in the
Product Intellectual Property, or the Other Intellectual Property, other than the

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limited rights to use the Seller Marks for the limited transition period pursuant to the
provisions of Section 8.4 and other than as specifically provided in Section 8.18.

     Section 2.3. Assumed Liabilities. As of the Effective Time, Buyer shall assume and
agree to pay, perform or otherwise discharge, in accordance with their respective terms and subject
to the respective conditions thereof, only the following Liabilities (collectively, the
“Assumed Liabilities”):

               (a) Any Liability arising after the Effective Time under any Contract listed on Schedule
2.3(a) (other than any Liability arising out of or relating to a breach of such Contract which
occurred prior to the Effective Time);

               (b) Any Liability arising after the Effective Time under any Contract which was entered into
by Seller after the Execution Date in accordance with the provisions of Section 5.2 (other
than any Liability arising out of or relating to a breach of such Contract which occurred prior to
the Effective Time); and

               (c) Any other Liability specifically set forth on Schedule 2.3(c) hereto.

For avoidance of doubt, nothing in this Section 2.3 is intended to, or shall be interpreted to,
limit or otherwise reduce the Liabilities of Buyer as they may occur and/or exist after the
Effective Time solely by virtue of Buyer’s ownership of the Purchased Assets or operation of the
Product Business, but rather, this Section 2.3 is solely intended to identify and provide for the
assumption by Buyer of those Liabilities of Seller that are specifically assumed by Buyer hereunder
and which, but for such assumption, would remain Liabilities of Seller.

     Section 2.4. Excluded Liabilities.

               (a) The Parties hereby acknowledge and agree that, other than the Assumed Liabilities, Buyer
shall not be responsible for, assume, or be obligated to pay, perform or otherwise discharge any
Liabilities of Seller, whether or not related to the Product Business, including any Excluded
Liabilities as set forth on Schedule 2.4(a). The Parties acknowledge that in no event
shall the foregoing sentence be construed to limit Buyer’s obligations under Article IX.

               (b) The Parties hereby acknowledge and agree Seller shall not be responsible for, assume, or
be obligated to pay, perform or otherwise discharge any obligations or liabilities of Buyer. The
Parties acknowledge that in no event shall the foregoing sentence be construed to limit Seller’s
obligations under Article IX.

     Section 2.5. Purchase Price and Inventory Cost. In addition to the assumption by
Buyer of the Assumed Liabilities pursuant to Section 2.3, Buyer will pay to Seller (x) the
payments set forth in Section 2.5(a) to 2.5(e) below for the Purchased Assets (the
“Purchase Price”), and (y) the Inventory Cost for the Inventory, as follows:

               (a) On the Closing Date, Buyer (or its Affiliates) will transfer to Seller in accordance with the
written instructions provided to Buyer by Seller, (i) One Hundred Thirteen

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Million Five Hundred Thousand Dollars ($113,500,000) (the “Closing Payment”), plus (ii) the
Estimated Inventory Cost for the Inventory. Thereafter, the final Inventory Cost will be
determined and a final reconciliation payment with respect thereto will be made in accordance with
Section 8.2;

               (b) Buyer will transfer to Seller in accordance with the written instructions provided to
Buyer by Seller, a one time cash milestone payment of Five Million Dollars ($5,000,000) within five
(5) Business Days of the completion of the key tables and listings generated from the locked
clinical database following the last patient visit in the IRHC-001 Trial;

               (c) Buyer will transfer to Seller in accordance with the written instructions provided to
Buyer by Seller, a one time cash milestone payment of Ten Million Dollars ($10,000,000) within five
(5) Business Days of [***] of a [***] to the [***] of [***] in [***] with [***]; provided, however,
that if [***] has not [***], in lieu of such $10 million milestone payment, a one-time cash
milestone payment will be paid no later than January 15, 2010 as follows:

          (i) if, upon completion of the IRHC-001 Trial, the [***] in [***] [***] of the IRHC-001
Trial is [***] or [***]([***]%), Buyer will have no obligation to pay a milestone payment
pursuant to this Section 2.5(c);

          (ii) if, upon completion of the IRHC-001 Trial, the [***] the [***] of [***] of the
IRHC-001 Trial is [***] or [***] ([***]%) but [***] ([***]%), the cash milestone payment
will equal Five Million Dollars ($5,000,000);

          (iii) if, upon completion of the IRHC-001 Trial, the [***] the [***] of [***] of the
IRHC-001 Trial is [***] or [***] ([***]%) but [***] ([***]%), the cash milestone payment
will equal Ten Million Dollars ($10,000,000); and

          (iv) if, upon completion of the IRHC-001 Trial, [***] the [***] of [***] of the
IRHC-001 Trial is [***] or [***] ([***]%), the cash milestone payment will equal Fifteen
Million Dollars ($15,000,000).

               (d) Buyer will transfer to Seller in accordance with the written instructions provided to
Buyer by Seller, a one time cash milestone payment of Two Million Euros (€2,000,000) on January 15,
2007 in connection with the [***] of the [***].

     Section 2.6. Risk of Loss. Until the Effective Time, any loss of or damage to the
Purchased Assets, and Inventory from fire, flood, casualty or any other similar occurrence shall be
the sole responsibility of Seller. As of the Effective Time, title to the Purchased Assets, and
Inventory shall be transferred to Buyer. After the Effective Time, Buyer shall bear all risk of
loss associated with the Purchased Assets and Inventory and shall be solely responsible for

 

			
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procuring adequate insurance to protect the Purchased Assets and Inventory against any such loss.

ARTICLE III — REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer that the following representations and warranties are
true and correct as of the Execution Date and shall be reaffirmed at Closing pursuant to
Section 7.3(a), subject in each case to the attached disclosure schedules supplied by
Seller to Buyer and dated as of the date hereof (the “Seller Disclosure Schedule “) and
provided that each exception set forth in such Seller Disclosure Schedule shall be deemed to
qualify only such representation and warranty that is specifically identified (by cross reference
or otherwise) in any specific section of the Seller Disclosure Schedule.

     Section 3.1. Organization and Authority. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware. Seller has full
corporate power and corporate authority to execute and deliver this Agreement and the Ancillary
Agreements, and the transactions contemplated hereby and thereby, and effect the transactions
contemplated hereby and thereby and has duly authorized the execution, delivery and performance of
this Agreement and the Ancillary Agreements and transactions or documents contemplated thereby by
all necessary corporate action. Seller has all corporate power and corporate authority necessary
to own its assets and carry on the Product Business as currently being conducted by Seller. This
Agreement and the Ancillary Agreements are the valid and legally binding obligations of Seller,
enforceable against it in accordance with their terms, subject to applicable bankruptcy moratorium,
reorganization, insolvency and similar laws of general application relating to or affecting the
rights and remedies of creditors generally and to general equitable principles (regardless of
whether in equity or at law).

     Section 3.2. Title to Purchased Assets and Inventory. Seller has good and marketable
title to the Purchased Assets and Inventory free and clear of any Encumbrances, except for the
Permitted Encumbrances. Seller has not received any notice of any adverse claims of ownership to
or right to use the Purchased Assets or Inventory, and to Seller’s Knowledge, no facts or
circumstances exist which would provide a reasonable basis for any such adverse claim of ownership
or right to use any of the Purchased Assets or Inventory.

     Section 3.3. Consents; No Violations.

               (a) Except for the requisite filings under the HSR Act and the expiration or termination of
the waiting period thereunder, and except for all filings and other actions contemplated by this
Agreement and the Ancillary Agreements (including the necessary transfer of filings, notices and
approvals required to transfer the Regulatory Approvals from Seller to Buyer) (the
“Consents”), the execution, delivery and performance by Seller of this Agreement and the
Ancillary Agreements and the consummation by Seller of the transactions contemplated hereby and
thereby will not require any notice to, filing with, or the consent, approval or authorization of,
any Person or Governmental Authority.

               (b) Neither the execution and delivery of this Agreement or the Ancillary Agreements nor the
consummation of the transactions contemplated hereby or thereby will

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(i) violate or result in a breach or result in the acceleration or termination of, or the
creation in any Third Party of the right to accelerate, terminate, modify or cancel, any Contract
listed on Section 3.7 of the Seller Disclosure Schedule, (ii) conflict with, violate or
result in a breach of any provision of the certificate of incorporation or by-laws of Seller, or
(iii) conflict with or violate in any material respect Applicable Law.

     Section 3.4. Regulatory Approvals.

               (a) Section 3.4(a) of the Seller Disclosure Schedule sets forth a complete and correct
list of all applications (including the BLA), new drug applications, abbreviated new drug
applications, new drug submissions and any comparable applications and submissions in the Territory
with respect to the Product. Seller has provided to Buyer complete and correct copies of the
Regulatory Approvals or Buyer has had access to such copies of the Regulatory Approvals. The
Regulatory Approvals are in full force and effect and have been duly and validly issued.

               (b) Seller has all Regulatory Approvals necessary for or used to carry on the Product Business
as being conducted by Seller as of the Execution Date and which are required by Applicable Law.

               (c) Seller is in compliance with all of the Regulatory Approvals listed on Section
3.4(a) of the Seller Disclosure Schedule, and, since the time Seller acquired its rights in the
Product, Seller has not received any notification, written or oral, from any Third Party with
respect to any alleged or possible violation with respect to any such Regulatory Approvals, and to
Seller’s Knowledge, there are no facts or circumstances that would form a reasonable basis for any
such violation.

     Section 3.5. Compliance with Laws and Litigation.

               (a) Except with respect to any matter relating to or arising from Regulatory Approvals (which
is addressed in Section 3.4), with respect to the Product Business, the Purchased Assets,
the Inventory and the Assumed Liabilities, Seller is in compliance with all Applicable Law, except
where such noncompliance would not reasonably be expected to have a Material Adverse Effect.

               (b) There are no lawsuits, claims or any civil, administrative or criminal actions, suits, or
proceedings or governmental investigations, including any action or investigation by the U.S.
Department of Justice, Office of the Inspector General, or any Governmental Authority, existing,
pending, or to the Knowledge of Seller, threatened, with respect to the Product Business, the
Purchased Assets or the Assumed Liabilities or with respect to this Agreement or the transactions
contemplated hereby. Seller is not subject to any decree or order of any Governmental Authority
that would reasonably be expected to impair or delay its ability to perform its obligations under
this Agreement.

     Section 3.6. No Material Adverse Change.

               (a) Since January 1, 2005, there has not been any Material Adverse Change and no event has
occurred or circumstance exists that would reasonably be expected to result in such a Material
Adverse Change.

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               (b) Since January 1, 2005, Seller has, consistent with the conduct of the Product Business
during the two (2) years prior to the Execution Date: (i) continued and conducted the Product
Business in Seller’s ordinary and usual course of business, and (ii) maintained its relationships
with suppliers, distributors, customers and others having material business relationships with
Seller related to the Product Business.

     Section 3.7. Contracts.

               (a) Section 3.7 of the Seller Disclosure Schedule sets forth a complete and correct
list of each of the Contracts (i) which involve payments totaling $50,000 or more, or (ii) which
are otherwise material to the Product Business. Such Contracts are all of the Contracts necessary
to conduct the Product Business. Seller has delivered to or made available to Buyer true and
complete copies of all such Contracts and any other contracts or agreements identified in
Section 3.7 of the Seller Disclosure Schedule. All such Contracts to which Seller is a
party are, as to Seller (and, as to the other parties thereto, to the Knowledge of Seller), legal,
valid and binding agreements in full force and effect and enforceable in accordance with its terms
(subject to applicable bankruptcy moratorium, reorganization, insolvency and similar laws of
general application relating to or affecting the rights and remedies of creditors generally and to
general equitable principles (regardless of whether in equity or at law)).

               (b) Seller is not in material breach or default, and no event has occurred that with notice or
lapse of time would constitute a material breach or default by Seller permitting termination,
modification, or acceleration, under any Contract set forth on Section 3.7 of the Seller
Disclosure Schedule. To the Knowledge of Seller, no other party to any Contract is in material
breach or default under, or has repudiated any material provision of, any Contract set forth on
Section 3.7 of the Seller Disclosure Schedule.

               (c) The Amgen Agreements are all of the Contracts between Seller and Amgen that pertain to the
Product.

     Section 3.8. Inventory and Returns.

               (a) Section 3.8(a) of the Seller Disclosure Schedule sets forth a complete and correct
list of Seller’s Inventory as of November 4, 2005. The Inventory consists of finished goods usable
and salable by Seller in the ordinary course of business. The Inventory has been produced or
manufactured in accordance with all Applicable Law and Product Registrations.

               (b) Since January 1, 2005, other than entering into the Contracts with specialty pharmacies
for the direct sales by Seller to such pharmacies of Infergen and entering into distribution
Contracts or amendments to existing distribution Contracts with two wholesalers, Seller has not (i)
materially altered its distribution practices or terms with respect to Infergen, or (ii) materially
altered its activities and practices with respect to inventory levels of Infergen maintained at the
wholesale, chain, institutional or retail levels in any material respect.

               (c) As of the Closing Date, the aggregate dollar value of the inventory of Infergen (the
“Aggregate Inventory Value”) maintained by (a) Cardinal Health, McKesson, and AmeriSource
Bergen (collectively, “Seller’s Principal Wholesalers”), and (b) the specialty pharmacies
with which Seller has a contractual relationship, will not exceed the Maximum

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Inventory Amount. For purposes hereof, (i) the “Aggregate Inventory Value” shall be
calculated by multiplying the number of units of inventory of Infergen maintained by Seller’s
Principal Wholesalers and the specialty pharmacies as of the Closing Date by the wholesale
acquisition cost (“WAC”) for such units as of the Closing Date, and (ii) the “Maximum
Inventory Amount” shall mean the amount equal to: (x) the weekly average of the aggregate number of
units of each SKU shipped by all of Seller’s Principal Wholesalers in the previous
[***]([***])[***] multiplied by (y) [***] ([***]) [***], multiplied by (z) the WAC for each unit.

               (d) Section 3.8(d) of the Seller Disclosure Schedule sets forth, on a [***] basis, the
returns of Infergen for [***] ([***]) [***].

     Section 3.9. Tax Matters. There are no Encumbrances on any of the Purchased Assets
or the Inventory that arose in connection with any failure (or alleged failure) to pay any Tax, and
Seller has no Knowledge of any basis for assertion of any claims attributable to Taxes which, if
adversely determined, would reasonably be expected to result in any such Encumbrance.

     Section 3.10. Intellectual Property.

               (a) Seller is the owner, licensee or sub licensee (as applicable), free and clear of any
Encumbrance, except for the Permitted Encumbrances, of all right, title and interest in and to the
Product Intellectual Property.

               (b) Sections 3.10(b)(i)-(iv) of the Seller Disclosure Schedule set forth a true and
complete list of the Intellectual Property owned, licensed or controlled by Seller covering the
Product Business.

               (c) The activities of Seller, if any, relating to the development, manufacture, marketing,
use, sale, distribution, import, export or other commercial exploitation of Infergen by Seller, in
each case in connection with the operation of the Product Business, do not infringe upon,
misappropriate, violate, dilute (with respect to any trademarks, trade names, brand names and
service marks) or otherwise constitute the unauthorized use of, the Intellectual Property rights of
any third party; (ii) no claim is pending or, to the Knowledge of Seller, threatened against Seller
alleging any of the foregoing; and (iii) to the Knowledge of Seller, no right, license, lease,
consent or other agreement is required with respect to any Product Intellectual Property for the
conduct of the Product Business other than those included in the Purchased Assets.

               (d) To the actual knowledge of an executive officer or director of Seller, or a key employee
of Seller directly involved on behalf of Seller in the transactions contemplated herein (the
“Actual Knowledge of Seller”), none of the Product Patents is involved in any litigation, reissue,
interference, reexamination, or opposition, and there has been no threat or other indication that
any such proceeding will hereafter be commenced. To the Actual Knowledge of Seller, the Product
Patents (excluding patent applications) (i) are in good standing,

 

			
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Confidential treatment has been requested with respect to the omitted portions.

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(ii) are all without challenge of any kind, (iii) are valid and enforceable, and (iv) have not
been adjudged invalid or unenforceable in whole or in part.

               (e) To the Actual Knowledge of Seller, none of the Product Trademarks, Product Copyrights or
Product Domains or registrations or applications to use or register such items are involved in any
cancellation, nullification, interference, conflict, concurrent use or opposition proceeding, and
there has been no threat or other indication that any such proceeding will hereafter be commenced.

               (f) No legal proceedings are pending, or to the Actual Knowledge of Seller are threatened,
against Seller (i) based upon, challenging or seeking to deny or restrict the use of any of the
Product Intellectual Property, (ii) alleging that any services provided by, processes used by, or
products manufactured or sold or to be manufactured or sold by Seller in relation to the Product
Business infringe or misappropriate any Intellectual Property right of any third party, or (iii)
alleging that the Amgen License Rights conflict with the terms of any third party license or other
agreement.

               (g) To the Actual Knowledge of Seller, all maintenance fees, annuity fees or renewal fee
payment for each jurisdiction in which each patent, patent application, trademark, trademark
application, trade name, trade name registration, brand name, brand name registration, service
mark, service mark registration, copyright, copyright application, domain name or domain name
application included within the Product Intellectual Property has issued or is pending have been
timely paid.

               (h) To the Knowledge of Seller, no third party is engaging in any activity that infringes or
misappropriates the Product Intellectual Property. Seller is not a party to any agreement granting
rights by Seller to any third party with respect to the Product Intellectual Property.

               (i) Seller has, with respect to the Product Business, used commercially reasonable efforts to
maintain its trade secrets in confidence.

               (j) To the Knowledge of Seller, there has been no misappropriation of any trade secrets or
other confidential information of Seller with respect to the Product Business.

               (k) All employees of, consultants to or vendors of Seller with access to confidential
information with respect to the Product Business are parties to written agreements under which each
such employee, consultant or vendor is obligated to maintain the confidentiality of confidential
information of Seller. To the Knowledge of Seller, none of the employees, consultants or vendors
of Seller or any of its subsidiaries is in violation of such agreements.

               (l) The execution, delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby, will not result in or give rise to any right of termination or
other right to impair or limit, or otherwise result in a breach of, any of Seller’s rights to own
or retain a license to any of the Product Intellectual Property.

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     Section 3.11. Product Records. All of the Product Records have been made available by Seller to Buyer for
examination, are complete and correct in all material respects and have been maintained in
accordance with sound business practices.

     Section 3.12. Brokers, Finders, etc. Seller has not employed any broker, finder,
consultant or other intermediary in connection with the transactions contemplated by this Agreement
and the Ancillary Agreements who would have a valid claim for a fee or commission from Buyer in
connection with such transactions by reason of any action taken by or on behalf of Seller.

     Section 3.13. Financial Statements.

          (a) Each form, report, schedule and document required to be filed by Seller under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) since January 1, 2003
(collectively, the “Seller SEC Filings” and individually, a “Seller SEC Filing”), solely
with respect to the Product Business, (i) did, as of its date, comply in all material respects with
the requirements of the Exchange Act and (ii) did not, at the time it was filed, contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading.

          (b) Each of the consolidated financial statements (including in each case, any notes thereto)
contained in any Seller SEC Filing, solely to the extent each relates to the Product Business, (i)
was prepared in accordance with GAAP applied (except as may be indicated in the notes thereto and,
in the case of unaudited quarterly financial statements, as permitted by Form 10-Q under the
Exchange Act) on a consistent basis throughout the periods indicated, and (ii) presented fairly the
consolidated financial position, results of operations and cash flows of Seller as of the
respective dates thereof and for the respective periods indicated therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments which did not result in a
Material Adverse Effect).

     Section 3.14. Insurance.

          (a) Seller maintains, and shall continue to maintain at its sole cost and expense on an
uninterrupted basis for a period of at least [***] following the Effective Time, product liability
and other insurance on a primary and non-contributory basis for itself in amounts, respectively,
which are reasonable and customary in the United States consumer healthcare industry for companies
of comparable size and activities at the place of business of Seller, provided that the product
liability insurance amounts are not, and shall not at any time be allowed to be, less than
[***]($[***]) per occurrence (or per claim) and [***]($[***]) in the aggregate limit of liability
per year. Such insurance insures against, and at all times shall insure against, all liability,
including personal injury, product liability, physical injury, clinical development liabilities,
and property damage arising out of the development, manufacture, sale, distribution, or marketing
of the Product.

          (b) There are no material claims currently made against any of the insurance policies of Seller
relating to the Product Business, no material impairment of the amounts of

 

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

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coverage required thereunder, and Seller has no Knowledge of any reasonable basis for any such
claims.

     Section 3.15. Sufficiency. The Purchased Assets together with the Assumed
Liabilities, the Inventory, and Buyer’s rights under this Agreement, and the other Ancillary
Agreements, constitute all of the material assets that are necessary for Buyer to operate the
Product Business as of and after the Closing in a substantially similar manner as the Product
Business was operated by Seller for the two (2) years prior to the Effective Time; provided,
however, for the avoidance of doubt, such representation and warranty shall exclude any and all
assets and capabilities that a comparable company in the global pharmaceutical business should
customarily be capable of providing in connection with the operation of a business such as the
Product Business, including internal and external infrastructure, manufacturing equipment and
facilities, business permits and licenses, professional services, trade and distribution networks,
personnel, facilities, factories and other property, promotional and brand strategies, and
financing.

     Section 3.16. Government Multi-Product Contracts.

          (a) Seller is not a party to any managed care contracts or other sales contracts pursuant to
which Seller is required to provide or honor discounts, rebates, charge backs, or similar price
breaks in connection with selling Infergen.

          (b) Seller has made available to Buyer copies of all Government Multi-Product Contracts;
provided that such copies may have been redacted to prevent disclosure of information not related
to Infergen. After the Effective Time, Buyer shall honor and perform all Liabilities of Seller
arising after the Effective Time under and pursuant to each Government Multi-Product Contract
(other than any Liability arising out of or relating to a breach of such Government Multi-Product
Contract which occurred prior to the Effective Time) with respect to supplying Infergen to the
applicable party pursuant to such Government Multi-Product Contract until such time as Seller has
terminated each such Government Multi-Product Contract as provided below. Seller agrees that after
the Effective Time it will not take any action with respect to any Government Multi-Product
Contract that would extend the term of such Government Multi-Product contract with respect to
Infergen, create or agree to any additional obligations with respect to Infergen, or otherwise
adversely affect Buyer or the Product Business, without the prior written consent of Buyer,
although Seller may enter into a separate agreement with such government party, provided that such
agreements do not contain any provisions relating to Infergen or the Product Business. Seller
further agrees that Seller shall terminate the rights and obligations of Seller with respect to the
Product under each such Government Multi-Product Contract, to the extent permitted by the terms
thereof, as soon as practicable after the Effective Time.

     Section 3.17. Regulatory Compliance. To the extent applicable to Infergen in the
Territory:

          (a) To the Knowledge of Seller, Infergen has been developed, labeled, stored, tested and
distributed in compliance with all applicable requirements under the Federal Food Drug and Cosmetic
Act 21 U.S.C. §§301 et. seq., its implementing regulations, and all similar Applicable Laws,
including those relating to investigational use, premarket clearance and

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applications or abbreviated applications to market a new product, except for noncompliance
which, individually or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.

          (b) All preclinical trials and clinical trials conducted by or, to the Knowledge of Seller, on
behalf of Seller with respect to Infergen have been, and are being, conducted in compliance with
the applicable requirements of Good Laboratory Practice and Good Clinical Practice requirements
contained in 21 C.F.R. Part 58 and Part 312 and all applicable requirements relating to protection
of human subjects contained in 21 C.F.R. Parts 50, 54, and 56, and all similar Applicable Laws,
except for noncompliance which, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.

          (c) To the Knowledge of Seller, with respect to Infergen (i) all manufacturing operations
conducted for the benefit of Seller have been and are being conducted in compliance with the FDA’s
current Good Manufacturing Practice regulations for drug products, including 21 C.F.R. Parts 210
and 211, and all similar Applicable Laws, except for noncompliance which, individually or in the
aggregate, would not have, or be reasonably likely to have, a Material Adverse Effect; and (ii)
Seller is in compliance with all registration and listing requirements set forth in 21 U.S.C. §360
and 21 C.F.R. Part 207, and all similar Applicable Laws, except for noncompliance which,
individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.

          (d) Since the date of acquisition of Infergen (or rights thereto) by Seller, Infergen has not
been recalled, suspended or discontinued as a result of any action by the FDA or any other foreign
Governmental Authority within the Territory, by Seller or by any licensee, distributor or marketer
of Infergen, in the United States or, to the Knowledge of Seller, outside of the United States and
within the Territory.

          (e) Seller has not received any notice that the FDA or any other Governmental Authority has
commenced, or threatened to initiate, any action to withdraw approval or request the recall of
Infergen, or commenced, or threatened to initiate, any action to enjoin or place restrictions on
the production of Infergen.

          (f) To the Knowledge of Seller, there are no facts, circumstances or conditions that would be
sufficient to presently, or solely with the passage of time in the ordinary course of business,
provide a reasonable basis for a recall, suspension or discontinuance of Infergen.

          (g) With respect to any new drug application, investigational new drug application or similar
state or foreign regulatory application with respect to Infergen, Seller is in compliance with 21
U.S.C. §§355 or 21 C.F.R. Parts 312 or 314, respectively (and all similar Applicable Laws), and all
terms and conditions of such licenses or applications, except for any such failure or failures to
be in compliance which individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. As to Infergen, Seller and its officers, employees or
agents have included in each applicable application, where required, the certification described in
21 U.S.C. § 335a(k)(l) and each such certification was true, complete and correct in all material
respects when made.

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          (h) With respect to Infergen or the Product Business, Seller has not committed any act, made
any statement or failed to make any statement that would reasonably be expected to provide a basis
for the FDA to invoke its policy with respect to “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any
amendments thereto. Additionally, none of Seller or any of its officers, key employees or agents
have been convicted of any crime or engaged in any conduct that has resulted, or would reasonably
be expected to result, in debarment under 21 U.S.C. Section 335a or any similar state law or
regulation under 42 U.S.C. Section 1320a-7.

          (i) Seller has delivered to Buyer or made available to Buyer copies of all adverse experience
reports received by Seller with respect to Infergen.

          (j) Section 3.17(j) of the Seller Disclosure Schedule sets forth a true and correct
list of all IST Trials conducted by or on behalf of Seller as of the date hereof.

          (k) Seller has not received any notice from the U.S. Department of Justice, the Office of the
Inspector General or any other Governmental Authority that such Governmental Authority has
commenced, threatened or intends to commence any action or investigation with respect to the
Product Business, and there are no facts, circumstances or conditions that would be sufficient to
presently, or solely with the passage of time in the ordinary course of business, provide a
reasonable basis for any such action or investigation.

     Section 3.18. Product Registrations.

          (a) Section 3.4(a) of the Seller Disclosure Schedule sets forth a complete and correct
list of all applications (including the BLA), new drug applications, abbreviated new drug
applications, new drug submissions and any comparable applications and submissions in the Territory
with respect to Infergen. Seller owns the Product Registrations and no other party has any rights
thereto. The FDA approval for Infergen is in good standing, has not been revoked, rescinded,
amended or modified, and to Seller’s Knowledge, no event has occurred or notification been received
by Seller from the FDA, a notified body or any other party that would materially adversely affect
or otherwise jeopardize the FDA approval status of Infergen. To the Knowledge of Seller, no
applications made or other materials submitted by Seller to the FDA or a notified body with respect
to Infergen contained an untrue statement of material fact when submitted, or omitted to state a
material fact within Seller’s Knowledge when submitted which was required to be stated therein or
necessary in order to make the statements contained therein, in light of the circumstances under
which they were made, not misleading.

          (b) The Product Registration files of Seller have been maintained in accordance with
reasonable industry standards. Seller has in its possession or control, or has access to, copies
of all the material documentation filed in connection with filings made by Seller for regulatory
approval or registration of Infergen, including the complete regulatory chronology for each Product
Registration (if applicable).

          (c) Seller has not received any Paragraph IV Notification under U.S.C. 355(j)(2)(B) relative
to any patents listed in any Product Registration held by Seller. In addition,

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Seller has not received any notice regarding, and otherwise has no Knowledge of, any plans by
any third party to file product registration relative to Product Registration held by Seller.

     Section 3.19. No Other Warranties. Except as expressly provided in this Agreement
and the Ancillary Agreements, Seller does not make any representation or warranty about the
Product, the Purchased Assets, the Inventory, the Clinical Trial Inventory, the Other Intellectual
Property, the Assumed Liabilities or the Product Business, whatsoever. WITHOUT LIMITING THE
FOREGOING, BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE
ANCILLARY AGREEMENTS, (A) THE PURCHASED ASSETS, INVENTORY, CLINICAL TRIAL INVENTORY AND OTHER
INTELLECTUAL PROPERTY, ARE BEING TRANSFERRED “AS IS”, (B) SELLER MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND OR AS BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND (C) SELLER
SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, WARRANT OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF NONINFRINGEMENT.

     Section 3.20. Adequacy of Disclosure. To the Knowledge of Seller, there are no
material facts that have specific application to the Product Business, the Purchased Assets, the
Inventory, or the Assumed Liabilities that would reasonably be expected to have a Material Adverse
Effect that have not been set forth in this Agreement or the Seller Disclosure Schedules.

ARTICLE IV —

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to Seller that the following representations and warranties are
true and correct as of the Execution Date to be reaffirmed at Closing pursuant to Section
7.4(a), subject in each case to the attached Schedules of Buyer and provided that each
exception set forth in such Schedules shall be deemed to qualify only such representation and
warranty that is specifically identified (by cross reference or otherwise) in any specific
schedule.

     Section 4.1. 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 corporate authority to execute and deliver this Agreement and the Ancillary
Agreements, and the transactions contemplated hereby and thereby, and effect the transactions
contemplated hereby and thereby and has duly authorized the execution, delivery and performance of
this Agreement and the Ancillary Agreements and transactions or documents contemplated thereby by
all necessary corporate action. Buyer has all corporate power and corporate authority necessary to
carry on its business as is currently being conducted. This Agreement and the Ancillary Agreements
are the valid and legally binding obligations of Buyer, enforceable against it in accordance with
their terms, subject to applicable bankruptcy moratorium, reorganization, insolvency and similar
laws of general application relating to or affecting the rights and remedies of creditors generally
and to general equitable principles (regardless of whether in equity or at law).

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     Section 4.2. Consents; No Violations.

          (a) Except for the requisite filings under the HSR Act and the expiration or termination of
the waiting period thereunder, and except for all filings and other actions contemplated by this
Agreement and the Ancillary Agreements (including the necessary transfer of filings, notices and
approvals required to transfer the Regulatory Approvals from Seller to Buyer), the execution,
delivery and performance by Buyer of this Agreement and the Ancillary Agreements and the
consummation by Buyer of the transactions contemplated hereby and thereby will not require any
notice to, filing with, or the consent, approval or authorization of, any Person or Governmental
Authority.

          (b) Neither the execution and delivery of this Agreement or the Ancillary Agreements nor the
consummation of the transactions contemplated hereby or thereby will (i) violate or result in a
breach or result in the acceleration or termination of, or the creation in any Third Party of the
right to accelerate, terminate, modify or cancel, any indenture, contract, lease, sublease, loan
agreement, note or other obligation or liability to which Buyer is a party or is bound, (ii)
conflict with, violate or result in a breach of any provision of the articles of incorporation or
by-laws of Buyer, or (iii) conflict with or violate in any material respect Applicable Law.

     Section 4.3. Brokers, Finders, etc. Buyer and its Affiliates have not employed any
broker, finder, consultant or other intermediary in connection with the transactions contemplated
by this Agreement and the Ancillary Agreements who would have a valid claim for a fee or commission
from Seller in connection with such transactions by reason of any action taken by or on behalf of
Buyer.

     Section 4.4. Financing. Buyer will have funds sufficient to pay the Purchase Price
and the Estimated Inventory Cost on the dates that such payments are due under this Agreement.

     Section 4.5. Litigation. There are no lawsuits, claims or any civil, administrative
or criminal actions, suits, or proceedings or governmental investigations existing, pending, or to
the Knowledge of Buyer, threatened, with respect to this Agreement or the transactions contemplated
hereby. Buyer is not subject to any decree or order of any Governmental Authority that would
impair or delay its ability to perform its obligations under this Agreement or the Ancillary
Agreements.

ARTICLE V — COVENANTS OF SELLER PRIOR TO CLOSING

     Section 5.1. Access to Information. Between the Execution Date and the Effective
Time, Seller shall, subject to any Applicable Law, (i) afford Buyer and its representatives access,
during regular business hours and upon reasonable agreed upon times, to Seller’s personnel,
properties, Contracts, Regulatory Approvals, the Product Records and all other information and
materials pertaining to the Product Business (with the ability to photocopy such materials),
provided that such access shall not unreasonably interfere with Seller’s business and operations;
and (ii) otherwise cooperate with and assist Buyer in its review and assessment of the Product and
the Product Business.

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     Section 5.2. Conduct of the Product Business.

          (a) Between the Execution Date and the Effective Time, except as otherwise set forth on
Schedule 5.2 or as contemplated by this Agreement or consented to in writing by the Buyer,
Seller shall, consistent with its conduct of the Product Business during the twelve (12) months
prior to the Execution Date: (i) continue and conduct the Product Business in Seller’s ordinary and
usual course of business, (ii) preserve intact the market for Infergen and the goodwill associated
with Infergen and the Product Intellectual Property, (iii) preserve in full force and effect all
material Contracts, and (iv) continue to maintain its relationships with suppliers, distributors,
customers and others having material business relationships with it related to the Product
Business.

          (b) Between the Execution Date and the Effective Time, Seller shall not (i) take any
affirmative action, or fail to take any reasonable action within its control, which would resonably
be expected to (A) cause Seller to violate Section 5.2(a), or (B) have a Material Adverse Effect;
(ii) make any modifications to any material Contract; or (iii) allow the levels of raw materials,
supplies, or other materials instrumental in the manufacture of Infergen or the Inventory to vary
materially from the levels thereof customarily maintained.

     Section 5.3. Required Approvals and Consents. As soon as practicable after the
Execution Date, Seller shall make all filings required to be made in order to consummate the
transactions contemplated herein, including all filings under the HSR Act in accordance with
Section 8.1. Seller shall also cooperate with Buyer with respect to all filings that Buyer elects
to make. Seller shall use its commercially reasonable efforts to obtain all required Third Party
Consents, including all Material Consents required to effect the assignment of the Contracts to
Buyer.

     Section 5.4. Notice of Default. Between the Execution Date and the Effective Time,
Seller shall promptly notify Buyer in writing if Seller becomes aware of any fact or condition that
constitutes, or could reasonably be expected to cause, a breach of a representation, warranty or
covenant of Seller under this Agreement. Any such notice or disclosure shall not be deemed to
amend or supplement Seller’s disclosure under Article III or any schedule hereto, or to
correct or cure any misrepresentation, breach of warranty or breach of covenant.

     Section 5.5. No Negotiation. Between the Execution Date and the Effective Time,
Seller shall not directly or indirectly solicit, initiate, encourage or entertain any inquiries or
proposals, discuss or negotiate with, provide any information to, or consider the merits of any
inquiries or proposals from any Person (other than Buyer) relating to any transaction involving, in
whole or in part, the Product Business or the Product, or that would otherwise compromise Seller’s
ability to consummate the transactions contemplated in this Agreement and the Ancillary Agreements.
Seller shall immediately notify Buyer in the event Seller receives any inquiries regarding any such
transactions.

     Section 5.6. Reasonable Best Efforts. Seller shall use its reasonable best efforts
to cause the conditions in Section 7.2 and 7.3 to be satisfied.

     Section 5.7. Transition Activities.

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          (a) Between the Execution Date and the Effective Time, Seller shall promptly furnish Buyer
with such reasonable sample quantities of any Promotional Materials that Seller may have utilized
in connection with the Product Business during the twelve (12) month period prior to the Execution
Date, for use by Buyer in preparing its own Promotional Materials. In that regard, Seller shall
and hereby does grant Buyer a non-exclusive, non-transferable, non-sublicensable, royalty free,
paid-up license in the Territory to use Seller’s Promotional Materials in connection with creating
Buyer’s Promotional Materials. All costs and expenses incurred by Buyer with respect to creating
its own Promotional Materials shall be borne by Buyer.

          (b) No later than five (5) Business Days prior to Closing, the Parties shall enter into a
Transition Services Agreement, to be effective immediately after the Effective Time, substantially
in the form attached hereto as Exhibit 5.7 providing for the services specified therein pursuant to
which Seller shall perform certain transitional services for Buyer in accordance with the terms
thereof.

     Section 5.8. Notice of Government Investigations. Between the Execution Date and the
Effective Time, Seller shall promptly notify Buyer in writing if Seller has received any notice
from the U.S. Department of Justice, the Office of the Inspector General or any other Governmental
Authority that such Governmental Authority has commenced, threatened or intends to commence any
action or investigation with respect to the Product Business.

ARTICLE VI — COVENANTS OF BUYER PRIOR TO CLOSING

     Section 6.1. Required Approvals and Consents. As soon as practicable after the
Execution Date, Buyer shall make all filings required to be made in order to consummate the
transactions contemplated herein, including all filings under the HSR Act in accordance with
Section 8.1. Buyer shall also cooperate with Seller with respect to all filings that Seller is
required to make.

     Section 6.2. Notice of Default. Between the Execution Date and the Effective Time,
Buyer shall promptly notify Seller in writing if Buyer becomes aware of any fact or condition that
constitutes, or could reasonably be expected to cause, a breach of a representation, warranty or
covenant of Buyer under this Agreement. Any such notice or disclosure shall not be deemed to amend
or supplement Seller’s disclosure under Article IV or any schedule hereto, or to correct or
cure any misrepresentation, breach of warranty or breach of covenant.

     Section 6.3. Reasonable Best Efforts. Buyer shall use its reasonable best efforts to
cause the conditions in Section 7.2 and 7.4 to be satisfied.

ARTICLE VII — CLOSING AND TERMINATION

     Section 7.1. Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place commencing at 10:00 a.m., Pacific Standard Time, on the
later of (i) December 30, 2005, or (ii) the date that is two (2) Business Days following the
termination of the applicable waiting period under the HSR Act, unless another time or date is
agreed to by the Parties (the “Closing Date”). The Closing shall be deemed to have
occurred at 11:59 PM (EST) on the Closing Date (the “Effective Time”.)

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     Section 7.2. Conditions Precedent to Obligations of Buyer and Seller. The respective
obligations of Buyer and Seller to consummate the transactions contemplated by this Agreement on
the Closing Date are subject to the satisfaction or waiver at or prior to the Closing Date of the
following condition:

          (a) Litigation. No preliminary or permanent injunction or other order shall have been
issued by any court or by any governmental or regulatory agency, body or authority which enjoins,
restrains, prohibits or makes illegal pursuant to Applicable Law the transactions contemplated by
this Agreement on the Closing Date; and

          (b) HSR Clearance. Any waiting period (and any extension thereof) under the HSR Act
applicable to the transactions contemplated by this Agreement shall have expired or been
terminated.

     Section 7.3. Conditions Precedent to Buyer’s Obligations. Buyer’s obligations to
consummate the transactions contemplated by this Agreement and the Ancillary Agreements shall be
subject to the fulfillment of each of the following additional conditions, any one or more of which
may be waived, at Buyer’s sole discretion, in writing by the Buyer:

          (a) Representations and Warranties. The representations and warranties of Seller
contained in Article III that are qualified as to materiality shall be true and correct as of the
Execution Date and as of the Effective Time, and the representations and warranties of Seller
contained in Article III that are not qualified as to materiality, shall be true and correct in all
material respects as of the Execution Date and as of the Effective Time.

          (b) Performance. Seller shall have performed and complied in all material respects
with each of the covenants, agreements and obligations Seller is required to perform under this
Agreement on or before the Closing.

          (c) Material Consents. Each of the consents, including the Amgen Consent, listed on
Schedule 7.3(c) (the “Material Consents”) shall have been obtained and shall be in
full force and effect.

          (d) Audited Financial Statements. Seller shall have caused to be prepared and
delivered to Buyer on or before the Closing (i) an audited income statement, statement of cash
flow, and balance sheet for the Product Business as of and for the twelve months ended December 31,
2004 (the “2004 Audited Financials”) and (ii) an income statement, statement of cash flow
and balance sheet for the Product Business as of and for the nine months ended September 30, 2005
(the “2005 Stub Financials”).

          (e) No Material Adverse Change. At any time after the Execution Date, there has not
been any Material Adverse Change, and no event has occurred or circumstance exists that would
reasonably be expected to result in such a Material Adverse Change.

          (f) Closing Certificate. Seller shall have delivered to Buyer a certificate
(“Seller’s Closing Certificate”), dated as of the Closing Date and executed by a duly
elected, qualified and acting officer of Seller certifying:

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     (i) attached thereto is a complete and correct copy of resolutions adopted by the board
of directors of Seller authorizing the execution, delivery and performance of this Agreement
and the Ancillary Agreements executed in connection herewith by Seller, and that such
resolutions, approvals and consents have not been amended or modified in any respect and
remain in full force and effect as of the date thereof (or, in the alternative, a statement
to the effect that no such board of directors approval is necessary regarding the execution,
delivery and performance of this Agreement and the Ancillary Agreements); and

     (ii) the due organization and good standing of Seller; and

     (iii) the conditions specified in Section 7.2 and this Section 7.3 have been
fulfilled.

          (g) Ancillary Agreements. Seller shall have duly executed and delivered to Buyer the
ancillary agreements listed on Schedule 7.3(g) in the form agreed by the Parties (together
with any additional Instruments of Transfer, the “Ancillary Agreements”).

     Section 7.4. Conditions Precedent to Seller’s Obligations. Seller’s obligation to
consummate the transactions contemplated hereby shall be subject to the fulfillment of each of the
following additional conditions, any one or more of which may be waived, at Seller’s sole
discretion, in writing by Seller:

          (a) Representations and Warranties. The representations and warranties of Buyer
contained in Article IV that are qualified as to materiality shall be true and correct as of the
Execution Date and as of the Effective Time, and the representations and warranties of Buyer
contained in Article IV that are not qualified as to materiality, shall be true and correct in all
material respects as of the Execution Date and as of the Effective Time.

          (b) Performance. Buyer shall have performed and complied in all material respects
with each of the covenants, agreements and obligations Buyer is required to perform under this
Agreement on or before the Closing.

          (c) Closing Certificate. Buyer shall have delivered to Seller a certificate
(“Buyer’s Closing Certificate”), dated as of the Closing Date and executed by a duly
elected, qualified and acting officer of Buyer certifying:

     (i) attached thereto is a complete and correct copy of resolutions adopted by the board
of directors of Buyer authorizing the execution, delivery and performance of this Agreement
and the Ancillary Agreements executed in connection herewith by Buyer, and that such
resolutions, approvals and consents have not been amended or modified in any respect and
remain in full force and effect as of the date thereof (or, in the alternative, a statement
to the effect that no such board of directors approval is necessary regarding the execution,
delivery and performance of this Agreement and the Ancillary Agreements); and

     (ii) the due organization and good standing of Buyer; and

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     (iii) the conditions specified in Section 7.2 and this Section 7.4 have
been fulfilled.

          (d) Ancillary Agreements. Buyer shall have duly executed and delivered the Ancillary
Agreements to Seller.

     Section 7.5. Closing Deliveries.

          (a) At the Closing, Seller shall deliver or cause to be delivered to Buyer executed copies of
the following:

     (i) Executed copies of the bill of sale, assignment and assumption agreement with
respect to the Purchased Assets and the Inventory and Assumed Liabilities substantially in
the form attached hereto as Exhibit 7.5(a)(i) (the “Bill of Sale”);

     (ii) Executed copies of the intellectual property assignment documentation necessary to
transfer to Buyer the Product Intellectual Property, substantially in the form attached
hereto as Exhibit 7.5(a)(ii) (the “IP Assignments”);

     (iii) Executed copies of the Material Consents (including the Amgen Consent and the
Cardinal Health Acknowledgment);

     (iv) A copy of the 2004 Audited Financials and 2005 Stub Financials.

     (v) Executed copies of the Ancillary Agreements;

     (vi) Executed copies of any other Instruments of Transfer reasonably requested by
Buyer; and

     (vii) Executed copies of such other documents as may be reasonably necessary or
appropriate to consummate the transactions contemplated hereby.

          (b) At the Closing, Buyer shall deliver or cause to be delivered to Seller the following:

     (i) The Closing Payment;

     (ii) The Estimated Inventory Cost;

     (iii) Executed copies of the Ancillary Agreements;

     (iv) Executed copies of any other Instruments of Transfer reasonably requested by
Seller;

     (v) To the extent required, executed copies of any of the Material Consents (including
the Amgen Consent); and

     (vi) Executed copies of such other documents as may be reasonably necessary or
appropriate to consummate the transactions contemplated hereby.

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     Section 7.6. Termination. This Agreement may be terminated:

          (a) at any time before the Closing Date by mutual written consent of Buyer and Seller; or

          (b) by either Buyer or Seller, in writing, if the transactions contemplated hereby have not
been consummated on or before January 31, 2006 (as such date may be extended pursuant to
Section 7.1), provided that such failure is not due to the failure of the Party seeking to
terminate this Agreement to comply in all material respects with its obligations under this
Agreement, including the failure of the Party seeking to terminate this Agreement to satisfy its
closing conditions set forth in this Article VII; or

          (c) by Seller, in writing, if:

     (i) any of the conditions set forth in Section 7.2 or 7.4 has not been
satisfied as of the Closing Date, or shall become impossible to fulfill, other than for
reasons within the reasonable control of Seller, and such conditions shall not have been
waived by Seller (in its sole discretion); or

     (ii) a material breach of any provision of this Agreement has been committed by Buyer,
such breach has not been waived by Seller and such breach is not cured by Buyer within ten
(10) days after written notice thereof or, in the reasonable determination of Seller, is
incapable of being cured by Buyer; or

          (d) by Buyer, in writing, if:

     (i) any of the conditions set forth in Section 7.2 or 7.3 has not been
satisfied as of the Closing Date, or shall become impossible to fulfill, other than for
reasons within the reasonable control of the Buyer, and such conditions shall not have been
waived by Buyer (in its sole discretion); or

     (ii) a material breach of any provision of this Agreement has been committed by Seller,
such breach has not been waived by Buyer and such breach is not cured by Seller within ten
(10) days after written notice thereof or, in the reasonable determination of Buyer, is
incapable of being cured by Seller.

     Section 7.7. Procedure and Effect of Termination. Upon termination of this Agreement
by Seller or Buyer pursuant to Section 7.5, written notice thereof shall forthwith be
given to the other Party and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned without further action by any of the Parties. Termination of this
Agreement shall terminate all outstanding obligations and liabilities between the Parties arising
from this Agreement except those described in: (i) this Section 7.7, ARTICLE IX, and
Section 10.1; (ii) the Confidentiality Agreement; and (iii) any other provisions of this Agreement
which by their nature are intended to survive any such termination.

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ARTICLE VIII — CERTAIN OTHER COVENANTS

     Section 8.1. HSR Filings. If required pursuant to Applicable Law, each of Seller and
Buyer undertakes and agrees to file as soon as practicable, and in any event no later than ten
(10) business days after the Execution Date, a Notification and Report Form under the HSR Act with
the United States Federal Trade Commission and the Antitrust Division of the United States
Department of Justice. As deemed advisable, each of Seller and Buyer shall respond as promptly as
practicable to any inquiries or requests received from any Governmental Authority in the Territory
for additional information or documentation. Each Party shall (a) promptly notify the other Party
of any written communication to that Party or its Affiliates from any Governmental Authority and,
subject to Applicable Law, permit the other Party or the other Party’s counsel to review in advance
any proposed written communication to any of the foregoing; (b) not participate, or permit its
Affiliates to participate, in any substantive meeting or discussion with any Governmental Authority
in respect of any filings, investigation or inquiry concerning this Agreement unless it consults
with the other Party in advance and, to the extent permitted by such Governmental Authority in the
Territory, gives the other Party the opportunity to attend and participate thereat; and (c) with
the exception of business documents deemed confidential by the Buyer (including documents submitted
as attachments to each of the Buyer’s Notification and Report Form under the HSR Act), furnish
Seller with copies of all correspondence, filings, and communication (and memoranda setting forth
the substance thereof) between Buyer (its affiliates, and its respective representatives) on the
one hand, and any Governmental Authority or members of their respective staffs on the other hand,
with respect to this Agreement. Buyer and Seller shall share equally any required HSR Act filing
fees related to this transaction.

     Section 8.2. Inventory Cost Adjustment.

          (a) On the weekend immediately preceding the Closing Date, Seller shall temporarily halt all
shipments of Infergen in the Territory, in order to allow Seller to conduct a review of those of
its locations at which Inventory is located in order to derive a reasonably accurate estimate of
the quantities of Inventory that will be outstanding at such locations as of the Closing Date, and
Seller shall provide Buyer with such good faith written estimate (the “Estimated Inventory
Statement”) by Midnight (PST) of the next Business Day. Seller shall be entitled to resume
shipments of Infergen in the Territory starting on such next Business Day and continue such
shipments through the day immediately preceding the Closing Date.

          (b) Seller shall also deliver to Buyer, together with the Estimated Inventory Statement, a
good faith written estimate of the Inventory Cost (the “Estimated Inventory Cost”) as
determined pursuant to Schedule 8.2(b) (which details the per-unit Inventory purchase
price), and Buyer shall pay an amount equal to the Estimated Inventory Cost to Seller on the
Closing Date pursuant to the terms of this Agreement. Thereafter, the Inventory Cost shall be
finally determined as described below:

     (i) On the Closing Date, Seller shall deliver the Inventory to Buyer at the locations
set forth in the Inventory Statement (as such term is defined below).

     (ii) Within thirty (30) days after the Closing Date, Seller shall deliver a written
statement (the “Inventory Statement”) of the amount, location, lot and batch

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numbers of the Inventory provided to Buyer on the Closing Date and Seller shall
calculate the actual cost of the Inventory (the “Inventory Cost”) provided to Buyer
on the Closing Date pursuant to Schedule 8.2(b) which details the per-unit Inventory
cost.

     (iii) If Buyer agrees with the Inventory Statement, it shall within thirty (30) days
after receipt thereof, so notify Seller; however, if Buyer disputes the amounts or Inventory
Cost (or the calculation thereof) reflected in the Inventory Statement, Buyer shall notify
Seller in writing of its dispute, setting forth in reasonable detail, the basis for such
dispute, within thirty (30) days after Seller’s delivery of the Inventory Statement to
Buyer. The Parties shall, for a period not to exceed one (1) week, negotiate in good faith
to resolve such dispute, and, in the event a resolution is not reached, within 2 Business
Days after the end of such one (1) week period Seller and Buyer shall submit the items
remaining in dispute for resolution to a mutually acceptable independent accounting firm of
international reputation for resolution by such firm within a one (1) week period. Such
accounting firm’s decision shall be binding upon the Parties and the resulting Inventory
Statement and Inventory Cost shall be final and binding upon the Parties. The Parties shall
equally split the reasonable fees and expenses of such accounting firm associated with the
resolution of such dispute.

     (iv) The Inventory Statement and the Inventory Cost shall be deemed final upon the
earlier of (A) Buyer’s notice to Seller that it accepts the Inventory Statement, (B) thirty
(30) days after delivery of the Inventory Statement if Buyer fails to notify Seller of a
dispute within thirty (30) days after Seller’s delivery of the Inventory Statement to Buyer
or (C) the resolution of any disputes as described in Section 8.2(c).

     (v) Within five (5) Business Days after the Inventory Statement and the Inventory Cost
are deemed final, a payment shall be made as follows:

     (A) In the event the amount of the final Inventory Cost reflected on the
Inventory Statement is less than the Estimated Inventory Cost, then Seller shall
remit payment of the amount equal to such difference to Buyer; or

     (B) In the event the amount of the final Inventory Cost reflected on the
Inventory Statement exceeds the Estimated Inventory Cost, then Buyer shall remit
payment of the amount equal to such difference to Seller.

          (c) Notwithstanding anything herein to the contrary, Buyer shall not be required to purchase
any Inventory in excess of the Inventory Cap. For avoidance of doubt, any Inventory (other than
the Clinical Trials Inventory) held by Seller at the Effective Time in excess of the Inventory Cap
shall constitute an Excluded Asset.

          (d) Seller shall not sell any Inventory in the Territory after the Effective Time, and Buyer
shall be entitled to sell the Inventory in the Territory as of and after the Effective Time.

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Section 8.3. Product Returns, Rebates and Chargebacks.

          (a) Product Returns.

          (i) For a three (3) year period following the Closing, Seller shall be financially
responsible for all costs associated with any customer or wholesaler returns of expired,
damaged, defective, or other unsalable Infergen (“Product Returns”) for any Infergen
that was shipped on or before the Closing Date. Buyer shall be financially responsible for
all costs associated with any Product Returns of any Infergen shipped after the Closing
Date. Seller shall have delivered to Buyer at and as of the Closing Date a schedule
containing the lot number and units per lot of Infergen that were distributed by Seller
prior to Closing. Any Product Returns will be made in accordance with Buyer’s returned
goods policy at the time of such Product Return, unless otherwise mutually agreed by Buyer
and Seller. By agreeing to process the Product Returns for the benefit of Seller, Buyer
does not agree to assume any liability associated with such Product Returns, but is
providing a service as an accommodation to Seller and to minimize confusion on the part of
customers.

          (ii) Except as set forth herein, Buyer shall be responsible for processing all Product
Returns received after the Closing Date irrespective of when and by whom the returned
Infergen was shipped. Product Return processing shall include the destruction of all
returned Infergen by Buyer, or the customer, as applicable. Buyer agrees to only issue
return credits for Infergen shipped by Seller prior to the Closing Date at such time that
Buyer has received the returned Infergen from the customer, unless Seller agrees to waive
the customer return of Infergen.

          (iii) Each Party agrees it will not take, directly or indirectly, any action that would
provide any incentive or otherwise induce or motivate customers to return Infergen, except
as the parties may otherwise mutually agree.

          (b) Government Rebates.

          (i) Seller shall be responsible for all rebates pursuant to any government rebate
programs with respect to government claims for Infergen indicating Seller’s NDC numbers and
sold by Seller prior to the Effective Time including, but not limited to, rebates related to
Infergen dispensed within [***] ([***]) [***] following the Effective Date (the
“Government Rebate Tail Period”) (it being understood and agreed that the dispense
date contained in any report from a state rebate program shall be used for purposes of
determining the date of such claim).

          (ii) Buyer shall be responsible for all rebates pursuant to any government rebate
programs with respect to government claims for Infergen indicating Seller’s or Buyer’s NDC
numbers and sold subsequent to the Effective Time, excluding rebates relating to Infergen
dispensed during the Government Rebate Tail Period (it being understood and agreed that the
dispense date contained in any report from a state rebate program shall be used for purposes
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          (c) Commercial Rebates.

     (i) Seller shall be responsible for all commercial rebates with respect to Infergen
sold prior to the Effective Time. Notwithstanding the foregoing, Buyer and Seller agree
that (a) Seller’s financial liability for the commercial rebates during the period from the
Effective Time through [***] ([***]) [***] thereafter shall be limited to those commercial
customers with which Seller has a rebate obligation as of the Effective Time and (b) any
such payments by Seller shall be made on the terms and conditions comparable to Seller’s
rebate obligations as of the Effective Time with respect to each commercial customer and
shall be based on Seller’s terms of agreement with the respective contract, as such terms of
agreement existed as of the Effective Time. Seller shall utilize records from third party
rebate administrators to demonstrate which rebates relate to Infergen sold prior to the
Effective Time for purposes of determining Seller’s obligation.

     (ii) Any rebates for Infergen sold subsequent to the Effective Time will be the
liability of Buyer. To the extent that Seller processes such claims, Buyer shall reimburse
Seller within thirty (30) days of receipt of invoices that describe the requested payments
in reasonable detail.

          (d) Chargeback Claims.

     (i) Seller shall be financially responsible for all chargeback claims related to
Infergen sold prior to the Effective Time (the “Chargeback Claims”). Buyer shall
process and be financially liable for all Chargeback Claims related to Infergen sold
subsequent to the Effective Time. Notwithstanding the foregoing, the parties acknowledge
that the VA National Acquisition Center must approve the removal of Infergen from Seller’s
Federal Supply Schedule (“FSS”) before the responsibility of processing such rebates
is transferred from Seller to Buyer. Until such approval is obtained, Seller shall continue
to be responsible for processing the FSS chargebacks on Buyer’s behalf, and Buyer shall
reimburse Seller for same. Buyer and Seller agree that (i) Seller’s financial liability for
the Chargeback Claims shall be limited to those commercial customers with which Seller has
chargeback obligations as of the Effective Time, and (ii) any such chargebacks issued by
Seller shall be made on terms and conditions comparable to Seller’s obligations as of the
Closing with respect to each customer and shall be based on Seller’s terms of respective
agreements as of the Effective Time. Seller shall utilize records from third party rebate
administrators to demonstrate which chargebacks relate to Infergen sold prior to the
Effective Time for purposes of determining Seller’s obligation.

     (ii) To the extent that Seller processes Chargeback Claims which are the responsibility
of Buyer, Buyer shall reimburse Seller within thirty (30) days of receipt of invoices that
describe the requested payments in reasonable detail.

          (e) Procedures. Within fifteen (15) days after the end of each calendar quarter, Buyer
shall submit to Seller an invoice and supporting documentation relative to all Product Returns,
Government Rebates, Commercial Rebates and Chargeback Claims received during the preceding calendar
quarter for which Seller is financially responsible. Such invoice

 

			
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and the supporting documentation shall set forth the following detail: (i) where applicable, the
stock-keeping-unit number and lot code of returned Infergen (the “Returned Product”) and
the date the Returned Product or claim for applicable rebate or chargeback was received by Buyer,
if applicable; (ii) the name and address of the customer returning such Returned Product or making
such claim; (iii) the reason given by such customer for the return or claim if applicable; (iv) the
cost of performing such return or processing and paying such claim, provided, however, with
respect to returns, such cost shall include only the cost of replacing, or refunding the allegedly
defective Infergen, plus any reasonable shipping costs associated with such return, plus a [***]
([***]%) processing and destruction fee. Unless Seller contests such invoice in accordance
herewith, Seller shall remit the total invoiced amount to Buyer within ten (10) days after its
receipt of such invoice. In the event Seller in good faith disagrees with such invoice, the
Parties shall, for a period not to exceed one (1) month , negotiate in good faith to resolve such
dispute, and, in the event a resolution is not reached, within two (2) Business Days after the end
of such one (1) month period Seller and Buyer shall submit the items remaining in dispute for
resolution to a mutually acceptable independent arbitrator for resolution by such arbitrator with a
one (1) month period. In the event the Parties cannot mutually agree on an independent
arbitrator, Buyer and Seller shall each select an independent arbitrator. These independent
arbitrators shall then select a third arbitrator to resolve the dispute. The decision of the
arbitrator shall be binding upon the Parties and the resulting determination shall be final and
binding upon the Parties. The Parties shall equally split the reasonable fees and expenses of any
arbitrator associated with the resolution of such dispute.

     Section 8.4. Transitional Trademark License.

          (a) As of the Effective Time and for a period of up to twenty four months (24) months after
the Closing Date, Seller hereby grants to Buyer (or its Affiliates responsible for operating the
Product Business after Closing or any third-party manufacturers utilized by Buyer in connection
with the Product Business after the Closing Date), and Buyer hereby accepts, a non-exclusive,
non-transferable, non-sublicensable (except with respect to such third-party manufacturers or
Buyer’s Affiliates), royalty-free, paid-up, license in the Territory under the Seller Marks, for
use solely in connection with (i) Buyer’s sale of the Inventory in the Territory, and (ii) Buyer’s
use of the Promotional Materials existing as of the Closing Date and transferred to Buyer as part
of the Purchased Assets, and (iii) the labeling on the Infergen manufactured by or on behalf on
Buyer as of and after the Effective Time; provided, however, that such license is being granted
solely for transitional purposes and Buyer shall therefore, notwithstanding the time period
provided for above, use its commercially reasonable efforts to as quickly as is reasonably possible
cease its use of the Seller Marks after the Effective Time, but in no event later than twenty four
months (24) months after the Closing Date, or such later date (not to exceed an additional three
(3) months) as may be agreed-to by Seller, in its sole discretion, in the event Buyer is unable to
revise the labeling on the Infergen to remove the applicable Seller Marks due to governmental and
regulatory laws and regulations.

          (b) To the extent that Buyer is utilizing the transitional trademark license of this Section
8.4, Buyer shall not (i) add any other labels or marks to, or otherwise alter, the Seller Marks
as used in the Product Business as of the Closing Date (except as required by law); (ii) change in
any way the style of the Seller Marks as used in the Product Business as of the Closing

 

			
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Date; or (iii) otherwise use the Seller Marks in any manner other than as specifically provided in
this Section 8.4.

          (c) Buyer acknowledges Seller’s ownership of the Seller Marks, shall do
nothing inconsistent with such ownership, agrees that all use of the Seller Marks by Buyer shall
inure to the benefit and be on behalf of Seller, and agrees not to challenge Seller’s title to the
Seller Marks. Nothing in this Agreement shall give Buyer any right, title or interest in the
Seller Marks other than the right to use the Seller Marks strictly in accordance with this
Section 8.4. All use of the Seller Marks by Buyer under this Section 8.4 shall
conform to the standards followed by Seller in operating the Product Business prior to the Closing
Date, and Seller shall have the right to review the standards used by Buyer to operate the Product
Business after the Closing Date to ensure Buyer’s compliance with this requirement related to the
Seller Marks.

          (d) Buyer shall not have the right to, and shall not, sublicense, assign, pledge, grant or
otherwise encumber or transfer to any Third Party any rights licensed by Seller to Buyer under
this Section 8.4 without Seller’s prior written consent. The Parties understand and agree
that, in addition to all other legal remedies, Seller shall be entitled to immediate injunctive
relief in order to enforce the terms of this Section 8.4.

          (e) Nothing in this Section 8.4, or any other provision of this Agreement or any
provision of the Ancillary Agreements, shall grant the Buyer any rights in any of Seller’s Internet
domain names, registrations or applications for registration, or renewals thereof, registered in
the United States or any other country or jurisdiction throughout the world, except as such
Internet domain names, registrations or applications for registration, or renewals thereof are
included as part of the Purchased Assets.

          (f) Following the Closing, Buyer shall promptly and at its own expense use commercially
reasonable efforts to obtain such FDA approvals necessary for Buyer Labeling for the Infergen to be
manufactured after the Closing and, promptly comply with such FDA approvals upon receipt thereof.

     Section 8.5. Customer Billing. In the event that Seller or any of its Affiliates
receives payment after the Closing Date on invoices relating to the Product Business operated by
the Buyer or sales of products or services rendered by Buyer on or after the Effective Time, Seller
will promptly notify Buyer of such receipt and will promptly remit, or will cause such Affiliate to
promptly remit, such payment to Buyer without depositing such payment in an account of Seller, or
such Affiliate, unless in error, and Seller, or such Affiliate, shall not be entitled to offset
such payment against any payments due Seller from Buyer. In the event Seller receives an invoice
or request for payment relating to the operation of the Product Business on or after the Effective
Time, or with respect to any Assumed Liability, Seller will promptly notify Buyer of such request
or invoice and forward the invoice and all other appropriate information to Buyer for payment. In
the event Buyer or any of its Affiliates receive payment after the Effective Time on invoices
issued by Seller relating to an Excluded Asset (such as Seller’s accounts receivable as of the
Effective Time) or relating to product sold or services rendered by businesses other than the
Product Business or the Purchased Assets, Buyer will promptly notify Seller of such receipt and
will promptly remit, or will cause such Affiliate to promptly remit, such payment to Seller without
depositing such payment in an account of Buyer, or such Affiliate, unless in error, and Buyer, or
such Affiliate, shall not be entitled to offset such payment against any payments due Buyer from
Seller.

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     Section 8.6. Covenant Not To Compete. Seller hereby agrees that for a period ending
on the later of (a) [***] ([***]) [***] after the Closing Date and (b) the [***] the [***], Seller
shall not, directly or indirectly, alone, as a licensor, or otherwise in conjunction with other
Persons, develop, manufacture, license-in, market, sell or otherwise distribute in the Territory
for human use, or assist any other Person in developing, manufacturing, licensing-in, marketing,
selling or otherwise distributing in the Territory for human use, any Competing Product, either
alone or in combination, whether such Competing Product is available with or without a
prescription. For purposes hereof, “Competing Product” means any product containing
interferon alfacon-1 as an active ingredient, [***] that [***] is [***] the [***]. Notwithstanding
this Section 8.6, Seller shall have the right to conclude its ongoing clinical trials with respect
to the combination of the Product with the pharmaceutical product currently marketed by Seller
under the trademark Actimmune®.

     Section 8.7. Cooperation.

          (a) After the Execution Date, the Parties shall cooperate reasonably with each other in
connection with any reasonable actions required to be taken with respect to their respective
obligations under this Agreement and the Ancillary Agreements, and shall (i) furnish upon
reasonable request to each other such further information, and (ii) execute and deliver to each
other such other reasonable documents, and (iii) do such other acts, all as the other Party may
reasonably request for the purpose of carrying out the provisions of this Agreement (and the
Ancillary Agreements) and the transactions contemplated hereby and thereby.

          (b) Seller will promptly notify Buyer, and Buyer will notify Seller, as applicable and in
writing, of any event or fact which represents a material breach of any of their respective
representations, warranties, covenants or agreements hereunder.

     Section 8.8. Clinical Trials. As of the Effective Time, Buyer shall take over and
assume, from and after the Effective Time, (a) all of Seller’s duties and responsibilities relative
to the ongoing conduct of the Clinical Trials from and after the Effective Time, in accordance with
the protocols therefore (other than such duties and responsibilities which Seller agrees to perform
on behalf of and as Buyer’s agent from and after the Effective Time) and (b) all costs, expenses
and Liabilities associated with conducting the Clinical Trials from and after the Effective Time
(other than any Liability arising out of or relating to the conduct of the Clinical Trials by
Seller prior to the Effective Time), all as described in more detail in the Transition Services
Agreement.

     Section 8.9. Employees. Buyer anticipates it will offer employment to certain personnel
of Seller directly related to the Product Business. Notwithstanding the foregoing, Buyer shall not
be obligated to offer employment to any employees of Seller nor to offer employment to or hire any
specific number of Seller’s employees, and any such offer of employment shall be on terms and
conditions as Buyer, in its sole discretion, shall determine, without regard to the terms and
conditions under which any employees of Seller have been employed prior to the Closing Date. Buyer
shall have no obligation of any kind or nature for any compensation or benefits of any kind or
nature with respect to the employees or consultants of Seller for any services rendered or
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any Liability and cost associated with the termination by Seller of any employee or consultant of
Seller.

     Section 8.10. Tax Matters.

          (a) U.S. Statement of Allocation. Buyer and Seller acknowledge their mutual
obligations pursuant to Section 1060 of the Code to timely file IRS Form 8594 with each of their
respective federal income tax returns (the “Asset Acquisition Statement”). Accordingly,
Buyer and Seller agree to cooperate in the preparation of the Asset Acquisition Statement for
timely filing in each of their respective U.S. federal income tax returns in accordance with a
written statement (the “Statement of Allocation”), in form and substance reasonably
acceptable to Buyer and Seller, setting forth an allocation of the Purchase Price (which for such
purpose shall be increased by the amount of the Assumed Liabilities) among the Purchased Assets (as
applicable for each Statement of Allocation) and the Inventory Cost among the Inventory in
accordance with the provisions of Section 1060 of the Code and the Treasury Regulations. No later
than ten (10) days prior to the Closing Date, Buyer shall prepare and deliver to Seller a proposed
Statement of Allocation. If Seller approves the Statement of Allocation, then, unless otherwise
prohibited by law, all federal, state and local income Tax returns of Buyer and Seller shall be
filed consistently with the allocations made pursuant to the Statement of Allocation. If Seller
does not approve the Statement of Allocation, Buyer and Seller shall make good faith efforts to
agree on the allocation of the consideration among the Purchased Assets. If Buyer and Seller, after
good faith negotiations, cannot agree on the allocation of the consideration within one hundred
twenty (120) days following the Closing Date, then no Statement of Allocation shall be prepared,
and each Party shall prepare and file its returns in accordance with its own allocations.

          (b) Seller and Buyer shall provide reasonable cooperation and information to each other in
connection with (i) the preparation or filing of any Return, amended Return, Tax election, Tax
consent or certification, or any claim for a Tax refund, (ii) any determination of liability for
Taxes, and (iii) any audit, examination or other proceeding in respect of Taxes exclusively related
to the Product Business. Any information obtained under this Section 8.10 shall be kept
confidential pursuant to Section 10.1, except as may be otherwise necessary in connection with the
filing of Returns, claims for a Tax refund or in conducting any audit, examination or other
proceeding in respect of Taxes. In addition, upon request, Seller shall provide Buyer with an
income tax withholding statement in a form reasonably acceptable to Buyer.

          (c) Buyer shall be solely responsible for all sales, use, transfer, value added and other
related Taxes (the “Transfer Taxes”), if any, arising out of the transfer by Seller of the
Purchased Assets, Inventory, Clinical Trial Inventory and Other Intellectual Property to Buyer
pursuant to this Agreement, it being acknowledged and specifically agreed, however, that Buyer
shall have no responsibility for, and Seller will be solely responsible for, any Tax payable on any
income or gain of Seller arising from the sale of the Purchased Assets and Inventory or otherwise
arising under this Agreement. Notwithstanding the foregoing, Seller hereby agrees to indemnify,
pursuant to the terms of Article IX hereof, and hold Buyer harmless against any Liability resulting
from any noncompliance by Seller with the provisions of any applicable bulk sale or bulk transfer
laws. Each Party shall make all commercially reasonable efforts and take such commercially
reasonable actions to avail itself of all available exemptions to or reductions of

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such Transfer Taxes as reasonably requested by the other Party, and shall otherwise cooperate
with the other Party to avail itself of such exemptions to or reductions available pursuant to
Applicable Law.

          (d) Each Party shall be responsible for and shall pay all Taxes payable on any payments made
to such Party by the other Party, except as is otherwise set forth in Section 8.9(b).

          (e) If subsequent to the payment by the Buyer to Seller any amounts paid hereunder are
determined to be subject to withholding taxes by any taxing jurisdiction and payment of such taxes
is required by the Buyer, Seller agrees to reimburse Buyer for such amounts assessed and paid plus
interest.

          (f) Seller shall promptly after the Closing prepare and file all reports and Returns required
by Tax Law relating to the Product Business, the Purchased Assets, the Inventory and the Product as
owned or operated by Seller prior to and including the Effective Time.

     Section 8.11. Notice to Customers. Seller agrees to cooperate with Buyer, at Buyer’s
reasonable request, in the notification to customers of the transactions contemplated by this
Agreement and Seller agrees not to notify any customer of such transactions without the consent of
Buyer. Such notification shall be in such form as is reasonably satisfactory to both Buyer and
Seller as agreed to prior to Closing.

     Section 8.12. Assistance in Supply of Infergen. From and after the Effective Time,
Buyer shall supply to Seller any amount of Infergen reasonably requested by Seller solely for
purposes of Seller’s completion of its ongoing clinical trials with respect to the combination of
Infergen with the pharmaceutical product currently marketed by Seller under the trademark
Actimmune®; provided, however, Seller shall pay Buyer for all such Infergen.

     Section 8.13. Adverse Experience Reports. At a mutually agreed upon time after the
Effective Time, Seller shall provide Buyer with information relating to the investigation and
reporting of all adverse experiences regarding Infergen, including with respect to the use of
Infergen in both clinical studies, as well as spontaneous reports, prior to the Effective Time and
all other information which is materially relevant to the safe use of Infergen in Seller’s
possession as of the Effective Time. After the Effective Time, Seller shall promptly submit to
Buyer all adverse drug experience information or customer complaints brought to the attention of
Seller in respect of Infergen, as well as any material events and matters concerning or affecting
the safety or efficacy of Infergen. After the Effective Time, Buyer shall have all responsibility
for required reporting of adverse experiences for Infergen.

     Section 8.14. Regulatory Matters.

          (a) Except as expressly set forth in Section 8.7, from and after the Effective Time, Buyer, at its
cost, shall be solely responsible and liable for (i) taking all actions, paying all fees and
conducting all communication with the appropriate Governmental or Regulatory Authority required by
Law in respect of the Regulatory Approvals, including preparing and filing

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all reports (including adverse drug experience reports) with the appropriate Governmental or
Regulatory Authority (whether Infergen is sold before or after transfer of such Regulatory
Approval), (ii) taking all actions and conducting all communication with third parties in respect
of Infergen sold pursuant to such Regulatory Approval (whether sold before or after transfer of
such Regulatory Approval), including responding to all complaints in respect thereof, including
complaints related to tampering or contamination, and (iii) investigating all complaints and
adverse drug experiences in respect of Infergen sold pursuant to such Regulatory Approval (whether
sold before or after transfer of such Regulatory Approval).

          (b) From and after the Effective Time, Seller promptly (and in any event within the time
periods required by Law) shall notify Buyer within three (3) Business Days if Seller receives a
complaint or a report of an adverse drug experience in respect of Infergen. In addition, Seller
shall cooperate with Buyer’s reasonable requests and use commercially reasonable efforts to assist
Buyer in connection with the investigation of and response to any complaint or adverse drug
experience related to Infergen sold by Seller.

          (c) From and after the Effective Time, Buyer, at its cost, shall be solely responsible and
liable for conducting all voluntary and involuntary recalls of units of Infergen sold pursuant to
such Regulatory Approval (whether sold before or after transfer of such Regulatory Approval),
including recalls required by any Governmental or Regulatory Authority and recalls of units of
Infergen sold by Seller deemed necessary by Seller in its reasonable discretion; provided, however,
that Seller shall reimburse Buyer for the reasonable expenses and costs of conducting recalls
relating to Infergen sold by or on behalf of Seller prior to the Closing, including the costs of
notifying customers, the costs associated with shipment of such recalled Infergen, the price paid
for such Inventory, and reasonable credits extended to customers in connection with the recall.
Seller promptly shall notify Buyer in the event that a recall of Infergen sold by Seller is
necessary.

          (d) Seller shall, within fifteen (15) days of the Closing, notify the FDA of the transfer of
the Regulatory Approvals to Buyer in accordance with all Applicable Laws.

     Section 8.15. Differentiation of Product. From and after the Effective Time, Buyer
shall institute appropriate procedures to ensure that products and goods of the Product Business
manufactured, finished or sold by, or on behalf of, Buyer can be distinguished from products and
goods of the Business manufactured, finished or sold by, or on behalf of, Seller.

     Section 8.16. [***]. Seller hereby grants to Buyer the [***] with respect to the
Nektar Agreements:

          (a) At any time prior to the commencement of the [***], provided that Seller shall have
incurred documented expenses of at least [***] in connection with its continued clinical
development of a pegylated formulation of alfacon-1 as contemplated under the Nektar Agreements,
Seller may [***] (“[***]”) to Buyer. Buyer will have [***] ([***]) [***] following receipt
of the [***] to inform Seller in writing whether it intends to [***] (the “[***] [***]”) to
[***] and [***] (the “[***]”) and to [***] for [***]

 

			
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as listed in [***]  If Buyer elects to [***], Buyer shall pay Seller an amount
equal to [***]% of Seller’s documented expenses directly incurred in connection with the
development of the pegylated formulation of Infergen between the time of Closing and the [***]
date. Such expenses will not include any allocation of overhead of Seller. During such [***]
([***])-[***]period, Seller will cooperate with Buyer in connection with any reasonable inquiries
Buyer may have with respect to the clinical development program or the [***] of the [***]. In the
event Buyer determines to [***] the [***], the parties will cooperate to close the [***] and [***]
as soon as practicable following delivery of the [***]. Buyer shall be responsible for any and all
obligations arising [***] after the [***].

          (b) If Seller determines to [***] from a [***] to [***] any of the [***], Seller shall,
promptly after making such determination, [***] (an “[***]”) [***]. The [***] shall
disclose in reasonable detail the proposed [***] and will [***], [***] on [***] to those contained
in the [***]. Buyer may elect to [***] on the [***] contained in the [***] by delivering [***] of
such [***] to Seller within sixty (60) Business Days after delivery of the [***]. If Buyer elects
to [***], the [***] of such [***] shall be consummated as soon as practicable following Buyer’s
[***] of the [***]. Seller will afford Buyer with reasonable access to all necessary information
for Buyer to conduct any due diligence investigation Buyer reasonably determines to be necessary or
appropriate in [***]. In the event Buyer determines [***] to [***] the [***], Seller may [***]
with the [***] identified in the [***] on the terms and conditions specified in the [***] set forth
in this Section 8.16 shall be of no further force or effect.

          (c) If Seller in good faith determines to terminate its rights under the Nektar Agreements,
Seller shall, promptly after making such determination, deliver a written notice to Buyer.

     Section 8.17. Books and Records. At the Closing, or as soon as possible thereafter,
Seller shall transfer to Buyer the original copies of the Product Records. Seller may retain one
archival copy of the Product Records and Contracts solely for archival purposes or as required by
Applicable Law.

     Section 8.18. Non-Exclusive License. In the event Seller receives approval from the FDA
of a product with labeling providing for combination use of Infergen and Actimmune, Seller hereby
grants to Buyer an irrevocable, fully paid-up, royalty-free, perpetual, transferable, non-exclusive
license in the Territory to any Intellectual Property covering such combination therapy.
Furthermore, Seller hereby grants to Buyer an irrevocable, fully paid-up, royalty-free, perpetual,
transferable, non-exclusive license to any Intellectual Property owned or controlled by Seller
related to the Product which is not derived from the Amgen Agreements, and which is not assigned,
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however, that any such license shall be limited to such rights as are necessary to make,
use, practice, market, sell or otherwise commercialize the Product in the Territory for any purpose
or approved indication, including any future approved indication, or as are necessary to exercise
or practice any rights, obligations or other licenses under this Agreement.

     Section 8.19. Assistance Regarding Required SEC Financial Disclosures.

          (a) Seller shall cause to be prepared and delivered to Buyer, on or before forty five (45)
days following the Closing, an audited income statement, statement of cash flow and balance sheet
for the Product Business as of and for the twelve month period ending December 31, 2005 (the
“2005 Audited Financials”). Buyer hereby agrees to reimburse Seller for one-half of
Seller’s costs and expenses associated with preparing the 2005 Audited Financials.

          (b) In addition to the foregoing, upon Buyer’s request, Seller shall from time to time prior
to and after Closing provide Buyer with such financial information relative to Seller, Infergen
and/or the Product Business as Buyer may reasonably require in order for Buyer to comply with
Buyer’s financial disclosure obligations under the rules and regulations of the Securities and
Exchange Commission relative to Buyer’s acquisition of the Product. Notwithstanding the foregoing,
Seller shall not be required to generate new financial reports or analysis, or reformat existing
reports or analysis, but rather shall only be required to provide the required financial
information to Buyer in the form currently maintained by Seller.

ARTICLE IX — INDEMNIFICATION

     Section 9.1. Survival of Representations and Warranties. Other than the
representations and warranties contained in Section 3.2, which shall survive indefinitely, and
those in Section 3.9 and Section 3.10, which shall survive for any applicable statute of
limitations, all representations and warranties made in this Agreement or any Ancillary Agreement
by Buyer or Seller shall survive the execution and delivery of this Agreement or the applicable
Ancillary Agreement and shall remain in full force and effect for a period of eighteen (18) months
following the Closing Date (unless a different applicable time period is set forth in such
representation, warranty or covenant), and shall be deemed to have been relied upon by each other
party hereto, notwithstanding any investigation made by or on behalf of such party; provided that
if notice of any claim for indemnification is given pursuant to Section 9.3 prior to such time and
such notice describes with specificity the circumstances with respect to which such indemnification
relates, such indemnification claim shall survive until such time as such claim is finally
resolved.

     Section 9.2. Indemnification.

          (a) Seller’s Indemnification Obligations. Seller shall indemnify, defend and hold
harmless Buyer and its Affiliates and their respective officers, directors, agents, and employees
(collectively, the “Buyer Indemnitees”) from and against any and all losses, liabilities,
claims, damages (including consequential damages), expenses (including costs of investigation and
defense and reasonable attorneys’ fees and expenses) or diminution of value (collectively,
“Buyer Losses”) to the extent that such Buyer Losses are based on, result from or arise in
connection with:

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     (i) the breach of any representation or warranty made by Seller or a Seller Indemnitee
in this Agreement or any Ancillary Agreement;

     (ii) any failure of Seller or a Seller Indemnitee to duly to perform or observe any
provision, obligation, covenant or agreement to be performed or observed by Seller or a
Seller Indemnitee pursuant to this Agreement or any Ancillary Agreement;

     (iii) the Excluded Liabilities;

     (iv)
the operation of Seller’s business, including the Product Business prior
to the Closing (except with respect to Assumed Liabilities relating to such pre-Closing
operation); or

     (v) any Liability of Seller under the Amgen Agreements arising prior to the Effective
Time (including any Liability arising out of Seller’s operations prior to the Effective Time
irrespective of when such Liability is first asserted).

provided,
however, that Seller shall not be obligated to indemnify, defend or hold harmless any
Buyer Indemnitee under this Section 9.2(a) for any Buyer Losses incurred by a Buyer Indemnitee to
the extent arising out of or principally attributable to: (A) any act or omission by a Buyer
Indemnitee, which constitutes negligence, recklessness, gross negligence, or willful misconduct on
the part of such Buyer Indemnitee, or (B) the breach of any representation or warranty made by
Buyer or a Buyer Indemnitee in this Agreement or any Ancillary Agreement, or (C) any failure of
Buyer or a Buyer Indemnitee duly to perform or observe any provision, obligation, covenant or
agreement to be performed or observed by Buyer or a Buyer Indemnitee pursuant to this Agreement or
any Ancillary Agreement, or (D) the Assumed Liabilities.

          (b) Buyer’s Indemnification Obligations. Buyer shall indemnify, defend and hold
harmless Seller and its Affiliates and their respective officers, directors, agents and employees
(collectively, the “Seller Indemnitees”) from and against any and all losses, liabilities,
claims, damages, expenses (including costs of investigation and defense and reasonable attorneys’
fees and expenses), or diminution of value (collectively, “Seller Losses”) to the extent
that such Seller Losses are based on, result from, or arise in connection with:

     (i) the breach of any representation or warranty made by Buyer or a Buyer Indemnitee in
this Agreement or any Ancillary Agreement;

     (ii) any failure of Buyer or a Buyer Indemnitee duly to perform or observe any
provision, obligation, covenant or agreement to be performed or observed by Buyer or a Buyer
Indemnitee pursuant to this Agreement or any Ancillary Agreement;

     (iii) the Assumed Liabilities;

     (iv) the operation by Buyer of the Product Business following the Closing; or

     (v) any Liability of Buyer under the Amgen Agreements arising from and after the
Effective Time.

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provided,
however, that Buyer shall not be obligated to indemnify, defend or hold harmless any
Seller Indemnitee under this Section 9.2(b) from any Seller Claim or for any Seller Losses incurred
by a Seller Indemnitee to the extent arising out of or principally attributable to: (A) any act or
omission by a Seller Indemnitee, which constitutes negligence, recklessness, gross negligence, or
willful misconduct on the part of such Seller Indemnitee, or (B) the breach of any representation
or warranty made by Seller or a Seller Indemnitee in this Agreement or any Ancillary Agreement, or
(C) any failure of Seller or a Seller Indemnitee to duly to perform or observe any provision,
obligation, covenant or agreement to be performed or observed by Seller or a Seller Indemnitee
pursuant to this Agreement or any Ancillary Agreement, or (D) the Excluded Liabilities.

     Section 9.3. Indemnification Procedures.

          (a) In the event a Party’s right to indemnification hereunder arises out of or results from a
Third Party claim (a “Third Party Claim”), each indemnified Party (the “Indemnified
Party”) shall notify the indemnifying Party (the “Indemnifying Party”) in writing (and
in reasonable detail) of the Third Party Claim within twenty (20) Business Days after receipt by
such Indemnified Party of notice of the Third Party Claim (the “Indemnification Claim
Notice”), or otherwise becoming aware of the existence or threatened existence thereof.
Failure to give such notice shall not constitute a defense, in whole or in part, to any claim by an
Indemnified Party hereunder except to the extent the rights of the Indemnifying Party are
materially prejudiced by such failure to give notice.

          (b) At its option, the Indemnifying Party may assume the defense of any Third Party Claim by
giving written notice to the Indemnified Party within thirty (30) days after the Indemnifying
Party’s receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party
Claim by the Indemnifying Party shall not be construed as an acknowledgment that the Indemnifying
Party is liable to indemnify any Indemnitee in respect of the Third Party Claim, nor shall it
constitute a waiver by the Indemnifying Party of any defenses it may assert against any
Indemnitee’s claim for indemnification. Upon assuming the defense of a Third Party Claim, the
Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal
counsel selected by the Indemnifying Party that is reasonably acceptable to the Indemnified Party.
In the event the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified
Party shall promptly deliver to the Indemnifying Party all original notices and documents
(including court papers) received by any Indemnitee in connection with the Third Party Claim.
Should the Indemnifying Party assume the defense of a Third Party Claim, except as provided in
Section 9.3(c) below, the Indemnifying Party shall not be liable to the Indemnified Party or any
other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other
Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim. In the
event that it is ultimately determined that the Indemnifying Party is not obligated to indemnify,
defend or hold harmless an Indemnitee from and against the Third Party Claim, the Indemnified Party
shall reimburse the Indemnifying Party for any and all costs and expenses (including attorneys’
fees and costs of suit) and any Damages incurred by the Indemnifying Party in its defense of the
Third Party Claim with respect to such Indemnitee.

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          (c) Without limiting Section 9.3(b), any Indemnitee shall be entitled to participate in, but
not control, the defense of such Third Party Claim and to employ counsel of its choice for such
purpose; provided, however, that such employment shall be at the Indemnitee’s own expense unless
(A) the employment thereof has been specifically authorized in advance by the Indemnifying Party in
writing, (B) the Indemnifying Party has failed to assume the defense and employ counsel in
accordance with Section 9.3(b) (in which case the Indemnified Party shall control the defense) or
(C) if the Indemnified Party and the Indemnifying Party are both named parties to the proceeding
and the Indemnified Party has reasonably concluded that there may be one or more legal defenses
that are different from or in addition to those available to the Indemnifying Party (in which case
the Indemnifying Party shall not have the right to assume the defense of such action on behalf of
the Indemnified Party and the Indemnifying Party shall be liable for all legal expenses incurred by
the Indemnified Party in furtherance thereof).

          (d) With respect to any Buyer Losses or Seller Losses, as the case may be, relating solely to
the payment of money damages in connection with a Third Party Claim and that will not result in the
Indemnitee’s becoming subject to injunctive or other relief or otherwise materially adversely
affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party shall
have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying
Party shall have the sole right to consent to the entry of any judgment, enter into any settlement
or otherwise dispose of such Buyer Losses or Seller Losses, as the case may be, on such terms as
the Indemnifying Party, in its reasonable discretion, shall deem appropriate; provided, however,
that the Indemnifying Party shall have obtained a full release from such Third Party in connection
with any such settlement or disposition. With respect to all other Buyer Losses or Seller Losses,
as the case may be, in connection with Third Party Claims, where the Indemnifying Party has assumed
the defense of the Third Party Claim in accordance with Section 9.3(b), the Indemnifying Party
shall have authority to consent to the entry of any judgment, enter into any settlement or
otherwise dispose of such Buyer Losses or Seller Losses, as the case may be; provided that it
obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably
withheld or delayed). The Indemnifying Party shall not be liable for any settlement or other
disposition of Buyer Losses or Seller Losses, as the case may be, by an Indemnitee that is reached
without the written consent of the Indemnifying Party (which consent shall not be unreasonably
withheld or delayed). Regardless of whether the Indemnifying Party chooses to defend or prosecute
any Third Party Claim, no Indemnitee shall admit any liability with respect to, or settle,
compromise or discharge, any Third Party Claim without the prior written consent of the
Indemnifying Party which consent shall not be unreasonably withheld or delayed.

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

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Party for all its reasonable out-of-pocket expenses in connection therewith. If the Indemnified
Party controls the defense of the claim, the Indemnifying Party shall cooperate with the
Indemnified Party on the terms described above.

     Section 9.4. Limitations.

          (a) The indemnification provided for in Section 9.2(a)(i) and Section
9.2(a)(ii) shall not apply unless and until the aggregate Buyer Losses for which Buyer seeks or
has sought indemnification hereunder, as stated in one or more claim notices, exceed a cumulative
aggregate of $[***] (the “Basket”), in which case the right to recover Buyer Losses shall
apply to the full amount of the Basket, and in no event shall the aggregate liability of Seller for
Buyer Losses pursuant to Sections 9.1(a)(i) and (ii) exceed $[***] (the
“Buyer’s Cap”); provided, however, that neither the Basket, nor the Buyer’s Cap, shall
apply to any indemnification claim (i) involving fraud or willful misrepresentation on the part of
Seller, (ii) based upon a breach of Sections [***], or (iii) under Section [***]

          (b) The indemnification provided for in Section 9.2(b)(i) and (ii) shall not
apply unless and until the aggregate Seller Losses for which Seller seeks or has sought
indemnification hereunder, as stated in one or more claim notices, exceed the Basket, in which case
the right to recover Seller Losses shall apply to the full amount of the Basket, and in no event
shall the aggregate liability of Buyer for Seller Losses pursuant to Sections 9.2(b)(i) and
(ii) exceed $[***] (“Seller’s Cap”); provided, however, that neither the Basket nor the
Seller’s Cap shall apply to any indemnification claim (i) involving fraud or willful
misrepresentation on the part of Buyer, (ii) based upon a breach of Sections [***], or
(iii) under Section [***].

          (c) Nothing in this Agreement shall (i) limit the right of any Party to seek specific
performance of, or equitable relief with respect to, another Party with respect to a breach of any
covenant or agreement set forth in this Agreement or (ii) be deemed a waiver by any Party to this
Agreement of any right or remedy which such Party may have at law or in equity based on any claim
of fraud.

     Section 9.5. Right of Setoff. Buyer may setoff any amount to which it is entitled
under this Article IX against amounts otherwise payable to Seller hereunder or under the Ancillary
Agreements, provided that any amount to be setoff is reasonably determined in good faith and is no
greater than any amount to which Buyer is entitled to under this Article IX. Neither the exercise
nor the failure to exercise such right of setoff shall constitute an election of remedies or limit
Buyer in any manner in the enforcement of any other remedies that may be available to it.

ARTICLE X — MISCELLANEOUS PROVISIONS

     Section 10.1. Confidentiality and Publicity.

          (a) The Mutual Confidential Disclosure between Seller and Buyer, dated July 14, 2005 (the
“Confidentiality Agreement”) is hereby incorporated in this Agreement as though

 

			
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fully set forth herein. All Information provided to Recipient (or its representatives or
Affiliates) by the Discloser (or its representatives or Affiliates), as the case may be, shall be
shall be subject to and treated in accordance with the terms of the Confidentiality Agreement. As
used in this Section 10.1, the terms “Information”, “Recipient” and “Discloser” shall have
the meanings assigned to such terms in the Confidentiality Agreement. Upon the Effective Time, the
Confidentiality Agreement shall expire and be of no further force and effect with respect to all
Information relating to the Product Business, the Purchased Assets or the Assumed Liabilities;
provided, however, such expiration of the Confidentiality Agreement shall in no way prejudice or
adversely affect Seller’s or Buyer’s ability to seek damages, or any other remedy available to
Seller or Buyer, as appropriate, with respect to a violation by such other Party (or its Affiliates
or representatives) of the Confidentiality Agreement prior to or after the Effective Time. Upon
and after the Effective Time, the Confidentiality Agreement shall remain in full force and effect
pursuant to its terms with respect to all other Information that does not relate to the Product
Business, the Purchased Assets or the Assumed Liabilities.

          (b) From and after the Effective Time, all Information exclusively concerning the Product
Business, the Purchased Assets and the Assumed Liabilities (the “Buyer Proprietary
Information”) shall be used by Seller solely as required to perform its obligations, exercise
or enforce its rights under this Agreement (or any Ancillary Agreement), or comply with Applicable
Law, and for no other purpose. Seller shall not disclose, or permit the disclosure of, any of the
Buyer Proprietary Information to any Person except those Persons to whom such disclosure is
necessary to permit Seller to perform its obligations, exercise or enforce its rights under this
Agreement (or any Ancillary Agreement), or comply with Applicable Law. Seller shall treat, and
will cause its Affiliates and the directors, officers, employees, agents, representatives and
advisors of Seller or any of their Affiliates to treat, the Buyer Proprietary Information as
confidential, using the same degree of care as Seller normally employ to safeguard its own
confidential information from unauthorized use or disclosure, but in no event less than a
reasonable degree of care.

          (c) All Information obtained by Buyer (or its Affiliates or Representatives) from Seller (or
its Affiliates or Representatives) other than the Buyer Proprietary Information (the “Seller
Proprietary Information”) shall be used by Buyer solely as required to perform its obligations,
exercise or enforce its rights under this Agreement (or any Ancillary Agreement), or comply with
Applicable Law, and for no other purpose. Buyer shall not disclose, or permit the disclosure of,
any of Seller Proprietary Information to any person except those persons to whom such disclosure is
necessary to permit Buyer’s perform its obligations, exercise or enforce its rights under this
Agreement (or any Ancillary Agreement), or comply with Applicable Law. Buyer shall treat, and will
cause its Affiliates and the directors, officers, employees, agents, representatives and advisors
of Buyer or any of their Affiliates to treat, Seller Proprietary Information as confidential, using
the same degree of care as Buyer normally employ to safeguard its own confidential information from
unauthorized use or disclosure, but in no event less than a reasonable degree of care.

          (d) In the event either Party is requested pursuant to, or required by, Applicable Law to
disclose any of the other Party’s proprietary information (i.e., Seller Proprietary Information or
Buyer Proprietary Information, as applicable), it will notify the other Party in a timely manner so
that such Party may seek a protective order or other appropriate

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remedy or, in such Party’s sole discretion, waive compliance with the confidentiality
provisions of this Agreement. Each Party will co-operate in all reasonable respects, in connection
with any reasonable actions to be taken for the foregoing purpose. In any event, the Party
requested or required to disclose such proprietary information may furnish it as requested or
required pursuant to Applicable Law (subject to any such protective order or other appropriate
remedy) without liability hereunder, provided that such Party furnishes only that portion of the
Confidential Information which such Party is advised by a reasoned opinion of its counsel is
legally required, and such Party exercises reasonable efforts to obtain reliable assurances that
confidential treatment will be accorded such proprietary information.

          (e) No public announcement or other disclosure concerning the existence of, terms, or subject
matter of this Agreement (and any Ancillary Agreement) and the transactions contemplated hereby and
thereby shall be made, either directly or indirectly, by any Party, without first obtaining the
approval of the other Party and agreement upon the nature and text of such public announcement or
other disclosure which such agreement and approval shall not be unreasonably withheld. The Party
desiring to make any such public announcement or other disclosure (including those which are
legally required) shall inform the other Party of the proposed announcement or disclosure in
reasonably sufficient time prior to public release, which shall be not less than fifteen (15) days
(or such shorter period as the Parties may agree upon in writing, or such shorter period applicable
to those public announcements or other disclosure which are legally required) prior to release of
such proposed public announcement or other disclosure, and shall provide the other Party with a
written copy thereof in order to allow such other Party to comment upon such public announcement or
other disclosure. Each Party agrees that it shall co-operate fully with the other with respect to
all disclosures regarding this Agreement and any Ancillary Agreement to any governmental or
regulatory agencies, including requests for confidential treatment of proprietary information of
either Party included in any such disclosure.

          (f) Nothing in this Section 10.1 shall be construed as preventing or in any way
inhibiting either Party from complying with Applicable Law governing activities and obligations
undertaken pursuant to this Agreement, in any manner which it reasonably deems appropriate,
including, for example, by disclosing to regulatory authorities confidential or other information
received from the other Party, subject to Section 10.1(e).

     Section 10.2. Notices. Notices required or permitted under this Agreement shall be
in writing and sent by overnight express mail (e.g., FedEx), or by facsimile confirmed by overnight
express mail (e.g., FedEx), (failure of such confirmation shall not affect the validity of such
notice by facsimile to the extent the receipt of such notice is confirmed by the act of the
receiving Party (e.g., a facsimile of the receiving Party submitting its receipt of such notice))
and shall be deemed to have been properly served to the addressee upon receipt of such written
communication, to the following addresses of the Parties:

-50-

 

     If to the Seller:

InterMune, Inc.

3280 Bayshore Boulevard

Brisbane, California 94005

Attention: General Counsel

Fax: (415) 466-2364

     with a copy to:

Latham & Watkins LLP

12636 High Bluff Drive, Suite 400

San Diego, California 92130

Attention: Faye H. Russell, Esq.

Fax: (858) 523-5450

     If to the Buyer:

Valeant Pharmaceuticals North America

3300 Hyland Avenue

Costa Mesa, California 92626

Attention: General Counsel

Fax: (714) 641-7206

     with a copy to:

Winstead Sechrest & Minick P.C.

1201 Elm, 5400 Renaissance Tower

Dallas, Texas 75270

Attention: Mark G. Johnson, Esq.

Fax: (214) 745-5390

     Section 10.3. Modification; Waiver. This Agreement may be modified only by a written
instrument executed by the Parties hereto specifically referencing this Agreement.

     Section 10.4. Expenses. All expenses, including the fees of any attorneys,
accountants, investment bankers or others engaged by a Party, incurred in connection with this
Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby, shall be
paid by the Party incurring such expenses.

     Section 10.5. Entire Agreement. The agreement of the Parties, which is comprised of
this Agreement, the Ancillary Agreements, the Confidentiality Agreement, the schedules and the
documents referred to herein, sets forth the entire agreement and understanding between the Parties
and supersedes any prior agreement or understanding, written or oral, relating to the subject
matter of this Agreement. All Schedules, appendices, and exhibits referred to in this Agreement
are incorporated herein by reference.

     Section 10.6. Assignment. This Agreement may not be assigned by either Party without the
prior written consent of the other Party; provided, however, that either Party shall

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have the right to assign its rights and obligations under this Agreement to any of its Affiliates
or to any Third Party successor to all or substantially all of (i) its entire business, or (ii) its
consumer healthcare or pharmaceuticals business. In no event shall any assignment hereof to any
Affiliate or Third Party be deemed to relieve the assigning Party of its liabilities or obligations
to the other Party under this Agreement, and the assigning Party expressly acknowledges and agrees
that it shall remain fully and unconditionally obligated and responsible for the full and complete
performance of all of its obligations under the terms and conditions of this Agreement.

     Section 10.7. Third Parties. None of the provisions of this Agreement shall be for
the benefit of, or enforceable by, any Third Party.

     Section 10.8. Waiver. The waiver by either Party of a breach or a default of any
provision of this Agreement by the other Party shall not be construed as a waiver of any succeeding
breach of the same or any other provision, nor shall any delay or omission on the part of either
Party to exercise or avail itself of any right, power or privilege that it has or may have
hereunder operate as a waiver of any right, power or privilege by such Party.

     Section 10.9. Severability. If any part of this Agreement is declared invalid by any
legally governing authority having jurisdiction over either Party, then such declaration shall not
affect the remainder of the Agreement and the Parties shall revise the invalidated part in a manner
that will render such provision valid without impairing the Parties’ original intent.

     Section 10.10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its conflicts of laws
principles.

     Section 10.11. Headings. The headings are placed herein merely as a matter of
convenience and shall not affect the construction or interpretation of any of the provisions of
this Agreement.

     Section 10.12. Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement. Each of the Parties agrees to accept and be bound by
facsimile signatures hereto.

     Section 10.13. Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of performance by the
defaulting Party if the failure is occasioned by government action, war, terrorism, fire,
explosion, flood, strike, lockout, embargo, shortage of materials or utilities, vendor failure to
supply, act of God, or any other cause beyond the control and without the fault or negligence of
the defaulting Party, provided that the Party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be
required to settle any labor dispute or disturbance. Such excuse shall continue as long as the
condition preventing the performance continues. Upon cessation of such condition, the affected
Party shall promptly resume performance hereunder. Each Party agrees to give the other Party prompt
written notice of the occurrence of any such condition, the nature thereof, and the extent to which
the affected Party will be unable to perform its obligations hereunder. Each Party further agrees

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to use all reasonable efforts to correct the condition as quickly as possible and to give the
other Party prompt written notice when it is again fully able to perform its obligations.

     Section 10.14. Relationship of the Parties. In making and performing this Agreement,
the Parties are acting, and intend to be treated, as independent entities and nothing contained in
this Agreement shall be construed or implied to create an agency, partnership, joint venture, or
employer and employee relationship between Buyer and Seller. Except as otherwise expressly
provided herein, neither Party may make any representation, warranty or commitment, whether express
or implied, on behalf of or incur any charges or expenses for or in the name of the other Party.
No Party shall be liable for the act of any other Party unless such act is expressly authorized in
writing by both Parties hereto.

     Section 10.15. Arbitration. Notwithstanding anything herein to the contrary, in the
event that there shall be a dispute among the Parties arising out of or relating to this Agreement,
including, without limitation, the indemnities provided in Article IX hereof, or the breach
thereof, the Parties agree that such dispute shall be finally resolved by binding arbitration in
accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex
Disputes of the American Arbitration Association (“AAA”), and judgment on the arbitration
award may be entered in any court having jurisdiction thereof. The arbitration shall be conducted
by a panel of three persons experienced in the pharmaceutical business: within thirty (30) days
after initiation of arbitration, each Party shall select one person to act as arbitrator and the
two Party-selected arbitrators shall select a third arbitrator within thirty (30) days of their
appointment. If the arbitrators selected by the Parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the AAA. Within 45 days of initiation of
arbitration, the Parties shall reach agreement upon and thereafter follow procedures assuring that
the arbitration will be concluded and the award rendered within no more than six months from
selection of the arbitrators. Failing such agreement, the AAA will design and the Parties will
follow procedures that meet such a time schedule. The arbitrators (i) shall not have any power or
authority to add to, alter, amend or modify the terms of this Agreement but shall specify rules
sufficient to allow reasonable discovery by the Parties; (ii) shall establish and enforce
appropriate rules to ensure that the proceedings, including the decision, be kept confidential and
that all confidential information of the Parties be kept confidential and be used for no purpose
other than the arbitration; (iii) shall have the power to enforce specifically this Agreement and
the terms and conditions hereof in addition to any other remedies at law or in equity; and (iv)
shall issue all decisions in writing. The place of arbitration shall be San Francisco, California,
and all proceedings and communications shall be in English. Either Party may apply to the
arbitrators for interim injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary
to protect the rights or property of that Party pending the arbitration award. The arbitrators
shall have no authority to award punitive or any other type of damages not measured by a Party’s
compensatory damages. Each Party shall bear its own costs and expenses and attorneys’ fees and an
equal share of the arbitrators’ fees and any administrative fees of arbitration. Except to the
extent necessary to confirm an award or as may be required by law, neither a Party nor an
arbitrator may disclose the existence, content, or results of an arbitration without the prior
written consent of both Parties. In no event shall an arbitration be initiated after

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the date when commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable California statute of limitations.

[signatures appear on the following page]

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

	 	 	 
	INTERMUNE, INC.
	 	 
	 
	 	 
	    /s/ Daniel G. Welch
 

By: Daniel G. Welch

	 	 
	Title: President and Chief Executive Officer
	 	 
	 
	 	 
	VALEANT PHARMACEUTICALS NORTH AMERICA
	 	 
	 
	 	 
	    /s/ Timothy C. Tyson
 

By: Timothy C. Tyson

	 	 
	Title: Presidentexv10w4

 

EXHIBIT 10.4

OFFICE LEASE

ONE TECHNOLOGY CENTER

This is a Lease Agreement made and entered into between Medical Plaza Partners, Ltd.
(“Landlord”), and Pan American Acceptance Corporation as (“Tenant”), whether one or more.

1.1. THE LEASED PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord
the “Leased Premises” which consists of Tenant’s “Office Space” and “Common Area” as defined below.

(a) Tenant’s Office Space. Tenant’s “Office Space”, to which Tenant shall have exclusive use
rights, consists of suite(s) Suites 1400 and 1225 representing the Office Space outlined
and shaded on the floor plan contained in Exhibit A. Such Office Space is located in the office
building known as One Technology Center (“Office Building”) on a tract of land, legally described
by lot and block and metes and bounds in Exhibit B. The street address of the Office Building is
7411 John Smith Drive, San Antonio, Texas 78229. The “Property” shall mean the land, the Office
Building, the parking building, the parking areas and all other improvements to the land.

(b) Common Area. The “Common Area”, to which Tenant shall have non-exclusive use rights, consists
of (1) the interior Common Area located in the Office Building, i.e., areas normally accessible to
all tenants such as the hallways, stairwells, elevators, lobby, restrooms, and snack bar areas, and
(2) the exterior Common Area located outside the Office Building on the above described land, i.e.,
loading areas, sidewalks, driveways, parking garage, parking areas, and other open areas (if any),
subject to paragraph 9.2 on parking.

1.2. USE. Tenant’s Office Space may be used only for general office purposes. The name of Tenant’s
business will be Pan American Acceptance Corporation .

1.3. RENTABLE AREA.

	(a)	 	The term “Rentable Area” as used herein means (i) in a case of a single tenant floor, ail
floor area measured from the inside surface of the outer glass of the Office Building,
excluding only the area (“Service Area”) within the outside wall used for building stairs,
fire towers, elevator shafts, flues, vents, stacks, pipestacks, and vertical ducts (which
areas shall be measured from the mid-point of walls enclosing such areas) but including any
Service Area which is for the specific use of Tenant, such as special stairs or elevators,
plus a proportionate part of the square footage of the Office Building central areas for
providing electrical, mechanical, janitorial, security and mail services as well as the
central lobby and central fire exit corridor (“Central Area”), and (b) in the case of a floor
to be occupied by more than one (1) tenant, all floor areas within the inside surface of the
outer glass enclosing the space on such floor and measured to the mid-point of the walls
separating areas leased by or held for lease to other tenants or from Common Area devoted to
public corridors, electrical and telephone rooms, elevators, foyers, restrooms, mechanical,
janitor’s closet, vending areas, and other similar facilities for the use of all tenants on
the particular floor, plus Tenant’s proportionate part of such Common Area located on such
floor plus a proportionate share of the square footage of the Office Building’s Central Area.
In the case of both single and multiple tenant floors, telephone, electrical, mechanical,
maintenance, janitorial and security rooms not included in the Office Building Central Area,
but which serve more than one (1) floor shall be considered Common Area and shall be allocated
among tenants whose office spaces are served thereby, regardless of whether such Office Spaces
are located on the same floor as the rooms in question. Such allocation shall be made in
proportion with the Rentable Areas of all Tenants so served. No deductions from Rentable Area
shall be made for columns or projections necessary to the Office Building.

	(b)	 	The Rentable Area of the Office Building is approximately one hundred ninety-six thousand one
hundred seventy-four square feet (196,174 sq.ft.) and the Rentable Area of the Office Space is
estimated to be 17,082 and shall be specifically calculated in accordance with the
above definition by Landlord or Landlord’s architect when floor plans are complete. Upon such
determination, the Rentable Area of the Office Space shall be appropriately adjusted to
reflect the actual square feet of the Rentable Area of the Office Space as determined by such
calculation. The Rentable Area of the Office Building shall be subject to further adjustment
only in the event of any future expansion or modification of the Office Building.

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1.4. USABLE AREA. The term “Usable Area” as used herein means the Rentable Area less
Tenant’s proportionate part of Common Area on a multiple tenant floor and less Tenant’s allocation
of Central Area.

2.1. BASE RENT AND ADDITIONAL RENTS. Tenant shall pay to Landlord a “Base Rent” of $
2.442.726.00 in total for the initial lease term, which amounts to the following amounts per
calendar month:

	 	 	 	 	 	 	 
	 

	 	$	-0-	 	 	First Month
	 

	 	$	20,284.88	 	 	Months 2 through 61
	 

	 	$	20,427.23	 	 	Months 62 through 121

“Additional Rent” representing Tenant’s prorata share of Office Building Operating Expenses
shall be paid in accordance with paragraph 32.1.

3.1. DATE AND PLACE OF PAYMENT. The monthly rent and one-twelfth of Tenant’s share of estimated
Office Building Operating Expenses under paragraph 32.1 shall be due and payable in advance on the
first day of each calendar month without demand. Partial months shall be prorated. All rent and
other sums are due and payable in San Antonio, Bexar County, Texas at the address designated by
Landlord from time to time. All sums due by Tenant are without right of set-off or deduction.
Monies mailed are considered timely paid only if received by Landlord by the due date or if
received later than the due date, in an envelope postmarked more than two (2) days before the due
date. Rent shall be paid without notice or demand. All other sums shall be due as otherwise
provided herein (or upon delivery of written notice in accordance with paragraph 29.1),

3.2. LATE PAYMENTS. If any rent payment or other sum due by Tenant to Landlord is received and
accepted by Landlord later than five (5) days after its due date, Tenant shall pay a late charge of
ten (10%) of such rent payment or other sum. Landlord’s acceptance of late rent or other sum shall
not constitute permission for Tenant to pay the rent or other sum late thereafter and shall not
constitute a waiver of Landlord’s remedies for subsequent late payments. Late payment charges are
due immediately upon notice or demand. For each returned check, Tenant shall pay all applicable
bank charges incurred by Landlord plus $25.00. Payments of any kind received by Landlord on behalf
of Tenant may be applied at Landlord’s option to non-rent items first, then to rent. Payment of
rent by Tenant shall be an independent covenant. If Tenant has not timely paid rentals and other
sums, due on two or more occasions, or if a check from Tenant is returned for insufficient funds or
no account, Landlord may require that all rent and other sums due be paid by cashier’s check,
certified check, or money order.

3.3. SECURITY DEPOSIT. At the time of execution of this lease, Tenant shall deposit with Landlord $
-0- cash to secure performance of Tenant’s obligations under this lease. If Tenant fails to pay
rent or other sums when due under this lease, Landlord may apply any cash security deposit toward
amounts due and unpaid by Tenant. Tenant shall immediately restore the security deposit to its
original amount after any portion of it is applied to amounts due and unpaid by Tenant. Tenant
acknowledges that Landlord has the right to transfer or mortgage its interest in the property and
in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall
have the right to transfer or assign the security deposit of Tenant to the transferee or mortgagee.
Tenant’s security deposit shall not be mortgaged, assigned or encumbered in any manner whatsoever
by Tenant.

4.1. TERM, COMMENCEMENT, AND ANNIVERSARY. The initial lease term shall start on the commencement
date and shall continue for any partial first calendar month plus one hundred twenty-one
(121) full calendar months thereafter and shall continue for month-to-month thereafter until
Landlord or Tenant gives thirty (30) days prior written notice of termination. The lease
commencement date shall be the Completion Date, as defined in Exhibit E hereto or the date Tenant
occupies all or any part of Tenant’s Office Space, whichever occurs first. The annual anniversary
date of this lease shall be the first day of the first full month following the commencement date
of the lease, unless the lease commencement date is the first day of the month. The date rent
commences shall be the same day as the above lease commencement date.

4.2. ACKNOWLEDGEMENT OF LEASE. Upon commencement of this lease, Landlord and Tenant shall execute a
recordable acknowledgement of this lease in a form which is attached as Exhibit D and which will
confirm the commencement date, ending date, annual anniversary date of the lease, Rentable Area and
Usable Area in Tenant’s Office Space.

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4.3. DELIVERY OF POSSESSION. Landlord shall deliver keys and/or access cards or codes and
possession o1 Tenant’s Office Space to Tenant on the lease commencement date stated in paragraph
4.1 unless otherwise agreed in writing by the parties. Tenant shall not be liable for rent until
Landlord delivers possession of the Leased Premises to Tenant. If there is a delay in delivery of
possession, Tenant’s remedy shall be as set forth in Exhibit E hereto; and neither Landlord nor
Landlord’s agents shall otherwise be liable for any damages; and the lease shall not terminate.

5.1. TENANT FINISH-OUT. Pursuant to Exhibit E, Landlord, at Landlord’s sole expense, will finish
Tenant’s Office Space as per plans approved by both Landlord and Tenant and included in this Office
Lease as Exhibit K.

6.1. QUIET POSSESSION. If Tenant is current and in compliance with all of Tenant’s obligations
under this lease, Tenant shall be entitled to peaceful and quiet possession and enjoyment of
Tenant’s Office Space, subject to the terms and conditions of this lease. Tenant shall have access
to the building parking garage and common parking areas at all times, subject to parking fees and
the rules referred to in paragraphs 9.2 and 23.1. Landlord shall make diligent efforts to have all
other tenants in the Office Building comply with parking and building rules. Failure of other
tenants to comply with such rules shall not be considered a default by Landlord, Landlord shall not
be liable for damages as a result of construction noise or vibrations unless such noise or
vibration unreasonably interferes with Tenant’s use of the Leased Premises and Landlord fails to
abate the noise or vibration within fifteen (15) days following Landlord’s receipt of written
notice from Tenant,

7.1. UTILITIES AND SERVICES BY LANDLORD. Except where otherwise stated in this lease, Landlord
shall pay for and furnish in a timely and diligent manner to Tenant the following utilities and
services and no others, subject to paragraph 32.1 regarding Tenant’s payment of Tenant’s prorata
share of Office Building Operating Expenses.

	(a)	 	electricity, gas, water and waste water services for Common Area as well as electric lighting
service;

	(b)	 	air conditioning and heating as reasonably required on a seasonal basis to maintain the
temperature in the Tenant’s Office Space at levels typical for buildings of comparable age and
construction in San Antonio, Texas, for comfortable use and occupancy under normal office
conditions from 7:00 a.m. to 7:00 p.m. on Monday through Friday inclusive, and from 8:00 a.m.
to 1:00 p.m. on Saturday upon request, (but not on Sunday, New Year’s Day, Memorial Day, July
4th, Labor Day, Thanksgiving and Christmas) or during such other times or days as Landlord may
reasonably designate;

	(c)	 	janitorial service, five (5) days per week (excluding the above holidays) in accordance with
the Cleaning Specifications attached hereto as Exhibit M;

	(d)	 	electricity for standard office equipment and lighting at levels typical for buildings of
comparable age and construction in San Antonio, Texas;

(e) trash collection services (dumpster or garbage cans);

(f) pest control services as needed in the reasonable judgment of Landlord;

(g) landscaping and parking lot maintenance services;

(h) repair and maintenance services pursuant to paragraph 8.1;

(i) replacement of fluorescent light bulbs and ballasts in building standard lighting fixtures (but
not incandescent
light bulbs for nonstandard fixtures or for Tenant’s
lamps);

(i) elevator service; and

(k) water and waste water services as provided for in the Plans for Tenant’s Office Space.

7.2. UTILITIES AND SERVICES BY TENANT. Except for adjustment payments of Office Building Operating
Expenses described in Exhibit “C” hereto, charges for any services for which Tenant is required to
pay from time to time hereunder shall be due and payable within five (5) days after such billing.
If Tenant shall fail to make payment for such services in full within three (3) days after Landlord
hand delivers to Tenant or to Tenant’s representative written notice of Landlord’s intent to
terminate utilities or services which are furnished by Landlord, then Landlord may terminate such
utilities or services after such three (3) day notice period without further notice, and such
discontinuance shall not be deemed to constitute an eviction or disturbance of the Tenant’s use and
possession of the Leased Premises or relieve Tenant from paying rent or performing any of its
obligations under this Lease. Landlord reserves the right to submeter electricity and/or water. Any
electricity or water submetering shall be billed to and paid by Tenant at Landlord’s average cost
per KWH or gallon, and no more. If the water bill from the utility company includes waste water
charges, Tenant’s liability for water submetering shall include corresponding waste water costs (if
any).

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7.3. INTERRUPTION OF UTILITIES OR SERVICES. Temporary interruption or malfunction of utilities,
services, and/or telephones shall not render Landlord liable for damages, rent abatements, or
release of any Tenant obligation. Landlord shall use diligent efforts to have such utilities and
services restored as soon as reasonably possible. In the event the Leased Premises are unusable for
Tenant’s purposes by reason of an interruption of services to be provided by Landlord and such
interruption is due to the negligence or willful misconduct of Landlord and such interruption
continues for two (2) consecutive days following written notice from Tenant to Landlord, then rent
under this Lease shall be abated with respect to any unusable portion of the Leased Premises for
the period of such interruption.

7.4. EXTRA ELECTRICITY. There shall be no extra electricity charges for typewriters, word
processors, dictating equipment, adding machines, desk top calculators, lamps, or other standard
110 volt office equipment. However, Tenant shall pay Landlord monthly, as billed, for charges which
are separately metered or which Landlord may reasonably compute for electricity utilized by Tenant
for the following purposes: x-ray machines, hotplates, electric heaters, 220 volt equipment,
computers (other than desktop or word processor computers), or other electrical service not
standard for the Office Building.

7.5. EXTRA HEATING OR AIR CONDITIONING. If Tenant requests air conditioning or heating after the
hours as set forth in paragraph 7,1(b), Tenant shall have access to such services without notice to
Landlord. Landlord may charge Tenant an hourly fee established from time to time by Landlord for
after-hour air conditioning or heating in the Office Building. The fee charged for such after hours
services shall be consistent with the fees charged for similar services at comparable office
buildings in San Antonio, Texas.

8.1. MAINTENANCE AND REPAIRS BY LANDLORD. Landlord, at its expense, shall be responsible for all
maintenance of Leased Premises and Common Areas except as expressly required by Tenant in paragraph
8.2 herein. Landlord shall maintain the interior of Tenant’s Office Space in good repair, at
Tenant’s expense. Landlord shall use diligence to provide for the reasonable cleaning, maintenance,
repair, reconnection of interrupted utilities or services, and landscaping of Common Area, subject
to any reimbursement obligations of Tenant under paragraph 8.2. Landlord may rekey at any time.
Landlord may temporarily close any part of the common facilities if reasonably necessary for
repairs or construction. Repairs and maintenance shall be in accordance with applicable
governmental requirements.

8.2. MAINTENANCE AND REPAIRS BY TENANT. Tenant shall promptly reimburse Landlord for Landlord’s
cost of repairing or replacing damage which is caused inside Tenant’s Office Space by Tenant,
Tenant’s agents, employees, family, or licensees, invitees, visitors, or customers or outside
Tenant’s Office Space by Tenant or Tenant’s employee’s, agents, or contractors. Landlord’s cost of
repair shall include 15% for overhead. Landlord may require advance payment therefor prior to
repair or replacement. Landlord shall have right of approval of all repairmen or maintenance
personnel. Tenant shall not damage or allow other persons listed above to damage any portion of the
Leased Premises. Tenant shall pay for replacement of all incandescent light bulbs and for
unstopping any drains or water closets in Tenant’s Office Space. If Landlord or Tenant’s workmen or
contractors are permitted to repair, alter, or modify Tenant’s Office Space, Tenant shall warrant
that no mechanic’s or materialman’s lien shall be filed against the Leased Premises. All such work
shall be in accordance with applicable governmental requirements.

8.3. TELECOMMUNICATIONS EQUIPMENT. All telecommunications equipment necessary to serve Tenant shall
be located in Tenant’s Office Space and paid for by Tenant.

9.1. ACCESS, KEYS, LOCKS, AND SECURITY, (a) Access. Tenant shall have access to Tenant’s Office
Space at all times. Landlord shall have access to Tenant’s Office Space at reasonable times for
reasonable business purposes. A request for access by Landlord shall be deemed reasonable if
Landlord provides twenty-four (24) hours advance notice to Tenant. In the case of an emergency
Landlord may enter Tenant’s Office Space at any hour and without advance notice to Tenant.

(b) Keys, Landlord shall furnish Tenant two (2) keys or access codes or cards for Tenant’s Office
Space, two (2) keys or access codes or cards for the main exterior entry doors of the Office
Building if such door is locked after hours, and two (2) keys or access codes or cards to
Tenant’s mailbox in the Office Building. A deposit of $10.00 shall be charged for each mailbox
key and office key, and access card. Additional or replacement keys or access codes or cards
shall be furnished at the same amount charged to all other tenants in the Office Building at the
time of Tenant’s request. Landlord shall not be liable for risk of loss resulting from Tenant’s
keys, access codes, or cards being lost or used by

-4-

 

unauthorized persons. Landlord reserves the right to rekey or change locks for security reasons if
new keys are timely furnished to Tenant.

(c) Locks. Tenant may not add locks, change locks, or rekey locks without written permission of
Landlord. Locks may be changed at Tenant’s request and expense. If locks to the Office Space are
changed, Landlord may specify kind and brand of locks, placement, installation, master key
compatibility, etc.

(d) Security. Landlord agrees to provide one (1) security guard on duty between the hours of 7:00
a.m. and 7:00 p.m. The parties hereto acknowledge that the security required to be provided by
Landlord as specified herein as between Landlord and Tenant shall be the extent of Landlord’s
responsibility with respect thereto, and so long as Landlord provides the security equipment and/or
personnel required hereby, Landlord shall not be deemed to assure or otherwise be responsible for
the safety of Tenant, its employees or invitees from events, circumstances or actions that are the
responsibility of the security guard to prevent. Tenant may at its sole option and expense, provide
additional security personnel for Tenant’s Office Space. Landlord shall not be liable to Tenant or
Tenant’s employees, family, customers, invitees, contractors, or agents for injury, damage, or loss
to person or property caused by criminal conduct of other persons, including theft, burglary,
assault, vandalism or other crimes. Tenant shall be responsible for locking its Office Space doors
when the last person leaves such Office Space for the day.

9.2. PARKING. Tenant shall have the use of seventy-nine ( 79 ), parking spaces of which
fifty-five (55) will be unreserved on the Property and twenty-four (24) covered reserved spaces in
the attached garage. The location of Tenant’s covered reserved parking spaces are depicted on
Exhibit H attached hereto. There will be no charge for any of these seventy-nine (79) spaces.
Landlord shall have sole control over parking and the parking building and parking areas. Parking
rules are contained in attached
Exhibit F-1. If vehicles are parked in violation of Landlord’s
parking rules or in violation of state statutes, Landlord may exercise vehicle removal remedies
under V.T.C.A. Transportation Code §684 upon compliance with statutory notice. There shall be no
reserved parking spaces unless agreed in writing by Landlord. In the event Tenant elects to
exercise its Expansion Option pursuant to Exhibit J hereto, the number of covered reserved spaces
provided to Tenant shall be adjusted to provide Tenant with its proportionate share of such spaces
based on Tenant’s proportionate share of the Office Space in the Office Building and the number of
unreserved spaces provided to Tenant shall be adjusted to provide Tenant with the same ratio of
unreserved parking spaces per square foot of Rentable Area as Tenant is entitled to on the lease
commencement date.

10.1. OCCUPANCY, NUISANCE, AND HAZARDS. Tenant’s Office Space shall be occupied only by Tenant or
Tenant’s employees and shall not be left entirely vacant or used exclusively for storage. Tenant
and Tenant’s agents, employees, family, licensees, invitees, visitors, and contractors shall
comply with all federal, state, and local laws relating to occupancy or to criminal conduct while
such persons are on the Leased Premises. Tenant and the persons listed above shall not (1) use,
occupy, or permit the use or occupancy of the Leased Premises for any purpose which is directly or
indirectly forbidden by such laws or which may be dangerous to life or property, (2) permit any
public or private nuisance, (3) disturb the quiet enjoyment of other tenants, (4) do anything
which might emit offensive odors or fumes, (5) make undue noise or vibrations, (6) permit anything
which would cancel insurance coverage or increase the insurance rate on the Office Building or
contents, or (7) otherwise damage the Leased Premises.

11.1. TAXES. Landlord shall be responsible for payment of all taxes and assessments against the
Office Building subject to Tenant’s obligation to pay Landlord for Tenant’s share thereof, on a
prorata square foot basis, as additional rent pursuant to paragraph 32.1. Tenant shall timely pay
all taxes assessed against Tenant’s furniture, equipment, fixtures, or other personal property in
Tenant’s Office Space.

12.1. INSURANCE. Landlord and Tenant shall comply with the respective insurance obligations as set
forth below:

(a) Landlord. Landlord, at its option, may maintain (1) fire and extended coverage insurance,
including vandalism and malicious mischief, on the office building, and (2) comprehensive general
liability insurance. If Landlord elects to so insure, the amounts shall be as Landlord may deem
reasonably appropriate. Landlord shall have no responsibility to maintain fire and extended
coverage insurance on Tenant’s contents.

(b) Tenant. Tenant shall carry insurance from the first day of Tenant’s occupancy and then during
the entire occupancy hereof insuring Tenant and Landlord as their interests may appear with terms
and coverages and by

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companies satisfactory to Landlord, and with such increases in limits as Landlord may from time to
time request, but initially Tenant shall maintain the following coverages in the amounts as
follows:

	 	(i)	 	in case of personal injury to or death of any person or persons, not less than
$2,000,000.00 for each
injury or death to a person and $2,000,000.00 for each incident involving personal
injury or death of person, and, in the case of property damage, not less than
$1,000,000.00 for one occurrence; and
	 
	 	(ii)	 	In case of fire, sprinkler leakage, malicious mischief, vandalism, and other
extended coverage perils, for the full insurable replacement value of all additions,
improvements and alterations to the Office Space which are beyond those tenant
improvements initially provided by Landlord and all office furniture, trade fixtures,
office equipment, merchandise, and all other items of Tenant’s property on the Leased
Premises.

(c) Waiver of Subrogation. Upon written request after signing this lease, but before any loss or
damage occurs, Landlord may require that Tenant’s fire/casualty and liability insurance policy
provide a waiver for all right of recovery by way of subrogation in connection with any loss or
damage covered by such insurance policies. Notwithstanding the foregoing, if such waiver of
subrogation is not incorporated into the policy and cannot be procured or if it can be procured
only with an additional premium charge, such party shall furnish to the other party written
evidence from the insurance company or insurance agent, verifying that such waiver is (1) not
obtainable or (2) not obtainable without extra charge. Thereafter, within a reasonable time after
receiving such notice, the party for whose benefit the waiver is sought may (1) agree to pay any
additional charge necessary to obtain the waiver of subrogation or (2) place the insurance with a
company which is reasonably satisfactory to the other party and its mortgagees with a policy of the
same terms and coverage, the extra cost of which will be entirely borne by the party for whose
benefit the waiver of subrogation is sought.

(d) Insurance Certificates. Tenant shall provide Landlord with a certificate of Tenant’s insurance
as required prior to the date Tenant initially occupies Tenant’s Office Space or any portion
thereof. Landlord and Landlord’s managing agent (if any) shall be named as additional insureds on
Tenant’s liability insurance policy. Upon written request by Landlord, changes in the name of
Landlord or Landlord’s managing agent shall be reflected on such certificate. Upon written request,
Tenant shall furnish to Landlord copies of the policies of insurance referred to in this lease,
including any waivers of subrogation, or satisfactory evidence of same.

(e) Notice from Tenant’s Insurance Carrier. All policies of insurance to be provided by Tenant
shall contain a provision (to the extent legally permitted) that the insurance company shall give
Landlord thirty (30) days’ written notice in advance of (1) any cancellation or non-renewal of the
policy, (2) any reduction in the policy amount, and (3) any deletion of additional insureds.

12.2. MUTUAL RELEASES. (a) To the extent that the coverage of their respective insurance policies
are not adversely affected, Landlord and Tenant release each other and their respective officers,
directors, employees, and agents from any claims for loss or damage to any person or property on
the Leased Premises which is caused by or which results from risks insured against under insurance
policies carried by Landlord or Tenant and in force at the time of any such loss or damage. The
foregoing release shall not apply to property losses or damages in excess of policy limits or to
losses or damages not covered by insurance due to a deductible clause in the policy.

12.3. HOLD HARMLESS. (a) Landlord shall not be liable for and Tenant will indemnify and save
harmless Landlord of and from all fines, suits, claims, demands, losses and actions (including
attorney’s fees) for any injury to person or damage to or loss of property on or about the Leased
Premises caused by the gross negligence or willful misconduct of, or breach of this Lease by,
Tenant, its employees, invitees or other persons entering the Leased Premises, the Office Building,
or the parking areas under express or implied invitation of Tenant, or arising out of Tenant’s use
of the Leased Premises but only to the extent insurance payable to Landlord as a result of such
injury or damage is not sufficient to satisfy Landlord’s losses or claims against it. Tenant shall
not be liable for and Landlord will indemnify and save harmless Tenant of and from all fines,
suits, claims, demands, losses and actions (including attorney’s fees) for any injury to person or
damage to or loss of property on or about the Leased Premises caused by the gross negligence or
willful misconduct of, or breach of this Lease by, Landlord, its employees, invitees or other
persons entering the Leased Premises, the Office Building, or the parking areas under express or
implied invitation of Landlord, or arising out of Landlord’s use of the Leased Premises but only to
the extent insurance payable to Tenant as a result of such injury or

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damage is not sufficient to satisfy Tenant’s losses or claims against it. Landlord shall not be
liable or responsible for any loss or damage to any property or death or injury to any person
occasioned by theft, fire, act of God, public enemy, criminal conduct of third parties, injunction,
riot, strike, insurrection, war, court order, requisition or other action by any governmental body
or authority, by other tenants of the Office Building or any other matter beyond the control of
Landlord.

(b) Landlord’s liability to Tenant for any default by Landlord under the Lease or for any other
claim arising out of Tenant’s occupancy, possession or use of the Leased Premises shall be limited
to Landlord’s interest in the Property, and Tenant agrees to look solely to Landlord’s interest in
the Property for the recovery of any judgement from Landlord, it being agreed by Tenant that
neither Landlord nor any shareholder, officer or director of Landlord shall be personally liable
for any such liability, judgment or deficiency.

(c) This paragraph 12.3 shall survive any expiration or earlier termination of this Lease for a
period not to exceed two (2) years during which time any and all claims hereunder must be asserted.

13.1. ALTERATIONS BY TENANT. Tenant may not make any alterations, improvements, door lock changes,
or other modifications of any kind to the Leased Premises without Landlord’s written consent.
“Alterations” include but are not limited to improvements glued, screwed, nailed, or otherwise
permanently attached to the Office Building, structural changes, roof and wall penetrations, and
all plumbing, electrical, and HVAC changes. Requests for Landlord’s approval shall be in writing
and shall be detailed to Landlord’s reasonable satisfaction. The foregoing shall be done only by
Landlord’s contractors or employees or by third parties approved by Landlord in writing. Tenant
shall pay in advance for any requested alterations, improvements, lock changes, or other
modifications which are approved and performed by Landlord. If same are performed by Tenant with
Landlord’s permission, Tenant shall not allow any liens to be placed against the Office Building
as a result of such additions or alterations. Alterations, improvements, and modifications done at
Tenant’s request shall comply with all applicable laws. Changes in Tenant’s alterations or
improvements which may be later required by governmental action shall also be paid for by Tenant.

14.1. REMOVAL OF PROPERTY BY TENANT. Tenant may remove its trade fixtures, furniture, and
equipment only if (1) such removal is made prior to the end of the lease term, (2) Tenant is not
in default under this lease at time of removal, and (3) such removal is not in anticipation of an
early move-out prior to the end of the lease term. Tenant shall pay all costs of removal. Tenant
shall have no rights to property remaining on the Leased Premises after move-out and all such
property shall be conclusively presumed to have been abandoned by Tenant and title to such
property shall pass to Landlord under this Lease as in a bill of sale. Tenant may not remove any
alterations as defined in paragraph 13.1 or improvements such as wall-to-wall carpeting, book
shelves, window coverings, drapes, cabinets, paneling, counters, kitchen or break room built-ins,
shelving, wall covering, and anything else attached to the floor, walls, or ceilings. If Landlord
requests in writing, Tenant shall, immediately prior to moving out, remove any alterations,
fixtures, equipment, and other property installed by Tenant. Tenant shall pay for cleaning or
repairing damage caused by Tenant’s removal of any property.

15.1. SUBLETTING AND ASSIGNMENT. Tenant may not sublet, assign, pledge, or mortgage this lease and
may not grant licenses, commissions, or other rights of occupancy to all or any part of the Leased
Premises without Landlord’s prior written approval, which shall not be unreasonably withheld or
delayed. Sale, transfer, or merger of the majority of the voting shares or voting partnership
interests in Tenant (if a corporation or partnership) shall be considered an assignment; likewise
for issuance of treasury stock or admission of a new general partner. However, if Landlord gives
such approval, Landlord shall be entitled to (1) the excess between Tenant’s rental per square
foot under the lease and the rental per square foot under the sublease or assignment, and (2) any
other consideration flowing directly or indirectly from the subtenant or assignee to Tenant or
Tenant’s agents provided that Tenant shall be entitled to deduct from the sum of (1) and (2) an
amount equal to Tenant’s actual reasonable out of pocket expenses paid to third parties in
connection with the assignment or sublease including construction, commission and legal expenses.
The foregoing is in consideration of additional management performed or to be performed by
Landlord under such sublease or assignment. In addition to the foregoing, Landlord may charge
Tenant a one-time fee equal to one month’s lease rental for such additional administrative,
investigative, and management services. Violation of this lease by subtenants or assignees shall
be deemed a violation by Tenant. Approval by Landlord of any sublease or assignment shall not
release Tenant from any obligation under this lease and shall not constitute approval for
subsequent subletting or assignment. Subtenants or assignees shall be liable for all of Tenant’s
obligations under this lease unless otherwise specified in writing. Upon default by Tenant any
subtenant shall pay all sublease rentals and other sums due Landlord, direct to

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Landlord, to be credited against sums owed to Landlord by Tenant under this lease. Unless otherwise
agreed in writing, no sublease or assignment shall be valid unless (1) a copy of this lease is
attached thereto, (2) the subtenant or assignee agrees in writing to be liable for all of Tenant’s
obligations under this lease, and (3) Landlord’s written approval is attached to the sublease or
assignment.

16.1. DESTRUCTION BY FIRE OR OTHER CASUALTY. (a) Total destruction, rent abatement, and
restoration. If Tenant’s Office Space is totally damaged by fire or other casualty so that it cannot reasonably be
used by Tenant and if this lease is not terminated as provided in subparagraph (d) below, there
shall be a total abatement of Tenant’s rent and Tenant’s obligation to pay Office Building
Operating Expenses until Tenant’s Office Space is restored by Landlord and Tenant.

(b) Partial destruction, rent abatement, and restoration. If Tenant’s Office Space is partially
destroyed or damaged by fire or other hazard so that it can be only partially used by Tenant for
the purposes allowed in this lease and if this lease is not terminated as provided in subparagraph
(d) below, there shall be a partial abatement of Tenant’s rent and Tenant’s obligation to pay
Office Building Operating Expenses which fairly and reasonably corresponds to the time and extent
to which Tenant’s Office Space cannot reasonably be used by Tenant.

(c) Restoration. Landlord’s obligation to restore shall be limited to the condition of the Leased
Premises as constructed by Landlord or as otherwise delivered to Tenant by Landlord on the
commencement date . Landlord shall proceed with diligence to restore the Leased Premises to its
condition on the commencement date. Landlord shall not be liable for or responsible for repair or
replacement of furniture, fixtures or equipment placed on the Leased Premises by Tenant. During
restoration, Tenant shall continue business to the extent practical in Tenant’s reasonable
judgment. Notwithstanding the foregoing, in the event any mortgagee under a deed of trust, security
agreement or mortgage on the Office Building should require that any insurance proceeds be used to
retire mortgage debt, Landlord shall not be required to rebuild and this Lease shall terminate
effective on the date of such casualty.

(d) Lease termination. If Tenant’s Office Space or the Office Building is so badly damaged that
restoration and repairs cannot be completed within one hundred eighty (180) days after the fire or
casualty, then this lease may be terminated by Landlord or Tenant as of the date of the destruction
by Landlord by serving written notice upon the other party. Termination notice must be delivered
within 30 days after the casualty. In the event neither Landlord nor Tenant elects to terminate the
Lease, Landlord shall be obligated to restore the Leased Premises pursuant to subparagraph (c)
above.

17.1. CONDEMNATION. If any part of Tenant’s Office Space is taken by condemnation or by deed in
lieu of condemnation by any governmental authority, this lease shall terminate one day prior to
such taking. If any part of the Office Building’s parking building is so taken, Tenant’s right to
use such portion shall terminate one day prior to such taking; and Tenant’s rent shall be reduced
only to the extent that such partial taking reduces the fair market value of Tenant’s Office
Space. Landlord shall pay all costs associated with construction reasonably necessary to render
the Leased Premises usable for Tenant’s permitted purposes after such partial taking. All
compensation awarded for any partial or total taking of the Property shall be the property of
Landlord. If Landlord has received written notice of intent to condemn, Tenant shall upon ten (10)
days written request by Landlord execute an acknowledgement that the lease terminates one day
prior to the condemnation or deed in lieu of condemnation and that Tenant claims no interest in
the condemnation award. Landlord shall have no interest in any monies paid by the condemning
authorities to Tenant for Tenant’s leasehold estate, moving costs or for the other personal
property within the Leased Premises (excluding leasehold improvements) if a separate award for
such items is made to Tenant.

18.1. DEFAULT BY LANDLORD. If Landlord fails to perform any of its obligations hereunder within
thirty (30) days following written notice from Tenant specifying such failure, or if such failure
cannot reasonably be cured within said thirty (30) days and Landlord fails to diligently prosecute
the curing of such failure until completion, then Tenant’s exclusive remedy shall be an action for
damages.

19.1. DEFAULT BY TENANT. If Tenant defaults, Landlord shall have any or all remedies set forth
below.

(a) Definition of default. The occurrence of any of the following shall constitute a default by
Tenant: (1) failure to pay rent or any other sum due by Tenant under this lease; (2) failure to
vacate on or before the last day of the lease term, renewal term, or extension period; (3) failure
to pay rent in advance on a daily basis in the event of unlawful holdover by Tenant; (4)
unauthorized early move-out or notice of same as set forth below; (5) acquisition of Tenant’s
interest

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in the lease by a third party by judicial or non-judicial process; or (6) failure to comply with
any other provision of the lease (including rules). However, Tenant shall not be in default under
subclause (6) above if Tenant promptly commences to cure such noncompliance and diligently proceeds
in good faith to cure same after receiving written notice of such default.

(b) Door Locks. If Tenant is in default for nonpayment of rent or other sums due and if Tenant
fails to pay same in full within three (3) days after Landlord delivers to Tenant or to Tenant’s
Office Space written demand or notice of nonpayment, then Landlord shall be entitled to change or
modify door locks on all entry doors of Tenant’s Office Space until all such sums are paid in full;
provided, however, Landlord shall immediately thereafter post a notice on the primary entry door to
Tenant’s Office Space, stating that Landlord has expressed such lockout rights. No other notice
requirements or lockout laws shall apply. Landlord’s right to modify or change locks shall occur
automatically and without notice if Tenant’s rent is accelerated under subparagraph (e) below,
relating to unlawful early move-out. If Tenant moves out or abandons Tenant’s Office Space for ten
(10) consecutive days, Landlord may permanently change the locks without notice to Tenant, and
Tenant shall not be entitled to a key or to reentry.

(c) Utilities and services. If Tenant is in default for nonpayment of rent or other sums due and if
Tenant fails to pay same in full within three (3) days after Landlord hand delivers to Tenant or to
Tenant’s representative written notice of Landlord’s intent to terminate utilities or services
which are furnished by Landlord, then Landlord may terminate such utilities or services after such
three (3) day notice period, without further notice. Landlord’s right to terminate such utilities
or services shall occur automatically and without notice if Tenant’s rent is accelerated under
subparagraph (e) below, relating to unlawful early move-out.

(d) Acceleration after notice of rental delinquency. If Tenant is in default for nonpayment of rent
or other sums due and if Tenant fails to pay same in full within three (3) days after Landlord
delivers to Tenant or to Tenant’s Office Space a written notice of Landlord’s intent to accelerate,
then all rent for the remainder of the lease term shall be accelerated, due, and delinquent at the
end of such three (3) day notice period without further demand or notice. Such acceleration rights
are in consideration of the rentals for the entire term being payable in monthly installments
rather than in one lump sum at the beginning of the lease term. If Tenant has already vacated the
Leased Premises, notice of acceleration may be delivered to Tenant pursuant to paragraph 29.1.
Liability for additional rents accruing in the future (over and above any Base Rents) shall not be
waived by such acceleration.

(e) Acceleration upon early move-out. If Tenant is lawfully evicted, or if Tenant moves out or
gives verbal or written notice (in person or by an employee or agent) of intent to move-out prior
to the end of the lease term without the rent being paid in full for the entire remainder of the
lease term or renewal or extension period or without prior written consent of Landlord, all
remaining rents for the remainder of the lease term shall be accelerated immediately and
automatically, without demand or notice. Such accelerated rents shall be due and delinquent without
notice before or after such acceleration. Such acceleration shall occur even if the rent for the
current month has been paid in full.

(f) Termination of possession. If Tenant is in default as defined in subparagraph (a) above and if
Tenant remains in default for three (3) days after Landlord gives notice of such default to Tenant,
or if Tenant abandons the Leased Premises, Landlord may (with or without demand for performance)
terminate Tenant’s right of possession by giving one day’s written notice to vacate; and Landlord
shall be entitled to immediate possession without termination of Tenant’s obligations under the
lease. Landlord’s repossession shall not be considered an election to terminate this lease unless
written notice of such intention to terminate is given to Tenant by Landlord. Repossession may be
by voluntary agreement or by eviction lawsuit. Commencement of an eviction lawsuit shall not
preclude other Landlord remedies under this lease or other laws.

(g) Reletting costs. if Tenant is in default as defined in subparagraph (a) above and if Landlord
terminates Tenant’s right of possession without terminating this lease, Tenant shall pay upon
Landlord’s demand the following: (1) all costs of reletting (which in no event shall be less than
one month’s rent), including leasing commissions, rent concessions (whether in the form of assuming
or buying out lease remainders elsewhere, free rent for a period of time, or reduced rental rates),
utilities during the vacancy, advertising costs, administrative overhead, and all costs of repair,
remodeling, or redecorating for replacement tenants in Tenant’s Office Space, (2) all rent and
other indebtedness due from Tenant to Landlord through the date of termination of Tenant’s right of
possession, and (3) all rent and other sums required to be paid by Tenant during the remainder of
the entire lease term, subject to the acceleration paragraphs above.

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(h) Termination of Lease. Landlord may terminate this lease (as contrasted to termination of
possession rights only) upon default by Tenant or at any time after Landlord’s lawful re-entry or
repossession following default by Tenant. Landlord’s agents have authority to terminate the Lease
only by written notice given pursuant to paragraph 29.1.

(i) Re-Entry, Waiver and Damages. No re-entry or taking possession of the Leased Premises by
Landlord shall be construed as an election on its part to terminate this lease, unless a written
notice of such intention is given to Tenant. Notwithstanding any such reletting or re-entry or
taking possession, Landlord may at any time thereafter elect to terminate this lease for a
previous default. Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law, nor shall pursuit of any
remedy herein provided constitute a forfeiture or waiver of any rent due to Landlord hereunder or
of any damages occurring to Landlord by reason of the violation of any of the terms, provisions
and covenants herein contained. Landlord’s acceptance of rent following an event of default
hereunder shall not be construed as Landlord’s waiver of such event of default. No waiver by
Landlord of any violation or breach of any of the terms, provisions and covenants herein contained
shall be deemed or construed to constitute a waiver of any other violation or default. The loss or
damage that Landlord may suffer by reason of termination of this lease or the deficiency from any
reletting as provided for above shall include the expense of repossession and any repairs or
remodeling undertaken by Landlord following repossession. Should Landlord at any time terminate
this lease for any default, in addition to any other remedy Landlord may have, Landlord may
recover from Tenant all damages Landlord may incur by reason of such default, including the cost
of recovering the Leased Premises and the loss of rental for the remainder of the lease term.
Landlord shall have no obligation to mitigate damages, except for as required by Texas law.

20.1. LIEN FOR RENT. Tenant gives to Landlord a contractual lien on all of Tenant’s property which
may be found on the Leased Premises to secure payment of all monies and damages owed by Tenant
under the Lease. Such lien also covers all insurance proceeds on such property. Tenant shall not
remove such property while rent or other sums remain due and unpaid to Landlord and such property
shall not be removed until all Tenant’s obligations under the Lease have been complied with. This
lien is in addition to Landlord’s statutory lien under Section 54.021 of the Texas Property Code.
If Tenant is in default for nonpayment of rent or any other sums due by Tenant, Landlord’s
representatives may peacefully enter the Leased Premises and remove and store all property. If
Landlord removes any property under this lien, Landlord shall leave the following information in a
conspicuous place inside Tenant’s Office Space: (1) written notice of exercise of lien, (2) a list
of items removed, (3) the name of Landlord’s representative who removed such items, and (4) the
date of such removal. Landlord shall be entitled to reasonable charges for packing, removing, or
storing abandoned or seized property, and may sell same at public or private sale (subject to any
properly recorded chattel mortgage or recorded financing statement) after 30 days’ written notice
of time and place of sate is given to Tenant by certified mail, return receipt requested. Upon
request by Landlord, Tenant shall acknowledge the above lien rights by executing a UCC-1 form or
similar form reflecting same. Upon Tenant’s request Landlord shall subordinate its liens against
Tenant’s property to a third party lien holder with a first lien against such property.

21.1. ATTORNEY’S FEES, INTEREST, AND OTHER EXPENSES. If Tenant or Landlord is in default and if
the nondefaulting party places the Lease in the hands of an attorney in order to enforce lease
rights or remedies, the nondefaulting party may recover reasonable attorney’s fees from the
defaulting party even if suit has not been filed. In any lawsuit enforcing lease rights, the
prevailing party shall be entitled to recover reasonable attorney’s fees from the nonprevailing
party, plus all out-of-pocket expenses. Ail delinquent sums due by Landlord or Tenant shall bear
interest at the maximum lawful rate of interest, compounded annually, from date of default until
paid, plus any late payment fees. Late payment fees as set forth in paragraph 3.2 shall be
considered reasonable liquidated damages for the time, trouble, inconvenience, and administrative
overhead expense incurred by Landlord in collecting late rentals, such elements of damages being
uncertain and difficult to ascertain. Late payment fees shall not be liquidated damages for
attorney’s fees or for Landlord’s loss of use of such funds during the time of delinquency.

22.1. NONWAIVER. The acceptance of monies past due or the failure to complain of any action,
nonaction, delayed payment, or default, whether singular or repetitive, shall not constitute a
waiver of rights or obligations under the Lease. Landlord’s or Tenant’s waiver of any right or any
default shall not constitute waiver of other rights, violations, defaults, or subsequent rights,
violations, or defaults under this Lease. No act or omission by Landlord or Landlord’s agents
shall be deemed an acceptance of surrender by Tenant of the Leased Premises, and no agreement by
Landlord to accept a surrender of the Leased Premises shall be valid unless it is in writing and
signed by a duly authorized agent of Landlord.

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23.1. COMPLIANCE WITH LAWS. Landlord and Tenant shall each comply with all laws, ordinances, rules
and regulations (state, federal, municipal and other agencies or bodies having any jurisdiction
hereof, relating to the use, condition or occupancy of the Office Building and the Leased
Premises.) If the Americans With Disabilities Act of 1990 (the “ADA”) now or hereafter applies to
the Leased Premises, Tenant will, at its sole cost and expense, be responsible for (a) complying
with all aspects of the ADA governing design or construction of any improvements or alterations to
the Leased Premises now or hereafter made by Tenant and (b) comply with all other aspects of the
ADA applicable to Tenant’s business upon the Leased Premises. If the ADA now or hereafter applies
to the Office Building of which the Leased Premises are a part, Landlord shall, at its sole cost
and expense, be responsible for (i) compliance with all aspects of the ADA governing design or
construction of any improvements or alterations to the Office Building (other than the Leased
Premises) now or hereafter made by Landlord, and (ii) compliance with all other aspects of the ADA
applicable to the Office Building (other than the Leased Premises). Each party (for purposes of
this paragraph (“Indemnitor”) hereby agrees to indemnify and hold harmless and defend the other,
its directors, officers, employees, volunteers, and agents from and against any and ail claims,
suits, damages, fines, penalties, liabilities, and expenses (including reasonable attorneys’ fees
and other related charges of outside counsel) resulting from or arising out of or in connection
with any failure by the Indemnitor to comply with its obligations pursuant to this paragraph. In
the event either party fails to comply with the provisions of this Section 23.1 and such failure
continues for a period of thirty (30) days following delivery of written notice from the other
party, such failure shall constitute an event of default under this Lease, but shall not entitle
the non-defaulting party to pursue any special cause of action, remedies or damages under the ADA.

23.2 COMPLIANCE WITH RULES OF OFFICE BUILDING. Tenant will comply with the rules of the Office
Building adopted by Landlord which are set forth in Exhibit F-2 attached hereto. Separate parking
rules are contained in Exhibit F-1. Landlord shall have the right, if necessary, to change such
rules and regulations or amend them in any reasonable manner and for preservation of good order
therein, all of which changes and amendments will be sent by Landlord to Tenant in writing and
shall be thereafter carried out and observed by Tenant. Tenant shall further be responsible for
the compliance with such rules and regulations by its employees, servants, authorized agents,
visitors and invitees.

24.1. TRANSFER OF OWNERSHIP BY LANDLORD. If Landlord transfers ownership of the Property (other
than as security for a mortgage) and if Landlord has delivered to the transferee all of Tenant’s
security deposits and any prepaid rents, Landlord shall be released from all liability under the
Lease; and such transferee shall become liable as Landlord. Such right to be released of liability
shall accrue to subsequent owners only if such transfer is in good faith and for consideration.

25.1. GROUND LEASES; MORTGAGES. (a) This Lease is subject and subordinate to all present and
future ground and underlying leases of the Property and to the lien of any mortgages or trust
deeds, now or hereafter enforced against the Property, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made or hereafter to
be made upon the security of such mortgages or trust deeds. Tenant shall simultaneously with the
execution hereof execute a Subordination, Non-Disturbance and Attornment Agreement in the form
attached hereto as Exhibit L. In the event of execution by Landlord after the date of this Lease
of any mortgage, deed of trust, security instrument, ground or primary lease, renewal, replacement
or extension, Tenant agrees to execute a Subordination, Non-Disturbance and Attornment Agreement
with the holder thereof in the form attached hereto as Exhibit L.

     This Lease is further subject and subordinate to: (x) all applicable ordinances of the city
of San Antonio and all easements, franchises, and other interests or rights upon, across or
pertinent to the Property; and (y) all utility easements and agreements.

(b) Notwithstanding the generality of the foregoing provisions of paragraph 25.1 (a) above, any
such mortgagee or ground or primary lessor shall have the right at any time to subordinate any
such ground or primary leases or such deeds of trusts, mortgages or other security instruments to
this Lease on such terms and subject to such conditions as such ground or primary lessor or such
mortgagee may consider appropriate in its discretion. At any time, before or after the institution
of any proceedings for the foreclosure of any such deed of trusts, mortgages or any other security
instruments or sale of the Property under any such deeds and trusts, mortgages, or other security
instruments, or termination of any ground or primary lease, Tenant shall attorn to such ground or
primary lessor or such purchaser upon any sale or the grantee under a deed in lieu of foreclosure
and shall recognize any such ground or primary lessor, purchaser or grantee as Landlord under this
Lease. The agreement of Tenant to attorn contained in the immediately

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preceding sentence shall survive any such termination of ground or primary lease, foreclosure sale,
trustee sale or conveyance in lieu thereof. Tenant shall upon demand at any time, before or after
such termination of ground or primary lease, foreclosure sale, trustee sale or conveyance in lieu
thereof, execute, acknowledge and deliver to Landlord’s mortgagee or the ground or primary lessor
as, the case may be, any written instruments or certificates evidencing such attornment as
Landlord’s mortgagee or ground or primary lessor may be reasonably require.

26.1. SURRENDER OF PREMISES. When Tenant moves out, Tenant shall surrender Tenant’s Office Space
in the same condition as on the date of lease commencement by Tenant (as changed or improved from
time to time in accordance with this lease), less ordinary wear and
shall return all keys and/or
access cards. Removal of property from the Leased Premises is subject to paragraph 14.1 above.

27.1. HOLDING OVER. If Tenant remains in possession of the Leased Premises after the expiration or
mutually-agreed termination date of the Lease, without the execution by Landlord and Tenant of a
new lease or a renewal or extension of the Lease, then (1) Tenant shall be deemed to be occupying
the Leased Premises as a tenant-at-sufferance on a daily basis, subject to all obligations of the
Lease, (2) Tenant shall pay rent daily for the entire holdover period at a daily rate equal to
175% of the last monthly payment of Base Rent plus Additional Rent divided by thirty (30), (3)
Tenant shall be subject to all other remedies of Landlord as provided in paragraph 19.1, (4)
Tenant shall indemnify Landlord and/or prospective tenants for damages, including lost rentals,
storage expenses, and attorney’s fees, and (5) at Landlord’s sole option, Landlord may extend the
Lease term for a period of one month at the then current rental rates for the Office Building, as
reasonably determined by Landlord, by delivering written notice to Tenant or to Tenant’s Office
Space while Tenant is holding over. Holdover rents shall be immediately due on a daily basis and
delinquent without notice or demand; and the prior written notice and waiting period requirements
of this Lease shall not be necessary in order for Landlord to exercise remedies thereunder.

28.1. SIGNS AND BUILDING NAME. Except for standard suite signage and Office Building directory
listings, there shall be no signs, symbols, or identifying marks on or in the Office Building,
halls, elevators, staircases, entrances, parking areas, landscape areas, doors, walls, or windows
without prior written approval of Landlord. All signs or lettering shall conform to the sign and
lettering criteria established by Landlord. Unless otherwise stated in the rules, suite signage and
Office Building directory changes shall be done exclusively by Landlord and at Tenant’s expense.
Landlord may remove all unapproved signs without prior notice to Tenant and at Tenant’s expense.
Landlord may at any time change the name of the Office Building upon fifteen (15) days’ written
notice to Tenant.

28.2. TENANT FINANCIAL STATEMENTS. Prior to execution of the Lease and thereafter from time to time
(but not more frequently than two (2) times per twelve (12) month period), Tenant shall, upon
written request, furnish to Landlord a current statement of Tenant’s financial condition in a form
reasonably satisfactory to Landlord. All financial statements shall be originally signed by Tenant
or Tenant’s certified public accountant. Tenant may satisfy the requirements of this Section 28.2
by providing Landlord with a copy of Tenant’s financial statements for Tenant’s most recently ended
fiscal year.

29.1. NOTICES. Whenever notice is required or permitted under this lease, such notice shall be in
writing and shall be either (a) delivered personally to the party being notified, (b) delivered to
or inside such party’s mailing address, or (c) delivered at such party’s mailing address by
certified mail, return receipt requested, postage prepaid. The mailing address of Landlord shall
be the address to which Tenant normally mails or delivers the monthly rent unless Landlord
notifies Tenant of a different address in writing. The mailing address of Tenant shall be Tenant’s
Office Space under this lease. However, if Tenant moves out, it shall be Tenant’s last address
known by Landlord. Hand delivered notice is required only when expressly required in the Lease.
Notice by noncertified mail is sufficient if actually received by the addressee or an employee or
agent of addressee. The term “notice” shall be inclusive of notices, billings, requests, and
demands.

30.1. ESTOPPEL CERTIFICATES. From time to time, upon seven (7) days’ prior written request from
Landlord, Tenant shall execute and deliver to Landlord the estoppel certificate attached as
Exhibit G. The form in Exhibit G may be changed as reasonably required by a prospective purchaser
or lender. If any statement in the estoppel certificate form is contrary to the facts existing at
the time of execution of such form, Tenant may correct same before signing. The estoppel
certificate may be conclusively relied upon by Landlord and by any prospective lienholder or
purchaser of the Leased Premises. If Tenant fails to comply with the foregoing by the end of such
seven (7) day period, it shall be conclusively presumed that (1) this Lease is in full force and
effect without any subleases or assignments and is

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unamended or modified except for amendments verified by affidavit of Landlord to the prospective
lienholder or purchaser, (2) no rents, or other charges except for security deposits, have been
prepaid, (3) the statements contained in the estoppel certificate form (Exhibit G) are correct, (4)
there are no uncured defaults by Landlord, (5) Tenant has no right of offset or rescission, and (6)
any prospective purchaser or lienholder may conclusively rely on such silence or noncompliance by
Tenant and may conclusively assume no Landlord defaults within the 120 days preceding Tenant’s
receipt of Landlord’s request for an estoppel certificate.

31.1. SUCCESSORS. This Lease shall bind and inure to the benefit of the parties, any guarantors of
this Lease, and their respective successors and assigns.

31.2. LEASING AGENT COMMISSIONS. No leasing commission shall be due by Landlord to any leasing
agent unless in writing. Commission agreements executed by Landlord shall be binding on subsequent
Property owners if the tenant of the Lease in question is in possession at the time of transfer of
Property ownership.

32.1. BUILDING OPERATING EXPENSES. In addition to the monthly Base Rent in paragraph 2.1, Tenant
shall pay Additional Rent on a monthly basis, equivalent to Tenant’s prorata share of actual
Office Building Operating Expenses as per Exhibit C.

33.1. REPRESENTATIONS AND WARRANTIES BY LANDLORD. Landlord warrants that Landlord has full right
to enter into this Lease. Landlord’s duties and warranties are limited to those expressly stated
in this Lease and shall not include any implied duties or implied warranties, now or in the
future. No representations or warranties have been made by Landlord other than those expressly
contained in this Lease.

34.1. REPRESENTATIONS AND WARRANTIES BY TENANT. Tenant warrants to Landlord that (1) the financial
statements of Tenant heretofore furnished to Landlord are true and correct to the best of Tenant’s
knowledge, (2) there has been no significant adverse change in Tenant’s financial condition since
the date of the financial statements, (3) the financial statements fairly represent the financial
condition of Tenant upon those dates and at the time of execution hereof, (4) there are no
delinquent taxes due and unpaid by Tenant, and (5) Tenant and none of the officers or partners of
Tenant (if Tenant is a corporation or partnership) have ever declared bankruptcy. Tenant warrants
that Tenant has disclosed in writing to Landlord all lawsuits pending or threatened against
Tenant, and Tenant has made no material misrepresentation or material omission of facts regarding
Tenant’s financial condition or business operations. All financial statements must be dated and
signed by Tenant or Tenant’s certified public accountant. Tenant acknowledges that Landlord has
relied on the above information furnished by Tenant to Landlord and that Landlord would not have
entered into this lease otherwise.

35.1. PLACE OF PERFORMANCE. Unless otherwise expressly stated in this lease, all obligations under
this lease, including payment of rent and other sums due, shall be performed in San Antonio,
Texas, at the address designated from time to time by Landlord.

36.1. MISCELLANEOUS. This Lease contains the entire agreement of the parties. No other written or
oral promises or representations have been made, and none shall be binding. This Lease supersedes
and replaces any previous Lease between the parties on Tenant’s Office Space, including any
renewals or extensions thereunder. Except for reasonable changes in written rules, this Lease
shall not be amended or changed except by written instrument, signed by both Landlord and Tenant,
Landlord’s agents do not and will not have authority to (1) make exceptions, changes or amendments
to this Lease, or factual representations not expressly contained in this Lease, (2) waive any
right, requirement, or provision of this Lease, or (3) release Tenant from all or part of this
Lease, unless such action is in writing. Multiple tenants shall be jointly and severally liable
under this Lease. Notices, requests, or agreements to, from, or with one of multiple tenants shall
be deemed to be to, from, or with all such Tenants. Under no circumstances shall Landlord or
Tenant be considered an agent of the other. The Lease shall not be construed against either party
more or less favorably by reason of authorship or origin of language. Texas law applies. If any
date of performance or exercise of a right ends on a Saturday, Sunday, or state holiday, such date
shall be automatically extended through the next business day. Time is of the essence; and all
performance dates, time schedules, and conditions precedent to exercising a right shall be
strictly adhered to without delay except where otherwise expressly provided, if any provision of
this Lease is invalid under present or future laws, the remainder of this Lease shall not be
affected.

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37.1. GUARANTY. This Lease is not guaranteed by others. The names and titles of any guarantors are
shown on the signature page(s) at the end of this Lease. The specific obligations of such
guarantors, if any, shall be pursuant to attached Exhibit H entitled “Lease Guaranty”. Such
guaranty shall continue and shall be unaffected by any modification or amendment to this lease or
any renewal or extension thereof. The signature requirements and corporate resolution requirements
for any guarantors shall conform to the requirements for Tenants in
paragraph 39.1 below.

37.2. SPECIAL CONDITIONS. Additional provisions of this lease are set forth in Exhibit “J”.

38.1. EXHIBIT LIST. The exhibits attached to this lease are listed below. All exhibits are a part
of this lease except for those which have been lined out or which have been shown below as
omitted.

	 	 	 	 	 
	 

	 	Exhibit A
	 	Floor Plan of Tenant’s Office Space (paragraph 1.1)
	 
	 	 	 	 
	 

	 	Exhibit B
	 	Legal Description of Office Building (paragraph 1.1)
	 
	 	 	 	 
	 

	 	Exhibit C
	 	Building Operating Expense Passthrough Calculations (paragraphs 2.1 and 32.1)
	 
	 	 	 	 
	 

	 	Exhibit D
	 	Acknowledgement of Lease (paragraph 4.2)
	 
	 	 	 	 
	 

	 	Exhibit E
	 	Construction by Landlord (paragraph 5.1)
	 
	 	 	 	 
	 

	 	Exhibit F-1
	 	Parking Rules (paragraphs 9.2 and 23.1)
	 
	 	 	 	 
	 

	 	Exhibit F-2
	 	Building Rules (paragraph 23.1)
	 
	 	 	 	 
	 

	 	Exhibit G
	 	Estoppel Certificate (paragraph 30.1)
	 
	 	 	 	 
	 

	 	Exhibit H
	 	Diagram depicting location of Tenant’s reserved parking spaces (paragraph 9.2)
	 
	 	 	 	 
	 

	 	Exhibit I
	 	Corporate Resolution Authorizing Lease or Guaranty (paragraphs 37.1 and 39.1)
	 
	 	 	 	 
	 

	 	Exhibit J
	 	Special Conditions (paragraph 37.2)
	 
	 	 	 	 
	 

	 	Exhibit K
	 	Plans and Specifications for improvements to Tenant’s Office Space (Exhibit E)
	 
	 	 	 	 
	 

	 	Exhibit L
	 	Subordination, Non-Disturbance and Attornment Agreement (paragraph 25.1)
	 
	 	 	 	 
	 

	 	Exhibit M
	 	Cleaning Specifications (paragraph 7.1(c))

39.1.TENANT SIGNATURE REQUIREMENTS. Tenant is a corporation. Such corporation is organized or chartered
under the laws of the State of TEXAS. Tenant’s name
stated at the beginning of this Lease (__) is or (X) is
not an assumed name. If so, an assumed name certificate has been or will be filed by Tenant in
Bexar County, Texas or with the Texas Secretary of State’s Office in Austin, Texas, whichever is
appropriate. Tenant shall disclose to Landlord the names and addresses of all partners or venturers
of Tenant if Tenant is a partnership or joint venture. If Tenant or Guarantor is a corporation,
corporate resolutions shall be executed on the form in Exhibit I.

39.2. LEASE DATE AND AUTHORITY TO SIGN. This lease has been executed effective this                      day of
                    , 1997. The names and signatures of all parties are shown below; and ail persons signing have
been duly authorized to sign.

	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 
	 	 	MEDICAL PLAZA PARTNERS, LTD.,
	 	 	a Texas limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	ORION PARTNERS MEDICAL PLAZA, LTD.,
	 	 	 	 	a Texas limited partnership, its General Partner
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	ORION PARTNERS, INC., a Texas
	 	 	 	 	 	 	corporation, its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ [ILLEGIBLE]
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: [ILLEGIBLE]
	 

	 	 	 	 	 	 	 	Title: SR. V.P.
	 
	 	 	 	 	 	 	 	 
	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	 	 	PAN AMERICAN ACCEPTANCE CORPORATION
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Don Cangelosi
	 	 	 	 	 
	 	 	Name:	 	Don Cangelosi
	 	 	Title:	 	 PRESIDENT

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EXHIBIT A

(Page 1 of 2 Pages)

FLOOR PLAN OF TENANT’S OFFICE SPACE

(see paragraph 1.1 of lease)

The parties agree that the floor plan below is a true and correct diagram of Tenant’s office space
referred to in paragraph 1.1. and reflects 17,082 square feet of Rentable Area and 15,324
square feet of Usable Area.

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EXHIBIT A

(Page 2 of 2 Pages)

FLOOR PLAN OF TENANT’S OFFICE SPACE

(see paragraph 1.1 of lease)

The parties agree that the floor plan below is a true and correct diagram of Tenant’s office space
referred to in paragraph 1.1. and reflects 17,082 square feet
of Rentable Area and 15,324
square feet of Usable Area.

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EXHIBIT
B

LEGAL DESCRIPTION OF OFFICE BUILDING

by lot, block, subdivision, and county or

by metes and bounds description

(See paragraph 1.1 of lease)

ALL THAT CERTAIN PARCEL OR TRACT OF LAND OUT OF THE MANUEL TEJEDA
SURVEY NO. 89, CITY OF SAN ANTONIO, BEXAR COUNTY, TEXAS; BEING A
PORTION OF LOT 1, BLOCK 1, N.C.B. 17108, OAK HILLS PARK, UNIT 10, A
SUBDIVISION AS RECORDED IN VOLUME 9100, PAGE 228 OF THE DEED AND
PLAT RECORDS OF BEXAR COUNTY, TEXAS; SAID LOT 1 BEING CONVEYED TO
REALTY ALLIANCE OF TEXAS, LTD., MBANK WACO AND MBANK CORPUS CHRISTI
BY AGREEMENT REGARDING CO-OWNERSHIP OF REAL PROPERTY AS RECORDED IN
VOLUME 4724, PAGE 347 OF THE OFFICIAL PUBLIC RECORDS OF REAL
PROPERTY OF BEXAR COUNTY, TEXAS; AND BEING MORE PARTICULARLY
DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

          BEGINNING at a 1/2” iron rod found on the northwest right-of-way line of John Smith Drive at
the most easterly corner of the above-described Lot 1 for the most easterly corner and POINT OF
BEGINNING of the herein described parcel;

          THENCE, with the northwest right-of-way line of John Smith Drive, S41 °53’58“W a distance of
266.79 feet to a 100D nail set for the most southerly corner of this parcel;

          THENCE, five (5) feet southwest of and parallel to the southwest edge of a concrete wall and
extension thereof, N48°05’50“W a distance of 297.42 feet to a 100D nail set for an inside corner
of this parcel;

          THENCE, five (5) feet southeast of and parallel to the southeast curb of an asphalt parking
area, S41 °56’43“W a distance of 72.19 feet to a 10OD nail set for an outside corner of this
parcel;

          THENCE, five (5) feet southwest of and parallel to the southwest curb of an asphalt parking
area, N47°58’04“W a distance of 180.32 feet to a 100D nail set for an inside corner of this
parcel;

          THENCE, five (5) feet southeast of and parallel to the southeast curb of an asphalt drive,
S41°49’45“W a distance of 262.89 feet to a 100D nail set on the northeast right-of-way line of
Babcock Road for an outside corner of this parcel;

          THENCE, with the northeast right-of-way line of Babcock Road, N48°16’08“W a distance of 35.77
feet to a 100D nail set for an outside corner of this parcel;

          THENCE, five (5) feet northwest of and parallel to the northwest curb of an asphalt drive,
N41 °54’16“E a distance of 263.08 feet to a 100D nail set for an inside corner of this parcel;

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          THENCE, five (5) feet southwest of and parallel to the southwest curb of an asphalt
parking area and extension thereof, N47°58'04"W a distance of 157.66 feet to a 100D nail set on
the northwest line of said Lot 1, for the most westerly corner of this parcel;

          THENCE, with the northwest line of said Lot 1, N41 °52'56"E a distance of 338.48 feet to a
1/2" rod found for the most northerly corner of this parcel;

          THENCE, with the northeast line of said Lot 1, S48°04'07"E a distance of 670.98 feet to the
POINT OF BEGINNING, and containing 4.942 acres of land, more or less; and including

A 2.555-ACRE (111,274 SQUARE FEET) TRACT OF LAND OUT OF THE
REMAINING PORTION OF LOT 20 N.C.B. 13663, OAK HILLS PARK, UNIT 10,
AS RECORDED IN VOLUME 9100, PAGE 228, DEED AND PLAT RECORDS OF
BEXAR COUNTY, TEXAS, SAID 2.555-ACRE TRACT OF LAND BEING MORE
PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

          BEGINNING
at a found 1/2" iron pin on the northeast right-of-way line of Babcock Road (a
dedicated 110 foot right-of-way) for a corner of this 2.555-acre tract, said corner also being S
45°26'21" E 152.17 feet from the intersection of the southeast right-of-way line of John Smith
Drive (a dedicated 60-foot right-of-way) with the northeast right-of-way line of Babcock Road;

          THENCE, N 41°55'53" E 190.00 feet to a found 1/2" iron pin for a corner of this 2.555-acre
tract, said corner also being the southeast corner of Lot 24, N.C.B. 13663 (ref: Volume 9523, Page
112, Deed and Plat Records of Bexar County, Texas);

          THENCE,
N 48°04'07" W165.00 feet to a found 1/2" iron pin for the northwest corner of this
2.555-acre tract, said corner also being the northeast corner of the aforementioned Lot 24, on
the southeast right-of-way line of John Smith Drive;

          THENCE, N 41 °55'53" E 237.44 feet along the southeast right-of-way line of John Smith Drive
to a found 1/2" iron pin for the northeast corner of this 2.555-acre tract, said point also being
the northwest corner of Lot 19, N.C.B. 13663;

          THENCE, S 48°04'07" E 249.00 feet along the common line of this 2.555-acre tract with the
aforementioned Lot 19, and said point also being the northwest corner of Lot 16, N.C.B. 13663
(ref: Volume 9000, Page 158, Deed and Plat Records) and continuing S 47°58'53" E 151.00 feet
along the common line of this 2.555-acre tract and the aforementioned Lot 16 to a found 1 /2"
iron pin for the southeast corner of this 2.555-acre tract, said corner also being the southwest
corner of Lot 16;

          THENCE, S 41 °55'53" W 237.21 feet to a found 1/2" iron pin for a corner;

          THENCE, N 48°04'07" W 150.00 feet to a found 1/2" iron pin for a corner;

          THENCE, S 41 °55'53" W 193.90 feet to a found 1/2" iron pin on the northeast right-of-way
line of Babcock Road;

          THENCE, 45°26'21" W 85.09 feet along the northeast right-of-way line of Babcock Road to the
POINT OF BEGINNING containing 2.555 acres.

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EXHIBIT C

BUILDING OPERATING EXPENSE PASS THROUGH CALCULATIONS

(see paragraphs 2.1 and 32.1 of lease)

A. In the event that during the term hereof the Office Building Operating Expenses adjusted as
necessary to reflect a 95% occupied Office Building during any Calendar Year shall exceed the
Office Building Operating Expenses during the Base Year adjusted as necessary to reflect a 95%
occupied Office Building, Lessee shall pay in addition to Base Rent as described in Paragraph 2,1
as Additional Rent its Proportionate Share of such excess. Notwithstanding anything to the contrary
in this Lease, Office Building Operating Expenses shall be adjusted upward only with regard to
those components of Office Building Operating Expenses that fluctuate with the occupancy level of
the Office Building, including, without limitation, janitorial services, janitorial supplies, trash
hauling, project maintenance, utilities (including, without limitation, water, sewer, and
electricity), and management fees. The following components of the Office Building Operating
Expenses shall be conclusively deemed not to fluctuate with the occupancy of the Office Building:
property taxes and assessments, amortized capital improvement costs, insurance premiums, pest
control, landscaping services, security services and costs associated with the operation and
maintenance of the parking garage area. Landlord shall be entitled to include any and all other
components of the Office Building Operating Expenses in the upward adjustment if Landlord
reasonably determines that such an inclusion is appropriate based on the relationship of such
components to the occupancy level of the Office Building.

B. As promptly as practical following the close of the Base Year and each Calendar Year thereafter,
Lessor shall furnish to Lessee, in reasonable detail, a schedule of the Office Building Operating
Expenses adjusted as necessary to reflect a 95% occupied Office Building for such year, including
the Base Rent. Failure of Lessee to notify Lessor in writing of any objections to the schedule of
Office Building Operating Expenses within thirty (30) days of receipt of the schedule by Lessee
shall conclusively constitute acceptance by Lessee of such schedule. In the event of a timely
objection by Lessee, Lessee shall have the right, at its expense and reasonable time, to review
Lessor’s Office Building Operating Expense invoices or checks relating to the year for which such
schedule was prepared. Lessor shall cause to be kept books and records showing Office Building
Operating Expenses in accordance with an appropriate system of accounts and accounting practices
consistently maintained. Notwithstanding the foregoing, should Lessor provide Lessee with an
audited schedule of Office Building Operating Expenses certified by an independent certified public
accountant, such schedule of Office Building Operating Expenses shall be deemed final and
conclusive on Lessee.

C. At such time as Lessor delivers the schedule of Office Building Operating Expenses for a year
other than the Base Year, Lessor shall deliver to Lessee a computation notice setting forth:

1) the adjustment for the Additional Rent, if any, due Lessor resulting from the Office
Building Operating Expenses for the immediately preceding Calendar Year (“Lump Sum
Adjustment”);

2) an adjustment in the monthly Base Rent for the current Calendar Year resulting from the
Office Building Operating Expenses for the immediately preceding year (“Catch Up
Adjustment”); and

3) an adjustment in the monthly Base Rent for the current Calendar Year based upon
Landlord’s estimate of the increase in Office Building Operating Expenses for the current
Calendar Year (“Estimate Adjustment”).

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	 	(a)	 	In determining the Lump Sum Adjustment for the immediately preceding
Calendar Year:

	 	(1)	 	a comparison shall be made between the Office
Building Operating Expenses for such Calendar Year and the Office
Building Operating Expenses for the immediately preceding Calendar
Year; and
	 
	 	(2)	 	a credit against the Lump Sum Adjustment
shall be provided Lessee for the Estimate Adjustment, if any, made by
Lessee, attributable to such Calendar Year. Lessee shall pay in full
the Lump Sum Adjustment attributable to the previous Calendar Year
within thirty (30) days from receipt of the computation notice from
Landlord.

	 	(b)	 	In addition to the Lump Sum Adjustment, on the first day for
the payment of a monthly Base Rent installment following the furnishing to
Lessee of the computation notice for the immediately preceding Calendar Year,
Lessee shall pay to Lessor an amount equal to

	 	(1)	 	One-twelfth (1/12) of the Lump Sum Adjustment
(prior credit for the Estimate Adjustment), multiplied by
	 
	 	(2)	 	the number of months of the lease term elapsed
during the current Calendar Year.

	 	(c)	 	Thereafter, commencing with the next due installment of monthly
Base Rent for the current Calendar Year and continuing monthly thereafter,
until a different computation notice is received by Lessee, the monthly Base
Rent shall be increased by

	 	(1)	 	an amount equal to one-twelfth (1/12) of the
Lump Sum Adjustment (prior credit for the Estimate Adjustment, and
	 
	 	(2)	 	the Estimate Adjustment, if any.

D. in the event that Office Building Operating Expenses for a Calendar Year are less than Office
Building Operating Expenses for the immediately preceding Calendar Year, and/or the Lump Sum
Adjustment for any Calendar Year is less than the Estimate Adjustment
for such year, Lessee shall
receive a lump sum payment refunding such excess payments within one hundred twenty (120) days
after the close of the Calendar Year:

E. Definitions:

	 	(1)	 	“Base Year” shall mean Calendar Year 1997;
	 
	 	(2)	 	“Calendar Year” shall mean each calendar year or part thereof during the Term
of this Lease;
	 
	 	(3)	 	“Proportionate Share” shall be the percentage calculated by dividing the
Rentable Area of the Leased Premises by 95% of the Rentable Area of the Office
Building;

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	 	(4)	 	(a) “Office Building Operating Expenses” shall mean Taxes and all cost of operation and
maintenance of the Property of every kind and nature paid or incurred by Lessor in
connection with the ownership, management, operation and repair of the Property, including
but not limited to utility charges, sewerage charges, insurance premiums, management,
janitorial and cleaning services, elevator services, licenses, permits and inspection fees,
heating and cooling, maintenance and repairs, labor and supplies, but not including costs
normally capitalized under generally accepted accounting principles, except for the costs
of capital investment items that (i) are intended to primarily reduce operating costs for
the Leased Premises or the Property as a whole or that (ii) are required by any
governmental authority, provided that the cost of such capital improvements shall be
included in the Office Building Operating Expenses only to the extent of the annual
amortization of such cost over a period equal to the greater of (X) the remaining term of
the Lease or (Y) the useful life of such improvement;
	 
	 	(5)	 	(b) The following are specifically excluded from the definition of Office Building Operating
Expenses:

(i) repairs or other work occasioned by fire, windstorm or other casualty,
the costs of which are reimbursed or reimbursable to Landlord by insurers or by
governmental authorities in eminent domain;

(ii) leasing commissions, attorney’s fees, costs and disbursements and other
expenses incurred in connection with negotiations or disputes with tenants, other
occupants, or prospective tenants or other occupants of the Office Building;

(iii) costs incurred in renovating or otherwise improving or decorating or
redecorating space for tenants or other occupants in the Office Building or vacant
space in the Office Building;

(iv) costs of correcting defects in the construction of the Office Building
(including latent defects in the Office Building) or in the Office Building
equipment, except that for the purposes of this subparagraph, conditions resulting
from ordinary wear and tear and use and not occasioned by construction defects
shall not be deemed defects;

(v) Landlord’s costs of electricity and other services sold to tenants (other than
electricity and other services to the common areas) for which Landlord is entitled
to be reimbursed by tenants (whether or not actually collected by Landlord) as a
separate additional charge or rental;

(vi) costs of a capital nature, including but not limited to, capital repairs,
capital equipment and capital tools all in accordance with generally accepted
accounting principles, consistently applied except as set forth in
subparagraph E(4)(a) above;

(vii) expenses in connection with services or other benefits of a type which are
not building standard but which are provided to another tenant or occupant, and
the excess cost of any work or services performed for a facility furnished to any
tenant of the Office Building to a greater extent or in a manner more favorable to
such tenant than that performed for or delivered to Tenant;

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(viii) costs incurred due to the violation by Landlord or any tenant of the terms and conditions
of any lease pertaining to the Office Building or of any valid, applicable building code,
regulation, or law or incurred due to the Office Building being in violation of any such code,
regulation or law which exists as of the date construction of the Office Building commences;

(ix) overhead and profit increment paid to subsidiaries or affiliates of Landlord for services on
or to the Office Building, to the extent that the costs of such services exceed competitive costs
for such services rendered by persons or entities of similar skill, competence and experience;

(x) interest on debt or amortization payments on any mortgage or mortgages, and rental under any
ground or underlying leases or lease pertaining to the Office Building, parking areas or the land
(except to the extent the same may be made to pay real property taxes);

(xi) costs of Landlord’s general corporate overhead and general administrative expenses, which
would not be chargeable to operating expenses of the Office Building in accordance with generally
accepted accounting principles, consistently applied. However, Tenant acknowledges Landlord’s
right to manage the Office Building and impute management fees to the Office Building Operating
Expenses which fees however, may not exceed five percent (5%) of the gross aggregate rental income
for the Office Building for any given year and Landlord agrees that a management fee of five
percent (5%) of the gross aggregate rental income for the Office Building will be imputed to the
Office Building Operating Expenses for the Base Year;

(xii) any compensation paid to clerks, attendants or other persons in commercial concessions
operated by Landlord;

(xiii) rentals and other related expense, if any, incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a capital nature, except equipment
which is used in providing janitorial and landscaping services and which is not affixed to the
Office Building;

(xiv) all items and services for which Tenant or another tenant reimburses Landlord pursuant to
other provisions of this Lease, or for which Tenant or another tenant pays third persons;

(xv) costs incurred in advertising and promotional activities for the Office Building;

(xvi) costs incurred in installing operating and maintaining any specialty such as an
observatory, broadcasting facility (other than the Office Building’s music system, life support
and security system), luncheon club, athletic or recreation club;

(xvii) any other expenses which, under generally accepted accounting principles, consistently
applied would not be rendered as a normal maintenance or operating expense of the Office
Building other than as set forth in subparaqraph E(4)(a) above;

-4-

 

(xviii) any fee payable to the operator of the parking facilities located within
or connected to the building;

(xix) any costs attributable to electrical consumption in the Office Building by
other tenants, which consumption is in excess of the amounts of allocation of
electrical capacity set out in this Lease for such other tenant space, regardless
of whether such other tenant is actually charged for such excess consumption;

(xx) the cost of removing any hazardous waste or asbestos or of correcting any
other environmental condition existing on the date of this Lease or caused by
Landlord or other tenants in order to comply with any environmental law or
ordinance;

(xxi) the cost of alterations in space for other tenants;

(xxii) income, excess profits or franchise taxes or other such taxes (other than
sales taxes) imposed on or measured by the income of Landlord from the operation
of the Office Building, and charges for Landlord’s income tax, excess profits
tax, franchise tax or similar tax;

(xxiii) Landlord shall apply and use all reasonable efforts to cause the Office
Building to be operated in an efficient and economical manner in keeping with the
usual standard for comparable first-class office buildings in San Antonio, Texas
under similar conditions, to take all reasonable available discounts, to resist
with all reasonable efforts any increases in valuation for ad valorem tax
purposes, and to negotiate with all reasonable efforts any contract for services
or supplies pertaining to the Office Building and its operation. Any discounts or
cost savings resulting from such negotiations shall be passed on to tenants. If
any expenditure relates to any period beyond the then current year (whether the
base year or any subsequent year), the portion of the expenditure attributable to
the then current year shall be allocated in accordance with accepted accounting
principles for the purpose of determining the portion thereof to constitute Office
Building Operating Expenses for the then current year, and allocated to subsequent
year or years upon the same basis for determining Office Building Operating
Expenses for those years;

	 	(6)	 	“Taxes” shall mean all real estate taxes and assessments, special or otherwise, levied or
assessed upon or with respect to the Property and ad valorem taxes
for any personal property
used in connection therewith. Should, by way of substitution, for such real estate taxes and
ad valorem personal property taxes, the State in which the Property is located, or any
political subdivision thereof, or any other governmental authority having jurisdiction over
the Property, impose a tax, assessment, charge or fee, including but not limited to an
income or franchise tax or a tax on rents, all such taxes, assessments, fees or charges
(hereinafter defined as “in lieu Taxes”) shall be deemed to constitute Taxes hereunder.
Taxes may also include all fees and costs incurred by Lessor in seeking to obtain a
reduction of, or a limitation on the increase in, any taxes, regardless of whether any
reduction or limitation is obtained. Except as hereinabove provided with regard to “in lieu
Taxes”. Taxes shall not include any inheritance, estate, succession, transfer, gift,
franchise, net income or capital stock tax. The tax

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	 	 	 	component of the Office Building Operating Expenses shall be established based on
the greater of the following:

(i) the actual 1997 tax for the land, the Office Building, and all parking
areas including the garage and the surface parking lot; or

(ii) the applicable 1997 tax based on an agreed aggregate value of Six
Million Seven Hundred Fifty Thousand and No/100 Dollars ($6,750,000.00) for
the land, the Office Building, the garage and the surface parking lot; or

(iii) on a per square foot basis, the applicable 1997 tax rate based on the
average of the greater of (A) the 1996 assessment or (B) the 1997
assessment, for each of the following buildings:

	 	(a)	 	Kelly Bank Tower, 6100 Bandera
Road (136,603 rentable square feet);
	 
	 	(b)	 	Corporate Square Office Building,
4801 N.W. Loop 410 (190,198 square feet);
	 
	 	(c)	 	8401 Datapoint Building, 8401
Datapoint (152,918 rentable square feet); and
	 
	 	(d)	 	One Data Center, 8415 Datapoint
Drive (147,769 rentable square feet).

F. Any payment to be made pursuant to this Section with respect to the Calendar Year in which the
Lease commences and/or terminates shall be prorated if less than a full year, with such proration
to be calculated on a daily basis. Any obligations of Tenant applicable to the Calendar Year in
which this Lease terminates shall survive the expiration of this Lease.

G. At Lessor’s option, adjustments may be delayed. Lessor’s delay in implementing such adjustments
shall not waive Lessor’s right thereto, and the most recent monthly rental figures shall continue
to be paid during such delay. If Lessor delays in timely calculating adjustments, such adjustments
shall be retroactive to the respective date on which Lessor had a right to make such adjustment;
and such delayed rent adjustments shall become due upon written notice to Lessee.

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EXHIBIT D

ACKNOWLEDGEMENT OF LEASE

(see paragraph 4.2 of lease)

The undersigned parties acknowledge that the Lease described below is in full force and effect and
that Tenant has taken possession of the space.

	 	 	 	 	 
	 

	 	Date of Lease:	 	 
	 

	 	Landlord:
	 	Medical Plaza Partners, Ltd.
	 

	 	Tenant:
	 	Pan American Acceptance Corporation
	 

	 	Guarantor, if any	 	 
	 

	 	(not Tenant’s name):	 	 
	 

	 	Building name:
	 	One Technology Center
	 

	 	Suite No.:
	 	Suites 1400 and 1225
	 

	 	 	 	17,082 square feet Rentable Area;
	 

	 	 	 	15,324 square feet Useable Area; and
	 

	 	 	 	79 parking spaces, of which 55 are unreserved and 24 are
	 

	 	 	 	covered reserved spaces.
	 
	 	 	 	 
	 

	 	Building address:
	 	7411 John Smith Drive
	 

	 	 	 	San Antonio, Texas 78229
	 
	 	 	 	 
	 

	 	Legal description of property:
	 	See Attached Exhibit “B” to the Lease Agreement

The commencement date, annual anniversary date, and ending date of the initial lease term as
defined in paragraph 4.1 of above Lease are as follows:

Commencement date:
 Annual
Anniversary date:

Ending date:

The parties acknowledge that the Lease has not been amended or modified and that this
acknowledgement may be filed of record with the Texas Secretary of State or in Bexar County in
order to record (1) Tenant’s possession rights to the Leased Premises, and (2) Landlord’s
contractual landlord lien rights over all personal property therein. The entire Lease is hereby
affirmed and incorporated herein. The Lease will cease to be an encumbrance to Landlord’s title if
Landlord files an affidavit of record, stating that Tenant no longer occupies the premises and
that Tenant’s right of possession has been lawfully terminated.

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	TENANT	 	 	 	LANDLORD	 	 
	(To be signed at move-in)	 	 	 	(To be signed at move-in)	 	 
	 
	Pan American Acceptance Corporation	 	 	 	Medical Plaza Partners, Ltd., a Texas limited partnership	 	 
	 

	 	 	 	 	 	By:
	 	Orion Partners Medical Plaza, Ltd.,	 	 
	 

	 	 	 	 	 	 	 	a Texas limited partnership, its General Partner	 	 
	 

	 	 	 	 	 	 	 	By: Orion Partners, Inc., a Texas corporation,	 	 
	By:

	 	 	 	 	 	 	 	       its General Partner	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date signed	 	 	 	Date signed	 	 

	 	 	 
	STATE OF TEXAS

	 	§
	 

	 	§
	COUNTY OF BEXAR

	 	§

This instrument was acknowledged before me on                    
            
          
          
             
                 by                                                   
              
                
on behalf of the above stated Landlord and in the above
stated capacity.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Notary Public for the State of Texas	 	 
	 

	 	Printed name of notary:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	My commission expires:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 
	STATE OF TEXAS

	 	§
	 

	 	§
	COUNTY OF BEXAR

	 	§

This instrument was acknowledged before me on                                                              
                    by                                                          
                       
on behalf of the above stated Tenant and in the above stated capacity.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Notary Public for the State of Texas	 	 
	 

	 	Printed name of notary:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	My commission expires:	 	 	 	 
	 

	 	 	 	 	 	 

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EXHIBIT E

CONSTRUCTION BY LANDLORD

(see paragraph 5.1 of lease)

	 	 	 
	Landlord:

	 	Medical Plaza Partners, Ltd.
	Tenant:

	 	Pan American Acceptance Corporation
	Date of lease:
	 	 
	Office space:

	 	Suites 1400 and 1225
	Building name or address:

	 	One Technology Center

1. STANDARD CONSTRUCTION BY LANDLORD. Landlord shall construct and furnish all common facilities,
the building shell, and office finish work as set forth below. All construction work and finish
work and other improvements to the Leased Premises will be performed by Landlord’s employees or
contractors.

2. PLANS FOR TENANT’S OFFICE SPACE. Final plans and specifications approved by both Landlord and
Tenant for improvements to Tenant’s Office Space to be furnished or installed by Landlord are
attached as Exhibit K to this lease and incorporated herein for all purposes (the “Plans”).

3. LANDLORD’S WORK. Landlord, at Landlord’s sole cost, will finish Tenant’s space in
accordance with the Plans (“Landlord’s Work”). All costs of additional finish work in excess of
the work described in the Plans shall be paid by Tenant to Landlord within five (5) days following
delivery of a statement therefor and prior to construction of such improvements. All additional or
nonstandard finish work items must be approved by Landlord’s architect in advance.

4. ESTIMATED COMPLETION DATE. Landlord’s estimated Completion Date for finishing
Landlord’s Work shall be May 1, 1997. If construction pursuant to change orders for
Tenant’s Office Space will cause delay in such estimated completion date and if Landlord and Tenant
mutually note on such change orders that same will cause a specified number of days of delay, the
estimated completion date above shall be extended by such specified number of days. The
“Completion Date” means, the date of substantial completion of the Landlord’s Work in the Leased
Premises in compliance with the following procedures and standards:

     A. When Landlord believes that Landlord’s Work in the Leased Premises has been substantially
completed in accordance with the Plans, Landlord, Tenant, and a representative of Insite
Architects, Inc. shall walk through and observe Landlord’s Work in the Leased Premises. Landlord
shall provide Tenant with at least ten (10) days prior written notice before the estimated date of
the substantial completion of the Landlord’s Work.

     B. Landlord’s Work in the Leased Premises shall be considered substantially completed if they
conform to the Plans and are capable of being occupied for their intended purpose exclusive of
touch-up, minor finish, and similar so-called “punch-list” items that do not unreasonably interfere
with occupancy or Tenant’s business activities. In the event of any dispute between Landlord and
Tenant relating to whether the Landlord’s Work in the Leased Premises is substantially complete, or
relating to what punch-list or other work is required to finally complete such construction in
accordance with the Plans, the reasonable decision of Insite Architects, Inc. shall be controlling,

     C. Upon the Completion Date, Tenant shall cause Tenant’s architect to issue a Certificate of
Substantial Completion and to attach to each such certificate a list of all punch-list items needed
to achieve final completion. Landlord shall cause the contractor to complete all punch-list items
identified in any Substantial Completion Certificate as soon as possible, but in any event within
thirty

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(30) days after the Substantial Completion Certificate has been issued or, if such items cannot be
reasonably completed within such 30-day period, then within such longer period of time as may be
reasonably required provided that the Landlord diligently and continuously pursues the same to
completion.

5. CHANGE ORDERS. During the construction of the Landlord’s Work, Tenant shall have the right
to request changes in the Landlord’s Work to the Leased Premises by delivery of written notice to
Landlord (“Change Order Request”) advising Landlord of the requested changes in the work. Tenant
shall include within the Change Order Request such additional plans and specifications as Landlord
may reasonably require with respect to any such proposed changes. Within five (5) business days
after Landlord’s receipt of a Change Order Request, Landlord shall advise Tenant in writing
(“Landlord’s Response”) of (i) any increase in the cost of the Landlord’s Work and (ii) any
extension of the Completion Date, which Landlord determines would result from such Change Order
Request. Tenant shall advise Landlord within three (3) days following its receipt of Landlord’s
Response whether Tenant elects to proceed with the changes included in the Change Order Request.
In the event Tenant so elects to proceed with changes. Tenant shall promptly pay to Landlord the
amount of the increase in cost attributable thereto and the Completion Deadline shall be extended
by the number of days that the Completion Date is delayed due to such changes as set forth in
Landlord’s Response.

6. DELAY. If the Leased Premises are not ready for occupancy within fifteen (15) days following
the above estimated Completion Date, then, for every day that construction is delayed beyond such
date, Tenant shall have one (1) free day rent with regard to the portion of the Leased Premises
that is required to be completed but is incomplete.

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EXHIBIT F-1

OFFICE BUILDING

PARKING RULES

(see paragraph 9.2 of lease)

It is the desire of Landlord to maintain and operate the parking garage and parking areas in an
orderly manner. The following rules and regulations apply to all tenants in the building and their
agents, employees, family, licensees, invitees, visitors, and contractors unless otherwise stated.
Landlord reserves the right to rescind these rules, make reasonable changes, or make other
reasonable rules and regulations for the safety, care, and cleanliness of the parking garage and
parking areas and for the preservation of good order.

1. TRAFFIC SIGNS. All persons parking in the parking areas and parking garage shall observe
posted signs and markings regarding speed, stop signs, traffic lanes, reserved parking, no parking,
parking stripes, etc.

2. TENANT EMPLOYEE AND CUSTOMER PARKING. Except as may otherwise be provided in the lease agreement
of a particular lease, Tenants and their employees and customers may park without charge in spaces
which are not specifically reserved for other tenants or for “Visitors”, fire lanes, loading zones,
handicapped parking, or other specialized parking and so marked. Tenant’s and other tenant’s usage
of the parking building and parking areas shall be limited to parking of vehicles during the normal
operating hours of the Office Building. If Tenant desires from time to time to park a vehicle for a
period exceeding seventy-two (72) hours, Tenant shall notify Landlord of such desire and Landlord
may allow Tenant to park a vehicle for such period. Landlord reserves the right to utilize any
reasonable system by which building tenants may access and pay for parking of their guests or
customers.

3. TRASH. All persons parking in the parking garage or parking areas shall refrain from throwing
trash, ashtray contents, or other debris on the parking garage floor or parking areas.

4. FLAT TIRES. All vehicle owners and all persons parking in the parking garage or parking areas
shall be responsible for promptly repairing flat tires or other conditions of the vehicle which
cause unsightliness in the reasonable judgment of Landlord.

5. REMOVAL OF UNAUTHORIZED VEHICLES. If vehicles are blocking driveways or passageways or parked in
violation of these rules and regulations or state statutes, Landlord may exercise vehicle removal
remedies under V.T.C.A. Transportation Code §684 upon compliance with statutory notice.

6. SECURITY. Landlord shall use reasonable diligence in the maintenance of existing lighting in
the parking garage or parking areas. Landlord shall have no duty for additional lighting or
further security measures in the parking areas, including the parking garage.

7. PARKING OF EMPLOYEE VEHICLES. Landlord may from time to time designate specific areas in which
vehicles owned by Tenant and Tenant’s employees, sublessees, assignees, licensees, and
concessionaires shall be parked. Tenant shall use best efforts to see that such vehicles are
parked in such areas. Upon request by Landlord, Tenant shall furnish Landlord a complete list of
license numbers of all vehicles operated by Tenant and the above listed persons. Landlord may
charge penalty fees for vehicles not parked in the designated areas.

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8. PARKING OF TRUCKS AND DELIVERY VEHICLES. Without Landlord’s prior written approval, no
trailers or large trucks may be parked in the parking areas except for temporary loading or
unloading, Service and delivery vehicles may be parked in loading zones only when necessary.

9. ALLOTTED SPACES. At no time shall Tenant or its employees use more than the number of
unreserved parking spaces allotted to Tenant in its lease.

10. TIMELY PAYMENT OF PARKING RENT. Tenant shall be entitled to monthly parking rights in the
parking garage for reserved spaces only upon timely payment of the then current monthly parking
rent, in advance. Tenant may rent less than the allowed number of spaces. Tenant may rent more than
the allowed number of spaces if available in the reasonable judgment of Landlord.

11. CONTROL DEVICES. Landlord reserves the right to install or utilize any reasonable system of
entry and exit control devices in the parking garage, parking areas and marked loading areas.

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EXHIBIT F-2

BUILDING RULES AND REGULATIONS

	1.	 	Normal Office Building operating hours are defined as 7:00 a.m. to 6:00 p.m. Monday
through Friday, holidays excepted. In addition, the building will be unlocked on Saturday
from 8:00 a.m. to 1:00 p.m., but an access card or number may be needed to operate the
elevators. During non-office building working hours, access to the Office Building, or to the
halls, corridors, elevators, or stairways in the Office Building, or to the office space
premises may be refused unless the person seeking has a pass or is properly identified.
Tenant, its employees, guests and invitees may be called upon to show identification and sign
Office Building register when entering or leaving the Office Building at times other than
normal Office Building operating hours and Tenant shall cooperate fully with Office Building
security procedures, if any, in complying with such requirements.
	 
	2.	 	Janitorial service will be provided on Sunday through Thursday. Should Tenant find specific
fault with the service rendered, he will so inform the building manager who will be
responsible for arranging corrective action. The janitorial contractor is only responsible
for services and standards established in the service contract. Tenant may be provided a
copy of contract specifications upon request.
	 
	 	 	Tenant shall not employ any person for the purpose of cleaning other than the authorized
cleaning and maintenance personnel for the Office Building unless otherwise approved in
writing by Landlord. In those instances when Tenant contracts, with Landlord’s written
approval, for its own janitorial services, rubbish removal and exterminating shall be part
of the work of the lessee’s contractor. Janitorial service shall not be hindered by Tenant
after 6:00 p.m. unless specific arrangements have been made with the building management
office.
	 
	3.	 	Tenant will refer all contractors, contractor’s representatives and installation technicians,
rendering any service on or to the Leased Premises for Tenant, to Landlord for Landlord’s
approval and supervision before performance of any contractual service. This provision shall
apply to all work performed in the Office Building including installation of telephones,
telegraph equipment, electrical devices and attachments and installations of any nature
affecting floors, walls, woodwork, trim, windows, ceiling, equipment or any other physical
portion of the Office Building.
	 
	4.	 	No Tenant shall at any time occupy any part of the Office Building as sleeping or lodging
quarters.
	 
	5.	 	Tenant shall not place, install or operate on the Leased Premises or any part of Office
Building, any engine, stove or machinery, or conduct mechanical operations or cook thereon or
therein, or place or use on or about the Leased Premises any explosives, gasoline, kerosene,
oil, acids, caustics, or any inflammable, explosive, or hazardous material without written
consent of Landlord. Microwave ovens, refrigerators and coffee makers for Tenant’s own use and
installed in Tenant’s Office Space are exceptions to these conditions.
	 
	6.	 	Tenant shall exercise caution in the protection of personal property located within the
Office Space from loss or damage by keeping doors to unattended areas locked. Landlord shall
not be responsible to the Tenant, its agents, employees or invitees for any losses of money,
jewelry or other personal property from the Office Space or public areas or for any damages to
any property therein from any cause whatsoever whether such loss or damage occurs when an area
is locked against entry or not. Tenant shall report any thefts or losses to the Building
Manager and security personnel as soon as reasonably possible after discovery and shall also
notify the

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	 	 	Building Manager and security personnel of the presence of any persons whose conduct is
suspicious or causes a disturbance.
	 
	7.	 	No birds, fowl, fish, reptiles or animals shall be brought into or kept in or about the
Office Building.
	 
	8.	 	Employees of Landlord shall not receive or carry messages for or to any Tenant or other
person, nor contract with or render free or paid services to any Tenant or Tenant’s agents,
employees or invitees.
	 
	9.	 	Landlord will not permit entrance to Tenant’s Office Space by use of pass key controlled by
Landlord, to any person at any time without permission by Tenant, except Landlord’s
employees, contractors, or service personnel.
	 
	10.	 	None of the entries, passages, doors, elevators, hallways, stairways, or other common areas
shall be blocked or obstructed, or any rubbish, litter, trash or material of any nature
placed, emptied or thrown into the Common Areas, or such areas be used at any time except for
access or egress by Tenant, Tenant’s agent, employees or invitees.
	 
	11.	 	During move-in, and at other times when receiving large items on the Office Building, Tenant
shall give Landlord at least one day’s notice to provide time to equip elevators, and office
building walls and floors with protective covering as necessary. Only the freight elevator
will be used for move-in or move-out, and all hand cart/dolly traffic. Further, Tenant will
insure that delivery personnel make deliveries through the west emergency exit, and that they
use all caution necessary to prevent any damage to the Office Building structure and
furnishings. Tenant shall be responsible for any damages resulting from its own or its
employee’s, agent’s, or invitee’s activities on the Property, and may be billed for any
repairs required as a result of such damage.
	 
	12.	 	Landlord will provide outside waste containers available to Tenant for the disposal of waste
too large to deposit in Office Space containers. Tenant may use the outside containers, but
must ensure that waste is deposited only in the containers provided, and that the area around
the Office Space and the waste containers is kept in a neat, orderly condition. Packing
cartons, large boxes or other items must be broken down before depositing so as to fit in the
hopper.
	 
	13.	 	Planters are not waste containers. Waste paper, smoking materials, drink or food remains, or
any other refuse must not be deposited in any area or container designed or used for growing
plants in the Office Building’s Common Areas either inside or outside.
	 
	14.	 	The water closets and other water fixtures shall not be used for any purpose other than that
for which they were constructed, and any damage resulting to them from misuse, or the defacing
or injury of any part of the Office Building shall be borne by the person who shall
occasion it. No person shall waste water by interfering with the faucets or otherwise. Tenant
shall bear the cost of any repairs which may from time to time be required to plumbing into
the Tenant’s Leased Premises, such responsibility to include all pipes and fixtures from the
point at which they depart the office building’s Common Areas either inside or outside.
	 
	15.	 	No person shall disturb the occupants of the Office Building by the use of any musical
instruments, the making of unseemly noises, or any unreasonable use.
	 
	16.	 	Nothing shall be thrown from the top of the Office Building, or down the stairways,
corridors, or from balconies.

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	17.	 	Uninvited soliciting is prohibited on the Property. Any Tenant annoyed by uninvited
solicitors should report them to the Building Manager.
	 
	18.	 	Tenant, its employees, agents, customers, guests and invitees shall have access to the
parking facilities as may be provided by Landlord, to the extent available, but not so as to
unreasonably interfere with the similar parking rights of other tenants in the Office
Building; parking rights, if any, of Tenant pursuant to the terms and conditions of this Lease
are subject to the parking rules and to the rights and interests of municipal and other
governmental agencies and authorities as with respect thereto and the exercise of any such
right or authority by any such party shall in no event be or constitute a default of any of
the terms hereof.
	 
	19.	 	Landlord shall have the right to prescribe the weight, size and position of all safes and
other heavy equipment brought into the Office Building. Safes or other heavy objects shall,
if considered necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight, with the cost thereof being borne by Tenant. Landlord will
not be responsible for loss or damage done to the Office Building by moving or maintaining any
such safe or other property and all such damage shall be repaired at the expense of Tenant.
	 
	20.	 	Unauthorized storage or abandonment of vehicles or equipment in or about the Property is
prohibited. Landlord has the right to enforce this restriction by removal and storage of
same and such cost of storage and removal shall be borne by Tenant.
	 
	21.	 	Landlord reserves the right to approve all vending machines or any other machines and all
concessionaires, vending machines operators or other distributors of cold drinks, coffee, food
or other concessions, water, towels or newspapers.
	 
	22.	 	Landlord reserves the right, at any time, to grant to anyone the exclusive right to conduct
any business or render any service in the Office Building.
	 
	23.	 	Glass that reflects or admits light into passageways or into any place in the Office Building
or Leased Premises shall not be covered or obstructed by Tenant. Landlord shall designate
Building Standard window coverings.
	 
	24.	 	Landlord reserves the right to erect, use and maintain pipes, ducts, wiring and conduits, and
appurtenances thereto in and through the Leased Premises at
reasonable locations.
	 
	25.	 	Tenant and Tenant’s agents, employees, family, licensees, invitees, visitors and contractors
shall comply with all federal, state and local laws relating to occupancy or use of the Office
Space, the Leased Premises and the Property, including but not limited to, the observance of
designated non-smoking areas.

It is the Landlord’s desire to maintain in the Office Building the highest standard of dignity
and good taste consistent with comfort and convenience for Tenant. Any action or condition not
meeting this high standard should be reported directly to Landlord. Your cooperation will be
mutually beneficial and sincerely appreciated. Landlord reserves the right to make such other and
further reasonable rules and regulations as in its judgment may from time to time be needful, for
the safety, care and cleanliness of the Property, and for the preservation of good order therein.

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EXHIBIT G

This form is not to be executed at time of lease execution.

ESTOPPEL CERTIFICATE

(see paragraph 30.1 of lease)

The purpose of this certificate is to confirm the current status of matters relating to the lease
described below. It is for the benefit of the owner or prospective purchaser or mortgagee of the
building in which the leased premises are located.

1. The undersigned is the Tenant under a lease between                                                           
                                           , as Landlord, and
                                                                          
                           , as Tenant, dated                                           
                                       on leased premises locally known
as the                                                                  
                building and located at 7411 John Smith Drive in
San Antonio, Texas. A copy of the fully executed lease and any amendments or modifications thereto
are attached. There are no other modifications or amendments to the above described lease. The
dates of any amendments or modifications are: (put “none”
if inapplicable)                .

2. There are no unfulfilled written or verbal promises, representations, or warranties by Landlord.

3. There are no subleases of the leased premises or any portions thereof.

4. The lease (together with any amendments or modifications referred to above) is in good standing
and in full force and effect. Landlord is not in default. Tenant agrees to give notice of any
Landlord default to any purchaser or lender making written requests to Tenant for same.

5. Except for rents (if any) which may be due under the lease for the current month, there are no
rents or other charges which have been prepaid by the undersigned Tenant to Landlord under the
lease other than the following:

6. The amount of security deposit currently posted by Tenant with Landlord is $                     in
the form of cash.

7. Tenant acknowledges that the space being leased consists of                      square feet of Rentable
Area according to the lease, that the improvements to be constructed by Landlord have been
satisfactorily completed, that the lease space has been accepted by Tenant, that Tenant now
occupies the lease space, and that the commencement date for
the lease term was                                                                        
         .

8. There are no rentals which are due and unpaid. Rentals are fully paid (if required by the
lease) through the last day of the month in which this estoppel certificate has been executed.

9. There are no known offsets or credits against rentals except as expressly provided by the terms
of the lease. There is no known right of rescission and no known defense to Tenant’s future
obligations to pay the specified rentals at the times and in accordance with the lease terms.
Tenant has not received any concession (rental or otherwise) or similar compensation not expressed
in the lease which is presently in effect.

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10. Tenant has no options or rights of refusal regarding the leased premises or additional rental
space other than as set out in the lease.

11. Tenant has not: (a) made a general assignment for the benefit of creditors; and (b) commenced
any case, proceeding or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution, or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization, or relief of debtors; or (c) had any involuntary case,
proceeding, or other action commenced against it which seeks to have an order for relief entered
against it, as debtor, or seeks reorganization, arrangement, adjustment, liquidation,
dissolution, or composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization, or relief of debtors; or (d) concealed, removed, or permitted to be concealed or
removed, any part of its property, with intent to hinder, delay, or defraud its creditors or any
of them, or made or suffered a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance, or similar law; or made any transfer of its property to or for
the benefit of a creditor at a time when other creditors similarly situated have not been paid;
or (e) had a trustee, receiver, custodian or other similar official appointed for or take
possession of all or any part of its property or had any court take jurisdiction of any other of
its property.

12. Tenant acknowledges that this estoppel certificate and the statements therein may be
conclusively relied upon by Landlord and by any prospective purchaser or lien holder of the leased
premises.

13. The form of this estoppel certificate may vary, depending on lender or purchaser requirements.
It is agreed that this certificate may be modified to conform to reasonable requests by lenders or
purchasers.

14. This agreement shall be binding upon and shall inure to the benefit of the Landlord, any
present or future mortgagee, any prospective buyer or master Tenant of the property, and their
successors and assigns.

Dated this                                          day of                  
                                           , 19                     .

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	TENANT	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	          Signature	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Printed name of signatory	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

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EXHIBIT H

DIAGRAM DEPICTING LOCATION OF TENANT’S RESERVED PARKING SPACES

	 	 	 	 	 	 	 
	 

	 	FLOOR PLAN AT PARKING GARAGE MID LEVEL
	 	 	 	STANDARD PARKING SPACES [ILLEGIBLE]
	 

	 	 	 	 	 	 
	 

	 	[ILLEGIBLE]
	 	 	 	H/C PARKING SPACES [ILLEGIBLE]
	 

	 	 	 	 	 	TOTAL [ILLEGIBLE]

 

EXHIBIT I

CERTIFICATE OF CORPORATE RESOLUTION

AUTHORIZING LEASE OR GUARANTY

(see paragraphs 37.1 and 39.1 of lease)

The undersigned, as secretary of the corporation named below, certifies that at a meeting
of the board of directors of the corporation, duly called and held on the 13th day of
December, 1996, at which a quorum of the directors were present and acting throughout, the
following resolutions were unanimously adopted and are still in force and effect:

     RESOLVED that the president or any vice president of the corporation shall be
authorized to execute a lease for office space on behalf of the corporation and/or to
guarantee performance of a lease for office space, described below:

	 	 	 	 	 
	 

	 	Date of lease:	 	 
	 

	 	Landlord:
	 	Medical Plaza Partners, Ltd.
	 

	 	Tenant:
	 	Pan American Acceptance Corporation
	 

	 	Guarantor, if any	 	 
	 

	 	(not Tenant’s name):	 	 
	 

	 	Building name:
	 	One Technology Center
	 

	 	Suite No.:
	 	Suites 1400 and 1225
	 

	 	Building address:
	 	7411 John Smith Drive
	 

	 	 	 	San Antonio, Texas 78229

     RESOLVED FURTHER, that the president or any vice president is authorized on
behalf of the Corporation to execute and deliver to the Landlord all instruments
reasonably necessary for the lease. Landlord is entitled to rely upon the above
resolutions until the board of directors of the corporation revokes or alters same in
written form, certified by the secretary of the corporation, and delivers same, certified
mail, return receipt requested, to the Landlord. The corporation is duly organized and is
in good standing under the laws of the State of Texas. The undersigned further
certifies that on the meeting date referred to above, the names and respective titles of
the officers of the corporation were as follows:

     WITNESS MY HAND this 18th day of February, 1997

	 	 	 	 	 
	 

	 	PAN AMERICAN ACCEPTANCE CORP.
	 	 
	 

	 	 	 	 
	 

	 	Typed name of corporation	 	 
	 
	 	 	 	 
	 

	 	/s/ DONALD E. MEYER	 	 
	 

	 	 	 	 
	 

	 	Signature of secretary of corporation	 	 
	 
	 	 	 	 
	 

	 	DONALD E. MEYER	 	 
	 

	 	 	 	 
	 

	 	Printed name of secretary	 	 

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	STATE OF TEXAS

	 	§
	 

	 	§
	COUNTY OF BEXAR

	 	§

This instrument was acknowledged before me on Feb 18, 1997 by DON E. MEYER on behalf
of the above stated Tenant and in the above stated capacity.

	 	 	 	 	 
	 

	 	/s/ IRENE TREVINO
	 	 
	 

	 	 	 	 
	 

	 	Notary Public for the State of Texas	 	 
	 

	 	Printed name of notary: IRENE TREVINO	 	 
	 

	 	My commission expires: 4/22/97	 	 

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EXHIBIT J

SPECIAL CONDITIONS

(see paragraph 37.2 of lease)

The following special conditions shall apply to this lease and shall prevail on any other
provisions to the contrary.

	 	(1)	 	Early Termination Option. Provided Tenant is not in default under this
Lease, Tenant shall have the one-time option to terminate this Lease on the fifth
anniversary of the commencement date of the Lease (the “Termination Date”) by delivery
of the following to Landlord not less than two hundred and seventy (270) days prior to
the Termination Date: (i) written notice of Tenant’s election to terminate,
(“Termination Notice”) (ii) a termination fee equal to the product of the monthly Base
Rent payable hereunder on the date of the Termination Notice multiplied by six, and
(iii) payment of the Unamortized Cost of Landlord’s Improvement’s (as hereinafter
defined). For the purposes hereof, the Unamortized Cost of Landlord’s Improvements
shall mean the unamortized cost, based on a 10-year amortization, as of the date of
the Termination Notice of the total amount expended by Landlord for the completion of
Landlord’s Improvements described in Exhibit C-1 to this Lease and any
improvements to the Expansion Space paid for by Landlord pursuant to paragraph (2)
below, and all leasing commissions paid in connection with this Lease. Landlord shall
certify to Tenant the amount of the then Unamortized Cost of Landlord’s Improvements
within five (5) business days following Tenant’s request for such certificate from
Landlord. Tenant’s failure to timely deliver to Landlord the Termination Notice and
the payments described in clauses (ii) and (iii) in accordance with this paragraph
shall constitute Tenant’s election not to terminate this Lease and Tenant shall have
no further options to terminate this Lease pursuant hereto.
	 
	 	(2)	 	Expansion Option. Provided Tenant is not in default
hereunder, Tenant
at any time during the lease term may provide Landlord with one or more written
notices of Tenant’s election to lease any or all lease space on the 12th floor which
is vacant and not under lease obligation to another tenant. Any notice of such
election delivered by Tenant shall be referred to herein as the “Expansion Notice”.
Within five (5) days following the receipt of an Expansion Notice, Landlord shall
deliver notice to Tenant stating whether the vacant space is under obligation to
another Tenant (“Landlord’s Notice”). If the space specified in the Expansion Notice
is not under any obligation to another tenant it shall be “Expansion Space” to be
incorporated into the Leased Premises for all purposes. The date on which the
Expansion Space shall be part of the Leased Premises shall be the earlier of the date
of Tenant’s occupancy of the Expansion Space or the date of Substantial Completion for
the Expansion Space determined in accordance with Exhibit E to this Lease (the
“Expansion Space Commencement Date”). If the Expansion Space Commencement Date is on
or before the third anniversary of the commencement date of this Lease, the Base Rent
per square foot of Rentable Area of Expansion Space shall be the monthly Base Rent per
square foot of Rentable Area of the Leased Premises payable for the original Leased
Premises on the Expansion Space Commencement Date, and shall be increased at the same
time and in the same amount per square foot as the Base Rent for the original Leased
Premises is thereafter increased. If the Expansion Space Commencement Date begins
after the third anniversary of the commencement date of this Lease, the Base Rent per
square foot of Rentable Area of the Expansion Space shall equal one hundred fifteen
percent (115%)

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