AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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ONYX PHARMACEUTICALS, INC | PROFITEROLE ACQUISITION CORP | PROTEOLIX, INC | SHAREHOLDER REPRESENTATIVE SERVICES LLC | US BANK NATIONAL ASSOCIATION

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 10/13/2009
Industry: Biotechnology and Drugs Law Firm: Cooley Godward Sector: Healthcare

AGREEMENT AND PLAN OF MERGER, Parties: onyx pharmaceuticals inc , profiterole acquisition corp , proteolix inc , shareholder representative services llc , us bank national association

Exhibit 2.1

CONFIDENTIAL
EXECUTION VERSION

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

AGREEMENT AND PLAN OF MERGER

among:

Onyx Pharmaceuticals, Inc.,
a Delaware corporation;

Profiterole Acquisition Corp.,
a Delaware corporation;

Proteolix, Inc.,
a Delaware corporation;

and

Shareholder Representative Services LLC,
a Colorado limited liability company,
as the Stockholders’ Agent.

Dated as of October 10, 2009

CONFIDENTIAL

Table of Contents


Section	Page
1. Description of Transaction		1

1.1 Merger of Merger Sub into the Company		1
1.2 Effect of the Merger		1
1.3 Closing; Effective Time		1
1.4 Certificate of Incorporation and Bylaws; Directors and Officers		2
1.5 Conversion of Shares		2
1.6 Treatment of Stock Options		6
1.7 Contingent Consideration		7
1.8 Payment of Milestone Payments in Parent Common Stock		15
1.9 Dissenting Shares		17
1.10 Exchange of Certificates		17
1.11 Further Action		19

2. Representations and Warranties of the Company		19

2.1 Due Organization; Subsidiaries; Etc.		19
2.2 Charter Documents; Records		20
2.3 Capitalization		20
2.4 Financial Statements and Related Information		22
2.5 Liabilities		23
2.6 Absence of Changes		24
2.7 Title to Assets		25
2.8 Bank Accounts		25
2.9 Equipment; Real Property		26
2.10 Intellectual Property		26
2.11 Contracts		31
2.12 Compliance with Legal Requirements		33
2.13 Regulatory Matters		33
2.14 Governmental Authorizations; No Subsidies		35
2.15 Tax Matters		36
2.16 Employee and Labor Matters; Benefit Plans		38
2.17 Environmental Matters		41
2.18 Insurance		42
2.19 Related Party Transactions		42
2.20 Legal Proceedings; Orders		42
2.21 Authority; Binding Nature of Agreement; Inapplicability of Anti-takeover Statutes		43
2.22 Non-Contravention; Consents		43
2.23 Vote Required		44
2.24 Brokers		44
2.25 Information Statement		44

CONFIDENTIAL


Section	Page
3. Representations and Warranties of Parent and Merger Sub		45

3.1 Due Organization		45
3.2 Non-Contravention; Consents		45
3.3 Authority; Binding Nature of Agreement		45
3.4 Legal Proceedings		45
3.5 Available Funds		46

4. Certain Covenants of the Company		46

4.1 Access and Investigation		46
4.2 Operation of the Business of the Company		46
4.3 Notification		49
4.4 No Negotiation		49
4.5 Termination of Certain Employee Benefit Plans		49
4.6 Termination/Amendment of Agreements		50
4.7 FIRPTA Matters		50
4.8 Insider Receivables		50
4.9 Net Cash Shortfall Amount		50
4.10 Third Quarter Financial Statements		50

5. Certain Covenants of the Parties		51

5.1 Filings and Consents		51
5.2 Stockholder Consent		51
5.3 Public Announcements		52
5.4 Reasonable Efforts		52
5.5 Employee Benefits		53
5.6 Communications with Employees		53
5.7 Resignation of Officers and Directors		53
5.8 Amendment to Certificate of Incorporation		53
5.9 Directors and Officers		53
5.10 Investor Representation Letters		54

6. Conditions Precedent to Obligations of Parent and Merger Sub		54

6.1 Accuracy of Representations		54
6.2 Performance of Covenants		55
6.3 Governmental Consents		55
6.4 No Material Adverse Effect		55
6.5 Stockholder Approval		55
6.6 Certificate Amendment		55
6.7 Agreements and Documents		55
6.8 FIRPTA Compliance		57
6.9 No Restraints		57
6.10 No Legal Proceedings		57
6.11 No Company Options/Warrants		58
6.12 Termination of Employee Plans		58

CONFIDENTIAL


Section	Page
6.13 Section 280G Stockholder Approval		58
6.14 Pay-Off Letters; Insider Receivables		58
6.15 Securities Exemption		58

7. Conditions Precedent to Obligations of the Company		58

7.1 Accuracy of Representations		58
7.2 Performance of Covenants		59
7.3 Stockholder Approval		59
7.4 Documents		59
7.5 No Restraints		59

8. Termination		59

8.1 Termination Events		59
8.2 Termination Procedures		60
8.3 Effect of Termination		60

9. Indemnification, Etc.		61

9.1 Survival of Representations, Etc.		61
9.2 Indemnification		62
9.3 Limitations		63
9.4 No Contribution		64
9.5 Defense of Third Party Claims		64
9.6 Setoff		65
9.7 Exercise of Remedies Other Than by Parent		65

10. Miscellaneous Provisions		66

10.1 Stockholders’ Agent		66
10.2 Further Assurances		67
10.3 Fees and Expenses		67
10.4 Attorneys’ Fees		68
10.5 Notices		68
10.6 Headings		69
10.7 Counterparts and Exchanges by Electronic Transmission or Facsimile		69
10.8 Governing Law; Dispute Resolution		69
10.9 Assignment; Successors and Assigns		70
10.10 Remedies Cumulative; Specific Performance		70
10.11 Waiver		70
10.12 Waiver of Jury Trial		71
10.13 Amendments		71
10.14 Severability		71
10.15 Parties in Interest		71
10.16 Entire Agreement		71
10.17 Disclosure Schedule		71
10.18 Construction		71

iii

CONFIDENTIAL

Exhibit A Certain Definitions

Annex 1 to Exhibit A Persons Whose Knowledge is Imputed to the Company

Exhibit B Form of Escrow Agreement

Exhibit C Form of Release Agreement

Exhibit D Dispute Resolution Procedures

Exhibit E Form of Certificate Amendment

CONFIDENTIAL

Agreement and Plan of Merger

This Agreement and Plan of Merger (the “ Agreement ”) is made and entered into as of October 10, 2009, by and among: Onyx Pharmaceuticals, Inc., a Delaware corporation (“ Parent ”); Profiterole Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”); Proteolix, Inc., a Delaware corporation (the “ Company ”); and, with respect to Sections 1.7, 1.8, 9, 10.1 and 10.15 only, Shareholder Representative Services LLC , a Colorado limited liability company, as the Stockholders’ Agent (as defined in Section 10.1). Certain other capitalized terms used in this Agreement are defined in Exhibit A .

Recitals

A. Parent, Merger Sub and the Company intend to effect a merger of Merger Sub into the Company (the “ Merger ”) in accordance with this Agreement and the Delaware General Corporation Law (the “ DGCL ”). Upon consummation of the Merger, Merger Sub will cease to exist, and the Company will become a wholly-owned subsidiary of Parent.

B. The respective boards of directors of Parent, Merger Sub and the Company have approved this Agreement and the Merger.

C. As an inducement for Parent and Merger Sub to enter into this Agreement, concurrently with the execution and delivery hereof, certain stockholders and/or optionees of the Company are entering into Noncompetition and Non-Solicitation Agreements in favor of Parent (collectively, the “ Noncompetition and Non-Solicitation Agreements ”), which Noncompetition and Non-Solicitation Agreements shall become effective contingent upon, and subject to, the occurrence of the Effective Time (as defined in Section 1.3).

D. As an inducement for Parent and Merger Sub to enter into this Agreement, concurrently with the execution and delivery hereof, each of the Major Stockholders is entering into a Stockholder Support Agreement in favor of Parent (a “ Support Agreement ”).

Agreement

The parties to this Agreement agree as follows:

1. Description of Transaction

1.1 Merger of Merger Sub into the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined in Section 1.3), Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company will continue as the surviving corporation in the Merger (the “ Surviving Corporation ”).

1.2 Effect of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.

1.3 Closing; Effective Time. The consummation of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Dewey & LeBoeuf LLP, 1950 University Avenue, East Palo Alto, California 94303 at 10:00 a.m. on a date to be designated by Parent, which shall

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be no later than the second business day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Sections 6 and 7 (other than those conditions set forth in Sections 6.6, 6.7(e), 6.7(f), 6.7(g), 6.7(j) and 7.4(b), which are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or at such other time and date as Parent and the Company may designate. The date on which the Closing actually takes place is referred to in this Agreement as the “ Closing Date .” Contemporaneously with or as promptly as practicable after the Closing, a properly executed certificate of merger (the “ Certificate of Merger ”) conforming to the requirements of the DGCL shall be filed with the Secretary of State of the State of Delaware. The Merger shall become effective as of the time that the Certificate of Merger is filed with and accepted by the Secretary of State of the State of Delaware (the “ Effective Time ”).

1.4 Certificate of Incorporation and Bylaws; Directors and Officers. Unless otherwise determined by Parent prior to the Effective Time:

(a) except as set forth in Section 5.9 hereof, the certificate of incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time in a form acceptable to Parent;

(b) except as set forth in Section 5.9 hereof, the bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the bylaws of Merger Sub as in effect immediately prior to the Effective Time; and

(c) the directors and officers of the Surviving Corporation immediately after the Effective Time shall be those Persons designated by Parent in its sole discretion.

1.5 Conversion of Shares.

(a) Conversion . Subject to Sections 1.5(d), 1.8, 1.9 and 1.10, at the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any stockholder of the Company, each share of Company Capital Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive from Parent, following the surrender of the certificate representing such share of Company Capital Stock in accordance with Section 1.10, the following consideration:

(i) each share of Company Capital Stock held in the Company’s treasury or owned by Parent, Merger Sub, the Company or any direct or indirect wholly-owned subsidiary of Parent, Merger Sub or the Company immediately prior to the Effective Time, if any, shall be canceled without payment of any consideration with respect thereto;

(ii) each share of Series A Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive: (A) an amount in cash equal to: (1) the Series A Preference Per Share Amount (as defined in Section 1.5(b)); plus (2) the Residual Upfront Per Share Amount (as defined in Section 1.5(b)); minus (3) the Indemnification Escrow Contribution Amount (as defined in Section 1.5(b)) per share of Series A Preferred Stock; minus (4) the Expenses Escrow Contribution Amount (as defined in Section 1.5(b)) per share of Series A Preferred Stock; plus (B) any cash disbursements required to be made from the Indemnification Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any

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cash disbursements required to be made from the Expenses Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (D) any amounts required to be paid (or shares of Parent Common Stock to be issued) by Parent with respect to such share to the former holder thereof in accordance with the terms of Sections 1.7 and 1.8, as and when such payments (or issuances) are required to be made;

(iii) each share of Series A-1 Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive: (A) an amount in cash equal to: (1) the Series A-1 Preference Per Share Amount (as defined in Section 1.5(b)); plus (2) the Residual Upfront Per Share Amount; minus (3) the Indemnification Escrow Contribution Amount per share of Series A-1 Preferred Stock; minus (4) the Expenses Escrow Contribution Amount per share of Series A-1 Preferred Stock; plus (B) any cash disbursements required to be made from the Indemnification Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements required to be made from the Expenses Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (D) any amounts required to be paid (or shares of Parent Common Stock to be issued) by Parent with respect to such share to the former holder thereof in accordance with the terms of Sections 1.7 and 1.8, as and when such payments (or issuances) are required to be made;

(iv) each share of Series B Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive: (A) an amount in cash equal to: (1) the Series B Preference Per Share Amount (as defined in Section 1.5(b)); plus (2) the Residual Upfront Per Share Amount; minus (3) the Indemnification Escrow Contribution Amount per share of Series B Preferred Stock; minus (4) the Expenses Escrow Contribution Amount per share of Series B Preferred Stock; plus (B) any cash disbursements required to be made from the Indemnification Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements required to be made from the Expenses Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (D) any amounts required to be paid (or shares of Parent Common Stock to be issued) by Parent with respect to such share to the former holder thereof in accordance with the terms of Sections 1.7 and 1.8, as and when such payments (or issuances) are required to be made;

(v) each share of Series C Preferred Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive: (A) an amount in cash equal to: (1) the Series C Preference Per Share Amount (as defined in Section 1.5(b)); plus (2) the Residual Upfront Per Share Amount; minus (3) the Indemnification Escrow Contribution Amount per share of Series C Preferred Stock; minus (4) the Expenses Escrow Contribution Amount per share of Series C Preferred Stock; plus (B) any cash disbursements required to be made from the Indemnification Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements required to be made from the Expenses Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (D) any

CONFIDENTIAL

amounts required to be paid (or shares of Parent Common Stock to be issued) by Parent with respect to such share to the former holder thereof in accordance with the terms of Sections 1.7 and 1.8, as and when such payments (or issuances) are required to be made;

(vi) each share of Company Common Stock outstanding immediately prior to the Effective Time (other than those referred to in Section 1.5(a)(i)) shall be converted into the right to receive: (A) an amount in cash equal to : (1) the Residual Upfront Per Share Amount; minus (2) the Indemnification Escrow Contribution Amount per share of Company Common Stock; minus (3) the Expenses Escrow Contribution Amount per share of Company Common Stock; plus (B) any cash disbursements required to be made from the Indemnification Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (C) any cash disbursements required to be made from the Expenses Escrow Fund with respect to such share to the former holder thereof in accordance with the terms of the Escrow Agreement, as and when such disbursements are required to be made; plus (D) any amounts required to be paid by Parent with respect to such share to the former holder thereof in accordance with the terms of Section 1.7, as and when such payments are required to be made; and

(vii) each share of the common stock, par value $0.001 per share, of Merger Sub outstanding immediately prior to the Effective Time shall be converted into one share of common stock of the Surviving Corporation.

The amount of cash, if any, that each stockholder of the Company is entitled to receive at any particular time for the shares of Company Capital Stock held by such stockholder shall be rounded to the nearest cent (with $0.005 being rounded upward) and computed after aggregating the cash amounts payable at such time for all shares of each class and series of Company Capital Stock held by such stockholder.

(b) Definitions . For purposes of this Agreement:

(i) The “ Aggregate Liquidation Preference Amount ” shall be the sum of : (A) the Series A Preference Per Share Amount multiplied by the aggregate number of shares of Series A Preferred Stock outstanding immediately prior to the Effective Time; plus (B) the Series A-1 Preference Per Share Amount multiplied by the aggregate number of shares of Series A-1 Preferred Stock outstanding immediately prior to the Effective Time; plus (C) the Series B Preference Per Share Amount multiplied by the aggregate number of shares of Series B Preferred Stock outstanding immediately prior to the Effective Time; plus (D) the Series C Preference Per Share Amount multiplied by the aggregate number of shares of Series C Preferred Stock outstanding immediately prior to the Effective Time.

(ii) The “ Aggregate Residual Upfront Consideration Amount ” shall be: (A) the Aggregate Upfront Transaction Value; minus (B) the Aggregate Liquidation Preference Amount.

(iii) The “ Aggregate Upfront Transaction Value ” shall be: (A) $276,000,000; minus (B) if and only if the Closing Date occurs on or prior to November 15, 2009, the Net Cash Shortfall Amount, if any, as set forth and represented in the Merger Consideration Certificate (as defined in Section 6.7(f)).

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(iv) The “ Expenses Escrow Amount ” shall mean $250,000.

(v) The “ Expenses Escrow Contribution Amount ” means, with respect to each share of Company Capital Stock held by a Non-Dissenting Stockholder and each share of Company Common Stock subject to a Company Option, in each case outstanding immediately prior to the Effective Time, an amount determined by dividing : (A) the Expenses Escrow Amount; by (B) the sum of (1) the total number of outstanding shares of Company Capital Stock held by the Non-Dissenting Stockholders immediately prior to the Effective Time; plus (2) the total number of shares of Company Common Stock that were subject to Company Options outstanding immediately prior to the Effective Time.

(vi) The “ Fully Diluted Company Share Number ” shall be the sum of: (A) the aggregate number of shares of Company Common Stock outstanding immediately prior to the Effective Time (including: (1) any such shares that are subject to a repurchase option or risk of forfeiture under any restricted stock purchase agreement or other Contract; (2) any such shares subject to issuance pursuant to Company Options and Company Warrants that are exercised or deemed exercised as of immediately prior to the Effective Time; and (3) any such shares subject to issuance pursuant to any Company Preferred Stock converted to Company Common Stock prior to the Effective Time); plus (B) the aggregate number of shares of Company Common Stock issuable upon the conversion of Company Preferred Stock outstanding immediately prior to the Effective Time; plus (C) the aggregate number of shares of Company Capital Stock purchasable under or otherwise subject to Company Options (whether vested or unvested) outstanding immediately prior to the Effective Time; plus (D) the aggregate number of shares of Company Capital Stock purchasable under or otherwise subject to any rights (other than Company Options and Company Warrants) to acquire shares of Company Capital Stock (whether or not immediately exercisable) outstanding immediately prior to the Effective Time; plus (E) the aggregate number of shares of Company Common Stock issuable upon the conversion of any convertible securities of the Company (other then shares of Company Preferred Stock) outstanding immediately prior to the Effective Time.

(vii) The “ Initial Indemnification Escrow Amount ” shall mean $27,600,000.

(viii) The “ Indemnification Escrow Amount ” shall mean $31,600,000.

(ix) The “ Indemnification Escrow Contribution Amount ” means, with respect to each share of Company Capital Stock held by a Non-Dissenting Stockholder and each share of Company Common Stock subject to a Company Option, in each case outstanding immediately prior to the Effective Time, an amount determined by dividing : (A) the Initial Indemnification Escrow Amount; by (B) the sum of (1) the total number of outstanding shares of Company Capital Stock held by the Non-Dissenting Stockholders immediately prior to the Effective Time; plus (2) the total number of shares of Company Common Stock that were subject to Company Options outstanding immediately prior to the Effective Time.

(x) “ Net Cash Shortfall Amount ” shall mean the amount, if any, by which: (A) the sum (without duplication) of (1) unpaid Company Transaction Expenses as of immediately after the Closing and (2) $5,002,984; exceeds (B) the amount by which the aggregate amount of all cash and cash equivalents of the Company as of immediately after the Closing, determined in accordance with GAAP, exceeds the aggregate amount of all Indebtedness of the

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Company as of immediately after the Closing (it being understood that all amounts used in calculating “Net Cash Shortfall Amount” shall be based on the amounts set forth and represented in the Merger Consideration Certificate).

(xi) The “ Residual Upfront Per Share Amount ” shall be determined by dividing : (A) the Aggregate Residual Upfront Consideration Amount; by (B) the Fully Diluted Company Share Number.

(xii) The “ Series A Preference Per Share Amount ” shall be equal to $1.00.

(xiii) The “ Series A-1 Preference Per Share Amount ” shall be equal to $1.00.

(xiv) The “ Series B Preference Per Share Amount ” shall be equal to $2.22.

(xv) The “ Series C Preference Per Share Amount ” shall be equal to $2.66.

(c) Escrow Contribution . At the Effective Time, Parent shall cause to be delivered to the Escrow Agent in cash:

(i) as a contribution to the Indemnification Escrow Fund and the Expenses Escrow Fund with respect to each share of Company Capital Stock held by the Non-Dissenting Stockholders immediately prior to the Effective Time, an amount equal to the Indemnification Escrow Contribution Amount and the Expenses Escrow Contribution Amount, respectively, applicable to such share of Company Capital Stock; and

(ii) as a contribution to the Indemnification Escrow Fund and the Expenses Escrow Fund with respect to each share of Company Common Stock that is subject to a Company Option that is outstanding immediately prior to the Effective Time, an amount equal to the Indemnification Escrow Contribution Amount and the Expenses Escrow Contribution Amount, respectively, applicable to such share of Company Common Stock.

Each of the Indemnification Escrow Fund and the Expenses Escrow Fund: (A) shall be held by the Escrow Agent in accordance with the terms of this Agreement and the terms of the Escrow Agreement; (B) shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or other judicial process of any creditor of any Person; and (C) shall be held and disbursed solely for the purposes and in accordance with the terms of this Agreement and the Escrow Agreement.

(d) Adjustments . In the event that the Company, at any time or from time to time between the date of this Agreement and the Effective Time, declares or pays any dividend on Company Capital Stock payable in Company Capital Stock or in any right to acquire Company Capital Stock, or effects a subdivision of the outstanding shares of Company Capital Stock into a greater number of shares of Company Capital Stock, or in the event the outstanding shares of Company Capital Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Company Capital Stock, or a record date with respect to any of the foregoing shall occur during such period, then the amounts payable in respect of shares of Company Capital Stock pursuant to Section 1.5(a) and the amounts payable in respect of shares of Company Capital Stock subject to Company Options pursuant to Section 1.6 shall be appropriately adjusted.

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1.6 Treatment of Stock Options . Subject to Section 1.10(h), at the Effective Time, each Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall become fully vested immediately prior to the Effective Time and shall be cancelled at the Effective Time and the holder thereof shall be entitled to receive for each share of Company Common Stock subject to such Company Option (a) an amount in cash equal to: (i) the Residual Upfront Per Share Amount; minus (ii) the exercise price per share of Company Common Stock subject to such Company Option; minus (iii) the Indemnification Escrow Contribution Amount per share of the applicable Company Common Stock; minus (iv) the Expenses Escrow Contribution Amount per share of the applicable Company Common Stock; plus (b) any cash disbursements required to be made from the Indemnification Escrow Fund with respect to such share to the former holder of such Company Option in accordance with the Escrow Agreement, as and when such disbursements are required to be made; plus (c) any cash disbursements required to be made from the Expenses Escrow Fund with respect to such share to the former holder of such Company Option in accordance with the Escrow Agreement, as and when such disbursements are required to be made; plus (d) any amounts required to be paid by Parent with respect to such share to the former holder thereof in accordance with the terms of Section 1.7, as and when such payments are required to be made. Prior to the Effective Time, the Company shall take all action that may be necessary (under the Company Option Plan or otherwise) to effectuate the provisions of this Section 1.6. and to ensure that, from and after the Effective Time, each holder of an outstanding Company Option cancelled as provided in this Section 1.6 shall cease to have any rights with respect thereto, except the right to receive the consideration specified in this Section 1.6 without interest.

1.7 Contingent Consideration .

(a) Definitions . For purposes of this Section 1.7:

(i) “ 003-A1 Study ” shall mean that human clinical study of the Product referred to internally by the Company as PX-171-003-A1, which is ongoing as of the date of this Agreement, in relapsed and refractory multiple myeloma patients.

(ii) “009 Study ” shall mean the planned human clinical study of the Product referred to internally by the Company as PX-171-009 in relapsed multiple myeloma patients.

(iii) “011 Study ” shall mean the planned human clinical study of the Product referred to internally by the Company as PX-171-011 in relapsed and refractory multiple myeloma patients.

(iv) “ Agreed Trial Design ” with respect to the 003-A1 Study, 009 Study and 011 Study shall mean a human clinical study of the Product that reflects, in all material respects, the material elements for such study as described in the protocol summary for such study agreed between Parent and the Company as of the date of this Agreement.

(v) “ Applicable Efforts ” shall mean those efforts and resources consistent with the usual practice of Parent and its Subsidiaries in pursuing, in a reasonably timely manner, the development and approval of its own pharmaceutical products that are of similar market potential and strategic value to the Product, taking into account relevant factors including product labeling or anticipated labeling, market potential, past performance of the Product, medical and clinical considerations, safety and tolerability profile, present and future regulatory environment and competitive conditions, all as measured by the facts and circumstances at the time such

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efforts are due; provided, however, that in no event shall Parent’s obligation to use Applicable Efforts ever require Parent to conduct any registrational studies other than the 003-A1 Study, the 011 Study and the 009 Study.

(vi) “ Contingent Payment Shares ” of a particular Participating Securityholder shall mean: (A) each outstanding share of Company Capital Stock held by such Participating Securityholder immediately prior to the Effective Time; and (B) each share of Company Common Stock subject to outstanding Company Options held by such Participating Securityholder immediately prior to the Effective Time.

(vii) “ MAA ” shall mean a marketing authorization application filed with the EMEA.

(viii) A “ Material Modification ” to the Agreed Trial Design for the 003-A1 Study, 009 Study or 011 Study shall mean a material modification to such Agreed Trial Design, other than any Permitted Modification to the Agreed Trial Design for such study.

(ix) “ Milestone Event 2 Termination Date ” shall mean [ * ]; provided, however, that (A) if Milestone Event 2 has not occurred by [ * ], and such failure to occur by [ * ] is due to (1) a request by the FDA for an updated safety database, or to allow the FDA to hold an advisory committee meeting, or to complete either clinical or manufacturing audits or to finalize the prescribing information content, (2) a request by the FDA for Parent to further analyze, format or submit Product data available from studies at the time of such request or (3) an extension by the FDA of the PDUFA action date with respect thereto, then the Milestone Event 2 Termination Date shall be extended until [ * ]; or (B) if Parent implements a Material Modification to the Agreed Trial Design for the 011 Study, the Milestone Event 2 Termination Date, as may be extended in accordance with clause “(A)”, will be extended further by the time period equal to the difference, in days, between (1) the expected date of completion (measured by the date of last visit of the last patient enrolled) of the 011 Study, under the Agreed Trial Design for such study (as modified by any Permitted Modifications) and (2) the actual date of completion (measured by the date of last visit of the last patient enrolled) of the 011 Study as implemented with such Material Modification.

(x) “ Milestone Event ” shall mean each event referred to in the chart in Section 1.7(b) under the heading “Milestone Event”.

(xi) “ Milestone Payment ” shall mean any payment that becomes due and payable upon the occurrence of a Milestone Event pursuant to Section 1.7(b).

(xii) “ Milestone Termination Date ” means, with respect to each Milestone Event other than Milestone 1, the date for completion of such event in the chart set forth in Section 1.7(b).

(xiii) “ NDA ” shall mean a new drug application filed with the FDA.

(xiv) A “ Permitted Modification ” to the Agreed Trial Design for the 003-A1 Study, 009 Study or 011 Study shall mean a modification to the Agreed Trial Design for such study: (A) that a Regulatory Authority clearly indicates in writing or in such Regulatory

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Authority’s minutes of an oral meeting is required for such Regulatory Authority to grant Regulatory Approval based on the results of such study; (B) with respect to the 011 Study only, that is required to obtain the approval of a sufficient number of institutional review boards (as described in 21 CFR 56), or any similar bodies in the European Union, that would reasonably be expected to allow Parent to (1) conduct and complete the 011 Study and (2) be in a position to submit the MAA referred to in Section 1.7(h)(ii)(B) to CHMP by [ * ]; (C) with respect to the 011 Study only, that is required to address a negative public reaction to the 011 Study in the medical or general community in such a manner as would reasonably be expected to allow Parent to (1) conduct and complete the 011 Study and (2) be in a position to submit the MAA referred to in Section 1.7(h)(ii)(B) to CHMP by [ * ]; or (D) with respect to the 011 Study only, that would not, individually or in the aggregate with all other modifications that are not otherwise excluded pursuant to clause “(A),” clause “(B)” or clause “(C)” of this sentence, reasonably be expected to have, and does not in fact have, an adverse impact on the achievement by Parent of Milestone Event 2 or Milestone Event 3.

(xv) “ Related Milestone Event ” shall mean: (A) with respect to the 001-A3 Study, Milestone Event 2 and Milestone Event 3; (B) with respect to the 011 Study, Milestone Event 3; and (C) with respect to the 009 Study, Milestone Event 4 and Milestone Event 5.

(xvi) “ Technical Failure ” shall mean Parent’s reasonable determination that the Product presents unacceptable levels of safety risks such that Parent terminates development of the Product.

(b) Milestone Events and Milestone Payments . Upon the occurrence of any of the Milestone Events set forth in the chart below under the heading “Milestone Event,” the Milestone Payment set forth opposite such Milestone Event in the chart below shall become due and payable in accordance with Section 1.7(c):

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Milestone Event	Milestone Payment
The occurrence of the date that is 180 days after the date of the final patient’s first visit (as determined pursuant to the protocol for the 003-A1 Study as of the date of this Agreement) in the 003-A1 Study (the occurrence of the date that is 180 days after the date of such patient’s first visit, “ Milestone Event 1 ”)	$	40,000,000

Regulatory Approval by the FDA, on or before the Milestone Event 2 Termination Date, of the Product as therapy in treating relapsed/refractory multiple myeloma based on the results of the 003-A1 Study and/or the 011 Study (“ Milestone Event 2 ”)	$	170,000,000

Regulatory Approval by the EMEA, on or before [ * ], of the Product as therapy in treating relapsed/refractory multiple myeloma based on the results of the 011 Study and/or the 003-A1 Study (“ Milestone Event 3 ”)	$	65,000,000

Regulatory Approval by the FDA, on or before [ * ], of the Product as therapy in treating relapsed multiple myeloma based on the results of the 009 Study (“ Milestone Event 4 ”)	$	150,000,000

Regulatory Approval by the EMEA, on or before [ * ], of the Product as therapy in treating relapsed multiple myeloma based on the results of the 009 Study (“ Milestone Event 5 ”)	$	150,000,000

For purposes of the foregoing Milestone Events, where such event is referred to as being based on the results of the 003-A1 Study, the 011 Study or the 009 Study, as the case may be, it is understood that such reference includes any Permitted Modification or Material Modification, or other modification to such study, as may be implemented in accordance with this Section 1.7.

In the event that: (1) Parent does not conduct and/or complete the 011 Study; (2) Parent elects to conduct another study in Europe; and (3) the EMEA grants Regulatory Approval, on or before [ * ], of the Product as therapy in treating relapsed/refractory multiple myeloma based on the results of such other study and/or the 003-A1 Study, the Milestone Payment that would otherwise have become due and payable upon the occurrence of Milestone Event 3 shall instead become due and payable upon the occurrence of such Regulatory Approval.

Notwithstanding anything to the contrary contained in this Agreement, each Milestone Payment is payable one time only, regardless of the number of Products that satisfy the condition or the number of indications for which the condition is satisfied.

(c) Distribution of Milestone Payments .

(i) Subject to Section 1.10(h) and to the Stockholders’ Agent’s rights pursuant to Section 10.1(d), if the Milestone Payment that becomes due and payable upon the occurrence of Milestone Event 1 (the “ First Milestone Payment ”) becomes due and payable

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pursuant to Section 1.7(b), Parent shall: (A) pay to each Participating Securityholder (or, at Parent’s election, cause the Payment Agent (as defined in Section 1.10(a)) to deliver to each Participating Securityholder), within seven business days following the achievement of Milestone Event 1, in respect of each Contingent Payment Share of such Participating Securityholder, an amount determined by dividing $36,000,000 by the Fully Diluted Share Number; and (B) cause to be delivered to the Escrow Agent as a contribution to the Indemnification Escrow Fund with respect to each Contingent Payment Share of such Participating Securityholder, an amount equal to $4,000,000 divided by the aggregate number of Contingent Payment Shares held by all Participating Securityholders.

(ii) Subject to Parent’s rights pursuant to Sections 1.8 and 9.6 and the Stockholders’ Agent’s rights pursuant to Section 10.1(d), if any other Milestone Payment becomes due and payable pursuant to Section 1.7(b), Section 1.7(d) or Section 1.7(i), Parent shall pay to each Participating Securityholder (or, at Parent’s election, cause the Payment Agent to deliver to each Participating Securityholder), within 25 Trading Days following the achievement of the Milestone Event applicable to such Milestone Payment, in respect of each Contingent Payment Share of such Participating Securityholder, an amount determined by dividing such Milestone Payment by the Fully Diluted Share Number.

(d) Acceleration of Milestone Payments . Notwithstanding anything to the contrary in this Agreement, immediately upon the occurrence of a Specified Bankruptcy Event, to the extent not previously paid, 100% of the Milestone Payments as to which a Milestone Termination Date has not yet occurred shall become due and payable; provided, however , that in a case under title 11 of the United States Code, if Parent or the Surviving Corporation assumes this Agreement in accordance with section 365 of title 11 of the United States Code and cures any and all outstanding defaults, including any and all monetary and non-monetary defaults, within five business days of entry of an order authorizing such assumption, then any Milestone Payments as to which a Milestone Termination Date has not yet occurred shall not be deemed accelerated in accordance with this Section 1.7(d), but shall remain due and payable in accordance with the deadlines and subject to the conditions set forth in Sections 1.7(b) and 1.7(i). Nothing in this Agreement shall be construed, explicitly or implicitly, as consent or agreement by or on behalf of the Stockholders’ Agent or the Participating Securityholders to any proposed action by the Parent or the Surviving Corporation in a bankruptcy proceeding, including any proposed assumption, assumption and assignment or other disposition of this Agreement.

(e) Milestone Payments Generally . The parties acknowledge and agree that Parent’s or the Surviving Corporation’s achievement of the Milestone Events are material factors in determining the valuation of the Company by Parent. Therefore, except as provided in Sections 1.7(d) or 1.7(i), the Participating Securityholders shall have no right to receive any particular Milestone Payment (or any portion thereof) unless and until the particular Milestone Event that must be achieved in order for the Participating Securityholders to receive such Milestone Payment is achieved by the applicable Milestone Termination Date as determined pursuant to this Section 1.7.

(f) Milestone Rights Not Transferable . The right of any Participating Securityholder to receive any Milestone Payment: (i) does not give the Participating Securityholder dividend rights, voting rights, liquidation rights, preemptive rights or other rights of holders of capital stock of the Surviving Corporation; (ii) shall not be evidenced by a certificate or other instrument; (iii) shall not be assignable or otherwise transferable by such Participating Securityholder, except by will, upon death or by operation of law; (iv) shall not accrue or pay interest on any portion thereof; and (v) does not represent

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any right other than the right to receive the consideration set forth in this Section 1.7 and Section 1.8. Any attempted transfer of the right to any Milestone Payment by any holder thereof (other than as specifically permitted by the immediately preceding sentence) shall be null and void.

(g) Information Obligations . Subject to the Stockholders’ Agent first entering into a confidentiality agreement with Parent in form and substance reasonably satisfactory to Parent containing restrictions on the use and disclosure of confidential information of Parent or its affiliates, for so long as one or more Milestone Payments may reasonably become payable: (x) (i) during the period commencing on the date that is three months following the Closing Date and ending on the date of acceptance of the NDA described in Section 1.7(h)(i) or, if applicable, Section 1.7(i)(ii)(1) (the “ Acceptance Date ”), Parent shall provide, on a quarterly basis, a written report to the Stockholders’ Agent in reasonable detail regarding the technical development of the Products and the status of efforts to achieve the Milestone Payments (each such report, an “ Update Report ”); and (ii) after the Acceptance Date, Parent shall provide an Update Report to the Stockholders’ Agent on a semi-annual basis; and (y) Parent shall notify the Stockholders’ Agent of a proposed implementation of a material modification to the Agreed Trial Design for the 003-A1 Study, 009 Study or 011 Study at least 30 days prior to any such implementation (unless a patient safety issue requires any such material modification to be implemented in less than 30 days, in which case Parent shall provide such notice to the Stockholders’ Agent as soon as is practicable) and shall notify the Stockholders’ Agent that such material modification has been implemented within 10 days after any such implementation (each such report, a “ Material Modification Report ”) and (z) Parent shall notify the Stockholders’ Agent within five business days after the date on which any Milestone Payment becomes payable. Within 30 days after delivery of an Update Report, or within 10 days after delivery of a Material Modification Report, if the Stockholders’ Agent requests a meeting with representatives of Parent to discuss such report, Parent shall use its commercially reasonable efforts to make available for such a meeting those of its senior medical and regulatory employees as are responsible for the applicable activities set forth in the Update Report or Material Modification Report. Provided that Parent has made available to the Stockholders’ Agent at the requested meeting those employees of Parent as the Stockholders’ Agent may have reasonably requested, the Stockholders’ Agent may not request more than one such meeting for any Update Report or Material Modification Report. All information contained in any Update Report or Material Modification Report, or conveyed to the Stockholders’ Agent in any meeting regarding an Update Report or Material Modification Report, shall be subject to the confidentiality agreement between Parent and the Stockholders’ Agent.

(h) Applicable Efforts . Subject to Section 1.7(i), commencing upon the Closing, Parent and its Subsidiaries shall use Applicable Efforts to implement and conduct all research, development and clinical manufacturing activities for, and regulatory activities with respect to, the Product (which may include activities conducted through third parties) that are components of or directly related to or required for the achievement of the Milestone Events by the applicable Milestone Termination Dates. Without limiting and notwithstanding the foregoing, subject to Section 1.7(i), commencing upon the Closing, Parent and its Subsidiaries shall:

(i) with respect to Milestone Event 2 only: (A) conduct and complete the 003-A1 Study based on the Agreed Trial Design for such study (as modified by any Permitted Modifications); (B) submit the NDA for the Product for the Milestone Event 2 indication to the FDA by [ * ] and use Applicable Efforts to cause such NDA to be accepted for filing by the FDA, provided in each case that Parent determines in its reasonable discretion that Milestone Event 2 would reasonably be expected to be achieved based upon the outcome of the relevant studies; and (C) if Parent was required to submit the NDA referred to in clause “(B)” above to the FDA, use

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Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 2 indication such that Milestone Event 2 would reasonably be expected to be achieved on or before the Milestone Event 2 Termination Date;

(ii) with respect to Milestone Event 3 only: (A) use Applicable Efforts to conduct and complete the 011 Study based on the Agreed Trial Design for such study (as modified by any Permitted Modifications); (B) submit the MAA for the Product for the Milestone Event 3 indication to the EMEA’s Committee for Medicinal Products for Human Use (“ CHMP ”) by [ * ] and use Applicable Efforts to cause the designation of day 0 of the MAA review clock by EMEA with respect to such MAA, provided in each case that there is a reasonable basis for submission thereof based upon the outcome of the relevant studies; and (C) if Parent was required to submit the MAA referred to in clause “(B)” above to CHMP, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 3 indication such that Milestone Event 3 would reasonably be expected to be achieved on or before [ * ];

(iii) with respect to Milestone Event 4 only: (A) conduct and complete the 009 Study based on the Agreed Trial Design for such study (as modified by any Permitted Modifications); (B) complete the interim analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study; (C) complete the final analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study; (D) submit the NDA for the Product for the Milestone Event 4 indication to the FDA by [ * ] and use Applicable Efforts to cause such NDA to be accepted for filing by the FDA, provided in each case that there is a reasonable basis for submission thereof based upon the outcome of the relevant studies; and (E) if Parent was required to submit the NDA referred to in clause “(D)” above to the FDA, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 4 indication such that Milestone Event 4 would reasonably be expected to be achieved on or before [ * ]; and

(iv) with respect to Milestone Event 5 only: (A) conduct and complete the 009 Study based on the Agreed Trial Design for such study (as modified by any Permitted Modifications); (B) complete the interim analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study; (C) complete the final analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study; (D) submit the MAA for the Product for the Milestone Event 5 indication to CHMP by [ * ] and use Applicable Efforts to cause the designation of day 0 of the MAA review clock by EMEA with respect to such MAA, provided in each case that there is a reasonable basis for submission thereof based upon the outcome of the relevant studies; and (E) if Parent was required to submit the MAA referred to in clause “(D)” above to CHMP, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 5 indication such that Milestone Event 5 would reasonably be expected to be achieved on or before [ * ].

The provisions of this Section 1.7(h) with respect to any specified Milestone Event shall terminate and be of no further force and effect upon the earliest of: (i) the payment of the applicable Milestone Payment pursuant to Section 1.7(c), Section 1.7(d) or Section 1.7(i)(i); (ii) the occurrence of the applicable Milestone Termination Date; and (iii) the occurrence of a Technical Failure (it being understood that if a Technical Failure occurs, then all provisions in Section 1.7(h) shall terminate with respect to all Milestone Events). Notwithstanding anything to the contrary in this Agreement, but subject to Section 1.7(i),

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Parent, the Company and the Stockholders’ Agent hereby acknowledge and agree that no failure by Parent or its Subsidiaries to complete any of the actions referenced in this Section 1.7(h) by the specified date shall, in and of itself, be the basis of any claim relating to any alleged breach of this Agreement by Parent, where Parent has undertaken Applicable Efforts to achieve such actions within such specified timeframe.

(i) Failure to Achieve Milestone Events .

(i) If: (A) a Milestone Event is not satisfied by the applicable Milestone Termination Date; (B) prior to the occurrence of the applicable Milestone Termination Date, other than with respect to a Material Modification to the applicable Agreed Trial Design (which shall be subject to Section 1.7(i)(ii)), Parent breached its obligations under Section 1.7(h) with respect to such Milestone Event, including by the failure by Parent or its Subsidiaries to complete any of the actions referenced in Section 1.7(h) by the date specified therefor; and (C) the Stockholders’ Agent demonstrates that Parent’s breach was a direct and primary cause of the failure of such Milestone Event to be satisfied prior to the applicable Milestone Termination Date, then the Milestone Payment that would otherwise have become due and payable upon the satisfaction of such Milestone Event (but no other Milestone Payment) shall immediately become due and shall be payable in accordance with Section 1.7(c).

(ii) If Parent implements a Material Modification to the Agreed Trial Design for the 003-A1 Study, 009 Study or 011 Study, then (x) the Milestone Termination Date(s) applicable to such study’s Related Milestone Event(s) (but no other Milestone Event) shall cease to be applicable, and the Milestone Payment(s) that would become due and payable upon the satisfaction of such Milestone Event(s) (but no other Milestone Payment) shall become due and payable in accordance with Section 1.7(c) upon the occurrence of the Milestone Event(s) (without regard to the Milestone Termination Date contemplated thereby) at any time and (y) the obligations of Parent set forth in Sections 1.7(h)(i) through (iv) shall cease to be applicable with respect to such study’s Related Milestone Event(s) (but no other Milestone Event) and shall thereafter be replaced with the following obligations, as applicable:

(1) with respect to Milestone Event 2 only: (A) conduct and complete the 003-A1 Study based on the Agreed Trial Design for such study, as modified, using Applicable Efforts; (B) submit the NDA for the Product for the Milestone Event 2 indication to the FDA and use Applicable Efforts to cause such NDA to be accepted for filing by the FDA on or before the date that is 9 months after the last patient’s last visit in the 003-A1 Study, provided in each case that Parent determines in its reasonable discretion that Milestone Event 2 (without regard to the Milestone Termination Date contemplated thereby) would reasonably be expected to be achieved based upon the outcome of the relevant studies; and (C) if Parent was required to submit the NDA referred to in clause “(B)” above to the FDA, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 2 indication such that Milestone Event 2 would reasonably be expected to be achieved;

(2) with respect to Milestone Event 3 only: (A) conduct and complete the 011 Study, based on the Agreed Trial Design for such study, as modified, using Applicable Efforts and, if a Material Modification is made to the 003-A1 Study, the 003-A1 Study, based on the Agreed Trial Design for such study, as modified, using

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Applicable Efforts; (B) submit the MAA for the Product for the Milestone Event 3 indication to the CHMP and use Applicable Efforts to cause the designation of day 0 of the MAA review clock by EMEA with respect to such MAA on or before the date that is 9 months after the last patient’s last visit in the 011 Study, provided in each case that there is a reasonable basis for submission thereof based upon the outcome of the relevant studies; and (C) if Parent was required to submit the MAA referred to in clause “(B)” above to CHMP, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 3 indication such that Milestone Event 3 would reasonably be expected to be achieved;

(3) with respect to Milestone Event 4 only: (A) conduct and complete the 009 Study based on the Agreed Trial Design for such study, as modified, using Applicable Efforts; (B) complete the interim analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study, as modified; (C) complete the final analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study, as modified; (D) submit the NDA for the Product for the Milestone Event 4 indication to the FDA and use Applicable Efforts to cause such NDA to be accepted for filing by the FDA on or before the date that is 9 months after the last patient’s last visit in the 009 Study, provided in each case that there is a reasonable basis for submission thereof based upon the outcome of the relevant studies; and (E) if Parent was required to submit the NDA referred to in clause “(D)” above to the FDA, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 4 indication such that Milestone Event 4 would reasonably be expected to be achieved; and

(4) with respect to Milestone Event 5 only: (A) conduct and complete the 009 Study based on the Agreed Trial Design for such study, as modified, using Applicable Efforts; (B) complete the interim analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study, as modified; (C) complete the final analysis for the 009 Study using the Independent Review Committee as contemplated by the Agreed Trial Design for such study, as modified; (D) submit the MAA for the Product for the Milestone Event 5 indication to CHMP and use Applicable Efforts to cause the designation of day 0 of the MAA review clock by EMEA with respect to such MAA on or before the date that is 9 months after the last patient’s last visit in the 009 Study, provided in each case that there is a reasonable basis for submission thereof based upon the outcome of the relevant studies; and (E) if Parent was required to submit the MAA referred to in clause “(D)” above to CHMP, use Applicable Efforts to obtain Regulatory Approval for the Product for the Milestone Event 5 indication such that Milestone Event 5 would reasonably be expected to be achieved.

For greater clarity, a Permitted Modification to the Agreed Trial Design for the 003-A1 Study, 009 Study or 011 Study shall not constitute a Material Modification to such Agreed Trial Design. The provisions of Section 1.7(i)(ii) with respect to any specified Milestone Event shall terminate and be of no further force and effect upon the earliest of: (i) the payment of the applicable Milestone Payment pursuant to Section 1.7(c), Section 1.7(d) or Section 1.7(i)(i); and (ii) the occurrence of a Technical Failure (it being understood that if a Technical Failure occurs, then all provisions in Section 1.7(i)(ii) shall terminate with respect to all Milestone Events). Notwithstanding anything to the contrary in this Agreement, Parent, the

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Company and the Stockholders’ Agent hereby acknowledge and agree that no failure by Parent or its Subsidiaries to complete any of the actions referenced in Section 1.7(i)(ii)(1), Section 1.7(i)(ii)(2), Section 1.7(i)(ii)(3) or Section 1.7(i)(ii)(4) by the specified date shall, in and of itself, be the basis of any claim relating to any alleged breach of this Agreement by Parent, where Parent has undertaken Applicable Efforts to achieve such actions within such specified timeframe.

1.8 Payment of Milestone Payments in Parent Common Stock .

(a) Definitions . For purposes of this Section 1.8:

(i) “ Participating Preferred Securityholders ” shall mean each of the Participating Securityholders that held shares of Company Preferred Stock immediately prior to the Effective Time.

(ii) “ Principal Market ” shall mean the principal trading market or quotation system for shares of Parent Common Stock at any applicable time.

(iii) “ SEC ” shall mean the Securities and Exchange Commission.

(iv) “ Share Issuance Amount ” shall mean the portion (expressed in dollars) of the applicable Milestone Payment that Parent elects to satisfy by issuing shares of Parent Common Stock to each of the Participating Preferred Securityholders.

(v) “ Share Payment Closing Date ” shall mean the date on which a Milestone Payment as to which Parent has delivered a Share Payment Notice is distributed pursuant to Section 1.7(c).

(vi) “ Share Payment Notice ” shall mean a notice delivered by Parent to Participating Preferred Securityholders of Parent’s election to issue shares of Parent Common Stock pursuant to the provisions of this Section 1.8 in satisfaction of all or a portion of the applicable Milestone Payment.

(vii) “ Trading Day ” means any day on which the Parent Common Stock is traded for at least two hours on the Principal Market.

(viii) “ Volume Weighted Average Price ” for the Parent Common Stock with respect to each Share Payment Closing Date means the average of the daily volume-weighted average prices for a share of Parent Common Stock on the Principal Market during the period beginning at 9:30 a.m., New York City time, and ending at 4:00 p.m., New York City time, as reported by Bloomberg, over the 10-Trading Day period commencing on the sixth Trading Day following the public announcement by Parent of achievement of the applicable Milestone Event (adjusted as appropriate to reflect any stock split, reverse stock split or similar transaction effected by Parent between the commencement of such period and the Stock Payment Closing Date).

(b) Right to Make Share Issuance . Subject to Section 1.8(e) below, in lieu of making any Milestone Payment (other than the First Milestone Payment) to the Participating Preferred Securityholders in cash, except in connection with an acceleration of any Milestone Payment pursuant to

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Section 1.7(d), Parent may elect to satisfy all or any portion of such Milestone Payment that is owed to the Participating Preferred Securityholders by the issuance to the Participating Preferred Securityholders of shares of Parent Common Stock (a “ Share Issuance ”) in accordance with the provisions of this Section 1.8; provided, however, that in no event shall Parent issue, or be obligated to issue, shares of Parent Common Stock in payment of all or any portion of any Milestone Payment if the issuance of such shares would require or would have required the approval of Parent’s stockholders under applicable rules of the Principal Market or other Legal Requirements.

(c) Exercise of Right to Make Share Issuance . No less than 15 Trading Days prior to the Share Payment Closing Date, Parent may deliver to the Participating Preferred Securityholders the Share Payment Notice. The Share Payment Notice shall be irrevocable and shall specify the Share Issuance Amount. Parent agrees that if Parent delivers a Share Payment Notice, Parent shall, to the extent not previously publicly announced, publicly announce the achievement of the Milestone Event with respect to the applicable Milestone Payment by no later than 9:30 a.m., New York City time, on the Trading Day that is 15 Trading Days prior to the Share Payment Closing Date.

(d) Share Issuance Closing . On the Share Payment Closing Date, subject to Section 1.8(f), Parent shall: (i) issue to each Participating Preferred Securityholder, with respect to each share of Company Preferred Stock held by such Participating Preferred Securityholder immediately prior to the Effective Time, a fraction of a share of Parent Common Stock having a numerator equal to the Share Issuance Amount and having a denominator determined by multiplying the aggregate number of shares of Company Preferred Stock held by the Participating Preferred Securityholders immediately prior to the Effective Time by the Volume Weighted Average Price; and (ii) reduce the amount of cash otherwise payable in respect of each share of Company Preferred Stock in connection with the payment of such Milestone Payment pursuant to Section 1.7(c) by subtracting from such amount the amount determined by dividing (A) the Share Issuance Amount by (B) the aggregate number of shares of Company Preferred Stock held by the Participating Preferred Securityholders immediately prior to the Effective Time. By no later than 5:30 p.m., New York City time, on each Share Payment Closing Date, Parent shall cause its transfer agent to electronically transmit the applicable Milestone Shares, by crediting the account of each Participating Preferred Securityholder’s broker (as specified by such Participating Preferred Securityholder no later than two Trading Days prior to the Share Payment Closing Date) with DTC through its Deposit Withdrawal Agent Commission (DWAC) system.

(e) Limitations on Share Issuances . It shall be a condition precedent to any Share Issuance on any Share Payment Closing Date that the shares of Parent Common Stock to be issued in such Share Issuance shall as of such Share Payment Closing Date: (i) be freely transferable without restriction under applicable securities laws by the Participating Preferred Securityholders, without any requirement for any further delivery of any opinion of counsel or other instruction to Parent’s transfer agent by Parent or otherwise, except to the extent that a Participating Securityholder is an affiliate of Parent as of such Share Payment Closing Date; (ii) have been duly authorized by all necessary corporate action; (iii) be listed for trading on a national securities exchange or quotation system in the United States; and (iv) be validly issued, fully paid and nonassessable. If Parent determines that registration of the shares to be issued to the Participating Preferred Securityholders for resale pursuant to a registration statement under the Securities Act (as defined in Exhibit D ) is required for such shares to meet the requirements set forth in Section 1.8(e)(i), then the Stockholders’ Agent shall use reasonable efforts to facilitate the negotiation, and the execution and delivery by the Participating Preferred Securityholders, of a customary registration rights agreement relating thereto.

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(f) No Fractional Shares . No fractional shares of Parent Common Stock shall be issued pursuant to this Agreement, and no certificates or scrip for any such fractional shares shall be issued. Any Participating Securityholder who would otherwise be entitled to receive a fraction of a share of Parent Common Stock in a Share Issuance (after aggregating all fractional shares of Parent Common Stock issuable to such Participating Securityholder in such Share Issuance) shall, in lieu of such fraction of a share, be paid in cash the amount, rounded to the nearest whole cent (with $0.005 being rounded upward), without interest, determined by multiplying such fraction by the closing price of a share of Parent Common Stock on the Principal Market on the date of issuance of such share of Parent Common Stock.

(g) Successors . In the event that a Person purchases either (i) all of the issued and outstanding shares of capital stock, or (ii) all or substantially all of the assets of Parent or the Surviving Corporation in a transaction in which Parent assigns its rights under Section 1.7 to such Person in accordance with Section 10.9, in the case of clauses “(i)” and “(ii)” all references to Parent contained in this Section 1.8 shall be deemed to instead refer to such Person, and all references to Parent Common Stock shall be deemed to instead refer to shares of common stock shares (or any equivalent class of shares) of such Person.

1.9 Dissenting Shares .

(a) Effect on Dissenting Shares . Notwithstanding any provisions of this Agreement to the contrary, shares of Company Capital Stock held by a holder who has demanded and perfected such demand for appraisal of such holder’s shares of Company Capital Stock in accordance with Section 262 of the DGCL (or, if the Company is subject to Section 2115 of the California General Corporation Law (the “ CGCL ”), in accordance with Chapter 13 of the CGCL) and as of the Closing has neither effectively withdrawn nor lost such holder’s right to such appraisal (the “ Dissenting Shares ”) shall not be converted into the applicable Merger Consideration, but shall be entitled to only such rights as are granted by the DGCL (and, if the Company is subject to Section 2115 of the CGCL, by the CGCL). Parent shall be entitled to retain any Merger Consideration not paid on account of such Dissenting Shares pending resolution of the claims of such holders, and the Effective Time Holders shall not be entitled to any portion of such retained Merger Consideration.

(b) Loss of Dissenting Share Status . Notwithstanding the provisions of Section 1.9(a), if any holder of shares of Company Capital Stock who demands appraisal of such holder’s shares under the DGCL (or, if the Company is subject to Section 2115 of the CGCL, the CGCL) shall effectively withdraw or lose (through the failure to perfect or otherwise) such holder’s right to appraisal, then as of the Closing or the occurrence of such event, whichever later occurs, such holder’s shares of Company Capital Stock shall automatically be converted into the right to receive the applicable Merger Consideration, without interest thereon, promptly following the surrender of the certificate or certificates representing such shares of Company Capital Stock.

(c) Notice of Dissenting Shares . The Company shall give Parent: (i) prompt notice of any demands for appraisal of shares of Company Capital Stock received by the Company, withdrawals of any demands, and any other instruments or notices served or otherwise delivered pursuant to the DGCL or the CGCL and received by the Company; and (ii) the opportunity to direct all negotiations and proceedings with respect to any such demands for appraisal. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal of shares of

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Company Capital Stock or offer to settle any such demands other than by operation of law or pursuant to a final order of a court of competent jurisdiction.

1.10 Exchange of Certificates.

(a) Payment Agent . On or prior to the Closing Date, Parent shall select a reputable bank or trust company reasonably acceptable to the Company to act as payment agent in the Merger (the “ Payment Agent ”). On or promptly following the Closing Date, Parent shall deposit with the Payment Agent cash sufficient to pay the cash consideration payable pursuant to Sections 1.5(a)(ii)(A), 1.5(a)(iii)(A), 1.5(a)(v)(A) and 1.5(a)(vi)(A). The cash amount so deposited with the Payment Agent is referred to as the “ Payment Fund .” The Payment Agent will invest the funds included in the Payment Fund in the manner directed by Parent. Any interest or other income resulting from the investment of such funds shall be the property of, and will be paid to, Parent.

(b) Letter of Transmittal . Prior to the Effective Time, the Company shall mail to each Person who is a record holder of Company Capital Stock or Company Options immediately prior to the Effective Time: (i) a letter of transmittal (or similar document to be delivered to the holders of Company Options) containing such provisions as Parent or the Payment Agent may reasonably specify (including a provision confirming that delivery of Company Stock Certificates (as defined in 1.10(d)) shall be effected, and risk of loss and title to Company Stock Certificates shall pass, only upon delivery of such Company Stock Certificates to the Payment Agent, and a provision whereby such holder agrees to be bound by the provisions of Sections 1.10, 9 and 10.1) (a “ Letter of Transmittal ”); and (ii) instructions for use in effecting the exchange of Company Stock Certificates for the Merger Consideration, if any, payable with respect to such Company Capital Stock. Upon the surrender to the Payment Agent of a Company Stock Certificate (or an affidavit of lost stock certificate as described in Section 1.10(e)), together with a duly executed Letter of Transmittal and such other customary documents as Parent or the Payment Agent may reasonably request, the holder of such Company Stock Certificate shall be entitled to receive in exchange therefor the Merger Consideration, if any, which such holder has the right to receive pursuant to Section 1.5(a) at the time of such surrender, and the Company Stock Certificate so surrendered shall forthwith be canceled. From and after the Effective Time, each Company Stock Certificate which prior to the Effective Time represented shares of Company Capital Stock shall be deemed to represent only the right to receive the Merger Consideration payable with respect to such shares, and the holder of each such Company Stock Certificate shall cease to have any rights with respect to the shares of Company Capital Stock formerly represented thereby. Upon the delivery to the Payment Agent of a duly executed letter of transmittal and such other customary documents as Parent or the Payment Agent may reasonably request, a holder of Company Options that were outstanding immediately prior to the Closing shall be entitled to receive in exchange therefor the Merger Consideration payable in respect thereof, which amount Parent shall cause to be paid through the Surviving Corporation’s payroll agent. The Company shall deliver a copy of the Letter of Transmittal to the Stockholders’ Agent.

(c) Payments to Others . If payment of Merger Consideration in respect of shares of Company Capital Stock converted pursuant to Section 1.5 is to be made to a Person other than the Person in whose name a surrendered Company Stock Certificate is registered, it shall be a condition to such payment that the Company Stock Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the Person requesting such payment shall have paid any transfer and other Taxes required by reason of such payment in a name other than that of the registered holder of the Company Stock Certificate surrendered or shall have established to the satisfaction of Parent that such Tax either has been paid or is not payable.

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(d) Stock Transfer Books . As of the Effective Time, the stock transfer books of the Company shall be closed and there shall not be any further registration of transfers of shares of Company Capital Stock thereafter on the records of the Company. If, after the Effective Time, certificates for shares of Company Capital Stock (“ Company Stock Certificates ”) are presented to the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration, if any, payable with respect to such shares as provided for in Section 1.5. No interest shall accrue or be paid on any Merger Consideration payable upon the surrender of a Company Stock Certificate which immediately before the Effective Time represented outstanding shares of Company Capital Stock.

(e) Lost Certificates . In the event any Company Stock Certificate representing shares of Company Capital Stock converted in connection with the Merger pursuant to Section 1.5 shall have been lost, stolen or destroyed, Parent may, in its discretion and as a condition precedent to the payment of any Merger Consideration with respect to the shares of Company Capital Stock previously represented by such Company Stock Certificate, require the owner of such lost, stolen or destroyed Company Stock Certificate to provide an appropriate affidavit and an indemnity agreement in form and substance reasonably satisfactory to Parent as indemnity against any claim that may be made against the Payment Agent, Parent, the Surviving Corporation or any affiliated party with respect to such Company Stock Certificate.

(f) Undistributed Payment Funds . Any portion of the Payment Fund that remains undistributed to Effective Time Holders as of the date that is 180 days after the Closing Date shall be delivered to Parent upon demand, and Effective Time Holders who have not theretofore surrendered their Company Stock Certificates or Company Warrants in accordance with this Section 1.10 shall thereafter look only to Parent for satisfaction of their claims for the Merger Consideration payable with respect to the shares of Company Capital Stock previously represented by such Company Stock Certificates or the shares of Company Capital Stock subject to such Company Warrants, as applicable, without any interest thereon.

(g) Escheat . Notwithstanding anything in this Agreement to the contrary, neither Parent nor any other Person shall be liable to any holder of shares of Company Capital Stock or Company Warrants or to any other Person for any amount paid to a public official pursuant to applicable abandoned property law, escheat law or similar Legal Requirement. Any amounts remaining unclaimed by holders of shares of Company Capital Stock or Company Options immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Body shall, to the extent permitted by applicable Legal Requirements, become the property of Parent free and clear of any Encumbrance.

(h) Withholding . Each of the Payment Agent, Parent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement to any security holder or former security holder of the Company such amounts as Parent reasonably determines in good faith are required to be deducted or withheld therefrom or in connection therewith under the Code or any provision of state, local or foreign Tax law or under any other applicable Legal Requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

1.11 Further Action. If, at any time after the Effective Time, any further action is reasonably determined by Parent to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation or Parent with full right, title and possession of and to all rights and property of

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Merger Sub and the Company, the officers and directors of the Surviving Corporation and Parent shall be fully authorized (in the name of Merger Sub, in the name of the Company and otherwise) to take such action.

2. Representations and Warranties of the Company

The Company represents and warrants, to and for the benefit of the Indemnitees, as follows:

2.1 Due Organization; Subsidiaries; Etc.

(a) Organization . The Company has been duly organized, and is validly existing and in good standing, under the laws of the State of Delaware. The Company has full power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Contracts to which it is a party or by which it is bound.

(b) Qualification . The Company is qualified, licensed or admitted to do business as a foreign corporation, and is in good standing (to the extent that the applicable jurisdiction recognizes the concept of good standing), under the laws of all jurisdictions where the property owned, leased or operated by it or the nature of its business requires such qualification, license or admission and where the failure to be so qualified, licensed or admitted would have a Material Adverse Effect. Part 2.1(b) of the Disclosure Schedule accurately sets forth each jurisdiction where the Company is qualified, licensed or admitted to do business.

(c) Directors and Officers . Part 2.1(c) of the Disclosure Schedule accurately sets forth: (i) the names of the members of the board of directors (or similar body) of the Company; (ii) the names of the members of each committee of the board of directors (or similar body) of the Company; and (iii) the names and titles of the officers of the Company.

(d) No Subsidiaries . The Company does not own any shares or other securities of any other Entity. There are no Entities that the Company is required or permitted to consolidate for financial reporting purposes under GAAP. There are no Entities that have been merged into or that otherwise are predecessors to the Company. The Company has not agreed nor is obligated to make any future investment in or capital contribution to any Entity.

2.2 Charter Documents; Records. The Company has made available to Parent accurate and complete copies of: (a) the Charter Documents; and (b) the minutes and other records of the meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the stockholders, the board of directors and all committees of the board of directors of the Company since January 1, 2004. All actions taken and all transactions entered into by the Company have been duly approved by all necessary action of the board of directors and stockholders of the Company. There has been no violation of any of the provisions of the Charter Documents, and the Company has not taken any action that is inconsistent in any material respect with any resolution adopted by the Company’s stockholders, board of directors or any committee of the board of directors. The stock records and minute books of the Company are accurate, up-to-date and complete in all material respects, and have been maintained in accordance with prudent business practices and all applicable Legal Requirements.

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2.3 Capitalization.

(a) Outstanding Securities . The authorized capital stock of the Company consists of: (i) 170,945,000 shares of Company Common Stock, of which 4,503,569 shares are issued and outstanding as of the date of this Agreement; and (ii) 149,890,000 shares of Company Preferred Stock, of which: (A) 18,345,000 shares are designated as Series A Preferred Stock, 17,800,000 shares of which are issued and outstanding as of the date of this Agreement; (B) 18,345,000 shares are designated as Series A-1 Preferred Stock, 500,000 of which are issued and outstanding as of the date of this Agreement (however, at no time is the Company authorized to issue and have outstanding more than a total of 18,345,000 shares of Series A Preferred Stock and Series A-1 Preferred Stock together); (C) 26,600,000 shares are designated as Series B Preferred Stock, 20,425,364 of which are issued and outstanding as of the date of this Agreement; (D) 26,600,000 shares are designated as Series B-1 Preferred Stock, none of which are issued and outstanding as of the date of this Agreement (however, at no time is the Company authorized to issue and have outstanding more than a total of 26,600,000 shares of Series B Preferred Stock and Series B-1 Preferred Stock together); (E) 30,000,000 shares are designated as Series C Preferred Stock, 29,614,654 of which are issued and outstanding as of the date of this Agreement; and (F) 30,000,000 shares are designated as Series C-1 Preferred Stock, none of which are issued and outstanding as of the date of this Agreement (however, at no time is the Company authorized to issue and have outstanding more than a total of 30,000,000 shares of Series C Preferred Stock and Series C-1 Preferred Stock together). There are 94,905 shares of Common Stock and no shares of Preferred Stock held in the Company’s treasury as of the date of this Agreement. Part 2.3(a) of the Disclosure Schedule sets forth the names of the Company’s stockholders and the class, series and number of shares of Company Capital Stock owned of record by each of such stockholders as of the date of this Agreement.

(b) Dividends, Authorization, Etc. The Company has not declared or paid any dividends on any shares of Company Capital Stock. All of the outstanding shares of Company Capital Stock have been duly authorized and validly issued, and are fully paid and nonassessable. Except as set forth in Part 2.3(b) of the Disclosure Schedule, no shares of Company Capital Stock are subject to forfeiture, restriction on transfer (other than restrictions on transfer imposed by virtue of applicable federal and state securities laws) or a right of repurchase by the Company (“ Restricted Company Shares ”). Each share of Company Preferred Stock is convertible into shares of Company Common Stock on a one-for-one basis.

(c) Stock Options . The Company has reserved 17,712,287 shares of Company Common Stock for issuance under the Company Option Plan, of which options with respect to 13,896,080 shares are outstanding as of the date of this Agreement. Part 2.3(c) of the Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option; (iii) the exercise price per share of Company Common Stock purchasable under such Company Option; and (iv) the expiration date of such Company Option. Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “ Grant Date ”) by all necessary corporate action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, each such grant was made in accordance with the terms of the applicable compensation plan or arrangement of the Company and all other applicable Legal Requirements, the per share exercise price of each Company Option was equal to or greater than the fair

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market value of a share of Company Common Stock on the applicable Grant Date and each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company. The cancellation of Company Options at the Effective Time and payment of cash in exchange therefor in accordance with Section 1.6 will comply with the terms of the Company Option Plan, all Contracts applicable to such Company Options and all Legal Requirements and, as of the Closing, no former holder of a Company Option will have any rights with respect to such Company Option other than the right to receive cash in respect thereof as contemplated by this Agreement.

(d) Warrants . Part 2.3(d) of the Disclosure Schedule accurately sets forth, with respect to each Company Warrant that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Warrant; (ii) the class, series and total number of shares of Company Capital Stock that are subject to such Company Warrant and the class, series and number of shares of Company Capital Stock with respect to which such Company Warrant is immediately exercisable; (iii) the date on which such Company Warrant was issued and the term of such Company Warrant; and (iv) the exercise price per share of Company Capital Stock purchasable under such Company Warrant. The Company has made available to Parent accurate and complete copies of each Contract pursuant to which any Company Warrant is outstanding.

(e) No Other Securities . Except for the Company Preferred Stock and except as set forth in Part 2.3(c) or 2.3(d) of the Disclosure Schedule, there is no: (i) outstanding subscription, option, call, convertible note, warrant or right (whether or not currently exercisable) granted or issued by the Company to acquire any shares of Company Capital Stock or other securities of the Company; (ii) outstanding security, instrument or obligation granted or issued by the Company that is or may become convertible into or exchangeable for any shares of Company Capital Stock (or cash based on the value of such shares) or other securities of the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of Company Capital Stock or any other securities, including any promise or commitment to grant Company Options or other securities of the Company to an employee of or other service provider to the Company; or (iv) condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of Company Capital Stock or other securities of the Company from the Company. As of immediately following the Effective Time, there will be no outstanding options, warrants or other rights to purchase shares of Company Capital Stock.

(f) Legal Issuance . All outstanding shares of Company Capital Stock, all outstanding Company Options and Company Warrants and all other securities that have ever been issued or granted by the Company have been issued and granted in compliance with: (i) all applicable securities laws and other applicable Legal Requirements; and (ii) all requirements set forth in all applicable Contracts. None of the outstanding shares of Company Capital Stock were issued in violation of any preemptive rights or other rights to subscribe for or purchase securities of the Company. Part 2.3(f) of the Disclosure Schedule accurately identifies each Company Contract relating to any securities of the Company that contains any information rights, registration rights, financial statement requirements or other terms that would survive the Closing unless terminated or amended prior to the Closing.

(g) Repurchased Shares . All shares of capital stock of the Company ever repurchased or redeemed by the Company were repurchased or redeemed in compliance with: (A) all applicable securities laws and other applicable Legal Requirements; and (B) all requirements set forth in all applicable Contracts.

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2.4 Financial Statements and Related Information.

(a) Delivery of Financial Statements . The Company has made available to Parent the following financial statements and notes thereto (collectively, the “ Company Financial Statements ”): (i) the audited balance sheets of the Company as of December 31, 2006, December 31, 2007 and December 31, 2008, and the related audited statements of income, statements of stockholders’ equity and statements of cash flows for the years ended December 31, 2006, December 31, 2007 and December 31, 2008, together with the notes thereto and the unqualified report and opinion of Ernst & Young relating thereto; (ii) the unaudited balance sheet of the Company as of March 31, 2009, and the related unaudited statement of income, statement of stockholders’ equity and statement of cash flows for the three months ended March 31, 2009; and (iii) the unaudited balance sheet of the Company as of June 30, 2009 (the “ Unaudited Interim Balance Sheet ”), and the related unaudited statement of income, statement of stockholders’ equity and statement of cash flows for the six months ended June 30, 2009.

(b) Fair Presentation . The Company Financial Statements present fairly the financial position of the Company as of the respective dates thereof and the results of operations and cash flows of the Company for the periods covered thereby. The Company Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered, except that the financial statements referred to in Sections 2.4(a)(ii) and 2.4(a)(iii) do not contain footnotes. The financial statements delivered to Parent pursuant to Section 4.10: (i) will present fairly the financial position of the Company as of September 30, 2009 and the balance sheet, results of operations and cash flows of the Company for the nine months ended September 30, 2009; and (ii) will be prepared in accordance with GAAP applied on a basis consistent with the basis on which the Company Financial Statements were prepared, except that the September 30 ^th Financial Statements (as defined in Section 4.10) will not contain footnotes.

(c) Internal Controls . The books, records and accounts of the Company accurately and fairly reflect, in reasonable detail, the transactions in and dispositions of the assets of the Company. The systems of internal accounting controls maintained by the Company are sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Part 2.4(c) of the Disclosure Schedule lists, and the Company has made available to Parent copies of, all written descriptions of, and all policies, manuals and other documents promulgating, such internal accounting controls.

(d) Insider Receivables . Part 2.4(d) of the Disclosure Schedule provides an accurate and complete breakdown of all amounts (including any Indebtedness) owed to the Company by any Company Employee or stockholder of the Company (“ Insider Receivables ”) as of the date of this Agreement. There will be no outstanding Insider Receivables as of the Effective Time.

2.5 Liabilities.

(a) No Liabilities . The Company has no accrued, contingent or other Liabilities of any nature, either matured or unmatured (whether or not required to be reflected in financial statements in accordance with GAAP, and whether due or to become due), except for: (i) Liabilities identified as such

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in the “liabilities” column of the Unaudited Interim Balance Sheet; (ii) Liabilities that have been incurred by the Company since the date of the Unaudited Interim Balance Sheet in the ordinary course of business consistent with the Company’s past practices; (iii) Liabilities incurred in connection with this Agreement and the transactions contemplated by this Agreement; and (iv) the Liabilities identified in Part 2.5(a) of the Disclosure Schedule.

(b) Accounts Payable . Part 2.5(b) of the Disclosure Schedule provides an accurate and complete breakdown and aging of: (i) all accounts payable of the Company as of the date of this Agreement; and (ii) all notes payable of the Company and all other indebtedness of the Company for borrowed money as of the date of this Agreement.

(c) No “Off-Balance Sheet” Arrangements . The Company has not effected or otherwise been involved in any “off-balance sheet arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended). Without limiting the generality of the foregoing, the Company has not guaranteed any Indebtedness or other obligation of any other Person.

(d) Director and Officer Indemnification . No event has occurred, and no circumstance or condition exists, that has resulted in, or that will or would reasonably be expected to result in, any claim for indemnification, reimbursement, contribution or the advancement of expenses by any Company Employee (other than a claim for reimbursement by the Company, in the ordinary course of business, of travel expenses or other out-of-pocket expenses of a routine nature incurred by such Company Employee in the course of performing such Company Employee’s duties for the Company) pursuant to: (i) the terms of the Charter Documents; (ii) any indemnification agreement or other Contract between the Company and any such Company Employee; or (iii) any applicable Legal Requirement.

(e) Claims by Securityholders . No event has occurred, and no circumstance or condition exists, that has resulted in, or that will or would reasonably be expected to result in, any Liability of the Company to any current, former or alleged holder of Company Capital Stock, Company Options or Company Warrants in such holder’s capacity (or alleged capacity) as a securityholder of the Company.

2.6 Absence of Changes. Except as set forth in Part 2.6 of the Disclosure Schedule, between June 30, 2009 and the date of this Agreement:

(a) there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, will or would reasonably be expected to have or result in a Material Adverse Effect;

(b) there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the Company’s material assets (whether or not covered by insurance);

(c) the Company has not declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of its capital stock or other securities, and the Company has not repurchased, redeemed or otherwise reacquired any of its shares of capital stock or other securities, other than from former employees, directors and consultants pursuant to restricted stock purchase agreements or stock option agreements providing for the repurchase of such securities in connection with their termination of service to the Company;

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(d) the Company has not sold, issued, granted or authorized the sale, issuance or grant of: (i) any capital stock or other security (except for Company Common Stock issued upon the exercise of outstanding Company Options); (ii) any option, call, warrant or right to acquire any capital stock or other security (except for Company Options described in Part 2.3(c) of the Disclosure Schedule); or (iii) any instrument convertible into or exchangeable for any capital stock (or cash based on the value of such capital stock) or other security;

(e) the Company has not amended or waived any of its rights under, or permitted the acceleration of vesting under: (i) any provision of the Company Option Plan; (ii) any provision of any agreement evidencing any outstanding Company Option; or (iii) any restricted stock agreement;

(f) there has been no amendment to any of the Charter Documents (other than the Certificate Amendment), and the Company has not effected or been a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;

(g) the Company has not made any individual capital expenditure that exceeds $100,000;

(h) the Company has not amended or prematurely terminated, or waived any material right or remedy under, any Contract that is or would constitute a Material Contract (as defined in Section 2.11(a));

(i) the Company has not: (i) acquired, leased or licensed any material right or other material asset from any other Person; (ii) sold or otherwise disposed of, or leased or licensed, any material right or other material asset to any other Person; or (iii) waived or relinquished any material right;

(j) the Company has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other indebtedness in excess of $10,000 with respect to a single matter;

(k) the Company has not made any pledge of any of its assets or otherwise permitted any of its assets to become subject to any Encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices;

(l) the Company has not: (i) lent money to any Person (other than pursuant to routine and reasonable travel advances made to current employees of the Company in the ordinary course of business); or (ii) incurred or guaranteed any indebtedness for borrowed money;

(m) the Company has not: (i) established, adopted or amended any Company Employee Plan; (ii) made any bonus, profit-sharing or similar payment to, or increased the amount of wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to, any of its directors, officers or employees; (iii) funded any compensation obligation (whether by grantor trust or otherwise); or (iv) other than with respect to non-officer employees and in the ordinary course of business and consistent with past practices, hired any new employee;

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(n) the Company has not changed any of its methods of accounting or accounting practices in any respect;

(o) the Company has not made or changed any Tax election, adopted or changed a material accounting method in respect of Taxes, entered into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settled or comprised a claim, notice, audit report or assessment in respect of Taxes, or consented to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes;

(p) the Company has not commenced or settled any Legal Proceeding;

(q) the Company has not entered into any material transaction or taken any other material action outside the ordinary course of business; and

(r) the Company has not agreed or legally committed to take any of the actions referred to in clauses “(c)” through “(q)” above.

2.7 Title to Assets.

(a) Good Title . The Company owns, and has good and valid title to, all assets purported to be owned by it, including: (i) all assets reflected on the Unaudited Interim Balance Sheet; and (ii) all other assets reflected in the books and records of the Company as being owned by the Company. All of said assets are owned by the Company free and clear of any liens or other Encumbrances, except for: (A) any lien for current Taxes not yet due and payable; and (B) minor liens that have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of the Company. Notwithstanding the foregoing, title with respect to Intellectual Property is covered by Section 2.10.

(b) Leased Assets . Part 2.7(b) of the Disclosure Schedule identifies all assets that are material to the business of the Company and that are being leased to the Company for which the annual rental payment for each such asset exceeds $50,000.

2.8 Bank Accounts. Part 2.8 of the Disclosure Schedule provides the following information with respect to each account maintained by or for the benefit of the Company at any bank or other financial institution: (a) the name of the bank or other financial institution at which such account is maintained; (b) the account number; (c) the type of account; and (d) the names of all Persons who are authorized to sign checks or other documents with respect to such account.

2.9 Equipment; Real Property.

(a) Equipment . All material items of equipment, fixtures and other tangible assets owned by or leased to the Company are reasonably adequate for the uses to which they are being put, are in good condition and repair (ordinary wear and tear excepted) and are adequate for the conduct of the Company’s business in the manner in which such business is currently being conducted.

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(b) Real Property . The Company does not own any real property or any interest in real property, except for the leasehold created under the real property leases or subleases identified in Part 2.9(b) of the Disclosure Schedule.

2.10 Intellectual Property.

(a) Registered IP . Part 2.10(a) of the Disclosure Schedule accurately identifies each item of Registered IP in which the Company has or believes or has indicated to Parent it has an ownership interest of any nature (whether exclusively, jointly with another Person or otherwise) including:

(i) all Patents included in such Registered IP, and used in the business or operations of the Company, including a listing of the country of filing, owner, filing number, date of issue or filing, expiration date and title of such Patent;

(ii) all registered trademarks and applications for registration of trademarks included in such Registered IP and used by the Company, including a listing of the country of filing, description of goods or services, registration or application number and date of issue; and

(iii) all registered copyrights and applications for registration of copyrights included in such Registered IP used by the Company, including a listing of the country of filing, owner, filing number, date of issue and expiration date.

Part 2.10(a) of the Disclosure Schedule also identifies any other Person that has an ownership interest in any item of Registered IP listed on Part 2.10(a) of the Disclosure Schedule and the nature of such ownership interest. The Company has made available to Parent complete and accurate copies of all applications, prosecution file histories that are not publicly available and other material documents related to each item of Registered IP within the scope of subclauses (i) through (iii) above.

(b) Inbound Licenses . Part 2.10(b) of the Disclosure Schedule accurately identifies: (i) each Contract pursuant to which any Intellectual Property is or has been licensed, sold, assigned or otherwise conveyed or provided to the Company or pursuant to which the Company has otherwise received or acquired any right in Intellectual Property being used in the current business of the Company or related to Company Pharmaceutical Products, whether or not currently exercisable and including a right to receive a license (other than: (A) agreements between the Company and its employees in the Company’s standard form thereof; and (B) non-exclusive “off the shelf” licenses to third party Computer Software); and (ii) whether the licenses or rights granted to the Company in each such Contract are exclusive or non-exclusive.

(c) Outbound Licenses . Part 2.10(c) of the Disclosure Schedule accurately identifies each Contract pursuant to which any Person has been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable and including a right to receive a license) or interest in, any Company IP. The Company is not bound by, and no Company IP is subject to, any Contract containing any covenant or other provision that in any way limits or restricts the ability of the Company to use, exploit, assert or enforce any Company IP anywhere in the world, other than as expressly provided in the provisions of a Contract listed in Part 2.10(b) or Part 2.10(c) of the Disclosure Schedule

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(d) Royalty Obligations . The Company is not obligated to pay to any Person any royalties (including Reach-Through Royalties (as defined below)), fees, commissions or other amounts for the use by Company of any Company IP, other than as provided in a Contract listed in Part 2.10(b) of the Disclosure Schedule, and provided that no such Contract provides for Reach-Through Royalties. “Reach-Through Royalties” shall mean a royalty payable with respect to a Patent or other Intellectual Property right, which is based on a percentage of sales of products by or through the licensee of Company, where the licensed item(s) of Intellectual Property, including research and development tools and processes, is or are not incorporated into and/or do not cover the product with respect to the sales of which the royalty is payable.

(e) Standard Form Company IP Contracts . The Company has made available to Parent a complete and accurate copy of each standard form of Company IP Contract used by the Company, including each standard form of: (i) development agreement; (ii) employee agreement containing any assignment or license of Intellectual Property or any confidentiality provision; (iii) consulting or independent contractor agreement containing any assignment or license of Intellectual Property or any confidentiality provision; (iv) confidentiality or nondisclosure agreement; (v) employee agreement or consulting or independent contractor agreement; (vi) clinical trial agreement; (vii) material transfer agreement; (viii) master service agreement; or (ix) research agreement. Part 2.10(e) of the Disclosure Schedule accurately identifies all Company IP Contracts (including all development agreements, employee agreements, consulting or independent contractor agreements, clinical trial agreements, material transfer agreements, master service agreements and research agreements), whether or not based on the foregoing forms. The Company has made available to Parent copies of all agreements listed in Part 2.10(e) of the Disclosure Schedule.

(f) Ownership . The Company is the sole and exclusive owner of all right, title and interest to and in the Company IP (other than Intellectual Property exclusively licensed to the Company, pursuant to Contracts identified in Part 2.10(b) of the Disclosure Schedule and other than Registered IP listed in Part 2.10(a) of the Disclosure Schedule which is co-owned by any other Person, provided that such ownership has been described in Part 2.10(a)) of the Disclosure Schedule, free and clear of any Encumbrances (other than nonexclusive licenses granted pursuant to the Contracts listed in Part 2.10(c) of the Disclosure Schedule). Without limiting the generality of the foregoing:

(i) all documents and instruments necessary to establish, perfect and maintain the rights of the Company in any Registered IP included in the Company IP have been validly executed, delivered, filed and/or recorded in a timely manner with the appropriate Governmental Body;

(ii) each Company Employee who is or was involved in the creation or development of any Company IP has signed a valid and enforceable agreement containing an irrevocable assignment of Intellectual Property pertaining to such Company IP to the Company and confidentiality provisions protecting the Company IP, and no such Company Employee has any obligation to any university or other Person with respect to such Company IP;

(iii) without limiting subsection 2.10(f)(v) below, the Company has taken all reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in all Trade Secrets pertaining to the Company, the Company IP or the business of the Company;

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(iv) the Company owns or otherwise has, and after the Closing the Surviving Corporation and its Subsidiaries will continue to have, sufficient rights in all Intellectual Property necessary to conduct the business of the Company as currently conducted and currently planned by the Company to be conducted;

(v) the Company has not divulged, furnished to or made accessible any of its Trade Secrets that (A) relate to the Compound or to other Company Pharmaceutical Products, and (B) are used in or necessary for the conduct of its business as it is currently conducted or is currently planned by the Company to be conducted, to any Person who is not subject to a written agreement to maintain the confidentiality of such Trade Secrets;

(vi) to the Knowledge of the Company, no officer or employee of the Company is subject to any Contract with any other Person which requires such officer or employee to assign any interest in inventions or other Intellectual Property to such other Person or keep confidential any Trade Secrets, proprietary data, customer lists or other business or technical information; and

(vii) the Company has taken all actions which are necessary in order to fully protect the Trade Secrets of the Company from misappropriation in a manner consistent with prudent commercial practice in the pharmaceutical and biotechnology industries.

(g) Valid and Enforceable . All Company IP owned or which the Company believes or has indicated to Parent is owned by the Company is valid, subsisting and enforceable, and to the Knowledge of the Company, all other Company IP is valid, subsisting and enforceable. Without limiting the generality of the foregoing:

(i) no trademark or trade name owned, used or applied for by the Company conflicts or interferes with any trademark or trade name owned, used or applied for by any other Person, and the Company has taken reasonable steps to police the use of its trademarks;

(ii) Part 2.10(g)(ii) of the Disclosure Schedule accurately identifies and describes each action, filing, and payment that must be taken or made on or before the date that is 120 days after the date of this Agreement in order to maintain such item of Company IP in full force and effect (but excluding any such action, filing or payment the requirement for which first comes into being after the date of this Agreement and was unknown prior to the date of this Agreement);

(iii) Part 2.10(g)(iii) of the Disclosure Schedule accurately identifies and describes every interference, opposition, reissue, reexamination or other Legal Proceeding that is or has been pending or, to the Knowledge of the Company, overtly threatened, in which the scope, validity or enforceability of any Company IP is being, or has been, or would reasonably be expected to be contested or challenged. To the Knowledge of the Company, there is no legally supportable basis for a claim that any Company IP is invalid or unenforceable, or, in the case of any claim(s) of Patent applications included in the Company IP, unpatentable;

(iv) all necessary registration, maintenance and renewal fees in respect of the Company IP owned by the Company that is Registered IP have been paid and all necessary

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documents and certificates have been filed with the relevant Governmental Body for the purpose of maintaining the Company IP;

(v) no act has been done or omitted to be done by the Company, which has had or would be reasonably expected to have the effect of (A) rendering any Patent included in the Company IP unenforceable; (B) impairing or dedicating to the public, or entitling any Person to cancel, forfeit, modify or consider abandoned, any Company IP; or (C) in the case of any claim(s) of pending Patent applications included in the Company IP, rendering such claim(s) unpatentable; and

(vi) the Company has diligently prepared and is diligently preparing to file Patent applications for all inventions owned by the Company and included within the Company IP that relates to a Company Pharmaceutical Product and that the Company has deemed in its reasonable business judgment to be best protected through application for a Patent, in a manner and within a sufficient time period to avoid statutory disqualification of any potential Patent application. All prior art material to the patentability of the claims in any issued Patent or Patent applications of the Company of which the Company has Knowledge is cited in the respective issued Patents, applications or associated file histories thereof, and there is no other material prior art with respect to such Patents of which the Company has Knowledge. The Company has complied with all Legal Requirements regarding the duty of disclosure, candor and good faith in connection with each Patent and Patent application filed by the Company.

(h) No Third Party Infringement of Company IP . To the Knowledge of the Company, no Person has infringed, misappropriated or otherwise violated, and no Person is currently infringing, misappropriating or otherwise violating, any Company IP. Part 2.10(h) of the Disclosure Schedule accurately identifies (and the Company has made available to Parent a complete and accurate copy of) each letter or other written or electronic communication or correspondence that has been sent by or to the Company or any representative of the Company regarding any actual, alleged or suspected infringement or misappropriation of any Company IP, and provides a brief description of the current status of the matter referred to in such letter, communication or correspondence.

(i) Effects of This Transaction . Neither the execution, delivery or performance of this Agreement or any other agreements executed in connection with the transaction contemplated by this Agreement nor the consummation of any of the transactions contemplated by this Agreement or any such other agreement entered into in connection herewith or therewith will, with or without notice or lapse of time, result in, or give any other Person the right or option to cause or declare: (i) a loss of, or Encumbrance on, any Company IP; (ii) a breach of or default under any Company IP Contract; (iii) the release, disclosure or delivery of any Company IP by or to any escrow agent or other Person; (iv) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Company IP; or (v) by the terms of any Company Contract, a reduction of any royalties or other payments the Company would otherwise be entitled to with respect to any Company IP.

(j) No Infringement of Third Party IP . The Company is not infringing, misappropriating or otherwise violating or making unlawful use of any Intellectual Property of any other Person, nor has it ever done so (including in conducting the research and development activities of the Company). To the Knowledge of the Company, the commercialization of the Company Pharmaceutical Products intended as of the date of this Agreement to be commercialized by the Company would not reasonably be expected to infringe, misappropriate or otherwise violate or make unlawful use of, any

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Intellectual Property of any other Person. For purposes of the foregoing, “infringe” includes infringement directly, contributorily, by inducement or otherwise. Without limiting the generality of the foregoing:

(i) no infringement, misappropriation or similar Intellectual Property claim or Legal Proceeding is pending or, to the Knowledge of the Company, threatened against the Company or against any other Person who is or may be entitled to be indemnified, defended, held harmless or reimbursed by the Company with respect to such claim or Legal Proceeding;

(ii) the Company has not received any written notice or other formal communication (in writing or otherwise) from any Person asserting any actual, alleged or suspected infringement, misappropriation or violation by the Company, any Company Employee or agents of the Company of any Intellectual Property of another Person, including any letter or other communication suggesting or offering that the Company obtain a license to any Intellectual Property of another Person; and

(iii) other than as provided in indemnification provisions of the Contracts identified in Part 2.10(b) and Part 2.10(c) of the Disclosure Schedule, the Company is not bound by any Contract to indemnify, defend, hold harmless or reimburse any other Person with respect to, and the Company has not otherwise assumed or agreed to discharge or otherwise take responsibility for, any existing or potential intellectual property infringement, misappropriation or similar claim (other than indemnification provisions in the Company’s standard forms of Company IP Contracts).

(k) Information Technology . All Company IT Systems have been properly maintained by technically competent personnel, in accordance with standards set by the manufacturers or otherwise in accordance with standards prudent in the industry, to ensure proper operation, monitoring and use. The Company IT Systems are in good working condition to effectively perform all information technology operations necessary to conduct the business of the Company as it is currently being conducted or is currently planned by the Company to be conducted. The Company has not experienced within the past three years any material disruption to, or material interruption in, the conduct of business attributable to a defect, bug, breakdown or other failure or deficiency of the Company IT Systems. The Company has taken commercially reasonable measures to provide for the back-up and recovery of the data and information necessary to the conduct of the business of the Company (including such data and information that is stored on magnetic or optical media in the ordinary course) without material disruption to, or material interruption in, the conduct of the business of the Company. Part 2.10(k) of the Disclosure Schedule lists all Contracts relating to such back-up and recovery, and identifies the locations of relevant servers. The Company is not in breach of any Contract related to any Company IT System, nor is the Company aware of any event that, with the passage of time or the giving of notice, or both, would constitute a breach of any Company Contract related to any Company IT System. All Company IT Systems housing data relevant for current or anticipated regulatory filings with Regulatory Authorities have been and are in compliance with the requirements outlined in 21 CFR Part 11, or similar Legal Requirements set by Regulatory Authorities outside the United States.

(l) Ownership of Data . All Company Data is owned by the Company, free and clear of all Encumbrances, and is not subject to any Company Contract (other than agreements with contract research organizations entered into in connection with the preclinical or clinical development of the Company Pharmaceutical Products in the normal course and which have been made available to Parent).

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The Company has all necessary and required rights to license, use, sublicense and distribute the data contained in the Company Data, including in connection with the operation of the Company IT Systems.

(m) Information Security . The Company has established and is in compliance with a written information security program that: (i) includes administrative, technical and physical safeguards designed to safeguard the security, confidentiality, and integrity of transactions and confidential or proprietary of Company Data; and (ii) is designed to protect against unauthorized access to the Company IT Systems or Company Data and the systems of any third party service providers that have access to Company Data or Company IT Systems. The Company has not suffered a security breach with respect to the Company Data in the last five years. The Company has not notified any Person of any information security breach involving Personal Data. The Company is in compliance with all privacy policies of the Company and all applicable Legal Requirements related to information privacy and security. The Company is not prohibited by any applicable Legal Requirements, privacy policy of the Company or Company Contract from providing Parent with the Personal Data, including the clinical trials patients’ data, that has been, or will be, provided to Parent, on or after the Closing Date, in connection with the transactions contemplated by this Agreement.

2.11 Contracts.

(a) List of Contracts . Part 2.11(a) of the Disclosure Schedule accurately identifies, in each case as of the date of this Agreement:

(i) (A) each Company Contract relating to the employment of, or the performance of services by, any Company Employee (other than offer letters, proprietary information and invention assignment agreements and stock option agreements entered into in the ordinary course of business); (B) any Company Contract pursuant to which the Company is or may become obligated to make any severance, termination, retention, gross-up or similar payment to any Company Employee; and (C) any Company Contract pursuant to which the Company is or may become obligated to make any bonus, incentive compensation or similar payment (other than payment in respect of salary) to any Company Employee;

(ii) each Company Contract which provides for indemnification of any officer, director, employee or agent;

(iii) each Company Contract relating to the voting and any other rights or obligations of a stockholder of the Company;

(iv) each Company Contract relating to the merger, consolidation, reorganization or any similar transaction with respect to the Company;

(v) each Company Contract (including each Company IP Contract) relating to the acquisition, transfer, development or sharing of any technology or Intellectual Property (including any joint development agreement, technical collaboration agreement or similar agreement entered into by the Company);

(vi) any Company Contract with any clinical research organization providing clinical trial services for any clinical trial for any Company Pharmaceutical Product;

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(vii) any Company Contract with any contract manufacturing organization providing manufacturing services for any Company Pharmaceutical Product, including clinical supplies.

(viii) each Company Contract relating to the acquisition, sale, spin-off or outsourcing of any Subsidiary or business unit or operation of the Company;

(ix) each Company Contract creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities;

(x) each Company Contract imposing any restriction on the Company: (A) to compete with any other Person; (B) to acquire any product or other asset or any services from any other Person, to sell any product or other asset to or perform any services for any other Person or to transact business or deal in any other manner with any other Person; (C) to develop or distribute any technology; (D) to use any Intellectual Property; or (E) to manufacture any products;

(xi) each Company Contract: (A) granting exclusive rights to license, market, sell or deliver any of the products or services of the Company or of users of any marketplace, website or service of the Company; or (B) otherwise contemplating an exclusive relationship between the Company and any other Person;

(xii) each Company Contract creating or involving any agency relationship, distribution arrangement or franchise relationship;

(xiii) each Company Contract regarding the acquisition, issuance or transfer of any securities and each Company Contract affecting or dealing with any securities of the Company, including any restricted share agreements or escrow agreements but excluding Company Option agreements;

(xiv) each Company Contract involving any loan, guaranty, pledge, performance or completion bond or indemnity or surety arrangement;

(xv) each Company Contract relating to the purchase or sale of any asset by or to, or the performance of any services by or for, any Related Party;

(xvi) each Company Contract relating to any liquidation or dissolution of the Company;

(xvii) any Company Contract that contemplates or involves: (A) the payment or delivery of cash or other consideration by the Company in an amount or having a value in excess of $200,000 in the aggregate; or (B) the performance of services having a value in excess of $200,000 in the aggregate; and

(xviii) any other Company Contract that was entered into outside the ordinary course of business of the Company.

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(Company Contracts in the respective categories described in clauses “(i) ” through “(xviii)” above, all Company Contracts identified, or required to be identified, in Part 2.11(a) of the Disclosure Schedule, and all Company Contracts identified, or required to be identified, in Parts 2.10(b), 2.10(c) and 2.10(d) of the Disclosure Schedule and all material Company Contracts identified or required to be identified in Part 2.10(e) of the Disclosure Schedule are referred to in this Agreement as “ Material Contracts .”)

(b) Delivery of Contracts . The Company has made available to Parent accurate and complete copies of all written Material Contracts identified in Part 2.11(a) of the Disclosure Schedule, including all amendments thereto. Part 2.11(b) of the Disclosure Schedule provides an accurate and complete description of the material terms of each Material Contract that is not in written form. Each Contract identified in Part 2.11(a) of the Disclosure Schedule is valid and in full force and effect, and is enforceable by the Company in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(c) No Breach . Except as set forth in Part 2.11(c) of the Disclosure Schedule: (i) the Company has not violated or breached, or committed any default under, any Company Contract that remains uncured, and, to the Knowledge of the Company, no other Person has violated or breached, or committed any default under, any Company Contract which remains uncured; (ii) to the Knowledge of the Company, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or would reasonably be expected to: (A) result in a violation or breach of any of the provisions of any Company Contract; (B) give any Person the right to declare a default or exercise any remedy under any Company Contract; (C) give any Person the right to accelerate the maturity or performance of any Company Contract; or (D) give any Person the right to cancel, terminate or modify any Company Contract; (iii) since January 1, 2006, the Company has not received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Company Contract; and (iv) the Company has not waived any of its material rights under any Company Contract.

(d) No Renegotiation . No Person has a contractual right pursuant to the terms of any Material Contract to renegotiate any amount paid or payable to Company under any Material Contract or any other material term or provision of any Material Contract.

(e) Proposed Contracts . Part 2.11(e) of the Disclosure Schedule identifies and provides a brief description of each proposed Contract as to which any offer, award, written proposal, term sheet or similar document, in each case that would contain binding obligations of the Company if accepted by the recipient, has been submitted by the Company.

2.12 Compliance with Legal Requirements.

(a) Compliance . The Company is, and has at all times been, in compliance in all material respects with each Legal Requirement that is applicable to it or to the conduct of its business or the ownership of its assets. No event has occurred, and no condition or circumstance exists, that will (with or without notice or lapse of time) constitute or result in a material violation by the Company of, or a material failure on the part of the Company to comply with, any Legal Requirement that is applicable to it, to the conduct of its business as currently conducted or to a Company Pharmaceutical Product. Except as set forth in Part 2.12 of the Disclosure Schedule, since January 1, 2006, the Company has not received any written notice or other written communication from any Person regarding any actual or possible

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violation of, or failure to comply with, any Legal Requirement that is applicable to it, to the conduct of its business as currently conducted or to a Company Pharmaceutical Product.

(b) Certain Business Practices . Neither the Company, nor (to the Knowledge of the Company) any Representative of the Company with respect to any matter relating to the Company, has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any other unlawful payment.

2.13 Regulatory Matters.

(a) All Necessary Approvals . The Company has obtained all required exemptions, approvals, certifications, registrations and authorizations from all applicable Regulatory Authorities relating to its activities conducted with respect to all Company Pharmaceutical Products as of the date of this Agreement.

(b) Compliance . All submissions made to Regulatory Authorities by the Company with respect to the Company Pharmaceutical Products have complied in all material respects with all applicable Legal Requirements. All preclinical studies and clinical trials conducted by the Company have been, and are being, conducted in compliance in all material respects with applicable Legal Requirements, and the Company is reasonably monitoring clinical sites for their compliance. The Company is not subject to an FDA consent decree or any similar order of a Regulatory Authority or Governmental Body. The Company has not received any notice or any other form of communication from any Person regarding any actual or possible violation of, or failure to comply with, any Legal Requirement applicable to the manufacture, use, sale or investigation of any Company Pharmaceutical Products, including any FDA Form 483, Warning Letter or any other adverse action or notice from the FDA or other applicable Regulatory Authorities.

(c) Company Pharmaceutical Products . All Company Pharmaceutical Products are being manufactured, developed, labeled, stored, tested and shipped by the Company in compliance with all applicable requirements under the United States Federal Food, Drug, and Cosmetic Act, as amended, and the rules and regulations promulgated thereunder (the “ FD&C Act ”), the Public Health Service Act of 1944 and all applicable similar state and non-U.S. Legal Requirements, including those relating to investigational use and applications to market a new Pharmaceutical Product.

(d) Clinical Trials .

(i) There has not been, and, to the Knowledge of the Company, there are no facts, circumstances or conditions that could result in, any material and adverse effect upon the use, integrity or validity of any clinical trial conducted by the Company.

(ii) Without limiting the generality of Section 2.13(b), all preclinical studies and clinical trials conducted by the Company have been, and are being, to the extent applicable, conducted in compliance with all requirements of Good Laboratory Practice (within the meaning of 21 CFR 58) and Good Clinical Practice (within the meaning of 21 CFR 56) and all requirements relating to protection of human subjects contained in Title 21, Parts 50, 54, 56 and 58 of the United States Code of Federal Regulations.

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(iii) No clinical trial of any Company Pharmaceutical Product has been suspended, put on hold or terminated prior to completion, and no Investigational New Drug Application (as defined in the FD&C Act) that is required to be submitted with the FDA before beginning clinical testing in human subjects, or an equivalent non-U.S. filing or application (an “ IND ”) for any Company Pharmaceutical Product has been suspended, withdrawn, rejected or refused, in each case, as a result of any action by a Regulatory Authority or voluntarily by the Company. The Company has not received any notice or other communication indicating that a Regulatory Authority has commenced or threatened to initiate any action to withdraw approval or terminate clinical development of any Company Pharmaceutical Product, or to enjoin or place any restriction on the testing of or any other activity with respect to any Company Pharmaceutical Product.

(e) Access to Correspondence, Filings and Audits .

(i) The Company has made available to Parent each annual report filed by the Company with the FDA or any similar state or non-U.S. Regulatory Authority with respect to the Product. The Company has made available to Parent in an accurate and complete manner all clinical data from completed clinical trials (including all adverse events) known to the Company regarding the Product. None of the individuals identified on Annex I to Exhibit A has any actual knowledge of any clinical data regarding the Product that is materially inconsistent with the Specified Clinical Data. The Company has made available to Parent all reports of monitoring visits of clinical studies, all internal, third party and FDA audits of clinical studies and all internal, third party and FDA audits related to compliance with applicable FDA requirements. “ Specified Clinical Data ” refers to clinical data (including adverse events) regarding the Product that have been provided to Parent, or to which Parent has been given access, during the due diligence process prior to the date of this Agreement.

(ii) The Company has made available to Parent accurate and complete copies of: (A) each IND and each similar state or non-U.S. regulatory filing made on behalf of the Company, including all related supplements, amendments and annual reports; and (B) all correspondence and minutes of meetings or memoranda of meetings or regulatory contacts with a Regulatory Authority that concerns any Company Pharmaceutical Product.

(f) No False Statements . Neither the Company, nor any officer, employee, or agent of the Company, has made any false statement or failed to disclose a material fact in, the applications, approvals, reports or other submissions to the FDA or other Regulatory Authority or in or from any other records and documentation prepared or maintained to comply with the requirements of the FDA or other Regulatory Authorities relating to any Company Pharmaceutical Product, or committed an act, made a statement or failed to make a statement, that (in any such case) establishes a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for the EMEA or any similar state or non-U.S. Regulatory Authority to invoke any similar policy. The Company has not, and no officer, employee or agent of the Company or principal investigator or sub-investigator of any clinical investigation sponsored by the Company has, on account of actions taken for or on behalf of the Company, been convicted of any crime under 21 U.S.C. Section 335a(a) or any similar state or non-U.S. Legal Requirement or under 21 U.S.C. Section 335a(b) or any similar state or non-U.S. Legal Requirement.

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(g) Debarment . The Company has not used in any capacity associated with the manufacture or investigation of any new drug the services of any Person who has been, or to the Knowledge of the Company, is in the process of being, debarred under the Generic Drug Enforcement Act of 1992, 21 U.S. C. §§335a-335c.

(h) Clinical Research Organizations . The Company uses commercially reasonable efforts to maintain its business relationships with clinical research organizations with which there are Company Contracts. To the Knowledge of the Company, there is no basis for such clinical research organizations to terminate a Company Contract or otherwise not to maintain a business relationship with the Surviving Corporation after the Effective Time.

2.14 Governmental Authorizations; No Subsidies.

(a) Governmental Authorizations . Part 2.14(a) of the Disclosure Schedule identifies each Governmental Authorization held by the Company, and the Company has made available to Parent accurate and complete copies of all Governmental Authorizations identified in Part 2.14(a) of the Disclosure Schedule. The Governmental Authorizations identified in Part 2.14(a) of the Disclosure Schedule are valid and in full force and effect, and collectively constitute all Governmental Authorizations necessary to enable the Company to conduct its business in the manner in which its business is currently being conducted. The Company is, and has at all times been, in compliance with the terms and requirements of the Governmental Authorizations identified in Part 2.14(a) of the Disclosure Schedule. Since January 1, 2006, the Company has not received any notice or other communication from any Governmental Body regarding: (i) any actual or possible violation of or failure to comply with any term or requirement of any Governmental Authorization; or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization.

(b) No Subsidies . The Company does not possesses and has never possessed, and the Company has no rights or interests with respect to and has never had any rights or interests with respect to, any grants, incentives or subsidies from any Governmental Body.

2.15 Tax Matters.

(a) Tax Returns and Payments . All Tax Returns required to be filed by or on behalf of the Company have been timely and properly filed and are true, accurate and complete in all material respects. All Taxes of the Company that are due and payable have been timely and properly paid, other than any Taxes for which proper and adequate accruals or reserves in accordance with GAAP are included in the Financial Statements as provided in the last sentence of this Section 2.15. All Taxes required to be withheld by the Company have been properly and timely withheld and remitted. The Company has made available to Parent accurate and complete copies of all Tax Returns filed by the Company, other than immaterial Tax Returns (e.g., Forms W-2 and 1099) unless specifically requested by Parent. There are no jurisdictions in which the Company is required to file a Tax Return other than the jurisdictions in which the Company has filed Tax Returns. No claim has ever been made by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The Company Financial Statements properly and adequately accrue or reserve for Tax liabilities in accordance with GAAP.

(b) Audits; Claims . No Company Tax Return has ever been examined or audited by any Governmental Body. The Company has not received from any Governmental Body any: (i) notice

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indicating an intent to open an audit or other review; (ii) request for information related to Tax matters; or (iii) notice of deficiency or proposed Tax adjustment. No extension or waiver of the limitation period applicable to any Tax Returns has been granted by or requested from the Company that is still in effect. No claim or Legal Proceeding is pending or, to the Knowledge of the Company, threatened against the Company in respect of any Tax. There are no liens for Taxes upon any of the assets of the Company except liens for current Taxes not yet due and payable (and for which there are adequate accruals, in accordance with GAAP).

(c) Tax Sharing Agreements; Etc . The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion there) ending after the Closing Date that would give rise to a Tax liability for such post-Closing Tax period as a result of any change in method of accounting, closing agreement, intercompany transaction, installment sale or prepaid amount received for a taxable period ending on or prior to the Closing Date. The Company is not a party to or bound by any Tax allocation or sharing agreement. The Company has never been a member of an Affiliated Group, other than an Affiliated Group of which the Company is the common parent. The Company has no Liability for the Taxes of any other Person.

(d) Closing Agreements; Etc . The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion there) ending after the Closing Date as a result of any change in method of accounting, closing agreement, intercompany transaction, installment sale or prepaid amount received for a taxable period ending on or prior to the Closing Date. The Company is not a party to or bound by any Tax allocation or sharing agreement. The Company has never been a member of an Affiliated Group. The Company has no Liability for the Taxes of any other Person.

(e) Distributed Stock . The Company has not distributed stock of another Person, nor has the Company had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.

(f) Tax Holidays . Part 2.15(f) of the Disclosure Schedule sets forth all Tax exemptions, Tax holidays or other Tax reduction agreements or arrangements applicable to the Company. The Company has provided to the Parent all documentation relating to any applicable Tax holidays or incentives. The Company is in compliance with the requirements for any applicable Tax holidays or incentives and none of the Tax holidays or incentives will be jeopardized by the transaction contemplated in this Agreement.

(g) Section 481 or 263A . The Company is not currently, nor for any period for which a Tax Return has not been filed will the Company be, required to include any adjustment in Taxable income for any Tax period (or portion thereof) pursuant to Section 481 or 263A of the Code (or any comparable provision under state, local or foreign Tax laws) as a result of transactions, events or accounting methods employed prior to the Merger.

(h) Section 6662 . The Company has disclosed on its Tax Returns any Tax reporting position taken in any Tax Return which could result in the imposition of penalties under Section 6662 of the Code (or any comparable provisions of state, local or foreign law).

(i) Tax Shelters . The Company has not consummated or participated in, nor is the Company currently participating in, any transaction which was or is a “Tax shelter” transaction as defined

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in Sections 6662 or 6111 of the Code or the Treasury Regulations promulgated thereunder. The Company has not participated in, and is not currently participating in, a “Listed Transaction” or a “Reportable Transaction” within the meaning of Section 6707A(c) of the Code or Treasury Regulation Section 1.6011-4(b), or any transaction requiring disclosure under a corresponding or similar provision of state, local, or foreign law.

(j) Section 1.1502-6 . The Company has no Liability for the Taxes of any Person (other than the Company and any members of an Affiliated Group of which the Company is the common parent) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign law) as a transferee or successor, by Contract or otherwise.

(k) Section 1503 . The Company has not incurred a dual consolidated loss within the meaning of Section 1503 of the Code.

(l) Foreign Taxes . The Company has in its possession official foreign government receipts for any Taxes paid by it to any foreign Tax Authorities.

(m) FIRPTA . The Company is not, nor has the Company ever been, a “United States real property holding corporation” within the meaning of Section 897 of the Code, and the Company has filed with the Internal Revenue Service all statements, if any, which are required under Section 1.897-2(h) of the Treasury Regulations.

(n) Withholding Taxes . The Company has complied with all applicable Legal Requirements relating to the payment, reporting and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445 and 1446 of the Code or similar provisions under any foreign law), has, within the time and in the manner prescribed by law, withheld from employee wages or consulting compensation and timely paid over to the proper governmental authorities (or is properly holding for such timely payment) all amounts required to be so withheld and paid over under all applicable Legal Requirements, including federal and state income Taxes, Federal Insurance Contribution Act, Medicare, Federal Unemployment Tax Act, relevant state income and employment Tax withholding laws, and has timely filed all withholding Tax Returns, for all periods.

(o) 409A . No Company Employee Plan and no grants, awards or benefits thereunder are subject to Section 409A(a) or 409A(b) of the Code or, if subject to Section 409A(a) of the Code, have failed, in form or operation, to meet the requirements of Section 409A(a)(2), 409A(a)(3) or 409A(a)(4) of the Code.

2.16 Employee and Labor Matters; Benefit Plans.

(a) Employee List . Part 2.15(a) of the Disclosure Schedule contains a list of all current Company Employees as of the date of this Agreement, and correctly reflects: (i) their dates of employment; (ii) their positions; (iii) their salaries; (iv) any other compensation payable to them (including housing allowances, compensation payable pursuant to bonus, deferred compensation or commission arrangements or other compensation); and (v) any promises made to them with respect to changes or additions to their compensation or benefits. The Company is not, nor has the Company ever been, bound by or a party to, or has a duty to bargain for, any collective bargaining agreement or other Contract with a labor organization representing any Company Employees and there are no labor organizations representing, purporting to represent or, to the Knowledge of the Company, seeking to

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represent any current Company Employees. The Company is not engaged, and the Company has never been engaged, in any unfair labor practice of any nature. There are no unfair labor practice complaints pending or, to the Knowledge of the Company, threatened against the Company before the National Labor Relations Board. The Company has not had any strike, slowdown, work stoppage, lockout, job action or threat thereof, or question concerning representation, by or with respect to any of the Company Employees. No event has occurred, and no condition or circumstance exists, that might directly or indirectly give rise to or provide a basis for the commencement of any such strike, slowdown, work stoppage, lockout, job action, labor dispute or union organizing activity or any similar activity or dispute.

(b) Leave of Absence . There is no current Company Employee who is not fully available to perform work because of disability or other leave.

(c) At Will Employment . Except as set forth in Part 2.16(c) of the Disclosure Schedule, the employment of each of the current Company Employees is terminable by the Company at will. The Company has made available to Parent accurate and complete copies of all employee manuals and handbooks, disclosure materials and policy statements.

(d) Employee Departures/Restrictions . To the Knowledge of the Company, no employee of the Company at the level of senior manager or above: (i) intends to terminate his employment with the Company; (ii) has received an offer to join a business that may be competitive with the Company’s business; or (iii) is a party to or is bound by any confidentiality agreement, noncompetition agreement or other Contract (with any Person) that may have an adverse effect on: (A) the performance by such employee of any of his duties or responsibilities as an employee of the Company; or (B) any Company’s business or operations.

(e) Employee Plans and Agreements . Part 2.16(e) of the Disclosure Schedule contains an accurate and complete list of each Company Employee Plan. The Company does not intend, nor has the Company committed, to establish or enter into any new Company Employee Plan, or to modify any Company Employee Plan (except to conform any such Company Employee Plan to the requirements of any applicable Legal Requirements, in each case as previously disclosed to Parent in writing or as required by this Agreement).

(f) Delivery of Documents . As applicable with respect to each Company Employee Plan, the Company has delivered or made available to Parent: (i) correct and complete copies of all documents setting forth the terms of each Company Employee Plan, including all amendments thereto and all related trust documents; (ii) the most recent summary plan description together with the summaries of material modifications thereto, if any, with respect to each Company Employee Plan; (iii) all material written Contracts relating to each Company Employee Plan, including administrative service agreements and group insurance contracts; (iv) the annual reports (Form 5500 series) for the last three complete plan years; (v) the most recent letter of determination from the U.S. Internal Revenue Service relating to the tax-qualified status of each Company Employee Plan intended to be qualified under Section 401(a) of the Code; (vi) all written materials provided to any Company Employee relating to any Company Employee Plan and any proposed Company Employee Plans, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of payments or vesting schedules or other events that would result in any liability to the Company; (vii) all correspondence to or from any Governmental Body relating to any Company Employee Plan; and (viii) all insurance policies in the possession of the Company pertaining to fiduciary liability insurance covering the fiduciaries for each Company Employee Plan.

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(g) No Foreign Plans . The Company has not established or maintained: (i) any plan, program, policy, practice, Contract or other arrangement mandated by a Governmental Body other than the United States; (ii) any Company Employee Plan that is subject to any of the Legal Requirements of any jurisdiction outside of the United States; or (iii) any Company Employee Plan that covers or has covered Company Employees whose services are or have been performed primarily outside of the United States.

(h) Absence of Certain Retiree Liabilities . No Company Employee Plan provides (except at no cost to the Company), or reflects or represents any liability of the Company to provide, retiree life insurance, retiree health benefits or other retiree employee welfare benefits to any Person for any reason, except as may be required by applicable Legal Requirements. Other than commitments made that involve no future costs to the Company, the Company has never represented, promised or contracted (whether in oral or written form) to any Company Employee (either individually or to Company Employees as a group) or any other Person that such Company Employee(s) or other person would be provided with retiree life insurance, retiree health benefit or other retiree employee welfare benefits, except to the extent required by applicable Legal Requirements.

(i) No Defaults . The Company has performed all obligations required to be performed by it under each Company Employee Plan and is not in default or violation of, and, to the Knowledge of the Company, there is no default or violation by any other party to, the terms of any Company Employee Plan. Each of the Company Employee Plans has been operated and administered in all material respects in accordance with applicable Legal Requirements, including the applicable tax qualification requirements under the Code. All contributions to, and material payments from, any Company Employee Plan which may have been required to be made in accordance with the terms of such Company Employee Plan or applicable Legal Requirements have been timely made, and all contributions for any period ending on or before the Closing Date which are not yet due, but will be paid on or prior to the Closing Date, are reflected as an accrued liability on the Unaudited Interim Balance Sheet. Each Company Employee Plan can be amended, terminated or otherwise discontinued after the date of this Agreement, without liability to the Company or Parent (other than ordinary administration expenses). There are no audits, inquiries or Legal Proceedings pending or, to the Knowledge of the Company, threatened, by any Person with respect to any Company Employee Plan.

(j) No Conflict . Except as set forth in Part 2.16(j) of the Disclosure Schedule, neither the execution, delivery or performance of this Agreement, nor the consummation of the Merger or any of the other transactions contemplated by this Agreement, will or may (either alone or upon the occurrence of any additional or subsequent events): (i) constitute an event under any Company Employee Plan, trust or loan that will or may result (either alone or in connection with any other circumstance or event) in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits (through a grantor trust or otherwise) with respect to any Company Employee; or (ii) create or otherwise result in any Liability with respect to any Company Employee Plan. Without limiting the generality of the foregoing, no amount paid or payable by the Company in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) could be an “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding provisions of state, local or foreign Legal Requirements).

(k) Compliance . The Company: (i) is in compliance in all material respects with all applicable Legal Requirements, Contracts and orders, rulings, decrees, judgments or arbitration awards of

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any arbitrator or any court or other Governmental Body respecting employment, employment practices, terms and conditions of employment, wages, hours or other labor-related matters, including Legal Requirements, orders, rulings, decrees, judgments and awards relating to discrimination, wages and hours, labor relations, leave of absence requirements, occupational health and safety, privacy, harassment, retaliation, immigration, wrongful discharge or violation of the personal rights of Company Employees (or prospective employees or other service providers), including, but not limited to, the Workers’ Adjustment and Retraining Notification Act (and any similar foreign, provincial, state or local statute or regulation, including the provisions of California Labor Code Sections 1400-1408); (ii) has withheld and reported all amounts required by any Legal Requirement or Contract to be withheld and reported with respect to wages, salaries and other payments to any Company Employee; (iii) has no Liability for any arrears of wages or any Taxes or any penalty for failure to comply with any of the foregoing; and (iv) has no Liability for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Body with respect to unemployment compensation benefits, social security or other benefits or obligations for any Company Employee (other than routine payments to be made in the normal course of business and consistent with past practice). Each Company Employee Plan intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable IRS determination letter with respect to such qualification and the Tax-exempt status of its related trust, and no circumstances exist which could result in liability to the Company in respect of such qualified status. No Company Employee Plan is intended to meet the requirements of Section 501(c)(9) of the Code.

(l) Title IV of ERISA . Neither the Company, nor any ERISA Affiliate of the Company, has ever maintained, been a participating employer, contributed to, or has had any liability with respect to (i) any multiemployer plan as defined in Section-3(37) or Section 4001(a)(3) of ERISA or 414(f) of the Code; (ii) any multiple employer plan within the meaning of Section 4063 or 4064 of ERISA or Section 413(c) of the Code; or (iii) any other employee benefit plan, fund, program, contract or arrangement that is subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA.

(m) Labor Relations . The Company has good labor relations, and, except as set forth in Part 2.16(m) of the Disclosure Schedule, the C

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