ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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CEPHALON INC | ANESTA AG | E CLAIBORNE ROBINS COMPANY, INC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: New York Date: 11/9/2007
Industry: Biotechnology and Drugs Law Firm: Sidley Austin Sector: Healthcare

Exhibit 10.1

ASSET PURCHASE AGREEMENT

BY AND
BETWEEN

ANESTA AG,
as Buyer

and

E. CLAIBORNE ROBINS COMPANY, INC.,
as Seller

August 23, 2007

TABLE OF CONTENTS

		Page

	ARTICLE I. DEFINITIONS

Section 1.01	DEFINED TERMS	6
Section 1.02	CONSTRUCTION OF CERTAIN TERMS AND PHRASES	13

	ARTICLE II. SALE AND ASSIGNMENT OF THE PURCHASED ASSETS

Section 2.01	SALE AND ASSIGNMENT OF THE PURCHASED ASSETS	14
Section 2.02	EXCLUDED ASSETS	14

	ARTICLE III. ASSUMPTION OF ASSUMED LIABILITIES; EXCLUDED LIABILITIES

Section 3.01	ASSUMPTION OF ASSUMED LIABILITIES	15
Section 3.02	EXCLUDED LIABILITIES	15

	ARTICLE IV. PURCHASE PRICE AND PAYMENT

Section 4.01	BASE PURCHASE PRICE	16
Section 4.02	ADDITIONAL CONSIDERATION	16
Section 4.03	ALLOCATION OF PURCHASE PRICE	18
Section 4.04	PAYMENT OF SALES, USE AND OTHER TAXES	19

	ARTICLE V. CLOSING

Section 5.01	TIME AND PLACE	19
Section 5.02	DELIVERIES AT CLOSING	19

	ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER

Section 6.01	ORGANIZATION	21
Section 6.02	AUTHORITY OF SELLER	21
Section 6.03	NON-CONTRAVENTION	22
Section 6.04	CONSENTS AND APPROVALS	22
Section 6.05	PRODUCT CONTRACTS	23
Section 6.06	INTELLECTUAL PROPERTY RIGHTS	23
Section 6.07	LITIGATION	24
Section 6.08	COMPLIANCE WITH LAW	25
Section 6.09	INVENTORY; SALES OF THE PRODUCT	25
Section 6.10	REGULATORY MATTERS	25
Section 6.11	TITLE; SUFFICIENCY OF ASSETS	27
Section 6.12	BROKERS	28

Section 6.13	ENVIRONMENTAL MATTERS	28
Section 6.14	TAXES	28
Section 6.15	SUPPLIERS	29
Section 6.16	INSURANCE	29
Section 6.17	DISCLOSURE	29

	ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF BUYER

Section 7.01	CORPORATE ORGANIZATION	30
Section 7.02	AUTHORITY OF BUYER	30
Section 7.03	NON-CONTRAVENTION	31
Section 7.04	CONSENTS AND APPROVALS	31
Section 7.05	LITIGATION	31
Section 7.06	BROKERS	32
Section 7.07	FINANCIAL CAPABILITY	32
Section 7.08	NON-COMPETITION	32

	ARTICLE VIII. COVENANTS OF THE PARTIES

Section 8.01	MAINTENANCE OF BUSINESS PRIOR TO CLOSING	32
Section 8.02	COMMERCIALLY REASONABLE EFFORTS	33
Section 8.03	PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES; NOTIFICATION OF CERTAIN MATTERS	33
Section 8.04	ACCESS	34
Section 8.05	PUBLIC ANNOUNCEMENTS	35
Section 8.06	BULK SALES	35
Section 8.07	SELLER’S EMPLOYEES	35
Section 8.08	CORPORATE NAMES	35
Section 8.09	RECEIPT OF CERTAIN AMOUNTS	36
Section 8.10	REGULATORY MATTERS	36
Section 8.11	FURTHER ASSURANCES	36
Section 8.12	REGULATORY TRANSITION BY SELLER	36
Section 8.13	TAXES	37
Section 8.14	COVENANT NOT TO COMPETE OR SOLICIT BUSINESS	38
Section 8.15	ACQUISITION PROPOSALS	39

	ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF SELLER

Section 9.01	REPRESENTATIONS, WARRANTIES AND COVENANTS	39
Section 9.02	NO ACTIONS OR PROCEEDINGS	39
Section 9.03	CONSENTS	39

	ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF BUYER

Section 10.01	REPRESENTATIONS, WARRANTIES AND COVENANTS	40

**Portions of the Exhibit have been omitted and have been filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Section 10.02	NO MATERIAL ADVERSE EFFECT	40
Section 10.03	NO ACTIONS OR PROCEEDINGS	40
Section 10.04	CONSENTS	40

	ARTICLE XI. INDEMNIFICATION

Section 11.01	SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC.	40
Section 11.02	INDEMNIFICATION	41
Section 11.03	LIMITATIONS	43
Section 11.04	REMEDIES EXCLUSIVE	44
Section 11.05	SET-OFF	44
Section 11.06	ADJUSTMENT TO PURCHASE PRICE	44
Section 11.07	TAX MATTERS	45

	ARTICLE XII. TERMINATION AND ABANDONMENT

Section 12.01	METHODS OF TERMINATION	45
Section 12.02	PROCEDURE UPON TERMINATION	45

	ARTICLE XIII. MISCELLANEOUS

Section 13.01	CONFIDENTIALITY	46
Section 13.02	NOTICES	46
Section 13.03	ENTIRE AGREEMENT	48
Section 13.04	WAIVER	48
Section 13.05	AMENDMENT	48
Section 13.06	THIRD PARTY BENEFICIARIES	48
Section 13.07	ASSIGNMENT; BINDING EFFECT	48
Section 13.08	HEADINGS	49
Section 13.09	SEVERABILITY	49
Section 13.10	GOVERNING LAW	49
Section 13.11	VENUE	49
Section 13.12	EXPENSES; ATTORNEY’S FEES	50
Section 13.13	COUNTERPARTS	50

Exhibits

Exhibit A Form of Assignment and Assumption Agreement

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is made and entered into as of August 23, 2007, by and between ANESTA AG, a company organized under the laws of Switzerland (“Buyer”), and E. CLAIBORNE ROBINS COMPANY, INC., a Virginia corporation d/b/a “ECR Pharmaceuticals” (“Seller”).

RECITALS

WHEREAS, Seller is engaged in the business of developing, manufacturing (or having manufactured), marketing, in-licensing, selling and distributing the Product (as defined below) in the Territory (the “Business”).

WHEREAS, subject to the terms and conditions of this Agreement, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, substantially all of Seller’s assets and properties, tangible and intangible, associated with the Business and the Product.

WHEREAS, concurrently with the execution and delivery of this Agreement, Parent is executing and delivering to Seller a guarantee of all of the obligations of Buyer hereunder.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties agree as follows:

ARTICLE I. DEFINITIONS

Section 1.01 DEFINED TERMS.

As used in this Agreement, the following defined terms have the meanings described below:

(a) “Action or Proceeding” means any claim, action, charge, complaint, suit, proceeding, arbitration, Order, inquiry, hearing, assessment with respect to fines or penalties, or litigation (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental or Regulatory Authority.

(b) “Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person. “Control” and, with correlative meanings, the terms “controlled by” and “under common control with” means the power to direct or cause the direction of the

management or policies of a Person, whether through the ownership of voting securities or by contract, resolution or regulation.

(c) “Agreement” has the meaning set forth in the Preamble hereto.

(d) “Allocation” has the meaning set forth in Section 4.03(a) .

(e) “Allocation Statement” has the meaning set forth in Section 4.03(a) .

(f) “Assets and Properties” and “Assets or Properties” of any Person means all assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including cash, cash equivalents, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, goods and Intellectual Property.

(g) “Assignment and Assumption Agreement” means the Assignment and Assumption Agreement in the form of Exhibit A attached hereto.

(h) “Assumed Liabilities” means (i) all Liabilities and obligations of Seller under or pursuant to the Product Contracts to be performed following the Closing, except to the extent such Liabilities and obligations, but for the breach or default by Seller, would have been paid, performed or otherwise discharged on or prior to the Closing Date or to the extent the same arise out of such breach or default and (ii) all Liabilities in respect of Taxes other than Taxes for which Seller is liable pursuant to Sections 4.04 and 8.13 .

(i) “Base Purchase Price” has the meaning set forth in Section 4.01 .

(j) “Books and Records” means all files, documents, instruments, papers, books and records (scientific or financial) of Seller to the extent relating to the Purchased Assets, the Product or Business (other than Marketing Materials), including any pricing lists, customer lists (to the extent owned by Seller), vendor lists, financial data, regulatory information or files (including adverse event reports and annual regulatory reports), litigation, adverse claims or demands, investigation information or files, Trademark registration certificates, Trademark renewal certificates, and other documentation relating to Intellectual Property, the Product or the Regulatory Approvals, but excluding any such items specifically prepared by Seller for the negotiation of this Agreement.

(k) “Business” has the meaning set forth in the recitals to this Agreement.

(l) “Business Day” means a day other than Saturday, Sunday or any day on which banks located in New York City or Switzerland are authorized or obligated by Law to be closed.

(m) “Buyer” has the meaning set forth in the preamble to this Agreement.

(n) “Buyer Ancillary Agreements” means all agreements, instruments and documents being or to be executed and delivered by Buyer under this Agreement or in connection herewith.

(o) “Buyer Disclosure Schedule” has the meaning set forth in the preamble of Article VII to this Agreement.

(p) “Buyer Governmental Consents” has the meaning set forth in Section 7.04 .

(q) “Buyer Group Member” has the meaning set forth in Section 11.02(a) .

(r) “Change of Control” means a transaction which results in: (a) the voting securities of Parent immediately prior to such transaction ceasing to represent at least fifty percent (50%) of the combined voting power of Parent or the Successor Entity to Parent immediately after such transaction; (b) any third party (other than a trustee or other fiduciary holding securities under an employee benefit plan and other than any Affiliate of Buyer) becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of Parent or Buyer; or (c) a sale or other disposition to a third party (other than any Affiliate of Buyer) of all or substantially all of the assets or business of Parent or Buyer.

(s) “Closing” has the meaning set forth in Section 5.01 .

(t) “Closing Date” means the date that the Closing actually occurs as provided in Section 5.01 .

(u) “Commercially Reasonable Efforts” has the meaning set forth in Section 4.02(c) .

(v) “Code” means the Internal Revenue Code of 1986.

(w) “Contaminant” has the meaning set forth in Section 6.13(b) .

(x) “Contract” means any and all commitments, contracts, purchase orders, leases, licenses, sublicenses, notes, instruments or other agreements, undertakings or arrangements of any nature, whether written or oral.

(y) “Copyrights” means United States and non-U.S. copyrights (as defined in 17 U.S.C. § 901), whether registered or unregistered, and pending applications to register the same.

(z) “Corporate Names” has the meaning set forth in Section 8.08(a) .

(aa) “Damages” has the meaning set forth in Section 11.02(a).

(bb) “Encumbrance” means any mortgage, pledge, assessment, security interest, deed of trust, easement, encroachment, lease, lien, adverse claim, defect of title, levy, charge, preference, priority, right of first refusal, covenant or other encumbrance or restriction of any

kind, or any conditional sale or title retention agreement or other agreement to give any of the foregoing in the future.

(cc) “Environmental Law” has the meaning set forth in Section 6.13(b) .

(dd) “Eurand” means Eurand, Inc. (formerly doing business as Eurand America, Inc.), a Nevada corporation.

(ee) “Eurand Agreement” means that certain Development, License and Contract Manufacturing Agreement dated July 3, 2000 between Seller and Eurand, as amended by Amendment No. 1 dated June 15, 2007, the Eurand Amendment and three addenda dated March 11, 2003, July 18, 2003 and August 6, 2003, respectively.

(ff) “Eurand Amendment” means Amendment No. 2 to the Eurand Agreement, dated August 23, 2007, between Seller and Eurand.

(gg) “Eurand Intellectual Property” means the Intellectual Property rights of Eurand related to the Product, the Business or the Purchased Assets, as such rights are described in, identified in or established under the Eurand Agreement (as amended by the Eurand Amendment).

(hh) “Excluded Assets” has the meaning set forth in Section 2.02 .

(ii) “Excluded Liabilities” has the meaning set forth in Section 3.02 .

(jj) “Expiration Date” means the date two years after the Closing Date.

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

(ll) “FDCA” shall mean the Federal Food, Drug and Cosmetic Act.

(mm) “Governmental or Regulatory Authority” means any court, tribunal, arbitrator, arbitration panel or authority, authority, agency, commission, official or other instrumentality of the United States or other country, or any supra-national organization, state, county, city or other political subdivision or any self-regulatory organization.

(nn) “Indemnification Claim Notice” has the meaning set forth in Section 11.02(c) .

(oo) “Indemnified Party” has the meaning set forth in Section 11.02(c) .

(pp) “Indemnifying Party” has the meaning set forth in Section 11.02(c)

(qq) “Intellectual Property” means any and all of the following intellectual property rights: (i) Know-How; (ii) Patents; (iii) Copyrights; (iv) internet domain names; and (v) Trademarks.

(rr) “Inventory” means all inventory of Product packaged in commercial bottles or physician sample units and all work-in-process (including all inventory of Product in bulk lots) owned by Seller, whether held at a location or facility of Seller (or any other Person on behalf of Seller) or in transit to or from Seller (or any such other Person).

(ss) “Know-How” means, to the extent relating to the Product, the Purchased Assets or the Business, all Product specifications, technical knowledge, expertise, skill, practice, procedures, formulae, trade secrets, inventions, confidential information, analytical methodology, processes, methods, preclinical, clinical, stability and other data and results, market studies, customer lists, supplier lists, mailing lists, business plans and other proprietary information, and all other experience and know-how, in each case in tangible form, whether or not patentable.

(tt) “Knowledge” with respect to Seller means the actual knowledge of the Persons listed in Section 1.01(tt) of the Seller Disclosure Schedule, after due inquiry.

(uu) “Law” means any law, statute, code, treaty, order, ordinance, rule, regulation or other requirement promulgated or enacted by any Governmental or Regulatory Authority.

(vv) “Liability” means any liability, debt or obligation (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, and due or to become due).

(ww) “Marketing Materials” means (i) all market research, marketing plans, media plans, advertising, marketing-related clinical study results, form letters and medical queries, sales training materials, customer lists and information with respect to sales of Product (including doctors and pharmacists), promotional and marketing books and owned by Seller and used in connection with the marketing and promotion of the Product; and (ii) those items of advertising and promotional materials and literature owned by Seller as of the Closing and used in connection with the advertising and promotion of the Product, provided that “Marketing Materials” shall exclude the labeling of the Product, which shall be deemed part of the Regulatory Approvals.

(xx) “Material Adverse Effect” means an effect or condition that individually or in the aggregate is materially adverse to: (i) the Purchased Assets; (ii) the results of operations, business, operations, condition (financial or otherwise) or prospects of the Business; or (iii) Seller’s ability to consummate the transactions contemplated hereby.

(yy) “Net Sales” means the aggregate amount invoiced on account of sales of the Product by Buyer or any of its Affiliates or their sublicensees to a third party in the Territory (but not including sales between Buyer and its Affiliates where the Product is intended for resale) less the following reductions relating to such sales: (a) trade, quantity and cash discounts or rebates, which are not already reflected in the amount invoiced; (b) any adjustments or allowances on account of price adjustments, billing errors, rejected goods, damaged goods and returns; (c) credits, volume rebates, charge-back and prime vendor rebates, fees, reimbursements or similar

payments granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations or other institutions or health care organizations, which are not already reflected in the amount invoiced; (d) any tax, tariff, customs duty, excise or other duty or other governmental charge (other than a tax on income) levied on the sale, transportation or delivery of the Product and borne by the seller thereof, itemized on the applicable invoice and remitted to the applicable taxing authority; (e) payments or rebates paid in connection with sales of the Product to any governmental or regulatory authority in respect of any state or federal Medicare, Medicaid or similar programs, which are not already reflected in the amount invoiced; and (f) any invoiced charge for freight, insurance or other transportation costs charged to the customer. For purposes of this definition, the Product shall be considered “sold” and “reductions” allowed when so recorded in Parent’s consolidated and consolidating financial statements prepared in accordance with generally accepted accounting principles.

(zz) “Net Sales Milestone” has the meaning set forth in Section 4.02(a) .

(aaa) “Net Sales Milestone Payment” has the meaning set forth in Section 4.02(a) .

(bbb) “Net Sales Milestone Termination Date” means the date that is the later to occur of (i) twelve (12) years from the Closing Date and (ii) the date of the first commercial sale of a generic version of the Product in the Territory.

(ccc) “Open Territories List” has the meaning set forth in Section 8.07 .

(ddd) “Order” means any writ, judgment, decree, injunction, award or similar order of any Governmental or Regulatory Authority, including any award in an arbitration proceeding (in each such case whether preliminary or final).

(eee) “Ordinary Course of Business” means such action that is in the ordinary course of the Business and consistent with the past practices of the Business.

(fff) “Parent” means Cephalon, Inc., a Delaware corporation.

(ggg) “Patents” means United States and non-U.S. patents, provisional patent applications, patent applications, continuations, continuations-in-part, divisions and reissues.

(hhh) “Permits” has the meaning set forth in Section 6.10(a) .

(iii) “Permitted Encumbrance” means (i) any Encumbrance for Taxes not yet due or delinquent or for those Taxes being contested in good faith by appropriate proceedings for which adequate reserves have been established and (ii) any Encumbrance or imperfection of title on property that does not adversely affect title to, detract from the value of or impair the existing use of, the property affected by such Encumbrance or imperfection.

(jjj) “Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, joint venture, proprietorship, other business organization or entity, trust, union, association or Governmental or Regulatory Authority.

(kkk) “Product” means cyclobenzaprine hydrochloride extended-release capsules (currently being marketed with the trade name AMRIX), as approved by the FDA and described in the New Drug Application for the Product identified in Section 6.10(a) of the Seller Disclosure Schedule.

(lll) “Product Contract” has the meaning set forth in Section 6.05(a) .

(mmm) “Purchased Assets” means, subject to Section 2.02 , all of the Assets and Properties of Seller used primarily in connection with the Product or the Business, including all right, title and interest of Seller in, to and under: (i) the Intellectual Property owned by or licensed to Seller, to the extent used in connection with or pertaining to the Purchased Assets, the Product or the Business, including all rights in domain names used primarily in connection with the Business; (ii) the Eurand Agreement; (iii) all of the other Product Contracts; (iv) the Marketing Materials; (v) the Books and Records; (vi) the Regulatory Approvals and the other Permits; (vii) the Product; (viii) the Inventory; and (ix) all telephone, telex and telephone facsimile numbers and other directory listings utilized by Seller primarily in connection with the Business. The Purchased Assets do not include any fixed assets.

(nnn) “Registered Intellectual Property” means all of the following Intellectual Property registered or filed in the Territory owned by or licensed to Seller, to the extent used in connection with or pertaining to the Purchased Assets, the Product or the Business: (i) the Trademarks listed in Section 6.06(a) of the Seller Disclosure Schedule; (ii) the Internet domain names listed in Section 6.06(a) of the Seller Disclosure Schedule; (iii) the Patents listed in Section 6.06(a) of the Seller Disclosure Schedule; and (iv) the Copyrights listed in Section 6.06(a) of the Seller Disclosure Schedule.

(ooo) “Regulatory Approvals” means, with respect to the Product, the New Drug Application for the Product identified in Section 6.10(a) of the Seller Disclosure Schedule, all supplements thereto and the official regulatory files and data in Seller’s possession as of the Closing relating thereto.

(ppp) “Required Seller Third Party Consents” has the meaning set forth in Section 6.04(b) .

(qqq) “Release” has the meaning set forth in Section 6.13(b) .

(rrr) “Seller” has the meaning set forth in the Preamble to this Agreement.

(sss) “Seller Ancillary Agreements” means all agreements, instruments and documents being or to be executed and delivered by Seller under this Agreement or in connection herewith.

(ttt) “Seller Disclosure Schedule” has the meaning set forth in the preamble to Article VI of this Agreement.

(uuu) “Seller Governmental Consents” has the meaning set forth in Section 6.04(a) .

(vvv) “Seller Group Member” has the meaning set forth in Section 11.02(b) .

(www) “Seller Property” has the meaning set forth in Section 6.13(b) .

(xxx) “Straddle Period” means any taxable year or period beginning on or before and ending after the Closing Date.

(yyy) “Successor Entity” means a successor entity to Buyer following a Change of Control.

(zzz) “Tax” means all of the following tax in connection with the operations of the Business or the transactions contemplated hereby: (i) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, excise, severance, stamp, occupation, employment, payroll, production, withholding, value added, premium, property, environmental or windfall profit tax, or any other tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental or Regulatory Authority; (ii) any Liability for the payment of any amounts of the type described in (i) above as a result of being a member of any affiliated, consolidated, combined, unitary or other group for any Taxable period; and (iii) any Liability for the payment of any amounts of the type described in (i) or (ii) above as a result of any express or implied obligation to indemnify any other person.

(aaaa) “Tax Return” means any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including any information return, claim for refund, amended return or declaration of estimated Tax.

(bbbb) “Territory” means the United States of America, including its territories and possessions, Canada and Mexico.

(cccc) “Third Party Claim” has the meaning set forth in Section 11.02(d) .

(dddd) “Trademarks” means United States, state and non-U.S. trademarks, service marks, trade names, designs, logos, slogans and general intangibles of like nature, whether registered or unregistered, and pending registrations and applications to register the foregoing, together with all goodwill of the Business associated with the foregoing.

Section 1.02 CONSTRUCTION OF CERTAIN TERMS AND PHRASES.

Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender; (b) words using the singular or plural number also include the plural or

singular number, respectively; (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (d) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; (e) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”; and (f) the term “including” or “includes” means “including without limitation” or “includes without limitation.” The Seller Disclosure Schedule, Buyer Disclosure Schedule and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.

ARTICLE II. SALE AND ASSIGNMENT OF THE PURCHASED ASSETS

Section 2.01 SALE AND ASSIGNMENT OF THE PURCHASED ASSETS.

(a) Subject to the terms and conditions of this Agreement, on the Closing Date, pursuant to the Assignment and Assumption Agreement, Seller shall sell, transfer, convey, assign and deliver to Buyer, free and clear from all Encumbrances other than Permitted Encumbrances, and Buyer shall purchase, acquire and accept from Seller all of Seller’s right, title and interest, as of the Closing, in and to the Purchased Assets.

(b) Buyer acknowledges and agrees that the Eurand Agreement (i) contains a restriction on the right of Seller to manufacture, market or sell the Product outside of the Territory and (ii) does not provide any rights to manufacture, market, sell, distribute or otherwise exploit the Product outside of the Territory.

(c) Notwithstanding anything contained in this Agreement to the contrary, (i) from and after the Closing Seller shall retain all of its right, title and interest in and to the Excluded Assets; and (ii) Seller may retain an archival copy of all Product Contracts, Books and Records, Marketing Materials and other documents or materials included in the Purchased Assets (but Seller shall not use any such archival copy for any other purposes than as an archive and shall maintain the confidentiality of such materials pursuant to Section 13.01 ).

Section 2.02 EXCLUDED ASSETS. Notwithstanding the provisions of Section 2.01 , the Purchased Assets shall not include the following (herein referred to as the “Excluded Assets”):

(a) except to the extent provided in Section 8.08 , the Corporate Names;

(b) Seller’s rights, claims or causes of action against third parties relating to the Assets and Properties, business or operations of Seller which might arise in connection with the discharge by Seller of the Excluded Liabilities;

(c) all contracts of insurance;

(d) all corporate minute books and stock transfer books and the corporate seal of Seller;

(e) all machinery, equipment, vehicles, furniture or other personal property;

(f) all Assets and Properties relating to any employee benefit plan, program or arrangement of Seller;

(g) all fixed assets;

(h) all refunds of any Tax for which Seller is liable pursuant to Section 8.13 ;

(i) any and all claims that Seller has or may have against Eurand under the Eurand Agreement with respect to, or arising out of, actions taken, events occurring or circumstances arising prior to the Closing Date; and

(j) any other Assets and Properties of Seller not used in connection with the Product or the Business.

ARTICLE III. ASSUMPTION OF ASSUMED LIABILITIES; EXCLUDED LIABILITIES.

Section 3.01 ASSUMPTION OF ASSUMED LIABILITIES.

Subject to the terms and conditions of this Agreement, on the Closing Date, Buyer shall deliver to Seller the Assignment and Assumption Agreement pursuant to which Buyer shall assume and agree to satisfy, perform, pay and discharge all of the Assumed Liabilities.

Section 3.02 EXCLUDED LIABILITIES.

Buyer shall not assume or be obligated to satisfy, pay, perform or otherwise discharge any Liability or obligation of Seller not expressly assumed by Buyer pursuant to the Assignment and Assumption Agreement (all such Liabilities and obligations not being assumed being herein called the “Excluded Liabilities”) and, notwithstanding anything to the contrary in Section 3.01 , none of the following shall be Assumed Liabilities for purposes of this Agreement:

(a) any Liabilities in respect of Taxes for which Seller is liable pursuant to Section 8.13 ;

(b) any payables and other Liabilities or obligations of Seller to any of Seller’s Affiliates;

(c) any costs and expenses incurred by Seller incident to its negotiation and preparation of this Agreement and its performance and compliance with the agreements and conditions contained herein;

(d) any Liabilities or obligations in respect of any Excluded Assets;

(e) any Liabilities in respect of the lawsuits, claims, suits, proceedings or investigations set forth in Section 6.07 of the Seller Disclosure Schedule;

(f) any product liability or claims for injury to person or property, regardless of when made or asserted, relating to any Product manufactured, marketed, sold or licensed by or on behalf of Seller prior to the Closing Date, but only if such liability or claim involves or relates to the inaccuracy or breach of any representation or warranty made by Seller in this Agreement; or

(g) any recalls on or after the Closing Date mandated by any Governmental or Regulatory Authority of any Product manufactured, marketed, sold or licensed by or on behalf of Seller prior to the Closing Date, but only if such recall involves or relates to the inaccuracy or breach of any representation or warranty made by Seller in this Agreement.

ARTICLE IV. PURCHASE PRICE AND PAYMENT

Subject to the terms and conditions set forth herein, the purchase price for the Purchased Assets shall be paid by Buyer in accordance with Sections 4.01 and 4.02.

Section 4.01 BASE PURCHASE PRICE.

As consideration for the Purchased Assets, Buyer shall, subject to the satisfaction or waiver of the conditions set forth in Article X , deliver or cause to be delivered to Seller at the Closing the sum of $100,122,000 (the “Base Purchase Price”) in immediately available funds by wire transfer into an account designated by Seller in writing at least two (2) Business Days prior to the Closing Date.

Section 4.02 ADDITIONAL CONSIDERATION.

(a) In addition to the Base Purchase Price, upon the attainment by Buyer of the Net Sales milestones of the Product in the Territory set forth below (each a “Net Sales Milestone” and collectively the “Net Sales Milestones”), Buyer shall pay to Seller the respective amounts set forth below (each a “Net Sales Milestone Payment” and collectively the “Net Sales Milestone Payments”):

(i) [] if cumulative Net Sales of the Product in the Territory after the Closing Date and prior to the Net Sales Milestone Termination Date equal [];

(ii) [] (not to exceed [] in the aggregate) for each additional [] of cumulative Net Sales of the Product in the Territory after the Closing Date and prior to the Net Sales Milestone Termination Date in excess of [];

(iii) [] (not to exceed [] in the aggregate) for each additional [] of cumulative Net Sales of the Product in the Territory after the Closing Date and prior to the Net Sales Milestone Termination Date in excess of []; and

(iv) [] (not to exceed [] in the aggregate) for each additional [] of cumulative Net Sales of the Product in the Territory after the Closing Date and prior to the Net Sales Milestone Termination Date in excess of [].

No additional payments will be due and payable by Buyer to Seller following the attainment of cumulative Net Sales of the Product in the Territory after the Closing Date and prior to the Net Sales Milestone Termination Date in excess of [**].

(b) The Net Sales Milestone Payments, if any, shall be payable within sixty (60) days of the end of the calendar quarter in which the relevant Net Sales Milestone is achieved by wire transfer of immediately available funds to an account designated by Seller in writing within two (2) Business Days after Seller becomes entitled to receive such payment. Upon at least thirty (30) days prior written notice to Buyer, Seller and its agents shall have the right to inspect and audit Buyer’s books and records related to Net Sales of the Product and the calculation of any such payments due and payable to Seller for the five (5) year period prior to the end of the last fiscal quarter of Buyer ending prior to the date of commencement of such audit during Buyer’s normal business hours; provided , that Seller shall not inspect and audit such books and records more than once during any calendar year. The costs of any such audit shall be borne by Seller, unless the audit reveals an underpayment of [**] or more of the amount actually due, in which case, Buyer shall reimburse Seller for any and all reasonable costs associated with the audit.

(c) From and after the Closing until the Net Sales Milestone Termination Date, Buyer hereby agrees to use, or to cause its Affiliates to use, Commercially Reasonable Efforts with respect to the marketing and sale of the Product. If at any time between the Closing Date and the Net Sales Milestone Termination Date the business strategy of (i) Buyer or Parent or (ii) following a Change of Control, any Successor Entity changes such that Buyer or its Affiliates or such Successor Entity fails to use Commercially Reasonable Efforts with respect to the marketing and sale of the Product, then Seller shall be entitled to receive an amount equal to [**], which amount shall be paid within sixty (60) days of Seller becoming entitled thereto by wire transfer of immediately available funds to the account designated by Seller in writing within two (2) Business Days after Seller becomes entitled to receive such payment. As used in this Section 4.02(c) , “Commercially Reasonable Efforts” means, with respect to any Person, the efforts and resources that would be used (including the promptness in which such efforts and resources would be applied) by such Person consistent with its normal business practices, which in no event shall be less than the level of efforts and resources standard in the pharmaceutical industry for a company similar in size and scope to such Person, with respect to a product at a similar stage in its development or product life taking into account efficacy, safety, commercial value, the competitiveness of alternative products of third parties that are in the marketplace or under development, and the Patent and other proprietary position of such product. Notwithstanding anything herein to the contrary, the “Commercially Reasonable Efforts” to be used by Buyer under this Section 4.02(c) shall not be less than those efforts Parent would be obligated to take under this Section 4.02(c) if Parent had executed and delivered this Agreement as Buyer.

(d) With respect to each calendar quarter from and after the Closing until the Net Sales Milestone Termination Date, Buyer shall deliver to Seller, within fifty (50) days after the end of such calendar quarter (other than the fourth quarter) and within seventy (70) days after the end of the fourth calendar quarter of each year, a report, certified by an officer of Buyer and setting forth in reasonable detail a calculation of the Net Sales for such calendar quarter.

(e) From and after the Closing Date until the Net Sales Milestone Termination Date, Buyer shall not consummate a transaction involving a sale or other transfer of all or substantially all of the Purchased Assets that does not constitute a Change of Control transaction without the prior written consent of Seller, which consent may not be unreasonably withheld.

(f) The provisions of this Section 4.02 shall survive until the Net Sales Milestone Termination Date, except that the right of Seller to conduct an audit of Buyer’s books and records pursuant to Section 4.02(b) shall continue for a period of five (5) years after the Net Sales Milestone Termination Date and the obligation of Buyer pursuant to Section 4.02(d) shall continue until a report relating to the quarter in which the Net Sales Milestone Termination Date occurs has been delivered.

(g) Buyer and Seller each agrees that the Net Sales Milestone Payments, if any, are part of the purchase price for the Purchased Assets for Tax purposes, and each agrees to treat the same as such as required by applicable Tax law.

Section 4.03 ALLOCATION OF PURCHASE PRICE.

(a) As promptly as reasonably practical, but in no event later than sixty (60) days after the Closing Date, Seller shall deliver to Buyer a schedule (the “Allocation Statement”) reflecting the allocation of the Base Purchase Price among the Purchased Assets in a manner that is consistent with the allocation methodology provided by Section 1060 of the Code and the Treasury regulations promulgated thereunder (the “Allocation”). Within thirty (30) days following the receipt by Buyer of the Allocation Statement, Buyer shall review the Allocation. If the Allocation Statement is not objected to by Buyer (by written notice to Seller) by the expiration of such thirty (30) day period, it shall be deemed agreed upon by the parties and shall be deemed conclusive for purposes of the Allocation.

(b) Except to the extent required to comply with audit determinations of any tax authority with jurisdiction over a party, Buyer and Seller shall report the transactions contemplated by this Agreement for all required federal income tax and all other tax purposes in a manner consistent with the Allocation. Buyer and Seller shall not take any position in any Tax Return or Tax proceeding that is inconsistent with the Allocation without the consent of the other party; provided , however , that nothing contained herein shall prevent Buyer or Seller from settling in good faith any proposed deficiency or adjustment by any Governmental or Regulatory Authority based upon, or arising out of, the Allocation, and none of the parties shall be required to litigate before any court, any proposed deficiency or adjustment by any Governmental or Regulatory Authority challenging the Allocation.

Section 4.04 PAYMENT OF SALES, USE AND OTHER TAXES.

Seller shall be solely liable for and pay all sales, use, transfer, value added and other related Taxes, if any, arising out of the sale by Seller of the Business and the Purchased Assets to Buyer pursuant to this Agreement. Buyer agrees to timely sign and deliver such certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce), or file Tax Returns with respect to, such Taxes.

ARTICLE V. CLOSING

Section 5.01 TIME AND PLACE.

Unless this Agreement is earlier terminated pursuant to Article XII, upon the terms and subject to the conditions of this Agreement, the Closing of the transactions contemplated by this Agreement, including the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities (the “Closing”), shall take place on the third Business Day after the conditions set forth in Articles IX and X have been satisfied or waived at the offices of Cantor Arkema, P.C., 1111 E. Main Street, 16 ^th Floor, Richmond, VA, unless another time or place shall be agreed to by the parties.

Section 5.02 DELIVERIES AT CLOSING.

(a) Closing Deliveries by Seller . Subject to the satisfaction or waiver of the conditions set forth in Article IX , at the Closing, Seller shall deliver or cause to be delivered to Buyer:

(i) a copy of Seller’s Articles of Incorporation certified as of a recent date by the Secretary of the Commonwealth of the Commonwealth of Virginia;

(ii) a certificate of good standing of Seller issued as of a recent date by the Secretary of the Commonwealth of the Commonwealth of Virginia;

(iii) a certificate dated the Closing Date and executed by the secretary or an assistant secretary of Seller, in form and substance reasonably satisfactory to Buyer, as to: (i) no amendments to the Articles of Incorporation of Seller since a specified date; (ii) the by-laws of Seller; (iii) the resolutions of the Board of Directors of Seller authorizing the execution, delivery and performance of this Agreement and each of the Seller Ancillary Agreements; and (iv) the incumbency and signatures of the officers of Seller executing this Agreement and each of the Seller Ancillary Agreements;

(iv) physical possession of the Purchased Assets, including: (A) the Inventory (which shall be delivered at the respective locations listed in Section 6.09(c) of the Seller Disclosure Schedule); (B) the Regulatory Approvals; (C) the Marketing Materials; and (D) the Books and Records, and appropriate documents of transfer related thereto in form and substance reasonably acceptable to Seller and Buyer;

(v) the Assignment and Assumption Agreement, duly executed by Seller;

(vi) an assignment of the Intellectual Property included in the Purchased Assets in form and substance reasonably acceptable to Seller and Buyer;

(vii) copies of all Seller Governmental Consents and Required Seller Third Party Consents, including the consent of Eurand relating to the Eurand Agreement;

(viii) the certificates of Seller contemplated by Sections 10.01 and 10.02 , duly executed by an authorized officer of Seller;

(ix) the Eurand Amendment, duly executed by each of Seller and Eurand; and

(x) such other bills of sale, assignments and other instruments of transfer or conveyance as Buyer may reasonably request or as may be otherwise necessary to evidence and effect the sale, assignment, transfer, conveyance and delivery of the Purchased Assets to Buyer.

In addition to the above deliveries, Seller shall take all steps and actions as Buyer may reasonably request or as may otherwise be necessary to put Buyer in actual possession or control of the Purchased Assets.

(b) Closing Deliveries by Buyer . Subject to the satisfaction or waiver of the conditions set forth in Article X , at the Closing, Buyer will deliver or cause to be delivered to Seller:

(i) the Base Purchase Price pursuant to Section 4.01 ;

(ii) a copy of Buyer’s articles of incorporation certified as of a recent date by the register of commerce of the canton of Zug, Switzerland;

(iii) an extract from the register of commerce of the canton of Zug, Switzerland as of a recent date relating to Buyer;

(iv) a certificate dated the Closing Date and executed by the Chairman of Buyer, in form and substance reasonably satisfactory to Seller, as to: (i) no amendments to the articles of incorporation of Buyer since a specified date; and (ii) the incumbency and signatures of the officers of Buyer executing this Agreement and each of the Buyer Ancillary Agreements;

(v) copies of all Buyer Governmental Consents;

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

(vii) the certificate of Buyer contemplated by Section 9.01 , duly executed by an authorized officer of Buyer.

ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER

As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, Seller represents and warrants to Buyer, subject to such exceptions as are specifically disclosed in the disclosure schedule (referencing the specific Section(s) hereof being qualified) supplied by Seller to Buyer and dated as of the date hereof (the “Seller Disclosure Schedule”), which Seller Disclosure Schedule shall be deemed to be representations and warranties of Seller as if made herein, as follows:

Section 6.01 ORGANIZATION.

(a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and has all requisite power and authority to own or lease its assets and carry on the Business as currently conducted by it. Seller is duly authorized to conduct its business and is in good standing in each jurisdiction where such qualification is required, except for any jurisdiction where failure to so qualify would not have a Material Adverse Effect.

(b) Seller is its own sole “ultimate parent entity” (as defined in 16 C.F.R. § 801.1(a)(3). The “person” (as defined in 16 C.F.R. § 801.1(a)(1)) of which Seller is the “ultimate parent entity” (as defined in 16 C.F.R. § 801.1(a)(3))— i.e. , the “person” consisting of Seller and all entities that Seller controls directly or indirectly, does not have “total assets” (as defined in 16 C.F.R. § 801.11) as of June 30, 2007, the date of the most recent balance sheet of Seller, or “annual net sales” (as defined in 16 C.F.R. § 801.11) for the year ended December 31, 2006 of $12.0 million or more.

Section 6.02 AUTHORITY OF SELLER.

Seller has all necessary power and authority and has taken all actions necessary to enter into this Agreement and the Seller Ancillary Agreements and to carry out the transactions contemplated hereby and thereby. Seller has taken all action required by Law, its Bylaws, Articles of Incorporation or otherwise to be taken by it to duly and validly authorize the execution and delivery by Seller of this Agreement and the Seller Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby, and no other corporate proceedings on the part of Seller or its shareholders is necessary to consummate the transactions contemplated hereby or thereby. This Agreement has been duly and validly authorized, executed and delivered by Seller and, when executed and delivered by Buyer, will constitute a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, and each of the Seller Ancillary Agreements has been duly authorized by Seller and upon execution and delivery by Seller will constitute a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, in each case except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

Section 6.03 NON-CONTRAVENTION.

The execution and delivery by Seller of this Agreement and the Seller Ancillary Agreements do not, and the performance by it of its obligations under this Agreement and the Seller Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby will not (with or without notice or lapse of time or both):

(a) contravene, conflict with or result in a violation or breach of, or the creation of any Encumbrance upon any of the Purchased Assets under, any of the terms, conditions or provisions of the Bylaws, Articles of Incorporation or other organizational documents of Seller or any material Contract to which Seller is a party or any of its Assets and Properties is subject or by which Seller is bound;

(b) assuming the receipt or making of all Seller Governmental Consents, contravene, conflict with or result in a violation or breach of, or the creation of any Encumbrance (other than any Permitted Encumbrance) upon any of the Purchased Assets under, any term or provision of (i) any Law applicable to Seller, the Business, the Product or the Purchased Assets or (ii) any Order to which Seller, the Business, the Product or the Purchased Assets is subject or by which Seller is bound; or

(c) assuming the receipt of all Required Seller Third Party Consents, contravene, conflict with or result in a violation or breach or default (or an event which, with notice or lapse of time or both, would constitute a breach or default) under, or the creation of any Encumbrance (other than any Permitted Encumbrance) upon any of the Purchased Assets under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any Product Contract or any material Contract to which Seller is a party or any of its Assets and Properties is subject or by which Seller is bound.

Section 6.04 CONSENTS AND APPROVALS.

(a) Section 6.04(a) of the Seller Disclosure Schedule sets forth a complete and accurate list of all consents, waivers, approvals, Orders or authorizations of, or registrations, declarations or filings with, any Governmental or Regulatory Authority that are required to be obtained or made by Seller in connection with the execution and delivery by Seller of this Agreement and the Seller Ancillary Agreements or the performance of its obligations hereunder and thereunder (collectively, the “Seller Governmental Consents”).

(b) Section 6.04(b) of the Seller Disclosure Schedule sets forth a complete and accurate list of all consents, waivers, approvals, or authorizations of, or notices to, any third party (other than a Governmental or Regulatory Authority) that are required to be obtained or made by Seller under any Product Contract or otherwise in connection with the execution and delivery by Seller of this Agreement and the Seller Ancillary Agreements or the performance of its obligations hereunder and thereunder, including the consent of Eurand under the Eurand Agreement (collectively, the “Required Seller Third Party Consents”).

Section 6.05 PRODUCT CONTRACTS.

(a) Section 6.05(a) of the Seller Disclosure Schedule sets forth a complete and correct list of each Contract to which Seller or any of its Affiliates is a party that: (i) relates to the manufacture, marketing, sale, licensing or distribution of the Product;(ii) relates to the acquisition, sale, licensing in or out, assignment or use of Intellectual Property included in the Purchased Assets; (iii) relates to the purchase or disposition of assets, or the provision of services, to or by the Business; (iv) relates to the sale or distribution of the Product to any Governmental or Regulatory Authority or any other Person; (v) limits or restricts where Seller may conduct the Business or the Product may be sold, or grants any preferential rights to purchase or license the Purchased Assets; or (vi) is not otherwise described in clauses (i) – (v) above but is material to the conduct of the Business as currently conducted or as planned to be conducted in the future, or was not entered into by Seller in the Ordinary Course of Business (collectively, the “Product Contracts”). Seller has made available to Buyer complete and correct copies (including any schedules, annexes, exhibits or amendments) of all Contracts identified in Section 6.05(a) of the Seller Disclosure Schedule.

(b) Except for the Contracts set forth in Section 6.05(b) of the Seller Disclosure Schedule, the Product Contracts are the only Contracts material to the conduct of the Business by Seller or its Affiliates. Each of the Product Contracts is in full force and effect and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, of Seller and each other party thereto and may be transferred to Buyer pursuant to this Agreement and will continue in full force and effect immediately after the Closing, in each case without breaching the terms thereof or re

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