ASSET PURCHASE AGREEMENT

Exhibit 99.1

Execution Copy

ASSET PURCHASE AGREEMENT

by and among

PROTEIN SCIENCES CORPORATION,

310, LLC,

and

EMERGENT BIOSOLUTIONS INC.

Dated as of May 26, 2008

TABLE OF CONTENTS

APPENDIX

EXHIBITS

SCHEDULES

Execution Copy

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement ( “Agreement” ) is made as of May 26, 2008, by and among Protein Sciences Corporation, a Delaware corporation ( “Seller” ), 310, LLC, a Delaware limited liability company ( “310, LLC” ), and Emergent BioSolutions Inc., a Delaware corporation ( “ EBS ” , and together with 310, LLC, “Buyer” ).

RECITALS:

     WHEREAS, Seller has agreed to sell, and Buyer has agreed to purchase, substantially all of the assets of Seller, on the terms and subject to the conditions contained herein.

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

1. DEFINITIONS AND USAGE

      1.1 Definitions

     Capitalized terms used in this Agreement are defined in Appendix 1 attached hereto.

      1.2 Usage

          (a) Interpretation. In this Agreement, unless a clear contrary intention appears:

          (i) the singular number includes the plural number and vice versa ;

          (ii) reference to any Person includes such Person’s successors and assigns to the extent such successors and assigns are permitted by, or bound in accordance with, this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;

          (iii) reference to any gender includes each other gender;

          (iv) reference to any agreement, document or instrument means such agreement, document or instrument as amended, modified, supplemented or restated and in effect from time to time in accordance with the terms thereof, and all addenda, exhibits, schedules, parts and amendments thereto;

          (v) reference to any Legal Requirement means such Legal Requirement as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder; and reference to any section or other provision of any Legal Requirement means that provision of such Legal Requirement from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

          (vi) “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed reference to this Agreement as a whole and not to any particular Article, Section or other provision thereof;

          (vii) “including” (and the correlative meaning “include”) means including without limiting the generality of any description preceding such term;

          (viii) with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”; and

          (ix) the terms “Exhibit” and “Schedule” mean the respective Exhibits and Schedules to this Agreement.

          (b) Accounting Terms. Unless otherwise specified herein, all accounting terms used herein shall be interpreted and all accounting determinations in connection herewith shall be made in accordance with GAAP.

          (c) Joint Negotiation by Parties. This Agreement was negotiated by the Parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any Party shall not apply to any construction or interpretation hereof.

2. SALE AND PURCHASE OF ASSETS; CONSIDERATION; CLOSING

      2.1 Purchased Assets

     Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, but effective as of the Effective Time, Seller shall sell, convey, assign, transfer and deliver to Buyer, free and clear of any Encumbrances, other than Permitted Encumbrances, and Buyer shall purchase and acquire from Seller, all of Seller’s right, title and interest in and to all of the Purchased Assets.

      2.2 Excluded Assets

     Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere in this Agreement, the following assets of Seller (collectively, the “Excluded Assets” ) are not part of the sale and purchase contemplated hereunder, are expressly excluded from the Purchased Assets, and shall remain the property of Seller after the Closing:

          (a) all insurance policies and rights thereunder of Seller to the extent related to the period prior to Closing, subject to Buyer’s rights pursuant to Section 7.13 and other than the Purchased Insurance Policies;

          (b) all personnel Records and other Records that Seller is required by any applicable Legal Requirement to retain in its possession; provided , that upon request and if the Transferred Employee has consented thereto (to the extent legally required to do so), Seller shall provide copies of personnel Records concerning Transferred Employees to EBS;

          (c) except as set forth in Section 7.7(c), all claims for refunds of Taxes and other charges of any Governmental Body of any nature whatsoever;

          (d) any and all rights in connection with and assets of the Seller Employee Plans;

          (e) all loans, subscriptions receivable or other amounts due to Seller from any officer, director, employee, or shareholder, including amounts due under that certain promissory note (i) dated May 1, 2005 and issued by Manon M.J. Cox in favor of Seller in the principal amount of Two Hundred Thousand Dollars ($200,000) and (ii) dated January 13, 2005 and issued by Daniel D. Adams in favor of Seller in the principal amount of Six Hundred Fifty-Seven Thousand Five Hundred Dollars ($657,500);

          (f) (i) the employment agreement, dated January 1, 2007, by and between Seller and Daniel D. Adams and (ii) the employment agreement, dated January 1, 2007, by and between Seller and Manon M. J. Cox;

          (g) the Letter dated January 29, 2008 from Seller to Kerry Quinn-Senger, Ph.D. (offering position as Director, Drug Safety) and the Letter dated March 11, 2008 from Seller to David Turrill, CPA (offering position as Controller) and any other Seller Contracts listed on Schedule 2.2(g) ;

          (h) subject to Section 7.19, all of Seller’s cash in an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) less any amounts of deferred compensation paid by Seller to Daniel D. Adams on or before the Closing Date (the “Excluded Cash” );

          (i) any and all rights of Seller under the Transaction Documents to which it is a party; and

          (j) any other assets of Seller set forth in Schedule 2.2(j) .

      2.3 Consideration

     Subject to any adjustments on and after Closing pursuant to the procedures specified in Sections 2.3(i)(i), 2.5, 7.22 and 8.6, respectively, the consideration for the Purchased Assets shall consist of the following (collectively, the “Consideration” ):

          (a) Termination of Loan Facility and Assumption of Assumed Liabilities.

          (i) 310, LLC and Seller have entered into the Loan Facility, under which all outstanding borrowings as of the Closing shall be assumed and all Encumbrances thereunder released, and all Loan Documents shall be terminated, effective as of the Closing, pursuant to a termination and release agreement in the form attached as Exhibit A hereto (the “Termination and Release Agreement” ); and

          (ii) Buyer shall assume the Assumed Liabilities in accordance with Section 2.4(a).

          (b) Convertible Notes.

          (i) EBS and 310, LLC shall issue and deliver to Seller at Closing (A) a convertible promissory note in an original principal amount equal to Sixteen Million Two Hundred Fifty Thousand Dollars ($16,250,000), in the form attached as Exhibit B-1 hereto (the “Convertible Note” ), and (B) a convertible promissory note in an original

principal amount equal to Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000), in the form attached as Exhibit B-2 hereto (the “Setoff Note” ).

          (ii) EBS and 310, LLC shall issue and deliver to Seller no more than one (1) additional convertible promissory note in the applicable amount set forth in either clause (A) or (B) of this Section 2.3(b)(ii), no later than ten (10) Business Days after the occurrence of, but dated the date of, the respective milestone event set forth in the following clause (A) or (B), in the form attached hereto as Exhibit C (the “Additional Convertible Note” ):

          (A) if BLA Approval is achieved during calendar year 2008, an Additional Convertible Note in the original principal amount of Five Million Dollars ($5,000,000); or

          (B) if BLA Approval is achieved at any time from January 1, 2009 through and including June 30, 2009, an Additional Convertible Note in the original principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000).

          (c) Registration Rights Agreement. At the Closing, EBS shall deliver to Seller a registration rights agreement, in the form attached hereto as Exhibit D (the “Registration Rights Agreement” ).

          (d) Milestone Payments. Buyer shall pay to Seller, in immediately available funds, the respective cash amount set forth in clauses (i) and (ii) of this Section 2.3(d), no later than ten (10) Business Days after the occurrence of the respective milestone events set forth therein (collectively, the “Milestone Payments” ):

          (i) HHS Milestone Payment . Upon receipt of the first payment in respect of an HHS Award, a Milestone Payment equal to the greater of Two Million Dollars ($2,000,000) or three percent (3%) of such HHS Award Amount, and upon each subsequent payment of an additional HHS Award, an amount equal to three percent (3%) of the amount of such award if the aggregate HHS Award Amount exceeds the HHS Threshold (each an “HHS Milestone Payment” ). For the avoidance of doubt, if a subsequent HHS Award results in the aggregate HHS Award Amount (including the subsequent HHS Award) exceeding the HHS Threshold, then, with respect to that subsequent HHS Award, the HHS Milestone Payment shall equal three percent (3%) of the excess over the HHS Threshold. In connection with any HHS Milestone Payments, to the extent that there is a discrepancy between the amount of any HHS Award and the amount of HHS Award payments actually received by Buyer from HHS, Buyer shall make quarterly adjustments, in arrears, to account for any such discrepancy.

          (ii) BLA Approval Milestone Payments .

          (e) Net Sales Payments. Buyer shall pay to Seller, in immediately available funds, the additional respective cash amount(s) set forth in clauses (i) through (iii) of this Section 2.3(e), no later than ten (10) Business Days after the end of the calendar quarter in which Net Sales equal or exceed the following thresholds (collectively, the “Net Sales Payments” ):

          (i) At least Five Hundred Million Dollars ($500,000,000) in aggregate Net Sales, a Net Sales Payment in the amount of Three Million Dollars ($3,000,000);

          (ii) At least Seven Hundred Fifty Million Dollars ($750,000,000) in aggregate Net Sales, a Net Sales Payment in the amount of Two Million Dollars ($2,000,000); and

          (iii) At least One Billion Dollars ($1,000,000,000) in aggregate Net Sales, a Net Sales Payment in the amount of Five Million Dollars ($5,000,000).

          (f) Additional Consideration .

          (i) Buyer shall pay to Seller, on a calendar quarterly basis, in arrears, the amount of four and one-half percent (4.5%) (“ Additional Consideration Rate” ) of Net Sales ( “Additional Consideration” ), which Additional Consideration shall be payable from the date of the BLA Approval until the seventh (7 ^th ) anniversary of the date of such BLA Approval; provided , however , in the event BLA Approval is not achieved on or before December 31, 2009, then the Additional Consideration shall be payable from the Closing Date until the ninth (9 ^th ) anniversary of the Closing Date. Payment of the Additional Consideration shall be made no later than forty-five (45) days after the end of each calendar quarter and shall be accompanied by the reports required under Section 7.17.

          (ii) If Buyer deems it reasonably necessary that Buyer must obtain one or more licenses from a Third Party to Commercialize Improved FluBlok (a “Third Party License” ), then the Additional Consideration Rate with respect to Net Sales of the Improved FluBlok product that required such license shall be reduced by an amount equal to one-half (1/2) of any upfront fees, milestone payments or royalties paid pursuant

to such Third Party License(s); provided , however , that in no event shall the Additional Consideration Rate for such Improved FluBlok product be reduced below three percent (3%) of Net Sales. For the avoidance of doubt, the term “Third Party License” does not include the License Agreement.

          (g) Sales or Licenses of FluBlok Products (Generally) . In the event of any sale or license of FluBlok Products by Buyer to a Third Party purchaser or licensee, Buyer shall (i) pay to Seller an amount equal to four and one-half percent (4.5%) multiplied by the gross proceeds received by such Third Party purchaser or licensee with respect to the sale by such Third Party of FluBlok Products minus seven percent (7%), and (ii) be required to pay such amount to Seller within ten (10) Business Days of Buyer’s receipt of such corresponding payments from any such Third Party purchaser or licensee. In addition, as a condition precedent to such sale or license, Buyer shall require such Third Party purchaser or licensee use Commercially Reasonable Efforts to Commercialize FluBlok Products.

          (h) UMN Pharma . If the royalty rate payable by UMN Pharma to Buyer is reduced under Section 8.2 of the License Agreement and such reduction results in the royalty to Buyer falling below nine percent (9%), then the Additional Consideration Rate with respect to Net Sales shall be equal to fifty percent (50%) of the reduced royalty rate paid by UMN Pharma, provided, however , in no event shall the Additional Consideration Rate be less than three percent (3%) of Net Sales of UMN Pharma.

          (i) Flip Transaction .

          (i) Upon the occurrence of a Flip Transaction within eighteen (18) months of the Closing Date:

provided , that in no event shall the payment under Section 2.3(i)(i)(2) be less than the amount Seller would have received on account of Net Sales at the Additional Consideration Rate. For the avoidance of doubt, the Additional Flip Payment is in

addition to, and is not in lieu of the payments that otherwise would have been due to Seller under Section 2.3(d) or (e) and the amounts payable under Section 2.3(i)(i)(2) above shall be in lieu of the payments required under Section 2(f). In the event Buyer pays to Seller, in accordance with Section 2.3(i)(i)(1), any Additional Flip Payments, an amount equal to fifty percent (50%) of any such Additional Flip Payment shall be credited against the amount of any Net Sales Payments that would otherwise be due and payable to Seller hereunder in the sequential order of such Nets Sales Payments as set forth in Section 2.3(e).

          (ii) With respect to a Flip Transaction or Partial Flip Transaction occurring at any time from and after the Closing Date, Buyer shall require that the Third Party purchaser or licensee use Commercially Reasonable Efforts to Commercialize FluBlok.

          (iii) For the avoidance of doubt:

          (j) Cash Consideration . At the Closing, Buyer shall pay to Seller, by wire transfer, Four Million Dollars ($4,000,000) in cash, which such cash payment shall be used by Seller to satisfy expenses incurred by Seller related to the Contemplated Transactions (including Tax Liabilities), for the implementation by Seller of the Plan of Liquidation contemplated by Section 7.14, to pay Retained Liabilities and for working capital purposes.

          (k) Default Interest Rate . Any payment of Consideration that is not made on a timely basis shall thereafter bear interest at the rate of eight percent (8%) per annum.

      2.4 Assumed and Retained Liabilities

          (a) On the Closing Date, but effective as of the Effective Time, Buyer shall assume and hereby agrees to discharge only the following Liabilities (collectively, the “Assumed Liabilities” ):

          (i) Liabilities arising from and after the Closing under Seller Contracts, Seller Governmental Authorizations and Non-Governmental Permits that are included in the Purchased Assets and that are set forth in Schedule 1.1(c) and Sections 3.6(b)(1) or 3.13(b) of the Disclosure Schedule, respectively, including any obligations related to customer deposits or prepayments disclosed on Schedule 2.4(a)(i) ;

          (ii) Liabilities arising from the ownership of the Purchased Assets and the operation of the Business solely to the extent relating to the period from and after the Effective Time; and

          (iii) Liabilities arising from Trade Payables in the amount set forth on Schedule 2.4(a)(iii) ;

          (iv) Liabilities related to costs and expenses incurred by Seller in connection with the consummation of the Contemplated Transactions in an amount not to exceed One Million Dollars ($1,000,000) individually or in the aggregate;

          (v) Liabilities related to vacation or paid time off to which any Transferred Employee is entitled pursuant to the written vacation policy applicable to such Transferred Employee immediately prior to the Closing in an amount not to exceed One Hundred Sixty-Five Thousand Dollars ($165,000) individually or in the aggregate (the “Assumed Employee Liabilities” );

          (vi) to the extent actually incurred by Seller and verifiable by Buyer or a Buyer Representative pursuant to Section 7.7(c), Liabilities of Seller arising from Taxes in an amount not to exceed the Tax Cap, individually or in the aggregate (the “Assumed Taxes” ); and

          (vii) subject to Section 2.4(b)(xiii), Liabilities related to the repayment of any and all unpaid principal and accrued interest thereon related to the Zachs Note and the Series G Promissory Notes, in an aggregate principal amount of Two Million Seven Hundred Thirty Thousand Dollars ($2,730,000).

          (b) The Retained Liabilities shall be the sole responsibility of and shall be retained, paid, performed and discharged solely by Seller. Notwithstanding anything to the contrary contained herein or in any of the Transaction Documents, the Retained Liabilities include all of the following:

          (i) all Liabilities arising out of the ownership of the Purchased Assets or the operation of the Business at any time prior to the Effective Time, except to the extent of Liabilities related to the pre-closing operation of the Business that are Assumed Liabilities;

          (ii) any Liability arising out of or relating to products and Services sold or otherwise provided by Seller prior to the Effective Time subject to Buyer’s continuation of tail coverage with respect to clinical trial insurance in accordance with the provisions of Section 7.13;

          (iii) any Liability under any Seller Contract, Seller Governmental Authorization or Non-Governmental Permit assumed by Buyer pursuant to Section 2.4(a)

that arises out of or relates to Breach of any such Seller Contract, Seller Governmental Authorization or Non-Governmental Permit that occurred prior to the Effective Time;

          (iv) except for the Assumed Taxes, any Liability of Seller or its Affiliates for Taxes;

          (v) any Environmental, Health and Safety Liabilities, and any Environmental Condition, arising, relating to or originating prior to the Effective Time in either case caused by Seller;

          (vi) except for the Assumed Employee Liabilities, any Liability under the Seller Employee Plans or relating to payroll, vacation, sick leave, worker’s compensation, unemployment benefits, pension benefits, employee stock option or profit-sharing plans, health care plans or benefits, or any other employee plans or benefits of any kind for Seller’s employees or for the Transferred Employees arising out of or related to any event or occurrence prior to the effectiveness of Transferred Employees’ employment with EBS;

          (vii) except for the Assumed Employee Liabilities or any unpaid amounts of salary for the then current pay period that is set forth in the Trade Payables, any Liability under any employment, severance (including any deferred compensation owed to any Seller Employee), bonus, change in control, retention or termination policy, practice or Contract with any Seller Employee or former employee of Seller (including any Employment Agreement);

          (viii) subject to Section 7.5(j), any employee-related Liability, including Liabilities arising out of or relating to any claim by an employee arising out of or related to any event or occurrence prior to the Closing, regardless of whether the affected employee is hired by EBS;

          (ix) any Liability of Seller to any officer, director or shareholder or any Related Person of Seller or any such Person, whether arising under Contract, applicable Legal Requirements or otherwise;

          (x) any Liability arising out of any Proceeding pending or threatened as of the Closing, regardless of whether disclosed in the Disclosure Schedule or otherwise in connection with the Contemplated Transactions, or any Liability arising out of any Proceeding commenced after the Effective Time by a Third Party and arising out of or relating to any occurrence or event prior to the Closing;

          (xi) Seller’s non-compliance with any Legal Requirement at any time;

          (xii) any Liability relating to or arising out of any Excluded Asset;

          (xiii) any Liability related to a prepayment penalty or premium required to be paid by Seller pursuant to, and in accordance with, the terms and conditions of the Zachs Note and the Series G Promissory Notes, respectively;

          (xiv) any and all claims and Liability arising from, or related to, any advance or financing arrangement between or among Seller or its officers, directors or

Affiliates and a third party previously identified to Buyer (the “3 ^rd Party” ) (whether such claims and/or Liabilities arose on or before the Closing Date) (the “3 ^rd Party Arrangement” ), including the One Million Dollar ($1,000,000) advance made by the 3 ^rd Party to Seller on or about February 27, 2008;

          (xv) any Liability arising from, or related to, any vehicle owned or leased by Seller or otherwise used, useful or held for use in connection with the Business;

          (xvi) any Liability of Seller under this Agreement or any other Transaction Document, subject to any right to indemnification hereunder or thereunder; and

          (xvii) any additional Liability set forth on Schedule 2.4(b)(xvii) .

      2.5 Consideration Credit

     Buyer shall receive a credit against the Consideration payable to Seller following the Closing (including cash and non-cash elements of the Consideration) in an amount equal to the aggregate amounts of the unpaid principal and accrued interest under both the Zachs Note and the Series G Promissory Notes, respectively, to be assumed by Buyer in accordance with Section 2.4(a)(vii) (the “Purchase Price Credit” ), and such Purchase Price Credit shall be applied against the Consideration in the priority set forth below:

          (a) an initial portion of the Purchase Price Credit equal to fifty percent (50%) of such Purchase Price Credit (the “Initial Purchase Price Credit Amount” ) shall reduce the amount of the Milestone Payment and Net Sales Payments that would otherwise be payable to Seller in such priority as Buyer deems appropriate in its discretion until the Initial Purchase Price Credit Amount is fully utilized; provided, however that in no event shall the amount of the HHS Milestone Payment be reduced below One Million Dollars ($1,000,000) by the Initial Purchase Price Credit Amount; and

          (b) the remaining portion of the Purchase Price Credit equal to fifty percent (50%) of such Purchase Price Credit (the “Remaining Purchase Price Credit Amount” ) shall be applied against any Additional Consideration payable by Buyer to Seller in accordance with Section 2.3(f).

      2.6 Balance Sheet.

     Seller shall deliver to Buyer on the date hereof a balance sheet setting forth Seller’s good faith estimate of Seller’s assets and Liabilities (including Trade Payables) as of the date hereof and in substantially the form attached hereto as Schedule 2.6 (the “Balance Sheet” ).

      2.7 Allocation of Consideration

     Buyer shall deliver to Seller, within One Hundred Eighty (180) days after the Closing Date, Buyer’s reasonable determination of the allocation of the Consideration and the Assumed Liabilities. Such allocation shall be binding upon Seller for financial and Tax reporting purposes and Seller shall not take a position inconsistent with such allocation.

      2.8 Closing

     The consummation of the purchase and sale contemplated in this Agreement (the “Closing” ) will take place at offices of Thelen Reid Brown Raysman & Steiner LLP located at 185 Asylum Street, CityPlace II, Hartford, Connecticut, at 10:00 a.m. (local time) on a Business Day mutually determined by the Parties but in no event more than two (2) Business Days following the satisfaction of all conditions to Closing set forth in Article 5 (other than those that by their nature are to be satisfied at the Closing) or waiver thereof or on such other date on which Buyer and Seller agree. The date on which the Closing actually occurs is referred to as the “Closing Date” .

      2.9 Closing Obligations

     In addition to any other documents and items to be delivered under other provisions of this Agreement, at the Closing:

          (a) Seller shall deliver or cause to be delivered to Buyer,

          (i) a Bill of Sale and Assignment and Assumption Agreement for certain Purchased Assets consisting of tangible and intangible personal property, in the form attached hereto as Exhibit E (the “Bill of Sale” ), duly executed by Seller;

          (ii) appropriate instruments, in form and substance satisfactory to Buyer and in form recordable with the applicable Governmental Bodies, assigning, transferring and conveying to Buyer all Seller’s right, title and interest in all Patents, Trademarks, domain names and registered copyrights (and all applications with respect to any of the foregoing) included in the Purchased Assets (the “Intellectual Property Assignments” ), each duly executed by Seller, together with all related documents and files, including file histories of Patents and Trademarks, results of patentability and freedom to operate searches, legal memoranda and opinions, correspondence files and files containing art references cited or citable in support of Patent prosecution;

          (iii) an assignment of lease with respect to the MEDCO Lease, consent by MEDCO to said assignment and, if available from MEDCO, a ground lessors’ estoppel certificate by MEDCO, in the respective forms attached hereto as Exhibit F (collectively, the “MEDCO Lease Assignment Documents” ), each duly executed by MEDCO or Seller, as applicable;

          (iv) the Termination and Release Agreement, duly executed by Seller;

          (v) all Additional Assignment Instruments, each duly executed by Seller;

          (vi) a certificate executed by an executive officer of Seller as to the matters set forth in Sections 5.1 and 5.2 and as to the incumbency of the officer of Seller executing the certificate described in clause (vii), below;

          (vii) a certificate of the Secretary or Assistant Secretary of Seller certifying (A) as complete and accurate as of the Closing, copies of the Governing Documents of Seller, (B) as to all requisite resolutions or actions of the board of directors and shareholders of Seller approving the execution and delivery of this Agreement and each of the Seller’s Closing Documents and the consummation of the Contemplated

Transactions, and (C) to the incumbency and specimen signatures of the officers of Seller executing this Agreement and any other document relating to the Contemplated Transactions;

          (viii) a balance sheet setting forth Seller’s good faith estimate of the current assets and current Liabilities of Seller (including Trade Payables) as of the Closing (the “ Closing Date Balance Sheet ”); and

          (ix) a schedule setting forth Liabilities of Seller arising from Trade Payables as of the Closing Date in the form attached as Schedule 2.4(a)(iii) (the “ Closing Date Trade Payables ”).

          (b) Buyer shall deliver or cause to be delivered to Seller:

          (i) the consideration to be delivered to Closing, consisting of (A) the Convertible Note, duly executed by EBS, (B) the Registration Rights Agreement, duly executed by EBS, (C) the original counterpart of the Promissory Note, marked “cancelled,” and (D) appropriate documentation evidencing the termination of the other Loan Documents;

          (ii) the Bill of Sale, duly executed by Buyer:

          (iii) the Intellectual Property Assignments, each duly executed by Buyer;

          (iv) all Additional Assignment Instruments to which Buyer is a party, each duly executed by Buyer;

          (v) the Termination and Release Agreement, duly executed by Buyer;

          (vi) a certificate executed by an executive officer of each Buyer as to the matters set forth in Sections 6.1 and 6.2 and as to the incumbency of the officer of each Buyer executing the certificate described in clause (vii), below; and

          (vii) a certificate of the Secretary or Assistant Secretary of each Buyer certifying (A) as complete and accurate as of the Closing, copies of the Governing Documents of such Buyer, (B) as to all requisite resolutions or actions of the board of directors or sole member, as the case may be, of Buyer approving the execution and delivery of this Agreement and each of the Buyer’s Closing Documents and the consummation of the Contemplated Transactions, and (C) to the incumbency and specimen signatures of the officers of such Buyer executing this Agreement and any other document relating to the Contemplated Transactions.

3. REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer as follows:

      3.1 Existence and Good Standing; Enforceability; Authority; No Conflict

          (a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it

purports to own or use, and to perform all its obligations under all of the Seller Contracts. Seller is duly qualified to do business as a foreign corporation and is in good standing under the laws of the State of Connecticut, which is the only other jurisdiction in which the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification. Except as described in Section 3.1(a) of the Disclosure Schedule, Seller does not have, and in the last five (5) years has not had, any subsidiaries and holds no Equity Interest in any other Person.

          (b) This Agreement has been duly executed and delivered by Seller and constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally. Upon the execution and delivery by Seller of each Transaction Document to be executed or delivered by Seller at the Closing (collectively, the “Seller’s Closing Documents” ), each such Seller’s Closing Document will constitute the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its respective terms. Seller has the unrestricted right, power and authority to execute and deliver this Agreement and each Seller’s Closing Document to which it is or will be a party and, subject to obtaining the Requisite Stockholder Approval, to perform its obligations hereunder and thereunder and the Contemplated Transactions, and each such action has been duly authorized by all necessary action by Seller’s shareholders and board of directors.

          (c) Subject to the obtaining or making of all Seller Required Consents set forth in Section 3.1(c) of the Disclosure Schedule and, to the extent applicable, the filing of any Notification and Report forms required to be filed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), neither the execution and delivery of this Agreement or of the Seller’s Closing Documents nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

          (i) Breach any provision of any of Seller’s Governing Documents or of any resolution adopted by Seller’s shareholders or board of directors;

          (ii) give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under any Legal Requirement to which Seller, its business or any of the Purchased Assets is or may be subject or by which Seller, its business or any of the Purchased Assets is bound;

          (iii) contravene, conflict with, or result in a violation or Breach of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that relates to the Purchased Assets or Seller’s business;

          (iv) Breach any provision of, or give any Person the right to declare a default or exercise any remedy under, to accelerate the maturity or performance of or payment under, or to cancel, terminate or modify, any Seller Contract or Non-Governmental Permit; or

          (v) result in the imposition or creation of any Encumbrance upon or with respect to any of the Purchased Assets.

      3.2 Financial Statements; Undisclosed Liabilities

          (a) Seller has delivered to Buyer true and complete copies of the: (i) audited balance sheets of Seller as of December 31, 2006, December 31, 2005, and December 31, 2004, and audited statements of income and cash flows for the twelve-month periods ended on each such date, and (ii) the Balance Sheet (such financial statements referred to in (i) and (ii), collectively, the “Financial Statements” ). Except as set forth in Section 3.2(a) of the Disclosure Schedule, the Financial Statements present fairly, in all material respects, the financial position of Seller and the results of operations and cash flows of Seller as of the dates and for the periods indicated thereon in conformity with GAAP subject, in the case of the unaudited Financial Statements, to the absence of notes and normal period end adjustments, none of which are expected to be material. Since December 31, 2006, Seller has not incurred any Liabilities except (u) Liabilities for the Zachs Note, the Series G Promissory Notes, the 3 ^rd Party Arrangement and customer deposits and prepayments set forth on Schedule 2.4(a)(i) , (v) Liabilities for the Trade Payables set forth in Schedule 2.4(a)(iii) , (w) Liabilities pursuant to the Loan Facility, (x) Liabilities arising in the Ordinary Course of Business, none of which are evidenced by any type of loan facility or other Contract evidencing indebtedness, or (y) Liabilities related to the Upgrade, Seller’s response to the RFP and the BLA submission, and (z) Liabilities related to the Contemplated Transactions.

          (b) Except for those Liabilities shown in the Balance Sheet, Seller has no Liabilities, other than Liabilities set forth in Section 3.2(b) of the Disclosure Schedule.

          (c) The Balance Sheet has been prepared by Seller in good faith and sets forth Seller’s reasonable assumptions, as of the time of preparation of such Balance Sheet, of the information set forth therein.

      3.3 Absence of Certain Changes

     (a) Since December 31, 2006, except as otherwise set forth in Section 3.3(a) of the Disclosure Schedule, there has not been any event or condition of any character that has materially adversely affected, the Business, including: (i) any change in the condition, assets, liabilities (existing or contingent) or business of Seller from that shown in the Financial Statements, (ii) any damage, destruction or loss of any of the properties or assets of Seller (regardless of whether covered by insurance) adversely affecting the Business or plans of Seller, (iii) any actual or threatened cancellation or adverse modification of any Seller Contract or Governmental Authorization or Permit held by Seller or that otherwise relates to the Business, (iv) any labor trouble or (v) any other event or condition of any character affecting the Business or plans of Borrower.

     (b) Since December 31, 2006, except as set forth in Section 3.3(b) of the Disclosure Schedule, Seller has not:

          (i) declared, set aside, paid or otherwise distributed any cash or other property in respect of any of Seller’s capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of such stock;

          (ii) acquired, sold, leased, licensed or otherwise disposed of any assets or property (including any Equity Interests in or securities of any other Person), other than sales of inventory in the Ordinary Course of Business or equipment not necessary to the normal operation of Seller’s business or otherwise replaced in connection with the Upgrade in accordance with Schedule 1.1(g) ;

          (iii) terminated or permitted to be terminated or to lapse any material Seller Contract or Governmental Authorization or any Permit held by Seller that relates in any way to the Business;

          (iv) other than pursuant to the Loan Facility, created, incurred or assumed any indebtedness (including obligations in respect of capital leases); assumed, guaranteed, endorsed or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or mortgaged or pledged any of its property or assets or subjected any such property or assets to any Encumbrance;

          (v) made any loans, advances or capital contributions to, or investments in, any other Person;

          (vi) entered into, adopted or amended any Seller Employee Plan unless legally required to do so or any employment or severance Contract or increased in any manner the compensation or fringe benefits of, or materially modified the employment terms of, any of Seller’s directors, officers or employees, generally or individually, or paid any bonus or other benefit to any of its directors, officers or employees (except for existing payment obligations listed in Section 3.14(a) of the Disclosure Schedule), or hired any new officers or employees (other than replacements for employees whose employment terminated for any reason);

          (vii) forgiven or cancelled any amount owed to Seller, or deferred payment of any amount owed to Seller, whether indebtedness owed to Seller, trade receivables held by Seller, or otherwise;

          (viii) changed any of its accounting methods, principles or practices, except as required by a generally applicable change in GAAP or pursuant to applicable Legal Requirements, or made any new elections or changes to any current elections with respect to Taxes;

          (ix) taken or omitted to take any action that would constitute a Breach of, or waived any rights under, any Seller Contract, Governmental Authorization or other Permit;

          (x) made or committed to make any capital expenditure in excess of $10,000 (individually or in the aggregate) other than in connection with the Upgrade in accordance with Schedule 1.1(g) ;

          (xi) instituted or settled any Proceedings, or waived any material rights; or

          (xii) agreed to take any of the foregoing actions.

      3.4 Title to and Sufficiency of Assets

     Seller has good and valid title to all of the Purchased Assets owned by it, and a valid leasehold or other interest in all Purchased Assets leased, licensed or otherwise held by it, in each case free and clear of any Encumbrances other than Permitted Encumbrances. Except as set forth in Section 3.4 of the Disclosure Schedule, the Purchased Assets constitute all of the assets, tangible and intangible, of any nature whatsoever, necessary for Seller to (a) operate the Business in the manner presently operated and as currently contemplated by Seller, and (b) to Exploit the products of Seller, including FluBlok, and the Services, Clinical Data and Technology as currently Exploited and as contemplated to be Exploited by Seller.

      3.5 Taxes

          (a) Except as set forth in Section 3.5(a) of the Disclosure Schedule, during the last five (5) years, Seller has filed or caused to be filed on a timely basis all Tax Returns and all reports with respect to Taxes that are or were required to be filed pursuant to applicable Legal Requirements. All Tax Returns and reports filed by Seller are true, correct and complete. Seller has timely paid all Taxes due for all periods covered by such Tax Returns or otherwise, or pursuant to any assessment received by Seller, except such Taxes, if any, as are listed in Section 3.5(a) of the Disclosure Schedule, all of which are being contested in good faith, and for which Seller has established adequate reserves (determined in accordance with GAAP) that are reflected in the Balance Sheet. Except as set forth in Section 3.5(a) of the Disclosure Schedule, Seller is not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been asserted, or to Seller’s Knowledge has been threatened, against Seller by any Governmental Body in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Encumbrances on any of the Purchased Assets that arose in connection with any failure (or alleged failure) to pay any Tax, and there exists no basis for the assertion of any claims attributable to Taxes that, if adversely determined, would result in any such Encumbrance.

          (b) Section 3.5(b)(1) of the Disclosure Schedule contains a complete and accurate list and copies of all Tax Returns filed during the past three (3) years by Seller or that pertain to the Business or any of the Purchased Assets. Section 3.5(b)(2) of the Disclosure Schedule contains a complete and accurate list of all Seller’s Tax Returns that have been audited or are currently under audit and accurately describes any deficiencies or other amounts that were paid or are currently being contested. No undisclosed deficiencies are expected to be asserted with respect to any such audit. All deficiencies proposed as a result of any such audit have been paid, reserved against, settled or are being contested in good faith by appropriate proceedings, in each case as described in Section 3.5(b)(2) of the Disclosure Schedule. Seller has provided to Buyer complete and correct copies of any examination reports, statements or deficiencies, or similar items with respect to such audits. Seller has no Knowledge that any Governmental Body may assess any additional Taxes for any period for which Seller has filed a Tax Return, and, to Seller’s Knowledge, no basis for any such assessment of additional Taxes exists. There is no dispute or claim concerning any Taxes of Seller either (i) claimed or raised by any Governmental Body in writing or (ii) as to which Seller has Knowledge.

          (c) Section 3.5(c) of the Disclosure Schedule lists all of the states, municipalities and other jurisdictions with which Seller is required to file any corporate, franchise, property or other Tax Returns (other than income Tax Returns).

      3.6 Compliance with Legal Requirements; Governmental Authorizations

          (a) Except as set forth in Section 3.6(a) of the Disclosure Schedule:

          (i) to the Knowledge of Seller, Seller is, and at all times during the past five (5) years has been, in compliance in all material respects with each material Legal Requirement that is or was applicable to it, including any Legal Requirement related to the conduct or operation of the Business, the collection and maintenance of Clinical Data or the ownership or use of any of its assets;

          (ii) to the Knowledge of Seller, no event has occurred or circumstance exists that (with or without notice or lapse of time) is reasonably likely to (A) constitute or result in a violation by Seller of, or a failure by Seller or the Business to comply in all material respects with, any material Legal Requirement applicable to it, or (B) give rise to any obligation by Seller to undertake, or to bear all or any portion of the cost of, any remedial action of any nature; and

          (iii) neither Seller nor any of its Affiliates has received, at any time during the past five (5) years, any notice from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential violation of, or failure to comply in ally material respects with, any Legal Requirement, or (B) any actual, alleged, possible, or potential obligation by Seller to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.

          (b)  Section 3.6(b)(1) of the Disclosure Schedule contains a complete and accurate list of each Governmental Authorization held by Seller and for each, the grantor, date, expiration date, and subject matter (each such Governmental Authorization, regardless of whether actually listed in the Disclosure Schedule, a “Seller Governmental Authorization” ). Each Seller Governmental Authorization is valid and in full force and effect. Except as disclosed in Section 3.6(b)(2) of the Disclosure Schedule, and for which Seller has provided all related Records to Buyer hereunder:

          (i) to the Knowledge of Seller, Seller is and at all times during the past five (5) years has been, in compliance in all material respects with all of the material terms and requirements of each Seller Governmental Authorization;

          (ii) to the Knowledge of Seller, no event has occurred or circumstance exists that (with or without notice or lapse of time) is reasonably likely to (A) constitute or result directly or indirectly in a material Breach of any term or requirement of any material Seller Governmental Authorization, or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any material Seller Governmental Authorization;

          (iii) Seller has not received at any time during the past five (5) years any notice from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential Breach of any Governmental Authorization, including any Form 483 or warning letters or untitled letters issued by the FDA from the FDA, or (B) any actual, proposed, possible or potential revocation, withdrawal, suspension,

cancellation, termination of or modification to any Seller Governmental Authorization; and

          (iv) to the Knowledge of Seller, all applications required to have been filed for the renewal of any material Seller Governmental Authorizations have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such material Seller Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies.

          (c) To the Knowledge of Seller, the Seller Governmental Authorizations collectively constitute all of the material Governmental Authorizations necessary to permit Seller to conduct and operate the Business in the manner currently conducted and to own and operate its assets and properties in the manner currently owned and operated.

      3.7 Legal Proceedings; Orders

          (a) Except as set forth in Section 3.7(a) of the Disclosure Schedule, there is no pending or, to Seller’s Knowledge threatened, Proceeding:

          (i) by or against Seller or that otherwise relates to or may affect the Business or any of the Purchased Assets,

          (ii) that prohibits (or in which an adverse Order could prohibit) the consummation of any of the Contemplated Transactions,

          (iii) involving any challenge to, or seeking damages or any other legal or equitable relief in connection with, any of the Contemplated Transactions or

          (iv) that could reasonably be expected to have the effect of preventing, delaying, making illegal, imposing limitations or conditions on or otherwise interfering with the consummation of any of the Contemplated Transactions or Buyer’s ownership or operation of the Purchased Assets or operation of the Business following the Closing.

Except as set forth in Section 3.7(a) of the Disclosure Schedule, to Seller’s Knowledge, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any Proceeding described in this Section 3.7(a). Seller has delivered to Buyer complete and correct copies of all pleadings, correspondence and other Records relating to each Proceeding listed in Section 3.7(a) of the Disclosure Schedule. None of the Proceedings listed or required to be listed in Section 3.7(a) of the Disclosure Schedule, or any Order expected or reasonably likely to result from any such Proceeding would reasonably be expected to have a Material Adverse Effect.

          (b) Except as set forth in Section 3.7(b) of the Disclosure Schedule: there is no Order to which Seller, the Business or any of the Purchased Assets is subject; and no officer, director, agent or employee of Seller is subject to any Order that prohibits any such officer, director, agent or employee from engaging in or continuing any conduct, activity or practice relating to the Business or any of the Purchased Assets. Except as set forth in Section 3.7(b) of the Disclosure Schedule: (i) Seller is, and at all times during the past five (5) years has been, in compliance in all material respects with all of the terms and requirements of each Order to which

Seller, the Business or any of the Purchased Assets is or has been subject; (ii) no event has occurred or circumstance exists that could reasonably be expected to constitute or result in (with or without notice or lapse of time) a violation of or failure to comply in all material respects with any term or requirement of any Order to which Seller, the Business or any of the Purchased Assets is subject; and (iii) Seller has not received any written notice from any Governmental Body or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with, any term or requirement of any Order to which Seller, the Business or any of the Purchased Assets is or has been subject.

      3.8 Environmental Matters

          (a) (i) To the Knowledge of Seller, Seller holds all Environmental Permits necessary in order to hold and operate the Purchased Assets and to conduct the Business as it is now being conducted, and each such Environmental Permit is in full force and effect. Seller is in compliance in all material respects with the requirements, terms and provisions of the Environmental Permits issued to or otherwise held by it and has filed on a timely basis (and updated as required) all reports, notices, applications and other documents required to be filed pursuant to such Environmental Permits.

          (ii) Except as set forth in Section 3.8 of the Disclosure Schedule, to the Knowledge of Seller, Seller and the Business are and at all times have been in compliance in all material respects with all Environmental Laws then applicable to Seller, the Business, the Facilities, the Former Facilities, Off-Site Facilities and all Real Property used in the operation of the Business. During the past ten (10) years, Seller has not received any notice that Seller, the Business, any of the Purchased Assets, the Facilities or any Former Facilities or Off-Site Facilities: (A) is or at any time was in violation of, or was not in compliance in all material respects with, any requirement of any Environmental Permit or Environmental Law; (B) is or at any time was the subject of any suit, claim, proceeding, demand, order, investigation, request or demand for information arising under any Environmental Permit or Environment Law; or (C) has actual or potential Liability under any Environmental Law.

          (iii) To the Knowledge of Seller, Seller has filed on a timely basis (and updated as required) all reports, disclosures, notifications, applications, pollution prevention, storm water prevention and discharge prevention and response plans and other emergency and contingency plans required to be filed under applicable Environmental Laws, all of which are true, accurate and complete. Section 3.8 of the Disclosure Schedule lists all such reports, disclosures, notifications, applications and plans filed by Seller.

          (iv) Except as set forth in Section 3.8 of the Disclosure Schedule, to the Knowledge of Seller, there are no Environmental Conditions or other facts, circumstances or activities arising out of or relating to the Business, any of the Purchased Assets or Seller’s use, operation or occupancy of the Facilities or, to Seller’s Knowledge, the Former Facilities or Off-Site Facilities that has or would reasonably be expected to result in: (A) any obligation of Seller to file any report or notice, to conduct any investigation, sampling or monitoring or to effect any environmental cleanup or remediation, whether onsite or offsite; or (B) Liability, either to Governmental Bodies or

other Persons, for damages (whether to person, property or natural resources), cleanup costs or remedial costs of any kind or nature whatsoever.

          (v) No Governmental Body has obtained or asserted, or to Seller’s Knowledge threatened to obtain or assert, any Encumbrance upon the Facilities or any other assets or property of Seller, including any of the Former Facilities or Off-Site Facilities, as a result of any Release, use or cleanup of any Hazardous Material for which Seller is legally responsible; nor, except as set forth in Section 3.8 of the Disclosure Schedule and to Seller’s Knowledge, has any such Release, use or cleanup occurred that could result in the assertion or creation of any such Encumbrance.

          (vi) Except as listed in Section 3.8 of the Disclosure Schedule: (A) there is not now, and to Seller’s Knowledge never has been, located on the Facilities any areas or vessels used or intended for the treatment, storage or disposal of Hazardous Wastes, including, but not limited to, drum storage areas, surface impoundments, incinerators, landfills, tanks, lagoons, ponds, waste piles or deem well injunction systems; and (B) Seller has not transported any Hazardous Waste for storage, treatment or disposal or arranged for the transportation, storage, treatment or disposal of any Hazardous Waste by Contract or otherwise, at or to any location including any Off-Site Facilities or any other location used for the treatment, storage or disposal of Hazardous Wastes.

          (vii) Neither the execution and delivery of this Agreement nor the consummation of any of the Contemplated Transactions does or will trigger any obligation by Seller under any environmental transfer statute in effect in the State of Connecticut or, to Seller’s Knowledge, any other jurisdiction.

      3.9 Intellectual Property

          (a)  Ownership; Sufficiency. Section 3.9(a) of the Disclosure Schedule sets forth all Patents applicable to the Business and owned by Seller (collectively, “Seller Patents” ), in each case enumerating specifically the applicable application or patent number, title and jurisdiction in which filing was made and the date of filing or issuance. Seller is the owner of and has good title to all Seller Patents, free and clear of any Encumbrances. All assignments of Seller Patents to Seller have been properly executed and recorded. All Seller Patents are valid and enforceable and all issuance, renewal, maintenance and other payments that are or have become due with respect thereto have been timely paid by or on behalf of Seller. To Seller’s Knowledge, the Seller Patents and the Know-How included in the Purchased Assets constitute all Patents and Know-How necessary to conduct the Business in the manner currently conducted by Seller and Exploit the products and Services, except as set forth on Section 3.9(a) of the Disclosure Schedule.

          (b)  Prosecution Matters. There are no inventorship challenges, opposition or nullity proceedings or interferences declared, commenced or provoked, or to Seller’s Knowledge threatened, with respect to any Seller Patents. To Seller’s Knowledge, Seller and all Persons involved in the prosecution of the Seller Patents (including Seller’s attorneys, inventors and other Representatives) have complied with their duty of candor and disclosure to the United States Patent and Trademark Office and each applicable foreign patent office requiring such disclosure with respect to all patent applications filed by or on behalf of Seller and have made no material misrepresentation or omission in any such applications. Seller has no Knowledge of any

information that would preclude Seller from having clear title to the Seller Patents or negating the patentability or enforceability of any Seller Patent.

          (c)  Intellectual Property Assets; Protection Measures. Section 3.9(c) of the Disclosure Schedule contains a complete and correct list of all Trademarks and all other material items of Intellectual Property owned, licensed or otherwise held by Seller (collectively, “Intellectual Property Assets” ), other than (i) the Seller Patents set forth in Section 3.9(a) of the Disclosure Schedule, and (ii) Intellectual Property licenses for commercially available computer hardware and software. Seller has taken measures it deems reasonable to protect the proprietary nature of all of the Intellectual Property Assets and to maintain in confidence all trade secrets and information comprising a part thereof. To Seller’s Knowledge, there has been no: (i) unauthorized disclosure of any Third Party proprietary or confidential information in the possession, custody or control of Seller, or (ii) Breach of Seller’s security procedures wherein information has been disclosed to a Third Party.

          (d)  Trademarks. To Seller’s Knowledge, Seller has actively policed the quality of all products and services sold, distributed or marketed under each Trademark included in the Intellectual Property Assets and has enforced commercially reasonable quality control measures to ensure that no Trademarks used by Seller or that Seller has licensed to others shall be deemed to have been abandoned.

          (e)  Products and Services; Non-infringement of Third Party Rights. Section 3.9(e) of the Disclosure Schedule sets forth all material products and Services manufactured, offered for sale, sold or otherwise currently Exploited by Seller. Except as set forth on Section 3.9(e) of the Disclosure Schedule, to the Knowledge of Seller, none of such products, Services or Technology, or the intended Exploitation thereof by Buyer or any distributor, customer or user thereof, and no other activity of Seller, infringes or violates, or constitutes a misappropriation of, any Patents, Know-How or other Intellectual Property rights of any Third Party. Except as set forth on Section 3.9(e) of the Disclosure Schedule, to the Knowledge of Seller, none of Seller’s past, current or currently-contemplated Exploitation of any of the products, Services or Technology, or any other activity undertaken by Seller in connection with the products, Services or Technology and the Exploitation thereof, does or will infringe or violate, or constitute a misappropriation of, any Patents, Know-How rights or other Intellectual Property rights of any Third Party. There has been no complaint, claim or notice, or any threat of any of the foregoing (including any notification that a license under any patent is or may be required), received by Seller alleging any such infringement, violation or misappropriation, or any request or demand for indemnification or defense received by Seller from any reseller, distributor, customer, user or any other Third Party. Seller has provided to Buyer complete and correct copies of all of such complaints, claims, notices, requests, demands and threats, as well as all legal opinions, studies, market surveys and analyses relating to any alleged or potential infringement, violation or misappropriation.

          (f)  Infringement of Seller’s Rights. To Seller’s Knowledge, no Third Party (including any current or former employee, founder, inventor of any Seller Patent or consultant to Seller) is infringing, violating or misappropriating any of the Seller Patents or any other Intellectual Property Asset. Seller has provided to Buyer complete and correct copies of all correspondence, analyses, legal opinions, complaints, claims, notices and threats concerning the

infringement, violation or misappropriation of any Seller Patent or other Intellectual Property Asset.

          (g)  Outbound IP Agreements. Section 3.9(g) of the Disclosure Schedule identifies each currently effective assignment, license, covenant or other Contract pursuant to which Seller has assigned, transferred, licensed, distributed or otherwise granted any right or continuing access to any Person, or covenanted not to assert any right, with respect to any past, existing or future Intellectual Property Asset. Seller has not agreed to indemnify any Person against any infringement, violation or misappropriation of any Patent or other Intellectual Property rights with respect to any Purchased Asset or any Third Party Patents or Intellectual Property rights. Seller is not a member of or party to any patent pool, industry standards body, trade association or other organization pursuant to the rules of which it is obligated to license any existing or future Patents or other Intellectual Property to any Person.

          (h)  Inbound IP Agreements. Section 3.9(h) of the Disclosure Schedule identifies each currently effective assignment, license, covenant or other Contract between Seller and any Third Party under which Seller has licensed, acquired, assumed or otherwise obtained any Intellectual Property right, Technology or Clinical Data. Other than as set forth in the Contracts set forth in Section 3.9(h) of the Disclosure Schedule, to Seller’s Knowledge, no other Third Party inventions, methods, services, materials, processes, data or Intellectual Property are included in or are necessary to Exploit FluBlok or any of the other products, Services or Technology.

          (i)  Employee and Inventor Assignments . Each current and, to Seller’s Knowledge, former employee of Seller and each inventor of any of the Seller Patents has executed a valid and binding written Contract expressly assigning to Seller all right, title and interest in and to any inventions and works of authorship, regardless of whether patentable, invented, created, developed, conceived or reduced to practice and all Patents.

          (j)  Support and Funding . Except as set forth in Section 3.9(j) of the Disclosure Schedule, Seller has neither sought, applied for nor received any support, funding, resources or assistance from any Governmental Body or funding source in connection with the development or Exploitation of the products, Services or other Technology or any facilities or equipment used in connection therewith.

      3.10 FDA Compliance  Except as set forth in Section 3.10(a) of the Disclosure Schedule, to Seller’s Knowledge, FluBlok is being manufactured, tested, distributed, and held in substantial compliance with all applicable requirements under the FDCA, the PHSA and any other applicable Legal Requirements, including those relating to good laboratory practices, good clinical practices, adverse event reporting, good manufacturing practices, recordkeeping, filing of reports, and security.

          (b) Seller has received no notice or other communication from the FDA or any other Governmental Body (i) alleging any violation by Seller of any Legal Requirement, including any failure to maintain systems and programs adequate to ensure compliance with any applicable Legal Requirement related to product quality, including “Good Manufacturing Practices,” “Good Laboratory Practices,” and “Good Clinical Practices” as those terms are

defined by the FDA and under all applicable Legal Requirements or (ii) contesting the premarket approval or the uses of FluBlok.

          (c) Except as set forth in Section 3.10(c) of the Disclosure Schedule, to Seller’s Knowledge, all human clinical trials to the extent conducted by or on behalf of Seller have been and are being conducted in material compliance with all applicable requirements of “Good Clinical Practices”, “Informed Consent”, “Institutional Review Boards”, as those terms are defined by the FDA and under all applicable Legal Requirements relating to clinical trials or the protection of human subjects, including those contained in the International Conference on Harmonization (“ ICH ”) E6: Good Clinical Practices Consolidated Guideline, and in 21 C.F.R. Parts 50, 54, 56, and 312, and the provisions governing the privacy of patient medical records under the Health Insurance Portability and Accountability Act of 1996 and the implementing regulations of the United States Department of Health and Human Services, and all comparable foreign Legal Requirements. Neither Seller, nor to the Knowledge of Seller, anyone acting on behalf of Seller, has received any notice that the FDA or any other Governmental Body or institutional review board has initiated, or threatened to initiate, any clinical hold or other action to suspend any clinical trial or suspend or terminate any IND (or foreign equivalent thereof) sponsored by Seller, or otherwise restrict the preclinical research on or clinical study of FluBlok.

          (d) To Seller’s Knowledge, all preclinical tests performed in connection with or as the basis for any submission to the FDA or other comparable Governmental Body, filed under an IND, CTA, or other foreign equivalent or that Seller anticipates will be submitted to the FDA or other comparable Governmental Body either (i) have been conducted in accordance, in all material respects, with applicable Good Laboratory Practice (“ GLP ”) requirements, including those contained in 21 C.F.R. Part 58 or (ii) involved experimental research techniques that were not required to be performed by a registered GLP testing laboratory (with appropriate notice being given to the FDA or the applicable Government Body), but employed procedures and controls generally used by qualified experts in the conduct of preclinical studies.

          (e) All clinical trials conducted by or on behalf of Seller and, to the Knowledge of Seller, the results of all such clinical trials have been registered and disclosed in accordance with all applicable Legal Requirements.

          (f) Except as set forth in Section 3.10(f) of the Disclosure Schedule, to Seller’s Knowledge, all manufacturing operations conducted by or for the benefit of, Seller with respect to FluBlok have been and are being conducted in accordance, in all material respects, with applicable current Good Manufacturing Practices as that term is defined by the FDA and under all applicable Legal Requirements.

          (g) Other than its activities related to the BLA, neither Seller nor any entity acting on its behalf is marketing, distributing, selling or otherwise commercializing any product candidate subject to the jurisdiction of the FDA under the FDCA and/or the PHS (each a “ Pharmaceutical Product ”) or has done so.

          (h) Seller has, prior to the execution of this Agreement, provided Buyer access to all material Records in its possession or under its control pertaining to compliance with all Legal Requirements within the jurisdiction of the FDA or any comparable state or foreign Governmental Body, including copies of (i) any Records concerning any oral or written communication received by Seller from the FDA or any comparable state or foreign

Governmental Body in the last five (5) years, including any and all reports of telephone conversations, visits and inspections, and any notice of intention to conduct an inspection, (ii) all Governmental Authorizations, Permits, and Consents, (iii) any Records relating to clinical studies conducted by or on behalf of Seller, (iv) all information about adverse drug experiences obtained or otherwise received by Seller from any source, in the United States or outside the United States, including information derived from clinical investigations, reports in the scientific literature, and unpublished scientific papers, relating to any Pharmaceutical Product, and (v) all audit reports relating to Pharmaceutical Products. Seller has not received any notices of inspectional observations (including those recorded on form FDA 483), establishment inspection reports, warning letters, untitled letters, or any other documents issued by the FDA or any comparable state or foreign Governmental Body that indicate or suggest lack of compliance with any applicable Legal Requirement by Seller or by any entity acting on Seller’s behalf. To Seller’s Knowledge, Seller has all Governmental Authorizations, Permits, and Consents that are required to conduct Seller’s business as now being conducted, and such Governmental Authorizations, Permits, and Consents are in full force and effect in all material respects. Seller has filed all reports, notifications and filings with, and has paid all regulatory fees to, the applicable Governmental Body necessary to maintain all of its Governmental Authorizations in full force and effect. To Seller’s Knowledge, Seller is in compliance in all material respects with the terms of all Governmental Authorizations, Permits, and Consents, and has received no written notice to the effect that a Governmental Body was considering the amendment, termination, revocation or cancellation of any Governmental Authorization.

          (i) Seller has not recalled, withdrawn or suspended distribution of any Pharmaceutical Products in the United States or outside the United States (whether voluntarily or otherwise) within the past five (5) years. No Proceedings in the United States or outside of the United States (whether completed or pending) seeking the recall, withdrawal, suspension or seizure of any Pharmaceutical Product is pending or, to Seller’s Knowledge threatened, against Seller.

          (j) As to each Pharmaceutical Product for which a biological license application, new drug application, investigational new drug application or similar state or foreign regulatory application has been submitted, filed or approved, to Seller’s Knowledge, Seller is in substantial compliance with 21 U.S.C. §355 and 21 C.F.R. Parts 312 or 314 et seq. , respectively, and similar Legal Requirements and all terms and conditions of such applications. As to each such Pharmaceutical Product, Seller and its Representatives have complied with the requirements of 21 U.S.C. §335a and any similar Legal Requirements. Neither Seller nor, to the Knowledge of Seller, any officer, employee or agent of Seller has been convicted of any crime or engaged in any conduct that would reasonably be expected to result in or that has resulted in (i) debarment under 21 U.S.C. Section 335a or any similar Legal Requirement, or (ii) exclusion from participating in the federal health care programs under Section 1128 of the Social Security Act or any similar Legal Requirement. In addition, to the Knowledge of Seller, Seller is in substantial compliance with all applicable registration and listing requirements.

          (k) None of Seller or any officer, employee or, to the Knowledge of Seller, agent of Seller, has made an untrue statement of a material fact or fraudulent statement to the FDA or any other Governmental Body, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Body, or committed any act, made any statement, or failed to make any statement, that would reasonably be expected to provide a basis for the FDA

to invoke its policy respecting “Fraud, Untrue Statements of Material Fact, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy.

          (l) There are no Proceedings pending or, to the Knowledge of Seller, threatened against Seller with respect to (i) a violation by Seller of any Legal Requirement, or (ii) any alleged injuries to a participant in any clinical trial conducted by or on behalf of Seller.

          (m)  Section 3.10(m) of the Disclosure Schedule sets forth all investigational new drug applications, biologics license applications and other product license applications and product licenses of Seller.

      3.11 Product Registration Files

     To Seller’s Knowledge, all of Seller’s Pharmaceutical Product registration files and dossiers have been maintained in accordance with good industry standards and all applicable Legal Requirements. Seller owns all right, title and interest to these files, and no other Person has any right or claim of right to these files anywhere in the world. Seller has in its possession (and the same are included in the Purchased Assets) copies of all the material documentation filed in connection with filings made by Seller for regulatory approval or registration of any of its Pharmaceutical Products. No filing made by Seller for regulatory approval or registration of any Pharmaceutical Product contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein not misleading.

      3.12 Real Property

          (a)  Section 3.12(a)(1) of the Disclosure Schedule contains a complete and correct legal description of each parcel of Real Property leased, used or held for use by Seller. Except as set forth in Section 3.12(a)(2) of the Disclosure Schedule, Seller has a valid leasehold interest in each such parcel, free and clear of any Encumbrances other than Permitted Encumbrances. Seller does not own any real property and does not lease or sublease any of the Real Property to any other Person.

          (b) There are no (i) pending, or to Seller’s Knowledge threatened, permanent or temporary condemnation Proceedings relating to the Real Property or any portion thereof, or (ii) pending, or to Seller’s Knowledge, threatened Proceedings or Orders relating to any of the Real Property.

          (c) To Seller’s Knowledge, all buildings and other improvements on any of the Real Property may be used as currently used as of right under applicable zoning and other Legal Requirements relating to land use, and all such buildings and other improvements are located within the boundary lines of the described parcels of land, are not in violation of, and comply in all material respects with, any setback requirements, zoning laws or other Legal Requirements and do not encroach on any easement that may burden the applicable Real Property. There is no pending, or to Seller’s Knowledge threatened, and Seller has received no written notice of any, proposed or pending Proceeding to change or redefine the zoning classification of all or any portion of any of the Real Property. To Seller’s Knowledge, none of the Real Property serves any adjoining property (other than another parcel of the Real Property) for any purpose. No portion of the Real Property is located within any flood plain or is subject to any similar restriction for which any Governmental Authorization or other Permit is necessary.

          (d) All facilities located on any of the Real Property are supplied with utilities and other services necessary for the operation of such facilities as currently operated, including gas, electricity, water, telephone, sanitary sewer and storm sewer, all of which services are adequate for the current use of the applicable portion of the Real Property and in accordance with applicable Legal Requirements and are provided via public roads or via permanent, irrevocable, appurtenant easements benefiting the applicable Real Property.

          (e) All improvements constructed on the Real Property and all fixtures affixed thereto are in reasonable operating condition, taken as a whole and subject to reasonable wear and tear and with due regard for its age, and, to the Knowledge of Seller, are free of material damage or disrepair (from casualty events or any other cause, event, condition, action or omission, leaks, insect or rodent infestation and construction defects) and have been properly maintained and repaired consistent with Seller’s past practices and in accordance with applicable Legal Requirements and in a manner suitable for the operation of the Business as presently contemplated. All mechanical and utility systems servicing such improvements are in reasonable operating condition and to the Knowledge of Seller, free of material defects, subject to reasonable wear and tear and with due regard for their respective age. Except as set forth in Section 3.12(e) of the Disclosure Schedule, Seller has received no notice, and has no Knowledge, that any repairs or modifications to any of such improvements are necessary or appropriate. All warranty, maintenance and repair Records in the possession of Seller relating to any of such improvements and fixtures are available for inspection to Buyer.

          (f) Each parcel of Real Property is an independent unit that does not rely on any facilities (other than the facilities of public utility and water companies) located on any other property (i) to comply with any zoning, building code or other Legal Requirements, or (ii) for structural support or the furnishing of any building systems or utilities, including electric, plumbing, mechanical, heating, ventilating and air conditioning systems. To Seller’s Knowledge, no building or other improvement not located on any of the Real Property relies on any part of the Real Property to comply with any zoning, building code or other applicable Legal Requirement or for structural support or the furnishing of any essential building systems or utilities.

          (g) Seller has provided to Buyer complete and correct copies of all title insurance policies and commitments; surveys; deeds; certificates of occupancy; as-built construction plans; blue prints; construction Contracts and warranties; appraisals; and structural inspection, soils, environmental assessment and other similar reports that relate to any of the Real Property and that are in Seller’s possession or under its control.

      3.13 Contracts and Permits

          (a)  Section 3.13(a) of the Disclosure Schedule lists all Seller Contracts that (i) require a payment to or from Seller in excess of Twenty-Five Thousand Dollars ($25,000) and (ii) which are not cancelable by Seller on ninety (90) days notice or less without payment or penalty. Seller has provided to Buyer complete and correct copies of all Seller Contracts. Except as set forth in Section 3.13(a) of the Disclosure Schedule, all Seller Contracts are in full force and effect and are valid and enforceable in accordance with their terms. No event has occurred or circumstance exists that (with or without notice or lapse of time) may result in a Breach of, or give any Person the right to declare a default under, or to terminate any Seller Contract that is

material to the Business. Seller has no Knowledge of, and has not given or received from any other Person any oral or written notice regarding, any actual, alleged, possible or potential violation or Breach of or default or termination under any Seller Contract.

          (b)  Section 3.13(b) of the Disclosure Schedule contains a complete and accurate list of each material Permit (other than Governmental Authorizations) held by Seller and for each, the grantor, date, expiration date, and subject matter (each such Permit, regardless of whether actually listed in the Disclosure Schedule, a “Non-Governmental Permit” ). Seller has provided to Buyer complete and correct copies of each Non-Governmental Permit and access to all related Records. Each Non-Governmental Permit is valid and in full force and effect. Except as disclosed in Section 3.13(b) of the Disclosure Schedule: (i) Seller is in compliance in all material respects with the terms and requirements of each Non-Governmental Permit; (ii) no event has occurred or circumstance exists that (with or without notice or lapse of time) is reasonably likely to (A) constitute or result directly or indirectly in a Breach of any term or requirement of any Non-Governmental Permit, or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any Non-Governmental Permit; (iv) Seller has not received any written notice from the grantor of any Non-Governmental Permit regarding (A) any actual, alleged, possible or potential Breach thereof or any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of or modification to any Non-Governmental Permit; and (v) all applications required to have been filed for the renewal of the Non-Governmental Permits have been duly filed on a timely basis with the appropriate Persons, and all other filings required to have been made with respect thereto have been duly and timely made with the appropriate Persons.

      3.14 Employees; Labor Relations

          (a)  Section 3.14(a) of the Disclosure Schedule sets forth the following information for each current employee of Seller, including each such employee who is on a leave of absence or layoff status (collectively, “Seller Employees” ): name; job title or position; status as exempt or non-exempt from the Fair Labor Standards Act or applicable state wage and hour Legal Requirements; date of hire; current rate of pay; all compensation (including, separately, base pay and any incentive or commission pay) and all such compensation paid over the previous twelve (12) month period, and any change(s) in compensation since December 31, 2006; accrued vacation and vacation accrual rate; any other accrued benefits; and service credited for purposes of vesting and eligibility to participate under any Seller Employee Plan; and, as to each employee who is on a leave of absence status, the nature of the leave and the anticipated date of return, if any.

          (b) Seller has complied and is in compliance in all material respects with the requirements of the Immigration Reform and Control Act of 1986. Section 3.14(b) of the Disclosure Schedule sets forth a true and complete list of all Seller Employees working in the United States who are not U.S. citizens and a description of the legal status under which each such Seller Employee is permitted to work in the United States. To Seller’s Knowledge, all Seller Employees who are performing services for Seller are legally able to work in the United States and will be able to continue to work in the United States following the consummation of the Contemplated Transactions.

          (c) To Seller’s Knowledge, no Seller Employee is a party to, or is otherwise bound by, any Contract, including any confidentiality, non-competition, or proprietary rights agreement, between such Seller Employee and any other Person that in any way adversely affects or could reasonably be deemed to affect or interfere with such Seller Employee’s performance of his duties to Seller, Buyer (if retained by Buyer) or any of their respective Affiliates.

          (d) There is no complaint or charge by any Seller Employee or former employee against Seller or any of its officers, directors or employees pending, or to Seller’s Knowledge threatened, before the Equal Employment Opportunity Commission ( “EEOC” ), any EEOC-recognized state “referral agency” or any other Governmental Body, and no employment-related investigation or audit is pending, or to Seller’s Knowledge threatened, by any Governmental Body.

          (e) Except as set forth in Section 3.14(e) of the Disclosure Schedule, (i) Seller has paid in full to all Seller Employees and its former employees all wages, salaries, commissions, bonuses, benefits, compensation, vacation pay and severance that are due and payable; and (ii) there have not been any promises to any Seller Employees orally or in writing, of any bonus or increase in compensation, regardless of whether legally binding.

          (f) There is no collective bargaining or other labor union agreement applicable to Seller or any Seller Employees, and no collective bargaining agreement is being negotiated by Seller with respect to any of the Seller Employees. None of the Seller Employees are represented by any labor organization or group that was either certified by any labor relations board or any Governmental Body or voluntarily recognized by Seller as a bargaining representative of any of the Seller Employees and, to Seller’s Knowledge, there is no effort by or on behalf of any such labor organization or group to organize any of the Seller Employees. There is no labor dispute, work stoppage or strike pending or, to Seller’s Knowledge threatened, against Seller, and to Seller’s Knowledge, no event has occurred or circumstance exists that would provide the basis for any work stoppage or other labor dispute by or with any of the Seller Employees. Seller has complied in all material respects with all applicable Legal Requirements relating to employment practices, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closings. Seller is not liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements.

          (g) Except as set forth in Section 3.14(g) of the Disclosure Schedule, all Seller Employees are employed at-will and can be terminated at any time without Liability, and no current or former employee of Seller is entitled to receive any severance, compensation or benefits following termination of employment, except as may be required by applicable Legal Requirements.

          (h) Seller has no Knowledge that any officer, key employee or group of Seller Employees intends to terminate his, her or their employment with Seller; nor does Seller have a present intention to terminate the employment of any officer, key employee or group of Seller Employees.

          (i) Neither the execution and delivery of this Agreement nor the consummation of any of the Contemplated Transactions will trigger or subject Seller or Buyer to any employee notification or other obligation under the WARN Act or any similar Legal Requirement.

      3.15 Employee Plans

          (a)  Section 3.15(a) of the Disclosure Schedule sets forth all Seller Employee Plans. Seller has provide to Buyer complete and correct copies of all Seller Employee Plans and, with respect to each Seller Employee Plan, to the extent applicable, any related trust or funding arrangements, its most recent summary plan description, actuarial report, Form 5500 and IRS determination letter. To the Knowledge of Seller, Each Seller Employee Plan has been operated and administered in compliance in all material respects with the terms thereof and all applicable Legal Requirements, including ERISA and the Code, and Seller has not received any notice of any failure of any Seller Employee Plan to be so operated and administered. There is no Proceeding pending against or involving or, to Seller’s Knowledge threatened, against Seller or against or involving any Seller Employee Plan.

          (b) Except as set forth in Section 3.15(b) of the Disclosure Schedule, the consummation of the Contemplated Transactions will not (either alone or together with any other event) entitle any current or former employee or officer of Seller to any bonus, retirement, severance, job security or similar benefit or to an enhancement of any such benefit or accelerate the time of payment or vesting or trigger any payment of funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other obligation pursuant to, any Employee Plan. Except as set forth in Section 3.15(b) of the Disclosure Schedule, there is no Contract or plan that, individually or collectively, would entitle any such individual to any severance, retention bonus or other payment or other payment (whether alone or in conjunction with other events) as a result of the Contemplated Transactions, or could give rise to the payment of any amount that would not be deductible pursuant to the terms of Section 280G of the Code.

          (c) Neither Seller nor any of its ERISA Affiliates maintains an Employee Plan providing, or has any Liability in respect of, any post-employment or post-retirement health, medical or life insurance benefits for retired, former or current Employees.

      3.16 Tangible Personal Property; Biological Materials

      Section 3.16 of the Disclosure Schedule lists all items of Tangible Personal Property (including biological materials) with a net book value in excess of Ten Thousand Dollars ($10,000), in the aggregate, that is owned, leased or otherwise held by Seller and indicating (i) which of such Tangible Personal Property is owned and which is leased, licensed or otherwise used by Seller, and (ii) the location of each item of Tangible Personal Property. All such Tangible Personal Property is in reasonable operating condition, subject to reasonable wear and tear and with due regard for its age. All of the Tangible Personal Property is and has at all times been owned or otherwise held, used, installed, maintained and repaired in compliance in all material respects with standard industry practices and all applicable Legal Requirements. All Tangible Personal Property that is leased, licensed or otherwise used (but not owned) by Seller is used in or necessary for the operation of the Business and is leased, licensed or otherwise used pursuant to a valid Seller Contract that is set forth in Section 3.13(a) of the Disclosure Schedule.

      3.17 Purchased Inventories and Related Materials and Supplies.

          (a) The Purchased Inventories and Related Materials and Supplies taken as a whole are of sufficient quality to be useable in the Ordinary Course of Business and the quantity thereof is sufficient for Seller to operate its Business in the Ordinary Course of Business.

          (b) All biological material included within the Purchased Inventories and Related Materials and Supplies are suitable for their current or anticipated use in the Business. All such biological materials are and have at all times been used, maintained and stored in compliance in all material respects with standard industry practices and all applicable Legal Requirements, including the FDA, the FDCA and the PHSA.

      3.18 Relationships with Related Persons

     Except as set forth in Section 3.18 of the Disclosure Schedule, no Related Person of Seller has any interest in any of the Purchased Assets or any other property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Business. Neither Seller nor any Related Person of Seller owns or holds (of record or beneficially) an equity interest or any other financial or profit interest in any Person that has (i) had material business dealings or a material financial interest in any transaction with Seller (other than business dealings or transactions disclosed in Section 3.18 of the Disclosure Schedule, each of which has been conducted in the Ordinary Course of Business with Seller at substantially prevailing market prices and on substantially prevailing market terms), or (ii) engaged in competition with Seller with respect any products or services of Seller related to the Business (a “Competing Business” ), except for ownership of less than one percent (1%) of the outstanding capital stock or other equity of any Competing Business that is publicly traded on any recognized exchange or in the over-the-counter market. Except as set forth in Section 3.18 of the Disclosure Schedule, no Related Person of Seller is a party to any Contract with, or has any claim or right against, Seller.

      3.19 Solvency

          (a) Seller is not insolvent, and neither the Contemplated Transactions nor Seller’s operation of the Business in the ordinary course, consistent with past practices from the date hereof until the Closing will render Seller insolvent. As used herein, “insolvent” means that the sum of Seller’s debts and other probable Liabilities exceeds the present fair saleable value of Seller’s assets.

          (b) Immediately after giving effect to the consummation of the Contemplated Transactions, (i) Seller expects to be able to restructure the Retained Liabilities so they can be paid as they become due in the Ordinary Course of Business, (ii) Seller does not expect to have unreasonably small capital with which to conduct its present or proposed business, (iii) Seller will have assets (calculated at fair market value) that exceed its Liabilities and (iv) taking into account all pending and threatened litigation, final judgments against Seller in actions for money damages are not reasonably anticipated to be rendered at a time when, or in amounts such that, Seller will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum probable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) as well as all other obligations of Seller.

      3.20 Insurance

      Section 3.20 of the Disclosure Schedule sets forth a list of each current insurance policy (including policies providing property, casualty, products and other liability, clinical trials, environmental and workers’ compensation coverage and bond and surety arrangements) of which Seller is the owner, a named insured, or otherwise the beneficiary of coverage. Except as set forth in Section 3.20 of the Disclosure Schedule, there are no claims pending under any of said policies or bonds or disputes with underwriters, and no premium payments are overdue. Except as set forth in Section 3.20 of the Disclosure Schedule, there are no pending or threatened terminations with respect to any of such policies and bonds and Seller is in compliance in all material respects with all conditions contained therein. All such policies and bonds are in full force and effect. Complete and correct copies of each such insurance policy have been delivered to Buyer. Section 3.20 of the Disclosure Schedule describes any self-insurance arrangements affecting Seller.

      3.21 Brokers and Finders

     Other than to BMO Capital Markets Corp., neither Seller nor any of its officers, directors, employees or agents has incurred any Liability for any brokerage or finder’s fee, agent’s commission or other similar payment in connection with the consummation of the Contemplated Transactions.

      3.22 Investor Representations

     The Parties acknowledge and agree that nothing contained in this Section 3.22 shall in any way affect Seller’s right to rely upon Buyer’s representations and warranties and covenants in this Agreement.

          (a)  Purchase for Own Account . Seller is acquiring the Notes, and the securities issuable upon the conversion of such Notes, for its own account, for investment purposes and not for resale and, other that a proposed Plan of Liquidation to be effected in accordance with Section 7.15, Seller does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of the Notes or the securities issuable upon the conversion of such Notes to or through any Person.

          (b)  Receipt of Information . Seller has had an opportunity to ask questions and receive answers from EBS regarding EBS’s business operations and financial condition. Except as set forth in Article 4 of this Agreement, no other representations or warranties, oral or written, have been made to Seller, including any representations and warranties concerning the future prospects of EBS or any Representative or Affiliate thereof.

          (c)  Investment Experience . Seller has the requisite knowledge and experience in its financial and business matters, including investments of this type, to be capable of evaluating the merits and risks of an investment in the Notes, and the securities issuable upon the conversion of such Notes in accordance with the terms thereof, and of making an informed investment decision with respect thereto. Seller is an “accredited investor” as that term is defined in Section 501(a) of Regulation D promulgated under the Securities Act.

          (d)  Restricted Securities . Seller understands and acknowledges that the Notes and the securities issuable upon the conversion of such Notes, in accordance with the terms

thereof, (i) are “restricted securities” under United States federal and state securities Legal Requirements insofar as they have not been registered under the Securities Act, or the securities Legal Requirements of any other state or jurisdiction, and (ii) may not be resold or transferred without (A) compliance with the registration or qualification provisions of the Securities Act or applicable federal and state securities Legal Requirements of any state or other jurisdiction or (B) an opinion of counsel reasonably acceptable to EBS that an exemption from such registration and qualification requirements is available. A legend in substantially the following form will be placed on the Notes:

NEITHER THIS CONVERTIBLE PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS CONVERTIBLE PROMISSORY NOTE HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO EMERGENT BIOSOLUTIONS INC.

      3.23 Disclaimer of other Representations and Warranties

     Except as expressly set forth in Article 3, Seller does not make any other representation or warranty, express or implied, at law or in equity, and any such other representation or warranty is hereby expressly disclaimed notwithstanding any other provision contained herein or in any other Transaction Document or any other instrument or document delivered to Buyer pursuant hereto or in connection with the Contemplated Transactions.

4. REPRESENTATIONS AND WARRANTIES OF 310, LLC AND EBS

      4.1 Representations and Warranties of 310, LLC and EBS

     310, LLC and EBS jointly and severally represent and warrant to Seller as follows:

          (a)  Organizational Authority.

          (i) 310, LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. EBS is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. This Agreement has been duly executed and delivered by each of 310, LLC and EBS and constitutes a legal, valid and binding obligation of each of 310, LLC and EBS, enforceable against 310, LLC and EBS in accordance with its terms.

Upon the execution and delivery by each of 310, LLC and EBS of each Transaction Document to be executed or delivered by 310, LLC or EBS, as the case may be, at the Closing (collectively, the “Buyer’s Closing Documents” ), each applicable Buyer’s Closing Document will constitute the legal, valid and binding obligation of each of 310, LLC or EBS, enforceable against each of 310, LLC and EBS in accordance with its respective terms. Each of 310, LLC and EBS has the unrestricted right, power and authority to execute and deliver this Agreement and each Buyer’s Closing Document (to which it is or will be a party) and to perform its obligations hereunder and thereunder and the Contemplated Transactions, and such action has been duly authorized by all necessary action by 310 LLC’s sole member and manager and EBS’s shareholders and board of directors.

          (ii) 310, LLC is a wholly-owned subsidiary of EBS.

          (b)  No Conflicts .

          (i) Neither the execution and delivery by either 310, LLC or EBS of this Agreement or of the Buyer’s Closing Documents nor the consummation or performance by 310, LLC or EBS of any of the Contemplated Transactions will, directly or indirectly, (i) Breach any provision of any of 310 LLC’s or EBS’s Governing Documents or of any resolution adopted by 310 LLC’s sole member and manager or EBS’s shareholders or board of directors, or (ii) Breach any material Contract of EBS or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under any Legal Requirement to which 310, LLC or EBS is subject or by which it is bound.

          (ii) No Consent, Permit, Order from, or registration, declaration or filing with, any Governmental Body or Third Party is required to be obtained or made by 310, LLC or EBS in connection with the execution, delivery and performance of this Agreement, the Buyer’s Closing Documents or the consummation of the Contemplated Transactions, other than, to the extent applicable, any Notification and Report forms required to be filed under the HSR Act and those the failure of which to be obtained or made, individually or in the aggregate, would not materially impair the ability of 310, LLC or EBS, as the case may be, to consummate the Contemplated Transactions.

          (c)  Brokers and Finders . Other than to Jefferies & Company, Inc., none of 310, LLC, EBS or any of their respective officers, directors, employees or agents has incurred any Liability for any brokerage or finder’s fee or agent’s commission or other similar payment in connection with the consummation of the Contemplated Transactions.

          (d)  Legal Proceedings . There is no pending or, to either 310 LLC’s or EBS’s Knowledge threatened, Proceeding as of the date hereof involving 310, LLC or EBS, as the case may be, that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions.

          (e)  Capitalization .

          (i) The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of EBS (whether or not presently

convertible into or exercisable or exchangeable for shares of capital stock of EBS) has been set forth in the SEC Reports and has changed since the date of such SEC Reports only to reflect stock option and warrant exercises that do not, individually or in the aggregate, have a material affect on the issued and outstanding capital stock, options and other securities. All of the outstanding shares of capital stock of EBS are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all applicable Legal Requirements, and, to EBS’s Knowledge, none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of EBS. Except as specified in the SEC Reports: (1) no shares of EBS’s capital stock are subject to preemptive rights or any Encumbrances established by EBS; (2) there are no outstanding options, warrants, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of EBS, or contracts, commitments, understandings or arrangements by which EBS is or may become bound to issue additional shares of capital stock of EBS or options, warrants, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of EBS; (3) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of EBS or by which EBS is or may become bound; (4) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with EBS; (5) there are no agreements or arrangements under which EBS is obligated to register the sale of any of their securities under the Securities Act (except the Registration Rights Agreement); and (6) there are no outstanding securities or instruments of EBS which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which EBS is or may become bound to redeem a security of EBS.

          (ii) The shares of EBS’s common stock (the “ Common Stock ”) to be issued upon conversion of the Notes have been duly and validly reserved for issuance and, when issued, will be duly authorized, fully paid and non-assessable.

          (f)  SEC Reports . The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve (12) month period preceding the date hereof (or such shorter period as EBS was required by any Legal Requirement to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ”), on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective filing dates, or to the extent corrected by a subsequent restatement, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

          (g)  Financial Statements; Undisclosed Liabilities .

          (i) The financial statements of EBS included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement). Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of EBS as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.

          (ii) Except for those Liabilities shown in the financial statements of EBS included in the SEC Reports, EBS has no material Liabilities.

          (h)  Solvency . EBS is not insolvent, and the Contemplated Transactions will not render EBS insolvent. As used herein, “insolvent” means that the sum of EBS’s debts and other probable Liabilities exceeds the present fair saleable value of the EBS’s assets.

          (i)  Debarment . None of 310, LLC, EBS or their respective Affiliates, directors, officers or members, as the case may be, has been debarred or suspended from participation in the award of any Contract with a Government Body or subcontracts or from otherwise conducting business with any Governmental Body, nor to 310 LLC’s or EBS’s Knowledge are there any facts or circumstances reasonably likely to result in debarment or suspension proceeding with respect to any of 310, LLC, EBS or their respective directors, officers or members, in any such case.

          (j)  BLA and RFP . Buyer has no current intention to withdraw the BLA or RFP.

          (k)  Disclaimer of other Representations and Warranties . Except as expressly set forth in Article 4, neither 310, LLC nor EBS makes any representation or warranty, express or implied, at law or in equity, and any such other representation or warranty is hereby expressly disclaimed notwithstanding any other provision contained herein or in any other Transaction Document or any other instrument or document delivered to Seller pursuant hereto or in connection with the Contemplated Transactions.

5. CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

     Buyer’s obligation to consummate the Contemplated Transactions and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer, in whole or in part):

      5.1 Accuracy of Representations

     Each of the representations and warranties of Seller contained in this Agreement or any certificate delivered by Seller pursuant hereto shall be true and correct in all material respects as

of the date of this Agreement and as of the Closing as if made at and as of each such time, except (a) that those representations and warranties that by their express terms are made as of a specific date shall have been true and correct only as of such date and (b) to the extent such representations and warranties are qualified by “materiality”, “Material Adverse Effect” or other terms of similar impact or effect, in which case such representations and warranties shall be true and correct in all respects on and as of such date.

      5.2 Seller’s Performance

     Seller shall have performed and complied in all material respects with all covenants and other obligations required to be performed or complied with by it prior to or at the Closing.

      5.3 Seller Required Consents; MEDCO Lease Assignment Documents

     All Seller Required Consents that are material, in the reasonable judgment of Buyer, to the Purchased Assets or the operation of Seller’s business are identified on Schedule 5.3 , and shall have been obtained or made in accordance with any applicable terms hereof, shall be in full force and effect, and Seller shall have delivered to Buyer written evidence, satisfactory to Buyer, of all such Seller Required Consents. MEDCO shall have executed and delivered each of the MEDCO Lease Assignment Documents required to be delivered pursuant to Section 2.9(a)(iii).

      5.4 Termination of Encumbrances

     All Encumbrances other than Permitted Encumbrances on any of the Purchased Assets, including all Encumbrances pursuant to the Zachs Mortgage, shall have been terminated or released, and Buyer shall have delivered to Seller written evidence, reasonably satisfactory to Buyer, of such releases and terminations.

      5.5 Conversion of Zachs Note

     The Zachs Note shall have been terminated and converted to a Series G Promissory Note made and delivered by Seller to Zachs or Zachs shall have elected not to convert the Zachs Note and instead elected to have the Zachs Note repaid in full, and Seller shall have delivered to Buyer written evidence, satisfactory to Buyer, of such termination, conversion and issuance of such note or the election by Zachs.

      5.6 No Proceedings, Legal Requirements or Orders

     There shall not be in effect (a) any injunction, temporary restraining or other similar equitable remedy against 310, LLC or EBS, as the case may be, or any Related Person of 310, LLC or EBS, as the case may be, (b) or pending any Proceeding against 310, LLC or EBS, as the case may be, or any Related Person of 310, LLC or EBS, as the case may be, or (c) any Legal Requirement or Order, that (i) prohibits (or in which an adverse Order could prohibit) the consummation of any of the Contemplated Transactions, (ii) involves any challenge to, or seeks damages or any other legal or equitable relief in connection with, any of the Contemplated Transactions or (iii) in the case of a Proceeding by a Government Body, could have the effect of preventing, delaying, making illegal, imposing limitations or conditions on or otherwise interfering with the consummation of any of the Contemplated Transactions or Buyer’s ownership or operation of the Purchased Assets or operation of the Business following the Closing.

      5.7 Material Adverse Effect

     No Material Adverse Effect shall have occurred.

      5.8 Series G Promissory Notes

     Holders of the Series G Notes shall have elected to accept either (a) the prepayment in full by Buyer of the unpaid principal amount and all accrued interest of their respective Series G Notes, subject to Seller’s obligation to pay any prepayment penalty or premiums in accordance with the terms and conditions of such Series G Notes, or (b) substitute promissory notes issued by EBS and in a form and substance reasonably acceptable to EBS.

      5.9 Employees

     Seller Employees (other than Manon Cox) sufficient for Buyer to continue to conduct the Business immediately following the Closing, as reasonably determined by Buyer, shall have accepted offers of employment with EBS, and all key employees of Seller (other than Manon Cox) shall have signed EBS’s standard agreements containing confidentiality, assignment, non-competition and non-solicitation obligations.

      5.10 Requisite Stockholder Approval

     Seller shall have obtained the Requisite Stockholder Approval.

      5.11 Closing Deliveries

     Seller shall have caused the documents and instruments required by Section 2.9(a) and this Article 5 and the following documents to be executed and delivered (or tendered subject only to Closing) to Buyer:

          (a) certificates dated as of a date not earlier than the third (3 ^rd ) Business Day prior to the Closing as to the good standing of Seller issued by the appropriate officials of the applicable Government Body in each jurisdiction in which Seller is licensed or qualified to do business; and

          (b) such other documents as Buyer may reasonably request for the purpose of: (i) evidencing the accuracy of any of Seller’s representations and warranties, (ii) evidencing the performance by Seller of, or the compliance by Seller with, any covenant or obligation required to be performed or complied with by Seller, (iii) evidencing the satisfaction of any condition referred to in this Article 5, or (iv) otherwise facilitating the consummation or performance of any of the Contemplated Transactions.

      5.12 Environmental Matters

     The results of the Phase II environmental survey shall not indicate any Environmental Condition relating to the underground storage tanks previously removed from the real property or potential asbestos that will cost more than Five Hundred Thousand Dollars ($500,000) in the aggregate to remediate in compliance with all Legal Requirements.

      5.13 HSR Act

     To the extent applicable, the applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or otherwise been terminated without the FTC or the Antitrust Division, as applicable, taking any action which has not been terminated or resolved.

6. CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE

     Seller’s obligation to consummate the Contemplated Transactions and to take the other actions required to be taken by Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Seller, in whole or in part):

      6.1 Accuracy of Representations

     Each of the representations and warranties of Buyer contained in this Agreement or any certificate delivered by Buyer pursuant hereto shall be true and correct in all material respects as of the date of this Agreement and as of the Closing as if made at and as of each such time, except (a) that those representations and warranties that by their express terms are made as of a specific date shall have been true and correct only as of such date and (b) to the extent such representations and warranties are qualified by “materiality”, “Material Adverse Effect” or other terms of similar impact or effect, in which case such representations and warranties shall be true and correct in all respects on and as of such date.

      6.2 Buyer’s Performance

     Buyer shall have performed and complied, in all material respects, with all covenants and other obligations required to have been performed or complied with by it prior to or at the Closing.

      6.3 No Proceedings, Legal Requirements or Orders

     There shall not be in effect (a) any injunction, temporary restraining or other similar equitable remedy against Seller or any Related Person of Seller, (b) or pending any Proceeding against Seller or any Related Person of Seller, or (c) any Legal Requirement or Order, that (i) prohibits (or in which an adverse Order could prohibit) the consummation of any of the Contemplated Transactions, (ii) involves any challenge to, or seeks damages or any other legal or equitable relief in connection with, any of the Contemplated Transactions or (iii) in the case of a Proceeding by a Government Body, could have the effect of preventing, delaying, making illegal, imposing limitations or conditions on or otherwise interfering with the consummation of any of the Contemplated Transactions or Buyer’s ownership or operation of the Purchased Assets or operation of the Business following the Closing.

      6.4 Termination of Loan Facility

     All of the Loan Documents shall have been (or shall be, concurrent with the Closing) terminated and cancelled, and 310, LLC shall have returned the original Promissory Note to Seller marked “cancelled”.

      6.5 Requisite Stockholder Approval

     Seller shall have obtained the Requisite Stockholder Approval.

      6.6 Buyer Material Adverse Effect

     No Buyer Material Adverse Effect shall have occurred.

      6.7 Closing Deliveries

     Buyer shall have caused the documents and instruments required by Section 2.9(b) and this Article 6 and the following documents to be executed and delivered (or tendered subject only to Closing) to Seller:

          (a) (i) the certificate of formation and all amendments thereto of 310, LLC, duly certified as of a recent date by the appropriate Government Body, and (ii) the certificate of incorporation of EBS, duly certified as of a recent date by the appropriate Government Body;

          (b) a certificate dated as of a date not earlier than the third (3 ^rd ) Business Day prior to the Closing as to the good standing of 310, LLC and EBS in their respective states of formation or incorporation, as applicable;

          (c) (i) a form of consulting agreement to be entered into by and between EBS and Daniel D. Adams as soon as practicable after the Closing Date, and (ii) an offer letter for the employment of Manon Cox by EBS from and after the Closing Date (it being understood by the Parties that the acceptance of the offer to consult for, or be employed by, EBS, as the case may be, shall not be a condition precedent to the consummation of the Contemplated Transactions by the Parties); and

          (d) such other documents as Seller may reasonably request for the purpose of: (i) evidencing the accuracy of any of Buyer’s representations and warranties, (ii) evidencing the performance by Buyer of, or the compliance by Buyer with, any covenant or obligation required to be performed or complied with by Buyer, (iii) evidencing the satisfaction of any condition referred to in this Article 6, or (iv) otherwise facilitating the consummation or performance of any of the Contemplated Transactions.

      6.8 HSR Act

     To the extent applicable, the applicable waiting periods (and any extensions thereof) under the HSR Act shall have expired or otherwise been terminated without the FTC or the Antitrust Division, as applicable, taking any action which has not been terminated or resolved.

      6.9 Agreement with Diaymd

     Prior to the Closing Date, Buyer and Seller shall jointly seek an amendment or clarification to the Diamyd Agreement so that it does not, in Buyer’s reasonable discretion, conflict with or impose an undue burden on the Business follow the Closing. If no such amendment or clarification is achieved to Buyer’s reasonable satisfaction prior to Closing, then Buyer shall have the right either to (i) assume the Diamyd Agreement, thereby treating it as an Assumed Liability, and proceed to Closing or (ii) terminate this Agreement. For the avoidance of doubt, Buyer shall not be permitted to exclude the Diamyd Agreement, thereby treating it as a Retained Liability, and proceed to Closing.

7. PRE- AND POST-CLOSING COVENANTS

      7.1 Due Diligence; Access

          (a) From the date hereof until the Closing, during normal business hours, upon reasonable prior notice to Seller and without unreasonably interfering with the operation of Seller’s business, Seller shall and shall cause its Representatives to provide to Buyer and Buyer’s Representatives prompt and reasonable access to all premises, properties, management personnel, Representatives and Records concerning the Purchased Assets as deemed necessary by Buyer to conduct a thorough due diligence investigation of the Purchased Assets and the Business. Seller shall promptly provide to Buyer copies of all Contracts, Permits, Governmental Authorizations and other Records comprising or relating to the Purchased Assets and the Business as are required to be provided hereunder or as Buyer may request and, in any event, shall provide copies of all correspondence between Seller and any Governmental Body concerning the products, Services and the Business. Buyer shall be entitled to conduct such financial, environmental, engineering, title, physical property and other investigations and audits of any of the Purchased Assets or any aspect of the Business as Buyer shall determine, at Buyer’s cost and expense, and Seller shall and shall cause its Representatives to cooperate with Buyer and its Representatives in connection with the foregoing. Notwithstanding the foregoing, in no event shall Seller be required to make available to Buyer any Records to the extent legally privileged. Prior to the Closing, any information, Records or Contracts between Seller and any Person reasonably determined to be a competitor of EBS or any of its Affiliates by Seller shall only be made available to outside counsel to Buyer who shall not be allowed to disclose to any non-legal employee or Representative of EBS the name of the competitor or the specific type of development work undertaken by Seller for such competitor.

          (b) From the date hereof until the Closing, during normal business hours and upon reasonable prior notice to EBS and in a manner that does not materially interrupt EBS’s business, EBS shall and shall cause its Representatives to provide to Seller and Seller’s Representatives, at Seller’s expense, full access to all Records (other than those Records that include information (financial or otherwise) previously disclosed by EBS in the SEC reports) deemed reasonably necessary by Seller to conduct a financial and accounting due diligence investigation of EBS. Notwithstanding the foregoing, in no event shall EBS be required to make available to Seller any Records to the extent legally privileged.

          (c) From and after the date hereof until the Closing, Seller shall promptly notify Buyer of any and all responses Seller receives from the FDA as it relates to the BLA Approval application and from HHS as it relates to the RFP, and to the extent such responses are in writing Seller shall immediately provide to Buyer, at Buyer’s expense, copies of the same.

      7.2 Operations Pending Closing

          (a) Ordinary Course of Business . From the date hereof until the Closing and subject to the continued funding of the Loan Facility, Seller shall operate the Business in compliance in all material respects with all applicable Legal Requirements and all Seller Contracts, Non-Governmental Permits and Seller Governmental Authorizations, and in the Ordinary Course of Business, but shall not in any event take any action that would constitute or would reasonably be expect to cause a Material Adverse Effect or any Breach under this Agreement or any of the Loan Documents. Subject to the performance of Buyer’s obligations

under Section 7.2(b) and (c), Seller shall use commercially reasonable efforts to (i) keep the Business and the Purchased Assets intact, including Seller’s present operations and physical facilities, and (ii) maintain and preserve its relationships and goodwill with all customers, suppliers, lessors, lenders and licensors of the Business and all Governmental Bodies with jurisdiction over Seller, the Purchased Assets or the Business.

          (b) Trade Payables . From and after the date hereof until the Closing Date, 310, LLC shall continue to fund the Loan Facility to pay the Trade Payables as they arise in the Ordinary Course of Business. To the extent the amount of the Loan Facility is not sufficient to pay such Trade Payables as they become due on or before the Closing Date, Buyer and Seller agree to amend the Dollar amount of the Loan Facility for the purpose of providing Seller sufficient funds to pay such Trade Payables on or prior to the Closing Date; provided , however , the Parties agree that in no event shall the Dollar amount of the portion of the Loan Facility secured by the Real Property exceed Ten Million Dollars ($10,000,000). Schedule 2.4(a)(iii) sets forth Seller’s good faith projection and schedule of all expenses expected to be paid by Seller from the date hereof through and until June 30, 2008 or to be accrued and assumed by the Buyer as a Trade Payable.

          (c) Cash Disbursement and Contract Approval Process . From and after the date hereof until the Closing Date, in order for Seller to make any cash disbursement for any reason or enter into, renew or amend any Seller Contract, Seller Governmental Authorization or Non-Governmental Permit or permit any such Seller Contract, Seller Governmental Authorization or Non-Governmental Permit to lapse or terminate, Seller shall be required to specifically follow the procedures set forth in Schedule 7.2(c) . No action taken by Seller with Buyer’s written approval under this Section 7.2(c) shall be deemed to Breach any representation, warranty, covenant or condition of this Agreement.

          (d) Actions Requiring Buyer Approval . Without limiting the generality of Sections 7.2(a), 7.2(b) or 7.2(c) without Buyer’s express written consent which shall not be unreasonably withheld or delayed, Seller shall:

          (i) continue the development of FluBlok, including providing the continued financial and other necessary support for existing FluBlok studies and trials, and shall continue the Upgrade in accordance with Schedule 1.1(g) ;

          (ii) not acquire, sell, lease, license or otherwise dispose of any assets or property other than sales of research antigen in the Ordinary Course of Business to fulfill existing Seller Contracts;

          (iii) not acquire any asset, obtain any Governmental Authorization or other Permit or enter into any Contract that would constitute a Purchased Asset;

          (iv) other than pursuant to the Loan Facility, not create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or mortgage or pledge any of its property or assets or subject any such property or assets to any Encumbrance other than any Permitted Encumbrance;

          (v) maintain all existing insurance coverage relating to the Purchased Assets and the Business;

          (vi) not make any loans, advances or capital contributions to, or investments in, any other Person;

          (vii) not enter into, adopt or amended any Seller Employee Plan or any employment or severance Contract or increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, any of Seller’s directors, officers or employees, generally or individually, or pay any bonus or other benefit to any of its directors, officers or employees (except for existing payment obligations listed in Section 3.14(a) of the Disclosure Schedule), hire any new officer or employee or terminate any officer or employee;

          (viii) not forgive, cancel or defer payment of any amount owed to Seller, other than an Excluded Asset, whether indebtedness owed to Seller, trade receivables held by Seller, or otherwise, other than an Excluded Asset;

          (ix) not change any of its accounting methods, principles or practices, except as required by a generally applicable change in GAAP or pursuant to applicable Legal Requirements, or make any new elections or changes to any current elections with respect to Taxes;

          (x) take or omit to take any action that would constitute a Breach of, or waive any rights under, any Contract, Governmental Authorization or other Permit, including the Loan Documents;

          (xi) make or commit to make any capital or other expenditure;

          (xii) institute or settle any Proceedings or waive any material rights; or

          (xiii) agree or undertake to do any of the items described in clauses (i) through (xii).

      7.3 Seller Required Consents

          (a) Seller shall use commercially reasonable efforts to obtain all Seller Required Consents identified on Schedule 5.3 and to have MEDCO execute and deliver each the MEDCO Lease Assignment Document as soon as practicable following the date hereof (but in no event later than the Closing Date), in each case on terms that are no less favorable than the existing terms of the applicable underlying Governmental Authorizations, Permits, Contracts or other obligations, and in accordance with any other applicable terms set forth in this Agreement. Buyer shall cooperate as reasonably requested by Seller in seeking the Seller Required Consents, and Seller shall notify Buyer of all meetings, conference calls and similar events relating to any of the Seller Required Consents of which Seller becomes aware, and Buyer, upon Seller’s invitation, shall be entitled to attend or participate therein; provided , however , Buyer shall be entitled, without an invitation from Seller, to attend or participate in any meeting, conference call and similar event between Seller and Diamyd Therapeutics AB (“ Diamyd ”) relating to the restructuring of the Series G Promissory Notes held by Diamyd. Buyer shall be entitled to review and approve all form(s) of Seller Required Consents and applications or other requests

therefor that are submitted prior to Seller’s submission thereof, which approval Buyer shall not unreasonably withhold. Each Party shall bear its own costs and expenses incurred in connection with seeking and obtaining the Seller Required Consents; provided , that Buyer shall have no Liability with respect to any filing or other similar fees required in connection with any Seller Required Consents or to incur any costs or expenses other than de minimis out-of-pocket expenses.

          (b) Without limiting the foregoing and to the extent applicable, Seller and Buyer, shall promptly file after the date hereof with the Federal Trade Commission (the “ FTC ”) and the Antitrust Division of the United States Department of Justice (the “ Antitrust Division ”) any Notification and Report forms, and any material related to the foregoing, required under the HSR Act. Each of the Parties shall use commercially reasonable efforts to obtain expiration or early termination of the applicable waiting period, and will make any further filings that may be necessary in connection therewith.

      7.4 Environmental, Title and Other Investigations

          (a) Buyer may elect, at its own expense, to order a Phase I environmental site assessment of any parcel of Real Property as Buyer may determine, to be performed by an environmental firm selected by Buyer (the “Environmental Firm" ) on a date reasonably acceptable to Seller and without unreasonably interfering with the operation of the Business. If the Environmental Firm reasonably determines as a result of any such assessment with respect to a parcel of Real Property that further investigation or testing is necessary, and Buyer desires that such investigation or testing be conducted, Seller shall use commercially reasonable efforts to cause the owner of such Real Property to permit the Environmental Firm to perform a Phase II environmental site assessment (or other applicable investigation or testing, as the case may be). If such approval is obtained from the applicable owner, Buyer may cause such Phase II environmental site assessment or other investigation or testing to be conducted on a date reasonably acceptable to Seller and without unreasonably interfering with the operation of the Business. Following their completion, Buyer will promptly deliver copies of such Phase I and Phase II (and any other) environmental site assessment reports to Seller. Seller shall and shall cause its Representatives to, and shall use commercially reasonable efforts to cause the owners of the applicable Real Property to, comply with any reasonable request for information made by Buyer or the Environmental Firm in connection with any such investigation, and shall afford Buyer and the Environmental Firm access to all areas of the applicable Real Property, at reasonable times and in a reasonable manner in connection with any such investigation. If as a result of a Phase II environmental assessment the Environmental Firm reasonably determines that Remedial Action is required under applicable Environmental Laws, Buyer shall promptly notify Seller thereof, and Seller shall promptly notify the owner of the applicable Real Property thereof. Seller shall use commercially reasonable efforts to cause the owner of such Real Property to perform or cause to be performed such Remedial Action as soon as reasonably practicable and in accordance with applicable Legal Requirements, Remediation Standards and any recommendations of the Environmental Firm, but in no event shall Seller be obligated to incur any out-of-pocket expenses for such Remedial Work or be obligated to commence any proceeding against such owner. All information learned or discovered pursuant to its activities under Section 7.4 shall be Confidential Information of Seller as the Disclosing Party and subject to the provisions of Section 10 of this Agreement.

          (b) Buyer shall be entitled to obtain one or more surveys, title reports and commitments of title insurance with respect to all or any portion of the Real Property from any title insurance company or companies and surveyors as Buyer selects. Seller shall and shall cause its Representatives to, and shall use commercially reasonable efforts to cause the owners of such Real Property to, cooperate as reasonably requested by Buyer in connection with Buyer’s efforts to obtain such surveys, title reports and/or title commitments, including Seller’s and such property owners’ execution and delivery to any such surveyors or title insurance companies of any such records, data, documents, certificates, agreements, affidavits and other instruments and items in customary form as Buyer or such surveyor or title insurance company may reasonably request. In connection with the foregoing, if, prior to Closing, Buyer obtains and delivers to Seller a copy of a title report with respect to any portion of the Real Property that identifies any Encumbrance other than a Permitted Encumbrance, Seller shall remove or terminate or cause to be removed or terminated such Encumbrance as soon as reasonably practicable and in any event prior to Closing.

      7.5 Employment Matters

          (a) From the date hereof until the Closing, Seller shall notify Buyer and EBS of any change to any of the information concerning Seller Employees contained in Section 3.14(a) of the Disclosure Schedule. Following the date hereof, Seller shall make all Seller Employees available to EBS, at reasonable times and at reasonable or convenient locations to Seller, in order to prepare for the transition of employment of the Transferred Employees from Seller prior to Closing to Buyer from and after Closing (or upon the later date of commencement of active employment with Buyer). No less than ten (10) days prior to the anticipated Closing Date, EBS shall make written offers of employment, effective as of the Closing Date, to the Seller Employees specifying the basic terms of employment, including a salary no less favorable than such Seller Employee’s current salary as set forth on Schedule 7.5(a); provided , however , EBS shall offer to employ Manon Cox pursuant to an offer letter substantially in the form attached hereto as Exhibit G ; provided , further , however , EBS shall offer to engage Daniel D. Adams as a consultant pursuant to a consulting agreement substantially in the form attached hereto as Exhibit H . Such offers shall be contingent upon (w) the occurrence of the Closing, (x) any applicable Seller Employee being employed by Seller as of the Closing (other than Manon Cox or Daniel D. Adams), (y) such Seller Employee’s satisfaction of customary employment conditions generally applicable to EBS’s employees (including but not limited to EBS’s standard employment screening, including employment drug screening and background checks) (the " Background Check " ) and (z) such Seller Employee’s completion and submission of EBS’s standard employment application form and other “new-hire” documents, including form I-9, a Background Check disclosure and consent form, an employee responsibility and conduct acknowledgment and standard confidentiality, invention assignment, non-competition and non-solicitation commitments.

          (b) Effective as of the Closing Date (or upon the later date of commencement of active employment with Buyer), each Transferred Employee shall be given the opportunity to participate in EBS employee benefit plans, agreements, programs, policies and arrangements that EBS provides to its other similarly situated employees as of such time (the " Buyer Plans " ); provided , however , that to the extent any Buyer Plan or EBS company policy by its terms prohibits the participation of any such Transferred Employee in a Buyer Plan effective as of the Closing Date (or upon the later date of commencement of active employment with Buyer), then

such Transferred Employee shall be eligible to participate in such Buyer Plan upon the earliest available participation date thereunder.

          (c) EBS and Seller shall reasonably cooperate from and after the date hereof to communicate with Seller Employees regarding the offers of employment described herein.

          (d) Seller shall terminate the employment of any Transferred Employee effective as of the Closing. EBS agrees to retain each Transferred Employee for a period of twelve (12) months from and after the Closing Date, subject to the termination of such Transferred Employee’s employment “for cause” or as the result of the resignation of any such Transferred Employee prior to the expiration of such twelve (12) month period. The Parties shall cooperate with each other to give effect to this Section 7.5, and Seller shall not take any actions that would interfere with the Seller Employees so offered employment from becoming employed by EBS. If any Employee becomes entitled to any payments or benefits under any employment agreement, retention, severance or change of control policy, plan, agreement, arrangement or program that exists or arises under any applicable Legal Requirement or otherwise as a result of the consummation of the Contemplated Transactions, including under the WARN Act, the federal Consolidated Omnibus Budget Reconciliation Act (“ COBRA ”) or any other similar Legal Requirement, Seller shall be liable for such amounts, which Liability shall constitute a Retained Liability, provided , however , that if required by any applicable Legal Requirement, Buyer shall offer any terminated Seller’s employees any applicable COBRA rights.

          (e) With respect to any Buyer Plan that is a “welfare benefit plan,” as defined in Section 3(1) of ERISA, or any plan that would be a welfare benefit plan if it were subject to ERISA, maintained by EBS, EBS shall, to the extent permitted by such plan (i) provide coverage for Transferred Employees under its medical, dental and health plans as of the first day of the month following Closing in accordance with the terms of such plans, and Seller shall provide coverage for the balance of the month in which the Closing occurs, (ii) cause the waiver of any pre-existing conditions, actively at work requirements and waiting periods or other eligibility requirements to the extent such conditions, requirements or waiting periods were satisfied by a Transferred Employee under a corresponding Seller Employee Plan, and (iii) cause such Buyer Plans to honor any expenses incurred by the Transferred Employees and their dependents or beneficiaries under similar plans of Seller during the portion of the calendar year ending with the end of the month in which the Closing Date occurs for purposes of satisfying applicable deductibles.

          (f) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employee or his or her covered dependents on or prior to the last day of the month during which the Closing occurs. EBS shall provide and be responsible for all expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents as of the first day of the month following the Closing. For purposes of this Section 7.5(f), a claim is deemed incurred: (i) in the case of hospital, medical or dental benefits, when the services that are the subject of the claim are performed, (ii) in the case of life insurance, when the death occurs, (iii) in the case of long-term disability benefits, when the employee becomes disabled, and (iv) in the case of workers compensation benefits, when the event giving rise to the benefits occurs.

          (g) For purposes of eligibility and vesting only under each Buyer Plan in which Transferred Employees are or become eligible to participate, such Transferred Employees shall, to the extent permitted by any such Buyer Plan, be given credit for all service (including service with Seller or any of its Affiliates and predecessors) for which such Transferred Employees were credited for such purposes under a corresponding Seller Employee Plan prior to the Closing Date; provided , that nothing in this Section 7.5(g) shall result in any duplication of benefits or result in Transferred Employees receiving credit in a Buyer Plan for benefit accrual purposes. Such past service credit will be established entirely on the information as recorded by Seller and communicated to EBS, and EBS will not be responsible to audit, validate or confirm the accuracy of any such information.

          (h) From and after the Closing, Seller shall remain solely responsible for any and all Liabilities in respect of the Seller Employees, including the Transferred Employees, related to accruals through the Closing Date under the Seller Employee Plans except to the extent reflected on the Trade Payables. Further, Seller shall retain all obligations with respect to continued coverage under COBRA (and any similar state Legal Requirement), if and so long as Seller maintains a health insurance plan following the Closing, Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA and the regulations thereunder for all Seller Employees who do not become Transferred Employees. EBS shall not assume nor have transferred to it the sponsorship of, or any Liability in connection with, any of the Seller Employee Plans or any other benefit plans or arrangements maintained by Seller or any of its Affiliates or predecessors.

          (i) Seller shall and shall cause its Affiliates to make all commercially reasonable efforts necessary to fully vest the Transferred Employees in their account balances under all of the Seller Employee Plans that utilize vesting requirements, including but not limited to their tax-qualified 401(k) plans, effective no later than the Closing Date. EBS shall accept rollover contributions from the Transferred Employees’ accounts with Seller’s 401(k) plans following the Closing and pursuant to the terms and conditions of the applicable Buyer Plan(s).

          (j) With respect to any accrued but unused vacation time and paid time off to which any Transferred Employee is entitled pursuant to the vacation and paid time off policy applicable to such Transferred Employee immediately prior to the Closing, EBS shall, to the extent permitted by applicable Legal Requirements, but only to the extent as set forth in Section 2.4(a)(v), assume the Liability for such accrued vacation and allow such Transferred Employee to use such accrued vacation to the extent such Transferred Employee would have been entitled to such accrued vacation based on his level and years of service under the vacation policy of Buyer in effect as of the Closing Date as if such Transferred Employee had been employed by EBS during such Transferred Employee’s employment with Seller. Except as expressly set forth herein, upon commencement of employment with EBS, Transferred Employees shall be subject to EBS’s vacation accrual and use policies.

          (k) Seller shall be responsible for providing or discharging any and all notifications, benefits and Liabilities to Seller Employees and Governmental Bodies required by the WARN Act or by any other Legal Requirement relating to plant closings or employee separations or severance pay that are required to be provided as a result of termination of Seller’s Employees by Seller in connection with consummation of the Contemplated Transactions.

          (l) The Parties hereby acknowledge and agree that no provision of this Agreement shall be construed to create any right to any compensation or benefits whatsoever on the part of any Seller Employee or other future, present or former employee of Seller. Nothing in this Section 7.5 or elsewhere in this Agreement shall be deemed to make any employee of the Parties or their respective Affiliates a third party beneficiary of this Section 7.5 or any rights relating hereto.

          (m) Nothing in this Section 7.5 is intended to amend in any way any Buyer Plans.

      7.6 Notice of Certain Changes; Supplements to Disclosure Schedule

          (a) Seller shall promptly notify Buyer in writing of any material adverse development relating to the Business or any of the Purchased Assets or of any other fact or circumstance that would cause any of Seller’s representations, warranties or covenants in this Agreement or any Schedule hereto, to be untrue or incomplete in any respect, or would cause Seller to be unable to deliver the certificate required under Section 2.9(a)(vi), and Seller shall promptly deliver to Buyer an updated version of any applicable Section of the Disclosure Schedule or add a new Schedule to this Agreement to which such fact or circumstance relates (the “ Updated Disclosure Schedule ”). In the event that Seller delivers an Updated Disclosure Schedule, Buyer shall be entitled to extend, by written notice to Seller, the scheduled Closing Date to the third (3 ^rd ) Business Day after Buyer receives the updated Disclosure Schedule and any information regarding the updates reasonably requested by Buyer. The delivery by Seller of an Updated Disclosure Schedule shall not prejudice any rights of Buyer hereunder prior to the Closing, including the right to claim that the representations and warranties of Seller, when made as of the date hereof, were inaccurate or false in any material respect and to exercise any right to terminate this Agreement. If Buyer consummates the Closing, an Updated Disclosure Schedule shall be deemed to qualify the representations and warranties made as of the Closing date and replace for such purpose, in whole or in part, as the case may be, the applicable Section(s) of the Disclosure Schedule delivered hereunder for such purpose. If Buyer does not consummate the Closing as a result of information disclosed by Seller to Buyer on an Updated Disclosure Schedule, Buyer shall be permitted to terminate this Agreement pursuant to Section 9.1(f) no later than the third (3 ^rd ) Business Day after Buyer receives such Updated Disclosure Schedule; provided , however , that in the event the failure of Seller to disclose such facts or circumstances relating to such Updated Disclosure Schedule constitutes an Intentional Breach or fraud, Seller shall be required to pay to Buyer a Termination Fee in accordance with Section 9.2(c) as Buyer’s sole and exclusive remedy.

      7.7 Taxes

          (a) Each stamp, transfer, documentary, sales, use, registration, real or personal property transfer and other similar Tax or fee (including any penalties and interest) incurred in connection with this Agreement and the Contemplated Transactions (each, a “Transfer Tax" ) shall be borne by Buyer, and Seller shall properly file on a timely basis all necessary Tax Returns and other documentation with respect thereto; provided , that if any such return or other documentation is required to be filed jointly, the Parties shall cooperate in the timely preparation and filing thereof.

          (b) Further, Seller shall pay, or make adequate provision for the payment, as they become due, in full of all of the Retained Liabilities and other Liabilities of Seller under this Agreement.

          (c) Following the Closing, Seller shall prepare its state and federal income Tax Returns with the understanding that Seller may adopt a Plan of Liquidation that will accelerate the gain on the sale of some or all of Seller’s assets based on fair market value of the assets that are distributed. Seller will allow Buyer to review its Tax Returns and any accompanying workpapers in order to verify Seller’s calculation of the projected amount of Seller’s Tax Liability. In accordance with Section 2.4(a)(vi), Buyer shall reimburse Seller for the aggregate Tax Liabilities incurred for 2008 or thereafter that exceed Four Million Dollars ($4,000,000) and are related to our arise out of the Consideration received in connection with the Contemplated Transactions, to the extent actually incurred by Seller and verifiable by Buyer, in an amount not to exceed the Tax Cap. For the avoidance of doubt, Seller’s Tax Liability will include any income attributable to original issue discount of any of the Consideration and the amount of interest paid to the IRS on any Consideration that is subject to “installment sales” treatment.

          (d) To the extent Seller receives, from and after the Closing Date, any refunds of Taxes or charges of any Governmental Body related to any Assumed Taxes, Seller shall immediately reimburse Buyer in the amount of such refund(s) or credit(s), as the case may be, if such refund or credit reduces Seller’s aggregate Tax Liability related to the Contemplated Transactions for all years after the date hereof below Six Million Dollars ($6,000,000).

      7.8 Regulatory Permits

     At Closing, Seller shall deliver to Buyer all original documentation and information related to (a) regulatory filings for all the products, including any master drug files, establishment license applications, investigational new drug applications, new drug applications, and biologic license applications and (b) Facilities related to the manufacture or testing of the products. Seller may retain any copies thereof but shall not disseminate any information therein to any Third Party without Buyer’s prior written Consent of Buyer.

      7.9 Stockholder Meeting; Proxy

          (a) Stockholder Meeting . Seller shall use its commercially reasonable efforts in accordance with and subject to Delaware Law and Seller’s Governing Documents to (i) cause a meeting of the stockholders of Seller (the “ Stockholder Meeting ”) to be duly called and held no later than June 23 ^rd , 2008 for the purpose of voting on the approval and the adoption of this Agreement, the other Transaction Documents and the Contemplated Transactions (the “ Requisite Stockholder Approval ”), unless Seller adjourns or delays such Stockholder Meeting for good cause; provided , in the event Seller adjourns or delays such Stockholder Meeting for good cause, Seller expressly agrees to reschedule such meeting as soon as practicable thereafter, and (ii) prior to such Stockholder Meeting and no later than June 12, 2008, distribute to its stockholders a proxy statement that shall include, among other things, the recommendation of the board of directors of Seller that the stockholders of Seller approve this Agreement, the other Transaction Documents and the Contemplated Transactions (the “ Seller Board Recommendation ”), unless such recommendation was withdrawn by Seller’s board of directors pursuant to Section 7.10 with respect to a Superior Proposal. In connection with Seller’s obligation to obtain the

Requisite Stockholder Approval, Seller expressly agrees to permit Buyer to meet and consult with Seller with regard to the proxy solicitation process contemplated by clause (ii) of this Section 7.9(a). Except in accordance with Section 7.10(a) hereof, neither the board of directors of Seller nor any committee thereof shall withhold, withdraw, amend or modify in a manner adverse to Buyer, or publicly propose to withhold, withdraw, amend or modify in a manner adverse to Buyer, the Seller Board Recommendation or announce that it has resolved to take such action.

          (b) Proxy . Seller shall cause each member of the board of directors of Seller who is also a stockholder of Seller to grant, only in such Person’s capacity as a stockholder, a proxy to Mr. William H. Narwold authorizing Mr. Narwold to vote the shares of capital stock, subject to the proxy, in connection with any proposed resolution of Seller’s Stockholders, to approve this Agreement, the other Transaction Documents and the Contemplated Transaction.

      7.10 Exclusivity

          (a) Competitive Transaction . Until the Closing or the earlier termination of this Agreement in accordance with its terms, Seller will not, directly or indirectly, through any Representative or otherwise, solicit or entertain offers from, negotiate with or in any manner encourage, discuss, accept or consider any proposal from any Person (other than Buyer) relating to any Competitive Transaction. Seller shall notify Buyer immediately of any contact between Seller (or any of its Representatives) and any other Person (an “ Unsolicited Purchaser ”) regarding any offer or proposal or any inquiry relating to any Competitive Transaction. Notwithstanding the foregoing or any other provision of this Agreement, in the event Seller receives an unsolicited bona fide written offer relating to any Competitive Transaction (a “ Competitive Transaction Proposal ”) from any Unsolicited Purchaser, Seller shall be permitted to engage in good faith discussions with such Unsolicited Purchaser regarding the Competitive Transaction Proposal in order to evaluate whether the Competitive Transaction Proposal is, or, based upon an evaluation of the terms set forth in such bona fide written offer, could reasonably be expected to result in a proposal that is superior to the Contemplated Transactions. In connection with such evaluation of the Competitive Transaction Proposal, Seller may provide Confidential Information to such Unsolicited Purchaser subject to the agreement by such Unsolicited Purchaser to enter into a standard confidentiality agreement. Notwithstanding the foregoing, Seller may recommend, approve or consummate a Competitive Transaction or any Debt or Equity Financing prior to the receipt of the Requisite Stockholder Approval at the Stockholder Meeting if the board of directors of Seller determines in good faith (after consultation with outside legal counsel) that such Competitive Transaction Proposal or any Debt or Equity Financing is superior to the Contemplated Transactions (a “ Superior Proposal ”) and that the failure to recommend, approve or consummate such Superior Proposal would reasonably be expected to be inconsistent with the fiduciary duties of the board of directors of Seller to the stockholders of Seller under Delaware Law. Prior to recommending, approving or consummating such Superior Proposal, the board of directors of Seller shall give Buyer at least five (5) Business Days’ advance notice thereof (which notice itself shall not be deemed to be a Competitive Transaction (so long as such Competitive Transaction is not publicly announced or disclosed by Seller or any of its Representatives)) and the opportunity to meet with Seller and its outside legal counsel for the purpose of enabling Seller and Buyer to discuss in good faith any proposed modifications to the terms and conditions of this Agreement and the other Transaction Documents and the Contemplated Transactions.

          (b) Applicability of Competitive Transaction Restrictions . For the avoidance of doubt, if this Agreement is terminated in accordance with its terms, the restrictions in Section 7.10(a) shall not apply, subject to the payment obligations (if any) imposed by the following sentence, which obligations shall survive the termination of this Agreement for the applicable period stated therein. In the event Buyer has not previously terminated this Agreement pursuant to Section 9.1, and (i) the board of directors of Seller fails to obtain the Requisite Stockholder Approval at the Stockholder Meeting and Seller enters into legally binding agreements with respect to a transaction that qualifies under any of clauses (i) through (iv) as a Competitive Transaction within One Hundred Thirty-Five (135) days of the Stockholder Termination Date or (ii) prior to the receipt of the Requisite Stockholder Approval at the Stockholder Meeting, recommends, approves or consummates a Competitive Transaction, then, in the case of (i) or (ii), in addition to the principal balance and interest then due under the Promissory Note, Seller will pay to Buyer the Termination Fee on the earlier of (a) the closing of the Competitive Transaction, or (b) ninety (90) days after such failure to obtain the Requisite Shareholder Approval or such recommendation, approval or consummation of a Competitive Transaction. Prior to the Closing, payment of the Termination Fee shall be Buyer’s sole and exclusive remedy for any and all liability of Seller under this Agreement or in connection with the Contemplated Transactions but only if specific performance is not sought by Buyer in accordance with Section 9.2(b)(i). For the avoidance of doubt, no such payment shall terminate, release or affect Seller’s obligations under the Loan Documents.

          (c) Definition of Competitive Transaction . A “Competitive Transaction” means, with respect to the business, assets, Intellectual Property, Liabilities, operations or properties that are the subject of the Contemplated Transactions, (i) any merger, consolidation, business combination or similar transaction; (ii) the sale or other disposition, directly or indirectly, of any portion of the material assets of Seller in any single transaction or series of related transactions; (iii) any license or other disposition in any manner of Intellectual Property, including any patent, patent application, trademark, license right or other proprietary right, except in the ordinary course of Seller’s GeneXpress ^® service or research antigen business; (iv) any offer to the shareholders of Seller to acquire more than twenty percent (20%) of the voting securities of Seller; (v) any solicitation of shareholders of Seller in opposition to the approval of this Agreement by one or more Persons; or (vi) any public announcement of a proposal, plan or intention to do any of the foregoing. For the avoidance of doubt, no Debt or Equity Financing agreement between Seller and a Third Party shall be deemed to be a “Competitive Transaction.”

          (d) Exception to Exclusivity . Notwithstanding the foregoing, the limitations and obligations of Seller under Section 7.10(a) shall not apply in the event Buyer unjustifiably fails to make any loan disbursements in accordance with the Section 7.2 (b) and (c) and Seller has not otherwise taken any action that would constitute or would reasonably be expected to cause a Material Adverse Effect or any material Breach under this Agreement or any of the Loan Documents.

      7.11 Further Assurances and Cooperation

          (a) Further Assurances. The Parties shall at all times cooperate reasonably with each other and with their respective Affiliates and Representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement and otherwise in connection with the Contemplated Transactions, and the Parties agree (i) to furnish

upon request to each other such further information, (ii) to execute and deliver to each other such other documents and other items, and (iii) to do such other acts and things, all as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement, the Transaction Documents and the Contemplated Transactions.

          (b) Litigation Assistance. After the Closing, and subject to the other terms and conditions hereof and in the other Transaction Documents, for a period of three (3) years following the Closing, if and for so long as either Party hereto is actively prosecuting, contesting or defending against any Proceeding with a Third Party related to the Purchased Assets, Seller’s operation of the Business prior to the Closing, Seller’s Taxes or Buyer’s operation of the Business following the Closing (in any case that does not involve any claim for indemnification or injunctive relief hereunder, any claim arising from or related to the Transaction Documents or the Contemplated Transactions or any other dispute between Seller or its Related Persons, on one hand, and Buyer or its Related Persons, on the other), Buyer and Seller will use commercially reasonable efforts to cooperate with respect to making available their personnel, and providing such testimony and access to their books and records as may be reasonably necessary in connection with the contest or defense, or prosecution, as the case may be, all at the sole cost and expense of the Party requesting such assistance; provided , that neither Buyer nor Seller shall have any obligations pursuant to this Section 7.11(b) if it reasonably determines that performance pursuant to this Section 7.11(b) would require the disclosure of any of its Intellectual Property (or information pertaining to its Intellectual Property) or other confidential or proprietary materials (including, in the case of Buyer, any of the Clinical Data or Technology) or any other disclosure that would be materially detrimental to it.

          (c) Record Retention. After the Closing, Buyer and Seller will each retain for a period consistent with all applicable Legal Requirements, and for a period of no less than six (6) years, Records relating to the Business including, as to Buyer, Records, of any kind or wherever located, included in the Purchased Assets and Assumed Liabilities delivered to Buyer, and, as to Seller, all other Records relating to the Purchased Assets, Excluded Assets, Assumed Liabilities and Retained Liabilities. After the Closing Date, each Party will provide the other Party and its Representatives reasonable access to Records held by such Party and its facilities, during normal business hours and on reasonable prior written notice, to enable each Party to prepare financial statements, Tax filings, other government submissions, or to defend Proceedings by Third Parties relating to the Purchased Asserts, Excluded Assets, Assumed Liabilities or Retained Liabilities.

          (d) Inadvertent Transfer or Retention of Assets.

          (i) If any Excluded Assets are inadvertently transferred to Buyer under the Transaction Documents, the Party discovering the inadvertent transfer shall promptly notify the other Party. Each Party shall take all actions reasonably requested by the other to transfer, assign or convey such assets to Seller as soon as practicable after discovery of the inadvertent transfer. All reasonable expenses incurred by Buyer in respect of such notification, re-conveyance, transfer or assignment to Seller with respect to any of the above shall be borne by Seller.

          (ii) If any Purchased Assets are inadvertently retained by Seller after the Closing Date, then the Party discovering the inadvertent retention shall promptly

notify the other Party. Seller shall take all actions reasonably requested by Buyer to transfer, assign or convey such assets to Buyer as soon as practicable after discovery of the inadvertent retention. All reasonable expenses incurred by Seller in respect of such notification, conveyance, transfer or assignment to Buyer with respect to any of the above shall be borne by Seller.

      7.12 Non-Solicitation and Non-Disparagement

          (a) Commencing on the date hereof and through and until three (3) years after the Closing Date, Seller shall not directly or indirectly:

          (i) cause, induce or attempt to cause or induce any customer, supplier, licensee, licensor, franchisee, employee, consultant or other business relation of Seller or its Affiliates on or prior to the Closing Date or Buyer or its Affiliates from and after the Closing Date or within the one (1) year preceding the Closing Date to cease doing business with Buyer or such Affiliates, to deal with any competitor of Buyer or any of its Affiliates, or in any way interfere with its relationship with Buyer or such Affiliates; or

          (ii) hire, retain, or attempt to hire or retain any employee of Buyer or any of its Affiliates, or in any way interfere with the relationship between Buyer or any of its Affiliates, on the one hand, and any of Buyer’s or such Affiliates’ employees, on the other hand; provided , that Seller may hire or retain employees of Buyer or its Affiliates in response to general solicitations for employment that are not targeted to the employees of Buyer and its Affiliates.

          (b) Effective as of the date hereof and continuing hereafter, neither Party shall disparage the other Party or any of the other Party’s Related Parties or Representatives.

          (c) If a final judgment of an arbitrator or court or tribunal of competent jurisdiction determines that any term or provision contained in Section 7.12(a) through (c) is invalid or unenforceable, then the Parties agree that the arbitrator or court or tribunal will have the power to reduce the scope, duration or geographic area of the applicable term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. This Section 7.12 will be enforceable as so modified after the expiration of the time within which the decision or judgment (as applicable) may be appealed. The Parties acknowledge and agree that this Section 7.12 is reasonable and necessary to protect and preserve the Parties’ legitimate business interests and, with respect to Buyer, the value of the Purchased Assets and the Business and to prevent any unfair advantage being conferred on either Party.

      7.13 Maintenance of Insurance

     Prior to the Closing, Seller shall maintain its existing clinical trial insurance coverage and Buyer will not cancel or modify the existing clinical trial insurance policy following the Closing Date through and until the expiration date of such policy. Prior to expiration of Seller’s clinical trial insurance policy, Buyer will obtain tail coverage for the five (5) year period after the expiration of the existing policy period with the type of coverage and in the amounts that are consistent with good industry practice, and such tail policy shall name Seller as an additional

insured. Buyer shall keep Seller informed as to the status of obtaining such tail coverage and shall, promptly after such tail insurance coverage is obtained, provide a copy of the tail insurance policy and an insurance certificate that names Seller as an additional insured.

      7.14 No Dissolution of Seller

     Seller covenants and agrees that, for a period of at least one (1) year after the Closing, Seller shall not (a) dissolve, liquidate or wind-up its business or terminate its existence, or (b) distribute or otherwise transfer any of its assets (including any of its rights hereunder or under any of the Transaction Documents) to its stockholders other than cash. At any time following the Closing, any transfer or assignment of any Note shall be done in accordance with the terms of such Note and any transfer or assignment of Seller’s rights hereunder, including the right to receive any Consideration thereafter due to Seller shall be done in accordance with the terms of Section 11.6 hereof. Notwithstanding the foregoing, the adoption of a plan of complete liquidation (the " Plan of Liquidation ”) pursuant to which Seller will assign all of Seller’s assets and properties including the Consideration and its rights under this Agreement to a liquidating trust or other entity and shall not be deemed to violate this Section 7.14; provided , however , that this Agreement will apply to and be binding in all respects upon such liquidating trust or other entity and any such liquidating trust or other entity shall expressly assume Seller’s obligations (including indemnification obligations) under this Agreement.

      7.15 Use of Names

     Seller shall not use, and shall not permit any Affiliate to use, the name FluBlok or the name of any other product or Service (or any name reasonably similar thereto) after the Closing Date in connection with any business related to, competitive with, or an outgrowth of, the Business.

      7.16 Commercialization of FluBlok

     Buyer shall use Commercially Reasonable Efforts to Commercialize FluBlok.

      7.17 Reports and Accounting

          (a) Net Sales Payments; Milestone Payments and Additional Consideration . From and after the Closing, Buyer agrees to provide to Seller written reports related to Net Sales Payments, Milestone Payments and payments of Additional Consideration (such reports, the “ Payment Reports ”) within forty-five (45) days after the close of each calendar quarter during which Buyer is obligated to makes such payments to Seller pursuant to the terms of this Agreement. These reports shall show for the calendar quarter in question and to the extent applicable the number of units of FluBlok Product sold and the Net Sales, by country of sale and of manufacture, if different, and shall identify the name of any licensee of FluBlok. This report shall be accompanied by a certificate of the chief financial officer or accounting officer of EBS that, to the best of his or her knowledge, the report is accurate and complete in all material respects and that the calculation of any amount due Seller hereunder was done in accordance with this Agreement.

          (b) Accounting . From and after the Closing, Buyer agrees to keep written or digitally stored Records for a period of six (6) years from the end of each reporting period showing the manufacture, sales, use and other disposition of FluBlok Products, and further

agrees to permit its Records related to any Payment Reports to be examined during normal business hours and in a manner that does not materially interrupt Buyer’s business by an independent accounting firm selected by Seller and reasonably satisfactory to Buyer, from time-to-time on reasonable notice, but no more than once per year. Such examination must be made confidentially and the auditing firm shall be require to enter into reasonable confidentiality agreements. The expense of such examination shall be borne by Seller, except that in the event that the results of the audit reveal a discrepancy in Seller’s favor in excess of ten percent (10%), then the audit fees shall be paid by Buyer. Any discrepancy will be promptly corrected by a payment or refund as appropriate.

      7.18 Galuzzo Property

     From and after the date hereof, Seller shall use its good faith efforts to cause Mr. Frank Galuzzo to enter into a commercial lease agreement with Buyer for the property located at 875 Research Parkway, Meriden, CT 06450.

      7.19 Make Whole Payment

     In the event EBS terminates the consulting agreement to be entered into between Daniel D. Adams and EBS “for cause” or Daniel D. Adams resigns in his capacity as a consultant pursuant to such consulting agreement at any time prior to the one (1) year anniversary of such consulting agreement, Seller shall be required to refund a portion of the Make Whole Payment determined by multiplying such Make Whole Payment by a fraction of which (i) the numerator shall be the total number of days in a calendar year (which the Parties agree shall equal 365 days) minus the total number of days Daniel D. Adams engaged as a consultant to EBS pursuant to such consulting agreement, and (ii) the numerator shall be the total number of days in a calendar year (which the Parties agree shall equal 365 days).

      7.20 Promissory Notes

          (a) If at the Closing, the Zachs Note has not been converted into a Series G Promissory Note, then at or prior to the Closing, Buyer shall pay or otherwise make available sufficient funds to pay the unpaid principal and accrued interest on the Zachs Note and Seller shall pay or otherwise make available any repayment premium on the Zachs Note, all in order to obtain a release of the Zachs Mortgage.

          (b) If at the Closing, the Series G Promissory Notes have not been converted into common stock of Seller, then at or prior to the Closing, Buyer shall pay or otherwise make available sufficient funds to pay the unpaid principal and accrued interest thereon and Seller shall pay or otherwise make available any repayment premium the Series G Promissory Notes or EBS shall make available substitute promissory notes to be issued by EBS to the holders of the Series G Promissory Notes in a form and substance reasonably acceptable to EBS.

      7.21 Delayed Consent

     To the extent that the transfers and assignments by Seller of the Purchased Assets to Buyer pursuant to this Agreement or any of the other Transaction Documents shall require the consent of any Person, and such consent shall not have been obtained on or before Closing, then, until appropriate consents are obtained, the transfer of such Purchased Assets shall not be

deemed to have occurred and Seller shall cooperate to: (i) provide Buyer the benefits (less any related costs incurred by Seller which would otherwise have been borne by Buyer, including any applicable Taxes) of any property, right or asset covered by this Section 7.21; (ii) cooperate in any reasonable and lawful arrangement designed to provide such benefits to Buyer; and (iii) at the request of Buyer, and at the cost of and for the account of Buyer, enforce any right of Seller arising from such property, right or asset. To the extent that Buyer is provided the benefits pursuant to this Section 7.21, Buyer shall fully perform when required to be performed and pay when due all of the obligations of Seller under such property, right or asset and indemnify, defend and save harmless Seller from all such obligations, related expenses and any actions taken in connection therewith.

      7.22 Undisclosed Liabilities

          (a) From the date hereof through and until the Closing Date, in the event that Seller incurred or incurs any Liability to a Third Party that arose in the Ordinary Course of Business and directly relates to the Business and (i) that should have been listed but was inadvertently omitted on the Balance Sheet and the Trade Payables identified on Schedule 2.4(a)(iii) or (ii) are subsequently identified on the Closing Date Balance Sheet and the Closing Date Trade Payables (clauses (i) and (ii), collectively, the “ Omitted Payables ”), the Buyer and Seller shall negotiate in good faith which party should be responsible to pay the Omitted Payables consistent with the spirit and intent of Contemplated Transactions and this Agreement. If the Parties cannot agree which Party should be responsible to pay such Omitted Payables, Buyer shall pay such Omitted Payables; provided , that in the event the aggregate amount of the Trade Payables and the Omitted Payables paid by Buyer pursuant to this Section 7.22(a) exceeds the Trade Payable Cap, Buyer shall be permitted to credit such excess amount in accordance with the processes and procedures set forth in Sections 2.5 (a) and (b).

          (b) Section 7.22(a) shall not apply to any Trade Payable that would otherwise be deemed an Omitted Payable pursuant to Section 7.22(a) if Seller or Buyer discovers such Trade Payable after the Effective Time, and Seller expressly agrees that such Trade Payable will be a Retained Liability for purposes of this Agreement.

          (c) In the event the Parties are unable to agree in good faith whether a Trade Payable is deemed to be an Omitted Payables in accordance with Section 7.22(a), the Parties agree that such dispute shall be resolved in accordance with the dispute resolution terms set forth in Section 11.1.

8. INDEMNIFICATION; REMEDIES

      8.1 Survival

     All representations, warranties, covenants, and obligations in this Agreement, the Schedules, the Disclosure Schedule (including all supplements thereto), the certificates delivered pursuant to Section 2.9(a)(vi), and any other certificate or document delivered pursuant to this Agreement shall survive the Closing and the consummation of the Contemplated Transactions, subject to Section 8.8. The right to indemnification, reimbursement, or other remedy based on such representations, warranties, covenants and obligations shall not be affected by any investigation (including any environmental investigation or assessment) conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or

after the execution and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or obligation. A Party’s waiver of any condition based upon any inaccurate representation or warranty, or on the performance of or compliance with any covenant or obligation prior to the Closing, will terminate such Party’s right after the Closing to indemnification, reimbursement or other remedy based on such inaccurate representations, warranties, covenants and obligations.

      8.2 Indemnification and Reimbursement by Seller

     Seller shall indemnify and hold harmless 310, LLC, EBS and their respective Affiliates, officers, directors, partners, managers, members, Representatives and other Related Persons (collectively, the “Buyer Indemnified Persons" ), and will reimburse the Buyer Indemnified Persons, for any Damages arising from or in connection with:

          (a) any Breach of any representation or warranty made by Seller in (i) this Agreement, (ii) the Schedules, (iii) the Disclosure Schedule, (iv) any certificate delivered pursuant to Section 2.9(a)(vi), (v) any Transaction Document or (vi) any other certificate, document, writing or instrument delivered by Seller or pursuant to this Agreement or the Contemplated Transactions;

          (b) any Breach of any covenant or obligation of Seller in this Agreement or in any other certificate, document, writing or instrument delivered by Seller pursuant to the Contemplated Transactions or this Agreement;

          (c) Seller’s ownership or operation of the Purchased Assets prior to the Effective Time, other than the Assumed Liabilities;

          (d) any brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any Person with Seller (or any Person acting on its behalf) in connection with any of the Contemplated Transactions;

          (e) any product or Service sold or provided by Seller prior to the Effective Time;

          (f) any noncompliance with any Bulk Sales Laws or fraudulent transfer law in respect of this Agreement, the Transaction Documents or the Contemplated Transactions;

          (g) any liability under the WARN Act or any similar Legal Requirement that may result from an “Employment Loss,” as defined by 29 U.S.C. §2101(a)(6) or any local or foreign equivalent thereof resulting from the Contemplated Transactions; or

          (h) any Excluded Assets or Retained Liabilities.

      8.3 Indemnification and Reimbursement by Buyer

     310, LLC and EBS, jointly and severally, shall indemnify and hold harmless Seller and its Affiliates and their respective officers, directors, partners, managers, members, Representatives and other Related Persons (collectively, the “Seller Indemnified Persons" ), and will reimburse Seller and each Seller Indemnified Person, for any Damages arising from or in connection with:

          (a) any Breach of any representation or warranty made by Buyer in (i) this Agreement, (ii) the Schedules, (iii) the certificates delivered pursuant to Section 2.9(b)(vi) or (iv) any other certificate, document, writing or instrument delivered by Buyer pursuant to this Agreement or the Contemplated Transactions;

          (b) any Breach of any covenant or obligation of Buyer in this Agreement or in any other certificate, document, writing or instrument delivered by Buyer pursuant to this Agreement, including the failure to (i) pay the Notes, the Milestone Payments, the Net Sales Payment or the Additional Consideration or (ii) reimburse Buyer for any Assumed Taxes in accordance with the terms hereof;

          (c) any Liability arising out of Buyer’s ownership, use, or operation of the Purchased Assets at any time following the Effective Time (except to the extent Seller had any indemnification Liability with respect thereto pursuant to Section 8.2);

          (d) any claim by any Person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding alleged to have been made by such Person with Buyer (or any Person acting on Buyer’s behalf) in connection with any of the Contemplated Transactions; or

          (e) any product or component thereof manufactured by or shipped, or any services provided by, Buyer, in whole or in part, after the Effective Time; or

          (f) any Assumed Liabilities, to the extent relating to the period from and after the Effective Time.

      8.4 Procedure for Indemnification — Third Party Claims

          (a) Promptly after receipt by a Person entitled to indemnity under Section 8.2 or 8.3 (an “Indemnified Person” ) of notice of the assertion of a Third Party Claim against it, such Indemnified person shall give notice to the Person obligated to indemnify under such Section (an “Indemnifying Person” ) of the assertion of such Third Party Claim; provided , that the failure to notify the Indemnifying Person will not relieve the Indemnifying Person of any liability that it may have to any Indemnified Person, except to the extent that the Indemnifying Person is prejudiced by the Indemnified Person’s failure to give such notice.

          (b) If an Indemnified Person gives notice to the Indemnifying Person pursuant to Section 8.4(a) of the assertion of such Third Party Claim, the Indemnifying Person shall be entitled to participate in the defense of such Third Party Claim and, to the extent that it wishes (unless (i) the Indemnifying Person is also a Person against whom the Third Party Claim is made and the Indemnified Person determines in good faith that joint representation would be inappropriate due to a conflict of interest, or (ii) the Indemnifying Person fails to provide reasonable assurance to the Indemnified Person of its financial capacity to defend such Third Party Claim and provide indemnification with respect to such Third Party Claim), to assume the defense of such Third Party Claim with counsel reasonably satisfactory to the Indemnified Person. If the Indemnifying Party assumes the defense of any Third Party Claim with counsel reasonably satisfactory to the Indemnified Party, then the Indemnified Party shall make no claim for indemnity for the cost or expenses of any separate legal counsel that the Indemnified Party may want to participate in such defense. If the Indemnifying Person assumes the defense of a

Third Party Claim, (x) such assumption will conclusively establish, for purposes of this Agreement, the claims made in that Third Party Claim are within the scope of and subject to indemnification; and (y) no compromise or settlement of such Third Party Claims may be effected by the Indemnifying Person without the Indemnified Person’s Consent unless (A) there is no finding or admission of any violation of Legal Requirement or any violation of the rights of any Person by the Indemnified Party, (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Person or any other Person other than the Indemnified Party, and (C) the Indemnified Person shall have no Liability with respect to any compromise or settlement of such Third Party Claims effected without its Consent. If notice is given to an Indemnifying Person of the assertion of any Third Party Claim and the Indemnifying Person does not, within twenty (20) Business Days after the Indemnified Person’s notice is given, give notice to the Indemnified Person of its election to assume the defense of such Third Party Claim, the Indemnifying Person will be bound by any determination made in such Third Party Claim or any compromise or settlement effected by the Indemnified Person.

          (c) Notwithstanding the foregoing, if an Indemnified Person determines in good faith that there is a reasonable probability that a Third Party Claim may materially adversely affect it or its Related Persons other than as a result of monetary damages for which it would be entitled to indemnification hereunder, the Indemnified Person may, by notice to the Indemnifying Person, assume the exclusive right to defend, compromise, or settle such Third Party Claim against the Indemnified Person but no such compromise or settlement shall impose or result in any admission of responsibility or Liability by the Indemnifying Person.

          (d) With respect to any Third Party Claim subject to indemnification under this Article 8: (i) both the Indemnified Person and the Indemnifying Person, as the case may be, shall keep the other Person fully informed of the status of such Third Party Claims and any related Proceedings at all stages thereof where such Person is not represented by its own counsel, and (ii) the Parties agree (each at its own expense) to render to each other such assistance as they may reasonably require of each other and to cooperate in good faith with each other in order to ensure the proper and adequate defense of any Third Party Claim.

          (e) With respect to any Third Party Claim subject to indemnification under this Article 8, the Parties agr