ASSET PURCHASE AGREEMENT

Exhibit 10.1

Section 1.1Sale and Purchase of the Purchased Assets                            1

Section 1.2First Closing Assets and Second Closing Assets                            3

Section 1.3Excluded Assets                            3

Section 1.4Assumption of Liabilities                            4

Section 1.5Retained Liabilities.                            5

Section 1.6First Closing; Second Closing.                            6

Section 1.7First Closing Assets Purchase Price.                            7

Section 1.8Second Closing Assets Purchase Price                            9

Section 1.9Obligations of Seller During Post-Closing Period.                            9

Section 1.10Withholding Taxes                            9

Section 1.11Assignment of Contracts; Rights and Obligations                            10

Section 2.1Organization, Standing and Corporate Power.                            10

Section 2.2Purchased Assets.                            11

Section 2.3Authority; Noncontravention; Voting Requirements.                            11

Section 2.4Governmental Approvals and Consents                            12

Section 2.5Seller SEC Documents; Undisclosed Liabilities.                            12

Section 2.6Absence of Certain Changes                            13

Section 2.7Legal Proceedings                            13

Section 2.8Compliance With Laws; Permits                            14

Section 2.9Taxes                            14

Section 2.10Personnel Matters.                            15

Section 2.11Employee Benefit Plans.                            16

Section 2.12Labor Matters                            16

Section 2.13Environmental Matters.                            17

Section 2.14Material Contracts.                            18

Section 2.15Properties.                            19

Section 2.16Intellectual Property.                            20

Section 2.17Regulatory Matters.                            22

Section 2.18Opinion of Financial Advisor                            24

Section 2.19Brokers and Other Advisors                            25

Section 2.20State Takeover Statutes                            25

Section 2.21Related Party Transactions.                            25

Section 2.22Solvency; Fair Consideration; No Fraudulent Conveyance                            25

Section 2.23Termination of Representations and Warranties                            25

Section 3.1Organization, Standing and Corporate Power                            25

Section 3.2Authority; Noncontravention.                            26

Section 3.3Governmental Approvals.                            26

Section 3.4Ownership and Operations of Purchaser                            27

Section 3.5Sufficient Funds                            27

Section 3.6Legal Proceedings                            27

Section 4.1Conduct of Business.                            27

Section 4.2No Solicitation.                            31

Section 4.3Reasonable Best Efforts.                            34

Section 4.4Certain Filings and Notices; SEC Filings.                            36

Section 4.5Public Announcements.                            36

Section 4.6Access to Information; Confidentiality.                            36

Section 4.7Notification of Certain Matters.                            38

Section 4.8Fees and Expenses                            39

Section 4.9Transferred Employees.                            39

Section 4.10Further Assurances                            41

Section 4.11Seller Non-Competition and Non-Solicitation.                            41

Section 4.12Certain Tax Matters.                            42

Section 4.13Mail; Payments.                            43

Section 4.14Excluded Products                            44

Section 4.15Notices to Debt, Option and Warrant Holders                            44

Section 4.16Release under Security for Boulder Leases                            44

Section 5.1Conditions to Each Party’s Obligation to Effect the Second Closing Transactions                            44

Section 5.2Conditions to the Seller’s Obligation to Effect the Second Closing Transactions                            44

Section 5.3Conditions to Parent’s and Purchaser’s Obligation to Effect the Second Closing Transactions                            45

Section 5.4Deliveries by the Seller at Second Closing                            46

Section 5.5Deliveries by Purchaser at Second Closing                            47

Section 6.1Termination.                            47

Section 6.2Effect of Termination                            49

Section 6.3Termination Fees.                            49

Section 6.4First Closing Assets Repurchase Right.                            50

Section 7.1Amendment or Supplement                            51

Section 7.2Extension of Time, Waiver, Etc                            51

Section 7.3Assignment                            51

Section 7.4Counterparts                            51

Section 7.5Entire Agreement; No Third Party Beneficiaries                            51

Section 7.6Governing Law; Jurisdiction; Waiver of Jury Trial.                            52

Section 7.7Specific Performance                            52

Section 7.8Notices                            52

Section 7.9Severability.                            53

Section 7.10Definitions                            54

Section 7.11Interpretation                            58

The following terms are defined in the section of this Agreement set forth after such term below:

This ASSET PURCHASE AGREEMENT, dated as of February 12, 2009 (this “ Agreement ”), is among PROTEIN TRANSACTION, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Parent (“ Purchaser ”), INSMED INCORPORATED, a Virginia corporation (the “ Seller ”),   and MERCK & CO., INC., a New Jersey corporation (“ Parent ”).

WHEREAS, the Boards of Directors of the Seller and Parent and the Board of Managers of Purchaser have approved the acquisition of the Purchased Assets by Purchaser on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, Purchaser desires to purchase from the Seller, and the Seller desires to sell to Purchaser, the Purchased Assets, upon the terms and subject to the conditions hereinafter set forth; and

WHEREAS, as an inducement to and condition to Parent’s and Purchaser’s willingness to enter into this Agreement, prior to the date of this Agreement, the Seller has entered into amendments to the Primary Boulder Leases, in form and substance satisfactory to Parent, which provide the Seller with assignable options to renew the Primary Boulder Leases through the year 2035.

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, Parent, Purchaser and the Seller hereby agree as follows:

Section 1.1   Sale and Purchase of the Purchased Assets .  Subject to the terms and conditions set forth in this Agreement, at the times set forth in Section 1.6 , the Seller shall sell, transfer, assign and deliver (or cause to be sold, transferred, assigned and delivered) to Purchaser, and Purchaser shall purchase and acquire, free and clear of any Liens, other than Permitted Liens, all right, title and interest in and to the Purchased Assets.  For purposes of this Agreement, the “ Purchased Assets ” shall mean all of the following assets of the Seller or its Subsidiaries:

(a)   (i) the Primary Boulder Leases and (ii) the Secondary Boulder Leases with respect to which a landlord consent to assignment is delivered to Purchaser on or before the Second Closing Date (the leases referenced to in (i) and (ii), together the “ Assumed Boulder Leases ”);

(b)   all equipment and other tangible assets located at the Boulder Facilities, which shall include all equipment and tangible assets used in connection with the Key Products, including those described in Section 1.1(b) of the Seller Disclosure Schedule;

(c)   the Key Products, including all formulations thereof and all proprietary rights of the Seller and its Subsidiaries embodied in or associated with the Key Products which is not otherwise set forth in this Section 1.1 ;

(d)   all Intellectual Property Rights embodied or disclosed in or otherwise related to the Key Products, or the research, production, manufacture, or development of any Key Product (the “ Key Products IP Rights ”), together with all of the Seller’s or its Subsidiaries’ rights to sue and obtain damages and equitable relief for past, present and future infringement, misappropriation or violation of any of the foregoing;

(e)   all notebooks, records and other media embodying the Key Products (and to the extent such is stored in any equipment, the Purchased Assets will include that equipment);

(f)   all filings and supporting documents submitted to and received from any Regulatory Authority relating to the Key Products and the Boulder Facilities, and all data contained therein or incorporated therein by reference, including any Investigational New Drug application (IND), Clinical Trial Application (CTA), investigator’s brochures, pharmacology/toxicology data and reports, correspondence to and from a Regulatory Authority, written summaries of any oral discussions with a Regulatory Authority, including minutes from teleconferences and meetings with a Regulatory Authority, registrations and licenses, adverse event files, complaint files and manufacturing and testing records, all qualification and validation documents, and all documentation pertaining to any Regulatory Authority inspections (the “ Purchased Assets Regulatory Documentation ”);

(g)   all data, information, publications and other materials of the Seller or its Subsidiaries embodying or relating to (i) the clinical and non-clinical (including in vitro and animal) testing of the Key Products performed by or on behalf of the Seller or its Subsidiaries and (ii) clinical field experience with the Key Products that is necessary or useful for making regulatory filings for, or marketing of, the Key Products;

(h)   all authorizations, registrations, filings, permits, licenses, franchises, orders, approvals, concessions, consents and other regulatory approvals issued by any Regulatory Authority which are required (i) to lease, own or operate the Boulder Facilities, (ii) for clinical testing of any Key Product or (iii) for the handling, possession, importation, marketing, promotion, pricing or sale of any Key Product and all applications for any of the aforementioned items;

(i)   all environmental, health and safety records and Permits for the Boulder Facilities;

(j)   all inventory of finished Key Products and all materials, samples, assays, reagents, chemicals generated or used by the Seller or its Subsidiaries (or Persons working on their behalf) in the research, development, manufacture or use of any Key Product, including the inventory set forth in Section 1.1(j) of the Seller Disclosure Schedule (collectively, the “ Purchased Inventory ”);

(k)   all manufacturing product records relating to the Boulder Facilities or any Key Products, including all of the reports, files, data and other documents and information produced by or for the Seller or its Subsidiaries in connection with the manufacture of any Key Product that are in the possession or control of the Seller or its Subsidiaries, including those described in Section 1.1(k) of the Seller Disclosure Schedule;

(l)   all rights, benefits and interests under all (i) Key Products IP Contracts, (ii) all Contracts relating to the Key Products, the Purchased Inventory or any of the Purchased Assets and (iii) all other Contracts, purchase orders and other similar arrangements (including all express or implied warranties from the suppliers of goods or services) used or held for use by the Seller or its Subsidiaries in connection with the Key Products, including, with respect to (i), (ii) and (iii) above, those described in Section 1.1(l) of the Seller Disclosure Schedule (the “ Purchased Contracts ”);

(m)   all rights to receive mail (including e-mail) and other communications related to the Purchased Assets and communications from suppliers, agents and others with respect to the Purchased Assets;

(n)   all claims, causes of action, defenses and rights of offset or counterclaim (at any time or in any matter existing or arising, whether choate or inchoate, known or unknown, contingent or noncontingent), including claims under warranties or guarantees or indemnities to the extent related to the Purchased Assets or the Assumed Liabilities;

(o)   all insurance benefits, including all property and casualty proceeds received or receivable in connection with the damage or destruction of any asset that would have been included in the Purchased Assets but for such damage or complete destruction;

(p)   all written legal opinions that Seller or its Subsidiaries have received with respect to any of the Key Products or the Boulder Facilities; and

(q)   all other assets, properties, rights, records and documentation used or held for use in connection with, or otherwise related to, the Key Products or the Boulder Facilities, other than the Excluded Assets.

To the extent any of the Purchased Assets consist of records, files, notebooks or other information, and such information is included in media that also contains information relating to any of the Excluded Assets, then the Purchased Assets shall include the original of such media, and the Seller shall be entitled to retain a copy of the information relating to the Excluded Assets.

Section 1.2   First Closing Assets and Second Closing Assets .  The Purchased Assets that are being sold, assigned and transferred to Purchaser at the First Closing shall include all of the Purchased Assets set forth in Section 1.1(c) , Section 1.1(d) , Section 1.1(e) , Section 1.1(f) , Section 1.1(g) and Section 1.1(k) to the extent constituting, associated with, or relating to, product candidates INS-19 Granulocyte Colony Stimulating Factor and INS-20 Pegylated Granulocyte Colony Stimulating Factor (the “ First Closing Assets ”).  All of the remaining Purchased Assets (the “ Second Closing Assets ”) shall be sold, assigned and transferred to Purchaser at the Second Closing.

Section 1.3   Excluded Assets .  Other than the Purchased Assets, neither the Seller nor its Subsidiaries shall sell, transfer, assign or deliver to Purchaser any of its rights, titles to or interests in any of its other assets (the “ Excluded Assets ”) which are not part of the sale and purchase contemplated hereunder, are excluded from the Purchased Assets, and shall remain the property of the Seller after the First Closing and the Second Closing.  The Excluded Assets include the following assets of the Seller or its Subsidiaries:

(a)   the Excluded Products;

(b)   the Intellectual Property Rights and other proprietary rights of the Seller embodied solely in or associated solely with the Excluded Products and/or the IPLEX™ EAP;

(c)   each Contract, and any verbal or written agreement to enter into a Contract, that any of the Seller or its Subsidiaries is a party to or bound by with respect to the Excluded Products, including any Contract that would obligate the Seller or its Subsidiaries to (i) research, develop, manufacture, supply or commercialize any Excluded Product, or any derivative product, for any indication, (ii) seek approval from the FDA or any other Regulatory Authority with respect to any Excluded Product or (iii) conduct clinical trials with respect to any Excluded Product or provide patients with access to any Excluded Product, including the IPLEX™ EAP;

(d)   all cash, cash equivalents and short term investments;

(e)   assets located at the Seller’s corporate headquarters in Richmond, Virginia, including all minute books, stock records and corporate seals, to the extent that such Richmond assets are not otherwise included in clauses (a) – (p) of the definition of the Purchased Assets;

(f)   all personnel records and other records that the Seller is required by Law to retain in its possession (provided copies of any such records shall be provided to the Purchaser at the Second Closing, to the extent permitted by Law);

(g)   all claims for refund of Seller's Taxes;

(h)   all rights of the Seller under this Agreement or any other agreement, instrument, certificate or document required to be delivered to the Seller at the Second Closing pursuant to Section 5.5 ; and

(i)   the property and assets expressly designated in Section 1.3(i) of the Seller Disclosure Schedule.

Section 1.4   Assumption of Liabilities .  Effective as of the Second Closing, the Seller shall not have any liability or obligation with respect to, and Purchaser shall assume and thereafter pay, perform and discharge when due, without recourse to the Seller, the Liabilities arising under the Purchased Contracts and the Assumed Boulder Leases (including the replacement of any security deposit, line of credit or other surety held by the landlord(s) under the Assumed Boulder Leases to ensure performance of the Assumed Boulder Leases) solely to the extent such obligations require performance after the Second Closing (which, for the avoidance of doubt, shall not include any obligations and Liabilities arising out of or relating to a breach by the Seller or its Subsidiaries that occurred prior to the Second Closing Date and any Liabilities which are Retained Liabilities, collectively, the “ Assumed Liabilities ”).  Parent shall cause Purchaser to, and Purchaser shall, pay, perform and discharge when due, without recourse to the Seller, all Assumed Liabilities related to the Purchased Assets which arise after the Second Closing Date.  Parent and Purchaser shall indemnify, defend and hold harmless the Seller, its Affiliates, and their respective officers, directors, employees, successors and assigns from and against all claims, losses, liabilities, damages, deficiencies, interest and penalties, Taxes, costs and expenses, including losses resulting from the defense, settlement and/or compromise of a claim and/or demand and/or assessment, reasonable attorneys’, accountants’ and expert witnesses’ fees, costs and expenses of investigation hereafter (individually a “ Loss ” and collectively “ Losses ”), arising in connection with or relating to the Assumed Liabilities.

Section 1.5   Retained Liabilities .

(a)   Notwithstanding anything to the contrary contained in this Agreement, Purchaser and its Affiliates shall not have any liability or obligation with respect to, shall not assume or agree to pay, perform or discharge, and shall not be deemed by virtue of the execution and delivery of this Agreement or any document delivered at the First Closing or the Second Closing pursuant to this Agreement, or as a result of the consummation of the Transactions, to have assumed, or to have agreed to pay, perform or discharge, any liability or obligation of the Seller, its Subsidiaries or any of their Affiliates, whether primary or secondary, direct or indirect, known or unknown, asserted or unasserted, due or to become due, accrued, absolute, contingent or otherwise, and whether arising prior to, on or after the First Closing Date, with respect to the First Closing Assets, or the Second Closing Date, with respect to the Second Closing Assets, other than the Assumed Liabilities (such Liabilities not assumed by Purchaser, collectively, the “ Retained Liabilities ”).  “Retained Liabilities” shall include the following:

(b)   The Seller shall pay, discharge and perform all of the Retained Liabilities when due.  The Seller shall indemnify, defend and hold harmless Parent, Purchaser, their Affiliates, and their respective officers, directors, employees, successors and assigns (the “ Parent Indemnified Parties ”) from and against all Losses, arising in connection with or relating to the Retained Liabilities.  For purposes of this Section 1.5 , the “Seller” shall be deemed to include all Affiliates of the Seller and any predecessors and successors to the Seller (including by operation of law, merger, liquidation, consolidation, assignment, assumption or otherwise).

Section 1.6   First Closing; Second Closing .

(a)   The closing (the “ First Closing ”) of the purchase and sale of the First Closing Assets (the “ First Closing Transactions ”) shall take place at 10:00 a.m. (New York City time) simultaneously with the execution and delivery of this Agreement (the “ First Closing Date ”).  At the First Closing, the Seller and Purchaser shall execute and deliver such documents (including a legal opinion, addressed to Parent and Purchaser, dated the First Closing Date, from outside counsel to Seller, in form and substance satisfactory to Purchaser, to the effect set forth in Section 5.3(h) of the Seller Disclosure Schedule) as are reasonably necessary and typical for similar transactions in order to complete the transfer of the First Closing Assets from the Seller to Purchaser.  Without limiting the foregoing, promptly following the First Closing, the Seller shall promptly take, or cause to be taken, the actions set forth in Section 1.6(a) of the Seller Disclosure Schedule with respect to the First Closing Assets.  Neither Parent nor Purchaser shall assume any of the Assumed Liabilities at the First Closing.  Effective as of the First Closing Date, Purchaser hereby grants to the Seller and its Subsidiaries a non-exclusive, non-transferable license to use the First Closing Assets solely to the extent necessary for the Seller and its Subsidiaries to perform those activities specified in the Work Plan attached as Section 4.1(c) of the Seller Disclosure Schedule (the “ Work Plan ”).

(b)   The closing (the “ Second Closing ”) of the purchase and sale of the Second Closing Assets and the assumption of the Assumed Liabilities (the “ Second Closing Transactions ”) will take place at 10:00 a.m. (New York City time) on March 31, 2009, or such earlier date as is agreed to in writing by the parties hereto, assuming that all of the conditions set forth in ARTICLE V have been satisfied (other than those conditions that by their nature are to be satisfied at the Second Closing, but subject to the satisfaction of those conditions at the Second Closing) or waived prior to such date; provided that if the Second Closing does not occur on March 31, 2009, the Second Closing will take place thereafter at 10:00 a.m. (New York City time) on the second Business Day after all of the conditions set forth in ARTICLE V have been satisfied (other than those conditions that by their nature are to be satisfied at the Second Closing, but subject to the satisfaction of those conditions at the Second Closing) or waived, unless another time or date is agreed to in writing by the parties hereto.  The date on which the Second Closing actually occurs is hereinafter referred to as the “ Second Closing Date .”

(c)   The First Closing and the Second Closing shall place at the offices of Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New York 10004, unless another place is agreed to in writing by the parties hereto.

Section 1.7   First Closing Assets Purchase Price.

(a)   Purchase Price .  On the terms and subject to the conditions set forth in this Agreement, at the First Closing, as consideration for the sale, transfer, assignment and delivery of the First Closing Assets to Purchaser, Purchaser shall purchase and acquire all right, title and interest in and to the First Closing Assets for an aggregate purchase price equal to $10,000,000 with $2,500,000 paid within one Business Day after the First Closing Date and, subject to Section 6.4(a) , the remaining $7,500,00 to be paid pursuant to, and subject to the conditions set forth in, Section 1.7(b) (the “ First Closing Purchase Price ”).  At the First Closing, Purchaser shall pay the $2,500,000 in cash by wire transfer of immediately available funds to the account designated in writing by the Seller prior to the First Closing Date (the “ Seller Account ”).

(b)   Additional Payments .  On the terms, and subject to the conditions, set forth in this Section 1.7(b) , on March 12, 2009, April 13, 2009 and May 12, 2009 (each, an “ Additional Payment Date ”), Purchaser shall make the following additional payments to the Seller in consideration for the sale, transfer, assignment and delivery of the First Closing Assets to Purchaser (provided that no payments shall be made to the Seller pursuant to this Section 1.7(b) after the earlier of the Second Closing and the termination of this Agreement pursuant to ARTICLE VI ):

(c)   The obligations of Purchaser to make each payment set forth in Section 1.7(b) shall be subject to the satisfaction (or waiver by Purchaser, in its sole discretion) on or prior to the applicable Additional Payment Date of the following conditions:

(d)   If Parent or Purchaser is not obligated to make a payment on any applicable Additional Payment Date as a result of the failure of the conditions set forth in Section 1.7(c) to be satisfied on such applicable Additional Payment Date, Purchaser and Parent shall either (i) make such payment within 10 Business Days after the applicable Additional Payment Date or (ii) after such ten-Business Day period, promptly notify the Seller of their intention to terminate this Agreement pursuant to ARTICLE VI .

Section 1.8   Second Closing Assets Purchase Price .  On the terms and subject to the conditions set forth in this Agreement, at the Second Closing, as consideration for the sale, transfer, assignment and delivery of all right, title and interest in and to the Second Closing Assets to Purchaser, Parent shall pay, or cause Purchaser to pay, an aggregate purchase price equal to (x) $120,000,000, plus (y) an amount (if any) equal to (i) $10,000,000 less (ii) any amounts previously paid pursuant to Section 1.7(a) and Section 1.7(b) (the “ Second Closing Purchase Price ” and with the First Closing Purchase Price, the “ Purchase Price ”).  At the Second Closing, Parent or Purchaser shall pay the Second Closing Purchase Price in cash by wire transfer of immediately available funds to the Seller Account.

Section 1.9   Obligations of Seller During Post-Closing Period .

(a)   The Seller shall not, and shall cause its Subsidiaries not to, liquidate or dissolve, or enter into any proceeding relating to bankruptcy, insolvency, liquidation or dissolution until the expiration of the 12 month period following the Second Closing (the “ Post Closing Period ”).  At all times during the Post Closing Period, the Seller shall (i) promptly satisfy and discharge all Liabilities of the Seller or its Subsidiaries existing on and after the Second Closing Date, (ii) maintain sufficient capital with which to continue its proposed operations and (iii) remain Solvent.  During the three month period following the Second Closing, Purchaser shall not take any action set forth in Section 4.1(b)(i) (B) or Section 4.1(b)(i) (C); provided that, if any action, suit, proceeding, inquiry or investigation by any Governmental Authority or third party (including any shareholders of the Seller, whether brought directly, derivatively or otherwise), shall be instituted, pending or threatened that seeks, or could reasonably be expected to seek to rescind, invalidate, void or undue any of the Transactions after the Second Closing Date, such three-month period shall automatically be extended until such action, suit, proceeding, inquiry or investigation is settled, terminated or dismissed or shall have become final and nonappealable, in each case without any of the Parent Indemnified Parties having any Liability or obligation with respect thereto.

(b)   In furtherance of the Seller’s obligations pursuant to Section 1.9(a) , promptly following the Second Closing, and before taking any actions during the three month period following the Second Closing that if taken prior to the Second Closing would have required the consent of Purchaser pursuant to Section 4.1(b)(i) (B) or Section 4.1(b)(i) (C), the Seller shall establish and set aside a cash reserve which is sufficient to pay all of the Retained Liabilities.  The amount of this reserve shall be as reasonably determined by the Seller’s Board of Directors and shall include an amount that is sufficient to pay all current Liabilities of the Seller or any of its Subsidiaries and all reasonably anticipated future Liabilities of the Seller or any of its Subsidiaries, including all Liabilities (i) under outstanding options, warrants, Indebtedness and convertible debt, (ii) under the lease for the Seller’s Virginia facility, (iii) under the Seller Plans and (iv) for Taxes (including Taxes resulting from or related to the Transactions).

Section 1.10   Withholding Taxes .  Purchaser shall be entitled to deduct and withhold (without duplication) from any amount otherwise payable pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), or under any provision of state, local or foreign Tax Law.  To the extent amounts are so withheld and paid over to the appropriate Governmental Authority, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

Section 1.11   Assignment of Contracts; Rights and Obligations .  Except as set forth in Section 5.3(g) , nothing contained herein shall require the Seller to assign (or cause to be assigned) any Purchased Contract to Purchaser in connection with the Transactions if an attempted assignment thereof, without the consent of a third party thereto, would constitute a breach or default thereof, cause or permit the acceleration or termination thereof or in any way materially and adversely affect the rights of the Seller, its Subsidiaries or Purchaser thereunder or the rights of Purchaser to the Key Products or other Purchased Assets.  In the event that any Purchased Contract cannot be so assigned or a third party to any such Purchased Contract shall not consent to such assignment, the Seller shall provide to Purchaser all of the Seller’s rights and interests in and to such Purchased Contracts and, where necessary or appropriate, the Seller shall be deemed to be Purchaser’s duly appointed agent for the purpose of completing, fulfilling and discharging all of Purchaser’s rights and liabilities arising after the Second Closing Date with respect to such Purchased Contracts.  The Seller shall use its commercially reasonable efforts to provide Purchaser with the benefit of such Purchased Contracts including (i) enforcing any rights under such Purchased Contracts (including the right to terminate in accordance with the terms thereof upon the request of Purchaser) or (ii) permitting Purchaser to enforce any rights as if such Purchased Contracts had been sold, conveyed, assigned and transferred to Purchaser.

Except as set forth in the disclosure schedule delivered by the Seller to Purchaser and Parent (the “ Seller Disclosure Schedule ”) prior to the execution of this Agreement, the Seller represents and warrants to Purchaser and Parent that:

Section 2.1   Organization, Standing and Corporate Power.

(a)   Each of the Seller and its Subsidiaries is duly organized, validly existing and in good corporate standing (or equivalent status) under the Laws of the state of its incorporation or organization and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as it is now being conducted, except where the failure to comply with any of the foregoing has not had and would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.  Each of the Seller and its Subsidiaries is duly licensed or qualified to do business and is in good standing (or equivalent status) as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it requires such license or qualification, except where the failure to be so licensed, qualified or in corporate good standing (or equivalent status) has not had and would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

(b)   The Seller has made available to Purchaser true, correct and complete copies of the articles of incorporation and bylaws of the Seller and the organizational documents of each of its Subsidiaries, as amended to the date of this Agreement (collectively, the “ Organizational Documents ”).  The Organizational Documents are in full force and effect, and neither the Seller nor any of its Subsidiaries is in material violation of its respective Organizational Documents.

Section 2.2   Purchased Assets.

(a)   Seller or its Subsidiaries have good, valid and marketable title to all of the Purchased Assets free and clear of any Liens, except for Permitted Liens.  The Purchased Assets, include all of the assets, rights and properties (including Intellectual Property Rights) of the Seller and its Subsidiaries related to the operation of the Boulder Facilities and that are used or held for use for the manufacture or development of Key Products.

(b)   All of the Purchased Assets used by the Seller or its Subsidiaries at the Leased Real Property are in all material respects free from defects (patent or latent) or adverse physical conditions, have been maintained in all material respects in accordance with normal industry practice and are in all material respects in good operating condition and repair, subject to normal wear and tear occurring in the ordinary course of business.

Section 2.3   Authority; Noncontravention; Voting Requirements.

(a)   The Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the Transactions.  The execution, delivery and performance by the Seller of this Agreement and the consummation by it of the Transactions, have been duly and validly authorized by all necessary corporate action on the part of the Seller and no other corporate action on the part of the Seller is necessary to authorize the execution, delivery and performance by the Seller of this Agreement or the consummation by it of the Transactions.  This Agreement has been duly and validly executed and delivered by the Seller and, assuming due authorization, execution and delivery by the other parties hereto, constitutes legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws affecting creditors’ rights generally and by general principles of equity (the “ Bankruptcy and Equity Exception ”).

(b)   The Seller’s Board of Directors, at a meeting duly called and held at which all of the directors of the Seller’s Board of Directors were present in person or by telephone in compliance with the applicable provisions of the Virginia Stock Corporation Act of the Commonwealth of Virginia (the “ VSCA ”), has duly and unanimously adopted resolutions (i) adopting and approving this Agreement and approving the Transactions, (ii) declaring that this Agreement and the Transactions are advisable and in the best interests of the Seller and its shareholders and (iii)  electing, to the extent permitted by applicable Laws, to make inapplicable all state takeover laws or similar Laws of the VSCA, to the extent they might otherwise apply to the execution, delivery, performance or consummation of this Agreement or the Transactions, and none of the aforesaid actions by the Seller’s Board of Directors has been amended, rescinded or modified as of the date hereof.  No further corporate action is required by the Seller’s Board of Directors in order for the Seller to approve this Agreement or the Transactions.

(c)   None of the execution and delivery of this Agreement by the Seller, the consummation by the Seller of the Transactions or compliance by the Seller with any of the terms or provisions hereof will (i) conflict with, or result in a violation or breach of, any provision of any Organizational Document of the Seller or any of its Subsidiaries, (ii) assuming that the authorizations, consents and approvals referred to in Section 2.4 are obtained and the filings referred to in Section 2.4 are timely made, violate any Law applicable to the Seller or any of its Subsidiaries or their respective properties or assets, (iii) assuming that the authorizations, consents and approvals referred to in Section 2.4 and the filings referred to in Section 2.4 are timely made, conflict with, or result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default (or give rise to a right of termination, cancellation or acceleration of any obligations or loss of any material benefit) under, require a consent or waiver under, require the payment of a penalty under, any terms, conditions or provisions of any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust or Contract to which the Seller or any of its Subsidiaries is a party or by which any of the Purchased Assets may be bound or any Purchased Assets Permit or (iv) result in the creation or imposition of any Lien on any Purchased Asset, except, in the case of clause (iii) , for such conflicts, violations, breaches, Liens or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Seller Material Adverse Effect.

(d)   The VSCA does not require that this Agreement or the Transactions be approved by holders of any class or series of capital stock of the Seller or any of its Subsidiaries.

Section 2.4   Governmental Approvals and Consents .   Except for filings required under, and compliance with other applicable requirements of, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the Securities Act of 1933, as amended (the “ Securities Act ”), the rules and regulations promulgated under the Exchange Act and the Securities Act, the rules and regulations of the Nasdaq Stock Market (“ Nasdaq ”), the HSR Act (if applicable), and the third party consents set forth in Section 2.4 of the Seller Disclosure Schedule, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority, any stock market or stock exchange on which shares of common stock, par value $0.01 per share, of the Seller (the “ Seller Common Stock ”) are listed for trading, or any third party are necessary (a) for the execution and delivery of this Agreement by the Seller or the consummation by the Seller of the Transactions, (b) to avoid the loss of the Purchased Assets Permits or the breach of any Purchased Contract or the creation of a Lien (other than a Permitted Lien) on any of the Purchased Assets or (c) to enable Purchaser to own the First Closing Assets following the First Closing Date and the Second Closing Assets following the Second Closing Date.

Section 2.5   Seller SEC Documents; Undisclosed Liabilities.

(a)   Since December 31, 2007, the Seller has timely filed or furnished, as applicable, all reports, forms, schedules, statements, prospectuses, registration statements and other document required to be filed or furnished by the Seller under the Securities Act or the Exchange Act, as the case may be (such documents, collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the “ Seller SEC Documents ”).  Each Seller SEC Document, as of its filing date or, if amended or supplemented prior to the date of this Agreement, as of the date of its last such amendment or supplement, complied as to form, and each such Seller SEC Document filed subsequent to the date hereof will comply as to form, in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations promulgated thereunder, applicable to such Seller SEC Documents.  Each Seller SEC Document, as of its filing date or, if amended or supplemented prior to the date of this Agreement, as of the date of its last such amendment or supplement, did not, and each such Seller SEC Document filed subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(b)   The consolidated financial statements (including the consolidated balance sheets and the related consolidated statements of income, consolidated statements of income and shareholders’ equity and consolidated statements of cash flows) of the Seller and its Subsidiaries included in the Seller SEC Documents (i) have been prepared from, are in accordance with, and accurately reflect the books and records of the Seller and its Subsidiaries in all material respects, (ii) have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except (A) as may be indicated in the notes thereto or, (B) in the case of interim financial statements, for normal year-end adjustments that did not and would not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse Effect and as may be permitted by the SEC on Form 10-Q under the Exchange Act) and (iii) fairly present in all material respects the consolidated financial position of the Seller and its Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows and changes in stockholders’ equity of the Seller and its Subsidiaries as of the dates and for the periods referred to therein (except, in the case of interim financial statement, to normal year-end adjustments that did not and would not, individually or in the aggregate, reasonably be expected to have a Seller Material Adverse Effect).

(c)   Neither the Seller nor any of its Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) other than liabilities or obligations that (i) have been discharged or paid in full prior to the date of this Agreement in the ordinary course of business, (ii) are accrued or reserved against in the most recent financial statements included in the Seller SEC Documents filed prior to the date hereof or are reflected in the notes thereto or (iii) were incurred in the ordinary course of business consistent with past practice and that have not had and would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

Section 2.6   Absence of Certain Changes .   Since December 31, 2007, the business of the Seller and its Subsidiaries has been conducted in the ordinary course and there has not been any Event that has had or would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

Section 2.7   Legal Proceedings .  There is no legal or administrative proceeding, claim, suit or action pending or, to the Knowledge of the Seller, threatened, against or affecting, the Seller, any of its Subsidiaries, any of their respective assets or rights, any Seller Plan, any present or former officer, director or employee of the Seller or any of its Subsidiaries in their respective capacities as such before (or, in the case of threatened actions, suits, investigations or proceedings, would be before) any arbitrator or Governmental Authority, nor is there any injunction, order, judgment, ruling or decree of any arbitrator or Governmental Authority imposed upon or outstanding against the Seller or any of its Subsidiaries, or any of their respective assets or rights, or, to the Knowledge of the Seller, investigation by any Governmental Authority involving the Seller or any of its Subsidiaries.

Section 2.8   Compliance With Laws; Permits .   Each of the Seller and its Subsidiaries has been and is currently in compliance in all material respects with all laws, injunctions, judgments, decrees, rulings, statutes, ordinances, codes, rules, regulations, decrees and orders of Governmental Authorities, including the Occupational Safety and Health Act of 1970 (29 U.S.C. § 651 et seq.) (collectively, “ Laws ”) applicable to the Purchased Assets or the Key Products Employees, including Laws relating to occupational safety and health, manufacturing practice, labeling, handling and use of compounds and products and employee exposure monitoring and control.  None of the Seller or any of its Subsidiaries has received any written notice or other written communication alleging or relating to a possible violation by the Seller or any of its Subsidiaries of any Laws applicable to the Purchased Assets.  The Seller and each of its Subsidiaries hold all licenses, registrations, variances, exemptions, operating certificates, franchises, orders, permits, certificates, approvals, authorizations, concessions, certificates of occupancy and similar rights from Governmental Authorities (collectively, “ Permits ”) necessary for the lawful operation of the Purchased Assets as currently conducted (collectively, the “ Purchased Assets Permits ”), and there has occurred no violation of, default (with or without notice or lapse of time or both) under, or event giving to others any right of termination, amendment or cancellation of, with or without notice or lapse of time or both, any of the Purchased Assets Permits except that have not had and would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.  There is not pending or, to the Knowledge of the Seller, threatened before any Governmental Authority any proceeding, notice of violation, order of forfeiture or complaint or investigation against the Seller or any of its Subsidiaries relating to any of the Purchased Assets Permits.  The Seller and its Subsidiaries are in compliance in all material respects with the terms of all of the Purchased Assets Permits, and no event has occurred that, to the Knowledge of the Seller, would reasonably be expected to result in the revocation, cancellation, non-renewal or adverse modification of any of the Purchased Assets Permits.

Section 2.9   Taxes .  As used in this Agreement, the term “ Tax ” or “ Taxes ” shall mean all taxes, charges, fees, duties, levies, imposts, or other assessments or governmental charges of any kind imposed by a federal, state, local or foreign Governmental Authority, including income, gross receipts, employment, excise, severance, stamp, occupation, premium, windfall profits, customs, duties, property, sales, use, license, profits, estimated, capital stock, transfer, franchise, registration, payroll, withholding, social security (or similar), unemployment, disability, value added, alternative or add-on minimum or other taxes, and including any interest, penalties or additions attributable thereto, whether disputed or not, and including any liability arising under any tax sharing agreement or indemnity obligation or any liability for taxes of another person by contract, as a transferee or successor, or under Treas. Reg. § 1.1502-6 or an analogous provision of state, local, or foreign law. As used in this Agreement, the term “ Tax Return ” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

(a)   The Seller and its Subsidiaries have timely filed or caused to be filed (taking into account any valid extensions) all material Tax Returns required to be filed by them with the appropriate Governmental Authority, and all such Tax Returns were true, complete and correct in all material respects.

(b)   All material Taxes due and payable by the Seller or any of its Subsidiaries have been duly and timely paid, whether or not shown on any Tax Return.

(c)   There are no Liens for Taxes upon the assets of the Seller or any of its Subsidiaries other than Permitted Liens.

(d)   All material Tax withholding and deposit obligations imposed on or with respect to the Seller and its Subsidiaries (including any withholding with respect to wages or other amounts paid to employees, independent contractors, creditors, shareholders or other third parties) have been satisfied in full.

(e)   Neither the Seller nor any of its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(f)   There is no claim, action, suit, investigation, audit or proceeding, including any appeal or application for review, now pending or, to the Knowledge of the Seller, threatened against or with respect to the Seller or any of its Subsidiaries in respect of any material Tax or Tax asset of the Seller or any of its Subsidiaries.

(g)   Neither the Seller nor any of its Subsidiaries is a party to any understanding or arrangement described in Section 6662(d)(2)(C)(ii) of the Code, or any “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4.

(h)   Neither the Seller nor any of its Subsidiaries has any material Liability for the Taxes of any Person (other than the Seller and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any comparable provision of state, local or foreign Law), as a transferee or successor, by Contract or otherwise.

(i)   Each Tax election made by the Seller or any of its Subsidiaries has been timely and properly made.

(j)   Neither the Seller nor any of its Subsidiaries is the beneficiary of any extension of time within which to file any Tax Return.

(k)   To the Knowledge of the Seller, no claim has ever been made by an authority in a jurisdiction where the Seller or any of its Subsidiaries does not file Tax Returns that the Seller or any of its Subsidiaries is or may be subject to taxation by that jurisdiction.

Section 2.10   Personnel Matters.

(a)   Section 2.10(a) (i) and Section 2.10(a) (ii) of the Seller Disclosure Schedule contain a true, accurate and complete list, as of date hereof, of all employees of the Seller employed primarily in the development or manufacture of Key Products (the “ Key Products Employees ”), including their respective positions, salaries, wages, bonuses and other compensation paid or payable by the Seller during 2009 and 2008 as well as dates of employment, and the date and amount of last salary increase, of such Key Products Employees.   Section 2.10(a) of the Seller Disclosure Schedule identifies any Key Products Employees who are on short-term disability or other approved leave of absence (other than vacation), their anticipated return to work date and the Seller Plans in which they participate in or may be entitled to benefits.

(b)   There are no claims (other than ordinary claims under the Seller Plans) or legal proceedings pending or, to the Knowledge of the Seller, threatened, by or between the Seller and any Key Products Employees.

Section 2.11   Employee Benefit Plans.

(a)   Section 2.11(a) of the Seller Disclosure Schedule contains a true, correct and complete list as of the date hereof of (i) each material deferred compensation, incentive compensation, equity compensation plan, vacation and “welfare” plan, fund or program (within the meaning of § 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)), (ii) each “pension” plan, fund or program (within the meaning of § 3(2) of ERISA), (iii) each material employment, consulting, termination, change in control or severance agreement to which a Key Products Employee is a party and (iv) each other material employee benefit plan, fund, program, policy, agreement, contract or arrangement, in each of clauses (i) through (iv), that is sponsored, maintained or contributed to or required to be contributed to by the Seller or its Subsidiaries or by any trade or business, whether or not incorporated (an “ ERISA Affiliate ”), that together with the Seller would be deemed a “single employer” within the meaning of § 4001(b) of ERISA, or to which the Seller or an ERISA Affiliate is a party for the benefit of any current or former officer, employee, independent contractor or director of the Seller or any of its Subsidiaries (collectively, and solely for purposes of Section 4.9(f) , whether or not material, the “ Seller Plans ”).

(b)   Neither the Seller nor any of its ERISA Affiliates nor any predecessor thereof sponsors, maintains or contributes to, has in the past six years sponsored, maintained or contributed to or is or has in the past been required to sponsor, maintain or contribute to, any plan subject to Title IV or § 302 of ERISA.  Neither the Seller nor any of its ERISA Affiliates nor any predecessor thereof contributes to, has in the past contributed to or is or has in the past six years been required to contribute to, any “multiemployer plan,” as defined in Section 3(37) of ERISA.

(c)   Each Seller Plan has been operated and administered in all material respects in accordance with its terms and in accordance with applicable Law, including ERISA and the Code and the operation or terms of any Seller Plan will not result in liability to Parent, Purchaser or any of Parent’s other Affiliates.

Section 2.12   Labor Matters .   Section 2.12 of the Seller Disclosure Schedule sets forth all of the collective bargaining agreements to which the Seller or any of its Subsidiaries is bound as of the date hereof with respect to any Key Products Employees.  Except for instances that have not had and would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect (a) there is no unfair labor practice charge, labor strike, dispute, slowdown, stoppage or representation petition brought before the National Labor Relations Board pending, or, to the Knowledge of the Seller, threatened, against the Seller or any of its Subsidiaries and (b) there are currently no charges or complaints against the Seller or any of its Subsidiaries concerning any Key Products Employees alleging employment discrimination, harassment or retaliation, whistleblower violations, violations of occupational safety and health requirements, employee misclassification, violations of employment termination-related Laws and other employment related matters, whether pending or, to the Knowledge of the Seller, threatened before a court of competent jurisdiction, the U.S. Equal Employment Opportunity Commission or any other Governmental Authority.  All Key Products Employees are employed within the United States.

Section 2.13   Environmental Matters.

(a)   Except as would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect, the Seller and each of its Subsidiaries are in compliance with all applicable Environmental Laws and have all Permits required by Environmental Laws to conduct their respective businesses, as currently conducted, and are in compliance with all such Permits.

(b)   (i) There is no pending, or to the Knowledge of the Seller, threatened claim, lawsuit, action, investigation or proceeding that is based upon or related to the operation of the Boulder Facilities or any of the other Purchased Assets against the Seller or any of its Subsidiaries under or pursuant to any Environmental Law, (ii) neither the Seller nor any of its Subsidiaries is a subject of any administrative or judicial consent, order, penalty, request for information, demand, citations, summons, complaint or decree in connection with any Environmental Laws that is based upon or related to the operation of the Boulder Facilities or any of the other Purchased Assets and (iii) neither the Seller nor any of its Subsidiaries has received notice from any Person, including any Governmental Authority, alleging that the Seller or any of its Subsidiaries is in violation of, or liable under, or potentially in violation of or liable under, any applicable Environmental Law, that is based upon or related to the operation of the Boulder Facilities or any of the other Purchased Assets and which violation or liability is unresolved.

(c)   Seller has not caused or permitted a Release, and to the Knowledge of the Seller, neither the owner of the Boulder Facilities nor a third party has caused or permitted a Release of any Hazardous Material on, at, to, from or underneath the Boulder Facilities that have had or would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

(d)   There has been no written environmental investigation, study, audit, test, review or other analysis conducted with respect to the Boulder Facilities in the possession or control of the Seller or any of its Subsidiaries which has not been delivered or made available to Purchaser at least five days prior to the date hereof.

(e)   Notwithstanding anything to the contrary in this Agreement, this Section 2.13 is the sole representation and warranty in this Agreement relating to Hazardous Materials, Environmental Laws or other environmental matters.

(f)   As used in this Agreement:

Section 2.14   Material Contracts.

(a)   Section 2.14 of the Seller Disclosure Schedule contains a true, correct and complete list of all of the following Contracts to which the Seller or any of its Subsidies are a party, or any of their assets may be bound:

(b)   The Seller has heretofore made available to Purchaser true, correct and complete copies of the Material Contracts.  Each of the Material Contracts constitutes the valid and legally binding obligation of the Seller or its Subsidiaries, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception), and is in full force and effect.  The Seller and each of its Subsidiaries are not (and with the giving of notice or lapse of time would not be) in breach of, or default under, any Material Contract and, to the Knowledge of the Seller, no other party thereto is in breach of, or default under, in any respect, any Material Contract.

Section 2.15   Properties.

(a)   Section 2.15(a) of the Seller Disclosure Schedule contains a true, correct and complete list of all real property leased, subleased, or otherwise occupied (whether as a tenant, subtenant or pursuant to other occupancy arrangements) by the Seller or any of its Subsidiaries in Boulder, Colorado, including the real property underlying the Boulder Facilities (collectively, including the improvements thereon, the “ Leased Real Property ”).  With respect to each Leased Real Property, Section 2.15(a) of the Seller Disclosure Schedule also contains a true, correct and complete list of all Contracts under which the Seller or any of its Subsidiaries is the landlord, sublandlord, tenant, subtenant or occupant (each a “ Boulder Lease ”).  Except as set forth in Section 2.15(a) of the Seller Disclosure Schedule, the Seller has heretofore made available to Purchaser true, correct and complete copies of the Boulder Leases (including all amendments and modifications thereto), including the Boulder Leases that relate to the Primary Boulder Facilities (the “ Primary Boulder Leases ”) and the Boulder Leases that relate to the Secondary Boulder Facilities (the “ Secondary Boulder Leases ”).

(b)   Except as set forth in Section 2.15(b) of the Seller Disclosure Schedule, the Transactions will not require notice to, or the approval or consent of, any third party to any of the Boulder Leases.

(c)   The Seller and/or its Subsidiaries have valid leasehold estates in all Leased Real Property free and clear of all Liens, except Permitted Liens.

(d)   Other than the Boulder Leases, none of the Boulder Facilities is subject to any lease, sublease, license or other agreement pursuant to which the Seller or any of its Subsidiaries has granted to any other Person any right to the use, occupancy or enjoyment of the Boulder Facilities or any part thereof.

(e)   The Boulder Leases are in full force and effect and constitutes the valid and legally binding obligation of the Seller or its Subsidiaries, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception), and there is no material default under the Boulder Leases either by the Seller or its Subsidiaries party thereto or, to the Knowledge of the Seller, by any other party thereto.

(f)   There does not exist any pending or, to the Knowledge of the Seller, threatened condemnation or eminent domain proceedings that affect the Boulder Facilities.  Neither the Seller nor any of its Subsidiaries has received any notice of the intention of any Governmental Authority or other Person to take or use any Leased Real Property.

(g)   There are no defects (patent or latent) or adverse physical conditions affecting the Boulder Facilities in any material respect.  All facilities, plants, warehouses, structures and other buildings that make up the Boulder Facilities are adequately maintained and are in good operating condition and repair in all material respects.

Section 2.16   Intellectual Property.

(a)   The Seller or its Subsidiaries exclusively own, have a valid license or otherwise have the valid right to use or access, all Key Products IP Rights free and clear of all Liens of any kind whatsoever.  Except as set forth in Section 2.16(a) of the Seller Disclosure Schedule, there are no Intellectual Property Rights owned by any third party that the Seller needs to develop, manufacture or sell any Key Product.

(b)   Section 2.16(b) of the Seller Disclosure Schedule sets forth a true, correct and complete list of (i) each patent, patent application, trademark registration, trademark application, copyright registration and domain name registration in which the Seller has or purports to have an ownership interest of any nature relating to the Key Products (whether exclusively, jointly with another Person, or otherwise) (collectively, “ Key Products Registered IP ”), (ii) the jurisdiction in which such item of the Key Products Registered IP has been registered or filed and the applicable registration or serial number, (iii) any other Person that has an ownership interest in such item of the Key Products Registered IP and the nature of such ownership interest and (iv) each Seller product that embodies, utilizes, is made under or is based upon or derived from (or, with respect to each Seller product currently under development, that is expected to embody, utilize, be made under or be based upon or derived from) such item of the Key Products Registered IP.  Each of the Key Products Registered IP identified in Section 2.16(b) of the Seller Disclosure Schedule is subsisting, valid and enforceable, and has not been adjudged invalid or unenforceable in whole or part.  The Seller has taken commercially reasonable steps to maintain and protect each item of such Key Products Registered IP, including by using commercially reasonable efforts to comply with any and all formal legal and/or administrative requirements related to the filing, prosecution and maintenance registrations and application (including the payment of all maintenance fees related thereto, and the timely post-registration filing of affidavits of use and incontestability and renewal applications).  Except as set forth in Section 2.16(b) of the Seller Disclosure Schedule, no Key Products IP Rights is subject to any outstanding decree, order, injunction, judgment or ruling restricting the use of such Intellectual Property Right or that would impair the validity or enforceability of such Intellectual Property Right.  Except as set forth in Section 2.16(b) of the Seller Disclosure Schedule, no Person has asserted by way of declaratory action, invalidation action, nullity action, revocation action, opposition, reexamination or otherwise that the Key Products IP Rights is invalid and/or unenforceable.

(c)   The manufacture, practice, use, offering for sale, importation and sale of the Key Products as previously manufactured, practiced, used, offered for sale, imported and sold, and as currently manufactured, used, offered for sale, imported and sold did not and does not infringe, misappropriate, or otherwise violate (including with respect to the development, clinical testing, manufacture, distribution, marketing, use or sale by the Seller or any of its Subsidiaries of any products to which they relate), the rights of any Person with regard to any Intellectual Property Right in a manner which, individually or in the aggregate, has resulted or would reasonably be expected to result in a Seller Material Adverse Effect.  To the Knowledge of the Seller, no Person or Persons has infringed, misappropriated or otherwise violated or is or are infringing, misappropriating or otherwise violating any Key Products IP Rights.

(d)   There are no pending or, to the Knowledge of the Seller, threatened claims (i) that, with respect to the Purchased Assets, the Seller or any of its Subsidiaries has infringed, misappropriated or otherwise violated or is infringing, misappropriating or otherwise violating (including with respect to the manufacture, use, distribution, marketing, or sale by the Seller or its Subsidiaries of any Key Products) any Intellectual Property Rights of any Person, (ii) based upon or challenging or seeking to deny or restrict the use by or ownership of the Seller of any of the Key Products IP Rights or (iii) alleging that any Key Products IP Right is being licensed or sublicensed in conflict with the terms of any license or other Contract.  No Person has asserted by way of allegation, cease and desist demands, unsolicited offers of license or otherwise or, to the Seller’s Knowledge, has the right to assert any claim regarding the use of, or challenging or questioning the Seller’s right or title in, any of the Key Products IP Rights.

(e)   All obligations for payment of monies currently due and payable by the Seller or any of its Subsidiaries have been satisfied in a timely manner in connection with options, rights, licenses or interests of any kind relating to any Intellectual Property Rights granted (i) to the Seller or any of its Subsidiaries, with respect to the Key Products IP Rights (other than software licenses for generally available software and except pursuant to employee proprietary inventions agreements (or similar employee agreements), non-disclosure agreements and consulting agreements entered into by the Seller or any of its Subsidiaries in the ordinary course of business), (ii) by the Seller or any of its Subsidiaries to any other Person, with respect to the Key Products IP Rights (including any obligations of such other Person to make any fixed or contingent payments, including royalty payments) or (iii) under any other Key Products IP Contract.

(f)   The Seller has taken reasonable security measures, including measures against unauthorized disclosure, to protect the secrecy, confidentiality, and value of its Trade Secrets and other Confidential Information, as such Trade Secrets or other Confidential Information relate to the Key Products.  To the Seller’s Knowledge, with respect to the Key Products, none of the Seller’s employees is obligated under any Contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of such employee’s best efforts to promote the interests of the Seller.  To the Seller’s Knowledge, with respect to the Key Products, none of its employees (i) is obligated (or was obligated at any time while employed by the Seller) under any Contract to assign any invention made, conceived, or reduced to practice during the period of such employee’s employment by the Seller to any Person other than the Seller or (ii) has assigned any inventions made, conceived, or reduced to practice during the period of such employee’s employment by the Seller.  To the Knowledge of the Seller, neither the execution nor delivery of this Agreement will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any Contract, covenant or instrument under which any of its employees are now obligated.  The Seller does not believe it is or will be necessary to utilize in connection with the Key Products any inventions of any of its employees made prior to their employment by the Seller that have not been licensed or acquired by the Seller.

(g)   The execution and delivery of this Agreement by the Seller do not, and the consummation by the Seller of the Transactions and compliance by the Seller with the provisions of this Agreement will not, (i) alter, impair, diminish or result in the loss of any rights or interests of the Seller or any of its Subsidiaries in respect of any Key Products IP Rights or under any Key Products IP Contract, (ii) grant or require the Seller or any of its Subsidiaries to grant to any Person any rights in respect of any Key Products IP Rights or (iii) subject the Seller or any of its Subsidiaries to any increase in or acceleration of royalties or other payments in respect of any Key Products IP Rights or under any Key Products IP Contract.

Section 2.17   Regulatory Matters .  With respect to the Key Products and the Boulder Facilities:

(a)   The Seller and its Subsidiaries are in compliance in all material respects with all applicable statutes, rules and regulations of the FDA, and, to the extent applicable, other Regulatory Authorities, with respect to the clinical testing, manufacture, labeling, storing, testing, or distribution of their compounds and products, including current “Good Manufacturing Practice,” or cGMP regulations, “Good Clinical Practice” or GCP regulations to the extent the clinical data from any of their clinical studies is used to support regulatory approval of the Seller’s products, “Good Laboratory Practice” (as such terms are defined in applicable Laws) or GLP regulations to the extent the non-clinical data from Seller non-clinical studies is used to support regulatory approval of any products of the Seller and its Subsidiaries.

(b)   The Seller and its Subsidiaries are in compliance with all applicable registration and listing requirements set forth at 21 U.S.C. § 360 and all similar applicable laws and regulations, except for noncompliance which would not have, and would not reasonably be expected to have, either individually or in the aggregate, a Seller Material Adverse Effect.

(c)   Neither the Seller nor its Subsidiaries, nor, to the Knowledge of the Seller, any Person providing services to the Seller or its Subsidiaries (including Third Party Suppliers), is in receipt of notice of, or is subject to, any adverse inspection, finding of non-compliance, compelled or voluntary recall, investigation, penalty for corrective or remedial action or other compliance or enforcement action, by the FDA or any other applicable Regulatory Authority.  There are no pending or, to the Knowledge of the Seller, threatened actions, proceedings or complaints by the FDA or any other applicable Regulatory Authority against the Seller or its Subsidiaries, or any Person providing services to the Seller or its Subsidiaries (including Third Party Suppliers).  Without limiting the generality of the foregoing, Section 2.17(c) of the Seller Disclosure Schedule sets forth each FDA Form 483 or similar inspection report and any warning letter or other similar notice that the Seller or its Subsidiaries or, to the Knowledge of the Seller, any Person providing services to the Seller or its Subsidiaries (including Third Party Suppliers) has received from the FDA or any other applicable Regulatory Authority.  True, correct and complete copies of any item set forth in Section 2.17(c) of the Seller Disclosure Schedule and all responses and other correspondence submitted by, or on behalf of, the Seller or its Subsidiaries to or from the FDA or any applicable Regulatory Authority (and any similar correspondence to or from any Person providing services to the Seller or its Sub