ASSET PURCHASE AGREEMENT

Exhibit 10.1

TABLE OF CONTENTS

THIS ASSET PURCHASE AGREEMENT, dated as of February 19, 2009 (the “ Execution Date ”), is entered into by and among Alsius Corporation, a Delaware corporation (“ Alsius ”), Alsius Medical Corporation, a California corporation and a wholly-owned subsidiary of Alsius (“ Alsius Medical ,” and collectively with Alsius, “ Seller ”), and ZOLL Circulation, Inc., a Delaware corporation (“ Buyer ”).  Seller and Buyer are referred to in this Agreement (as defined hereinafter) collectively as the “ Parties ” and individually as a “ Party .”

WHEREAS, Seller is engaged in the design, development, manufacture, sale and distribution of intravascular temperature management devices (the “ Business ”); and

WHEREAS, Buyer wishes to purchase from Seller, and Seller desires to sell to Buyer, substantially all of the assets of Seller relating to the Business (other than the Excluded Assets (as defined hereinafter)), and Buyer is willing to assume the Assumed Liabilities (as defined hereinafter) with respect to the Business, all for the consideration and upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the respective representations, warranties, covenants and agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

1.1            Definitions .  In addition to the terms defined above and other terms defined in other Sections of this Agreement, the following initially capitalized terms have the following meanings when used herein:

“ Acquired Assets ” has the meaning set forth in Section 2.1 .

“ Acquisition Transaction ” has the meaning set forth in Section 7.6(a) .

“ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act.

“ Agreement ” means this Asset Purchase Agreement, including all Schedules and Exhibits hereto, as it may be amended from time to time in accordance with its terms.

“ Allocation Schedule ” has the meaning set forth in Section 3.2 .

“ Assignment and Assumption Agreement ” means the Assignment and Assumption Agreement between Seller and Buyer, the form of which is attached hereto as Exhibit A .

“ Assignment of Contracts ” means the Assignment of Contracts between Seller and Buyer, the form of which is attached hereto as Exhibit B .

“ Assumed Liabilities ” has the meaning set forth in Section 2.3 .

“ Bill of Sale ” means the Bill of Sale between Seller and Buyer, the form of which is attached hereto as Exhibit C .

“ Business Day ” means any day other than a day which is Saturday or Sunday or other day on which commercial banks in Boston, Massachusetts are authorized or required to remain closed.

“ Buyer Indemnified Party ” has the meaning set forth in Section 10.1(a) .

“ Buyer Parties ” has the meaning set forth in Section 9.3(c) .

“ Buyer Schedules ” has the meaning set forth in the opening paragraph of Article VI .

“ Buyer Termination Fee ” has the meaning set forth in Section 9.3(b) .

“ Cap ” has the meaning set forth in Section 10.1(b) .

“ Cash ” means cash and cash equivalents (including marketable securities and short-term investments).

“ Closing ” means the closing of the purchase and sale of the Acquired Assets and the assignment and assumption of the Assumed Liabilities, each as contemplated by this Agreement.

“ Closing Date ” has the meaning set forth in Section 4.1 .

“ Commission ” means the United States Securities and Exchange Commission.

“ Consent ” means any consent, approval, authorization, consultation, waiver, permit, grant, agreement, license, certificate, exemption, order, registration, declaration, filing or notice of, with or to any Person, in each case required to permit the consummation of any of the transactions contemplated hereby.

“ Contract ” means any written or binding oral contract, agreement, instrument, order, arrangement, commitment or understanding of any nature, including sales orders, purchase orders, leases, subleases, data processing agreements, maintenance agreements, license agreements, sublicense agreements, distribution agreements, supply agreements, loan agreements, promissory notes, security agreements, pledge agreements, deeds, mortgages, guarantees, indemnities, warranties, employment agreements, consulting agreements, sales representative agreements, joint venture agreements, buy-sell agreements, options or warrants.

“ Corporate Names ” has the meaning set forth in Section 7.13(b) .

“ Customers and Distributors ” has the meaning set forth in Section 5.16 .

“ Encumbrance ” means any lien, mortgage, security interest, pledge, conditional sale agreement, title retention agreement or other charge or encumbrance of any nature whatsoever on any property or property interest.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Assets ” has the meaning set forth in Section 2.2 .

“ Excluded Liabilities ” has the meaning set forth in Section 2.4 .

“ FDA ” means the U.S. Food and Drug Administration and similar   federal, regional, state, local or foreign Governmental Authorities.

“ Finished Inventory ” means any stock of finished Products maintained by Seller or any of its Affiliates anywhere in the world.

“ GMP ” has the meaning set forth in Section 5.13(e) .

“ Governmental Authority ” means any supra-national, federal, regional, state, local or foreign government or other political subdivision thereof, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or foreign, exercising executive, judicial, regulatory or administrative governmental functions.

“ Hired Employees ” has the meaning set forth in Section 7.11 .

“ Inbound Licenses ” has the meaning set forth in Section 5.9(b)(i) .

“ Indemnified Party ” means any Person entitled to indemnification under Article X .

“ Indemnifying Party ” means any Person providing indemnification under Article X .

“ Information Statement ” has the meaning set forth in Section 5.2(c) .

“ Inspection Period ” has the meaning set forth in Section 7.12 .

“ Intellectual Property Assets ” means any and all of the following, as they exist throughout the world: (a) patents, patent applications of any kind, patent rights, inventions, discoveries and invention disclosures (whether or not patented) (collectively, “ Patents ”);  (b) rights in registered and unregistered trademarks, service marks, trade names, trade dress, logos, packaging design, slogans and Internet domain names and registrations and applications for registration of any of the foregoing (collectively, “ Marks ”); (c) registered and material unregistered copyrights in both published and unpublished works, and all copyright registrations and applications, and all derivatives, translations, adaptations and combinations of the above, including copyrights in (i) all design history files, (ii) the Manufacturing Instructions, and (iii) all documents primarily related to the Products and controlled by Seller (collectively, “ Copyrights ”); (d) know-how, trade secrets, confidential or proprietary information, research in progress, algorithms, data, designs, processes, formulae, drawings, schematics, blueprints, flow charts, models, strategies, prototypes, techniques, customer lists and contact numbers/addresses, business strategies, forecasts, testing procedures and testing results (collectively, “ Trade Secrets ”); (e) any and all other intellectual property rights and/or proprietary rights relating to any of the foregoing; (f) all licenses and other Contracts under which Seller has sold, licensed, leased or otherwise transferred or granted any interest or rights to any Marks, Patents, Copyrights or Trade Secrets and (g) goodwill, franchises, permits, consents, approvals, and claims of infringement and misappropriation against third parties.

“ Inventory ” shall mean all inventory of the Products together with all inventory of raw materials, work-in-progress related to the Products and finished goods inventory of the Products, whether held at a location or facility of Seller (or of any other Person on behalf of Seller) or in transit to or from Seller (or any such other Person).

“ Knowledge ” means the actual knowledge after due inquiry of any of John Riolo, John Rogitz, Greg Tibbitts, Andrew Wade, Suzanne Winter and William Worthen.

“ Law ” means each provision of any currently existing federal, state, local or foreign civil and criminal law, statute, ordinance, order, code, rule, regulation or common law promulgated or issued by any Governmental Authority, as well as any judgments, decrees, injunctions or agreements issued or entered into by any Governmental Authority.

“ Liability ” means, with respect to any Person, any liability or obligation of such Person, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

“ Losses ” has the meaning set forth in Section 10.1(a) .

“ Manufacturing Instructions ” means those manufacturing, packaging and labeling specifications for the Products used by Seller or Seller’s Affiliates in the production and supply of the Products.

“ Material Adverse Effect ” means a material adverse effect on the business, assets, financial condition, results of operations or prospects of the Business or the Acquired Assets, taken as a whole; provided , however , that Material Adverse Effect shall exclude any adverse changes or conditions as and to the extent such changes or conditions are proximately caused by (a) public or industry knowledge of the transactions contemplated by this Agreement (including, without limitation, any action or inaction by the Business’ employees, customers and vendors) or (b) general economic conditions or other conditions generally affecting the industry in which the Business competes.  Seller may, however, at its option, include in the Schedules of this Agreement or elsewhere items that would not have a Material Adverse Effect within the meaning of the previous sentence in order to avoid any misunderstanding, and such inclusion shall not be deemed to be an acknowledgement by Seller that such items would have a Material Adverse Effect or further define the meaning of such term for the purposes of this Agreement.

“ NASDAQ ” means The NASDAQ Capital Market.

“ Notice of Termination ” has the meaning set forth in Section 9.2 .

“ Ordinary Course ” means ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

“ Other Agreements ” means, collectively, the Assignment and Assumption Agreement, the Assignment of Contracts, the Bill of Sale, the Patent Assignment, the Trademark Assignment and other agreements entered into by Seller and Buyer in connection herewith.

“ Outbound Licenses ” has the meaning set forth in Section 5.9(d) .

“ Patent Assignment ” means the Patent Assignment between Buyer and Seller, the form of which is attached hereto as Exhibit D .

“ Payoff Amount ” shall have the meaning set forth in Section 8.2(h) .

“ Payoff Letter ” shall have the meaning set forth in Section 8.2(h) .

“ Permitted Encumbrances ” means (a) Encumbrances for Taxes not delinquent or past due; (b) pledges or deposits of money securing statutory obligations under workers’ or unemployment compensation Laws (excluding Encumbrances under ERISA); (c) mechanic’s, materialman’s, supplier’s, vendor’s or similar liens arising in the Ordinary Course securing amounts that are not delinquent or past due; (d) Encumbrances relating to purchase money security interests arising in the Ordinary Course; (e) zoning ordinances, easements and other restrictions of legal record affecting real property that would be revealed by a survey and would not, individually or in the aggregate, materially interfere with the value or usefulness of such real property to the Business; or (f) Encumbrances set forth on Schedule 1.1(a) .

“ Person ” means any individual, corporation, partnership, joint venture, limited liability company, trust or unincorporated organization or government or any agency or political subdivision thereof.

“ Product ” or “ Products ” means those products identified on Schedule 1.1(b) (and for the avoidance of doubt does not mean specific units thereof).

“ Purchase Order ” has the meaning set forth in Section 4.2 .

“ Purchase Price ” has the meaning set forth in Section 3.1 .

“ Regulatory Approval ” shall mean, with respect to a country, any and all approvals, substantial equivalence determinations, licenses, permits, registrations or authorizations of any Regulatory Authority necessary in order to commercially distribute, sell, market or clinically investigate the Products in such country, including, where applicable and as required, (a) pricing or reimbursement approval in such country, (b) pre- and post-approval investigational and marketing authorizations (including any prerequisite manufacturing approval or authorization related thereto), (c) labeling approval and (d) technical, medical and scientific licenses.

“ Regulatory Authority ” shall mean any Governmental Authority regulating or otherwise exercising authority with respect to the testing, manufacture, storage, distribution, use, promotion, marketing, sale and importation of Products, including the FDA.

“ Regulatory Documentation ” shall mean all applications, registrations, licenses, authorization and approvals (including all Regulatory Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents and all clinical studies and tests, related to the Products, and all data contained in any of the foregoing, including all 510(k)s, letters to file concerning device modifications, pre- and post-approval marketing authorizations, investigational device exemptions, product labeling, advertising and promotion documents, manufacturing data, complaint files, adverse event files, correction and removal records and reports, and all documents pertaining to recalls of the Products.

“ Representatives ” has the meaning set forth in Section 7.6(a) .

“ Required Stockholder Vote ” has the meaning set forth in Section 5.2(b) .

“ Schedules ” has the meaning set forth in the opening paragraph of Article V .

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Seller Balance Sheet ” has the meaning set forth in Section 5.5(b) .

“ Seller Commission Filings ” has the meaning set forth in Section 5.5(a) .

“ Seller Indemnified Party ” has the meaning set forth in Section 10.2(a) .

“ Seller In-Licensed Intellectual Property Assets ” has the meaning set forth in Section 5.9(b)(i) .

“ Seller Marks ” has the meaning set forth in Section 5.9(a).

“ Seller Parties ” has the meaning set forth in Section 9.3(c) .

“ Seller Patents ” has the meaning set forth in Section 5.9(a) .

“ Seller Termination Fee ” has the meaning set forth in Section 9.3(a) .

“ Seller Trade Secrets ” has the meaning set forth in Section 5.9(b)(viii) .

“ Seller’s Financial Advisor ” means Leerink Swann LLC.

“ Start Date ” has the meaning set forth in Section 7.11 .

“ Subject Commission Filings ” has the meaning set forth in Section 5.5(a) .

“ Superior Proposal ” has the meaning set forth in Section 7.6(c) .

“ Suppliers ” has the meaning set forth in Section 5.16 .

“ Tail Policy ” has the meaning set forth in Section 7.10 .

“ Tangible Assets ” has the meaning set forth in Section 2.1(a) .

“ Termination Date ” has the meaning set forth in Section 9.1(b) .

“ Third Party Intellectual Property Assets ” has the meaning set forth in Section 5.9(b)(iv) .

“ Taxes ” means all taxes, charges, fees, duties, levies or other assessments, including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, license, payroll, unemployment, environmental, customs duties, capital stock, disability, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational and interest equalization, windfall profits, severance and employees’ income withholding and Social Security taxes imposed by the United States or any foreign country; by any state, municipality, subdivision or instrumentality thereof or by any other tax authority and such term shall include any interest, penalties or additions to tax attributable to such taxes.

“ Tax Return ” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto and any amendment thereof.

“ Threshold Amount ” means Thirty Seven Thousand, Five Hundred Dollars ($37,500).

“ Trademark Assignment ” means the   Trademark Assignment between Seller and Buyer, the form of which is attached hereto as Exhibit E .

“ Transaction Written Consent ” has the meaning set forth in Section 7.4(a) .

“ Transfer Taxes ” has the meaning set forth in Section 7.7(a) .

“ Transferred Contracts ” shall mean each Contract listed in Schedule 1.1(c) .

“ Updated Schedule 2.1(d) ” has the meaning set forth in Section 2.1(d) .

1.2            Construction .  The language in all parts of this Agreement is to be construed in all cases according to its fair meaning.  Seller and Buyer acknowledge that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party are not to be employed in the interpretation of this Agreement.   Whenever used herein, the words “include,” “includes” and “including” mean “include, without limitation,” “includes, without limitation” and “including, without limitation,” respectively.  The masculine, feminine or neuter gender and the singular or plural number are each deemed to include the other(s) whenever the context so indicates.  “Days” means calendar days unless otherwise specified.  Whenever used herein, the words “Seller” and “Buyer” include their respective Affiliates whenever the context requires or to the extent applicable.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole (including any Exhibits and Schedules hereto) and not to any particular provision of this Agreement, and all Article, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.  All references to “Dollar” or “$” refer to the lawful money of the United States.

2.1            Agreements to Purchase and Sell .  Subject to the terms and conditions of this Agreement, and except for the Excluded Assets, at the Closing, Seller shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase and accept from Seller, free and clear from any Encumbrances other than Permitted Encumbrances, all right, title and interest of Seller in and to all of the assets, properties, interests and rights comprising the Business, of every kind and description, existing as of the date of this Agreement or acquired through the Closing, including all of the following assets (collectively, the “ Acquired Assets ”):

(a)           subject to Section 7.12 , the fixed and other tangible personal property and assets arising out of, relating to or resulting from the Business, including tooling, fixtures, equipment, computer systems and software, furniture, machinery, office equipment, furnishings and instruments, set forth on Schedule 2.1(a) , whether owned by Seller or its Affiliates (the “ Tangible Assets ”);

(b)           all goodwill directly arising from, related to or resulting from the Business;

(c)           all Seller Intellectual Property Assets;

(d)           all Inventory (other than the Finished Inventory purchased pursuant to the Purchase Order), including any Inventory on loan to or being used by any customers, clinicians or others for evaluation, testing or in conjunction with any studies or trials, including the Inventory set forth on Schedule 2.1(d) , which Schedule 2.1(d) shall be updated prior to the Closing to (i) include any Inventory that is acquired by Seller between the Execution Date and the Closing Date; and (ii) exclude any Inventory that is disposed of by Sellers between the Execution Date and the Closing Date (the “ Updated Schedule 2.1(d) ”); provided , however , that Buyer shall only be obligated to purchase Inventory that is identified by Buyer as being necessary or useful after the Closing Date, which Inventory will be identified by Buyer in accordance with Section 7.12 ;

(e)           all rights in, under and to the Transferred Contracts;

(f)           all Regulatory Documentation and Regulatory Approvals;

(g)           the Manufacturing Instructions; and

(h)           solely to the extent related to an Assumed Liability, (i) all claims (including claims for infringement or misappropriation of Intellectual Property Assets or rights related thereto included in the Acquired Assets); and (ii) all causes of action of Seller against any other Person, whether or not such claims and causes of action have been asserted, and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery of Seller (regardless of whether such rights are currently exercisable) directly arising out of, relating to or resulting from the Acquired Assets, the Assumed Liabilities or the Business; and

(i)           all other assets and properties directly arising out of, relating to or resulting from the Business, of every nature whatsoever, tangible and intangible, and wherever located, such as any business records; customer lists; customer records and histories; customer invoices; lists of suppliers and vendors and all records relating thereto; list of sales agents; price lists; engineering drawings; clinical trial data and records; records with respect to production, engineering, and product development costs; advertising matter; catalogues; photographs; instruction manuals; sales literature and materials; purchasing materials; media materials; manufacturing and quality control records and procedures; research and development files; design history files; data and laboratory books and media materials and plates; and copies of all files relating to the Seller Intellectual Property Assets, including all applications, registrations, assignments, correspondence to and from the United States Patent and Trademark Office and any other foreign patent and trademark offices, dockets, workbooks, legal opinions, prior art searches, notes, memoranda and other related information.

2.2            Excluded Assets .  Notwithstanding anything to the contrary in this Agreement, Seller shall not sell, transfer or assign, and Buyer shall not purchase or otherwise acquire, any right, title or interest of Seller in any of the following assets (collectively, the “ Excluded Assets ”):

(a)           rights of Seller arising under this Agreement, the Other Agreements or the Purchase Order or from the consummation of the transactions contemplated hereby or thereby;

(b)           all accounts receivable and notes receivable and intercompany receivable balances that exist as of the Closing Date, including any value added Taxes or similar Taxes levied on such accounts receivable, any unpaid interest accrued on any such accounts receivable and any security or collateral related thereto, and any payments received with respect thereto before or after the Closing Date;

(c)           all Cash and bank or other deposit accounts of Seller;

(d)           the capital stock of Seller or any of its Affiliates;

(e)           all books (including corporate minute books), documents, records (including stock records), files and Tax Returns of Seller and Seller’s Affiliates as may exist on the Closing Date (other than such books, records or files that are covered in Section 2.1 above), which include, without limitation, those which: (i) were prepared in connection with or relating to the transactions contemplated by this Agreement, including bids received from other Persons and analyses relating to the Acquired Assets, the Assumed Liabilities or the Products; or (ii) are maintained by Seller, its Affiliates and/or their representatives, agents or licensees in connection with their respective tax, legal, regulatory or reporting requirements;

(f)           all Contracts of Seller or its Affiliates other than the Transferred Contracts;

(g)           real property, buildings, structures and improvements thereon, whether owned or leased by Seller or Seller’s Affiliates, and all fixtures and fittings attached thereto, but not including any of the Tangible Assets or Transferred Contracts;

(h)           any and all claims of Seller for prepaid Taxes or refunds of Taxes or rights to use tax attributes, all arising from or relating to any period (or a portion of any period) ending on or before the Closing;

(i)           insurance policies and claims and refunds thereunder;

(j)           all employee benefit plans and arrangements and the assets related thereto;

(k)           all claims and causes of action, whether or not asserted, to the extent not exclusively or primarily related to an Assumed Liability or Acquired Asset; and

(l)           the assets set forth on Schedule 2.2(l) .

In addition, Seller may retain copies of any Transferred Contracts, documents or records which:  (x) relate to properties or activities of Seller, and (y) which are required to be retained pursuant to any legal requirement or are subject to the attorney-client privilege, for financial reporting purposes, for tax purposes, legal defense or prosecution purposes or otherwise; provided , however , that Seller shall comply with the provisions of Section 7.2 with respect to any such Contracts, documents or records.

2.3            Assumed Liabilities .  On the Closing Date, Buyer shall assume only the Liabilities of Seller specifically identified below in this Section 2.3 (the “ Assumed Liabilities ”), unless otherwise specifically excluded under Section 2.4 :

(a)           the Liabilities and obligations of Seller under the Transferred Contracts as and to the extent transferred to Buyer under Section 2.1(e) , but only to the extent either: (i) such obligations (A) are to be performed after the Closing; (B) do not arise from or relate to any breach or default by Seller or any of its Affiliates of any provision of any of the Transferred Contracts or any event, circumstance or condition occurring or existing on or prior to the Closing that, with notice or lapse of time, would constitute or result in a breach or default thereof; and (C) do not arise from actions taken (or omitted from being taken) by Seller or any of its Affiliates on or prior to the Closing (or except to the extent that Buyer expressly agrees to assume from or reimburse Seller for such Liabilities prior to the Closing Date); or (ii) Buyer expressly agrees in writing to reimburse Seller for such Liabilities;

(b)           to the extent permitted by applicable Law, Liabilities arising after the Closing Date directly relating to the repair or service of Products pursuant to valid product warranty claims made in accordance with the Seller’s written product warranties;

(c)           Liabilities relating to each of the Hired Employees, but only to the extent arising from or related to their being an employee of Buyer or its Affiliates or designees after their respective Start Dates;

(d)           Liabilities related to Regulatory Approvals, Regulatory Documentation and other regulatory matters pertaining to the Business, including, without limitation, those regulatory obligations owed to the FDA, the Japanese Ministry of Health and any corresponding European Regulatory Authorities; and

(e)           Liabilities arising out of or directly relating to ownership or operation of the Acquired Assets after the Closing.

2.4            Excluded Liabilities .  Buyer shall not assume, nor shall Buyer become responsible for, any Liabilities of Seller or Seller’s Affiliates other than the Assumed Liabilities (collectively, the “ Excluded Liabilities ”), which Excluded Liabilities shall include, without limitation, the following Liabilities, all of which shall remain the Liabilities of Seller or Seller’s Affiliates:

(a)           all Liabilities of Seller and Seller’s Affiliates arising under this Agreement, the Other Agreements or the Purchase Order or from the consummation of the transactions contemplated hereby or thereby;

(b)           all Liabilities of Seller and Seller’s Affiliates arising under or related to the Transaction Written Consent or the Information Statement other than Liabilities related to information provided by Buyer about itself or its Affiliates;

(c)           all accounts payable, including all intercompany payable balances owing by Seller or Seller’s Affiliates;

(d)           any Liabilities under Contracts of Seller or its Affiliates other than the Liabilities relating to Transferred Contracts that are assumed under Section 2.3(a) ;

(e)           any Liability to any current or former employee or independent contractor (to the extent not a party to a Transferred Contract) of Seller or any of its Affiliates arising (i) in respect of Hired Employees, prior to their respective Start Dates, including accrued vacation pay, holiday pay, sick pay, bonuses earned, pensions or profit sharing or with respect to any discrimination and/or any other claims that may arise or have arisen from the employment of such Hired Employees with, or the termination of their employment by, Seller on or prior to the Closing Date   and (ii) in respect of all other former and current employees or independent contractors (to the extent not a party to a Transferred Contract) of Seller or any of its Affiliates, at any time;

(f)           any Liability arising from or relating to any injury or damage to person or property allegedly caused or resulting from use of any Product prior to the Closing Date;

(g)           any Liability relating to any Seller Commission Filing or Subject Commission Filing;

(h)           any Liability with respect to Taxes of Seller for any period;

(i)           any Taxes attributable to the Acquired Assets and the Business arising from or relating to any period (or portion of any period) ending on or before the Closing;

(j)           any Liabilities under or in connection with any Excluded Assets;

(k)           any Liabilities arising out of or directly relating to ownership or operation of the Acquired Assets prior to the Closing; and

(l)           all Liabilities of Seller or its Affiliates other than the Assumed Liabilities.

3.1            Purchase Price .  In consideration of the sale by Seller to Buyer of the Acquired Assets, and in addition to the assumption of the Assumed Liabilities by Buyer, Buyer shall pay to Seller an amount equal to Twelve Million Dollars ($12,000,000) in cash (the “ Purchase Price ”).  The Purchase Price shall be paid as follows:

(a)           at the Closing, Buyer shall pay the Payoff Amount to GE Capital by wire transfer of immediately available funds in full and complete satisfaction of all outstanding amounts Seller and its Affiliates owe to GE Capital pursuant to the Payoff Letter; and

(b)           at the Closing, Buyer shall pay the difference between the Purchase Price and the Payoff Amount in cash to Seller by wire transfer of immediately available funds.

3.2            Purchase Price Allocation .  At least ten (10) days prior to the Closing Date, Buyer shall provide to Seller a proposed allocation schedule that allocates the Purchase Price among the Acquired Assets (the “ Allocation Schedule ”).  Seller shall have five (5) days after delivery of the Allocation Schedule to provide any comments to Buyer’s proposed Allocation Schedule.  The Parties agree to negotiate in good faith to resolve any differences between the Parties concerning such Allocation Schedule prior to the Closing Date.  The agreed upon final Allocation Schedule shall be set forth in Buyer Schedule 3.2 .  Seller and Buyer shall sign and submit all necessary forms to report this transaction for federal, national, state, local and foreign income tax purposes in accordance with the Allocation Schedule and shall not take a position for Tax purposes inconsistent therewith, except pursuant to a final “determination” (as defined in Section 1313(a) of the Internal Revenue Code or corresponding provision of state, local or foreign Law).  The Parties shall treat the transactions contemplated by this Agreement in all filings with Governmental Authorities for all Tax purposes (including consumption Taxes) consistently with the Allocation Schedule and this Section 3.2 .

4.1            Closing Date .  On the terms and subject to the conditions of this Agreement, the Closing shall take place at the offices of Goodwin Procter LLP, Exchange Place, Boston, Massachusetts, which Closing shall occur no later than the third (3 ^rd ) Business Day after the last to be fulfilled or waived of the conditions set forth in Article VIII shall be fulfilled or waived in accordance with this Agreement or at such other time, date or place as the Parties may mutually agree (the “ Closing Date ”).

4.2            Purchase Order .  Upon execution of this Agreement, Buyer or one of its Affiliates or designees shall issue a purchase order to Seller in the form attached hereto as Exhibit F (the “ Purchase Order ”) for the purchase of Finished Inventory as set forth therein.  Buyer or one of its Affiliates or designees shall pay Seller for such Finished Inventory upon the following schedule: (a) fifty (50%) of the Purchase Order sales price shall be paid within two (2) Business Days after issuance of the Purchase Order; and (b) fifty (50%) of the Purchase Order sales price shall be paid net thirty (30) days from the date of Seller’s invoice, which invoice shall be issued by Seller to Buyer upon delivery of the Finished Inventory to Buyer and Buyer’s acceptance thereof in accordance with the terms of the Purchase Order.

4.3            Transition Bonus Pool .  As consideration to assist in the successful transition of the Acquired Assets and Business to Buyer, the Parties shall establish and implement a transition and bonus plan for the benefit of Seller’s employees having the terms and conditions set forth in Buyer Schedule 4.3 .

4.4            Further Assurances .

(a)           To the extent that the consent or approval of any third party is required to transfer or assign any Acquired Asset, including any Transferred Contract, to Buyer as contemplated hereunder and, despite the commercially reasonable efforts of Seller, such consent or approval is not obtained prior to the Closing, Seller and Buyer shall mutually agree on a satisfactory arrangement intended to provide Buyer following the Closing the benefits of and under each such Acquired Asset, including any Transferred Contract.  Nothing herein shall be construed as an attempt to transfer any Acquired Asset for which the consent or approval of a third party is required unless and until such consent or approval shall be obtained.

(b)           Seller, from time to time after the Closing, at the request of Buyer and without further consideration, shall execute and deliver further instruments of transfer and assignment and take such other action as a party may reasonably require, and cause its Affiliates to do the same, to transfer more effectively and assign to, and vest in, Buyer, the Acquired Assets and all rights thereto, and to implement fully the provisions of this Agreement, the Other Agreements and the transactions contemplated hereby and thereby.

(c)           Promptly after the Closing, Seller shall take all requisite steps to put Buyer in actual possession and operating control of the Acquired Assets; provided that Buyer shall pay the shipping costs thereof.

As a material inducement to Buyer to enter into this Agreement, subject to the exceptions and limitations set forth in this Article V and the matters set forth on the disclosure schedule delivered by Seller to Buyer dated as of the Execution Date (the “ Schedules ”), Seller hereby represents and warrants to Buyer as follows:

5.1            Organization .  Seller is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified to transact business as a corporation in such jurisdictions where the nature of the Business makes such qualification necessary, except as to jurisdictions where the failure to qualify would not reasonably be expected to have a Material Adverse Effect.  Seller has all requisite corporate power and authority to carry on its business (including the Business) as now being conducted.

5.2            Authority; Binding Agreements .

(a)           The Board of Directors of Seller, at a meeting thereof duly called and held, has duly adopted resolutions by the requisite majority vote approving this Agreement, the Other Agreements and the transactions contemplated hereby and thereby determining that the terms and conditions of this Agreement, the Other Agreements and the transactions contemplated hereby and thereby are in the best interests of Seller and its stockholders, and recommending that Seller’s stockholders authorize the transactions contemplated by this Agreement and the Other Agreements.  The foregoing resolutions of the Board of Directors of Seller have not been modified, supplemented or rescinded and remain in full force and effect as of the Execution Date.

(b)           No stockholder or other equityholder approval is required on behalf of Seller for the execution, delivery or performance of this Agreement, the Other Agreements or any of the transactions contemplated hereby or thereby, other than the affirmative vote of the holders of a majority of the outstanding shares of Seller’s common stock (the “ Required Stockholder Vote ”).  Subject to obtaining the Required Stockholder Vote, the execution and delivery by Seller of this Agreement and the Other Agreements to which it is or will become a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of Seller.  Seller has all requisite corporate power and authority to enter into this Agreement and the Other Agreements to which it is or will become a party and, subject to obtaining the Required Stockholder Vote, to consummate the transactions contemplated hereby and thereby, and this Agreement and such Other Agreements have been, or upon execution and delivery thereof will be, duly executed and delivered by Seller.  This Agreement, the Other Agreements and the Purchase Order to which Seller is or will become a party are, or upon execution and delivery by Seller thereof will be, the valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, except to the extent that enforceability is limited by bankruptcy, insolvency or similar laws affecting creditors’ rights and remedies by equitable principles.

(c)           No Consent in respect of, or filing with, any Governmental Authority is required to be obtained or made by or with respect to Seller in connection with the execution, delivery and performance of this Agreement, the Other Agreements or the consummation of the transactions contemplated hereby and thereby, other than (i) an information statement related to the Transaction Written Consent (together with any amendments thereof or supplements thereto, the “ Information Statement ”), (ii) compliance with the rules of NASDAQ, and (iii) those that may be required solely by reason of Seller’s (as opposed to any other third party’s) participation in the transactions contemplated by this Agreement and the Other Agreements.

(d)           Except as otherwise set forth in this Section 5.2 or as set forth on Schedule 5.2 , no Consent of any Person is required for Seller or Seller’s Affiliates to consummate the transactions contemplated by this Agreement or the Other Agreements.

5.3            Conflicts .  The execution, delivery and performance by Seller of this Agreement and the Other Agreements to which it is or will become a party and the consummation of the transactions contemplated hereby and thereby do not and will not: (a) conflict with or result in a breach of the certificate of incorporation, bylaws or other organizational documents of Seller; (b) conflict with in any material respect, or result in any material violation or breach of, or constitute (with or without notice or lapse of time, or both) a material default (or give rise to a right of termination, cancellation, modification or acceleration of any material obligation or loss of any material benefit) under, require a consent or waiver under or require the payment of a penalty under, any material Contract or other instrument or obligation to which Seller is a party, or by which Seller or any of the Acquired Assets may be bound or affected, except as set forth on Schedule 5.3 ; (c) assuming the Required Stockholder Vote is obtained and the filings referred to in Section 7.4 are made, conflict with or violate in any material respect any permit, concession, franchise, license or applicable Law with respect to Seller, the Business or any of the Acquired Assets; or (d) result in the creation or imposition of any Encumbrance upon any Acquired Asset.

5.4            Information Statement .  None of the information set forth in, by incorporation by reference or otherwise, the Information Statement will 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 therein, in light of the circumstances under which they were made, not misleading.  The Information Statement and the furnishing thereof by Alsius will comply in all material respects with the requirements of applicable Law, including the Exchange Act and the General Corporation Law of the State of Delaware.

5.5            Commission Reports; Financial Statements .

(a)           Seller has filed or will file with the Commission all reports, registration statements, information statements and other documents required to be filed by it (including exhibits and in each case together with all amendments thereto) (such reports, registration statements, information statements and all other documents, together with any amendments thereto, are collectively referred to as the “ Seller Commission Filings ;” and all Seller Commission Filings made or required to be made from January 1, 2006 through the Closing Date are hereinafter referred to as the “ Subject Commission Filings ”).  The Subject Commission Filings constitute all of the documents (other than preliminary materials) that Seller was or will be required to file with the Commission from January 1, 2006 to the Closing Date.  As of their respective filing dates (or if amended or superseded by a filing date, then on the filing date of such amending or superseding filing), the Subject Commission Filings (i) were, and will be, prepared in accordance, and complied, or will comply, 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 of the Commission thereunder applicable to such Subject Commission Filings and (ii) did not, and will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b)           Each of the consolidated financial statements (including, in each case, any related notes and schedules) contained or to be contained in the Subject Commission Filings at the time filed (i) complied or will comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto; (ii) were or will be prepared in accordance with United States generally accepted accounting principles as in effect from time to time applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited interim financial statements, as permitted by the Commission on Form 10-Q or Form 8-K under the Exchange Act); and (iii) fairly presented or will fairly present in all material respects the consolidated financial position of Seller and its subsidiaries as of the dates indicated and the consolidated results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments that Seller does not expect to be material, individually or in the aggregate. The consolidated, unaudited balance sheet of Seller as of September 30, 2008 is referred to herein as the “ Seller Balance Sheet .”

(c)           Seller maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act. To the Knowledge of Seller, such disclosure controls and procedures are effective to ensure that all material information concerning Seller is made known on a timely basis to the individuals responsible for the preparation of Seller’s filings with the Commission and other public disclosure documents.  Except as set forth on Schedule 5.5(c) , Seller is in compliance in all material respects with the listing requirements of NASDAQ and has not received any notice other than as already publicly disclosed regarding the possible delisting of the Seller’s common stock from NASDAQ.

5.6            No Undisclosed Liabilities .  Except (a) as disclosed or reserved against in the financial statements, including the notes thereto, included within the Subject Commission Filings filed prior to the Execution Date; (b) for Liabilities incurred in the Ordinary Course between the date of the Seller Balance Sheet and the Execution Date; (c) Liabilities incurred in connection with this Agreement, the Other Agreements or the Purchase Order or the transactions contemplated hereby and thereby; (d) Liabilities that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (e) Liabilities disclosed in or arising directly and reasonably foreseeably out of matters set forth in the Schedules or that are the subject of representations or warranties herein, Seller and its Affiliates do not have any material Liabilities of any nature.

5.7            Absence of Certain Changes .  Except as disclosed in the Subject Commission Filings filed prior to the Execution Date, between the date of the Seller Balance Sheet and the Execution Date, (a) Seller and its Affiliates have conducted their respective businesses only in the Ordinary Course; and (b) there has not been (i) a Material Adverse Effect or (ii) any other action or event that would have required the consent of Buyer under Section 7.5 of this Agreement had such action or event occurred after the Execution Date.

5.8            Title .

(a)           Seller owns or licenses all of the Acquired Assets, and Seller has and will convey to Buyer hereunder, good, valid and marketable title (subject to the Permitted Encumbrances) to all of its personal property, tangible and intangible, included in the Acquired Assets to be transferred to Buyer at the Closing.  Except as set forth on Schedule 5.8(a) , no financing statement or security agreement under the Uniform Commercial Code or any similar Law with respect to the Acquired Assets (including with respect to the Seller Intellectual Property Assets) to be transferred to Buyer at the Closing is active in any jurisdiction, and Seller has not signed any such active financing statement or any security agreement authorizing any secured party thereunder to file any such financing statement or security agreement.

(b)           Upon delivery of the Other Agreements, Buyer will receive good, valid and marketable title to all of the Acquired Assets to be transferred to Buyer at the Closing, free and clear of all Encumbrances other than the Permitted Encumbrances.

(c)           The Acquired Assets are in all material respects all of the assets used or held for use in the Business as the same has been operated prior to the Execution Date and except as set forth on Schedule 5.8(c) , the Acquired Assets constitute all of the assets necessary for Buyer to continue to operate the Business.  Except as set forth on Schedule 5.8(c) , the Tangible Assets to be transferred to Buyer at the Closing (i) are in good operating condition and repair (reasonable wear and tear excepted); (ii) have been and shall through such date be maintained in accordance with normal industry practice; and (iii) conform in all material respects with all applicable Laws.

(d)           The Inventory consists of raw materials and supplies, manufactured and processed parts, work in progress and finished goods, all of which is of a quality and quantity saleable in the Ordinary Course, and none of which is obsolete or unsalable, subject only to the reserve for inventory write-down set forth on the financial statements presented in Subject Commission Filings, as adjusted for operations and transactions through the Closing Date in accordance with the past custom and practice of Seller.

5.9            Intellectual Property .

(a)            Schedule 5.9(a) contains a complete and accurate list of all issued patents and filed applications therefor within the definition of Patents that are owned, purported to be owned or licensed by Seller and used in the Business (“ Seller Patents ”), all registered marks or filed applications therefor and all material unregistered marks within the definition of Marks that are owned, purported to be owned or licensed by Seller and used in the Business (“ Seller Marks ”), and all registered copyrights and filed applications therefor and within the definition of Copyrights that are owned, purported to be owned or licensed by Seller and used in the Business, identifying (i) the owner of such Intellectual Property Assets and (ii) in the event that the owner is not Seller, identifying the agreement under which Seller is granted rights to the applicable Intellectual Property Asset.

(b)           Except as set forth on Schedule 5.9(b) :

(i)           Seller exclusively owns or has license rights to all Seller Intellectual Property Assets and/or Intellectual Property Assets that are the subject of a written license or other agreement under which Seller is granted rights by a third party with respect to the Business (such licenses or other agreements, the “ Inbound Licenses ” and such Intellectual Property Assets, the “ Seller In-Licensed Intellectual Property Assets ”), and all Seller Intellectual Property Assets and Seller In-Licensed Intellectual Property Assets are free and clear of all Encumbrances.

(ii)           The Seller Intellectual Property Assets owned or purported to be owned by Seller have