ASSET PURCHASE AGREEMENT

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WHEREAS, Section 7.2(c) of the Liquidating Trust Agreement provides: “As far as reasonably practicable, the Trustee shall cause any written instrument creating an obligation of the Trust Assets to include a reference to [the Liquidating Trust] Agreement and to provide that neither the Beneficiaries, the Trustee nor its agents shall be liable thereunder, and that the other parties to such instrument shall look solely to the Trust Assets for the payment of any claim [under such instrument] or the performance thereof; provided that the omission of such provision from any such instrument shall not render the Beneficiaries, the Trustee or its agents liable, nor shall the Trustee be liable to anyone for such omission.”;

WHEREAS, the Purchaser paid $50,000 (the “ Downpayment ”) to Seller on July 8, 2009; and

1.1     Certain Definitions .

(a)   The following terms, when used in this Agreement, shall have the respective meanings ascribed to them below:

“ Action ” means any litigation, claim, action, suit, inquiry, hearing, investigation or other proceeding.

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled by or is under common Control with, such Person.  For purposes of this definition, “ Control ” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of stock, as trustee or executor, by Contract or credit arrangement or otherwise.  Without limitation on the foregoing, Genaera Corporation shall be deemed an Affiliate of the Seller.

“ Agreement ” has the meaning set forth in the preamble hereto.

“ Ancillary Agreements ” means, collectively, the Bill of Sale and General Assignment, the Trademark Assignment and the Patent Assignment.

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

“ Bills of Sale ” has the meaning set forth in Section 3.2(c).

“ Business ” has the meaning set forth in the preamble hereto.

“ Business Day ” means any day other than Saturday, Sunday or any day on which banks in New York, New York are required or authorized to be closed.

“ China License Rights ” - shall mean (i) such of the Assets as include the right to manufacture, compound, deliver, license, use, sell or otherwise deal in Squalamine and related analog compounds and Trodusquemine and related analog compounds, and precursors of any of the foregoing, solely within China (and not for export from China or import into China) and (ii) the right of Seller to approve or disapprove of any transaction involving or affecting any of such Assets.

“ Claim Notice ” means written notification pursuant to Section 7.2(a) of a Third-Party Claim as to which indemnity pursuant to Section 7.1 is sought by an Indemnified Party.

“ Closing ” has the meaning set forth in Section 3.1.

“ Closing Date ” has the meaning set forth in Section 3.1.

“ Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“ DGCL ” has the meaning set forth in the preamble hereto.

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

“ GAAP ” means United States generally accepted accounting principles as in effect from time to time, consistently applied throughout the specified period and all prior comparable periods.

“ Governmental Entity ” means any government or political subdivision thereof, whether foreign or domestic, federal, state, provincial, county, local, municipal or regional, or any other governmental entity, any agency, authority, department, division or instrumentality of any such government, political subdivision or other governmental entity, any court, arbitral tribunal or arbitrator, and any nongovernmental regulating body to the extent that the rules, regulations or orders of such body have the force of Law.

“ Indemnified Party ” means any Person claiming indemnification under any provision of Article VII.

“ Indemnifying Party ” means any Person against whom a claim for indemnification is being asserted under any provision of Article VII.

“ Intellectual Property ” means such of the Assets as includes:  all (i) discoveries and inventions (whether patentable or unpatentable and whether or not reduced to practice), patents, patent applications (either filed or in preparation for filing) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, extensions and reexaminations thereof, all rights therein provided by international treaties or conventions, and all improvements thereto, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names, and other source identifiers (whether or not registered) including all common law rights, and registrations and applications for registration (either filed or in preparation for filing) thereof, all rights therein provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing, (iii) copyrightable works, copyrights (whether or not registered) and registrations and applications for registration thereof (either filed or in preparation for filing), all rights therein provided by international treaties or conventions, and all extensions and renewals of any of the foregoing, (iv) confidential and proprietary information, trade secrets, know-how (whether patentable or unpatentable and whether or not reduced to practice), processes and techniques, and research and development information, ideas, technical data, designs, drawings and specifications and associated goodwill, remedies against infringements thereof and rights of protection of an interest therein under the Laws of all applicable jurisdictions, and (viii) copies and tangible embodiments of any item described in the foregoing.

“ Knowledge ”, “ Known ” and words of similar import mean the actual knowledge of the Trustee.

“ Laws ” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any domestic or foreign state, county, city or other political subdivision or of any Governmental Entity.

“ Liability ” means all indebtedness, obligations and other liabilities of a Person, whether absolute, accrued, contingent, fixed or otherwise, and whether due or to become due.

“ Lien ” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, whether voluntary or involuntary (including any conditional sale Contract, title retention Contract or Contract committing to grant any of the foregoing).  For the avoidance of doubt, the China License Rights shall not be considered a “Lien” under this Agreement.

“Liquidating Trust Agreement ” means the Agreement and Declaration of Trust dated as of June 12, 2009, by and among the Predecessor and Argyce LLC, a Delaware limited liability company, as Trustee.

“ Loss ” means any and all damages, fines, fees, penalties, deficiencies, losses and expenses (including all interest, court costs, fees and expenses of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment or pursuit of rights to indemnification).

“ Material Adverse Effect ” means any material adverse effect on the condition (financial or otherwise), operations, business, prospects, assets or results of operations of the Business.

 “ Order ” means any writ, judgment, decree, injunction or similar order of any Governmental Entity (in each case whether preliminary or final).

“ Patent Assignment ” has the meaning set forth in Section 3.2(d).

 “ Person ” means any individual, general or limited partnership, limited liability company, corporation, association, joint stock company, trust, estate, joint venture, unincorporated organization, Governmental Entity or any other entity of any kind.

“ Predecessor ” has the meaning set forth in the preamble hereto.

“ Purchase Price ” has the meaning set forth in Section 2.4.

“ Purchaser ” has the meaning set forth in the preamble hereto.

“ Recipients ” has the meaning set forth in Section 6.4.

“ Representatives ” means, with respect to any Person, the directors, officers, partners, employees, counsel, accountants and other authorized representatives of such Person.

“ Resolution Period ” means the period ending thirty days following receipt by an Indemnified Party of a Dispute Notice.

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

“ Seller ” has the meaning set forth in the preamble hereto.

“ Seller ” has the meaning set forth in the preamble hereto.

“ Tax Returns ” means all returns and reports (including elections, claims, declarations, disclosures, schedules, estimates, computations and information returns) required to be supplied to a Taxing Authority in any jurisdiction relating to Taxes.

“ Taxes ” means all United States federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes, duties or assessments of any nature whatsoever together with all interest, penalties, fines and additions to tax imposed with respect to such amounts and any interest in respect of such penalties and additions to tax.

“ Taxing Authority ” means any governmental agency, board, bureau, body, department or authority of any United States federal, state or local jurisdiction or any foreign jurisdiction, having or purporting to exercise jurisdiction with respect to any Tax.

“ Third-Party Claim ” has the meaning set forth in Section 7.2(a).

“ Trademark Assignment ” has the meaning set forth in Section 3.2(e).

 “ Transfer Taxes ” means sales, use, value added, excise, registration, documentary, stamp, transfer, real property transfer, recording, gains, stock transfer and other similar Taxes and fees.

“ Trust ” has the meaning set forth in the preamble hereto.

“ Trustee ” means Argyce LLC, a Delaware limited liability company, as trustee of the Trust under the Liquidating Trust Agreement, and any successor trustee thereunder.

(b)   Construction .  For purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires:  (i) words using the singular or plural number also include the plural or singular number, respectively, and the use of any gender herein shall be deemed to include the other genders; (ii) references herein to “Articles,” “Sections,” “subsections” and other subdivisions, and to Exhibits, Schedules, Annexes and other attachments, without reference to a document are to the specified Articles, Sections, subsections and other subdivisions of, and Exhibits, Schedules, Annexes and other attachments to, this Agreement; (iii) a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to other subdivisions within a Section or subsection; (iv) the words “herein,” “hereof,” “hereunder,” “hereby” and other words of similar import refer to this Agreement as a whole and not to any particular provision; (v) the words “include,” “includes” and “including” are deemed to be followed by the phrase “without limitation”; and (vi) all accounting terms used and not expressly defined herein have the respective meanings given to them under GAAP.

(c)   Preamble . The Preamble set forth above is part of this Agreement.

2.1     Purchase and Sale of Assets .  Upon the terms and conditions set forth in this Agreement, and in consideration of the payment by the Purchaser of the Purchase Price, the Seller shall sell, convey, transfer, assign, grant and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller, at the Closing, all right, title and interest in and to the following assets and properties of every kind, nature, character and description (whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto (collectively, the “ Assets ”), free and clear of all Liens:

(a)   the Seller’s Intellectual Property relating to Squalamine and all related analog compounds and Trudosquemine and all related analog compounds including those set forth on Schedule 2.1(a)

(b)   the Seller’s tangible assets relating to Squalamine and all related analog compounds and Trudosquemine and all related analog compounds, including those set forth on Schedule 2.1(b) ;

(c)      the Seller’s records of the development of Squalamine and related analog compounds and Trodusquemine and related analog compounds including lab notebooks, FDA filings and correspondence, research reports, research and clinical data, manufacturing and production records, and patent correspondence.

2.2     Excluded Assets .  Notwithstanding anything in this Agreement to the contrary, all tangible and intangible property not described in Section 2.1 (the “ Excluded Assets ”) shall be excluded from, and shall not constitute, Assets.  Without limiting the generality of the immediately preceding sentence, the Excluded Assets include the following:

(a)   all intellectual property and tangible assets of the Seller relating to the IL-9 development program with Medimmune;

(b)   all intellectual property and tangible assets of the Seller relating to the pexiganan development program;

(c)   all intellectual property and tangible assets of the Seller relating to the talniflumate (“Lomucin”) development program;

(d)    the inventory of Squalamine previously sold to Georgetown University  as per the Bill of Sale  signed by the Predecssoron June 5, 2009;

(e)   cash, commercial paper, certificates of deposit, bank deposits, treasury bills and other cash equivalents;

(f)   all insurance policies relating to the operation of the Business;

(g)   all of the Seller’s right, title and interest in and to Tax credits and prepaid Taxes;

(h)   all assets owned or held by any employee benefit plan;

(i)   all receivables;

(j)   all real property owned or leased by the Seller;

(k)   the organizational books and records of the Seller;

(l)   all of the Seller’s right, title and interest in and to this Agreement;

(m)   the China License Rights; and

(n)   all claims or causes of action, except those directly related to the Assets.

2.3     Retained Liabilities .  The Purchaser assumes no Liabilities relating to the Business, the Assets or the Seller.  All such Liabilities (collectively, the “ Retained Liabilities ”), are, and shall at all times remain, the Liabilities of the Seller.

2.4     Purchase Price .  The Purchaser shall pay to the Seller the aggregate amount of $200,000 (the “ Purchase Price ”), of which $50,000 was previously paid as the Downpayment and the balance of $150,000 shall be paid at the Closing by wire transfer of immediately available funds. The Seller and the Purchaser shall each report federal, state, local and other Tax consequences of the purchase and sale contemplated hereby (including the filing of Internal Revenue Service Form 8594).

2.5     Third Party Consents .  To the extent that any of the Assets is not assignable without the consent, waiver or approval of another Person and such consent, waiver or approval has not been obtained before or at the Closing, this Agreement shall not constitute an assignment or an attempted assignment of such Asset by the Seller or an assumption or an attempted assumption of such Asset by the Purchaser.  The Seller shall use its commercially reasonable efforts to obtain such consents, waivers and approvals as soon as practicable following the date hereof and the Purchaser shall cooperate with and assist the Seller to this end; provided , however , that the Seller shall take no action to seek such consent, waiver or approval without prior consultation with or approval by the Purchaser and no party shall be required to pay any sums in connection therewith.  If any such consent, waiver or approval shall not be obtained before or at the Closing, then until such consent, waiver or approval is obtained, the Seller shall cooperate with the Purchaser in any reasonable arrangement designed to provide the Purchaser with the benefits intended to be assigned to the Purchaser with respect to the underlying Asset.

2.6     Certain Rights of Seller.   Seller retains all right, title and interest in and to the China License Rights provided however that Seller shall not license or otherwise transfer China License Rights unless it has first conferred with Purchaser as to the terms and conditions of said license and transfer and obtained Purchaser’s prior written consent. In the event that Seller or Purchaser, or any of their affiliates, receive or become aware of a bona fide offer to purchase or license those Assets subject to the China License Rights, Seller shall consider in good faith terms by which such purchase or license can be consummated. Seller now exp