EXECUTION VERSION ASSET PURCHASE AGREEMENT

Exhibit 10.1

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EXECUTION VERSION

ASSET PURCHASE AGREEMENT

by and between

PRAECIS PHARMACEUTICALS INCORPORATED

as Seller,

and

SPECIALITY EUROPEAN PHARMA LIMITED

as Buyer

Dated as of January 29, 2007

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

ARTICLE II

ASSET PURCHASE

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i

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ii

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SCHEDULES (as set forth in the Disclosure Schedule)

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THIS ASSET PURCHASE AGREEMENT (as may be amended, modified, or supplemented from time to time as provided herein, this " Agreement ") is made as of the 29th day of January, 2007, by and between PRAECIS PHARMACEUTICALS INCORPORATED, a Delaware corporation (" Seller ") and SPECIALITY EUROPEAN PHARMA LIMITED, a companyorganized under the laws of England and Wales (" Buyer ").  Seller and Buyer are referred to collectively herein as the "Parties" and each, individually as a "Party."

W I T N E S S E T H :

WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to sell to Buyer, all of Seller’s right, title and interest in and to the Acquired Assets (as defined below), upon the terms and subject to the conditions set forth herein; and

WHEREAS, Buyer has agreed to assume the Assumed Liabilities (as defined below), upon the terms and subject to the conditions set forth herein;

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

ARTICLE I

DEFINITIONS

Whenever used in this Agreement, the terms defined below shall have the respective indicated meanings:

"Abarelix License" means Seller’s license agreement dated as of October 17, 1996, as amended as of June 3, 1998, with Indiana University Foundation (or its assignees) relating to the Indiana University Intellectual Property.

"Abarelix Product" means (i) abarelix for injectable suspension and (ii) any other product in whatever form covered by the Abarelix License.

"Accountant" has the meaning set forth in Section 2.2(b).

"Accounts Receivable" means all accounts receivable, notes receivable and indebtedness for borrowed money or overdue accounts receivable, in each case, due and owing from any Third Party.

"Acquired Assets" has the meaning set forth in Section 2.1(a).

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"Acquired Assets MAE" means a material adverse effect on the Acquired Assets taken as a whole; provided , however , that none of the following circumstances, facts or effects (each an " Effect "), either alone or in combination, shall be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been or will be, an Acquired Assets MAE:  (i) any Effect resulting from Seller’s compliance with the terms of this Agreement; (ii) any Effect that results from changes or facts or circumstances affecting the pharmaceutical or biotechnology industries, or pharmaceutical products for ***************, generally or (iii) any Effect disclosed in the Disclosure Schedule.

"Act" means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 321, et seq., as amended, and the rules and regulations promulgated thereunder.

"Additional Abarelix Product" means any Abarelix Product in a significantly different formulation to that of the Plenaxis â  Product ************************** including any sustained release or depot formulation.

"Additional Marketing Region" means, collectively, the countries or territories other than (i) ************** and (ii) *************************************.

"Agreed Amount" has the meaning set forth in Section 5.3(b).

"Agreement" has the meaning set forth in the first paragraph of this Agreement.

"Affiliate" means, with respect to any Person, any Person which directly or indirectly through stock ownership or otherwise either controls, or is controlled by or under common control with, such Person.

"Allocation Resolution Period" has the meaning set forth in Section 2.2(b).

"Ancillary Agreements" has the meaning set forth in Section 2.3(b).

"Assigned Contracts" means, collectively, (i) the Abarelix License, (ii) the Manufacturing Contracts and (iii) the Contracts set forth on Schedule 1.1(a)(iii) pursuant to which services are or have been provided to Seller or PRAECIS Europe with respect to Plenaxis â  Product or the Product Operations; provided , however , that "Assigned Contracts" shall not be deemed to include any Excluded Contracts.

"Assumed Liabilities" has the meaning set forth in Section 2.1(c).

"BfArM" means Bundesinstitut für Arzneimittel und Medizinprodukte, or any successor agency with substantially the same responsibility for regulating the development, manufacture and sale of human pharmaceutical products.

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"Business Day" means any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions located in Boston, Massachusetts are permitted or required by law, executive order or governmental decree to remain closed.

"Buyer" has the meaning set forth in the first paragraph of this Agreement.

"Buyer Indemnitees" has the meaning set forth in Section 5.1.

"Buyer Licensed Party" means (i) Affiliates of Buyer and members of Buyer’s distribution chain for Abarelix Products, and (ii) any other Third Parties, in each case to which Buyer grants a license with respect to, or assigns, any of Buyer’s rights under this Agreement, any Ancillary Agreement or under any of the Assigned Contracts, or otherwise directly or indirectly sells any Abarelix Product under any agreement, arrangement or understanding with Buyer or any Person referred to in clause (i) of this definition.

"Buyer Licensed Party Consideration" means ****************************.

"Claim Notice" has the meaning set forth in Section 5.3(b).

"Claimed Amount" has the meaning set forth in Section 5.3(b).

"Closing" has the meaning set forth in Section 2.3(a).

"Closing Date" means the date on which the Closing occurs, which shall be the date of this Agreement.

"Closing Product Inventory" means ********************************.

"Closing Product Materials" means ********************************.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commercially Reasonable Efforts" means *****************************.

"Confidentiality Agreement" means that certain confidentiality agreement dated October 4, 2006 between Buyer and Seller.

"Consideration" has the meaning set forth in Section 2.2(b).

"Contracts" means any and all purchase orders, sales orders, leases, subleases, licenses, indentures, contracts, agreements and other legally binding arrangements, whether oral or written, in effect between Seller or PRAECIS Europe, on the one hand, and one or more Third Parties, on the other hand.

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"Cost Adjusted Sales" means ***************************************.

"Damages" shall have the meaning set forth in Section 5.1.

"Designated Intellectual Property" all patents, patent applications, domain names, trademarks, service marks, trademark applications and trade names, including the Trademark Rights, set forth on Schedule 1.1(b) .

"Development Costs" has the meaning set forth in Section 2.4(b).

"Disclosure Schedule" has the meaning set forth in Article III.

"Dossier" means the regulatory dossier supporting the Mutual Recognition Procedure.

"EMEA" means the European Medicines Evaluation Agency, or any successor agency with substantially the same responsibility for regulating the development, manufacture and sale of human pharmaceutical products.

************************************************.

"End User Kits" means ****************************************.

"Excluded Assets" has the meaning set forth in Section 2.1(b).

"Excluded Contracts" means any oral or written contract, commitment, purchase order, lease, note or other agreement to which Seller is a party, other than the Assigned Contracts.

"Excluded Records" means (i) records related to human resources and any other employee-related files and records; (ii) notes and lab notebooks; (iii) personal files and records; and (iv) records relating to the filing, prosecution, issuance, maintenance, enforcement or defense of any intellectual property rights not included in the Designated Intellectual Property or related to the Abarelix License.

"European Marketing Region" means *******************************.

"Final Allocation" has the meaning set forth in Section 2.2(b).

"FDA" means the United States Food and Drug Administration, or any successor agency with substantially the same responsibility for regulating the development, manufacture and sale of human pharmaceutical products.

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"GAAP" means generally accepted accounting principles as used in the United States of America, consistently applied.

"German Marketing Authorization" means the Certificate of Registration with respect to Plenaxis â   Product received by PRAECIS Europe from BfArM on September 27, 2005 to market Plenaxis â   Product in Germany, together with all amendments, supplements and updates thereto.

"Governmental Authority" means any governmental department, commission, board, bureau, agency, court or other instrumentality of any country, or any state, county, jurisdiction, municipality or other political subdivision of such country.

"Governmental Consents" has the meaning set forth in Section 3.3(a).

"Governmental Filings" registrations, filings and notices with or to Governmental Authorities.

"Gross Sales" means *********************.

"Incremental Consideration" has the meaning set forth in Section 2.4(a)(i).

"INDs" means the investigational new drug applications listed on Schedule 1.1(e) .

"Indemnified Party" has the meaning set forth in Section 5.3(a).

"Indemnifying Party" has the meaning set forth in Section 5.3(a).

"Indiana University Intellectual Property" means the patents and other intellectual property covering GnRH antagonist compounds, including abarelix (PPI-149), the active ingredient of Plenaxis â   Product, licensed to Seller under the Abarelix License.

"Information" has the meaning set forth in Section 6.1(a).

"Initial Regulatory Target Countries" means *******************.

"Intangible Property Rights" has the meaning set forth in Section 2.1(a)(iv).

"Knowledge of Seller" or "Seller’s Knowledge" has the meaning set forth in Article III.

"Knowledge of Buyer" has the meaning set forth in Article IV.

"Law" means any federal, state, local or foreign law, statute or ordinance, or any

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rule, regulation or regulatory requirement promulgated by any Governmental Authority.

"Lien" means any lien, charge, claim, pledge, security interest, conditional sale agreement or other title retention agreement, lease, mortgage, security agreement, right of first refusal, option, restriction, license, covenant, or other encumbrance, other than (i) mechanic’s, materialmen’s, and similar liens and (ii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business of Seller and not material to the Acquired Assets.

"MAA" means the marketing authorization application submitted by PRAECIS Europe to BfArM on June 23, 2003 (as supplemented or amended from time to time).

"Manufacturing Contracts" means Contracts relating to the manufacture of Plenaxis â  Product which are in effect on the Closing Date, all of which Manufacturing Contracts are set forth on Schedule 1.1(c) .

"Marketing Region" means **************************.

"Material Third Party Consents" means Third Party Consents, if any, required under any Manufacturing Contract.

"Medical Product Regulatory Authority" means any Governmental Authority that regulates the safety, efficacy, manufacture, investigation, sale or marketing of pharmaceuticals, medical products, biologics or biopharmaceuticals, including, without limitation, the FDA and EMEA.

"Medicare National Coverage Determination" means Seller’s files relating to the determination by the Centers for Medicare and Medicaid Services with respect to Plenaxis â   Product, listed as NCD Section Number 110.19.

"Minimum Annual Commitment Payments" means the payment amounts set forth opposite the name of each Manufacturing Contract or the reference to the Baxter Agreement, in each case listed on Schedule 1.1(d) .

"Mutual Recognition Procedure" means the procedure whereby a Regulatory Target Country may recognize the German Marketing Authorization in accordance with Article 28(4) of Directive 2001/83/EC.  Such terms also include any analogous or successor procedure under any successor legislation.

"NDA" means the New Drug Application (No. 21-320) approved by the FDA, together with all amendments, supplements and updates thereto.

"NDA Assumption Letter" has the meaning set forth in Section 2.1(e).

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"NDC Number" means a National Drug Code number, as listed with the FDA.

"Net Sales" means *****************.

"Net Sales Deductions" means ****************.

"Order" means any order, judgment, decree or ruling of any Governmental Authority or arbitrator.

"Ordinary Course of Business" means an action that is in compliance with applicable Laws and is generally consistent in all material respects with the past practices of Seller and its Affiliates with respect to Seller’s Product Operations or other activities in respect of the Acquired Assets in the twelve (12) months preceding the effective date of this Agreement.

"Parties" has the meaning set forth in the first paragraph of this Agreement.

"Permitted Liens" means Liens for Taxes that are not yet due and payable andLiens arising from any actions of Buyer.

"Person" means an individual, a corporation, a limited liability company, a partnership, an association, a trust or other entity or organization, including a federal, state, local or foreign government or regulatory entity or political subdivision or an agency or instrumentality thereof.

"Plenaxis â   Product" means *******************.

"PRAECIS Europe" means PRAECIS Europe Limited, a private limited company incorporated in England and Wales.

"Preliminary Allocation" has the meaning set forth in Section 2.2(b).

"Proceeding" shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation brought or conducted by or before any Governmental Authority or any arbitrator or arbitration panel.

"Product Operations" means the development (preclinical and clinical), manufacture (including the right to have manufactured), marketing, distribution and sale of Plenaxis â   Product.

"Product Records" means collectively (i) regulatory and other reports (including

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pharmacovigilance reports), information on adverse events, written contact regulatory reports and formal minutes with any Governmental Authority, any documents (including, without limitation, clinical and pre-clinical animal study data) relating to the Registrations or to the subject matter of the Registrations, in each case to the extent relating exclusively to the Plenaxis â   Product or Seller’s Product Operations and for the period commencing no earlier than 1995, and (ii) records for the period commencing no earlier than 1995 relating to the filing, prosecution, issuance, maintenance, enforcement or defense of the Designated Intellectual Property or in relation to the Abarelix License, in the case of (i) and (ii) that are owned or controlled by or otherwise in the possession of Seller as of the Closing Date and except to the extent included in or primarily related to any Excluded Assets or Retained Liabilities and excluding the Excluded Records.

"Purchase Price" has the meaning set forth in Section 2.2(a).

"Quarter" has the meaning set forth in Section 2.4(c).

"Registration Assumption Letters" has the meaning set forth in Section 2.1(e).

"Registrations" means the NDA, the German Marketing Authorization and the investigational new drug applications listed in Schedule 1.1(e) .

"Registration Transfer Letter" has the meaning set forth in Section 2.1(e).

"Regulatory Approval" means recognition by a Regulatory Target Country of the German Marketing Authorization in accordance with the Mutual Recognition Procedure and any approval to market Plenaxis â   Product in any other country or territory.

"Regulatory Target Countries" means **********************.

"Rel-Ease™" means Seller’s proprietary depot drug delivery technology as described under the Seller’s Rel-Ease™ Patents as of the date of this Agreement.

"Rel-Ease™ License" means the License Agreement, substantially in the form of Exhibit A , **********************.

"Retained Liabilities" has the meaning set forth in Section 2.1(d).

"Royalties" has the meaning set forth in Section 2.4(a)(ii).

"Royalty Bearing IP" means *****************.

"Royalty Term" has the meaning set forth in Section 2.4(b).

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"Sale" (as a noun) means ***************************.

"Sales Statement" has the meaning set forth in Section 2.4(c).

"Section 1060 Forms" has the meaning set forth in Section 2.2(b).

"Seller" has the meaning set forth in the first paragraph of this Agreement.

"Seller Indemnitees" has the meaning set forth in Section 5.2.

"Seller Licensed Party Consideration" means ******************.

"Seller’s NDC Number" means the NDC Number that has been used by Seller in connection with Plenaxis â  Product prior to Closing.

"Seller’s Product Operations" means any Product Operations conducted by Seller through the Closing Date.

"Seller Purposes" has the meaning set forth in Section 6.1(b).

"Seller’s Rel-Ease™ Patents" means the Seller’s issued patents listed on Schedule 1.1(f) .

"Shares" means all of the issued and outstanding shares of PRAECIS Europe as identified on Schedule 1.1(g) .

"Taxes" (and with correlative meanings, "Tax" and "Taxable") means all taxes of any kind imposed by a Governmental Authority, including but not limited to those on, or measured by or referred to as income, gross receipts, financial operation, sales, use, ad valorem, value added, alternative or add-on minimum, franchise, profits, license, withholding, payroll (including all contributions or premiums pursuant to governmental social security laws or pursuant to other tax laws and regulations), employment, excise or severance and any interest, fines, penalties, assessments or additions to tax imposed with respect to such items or any contest or dispute thereof.

"Tax Returns" means all reports, returns, schedules and any other documents required to be filed with a Governmental Authority (including federal, state, local and foreign) with respect to Taxes, including any attachments, schedule and amendment thereof.

"Third Party" means any entity other than Seller or Buyer and their respective Affiliates.

"Third Party Claim" has the meaning set forth in Section 5.3(a).

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"Third Party Consents" has the meaning set forth in Section 3.3(b).

"Trademark Rights" has the meaning set forth in Section 2.1(a).

"UK Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions located in the United Kingdom are permitted or required by law to remain closed.

"Valid Claim" means a claim of an issued and unexpired patent that has not been held permanently revoked, unenforceable or invalid by a decision of a court or other Governmental Authority of competent jurisdiction, unappealable or un-appealed within the time allowed for appeal, and that has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

ARTICLE II

ASSET PURCHASE

• • • • Section 2.1                                       Purchase and Sale of Assets; Assumption of Liabilities.

(a)           Transfer of Assets .  Upon and subject to the terms and conditions set forth in this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of Seller’s right, title and interest in and to the following assets, properties and rights of Seller (the " Acquired Assets "), excluding, however, the Excluded Assets:

• • (i)            all of Seller’s rights under the Assigned Contracts, with respect to the period following Closing;

    (ii)           the Registrations, subject, however, to Section 6.1(b);

    (iii)          the name "Plenaxis" and any variant thereof, the trademarks and trade names and all registrations thereof and all related registration applications set forth on Schedule 1.1(b) and all proceeds of the foregoing and the right to sue for past, present and future infringements of any of the foregoing and all future proceeds of such suits (the " Trademark Rights "), and the domain names set forth on Schedule 1.1(b) ;

    (iv)          the Designated Intellectual Property (other than the Trademark Rights), and other intangible property rights owned by Seller as of the Closing Date to the extent primarily related to Plenaxis â   Product or

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• • Seller’s Product Operations, including, to the extent so related, trade secrets, technical information and know-how (collectively, the " Intangible Property Rights "), it being understood for the avoidance of doubt that Intangible Property Rights does not include Seller’s rights under the Abarelix License or Seller’s rights with respect to Rel-Ease™ or Seller’s Rel-Ease™ Patents;

    (v)           all brochures and other promotional and printed materials, trade show materials (including displays), videos, web pages, advertising and/or marketing materials, package inserts and packaging materials (all in physical form, pdf, quark, or other electronic file and camera-ready artwork) in Seller’s possession or under its control as of the Closing Date previously used exclusively in connection with Seller’s promotion and sale of the Plenaxis â  Product; provided , however , that Seller shall be obligated to provide only one copy of any electronic file containing any of the foregoing;

    (vi)          copies of all customer and supplier lists, marketing studies and consultant reports related exclusively to the Plenaxis â  Product or Seller’s Product Operations to the extent maintained by Seller and as in existence and in Seller’s possession or under its control as of the Closing Date, and all complaint files and adverse event files related exclusively to the Plenaxis â  Product or Seller’s Product Operations and as in existence and in Seller’s possession or under its control as of the Closing Date;

    (vii)         all Closing Product Materials;

    (viii)        all the goodwill of Seller’s Product Operations;

    (ix)           all of Seller’s right, title, and interest in and to the Plenaxis â  Product as of the Closing Date, including all rights of Seller and its Affiliates to develop, manufacture, make and have made, offer to sell, sell, distribute, promote, and use the Plenaxis â  Product, to the extent Seller has such rights;

    (x)            the Rel-Ease™ License;

    (xi)           the manufacturing equipment located at Baxter Pharmaceutical Solutions LLC and which is used or held for use in the operation and conduct of Seller’s Product Operations;

    (xii)          all Product Records, to the extent not covered by any of the foregoing;

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• • (xiii)         the Medicare National Coverage Determination;

    (xiv)        the Shares; and

    (xv)         all other assets, properties and rights owned by Seller as of the Closing Date principally used in Seller’s Product Operations or otherwise principally used in relation to Plenaxis â   Product.

Such Acquired Assets shall be free and clear of all Liens, other than Permitted Liens.  Notwithstanding anything contained herein, Seller may retain two (2) archival copies of (A) the Registrations, (B) the Medicare National Coverage Determination, (C) any Product Records, and any supplements and associated materials related to the foregoing items (A) and (B), in each case solely for legal, regulatory, Tax or accounting purposes.

This Agreement shall not constitute an agreement to assign any Acquired Asset (including any Assigned Contract), or any claim or right arising thereunder if an attempted assignment thereof, without consent of a Third Party, would constitute a breach or other contravention of any agreement with respect to such Acquired Asset.  Seller and Buyer will each use reasonable commercial efforts (but without any payment of money by Seller, other than out-of-pocket legal expenses) to obtain the consent of the other party or parties to any such Acquired Asset (including any Assigned Contract) or any claim or right arising thereunder for the assignment thereof to Buyer.  If such consent is not obtained, or if an attempted assignment of any such Acquired Asset (including any Assigned Contract) or claim or right would be ineffective or would adversely affect the rights of Buyer thereunder so that Buyer would not in fact receive all such rights, Buyer shall not, except as provided in this sentence, assume liabilities or obligations with respect thereto, and Seller shall at its expense effect an alternate arrangement, in the form of a sublicense, sublease, subcontract, operating agreement or other arrangement, in any case reasonably satisfactory to Buyer, which results in Buyer obtaining all the benefits and assuming the liabilities and other obligations with respect to any such Acquired Asset or Seller shall enforce for the benefit of Buyer with Buyer assuming Seller’s obligations, any and all rights of Seller against a Third Party.  Seller will promptly pay to Buyer when received all monies received by such Party under or with respect to any such Acquired Asset (including any Assigned Contract) as to which such arrangement has been entered into, or any claim or right or any benefit arising thereunder, except to the extent the same represents an Excluded Asset as contemplated by Section 2.1(b) below.  For the avoidance of doubt, nothing under this Section 2.1(a) or under Section 2.6 shall require Seller to effect the recordation of any assignments of any Trademark Rights.

(b)           Excluded Assets . Notwithstanding anything to the contrary in this Agreement, Seller is not selling, conveying, assigning, transferring or delivering to Buyer any assets, properties or rights of Seller other than those specifically identified in Section 2.1(a).  The term "Excluded Assets" shall mean:

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• • (i)            any right, title or interest, including without limitation, any rights in any issued United States and foreign patents or other intellectual property and pending United States and foreign patents or other intellectual property applications, relating to Seller’s Rel-Ease™ drug delivery technology and depot formulation, but excluding rights granted to Buyer pursuant to the Rel-Ease™ License;

    (ii)           any Accounts Receivable (including Accounts Receivable with respect to Plenaxis â  Product which has been shipped prior to the Closing), and, for the avoidance of doubt, any cash, cash equivalents, bank deposits or similar cash items, or prepaid expenses (other than royalties) of Seller and its Affiliates, in each case as of the Closing (whether or not reflected on the books of Seller or its Affiliates as of the Closing Date);

    (iii)          any rights, claims and credits, including all guaranties, warranties, indemnities and similar rights in favor of Seller or any of its Affiliates or any of their respective employees to the extent relating to (A) any other Excluded Asset, (B) any Excluded Liability or (C) any matter to the extent Seller indemnifies any Buyer Indemnitees pursuant to Article V;

    (iv)          any Excluded Records; and

    (v)           any other assets, properties and rights set forth on Schedule 2.1(b)(v) .

(c)           Assumed Liabilities . Buyer shall, and hereby does, assume and agree to pay, perform and discharge when due the following liabilities and obligations (the " Assumed Liabilities "):

• • (i)            all liabilities arising, and all obligations of Seller to be performed, from and after the Closing under the Assigned Contracts; provided , however , that any obligations in respect of Minimum Annual Commitment Payments shall be included in Assumed Liabilities whether or not such payments are required to be paid prior to the Closing;

    (ii)           all liabilities and obligations of Seller and/or PRAECIS Europe under the Registrations to the extent to be performed from and after the Closing , including with respect to the post-marketing commitments and pharmacovigilance obligations relating to FDA approval of the NDA and any outstanding commitments under the German Marketing Authorization;

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• • (iii)          all liabilities with respect to all actions, suits, proceedings, disputes, claims or investigations arising out of or related to the ownership, use, maintenance or operation of any Abarelix Product, the Acquired Assets or the Product Operations after the Closing, subject to the proviso to clause (i) above;

    (iv)          all liabilities and obligations relating to the replacement, return or refund of the purchase price of any Abarelix Product distributed or sold by or on behalf of Buyer, any of its Affiliates or any Buyer Licensed Party after the Closing;

    (v)           all liabilities and obligations relating to any claim for breach of warranty in respect of (i) any Abarelix Product manufactured, distributed or sold by or on behalf of Buyer, any of its Affiliates or any Buyer Licensed Party after the Closing or (ii) the Closing Product Materials;

    (vi)          all liabilities and obligations arising out of or relating to any product liability claim involving (i) any Abarelix Product manufactured, distributed or sold by or on behalf of Buyer, any of its Affiliates or any Buyer Licensed Party after the Closing or (ii) the Closing Product Materials, in each case including, without limitation, injury to or death of persons or damage to or destruction of property, to the extent such injury, death, damage or destruction occurs after the Closing; and

    (vii)         all other liabilities and obligations not specifically referred to in subsections (i) through (vi) above (subject to the proviso to clause (i) above), arising out of or related to the ownership, use, maintenance or operation of any Abarelix Product, the Acquired Assets or the Product Operations after the Closing, including, without limitation, the tax liabilities to which reference is made in the second sentence of Section 7.15(b).

(d)           Retained Liabilities . Buyer shall not be obligated hereunder to be responsible for, assume or agree to pay, perform or discharge, and Seller shall remain responsible and liable for, any and all liabilities and obligations of Seller (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), other than the Assumed Liabilities (the " Retained Liabilities ").

(e)           Registrations . On the Closing Date, Seller shall assign or transfer to Buyer, and Buyer will assume, the Registrations to the extent provided in this Agreement.  Without limiting the generality of the foregoing, attached as Exhibits B-1 through B-4 are copies of the letters to be duly executed by and submitted by or on behalf of Seller to the

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FDA on the Closing Date authorizing the transfer of ownership of the NDA and the INDs from Seller to Buyer (each such letter, a " Registration Transfer Letter ") pursuant to 21 C.F.R. § 314.72.  As soon as practicable after the Closing and the receipt by Buyer of copies of the Registration Transfer Letters and evidence of the FDA’s receipt of each such letter, Buyer shall execute and submit to the FDA the letters, substantially in the form of the letters attached as Exhibits C-1 through C-4 , acknowledging Buyer’s commitment to assume ownership of the NDA and the INDs (collectively, the " Registration Assumption Letters ").

• • • • Section 2.2                                       Purchase Price and Related Matters .

(a)           Purchase Price . In consideration of the sale and transfer of the Acquired Assets, Buyer shall (i) reimburse Seller for any Minimum Annual Commitment Payments made by Seller and documented for Buyer, in accordance with Section 2.5 and (ii) pay the Incremental Consideration, the Seller Licensed Party Consideration and the Royalties, each as provided in Section 2.4 (the payments contemplated by subsections (i) and (ii), collectively, the " Purchase Price ") and (iii) assume the Assumed Liabilities as provided in Section 2.1(c).  All payments under this Agreement to Seller shall be made in United States Dollars by wire transfer of immediately available funds to an account designated by Seller in writing at least two (2) Business Days prior to the date that the payment is due and shall be non-refundable.

(b)           Allocation .

• • (i)            Buyer shall propose to Seller an allocation of the Purchase Price ********************** plus the Assumed Liabilities among the Acquired Assets for tax purposes (the " Consideration ") in accordance with the methodology required by Section 1060 of the Code within forty-five (45) Business Days after the Closing Date (the " Preliminary Allocation ").  Within ten (10) Business Days following the receipt of the Preliminary Allocation, Seller shall have the right to provide Buyer with a written notice objecting to the Preliminary Allocation.  Within five (5) Business Days following receipt of Seller’s objections, if any, to the Preliminary Allocation (the " Allocation Resolution Period "), Buyer and Seller shall negotiate in good faith to resolve any differences regarding the Preliminary Allocation, and Buyer shall make such changes as are reasonably requested by Seller (as so resolved, the " Final Allocation "). If Seller does not object to the Preliminary Allocation within ten (10) Business Days a set forth above, the Preliminary Allocation shall be deemed to be the Final Allocation for purposes of this Agreement.

    (ii)           If Buyer and Seller are unable to resolve any differences with regard to the Preliminary Allocation within the Allocation Resolution Period, then Buyer and Seller shall jointly engage an

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• • internationally recognized accounting firm (the " Accountant ").  The Accountant shall resolve any such differences based upon its appraisal of the fair value of the Acquired Assets among which the Consideration is to be allocated.  Buyer and Seller shall promptly provide to the Accountant such information as the Accountant may reasonably request in connection with the preparation of such allocation and shall request that the Accountant prepare and deliver to Buyer and Seller such allocation as promptly as practicable.  Buyer and Seller shall each pay 50% of the fees and expenses of the Accountant for its services under this Section 2.2(b)(ii).  The resolution by the Accountant of the matters set forth in this Section 2.2(b)(ii) shall be conclusive and binding upon Buyer and Seller.  Buyer and Seller agree that the procedure set forth in this Section 2.2(b)(ii) for resolving disputes with respect to the Preliminary Allocation shall be the sole and exclusive method for resolving any such disputes; provided , however , that this provision shall not prohibit either Party from instituting litigation to enforce any ruling of the Accountant.  The Accountant’s determination shall be deemed to be the Final Allocation for purposes of this Agreement.

    (iii)          Buyer and Seller shall (x) be bound by the Final Allocation for all Taxes purposes, (y) timely file IRS Form 8594 and all Tax Returns required to be filed in connection with the Final Allocation (and any other forms or reports required to be filed pursuant to Section 1060 of the Code or any comparable provisions of U.S. local or state, or foreign law (the " Section 1060 Forms ")), in accordance with the Final Allocation, and (z) take no position inconsistent with the Final Allocation in any Section 1060 Form or Tax Return, any audit or examination by, or any proceeding before, any Governmental Authority or otherwise, unless otherwise required by the final determination of a Governmental Authority.  Buyer and Seller shall make proper adjustments to the Final Allocation at the time Buyer makes any of the payments contemplated by this Section 2.2(a)(iii).

    (iv)          In the event that the Final Allocation is disputed by any Governmental Authority, the Party receiving notice of such dispute shall promptly notify and consult with the other Party and keep such other Party apprised of material developments concerning resolution of such dispute.  The Party receiving notice of such dispute shall control any examination, investigation, audit or other proceeding resulting from such dispute by any taxing authority regarding the Final Allocation; provided , however , that the other Party shall have the nonexclusive right to participate in such examination, investigation, audit or other proceeding at its sole cost and expense.

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(c)           Payments of the Purchase Price . Any and all payments of the Purchase Price as set forth in Section 2.2(a) shall be made free and clear of and without deduction for any and all Taxes.  If Buyer shall be required by applicable Law to deduct any such Taxes from or in respect of any such payment, then (i) such payment shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.2(c)) Seller shall receive an amount equal to the payment it would have received had no such deductions been made, (ii) Buyer shall make such deductions and (iii) Buyer shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Law.

• • • • Section 2.3                                       Closing .

(a)           Time and Location . The closing of the transactions contemplated by this Agreement (the " Closing ") shall take place, and is taking place, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP in Boston, Massachusetts (or at such other place as the parties may designate in writing), commencing at 10:00 a.m., Boston time, on the date of this Agreement.

(b)           Actions at the Closing . At the Closing:

• • (i)            Seller shall execute and deliver to Buyer a Bill of Sale substantially in the form of Exhibit D ;

    (ii)           Seller shall execute and deliver the Assignment of Intellectual Property substantially in the form of Exhibit E , suitable for recordation in the United States Patent and Trademark Office and/or United States Copyright Office, as applicable, or any other applicable Governmental Authority to evidence the assignment of intellectual property rights thereunder;

    (iii)          Seller shall deliver to Buyer a copy of each executed Registration Transfer Letter;

    (iv)          Seller and Buyer shall execute and deliver to each other counterparts of the Rel-Ease™ License;

    (v)           Seller and Buyer shall execute and deliver to each other counterparts of an Assignment and Assumption Agreement substantially in the form of Exhibit F ;

    (vi)          Seller shall deliver (or cause to be delivered) to Buyer all of the Governmental Consents set forth in Schedule 3.3(a) (not otherwise identified on such Schedule as not being delivered);

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• • (vii)         Seller shall deliver (or cause to be delivered) to Buyer a copy of duly executed Material Third Party Consents and other Third Party Consents to the extent obtained by Seller through the Closing Date;

    (viii)        Seller shall deliver to Buyer a certificate of corporate good standing of Seller in Delaware and a certificate as to the incumbency of officers of Seller executing this Agreement and the Ancillary Agreements and the adoption by Seller’s board of directors of authorizing resolutions with respect to the transactions contemplated by this Agreement;

    (ix)           Buyer shall deliver to Seller a certificate of good standing (or analogous equivalent) of Buyer in England and Wales and a certificate as to the incumbency of officers of Buyer executing this Agreement and the Ancillary Agreements and the adoption by Buyer’s board of directors of authorizing resolutions with respect to the transactions contemplated by this Agreement; and

    (x)            Seller shall deliver to Buyer certificate(s) representing the Shares, duly endorsed (or accompanied by duly executed stock powers), for transfer to Buyer.

The agreements and instruments referred to in clauses (i), (ii), (iii), (iv) and (v) above and the Registration Assumption Letters are referred to herein as the "Ancillary Agreements."

• • • • Section 2.4                                       Additional Consideration; Mechanics .

(a)           Additional Consideration . 

• • (i)            Incremental Consideration .  Buyer shall pay to Seller *****************************.  The payments described in this Section 2.4(a)(i) are collectively referred to as the "Incremental Consideration".  At such time as Buyer delivers the Sales Statement to Seller, Buyer shall pay to Seller the Incremental Consideration due hereunder for the applicable Quarter.  ********************.

    (ii)           Seller Licensed Party Consideration .  Buyer shall notify Seller within three (3) Business Days of the receipt by Buyer or any of its Affiliates of any Buyer Licensed Party Consideration.  Buyer shall pay or cause to be paid to Seller the Seller Licensed Party Consideration within ten (10) Business Days of the receipt by Buyer or any such Affiliate of such Buyer Licensed Party Consideration, together with a calculation of such Seller Licensed Party Consideration, including a breakdown of any

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• • reimbursed costs and expenses which have been excluded in determining the applicable Buyer Licensed Party Consideration.

    (iii)          Royalties . ******************************.

(b)           Conduct of the Product Operations .

Buyer shall, and shall cause its controlled Affiliates to, use Commercially Reasonable Efforts to commercialize, or cause to be commercialized, Plenaxis â  Product in **********.  Buyer shall use Commercially Reasonable Efforts to obtain Regulatory Approval for Plenaxis â  Product in each of the Regulatory Target Countries , including, in the Initial Regulatory Target Countries only, using Commercially Reasonable Efforts to commence, as soon as practicable and no later than one hundred eighty (180) days after the Closing Date, the Mutual Recognition Procedure for Plenaxis â  Product.  After obtaining a Regulatory Approval in any Regulatory Target Country, Buyer shall, and shall cause its controlled Affiliates to, use Commercially Reasonable Efforts to commercialize, or cause to be commercialized, Plenaxis â   Product in the Regulatory Target Countries.  Buyer shall notify Seller within two (2) Business Days after commencing the Mutual Recognition Procedure for Plenaxis â  Product in a Regulatory Target Country or filing for the applicable Regulatory Approval in any other country.  For purposes of this Section 2.4(b), "commencing" the Mutual Recognition Procedure for Plenaxis â  Product in a Regulatory Target Country means Buyer’s confirmation both to the applicable Governmental Authority in ******** and in such Regulatory Target Country of the date of dispatch of the Dossier to such Regulatory Target Country.  For the avoidance of doubt, none of the following shall, in and of itself, constitute a failure to use Commercially Reasonable Efforts under this Section 2.4(b):  (i) not commencing or causing to be commenced a Mutual Recognition Procedure in any Regulatory Target Country other than an Initial Regulatory Target Country; (ii) ceasing or causing to be discontinued efforts to obtain Regulatory Approval in any Regulatory Target Country; or (iii) not commencing or continuing, or causing not to be commenced or continued, efforts to commercialize Plenaxis â  Product in any Regulatory Target Country.

(c)           Reports .  Buyer shall deliver to Seller, within forty-five (45) days after the last day of each calendar quarter (each, a " Quarter "), a statement (each, a " Sales Statement "), setting forth (i) the aggregate amount of Gross Sales by or on behalf of Buyer or its Affiliates for each Abarelix Product (including unit quantities) for such Quarter, (ii) the aggregate Net Sales for such Quarter, including a breakdown of the Net Sales Deductions (which deductions shall be aggregated by category), for each Abarelix Product in each Marketing Region **********************, (iii) the aggregate Cost Adjusted Sales for such Quarter, (iv) ********************* and (v) the calculation of the Incremental Consideration for such Quarter and (vi) the calculation of the Royalties for such Quarter.

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(d)           Late Payments; Collections . Any amount not paid when due under this Section 2.4 shall bear interest at an annual rate equal to the lesser of (i) the highest U.S. Prime Interest Rate per annum published in the Wall Street Journal on the first Business Day after the payment first became due, plus three (3) percentage points, and (ii) the highest rate permitted by applicable law.

(e)           Books and Records; Audits .   Notwithstanding Section 6.1 to the contrary, Buyer and its Affiliates shall keep full, true and accurate books of account sufficient to determine the amounts payable pursuant to this Section 2.4.

Seller shall have the right to have the books and records of Buyer and its Affiliates audited by a qualified independent certified public accounting firm selected by Seller, subject to Buyer’s approval, which approval shall not be unreasonably withheld or delayed, under appropriate confidentiality provisions, to ascertain the accuracy of the reports and payments under this Section 2.4 for any year ending not more than thirty-six (36) months prior to the date of such request.  For the avoidance of doubt, Seller’s audit right shall extend to ascertaining the accuracy of Development Costs and reimbursed costs and expenses which have been excluded in determining Buyer Licensed Party Consideration.  Such audit shall be conducted upon at least ten (10) days’ advance written notice during normal business hours, not more than once in each year, and in a manner that does not interfere unreasonably with the business of the audited entity.  The accounting firm shall disclose to Seller only whether such reports are correct or incorrect and the specific details concerning any discrepancies.  Subject to Buyer’s right to dispute such amounts, any underpayment determined by such audit shall promptly be paid by Buyer after delivery to Buyer of such accounting firm’s report so concluding.  In the event such accounting firm concludes that amounts were overpaid by Buyer during such period, subject to Seller’s right to dispute such amounts, Seller shall promptly repay Buyer the amount of such overpayment after delivery to Buyer and Seller of such accounting firm’s written report so concluding.   Seller and Buyer shall treat all financial information subject to review under this Section 2.4(e) in accordance with the confidentiality provisions of this Agreement and shall cause the accounting firm selected by it to enter into a customary and mutually satisfactory confidentiality agreement with Buyer obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.  If Buyer has underpaid an amount due under this Section 2.4 by more than ten percent (10%) of the Royalties due hereunder for the period being reviewed, Buyer shall reimburse Seller for the reasonable fees and costs charged by such accounting firm (with all fees and costs of the audit to be borne by Seller in all other cases).

• • • • Section 2.5             Reimbursement for Certain Minimum Annual Commitment Payments.

Seller shall pay any Minimum Annual Commitment Payments  payable in respect of the year 2006 and forthwith provide evidence of such payments to Buyer who shall reimburse Seller for the amount of such Minimum Annual Commitment Payments thus paid, promptly upon receipt of evidence of such payments but in any event no later than ten (10) UK Business Days after the Closing Date.  For the avoidance of doubt, other than with respect to Minimum Annual Commitment

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Payments payable in respect of the year 2006, this Section 2.5 shall not limit Buyer’s obligations under Section 2.1(c).

• • • • Section 2.6             Further Assurances .

At any time and from time to time after the Closing Date, as and when requested by any Party, the other Party shall promptly execute and deliver, or cause to be executed and delivered, all such documents, instruments and certi