EXHIBIT 2.1 ASSET PURCHASE AGREEMENT

Exhibit 2.1

*** Text omitted and Filed Separately
CONFIDENTIAL TREATMENT REQUESTED
Under C.F.R. §§200.80(b)(4) and 240.24b-2

ASSET PURCHASE AGREEMENT

      This Asset Purchase Agreement (this Asset Purchase Agreement, together with all annexes, exhibits, schedules and other documents attached hereto, hereinafter referred to as the “Agreement” ) dated as of December 21, 2006 is made by and among Valeant Research & Development , a Delaware corporation ( “Seller” ), Valeant Pharmaceuticals International, Inc. , a Delaware corporation ( “Parent” ) (solely for purposes of Article 5) and IntraBiotics Pharmaceuticals, Inc. , a Delaware corporation ( “Purchaser” ).

Recitals

      Whereas , Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, certain assets of Seller related to the Programs.

      Whereas , certain terms used herein without definition are defined in Annex A and the location of all other defined terms used herein is listed in Annex A .

      Now Therefore , for and in consideration of the premises, mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, and intending to be legally bound, the parties agree as follows:

ARTICLE 1

ASSETS, LIABILITIES AND PURCHASE PRICE

      1.1 Purchase and Sale of Assets. Seller agrees to sell, transfer, convey, assign and deliver ( “Transfer” ) or where necessary cause its Affiliate(s) to Transfer to Purchaser, and Purchaser shall purchase, acquire and accept from Seller and its Affiliates, all of the rights, title and interest to the following properties, assets and contracts (such transferred assets hereinafter collectively referred to as the “Transferred Assets” ), free and clear of all Liens other than Permitted Liens:

           (a) the inventories including, without limitation, all raw materials and supplies, manufactured and processed parts, work in process and finished goods, (i) set forth on Schedule 1.1(a) or (ii) exclusively used or held for exclusive use in the Programs (collectively, the “Inventories” );

           (b) the packaging materials, shipping materials, machinery, equipment, furniture, furnishings, fixtures, handling equipment, laboratory equipment, computer hardware (excluding laptops and desktop computers), data, software, molds, tools, parts and other items of personal tangible property, including items on order but undelivered, (i) set forth on Schedule 1.1(b) or (ii) exclusively used or held for exclusive use in the Programs;

           (c) all right, title and interest in and to intellectual property rights and other proprietary or confidential information, whether protected, created or arising under

the laws of the United States or any other jurisdiction, including Patents, Copyrights, Know-How, Trade Secrets, Software and Confidential Information, including rights to sue for and remedies against past, present and future infringements thereof, and rights of priority and protection of interests therein under the laws of any jurisdiction worldwide and all tangible embodiments thereof, owned by Seller or its Affiliates and (i) used exclusively or held for the exclusive use in the Programs or (ii) listed on Schedule 1.1(c) (all of the foregoing, the “Acquired Intellectual Property” );

           (d) subject to Section 1.8, all rights in, to and under the Contracts, other than the Excluded Contracts, that are (i) listed on Schedule 1.1(d) or (ii) used exclusively or held for exclusive use in the Programs, (collectively, the “Assumed Contracts” );

           (e) the Permits, licenses, license applications, approvals, certifications, and product and/or service clearances that are (i) set forth on Schedule 1.1(e) or (ii) used exclusively or held for the exclusive use in the Programs;

           (f) all books, records, data, manuals, files and other documentation, whether written, electronic or otherwise, used exclusively or held for the exclusive use in the Programs, including, supplier lists, purchase and sale records, correspondence, quality control records, research and development files, drawings, blue prints, and designs;

           (g) all prepaid expenses, advance payments (if any), and prepaid items of Seller used exclusively or held for the exclusive use in the Programs;

           (h) the Notebooks and Study Reports set forth on Schedule 1.1(h) that exclusively relate to the MEK and HIV programs; and

           (i) the Notebooks and Study Reports set forth on Schedule 1.1(h) that predominantly relate to the MEK and HIV programs; provided that Purchaser will allow Seller reasonable access to examine and copy the files, or to temporarily possess the originals thereof, as reasonably requested by Seller.

      1.2 Excluded Assets. Notwithstanding anything in Section 1.1 to the contrary, Seller shall retain all right, title and interest to, and shall not Transfer to Purchaser, any rights, titles, interests, properties, assets, contracts or leases that are not specifically included in the Transferred Assets, (the “Excluded Assets” ), including but not limited to the following:

           (a) all cash, cash equivalents, marketable securities and intercompany accounts receivable of Seller, including all accounts receivable arising out of or relating to its Affiliates or the Programs;

           (b) all assets of Seller’s and its Affiliates’ employee benefit plans (the “Benefit Plans” );

           (c) all minute books, stock books, Relevant Tax Returns and similar corporate records of Seller and its Affiliates;

           (d) all employees of Seller and its Affiliates;

           (e) all claims and counterclaims with respect to rights of offset against Liabilities of the Programs not assumed by Purchaser;

           (f) all rights of Seller under this Agreement and the Transaction Documents;

           (g) all rights of Seller and its Affiliates in, to and under the Contracts listed on Schedule 1.2(g) (the “Excluded Contracts” );

           (h) all intellectual property rights other than those set forth in Schedule 1.1(c); and

           (i) all Notebooks and Study Reports set forth on Schedule 1.1(h) for the retigabine program; provided that Seller will allow Purchaser reasonable access to examine and copy the files as requested by Purchaser, or to temporarily possess the originals thereof, as reasonably requested by Purchaser.

      1.3 Obligations and Liabilities. Purchaser shall control all claims, proceedings and other matters relating to the Assumed Liabilities and Seller shall, and shall cause its Affiliates to, use commercially reasonable efforts to promptly refer all such matters to Purchaser for handling. Subject to the terms and conditions of this Agreement, at the Closing, Purchaser shall assume and agree to pay, perform and discharge when due, subject to Section 1.8, all obligations and Liabilities of Seller or its Affiliates under the Assumed Contracts listed on Schedule 1.1(d) to the extent such obligations are to be performed or such Liabilities arise after the Closing (the “Assumed Liabilities” ).

      1.4 Excluded Liabilities. Purchaser will not assume or be liable for any Excluded Liabilities. Seller shall control all claims, proceedings and other matters relating to Excluded Liabilities, and Purchaser shall, and shall cause its Affiliates to, use commercially reasonable efforts to promptly refer all such matters to Seller for handling. “Excluded Liabilities” shall mean all (i) Liabilities not specifically included in the Assumed Liabilities, (ii) Liabilities of Seller and its Affiliates arising out of, relating to or otherwise in respect of the Programs before the Closing, (iii) all other Liabilities of Seller and its Affiliates of any kind whatsoever that are not directly related to the Programs, and (iv) the following Liabilities:

           (a) all Liabilities in respect of any and all products of the Programs sold and/or services performed by Seller or any of its Affiliates before the Closing;

           (b) all Liabilities arising out of, relating to or with respect to (i) the employment or performance of services, or termination of employment or services, of any individual by Seller or any of its Affiliates, (ii) workers’ compensation claims against Seller or any Affiliate of Seller or (iii) any Benefit Plan;

           (c) all Liabilities in respect of a breach by or default of Seller occurring under Assumed Contracts with respect to any period prior to Closing;

           (d) all Liabilities under Assumed Contracts for payment of any amount, regardless of when invoiced, if and to the extent that such payment relates to the operation of the Programs prior to the Closing;

           (e) all Liabilities in respect of any pending or threatened Action or any claim arising out of, relating to or otherwise in respect of (i) the Programs (in which case only that portion of such Liabilities that relates exclusively to the operation of the Programs prior to the Closing and not operations thereafter shall be an Excluded Liability), or (ii) any Excluded Asset;

           (f) fees and expenses payable by Seller in accordance with Section 7.3 and all amounts required to be paid by Seller to any Third Party, other than a Governmental or Regulatory Authority, in connection with the Transfer to Purchaser of the Transferred Assets;

           (g) all Taxes of Seller, except as otherwise expressly provided herein; and

           (h) all Liabilities under the Excluded Contracts.

      1.5 Consideration; Milestones and Royalty Payments. As part of the consideration for the sale of the Transferred Assets and the transactions described in the Transaction Documents, Purchaser agrees as follows:

           (a) Product Development.

                (i)  Purchaser will use Commercially Reasonable Efforts to further develop the Products with the objective of obtaining marketing approval for the 806 Products and 119 Products in their respective Fields in the United States, the United Kingdom, France, Spain, Italy and Germany. Purchaser will employ efforts designed to consistently advance the Programs, with the goal of achieving the first Milestone Event within 24 months after Closing.

                (ii)  Purchaser may perform the efforts required under Section 1.5(a)(i) itself or through an Affiliate. Purchaser may also perform such efforts through a Sublicensee, but only as permitted under Section 1.5(a)(iii).

                (iii)  Purchaser may use a Sublicensee to perform the efforts required under Section 1.5(a)(i) with respect to the MEK Program or HIV Program in its sole discretion; provided that Purchaser shall not use a Sublicensee to perform the efforts required under Section 1.5(a)(i) with respect to the 806 Product without the prior written consent of Seller, such consent not to be unreasonably withheld, provided that, no such consent shall be required if such Sublicensee shall have [***]

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                (iv)  Except as otherwise provided in this Agreement, all costs and expenses incurred by Purchaser for the development of the Products after the Closing Date shall be paid by Purchaser.

                (v)  Except as provided for otherwise in the Transaction Documents or as necessary to enforce Seller’s rights under the Transaction Documents, neither Seller nor its Affiliates will take any actions intended to hinder or otherwise restrict Purchaser’s ability to develop the Products. For the avoidance of doubt, Purchaser and its Affiliates shall be permitted to employ or otherwise procure the services of any former employees of Seller or its Affiliates who are no longer employees of Seller or its Affiliates as of or after the Closing, and neither the Seller nor its Affiliates shall take any actions intended to hinder the Purchaser or its Affiliates from employing or procuring the services of such persons.

           (b) Lease, Master Service Agreement and Non-Compete Agreement. As partial consideration for Seller’s execution of this Agreement, Purchaser will:

                (i)  lease from Parent, for a period of not less than twelve (12) months at a rate of $1.50 per square foot, approximately 60,000 square feet of space at 3300 Hyland Avenue, Costa Mesa, California 92626 pursuant to a lease on substantially the terms set forth on Exhibit E hereto (the “Lease” );

                (ii)  provide research and development services to Seller related to Seller’s neuropharmacology program pursuant to a master services agreement in the form attached hereto as Exhibit F (the “Master Services Agreement” ); and

                (iii)  agree not to conduct discovery, research or development activities with respect to pharmaceutical products targeting neurological diseases, or otherwise compete with Seller in the field of neuropharmacology, during the term of the Master Services Agreement as more particularly described in the form of non-competition agreement attached hereto as Exhibit H (the “Non-Compete Agreement” ).

           (c) 806 Product Milestone Payments. Within 10 days following the first occurrence of each of the events set forth below with respect to an 806 Product, Purchaser shall pay to Seller the milestone payment set forth below:

Each of the milestone payments described in this Section 1.5(c) shall be payable no more than one (1) time regardless of the number of 806 Products or indications therefor which are developed or commercialized.

           (d) Back-Up 806 Product Milestone Payments. If a Back-Up 806 Product is developed, then the milestone payments under Section 1.5(c) shall apply to such Back-Up 806 Product but only those milestone payments under this Section 1.5(d) related to milestone events that were not previously achieved with respect to the 806 Product under Section 1.5(c) shall be payable with respect to a Back-Up 806 Product. Each of the milestone payments described in this Section 1.5(d) shall be payable no more than one (1) time regardless of the number of Back-Up 806 Products or indications therefor which are developed or commercialized.

           (e) 119 Product Milestone Payments. Within 10 days following the first occurrence of each of the events set forth below with respect to a 119 Product, Purchaser shall pay to Seller the milestone payment set forth below:

          Each of the milestone payments described in this Section 1.5(e) shall be payable no more than one (1) time regardless of the number of 119 Products or indications therefor which are developed or commercialized.

           (f) Royalties. Purchaser shall pay to Seller royalties on Net Sales of the identified Products by Purchaser and its Affiliates at the following rates:

                (i)  [***] of Net Sales in the United States and Canada of the first 806 Product or Back-Up 806 Product to generate Net Sales;

                (ii)  In the event any royalties have accrued or been paid pursuant to Section 1.5(f)(i), [***] of Net Sales in the United States and Canada of any other 806 Products or Back-Up 806 Products to generate Net Sales;

                (iii)  [***] of Net Sales of any 119 Product to generate Net Sales.

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           (g) Royalty Term. The payments specified in Section 1.5(f) shall be payable on a Product-by-Product and country-by-country basis for a period equal to the Royalty Term for such Product in such country.

           (h) Royalty Credits. In the event that licenses to intellectual property rights of Third Parties are required by Purchaser or its Affiliates or Sublicensees in order to make, have made, import, export, use, distribute, promote, market, offer for sale, or sell any Product, Purchaser or its Affiliates or Sublicensees shall be solely responsible for acquiring such licenses at its sole discretion. On a Product-by-Product basis, in the event that such a license is required, Purchaser shall have the right to reduce any royalty or other payment otherwise due to Seller hereunder (excluding any amounts previously paid to Seller) by [***] of the amount of royalties or payments actually paid by Purchaser, or any of its Affiliates or Sublicensees, to a Third Party under any such license granted by such Third Party; provided, however, that in no event shall the royalties or other payments due to Seller for any Product in any country in any calendar quarter be reduced to less than [***] of the payment otherwise due to Seller hereunder for such Product in such country.

      1.6 806 Product License Option. Purchaser hereby grants Seller an option for an exclusive, royalty-bearing license under the Purchaser 806 Patents to make, have made, use, sell, offer for sale and import, in all territories outside the United States and Canada, the first of either (i) the 806 Product or (ii) a Back-Up 806 Product successfully to complete a Phase 2b Clinical Trial for prevention or treatment of HIV infection (the “Option” ). Purchaser agrees to deliver promptly to Seller the final results from such Phase 2b Clinical Trial, certified by an authorized officer of Purchaser. Seller shall have the right to exercise the Option by providing Purchaser written notice of such exercise within [***] days following Purchaser’s delivery to Seller of the final results from such Phase 2b Clinical Trial. Seller’s exercise of the Option shall be subject to Seller making the following payments to Purchaser by wire transfer of immediately available funds to an account designated by Purchaser:

           (a) an Option fee of [***] due following execution by both parties of a definitive license agreement (the “Option License” ) between Seller and Purchaser for the territory outside of the United States and Canada following Seller’s exercise of the Option and following expiration or termination of any waiting period under the Hart-Scott Rodino (HSR) Act or other antitrust requirements relating to the Option License;

           (b) a payment of [***] due following execution by both parties of the Option License and upon delivery to Seller of the first of either a Certificate of Pharmaceutical Product from the FDA or a Certificate of Medicinal Product from the European Medicines Agency, in each case covering the 806 Product or the Back-Up 806 Product, as applicable;

           (c) a payment of [***] due following execution by both parties of the Option License and upon the receipt by Seller from the appropriate Regulatory Authority of an approved Market Authorization Application covering the 806 Product or

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the Back-Up 806 Product, as applicable, including the first approved pricing and reimbursement by a country in the European Union for the 806 Product or the Back-Up 806 Product, as applicable; and

           (d) following execution by both parties of the Option License, a [***] royalty on Net Sales of the 806 Product or the Back-Up 806 Product, as applicable, by Seller in all territories outside the United States and Canada on a country-by-country basis, where corresponding terms as the royalty term and royalty credits applied to royalties from Purchaser to Seller in 1.5(g) and (h) shall apply to royalties from Seller to Purchaser under this Section 1.6(d).

If Seller exercises the Option, Purchaser and Seller agree to negotiate in good faith to establish reasonable and customary terms and conditions related to the Option License for all territories outside the United States and Canada. Seller shall have no rights as a licensee with respect to any 806 Product or Back-Up 806 Product except as set forth in this Agreement or the Option License.

      1.7 Allocation of Purchase Consideration. The parties agree to allocate the Purchase Price plus the Assumed Liabilities among the Transferred Assets for all purposes (including financial accounting and Tax purposes) as mutually agreed upon by Purchaser and Seller in accordance with Section 1060 of the Code, based on the fair market value of the Transferred Assets. Purchaser shall provide to Seller a draft allocation schedule (the “Allocation” ) within [***] after the Closing. This Allocation shall become final and binding on the parties, unless Seller notifies Purchaser within [***] after receipt of such Allocation of Seller’s disagreement with such Allocation. In the event Seller timely notifies Purchaser of such disagreement, the parties shall resolve such disagreement in the manner described in Section 7.4 of this Agreement. The parties shall revise the Allocation from time to time as mutually agreed to take into account any purchase price adjustment (including without limitation, any indemnification payment made pursuant to Article 5). Accordingly, the parties shall file all Relevant Tax Returns (including, without limitation, IRS Form 8594 and any comparable form under state, local or foreign Tax Law) in a timely manner and consistent with such Allocation, as revised from time to time. Each party agrees to notify the other party in the event that any Governmental and Regulatory Authority takes or proposes to take a position for Tax purposes that is inconsistent with the Allocation. Seller shall provide Purchaser with a copy of any information required to be furnished to the Secretary of the Treasury under Code Section 1060.

      1.8 Third Party Consents. Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an agreement to Transfer any contract, or any claim, right or benefit arising under or resulting from any contract, if such Transfer or attempt to make such Transfer, without the consent or approval of a Third Party, would constitute a breach or violation thereof or affect adversely the rights of Seller thereunder; and no action under this Agreement shall constitute a Transfer of such a contract in the absence of such consent or approval. Seller shall give prompt notice to Purchaser of any written notice from any Third Party alleging that the consent of such Third Party is or may be required in connection with the transactions contemplated by

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this Agreement. To the extent that Seller is unable to Transfer any contract that would otherwise constitute an Assumed Contract, Seller and Purchaser shall use commercially reasonable efforts to enter into arrangements sufficient to provide equivalent benefits to Purchaser, provided, however, that nothing herein shall require the Seller or any of its Affiliates to pay a fee to any Third Party, or incur any cost, not reimbursed by Purchaser in order to procure their consent to the Transfer of any Assumed Contract to Purchaser.

      1.9 SOP License. Seller hereby grants Purchaser a perpetual, non-exclusive, worldwide, royalty-free license, without the right to sublicense, in the standard operating procedures used by Seller in connection with the Programs.

      1.10 Further Conveyances and Assumptions. From time to time following the Closing, Seller and Purchaser shall, and shall cause their respective Affiliates to, execute, acknowledge and deliver all such further conveyances, notices, assumptions, releases and acquaintances and such other instruments, and shall take such further actions, as may be reasonably necessary or appropriate to assure fully to Purchaser and its respective successors or assigns, all of the properties, rights, titles, interests, estates, remedies, powers and privileges intended to be transferred to Purchaser under this Agreement and the Transaction Documents and to assure fully to Seller and its Affiliates and their successors and assigns, the assumption of the Assumed Liabilities by Purchaser under this Agreement and obligations and Liabilities of Purchaser under the Transaction Documents, and to otherwise make effective the transactions contemplated hereby and thereby. Seller and Purchaser agree that (i) Schedule 1.1(c) and Schedule 1.1(d) may be reasonably expanded within six (6) months of the Effective Date to include any Patent(s), Know-How, Trade Secrets, Software, or Confidential Information, or Contracts, respectively, necessary to conduct the Programs that has been overlooked in this Agreement, and Seller will execute any necessary documents to effect transfer of said Patent(s), Know-How, Trade Secrets, Software, or Confidential Information, or Contracts, respectively, from Seller to Purchaser, and (ii) Schedule 1.1(c) and Schedule 1.1(d) may be reasonably narrowed within six (6) months of the Effective Date to exclude any Patent(s), Know-How, Trade Secrets, Software, or Confidential Information, or Contracts, respectively, not necessary to conduct the Programs that has been inadvertently included in such schedules, and any such excluded Patent(s), Know-How, Trade Secrets, Software, or Confidential Information, or Contracts, respectively, shall be deemed not to have been part of the Transferred Assets for purposes of this Agreement.

ARTICLE 2

CLOSING, DELIVERIES, DEVELOPMENT STATUS COMMITTEE

      2.1 Closing. The completion of the transactions contemplated by this Agreement (the “Closing” ) is effective at 10:00 A.M. Pacific time on the date of this Agreement (the “Closing Date” ).

      2.2 Deliveries by Seller. At the Closing, Seller shall deliver to Purchaser the following ( “Transaction Documents” ) (except to the extent Purchaser has waived any such item as a condition to Closing):

           (a) a bill of sale substantially in the form attached hereto as Exhibit A , executed by Seller;

           (b) a general assignment and assumption agreement in substantially the form attached hereto as Exhibit B ( “General Assignment” ), executed by Seller;

           (c) an assignment and assumption of contracts in substantially the form attached hereto as Exhibit C ( “Contract Assignment” ), executed by Seller;

           (d) an assignment of patents substantially in the form attached hereto as Exhibit D (the “Patent Assignment” ), executed by Seller;

           (e) the Lease duly executed by Seller;

           (f) the Master Services Agreement executed by Seller;

           (g) the Non-Compete Agreement executed by Seller;

           (h) certificates substantially in the form attached hereto as Exhibit G , executed by Seller, certifying that Seller is not a “foreign person” within the meaning of Section 1445 of the Code;

           (i) such other items as are specified on Schedule 2.2 that were not delivered to Purchaser prior to the Closing (except to the extent that Purchaser waived any such item as a condition to Closing).

      2.3 Deliveries by Purchaser. At the Closing, Purchaser shall, against the items delivered by Seller at the Closing, deliver to Seller (except to the extent Seller has waived any such item):

           (a) except in each case where execution by Purchaser is not applicable or not provided for, each of the following documents, executed by Purchaser: (i) the General Assignment; (ii) the Contract Assignment; (iii) the Patent Assignment; (iv) the Lease; (v) the Master Services Agreement; and (vi) the Non-Compete Agreement; and

           (b) such other items as are specified on Schedule 2.3 that were not delivered to Seller prior to the Closing (except to the extent that Purchaser waived any such item as a condition to Closing).

      2.4 Certain Tax Matters. The following provisions shall govern the allocation of responsibility as between Purchaser and Seller for certain tax matters following the Closing Date:

           (a) Transfer Taxes and Costs. Seller shall pay when due, and Purchaser shall promptly thereafter reimburse Seller for, all transfer, sales, use, value added, stamp, recording, registration, excise, or other similar Taxes and any notarial fees (other than Taxes measured by, or with respect to, income imposed on Purchaser) incurred in connection with (i) the Transfer of any of the Transferred Assets pursuant to

this Agreement or the Transaction Documents, (ii) the delivery of this Agreement or any of the Transaction Documents, and (iii) the consummation of any of the transactions contemplated by this Agreement or any of the Transaction Documents (collectively, “Transfer Taxes” ). Seller shall, at its own expense, file all necessary Relevant Tax Returns and other required documents with respect to such Transfer Taxes in a timely manner, and upon the request of Purchaser, promptly shall provide to Purchaser copies of such Relevant Tax Returns and documents and proof of payment of such Transfer Taxes. Purchaser shall provide to Seller, and Seller shall provide to Purchaser, all exemption certificates or resale certificates with respect to the listed Transfer Taxes that may be provided for under applicable Law. Such certificates shall be in the form, and shall be signed by the proper party, as provided under applicable Law.

           (b) Pre-Closing Taxes. Seller shall be liable for all Taxes relating to or arising out of the Transferred Assets or the operation of the Programs imposed with respect to any taxable period ending on or before the Closing Date

           (c) Prorations. All Taxes other than Transfer Taxes or Taxes based upon or related to income or receipts, including but not limited to, all real property taxes, personal property taxes, ad valorem obligations and similar taxes imposed on a periodic basis, in each case levied with respect to the Transferred Assets or the operation of the Programs for a taxable period which includes (but does not end on) the Closing Date, shall be apportioned between Seller and Purchaser as of the Closing Date based on the number of days in such taxable period prior to the Closing Date (the “Pre-Closing Period” ) and the number of days in such taxable period following the Closing Date (the “Post-Closing Period” ). Seller shall be liable for the proportionate amount of such taxes that is attributable to the Pre-Closing Period. Within [***] after the Closing, Seller and Purchaser shall present a reimbursement to which each is entitled under this Section 2.4(c) together with such supporting evidence as is reasonably necessary to calculate the proration amount. The proration amount shall be paid by the party owing it to the other within [***] after delivery of such statement. Thereafter, Seller shall notify Purchaser upon receipt of any bill for real or personal property taxes relating to the Transferred Assets, part or all of which are attributable to the Post-Closing Period, and shall promptly deliver such bill to Purchaser who shall pay the same to the appropriate taxing authority, provided that if such bill covers the Pre-Closing Period, Seller shall also remit prior to the due date of assessment to Purchaser payment for the proportionate amount of such bill that is attributable to the Pre-Closing Period. In the event that either Seller or Purchaser shall thereafter make a payment for which it is entitled to reimbursement under this Section 2.4(c), the other party shall make such reimbursement promptly but in no event later than [***] after the presentation of a statement setting forth the amount of reimbursement to which the presenting party is entitled along with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement. Any payment required under this Section and not made within [***] of delivery of the statement shall bear interest at the rate per annum determined, from time to time, under the provisions of Section 6621(a)(2) of the Code for each day until paid.

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           (d) Cooperation on Tax Matters. Purchaser and Seller shall cooperate fully, as and to the extent reasonably requested by the other party, and shall retain and (upon the other party’s request) furnish or cause to be furnished to the other party, as promptly as practicable, such information and assistance relating to the Transferred Assets and the Assumed Liabilities as is reasonably necessary for the preparation and filing of any Relevant Tax Return, claim for refund or other required or optional filings relating to Tax matters, for the preparation for any Tax audit, for the preparation for any Tax protest, or for the prosecution or defense of any suit or other proceeding relating to Tax matters. Such cooperation shall also include making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Purchaser and Seller agree (A) to retain all books and records with respect to Tax matters pertinent to the Seller relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Purchaser or Seller, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, the Purchaser or Seller, as the case may be, shall allow the other party to take possession of such books and records.

      2.5 Development Status Committee.

           (a) Formation. Within [***] days of Closing, the parties will form a joint committee (the “Development Status Committee” ) which will meet periodically as specified in Section 2.5(b) to review and discuss Product development activities. Initially, the Development Status Committee will be composed of at least two, but not more than four, representatives each from Purchaser or its Affiliates and Seller or its Affiliates. The chairperson of the Development Status Committee will be one of Purchaser’s representatives. The Development Status Committee may request other employees or consultants of Seller or Purchaser or their Affiliates to attend its meetings to present information or participate in discussions on an ad hoc basis as it deems appropriate.

           (b) Duties of the Development Status Committee. Purchaser will have full control over the development and commercialization of Products. The duties of the Development Status Committee may include, but need not be limited to, observing and discussing the progress of the development of Products. To accomplish its objective, the Development Status Committee will meet quarterly, or less often if mutually agreed upon by the parties, during any period in which development work is being conducted by Purchaser on any Product. The Development Status Committee may meet in person or by telephone conference; provided that annually at least two Development Status Committee meeting will be in person and these in-person meetings will be spaced no more than six (6) months apart. In-person Development Status Committee meetings will be at a site designated by Purchaser in the United States. Each party will bear all expenses of its personnel arising from attending such meetings.

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE SELLER

          Except as qualified in the disclosure schedule attached hereto, Seller hereby represents and warrants to Purchaser as follows:

      3.1 Corporate Existence. Seller and each Affiliate engaged in the conduct of the Programs or owning Transferred Assets (the “Program Affiliates” ) is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and has full corporate power and authority to conduct its business as it is now being conducted and to own or lease its properties and assets. Seller and each of the Program Affiliates is duly qualified or licensed to do business as a foreign corporation, and is in good standing as a foreign corporation, in every jurisdiction in which the ownership of the Transferred Assets or the conduct of the Programs requires such qualification or license, except where the failure to do so would not have a Material Adverse Effect.

      3.2 Corporate Power and Authority. Seller has full corporate power and authority to execute and deliver this Agreement, perform its obligations hereunder, to Transfer the Transferred Assets and carry out the transactions contemplated hereby. The execution and delivery of this Agreement, the performance by Seller of its obligations hereunder and the consummation of the transactions contemplated herein have been duly authorized by all corporate, stockholder and other actions on the part of Seller and the Program Affiliates as applicable, required by applicable Law and their respective certificates of incorporation and by-laws. This Agreement has been duly and validly executed and delivered by the Seller and (assuming the due authorization, execution and delivery by Purchaser) constitutes the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms except (a) as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to creditor’s rights generally and (b) subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) (clauses (a) and (b), the “Enforceability Exceptions” ) .

      3.3 No Violation. Except as set forth in Schedule 3.3, neither the execution and delivery of this Agreement nor the performance by Seller of its obligations hereunder nor the consummation of the transactions contemplated hereby will (a) contravene any provision of the certificate of incorporation, by-laws or applicable organizational documents of Seller or the Program Affiliates; (b) to the knowledge of Seller, violate, be in conflict with, constitute a default under, permit the termination of or cause the acceleration of the maturity of any Indebtedness or obligation of Seller relating to the Programs, under any mortgage, indenture, lease, contract or agreement to which Seller or any Program Affiliate is a party or by which Seller, any Affiliate of Seller or any of the Transferred Assets are bound or (c) violate any Law or any Order to which Seller or the Transferred Assets are subject or by which Seller or the Transferred Assets are bound.

      3.4 Consents and Approvals of Governmental Authorities. Except as set forth on Schedule 3.4, no consent, waiver, approval or authorization of, or declaration, filing or registration with, or notification to any Governmental or Regulatory Authority is required to be made or obtained by Seller or any Program Affiliate (i) in connection with the execution, delivery or performance of this Agreement, the compliance by Seller with any of the provisions hereof, the consummation of the transactions contemplated hereby or the taking by Seller or any Program Affiliate of any other action contemplated hereby, or (ii) for the continuing validity and effectiveness immediately following the Closing of any Assumed Contract or Permit of Seller or any Program Affiliate included in Transferred Assets.

      3.5 Tax Matters.

          (a) Seller and each Program Affiliate has timely filed all Relevant Tax Returns required to be filed by it, each such Relevant Tax Return has been prepared in compliance with all applicable laws and regulations, and all such Relevant Tax Returns are true and accurate as they relate to the Transferred Assets and the Programs. All Taxes due and payable by Seller and each Program Affiliate in connection with the Transferred Assets and its activities with respect to the Programs have been properly and timely paid.

          (b) Except as set forth in Schedule 3.5 attached hereto:

               (i) Neither Seller nor any Program Affiliate has requested or been granted an extension of the time for filing any Relevant Tax Return which has not yet been filed or consented to extend to a date later than the date hereof the time in which any Tax related to the Transferred Assets may be assessed or collected by any taxing authority;

               (ii) no deficiency or proposed adjustment which has not been settled or otherwise resolved for any amount of Tax has been proposed, asserted or assessed by any taxing authority against Seller or any Program Affiliate with respect to the Transferred Assets or its activities related to the Programs, and there is no action, suit, taxing authority proceeding or audit now in progress, pending or, to Seller’s knowledge, threatened in connection with such activities or assets;

               (iii) Seller does not reasonably expect any taxing authority to claim or assess any amount of additional Taxes against Seller or any Program Affiliate with respect to the Transferred Assets or its activities related to the Programs;

               (iv) no claim has ever been made by a taxing authority in a jurisdiction where Seller or any Program Affiliate does not file Relevant Tax Returns that Seller or such Program Affiliate is or may be subject to Taxes assessed by such jurisdiction in connection with the Transferred Assets or the Programs;

               (v) there are no liens for Taxes (other than for current Taxes not yet due and payable) upon the Transferred Assets;

               (vii) each lease which is an Assumed Liability and each lease to which any Transferred Asset is subject is a “true” lease for federal income tax purposes;

               (viii) Since December 31, 2003, neither Seller nor any Affiliate of Seller has (i) executed or entered into any agreement with, (ii) obtained any consent or clearance from, or (iii) become subject to any taxpayer-specific ruling guidance by, any Governmental or Regulatory Authority concerning Taxes related specifically to the Transferred Assets or the HIV or MEK Programs; and

               (xiii) neither Seller nor any Program Affiliate has a permanent establishment or similar exposure to the taxing authority of any non-U.S. jurisdiction with respect to its activities in connection with the Transferred Assets and the Programs.

          (c) Schedule 3.5 contains a list of states, territories and jurisdictions (whether foreign or domestic) in which Seller and each Program Affiliate has activities related to the Transferred Assets and the Programs.

      3.6 Intentionally Omitted.

      3.7 Absence of Certain Changes. Since [***], Seller has conducted the Programs only in the ordinary course, and there has not been any event, change, occurrence or circumstance that has had or would reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, since [***], neither Seller nor any Program Affiliate has:

           (a) other than in the ordinary course of business, sold, assigned or transferred any properties or assets of the Programs, in each case with a value greater than $100,000 ;

           (b) made any change in any method of bookkeeping, accounting or accounting practice relating to the Programs other than as required by GAAP or by applicable law;

           (c) failed to pay and discharge current liabilities of the Programs in accordance with its historical payment practices, except for Liabilities not material in amount that are disputed in good faith by appropriate proceedings;

           (d) mortgaged, pledged or subjected to any Lien any Transferred Assets;

           (e) materially amended the terms of any Indebtedness, trade payable, other Liability or claim of the Programs relating to the Transferred Assets or amended, modified, canceled, terminated, relinquished, waived or released any material right under an Assumed Contract except in the ordinary course of business;

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           (f) become a party to any Assumed Contract or other Assumed Liability that involves the payment or receipt of an amount greater than [***] other than in the ordinary course of business;

           (g) instituted any Action or entered into any compromise or settlement of any Action related to the Programs or the Transferred Assets;

           (h) granted any material license or material sublicense of any rights under or with respect to any Acquired Intellectual Property other than pursuant to an Assumed Contract; and

           (i) agreed or entered into any binding obligation to do anything set forth in this Section 3.7.

      3.8 Title to Properties; Encumbrances. The Transaction Documents to be executed and delivered by Seller (or Seller’s transferring Affiliate(s) where appropriate) will be valid and binding obligations of Seller (or Seller’s transferring Affiliate(s) where appropriate), and will effectively vest in Purchaser at and effective upon the Closing good and marketable title to all of the Transferred Assets free and clear of any Liens, other than Permitted Liens.

      3.9 Intellectual Property.

           (a) Schedule 1.1(c) sets forth a list of (i) Patents used exclusively or held for the exclusive use in the Programs in which Seller or any of its Affiliates has an interest, (ii) the jurisdiction in which such Patents have been filed and the applicable serial number; and (iii) any other Person that has an ownership interest in such Patents and the nature of such ownership interest. Seller has provided or otherwise made available to Purchaser copies of all applications, and material correspondence with any Governmental Authority, related to each such applications.

           (b) Schedule 1.1(c) sets forth a list of Software and Confidential Information that are used exclusively or held for the exclusive use in the Programs in which Seller or any of its Affiliates has or purports to have an interest.

           (c) To Seller’s knowledge, Acquired Intellectual Property is not licensed or otherwise made available to Seller by any Person.

           (d) To Seller’s knowledge, Acquired Intellectual Property is not licensed or otherwise made available to any Person by Seller.

           (e) To the knowledge of Seller, there are no Patents that are used exclusively by Seller or its Affiliates in the Programs that are not part of the Acquired Intellectual Property or other Transferred Assets.

           (f) To the knowledge of Seller, Seller exclusively owns all right, title, and interest to and in the Acquired Intellectual Property (other than intellectual property

*** Confidential Treatment Requested

rights exclusively licensed to Seller, as identified in Schedule 3.9(f)) free and clear of any Liens (other than Permitted Liens).

           (g) Except as set forth on Schedule 3.9(g), the Acquired Intellectual Property is subsisting and, to the knowledge of Seller, valid and enforceable.

           (h) Seller has taken reasonable measures and precautions to protect and maintain the confidentiality and secrecy of and otherwise protect and enforce its rights in all material proprietary information held by Seller, or purported to be held by Seller, as Trade Secrets.

           (i) To the knowledge of Seller, (i) Seller has not received any written notice or communication of any actual, alleged, or potential infringement, misappropriation or unlawful or unauthorized use of any intellectual property owned by any other Person in connection with the Programs and (ii) no other Person is infringing, misappropriating, or making any unlawful or unauthorized use of any Acquired Intellectual Property owned by Seller or its Affiliates.

           (j) As of the date of this Agreement, no interference, opposition, reissue, reexamination, or other Action is or has been pending or, to the Seller’s knowledge, is threatened, in which the scope, validity, or enforceability of any Acquired Intellectual Property is being, has been, or to the Seller’s knowledge could reasonably be expected to be contested or challenged.

           (k) To the Seller’s knowledge, no present or former employee of or consultant to Seller or any of its Affiliates has any ownership interest (whether or not currently exercisable), in whole or in part, in any material Acquired Intellectual Property.

      3.10 Litigation. There are no actions, claims, proceedings or investigations (collectively, “Actions” ) pending or to Seller’s knowledge, threatened against the Programs or any of the Transferred Assets by or before any Governmental or Regulatory Authority, including any Action that questions or challenges the validity of this Agreement or any actions taken or proposed to be taken by Seller or any Program Affiliate pursuant to this Agreement. As of the date of this Agreement, neither Seller nor any Program Affiliate is engaged in any Action to recover monies due to it or for damages sustained by it in connection with the Programs.

      3.11 Intentionally Omitted.

      3.12 Contracts and Commitments.

           (a) Schedule 3.12(a) and the leases set forth in Schedule 3.13 comprise in the aggregate a true and complete list of:

                (i)  any Contracts between the Seller or a Program Affiliate, on the one hand, and any Third Party, on the other, involving per annum payments in excess of [***] regarding research, development,

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manufacture, sale, distribution, or service with respect to the HIV Program or the MEK Program;

                (ii)  any outstanding purchase order or supply agreement issued by the Seller or any Program Affiliate in connection with the Programs representing an obligation in excess of [***]

                (iii)  all joint venture, strategic alliance, partnership or similar agreements to which Seller or any Program Affiliate is a party that provide for the manufacture, marketing, sale or distribution of any products or services of the Programs;

                (iv)  any material Contracts with any Affiliate of Seller or current or former officer, director or stockholder of Seller or its Affiliates relating to the Programs other than inter-company services agreements;

                (v)  any Contracts containing covenants of Seller or any Program Affiliates not to compete in any line of business or any geographical area relating to the Programs, or covenants of any other Person not to compete with Seller or any Program Affiliates anywhere in the world in the specific areas of the Programs;

                (vi)  outstanding agreements of guaranty, surety or indemnification, direct or indirect, by Seller or any Program Affiliates in respect of the Programs other than express and implied product and service warranties and indemnities included in purchase orders, commercial Contracts, and other Contracts in the ordinary course of business;

                (vii)  any Contracts other than the Assumed contracts that, to Seller’s knowledge, impose a material Lien other than a Permitted Lien on any of the Transferred Assets;

                (viii)  any Contracts for the sale of any of the Transferred Assets or any Contracts for the grant to any Person of any preferential rights to purchase any of the Transferred Assets of the Programs;

                (ix)  any other Contracts material to the Programs involving per annum payments in excess of [***]; and

                (x)  any other Assumed Contracts with aggregate obligations in excess of [***]

           (b) Seller has delivered to Purchaser copies of the documents identified on Schedule 3.12(a) and Schedule 3.13.

           (c) Each of the Assumed Contracts is in full force and effect and is the legal, valid and binding obligation of Seller or (Seller’s transferring Affiliate(s) where appropriate), enforceable against it in accordance with its terms, subject to Enforceability Exceptions. Neither Seller nor any Program Affiliate(s) is, to Seller’s knowledge, in default under any Assumed Contract, nor to Seller’s knowledge, is any other party in

*** Confidential Treatment Requested

default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder. No party to any of the Assumed Contracts has given Seller or any Program Affiliate written notice of the exercise of any termination rights with respect thereto. Except for Third Party consents to the Assumed Contracts listed on Schedule 3.12(c), no Transfer of an Assumed Contract to Purchaser pursuant hereto requires any consent of any other Person or will constitute a breach or default thereunder (including a breach or default after giving notice or the lapse of time).

      3.13 Leases. Schedule 3.13 contains a list of leases pursuant to which Seller or any Program Affiliate leases for the exclusive use of the Programs any material personal property or real property. To Seller’s knowledge, (i) each of such leases is in full force and effect (ii) neither Seller nor any Program Affiliate(s) is in default under any such lease, and (iii) there is no default under any such lease by another party thereto.

      3.14 Environmental Matters.

           (a) Seller and its Affiliates are in compliance with all applicable Environmental Laws in connection with the ownership and conduct of the Programs, and to Seller’s knowledge, Seller and its Affiliates have not been in violation of or in default under any Environmental Laws in connection with the ownership and conduct of the Programs, the effect of which, individually or in the aggregate with other such violations and defaults, could reasonably be expected to have a Material Adverse Effect.

           (b) Seller has obtained and possesses all Permits which are required under applicable Environmental Laws in connection with the conduct of the Programs as presently conducted, except where the failure to obtain any such Permit could not reasonably be expected to have, individually or in the aggregate with other such failures, a Material Adverse Effect. Each of such Permits is in full force and effect, and Seller is and has at all times been, and the Programs are, in compliance with the terms and conditions of all such Permits, except where the failure to be in compliance could not reasonably be expected to have, individually or in the aggregate with other such failures, a Material Adverse Effect.

           (c) No site or facility now or previously owned, operated or leased by either Seller or any of its Affiliates for use in the Programs is listed or proposed for listing on the NPL, CERCLIS or on any similar state or local list of sites requiring investigation or clean-up and, to Seller’s knowledge, there has been no Release of a Pollutant in connection with the ownership or operation of the Programs which may result in any such investigation or clean-up having a Material Adverse Effect.

           (d) All material environmental studies, audits, tests, reviews or other analyses conducted by, or in the possession of, Seller or any of its Affiliates in relation to any site or facility now or previously owned, operated, used or leased by the Programs have been delivered or made available to Purchaser prior to the execution of this Agreement.

           (e) Except for matters that have been settled or resolved, neither Seller nor any of its Affiliates has received since January 1, 2001 (i) any claim, notice, or request for information alleging Environmental Liability in connection with the ownership or operation of the Programs, which, if resolved unfavorably could have a Material Adverse Effect.

      3.15 Compliance with Laws. The Programs have been in compliance in all material respects with all applicable Laws for the previous five (5) years. Seller has not received any written notice of or, to Seller’s knowledge, any other notice of, or been charged with, the violation of any Law affecting the Programs.

      3.16 Licenses, Permits and Authorizations. Seller has all material Permits required to conduct the Programs as they are now being conducted. All such Permits are valid and in full force and effect. Schedule 3.16 contains a true and complete list of all such Permits other than resale certificates, employer identification numbers and business licenses and similar Permits required generally by businesses doing business in Costa Mesa, California. Seller is not in default or violation, and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation, in any material respect of any term, condition or provision of any such Permit to which it is a party and to which the Programs are subject or by which the Transferred Assets are bound. There is no Action pending, or to Seller’s knowledge, threatened, that disputes the validity of such Permits. All Permits may be Transferred to Purchaser as Transferred Assets, as provided herein, without breach, default or violation thereof under any applicable Law.

      3.17 Equipment; Condition of Tangible Assets. ALL MACHINERY, EQUIPMENT, AND OTHER TANGIBLE PERSONAL PROPERTY INCLUDED IN THE TRANSFERRED ASSETS ARE BEING TRANSFERRED TO PURCHASER ON AN “AS IS” BASIS AND SELLER MAKES NO WARRANTY RELATING TO SUCH TRANSFERRED ASSETS WHATSOEVER, INCLUDING NO WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

      3.18 Inventories. The inventories of the Programs consist of raw materials and supplies, manufactured and processed parts, and work-in-process. THE INVENTORIES OF THE PROGRAMS ARE BEING TRANSFERRED TO PURCHASER ON AN “AS IS” BASIS AND SELLER MAKES NO WARRANTY RELATING TO SUCH INVENTORIES WHATSOEVER, INCLUDING NO WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The Inventories are valued on the books of Seller in accordance with Seller’s standard accounting practices, consistently applied.

      3.19 Intentionally Omitted.

      3.20 Customers. Neither Seller nor any Program Affiliate has any customers related to the Programs.

      3.21 Intentionally Omitted.

      3.22 Brokers and Finders. Neither Seller nor any Program Affiliate is in any way obligated to make any payment to a broker, finder or financial advisor in connection with the origin, negotiation, execution or performance of this Agreement and the Transaction Documents.

      3.23 Sufficiency and Location of Transferred Assets. The Transferred Assets include all of the assets used by Seller to conduct the Programs as conducted by Seller on the date of this Agreement except for such assets that, both alone and when aggregated with all such assets, are not material to the Programs. All tangible Transferred Assets are located in Seller’s facility located at 3300 Hyland Avenue, Costa Mesa, California 92626.

      3.24 Product Warranty; Product Liability. Neither Seller nor any of its Affiliates has manufactured, sold or delivered any product related to the Programs.

      3.25 No Breach for Undisclosed Knowledge. In the event that Purchaser hires any Former Seller Employee who later contradicts any of Seller’s representations or warranties hereinabove, such contradiction shall not be used by Purchaser to allege or demonstrate a breach of such representation or warranty or of this Agreement absent a showing by contemporaneous written documents that such Former Seller Employee disclosed to an attorney or other senior officer of Seller prior to Closing the facts or circumstances that contradict such representation or warranty.

      3.26 Schedules. To the extent any Seller representation or warranty hereinabove provides a corresponding schedule of disclosures or exceptions, such schedule qualifies only the representation and warranty in the correspondingly numbered section of this Agreement to which it relates, unless the disclosure or exception contains information which, on its face, is clearly applicable to one or more sections, in which case such disclosure or exception shall be deemed to relate to such other sections as well.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     Purchaser hereby represents and warrants to Seller as follows:

      4.1 Corporate Existence. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as it is now being conducted and to own or lease its properties and assets. Purchaser is duly qualified or licensed to do business as a foreign corporation, and is in good standing as a foreign corporation, in every jurisdiction in which the ownership of the Programs’ property or assets or the conduct of its business would require such qualification or license, except where the failure to be so qualified would not have a Material Adverse Effect on Purchaser.

      4.2 Corporate Power and Authority. Purchaser has full corporate power and authority to execute and deliver this Agreement, perform its obligations hereunder, purchase the Transferred Assets and carry out the transactions contemplated herein. The

execution and delivery of this Agreement, the performance by Purchaser of its obligations hereunder and the consummation of the transactions contemplated herein have been duly authorized by all corporate, stockholder and other actions on the part of Purchaser required by applicable law, its certificate of incorporation and its by-laws. This Agreement constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its terms subject to the Enforceability Exceptions.

      4.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by Purchaser of its obligations hereunder nor the consummation of the transactions contemplated hereby will (a) contravene any provision of the certificate of incorporation or by-laws of Purchaser; (b) violate, be in conflict with, constitute a default under, permit the termination of or cause the acceleration of the maturity of any Indebtedness or obligation of Purchaser, under any mortgage, indenture, lease, contract or agreement to which Purchaser is a party or by which Purchaser is bound; or (c) violate any Law or Order to which Purchaser is subject or by which Purchaser, or any of its assets or properties are bound.

      4.4 Consents and Approvals of Governmental Authorities. Except for filings required pursuant to securities Laws, no consent, approval or authorization of, or declaration, filing or registration with, any Governmental or Regulatory Authority is required to be made or obtained by Purchaser in connection with the execution, delivery or performance of this Agreement by Purchaser, the compliance by Purchaser with any of the provisions hereof, the consummation of the transactions contemplated hereby or the taking by Purchaser of any other action contemplated hereby, except as has been obtained on or prior to the date hereof.

      4.5 Brokers and Finder’s Fees. Purchaser is not in any way obligated to make any payment to a broker, finder or financial advisor in connection with the origin, negotiation, execution or performance of this Agreement or the Transaction Documents.

ARTICLE 5

SURVIVAL OF REPRESENTATIONS AND WARRANTIES,
LIMITATIONS, AND INDEMNIFICATION

      5.1 Survival of Representations and Warranties. Notwithstanding the making of this Agreement, any examination made by or on behalf of the parties hereto and the Closing hereunder, the representations and warranties of Purchaser and Seller contained in Article 3 and Article 4 of this Agreement shall survive the Closing until the [***] (the “Expiration Date” ) and shall expire on the Expiration Date; provided, however , that the representations and warranties of Seller contained in Section 3.5 shall survive the Closing until [***], and the representations and warranties of Purchaser and Seller contained in Sections 3.2, 3.8, 3.9 and 4.2 shall [***].

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      5.2 Indemnification. Subject to the other provisions of this Article 5, from and after the Closing:

           (a) Indemnification by Seller.

                (i)  Seller and Parent shall indemnify and save harmless Purchaser and its officers, directors, employees, Affiliates and advisers from and against any Losses suffered or incurred by any such indemnified party to the extent arising directly or indirectly from (A) any breach of any representation or warranty of Seller in this Agreement; (B) any breach of any agreement, covenant or undertaking of Seller in this Agreement or any Transaction Document; and (C) the Excluded Assets or the Excluded Liabilities to the extent such Losses are due to facts and circumstances occurring prior to Closing;

                (ii)  no claim of Purchaser for indemnification by Seller of a Loss pursuant to Section 5.2(a)(i) may be made until the aggregate amount of all such Losses would reasonably be expected to exceed five hundred thousand dollars ($500,000), at which point Seller shall be liable for all Losses from the first dollar (including the first $500,000); provided however , that the limitation in this Section 5.2(a)(ii) shall not apply to any claim for indemnification pursuant to Section 5.2(a)(i)(C); and

                (iii)  any amount of indemnification owed by Seller up to six million dollars ($6,000,000) will be not be paid to Purchaser but will, instead, be credited against the book value of the tangible Transferred Assets, which book value at the time of Closing is agreed by the Parties to be in excess of six million dollars ($6,000,000), and any amount owed by Seller for indemnification in excess of six million dollars ($6,000,000) will be paid by Seller, if at all, as an offset against milestone and royalty payments due Seller pursuant to the terms of this Agreement; Purchaser’s sole means of collecting any such amounts in excess of six million dollars ($6,000,000) will be by such offset, and in the event this Agreement expires or is terminated before the amount of milestone and royalty payments used for such offset reaches the amount owed pursuant to such excess, then Purchaser’s claim for all Losses will be deemed to have been fully satisfied and Seller will have no further obligation relating to such Losses, even if no milestone or royalty payment has accrued in order to be used for such offset; provided however , that the limitation in this Section 5.2(a)(iii) shall not apply to any claim for indemnification pursuant to Section 5.2(a)(i)(C).

           (b) Indemnification by Purchaser.

                (i)  Purchaser shall indemnify and save harmless Seller and Parent and their officers, directors, employees and Affiliates from and against any Losses suffered or incurred by any such indemnified party to the extent arising directly or indirectly from (A) any breach of any representation or warranty of Purchaser in this Agreement; (B) any breach of any agreement, covenant or undertaking of Purchaser in this Agreement or any Transaction Document; (C) the employment by Purchaser of any employees working in the Programs after the Closing Date, including without limitation,

whether pursuant to any benefit plans or otherwise, any wages, salary, accrued vacation, commissions, fringe benefit, bonus, profit-sharing or other compensation or remuneration payable to any employee of the Purchaser working in the Programs after the Closing Date (D) the development, manufacture, use or sale by Purchaser or its Affiliates or their Sublicensees of compounds or products developed under the Programs or otherwise pursuant to the terms of this Agreement; and (E) the Assumed Liabilities; and

                (ii)  no claim of Seller for indemnification by Purchaser of a Loss pursuant to Section 5.2(a)(i) may be made until the aggregate amount of all such Losses would reasonably be expected to exceed five hundred thousand dollars ($500,000), at which point Purchaser shall be liable for all Losses from the first dollar (including the first $500,000); provided however , that the limitation in this Section 5.2(b)(ii) shall not apply to any claim for indemnification pursuant to Section 5.2(b)(i)(E).

           (c) In the event that indemnification is sought under this Section 5.2, the indemnified party shall notify the indemnifying party in writing and in accordance with Section 5.4. For purposes of determining the dollar amount of Losses under this Article 5, any materiality, Material Adverse Effect or material adverse effect qualifications in the representations, warranties, covenants and agreements shall be disregarded; provided, however, any materiality, Material Adverse Effect or material adverse effect qualifications shall not be ignored for purposes of determining whether there has been a breach of a representation and warranty giving rise to an indemnifiable claim.

      5.3 Claim Periods and Procedures.

           (a) No claim for Losses pursuant to Section 5.2(a)(i)(A)-(B) or 5.2(b)(i)(A)-(B) shall be brought against an indemnifying party after the date of expiration of such representation, warranty or covenant specified in Section 5.1 (the date of such expiration being the “Claim Date” ).

           (b) Any claim may be asserted prior to the applicable Claim Date if the indemnified party has a reasonable basis for such claim, whether or not the indemnified party is able to specify the amount of Loss at such time. Any claim made before the applicable Claim Date or, in the case of a claim under Section 5.2(a)(i)(C) or Section 5.2(b)(i)(C)-(E), any claim made before the expiration of the applicable statute of limitations, that is pending or unresolved by such date shall continue to be covered by Section 5.2 notwithstanding Section 5.1 or any other applicable survival period or statute of limitations (which the parties hereby waive) until such matter is finally resolved by the parties hereunder or by a court of competent jurisdiction and any amounts payable hereunder are finally determined and paid.

      5.4 Third Party Claims. A party entitled to indemnification hereunder (an “Indemnified Party” ) shall provide written notice to the party obligated to provide indemnification hereunder (the “Indemnifying Party” ) promptly after it becomes aware of the existence of an Action by a Third Party. The Indemnifying Party shall have thirty

(30) days after receipt of such notice to assume the conduct and control, through counsel selected by it that is reasonably acceptable to the Indemnified Party at the expense of the Indemnifying Party, of the settlement or defense or defense of such Action, and the Indemnified Party. After assumption of the defense of any Action as aforesaid, the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof; provided that the Indemnified Party shall be entitled to participate in any such settlement or defense with separate counsel at the expense of the Indemnified Party, further, provided , that if the Indemnified Party receives a written opinion of counsel that a conflict exists between the Indemnified Party and the Indemnifying Party that would make separate representation advisable under rules of professional conduct, the reasonable fees of one separate counsel to the Indemnified Party shall be borne by the Indemnifying Party. The Indemnified Party agrees to cooperate fully with (and to provide all relevant documents and records and make all relevant personnel available to) the Indemnifying Party and its counsel in the defense of any such asserted claim at no additional cost to the Indemnifying Party. If an Indemnifying Party assumes the defense of such an Action, (a) no compromise or settlement thereof may be effected by the Indemnifying Party without the Indemnified Party’s consent (which shall not be unreasonably withheld or delayed) unless (i) there is admission of any violation of law or any violation of the rights of any Person by the Indemnified Party and (ii) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party or declaratory or injunctive relief that has no actual or potential affect on any Indemnified Party or the business of the Indemnified Party, and (b) the Indemnifying Party shall have no Liability with respect to any compromise or settlement thereof effected by the Indemnified Party without its consent (which shall not be unreasonably withheld or delayed), in which case the consent of the Indemnified Party shall not be required. If notice is given to an Indemnifying Party of the commencement of any action pursuant to this Section and it does not, within thirty (30) business days after the Indemnified Party’s notice is given, give notice to the Indemnified Party of its election to participate in or assume the defense thereof, the Indemnified Party may defend the Action at the Indemnifying Party’s sole cost, risk and expense, in such manner and on such terms as the Indemnified Party deems appropriate, including settling any claims; provided, however, that no Indemnified Party may consent to the entry of any judgment or enter into any settlement of any Action without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed, taking into account the relative Liabilities of the parties in respect of such judgment or settlement. Notwithstanding the fo