PURCHASE AGREEMENT

Exhibit 2.1

PURCHASE AGREEMENT

between

QLT USA, INC.

and

ALLERGAN SALES, LLC

Dated as of June 6, 2008

TABLE OF CONTENTS

ARTICLE I DEFINITIONS					1
1.1		Definitions			1
1.2		Other Definitional Provisions			9
ARTICLE II PURCHASE AND SALE					9
2.1		Transfer of Purchased Assets			9
2.2		Excluded Assets			10
2.3		Assumed Liabilities			11
2.4		Excluded Liabilities			12
2.5		Consent of Third Parties			12
2.6		Purchase Price			13
2.7		Allocation of Purchase Price			13
2.8		Risk of Loss			13
ARTICLE III CLOSING					13
3.1		Closing			13
3.2		Transactions at Closing			14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER					15
4.1		Organization and Qualification			15
4.2		Due Authorization			15
4.3		No Conflicts; Enforceability			15
4.4		Title; Sufficiency of Assets			16
4.5		Intellectual Property			16
4.6		Litigation			19
4.7		Consents			20
4.8		Taxes			20
4.9		Permits; Compliance with Laws			20
4.10		FDA and Health Canada Regulatory Matters			20
4.11		Assigned Contracts			22
4.12		Absence of Undisclosed Liabilities			23
4.13		Inventory			23
4.14		Product Records			23
4.15		Absence of Changes or Events			23
4.16		Brokers, Etc.			23
4.17		Solvency			24
4.18		Disclaimer			24

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER					24
5.1		Organization			24
5.2		Due Authorization			24
5.3		No Conflicts; Enforceability			24
5.4		Litigation			25
5.5		Consents			25
5.6		Financing			25
5.7		Brokers, Etc.			25
5.8		Independent Investigation			25
ARTICLE VI COVENANTS					26
6.1		Access to Information			26
6.2		Conduct of the Seller			26
6.3		Required Approvals and Consents			27
6.4		HSR Act			28
6.5		[Reserved]			29
6.6		Notifications			29
6.7		Further Assurances; Further Documents			29
6.8		Third Party Offers			30
ARTICLE VII CONDITIONS TO CLOSING					31
7.1		Conditions Precedent to Obligations of Purchaser and Seller			31
7.2		Conditions Precedent to Purchaser’s Obligations			31
7.3		Conditions Precedent to Seller’s Obligations			32
ARTICLE VIII ADDITIONAL COVENANTS					33
8.1		Confidentiality; Publicity			33
8.2		Availability of Records			34
8.3		Use of Trade or Service Marks			35
8.4		FDA and Health Canada Regulatory Matters			36
8.5		Tax Matters			36
8.6		Destruction of Inventory Not Sold to Purchaser			37
8.7		Payment of Liabilities			37
ARTICLE IX TERMINATION					37
9.1		Termination			37
9.2		Procedure and Effect of Termination			39
ARTICLE X SURVIVAL; INDEMNIFICATION					39
10.1		Survival of Representations and Warranties and Covenants			39
10.2		Indemnification			39
10.3		Notice of Claims			41

10.4		Third Person Claims			42
10.5		Limitation on Indemnity			42
10.6		Remedies			43
10.7		Limitation on Liabilities			43
10.8		No Set-off			43
10.9		Treatment of Indemnification Payments			44
ARTICLE XI MISCELLANEOUS					44
11.1		Assignment; Binding Effect			44
11.2		Expenses			44
11.3		Notices			44
11.4		Severability			45
11.5		Entire Agreement			45
11.6		No Third Party Beneficiaries			45
11.7		Waiver			45
11.8		Governing Law; Jurisdiction			45
11.9		Waiver of Jury Trial			46
11.10		Injunctive Relief			46
11.11		Headings			46
11.12		Counterparts			46
11.13		Schedules			46
11.14		Construction			47
11.15		Time of the Essence			47

LIST OF EXHIBITS

Exhibit A		-		Assignment of Product Intellectual Property
Exhibit B		-		Bill of Sale and Assignment and Assumption Agreement
Exhibit C		-		Short Form Patent Assignment

LIST OF SCHEDULES

Schedule 1.1(a)		-		Assigned Contracts
Schedule 1.1(b)		-		Inventory
Schedule 1.1(c)		-		Knowledge
Schedule 1.1(d)		-		Product Branding Materials
Schedule 1.1(e)		-		Product Copyrights and Domain Names
Schedule 1.1(f)		-		Product Marks
Schedule 1.1(g)		-		Product Patent Rights
Schedule 1.1(h)		-		Product Trade Dress
Schedule 1.1(i)		-		Registrations
Schedule 2.3		-		Assumed Liabilities
Schedule 2.7		-		Purchase Price Allocation
Schedule 7.2(e)		-		Notices and Consents

SELLER DISCLOSURE SCHEDULE

Schedule 4.3		-		No Conflicts; Enforceability
Schedule 4.4		-		Title; Sufficiency of Assets
Schedule 4.5		-		Intellectual Property
Schedule 4.6		-		Litigation
Schedule 4.7		-		Consents
Schedule 4.10		-		FDA and Health Canada Regulatory Matters
Schedule 4.11		-		Assigned Contracts
Schedule 4.12		-		Absence of Undisclosed Liabilities
Schedule 4.14		-		Product Records

PURCHASE AGREEMENT

      THIS PURCHASE AGREEMENT (this “ Agreement ”), dated as of June 6, 2008 (the “ Execution Date ”), is entered into by and between QLT USA, Inc., a Delaware corporation (“ Seller ”) and a wholly-owned subsidiary of QLT Inc., a corporation formed under the laws of the Province of British Columbia, Canada, and Allergan Sales, LLC, a Delaware limited liability company (“ Purchaser ”) and a wholly-owned subsidiary of Allergan, Inc., a Delaware corporation (“ Allergan ”). Each of Seller and Purchaser is sometimes referred to herein, individually, as a “ Party ” and, together, as the “ Parties .” All capitalized terms used herein shall have the meanings specified in Article I below or elsewhere in this Agreement, as applicable.

INTRODUCTION

     WHEREAS, Seller owns all rights in the Product and, subject to the terms and conditions of this Agreement, Seller desires to transfer such rights to Purchaser; and

     WHEREAS, subject to the terms and conditions of this Agreement, Seller wishes to sell the Purchased Assets to Purchaser and transfer the Assumed Liabilities, and Purchaser wishes to purchase the Purchased Assets and assume the Assumed Liabilities from Seller.

     NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants, agreements and provisions set forth herein and in the Related Agreements, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
DEFINITIONS

     1.1       Definitions . In addition to the terms defined above and other terms defined in other Sections of this Agreement, the following terms shall have the meanings set forth below for purposes of this Agreement:

     “ Act ” means the United States Federal Food, Drug, and Cosmetic Act of 1938, as amended, and the implementing regulations, standards, guidelines, policies, and orders issued or administered by FDA.

     “ Action ” means any claim, action, suit, arbitration, inquiry, audit, proceeding or investigation by or before any Governmental Authority or arbitrator.

     “ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, a Person shall be deemed, in any event, to control another Person if it owns or controls, directly or indirectly, more than fifty percent (50%) of the voting equity of the other Person.

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

     “ Assets ” of any Person means all assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including cash, cash equivalents, accounts and notes receivable, chattel paper, documents, instruments, pre-paid expenses and other assets, general intangibles, equipment, inventory, goods, intellectual property, registrations, applicable permits, and product records, including those relating to clinical trials, other research, development, manufacture, formulation, use and distribution.

     “ Assigned Contract(s) ” means those Contracts set forth on Schedule 1.1(a) hereto.

     “ Assignment of Product Intellectual Property ” means the Assignment of Product Intellectual Property, in substantially the form attached hereto as Exhibit A .

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

     “ Bill of Sale and Assignment and Assumption Agreement ” means the Bill of Sale and Assignment and Assumption Agreement, in the form attached hereto as Exhibit B .

     “ Business Day ” means any day other than a Saturday, a Sunday or a day on which banks in the State of Colorado, United States of America are authorized or obligated by Law to be closed.

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

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

     “ Code ” means the United States Internal Revenue Code of 1986, as amended.

     “ Confidentiality Agreement ” means that certain Confidential Disclosure Agreement, dated as of March 21, 2008, between Parent and Allergan, as amended.

     “ Contracts ” means any and all binding commitments, contracts, purchase orders, leases, licenses, easements, permits, instruments, commitments, arrangements, undertakings, practices or other agreements, whether written or oral, and including amendments thereto.

     “ Copyrights ” means copyrights and other works of authorship and registrations and renewals therefore.

     “ Damages ” has the meaning set forth in Section 10.2(a)(i) .

     “ Effective Time ” has the meaning set forth in Section 3.1 .

     “ Encumbrance ” means any security interest, pledge, hypothecation, mortgage, lien or encumbrance, other than any licenses of Intellectual Property.

     “ Excluded Assets ” means any Assets whether or not relating to the Product, other than the Purchased Assets.

     “ Excluded Intellectual Property ” means all rights, title and interest of Seller in and to Intellectual Property, whether now existing or hereafter developed or acquired (including the Seller Brands) other than the Product Intellectual Property.

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

     “ Execution Date ” means the date set forth in the first paragraph of this Agreement.

     “ FDA ” means the United States Food and Drug Administration, or any successor agency thereto.

     “ GAAP ” means United States generally accepted accounting principles.

     “ Governmental Authority ” means any nation or government, any provincial, state, regional, local or other political subdivision thereof, any supranational organization of sovereign states, and any entity, department, commission, bureau, agency, authority, board, court, official or officer, domestic or foreign, exercising executive, judicial, regulatory or administrative functions of or pertaining to government.

     “ Health Canada ” means the Health Products and Food Branch of Health Canada, or any successor thereto.

     “ HSR Act ” means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

     “ Intellectual Property ” means all intellectual property rights arising under the laws of the United States or any other jurisdiction, including Trademarks, Copyrights and Patents, whether registered or unregistered, and all applications and registrations therefor, Know-How, confidential information, trade secrets, and similar proprietary rights in confidential inventions, discoveries, analytic models, improvements, processes, techniques, devices, methods, patterns, formulations and specifications.

     “ Inventory ” means the inventories of (a) finished Product, (b) components and materials included in the Product, (c) stability lot batches of the Product and (d) demonstration units and other samples of the Product, in each case, as described on Schedule 1.1(b) hereto.

     “ IRS ” means the Internal Revenue Service of the United States.

     “ Knowledge ” means, with respect to Seller, the actual knowledge, after reasonable investigation (which investigation is not required to include any freedom to operate analysis), of the Persons set forth on Schedule 1.1(c) hereto.

     “ Know-How ” means know-how, inventions, discoveries, methods, processes, technical data, specifications, designs, drawings, research and development information, technology, data

bases and all other proprietary or confidential information, including customer lists, pricing and cost information, and business and marketing plans and proposals.

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

     “ Liability ” means, collectively, any indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, choate or inchoate, liquidated or unliquidated, secured or unsecured, direct or indirect, matured or unmatured, or absolute, contingent or otherwise, including any product liability.

     “ Losses ” means, with respect to any claim or matter, all losses, expenses, obligations and other Liabilities or other damages (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation).

     “ Material Adverse Change ” means any change, occurrence, condition, event or effect that is materially adverse to (i) the business of developing, manufacturing, marketing, selling and otherwise exploiting the Product and the Purchased Assets, taken as a whole, but shall exclude any change, occurrence, condition, event or effect resulting or arising solely from: (a) events, changes, effects or circumstances that generally affect the industries in which Seller operates or the manufacture of products in such industry (including legal and regulatory changes), (b) general economic or political conditions or events, circumstances, changes or effects affecting the securities markets generally, (c) changes caused by a material worsening of current conditions caused by acts of terrorism or war (whether or not declared) occurring after the date hereof, (d) changes in GAAP or regulatory accounting requirements, (e) changes arising from (A) the consummation of the Transaction or (B) the announcement of the execution of this Agreement or the Related Agreements, or (f) any circumstance, change or effect that results from any action taken pursuant to or in accordance with this Agreement, the Related Agreements or at the request of Purchaser; provided that any changes, occurrences, conditions, events or effects of the nature described in clauses (a), (b), (c) or (d) shall only be excluded so long as they do not have a disproportionate effect on the business of developing, manufacturing, marketing, selling and otherwise exploiting the Product, taken as a whole, as compared to the effect on the business of other Persons in the industries in which Seller operates; or (ii) the ability of Seller and Parent to timely perform their obligations hereunder and to consummate the Transaction.

     “ Material Adverse Effect ” means any change, occurrence, condition, event or effect that is materially adverse to (i) the business of developing, manufacturing, marketing, selling and otherwise exploiting the Product and the Purchased Assets, taken as a whole, or (ii) the ability of Seller and Parent to timely perform their obligations hereunder and to consummate the Transaction, but as to each of (i) and (ii) above shall exclude any change, occurrence, condition, event or effect resulting or arising solely from any circumstance, change or effect that results

from any action required to be taken in accordance with this Agreement or at the request of Purchaser.

     “ Medical Product Regulatory Authority ” means any Governmental Authority that is concerned with the safety, efficacy, reliability, manufacture, investigation, sale or marketing of pharmaceuticals, medical products, biologics or biopharmaceuticals, including the FDA.

     “ NDA ” means FDA NDA 21-794, as supplemented by the approved supplements to that submission, including NDA 21-794 S-001 through S-005 and the final approved package insert and patient information leaflet.

     “ NDS ” means Health Canada NDS 096348 (Original Product Monograph).

     “ Other Transactions ” means, with respect to Seller or its Affiliates (and excluding the transfer of Purchased Assets contemplated by this Agreement), (a) any merger, consolidation, recapitalization or other direct or indirect business combination involving Seller or its Affiliates, (b) the issuance or acquisition of shares of capital stock or other equity securities of Seller or its Affiliates, (c) any tender or exchange offer for the capital stock or other equity securities of Seller or its Affiliates, (d) any dividend or distribution by Seller or its Affiliates to Seller’s or its Affiliates’ stockholders, or (e) the acquisition, license, purchase or other disposition of any of the Assets of Seller or its Affiliates outside the ordinary course of business.

     “ Outside Date ” has the meaning set forth in Section 9.1(a)(ii) .

     “ Parent ” means QLT Inc., a corporation formed under the laws of the Province of British Columbia, Canada.

     “ Party ” or “ Parties ” has the meaning set forth in the first paragraph of this Agreement.

     “ Patents ” means United States and foreign patents, patent applications, patent disclosures, invention disclosures, rights in respect of utility models or industrial designs and other rights relating to the protection of inventions worldwide and all rights related thereto, including all reissues, reexaminations, revisions, divisionals, continuations, continuations-in-part, extensions or renewals of any of the foregoing.

     “ Permitted Encumbrances ” means (a) statutory liens for current Taxes not yet due and payable and (b) mechanics’, carriers’, workers’, repairers’ and other similar liens arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of Seller, or pledges, deposits or other liens securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation), and (c) all other Encumbrances that have not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

     “ Person ” means any individual, corporation, partnership, joint venture, limited liability company, trust or unincorporated organization or Governmental Authority.

     “ Post-Closing Tax Period ” means any Tax period beginning after the Closing Date and that portion of a Straddle Period beginning after the Closing Date.

     “ Pre-Closing Tax Period ” means any Tax period ending on or before the Closing Date and that portion of any Straddle Period ending on the Closing Date.

     “ Prior Agreements ” means, collectively, the Prior Research Agreement and the Prior License Agreement.

     “ Prior License Agreement ” means the Agreement set forth on Schedule 4.5(f).1.

     “ Prior Research Agreement ” means the Agreement set forth on Schedule 4.5(f).2.

     “ Product ” means the topical gel formulation of dapsone known as Aczone®.

     “ Product Branding Materials ” means those branding materials for the Product set forth on Schedule 1.1(d) hereto.

     “ Product Copyrights ” means those Copyrights set forth on Schedule 1.1(e) hereto.

     “ Product Domain Names ” means those domain names set forth on Schedule 1.1(e) hereto.

     “ Product Intellectual Property ” means the Product Patent Rights, Product Copyrights, Product Domain Names, Product Know-How, Product Marks, and Product Trade Dress.

     “ Product Know-How ” means all Know-How owned by Seller or its Affiliates primarily or exclusively related to the Product, including such Know-How which is or becomes the subject of or is included in a Patent.

     “ Product Mark(s) ” means the Trademarks set forth on Schedule 1.1(f) hereto.

     “ Product Patent Rights ” means those Patents set forth on Schedule 1.1(g) hereto.

     “ Product Records ” means to the extent permitted by Law, all books and records that relate primarily or exclusively to the Product or the Purchased Assets, including copies of all material supplier lists, marketing studies, consultant reports, invention disclosures, laboratory notebooks and records, physician databases and correspondence (excluding invoices) with respect to or related to the Product or the Purchased Assets, to the extent maintained by or in the possession of Seller or its Affiliates or their agents (to the extent owned by Seller or its Affiliates), and all complaint files and adverse event files with respect to the Product, provided, however, that (i) all books, documents, records and files (A) prepared in connection with or relating to the Transaction, including bids received from other parties and strategic, financial or Tax analyses relating to the divestiture of the Purchased Assets, the Assumed Liabilities and the Product, or (B) maintained by Seller and/or its representatives, agents or licensees in connection with their respective ongoing Tax, legal, regulatory or reporting requirements, and (ii) any attorney work product, attorney-client communications and other items protected by privilege shall be excluded; provided, further, that Seller may retain a copy of any books and records that

constitute Product Records to the extent necessary for Tax, accounting, litigation or other valid business purposes or to the extent such books and records relate to the Product. In furtherance of the foregoing, Seller shall be entitled to redact from any such books and records that constitute Product Records any information that is not primarily or exclusively related to the Product or the Purchased Assets and such redacted information shall not constitute a Product Record.

     “ Product Trade Dress ” means the trade dress, package designs, product inserts, labels, logos and associated artwork set forth on Schedule 1.1(h) hereto.

     “ Property Taxes ” means all real property Taxes, personal property Taxes and similar ad valorem Taxes.

     “ PTO ” means the United States Patent and Trademark Office, or any successor agency thereto.

     “ Purchase Price ” has the meaning set forth in Section 2.6 .

     “ Purchased Assets ” means, collectively, Assigned Contracts, Inventory, Registrations, Product Records, Product Intellectual Property and Product Branding Materials.

     “ Purchaser ” has the meaning set forth in the first paragraph of this Agreement.

     “ Registrations ” means the regulatory approvals, franchises, authorizations, licenses, certificates, applications, agreements, permits, exemptions, and other permissions (including the NDA, the NDS and investigational new drug applications) issued by Governmental Authorities in the Territory and held by Seller as set forth on Schedule 1.1(i) hereto.

     “ Related Agreements ” means, collectively, the Assignment of Product Intellectual Property, the Bill of Sale and Assignment and Assumption Agreement, the SMP Patent License Agreement and the Short Form Patent Assignment.

     “ Representatives ” means, with respect to any Person, the directors, officers, managers, employees, independent contractors, agents or consultants of such Person.

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

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

     “ Seller Bank Account(s) ” means one or more bank accounts in the United States to be designated by Seller in a written notice to Purchaser at least three (3) Business Days before the Closing.

     “ Seller Brands ” means the Trademarks, housemarks, tradenames and trade dress owned or used by Seller, whether or not registered, other than the Product Marks.

     “ Seller Disclosure Schedule ” means the disclosure schedules delivered by Seller to Purchaser on the Execution Date of this Agreement specifically identifying the section or subsection to which such disclosure relates (it being expressly agreed that disclosure of any item,

matter, document or agreement under any Section or subsection in such Seller Disclosure Schedule, or in attachments thereto, shall be deemed disclosure for all purposes of any other sections or subsections of Article IV to the extent that the applicability of such disclosure to such other section or subsection is reasonably apparent on the face of such disclosure).

     “ Seller Nondisclosure and Invention Assignment Agreements ” has the meaning set forth in Section 4.5(e).

     “ Seller Taxes ” means, except as otherwise provided in this Agreement, Liability for Taxes of Seller, including Taxes (i) arising from or imposed with respect to the Purchased Assets attributable to any Pre-Closing Tax Period, (ii) of Seller for any period which Taxes are not related to the Purchased Assets; (iii) of Seller that will arise as a result of the transactions contemplated by this Agreement; (iv) of another Person as a transferee, as the result of having been a member of an affiliated, consolidated, combined or unitary group or otherwise through operation of law; and (v) as a result of being a party to any tax sharing, tax indemnity or tax allocation agreement. For the avoidance of doubt, any Tax of Seller that would otherwise be described in the foregoing sentence shall not fail to be a Seller Tax solely by reason of (i) the assessment or imposition of such Tax by a Governmental Authority against Purchaser or (ii) the fact that such Tax gives rise to an Encumbrance for Taxes on the Purchased Assets.

     “ Short Form Patent Assignment ” means the Short Form Patent Assignment, in substantially the form attached hereto as Exhibit C .

     “ SMP Patent License Agreement ” means the agreement between Seller and Purchaser relating to the license of SMP Technology by Seller to Purchaser in substantially the form agreed to as of the Execution Date.

     “ SMP Technology ” has the meaning set forth in the SMP Patent License Agreement.

     “ Straddle Period ” means any Tax period beginning on or before and ending after the Closing Date.

     “ Subsidiary ” means, with respect to any Person, any and all corporations, partnerships, limited liability companies, joint ventures, associations and other entities controlled by such Person.

     “ Tax ” or “ Taxes ” means any and all taxes, assessments, levies, tariffs, duties or other charges or impositions in the nature of a tax (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority, including income, estimated income, gross receipts, profits, business, license, occupation, franchise, capital stock, real or personal property, sales, use, transfer, value added, employment or unemployment, social security, disability, alternative or add-on minimum, customs, excise, stamp, environmental, commercial rent or withholding taxes.

     “ Tax Return ” means any report, return (including any information return), claim for refund, election, estimated Tax filing or payment, request for extension, document, declaration or other information or filing required to be supplied to any Governmental Authority with respect to Taxes, including attachments thereto and amendments thereof.

     “ Territory ” means worldwide.

     “ Trademark ” means trademarks, service marks, certification marks, trade dress, Internet domain names, trade names, identifying symbols, designs, product names, company names, slogans, logos or insignia, whether registered or unregistered, and all common law rights, applications for registration, registrations and renewals therefor, and all goodwill associated therewith.

     “ Transaction ” means the transaction contemplated by this Agreement and the Related Agreements.

     “ Transfer Taxes ” means any and all transfer, documentary, sales, use, gross receipts, stamp, registration, value added, recording, escrow and other similar Taxes and fees (including any penalties and interest) incurred in connection with the Transaction (including recording and escrow fees and any real property or leasehold interest transfer or gains Tax and any similar Tax).

     1.2      Other Definitional Provisions .

               (a)     When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.

               (b)     The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

               (c)     The terms defined in the singular has a comparable meaning when used in the plural, and vice versa.

               (d)     Words of one gender include the other gender.

               (e)     References to a Person are also to its successors and permitted assigns.

               (f)     The term “dollars” and “$” means United States dollars.

               (g)     The word “including” means “including without limitation” and the words “include” and “includes” have corresponding meanings.

               (h)     Unless the context clearly requires otherwise, “or” is not exclusive.

ARTICLE II
PURCHASE AND SALE

     2.1      Transfer of Purchased Assets .

               (a)      Purchase and Sale of Purchased Assets . At the Effective Time, on the terms and subject to the conditions hereof and in consideration of the Purchase Price paid to

Seller by Purchaser, Seller will sell, convey, transfer, assign and deliver to Purchaser, and Purchaser will purchase, take delivery of and acquire from Seller, all of Seller’s right, title and interest in and to the Purchased Assets. In connection with the sale and transfer of the Inventory, Purchaser shall provide to Seller a resale certificate or any such other instruments or documentation to the extent applicable to prevent Purchaser from paying State of Colorado sales and use Taxes with respect to the Inventory.

               (b)      Transferred Assets . Without limiting the foregoing, the Purchased Assets shall include, wherever located, (i) all goodwill related thereto, (ii) all rights, credits, interests and claims against third parties relating to the Purchased Assets and the Assumed Liabilities, whether choate or inchoate, known or unknown, contingent or non-contingent, (iii) insurance proceeds received by Seller or its Affiliates with respect to claims related to the Purchased Assets and (iv) all fees and expenses pre-paid by Seller (A) under any Assigned Contract, or (B) with respect to any Registrations, or (C) to any Governmental Authority with respect to any of the Product Intellectual Property.

               (c)      Acknowledgment . For the avoidance of doubt, and without limiting in any way the definition of “Purchased Assets,” Seller acknowledges and agrees that the Purchased Assets are intended to include:

        (i)     all material Contracts relating primarily or exclusively to the Product, other than those Contracts set forth on Schedule 4.11(b);

        (ii)     all Registrations owned by Seller and its Affiliates related primarily or exclusively to the Product or the Product Intellectual Property;

        (iii)     all intellectual property rights included in the definition of Product Intellectual Property (other than Product Know-How) primarily or exclusively related to the Product or the SMP Technology, in each case owned or in-licensed by Seller or its Affiliates;

        (iv)     Product Branding Materials owned by Seller or its Affiliates;

        (v)     Product Know-How;

        (vi)     Inventory; and

        (vii)     Product Records.

     2.2      Excluded Assets . The Parties acknowledge and agree that Seller is not selling, conveying, transferring, assigning or delivering any rights whatsoever to the Excluded Assets to Purchaser, and Purchaser is not purchasing, taking delivery of or acquiring any rights whatsoever to the Excluded Assets from Seller. Without limiting the foregoing, Purchaser expressly acknowledges it is not acquiring any rights whatsoever to, and the following are included within the definition of “Excluded Assets”:

               (a)     the Excluded Intellectual Property, including the Seller Brands thereof and any other logos or Trademarks of Seller not included in the Product Intellectual Property;

               (b)     any cash and cash equivalent balances of Seller as of the Closing Date;

               (c)     any fees and expenses pre-paid by Seller (i) under any Contract that is not an Assigned Contract, or (ii) with respect to the registration of any of Seller’s Intellectual Property other than the Product Intellectual Property, or (iii) otherwise for the period prior to the Closing Date to the extent not included in Section 2.1(b)(iv) ;

               (d)     any minute books, Tax Returns or other corporate documents or books and records of Seller that are not included in the Product Records;

               (e)     any claim, right or interest of Seller in and to any Tax refund or credit for any period;

               (f)     any Contracts set forth on Schedule 4.11(b);

               (g)     any inventory not included in the definition of “Inventory”; and

               (h)     any equipment located at Parent’s facilities in Vancouver, British Columbia, Canada used to store stability samples or to test such samples.

     2.3      Assumed Liabilities . As of the Effective Time, Purchaser shall assume and pay, perform or otherwise discharge, in accordance with their respective terms and subject to the respective conditions thereof, only the following Liabilities (collectively, the “ Assumed Liabilities ”):

               (a)     any Liability arising on or after the Closing Date under any Assigned Contract that may occur and/or exist after the Effective Time by virtue of Purchaser’s ownership of the Purchased Assets;

               (b)     any Liability arising on or after the Closing Date under any Assigned Contract, including any Liability under any Assigned Contract which was entered into by Seller after the Execution Date in accordance with this Agreement;

               (c)     any Liability for Taxes arising from or imposed with respect to the Purchased Assets attributable to any Post-Closing Tax Period;

               (d)     any Liability that Purchaser has expressly assumed or agreed to assume under this Agreement; and

               (e)     any other Liability specifically and to the extent set forth on Schedule 2.3 hereto.

Notwithstanding the foregoing, Purchaser is not assuming, and Seller shall retain, as an Excluded Liability, any Liability arising with respect to any default of Seller under any Assigned Contract or with respect to any Liability that arises out of or is based on or calculated on the basis of any event, circumstance or condition existing on or before the Effective Time. For avoidance of doubt, nothing in this Section 2.3 is intended to, or shall be interpreted to, limit or otherwise reduce the Liabilities of Purchaser as they may occur and/or exist after the Effective Time by

virtue of Purchaser’s ownership of the Purchased Assets, but rather, this Section 2.3 is solely intended to identify and provide for the assumption by Purchaser of those Liabilities of Seller that are specifically assumed by Purchaser hereunder and which, but for such assumption, would remain Liabilities of Seller.

     2.4      Excluded Liabilities . Seller shall retain and shall be responsible for paying, performing and discharging when due, and Purchaser shall not assume or have any responsibility for, any and all Liabilities of Seller other than the Assumed Liabilities, including the following Liabilities (the “ Excluded Liabilities ”):

               (a)      any Liabilities exclusively relating to or arising out of the Excluded Assets;

               (b)      any Liabilities of Seller owing to Parent, including any indebtedness for borrowed money owed to any Affiliate of Seller, and any Contract evidencing any such financing arrangement, in each case, whether such Liability arises before, on or after the Closing Date;

               (c)      Seller’s obligations under this Agreement; and

               (d)      any Liability for Seller Taxes.

     2.5       Consent of Third Parties . On the Closing Date, Seller shall assign to Purchaser, and Purchaser will assume, the Assigned Contracts, in each case to the extent permitted by, and in accordance with, applicable Law. Notwithstanding anything herein to the contrary, but subject to Purchaser’s rights under Section 7.2(e) , if the assignment or assumption of all or any portion of any rights or obligations under any Assigned Contract shall require the consent of any other party thereto or any other third party that has not been obtained prior to the Closing Date, this Agreement shall not constitute an agreement to assign, license, sublicense, lease, sublease, convey or otherwise transfer any rights or obligations under any such Assigned Contract if an attempted assignment without any such consent would constitute a breach or violation thereof, unless and until such consent is obtained. In order, however, to seek to provide Purchaser the full realization and value of every Assigned Contract of the character described in the immediately preceding sentence (i) as soon as practicable after the Closing, Seller and Purchaser shall cooperate, in all commercially reasonable respects, to obtain any necessary consents to the assignment of such Assigned Contracts, provided that no Party shall be required to make any material payments or agree to any material undertakings in connection therewith, and (ii) until the earliest of: (A) the date all such consents are obtained, (B) the date all such Assigned Contracts expire or are terminated or (C) the date which is six (6) months from the Closing Date, Seller and Purchaser shall cooperate, in all commercially reasonable respects, to provide to Purchaser the benefits under such Assigned Contracts (with Purchaser being entitled to all the gains and responsible for all Losses, Taxes and Liabilities realized or incurred thereunder from the Closing Date until the expiration of such period if Purchaser receives the benefits thereunder). In connection with this Section 2.5 , if reasonably requested by Purchaser, Seller shall use commercially reasonable efforts to seek to enforce for the benefit of Purchaser all reasonable claims or rights of Seller arising under the applicable Assigned Contracts at Purchaser’s expense; provided, that Purchaser shall indemnify Seller and its Affiliates for any

and all Losses arising in connection with any Action by a third party arising from, in connection with or otherwise with respect to actions taken or failed to be taken by Seller or any of its Affiliates consistent with Purchaser’s request and direction under this Section 2.5 . Provided that Purchaser receives the benefits thereunder, Purchaser shall perform and comply with, at Purchaser’s cost, all of Seller’s obligations incurred during such period under such Assigned Contracts as if Purchaser were Seller thereunder. Promptly after any required consents to assignment are obtained for any such Assigned Contracts, Seller shall assign and transfer such Assigned Contract to Purchaser without any further payment or consideration.

     2.6       Purchase Price . In consideration of the sale, assignment, conveyance and delivery of the Purchased Assets under this Article II , Purchaser shall, upon the Closing, assume the Assumed Liabilities and pay to Seller, by wire transfer of immediately available funds directly to the Seller Bank Account(s), $150,000,000 (the “ Purchase Price ”).

     2.7       Allocation of Purchase Price . The Purchase Price (plus Assumed Liabilities to the extent properly taken into account under the Code) shall be allocated among the Purchased Assets (other than the Inventory) and the Inventory as set forth on Schedule 2.7 hereto and in accordance with Section 1060 of the Code and the Treasury Regulations. To the extent the Purchase Price is adjusted pursuant to Section 10.9 or otherwise, Purchaser and Seller shall amend such schedule to reflect such adjustments. Purchaser and Seller shall file their Tax Returns (and IRS Form(s) 8594, as applicable) on the basis of such allocation, as it may be amended, and neither Party shall thereafter take a Tax Return position inconsistent with such allocation unless otherwise required by applicable Law.

     2.8      Risk of Loss . Until the Effective Time, any loss of or damage to the Purchased Assets from fire, flood, casualty or any other similar occurrence shall be the sole responsibility of Seller. As of the Effective Time, title to the Purchased Assets shall be transferred to Purchaser. After the Effective Time, Purchaser shall bear all risk of loss associated with the Purchased Assets and shall be solely responsible for procuring adequate insurance to protect the Purchased Assets against any such loss.

ARTICLE III
CLOSING

     3.1       Closing . Upon the terms and subject to the conditions of this Agreement, the Closing shall be held on a date to be specified by the Parties, such date (the “ Closing Date ”) to be no later than the third Business Day after satisfaction or waiver of all of the conditions set forth in Article VII at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025, unless the Parties otherwise agree. The Parties will exchange (or cause to be exchanged) at the Closing the funds, agreements, instruments, certificates and other documents, and do, or cause to be done, all of the things respectively required of each Party as specified in this Agreement. The Closing shall be deemed to have occurred at 12:01 a.m. Colorado time on the Closing Date (the “ Effective Time ”).

     3.2      Transactions at Closing . At the Closing, on the terms and subject to the conditions hereof:

                (a)       Seller’s Actions and Deliveries . Seller shall deliver or cause to be delivered to Purchaser:

          (i)     title to the Inventory, which Inventory Seller shall deliver to Purchaser at the locations set forth on Schedule 1.1(b) ;

          (ii)      executed counterparts of each of the Related Agreements to which it is a party;

          (iii)      possession of all tangible Purchased Assets, including originals of the Assigned Contracts, Registrations, Product Records and Product Branding Materials to the extent reasonably available;

          (iv)      letter(s) and completed form(s) from Seller to the FDA and each other Medical Product Regulatory Authority in the form and including the content required under the Act and other applicable Laws, and duly executed by Seller, transferring the rights to the Registrations to Purchaser, including those contemplated by Section 6.3(b) ;

          (v)      a certificate of a duly authorized officer of Seller certifying as to the matters set forth in Sections 7.2(a) and (b) ; and

          (vi)      such other documents and instruments as may be reasonably necessary to effect or evidence the Transaction.

                (b)       Purchaser’s Actions and Deliveries . Purchaser shall deliver or cause to be delivered to Seller:

          (i)     the Purchase Price in full by wire transfer of immediately available funds directly to the Seller Bank Account(s);

          (ii)      executed counterparts of each of the Related Agreements to which it is a party;

          (iii)      letter(s) from Seller to the FDA and each other Medical Product Regulatory Authority in the form and including the content required under the Act and other applicable Laws, and duly executed by Purchaser, assuming responsibility for Registrations from Seller, including those contemplated by Section 6.3(b) , and forms completed by Purchaser pursuant to Section 6.3(b) ;

          (iv)      a certificate of a duly authorized officer of Purchaser certifying as to the matters set forth in Sections 7.3(a) and (b) ; and

          (v)      such other documents and instruments as may be reasonably necessary to effect or evidence the Transaction.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

     Except as otherwise set forth on the Seller Disclosure Schedule, Seller hereby represents and warrants to Purchaser as of the Execution Date as follows:

     4.1       Organization and Qualification . Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and has all requisite corporate power and authority to own, lease, license and operate, as applicable, the Purchased Assets. Seller is duly qualified or licensed as a foreign corporation to do business and is in good standing in each jurisdiction where the ownership or operation of the Product and the Purchased Assets, or the nature of the activities conducted by Seller, makes such qualification or licensing necessary, except in each case, for any such failures that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Seller does not have any Subsidiaries other than Atrix Laboratories GmbH. Seller is a wholly-owned Subsidiary of Parent.

     4.2       Due Authorization . Seller has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and the Related Agreements, and the execution and delivery of this Agreement and the Related Agreements and the performance of all of its obligations hereunder and thereunder have been duly authorized by Seller and Parent, and no other corporate proceedings are required for Seller to execute, deliver and perform its obligations under this Agreement and the Related Agreements.

     4.3       No Conflicts; Enforceability . The execution, delivery and performance of this Agreement and the Related Agreements by Seller, and the consummation of the transactions contemplated hereby and thereby (a) are not prohibited or limited by, and will not result in the breach of or a default under, any provision of the Certificate of Incorporation or Bylaws of Seller, (b) assuming all of the consents, approvals, authorizations and permits described in Section 4.7 have been obtained and all the filings and notifications described in Section 4.7 have been made and any waiting periods thereunder have terminated or expired, does not materially conflict with or materially violate any material Law applicable to Seller, the Product or any of the Purchased Assets, and (c) except as set forth on Schedule 4.3 of the Seller Disclosure Schedule, does not conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, require any notice, consent or waiver under, or result in the creation of any Encumbrance on any of the Purchased Assets pursuant to, any agreement or other instrument binding on Seller or any applicable order, writ, injunction or decree of any court or Governmental Authority or arbitrator to which Seller is a party or by which Seller is bound or to which any of its Assets is subject, except in the case of subsection (c) above, for any such breaches, defaults or other occurrences that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. This Agreement and the Related Agreements have been duly executed and delivered by Seller, and constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other laws of general application relating to or affecting creditors’ rights generally.

     4.4       Title; Sufficiency of Assets .

               (a)      Except as set forth on Schedule 4.4(a) of the Seller Disclosure Schedule, Seller owns, leases, licenses or has the right to use the Purchased Assets.

               (b)      Schedule 4.4(b) of the Seller Disclosure Schedule sets forth a complete and accurate list of all Purchased Assets leased or licensed by Seller from any other Person (including Parent and any other Affiliate of Seller). Except as set forth on Schedule 4.4(b) of the Seller Disclosure Schedule, no other Person has any right, title or interest in any of the Purchased Assets.

               (c)      Seller has, and subject to obtaining any consents required by this Agreement, at the Closing will transfer to Purchaser, good, valid and transferable title to (or in the case of any leased or licensed Purchased Assets listed on Schedule 4.4(b) of the Seller Disclosure Schedule, a valid lease in or license to) the Purchased Assets, free and clear of all Encumbrances other than Permitted Encumbrances. Seller has the valid and exclusive right to possess, use and transfer the Purchased Assets; in each case, which right shall be fully transferred to Purchaser at the Closing pursuant to the terms of this Agreement.

               (d)      The Purchased Assets constitute (i) all of the Assets of Seller and its Affiliates relating primarily or exclusively to the Product and (ii) all of the Assets of Seller and its Affiliates that are material and necessary to the development and manufacture of the Product, provided that for purposes of clauses (i) and (ii): (A) Seller makes no representation as to the volume of Product that may be manufactured using only the Purchased Assets; (B) the following are excluded from “Assets”: (x) the Assets set forth in Section 2.2 and (y) records not included in the definition of Product Records; and (C) as to Contracts, the Purchased Assets include the material Contracts to which Seller or any Affiliate thereof is a party relating primarily or exclusively to the Product, other than those Contracts set forth on Schedule 4.11(b).

     4.5      Intellectual Property .

               (a)      Schedule 4.5(a) of the Seller Disclosure Schedule sets forth a true and complete list of all Product Patent Rights, registered Product Marks, applications for registration of Product Marks, registered Product Trade Dress, applications for registration of Product Trade Dress, material unregistered Product Trade Dress, Product Domain Names, registered Product Copyrights, applications for registration of Product Copyrights and material unregistered Product Marks owned by Seller (collectively, the “ Scheduled Intellectual Property ”), including all applicable information regarding the territory of any registration, or the status of any registration and/or application.
Schedule 4.5(a) of the Seller Disclosure Schedule sets forth the due date for all actions pending as of the Execution Date to be taken before relevant patent and trademark authorities with respect to such Scheduled Intellectual Property in the one (1) year following the Execution Date, which listing shall be limited to Seller’s Knowledge with respect to jurisdictions other than the U.S. and Canada. Except as set forth in Schedule 4.5(a) of the Seller Disclosure Schedule, Seller exclusively owns, free and clear of all Encumbrances, all right, title and interest in and to, all Scheduled Intellectual Property. Except as set forth on Schedule 4.5(a) of the Seller Disclosure Schedule, to Seller’s Knowledge, all of the Scheduled Intellectual Property is valid, subsisting and enforceable. To Seller’s Knowledge, there are no facts (including any material

prior art not disclosed to the applicable registering or granting authority in connection with any registered Trademarks or granted Patents, or applications for Trademarks or Patents, in each case included in the Scheduled Intellectual Property), that would invalidate or render unenforceable any Patents or Trademarks included in the Scheduled Intellectual Property. Seller (including its Affiliates and predecessors in interest, as applicable) has properly represented its entity status to the PTO and to the applicable patent or intellectual property registering authority in connection with the prosecution and maintenance fees related to any registered Patents or applications for Patents, respectively, in each case included in the Scheduled Intellectual Property. To Seller’s Knowledge, except as set forth on Schedule 4.5(a) of the Seller Disclosure Schedule, Seller (including its Affiliates and predecessors in interest) has paid all maintenance fees and made all filings (including all renewals, statements of use, affidavits of continued use and affidavits of incontestability, as applicable) when due (with the due date including any permitted extensions of fee payment dates and filing dates, as applicable).

               (b)      Except as set forth on Schedule 4.5(b) of the Seller Disclosure Schedule, no claim has been asserted or threatened, and Seller has not received any written notice, that the use or exploitation by Seller of any Product Intellectual Property infringes or misappropriates the Intellectual Property of any third party and, to Seller’s Knowledge, there is no reasonable basis for any such claim. Except as set forth on Schedule 4.5(b) of the Seller Disclosure Schedule, to Seller’s Knowledge, there is no reasonable basis for any claim that the making, having made, use, offer for sale, import or sale of the Product by Seller or its agents (or use of the Product in accordance with its intended use) infringes or misappropriates the Intellectual Property of any third party. There are no written claims (including interferences, oppositions or cancellation actions) against Seller that were either made after November 19, 2004 or are presently pending or, to the Knowledge of Seller, threatened, contesting the validity, ownership or enforceability of any of the Scheduled Intellectual Property or, solely as to the Product Marks, contesting the use or registrability of such Product Marks, and, to the Knowledge of Seller, no third party is infringing or misappropriating any of the Product Intellectual Property, except as set forth on Schedule 4.5(b) of the Seller Disclosure Schedule. The Scheduled Intellectual Property is not subject to any outstanding Order restricting the use thereof. In the last twelve (12) months, Seller has not taken any action (or failed to take any action) that has resulted in the loss, lapse, abandonment, invalidity or unenforceability of any of the Product Intellectual Property, except as set forth on Schedule 4.5(b) of the Seller Disclosure Schedule.

               (c)      Except as set forth on Schedule 4.5(c) of the Seller Disclosure Schedule, (i) Seller (including its Affiliates and predecessors in interest) has not granted any licenses to the Product Intellectual Property to third parties; and (ii) neither Seller nor, to Seller’s Knowledge, any other Person, is party to any Contract with third parties that limit or restrict the use of the Product Intellectual Property or require any payments for their use.

               (d)      The execution and delivery of this Agreement and the Related Agreements and the consummation of the Transaction will not (i) result in Seller (including its Affiliates and predecessors in interest) granting to any Person, other than Purchaser, any rights or licenses to any Product Intellectual Property, except as set forth on Schedule 4.5(d) of the Seller Disclosure Schedule, or (ii) impair the right, title or interest of Purchaser in or to any of the Product Intellectual Property or result in any modification of rights and obligations under any Assigned Contract or any other Contract to which Seller is a party, such that Purchaser’s use of the

Purchased Assets is subject to restrictions, impairments or payments that did not apply to Seller’s use of such Purchased Assets in such manner prior to the Closing Date.

               (e)      Seller (including its Affiliates and predecessors in interest) has taken all reasonable steps to protect the Product Know-How, including requiring each current and former employee and independent contractor of Seller (including its Affiliates and predecessors in interest) that contributed to the Product Intellectual Property to enter into agreements with Seller (including its Affiliates and predecessors in interest) pursuant to which he, she or it agrees to protect the confidential information of Seller (including its Affiliates and predecessors in interest) and assign (and has assigned) to Seller all Intellectual Property related to the Product created in the course of his, her or its employment or other relationship with Seller (including its Affiliates and predecessors in interest) to the extent permitted by applicable Law (collectively, “ Seller Nondisclosure and Invention Assignment Agreements ”).

               (f)      With respect to the Prior Agreements, Seller hereby represents and warrants that:

          (i)      The formulation of the Product that is the subject of the approvals by the FDA set forth on Schedule 1.1(i) was developed in all material respects prior to the effective date of the Prior Agreements;

          (ii)      The Patents set forth on Schedule 4.5(f)(ii) of the Seller Disclosure Schedule and all foreign counterparts of such Patents, claim inventions that were conceived and reduced to practice prior to the effective date of the Prior Agreements, and none of Prior Party’s employees or consultants, in their capacities as such, is an inventor of any of the inventions claimed in the Product Patent Rights or contributed to the Product or Purchased Assets;

          (iii)      The Prior Research Agreement, as extended by the parties on the date set forth on Schedule 4.5(f)(iii) of the Seller Disclosure Schedule, terminated in accordance with its terms on the date set forth on Schedule 4.5(f)(iii) of the Seller Disclosure Schedule;

          (iv)      Seller has and will maintain until six (6) years following the expiration or termination of the last to expire Patent included in the Purchased Assets all copies of written materials that were generated by Seller or provided to Seller in connection with the Prior Research Agreement, including any Exploratory Development Program Plans and Research Plans (as such plans are defined in the Prior Research Agreement), and any reports generated under the Prior Research Agreement pursuant to the section set forth on Schedule 4.5(f)(iv) of the Seller Disclosure Schedule;

          (v)      Prior Party has not paid any royalties or other compensation to Seller (including its Affiliates or predecessors-in-interest) under the Prior License Agreement with respect to the Product or the Purchased Assets or products using or practicing any of the Purchased Assets, and no such royalties or compensation

are owed under the Prior License Agreement with respect to the to the Product or the Purchased Assets or products using or practicing any of the Purchased Assets;

          (vi)      There was no Technology (as defined in Schedule 4.5(f)(vi) of the Seller Disclosure Schedule) developed under the Prior Research Agreement that includes or relates to the Product or Purchased Assets;

          (vii)      There was no disclosure of any Inventions (as defined in the Prior Research Agreement) relating to the Product or Purchased Assets by either party to the Prior Research Agreement in accordance with the section of that Research Agreement set forth on Schedule 4.5(f)(vii) of the Seller Disclosure Schedule;

          (viii)      There were no more than that number of Candidates (as defined in Schedule 4.5(f)(viii) of the Seller Disclosure Schedule) set forth in Schedule 4.5(f)(viii) of the Seller Disclosure Schedule provided by Prior Party to Seller (including its Affiliates and predecessors-in-interest) under the Prior Research Agreement;

          (ix)      No Candidates provided by Prior Party to Seller (including its Affiliates and predecessors-in-interest) pursuant to the Prior Research Agreement, or derivatives of such Candidates:

	(A)		were ever identified, tested or utilized under the Prior Research Agreement in connection with the Product or the Purchased Assets;
	(B)		include Dapsone or a derivative of Dapsone;
	(C)		have been or will be used to treat acne utilizing any of the Product Intellectual Property; or
	(D)		have been or will be applied topically utilizing any of the Product Intellectual Property.

     4.6       Litigation . Except as set forth on Schedule 4.6 of the Seller Disclosure Schedule, there is no Action pending or, to Seller’s Knowledge, threatened , and there is no claim, governmental investigation or administrative action pending or, or to Seller’s Knowledge, threatened involving Seller (or to Seller’s Knowledge, any third party) (i) related to or affecting the Product or the Purchased Assets which has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (ii) that would prohibit, hinder, delay or otherwise impair Seller’s ability to perform its obligations under this Agreement or under the Related Agreements, including the transfer of the Product and the Purchased Assets, o