PRODUCT SALES AGREEMENT

PRODUCT SALES AGREEMENT

THIS PRODUCT SALES AGREEMENT (this "Agreement") made as of the 21st day

of December, 2001, by and between XYZ, Inc., a .......... corporation, having

its principal place of business at ………., …………………., ..........,

.......... ("XYZ") and YYY, Inc., a .......... corporation, having

its principal place of business at ……………... ("YYY").

WHEREAS, XYZ is the owner of development projects relating to

certain products, including, but not limited to the abbreviated new drug

applications which have been filed and/or approved, as more specifically set

forth below; and

WHEREAS, YYY desires to purchase from XYZ and XYZ desires to sell

to YYY such products development projects, together with all their attendant

rights and obligations; and

WHEREAS, YYY has agreed to assume from XYZ certain liabilities and

undertake certain obligations on behalf of XYZ;

NOW THEREFORE, in consideration of the mutual covenants and benefits

contained in this Agreement, the parties agree as follows:

1 DEFINITIONS. In addition to the terms defined elsewhere

herein, the following terms shall be defined as follows:

1.1 "XXX" shall mean an abbreviated new drug application which is

submitted to the FDA for approval to manufacture and/or sell a pharmaceutical

product in the United States pursuant to the FDC Act

1.2 "XXX Products" shall mean (i) Acyclovir Capsules (200 mg); (ii)

Acyclovir Tablets (400 mg, 800 mg, UD); (iii) Etodolac Capsules (300 mg, bottle

of 100); (iv) Etodolac Tablets (400 mg, bottle of 100); and (iv) Ketoconazole

Tablets (200 mg, bottle of 100, blister packs).

1.3 "cGMP" shall mean current good manufacturing practices as set forth

in the FDC Act.

1.4 "Development Products" shall mean (i) Pentoxifylline Tablets (400

mg, bottle of 100, 5000, UD) and (ii) Selegiline Tablets/Capsules (generic

dosage forms).

1.5 "FDA" shall mean the United States Food and Drug Administration.

1.6 "FDC Act" shall mean the Federal Food, Drug and Cosmetic Act, 21

U.S.C.ss.321 et seq., as amended, and the regulations promulgated thereunder

from time to time.

1.7 "Governmental Entity" shall mean any federal, state, local or

non-U.S. government or any court of competent jurisdiction, legislature,

governmental agency,

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administrative agency or commission or other governmental authority or

instrumentality.

1.8 "LOI" shall mean that certain letter of intent executed by and

between XYZ and YYY on or about April 20, 2001.

1.9 "Material Adverse Effect" means a material adverse effect on the

business, assets, operations, prospects or condition, financial or otherwise,

relating to the XXX Products and the Development Products, taken as a whole.

2 TRANSFER OF THE ASSETS.

2.1 SALE OF ASSETS. On the terms and conditions set forth in this

Agreement, XYZ agrees to sell, assign, deliver, transfer and convey and YYY

agrees to purchase, acquire and accept all of the right, title and interest of

XYZ in and to the Products (as defined below), and more particularly the

assets set forth below in subsections 2.1.1 through 2.1.5 (the "Assets"), free

and clear of any and all liens or encumbrances.

2.1.1 THE PRODUCTS. All of XYZ's right, title and

interest in and to the XXX Products and the

Development Products (collectively referred to herein

as the "Products").

2.1.2 THE REGULATORY RECORDS. All of XYZ's right, title

and interest in and to any and all regulatory files

(including correspondence with regulatory

authorities), registrations, applications, approvals,

licenses and permits relating to the Products, as of

the Closing Date, from the FDA, or, to the extent

they exist, any other applicable regulatory authority

in any country, in each case to the extent

transferable in light of legal, regulatory and,

practical considerations;

2.1.3 THE INTELLECTUAL PROPERTY. All trademarks, trademark

rights, licenses, inventions, processes,

specifications, know-how, trade secrets, goodwill and

copyrights, which are currently owned by XYZ and

used exclusively in connection with the Products and

set forth on Schedule 2.1.3.

2.1.4 ACCRUED ROYALTIES. All royalties which accrue and

become due and owing from WWW to XYZ from the

date of the execution of the LOI, to be paid in

accordance with Section 6.1.3 below.

2.1.5 THE INTANGIBLES. All the rights exclusively relating

to the Assets set forth in 2.1.1, 2.1.2, 2.1.3 above,

including all claims, counterclaims, credits, causes

of action, rights of recovery and rights of setoff.

2.2 EXCLUDED ASSETS. YYY acknowledges and agrees that it is not

acquiring any right, title or interest in or to any other assets of XYZ

including, by way of example, the following assets ("Excluded Assets"):

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2.2.1 CASH. All of XYZ's cash, bank accounts,

certificates of deposit and other cash equivalents.

2.2.2 ACCOUNTS RECEIVABLE. Except as set forth in Section

2.1.4 above, all of XYZ's accounts receivable,

which shall include all receivables arising from or

relating to any Products at any time prior to the

close of business on the Closing Date.

2.2.3 REAL ESTATE. Any real estate owned or leased by

XYZ.

2.2.4 TAX RECORDS AND REFUNDS. All of XYZ's tax returns

and records and any tax refunds or tax credits due

XYZ attributable to the Products for tax periods

prior to the Closing Date.

2.2.5 OTHER ASSETS. All other assets of XYZ except for

the Assets.

2.3 PRIOR OBLIGATIONS OF YYY. In connection with the termination of the

Product Transfer, Manufacturing, Marketing and Distribution Agreement between

WWW Pharmaceutical Corporation ("WWW") and XYZ (the "WWW Agreement")

relating to the Products, which termination shall be effective on April 22, 2002

(the "Termination Date"), YYY hereby acknowledges that, in accordance with the

terms of the WWW Agreement an audit of WWW's books and records has been

requested by XYZ in order to determine the final balance of outstanding and

disputed amounts due to WWW under said WWW Agreement (the "Audit"). As partial

consideration for the transfer of the Assets, YYY further acknowledges and

agrees that YYY is and remains obligated, responsible and liable to undertake

the following actions on behalf of XYZ:

2.3.1 AUDIT COSTS. To pay all XYZ's costs associated

with the Audit which are unreimbursed by WWW

directly to the auditors conducting the Audit; and

2.3.2 INDEMNIFICATION. To indemnify, defend and hold

harmless XYZ, and its officers, directors,

employees and agents, against any and all suits,

claims, causes of action and liabilities, including,

without limitation, attorneys' fees, relating to the

termination of the WWW Agreement.

2.4 ASSUMPTION OF CERTAIN LIABILITIES. As partial consideration for the

transfer of the Assets, on the terms and subject to the conditions of this

Agreement, YYY shall assume and agree to pay, perform or discharge, when due,

the following debts, obligations and liabilities of XYZ (the "Assumed

Liabilities"):

2.4.1 AMOUNTS DUE WWW. YYY shall be solely responsible for

and the payment directly to WWW of any and all

amounts determined by the Audit to be due and owing

from XYZ to WWW under the WWW Agreement.

2.4.2 PRODUCT LIABILITY. All liabilities arising out of or

relating to any product liability, breach of warranty

or similar claim for injury to person or

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property, regardless of when asserted, which resulted

from the use or misuse of the Products or otherwise

related to the Products, provided, however, that

XYZ shall indemnify YYY, and its officers,

directors, employees and agents against any

liabilities for sales of Products by WWW to the same

extent that XYZ is indemnified against such

liabilities by WWW pursuant to the WWW Agreement.

2.4.3 PRODUCT RETURNS. Except to the extent set forth in

Section 2.5.1, all liabilities arising out of or

relating to the return of any Product on or after the

Closing Date, whether or not sold by XYZ prior to,

on, or after the Closing Date.

2.4.4 ADDITIONAL LIABILITIES. All other liabilities,

obligations and commitments of whatever kind and

nature, primary or secondary, direct or indirect,

absolute or contingent, known or unknown, whether or

not accrued, arising out of or relating to, directly

or indirectly, the Products or the Assets or the

ownership, sale or lease of any of the Assets but

only to the extent related to any period on or after

the Closing Date.

2.5 NO OTHER LIABILITIES ASSUMED. Except as expressly stated in

Sections 2.3 and 2.4, YYY shall not assume or agree to pay, perform or discharge

any of the debts, obligations and liabilities of XYZ. Without limiting the

foregoing YYY does not assume and will not be liable for the following (the

"Excluded Liabilities").

2.5.1 PRODUCT RECALLS. All liabilities arising out of or

relating to the recall of a Product pursuant to FDA

regulations or other applicable governmental

authority or returned by an end user, after the

Closing Date, which recall or return is a result of

adulteration, misbranding or other violation of the

FDC Act by XYZ or WWW prior to the Closing Date.

2.5.2 OTHER LIABILITIES. Except as provided elsewhere in

this Agreement, any debt, obligation or liability of

XYZ, known or unknown, liquidated, unliquidated,

absolute or contingent, accrued or otherwise whether

arising from contract, tort or otherwise and relating

to the Products prior to the Closing Date.

3 CONSIDERATION.

3.1 As further consideration for the transfer of the Assets, YYY agrees

to the following:

3.1.1 TERMINATE AGREEMENTS. On the Termination Date, YYY

shall, together with XYZ, terminate the following

agreements between the parties: (i) the Development

Agreement dated as of April 4, 1995, (ii) the License

Agreement for Selegiline Hydrochloride Capsules dated

as of June 24, 1996, and (iii) all ancillary

documents entered into between XYZ and YYY

pursuant to the agreements set forth in clauses (i)

and (ii) above (all of the foregoing, collectively,

the "XYZ/YYY Agreements").

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3.1.2 RELEASE OF CLAIMS. YYY shall waive any and all claims

against XYZ, known and unknown, under the

XYZ/YYY Agreements including, but not limited to,

all amounts due on invoices issued and unpaid and all

disputed amounts claimed due thereunder and agrees to

execute at Closing a General Release substantially in

the form attached hereto as Exhibit 3.1.2.

4 XYZ'S REPRESENTATIONS AND WARRANTIES. XYZ represents,

warrants and agrees as follows:

4.1 TITLE TO THE ASSETS. Except as disclosed on Schedule 4.1 hereto,

XYZ has good and marketable title to the Assets set forth in Section 2.1,

above, free and clear of all claims, liens, encumbrances or restrictions of any

kind.

4.2 DUE ORGANIZATION, GOOD STANDING AND POWER. XYZ is a corporation

duly organized, validly existing and in good standing under the laws of the

State of .......... and has all requisite corporate power and authority to own,

operate and lease its properties, to carry on its business as now being

conducted and to enter into this Agreement and perform its obligations

hereunder.

4.3 AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery

and performance by XYZ of this Agreement and the consummation of the

transactions contemplated hereby and thereby have been duly and effectively

authorized by XYZ's Board of Directors and the shareholders of XYZ, if

applicable. This Agreement has been duly executed and delivered by XYZ and,

assuming that this Agreement has been duly authorized, executed and delivered by

YYY, is a legal, valid and binding obligation of XYZ, enforceable in

accordance with its terms. No other corporate action on the part of the XYZ

is necessary for the execution, delivery and performance by XYZ of this

Agreement or any related agreement required for the completion of the within

transactions.

4.4 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS. Except as disclosed

on Schedule 4.4 hereto, the execution, delivery and performance by XYZ of

this Agreement and the consummation by it of the transactions contemplated

hereby: (i) will not violate XYZ's Certificate of Incorporation or Bylaws or

other organizational documents; (ii) will not violate (with or without the

giving of notice or the lapse of time or both) any provision of law, rule, or

regulation applicable to XYZ or the Assets; (ii) will not require (with or

without the giving of notice or the lapse of time or both) any consent, approval

or notice under, and will not materially conflict with, or result in the

material breach or termination of any provision of, or constitute a material

default under, or result in the acceleration of (or give anyone the right to

accelerate) the performance of, any obligation of XYZ with respect to the

Assets, or result in the creation of a lien upon the Assets or upon any

properties, assets or business of XYZ.

4.5 LEGAL PROCEEDINGS. There is no action or proceeding or, to the best

of XYZ's knowledge, any governmental investigation pending against XYZ

relating to the Assets, including product liability claims. XYZ is not in

violation of any term of any judgment, decree, injunction or order outstanding

against it, which violations would have, in the aggregate, a Material Adverse

Effect on the transactions contemplated hereby and, to the best knowledge of

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XYZ, there are no actions or proceedings, or any governmental investigations

against XYZ that would prevent the completion of the transactions

contemplated hereby.

4.6 COMPLIANCE WITH LAWS.

4.6.1 Except as set forth on Schedule 4.6.1 or to the

extent that it could not reasonably be expected to

have a Material Adverse Effect, (i) the Products have

been developed in compliance with all permits,

government licenses, registrations, approvals,

concessions, franchises, authorizations, orders,

injunctions and decrees and applicable laws,

including the FDC Act, (ii) all governmental

licenses, permits, registrations, approvals,

concessions, franchises and authorizations

principally employed in, or necessary to the ongoing

development, manufacture and sale of the Products in

the United States are in full force and effect, (iii)

no Governmental Entity has served notice, to the best

of XYZ's knowledge, there are no grounds for

notice, that the Assets were or are in violation of

any law, statute, ordinance, rule, regulation or

order in the United States or that there are any

circumstances currently existing which would lead to

any loss or refusal to renew any governmental

licenses, permits, registrations, approvals,

concessions, franchises and authorizations.

4.6.2 Except as set forth on Schedule 4.6.2 or to the

extent failure to do so could not reasonably be

expected to have a Material Adverse Effect, the XXX

Products have been developed in compliance in all

material respects with all applicable laws and

regulations in connection with the preparation and

submission to the FDA of the XXXs, and each of the

XXX Products has been approved by, and to the best

of XYZ's knowledge are currently in good standing

with the FDA. To the best of XYZ's knowledge, or

to the extent failure to do so could not reasonably

be expected to have a Material Adverse Effect, all

required notices, supplemental applications and

annual or other reports, including adverse experience

reports, with respect to each XXX Product have been

filed with the FDA.

4.6.3 Except as set forth on Schedule 4.6.3, neither

XYZ, nor to the best of XYZ's knowledge, WWW,

has received any notice from the FDA regarding the

commencement or threatened commencement of any action

to withdraw its approval or request the recall of any

Product, or the commencement of threatened

commencement of any action to enjoin production of

the Products at any facility.

4.6.4 To the best of XYZ's knowledge, all manufacturing

operations relating to the manufacturing of the

Products are being conducted in compliance in all

material respects with cGMP.

4.7 PRODUCT INFORMATION. XYZ has made available to YYY copies of (i)

all serious adverse event reports and periodic adverse event reports with

respect to the Products that have been filed with the FDA since September 26,

1996, including any material correspondence or

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other material documents relating thereto, (ii) a schedule of all payouts made

by XYZ or, to the best of XYZ's knowledge, made by WWW since September

26, 1996 to end-users in connection with claims relating to the Products and

(iii) a schedule of all actual or threatened claims made by end-users since

September 26, 1996 against Seller or, to the best of XYZ's knowledge, WWW,

relating to the Products.

4.8 INTELLECTUAL PROPERTY. The Intellectual Property listed and

identified in Schedule 2.1.3 attached hereto is owned or licensed by XYZ and

no rights have been granted to others with respect thereto except as set forth

in Schedule 4.8.

4.9 BROKERS' FEES. Neither XYZ nor any of its shareholders,

officers, directors or employees, on behalf of XYZ, has employed any broker

or finder or incurred any liability for any brokerage fees, commissions or

finders' fees in connection with the transactions contemplated by this

Agreement.

4.10 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the

representations and warranties contained in this Article 4 (including the

Schedules) neither XYZ nor and its officers, directors, shareholders,

employees or agents makes any other express or implied representation or

warranty on behalf of XYZ.

5 YYY'S REPRESENTATIONS AND WARRANTIES. YYY represents, warrants and

agrees as follows:

5.1 DUE ORGANIZATION, GOOD STANDING AND POWER. YYY is a corporation

duly organized, validly existing and in good standing under the laws of ..........

and has all requisite corporate power and authority to enter into this Agreement

and perform its obligations hereunder.

5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery

and performance by YYY of this Agreement and the consummation of the

transactions contemplated hereby have been duly and effectively authorized by

YYY's Board of Directors. This Agreement has been duly executed and delivered by

YYY, and, assuming that this Agreement has been duly authorized, executed and

delivered by XYZ, is a legal, valid and binding obligation of YYY,

enforceable in accordance with its terms. No other corporate action on the part

of the YYY is necessary for the execution, delivery and performance by YYY of

this Agreement or any related agreement required for the completion of the

within transactions.

5.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS. Except as disclosed

on Schedule 5.3 hereto, the execution, delivery and performance by YYY of this

Agreement and the consummation by it of the transactions contemplated hereby:

(i) will not violate YYY's Certificate of Incorporation or Bylaws or other

organizational documents; (ii) will not violate (with or without the giving of

notice or the lapse of time or both) any provision of law applicable to YYY; and

(iii) will not require (with or without the giving of notice or the lapse of

time or both) any consent, approval or notice under, and will not materially

conflict with, or result in the material breach or termination of any provision

of, or constitute a material default under, or result in the acceleration of (or

give anyone the right to accelerate) the performance of, any obligation of YYY

under, or result in the creation of a lien upon any properties, assets or

business of YYY.

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5.4 LEGAL PROCEEDINGS. There is no action or proceeding or, to the best

of YYY's knowledge, any governmental investigation pending against YYY which

would affect YYY's ability to consummate the transactions contemplated by this

Agreement.

5.5 FINANCIAL REVIEW. YYY acknowledges that it and its representatives

have been permitted full and complete access to the books and records, reports,

contracts, insurance policies (or summaries thereof) and conducted all due

diligence that YYY has deemed necessary relating to the Assets, and that it and

its representatives have had a opportunity to meet with the officers and

employees of XYZ to discuss the Assets and the Products. YYY acknowledges

that through its own experience and that of its representatives, YYY has such

knowledge and experience in financial and business matters so that it is capable

of evaluating the merits and risks of the purchase of the Assets.

5.6 BROKERS' FEES. Neither YYY nor any of its shareholders, officers,

directors or employees, on behalf of XYZ, has employed any broker or finder

or incurred any liability for any brokerage fees, commissions or finders' fees

in connection with the transactions contemplated by this Agreement.

6 COVENANTS

6.1 COVENANTS OF XYZ. XYZ covenants with YYY as follows:

6.1.1 CONDUCT OF BUSINESS. XYZ agrees that from the date

of this Agreement until the Closing Date, without the

prior written consent of YYY (which consent shall not

be unreasonably withheld), XYZ (i) shall not

mortgage, pledge or subject to any lien or

encumberence any Asset; (ii) shall use commercially

reasonable efforts to maintain satisfactory

relationships with and preserve the goodwill of

suppliers and customers in connection with the

manufacture and sale of the Products; (iii) shall not

transfer or grant any rights or options in or to any

of the Assets except for the transfer of inventory in

the ordinary course of business; (iv) shall, with the

aid and assistance of YYY, use commercially

reasonable efforts to maintain the current regulatory

status of the Products; (v) shall not transfer to any

third-party any rights under any licenses,

sublicenses or other agreements with respect to any

Intellectual Property; (vi) shall conduct its

marketing and promotional activities with respect to

the Products consistent with its past practices;

(vii) shall not institute any new methods of

purchase, sale or operation nor institute any changes

in the product pricing or in promotional allowances

other than in the ordinary course of business and

consistent with XYZ's past practices; (viii) shall

not make any material changes in selling, pricing or

advertising practices inconsistent with past

practices; and (ix) shall not launch any Product

packaging changes or Product line extensions.

6.1.2 ACCESS, AID AND ASSISTANCE. From the date hereof to

the Closing Date, XYZ shall permit YYY, its

representatives and agents to have reasonable access

during normal business hours to XYZ's books,

manufacturing

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records and personnel involved with the Products and

knowledgeable with respect to the Assets and XYZ

shall furnish to YYY such available information

concerning the Assets and the Products and provide

such assistance as YYY may reasonably request in

order to aid YYY in the preparation of its facilities

for scale-up and manufacturing of the Products by

YYY; provided, however, that such access, aid and

assistance does not unreasonably disrupt the normal

operations of XYZ.

6.1.3 PAYMENT OF ACCRUED ROYALTIES. As provided in Section

2.1.4 above, XYZ shall pay to YYY all accrued

royalties within ten (10) days of receipt of same

from WWW.

6.1.4 DISTRIBUTORSHIP. XYZ shall use its commercially

reasonable efforts to seek approval from WWW to

appoint YYY as XYZ's distributor pursuant to the

terms of the WWW Agreement.

6.1.5 NOTICE OF CLAIMS. XYZ covenants that it shall

immediately notify YYY of XYZ's receipt, knowledge

or discovery of any claim, action, or proceeding of

any nature whatsoever concerning (i) the past,

present or future development, manufacture or sale of

the Products; and/or (ii) any of the Assets.

6.2 COVENANTS OF YYY. YYY covenants with XYZ as follows:

6.2.1 HOLD HARMLESS. YYY agrees and covenants that it will

hold XYZ harmless with respect to the manufacture,

and sale of the Products by YYY after the Closing

Date.

6.2.2 AID AND ASSISTANCE. From the date hereof to the

Closing Date, YYY furnish to XYZ such aid and

assistance as XYZ may reasonably request in

connection with XYZ's obligations under Section

6.1.1(iv) above.

6.2.3 BULK TRANSFER LAWS. YYY hereby waives compliance by

XYZ with the provisions of any so-called "bulk

transfer law" of any jurisdiction in connection with

the sale of the Assets to YYY.

6.3 JOINT COVENANTS.

6.3.1 REGULATORY APPROVALS. Each of XYZ and YYY shall

use commercially reasonable efforts to procure all

applicable regulatory approvals necessary to

consummate the transactions contemplated hereby,

including the transfer from XYZ to YYY, within 90

days of the Closing Date, of all Seller's rights,

title and interest to the regulatory approvals

relating to the Products.

6.3.2 TRANSFER FEES. Except as otherwise provided herein,

any fees, charges, transfer taxes, bulk sales taxes

or other payments ("Transfer Fees")

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required to be made to any Governmental Entity in

connection with the transfer and sale of the Project

Assets and the assignment and assumption of the

Assumed Liabilities pursuant to the terms of this

Agreement shall be borne by the parties on an equal,

50/50 basis. XYZ and YYY shall cooperate in timely

making and filing all filings including, but not

limited to, tax returns, reports and forms as may be

required with respect to any Transfer Fees payable in

connection with the transactions contemplated

hereunder.

6.3.3 FURTHER ASSURANCES. Each party shall from time to

time after Closing, without additional consideration,

execute and deliver such further instruments and take

such other action as may be reasonably requested by

the other party to make effective the transactions

contemplated by this Agreement. With respect to all

documents, information and other materials included

in the Project Assets, in addition to paper and other

tangible copies, XYZ shall, upon YYY's request,

also provide to YYY electronic copies of such

documents, information and other materials, provided,

that, XYZ has electronic copies thereof. The

foregoing requirement shall only apply to such

documents, information and other material exclusively

related to the Project Assets, and XYZ shall have

no obligation to reformat or otherwise alter or

modify any such materials in order to provide them to

YYY.

7 INDEMNIFICATION.

7.1 XYZ'S INDEMNIFICATION. XYZ agrees from and after Closing,

subject to the conditions and limitations set forth herein, to defend, indemnify

and hold harmless YYY from and against any and all loss, cost, damage or

expense, including reasonable attorney's fees, whatsoever resulting from or

arising out of (i) any breach or inaccuracy of any covenant, obligation,

representation or warranty of XYZ contained herein or in the Schedules

referred to herein or in any certificate delivered by XYZ under this

Agreement; (ii) except as set forth herein, any liability or obligation relating

to the Products prior to the Closing; and (iii) any claims made by any creditor

of XYZ asserted against YYY by reason of the transfer of the Assets

contemplated herein.

7.2 YYY'S INDEMNIFICATION. YYY agrees from and after Closing, subject

to the conditions and limitations set forth herein, to defend, indemnify and

hold harmless XYZ from and against any and all loss, cost, damage or expense,

including reasonable attorney's fees, whatsoever resulting from or arising out

of (i) any breach of any covenant, obligation, representation or warranty of YYY

contained herein or in any certificate delivered by YYY hereunder; (ii) any

Assumed Liability; and (ii) the use of the Assets on or after the Closing.

7.3 CLAIMS. (a) If YYY or XYZ (the "Claimant") desires to make a

claim against the other (the "Indemnitor") under Section 7.1 or 7.2, the

Claimant shall give prompt written notice to the Indemnitor of the institution

of any action, suit, proceeding or demand at any time instituted against or made

upon the Claimant, or of the incurrence of the loss, cost, damage or expense, in

connection with which the Claimant could claim indemnification under Section 7.1

or 7.2 and shall advise the Indemnitor in writing, to the extent known, of the

amount and

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circumstances surrounding the same. If within sixty (60) days from the date the

Indemnitor is notified in writing in reasonable detail of the amount and

circumstances of a claim for indemnification, the Indemnitor has not contested a

claim made by the Claimant, the Indemnitor will pay the full amount thereof in

cash within ten (10) days after the expiration of the sixty (60) day period. (b)

If a claim is brought by a third party and the Indemnitor agrees in writing that

it is responsible to indemnify (fully and completely) the Claimant with respect

to such claim then, (i) the Claimant shall give the Indemnitor (at the sole

expense of the Indemnitor) full authority to defend, adjust, compromise or

settle the action, suit, proceeding or demand as to which notice has been given

(in the name of the Claimant or otherwise as the Indemnitor shall elect) and

(ii) the Indemnitor shall not be liable for any legal or other expense

thereafter incurred by the Claimant in connection with the defense, adjustment,

compromise or settlement thereof. The Indemnitor shall not be liable for any

settlement of any such action or claim effected without its consent. If the

Indemnitor contests the claim, the Indemnitor shall undertake the defense,

compromise or settlement of the claim in good faith, and shall be bound by the

results of such defense, compromise or settlement.

8 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND

INDEMNIFICATIONS. All representations and warranties made by or on behalf of YYY

or XYZ herein and the liabilities of the parties for the breach or inaccuracy

of any such representation or warranty and for any indemnity under Section 7

hereof, shall not be discharged or dissolved upon, but shall survive the Closing

Date, for a period of two (2) years and shall be unaffected by any investigation

made by any party at any time. The covenants set forth herein, as well as the

related obligations, shall survive indefinitely.

9 CONDITIONS PRECEDENT TO OBLIGATIONS OF YYY. The obligations of YYY

to consummate the transactions contemplated by this Agreement are subject, in

the discretion of YYY, to the satisfaction at or prior to the Closing Date of

each of the following conditions:

9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and

warranties of XYZ contained herein shall be true in all material respects on

and as of the Closing Date, except for changes permitted or contemplated by this

Agreement.

9.2 PERFORMANCE OF AGREEMENTS. XYZ shall have performed all material

obligations and agreements and complied with all material covenants and

conditions contained in this Agreement to be performed or complied with by it

prior to or at the Closing Date.

9.3 OFFICER'S CERTIFICATE. YYY shall have received a certificate of

XYZ dated the Closing Date, signed by the President of XYZ, to the effect

that the conditions specified in Sections 9.1 and 9.2 above have been fulfilled.

9.4 NO MATERIAL CHANGE. There shall have been no change in the status

of the Assets from the date of this Agreement through Closing which could

reasonably be expected to have a Material Adverse Effect.

9.5 NO SUITS OR ACTIONS. At the Closing Date, no suit, action or other

proceeding shall have been instituted to restrain, enjoin or otherwise prevent

or question the legality of the consummation of this Agreement or the

transactions contemplated thereby.

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10 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF XYZ. The obligations

of XYZ to consummate the transactions contemplated by this Agreement are

subject, in the discretion of XYZ, to the satisfaction at or prior to the

Closing Date of each of the following conditions:

10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations

and warranties of YYY contained herein shall be true in all material respects on

and as of the Closing Date, except for changes permitted or contemplated by this

Agreement.

10.2 PERFORMANCE OF AGREEMENTS. YYY shall have performed all material

obligations and agreements, and complied with all material covenants and

conditions, contained in this Agreement to be performed or complied with by it

prior to or at the Closing Date.

10.3 OFFICER'S CERTIFICATE. XYZ shall have received a certificate of

YYY, dated the Closing Date, signed by the President or Vice President of YYY,

to the effect that the conditions specified in Sections 10.01 and 10.02 above,

have been fulfilled.

10.4 NO SUITS OR ACTIONS. At the Closing Date, no suit, action or other

proceeding shall have been threatened or instituted to restrain, enjoin or

otherwise prevent or question the legality of the consummation of this Agreement

or the transactions contemplated thereby.

11 RISK OF LOSS. The XYZ shall bear the risk of loss, damage or

destruction to any of the Project Assets, not caused by the YYY, which occurs

prior to the Closing Date. If there is such a loss prior to Closing, YYY shall

have the right to terminate this Agreement.

12 WWW'S CONTINUING RIGHTS. YYY acknowledges and agrees that,

pursuant to the terms of the WWW Agreement, WWW has a continuing right to

manufacture, sell and distribute, on a non-exclusive basis, the products cover

by the WWW Agreement, for a period of seven years from the date of the first

commercial sale of each such product. A complete list of the products covered

under the WWW Agreement is set forth on Schedule 12.

13 CLOSING. The transfer of the Assets and Assumed Liabilities shall

take place at the closing (the "Closing") which shall be at 2 p.m. at the

offices of Reed Smith LLP, .......... Forrestal Village, 136 Main Street,

.........., .......... 08540, within two (2) business days of the Termination

Date, or such other time and location as may be mutually agreed upon between the

parties, but in no case later than May 1, 2002 (the "Closing Date").

13.1 INSTRUMENTS OF CONVEYANCE. At the time of Closing, XYZ shall

deliver to YYY a Bill of Sale, and any and all other instruments of sale,

conveyance or assignment that may be required for the proper transferring of the

Products and all of the Assets as enumerated in the Schedules attached pursuant

to Section 2.1, above, free from all encumbrances, except as otherwise provided

to the contrary herein, which instruments shall contain the usual warranties.

13.2 XYZ'S OBLIGATIONS AT CLOSING. At the Closing, and concurrently

with performance by YYY of its obligations under Section 12.3, XYZ shall

deliver or cause to be delivered to YYY the following:

<PAGE>

13.2.1 Instruments of conveyance and transfer described in

Section 12.1

13.2.2 The officer's certificate described in Section 9.3.

13.2.3 Copies of XYZ's resolutions relating to this

transaction, certified by an officer of XYZ.

13.2.4 Such other certificates, documents and agreements

which may be called for under this Agreement.

13.3 YYY'S OBLIGATIONS AT CLOSING. At the Closing, and concurrently

with performance by XYZ of its obligations under Section 12.2, YYY shall

deliver or cause to be delivered the following:

13.3.1 The officer's certificate described in Section 10.3.

13.3.2 Copies of YYY's resolutions relating to this

transaction, certified by an officer of YYY.

13.3.3 The General Release described in Section 3.1.2.

13.3.4 Such other certificates, documents and agreements

which may be called for under this Agreement.

14 LIMITATION OF LIABILITY; WARRANTIES.

14.1 LIMITATION OF LIABILITY. Notwithstanding any provision herein,

neither XYZ nor YYY shall in any event be liable to the other party officers,

directors, employees, stockholders, agents or representatives on account of any

indemnity obligation set forth in Sections 7.1(i) or 7.2(i) for any indirect,

consequential or punitive damages (including, but not limited to, lost profits,

loss of use, damage to goodwill or loss of business). XYZ and YYY shall

cooperate with each other in resolving any claim or liability with respect to

which one party is obligated to indemnify the other under this Agreement,

including without limitation, by making commercially reasonable efforts to

mitigate or resolve any such claim or liability.

14.2 NO WARRANTIES. YYY also acknowledges that, except as expressly set

forth in the representations and warranties set forth in Article 4 of this

Agreement (including the Schedules), or in the officer's certificate provided

pursuant to Section 9.3, there are no representations or warranties by XYZ of

any kind, express or implied, with respect to the Assets, and that Purchaser is

purchasing the Assets "AS IS", "WHERE IS" and "WITH ALL FAULTS". Without

limiting the generality of the foregoing, THERE ARE NO EXPRESS OR IMPLIED

WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

15 MODIFICATION OF AGREEMENT. The parties hereby acknowledge that the

terms of this Agreement cannot be modified orally, but can be modified only by

an instrument in writing signed by all parties.

<PAGE>

16 BINDING ON ALL PARTIES. This Agreement shall be binding upon the

parties hereto and upon respective successors, heirs, administrators, and

assigns of each and all of such parties.

17 WAIVER. Any of the terms or conditions of this Agreement may be

waived at any time and from time to time by the party entitled to the benefit of

such terms or conditions; however, no party shall be deemed to have waived any

rights hereunder or under any other agreement unless such waiver shall be in

writing and signed by the party, or the party's representative. No delay or

omission on the part of any party in exercising any right shall operate as a

waiver of such right or any other right. A waiver by any party of a breach of a

provision of this Agreement shall not constitute a waiver of or prejudice the

party's right otherwise to demand strict subsequent compliance with that

provision or any other provision.

18 NOTICES. All notices, requests, demands and other communications

given by YYY or XYZ shall be in writing and shall be deemed to have been duly

given upon receipt if delivered personally, or when sent if mailed by registered

or certified mail (return receipt requested) or by reputable overnight express

courier (charges prepaid) or transmitted by facsimile (with confirmation of

transmittal) to the parties at the following addresses:

If to XYZ to:

XYZ, Inc.

…………………..

.........., ..........

Attention: ………………….., President and CEO

Facsimile:

With copies to:

…………………………… LLP

..........

.........., ..........

Attention: ……………………………….

Facsimile: ……………….

If to YYY to:

YYY, Inc.

………………………..

……………….

Attention:……………….., Executive Vice President, CFO

Facsimile:

With copies to:

YYY Inc.

…………………………..

<PAGE>

.................., .................. 28405

Attention: Office of General Counsel

Facsimile:

19 ASSIGNMENT. This Agreement shall not be assigned by either party

hereto, except by written consent of the other party, which consent shall not be

unreasonably withheld, or as otherwise provided herein.

20 GOVERNING LAW. This Agreement and the performance thereof shall be

governed, interpreted, construed and regulated by the laws of the State of

...........

21 ENFORCEABILITY OF AGREEMENT. If any term, covenant, condition or

provision of this Agreement, or the application thereof to any person or

circumstance shall, at any time, or to any extent, be invalid or unenforceable,

the remainder of this Agreement or the application of such term or provision to

persons or circumstances other than those as to which it is held invalid or

unenforceable, shall not be effected thereby, and each term, covenant, condition

and provision of this Agreement shall be valid and enforced to the fullest

extent permitted by law.

22 SPECIFIC PERFORMANCE. The parties hereto agree that if any of the

provisions of this Agreement were not performed in accordance with their

specific terms or were otherwise breached, irreparable damage would occur, no

adequate remedy at law would exist and damages would be difficult to determine,

and that the parties shall be entitled to specific performance of the terms

hereof, in addition to any other remedy at law or equity.

23 WAIVER OF JURY TRIAL. Each party hereto hereby waives to the

fullest extent permitted by applicable law, any right it may have to a trial by

jury in respect to any litigation directly or indirectly arising out of, under

or in connection with this Agreement. Each party hereto (i) certifies that no

representative, agent or attorney of any other party has represented, expressly

or otherwise, that such other party would not, in the event of litigation, seek

to enforce that foregoing waiver and (ii) acknowledges that it and the other

parties hereto have been induced to enter into this Agreement by, among other

things, the mutual waivers and certifications in this Article 23.

24 COMPLETE AGREEMENT. This Agreement, together with the LOI, set

forth all of the promises, agreements, conditions and understandings between the

parties hereto relative to the subject matter hereof, and there are no promises,

agreements, conditions or understanding, either written or oral, express or

implied, between them other than as set forth herein or therein.

25 MISCELLANEOUS PROVISIONS.

25.1 All the terms, covenants, and conditions herein contained shall be

for and shall inure to the benefit of and shall bind the respective parties

thereto, and their legal representatives, successors and assigns, respectively.

<PAGE>

25.2 This section or any other headings contained in this Agreement are

for purposes of reference only and shall not affect the meaning and

interpretation of this Agreement.

25.3 In all references herein to any parties, persons, entities or

corporations, the use of any particular gender or the plural or singular number

is intended to include the appropriate gender or number as the text of the

within instrument may require.

25.4 Except as set forth in the LOI, and regardless of whether or not

the transactions contemplated by this Agreement are consummated, each party

shall bear its own fees and expenses incurred in connection with the

transactions contemplated by hereunder.

25.5 This Agreement may be executed in any number of counterparts, each

of which shall be an original, but such counterparts together shall constitute

one in the same instrument.

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands

and seals or caused these presents to be signed by the parties hereto.

XYZ, INC. YYY, INC.

By: By:

--------------------------------- ----------------------------------

Name: Name:

Title: Title: