between

METABASIS THERAPEUTICS, INC.,

and

GENSIA SICOR INC.

December 17, 1997

ASSET AND LIABILITY TRANSFER AGREEMENT

        THIS ASSET AND LIABILITY TRANSFER AGREEMENT (this "Agreement") is made and entered into as of the 17th day of December, 1997, between METABASIS THERAPEUTICS, INC., a Delaware corporation ("Metabasis"), and GENSIA SICOR INC., a Delaware corporation ("Gensia Sicor").

RECITALS:

        WHEREAS, subject to the terms and conditions of this Agreement, Gensia Sicor wishes to sell and transfer certain assets and certain liabilities of its research and development business to Metabasis.

        WHEREAS, subject to the terms and conditions of this Agreement, Metabasis desires to purchase such assets in consideration for the assumption of such liabilities, the issuance to Gensia Sicor of certain shares of Subordinated Convertible Preferred Stock of Metabasis (the "Subordinated Preferred Stock"), and the payment to Gensia Sicor of a certain amount in cash, all as more fully described below.

        WHEREAS, simultaneous with the Closing (as defined below), Sankyo Co, Ltd., a Japanese corporation ("Sankyo"), and Metabasis have entered into a Stock Purchase Agreement dated as of the date hereof (the "Sankyo Stock Purchase Agreement"), pursuant to which Sankyo is purchasing from Metabasis, and Metabasis is issuing to Sankyo, certain shares of Series A Preferred Stock of Metabasis (the "Series A Preferred Stock") on the terms and conditions thereof, and thereafter Metabasis will no longer be a wholly-owned subsidiary of Gensia Sicor.

        WHEREAS, the parties hereto desire to enter into this Agreement for the purpose of setting forth certain representations, warranties and covenants made to each other as an inducement to the execution and delivery of this Agreement and the conditions precedent to the consummation of the asset and liability transfer and the transactions related thereto.

        NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties hereto agree as follows:

ARTICLE 1

PURCHASE AND SALE OF ASSETS

        1.1    Purchase and Sale.    Subject to the terms and conditions and upon satisfaction of the conditions contained in this Agreement (which term shall include all exhibits and schedules attached hereto) and in reliance upon the representations, warranties an covenants contained herein, on the Closing Date (as hereinafter defined), Gensia Sicor shall sell, assign, transfer and deliver to Metabasis, and Metabasis shall purchase and acquire from Gensia Sicor, all of Gensia Sicor's right, title and interest in, to and under all the franchises, rights, business, properties and other assets, tangible or intangible, real, personal or mixed, listed below in this Section 1.1 (collectively, the "Assets"), used in or accrued or accruing to the business of discovering and developing proprietary pharmaceutical products (including drugs intended to address diabetes, pain, inflammation, cardiovascular, epilepsy and other conditions) as currently conducted at the Gensia Sicor facility located at 9390 Towne Centre Drive, San Diego_., California (the "Transferred Business"), free and clear of Liens (as hereinafter defined), except Permitted Liens (as hereinafter defined):

        (a)   All personal property (including, without limitation, all marketable securities, appliances, furniture, fixtures, machinery and equipment and other tangible personal property) relating to the Transferred Business and described or listed on Schedule 1.1(a) hereto;

        (b)   All inventory of every character and description relating to the Transferred Business and listed on Schedule 1.1(b) hereto, subject to adjustments in the ordinary course of business since September 30, 1997;

        (c)   All (i) United States and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisional applications, continuations and continuations-in-part thereof; (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know-how, technology, formulas, technical data and customer lists; (iii) copyrights, copyright registrations and applications therefor and all other rights corresponding thereto; (iv) industrial designs and any registrations and applications therefor; (v) trade names, logos, common law trademarks and service marks; and all goodwill associated therewith; (vi) similar, corresponding or equivalent rights to any of the foregoing; and (vii) documentation related to any of the foregoing; in each case relating to the Transferred Business and listed on Schedule 1.1(c) hereto (collectively, the "Intellectual Property");

        (d)   The goodwill of Gensia Sicor associated with the Transferred Business;

        (e)   All customer lists, supplier lists and mailing lists and all materials owned by Gensia Sicor and used for mailing list development, which lists and materials were prepared, created or acquired by Gensia Sicor for use solely in the Transferred Business;

        (f)    All books, records, files and other data (including without limitation operating manuals and invoices) prepared, created or acquired by Gensia Sicor for use solely in the Transferred Business, including without limitation, (i) all inventory, maintenance and asset history records solely regarding the Transferred Business, (ii) all sales promotion materials prepared, created or acquired by Gensia Sicor for use solely in the Transferred Business, (iii) all customer and supplier lists, mailing lists, materials used for mailing list development and telephone numbers with respect to past, present or prospective customers and suppliers for use solely in the Transferred Business, and (iv) all sales and credit records solely relating to the Transferred Business;

        (g)   (i) All computer hardware, databases and data collections and all rights therein; all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded; all Internet addresses, sites and domain names; all similar, corresponding or equivalent rights to any of the foregoing; and documentation related to any of the foregoing; in each case owned and used by Gensia Sicor in the Transferred Business and listed on Schedule 1.1(g) hereto, and (ii) all rights under any software licenses held and used by Gensia Sicor regarding the software listed on Schedule 1.1(g) hereto;

        (h)   To the extent transferable and relating solely to the Transferred Business, all federal, state, local or foreign governmental licenses, permits and other authorizations necessary or advisable for the conduct of the Transferred Business and listed on Schedule 1.1(h) hereto;

        (i)    All leases of personal property, whether as lessor, lessee, sublessor or sublessee, relating to the Transferred Business and listed on Schedule 1.1(i) hereto;

        (j)    All contracts, agreements, commitments, options and other arrangements of Gensia Sicor, of every kind and description, relating to the Transferred Business and described or listed on Schedule 1.1(j) hereto, as amended to date;

        (k)   All product registrations, approvals and applications therefor of Gensia Sicor, of every kind and description with any governmental entity, relating to the Transferred Business and listed on Schedule 1.1(k) hereto;

        (1)   To the extent transferable, all rights and claims under policies of insurance and warranty, surety, fidelity or other bonding arrangements relating to the Assets (excluding any rights to refunds of premiums or amounts paid under such policies of insurance and bonding arrangements) and, all other claims, demands, judgments, rights, equities, chattel mortgages, security agreements and chooses in action, and the proceeds thereof, relating to the Assets;


 

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