{"id":43401,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/exchange-agreement-maxygen-inc-and-profound-pharma-a-s2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"exchange-agreement-maxygen-inc-and-profound-pharma-a-s2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/exchange-agreement-maxygen-inc-and-profound-pharma-a-s2.html","title":{"rendered":"Exchange Agreement &#8211; Maxygen Inc. and ProFound Pharma A\/S"},"content":{"rendered":"<pre>                               EXCHANGE AGREEMENT\n                               ------------------\n\n\n         THIS EXCHANGE AGREEMENT (the \"Agreement\") is made as of April 12, 2000,\nby and among MAXYGEN, INC., a Delaware corporation (\"Maxygen\"), MAXYGEN HOLDINGS\nLTD., a Cayman Islands corporation (\"Holdings\"), all of whose capital stock is\nowned directly by Maxygen, PROFOUND PHARMA A\/S, a Danish corporation\n(\"ProFound\"), and the shareholders of ProFound.\n\n                                    RECITALS\n                                    --------\n\n         A. The Boards of Directors of Maxygen, Holdings and ProFound have\ndetermined that it is advisable and for the respective benefit of Maxygen,\nHoldings and ProFound, and their respective securityholders and in their\nlong-term strategic interests, to combine their businesses in order to combine\ntheir complementary capabilities, assets and human resources to develop\nprotein-based drugs that address market needs for improved biopharmaceuticals,\nand have approved this Agreement and authorized the transactions contemplated\nhereby on the terms and subject to the conditions of this Agreement.\n\n         B. Pursuant to the terms of this Agreement: (i) the outstanding shares\nof Common Stock of ProFound shall be exchanged for newly issued shares of Common\nStock of Maxygen; (ii) some or all of the warrants to subscribe for shares of\nCommon Stock of ProFound shall be exchanged for options to purchase shares of\nCommon Stock of Maxygen and (iii) the ProFound securities referenced in (i) and\n(ii) above shall subsequently be exchanged by Maxygen for shares of Common Stock\nof Holdings.\n\n         C. The parties intend that for tax purposes the exchanges provided for\nin Recital B shall (i) be approved by the Danish tax authorities as tax deferred\nreorganizations within the meaning of Section 13 of the Danish Act on Taxation\nof Capital Gains on Shares (aktieavancebeskatningsloven) and (ii) not qualify as\n\"tax free\" reorganizations within the meaning of Section 368 of the United\nStates Internal Revenue Code.\n\n         D. The ProFound Securityholders (as defined below) own all of the\noutstanding capital stock of ProFound and all securities or other instruments\nconvertible into or exercisable for capital stock of ProFound.\n\n \nTHE PARTIES AGREE AS FOLLOWS:\n\n1.       DEFINITIONS\n         -----------\n\n         For purposes of this Agreement, the following terms shall have the\nmeanings specified or referred to in this Section 1:\n\n         \"Accounts Receivable\"-- shall mean all accounts receivable reflected on\n          -------------------\nthe Financial Statements or accounts receivable ledger of ProFound.\n\n         \"Agreement\"-- shall mean this Exchange Agreement.\n          ---------\n\n         \"Alternative Acquisition\"-- as defined in Section 7.8.\n          -----------------------\n\n         \"BankInvest I\" -- shall mean Bankforeningernes\n          ------------\nErhvervsudviklingsforening BankInvest Biomedicinsk Udvikling.\n\n         \"BankInvest II\" -- shall mean Aktieselskabet BI Biomedicinsk Udvikling\n          -------------\n\n         \"Business Day\"-- shall mean any day, Monday through Friday, on which\n          ------------\nU.S. federally chartered banks are open for business in San Francisco,\nCalifornia and Danish banks are open for business in Copenhagen, Denmark.\n\n         \"CCL\"-- shall mean the Cayman Islands Companies Law (1998).\n          ---\n\n         \"Claim\"-- as defined in Section 12.4.\n          -----\n\n         \"Closing\"-- as defined in Section 2.3(a).\n          -------\n\n         \"Closing Date\"-- shall mean the date and time as of which the Closing\n          ------------\nactually takes place.\n\n          \"Code\"-- shall mean the United States Internal Revenue Code.\n           ----\n\n         \"Commission\"-- shall mean the United States Securities and Exchange\n          ----------\nCommission. \n\n         \"Confidentiality Agreement\"-- shall mean the Confidentiality Agreement,\n          -------------------------\ndated February 7, 2000, between Maxygen and ProFound.\n\n         \"Contract\"-- shall mean any agreement, contract, obligation, promise,\n          --------\ncommitment or undertaking of any kind (whether written or oral and whether\nexpress or implied), other than those that have been terminated.\n\n                                       2\n\n \n         \"DCA\"-- shall mean the Danish Companies Act, as amended.\n          ---\n\n         \"DGCL\"-- shall mean the Delaware General Corporation Law, as amended.\n          ----\n\n         \"Employee Benefit Plan\"-- shall mean any plan, policy, program,\n          ---------------------\npractice, agreement, understanding or arrangement (whether written or oral)\nproviding compensation or other benefits (other than ordinary cash compensation)\nto any current or former director, officer, employee or consultant (or to any\ndependent or beneficiary thereof), of ProFound, which are now, or were since\ninception of ProFound, maintained by ProFound, or under which ProFound has or\ncould have any obligation or liability, whether actual or contingent, including,\nwithout limitation, all incentive, bonus, deferred compensation, vacation,\nholiday, cafeteria, medical, disability, stock purchase, stock option, warrant,\nstock appreciation, phantom stock, restricted stock or other stock-based\ncompensation plans, policies, programs, practices or arrangements.\n\n         \"Employment Agreements\"-- as defined in Section 7.9.\n          ---------------------\n\n         \"Encumbrance\"-- shall mean any mortgage, charge, claim, community\n          -----------\nproperty interest, equitable interest, lien, option, pledge, security interest,\nright of first refusal or restriction of any kind, including any restriction on\nuse, voting, transfer, receipt of income or exercise of any other attribute of\nownership; and the verb \"Encumber\" shall be construed accordingly.\n\n         \"Environmental Claim\"-- shall mean any accusation, allegation, notice\n          -------------------\nof violation, action, claim, Encumbrance, Lien, demand, abatement or other Order\nor direction (conditional or otherwise) by any Governmental Authority or any\nPerson for personal injury (including sickness, disease or death), tangible or\nintangible property damage, damage to the environment, nuisance, pollution,\ncontamination or other adverse effects on the environment, or for fines,\npenalties or restrictions resulting from or based upon (i) the existence, or the\ncontinuation of the existence, of a Release (including, without limitation,\nsudden or non-sudden accidental or non-accidental Releases) of, or exposure to,\nany Hazardous Material or other substance, clinical, material, pollutant,\ncontaminant, odor, audible noise, or other Release in, into or onto the\nenvironment (including, without limitation, the air, soil, surface water or\ngroundwater) at, in, by, from or related to the Facilities or any activities\nconducted thereon; (ii) the environmental aspects of the transportation,\nstorage, treatment or disposal of Hazardous Materials in connection with the\noperation of the Facilities; or (iii) the violation, or alleged violation, of\nany Environmental Laws, Orders or Governmental Permits of or from any\nGovernmental Authority relating to environmental matters connected with the\nFacilities.\n\n         \"Environmental, Health and Safety Liabilities\"-- shall mean any cost,\n          --------------------------------------------\ndamage, expense, liability, obligation or other responsibility arising from or\nunder any Environmental Law, as well as any liability for torts and damages\naccording to general\n\n                                       3\n\n \nDanish rules, regulations and ordinary principles, including case law, or\nOccupational Safety and Health Law and consisting of or relating to: (a) any\nenvironmental, health or safety matter or condition (including on-site or off-\nsite contamination, generation, handling and disposal of Hazardous Materials,\noccupational safety and health, and regulation of chemical and Hazardous\nMaterials); (b) fines, penalties, judgments, awards, settlements, legal or\nadministrative proceedings, damages, losses, litigation, including civil and\ncriminal claims, demands and responses, investigative, remedial, response or\ninspection costs and expenses arising under Environmental Law or Occupational\nSafety and Health Law; (c) financial responsibility under Environmental Law or\nOccupational Safety and Health Law for cleanup costs or corrective action,\nincluding any investigation, cleanup, removal, containment or other remediation\nor response actions required by applicable Environmental Law or Occupational\nSafety and Health Law and for any natural resource damages; or (d) any other\ncompliance, corrective, investigative or remedial measures required under\nEnvironmental Law or Occupational Safety and Health Law.\n\n         \"Environmental Law\"-- shall mean any Law concerning the environment, or\n          -----------------\nactivities that might threaten or result in damage to the environment or human\nhealth, or any Law that is concerned in whole or in part with the environment\nand with protecting or improving the quality of the environment and human and\nemployee health and safety and includes, but is not limited to, the Danish\nEnvironmental Protection Act, the Danish Soil Pollution Act, the Danish Act on\nChemical Substances and Products, the Danish Act on Environmental Gene\nTechnology, the Danish Act on Compensation for Environmental Damages, the Danish\nAct on Working Environment, as such laws have been amended or supplemented, and\nthe regulations, statutory orders, local council waste by-laws, and other\nbinding by-laws and guidance and practice notes adopted under any of those laws.\n\n         \"Escrow Agent\"-- as defined in Section 3.1.\n          ------------\n\n         \"Escrow Agreement\"-- as defined in Section 3.1.\n          ----------------\n\n         \"Escrow Shares\"-- as defined in Section 3.1.\n          -------------\n\n         \"Exchange Act\"-- shall mean the United States Securities Exchange Act\n          ------------\nof 1934, as amended, or any successor law.\n\n         \"Exchange Agent\"-- as defined in Section 2.4(a).\n          --------------\n\n         \"Exchanges\"-- shall mean the Holdings Exchange and the Maxygen\n          ---------\nExchange.\n\n         \"Expiration Date\"-- as defined in Section 12.1(b).\n          ---------------\n\n         \"Facilities\"-- shall mean any real property, leaseholds or other\n          ----------\ninterests currently or formerly owned or operated by ProFound, and any\nbuildings, plants, structures or\n\n                                       4\n\n \nequipment (including motor vehicles) currently or formerly owned or operated by\nProFound.\n\n         \"Founding Shareholders\"-- shall mean Christian Karsten Hansen, Jan\n          ---------------------\nMoller Mikkelsen, Torben Halkier, Jens Sigurd Okkels, Anders Pedersen, Hans\nThalsgard Schambye, Knud Aunstrup, Claus Braestrup and Thue W. Schwartz.\n\n         \"GAAP\"-- shall mean generally accepted Danish accounting principles\n          ----\napplied on a consistent basis.\n\n         \"Governmental Authority\"-- shall mean any court, tribunal, authority,\n          ----------------------\nagency, commission, bureau, department, official or other instrumentality of the\nUnited States, the European Union, Denmark, any other country or any provincial,\nstate, local, county, city or other political subdivision.\n\n         \"Governmental Permit\"-- shall mean any license, franchise, permit or\n          -------------------\nother authorization of any Governmental Authority.\n\n         \"Hazardous Materials\"-- shall mean any substance, material or waste\n          -------------------\nwhich is regulated by any Environmental Law, including but not limited to,\npetroleum products, asbestos and polychlorinated biphenyls.\n\n         \"Holdings\"-- as defined in the first paragraph of this Agreement.\n          --------\n\n         \"Holdings Common Stock\"-- shall mean the Common Stock of Holdings.\n          ---------------------    \n\n         \"Holdings Exchange\"-- as defined in Section 2.2.\n          -----------------\n\n         \"Intellectual Property\"-- as defined in Section 4.21(a).\n          ---------------------\n\n         \"Law\"-- shall mean any Danish, European Union, other non-United States,\n          ---\nUnited States, state or local (including common law) statute, code, directive,\nordinance, rule, regulation or other requirement.\n\n         \"Lien\"-- shall mean any lien, pledge, hypothecation, levy, mortgage,\n          ----\ndeed of trust, security interest, claim, lease, charge, option, right of first\nrefusal, easement, or other real estate declaration, covenant, condition,\nrestriction or servitude, transfer restriction under any shareholder or similar\nagreement, encumbrance or any other restriction or limitation whatsoever.\n\n         \"Lock-up Agreement\"-- as defined in Section 7.12.\n          -----------------\n\n         \"Losses\"-- as defined in Section 12.2.\n          ------\n\n         \"Maxygen\"-- as defined in the first paragraph of this Agreement.\n          -------\n\n                                       5\n\n \n         \"Maxygen Common Stock\"-- shall mean the Common Stock, $0.0001 par value\n          --------------------\nper share, of Maxygen.\n\n         \"Maxygen Disclosure Schedule\"-- shall mean the disclosure schedule\n          ---------------------------\ndelivered by Maxygen to ProFound concurrently with the execution and delivery of\nthis Agreement.\n\n         \"Maxygen Exchange\"-- as defined in Section 2.1.\n          ----------------\n\n         \"Maxygen Indemnitee\"-- as defined in Section 12.2.\n          ------------------\n\n         \"Maxygen Material Adverse Effect\"-- shall mean an event that materially\n          -------------------------------\nand adversely affects the business, results of operation or financial condition\nof Maxygen and its Subsidiaries taken as a whole; provided, however, that any\nsuch effect resulting from (i) any change in economic or business conditions\ngenerally affecting the biotechnology industry or (ii) any change in generally\naccepted accounting principles or interpretations thereof generally affecting\nthe biotechnology industry or (iii) any reduction in the trading price of the\nMaxygen Common Stock shall not be considered when determining if a Maxygen\nMaterial Adverse Effect has occurred.\n\n         \"Maxygen Reports\"-- as defined in Section 6.3(a).\n          ---------------\n\n         \"Occupational Safety and Health Law\"-- shall mean any legal or\n          ----------------------------------\ngovernmental requirement or obligation relating to safe and healthful working\nconditions or to occupational safety and health hazards, whether governmental or\nprivate (including those promulgated or sponsored by industry associations and\ninsurance companies), designed to provide safe and healthful working conditions.\n\n         \"Order\"-- shall mean any order, consent, consent order, injunction,\n          -----\njudgment, decree, consent decree, ruling, writ, assessment or arbitration award.\n\n         \"Organizational Documents\"-- shall mean: (a) the articles or\n          ------------------------\ncertificate of incorporation, memorandum of association, articles of association\nand the by-laws of a corporation; (b) the partnership agreement and any\nstatement of partnership of a general partnership; (c) the limited partnership\nagreement and the certificate of limited partnership of a limited partnership;\n(d) the articles or certificate of formation and operating agreement of a\nlimited liability company; (e) any charter, trust certificate or document or\nsimilar document adopted or filed in connection with the creation, formation or\norganization of a Person; and (f) any and all amendments to any of the\nforegoing.\n\n         \"Person\"-- shall mean any individual, corporation (including any\n          ------\nnon-profit corporation), general or limited partnership, limited liability\ncompany, joint venture, estate, trust, association, organization, labor union or\nother entity or governmental body or Governmental Authority.\n\n                                       6\n\n \n         \"Proceeding\"-- shall mean any claim, action, investigation,\n          ----------\narbitration, litigation or other judicial, administrative or regulatory\nproceeding.\n\n         \"ProFound Common Stock\"-- shall mean the Class A and Class B Common\n          ---------------------\nStock of ProFound.\n\n         \"ProFound Disclosure Schedule\"-- shall mean the disclosure schedule\n          ----------------------------\ndelivered by ProFound to Maxygen and Holdings concurrently with the execution\nand delivery of this Agreement.\n\n         \"ProFound Financial Statements\"-- shall mean (i) the audited balance\n          -----------------------------\nsheet and statement of shareholders owning more than five percent of the share\ncapital of ProFound as of December 31, 1999 and the related income statement and\nstatement of cash flow for the year then ended, and (ii) the ProFound Interim\nFinancial Statements. The ProFound Financial Statements are included in Section\n4.5 of the ProFound Disclosure Schedule.\n\n         \"ProFound Intellectual Property\"-- as defined in Section 4.21(a).\n          ------------------------------\n\n         \"ProFound Interim Financial Statements\"-- shall mean the unaudited\n          -------------------------------------\nbalance sheet and statement of shareholders owning more than five percent of the\nshare capital of ProFound as of February 29, 2000, and the related unaudited\nincome statement for the two months then ended.\n\n         \"ProFound Material Adverse Effect\"-- shall mean any material adverse\n          --------------------------------\nchange in the business, operations, properties, assets, liabilities, results of\noperations, condition or prospects (financial or otherwise) of ProFound;\nprovided, however, that any such effect resulting from (i) any change in\neconomic or business conditions generally affecting the biotechnology industry\nor (ii) any change in generally accepted accounting principles or\ninterpretations thereof generally affecting the biotechnology industry shall not\nbe considered when determining if a ProFound Material Adverse Effect has\noccurred.\n\n         \"ProFound Registered Intellectual Property\"-- as defined in Section\n          -----------------------------------------\n4.21(a).\n\n         \"ProFound Securities\"-- shall mean the ProFound Common Stock and the\n          -------------------\nProFound Warrants.\n\n         \"ProFound Securityholders\"-- shall mean the holders of ProFound Common\n          ------------------------\nStock and ProFound Warrants.\n\n         \"ProFound Shareholders\" -- shall mean the holders of ProFound Common\n          ---------------------\nStock.\n\n         \"ProFound Warrants\"-- shall mean warrants to purchase shares of\n          -----------------\nProFound Common Stock.\n\n                                       7\n\n \n         \"Registered Intellectual Property\"-- as defined in Section 4.21(a).\n          --------------------------------\n\n         \"Related Person\"-- as defined in Section 4.23.\n          --------------\n\n         \"Release\"-- shall mean any release, spill, effluent, emission, leaking,\n          -------\npumping, injection, deposit, disposal, discharge, dispersal, leaching, or\nmigration into the indoor or outdoor environment of any Hazardous Material\nthrough or in the air, soil, surface water or groundwater.\n\n         \"Remedial Action\"-- shall mean all actions, including, without\n          ---------------\nlimitation, any expenditures, required or voluntarily undertaken to (i) clean\nup, remove, treat, or in any other way address any Hazardous Material or other\nsubstance in the indoor or outdoor environment; (ii) prevent the Release or\nthreat of Release, or minimize the further Release of any Hazardous Material or\nother substance so it does not migrate or endanger or threaten to endanger\npublic health or welfare of the indoor or outdoor environment; (iii) perform\npre-remedial studies and investigations or post-remedial monitoring and care; or\n(iv) bring any Facility into compliance with all Environmental Laws and\nEnvironmental Permits.\n\n         \"Representatives\"-- shall mean officers, directors, employees, agents,\n          ---------------\nattorneys, accountants, advisors and representatives.\n\n         \"Returns\"-- shall mean returns, reports and forms.\n          -------\n\n         \"Securities Act\"-- shall mean the United States Securities Act of 1933,\n          --------------\nas amended, or any successor law.\n\n         \"Securityholder Representative\"-- as defined in Section 3.2(a).\n          -----------------------------\n\n         \"Shareholders Agreement\"-- shall mean the Shareholders Agreement dated\n          ----------------------\nApril 28, 1999 among certain ProFound Securityholders.\n\n         \"Subsidiary\"-- shall mean with respect to any Person, any corporation,\n          ----------\njoint venture, limited liability company, partnership, association or other\nbusiness entity of which 50% or more of the total voting power of stock or other\nequity entitled to vote generally in the election of directors or managers or\nequivalent Persons thereof is owned or controlled, directly or indirectly, by\nsuch Person.\n\n         \"Tax Authority\"-- shall mean the Danish, United States, and any state,\n          -------------\nlocal or foreign government or any agency or subdivision thereof.\n\n         \"Taxes\"-- shall mean all taxes, charges, fees, customs, duties or other\n          -----\nassessments, however denominated, including all interest, penalties, additions\nto tax or additional taxes that may become payable in respect thereof, imposed\nby a Tax Authority, which shall\n\n                                       8\n\n \ninclude, without limitation, all income taxes, payroll and employee withholding\ntaxes, unemployment insurance, social security, sales and use taxes, excise\ntaxes, capital taxes, franchise taxes, gross receipt taxes, occupation taxes,\nreal and personal property taxes, value added taxes, stamp taxes, transfer\ntaxes, workers' compensation taxes, taxes relating to benefit plans and other\nobligations of the same or similar nature.\n\n         \"Transaction Documents\"-- means the agreements, documents or\n          ---------------------\ninstruments executed and delivered by a party hereto as contemplated under this\nAgreement.\n\n2. THE EXCHANGES; CLOSING\n   ----------------------\n\n    2.1 THE MAXYGEN EXCHANGE \n        --------------------\n\n        (a) Upon the terms and subject to the conditions set forth in this\nAgreement (including, without limitation, the last sentence of Section 2.1(e))\nand in accordance with the DCA, at the Closing all of the ProFound\nSecurityholders (shall transfer and assign all of their respective right, title\nand interest in and to all of their ProFound Securities to Maxygen in exchange\nfor shares of Maxygen Common Stock and options to purchase shares of Maxygen\nCommon Stock (collectively the \"Maxygen Exchange\") as provided in this Section\n2.1.\n\n        (b) Each share of Class A ProFound Common Stock shall be exchanged for\nshares of Maxygen Common Stock. The total number of shares of Maxygen Common\nStock that Maxygen will issue under this Section 2.1(b) is 328,799 shares. The\nnumber of shares of Maxygen Common Stock to be issued to each holder of Class A\nProFound Common Stock is set forth on Exhibit 2.1.\n\n        (c) Each share of Class B ProFound Common Stock held by BankInvest I and\nNovo Nordisk A\/S shall be exchanged for shares of Maxygen Common Stock. The\ntotal number of shares of Maxygen Common Stock that Maxygen will issue under\nthis Section 2.1(c) is 417,032 shares. The number of shares of Maxygen Common\nStock to be issued to each of BankInvest I and Novo Nordisk A\/S is set forth on\nExhibit 2.1.\n\n        (d) Each share of Class B ProFound Common Stock and each ProFound\nWarrant to purchase shares of Class B ProFound Common Stock held by BankInvest\nII shall be exchanged for shares of Maxygen Common Stock. The total number of\nshares of Maxygen Common Stock that Maxygen will issue under this Section 2.1(d)\nis 234,174 shares.\n\n        (e) Subject to the last sentence of this Section 2.1(e), each ProFound\nWarrant to purchase shares of Class A ProFound Common Stock shall be exchanged\nfor an option on substantially similar terms and conditions as those of such\nProFound Warrants, issued under the Maxygen International Stock Option Plan, to\npurchase shares\n\n                                       9\n\n \nof Maxygen Common Stock. The total number of shares of Maxygen Common Stock to\nbe covered by all these \"substitute Maxygen options\" is 41,812. The exercise\nprice per share of Maxygen Common Stock under those substitute Maxygen options\nwill be $22.65. The number of shares of Maxygen Common Stock covered by the\nsubstitute Maxygen options to be granted to each holder of a ProFound Warrant to\npurchase shares of Class A ProFound Common Stock is set forth on Exhibit 2.1.\nThe substitute Maxygen options shall have the same vesting schedule as the\nvesting schedule for the corresponding ProFound Warrant. In other words, the\npresent vesting schedule that applies to a ProFound Warrant shall be continued\nfor the Maxygen option that is substituted for that warrant. Notwithstanding the\nforegoing, a given holder of a ProFound Warrant to purchase shares of Class A\nProFound Common Stock shall not be entitled to receive any substitute Maxygen\noptions unless he or she will be a continuing employee of ProFound after the\nClosing and has delivered, before the Closing, the agreements required by\nSection 9.9.\n \n    2.2  THE HOLDINGS EXCHANGE \n         ---------------------\n\n         The parties acknowledge that, in accordance with the CCL and the DGCL,\nimmediately following the Maxygen Exchange, Maxygen intends to exchange the\nProFound Securities for 1,000 shares of Holdings Common Stock (the \"Holdings\nExchange\"). However, nothing in this Agreement shall require Maxygen to effect\nthe Holdings Exchange.\n\n    2.3 THE CLOSING \n        -----------\n\n        (a) Unless this Agreement shall have been terminated and the\ntransactions herein contemplated shall have been abandoned pursuant to Section\n11, and subject to the satisfaction or waiver of the conditions set forth in\nSections 9 and 10, the consummation of the Exchanges shall take place on or as\npromptly as practicable (and in any event within two business days) after\nsatisfaction or waiver of the conditions set forth in Sections 9 and 10 at the\noffices of Heller Ehrman White &amp; McAuliffe LLP, 2500 Sand Hill Road, Suite 100,\nMenlo Park, California 94025 (the \"Closing\"), unless another date, time or place\nis agreed to in writing by ProFound and Maxygen.\n\n        (b) As soon as practicable following the Closing, the parties hereto\nshall cause the Exchanges to be memorialized by making all filings or recordings\nrequired under the CCL, DCA and the DGCL.\n\n        (c) At and after the Closing, the Exchanges will have the\neffects set forth in this Agreement, and ProFound shall be a wholly owned\nsubsidiary of Holdings.\n\n                                       10\n\n \n    2.4 SURRENDER OF CERTIFICATES \n        -------------------------\n\n        (a) Exchange Agent. ChaseMellon Shareholders Services, L.L.C. shall act\n            --------------\nas exchange agent (the \"Exchange Agent\") for the Maxygen Exchange.\n\n        (b) Common Stock and Options to Purchase Common Stock. Promptly after\n            -------------------------------------------------\nthe Closing, Maxygen shall make available for exchange in accordance with\nSection 2.1 the aggregate number of shares of Maxygen Common Stock and options\nto purchase Maxygen Common Stock issuable pursuant to Section 2.1 in exchange\nfor the issued and outstanding ProFound Securities.\n\n    2.5 EXCHANGE PROCEDURES\n        -------------------\n\n        (a) Surrender of Certificates. At the Closing, the ProFound\n            -------------------------\n Shareholders shall deliver to the Exchange Agent (i) certificates representing\nall of the ProFound Securities held by them, duly completed and validly\nexecuted, (ii) documentary evidence of the due recordation in ProFound's share\nregister of Maxygen's (and then Holdings') full and unrestricted title to all of\nthe ProFound Securities held by them and (iii) such other documents as may be\nrequired, whereupon each ProFound Shareholder shall be entitled to receive in\nexchange therefor, subject to the escrow requirements of Section 3.1,\ncertificates evidencing the number of shares of Maxygen Common Stock to which\nsuch ProFound Shareholder is entitled pursuant to Section 2.1.\n\n        (b) No Further Ownership Rights in ProFound Securities. All shares of\n            --------------------------------------------------\nMaxygen Common Stock issued upon the surrender for exchange of shares of\nProFound Common Stock in accordance with the terms hereof and all Maxygen\nOptions issued upon surrender for exchange of ProFound Warrants shall be deemed\nto have been issued in full satisfaction of all rights pertaining to such shares\nof ProFound Common Stock and such ProFound Warrants.\n\n        (c) Restrictive Legends. Certificates evidencing shares of Maxygen\n            -------------------\nCommon Stock pursuant to this Agreement shall bear the\n\nfollowing legends:\n\n             (i) All certificates shall bear a restrictive legend indicating\nthat the shares evidenced thereby cannot be transferred except in accordance\nwith the terms of the applicable Lock-Up Agreement.\n\n             (ii) All certificates shall bear a restrictive legend indicating\nthat the shares evidenced thereby were not registered pursuant to the Securities\nAct, including any restrictive legend required by, or useful to aid compliance\nwith, Regulations D and S adopted by the Commission thereunder.\n\n                                       11\n\n \n3.       ESCROW OF SHARES\n         ----------------\n\n    3.1  DELIVERY OF ESCROW SHARES \n         -------------------------\n\n         In lieu of delivering to the ProFound Shareholders certificates for the\nfull number of shares of Maxygen Common Stock provided for in Section 2.1, at\nthe Closing Maxygen shall deliver pursuant to the escrow agreement substantially\nin the form attached hereto as Exhibit 3.1 (the \"Escrow Agreement\") 140,728\nshares of Maxygen Common Stock (the \"Escrow Shares\") to Maxygen as escrow agent\n(the \"Escrow Agent\"). The ProFound Shareholders acknowledge and agree that the\nEscrow Shares shall severally and jointly secure the indemnification obligations\nset forth in Section 12. The Escrow Shares shall be held by the Escrow Agent for\nat least 18 months after the Closing (and any longer period as provided in the\nEscrow Agreement) and shall be applied in accordance with the terms of the\nEscrow Agreement.\n\n    3.2 SECURITYHOLDER REPRESENTATIVE \n        -----------------------------\n\n        (a) Each ProFound Shareholder hereby irrevocably constitutes and\nappoints, effective as of the Closing, Christian Karsten Hansen (together with\nhis permitted successors, the \"Securityholder Representative\"), as the true and\nlawful agent and attorney-in-fact to enter into any agreement in connection with\nthe transactions contemplated by this Agreement and any transactions\ncontemplated by the Escrow Agreement, to exercise any or all of the powers,\nauthority and discretion conferred on him under any such agreement, to accept\ndelivery of and to submit for exchange and cancellation any ProFound Securities,\nto waive any terms and conditions of any such agreement, to give and receive\nnotices on his behalf and to be his, her or its exclusive representative with\nrespect to any matter or Proceeding arising with respect to any transaction\ncontemplated by any such agreement, including, without limitation, the defense,\nsettlement or compromise of any Proceeding for which any Maxygen Indemnitee may\nbe entitled to indemnification, and to act as the \"Purchaser Representative\" for\nany ProFound Shareholder who is not an \"accredited investor\" as that term is\ndefined in Rule 501 adopted by the Commission under the Securities Act in\nconnection with evaluating the merits and risks of investing in the Maxygen\nsecurities to be issued in the Maxygen Exchange, and the Securityholder\nRepresentative agrees to act as, and to undertake the duties and\nresponsibilities of, such agent and attorney-in-fact.\n\n        (b) Maxygen and the other Maxygen Indemnitees shall be entitled to deal\nexclusively with the Securityholder Representative on all matters contemplated\nherein and in the Escrow Agreement, including on the matters indicated in\nSections 10 and 11 and on all matters relating to Section 12, and shall be\nentitled to rely exclusively (without further evidence of any kind whatsoever)\non any document executed or purported to be executed on behalf of any ProFound\nShareholder by the Securityholder Representative, and on any\n\n                                       12\n\n \nother action taken or purported to be taken on behalf of any ProFound\nShareholder by the Securityholder Representative, as fully binding upon such\nProFound Shareholder.\n\n        (c) The Securityholder Representative shall not be liable to anyone for\nany action taken or not taken by him in good faith or for any mistake of fact or\nlaw for anything that he may do or refrain from doing in connection with his\nobligations under this Agreement and the Escrow Agreement (i) with the consent\nof ProFound Shareholders who, as of the date of this Agreement, owned a majority\nof the outstanding shares of ProFound Common Stock, or (ii) in the absence of\nhis own gross negligence or willful misconduct. Any action taken or not taken\npursuant to the advice of counsel shall be conclusive evidence of the absence of\ngross negligence or willful misconduct. The ProFound Shareholders shall, jointly\nand severally, indemnify and hold the Securityholder Representative harmless\nfrom any and all liability and expenses that may arise out of any action taken\nor omitted by him as Securityholder Representative in accordance with this\nAgreement and the Escrow Agreement, except such liability and expense as may\nresult from the gross negligence or willful misconduct of the Securityholder\nRepresentative.\n\n        (d) The Securityholder Representative may rely and shall be protected in\nrelying or refraining from acting on any instrument reasonably believed to be\ngenuine and to have been signed or presented by the proper party or parties. The\nSecurityholder Representative shall not be liable for other parties' forgeries,\nfraud or false representations.\n\n        (e) The Securityholder Representative shall have the reasonable\nassistance of Maxygen's, Holdings' and ProFound's officers and employees for\npurposes of performing his duties and exercising his rights hereunder, provided\nthat the Securityholder Representative shall treat confidentially and not\ndisclose any nonpublic information from or about Maxygen, Holdings or ProFound\nto anyone (except on a need to know basis to individuals who agree to treat such\ninformation confidentially).\n\n        (f) If the Securityholder Representative shall be unable or unwilling to\nserve in such capacity, his successor shall be named by those Persons holding a\nmajority of the shares of ProFound Common Stock outstanding just before the\nClosing, and such successor shall serve and exercise the powers of the\nSecurityholder Representative hereunder and under the Escrow Agreement. If for\nany reason there is no Securityholder Representative at any time, all references\nherein to the Securityholder Representative shall be deemed to refer to ProFound\nShareholders who hold a majority of the shares of ProFound Common Stock\noutstanding just before the Closing.\n\n        (g) The Securityholder Representative hereby represents and\nwarrants to the other ProFound Shareholders that: (i) he has such knowledge and\nexperience in financial and business matters that he is capable of evaluating\nthe merits and risks of the investment in the Maxygen securities to be issued in\nthe Maxygen Exchange and (ii) there\n\n                                       13\n\n \nis no material relationship between himself and Maxygen other than the matters\nset forth in this Agreement relating to the Maxygen securities that he will\nreceive as a result of the transactions contemplated by this Agreement,\nincluding possible receipt of a portion of the additional Maxygen options\ndescribed in Section 8.1 and the compensation and other benefits that he will\nreceive as an employee of ProFound after the Closing, whether under his\nEmployment Agreement referenced in Section 7.9 or otherwise.\n\n4.       REPRESENTATIONS AND WARRANTIES CONCERNING PROFOUND\n         --------------------------------------------------\n\n         Except as set forth in the ProFound Disclosure Schedule by means of a\ndisclosure that references the specific representation and warranty which that\nthe exception is intended to modify, ProFound and the ProFound Shareholders\nhereby represent and warrant to Maxygen and Holdings as follows:\n\n    4.1 ORGANIZATION AND GOOD STANDING\n        ------------------------------\n\n        (a) Section 4.1 of the ProFound Disclosure Schedule contains a complete\nand accurate list of the jurisdictions in which ProFound is authorized to do\nbusiness. ProFound is a corporation duly organized, validly existing and in good\nstanding under the laws of its jurisdiction of incorporation or formation, with\nfull corporate power and authority to conduct its business as it is now being\nconducted and to own or use the assets and properties that it purports to own or\nuse. ProFound is duly qualified to do business as a foreign corporation and is\nin good standing under the Laws of each state or other jurisdiction in which\neither the ownership or use of the assets or properties owned or used by it, or\nthe nature of the activities conducted by it, requires such qualification,\nexcept where the failure to be so qualified could not reasonably be expected to\nhave a ProFound Material Adverse Effect. ProFound does not have, and has never\nhad, any Subsidiaries.\n\n        (b) ProFound has delivered to Maxygen correct and complete copies of the\nOrganizational Documents of ProFound.\n\n    4.2 AUTHORITY; NO CONFLICT\n        ----------------------\n\n        (a) ProFound has the right, power, authority and capacity to execute and\ndeliver this Agreement and the Transaction Documents to which it is and will be\na party, to consummate the transactions contemplated hereby and thereby and to\nperform its obligations under this Agreement and the Transaction Documents to\nwhich it is and will become a party. This Agreement has been duly authorized and\napproved, executed and delivered by ProFound and constitutes the legal, valid\nand binding obligation of ProFound, enforceable against ProFound in accordance\nwith its terms. Upon the authorization and approval, execution and delivery by\nProFound of the Transaction Documents to which it is a party, such Transaction\nDocuments will constitute legal, valid\n\n                                       14\n\n \nand binding obligations of ProFound, enforceable against ProFound in accordance\nwith their respective terms.\n\n        (b) Neither the execution and delivery of this Agreement or any\nTransaction Document by ProFound nor the consummation or performance by ProFound\nof the Maxygen Exchange or any of the other transactions contemplated hereby or\nthereby will, directly or indirectly (with or without notice or lapse of time or\nboth):\n\n             (i) contravene, conflict with or result in a violation or breach of\n(A) any provision of any Organizational Document of ProFound, (B) any resolution\nadopted by the board of directors or the shareholders of ProFound, (C) any Law\nor any Order, award, decision, settlement or process to which ProFound or any of\nthe assets or properties owned or used by ProFound may be subject, or (D) any\nGovernmental Permit that is held by ProFound;\n\n             (ii) result in a breach of or constitute a default, give rise to a\nright of termination, cancellation or acceleration, create any entitlement to\nany payment or benefit, or require the consent, authorization or approval of or\nany notice to or filing with any Person under any material Contract to which\nProFound is a party or to which any of its or their assets or properties are\nbound, or require the consent, authorization or approval of or any notice to or\nfiling with any Governmental Authority to which ProFound or any of its or their\nassets or properties is subject; or\n\n             (iii) result in the imposition or creation of any Encumbrance or\nLien upon or with respect to any of the assets or properties owned or used by\nProFound.\n\n    4.3  CAPITALIZATION\n         --------------\n               \n         The authorized, issued and outstanding equity securities of ProFound\nconsist solely of 633,459 shares of common stock, DK1 par value per share. Of\nthose shares, 175,000 shares are designated Class A Common Stock and 458,459\nshares are designated Class B Common Stock. All of the outstanding shares of\nProFound Common Stock have been duly authorized and validly issued, are fully\npaid and nonassessable and are owned, of record and beneficially, by the Persons\nand in the amounts set forth in Section 4.3 of the ProFound Disclosure Schedule.\nWarrants to purchase 34,245 shares of Class A Common Stock and 139,289 shares of\nClass B Common Stock are issued and outstanding. All of the ProFound Warrants\nhave been duly authorized and validly issued and are owned, of record and\nbeneficially, by the Persons and in the amounts set forth in Section 4.3 of the\nProFound Disclosure Schedule. Section 4.3 of the ProFound Disclosure Schedule\nsets forth all outstanding securities of ProFound, including but not limited to\nall debt securities, ProFound Common Stock, ProFound Warrants, rights and all\nother securities convertible or exercisable into or for, or exchangeable for,\ncapital stock. Except as set forth in Section 4.3 of the ProFound Disclosure\nSchedule, there are no\n\n                                       15\n\n \nvoting trusts or other Contracts or understandings to which ProFound or any\nProFound Securityholder is a party with respect to the transfer, voting or\nregistration of any ProFound Securities and there are no Contracts relating to\nthe issuance, sale or transfer of any equity securities or other securities of\nProFound. ProFound does not own or have any Contract to acquire any equity\nsecurities or other securities of any Person or any, direct or indirect, equity\nor ownership interest in any other business. No Person has any pre-emptive\nrights, nor any right of first refusal, tag-along, drag along right or any\nrights similar thereto with respect to any security of ProFound. All of the\nProFound Securities have been issued in compliance with all Danish securities\nLaws.\n\n    4.4  BOOKS AND RECORDS\n         -----------------\n\n         The books of account and other records of ProFound, all of which have\nbeen furnished to Maxygen, are true, complete and correct in all material\nrespects. The minute books of ProFound contain true, accurate and complete\nrecords of all meetings held of, and corporate action taken by, the\nstockholders, the board of directors, and committees of the board of directors\nof ProFound. The share registry of ProFound contains a true, complete and\ncorrect record of all issuances, transfers and repurchases of all ProFound\nSecurities.\n\n    4.5  FINANCIAL STATEMENTS\n         --------------------\n\n         The ProFound Financial Statements (i) have been prepared from the books\nand records of ProFound in accordance with GAAP (except for the omission of\nfootnotes and cash flow statement from the ProFound Interim Financial\nStatements), (ii) fully reflect all liabilities and contingent liabilities of\nProFound required to be reflected therein on such basis as at the dates thereof,\nand (iii) fairly present the financial position of ProFound and the share\nholdings of ProFound's more-than-five-percent stockholders as of the dates of\nthe balance sheets included in the ProFound Financial Statements and the results\nof ProFound's operations and (in the case of the audited financial statements\nincluded in the ProFound Financial Statements) cash flow for the periods\nindicated.\n\n    4.6  NO UNDISCLOSED LIABILITIES\n         --------------------------\n\n         ProFound does not have any liabilities or obligations of any nature\n(whether known or unknown, absolute, accrued, contingent or otherwise, and\nwhether due or to become due), except for liabilities or obligations reflected\nor reserved against in the ProFound Financial Statements and current liabilities\nincurred in the ordinary course of business since the date of the balance sheet\nincluded in the ProFound Interim Financial Statements, consistent with past\npractices, which will not, individually or in the aggregate, have a ProFound\nMaterial Adverse Effect.\n\n                                       16\n\n \n    4.7  NO MATERIAL ADVERSE CHANGE\n         --------------------------\n\n         Since December 31, 1999, there has not been any ProFound Material\nAdverse Effect and no event has occurred or circumstance exists that could\nreasonably be expected to result in a ProFound Material Adverse Effect.\n\n    4.8 TAXES\n        -----\n\n        (a) ProFound has filed or caused to be filed with the appropriate Taxing\nAuthorities in a timely manner all Tax Returns required to be filed by it; (ii)\nthe information on such Returns is complete and accurate in all material\nrespects; (iii) ProFound has paid in full on a timely basis all Taxes or made\nadequate provision in the Financial Statements for all Taxes (whether or not\nshown on any Return) required to be paid by them; (iv) there are no Encumbrances\nor Liens for Taxes upon the assets or properties of ProFound other than for\nTaxes not yet due and payable; (v) no deficiencies for Taxes have been claimed,\nproposed, or assessed by any Tax Authority or other Governmental Authority with\nrespect to ProFound, and (vi) there are no pending or, to ProFound's knowledge,\nthreatened audits, investigations or claims for or relating to any liability in\nrespect of Taxes of ProFound.\n\n        (b) There are no outstanding Contracts or waivers with respect to\nProFound extending the statutory period of limitation applicable to any Taxes\nand ProFound has not requested any extension of time within which to file any\nReturn, which has not yet been filed.\n\n        (c) ProFound has made provision for all Taxes payable by it and such\nprovision is reflected on the ProFound Financial Statements with respect to any\nperiod covered thereby as to Taxes which are not payable prior to the date of\nsuch Financial Statements; (ii) the provisions for Taxes with respect to\nProFound for any period prior to the Closing are adequate to cover all Taxes\nwith respect to such period; (iii) ProFound has withheld and paid all Taxes\nrequired to have been withheld and paid in connection with amounts paid or owing\nto any employee, independent contractor, creditor, shareholder or other Person;\n(iv) all material elections with respect to Taxes made by ProFound as of the\ndate hereof are set forth in Section 4.8 of the ProFound Disclosure Schedule;\n(v) there are no private letter rulings in respect of any Tax pending between\nProFound and any Tax Authority, if such ruling would affect ProFound; (vi)\nProFound has never been a member of an affiliated group within the meaning of\nSection 1504 of the Code, or filed or been included in a combined, consolidated\nor unitary return of any Person; (vii) ProFound is not liable for Taxes of any\nother Person, and ProFound is not currently under any obligation to indemnify\nany Person with respect to Taxes, or a party to any tax sharing agreement or any\nother agreement providing for payments by ProFound with respect to Taxes; (viii)\nProFound is not, and never has been, a United States real property holding\ncorporation (as defined in Section 897(c)(2) of the Code), during the applicable\nperiod\n\n                                       17\n\n \nspecified in Section 897(c)(1)(A)(ii) of the Code; (ix) ProFound is not a party\nto any joint venture, partnership or other arrangement or Contract which could\nbe treated as a partnership for Tax purposes; (x) ProFound has not agreed to or\nis required, as a result of a change in method of accounting or otherwise, to\ninclude any adjustment under Section 481 of the Code (or any corresponding\nprovision of Law) in taxable income; (xi) ProFound is not a party to any\nContract, arrangement or plan that could result (taking into account the\ntransactions contemplated by this Agreement), separately or in the aggregate, in\nthe payment of any \"excess parachute payments\" within the meaning of Section\n280G of the Code (or any corresponding provision of Law); and (xii) Section 4.8\nof the Disclosure Schedule contains a list of all jurisdictions to which any Tax\nis properly payable or in which any Return is required to be filed by ProFound,\nand no written claim has ever been made by any Tax Authority in any other\njurisdiction that ProFound is subject to taxation in such jurisdiction and\n(xiii) ProFound is not jointly taxed with any other corporation under Section 31\nof the Danish Act on Corporate Taxation.\n\n        (d) ProFound has not taken any action that would jeopardize or limit its\nright or ability to make use of, and has not failed to take any action that is\nnecessary or desirable to make full use of, the losses ProFound has incurred\nsince its inception against its future income under Danish tax law.\n\n    4.9  ACCOUNTS RECEIVABLE \n         -------------------\n\n         All ProFound Accounts Receivable represent or will represent valid\nobligations arising from services actually performed or sales actually made in\nthe ordinary course of business. All of the Accounts Receivable are or will be\ncollectible at the full recorded amount thereof, less any applicable reserves\nestablished in accordance with GAAP, in the ordinary course of business and\nconsistent with ProFound's past practices.\n\n    4.10 TITLE TO PROPERTIES; ENCUMBRANCES \n         ---------------------------------\n\n         Section 4.10 of the ProFound Disclosure Schedule contains a complete\nand accurate list of all real property, leaseholds or other interests therein\nowned or held by ProFound. ProFound does not own, and has never owned, any real\nproperty other than as specified in Section 4.10 of the ProFound Disclosure\nSchedule and, for each such property, Section 4.10 of the ProFound Disclosure\nSchedule sets forth the owner thereof, a brief description thereof (including\napproximate square footage), when purchased or acquired and the approximate\npurchase price thereof, the use made of such property and the approximate annual\ncosts, fees and taxes associated with such property. ProFound has delivered or\nmade available to Maxygen true, correct and complete copies of the real property\nleases to which ProFound is party or pursuant to which it uses or occupies any\nreal property. Except as set forth in Section 4.10 of the ProFound Disclosure\nSchedule, ProFound has good title to all of the assets and properties, real and\npersonal, tangible and intangible, it owns or purports to own, or uses in its\nbusiness, including those reflected on\n\n                                       18\n\n \nits books and records and in the ProFound Financial Statements (except for\naccounts receivable collected and inventories, materials and supplies disposed\nof in the ordinary course of business consistent with past practice after the\ndate of the balance sheet included in the ProFound Interim Financial\nStatements). ProFound has a valid leasehold, license or other interest in all of\nthe other tangible assets or properties, real or personal, which are used in the\noperation of its business. Except as set forth in Section 4.10 of the ProFound\nDisclosure Schedule, all assets and properties owned, leased or used by ProFound\nare free and clear of all Encumbrances and Liens, except for (a) liens for\ncurrent Taxes not yet due, (b) workers', common carrier and other similar liens\narising in the ordinary course of business, none of which materially detracts\nfrom the value or impairs the use of the asset or property subject thereto, or\nimpairs the operations of ProFound, (c) Encumbrances or Liens disclosed in the\nProFound Financial Statements, and (d) with respect to real property, (i) minor\nimperfections of title, if any, none of which is substantial in amount,\nmaterially detracts from the value or impairs the use of the property subject\nthereto, or impairs the operations of ProFound, and (ii) zoning Laws and other\nland use restrictions that do not impair the present or anticipated use of the\nproperty subject thereto.\n\n    4.11 CONDITION AND SUFFICIENCY OF ASSETS\n         -----------------------------------\n\n         The Facilities and other tangible assets and property owned or used by\nProFound are structurally sound, are in good operating condition and repair\n(normal wear and tear excepted), and are adequate for the uses to which they are\nbeing put, and none of such Facilities or other property and assets owned or\nused by ProFound is in need of maintenance or repairs except for ordinary,\nroutine maintenance and repairs that are not material in nature or cost. The\nFacilities and other tangible assets and property owned or used by ProFound are\nsufficient for the continued conduct of its business after the Closing in\nsubstantially the same manner as conducted prior to the Closing.\n\n    4.12 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS\n         -------------------------------------------------\n\n        (a) ProFound is in compliance in all material respects with all Laws,\nlicenses and Orders affecting any or all of the assets or properties owned or\nused by ProFound or the business or operations of ProFound including,\nOccupational Safety and Health Laws and Environmental Laws. ProFound has not\nbeen charged with violating, or to the knowledge of ProFound, threatened with a\ncharge of violating, nor is ProFound under investigation with respect to a\npossible violation of, any provision of any Law, Order or administrative ruling\nor license relating to any of its or their assets or properties or any aspect of\nits or their business.\n\n        (b) Section 4.12 of the ProFound Disclosure Schedule contains a complete\nand accurate list of each Governmental Permit that ProFound is required by Law\nto hold\n\n                                       19\n\n \nor that otherwise relates to the business of, or to any of the assets or\nproperties owned or used by, ProFound. Each Governmental Permit listed or\nrequired to be listed in Section 4.12 of the Disclosure Schedule is valid and in\nfull force and effect, has not been breached or violated by ProFound, and is not\nsubject to any Proceedings for suspension, modification or revocation.\n\n    4.13 LEGAL PROCEEDINGS\n         -----------------\n\n         There is no pending Proceeding:\n\n        (a) that has been commenced by or against ProFound or that otherwise\nrelates to the business of, or any of the assets or properties owned or used by,\nProFound; or\n\n        (b) that challenges, or that may have the effect of preventing,\ndelaying, making illegal, or otherwise interfering with, any of the transactions\ncontemplated hereby.\n\nTo the knowledge of ProFound, no such Proceeding has been threatened.\n\n    4.14 ABSENCE OF CERTAIN CHANGES AND EVENTS\n         -------------------------------------\n\n        Since December 31, 1999, ProFound has conducted its business only in the\nordinary course, consistent with past practice, and there has not been any:\n\n         (a) declaration, setting aside, making or payment of any dividend or\nother distribution or repurchase or payment in respect of any shares of capital\nstock of ProFound or any warrants or other rights to acquire any shares of such\nstock;\n\n        (b) Encumbrance or Lien of or on any of its assets or properties;\n\n        (c) except to the extent indicated in Section 4.14 of the ProFound\nDisclosure Schedule, payment or increase of any bonuses, salaries or other\ncompensation to any shareholder, director, officer, consultant, agent or sales\nrepresentative or (except in the ordinary course of business consistent with\npast practice) employee or entry into any employment, severance or similar\nContract with any director, officer or employee;\n\n        (d) adoption of, or increase in the payments to or benefits under, any\nprofit sharing, bonus, deferred compensation, savings, insurance, pension,\nretirement or other employee benefit plan for or with any employees, except in\nthe ordinary course of business consistent with past practice;\n\n        (e) damage to or destruction of any asset or property, whether or not\ncovered by insurance, or loss of any customer, which could reasonably be\nexpected to have a ProFound Material Adverse Effect;\n\n                                       20\n\n \n        (f) entry into, termination of, or receipt of notice of termination of\nany Contract or transaction involving a total remaining commitment by or to\nProFound of at least DK400,000 including the entry into (i) any document\nevidencing any indebtedness; (ii) any capital or other lease; or (iii) any\nguaranty;\n\n        (g) sale, lease or other disposition (other than in the ordinary course\nof business consistent with past practice) of any asset or property;\n\n        (h) creation, incurrence or assumption of any indebtedness for borrowed\nmoney or guarantee of any obligation or the net worth of any Person in an\naggregate amount in excess of DK400,000, except for endorsements of negotiable\ninstruments for collection in the ordinary course of business;\n\n        (i) loan or advance to any Person other than travel and other similar\nroutine advances in the ordinary course of business consistent with past\npractice, or acquisition of any capital stock or other securities of or any\nownership interest in, or a significant portion of the assets of, any other\nbusiness enterprise;\n\n        (j) capital investment or capital expenditure or capital improvement,\naddition or betterment in amounts which exceed DK400,000 in the aggregate;\n\n        (k) institution or settlement of any Proceeding before any Governmental\nAuthority relating to it or its assets or properties;\n\n        (l) change in the method of accounting or the accounting principles or\npractices used by ProFound in the preparation of the ProFound Financial\nStatements;\n\n        (m) amendment or other modification of any of the Organizational\nDocuments of ProFound;\n\n        (n) transfer or grant of any rights or licenses under, or entry into any\nsettlement regarding the infringement of, any ProFound Intellectual Property, or\nentry into any licensing or similar agreements or arrangements; or\n\n        (o) agreement, whether oral or written, by ProFound to do any of the\nforegoing.\n\n    4.15 CONTRACTS; NO DEFAULTS\n         ----------------------\n\n        (a) Section 4.15(a) of the ProFound Disclosure Schedule contains a\ncomplete and accurate list, and ProFound has delivered to Maxygen true, correct\nand complete copies, if any are in force, of:\n\n                                       21\n\n \n             (i) each Contract involving payments of at least DK400,000 that\ninvolves performance of services or delivery of goods or materials by ProFound;\n\n             (ii) each Contract involving payments of at least DK400,000 that\ninvolves performance of services or delivery of goods or materials to ProFound;\n\n             (iii) each lease and other Contract affecting any leasehold or\nother interest in any real or personal property to which ProFound is a party;\n\n             (iv) each material license agreement or other Contract to which\nProFound is a party with respect to patents, trademarks, copyrights, biologic or\nother materials, trade secrets or other Intellectual Property, including\nagreements with current or former employees, consultants or contractors\nregarding the use or disclosure of any intellectual property;\n\n             (v) each collective bargaining agreement and other Contract to or\nwith any labor union or other employee representative of a group of employees\ninvolving or affecting ProFound;\n\n             (vi) each joint venture, partnership and other Contract involving a\nsharing of profits, losses, costs or liabilities by ProFound with any other\nPerson or requiring ProFound to make a capital contribution;\n\n             (vii) each Contract to which ProFound is a party containing\ncovenants that in any way purport to restrict the business activity of ProFound\nor any of the ProFound Securityholders or limit the freedom of ProFound or any\nof the ProFound Securityholders to engage in any line of business or to compete\nwith any Person or hire any Person;\n\n             (viii) each employment or consulting agreement between ProFound and\nits employees and consultants;\n\n             (ix) each agreement between ProFound and an officer or director of\nProFound or any affiliate of any of the foregoing;\n\n             (x) each Contract for capital expenditures by ProFound in excess of\nDK400,000;\n\n             (xi) each agreement of ProFound under which any money has been or\nmay be borrowed or loaned or any note, bond, factoring agreement, indenture or\nother evidence of indebtedness has been issued or assumed (other than those\nunder which there remain no ongoing obligations of ProFound), and each guaranty\nby ProFound of any evidence of indebtedness or other obligation, or of the net\nworth, of any Person (other than endorsements for the purpose of collection in\nthe ordinary course of business);\n\n                                       22\n\n \n             (xii) each stock purchase, merger or other agreement pursuant to\nwhich ProFound acquired any material amount of assets (other than capital\nexpenditures), and all relevant documents and agreements delivered in connection\ntherewith;\n\n             (xiii) each agreement pursuant to which ProFound has issued any\nequity securities;\n\n             (xiv) each agreement to which ProFound is a party containing a\nchange of control provision; and\n\n             (xv) each other agreement to which ProFound is a party having an\nindefinite term or a fixed term of more than one year (other than those that are\nterminable at will or upon not more than 30 days' notice by ProFound without\npenalty) or requiring payments by ProFound of more than DK400,000 per year.\n\n        (b) Each Contract identified or required to be identified in Section\n4.15(a) of the ProFound Disclosure Schedule is in full force and effect and is\nvalid and enforceable against ProFound and, to the knowledge of ProFound,\nagainst the other parties thereto in accordance with its terms.\n\n        (c) ProFound is in full compliance with all applicable terms and\nrequirements of each Contract under which ProFound has any obligation or\nliability or by which ProFound or any of the assets or properties owned or used\nby ProFound is or was bound, except for such noncompliance that could not\nreasonably be expected to have a ProFound Material Adverse Effect.\n\n        (d) To the knowledge of ProFound, each other Person that has or had any\nobligation or liability under any Contract under which ProFound has any rights\nis in full compliance with all applicable terms and requirements of such\nContract.\n\n        (e) To the knowledge of ProFound, no event has occurred and no\ncircumstance exists that (with or without notice or lapse of time or both) is\nlikely to result in a material violation or breach of any Contract.\n\n    4.16 INSURANCE\n         --------- \n\n         Section 4.16 of the ProFound Disclosure Schedule sets forth the premium\npayments and describes all the insurance policies of ProFound. These policies\nare now in full force and effect in accordance with their terms and expire on\nthe dates shown on Section 4.16 of the ProFound Disclosure Schedule. There has\nbeen no default in the payment of premiums on any of such policies, and there is\nno ground for cancellation or avoidance of any such policies, or any increase in\nthe premiums thereof, or for reduction of the coverage provided thereby. Such\npolicies shall continue in full force and effect up to the expiration dates\nshown in Section 4.16 of the Disclosure Schedule. True, correct\n\n                                       23\n\n \nand complete copies of all insurance policies listed in Section 4.16 of the\nProFound Disclosure Schedule have been previously furnished to Maxygen.\n\n    4.17 ENVIRONMENTAL MATTERS\n         ---------------------\n\n        (a) ProFound is in compliance with all applicable Environmental Laws\nincluding, but is not limited to, the possession by ProFound of all Governmental\nPermits required under applicable Environmental Laws, and compliance with the\nterms and conditions thereof. ProFound has not received notice of, and neither\nProFound nor any predecessor is the subject of, any Environmental Claim or\nRemedial Action. There are no circumstances or conditions related to ProFound,\nProFound's operations or any Facility that are reasonably likely to prevent or\ninterfere with such compliance or give rise to an Environmental Claim or\nRemedial Action in the future.\n\n        (b) There are no Environmental Claims that are pending or, to the\nknowledge of ProFound, threatened against ProFound, any Facility or against any\nPerson whose liability for any Environmental Claim ProFound has retained or\nassumed either contractually or by operation of Law.\n\n        (c) Neither ProFound, nor any other Person acting on behalf of ProFound\n(solely with respect to any such other Person, with ProFound's knowledge) has\n(A) disposed of, transported or arranged for the disposal of any Hazardous\nMaterials to, at or upon: (i) any location other than a site lawfully permitted\nto receive such Hazardous Materials or (ii) any Facilities and (B) there has not\noccurred during the period ProFound operated or possessed any Facility or is\npresently occurring a Release, or threatened Release, of any Hazardous Materials\non, into or beneath the surface of, or adjacent to, any Facilities.\n\n         (d) Section 4.17 of the ProFound Disclosure Schedule identifies (i) all\nenvironmental audits, assessments, or occupational health studies undertaken by\nProFound or its agents on its behalf, or undertaken by any Governmental\nAuthority, or any Person, relating to the Facilities; (ii) the results of any\ngroundwater, soil, air or asbestos monitoring undertaken by ProFound or its\nagents on its behalf, or, to the knowledge of ProFound, undertaken by any\nGovernmental Authority or any third Person, relating to any Facility; and (iii)\nall written communications between ProFound and any Governmental Authority\narising under or related to Environmental Laws.\n\n    4.18 EMPLOYEES\n         ---------\n\n        (a) Section 4.18 of the ProFound Disclosure Schedule contains a complete\nand accurate list of the following information for each employee of ProFound:\nname; job title; base salary; bonus; vacation accrued; service credited for\npurposes of vesting and\n\n                                       24\n\n \neligibility to participate under any employee benefit plan of any nature; and\nwhether such employee is a party to a non-competition agreement with ProFound.\n\n        (b) No Founding Shareholder and, to the knowledge of ProFound, no\nemployee of ProFound, is a party to, or is otherwise bound by, any agreement or\narrangement, including any non-competition or similar agreement, between such\nFounding Shareholder or employee and any other Person that could materially\nadversely affect (i) the performance of his or her duties as an officer or\nemployee of, or consultant to, ProFound, or (ii) the ability of ProFound to\nconduct its business as previously conducted or presently proposed to be\nconducted in the future. Since December 31, 1999, no officer or other employee\nhas terminated and, to the knowledge of ProFound, no other officer or employee\nof ProFound intends to terminate, his or her employment or consulting\nrelationship with ProFound.\n\n        (c) No employee of ProFound is bound by any agreement with any other\nPerson that is violated or breached by such employee performing the services he\nor she is performing for ProFound in connection with the business presently\nconducted or presently proposed to be conducted by ProFound in the future.\n\n        (d) ProFound has delivered to Maxygen prior to the date hereof true and\ncomplete copies of any employment agreements and any procedures and policies\nrelating to the employment of employees of ProFound and the use of temporary\nemployees and independent contractors by ProFound (including summaries of any\nprocedures and policies that are unwritten).\n\n    4.19 EMPLOYEE BENEFITS\n         -----------------\n\n        (a) ProFound does not maintain, have an obligation to contribute to or\nhave any actual or contingent liability with respect to any Employee Benefit\nPlan. ProFound has delivered to Maxygen prior to the date hereof true and\ncomplete copies of (i) plan instruments and amendments thereto for all Employee\nBenefit Plans (or written summaries of any Employee Benefit Plans that are\nunwritten) and related trust agreements, insurance and other contracts, summary\nplan descriptions, and summaries of material modifications, and material\ncommunications distributed to the participants of each Plan, (ii) to the extent\nannual reports are required with respect to any Employee Benefit Plan, the three\nmost recent annual reports and attached schedules for each Employee Benefit Plan\nas to which such report is required to be filed and (iii) where applicable, the\nmost recent (A) opinion, notification and determination letters, (B) audited\nfinancial statements, and (C) actuarial valuation reports.\n\n        (b) Each Employee Benefit Plan which provides health, disability or\ndeath benefits is fully insured; ProFound is not obligated to directly pay any\nsuch benefits or to reimburse any third Person payor for the payment of such\nbenefits.\n\n                                       25\n\n \n        (c) Each Employee Benefit Plan is and has been operated in material\ncompliance with its terms and all applicable Laws, Orders or governmental rules\nand regulations currently in effect with respect thereto, and by its terms can\nbe amended and\/or terminated at any time. As of and including the Closing,\nProFound (i) shall have performed all material obligations required to be\nperformed by it under, and shall not be in material default under or in material\nviolation of any Employee Benefit Plan and (ii) shall have made all\ncontributions or payments required to be made by it up to and including the\nClosing with respect to each Employee Benefit Plan, or adequate accruals\ntherefor will have been provided for and will be reflected on the ProFound\nFinancial Statements. All notices, filings and disclosures required by any Law\nhave been timely made.\n\n        (d) ProFound has not received notice of and is not aware of any\nProceeding (other than routine claims for benefits) pending or, to the knowledge\nof ProFound, threatened with respect to any Employee Benefit Plan or against any\nfiduciary of any Employee Benefit Plan, and there are no facts that could give\nrise to any such Proceeding. There has not occurred any circumstances by reason\nof which ProFound may be liable for an act, or a failure to act, by a fiduciary\nwith respect to any Employee Benefit Plan.\n\n        (e) There are no Proceedings against ProFound pending or, to ProFound's\nknowledge, threatened and no facts exist as a result of which ProFound could\nhave any liability based on, arising out of, in connection with or otherwise\nrelating to the classification of any individual by ProFound as an independent\ncontractor.\n\n        (f) Section 4.19(f) of the ProFound Disclosure Schedule sets forth a\ntrue and complete list of each current or former employee, officer or director\nof ProFound who holds (i) any warrant or option to purchase ProFound Common\nStock, together with the number of shares of ProFound Common Stock subject to\nsuch warrant or option, the exercise price of such warrant or option (to the\nextent determinable), and the expiration date of such warrant or option; (ii)\nany shares of ProFound Common Stock that are restricted as a result of an\nagreement with ProFound or the stock plan of ProFound; and (iii) any other\nright, directly or indirectly, to receive ProFound securities or any other\ncompensation based in whole or in part on the value of ProFound capital stock,\ntogether with the number of shares of ProFound stock subject to such right.\n\n        (g) Section 4.19(g) of the ProFound Disclosure Schedule sets forth a\ntrue and complete list of (i) all agreements with consultants who are\nindividuals obligating ProFound to make annual cash payments in an amount\nexceeding DK200,000; and (ii) all agreements with respect to the services of\nindependent contractors or leased employees who are individuals or individuals\ndoing business in a corporate form whether or not they participate in any of the\nEmployee Benefit Plans.\n\n                                       26\n\n \n        (h) No Employee Benefit Plan invests in ProFound Securities; and (ii)\nthe consummation of the transactions contemplated by this Agreement will not,\nalone or together with any other event, (A) entitle any employee or former\nemployee of ProFound to any payment, (B) result in an increase in the amount of\ncompensation or benefits or accelerate the vesting or timing of payment of any\nbenefits or compensation payable in respect of any employee or former employee\nor (C) result in any parachute payment, whether under the Danish Salaried\nEmployees Act, any other Danish law or any private agreement, and whether or not\nsuch payment is considered reasonable compensation for services rendered.\nProFound will take all actions within its control to ensure that all actions\nrequired to be taken by a fiduciary of any Employee Benefit Plan in order to\neffectuate the transaction contemplated by this Agreement shall comply with the\nterms of such Plan and applicable Law.\n\n        (i) No Employee Benefit Plan provides benefits, including, without\nlimitation, death or medical benefits (through insurance or otherwise) with\nrespect to any employee or former employee of ProFound beyond their retirement\nor other termination of service other than (i) coverage mandated by applicable\nLaw, (ii) retirement or death benefits under any Pension Plan, (iii) disability\nbenefits under any welfare plan that have been fully provided for by insurance\nor otherwise, (iv) deferred compensation benefits accrued as liabilities on the\nProFound Financial Statements or (v) benefits in the nature of severance pay.\n\n        (j) ProFound has not proposed, agreed to or announced any changes to any\nEmployee Benefit Plan that would cause an increase in benefits under any such\nEmployee Benefit Plan (or the creation of new benefits or plans) or to change\nany employee coverage which would cause an increase in the expense of\nmaintaining any such plan.\n\n        (k) No Employee Benefit Plan provides for the payment of severance\nbenefits.\n\n        (l) Section 4.19(l) of the ProFound Disclosure Schedule summarizes all\namounts that would be required by any applicable law to be paid to the employees\nof ProFound who terminate employment or are terminated.\n\n    4.20 LABOR RELATIONS\n         ---------------\n\n        (a) Since December 31, 1999, no employee of ProFound has terminated, and\nto the knowledge of ProFound, no ProFound employee is considering terminating,\nhis or her employment with ProFound.\n\n        (b) To the knowledge of ProFound, no condition or state of facts or\ncircumstances exists which could materially adversely affect ProFound's\nrelations with its\n\n                                       27\n\n \nemployees, including the consummation of the transactions contemplated by this\nAgreement.\n\n        (c) ProFound is in compliance in all material respects with all\napplicable Law respecting employment and employment practices, terms and\nconditions of employment and wages and hours and none of them is engaged in any\nunfair labor practice.\n\n        (d) No collective bargaining agreement with respect to the business of\nProFound is currently in effect or being negotiated. ProFound has not\nencountered any labor union or collective bargaining organizing activity with\nrespect to its employees. ProFound has no obligation to negotiate any such\ncollective bargaining agreement, and, to the knowledge of ProFound, there is no\nindication that the employees of ProFound desire to be covered by a collective\nbargaining agreement.\n\n        (e) There are no strikes, slowdowns, work stoppages or other labor\ntrouble pending or, to the knowledge of ProFound, threatened with respect to the\nemployees of ProFound, nor has any of the above occurred or, to the knowledge of\nProFound, been threatened.\n\n        (f) There is no representation claim or petition pending before the\nNational Labor Relations Board or any state or local labor agency and, to the\nknowledge of ProFound, no question concerning representation has been raised or\nthreatened respecting the employees of ProFound.\n\n        (g) There are no complaints or charges against ProFound pending before\nthe ordinary courts, the Danish Industrial Tribunal, industrial arbitration\ntribunal, the Danish Working Environment Service or other Danish Governmental\nAuthority, and, to the knowledge of ProFound, no complaints or charges have been\nfiled or threatened to be filed against ProFound with any such board or agency.\n\n        (h) To the knowledge of ProFound, no charges with respect to or relating\nto the business of ProFound are pending before any agency responsible for the\nprevention of unlawful employment practices.\n\n        (i) Section 4.20(i) of the ProFound Disclosure Schedule accurately sets\nforth all unpaid severance which, as of the date hereof, is due or claimed, in\nwriting, to be due from ProFound to any Person whose employment with ProFound\nwas terminated.\n\n        (j) ProFound has not received notice of the intent of any Governmental\nAuthority responsible for the enforcement of labor or employment Laws to conduct\nan investigation of ProFound, and no such investigation is in progress.\n\n                                       28\n\n \n        (k) ProFound is not and, to the knowledge of ProFound, no employee of\nProFound is, in violation in any material respect of any employment agreement,\nnon-disclosure agreement, non-compete agreement or any other agreement regarding\nan employee's employment with ProFound.\n\n        (l) ProFound has paid all wages which are due and payable to\n\neach of its employees and each of its independent contractors.\n\n    4.21 INTELLECTUAL PROPERTY\n         ---------------------\n\n        (a) For the purposes of this Agreement, the following terms have the\nfollowing definitions:\n\n         \"Intellectual Property\" shall mean any or all of the following and all\n          ---------------------\nrights in, arising out of, or associated therewith: (i) all United States,\ninternational and foreign patents and applications therefor and all reissues,\ndivisions, renewals, extensions, provisionals, continuations and\ncontinuations-in-part thereof; (ii) all inventions (whether patentable or not),\ninvention disclosures, improvements, trade secrets, proprietary information,\nknow how, technology, technical data and customer lists, and all documentation\nrelating to any of the foregoing; (iii) all copyrights, copyrights registrations\nand applications therefor, and all other rights corresponding thereto throughout\nthe world; (iv) all industrial designs and any registrations and applications\ntherefor throughout the world, (v) all trade names, logos, URLs, common law\ntrademarks and service marks, trademark and service mark registrations and\napplications therefor throughout the world; (vi) all databases and data\ncollections and all rights therein throughout the world; (vii) all moral and\neconomic rights of authors and inventors, however denominated, throughout the\nworld, and (viii) any similar or equivalent rights to any of the foregoing\nanywhere in the world.\n\n         \"ProFound Intellectual Property\" shall mean any Intellectual Property\n          ------------------------------\nthat is owned by, or exclusively licensed to ProFound.\n\n         \"Registered Intellectual Property\" means all United States,\n          --------------------------------\ninternational and foreign: (i) patents and patent applications (including\nprovisional applications); (ii) registered trademarks, applications to register\ntrademarks, intent-to-use applications, or other registrations or applications\nrelated to trademarks; (iii) registered copyrights and applications for\ncopyright registration; and (iv) any other Intellectual Property that is the\nsubject of an application, certificate, filing, registration or other document\nissued, filed with, or recorded by any state, government or other public legal\nauthority.\n\n         \"ProFound Registered Intellectual Property\" means all of the Registered\n          -----------------------------------------\nIntellectual Property owned by, or filed in the name of, ProFound.\n\n                                       29\n\n \n        (b) No material ProFound Intellectual Property or product or service of\nProFound is subject to any Proceeding or outstanding Order, agreement, or\nstipulation restricting in any manner the use, transfer, or licensing thereof by\nProFound, or which may affect the validity, use or enforceability of such\nProFound Intellectual Property.\n\n        (c) Section 4.21 of the ProFound Disclosure Schedule is a complete and\naccurate list of all ProFound Registered Intellectual Property and specifies,\nwhere applicable, the jurisdictions in which each such item of ProFound\nRegistered Intellectual Property has been issued or registered or in which an\napplication for such issuance and registration have been filed, including the\nrespective registration or application numbers. Each material item of ProFound\nRegistered Intellectual Property is valid and subsisting, all necessary\nregistration, maintenance and renewal fees currently due in connection with such\nProFound Registered Intellectual Property have been made and all necessary\ndocuments, recordations and certificates in connection with such ProFound\nRegistered Intellectual Property have been filed with the relevant patent,\ncopyright, trademark or other authorities in the United States or foreign\njurisdictions, as the case may be, for the purposes of maintaining such ProFound\nRegistered Intellectual Property.\n\n        (d) ProFound owns and has good and exclusive title to, or has license\n(sufficient for the conduct of its business as currently conducted and as\nproposed to be conducted) to, each material item of ProFound Intellectual\nProperty or other Intellectual Property used by ProFound free and clear of any\nLien or Encumbrance (excluding licenses and related restrictions); and ProFound\nis the exclusive owner of all trademarks and trade names used in connection with\nthe operation or conduct of the business of ProFound, including the sale of any\nproducts or the provision of any services by ProFound.\n\n        (e) ProFound owns exclusively, and has good title to, all copyrighted\nworks that are products of ProFound or which ProFound otherwise expressly\npurports to own.\n\n        (f) To the extent that any material Intellectual Property has been\ndeveloped or created by any Person for ProFound, ProFound has a written\nagreement with such Person with respect thereto and ProFound thereby either (i)\nhas obtained ownership of, and is the exclusive owner of, or (ii) has obtained a\nlicense (sufficient for the conduct of its business as currently conducted and\nas proposed to be conducted) to all such Person's Intellectual Property in such\nwork, material or invention by operation of law or by valid assignment, to the\nfullest extent it is legally possible to do so.\n\n        (g) ProFound has not transferred ownership of, or granted any exclusive\nlicense with respect to, any Intellectual Property that is or was material to\nProFound's Intellectual Property, to any third party.\n\n                                       30\n\n \n        (h) The ProFound Disclosure Schedule lists all material contracts,\nlicenses and agreements to which ProFound is a party (i) with respect to\nProFound Intellectual Property licensed or transferred to any third party (other\nthan end-user licenses in the ordinary course); or (ii) pursuant to which a\nthird party has licensed or transferred any material Intellectual Property to\nProFound.\n\n        (i) All material contracts, licenses and agreements relating to ProFound\nIntellectual Property are in full force and effect. The consummation of the\ntransactions contemplated by this Agreement will neither violate nor result in\nthe breach, modification, cancellation, termination, or suspension of such\ncontracts, licenses and agreements. ProFound is in material compliance with, and\nhas not materially breached any term of such contracts, licenses and agreements\nand, to the knowledge of ProFound, all other parties to such contracts, licenses\nand agreements are in compliance with, and have not materially breached any term\nof, such contracts, licenses and agreements. Following the Closing, ProFound\nwill be permitted to exercise all ProFound rights under such contracts, licenses\nand agreements to the same extent ProFound would have been able to had the\ntransactions contemplated by this Agreement not occurred and without the payment\nof any additional amounts or consideration other than ongoing fees, royalties or\npayments which ProFound would otherwise be required to pay.\n\n        (j) In operating its business since the inception of ProFound (including\nits design, development, manufacture, marketing and sales of products and\nservices), ProFound has not infringed or misappropriated any Intellectual\nProperty of any third Person or engaged in unfair competition or any unlawful\ntrade practice.\n\n        (k) ProFound has not received notice from any third party that the\noperation of the business of ProFound or any act, product or service of\nProFound, infringes or misappropriates the Intellectual Property of any third\nparty or constitutes unfair competition or trade practices under the laws of any\njurisdiction.\n\n        (l) Except as set forth in Section 4.21 of the ProFound Disclosure\nSchedule and to the knowledge of ProFound, no Person has infringed or\nmisappropriated or is infringing or misappropriating any ProFound Intellectual\nProperty.\n\n        (m) ProFound has taken reasonable steps to protect the rights of\nProFound in ProFound's confidential information and trade secrets that it wishes\nto protect or any trade secrets or confidential information of third parties\nprovided to ProFound, and, without limiting the foregoing, ProFound has and\nenforces, or prior to the Closing will have and will enforce, a policy requiring\neach employee and contractor to execute a proprietary\ninformation\/confidentiality agreement substantially in the form provided to\nMaxygen and all current and former employees and contractors of ProFound have\nexecuted such an agreement, except where the failure to do so is not reasonably\nexpected to be material to ProFound.\n\n                                       31\n\n \n        (n) Neither this Agreement nor the transactions contemplated by this\nAgreement will result in (i) ProFound granting to any third party any right to\nor with respect to any material Intellectual Property right owned by, or\nlicensed to, either of them, (ii) ProFound being bound by, or subject to, or any\nnon-compete or other material restriction on the operation or scope or their\nrespective businesses, or (iii) ProFound being obligated to pay any royalties or\nother material amounts to any third party in excess of those payable by\nProFound, in the absence of this Agreement or the transaction contemplated\nhereby.\n\n    4.22 CERTAIN PAYMENTS\n         ----------------\n\n         Neither ProFound nor any shareholder, director, officer, agent or\nemployee of ProFound, or to the knowledge of ProFound, any other Person\nassociated with or acting for or on behalf of ProFound, has directly or\nindirectly (a) made any contribution, gift, bribe, rebate, payoff, influence\npayment, kickback or other payment to any Person, private or public, regardless\nof form, whether in money, property or services: (i) to obtain favorable\ntreatment in securing business, (ii) to pay for favorable treatment for business\nsecured, or (iii) to obtain special concessions, or for special concessions\nalready obtained, for or in respect of ProFound or any affiliate of ProFound, or\n(b) established or maintained any fund or asset of ProFound that has not been\nrecorded in the consolidated books and records of ProFound.\n\n    4.23 RELATIONSHIPS WITH RELATED PERSONS\n         ----------------------------------\n\n         No stockholder, affiliate, officer, director or employee of ProFound,\nnor any spouse or child of any of them or any Person associated with any of them\n(\"Related Person\"), has any ownership interest in any assets or properties\n(including, without limitation, any Intellectual Property) used in or pertaining\nto the business of ProFound. No stockholder, affiliate, officer or director, or\nspouse or child of any of them, owns or owned, directly or indirectly, and\nwhether on an individual, joint or other basis, any equity interest or any other\nfinancial or profit interest in any Person (other than less than two percent\n(2%) of the outstanding capital stock of a Person) that (i) has or had business\ndealings involving a total value in excess of DK100,000 with ProFound since the\ninception of ProFound, or (ii) engaged in competition with ProFound. Except as\nset forth in Section 4.23 of the ProFound Disclosure Schedule, no stockholder,\naffiliate, officer, director or employee of ProFound nor any Related Person is a\nparty to any Contract with, or has any claim or right against, or owes any\namounts to, ProFound. All loans, payables and other amounts due to or from\nProFound and its affiliates are listed in Section 4.23 of the ProFound\nDisclosure Schedule. As used in this Section 4.23, \"stockholder\" does not\ninclude BankInvest I, BankInvest II, Novo Nordisk A\/S or any corporate affiliate\nof any of them.\n\n                                       32\n\n \n    4.24 BROKERS OR FINDERS\n         ------------------\n\n         Neither ProFound nor any of its agents has incurred any obligation or\nliability, contingent or otherwise, for brokerage or finders' fees or agents'\ncommissions or financial advisory services or other similar payment in\nconnection with this Agreement or the Transaction Documents or the transactions\ncontemplated hereby or thereby.\n\n    4.25 CUSTOMER RELATIONSHIPS\n         ----------------------\n\n         To the knowledge of ProFound, there are no facts or circumstances,\nincluding the consummation of the transactions contemplated by this Agreement,\nthat are reasonably likely to result in the loss of any material Customer of\nProFound or a material change in the relationship of ProFound with such a\nCustomer.\n\n    4.26 RESTRICTIONS ON BUSINESS ACTIVITIES\n         -----------------------------------\n\n         There is no Contract or Order binding upon ProFound or, to the\nknowledge of ProFound, threatened that has, or could reasonably be expected to\nhave, the effect of prohibiting or materially impairing any business practice of\nProFound (either individually or in the aggregate), any acquisition of property\nby ProFound (either individually or in the aggregate), providing of any service\nby ProFound or the hiring of employees or the conduct of business by ProFound\n(either individually or in the aggregate).\n\n    4.27 OUTSTANDING INDEBTEDNESS\n         ------------------------\n\n         Section 4.27 of the ProFound Disclosure Schedule sets forth as\nof the date of the balance sheet included in the ProFound Interim Financial\nStatements (a) the amount of all indebtedness for borrowed money of ProFound\nthen outstanding, the interest rate and maturity of that indebtedness, and the\namount of any prepayment penalty or premium applicable to that indebtedness, (b)\nany Encumbrances or Liens which relate to such indebtedness and (c) the name of\nthe lender or the other payee of each such indebtedness.\n\n    4.28 DEPOSIT ACCOUNTS\n         ----------------\n\n         Section 4.28 of the ProFound Disclosure Schedule contains a true,\ncorrect and complete list of (a) the name of each financial institution in which\nProFound has an account or safe deposit box, (b) the names in which each account\nor box is held, (c) the type of account, and (d) the name of each Person\nauthorized to draw on or have access to each account or box.\n\n                                       33\n\n \n    4.29 DISCLOSURE\n         ----------\n\n         No representation or warranty of ProFound or any ProFound Shareholder\nin this Agreement as modified by statements in the ProFound Disclosure Schedule\nis inaccurate in any material respect or omits to state a material fact\nnecessary to make the statements herein or therein, in light of the\ncircumstances under which they were made, not misleading.\n\n5.       REPRESENTATIONS AND WARRANTIES OF THE PROFOUND SHAREHOLDERS\n         -----------------------------------------------------------\n\n         Each ProFound Shareholder hereby represents and warrants to Maxygen and\nHoldings as follows:\n\n    5.1 AUTHORITY\n        ---------\n\n         Each ProFound Shareholder has the right, power, authority and capacity\nto execute and deliver this Agreement and the Transaction Documents to which it\nis or will become a party, to consummate the Maxygen Exchange and the other\ntransactions contemplated hereby and thereby and to perform its respective\nobligations under this Agreement and the Transaction Documents to which it is or\nwill become a party. This Agreement has been duly authorized, executed and\ndelivered by it and is enforceable against it in accordance with the terms\nhereof. It has all authorizations and consents necessary for the execution and\ndelivery of this Agreement, and for the performance of its obligations\nhereunder. If such ProFound Shareholder is not a natural Person, it is and at\nthe Closing will be duly organized, validly existing and in good standing under\nthe laws of the jurisdiction of its organization with corporate power and\nauthority to own, lease and operate its properties and to conduct its business.\nUpon the authorization and approval, execution and delivery by or on behalf of\nthe respective ProFound Shareholder of the Transaction Documents to which it is\nor will become a party, such Transaction Documents will constitute legal, valid\nand binding obligations of the respective ProFound Shareholder, enforceable\nagainst such holder in accordance with their respective terms.\n\n    5.2 OWNERSHIP\n        ---------\n\n         It has, and at the Closing will have, (i) good and marketable title to\nall the ProFound Securities listed beside its name in Section 4.3 of the\nProFound Disclosure Schedule (as to the applicable ProFound Shareholder, the\n\"Applicable Securities\"), free and clear of all Encumbrances and Liens, and (ii)\nfull legal right and power to sell, transfer and deliver the Applicable\nSecurities to Maxygen in accordance with this Agreement. The Applicable\nSecurities are the only securities of ProFound held by the ProFound Shareholder.\nUpon delivery of the Applicable Securities to be exchanged by it\n\n                                       34\n\n \nto Maxygen in accordance with this Agreement, Maxygen will receive good and\nmarketable title to all the Applicable Securities, free and clear of all\nEncumbrances and Liens.\n\n    5.3  TAXES\n         -----\n\n          On the Closing all stock transfer or other taxes (other than income\ntaxes) that are required to be paid in connection with the exchange and transfer\nof the ProFound Securities to Maxygen will have been fully paid or provided for\nand all laws imposing such taxes will have been fully complied with.\n\n    5.4  NO CONFLICT\n         -----------\n\n          None of the execution, delivery or performance of this Agreement or\nany of the Transaction Documents to which such ProFound Shareholder is or will\nbecome a party, and the consummation of the transactions contemplated herein or\ntherein by it conflicts or will conflict with or results or will result in any\nbreach or violation of any of the terms or provisions of, or constitute a\ndefault under, or result in the creation or imposition of any lien or\nencumbrance upon, any of its properties or assets pursuant to (i) the terms of\nits Organizational Documents; (ii) the terms of any contract or other agreement\nto which it is a party or by which it is bound or to which any of its properties\nis subject, which conflict, breach, violation or default would adversely affect\nthe ProFound Shareholder's ability to perform its obligations hereunder or\nthereunder; (iii) any statute, rule or regulation of any Governmental Authority\nhaving jurisdiction over it or any of its activities or properties; or (iv) the\nterms of any Order of any arbitrator or any Governmental Authority having such\njurisdiction.\n\n    5.5  NO CONSENT\n         ----------\n\n          No consent, approval, authorization or order of, or any filing or\ndeclaration with any Governmental Authority is required for the consummation by\nthe ProFound Shareholder of any of the transactions on its part contemplated\nunder this Agreement.\n\n    5.6  INVESTMENT\n         ----------\n\n          Such ProFound Shareholder is acquiring the Maxygen securities for\ninvestment, for its own account and not with a view to distribution, it being\nunderstood that some of the ProFound Shareholders may sell some of their shares\nof Maxygen Common Stock to Maxygen.  Such ProFound Shareholder acknowledges that\nthe Maxygen Common Stock will not be registered under the Securities Act and\nwill be subject to restrictions on transfer under the United States securities\nlaws and the terms of the applicable Lock-up Agreement.\n\n                                       35\n\n \n    5.7  BROKERS AND FINDERS\n         --------------------\n\n          The ProFound Shareholder has not retained any investment banker,\nbroker, or finder in connection with any of the transactions contemplated by\nthis Agreement.\n\n    5.8  UNREGISTERED SECURITIES\n         -----------------------\n\n          The ProFound Shareholder understands and acknowledges that the\noffering of the Maxygen securities pursuant to this Agreement will not be\nregistered under the Securities Act on the grounds that the offering and sale of\nMaxygen securities contemplated by this Agreement are exempt from registration\npursuant to Section 4(2) and\/or Section 3(b) of the Securities Act and\nRegulations S and D thereunder and that Maxygen's reliance upon such exemption\nis predicated upon such ProFound Shareholder's representations as set forth in\nthis Agreement.\n\n    5.9  EXPERIENCE\n         ----------\n\n          Each ProFound Shareholder represents that:  (a) it has such knowledge\nand experience in financial and business matters as to be capable of evaluating\nthe merits and risks of its prospective investment in the Maxygen securities;\n(b) it believes it has received all the information it has requested from\nMaxygen and considers necessary or appropriate for deciding whether to obtain\nMaxygen securities; (c) it has had the opportunity to discuss Maxygen's\nbusiness, management, and financial affairs with Maxygen management, it being\nunderstood that, in the case of Novo Nordisk A\/S, that opportunity has arisen\nprimarily in the context of Novo Nordisk A\/S's separate business relationship\nwith Maxygen.\n\n    5.10  NON-U.S. PERSON STATUS\n          ----------------------\n\n          The ProFound Shareholder, if a natural person, is not a resident of\nthe United States.  The ProFound Shareholder, if a partnership or corporation:\n(a) is organized or incorporated in a jurisdiction other than a jurisdiction\nthat is part of the United States and (b) was not formed by a \"U.S. person\"\nprincipally for the purpose of investing in securities that are not registered\nunder the Securities Act.  Each ProFound Shareholder is a natural person, a\npartnership or a corporation.  For purposes of this Section 5.10, \"U.S. person\"\nhas the meaning given to that term in Regulation S adopted by the Commission\nunder the Securities Act.\n\n6.  REPRESENTATIONS AND WARRANTIES OF MAXYGEN\n    -----------------------------------------\n\n          Except as set forth in the Maxygen Disclosure Schedule by means of a\ndisclosure that references the specific representation and warranty which that\nexception is intended to modify, or in the Maxygen Reports filed with the\nCommission on or prior to \n\n                                       36\n\n \nthe date hereof, Maxygen hereby represents and warrants to ProFound and the\nProFound Shareholders as follows:\n\n    6.1  ORGANIZATION AND GOOD STANDING\n         ------------------------------\n\n        (a)  Section 6.1 of the Maxygen Disclosure Schedule contains a complete\nand accurate list of the jurisdictions in which Maxygen is authorized to do\nbusiness. Maxygen is a corporation duly organized, validly existing and in good\nstanding under the laws of Delaware. Holdings is a corporation duly organized,\nvalidly existing and in good standing under the laws of the Cayman Islands. Each\nof Maxygen and Holdings has full corporate power and authority to conduct its\nbusiness as it is now being conducted and to own or use the assets and\nproperties that it purports to own or use. Each of Maxygen and Holdings is duly\nqualified to do business as a foreign corporation and is in good standing under\nthe Laws of each state or other jurisdiction in which either the ownership or\nuse of the assets or properties owned or used by it, or the nature of the\nactivities conducted by it, requires such qualification, except where the\nfailure to be so qualified could not reasonably be expected to have a Maxygen\nMaterial Adverse Effect.\n\n        (b)  Within 15 days after the date of this Agreement, Maxygen will\ndeliver to ProFound correct and complete copies of the Organizational Documents\nof Maxygen and Holdings.\n\n    6.2  AUTHORITY; NO CONFLICT\n         ----------------------\n\n        (a)  Maxygen and Holdings have the right, power, authority and capacity\nto execute and deliver this Agreement and the Transaction Documents to which\nthey are or will become a party, to consummate the Exchanges and the other\ntransactions contemplated hereby and thereby and to perform their respective\nobligations under this Agreement and the Transaction Documents to which they are\nor will become a party. This Agreement has been duly authorized and approved,\nexecuted and delivered by Maxygen and Holdings and constitutes the legal, valid\nand binding obligation of Maxygen and Holdings, enforceable against Maxygen and\nHoldings in accordance with its terms. Upon the authorization and approval,\nexecution and delivery by Maxygen and Holdings of the Transaction Documents to\nwhich they are or will become a party, such Transaction Documents will\nconstitute legal, valid and binding obligations of Maxygen and Holdings,\nenforceable against Maxygen and Holdings in accordance with their respective\nterms.\n\n        (b)  Neither the execution and delivery of this Agreement or any\nTransaction Document by Maxygen or Holdings nor the consummation or performance\nby Maxygen or Holdings of the Exchanges or any of the other transactions\ncontemplated hereby or thereby will, directly or indirectly (with or without\nnotice or lapse of time or both):\n\n                                       37\n\n \n             (i)   contravene, conflict with or result in a violation or breach\nof (A) any provision of the Organizational Documents of Maxygen or Holdings, (B)\nany resolution adopted by the board of directors or the stockholders of Maxygen\nor Holdings, (C) any legal requirement or any Order, award, decision, settlement\nor process to which Maxygen or Holdings or any of the assets or properties owned\nor used by Maxygen or Holdings may be subject, or (D) any Governmental Permit\nthat is held by Maxygen or Holdings;\n\n             (ii)  result in a breach of or constitute a default, give rise to a\nright of termination, cancellation or acceleration, create any entitlement to\nany payment or benefit, or require the consent, authorization or approval of or\nany notice to or filing with any third Person under any material Contract to\nwhich Maxygen or Holdings is a party or to which their respective assets or\nproperties are bound, or require the consent, authorization or approval of or\nany notice to or filing with any Governmental Authority to which Maxygen or\nHoldings or their respective assets or properties is subject; or\n\n             (iii) result in the imposition or creation of any Encumbrance or\nLien upon or with respect to any of the assets or properties owned or used by\nMaxygen or Holdings.\n\n    6.3  MAXYGEN REPORTS\n         ---------------\n\n        (a)  Maxygen has made available to each ProFound Shareholder Maxygen's\nfinal prospectus dated March 20, 2000 and will make available to each ProFound\nShareholder its Annual Report on Form 10-K for the year ended December 31, 1999\nand any and all reports required to be filed by Maxygen after the date of this\nAgreement and before the Closing with the Commission pursuant to the Exchange\nAct (collectively, the \"Maxygen Reports\").\n\n        (b)  The Maxygen Reports complied and will comply as to form in all\nmaterial respects with the requirements of the Securities Act and the Exchange\nAct in effect on the dates thereof. The Maxygen Reports, when filed pursuant to\nthe Securities Act and the Exchange Act, did not and will not contain any untrue\nstatement of a material fact or omit to state any material fact necessary in\norder to make the statements therein, in light of the circumstances under which\nthey were made, not misleading.\n\n        (c)  Each of the Maxygen financial statements (including the related\nnotes) included in the Maxygen Reports present fairly or will present fairly, in\nall material respects, the consolidated financial position and consolidated\nresults of operations, changes in shareholders' equity and cash flow of Maxygen\nas of the respective dates or for the respective periods set forth therein, all\nin conformity with United States generally accepted accounting principles\nconsistently applied during the periods involved except as otherwise noted\ntherein, and subject, in the case of any unaudited interim financial \n\n                                       38\n\n \nstatements included therein, to normal year-end adjustments and to absence of\ncomplete footnotes.\n\n    6.4  ABSENCE OF CERTAIN CHANGES AND EVENTS\n         -------------------------------------\n\n          Since December 31, 1999, Maxygen has conducted its business only in\nthe ordinary course and there has not been (i) any Maxygen Material Adverse\nEffect; (ii) any declaration, setting aside or payment of any dividend or other\ndistribution with respect to its capital stock; or (iii) any material change in\nits accounting principles, practices or methods.\n\n    6.5  VALIDITY OF SECURITIES\n         ----------------------\n\n          The Maxygen Common Stock, when issued, sold, and delivered in\naccordance with the terms and for the consideration expressed in this Agreement,\nwill be duly and validly issued (including, without limitation, issued in\ncompliance with applicable federal and state securities laws) and non-\nassessable.  The Maxygen Common Stock issuable upon exercise of the Maxygen\nOptions will have been duly and validly reserved and, assuming such Maxygen\nCommon Stock is issued to the ProFound Securityholders in accordance with the\nMaxygen International Option Plan, will be duly and validly issued (including,\nwithout limitation, issued in compliance with applicable United States and state\nsecurities laws) and non-assessable.\n\n    6.6  HOLDINGS\n         --------\n\n          Holdings has been formed for the purpose of holding the securities of\nentities that conduct some or all of the future non-U.S. operations of the\nMaxygen entities, including ProFound, and holding certain intangible and other\nassets.\n\n    6.7  SHORT SWING PROFIT RULE\n         -----------------------\n\n          Maxygen believes that, for so long as the Founding Shareholders'\nduties and responsibilities at ProFound are no greater than those contemplated\nby the Employment Agreements (see Section 7.9) and assuming no relevant change\nin the interpretation of the Exchange Act by courts or the Commission, none of\nthe Founding Shareholders will be a person covered by Section 16(a) of the\nExchange Act and thus will not be subject to the short swing profits rule of\nSection 16(b) of the Exchange Act.\n\n                                       39\n\n \n7.  COVENANTS\n    ---------\n\n    The parties, as applicable, hereby covenant and agree as follows:\n\n    7.1  NORMAL COURSE\n         -------------\n\n          From the date hereof until the Closing, ProFound shall:  (a) maintain\nits corporate existence in good standing; (b) maintain the general character of\nits business; (c) maintain in effect all of its presently existing insurance\ncoverage (or substantially equivalent insurance coverage); (d) preserve intact\nin all material respects its business organization, preserve its goodwill and\nthe confidentiality of its business know how, exercise reasonable efforts to\nkeep available the services of its current officers and employees and preserve\nits present material business relationships with its collaborators, licensors,\ncustomers, suppliers and other Persons with which it has material business\nrelations; and (e) in all respects conduct its business only in the usual and\nordinary manner consistent with past practice and perform all Contracts.\n\n    7.2  CONDUCT OF BUSINESS\n         -------------------\n\n          Without limiting the provisions of Section 7.1, from the date hereof\nuntil the Closing (or earlier if and when this Agreement is terminated in\naccordance with its Section 11), ProFound shall not, except as contemplated by\nthis Agreement, directly or indirectly, do, or propose to do, any of the\nfollowing without the prior written consent of Maxygen, which consent shall not\nbe unreasonably withheld or delayed:\n\n        (a)  amend or otherwise modify its Organizational Documents;\n\n        (b)  issue, sell, dispose of or Encumber or authorize the issuance,\nsale, disposition or Encumbrance of, or grant or issue any option, warrant or\nother right to acquire or make any agreement of the type referred to in Section\n4.3, with respect to, any shares of its capital stock or any other of its\nsecurities or any security convertible or exercisable into or exchangeable for\nany such shares or securities, or alter any term of any of its outstanding\nsecurities or make any change in its outstanding shares of capital stock or its\ncapitalization, whether by reason of a reclassification, recapitalization, stock\nsplit, combination, exchange or readjustment of shares, stock dividend or\notherwise;\n\n        (c)  Encumber any material assets or properties;\n\n        (d)  declare, set aside, make or pay any dividend or other distribution\nto any shareholder with respect to its capital stock;\n\n        (e)  redeem, purchase or otherwise acquire any of its capital stock or\nother securities;\n\n                                       40\n\n \n        (f)  increase the compensation or other remuneration or benefits payable\nor to become payable to any director or executive officer, or increase the\ncompensation or other remuneration or benefits payable or to become payable to\nany of its other employees or agents, except, with respect to such other\nemployees or agents only, for increases in the ordinary course of business\nconsistent with past practice;\n\n        (g)  adopt or (except as otherwise required by law) amend or make any\nunscheduled contribution to any employee benefit plan for or with employees, or\nenter into any collective bargaining agreement;\n\n        (h)  terminate or modify any Contract requiring future payments to or\nfrom such party, individually or in the aggregate, in excess of DK400,000,\nexcept for terminations of Contracts upon their expiration during such period in\naccordance with their terms;\n\n        (i)  create, incur, assume or otherwise become liable for any\nindebtedness in an aggregate amount in excess of DK400,000, or guarantee or\nendorse any obligation or the net worth of any Person, except for endorsements\nof negotiable instruments for collection in the ordinary course of business;\n\n        (j)  pay, discharge or satisfy any obligation or liability, absolute,\naccrued, contingent or otherwise, whether due or to become due, in an aggregate\namount in excess of DK400,000, except for liabilities incurred in the ordinary\ncourse of business prior to the date hereof where it shall not make any payment\nor commitment in an aggregate amount in excess of DK800,000 (for purposes of\nthis Section 7.2(j), indebtedness that is created, incurred, assumed or for\nwhich it is otherwise liable under Section 7.2(i) shall be included in\ndetermining whether the foregoing basket amounts have been reached);\n\n        (k)  sell, transfer, lease or otherwise dispose of any of its assets or\nproperties, except in the ordinary course of business consistent with past\npractice and for a cash consideration equal to the fair value thereof at the\ntime of such sale, transfer, lease or other disposition;\n\n        (l)  cancel, compromise, release or waive any material debt, claim or\nright;\n\n        (m)  make any loan or advance to any Person other than travel and other\nsimilar routine advances in the ordinary course of business consistent with past\npractice, or acquire any capital stock or other securities or any ownership\ninterest in, or substantially all of the assets of, any other business\nenterprise;\n\n                                       41\n\n \n        (n)  make any material capital investment or expenditure or capital\nimprovement, addition or betterment, other than those specified in the list of\nplanned capital expenditures set forth on Exhibit 7.2(n);\n\n        (o)  change its method of accounting or the accounting principles or\npractices used in the preparation of the ProFound Financial Statements, other\nthan as required by GAAP;\n\n        (p)  institute or settle any Proceeding before any Governmental\nAuthority relating to it or its assets or properties;\n\n        (q)  adopt a plan of dissolution or liquidation;\n\n        (r)  enter into any Contract, except Contracts made in the ordinary\ncourse of business consistent with past practice;\n\n        (s)  make any new election with respect to Taxes or any change in\ncurrent elections with respect to Taxes, or settle or compromise any federal,\nstate, local or foreign Tax liability or agree to an extension of a statute of\nlimitations;\n\n        (t)  commence any legal proceeding or settle any legal proceeding; or\n\n        (u)  enter into any commitment to do any of the foregoing, or take any\naction that would make any of the representations or warranties of such party\ncontained in this Agreement untrue or incorrect in any material respect (subject\nto the knowledge and materiality limitations set forth therein) or cause any\ncovenant, condition or agreement of such party in this Agreement not to be\ncomplied with or satisfied in any material respect.\n\n     In addition, without the prior written consent of Maxygen, from the date\nhereof until the Closing:\n\n             (i)   none of the ProFound Securityholders shall effect, permit or\nfacilitate ProFound to become a party to any Alternative Acquisition,\nrecapitalization, reclassification of shares, stock split, reverse stock split\nor similar transaction; and\n\n             (ii)  none of the ProFound Securityholders shall permit or\nfacilitate the taking of any action prohibited in (a) to (u) above.\n\n    7.3  DANISH TAX FILING\n         -----------------\n\n        (a)  With the assistance of ProFound, the ProFound Securityholders shall\njointly prepare and file, within 10 days after the date of this Agreement, an\napplication to the Danish Tax Authority for a ruling that the Exchanges will be\ntax deferred reorganizations pursuant to Section 13 of the Danish Act on\nTaxation of Capital Gains on \n\n                                       42\n\n \nShares (aktieavancebeskatingsloven). The application shall be submitted to\nMaxygen at least five days before filing for Maxygen's review and comment. The\nProFound Securityholders shall not submit the application without Maxygen's\nprior consent, which shall not be unreasonably withheld. The ProFound\nShareholders, on their behalf and on behalf of the ProFound Securityholders,\nacknowledge and agree that they, and not ProFound, Maxygen or Holdings, shall be\nresponsible for the accuracy of the contents of the application.\n\n        (b)  If: (i) all the conditions set forth in Section 9 except the\n             --\ncondition set forth in Section 9.12 are satisfied, (ii) all the conditions set\nforth in Section 10 except the condition set forth in Section 10.7 are satisfied\nor are waived by ProFound or the Securityholder Representative, (iii) the Danish\ntax authorities deny the application referenced in Section 7.3(a) by means of a\nfinal, non-appealable written action which explains that a reason (but not\nnecessarily the only reason) the application was denied was the Holdings\nExchange, (iv) this Agreement is terminated after that denial by ProFound under\nSection 11.2 or Section 11.4 and (v) ProFound elects to require that Maxygen\n                             ---\nextend a loan to ProFound by giving Maxygen a written notice to that effect\nwithin 20 days after that termination of this Agreement, then Maxygen, in lieu\n                                                         ----\nof purchasing the ProFound Securities, will loan US$10 million to ProFound on\nthe terms and conditions set forth in the balance of this Section 7.3 and on\nother reasonable and customary terms and conditions as the parties agree. The\nclosing and funding of that loan will occur within 20 days after ProFound gives\nthe notice specified in clause (v) above.\n\n        (c)  The loan, if made, will have these principal features: The funds\nloaned and all repayments will be made in, and all calculations will be based\nupon, U.S. dollars. The loan will be secured by a first lien on all of\nProFound's tangible and intangible assets, it being understood that ProFound\nwill pay all costs (including any and all fees and Taxes) associated with\nputting the lien in place and it being further understood that Maxygen's lien\nwill be junior to the lien currently held by Vaekstfonden on certain of\nProFound's assets. The loan will bear interest at one-year LIBOR plus 100 basis\npoints, with one-year LIBOR to be set for each calendar quarter or portion of\neach calendar quarter during which any portion of the loan is outstanding on the\nfirst Business Day of that calendar quarter based on the quotation for that day\npublished in The Wall Street Journal. The interest rate will increase to one-\n             --- ---- ------ -------\nyear LIBOR plus 600 basis points if and for so long as the loan is in default.\nInterest will be payable quarterly. All principal will be payable on the fifth\nanniversary after the loan is extended. Seventy-five percent of the loan (i.e.,\n                                                                          - -\nUS$7.5 million of the original principal plus all accrued and unpaid interest on\nthat principal) will be prepayable in whole or in part at the option of ProFound\nwithout penalty or premium. Any prepayments will be applied first to accrued and\nunpaid interest, and then to principal. In order to preserve Maxygen's\nconversion right set forth in Section 7.3(d), the balance of the loan (i.e.,\n                                                                       - - \nUS$2.5 million of the original principal plus all accrued and unpaid interest on\nthat principal) will not be prepayable, even with \n                     ---    \n\n                                       43\n\n \npenalty or premium, unless Maxygen so consents, which it shall be entitled not\nto do in its sole discretion. During the duration of the loan, Maxygen shall be\na beneficiary of all affirmative and negative covenants that run to the benefit\nof any other Person or Persons that then have outstanding loans to ProFound.\n\n        (d)  At any time during the duration of the loan (including after its\nmaturity date if any portion of the loan is then in default), Maxygen, at\nMaxygen's option exercisable by written notice to ProFound, may convert up to\nUS$2.5 million of the principal of the loan, plus all accrued and unpaid\ninterest on that principal, into shares of Class B ProFound Common Stock or\nother equity securities of ProFound having the same rights, preferences and\nprivileges as shares of Class B ProFound Common Stock. The price per share of\nthe securities purchased on conversion will be the lower of (i) US$68 and (ii)\n70 percent of the per security price at which ProFound securities are purchased\nin ProFound's next round of equity financing (adjusted, if and as appropriate in\nthe case of clause (i) and clause (ii), to reflect stock splits, stock dividends\nand similar events). The entitlements that accompany the securities purchased by\nMaxygen shall include all related contractual arrangements (such as\nrepresentations, warranties, indemnities and tag-along rights) and legal\nopinions received by any other Person or Persons that purchased any shares of\nClass B ProFound Common Stock.\n\n        (e)  During the duration of the loan (including after its maturity date\nif any portion of the loan is then default), unless and until Maxygen has\nexercised its conversion right in full, ProFound shall give Maxygen at least ten\nBusiness Days' prior written notice of the record date for any dividend,\ndistribution, exchange or other event or development respecting any class or\nseries of ProFound securities. The purpose of this requirement is to inform\nMaxygen of entitlements that may be associated with any class or series of\nProFound securities into which Maxygen might convert a portion of its loan so\nthat Maxygen may better determine whether to exercise its conversion right. An\nexample is a record date for an acquisition of ProFound in which ProFound\nsecurityholders would receive cash or securities of another entity for their\nProFound securities.\n\n        (f)  If the events set forth in clauses (i) through (iv) of Section\n             --\n7.3(b) occur but ProFound does not timely require that Maxygen loan funds to\nProFound, then, if Maxygen so elects, it may purchase up to the Danish kroner\n          ----\nequivalent of US$2.5 million of ProFound securities at the next closing of an\nissuance of equity securities by ProFound, excluding issuances to employees\nunder warrants, in which (unless Maxygen waives this requirement) at least the\nDanish kroner equivalent of another US$2.5 million of such equity securities are\n                            -------\nsold to one or more Persons who are not presently ProFound Securityholders or\naffiliates of present ProFound Securityholders. The price per security, the\nclass and series of such securities, and the entitlements that accompany those\nsecurities including all related contractual arrangements (such as\nrepresentations, warranties, indemnities and tag-along rights) and legal\nopinions of which Maxygen is a \n\n                                       44\n\n \nbeneficiary shall be the same as those received by such other \"independent\"\ninvestors. The \"Danish kroner equivalent\" for purposes of this Section 7.3(f)\nshall be based upon the \"buy\" exchange rate (U.S. dollars for Danish kroner)\npublished in The Wall Street Journal for the last Business Day before the day\n             --- ---- ------ -------\nthat the securities purchase closes. In order to enable Maxygen properly to\nassess whether it wishes to make the investment contemplated by this Section\n7.3(f), ProFound shall submit all documents and disclosures to Maxygen at least\n15 days before that closing.\n\n\n        (g)  ProFound and the ProFound Shareholders shall be responsible for\nobtaining all necessary approvals from, and making all necessary filings with,\nall Governmental Authorities and other Persons to enable Maxygen to complete the\nloan, pledge of assets and equity investments within the time schedules\nspecified in Section 7.3. By signing this Agreement, each ProFound Shareholder\ngives all approvals and consents required to be made or given by it to implement\nall aspects of this Section 7.3 including, for example, any and all approvals\nand consents needed under ProFound's Shareholders Agreement or to amend any\nOrganizational Document of ProFound. All filings and approvals necessary to\nenable Maxygen to exercise its conversion right shall have been obtained, to the\nreasonable satisfaction of Maxygen, before Maxygen is required to fund the loan.\nMaxygen shall be entitled to designate a wholly-owned direct or indirect\nsubsidiary of Maxygen to make the loan, equity investment or both.\n\n    7.4  CERTAIN FILINGS\n         ---------------\n\n          ProFound, the ProFound Shareholders, Maxygen and Holdings shall\ncooperate with respect to all filings, applications and notices with\nGovernmental Authorities and other Persons that are required to be made by\nProFound, the ProFound Shareholders, Maxygen or Holdings, including any filing\nwith the Danish Competition Council, to carry out the transactions contemplated\nby this Agreement or that may be necessary or useful to assure that ProFound can\nconduct its business after the Closing as it conducted its business before the\nClosing.\n\n    7.5  NOTIFICATION OF CERTAIN MATTERS\n         -------------------------------\n\n          Each party shall promptly notify the others of (i) the occurrence or\nnon-occurrence of any fact or event of which such party has knowledge that would\nbe reasonably likely (A) to cause any representation or warranty of such party\ncontained in this Agreement to be untrue or incorrect in any material respect at\nany time from the date hereof to the Closing or (B) to cause any covenant,\ncondition or agreement of such party in this Agreement not to be complied with\nor satisfied in any material respect and (ii) any failure of such party to\ncomply with or satisfy any covenant, condition or agreement to be complied with\nor satisfied by it hereunder in any material respect; provided, however, that no\nsuch notification shall affect any of the representations or warranties of such\nparty, or the right of the other party to rely thereon, or the conditions to the\nobligations of the \n\n                                       45\n\n \nparties, or the remedies available hereunder, except as provided in the last\nsentence of Section 11.6. The parties shall give prompt notice to the other\nparties of any notice or other communication from any third Person alleging that\nthe consent of such third Person is or may be required in connection with the\ntransactions contemplated by this Agreement.\n\n    7.6  ACCESS TO INFORMATION; CONFIDENTIALITY\n         --------------------------------------\n\n          Upon reasonable written notice, ProFound and Maxygen each shall afford\nto and shall cause their respective Representatives to afford, the\nRepresentatives of the other reasonable access, during the period prior to the\nClosing, to all its Facilities, properties, assets, books, Contracts and records\nand, during such period, ProFound and Maxygen each shall furnish promptly to the\nother all information concerning its business, Facilities, properties, assets\nand personnel as such other party may reasonably request, and each shall make\navailable to the other and its Representatives the appropriate individuals\n(including officers, employees, accountants, counsel and other professionals)\nfor discussion of the other's business, Facilities, properties, assets and\npersonnel as either Maxygen or ProFound may reasonably request.  Each party\nshall keep such information confidential in accordance with the terms of the\nConfidentiality Agreement.\n\n    7.7  REASONABLE EFFORTS; FURTHER ACTION\n         ----------------------------------\n\n        (a)  Upon the terms and subject to the conditions hereof, each of the\nparties hereto shall use its reasonable efforts (exercised diligently and in\ngood faith) to take, or cause to be taken, all actions and to do, or cause to be\ndone, all other things reasonably necessary, proper or advisable to consummate\nand make effective as promptly as practicable the transactions contemplated by\nthis Agreement, to obtain in a timely manner all necessary waivers, consents\n(including, without limitation, the consent required from the Vaekstfonden in\nconnection with the presently outstanding loan from the Vaekstfonden),\nauthorizations and approvals and to effect all necessary registrations and\nfilings, and otherwise to satisfy or cause to be satisfied all conditions\nprecedent to its obligations under this Agreement.\n\n        (b)  If, at any time after the Closing, any such further action is\nnecessary or desirable to carry out the purposes of this Agreement, the officers\nand directors of Maxygen, Holdings and ProFound immediately prior to the Closing\nare fully authorized in the name of their respective corporations or otherwise\nto take, and will take, all such lawful and necessary or desirable action.\n\n    7.8  NO SOLICITATION BY PROFOUND\n         ---------------------------\n\n          From the date hereof until the earliest of (a) the Closing, (b) the\n90th day after the ProFound Securityholders file the tax application referenced\nin Section 7.3(a) \n\n                                       46\n\n \nand (c) if the Danish Tax Authority denies that application, the date that is 30\ndays after ProFound receives that denial in writing unless the ProFound\nSecurityholders file an amended application before the end of that 30-day\nperiod, in which case 15 days if and after the Danish Tax Authority denies that\namended application in writing: ProFound shall not, and shall not permit any,\nofficer, director, ProFound Securityholder, employee, investment banker or other\nagent or Representative of ProFound, to, directly or indirectly, (i) solicit,\nengage in discussions or negotiate with any Person (whether or not such\ndiscussions or negotiations are initiated by ProFound), or take any other action\nintended or designed to facilitate the efforts of any Person, other than\nMaxygen, relating to the possible acquisition of ProFound (whether by way of\nmerger, purchase of capital stock, purchase of assets or otherwise) or any\nsignificant portion of its capital stock or assets (with any such efforts by any\nsuch Person to make such an acquisition referred to as an \"Alternative\nAcquisition\"), (ii) provide information with respect to ProFound to any Person,\nother than Maxygen and its Representatives, relating to a possible Alternative\nAcquisition by any Person, other than Maxygen, (iii) enter into an agreement\nwith any Person, other than Maxygen, providing for a possible Alternative\nAcquisition or (iv) make or authorize any statement, recommendation or\nsolicitation in support of any possible Alternative Acquisition by any Person,\nother than by Maxygen. ProFound shall immediately notify Maxygen of any contact\nfrom any Person regarding a possible Alternative Acquisition, including the name\nof such Person and the content of any discussions or requests for information.\n\n    7.9  EMPLOYMENT AGREEMENTS WITH FOUNDING SHAREHOLDERS\n         ------------------------------------------------\n\n          Maxygen or ProFound, and each Founding Shareholder shall enter into an\nemployment agreement in substantially the form attached hereto as Exhibit 7.9\n(the \"Employment Agreements\").\n\n    7.10  RELEASE AGREEMENT\n          -----------------\n\n          On or before the Closing, each ProFound Securityholder shall enter\ninto, and ProFound shall exercise its reasonable efforts to cause any officers,\ndirectors and employees of ProFound who are not also ProFound Securityholders to\nenter into, a release agreement in substantially the form attached hereto as\nExhibit 7.10.\n\n    7.11  UNANIMOUS WRITTEN CONSENT OF PROFOUND SECURITYHOLDERS\n          -----------------------------------------------------\n\n          Immediately after execution of this Agreement, ProFound shall take all\nreasonable action that is necessary or advisable to secure the execution and\ndelivery by each of the ProFound Securityholders of all Transaction Documents\nnecessary for \n\n                                       47\n\n \nClosing. From the date hereof until the Closing, the ProFound Securityholders\nshall not sell, transfer, dispose of or Encumber any of their ProFound\nSecurities.\n\n    7.12  LOCK-UP AGREEMENTS\n          -------------------\n\n          On or before the Closing, each ProFound Securityholder shall execute a\nlock-up agreement preventing the transfer of any shares of Maxygen Common Stock\nprior to the various time periods set forth therein.  There are four different\nforms of lock-up agreement.  Exhibit 7.12 sets forth the name of each ProFound\nSecurityholder and the version of lock-up agreement to be executed by such\nProFound Securityholder.  Exhibits 7.12A, 7.12B, 7.12C and 7.12D are the forms\nof lock-up agreements (together the \"Lock-Up Agreements\").\n\n    7.13  MAXYGEN STOCK POLICIES\n          ----------------------\n\n          All continuing employees will be subject to Maxygen's insider trading\npolicy and guidelines applicable to similarly situated employees, as the same\nmay be modified from time to time.  It shall be a term of employment that each\ncontinuing employee review the policy and comply with its terms.\n\n    7.14  LIMITATIONS ON TRANSFERABILITY\n          ------------------------------\n\n          Each ProFound Shareholder covenants that in no event will it dispose\nof any of the Maxygen securities (other than under the Put\/Call Agreement signed\nby that ProFound Shareholder in accordance with Section 10.8 or pursuant to\nRegulation S and Rule 144 adopted by the Commission under the Securities Act or\nany similar or analogous rule) unless and until (a) the ProFound Shareholder\nshall have notified Maxygen of the proposed disposition and shall have furnished\nMaxygen with a statement of the circumstances surrounding the proposed\ndisposition, and (b) if requested by Maxygen, the ProFound Shareholder shall\nhave furnished Maxygen with an opinion of counsel satisfactory in form and\nsubstance to Maxygen to the effect that (x) such disposition will not require\nregistration under the Securities Act, (y) appropriate action necessary for\ncompliance with the Securities Act and any applicable state, local, or non-U.S.\nlaw has been taken and (z) the proposed transfer satisfies all conditions set\nforth in the Lock-Up Agreement executed by the ProFound Shareholder.\n\n    7.15  CONVERSION TO APS\n          -----------------\n\n          Profound shall initiate action to convert ProFound from an A\/S to an\nAPS, it being understood that the completion of that conversion is not a\ncondition to Maxygen's or Holdings' obligation to complete the Closing.\n\n                                       48\n\n \n    7.16  LOSS CARRYFORWARDS\n          -------------------\n\n          ProFound shall not take any action that would jeopardize or limit its\nright or ability to make use of, and will take all actions that are necessary or\ndesirable to make full use of, the losses ProFound has incurred since its\ninception against its future income under Danish tax law.\n\n    7.17  RETENTION OF PROFOUND SHARES\n          ----------------------------\n\n          Maxygen or Holdings, either directly or indirectly through a direct or\nindirect Subsidiary of Maxygen or Holdings, shall hold all the shares of\nProFound Common Stock acquired by Maxygen at the Closing for at least three\nyears after the Closing or such shorter period as may be specified in the ruling\nissued by the Danish Tax Authority or as otherwise agreed by the Danish Tax\nAuthority.\n\n8.  ADDITIONAL MAXYGEN OPTIONS AND BONUSES\n    --------------------------------------\n\n    8.1  OPTIONS\n         -------\n\n          Subject to the balance of this Section 8.1, within 60 days after the\nClosing, Maxygen will issue options to purchase up to a total of 340,000 shares\nof Maxygen Common Stock to employees of ProFound who are continuing employees.\nThe number of options issued to each participating employee will be determined\nby the Maxygen Board of Directors in consultation with ProFound's current Chief\nExecutive Officers.  A tentative list is attached as Exhibit 8.1.  The options\nwill be issued pursuant to the Maxygen International Stock Option Plan.  Of\nthose options, options on 200,000 shares of Maxygen Common Stock will vest as to\n50% of the shares on the third anniversary after the Closing and as to 50% on\nthe fourth anniversary after the Closing based on the continuing employment of\nthe option holder with ProFound.  The options on the other 140,000 shares of\nMaxygen Common Stock will vest as to 100% of the shares of Maxygen Common Stock\non the fifth anniversary after the Closing based on the continuing employment of\nthe option holder with ProFound, except that those options will vest earlier if\nand to the extent ProFound attains performance objectives specified by the\nMaxygen Board of Directors in consultation with ProFound's current Chief\nExecutive Officers and the option holder is then still an employee of ProFound.\nNotwithstanding anything to the contrary set forth in this Section 8.1, if any\nof the persons listed on Exhibit 8.1 will not be a continuing employee of\nProFound after the Closing or has not delivered, by the Closing, the agreements\nrequired by Section 9.9, then the 340,000-, 200,000- and 140,000-share figures\nset forth in this Section 8.1 shall be reduced by the number of options shown as\nallocated to those  persons on Exhibit 8.1.  Maxygen will register the shares of\ncommon stock issuable under all the options referenced in this Section 8.1 on\nForm S-8.\n\n                                       49\n\n \n    8.2  BONUSES\n         -------\n\n          Promptly after the Closing, ProFound will pay cash bonuses to those\nemployees of ProFound listed on Exhibit 8.2 hereto who execute the agreements\nreferred to in Section 9.9.  The gross amount of those bonuses, including all\napplicable withholding taxes and other payments by ProFound in connection with\nthose bonuses, will total the Danish kroner equivalent of US$1,636,598.  The\nkroner equivalents will be based upon the \"buy\" exchange rate for the Closing\nDate as published in The Wall Street Journal.  The gross amount of the bonus\n                     -----------------------                                \npayable to each such employee is set forth on Exhibit 8.2.  Notwithstanding\nanything to the contrary set forth in this Section 8.2, if any of the persons\nlisted on Exhibit 8.2 will not be a continuing employee of ProFound after the\nClosing or has not delivered, by the Closing, the agreements required by Section\n9.9, then the US$1,636,598-figure shall be reduced by the bonus figures shown\nfor those persons on Exhibit 8.2.\n\n9.  CONDITIONS TO OBLIGATIONS OF MAXYGEN AND HOLDINGS\n    -------------------------------------------------\n\n     The obligations of Maxygen and Holdings under this Agreement to consummate\nthe Exchanges and the other transactions contemplated hereby shall be subject to\nthe satisfaction, at or prior to the Closing, of each of the following\nconditions, any one or more of which may be waived by Maxygen and Holdings:\n\n    9.1  REPRESENTATIONS AND WARRANTIES\n         ------------------------------\n\n          The representations and warranties of ProFound and the ProFound\nSecurityholders contained in this Agreement and in the agreements delivered\nunder Section 9.9, the ProFound Disclosure Schedule and each certificate\ndelivered pursuant hereto shall be complete and correct as of the date when\nmade, shall be deemed repeated at and as of the Closing as if made on the\nClosing and, without giving effect to any qualification as to materiality (or\nany variation of such term) contained in any representation or warranty, shall\nthen be complete and correct in all material respects.\n\n    9.2  PERFORMANCE OF COVENANTS\n         ------------------------\n\n          ProFound and the ProFound Shareholders shall have taken all necessary\ncorporate or other actions to consummate the transactions contemplated hereby\nand shall have performed and complied in all material respects with each\ncovenant, agreement and condition required by this Agreement to be performed or\ncomplied with by it at or prior to the Closing.\n\n                                       50\n\n \n    9.3  LACK OF ADVERSE CHANGE\n         ----------------------\n\n          There shall not have occurred any incident or event which,\nindividually or in the aggregate, has had, or in the reasonable good faith\njudgment of Maxygen is reasonably likely to result in, a ProFound Material\nAdverse Effect.\n\n    9.4  OFFICER CERTIFICATE AND SECURITYHOLDER REPRESENTATIVE certificate\n         -----------------------------------------------------------------\n\n          Maxygen and Holdings shall have received favorable certificates, dated\nthe Closing, signed by the Co-Chief Executive Officers of ProFound and the\nSecurityholder Representative as to the matters set forth in Sections 9.1, 9.2,\n9.3, 9.5, 9.6, 9.14, 9.15, 9.16 and 9.17.\n\n    9.5  NO GOVERNMENTAL OR OTHER PROCEEDING; ILLEGALITY\n         -----------------------------------------------\n\n          No Order of any Governmental Authority shall be in effect that\nrestrains or prohibits any transaction contemplated hereby or that would limit\nor affect Maxygen's or Holdings' ownership or operation of the business or\nassets of ProFound.  No Proceeding by any Governmental Authority shall be\npending or threatened against Maxygen, Holdings or ProFound or any director or\nofficer of any thereof or any ProFound Securityholder, that challenges the\nvalidity or legality, or that restrains or seeks to restrain the consummation,\nof the transactions contemplated hereby, or that limits or otherwise affects or\nseeks to limit or otherwise affect Maxygen's or Holdings' right to own or\noperate the business or assets of ProFound, or that compels or seeks to compel\nMaxygen or any of its Subsidiaries to divest, abandon, license, dispose of, hold\nseparate or take similar action with respect to any portion of the business,\nassets or properties (tangible or intangible) of Maxygen or any of its\nSubsidiaries or ProFound.  No Law or Order shall be enacted, entered, enforced\nor deemed applicable to either of the Exchanges or any of the other transactions\ncontemplated hereby which makes the consummation of either of the Exchanges or\nany of the other transactions contemplated hereby illegal.\n\n    9.6  APPROVALS AND CONSENTS\n         ----------------------\n\n          All material waivers, approvals, authorizations or Orders required to\nbe obtained, and all filings required to be made, by ProFound or the ProFound\nSecurityholders, for the authorization, execution and delivery of this Agreement\nand the Transaction Documents, the consummation by it of the transactions\ncontemplated hereby and thereby, and the continuation in full force and effect\nof any and all material rights, documents, instruments and Contracts of\nProFound, without restriction, burden or payment obligation other than those\nthat exist or would have existed had the transactions covered by this Agreement\nand the Transaction Documents never occurred, shall have \n\n                                       51\n\n \nbeen obtained and made, including all consents or approvals of any Person that\nmay be required under any lease for real property to which ProFound is a party.\nIn addition, all waiting periods applicable to the consummation of the Exchanges\nand the other transactions contemplated hereby shall have expired or terminated.\n\n    9.7  OPINIONS OF COUNSEL\n         -------------------\n\n          ProFound shall have delivered to Maxygen and Holdings legal opinions\nof Hjejle, Gersted &amp; Mogensen, and Solomon Ward Seidenwurm &amp; Smith, LLP, dated\nthe Closing Date and addressed to Maxygen and Holdings, as to the matters set\nforth on Exhibit 9.7 hereto, it being understood that those two firms shall\nallocate those opinions between them on the basis of the law of the\njurisdictions in which they practice law.\n\n    9.8  ESCROW AGREEMENT\n         ----------------\n\n          There shall have been executed and delivered to Maxygen the Escrow\nAgreement with such modifications thereto as may be agreed in accordance with\nthe amendment provisions set forth in the Escrow Agreement.\n\n    9.9  AGREEMENTS WITH PROFOUND EMPLOYEES\n         ----------------------------------\n\n          Each continuing employee of ProFound who is not a signatory to this\nAgreement shall have entered into, with Maxygen or ProFound as appropriate,\nagreements that are reasonably satisfactory to Maxygen addressing such subjects\nas non-use and confidentiality of trade secrets, the exchange of that employee's\nProFound Warrants for substitute Maxygen options (see Section 2.1),\nrepresentations and warranties analogous to those set forth in Section 5 of this\nAgreement, several (but not joint and several) indemnities respecting those\nrepresentations and warranties, and the appointment of Christian Karsten Hansen\nas the Securityholder Representative and (under Rule 501 adopted by the\nCommission under the Securities Act) the Purchaser Representative.\n\n    9.10  RELEASE AGREEMENTS\n          ------------------\n          Each of ProFound's officers, directors, securityholders and employees\nshall have entered into a release agreement in substantially the form attached\nhereto as Exhibit 7.10.\n\n    9.11  LOCK-UP AGREEMENTS\n          -------------------\n\n          Each ProFound Securityholder (other than any holders of ProFound\nWarrants to purchase shares of Class A ProFound Common Stock who do not receive\nsubstitute Maxygen options) shall have entered into the applicable Lock-Up\nAgreement as indicated in Exhibit 7.12.\n\n                                       52\n\n \n    9.12  TAX RULING\n          ----------\n\n          The ProFound Securityholders shall have received a ruling from the\nDanish Tax Authority to the effect that their receipt of Maxygen securities in\nthe Maxygen Exchange will be tax deferred under Danish law and that the deferral\nwill continue after the Holdings Exchange without imposing additional conditions\nor restrictions that would have a material adverse impact on one or more parties\nto this Agreement, it being understood that the deferral shall not apply to any\ncash received upon any exercise of a put or call under the agreements referenced\nin Section 10.8.\n\n    9.13  RESIGNATION OF DIRECTORS\n          ------------------------\n\n          Each of the directors of ProFound, if any, whom Maxygen requests\nresign, shall have submitted his written resignation as a director of ProFound\neffective as of the Closing.\n\n    9.14  SHAREHOLDERS AGREEMENT\n          ----------------------\n\n          The Shareholders Agreement shall be terminated and all parties thereto\nshall have waived all rights pursuant to such Shareholders Agreement.\n\n    9.15  STOCK REGISTRY\n          --------------\n\n          ProFound shall have delivered to Maxygen the original stock registry,\nminute books and audit records of ProFound, and Maxygen's title to all of the\nProFound Securities shall have been duly registered in the stock registry.\n\n    9.16  MERGER LEGISLATION\n          ------------------\n\n          Denmark shall not have enacted any legislation affecting the ability\nof parties to merge or combine or requiring review of any proposed merger,\ncombination or share exchange by any Government Authority or, if enacted, the\nnecessary approvals have been obtained.\n\n    9.17  DANISH LOAN\n          -----------\n\n          ProFound shall have received the written consent of Vaekstfonden to\nthe continuation of the outstanding loan in accordance with its terms after the\ncompletion of the Exchanges and, if applicable, on such additional terms as are\nacceptable to Maxygen.\n\n    9.18  PUT\/CALL AGREEMENTS\n          -------------------\n          Christian Karsten Hansen and Jan Moller Mikkelsen shall have executed\nPut\/Call Agreements with Maxygen in the form of Exhibit 10.8A.\n\n                                       53\n\n \n10.  CONDITIONS TO OBLIGATIONS OF PROFOUND AND PROFOUND SHAREHOLDERS\n     ---------------------------------------------------------------\n\n          The obligations of ProFound and the ProFound Shareholders under this\nAgreement to consummate the Maxygen Exchange and the other transactions\ncontemplated hereby shall be subject to the satisfaction, at or prior to the\nClosing, of each of the following conditions, any one or more of which may be\nwaived by ProFound or the Securityholder Representative:\n\n    10.1  REPRESENTATIONS AND WARRANTIES\n          ------------------------------\n\n          The representations and warranties of Maxygen and Holdings contained\nin this Agreement, the Maxygen Disclosure Schedule and each certificate\ndelivered pursuant hereto shall be complete and correct as of the date when\nmade, shall be deemed repeated at and as of the Closing as if made on the\nClosing and, without giving effect to any qualification as to materiality (or\nany variation of such term) contained in any representation or warranty, shall\nthen be complete and correct in all material respects.\n\n    10.2  PERFORMANCE OF COVENANTS\n          ------------------------\n\n          Maxygen and Holdings shall have taken all necessary corporate actions\nto consummate the transactions contemplated hereby and shall have performed and\ncomplied in all material respects with each covenant, agreement and condition\nrequired by this Agreement to be performed or complied with by them at or prior\nto the Closing.\n\n    10.3  LACK OF ADVERSE CHANGE\n          ----------------------\n\n          There shall not have occurred any incident or event which,\nindividually or in the aggregate, has had a Maxygen Material Adverse Effect.\n\n    10.4  OFFICER CERTIFICATES\n          --------------------\n\n          ProFound shall have received favorable certificates, dated the Closing\nDate, signed by the Chief Executive Officer, the Chief Financial Officer or the\nGeneral Counsel of Maxygen and the President or Secretary of Holdings as to the\nmatters set forth in Sections 10.1, 10.2, 10.3 and 10.5.\n\n    10.5  NO GOVERNMENTAL OR OTHER PROCEEDING\n          -----------------------------------\n\n          No Order of any Governmental Authority shall be in effect that\nrestrains or prohibits any transaction contemplated hereby.  No Law or Order\nshall be enacted, entered, enforced or deemed applicable to the Exchanges or the\nother transactions contemplated hereby which makes the consummation of the\nExchanges or the other transactions contemplated hereby illegal.\n\n                                       54\n\n \n    10.6  AGREEMENTS WITH FOUNDING SHAREHOLDERS\n          -------------------------------------\n\n          Maxygen shall have entered into the Employment Agreements with each\nFounding Shareholder in substantially the form attached hereto as Exhibit 7.9.\n\n    10.7  TAX RULING\n          ----------\n\n          The ProFound Securityholders shall have received a ruling from the\nDanish Tax Authority to the effect that their receipt of Maxygen securities in\nthe Maxygen Exchange will be tax deferred and that the deferral will continue\nafter the Holdings Exchange without imposing additional conditions or\nrestrictions that would have a material adverse impact on one or more parties to\nthis Agreement, it being understood that the deferral shall not apply to any\ncash received upon any exercise of a put or call under the agreements referenced\nin Section 10.8.\n\n    10.8  PUT AND PUT\/CALL AGREEMENTS\n          ---------------------------\n\n          Maxygen shall have executed  Put\/Call Agreements with Christian\nKarsten Hansen and Jan Moller Mikkelsen in the form of Exhibit 10.8A.  Maxygen\nshall also have executed Put Agreements with each holder of Class A Profound\nCommon Stock, other than Messrs. Hansen and Mikkelsen, in the form of Exhibit\n10.8B.  The number of shares of Maxygen Common Stock to be covered by each of\nthose agreements and the total put and call prices payable under each of those\nagreements appear on Exhibit 10.8C.\n\n    10.9  OPINIONS OF COUNSEL\n          -------------------\n\n          Maxygen and Holdings shall have delivered to ProFound and the ProFound\nShareholders a legal opinion of Heller Ehrman White &amp; McAuliffe LLP, dated the\nClosing Date and addressed to ProFound and the ProFound Shareholders, as to the\nmatters set forth on Exhibit 10.9.\n\n11.  TERMINATION OF AGREEMENT\n     ------------------------\n\n     This Agreement may be terminated at any time prior to the Closing,\nnotwithstanding approval thereof by ProFound, the ProFound Shareholders and\nMaxygen, in the following circumstances:\n\n    11.1  MUTUAL CONSENT\n          --------------\n\n          By mutual written consent of Maxygen, Holdings and ProFound.\n\n                                       55\n\n \n    11.2  TRANSACTION DATE\n          ----------------\n\n          If the Closing shall not have occurred by the later of (a) the close\n          --                                            ----- --             \nof business on the 90th day after the date of this Agreement and (b) five days\n                                                             ---              \nif and after Maxygen learns of any adverse and potentially material information\nabout or relating to ProFound that it did not know when this Agreement was\nsigned, whether it learned that information by means of a notice given under\nSection 7.5 or otherwise, then Maxygen (on behalf of itself and Holdings) or\n                          ----                                              \nProFound (on behalf of itself and the ProFound Shareholders) may terminate this\nAgreement, unless such failure shall be due to a material breach of any\n           ------                                                      \nrepresentation or warranty, or the nonfulfillment in a material respect, and\nfailure to cure such nonfulfillment, of any covenant or agreement contained\nherein on the part of the party seeking to terminate this Agreement or one or\nmore of the parties on whose behalf that party is acting (or, in the case of a\ntermination by Maxygen, such a breach or failure of a representation, warranty,\ncovenant or agreement contained in any of the agreements delivered under Section\n9.9).\n\n    11.3  FINAL ORDER OF GOVERNMENTAL AUTHORITY\n          -------------------------------------\n\n          By Maxygen or ProFound (on behalf of the ProFound Shareholders) if a\nGovernmental Authority shall have issued a nonappealable final Order or taken\nany other action having the effect of permanently restraining, enjoining or\notherwise prohibiting either of the Exchanges or any other transaction\ncontemplated hereby.\n\n    11.4  BREACH\n          ------\n\n          By Maxygen if there has been a material misrepresentation by ProFound\nor any of the ProFound Securityholders, or a material breach on the part of\nProFound or any of the ProFound Securityholders of any of their warranties,\ncovenants or agreements set forth herein or in any of the agreements delivered\nunder Section 9.9, or a material failure on the part of ProFound or any of the\nProFound Securityholders to comply with any of their other obligations hereunder\nor in any such agreements, or if Maxygen reasonably determines that the timely\nsatisfaction of any condition set forth in Section 9 has become impossible\n(other than as a result of any failure on the part of Maxygen or Holdings to\ncomply with or perform any covenant or obligation set forth in this Agreement);\nor by ProFound (on behalf of itself and the ProFound Shareholders) if there has\nbeen a material misrepresentation by Maxygen or Holdings, or a material breach\non the part of Maxygen or Holdings of any of its warranties, covenants or\nagreements set forth herein, or a material failure on the part of Maxygen or\nHoldings to comply with any of its other obligations hereunder or if ProFound\nreasonably determines that the timely satisfaction of any condition set forth in\nSection 10 has become impossible (other than as a result of any failure on the\npart of ProFound or any ProFound Securityholder to comply with or perform any\ncovenant or obligation set forth in this Agreement or in any of the agreements\ndelivered under Section 9.9); provided, however, that if such breach is \n\n                                       56\n\n \ncurable by a party within 30 days, then for so long as such party continues to\nexercise its reasonable efforts the other parties may not terminate this\nAgreement under this Section 11.4 unless such breach is not cured within 30 days\n(but no cure period shall be required for a breach that by its nature cannot be\ncured).\n\n    11.5  TERMINATION PROCEDURES\n          ----------------------\n\n          If Maxygen wishes to terminate this Agreement pursuant to Section 11.2\nor Section 11.4, Maxygen shall deliver to ProFound and the Securityholder\nRepresentative a written notice stating that Maxygen is terminating this\nAgreement and setting forth a brief description of the basis on which Maxygen is\nterminating this Agreement.  If ProFound wishes to terminate this Agreement\npursuant to Section 11.2 or Section 11.4, ProFound shall deliver to Maxygen a\nnotice, in writing, stating that ProFound is terminating this Agreement and\nsetting forth a brief description of the basis on which it is terminating this\nAgreement.\n\n    11.6  EFFECT OF TERMINATION\n          ---------------------\n\n          In the event of the termination of this Agreement pursuant to Section\n11.1, 11.2, 11.3 or 11.4, this Agreement shall forthwith become void, except\nthat (i) the Confidentiality Agreement and Sections 7.3(b) through (g) (in the\ncase of a termination by ProFound under Section 11.2 or Section 11.4), 7.8 (in\nthe case of a termination by Maxygen under Section 11.2 if ProFound or a\nProFound Securityholder is then in breach of this Agreement or any of the\nagreements delivered under Section 9.9, or by Maxygen under Section 11.4), 12\n(in the case of a termination by Maxygen under Section 11.2 if ProFound or a\nProFound Securityholder is then in such breach, or by Maxygen under Section\n11.4), 13.2, 13.4, 13.6, 13.7, 13.8, 13.9, 13.10, 13.11, 13.12, 13.13 and 13.14\nof this Agreement shall survive such termination, and (ii) except as provided in\nthe next sentence, nothing herein shall relieve any party from liability for any\nmisrepresentation, breach of or failure to comply with this Agreement.\nNotwithstanding the foregoing, if Maxygen proceeds with the Closing despite its\nhaving learned about, or terminates this Agreement as a result of, an event or\ncircumstance that first occurs after (but not before) the date of this Agreement\nand that constitutes a material breach of a representation or warranty of\nProFound or a ProFound Securityholder under this Agreement or any of the\nagreements delivered under Section 9.9 but does not result from a breach of a\ncovenant or agreement by ProFound or a ProFound Securityholder in this Agreement\nor any such agreements, then ProFound and the ProFound Securityholders shall\nhave no liability for that breach of representation or warranty.\n\n                                       57\n\n \n12.  INDEMNIFICATION\n     ---------------\n\n    12.1  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS\n          ------------------------------------------------------\n\n        (a)  Except as otherwise provided in this Section 12, the\nrepresentations, warranties, covenants and agreements of each party under this\nAgreement and the agreements delivered under Section 9.9 shall remain operative\nand in full force and effect regardless of any investigation made by or on\nbehalf of any other party hereto, any affiliate of such party or any of their\nofficers, directors or Representatives, whether prior to or after the execution\nof this Agreement.\n\n        (b)  The parties' representations and warranties in this Agreement and\nin any document or instrument delivered pursuant to this Agreement shall survive\nthe Closing and continue until 5:00 p.m., California time, on the date that is\n18 months after the Closing Date (the \"Expiration Date\"). Notwithstanding the\npreceding sentence, (i) the Tax representations and warranties set forth at\nSection 4.8, the ownership representations and warranties set forth at Section\n5.2, and the analogous ownership representations and warranties set forth in the\nagreements delivered under Section 9.9 shall survive for the applicable statutes\nof limitation; and (ii) any representation or warranty in respect of which\nindemnity may be sought under Section 12.2 or 12.3 shall survive the time at\nwhich it would otherwise terminate pursuant to the preceding sentence, if the\nnotice of the inaccuracy or breach thereof shall have been given to the party\nagainst whom such indemnity may be sought prior to such time.\n\n    12.2  OBLIGATION OF PROFOUND AND THE PROFOUND SHAREHOLDERS\n          ----------------------------------------------------\n\n          Subject to Sections 12.3 and 12.4, ProFound and each ProFound\nShareholder, jointly and severally, shall indemnify, reimburse, defend and hold\nharmless Maxygen and Holdings and each of their successors and permitted assigns\nand each of their respective directors, officers, employees, affiliates,\nSubsidiaries, Representatives and their respective successors and permitted\nassigns (each a \"Maxygen Indemnitee\") from and against (i) all Losses resulting\nfrom, imposed upon, incurred or suffered by any of them, directly or indirectly,\nbased upon, arising out of or otherwise in respect of any inaccuracy in or any\nbreach of any representation, warranty, covenant or agreement of ProFound or any\nProFound Securityholder in this Agreement or in any of the agreements delivered\nunder Section 9.9, and (ii) all Environmental, Health, and Safety Liabilities\narising out of, or attributable or relating to, the operations of ProFound prior\nto the Closing and the Facilities.  Notwithstanding the foregoing, if and after\nthe Closing takes place, ProFound shall have no indemnification obligations to\nany Maxygen Indemnitee or any implied or other obligation to indemnify or\nreimburse any ProFound Securityholder for or with respect to any amounts for\nwhich any ProFound Securityholder indemnifies \n\n                                       58\n\n \nany Maxygen Indemnitee or relinquishes rights in the Escrow Fund. For purpose of\nthis Agreement, \"Losses\" shall mean any claims, losses, liabilities, damages,\ncauses of action, costs and expenses (including reasonable attorneys',\naccountants', consultants' and experts' fees and expenses). The ProFound\nShareholders severally and jointly agree that the Escrow Shares shall be\navailable to the extent provided in this Section 12 and in the Escrow Agreement\nto compensate the Maxygen Indemnitees for the forgoing Losses.\n\n    12.3  LIMITS ON INDEMNIFICATION, REIMBURSEMENT, ETC.\n          ----------------------------------------------\n\n        (a)  No Maxygen Indemnitee shall have any right to seek indemnification,\nreimbursement or defense under this Agreement or the Escrow Agreement unless and\nuntil the total amount of all Losses and Environmental, Health, and Safety\nLiabilities that would otherwise be indemnifiable hereunder and have been\nincurred by the Maxygen Indemnitees as a group exceed the DK equivalent of\nUS$100,000 (determined on the basis of the exchange rate or rates published in\nThe Wall Street Journal on the date or dates that is or are 15 days after\n--- ---- ------ -------\nMaxygen gives the Securityholder Representative written notice of the claim with\nwhich the Losses and Environmental, Health, and Safety Liabilities are\nassociated), in which case, subject to Section 12.3(b), all Losses and\nEnvironmental, Health, and Safety Liabilities (not just those in excess of the\nDK equivalent of US$100,000) shall be fully indemnifiable. Subject to Section\n12.3(b), Maxygen acknowledges that the Maxygen Indemnitees' sole right and\nremedy for indemnification pursuant to this Agreement after the Closing shall be\nlimited to the Escrow Shares and other assets in the Escrow Fund.\n\n        (b)  Notwithstanding the foregoing, no aspect of Section 12.3(a) shall\napply to any Losses or Environmental, Health, and Safety Liabilities based upon,\narising out of or otherwise in respect of any fraudulent breach of any\nrepresentation or warranty of ProFound or any ProFound Securityholder set forth\nin this Agreement or any of the agreements delivered under Section 9.9.\nMoreover, except as explained in the next sentence, the indemnification\nobligations of the ProFound Shareholders shall be joint and several whether or\nnot Section 12.3(a) applies and whether or not, in the case of breaches of\nrepresentation and warranties, those representation and warranties are set forth\nin Section 4 or 5, or any of the agreements delivered under Section 9.9.\nNotwithstanding the foregoing, the indemnification obligations of Novo Nordisk\nA\/S shall extend beyond the Escrow Fund governed by the Escrow Agreement only to\nthe extent of any Losses resulting from, imposed upon, or incurred or suffered\nby a Maxygen Indemnitee by virtue of a breach of any of Novo Nordisk A\/S's\nrepresentations and warranties set forth in Section 5.2 of this Agreement or any\nfraudulent breach of any other representation or warranty by Novo Nordisk A\/S.\n\n                                       59\n\n \n    12.4  INDEMNIFICATION PROCEDURES\n          --------------------------\n\n        (a)  Notice.  Whenever any third Person claim shall arise for which\n             ------                                                        \nindemnification may be sought hereunder (a \"Claim\"), the party entitled to\nindemnification (the \"Maxygen Indemnitee\") shall promptly give notice to the\nSecurityholder Representative, with respect to the Claim after the receipt by\nthe Maxygen Indemnitee of reliable information as to the facts constituting the\nbasis for the Claim; but the failure to timely give such notice shall not\nrelieve the Indemnitor from any obligation under this Agreement, except to the\nextent, if any, that the Indemnitor is materially prejudiced thereby.\n\n        (b)  Defense. After delivery of notice from the Maxygen Indemnitee of a\n             -------\nClaim, the Maxygen Indemnitee may elect to assume the defense of the Claim. If\nthe Maxygen Indemnitee notifies the Securityholder Representative that the\nMaxygen Indemnitee is not assuming the defense of the Claim, the Securityholder\nRepresentative shall defend the Claim. Irrespective of whether the Maxygen\nIndemnitee or the Securityholder Representative defends the Claim, the cost and\nthe expense of that defense shall be paid from the escrow fund established under\nthe Escrow Agreement until that fund is exhausted. If the Maxygen Indemnitee\nelects to assume the defense of the Claim, the Securityholder Representative\nshall cooperate in all reasonable respects, at the Securityholder\nRepresentative's sole cost, risk and expense, with the Maxygen Indemnitee and\nits counsel in the investigation, trial, defense and any appeal arising from the\nmatter from which the Claim arose. If the Securityholder Representative defends\nthe Claim, the Maxygen Indemnitee shall cooperate in all reasonable respects\nwith the Securityholder Representative and its counsel in the investigation,\ntrial, defense and any appeal arising from the matter from which the Claim arose\nand shall deliver to the Securityholder Representative or its counsel copies of\nall pleadings and other information within the Maxygen Indemnitee's knowledge or\npossession reasonably requested by the Securityholder Representative or its\ncounsel that are relevant to the defense of the subject of any such Claim. If\nthe Securityholder Representative defends the Claims, the Securityholder\nRepresentative shall have the right to elect to settle any claim for monetary\ndamages without the Maxygen Indemnitee's consent only if the settlement includes\na complete release of the Maxygen Indemnitee. Any other settlement will be\nsubject to the consent of the Maxygen Indemnitee. The Securityholder\nRepresentative may not admit any liability of the Maxygen Indemnitee or waive\nany of the Maxygen Indemnitee's rights without the Maxygen Indemnitee's prior\nconsent. The Securityholder Representative shall not be liable for any\nsettlement effected without its prior consent, such consent not to be\nunreasonably withheld. If any Claim results in a judgment or settlement\nconsistent with the terms of this Section 12.4(b), then, subject to the rules\nset forth in this Section 12 that could result in indemnification \"beyond\" the\namounts held in the Escrow Fund (see Sections 12.1(b) and 12.3(b)), such\njudgment or settlement shall be paid out of any remaining amounts in the Escrow\nFund.\n\n                                       60\n\n \n13.  GENERAL PROVISIONS\n     ------------------\n\n    13.1  FURTHER ASSURANCES\n          ------------------\n\n          Each party hereto shall execute and cause to be delivered to each\nother party hereto such instruments and other documents, and shall take such\nother actions, as such other party may reasonably request (prior to, at or after\nthe Closing) for the purpose of carrying out or evidencing any of the\ntransactions contemplated by this Agreement.\n\n    13.2  CONFIDENTIALITY\n          ---------------\n\n          The parties acknowledge that Maxygen and ProFound have entered into\nthe Confidentiality Agreement, and that such agreement will survive the\ntermination of this Agreement or the consummation of the Exchanges.  Without\nlimiting the generality of anything contained in Section 13.6 (Public\nAnnouncements), on and at all times after the Closing Date, each ProFound\nShareholder shall keep confidential, and shall not use or disclose to any other\nPerson, any non-public document or other non-public information in such ProFound\nShareholders' possession that relates to the business of Maxygen, Holdings or\nProFound.\n\n    13.3  SEVERABILITY\n          ------------\n\n          In the event that any provision of this Agreement, or the application\nof any such provision to any Person or set of circumstances, shall be determined\nto be invalid, unlawful, void or unenforceable to any extent, the remainder of\nthis Agreement, and the application of such provision to Persons or\ncircumstances other than those as to which it is determined to be invalid,\nunlawful, void or unenforceable, shall not be impaired or otherwise affected and\nshall continue to be valid and enforceable to the fullest extent permitted by\nlaw.\n\n    13.4  EXPENSES\n          --------\n\n          Maxygen and ProFound will bear their respective fees, costs and\nexpenses incurred in connection with the preparation, execution, delivery and\nperformance of this Agreement, including all fees, costs and expenses of agents,\nrepresentatives, counsel and accountants.  Notwithstanding the foregoing and in\naddition to all other remedies available at law or equity, if the Agreement is\nterminated pursuant to Section 11.2 or 11.4, then Maxygen and Holdings (if\nMaxygen's or Holdings' breach gave rise to that termination) or ProFound and the\nProFound Shareholders (if ProFound's or a ProFound Securityholder's breach gave\nrise to that termination) shall pay the other party or parties by cashier's\ncheck or wire transfer within 10 Business Days after submission of invoices in\nreasonable detail all of the non-breaching party's or parties' out-of-pocket\nexpenses incurred in connection with the transactions contemplated by this\nAgreement.\n\n                                       61\n\n \n    13.5  CONVEYANCE DOCUMENTS AND TAXES\n          ------------------------------\n\n          The parties shall cooperate in the preparation, execution and filing\nof all returns, questionnaires, applications, or other documents regarding any\nreal or personal property transfer or any gains, sales, use, transfer, value\nadded, stock transfer and stamp Taxes, any transfer, recording, registration and\nother fees, and any similar Taxes which become payable in connection with the\ntransactions contemplated hereby that are required or permitted to be filed,\nwhether before, on or after the Closing, and the ProFound Securityholders shall\nbe responsible for the payment of all such Taxes and fees.\n\n    13.6  PUBLIC ANNOUNCEMENTS\n          --------------------\n\n          Unless required by Law, any public announcement or similar publicity\nwith respect to this Agreement, the Closing, the Exchanges or the other\ntransactions contemplated hereby will be issued, if at all, at such time and in\nsuch manner as Maxygen determines with the concurrence of ProFound, which\nconcurrence shall not be unreasonably withheld or delayed by ProFound.  Unless\ndisclosure is consented to by Maxygen in advance or required by Law or\ndisclosure has otherwise already been made, ProFound shall keep this Agreement\nand the transactions contemplated hereby strictly confidential and may not make\nany disclosure of this Agreement or such transactions to any Person other than\nits Representatives or employees who need to know such information to enable\nProFound and the ProFound Shareholders to comply with this Agreement, provided\nthat each such Representative or employee shall agree, for the benefit of\nMaxygen, to maintain the confidentiality of such information as provided in this\nSection 13.6.  ProFound and Maxygen will consult with each other concerning the\nmeans by which ProFound's employees, customers and suppliers and other Persons\nhaving dealings with ProFound will be informed of this Agreement, the Closing,\nthe Exchange and the other transactions contemplated hereby, and representatives\nof Maxygen may at its option be present for any such communication.\n\n    13.7  NOTICES\n          -------\n\n          All notices, consents, waivers, and other communications under this\nAgreement must be in writing and will be deemed to have been duly given when (a)\ndelivered by hand (with written confirmation of receipt), (b) sent by fax (with\nwritten confirmation of receipt), provided that a copy is mailed by registered\nmail, return receipt requested, or (c) when delivered to the address, if sent by\nan internationally recognized overnight delivery service (receipt requested), in\neach case to the appropriate addresses or fax numbers set forth below (or to\nsuch other address, Person's attention or fax number as a party may designate by\nnotice to the other parties given in accordance with this Section 13.7):\n\n                                       62\n\n \n        (a)  If to Maxygen or Holdings:\n             ------------------------- \n        Maxygen, Inc.\n        515 Galveston Drive\n        Redwood City, California 94068\n        U.S.A.\n        Telephone No.:  001-650-298-5300\n        Telecopier No.: 001-650-298-5803\n        Attention:   Chief Executive Officer\n                     and General Counsel\n\n     With a copy to:\n     --------------\n        Heller Ehrman White &amp; McAuliffe LLP\n        2500 Sand Hill Road, Suite 100\n        Menlo Park, California  94025\n        U.S.A.\n        Telecopier No.: 001-650-234-4299\n        Telephone No.:  001-650-234-4200\n        Attention:   August J. Moretti\n\n        (b)  If to ProFound or any ProFound Shareholder:\n             ------------------------------------------ \n          ProFound Pharma, A\/S\n          Ronnegade 2, 5. sal\n          2100 Kobenhavn o\n          Denmark\n          Telecopier No.:  011-45-70-20-55-30\n          Telephone No.:  011-45-39-29-84-69\n          Attention:   Christian Hansen and Jan Mikkelsen\n\n     With a copy to:\n     -------------- \n\n          Hjejle, Gersted &amp; Mogensen\n          Amagertorv 24\n          Denmark\n          1160 Kobenhavn K\n          Telecopier No.: 011-45-33-11-12-50\n          Telephone No.: 011-45-33-13-42-62\n          Attention:  Michael Wolff Jensen\n\n                                       63\n\n \n          Solomon Ward Seidenwurm &amp; Smith, LLP\n          1200 Wells Fargo Plaza\n          401 B Street\n          San Diego, California  92101\n          U.S.A.\n          Telecopier No.:  001-619-231-4755\n          Telephone No.:   001-619-231-0303\n          Attention:  Richard L. Seidenwurm\n\n    13.8  ARBITRATION\n          -----------\n\n        (a)  Any dispute, controversy or claim arising out of this Agreement,\nthe Escrow Agreement or any other Transaction Document, including the\ntermination of any of those agreements or any alleged breach of any of those\nagreements, shall be finally settled by binding arbitration as set forth in this\nSection 13.8. Arbitration of any dispute, controversy or claim shall be\nconducted in accordance with the Commercial Arbitration Rules of the American\nArbitration Association by three independent, neutral arbitrators appointed in\naccordance with those rules. The arbitration shall be held in San Francisco,\nCalifornia, U.S.A. The arbitrators shall determine what discovery shall be\npermitted, consistent with the goal of limiting the cost and time which the\nparties must expend for discovery, provided that the arbitrators shall permit\nsuch discovery as they deem necessary or useful to permit an equitable and\ninformed resolution of the dispute. Any written evidence originally in a\nlanguage other than English shall be submitted in English translation\naccompanied by the original or a true copy thereof.\n\n        (b)  The decision or award rendered by the arbitrator shall be written\n(specifically stating the arbitrator's findings of facts, as well as the reasons\nupon which the arbitrator's decision is based), final and nonappealable (except\nfor an alleged act of corruption or fraud on the part of the arbitrator) and may\nbe entered in any court of competent jurisdiction for a judicial recognition of\nthe decision and an order of enforcement. The parties agree that, any provision\nof applicable law notwithstanding, they will not request, and the arbitrator\nshall have no authority to award, punitive or exemplary damages against any\nparty. Except as otherwise expressly provided in this Agreement, the costs of\nthe arbitration, including administrative and arbitrator's fees, shall be borne\n50 percent by Maxygen and Holdings (jointly and severally) and: (i) if this\nAgreement is terminated, 50 percent by ProFound and the ProFound Shareholders\n(jointly and severally) and (ii) if the Closing occurs, by the ProFound\nShareholders (jointly and severally). Each party shall bear its own costs and\nattorneys' and witness' fees incurred in connection with the arbitration.\n\n                                       64\n\n \n        (c)  A disputed performance or suspended performance pending the\nresolution of the arbitration must be completed within a reasonable time\nfollowing the final decision of the arbitrators. The arbitrators shall be\ndirected that any arbitration subject to this Section 13.8 shall be completed\nwithin one year from the filing of notice of a request for such arbitration. The\narbitration proceedings and the decision shall not be made public without the\njoint consent of the parties. Each party shall maintain the confidentiality of\nsuch proceedings and decision, unless otherwise permitted by Maxygen and the\nSecurityholder Representative. However, if advised by counsel that disclosure is\nnecessary or appropriate under applicable law, Maxygen shall be entitled to\ndisclose the proceedings and decision without the consent of any other party\nafter giving notice to the Securityholder Representative. Likewise, if advised\nby counsel that disclosure is necessary or appropriate under applicable law, the\nSecurityholder Representative shall be entitled to disclose the proceedings and\ndecision without the consent of any other party after giving notice to Maxygen.\n\n        (d)  Except as provided in the Escrow Agreement, any decision that\nrequires a monetary payment shall require such payment to be made in United\nStates dollars, free of any Tax or other deduction. The parties agree that the\ndecision shall be the sole, exclusive and binding remedy between and among them\nregarding any and all disputes, controversies, claims and counterclaims\npresented to the arbitrators. The interpretation and enforcement of this Section\n13.8 shall be governed by the U.S. Federal Arbitration Act. Pending the\nestablishment of the arbitral tribunal or pending the arbitral tribunal's\ndetermination of the merits of the controversy, either party may seek from a\ncourt of competent jurisdiction any interim or provisional relief that may be\nnecessary to protect the rights or property of that party.\n\n    13.9  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE; SPECIFIC\n          ---------------------------------------------------------------\n          PERFORMANCE\n          -----------\n\n          No failure or delay on the part of any party hereto in the exercise of\nany right hereunder shall impair such right or be construed to be a waiver of,\nor acquiescence in, any breach of any representation, warranty, covenant or\nagreement herein, nor shall any single or partial exercise of any such right\npreclude other or further exercise thereof or of any other right.  All rights\nand remedies existing under this Agreement are cumulative to, and not exclusive\nof, any rights or remedies otherwise available.  The parties to this Agreement\nagree that, in the event of any breach or threatened breach by any party to this\nAgreement of any covenant, obligation or other provision set forth in this\nAgreement for the benefit of any other party to this Agreement, subject to\nSection 13.8, such other party shall be entitled (in addition to any other\nremedy that may be available to it) to (a) a decree or order of specific\nperformance or mandamus to enforce the observance and performance of such\ncovenant, obligation or other provision, and (b) an injunction restraining such\nbreach or threatened breach.\n\n                                       65\n\n \n    13.10  ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS\n           --------------------------------------------------\n\n          No party may assign any of its rights under this Agreement without the\nprior written consent of the other parties except that Maxygen may assign any of\nits rights, but not its obligations, under this Agreement to any direct wholly-\nowned Subsidiary of Maxygen.  Subject to the preceding sentence, this Agreement\nwill apply to, be binding in all respects upon, and inure to the benefit of the\nsuccessors and permitted assigns of the parties and their respective heirs and\npersonal representatives. Nothing expressed or referred to in this Agreement\nwill be construed to give any Person other than the parties to this Agreement\nand the Maxygen Indemnitees any legal or equitable right, remedy or claim under\nor with respect to this Agreement or any provision of this Agreement.\n\n    13.11  SECTION HEADINGS, CONSTRUCTION\n           ------------------------------\n\n          The headings of Sections in this Agreement are provided for\nconvenience only and will not affect its construction or interpretation.  In\nthis Agreement (i) words denoting the singular include the plural and vice\nversa, (ii) \"it\" or \"its\" or words denoting any gender include all genders,\n(iii) the word \"including\" shall mean \"including without limitation,\" whether or\nnot expressed, (iv) any reference to a statute shall mean the statute and any\nregulations thereunder in force as of the date of this Agreement or the Closing,\nas applicable, unless otherwise expressly provided, (v) any reference herein to\na Section, Schedule or Exhibit refers to a Section of or a Schedule or Exhibit\nto this Agreement, unless otherwise stated, and (vi) when calculating the period\nof time within or following which any act is to be done or steps taken, the date\nwhich is the reference day in calculating such period shall be excluded and if\nthe last day of such period is not a Business Day, then the period shall end on\nthe next day that is a Business Day.  Each party acknowledges that he, she or it\nhas been advised and represented by counsel in the negotiation, execution and\ndelivery of this Agreement and accordingly agrees that if an ambiguity exists\nwith respect to any provision of this Agreement, such provision shall not be\nconstrued against any party because such party or its representatives drafted\nsuch provision.\n\n    13.12  GOVERNING LAW\n           -------------\n\n          Except as provided in Section 13.8 and except in the case of those\ncorporate law matters which necessarily are governed by Danish law due to the\nfact that ProFound is incorporated and doing business in Denmark, this Agreement\nwill be governed by the internal laws of the State of California and without\nregard to principles of conflict of laws.\n\n                                       66\n\n \n    13.13  COUNTERPARTS\n           ------------\n\n          This Agreement may be executed in one or more counterparts, each of\nwhich will be deemed to be an original copy of this Agreement and all of which,\nwhen taken together, will be deemed to constitute one and the same agreement.\n\n    13.14  ENTIRE AGREEMENT AND MODIFICATION\n           ---------------------------------\n\n          This Agreement supersedes all prior agreements (other than the\nConfidentiality Agreement), whether written or oral, between or among the\nparties with respect to its subject matter and constitutes (along with the\ndocuments referred to in this Agreement) the entire agreement among the parties\nwith respect to its subject matter.  This Agreement may not be amended except by\na written agreement executed by Maxygen, Holdings, ProFound and either (i)\nProFound Shareholders holding a majority\n\n                                       67\n\n \nof the shares of ProFound Common Stock just before the Closing or (ii) the\nSecurityholder Representative.\n\n     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement\nas of the date first written above.\n\n                         MAXYGEN, INC.\n\n                         By:   \/s\/ Russell J. Howard\n                               ---------------------\n                               Name:    Russell J. Howard\n                               Title:   President &amp; CEO\n\n                         MAXYGEN HOLDINGS LTD.\n\n                         By:   \/s\/ B. S. Gill\n                               --------------\n                               Name:    B. Gill\n                               Title:   President\n\n                         PROFOUND PHARMA A\/S\n\n\n                         By:     \/s\/ C. Braestrup, \/s\/ Jan Mikkelsen,\n                                 ------------------------------------\n                                 \/s\/ Christian Hansen\n                                 ------------------------------------\n                               Name:    C. Braestrup\n                               Title:   Chairman of the Board\n\n                               \/s\/ Christian Hansen\n                         --------------------------------------------\n                         CHRISTIAN KARSTEN HANSEN\n\n\n                               \/s\/ Jan Mikkelsen\n                         --------------------------------------------\n                         JAN MOLLER MIKKELSEN\n\n\n                               \/s\/ Tobben Halkier\n                         --------------------------------------------\n                         TORBEN HALKIER\n\n\n                               \/s\/ S. Okkels\n                         --------------------------------------------\n                         JENS SIGURD OKKELS\n\n                                       68\n\n \n                               \/s\/ Anders Pedersen\n                         --------------------------------------------\n                         ANDERS PEDERSEN\n\n\n                               \/s\/ Hans Schambye\n                         --------------------------------------------\n                         HANS THALSGARD SCHAMBYE\n\n\n                               \/s\/ Knud Aunstrup\n                         --------------------------------------------\n                         KNUD AUNSTRUP\n\n\n\n\n                               \/s\/ C. BrAEstrup\n                         --------------------------------------------\n                         CLAUS BRAESTRUP\n\n\n                               \/s\/ Thue Schwartz\n                         --------------------------------------------\n                         THUE W. SCHWARTZ\n\n\n                         BANKFORENINGERNES ERHVERVSUDVIKLINGSFORENING\n                         BANKINVEST BIOMEDICINSK UDVIKLING\n\n\n                         By    \/s\/ Finn Moefelt\n                               ----------------\n                         Title Managing Director\n                               ------------------\n\n\n\n                         AKTIESELSKABET BIOMEDICINSK UDVIKLING II\n\n                         By    \/s\/ Jesper Zeuthen         \/s\/ unreadable\n                               -----------------------------------------\n\n                         Title Managing Director      CEO BankInvest Group\n                               -------------------------------------------\n\n                         NOVO NORDISK A\/S\n\n\n                         By    \/s\/ Ulrik Spork\n                               ---------------\n\n                         Title Director, Corp. Dev.\n                               --------------------\n\n                                       69\n\n \nExhibits:\n\n2.1      Stock and Warrant Exchanges\n\n3.1      Escrow Agreement\n\n7.2(n)   Authorized Capital Expenditures\n\n7.9      Employment Agreement for Founding Shareholders\n\n7.10     Release Agreement\n\n7.12     List of ProFound Securityholders and Lock-up Agreements\n\n7.12A    Lock-Up Agreement (Directors)\n\n7.12B    Lock-Up Agreement (Founders)\n\n7.12C    Lock-Up Agreement (Employees)\n\n7.12D    Lock-Up Agreement (BankInvest I, BankInvest II and Novo Nordisk A\/S)\n\n8.1      Additional Stock Options\n\n8.2      Cash Bonuses\n\n9.7      Matters to be Addressed in Opinions of ProFound's Counsel\n\n10.8A    Put\/Call Agreement\n\n10.8B    Put Agreement\n\n10.8C    Information About Each Put\/Call and Put Agreement\n\n10.9     Matters to be Addressed in Opinions of Maxygen's Counsel\n\n\nThe Registrant shall furnish a copy of any of the exhibits referred to above to\nthe Commission upon request.\n\n                                       70\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8151],"corporate_contracts_industries":[],"corporate_contracts_types":[9622,9625],"class_list":["post-43401","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-maxygen-inc","corporate_contracts_types-planning","corporate_contracts_types-planning__exchange"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43401"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43401"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43401"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}