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2. Will Seller be required to indemnify Buyer against any damages arising fromthe Blocking Patent?NO. Because the Blocking Patent was disclosed in the Disclosure Letter, Seller’srepresentations in Sections 3.6, 3.25, 3.29 and 3.33 were accurate as of thesigning date, and the representations remain accurate as “brought down” to theclosing date. Thus, neither the Agreement nor Seller’s closing certificate containsan inaccurate representation, and Seller will have no indemnification obligationunder Section 11.2(a) with respect to the Blocking Patent.Because Seller has no interest in the Blocking Patent, (x) it is not an IntellectualProperty Asset (or otherwise an Asset), (y) Seller is not obligated to transfer it toBuyer pursuant to Sections 2.1, 2.7 or 10.11, and (z) Buyer does not have anyindemnification right in respect thereof under Section 11.2(b) (breach ofcovenants and obligations, including obligation to transfer Assets). Buyer mayhave a claim against the Shareholder for wrongfully failing to transfer theBlocking Patent to Seller, which may be an Asset described under Section 2.1(h)or (j) and which Buyer could enforce against the Shareholder after the closing.SCENARIO 2.2(material pre-signing condition not disclosed in original Disclosure Letter, but disclosed beforeclosing in supplement to Disclosure Letter)Assumed Facts:• A few days after the signing of the Asset Purchase Agreement, the BlockingPatent is discovered by Buyer’s counsel and brought to the attention of Seller.• Seller does not disclose the Blocking Patent in its original Disclosure Letter(which is furnished to Buyer at the time the Asset Purchase Agreement is signed).Seller subsequently discloses the Blocking Patent in a supplement delivered toBuyer (pursuant to Section 5.5) a few days after the signing of the Agreement.• The Blocking Patent is not assigned or licensed to Seller or Buyer on or before thescheduled closing date.1. Can Buyer refuse to consummate the asset purchase (i.e., does Buyer have a“walk right”)?YES. Because the Blocking Patent was not disclosed in Seller’s originalDisclosure Letter, and because the Blocking Patent is material, Seller’srepresentations in Sections 3.6, 3.25, 3.29 and 3.33 were materially inaccurate asof the signing date. Thus, the condition in the first clause of Section 7.1(a) is notsatisfied, and Buyer has a “walk right.” (Under Section 7.1(a), no effect is givento the supplement to Seller’s Disclosure Letter for purposes of determining theaccuracy of Seller’s representations.)2415253v1Appendix E – Page 4