Exhibit 10.35

[*****] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

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ASSET PURCHASE AGREEMENT

between

NABI BIOPHARMACEUTICALS

(the Seller)

and

FRESENIUS USA MANUFACTURING, INC.

(the Buyer)

Dated October 11, 2006

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND CONSTRUCTION    1 1.1    DEFINED TERMS    1 1.2   
CONSTRUCTION    10 ARTICLE II CONTEMPLATED TRANSACTIONS    11 2.1    PURCHASE OF
ASSETS    11 2.2    PURCHASED ASSETS    11 2.3    EXCLUDED ASSETS    13 2.4   
ASSUMPTION OF LIABILITIES    14 2.5    CONSENT OF THIRD PARTIES    16 2.6   
REGISTRATIONS AND APPLICABLE PERMITS    17 ARTICLE III PURCHASE PRICE AND
CLOSING    17 3.1    PURCHASE PRICE    17 3.2    REPORTS; PAYMENTS    18 3.3   
BOOKS AND RECORDS; AUDITS    19 3.4    PAYMENTS    19 3.5    ALLOCATION OF
CLOSING PAYMENT    20 3.6    FREEDOM TO CONDUCT BUSINESS UNIMPAIRED    20
ARTICLE IV CLOSING    20 4.1    CLOSING    20 4.2    CLOSING OBLIGATIONS. AT THE
CLOSING:    20

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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER    22 5.1    ORGANIZATION
AND GOOD STANDING    22 5.2    AUTHORITY RELATIVE TO THIS AGREEMENT    22 5.3   
CONSENTS AND APPROVALS; NO VIOLATIONS    22 5.4    PURCHASED ASSETS    23 5.5   
REAL PROPERTY. [INTENTIONALLY BLANK]    23 5.6    INTELLECTUAL PROPERTY    23
5.7    SOFTWARE    25 5.8    PERMITS    25 5.9    CONTRACTS    26 5.10   
FINANCIAL STATEMENTS    27 5.11    BOOKS AND RECORDS    27 5.12    TAXES    27
5.13    LIABILITIES    27 5.14    PRODUCT LIABILITY; LITIGATION    27 5.15   
LITIGATION    27 5.16    REGULATORY COMPLIANCE    28 5.17    COMPLIANCE    29
5.18    CLINICAL AND SCIENTIFIC DATA; GOOD PRACTICES    31 5.19    EXPORTS AND
CUSTOMS    32 5.20    WARRANTY CLAIMS    32 5.21    SPECIFICATIONS    32 5.22   
LABOR AND EMPLOYMENT MATTERS    32 5.23    EMPLOYEE BENEFIT PLANS; ERISA    33
5.24    ENVIRONMENTAL MATTERS    33

 

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5.25    INSURANCE    34 5.26    ABSENCE OF CHANGES OR EVENTS    34 5.27   
CUSTOMERS AND SUPPLIERS    35 5.28    BUSINESS RELATIONSHIPS    35 5.29   
INVENTORY; PRICING; CERTAIN COSTS    35 5.30    OVERPAYMENT    36 5.31   
CERTAIN INTERESTS    36 5.32    COMMISSIONS    36 ARTICLE VI REPRESENTATIONS AND
WARRANTIES OF THE BUYER    36 6.1    ORGANIZATION AND QUALIFICATION    36 6.2   
AUTHORITY RELATIVE TO THIS AGREEMENT    36 6.3    CONSENTS AND APPROVALS; NO
VIOLATIONS    36 6.4    LITIGATION    37 6.5    COMMISSION    37 ARTICLE VII
PRE-CLOSING COVENANTS    37 7.1    CLOSING EFFORTS; HSR ACT    37 7.2   
OPERATION OF BUSINESS    39 7.3    ACCESS    40 7.4    REPORTS    40 7.5   
EXCLUSIVITY    40 7.6    NOTICE OF SUITS    41 7.7    EMPLOYEES    41 7.8   
UPDATED SCHEDULES    41 7.9    SALES TAX    41 7.10    INVENTORY    42

 

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ARTICLE VIII POST-CLOSING COVENANTS    42 8.1    POST-CLOSING PAYMENTS    42 8.2
   REPORTS    42 8.3    TAIL INSURANCE    42 8.4    INTELLECTUAL PROPERTY    43
8.5    ACCESS TO INFORMATION; RECORD RETENTION; COOPERATION; CONFIDENTIALITY   
43 8.6    POST-EFFECTIVE TIME RECEIPTS AND PAYMENTS    45 8.7    USE OF NAME FOR
TRANSITION PERIOD    45 8.8    WHOLESALER CHARGES AND REBATE CHARGES    46 8.9
   ASSISTANCE WITH PROCEEDINGS    46 8.10    BUYER’S DILIGENCE OBLIGATIONS    46
8.11    NON-COMPETITION BY THE BUYER    49 8.12    SELLER’S DILIGENCE
OBLIGATIONS    50 8.13    CERTAIN EXCLUDED LIABILITIES    50 8.14    ROXANE
PROCEEDING    50 8.15    [*******] AGREEMENT    50 8.16    EXCLUDED CONTRACTS   
51 8.17    PART D AND COMMERCIAL REBATE CONTRACTS    51 ARTICLE IX CLOSING
CONDITIONS    51 9.1    MUTUAL CONDITIONS    51 9.2    CLOSING CONDITIONS OF THE
SELLER    52 9.3    CLOSING CONDITIONS OF THE BUYER    53

 

iv

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ARTICLE X INDEMNIFICATION    54 10.1    SURVIVAL OF REPRESENTATIONS    54 10.2
   SELLER’S AGREEMENT TO INDEMNIFY    55 10.3    BUYER’S AGREEMENT TO INDEMNIFY
   55 10.4    PROCEDURE FOR THIRD-PARTY CLAIMS    56 10.5    PROCEDURE FOR
DIRECT CLAIMS    58 10.6    LIMITATIONS ON INDEMNIFICATION.    60 10.7   
TREATMENT OF INDEMNIFICATION PAYMENTS    61 10.8    CONSTRUCTION    61 10.9   
INTEREST    61 10.10    REMEDIES    61 ARTICLE XI TERMINATION    61 11.1   
TERMINATION    61 11.2    PROCEDURE AND EFFECT OF TERMINATION    62 ARTICLE XII
MISCELLANEOUS PROVISIONS    62 12.1    JURISDICTION, VENUE AND SERVICE OF
PROCESS    62 12.2    REMEDIES    62 12.3    ATTORNEYS’ FEES    63 12.4   
PUBLICITY    63 12.5    EXPENSES    63 12.6    WAIVER OF COMPLIANCE; CONSENTS   
63 12.7    NOTICES    64 12.8    BINDING AGREEMENT; ASSIGNMENT    64 12.9   
INTERPRETATION    65

 

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12.10    GOVERNING LAW    65 12.11    FURTHER ASSURANCES    65 12.12   
SEVERABILITY    65 12.13    COUNTERPARTS; ELECTRONIC SIGNATURES    65 12.14   
MERGER AND MODIFICATION; AMENDMENT    66

 

vi

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SCHEDULES

 

2.2(a)    Assigned Registrations/NDAs 2.2(b)    Assigned Trademark Rights 2.2(c)
   Assigned Patent Rights 2.2(e)    Assigned Contracts 2.2(g)    Brochures
2.2(i)    Customer, Supplier and Vendor Materials 2.2(j)    Sales Force Training
Materials 2.2(k)    Assigned Permits 2.2(q)    Acquired Fixed Assets 2.2(r)   
Acquired Telephone Numbers 2.3(e)    Excluded Assets, Rights and Properties
2.3(k)    Excluded Fixed Assets 2.3(l)    Excluded Telephone Numbers 2.4(a)   
Excluded Liabilities 3.2    Form of New Formulation Net Sales Statement 3.5   
Allocation of Closing Payment 4.2(a)(xi)    Delivered Software 5.3    Consents
and Approvals 5.4(a)    Tangible Assets 5.4(c)    Sufficiency 5.6(b)    Marks
5.6(c)    Patents 5.6(d)    Copyrights 5.6(f)    Agreements With Other Persons
5.6(g)    Infringement 5.7    Software 5.8(a)    Permits 5.9(a)    Contracts
5.9(c)    Events of Default 5.9(e)    Seller Third Party Consents 5.10   
Financial Statements 5.12    Taxes 5.14    Product Liability; Litigation 5.15   
Litigation 5.16(c)    Notices from Medical Product Regulatory Authorities
5.16(f)    Approvals 5.17    Compliance 5.18(a)    Scientific Data 5.20   
Warranty Claims 5.21    Specifications 5.22(a)    Employees 5.22(b)   
Employment Agreements 5.23    Employee Benefit Plans; ERISA 5.24   
Environmental Matters

 

vii

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5.25(a)    Insurance 5.25(c)    Accident Reports 5.26    Absence of Changes or
Events 5.27    Customers and Suppliers 5.29    Inventory Costs 5.30   
Adjustments 7.1(c)    Form of Assignment Agreement 7.2    Operation of Business
7.7(a)    Excluded Employees 8.10    Countries with Diligence Obligations 9.2(f)
   Seller’s Third Party Conditions 9.3(h)    Buyer Third Party Consents

EXHIBITS

 

Exhibit 4.2(a)(ii)    Noncompetition and Nonsolicitation Agreement
Exhibit 4.2(a)(iii)    Seller Registration Transfer Letter Exhibit 4.2(a)(iv)   
Bill of Sale Exhibit 4.2(a)(v)    Patent Agreement Exhibit 4.2(a)(vi)   
Trademark Agreement Exhibit 4.2(a)(vii)    Assumption Agreement
Exhibit 4.2(a)(viii)    Transition Services Agreement Exhibit 4.2(b)(v)    Buyer
Registration Transfer Letter Exhibit 7.2(c)    Braintree Assignment Agreement
Exhibit 9.2(g)    Opinion of Counsel for Buyer Exhibit 9.3(f)    Opinion of
Counsel for Seller Exhibit 9.3(g)    Employee Consent

 

viii

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated October 11, 2006, is
between Nabi Biopharmaceuticals, a Delaware corporation (the “Seller”); and
Fresenius USA Manufacturing, Inc., a Delaware corporation (the “Buyer”).

Background Statement

The Seller is engaged in, among other activities, the business of distributing,
marketing and selling a line of phosphate binder calcium acetate products known
as PhosLo® products, which includes causing such products to be manufactured,
inspected, packaged, inventoried and delivered to distributors and other
purchasers (such business together with the Seller’s activities related to New
Formulation Products is referred to herein as the “PhosLo Business”).

The Seller desires to sell to the Buyer, and the Buyer desires to purchase from
the Seller, certain of the assets of the Seller used in the PhosLo Business, all
on the terms and conditions set forth in this Agreement.

Statement of Agreement

In consideration of the premises and the mutual covenants herein contained, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
for themselves, their successors and assigns, agree as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

1.1 Defined Terms. Except as otherwise specifically provided herein, the
following terms shall have the meanings indicated below:

“Affiliate” means, with respect to any Person, each of the Persons that directly
or indirectly, through one or more intermediaries, owns or controls, or is
controlled by or under common control with, such Person. For the purpose of this
definition, “control” means the possession, directly or indirectly, of the power
to direct or cause the direction of management and policies of such Person
whether through the ownership of voting securities, by contract or otherwise.

“Agreement” means this agreement, as amended or supplemented in accordance with
the terms hereof, together with all Exhibits and Schedules attached hereto or
incorporated herein by reference.

“Arbitration Dispute” has the meaning set forth in Section 10.5(a).

“Arbitrators” has the meaning set forth in Section 10.5(c).

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“Assigned Contracts” has the meaning set forth in Section 2.2(e).

“Assigned Permits” shall mean the Permits which are listed on Schedule 2.2(k).

“Assumed Liabilities” has the meaning set forth in Section 2.4(a).

“Assumption Agreement” has the meaning set forth in Section 4.2(a)(vii).

“Bill of Sale” has the meaning set forth in Section 4.2(a)(iv).

“Braintree” means Braintree Laboratories, Inc., a Massachusetts corporation.

“Braintree Purchase Agreement” has the meaning set forth in Section 5.9(f).

“Business Day” means any day excluding Saturday, Sunday and any day that shall
be a legal holiday in Massachusetts.

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

“Buyer Certificate” has the meaning set forth in Section 9.2(c).

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

“Buyer Indemnified Parties” has the meaning set forth in Section 10.2(a).

“CARE 2 Study” means the clinical study initiated by the Seller and designed to
compare the relative rate of PhosLo and Renegal, with the addition of Lipitor,
in slowing progression of cardiovascular calcification.

“Closing” has the meaning set forth in Section 4.1.

“Closing Date” has the meaning set forth in Section 4.1.

“Closing Payment” has the meaning set forth in Section 3.1(a).

“CMS” means the Centers for Medicare and Medicaid Services, a division of the
United States Department of Health and Human Services.

“COBRA” has the meaning set forth in Section 5.22(h).

“Code” means the Internal Revenue Code of 1986, together with the regulations
thereunder, in each case as in effect from time to time.

“Commercial Rebate Contract” means each Contract designated as such on Schedule
2.2(e).

“Commercially Reasonable Discontinuance” has the meaning set forth in
Section 8.10(d).

 

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“Competitive Product” means [*******].

“Compliance Program” means a provider compliance program of the type described
in the compliance guidance published by the Office of Inspector General of the
Department of Health and Human Services.

“Confidentiality Agreement” has the meaning set forth in Section 7.3(a).

“Contract” means any legally binding obligation or agreement, whether oral or
written, and specifically including any note, bond, mortgage, lease of real or
personal property, license and other instrument.

“Copyright” means the legal right provided by the Copyright Act of 1976, as
amended, to the expression contained in any work of authorship fixed in any
tangible medium of expression together with any similar rights arising in any
other country as a result of statute or treaty.

“CPR” has the meaning set forth in Section 10.5(b).

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

“Data Lock” means, in respect of a clinical trial in support of a new drug
application, the time at which, in accordance with the trial protocol, no
modifications will be made to the clinical trial data base.

“Deferred Payment Period” has the meaning set forth in Section 3.1(c).

“Deferred Payments” has the meaning set forth in Section 3.1(c).

“Demand” has the meaning set forth in Section 10.5(b).

“Diligence Breach” has the meaning set forth in Section 8.10(a).

“Discounts” means amounts claimed as discounts with respect to PhosLo Products
sold (a) on or before the Closing Date or (b) under any Excluded Contract.

“Effective Time” means 12:01 a.m. on the Closing Date.

“Employees” means the individuals employed by the Seller principally in the
operation of the PhosLo Business.

“Employee Consent” means a consent by an Employee to the release of such
Employee’s personnel files to the Buyer, substantially in the form of the
Consent of Employee Regarding Transfer of Personnel Records attached hereto as
Exhibit 9.3(g).

“Environmental Laws” means any Legal Requirement relating to the protection of
safety, human health or the environment, including any requirement pertaining to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of materials that are or may constitute a threat to human health

 

3

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or the environment. Without limiting the foregoing, each of the following is an
Environmental Law: the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Material Transportation
Act (49 U.S.C. § 5101 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
§ 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the Safe Drinking Water Act
(42 U.S.C. § 300f et seq.), the Occupational Safety and Health Act (29 U.S.C.
§ 651 et seq.), and the Atomic Energy Act (42 U.S.C. § 2011 et seq.), and each
similar Legal Requirement promulgated under such federal, state and local laws.

“EPICK Study” means the clinical study initiated by the Seller and designed to
evaluate PhosLo’s ability to safely and effectively control serum phosphorus
levels, parathyroid levels, serum calcium levels and calcium phosphorus product
in chronic kidney disease, stage 4, patients.

“ERISA” means the Employee Retirement Income Security Act of 1974 (29 U.S.C.
§ 1001, et seq.).

“Excluded Assets” has the meaning set forth in Section 2.3.

“Excluded Contracts” has the meaning set forth in Section 2.3(d).

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

“Family Member” means any of (i) a Person’s spouse, (ii) the natural or adoptive
grandparents, parents, siblings, children or grandchildren of a Person or such
Person’s spouse, (iii) the stepparents, stepchildren, stepbrothers or
stepsisters of a Person or such Person’s spouse, (iv) the nieces, nephews, first
cousins, aunts or uncles of a Person or such Person’s spouse, or (v) the spouse
of any Person described in the foregoing clauses (i) through (iv).

“FDA” means the United States Food and Drug Administration.

“FDA Approval” means the approval, clearance or authorization of the FDA that
allows the Buyer to make, sell, promote, market and distribute a pharmaceutical
product for therapeutic use in humans on a lawful and commercial basis in the
United States.

“FD&C Act” means the Food, Drug and Cosmetic Act, 21 U.S.C. 321, et seq., as
amended, and the rules and regulations promulgated thereunder.

“Finished Goods Inventory” has the meaning set forth in Section 2.2(l).

“Fixed Assets” means all equipment (including computer hardware and data
processing and telecommunications equipment), machinery, furniture and
furnishings, fixtures, tools, vehicles and other tangible personal property of
every type, in each case that are used principally in the PhosLo Business,
whether owned or leased, all contract rights with respect thereto, and all
maintenance records and other documents relating thereto.

 

4

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“Foreign Marketing Authorization” means the equivalent of an FDA Approval in
each country of the Territory other than the United States.

“GAAP” means generally accepted accounting principles as recognized by the
American Institute of Certified Public Accountants, as in effect from time to
time, consistently applied and maintained on a consistent basis for the
applicable Person (or Persons on a consolidated basis, as the case may be)
throughout the period indicated and consistent with such Person’s prior
financial practices.

“Good Practices” means compliance with the applicable requirements contained in
“Good Laboratory Practices,” “Investigational New Drug” and/or “current Good
Manufacturing Practices” regulations as promulgated by the FDA.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any municipal, local, city or county government,
or any Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

“Governmental Filings” has the meaning set forth in Section 7.1(a).

“GPOs” has the meaning set forth in the definition of “Wholesaler Charges.”

“Hazardous Material” means any substance or material meeting any one or more of
the following criteria: (i) it is or contains a substance designated as a
hazardous waste, hazardous substance, hazardous material, pollutant, contaminant
or toxic substance under any Environmental Law; (ii) it is toxic, explosive,
corrosive, reactive, ignitable, infectious, radioactive, mutagenic, dangerous or
otherwise hazardous; (iii) its presence at some quantity requires investigation,
notification or remediation under any Environmental Law or common law; (iv) it
constitutes a danger, a nuisance, a trespass or a health or safety hazard to
persons or property; or (v) it is or contains, without limiting the foregoing
clauses (i)-(iv), asbestos, polychlorinated biphenyls, petroleum hydrocarbons,
petroleum derived substances or waste, crude oil or any fraction thereof,
nuclear fuel or waste, natural gas or synthetic gas.

“Healthcare Governmental Authority” means any Governmental Authority, whether
created under any federal, state or local statute or regulation, which governs
or has oversight over the delivery or reimbursement of healthcare services,
including CMS and fiscal intermediaries and other agents acting on behalf of
CMS, and the health department or health licensing department of any federal,
state or local Governmental Authority.

“HSR Act” has the meaning set forth in Section 5.3(a).

“Indemnified Party” has the meaning set forth in Section 10.4(a).

“Indemnifying Party” has the meaning set forth in Section 10.4(a).

“Information” has the meaning set forth in Section 8.5(a).

 

5

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“Inventory” means all inventories of pharmaceuticals, goods, materials and
supplies used principally in the PhosLo Business.

“Know-How” means ideas, designs, concepts, compilations of information, methods,
techniques, procedures and processes, inventions and discoveries, whether or not
patentable.

“Knowledge of the Seller,” “Seller’s Knowledge” and similar phrases means the
actual knowledge of any of the following Persons and the information available
in the books, records and files of the Seller: [*******].

“Legal Requirement” means any statute, law, treaty, rule, regulation of any
Governmental Authority or any Order applicable or binding upon the subject
Person (including its business or the ownership or use of any of its assets),
property or other asset.

“Liabilities” means all liabilities or obligations of any nature whatsoever,
whether absolute or contingent, due or to become due, accrued or unaccrued,
known or unknown, direct or consequential or otherwise.

“Lien” means any lien, charge, claim, pledge, security interest, conditional
sale agreement or other title retention agreement, lease, mortgage, security
agreement, right of first refusal, option, restriction, license, covenant or
other encumbrance (including the filing of, or agreement to file any financing
statement under the Uniform Commercial Code or statute or law of any
jurisdiction).

“[*******] Agreement” has the meaning set forth in Section 2.2(p).

“Mark” means any word, name, symbol or device used by a Person to identify its
goods or services, whether or not registered, and any right that may exist to
obtain a registration with respect thereto from any Governmental Authority and
any rights arising under any such application. As used in this Agreement, the
term “Mark” includes trademarks and service marks.

“Master Formulations” has the meaning set forth in Section 2.2(d).

“Material Adverse Effect” means any change, including any damage, destruction or
other casualty loss, that is or would reasonably be expected to be materially
adverse to the Purchased Assets or the PhosLo Business including its financial
condition or results of operations; provided however, (i) a “Material Adverse
Effect” does not include any change caused by a change in any circumstance,
political, economic or business conditions affecting the United States economy
as a whole or the pharmaceutical sector of the United States economy
specifically and (ii) in determining whether there has been a Material Adverse
Effect, any change shall be considered both individually and together with all
other changes.

“Medicaid” means that means tested entitlement program under Title XIX of the
Social Security Act that provides federal grants to states for medical
assistance based on specific eligibility criteria. (Social Security Act of 1965,
Title XIX, P.L. 89 87; 42 U.S.C. 1396 et seq.).

 

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

“Medicare” means that government sponsored entitlement program under Title XVIII
of the Social Security Act that provides for a health insurance system for
eligible elderly and disabled individuals. (Social Security Act of 1965, Title
XVIII, P.L. 89-87 as amended, 42 U.S.C. 1395 et seq.).

“Milestone Payments” means the payments payable from the Buyer to the Seller
pursuant to Sections 3.1(a)(i)-(vi) upon the achievement of certain milestones.

“NDA Filing Date” has the meaning set forth in Section 5.16(a).

“NDAs” has the meaning set forth in Section 2.2(a).

“Net Sales Deductions” means all: [*******].

“New Formulation Net Sales” means the excess of (a) the gross amount invoiced by
the Buyer or its subsidiaries or Affiliates or its or their licensees,
successors and assignees from or on account of sales or other dispositions of
any New Formulation Products to unaffiliated third parties who are not licensees
or sublicensees over (b) any Net Sales Deductions. The Buyer and any such
sublicensees, Affiliates, licensees, successors and assignees shall allocate Net
Sales Deductions to the New Formulation Products in a manner consistent with the
manner in which it allocates similar deductions to products in the balance of
its business. For the avoidance of doubt, New Formulation Net Sales shall not
result from any transfer between or among the Buyer and any of its subsidiaries
or Affiliates or its or their licensees, successors and assignees for resale,
but shall result from the sale or resale by any such subsidiary, Affiliate,
licensee, successor or assignee.

“New Formulation Net Sales Statement” has the meaning set forth in
Section 3.2(b).

“New Formulation Products” means each and every [*******].

“New Formulation Rights” has the meaning set forth in Section 2.2(p).

“Noncompetition and Nonsolicitation Agreement” has the meaning set forth in
Section 4.2(a)(ii).

“Order” means any award, decision, injunction, judgment, order, writ, decree,
ruling, subpoena or verdict entered, issued, made or rendered by any
Governmental Authority or arbitrator.

“Part D Rebate Contract” means each Contract designated as such on Schedule
2.2(e).

“Patent” means any patent granted by the United States Patent and Trademark
Office or by the comparable agency of any other country, and any renewal
thereof, and any rights arising under any patent application filed with the
United States Patent and Trademark Office or the comparable agency of any other
country and any rights that may exist to file any such application, together
with any divisionals, continuations or continuations in part with respect to any
such patent applications, any re-examinations of any such patent, any reissues
of any such patent and any amendments thereto as a result of reexamination.

 

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“Patent Agreement” has the meaning set forth in Section 4.2(a)(v).

“Permits” means all licenses, permits, authorizations, registrations,
certifications, certificates of occupancy, franchises and approvals of any
nature issued by any Governmental Authority and used in the operation of the
PhosLo Business, including regulatory approvals and worldwide registrations.

“Person” means an individual, partnership, corporation, limited liability
company, trust, decedent’s estate, joint venture, joint stock company,
association, unincorporated organization, Governmental Authority or other
entity.

“PhosLo Business” has the meaning set forth in the Background Statement to this
Agreement.

“PhosLo GelCap” means the size 0 capsule dose of PhosLo (667 mg) or the size 2
(333.5 mg) capsule dose of PhosLo as approved in NDA 21-160.

“PhosLo Products” means the following products: PhosLo GelCap and PhosLo
Tablets.

“PhosLo Tablets” means the round tablet dose of PhosLo (667 mg) as approved by
NDA 19-976.

“Plan” means any employee pension, retirement, profit-sharing, stock bonus,
incentive, deferred compensation, stock option, employee stock ownership,
hospitalization, medical, dental, vacation, insurance, sick pay, disability,
severance or other plan, fund, program, policy, contract or arrangement, whether
arrived at through collective bargaining or otherwise, providing employee
benefits, including any “employee benefit plan” as that term is defined in
Section 3(3) of ERISA, currently maintained by, sponsored in whole or in part
by, or contributed to by the Seller, for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries,
whether created in writing, through an employee manual or similar document, or
orally.

“Proceeding” means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental Authority or arbitrator.

“Proprietary Rights” means, cumulatively, Copyrights, Know-how, Marks, domain
names, Patents, Trade Secrets and other intellectual property rights.

“Proprietary Software” has the meaning set forth in the definition of
“Software.”

“Purchased Assets” has the meaning set forth in Section 2.2 of this Agreement.

 

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“Purchased Proprietary Rights” has the meaning set forth in Section 5.6(a).

“Purchase Price” has the meaning set forth in Section 3.1.

“Qualified Beneficiaries” has the meaning set forth in Section 5.22(h).

“Rebate Charges” means amounts claimed by or under, and actually paid to or in
respect of, Medicaid, state rebate programs, pharmaceutical benefit management
organizations, managed care organizations, and other Persons as rebates under
Contracts between such parties and the Seller or the Buyer, as the context
requires.

“Registrations” has the meaning set forth in Section 2.2(a).

“Restricted Period” has the meaning set forth in Section 8.11(a).

“Retained Marks” has the meaning set forth in Section 8.7(a).

“Roxane Proceeding” has the meaning set forth in Section 2.4(a)(iii).

“Scientific Data” has the meaning set forth in Section 5.18(a).

“Seller” has the meaning set forth in the introductory sentence of this
Agreement.

“Seller Certificate” has the meaning set forth in Section 9.3(c).

“Seller Damages” has the meaning set forth in Section 10.3(a).

“Seller Disclosure Schedule” has the meaning set forth in Section 5.

“Seller Indemnified Parties” has the meaning set forth in Section 10.3(a).

“Software” means:

(a) every computer software program or portion thereof (including operating
systems, application programs, software tools, firmware and software imbedded
within any telecommunications, dialysis or other equipment, including both
object code and source code versions thereof), including computer software
programs purchased or licensed from third parties;

(b) every computer software program that the Seller (including its employees and
independent contractors) has designed or created and all electronic or written
materials that explain any such computer software program or that were used in
the development of any such computer software program or represent an interim
step in the development of any such computer software program, including logic
diagrams, flowcharts, procedural diagrams and algorithms, and all electronic or
written materials used by the Seller or provided to any patient or physician in
connection with the installation, customization or use of any of the computer
software programs described above.

 

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That portion of the Software that is owned by the Seller is referred to herein
as the “Proprietary Software,” and that portion of the Software that is owned by
any Person other than the Seller is referred to herein as the “Third-Party
Software.”

“Specifications” has the meaning set forth in Section 5.21.

“Taxes” means all taxes, and all charges, fees, levies or other assessments
imposed in respect thereof, imposed by a Governmental Authority (whether
federal, state, local or foreign), including income, gross receipts, excise,
property, estate, sales, use, stamp, value added, transfer, license, payroll,
franchise, ad valorem, withholding, social security and unemployment taxes; and
such term shall include any interest, penalties and additions to such taxes,
charges, fees, levies or other assessments.

“Tax Return” means, with respect to any Person, any report, return or schedule
attached to a return (or any combination thereof) required to be supplied by
such Person to any Governmental Authority in connection with Taxes.

“Territory” shall mean each country in the world.

“Third-Party Consents” has the meaning set forth in Section 7.1(a).

“Third-Party Software” has the meaning set forth in the definition of the term
“Software.”

“Trade Secrets” means business or technical information of any Person including,
but not limited to, customer lists and Know-How, that is not generally known to
other Persons who are not subject to an obligation of nondisclosure and that
derives actual or potential commercial value from not being generally known to
other Persons.

“Trademark Agreement” has the meaning set forth in Section 4.2(a)(vi).

“Transaction Agreements” has the meaning set forth in Section 4.2(c).

“Transition Services Agreement” has the meaning set forth in
Section 4.2(a)(viii).

“Wholesaler Charges” means amounts claimed by wholesalers of the PhosLo Products
as chargebacks or returns to the wholesaler under contracts between group
purchasing organizations, FSS and PHS (collectively, “GPOs”) and the Seller and
amounts claimed by GPOs as administrative or marketing fees under contracts
between GPOs and the Seller.

1.2 Construction.

(a) The article and section headings contained in this Agreement are solely for
the purpose of reference and convenience, are not part of the agreement of the
parties, and shall not in any way limit, modify or otherwise affect the meaning
or interpretation of this Agreement.

(b) References to “Sections” or “Articles” refer to corresponding Sections or
Articles of this Agreement unless otherwise specified.

 

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(c) Unless the context requires otherwise, (i) the words “include,” “including”
and variations thereof mean without limitation; (ii) the words “hereof,”
“hereby,” “herein,” “hereunder” and similar terms refer to this Agreement as a
whole and not any particular section or article in which such words appear;
(iii) words in the singular include the plural, words in the plural include the
singular, and words importing any gender shall be applicable to all genders;
(iv) a term defined as one part of speech (such as a noun) shall have a
corresponding meaning when used as another part of speech (such as a verb); and
(v) currency amounts referenced herein are in U.S. Dollars.

(d) Any reference herein to a Legal Requirement shall include any amendment
thereof, any successor thereto and any rules, regulations and published
interpretations promulgated thereunder by Governmental Authorities.

(e) References to a number of days refer to calendar days unless Business Days
are specified. Except as otherwise specified, whenever any action must be taken
on or by a day that is not a Business Day, then such action may be validly taken
on or by the next day that is a Business Day.

(f) All accounting terms used herein and not expressly defined herein shall have
the meanings given to them under GAAP.

ARTICLE II

CONTEMPLATED TRANSACTIONS

2.1 Purchase of Assets. On the terms and subject to the conditions of this
Agreement, on the Closing Date, effective as of the Effective Time, the Seller
shall sell, convey, assign, and transfer to the Buyer (or one or more of its
assignees), all of the Seller’s right, title and interest in and to the
Purchased Assets, and the Buyer (or one or more of its assignees) shall
purchase, acquire and accept the Seller’s right, title and interest in and to
the Purchased Assets, free and clear of any Lien of any nature except for Liens
for Taxes not yet due and payable.

2.2 Purchased Assets. For purposes of this Agreement, the term “Purchased
Assets” shall mean all of the tangible and intangible assets, rights and
properties used or held for use by the Seller principally in connection with the
PhosLo Business, including the following assets, rights and properties, but
excluding the Excluded Assets:

(a) all regulatory approvals, worldwide product registrations and associated
materials (including the product dossier) relating to the PhosLo Business or the
PhosLo Products (the “Registrations”), including the New Drug Applications (No.
19-976 and No. 21-160) issued by the FDA (together with all amendments,
supplements and updates thereto (the “NDAs”)), and the other approvals,
registrations, pending registrations and associated materials set forth on
Schedule 2.2(a) hereto;

(b) the name “PhosLo” and any variant thereof, and the other Marks, trade names
and domain names set forth on Schedule 2.2(b) hereto;

(c) the Patents set forth on Schedule 2.2(c) hereto;

 

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(d) the intangible property rights that relate primarily to or are embodied in
the PhosLo Products or the PhosLo Business (including phosphate binders
generally or any product, device or service for the treatment of
hyperphosphetemia, if any), whether or not patentable, including but not limited
to Copyrights, Know-how, Trade Secrets, the goodwill associated with the PhosLo
Business, master formulations for the PhosLo Products (“Master Formulations”),
master processes used for manufacturing the PhosLo Products from the Master
Formulations and other confidential business information;

(e) the Contracts related to the PhosLo Business that are listed on Schedule
2.2(e) hereto exclusive of the rights thereunder that relate to PhosLo Products
sold prior to the Closing Date or the operation of the PhosLo Business prior to
the Closing Date (the “Assigned Contracts”);

(f) the exclusive right to satisfy all unfilled purchase orders relating to the
PhosLo Products from and after the Closing Date;

(g) all brochures and other promotional and printed materials, trade show
materials (including displays), videos, advertising and/or marketing materials,
including materials containing post-marketing clinical data, in the Seller’s
possession or under its control used solely in connection with the sale of the
PhosLo Products and/or the conduct of the PhosLo Business, including the
materials listed on Schedule 2.2(g);

(h) all warranties and guarantees and other similar contractual rights made by
third parties in favor of the Seller with respect to the PhosLo Products or the
PhosLo Business included in the Assigned Contracts exclusive of those to the
extent relating to PhosLo Products sold prior to the Closing Date or the
operation of the PhosLo Business prior to the Closing Date;

(i) copies of all customer and supplier lists, account lists, call data, sales
history, call notes, marketing studies, consultant reports, physician databases,
and correspondence (excluding invoices and credit memos) principally relating to
the PhosLo Products or the PhosLo Business to the extent maintained by the
Seller, and all complaint files and adverse event files principally relating to
the PhosLo Products or the PhosLo Business to the extent maintained by the
Seller, including the materials listed on Schedule 2.2(i);

(j) all PhosLo specific training materials including an outline of training,
quizzes and answers that accompany the written training materials to the extent
maintained by the Seller, including the materials listed on Schedule 2.2(j);

(k) the Permits listed in Schedule 2.2(k) (the “Assigned Permits”);

(l) all PhosLo Products held by or on behalf of the Seller in inventory as
finished goods (the “Finished Goods Inventory”), as well as all other Inventory;

(m) the Scientific Data, including any rights of access that the Seller has to
the Scientific Data;

(n) copies of all financial records maintained by the Seller principally in
connection with the sale of PhosLo Products relating to sales, accounts
receivable, returns, chargebacks, rebates and discounts, redacted as necessary
to delete all records and data respecting or including other products of the
Seller and/or other aspects of its business;

 

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(o) all rights of the Seller and its Affiliates to develop, make, have made,
sell, distribute, promote, and use the PhosLo Products worldwide subject, in the
case of Canada, to the rights of Genpharm Inc. pursuant to that certain
Distribution Agreement between Genpharm Inc. and the Seller dated July 12, 2005;

(p) all rights of the Seller, and its Affiliates to [*******] (the “New
Formulation Rights”) and all rights of the Seller and its Affiliates, if any, to
develop and manufacture such products;

(q) the Fixed Assets listed on Schedule 2.2(q);

(r) all telephone numbers and listings in telephone directories maintained by
third parties as listed on Schedule 2.2(r);

(s) copies of all other files, records, books, documents, data, plans and
proposals of the Seller relating principally to the PhosLo Business or PhosLo
Products, whether in written, electronic, visual or other form, redacted as
necessary to delete all files, records, books, documents, data, plans and
proposals respecting or including other products of the Seller and/or aspects of
its business;

(t) [intentionally blank];

(u) all claims and rights relating principally to the Purchased Assets or the
Assumed Liabilities, whether choate or inchoate, known or unknown, contingent or
noncontingent, including all claims and rights of the Seller against third
parties relating principally to the Purchased Assets or the Assumed Liabilities
and including claims and rights under express or implied warranties but
exclusive of those relating principally to PhosLo Products sold prior to the
Closing Date or the operation of the PhosLo Business prior to the Closing Date;
and

(v) the PhosLo Business as a going concern.

2.3 Excluded Assets. Notwithstanding anything in Section 2.2 to the contrary,
the Purchased Assets shall not include any of Seller’s right, title or interest
in or to the following assets, rights and properties (the “Excluded Assets”),
all of which shall be retained by the Seller:

(a) [intentionally blank];

(b) all cash, cash equivalents and short-term investments of cash;

(c) all accounts receivable (billed and unbilled) in respect of sales of PhosLo
Products made prior to the Closing Date;

(d) all Contracts and rights arising under any Contracts not specifically
included in the Purchased Assets (the “Excluded Contracts”);

(e) the assets, rights and properties, if any, set forth on Schedule 2.3(e);

 

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(f) any inter-company balances due to or from the Seller and any Affiliate;

(g) all interests in any real property, whether leased or owned;

(h) all Tax refunds and Tax deposits;

(i) any insurance policies;

(j) all Software;

(k) the Fixed Assets listed or described on Schedule 2.3(k);

(l) all telephone numbers and listings in telephone directories maintained by
third parties other than those listed on Schedule 2.2(r); and

(m) all rights to receive payment of a license fee pursuant to Section 6.1(b) of
the Distribution Agreement, dated as of July 12, 2005, between the Seller,
Genpharm, Inc. and Prepharm, Inc.

2.4 Assumption of Liabilities.

(a) Assumed Liabilities. On the Closing Date, the Buyer shall assume, and shall
thereafter timely pay and perform, the following Liabilities of the Seller (the
“Assumed Liabilities”):

(i) the Liabilities of the Seller arising after the Effective Time under the
Assigned Contracts (including in respect of all open purchase orders for PhosLo
Products placed by customers with the Seller as of the Effective Time and all
purchase orders and committed forecasts placed by the Seller with Braintree and
Verdugt for the production or delivery of Inventory as of the Effective Time),
excluding, however, any such Liabilities that arise from defaults or breaches
under such Assigned Contracts based upon actions, omissions, circumstances or
occurrences existing or occurring before the Closing Date (including for this
purpose any event which, with notice or time, would constitute such a breach or
default and any breach or default that occurs as a result of the Closing);

(ii) all Liabilities under the Registrations and the Assigned Permits, if any,
to the extent to be satisfied or performed, or arising out of acts or omissions
of the Buyer, after the Closing Date; and

(iii) any Liabilities arising from the Proceeding known as Nabi
Biopharmaceuticals v. Roxane Laboratories, Inc., filed in the United States
District Court for the Southern District of Ohio (the “Roxane Proceeding”),
based on acts, circumstances or omissions occurring after the Effective Time
including the fees and expenses of counsel and experts and other third parties
incurred in connection with the prosecution of the Roxane Proceeding after the
Effective Time. Any such Liabilities based on acts, circumstances or omissions
occurring prior to the Effective Time shall remain Liabilities of the Seller.

 

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(b) Liabilities Not Assumed. Except for the Liabilities specifically assumed
pursuant to Section 2.4(a), the Buyer shall not assume, shall not take subject
to and shall not be liable for, any Liabilities of the PhosLo Business, the
Seller or any Affiliate of the Seller (the “Excluded Liabilities”). Without
limiting the generality of the foregoing and notwithstanding anything in
Section 2.4(a) to the contrary, the Excluded Liabilities shall include the
following:

(i) any Liabilities incurred or arising in connection with the operation of the
PhosLo Business, the condition of the Seller’s assets or the ownership of the
Purchased Assets prior to the Effective Time, including any claims made by or
against the Seller or any Affiliate of the Seller, whether before or after the
Closing Date, that arise out of actions, omissions, circumstances or occurrences
existing or occurring before the Closing Date;

(ii) any claim, lawsuit or Liability of any kind or nature whatsoever (including
any Liabilities relating to malpractice, tort or breach of contract claims
asserted by any customer, patient, former patient, employee or any other party)
that is based on PhosLo Products sold prior to the Effective Time, the sale
after the Effective Time of Finished Goods Inventory existing as of the
Effective Time, or marketing practices or marketing materials for PhosLo
Products used prior to the Effective Time;

(iii) any Liabilities to refund or repay, and all Liability associated with, any
unreconciled payments, overpayments, duplicate payments, refunds, discounts,
rebates or adjustments due to Medicare, Medicaid, Blue Cross Blue Shield, or any
other healthcare reimbursement or payment program or intermediary third-party
payor, any states, the Veterans Administration, other governmental programs or
any other Person in respect of PhosLo Products sold prior to the Effective Time,
including any Liabilities to repay any amounts for failure to report correctly
average manufacturing price or best price in violation of any Contract or
Permit, including the Seller’s Medicaid Rebate Agreement, Pharmaceutical
Provider Agreement with the Veterans Administration, or 340B Agreement, in
violation of any Legal Requirement with respect to the calculation of reported
prices, or any Liabilities for rebates or discounts for PhosLo Products bearing
the Seller’s NDC number arising under Part D Rebate Contracts and Commercial
Rebate Contracts assigned to the Buyer pursuant to Section 8.17;

(iv) any Liabilities relating to investigations of the Seller or any Affiliate
of the Seller by any Governmental Authority or relating to any noncompliance by
the Seller or any Affiliate of the Seller with Legal Requirements, including
applicable healthcare laws and regulations;

(v) any Liabilities arising out of or relating to the conduct of the CARE 2
Study or the EPICK Study prior to the Effective Time;

(vi) any Liabilities (whether assessed or unassessed) of the Seller or any
Affiliate of the Seller for any Taxes, including any Taxes arising by reason of
the transactions contemplated herein;

 

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(vii) all Liabilities with respect to the Wholesaler Charges and Discounts in
respect of PhosLo Products sold prior to the Effective Time;

(viii) any product liability relating to or arising out of the sale of PhosLo
Products prior to the Effective Time or the sale after the Effective Time of the
Finished Goods Inventory existing as of the Effective Time;

(ix) all Liabilities arising out of or relating to the recall, replacement or
return of, or any claim for breach of warranty in respect of or for refund of
the purchase price of, the PhosLo Products sold prior to the Closing Date;

(x) all Liabilities of the Seller or its predecessors arising under any
Environmental Laws;

(xi) any Liabilities attributable to any period prior to the Closing Date that
arises out of any Contract, including Assigned Contracts, so long as such
Liabilities do not arise as a result of the performance or non-performance of
such Assumed Contract by the Buyer after the Closing Date;

(xii) except as specifically set forth in this Agreement, any Liabilities to
former or current officers, directors, employees, shareholders or Affiliates of
the Seller or any Affiliate of the Seller, including any Liabilities of the
Seller or any Affiliate of the Seller in connection with any Plans or collective
bargaining, labor or employment agreement or other similar arrangement, any
obligations in respect of retiree health benefits, and any accrued employee paid
time off, including for vacation and sick leave;

(xiii) any Liabilities of the Seller or any Affiliate of the Seller incurred or
arising in connection with this Agreement, including any fees or expenses of the
Seller or any Affiliate of the Seller incurred in connection with the
transactions contemplated herein; and

(xiv) any Liabilities relating to Excluded Assets.

2.5 Consent of Third Parties. On the Closing Date, the Seller shall assign to
the Buyer, and the Buyer shall assume, the Assigned Contracts to the extent
provided in this Agreement. To the extent that the assignment of all or any
portion of any Assigned Contract shall require the consent of the other party
thereto or any other third party, this Agreement shall not constitute an
agreement to assign any such Assigned Contract if an attempted assignment
without any such consent would constitute a breach or violation thereof. In
order, however, to seek to provide the Buyer the full realization and value of
every Assigned Contract of the character described in the immediately preceding
sentence (i) as soon as practicable after the Closing, the Seller and the Buyer
shall cooperate, in all reasonable respects, to obtain any necessary consents to
the assignment of the Assigned Contracts, provided that neither party shall be
required to make any payments or agree to any material undertakings in
connection therewith, and (ii) until all such consents are obtained or all such
Assigned Contracts expire or are terminated, the Seller and the Buyer shall
cooperate, in all reasonable respects, to provide to the Buyer the benefits
under the Assigned Contracts (with the Buyer entitled to all the gains and
responsible for all the losses, Taxes and Liabilities thereunder). In connection
with clause (ii) of this Section 2.5, the Seller shall seek to enforce at

 

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the cost of and for the benefit and risk of the Buyer all claims or rights of
the Seller arising under the Assigned Contracts to the extent such claims or
rights are included in the Purchased Assets, and the Buyer shall perform and
comply with, at the Buyer’s cost, all of the Seller’s obligations under the
Assigned Contracts, to the extent such obligations are Assumed Liabilities as if
the Buyer was the Seller thereunder. Nothing in this Section 2.5 shall in any
way diminish the conditions in Article IX of this Agreement.

2.6 Registrations and Applicable Permits. On the Closing Date, the Seller shall
assign or transfer to the Buyer, and the Buyer shall assume, the Registrations
and Assigned Permits to the extent provided in this Agreement to the extent that
they are assignable, provided, however, that the Buyer will reimburse the Seller
on the Closing Date for the portion of the fees paid by the Seller in respect of
periods after the Effective Time under the Prescription Drug User Fee Act. To
the extent that the assignment or transfer of all or any portion of any
Registration or Permit shall require the consent of the other party thereto or
any other third party, this Agreement shall not constitute any agreement to
assign or transfer any such Registration or Permit if an attempted assignment or
transfer without any such consent would constitute a breach or violation
thereof. In order, however, to seek to provide the Buyer the full realization
and value of every Registration and Permit of the character described in the
immediately preceding sentence (i) as soon as practicable after the Closing, the
Seller and the Buyer shall cooperate, in all reasonable respects, and use best
efforts to obtain, at the earliest possible date, any necessary consents to the
assignment or transfer of the Registrations and Permits, provided that neither
party shall be required to make any payments or agree to any material
undertakings in connection therewith, and (ii) until all such consents are
obtained or all such Registrations and Permits expire or are terminated, the
Seller and the Buyer shall cooperate, in all reasonable respects, to provide to
the Buyer the benefits under the Registration and Permits (with the Buyer
entitled to all the gains and responsible for all the losses, Taxes and
Liabilities thereunder). In such event, the Buyer shall perform and comply with,
at the Buyer’s cost, all of the Seller’s obligations under the Registrations and
Permits to the extent such obligations are Assumed Liabilities, as if the Buyer
was the Seller thereunder. Nothing in this Section 2.6 shall in any way diminish
the conditions in Article IX of this Agreement.

ARTICLE III

PURCHASE PRICE AND CLOSING

3.1 Purchase Price. In consideration of the transfer to the Buyer of the
Purchased Assets and the covenants of the Seller set forth herein, and subject
to the terms and conditions of this Agreement, the Buyer shall pay or cause to
be paid to the Seller the following amounts (together, the “Purchase Price”):

(a) $65,000,000 in cash on the Closing Date (the “Closing Payment”);

(b) the following amounts payable within ten (10) Business Days of notification
of the achievement of each of the following Milestones; provided, however, that
the payment due in connection with the achievement prior to the Closing Date of
the Milestone in Section 3.1(b)(i) shall be payable on the Closing Date or
within five (5) Business Days after the Closing Date:

(i) $5,000,000 upon completion of Data Lock related to the EPICK Study;

 

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(ii) $2,500,000 upon submission to the FDA of an application seeking FDA
Approval to market PhosLo GelCaps for use by chronic kidney disease, stage 4
patients, which application meets the requirements of 21 CFR Part 3.14 and other
relevant FDA guidance and has been prepared in accordance with normally accepted
industry standards for such applications, but only if such application is
submitted by December 31, 2009;

(iii) $2,500,000 upon FDA Approval to market a PhosLo Product for use by chronic
kidney disease, stage 4 patients, but only if such FDA Approval is obtained by
the tenth anniversary of the date hereof;

(iv) $2,500,000 upon presentation of the CARE 2 Study abstract at the American
Society of Nephrology 2006 meeting or cancellation of the meeting by ASN;

(v) $2,500,000 upon acceptance and publication of the CARE 2 Study by a mutually
agreed upon third party peer reviewed medical journal, but only if published by
December 31, 2010;

(vi) $5,000,000 within ten Business Days after the first commercial sale of a
New Formulation Product by the Buyer or its Affiliates or their licensees or
assignees, but only if such first commercial sale is made by the tenth
anniversary of the date hereof; and

(c) deferred payments (the “Deferred Payments”) equal to [*******] of the annual
New Formulation Net Sales in excess of $32,000,000 in each such calendar year
during the period (the “Deferred Payment Period”) from the Closing Date through
the earlier to occur of (a) receipt by the Seller of Closing Payments, Milestone
Payments and Deferred Payments totaling $150,000,000, and (b) the tenth
anniversary of the Closing Date. Notwithstanding the foregoing, the $32,000,000
threshold for the calendar year that includes the tenth anniversary of the
Closing Date shall be prorated and reduced by multiplying $32,000,000 by a
fraction equal to the total number of days between January 1, 2016 and the tenth
anniversary of the Closing Date (inclusive) divided by 366. In no event shall
the Buyer be obligated to pay the Seller Closing Payments, Milestone Payments
and Deferred Payments of more than $150,000,000.

(d) The Buyer agrees that it shall have no right to set-off or apply against any
Milestone Payment or Deferred Payment that the Buyer is obligated to make to the
Seller under this Agreement after the Closing any amounts owed to the Buyer or
its Affiliates by the Seller (including, without limitation, any indemnification
obligation of the Seller under Section 10.2) unless and until such amount(s)
shall have been reduced to an arbitration award or judgment.

3.2 Reports; Payments.

(a) Each party shall notify the other in writing whenever it believes that the
Buyer has earned a Milestone Payment (including the Milestone in
Section 3.1(b)(i)), together with reasonably detailed information supporting the
achievement of the corresponding Milestone. Except with respect to the Milestone
in Section 3.1(b)(i), the Seller shall not notify the Buyer of the achievement
of any Milestone before the Closing Date. Except as otherwise provided in
Section 3.1(b)(i), within ten (10) Business Days of the notice of

 

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achievement of a Milestone, the Buyer shall either pay the Seller the Milestone
Payment or, if the Buyer disputes whether the Seller has earned the Milestone
Payment, provide the Seller with written notice of its objections to payment of
the Milestone Payment, with reasonably detailed supporting information.

(b) The Buyer shall deliver to the Seller, within forty-five (45) days after the
last day of each calendar quarter (or partial quarter) that ends during the
Deferred Payment Period, a statement in the form attached hereto as Schedule 3.2
(each, a “New Formulation Net Sales Statement”), setting forth (i) the gross
amount of invoiced sales for each New Formulation Product (including unit
quantities) for the year to date and the quarter then ended, (ii) the Net Sales
Deductions for each such period (which deductions shall be aggregated by
category), and (iii) the calculation of the related Deferred Payment then due,
if any. For the avoidance of doubt the Seller agrees that no Deferred Payments
shall be due in respect of any quarter unless the New Formulation Net Sales
Statement delivered for such quarter establishes that the New Formulation Net
Sales for the period from January 1 of such year through the end of such quarter
exceed $32,000,000. If a New Formulation Net Sales Statement shall establish
that Deferred Payments are due, then the Buyer shall pay such Deferred Payments
to the Seller within ten days of its receipt of such New Formulation Net Sales
Statement. The parties agree that the first Deferred Payment hereunder and the
associated statement shall be made by the Buyer with respect to the quarter
ending after the first commercial sale of a New Formulation Product.

(c) Any disputes regarding the right to receive any of the foregoing payments
that cannot be settled amicably between the parties shall be resolved by
arbitration in accordance with the arbitration procedures set forth in Sections
10.5(b) through 10.5(i).

3.3 Books and Records; Audits. For a period of not less than three years after
the relevant calendar year, the Buyer and its subsidiaries and Affiliates and
its and their licensees that sell PhosLo Products and New Formulation Products
shall keep full, true and accurate books of account sufficient to determine the
amounts payable pursuant to Section 3.1. The Seller shall have the right, not
more than once during any calendar year, to have the books and records of the
Buyer, its subsidiaries and Affiliates and its and their licensees audited by a
qualified independent accounting firm of the Seller’s choosing, subject to the
Buyer’s approval, which approval shall not be unreasonably withheld or delayed,
under appropriate confidentiality provisions, to ascertain the accuracy of the
reports and payments under Section 3.2 and compliance by the Buyer with its
obligations under Section 3.1. Such audit shall be conducted upon at least ten
days’ advance notice during normal business hours and in a manner that does not
interfere unreasonably with the business of the audited entity. Subject to the
Buyer’s right to dispute such amounts, any underpayment determined by such audit
shall promptly be paid by the Buyer. The Seller shall pay for the costs of such
audit unless such audit shall establish an underpayment to the Seller in any
calendar year of more than the greater of (i) 10% of the correct Deferred
Payment and (ii) $50,000, in which event the Buyer shall reimburse the Seller
for not more than $20,000 of the Seller’s out-of-pocket costs incurred in
connection with conducting such audit.

3.4 Payments. Payments of Purchase Price shall be made by wire transfer to an
account or accounts designated by the Seller at least two Business Days prior to
the payment due date.

 

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3.5 Allocation of Closing Payment. The parties shall allocate the Closing
Payment among the Purchased Assets and the Seller’s covenants as indicated on
Schedule 3.5. The parties agree to report the transactions contemplated by this
Agreement for income Tax purposes in accordance with such allocation pursuant to
Section 1060 of the Code and the regulations thereunder, and agree not to take,
in any filing with or accompanying any Tax Return reporting any part of the
transactions contemplated herein, a position inconsistent with such allocations.

3.6 Freedom to Conduct Business Unimpaired. Subject to the terms of this
Agreement, including Sections 8.10 and 8.11, the Seller acknowledges and agrees
that the Buyer and its Affiliates shall be free to pursue their respective
business goals and that New Formulation Net Sales may be affected thereby.
Accordingly, this Agreement shall not be deemed to impose any express or implied
obligation on the Buyer or any of its Affiliates to maximize New Formulation Net
Sales for all or any portion of the Deferred Payment Period or to impair the
freedom of the Buyer and its Affiliates to conduct their respective businesses
as they deem appropriate.

ARTICLE IV

CLOSING

4.1 Closing. The closing of the purchase and sale of the Purchased Assets and
the consummation of the other transactions contemplated herein (the “Closing”)
shall take place on October 18, 2006, or, if all of the conditions to the
obligations of the parties to consummate the transactions contemplated hereby
(excluding the delivery of any documents to be delivered at the Closing by any
of the parties, it being understood that the occurrence of the Closing shall
remain subject to the delivery of such documents) have not been satisfied in
full or waived by such date, on such mutually agreeable later date as soon as
practicable (but in no event more than three Business Days) after the first date
on which the conditions to the obligations of the parties to consummate the
transactions contemplated hereby (excluding the delivery of any documents to be
delivered at the Closing by any of the parties, it being understood that the
occurrence of the Closing shall remain subject to the delivery of such
documents) have been satisfied or waived (the “Closing Date”), at the offices of
Nutter McClennen & Fish LLP, in Boston, Massachusetts, beginning at 10:00 a.m.,
local time. The Closing shall be effective as of the Effective Time.

4.2 Closing Obligations. At the Closing:

(a) The Seller shall deliver (or cause to be delivered) to the Buyer:

(i) the various certificates, instruments and documents required to be delivered
under Section 9.3;

(ii) a Non-solicitation and Non-competition Agreement in the form attached
hereto as Exhibit 4.2(a)(ii) (the “Noncompetition and Nonsolicitation
Agreement”)

(iii) a letter from the Seller in the form attached hereto as Exhibit
4.2(a)(iii), notifying the FDA of the transfer of the rights to the
Registrations to the Buyer;

 

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(iv) a Bill of Sale in the form attached hereto as Exhibit 4.2(a)(iv) (the “Bill
of Sale”);

(v) a Patent Assignment Agreement in the form attached hereto as Exhibit
4.2(a)(v) (the “Patent Agreement”);

(vi) a Trademark Assignment Agreement in the form attached hereto as Exhibit
4.2(a)(vi) (the “Trademark Agreement”);

(vii) an Assignment and Assumption Agreement in the form attached hereto as
Exhibit 4.2(a)(vii) (the “Assumption Agreement”);

(viii) a Transition Services Agreement in the form attached hereto as Exhibit
4.2(a)(viii) (the “Transition Services Agreement”);

(ix) such other instruments of conveyance, consent, and acknowledgement as may
be required to convey all of the Purchased Assets to the Buyer, to permit the
Buyer to record or register all registrable Purchased Proprietary Rights and to
put the Buyer in possession and control of all of the Purchased Assets of a
tangible nature, including documents and data in electronic formats, to the
extent that such documents and data are in electronic formats;

(x) original executed versions of the Assigned Contracts except for those that
are not in the Seller’s possession, as indicated on Schedule 2.2(e); and

(xi) copies of the Software listed on Schedule 4.2(a)(xi) (the Buyer
acknowledging that such copies of Software will be provided by the Seller
without any representation or warranty of any kind including as to any title or
right of the Seller or the Buyer to use such Software).

(b) The Buyer shall deliver (or cause to be delivered) to the Seller:

(i) The various certificates, instruments and documents required to be delivered
under Section 9.2;

(ii) The Assumption Agreement;

(iii) The Noncompetition and Nonsolicitation Agreement;

(iv) The Transition Services Agreement;

(v) A letter from the Buyer to the FDA in the form attached hereto as Exhibit
4.2(b)(v), notifying the FDA of the transfer of the Registrations to the Buyer;
and

(vi) The Closing Payment.

 

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(c) The agreements and instruments referred to in Sections 4.2(a)(ii) through
(viii) and Section 4.2(b)(v), together with this Agreement, are referred to
herein as the “Transaction Agreements.”

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as disclosed on Schedule 5 hereto (the “Seller Disclosure Schedule”) the
Seller represents and warrants to the Buyer the following:

5.1 Organization and Good Standing. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, as indicated in the introductory paragraph of this Agreement. The
Seller has full corporate power and authority necessary to enable it to own,
lease or otherwise hold its properties and assets (including the Purchased
Assets) and to carry on the PhosLo Business as presently conducted. The Seller
is duly qualified to do business as a foreign corporation in all the states,
provinces and jurisdictions in which such qualification is necessary because of
the operation of the PhosLo Business, the ownership or use of the Purchased
Assets or otherwise.

5.2 Authority Relative to this Agreement. The Seller has full corporate or other
power and authority to execute, deliver and perform this Agreement and the other
Transaction Agreements and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance by the Seller of the
Transaction Agreements and the consummation of the transactions contemplated
thereby have been duly and validly authorized by all necessary corporate or
other action on its part and no other further authorization or consent of the
Seller or its board of directors, lenders or stockholders will be necessary.
This Agreement has been, and each other Transaction Agreement will be, duly
executed and delivered by the Seller and constitutes, and such other Transaction
Agreement will constitute, the legally valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency or other
laws of general applicability affecting creditors’ rights and by general
principles of equity.

5.3 Consents and Approvals; No Violations.

(a) Subject to compliance with the applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), there is no requirement applicable to the Seller to make any filing with,
or to obtain any permit, authorization, consent or approval of, any Governmental
Authority as a condition to the lawful consummation of the transactions
contemplated hereby.

(b) The execution, delivery and performance of each Transaction Agreement by the
Seller and the Seller’s compliance with the terms thereof will not: (i) conflict
with any provision of the articles of incorporation, bylaws or other governing
documents of the Seller; (ii) conflict with, result in a breach of, constitute
(with or without due notice or lapse of time or both) a default under, result in
the acceleration of obligations under, create in any party the right to
terminate or modify, result in the loss of any rights under, or require any
notice, consent or waiver under, any Assigned Contract or any Assigned Permit;
(iii) contravene, conflict with, violate, or

 

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give any Governmental Authority or other Person the right to challenge any of
the transactions contemplated hereby or exercise any remedy (including
revocation, withdrawal, suspension or modification of any Permit) or obtain any
relief under, any Legal Requirement applicable to the Seller; (iv) violate any
Order specifically naming the Seller or any of its properties or assets; or
(v) result in the creation or imposition of any Lien of any nature upon any of
the Purchased Assets.

5.4 Purchased Assets.

(a) Tangible Assets. Schedule 5.4(a) lists or describes, as of the Closing Date,
each item of the Purchased Assets that is tangible personal property (other than
Inventory). The Fixed Assets listed on Schedule 2.2(q) are all of the Fixed
Assets owned or leased by the Seller that are used primarily in connection with
the PhosLo Business. All such Purchased Assets are in good working order and
condition, reasonable wear and tear excepted.

(b) Title. The Seller has the right to sell and transfer to the Buyer good title
to the Purchased Assets, free and clear of all Liens except for Liens for Taxes
not yet due and payable. The delivery to the Buyer of the instruments of
transfer of ownership contemplated by this Agreement will vest good title to the
Purchased Assets in the Buyer, free and clear of all Liens except for Liens for
Taxes not yet due and payable and Liens arising solely by actions or failures to
act of the Buyer.

(c) Sufficiency. Except for the Excluded Assets and for the Seller’s assets that
are used in connection with the provision of the corporate overhead and
administrative services and the assets listed or described in Schedule 5.4(c),
the Purchased Assets constitute all of the assets necessary for the continued
conduct of the PhosLo Business by the Buyer after the Closing in substantially
the same manner as conducted by the Seller prior to the Closing. The telephone
numbers and telephone directory listings listed on Schedule 2.2(r) are all of
the telephone numbers and telephone directory listings that are used by the
Seller primarily in connection with the PhosLo Business.

5.5 Real Property. [Intentionally Blank].

5.6 Intellectual Property.

(a) Ownership and Right to Use. The Seller owns or has the right to use on a
worldwide basis all of the Proprietary Rights included within the Purchased
Assets (the “Purchased Proprietary Rights”). The Purchased Proprietary Rights
include all of the Proprietary Rights necessary for the continued conduct of the
PhosLo Business by the Buyer after the Closing in substantially the same manner
as conducted by the Seller prior to the Closing. None of the Purchased
Proprietary Rights will lapse, be terminable, be diminished or limited or be
subject to any additional restrictions as a result of the Closing and the
assignment of the Purchased Proprietary Rights to the Buyer. Each Person under
Seller’s control, if any, who has participated in the creation, development,
testing, modification or documentation of any PhosLo Product or New Formulation
Product has entered into an enforceable agreement with the Seller assigning to
the Seller, or is required by Legal Requirement to assign to the Seller, any of
such Person’s rights in the Purchased Proprietary Rights.

 

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(b) Marks and Trade Names. Schedule 5.6(b) lists each Mark, trade name and
domain name that has been used by the Seller since August 4, 2003 to identify
the PhosLo Business or the PhosLo Products and lists each registration that has
been filed or obtained by the Seller with respect to any such Marks. All such
pending and registered Marks are valid. To the Knowledge of the Seller, no other
Person is using a confusingly similar Mark to describe products that are similar
to the PhosLo Products.

(c) Patents. Schedule 5.6(c) lists each Patent owned or licensed by the Seller
and used in or in connection with the PhosLo Business, specifies whether each
such Patent is owned or licensed by the Seller and lists each country in which
each such issued Patent has been issued. Each such issued Patent is valid and
enforceable with regard to its coverage of the applicable PhosLo Product. Each
Contract pursuant to which the Seller licenses any Patent included within the
Purchased Proprietary Rights grants the Seller the unrestricted right to carry
on any business within the scope of the inventions covered by such Patent in the
countries in which the Patent is valid. Neither the Seller nor, to the Knowledge
of the Seller, anyone acting on its behalf in a representative capacity, has
knowledge of any material misrepresentation made to any Governmental Authority
in connection with the procurement of any Patent included in the Purchased
Proprietary Rights.

(d) Copyrights. Schedule 5.6(d) lists each Copyright registration included
within the Purchased Proprietary Rights.

(e) Trade Secrets. The Seller has taken efforts that are reasonable under the
circumstances to prevent the unauthorized disclosure to any other Person of such
portions of the Seller’s Trade Secrets included in the Purchased Assets as would
enable any other Person to compete with the Seller within the scope of the
PhosLo Business as now conducted and as presently proposed to be conducted. Each
current or former Employee and independent contractor of the Seller engaged
principally in the operation of the PhosLo Business has executed a
confidentiality agreement with the Seller or is subject to an obligation of
confidentiality.

(f) Agreements with Other Persons. Schedules 5.6(c) and 5.6(f) list each
Contract pursuant to which the Seller has licensed or otherwise acquired the
right to use any Purchased Proprietary Rights that are not owned by the Seller.
The Seller has performed the obligations required to be performed by it under
the terms of each such Contract, and neither the Seller nor, to the Knowledge of
the Seller, any other party to any such Contract is in default under any such
Contract. Except as disclosed in Schedule 5.6(f) or as set forth in the
Contracts listed in Schedule 5.6(f), the Seller has no obligation to pay any
royalty or other fee to any Person relating to any of the Purchased Proprietary
Rights and is not under any obligation to any other Person to register, protect
or otherwise take any action with respect to any of the Purchased Proprietary
Rights. There is no Contract, other than those Contracts listed in Schedules
5.6(c) and 5.6(f), that grants any Person a license in any of the Purchased
Proprietary Rights or that imposes any restriction or limitation upon the Seller
relating to its use of the Purchased Proprietary Rights. The Seller is not
required to pay any royalty or other similar recurring payment to any other
Person in connection with developing, making, having made, using, importing,
distributing,

 

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offering for sale or selling the PhosLo Products or a New Formulation Product,
except for (i) payments to Governmental Authorities pursuant to requirements of
general application to Persons engaged in developing, making, having made,
using, importing, distributing, offering for sale or selling pharmaceutical
products, and (ii) administrative payments made to Governmental Authorities in
the ordinary course, such as patent maintenance fees.

(g) No Infringement. The Seller’s operation of the PhosLo Business in the United
States and Canada does not conflict with, infringe upon, contribute to or induce
the infringement of, or misappropriate or violate any Patent, Mark, trade name,
Copyright, Trade Secret or other proprietary right of any other Person; provided
that any representation and warranty made in this sentence with respect to New
Formulation Products is made solely to the Knowledge of the Seller. Since
August 4, 2003, the Seller has not received notice of a pleading or threatened
claim, interference action or other judicial or adversarial proceeding claiming
that (i) the development, manufacture, marketing, sale, distribution, promotion
and/or use of the PhosLo Products or the development of the New Formulation
Products infringes any Patent, Mark, trade name, Copyright, Trade Secret or
other proprietary right of any other Person, or (ii) the Seller has
misappropriated or is misappropriating or otherwise improperly using the Trade
Secrets, formulae or proprietary rights of any other Person with respect to the
development, manufacture, marketing, sale, distribution, promotion and/or use of
the PhosLo Products or the development of New Formulation Products. There is no
pending or threatened claim by the Seller against any other Person for
infringement, misuse, violation or misappropriation of the Purchased Proprietary
Rights and, to the Knowledge of the Seller, no facts or circumstances exist or
are threatened that, with or without the passing of time or the giving of notice
or both, might reasonably serve as the basis for any such claim.

5.7 Software. Schedule 5.7 lists all Proprietary Software and all Third-Party
Software used by the Seller in connection with the PhosLo Business, other than
unmodified versions of publicly available word processing, accounting,
communications and similar software.

5.8 Permits.

(a) Schedule 5.8(a) lists all of the Permits. The Permits constitute all of the
licenses, permits, authorizations, registrations, certifications, certificates
of occupancy, franchises and approvals of any nature from Governmental
Authorities that are necessary to enable the Seller to own, lease or otherwise
hold its assets, to carry on the PhosLo Business as presently conducted
including all rights to receive payment from private and Healthcare Governmental
Authorities for PhosLo Products.

(b) Each Permit is in full force and effect. Since August 4, 2003, no violations
of any Permit have occurred or, to the Knowledge of the Seller, have been
alleged to have occurred. No Proceedings are pending or, to the Knowledge of the
Seller, threatened that would have the effect of revoking or limiting or
affecting the transfer or renewal of any Permit. No Permit is subject to any
restrictions or conditions that would limit the PhosLo Business as presently
conducted. Each Permit may be assigned to the Buyer without the consent of any
Person other than the Seller. Each Permit shall be in full force and effect
immediately subsequent to the Closing and shall not be subject to any additional
restriction or condition as a result of their assignment to the Buyer.

 

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5.9 Contracts.

(a) Each of the Seller’s Contracts relating principally to the PhosLo Business
is disclosed in Schedule 5.9(a). True and correct copies of the written
Contracts have been made available to the Buyer by the Seller.

(b) Each Assigned Contract is a legal, valid and binding obligation of the
Seller and is enforceable by the Seller against the other party or parties to
such Assigned Contract in accordance with its terms (except as its
enforceability may be limited by applicable bankruptcy, insolvency or other laws
of general applicability affecting creditors’ rights and by general principles
of equity).

(c) There is no event of default or breach by the Seller or, to the Knowledge of
the Seller, any other Person under any Assigned Contract and no facts or
circumstances exist that, with the passage of time or the giving of notice or
both, would constitute an event of default or breach. The Seller has not
received notice that the Seller is in default under or in breach of any Assigned
Contract or received notice of the termination of any such Assigned Contract.
The Seller has not given notice to any other party to any of the Assigned
Contracts that such other party is in default thereunder or in breach thereof or
given notice of the termination thereof. The Seller has not received from any
other party to any of the Assigned Contracts notice of any actual or potential
claim relating to (i) any breach by the Seller of any warranty or any applicable
standard of care or (ii) any negligence or similar claim arising in relation to
any Assigned Contract. The Seller has no Knowledge of any facts or circumstances
that could give rise to any one or more of the claims set forth in this
paragraph.

(d) With respect to any and all Contracts (including Excluded Contracts)
relating to the PhosLo Business (i) the Seller is not a party to and has not
received notice of the commencement of any debarment proceeding or governmental
investigation or action (including any civil investigative demand or subpoena
under the False Claims Act (31 U.S.C. §3729, et seq.), Anti-Kickback Act (42
U.S.C. §1320a-7(b)), The Stark Law (42 U.S.C. §1395nn), Civil Monetary Penalties
Law (42 U.S.C. §1320a-7(a)), the Foreign Corrupt Practices Act (15 U.S.C. §§78m,
78dd-1-3 and 78ff), Truth in Negotiations Act (10 U.S.C. §§2306 and 2306a) or
otherwise), and no grounds for any such Proceeding, investigation, or action
exist and (ii) the Seller is in compliance in all material respects with all of
the terms, conditions and other requirements of such Contracts and all Legal
Requirements relating thereto.

(e) The Seller has the right to assign to the Buyer each of the Assigned
Contracts without the consent of any Person and, upon such assignment at Closing
in the manner contemplated by this Agreement, the Buyer shall have all of the
rights of the Seller thereunder. No Assigned Contract may be terminated by any
other party thereto as a result of the transactions contemplated by this
Agreement.

 

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(f) There have been no indemnification claims made by the Seller against
Braintree or its Affiliates under or in connection with the Asset Purchase
Agreement, dated June 23, 2003, between the Seller and Braintree (the “Braintree
Purchase Agreement”).

5.10 Financial Statements. Schedule 5.10 sets forth the Seller’s gross revenue,
net revenue, cost of sales and gross margin of the PhosLo Product for the
periods therein specified, determined in accordance with GAAP applied on a
consistent basis.

5.11 Books and Records. All the books and records of the Seller respecting the
PhosLo Business have been maintained in the ordinary course of business
consistent with the past practices and do not contain any material inaccuracies,
discrepancies or omissions. The Seller has records that accurately and validly
reflect its transactions, and accounting controls sufficient to insure that such
transactions are (i) executed in accordance with management’s general or
specific authorization, and (ii) recorded in conformity with GAAP so as to
maintain accountability for assets.

5.12 Taxes. There are no Liens with respect to Taxes (except for Liens for Taxes
that are not yet delinquent) upon any of the Purchased Assets. Schedule 5.12
lists each jurisdiction in which the Seller collects, or is registered to
collect, sales Taxes in respect of sales of the PhosLo Products.

5.13 Liabilities. [Intentionally Blank].

5.14 Product Liability; Litigation. Schedule 5.14 lists each (a) product
liability claim (including any claim based on strict products liability,
negligence, other tort theories, breach of express or implied warranty) that has
been asserted in writing against the Seller or, to the Knowledge of the Seller,
against any other Person, relating to the PhosLo Products since August 4, 2003;
(b) Order of any Governmental Authority, or any formal investigation conducted
by any Governmental Authority and any subpoena in connection therewith, since
August 4, 2003 that specifically names the Seller or, to the Knowledge of the
Seller, any other Person and relates to the PhosLo Business; and (c) Proceeding
by or before any Governmental Authority to which the Seller or, to the Knowledge
of the Seller, any other Person is or has been a party since August 4, 2003 that
relates to the PhosLo Business. Since August 4, 2003, neither the Seller nor, to
the Knowledge of the Seller, any other Person has received written notice
alleging the need for any recall arising out of, and neither the Seller nor, to
the Knowledge of the Seller, any other Person has been held liable for, any
injury to individuals or property as a result of the ownership, possession or
use of any PhosLo Product developed, manufactured, sold, leased or delivered in
connection with the PhosLo Business.

5.15 Litigation. Since August 4, 2003, there have been no Proceedings pending,
or to the Knowledge of the Seller, threatened, by or against or affecting the
Seller that relate to any of the Purchased Assets or the PhosLo Business or
seeking to enjoin the consummation of the transactions contemplated hereunder.
To the Knowledge of the Seller, no event has occurred or circumstance exists
that may give rise to or serve as a basis for the commencement of any such
Proceeding.

 

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5.16 Regulatory Compliance.

(a) The Seller has made available to the Buyer true and correct copies of the
NDAs and drug master files and has made available to the Buyer copies of
material written communications between the Seller, Braintree or any third party
manufacturer of the PhosLo Products, on the one hand, and the FDA or any other
applicable Medical Product Regulatory Authority, on the other hand, since May 8,
1989 (the “NDA Filing Date”), and any existing written summaries of material
discussions between such parties since the NDA Filing Date, that describe
matters that are material to assessing compliance of the Seller’s or Braintree’s
operation of the PhosLo Business or any third party manufacturer’s production of
the PhosLo Products with the FD&C Act and its implementing regulations,
including copies of (i) all warning letters, notices of adverse findings and
similar correspondence received by the Seller, Braintree or such third party
manufacturer from the FDA since the NDA Filing Date, (ii) all audit reports
relating to audits for compliance with the FD&C Act performed since the NDA
Filing Date and submitted to the FDA and (iii) any document concerning any
significant oral or written communication received from the FDA by the Seller,
Braintree or a third party manufacturer since the NDA Filing Date; provided,
however, that the Seller’s representations hereby with respect to Braintree and
each other third party manufacturer are limited to matters as to which the
Seller has Knowledge.

(b) The Seller’s operation of the PhosLo Business is in material compliance with
all FDA and other comparable state and local Legal Requirements applicable to
the PhosLo Business, including, but not limited to, FDA and comparable state and
local rules and regulations relating to clinical investigations, Good Practices,
advertising and promotion, pre- and post-marketing adverse drug experience and
adverse drug reaction reporting, and all other pre- and post-marketing reporting
requirements, as applicable. The Seller knows of no material adverse side
effects from the use of the PhosLo Products which are not disclosed in the
package insert for the PhosLo Products which are required to be disclosed in the
package insert for the PhosLo Products under the FD&C Act.

(c) Neither the Seller nor, to its Knowledge, Braintree or any third party
manufacturer of the PhosLo Products, is in receipt of written unresolved notice
of, or is Known by the Seller to be subject to any written, adverse inspection,
finding of deficiency, finding of non-compliance, compelled or voluntary recall,
investigation, penalty for corrective or remedial action or other compliance or
enforcement action, in each case relating to the PhosLo Products or to the
facilities in which such products are developed, manufactured, collected or
handled, by any applicable Medical Product Regulatory Authority. There are no
pending or, to the Seller’s Knowledge, threatened Proceedings or complaints by
any applicable Medical Product Regulatory Authority related to the Seller,
Braintree or any third party manufacturer which would prohibit or impede the
conduct of the PhosLo Business as it is currently conducted or would reasonably
be expected to result in a Material Adverse Effect.

(d) The Seller has not made any false statements on, or material omissions from,
any applications, approvals, reports and other submissions to any applicable
Medical Product Regulatory Authority or in or from any other records and
documentation prepared or maintained to comply with the requirements of any
applicable Medical Product Regulatory Authority relating to its PhosLo Products.

 

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(e) Since August 4, 2003, the Seller has not received any written notification
from the FDA or any other applicable Medical Product Regulatory Authority
indicating that any of its PhosLo Products is misbranded or adulterated as
defined in the FD&C Act.

(f) Schedule 5.16(f) lists all approvals for the manufacture, distribution,
advertising, importation and sale of PhosLo Products by any Medical Product
Regulatory Authority; provided that any representation and warranty made in this
sentence with respect to the manufacture of of PhosLo Products is made solely to
the Knowledge of the Seller. The PhosLo Products have been approved by the FDA
for sale in the United States and the PhosLo Tablets have been approved by the
applicable Medical Product Regulatory Authority for sale in Canada. The PhosLo
Products marketed and sold by the Seller in the United States during the twelve
month period immediately preceding the Closing Date have been manufactured and
sold in compliance, in all material respects, with the FDA Approval criteria for
PhosLo Products. The PhosLo Products marketed and sold by the Seller in Canada
during the twelve month period immediately preceding the Closing Date have been
manufactured and sold in compliance, in all material respects, with the Clinical
Trials and Special Access Program, Therapeutic Products Directorate.

(g) Neither the Seller nor, to the Seller’s Knowledge, any other Person has
received any material adverse events reports pertaining to the PhosLo Products
since August 4, 2003.

(h) The Seller has completed and timely filed all annual or other reports
required by the FDA or other Medical Product Regulatory Authority in order to
maintain the Registrations.

5.17 Compliance.

(a) The Seller is in compliance in all material respects with all applicable
Legal Requirements relating to the PhosLo Products or the PhosLo Business,
including all applicable safety, and equal opportunity laws (including
affirmative action compliance), ERISA, the Stark Law (42 U.S.C. § 1395nn), the
federal Anti-Kickback Law (42 U.S.C. § 1320a-7b), the administrative
simplification section of the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. §§ 1320d through d-8), the regulations contained in 45
C.F.R. Parts 160 and 164, the regulations contained in 45 C.F.R. Parts 160 and
162, applicable state privacy laws, and the False Claims Act (31 U.S.C. § 3729,
et seq.), and to the Knowledge of the Seller no facts or circumstances exist
that, with or without the passing of time or the giving of notice or both, might
reasonably serve as the basis for any claim that the Seller is not in compliance
in all material respects with any such Legal Requirement. The Seller has not
received any written communication from a Governmental Authority that alleges
that it is not in compliance with any Legal Requirement relating to the PhosLo
Products or the PhosLo Business or informs the Seller is under investigation by
a Governmental Authority with respect thereto. The Seller has delivered to the
Buyer complete and accurate copies of all surveys, reports or deficiency notices
concerning the PhosLo Business for the past three years by the Medicare program,
the Medicaid program, any state survey agency, or any accrediting body.

(b) The Seller has not been investigated, charged or implicated in any material
violation of any Legal Requirement relating to the PhosLo Products or the PhosLo
Business involving false, fraudulent or abusive practices, including false or
fraudulent billing practices, relating to its participation in state or
federally sponsored reimbursement programs. The Seller has properly and legally

 

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billed all Governmental Authorities, intermediaries and third-party payors for
services rendered relating to the PhosLo Products or the PhosLo Business and has
maintained its records to reflect such billing practices. Neither the Seller nor
any officer, director or Employee has engaged on behalf of the Seller in any of
the following relating to the PhosLo Products or the PhosLo Business:
(i) knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any application for any benefit or payment
under the Medicare or Medicaid program; (ii) knowingly and willfully making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment under the Medicare or
Medicaid program; (iii) failing to disclose knowledge of any event affecting the
initial or continued right to any benefit or payment under the Medicare or
Medicaid program on its own behalf or on behalf of another, with intent to
secure such benefit or payment fraudulently; (iv) knowingly and willfully
soliciting, paying, or receiving any remuneration (including any kickback, bribe
or rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay such remuneration (x) in return for referring an individual to a
Person for the furnishing or arranging for the furnishing of any item or service
for which payment may be made in whole or in part by Medicare or Medicaid, or
(y) in return for purchasing, leasing or ordering or arranging for or
recommending the purchasing, leasing or ordering of any good, facility, service,
or item for which payment may be made in whole or in part by Medicare or
Medicaid; (v) presenting or causing to be presented a claim for reimbursement
for services that is for an item or service that was known or should have been
known to be (x) not provided as claimed, or (y) false or fraudulent; or
(vi) knowingly and willfully making or causing to be made or inducing or seeking
to induce the making of any false statement or representation (or omitting to
state a fact required to be stated therein or necessary to make the statements
contained therein not misleading) of a material fact with respect to (x) a
facility in order that the facility may qualify for Healthcare Governmental
Authority certification, or (y) information required to be provided under 42 USC
§1320a-3.

(c) The Seller has filed all filings of required cost, government or other
reports required to be filed under the Medicare and Medicaid programs and state
survey programs due prior to the Closing Date with respect to the PhosLo
Products or the PhosLo Business. There are no claims, actions, payment reviews,
or appeals pending or, to the Knowledge of the Seller, threatened before any
commission, board or agency including any fiscal intermediary or carrier, the
Administrator of CMS or any other Governmental Authority with respect to any
Medicare or Medicaid claims filed by the Seller on or before the Effective Time
or program compliance matters, which could materially adversely affect the
Purchased Assets, the operation of the PhosLo Business, or the consummation of
the transactions contemplated hereby. No validation review or program integrity
review related to the Seller with respect to the PhosLo Products or the PhosLo
Business has been conducted by any commission, board or agency in connection
with the Medicare or Medicaid program, and no such reviews are scheduled,
pending or, to the Knowledge of the Seller, threatened against or affecting the
Seller with respect to the PhosLo Products or the PhosLo Business, or the
consummation of the transactions contemplated hereby.

(d) Neither the Seller or any of its Employees, nor to the Seller’s Knowledge
any of its agents or contractors, (i) has ever been excluded, suspended,
debarred or otherwise ineligible to participate in any federal or state funded
healthcare program nor, to the Knowledge of the Seller, is any such exclusion or
suspension threatened; or (ii) has ever been convicted of a criminal offense
related to the provision of healthcare items or services.

 

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(e) The Seller has made available to the Buyer a copy of its current compliance
program materials with respect to the PhosLo Products or the PhosLo Business,
including all ethics and risk area policy materials, training and education
materials, auditing and monitoring protocols, reporting mechanisms and
disciplinary policies. The Seller has a current Compliance Program with respect
to the PhosLo Products or the PhosLo Business, the materials for which include
ethics and risk area policy materials, training and education materials,
auditing and monitoring protocols, reporting mechanisms and disciplinary
policies with respect to the PhosLo Products or the PhosLo Business. With
respect to the PhosLo Products and the PhosLo Business the Seller (i) is not a
party to a Corporate Integrity Agreement with the Office of Inspector General of
the Department of Health and Human Services, (ii) has no reporting obligations
pursuant to any settlement agreement entered into with any Governmental
Authority, (iii) to the Knowledge of the Seller, has not been the subject of any
government payor program investigation conducted by any Governmental Authority,
(iv) has not been a defendant in any qui tam or False Claims Act litigation,
(v) has not been served with or received any search warrant, subpoena, civil
investigative demand, contact letter or, to the Knowledge of the Seller,
telephone or personal contact by or from any federal or state enforcement agency
(except in connection with medical services provided to third parties who may be
defendants or the subject of investigation into conduct unrelated to the
operation of the PhosLo Business), and (vi) has not received any complaints
(written, through the Seller’s compliance hotline, or communicated during
employee interviews or otherwise) from employees, independent contractors,
vendors, physicians or any other person that would indicate that the Seller has
violated any Legal Requirement. Schedule 5.17 contains a description of each
audit and investigation conducted by the Seller with respect to the PhosLo
Products or the PhosLo Business pursuant to its Compliance Program outside the
ordinary course of business.

5.18 Clinical and Scientific Data; Good Practices.

(a) The Seller has made available to the Buyer all available laboratory and all
clinical data, including raw data and reports created by the Seller or any third
party on behalf of the Seller or in the possession of the Seller, in connection
with the PhosLo Products or New Formulation Products (“Scientific Data”).
Schedule 5.18(a) identifies each clinical study of the PhosLo Products or New
Formulation Products, whether or not complete, conducted or sponsored by the
Seller or, to the Knowledge of the Seller, any other Person, indicating, in each
case, the location of the study, the principal investigator, the number of
patients included in the study, the period covered by the study and a brief
description of the study design.

(b) The Seller either owns or has full rights of access to and possession of all
Scientific Data created by the Seller, Braintree or any third party on behalf of
the Seller or Braintree in connection with the PhosLo Products.

(c) The clinical studies conducted, and all Scientific Data created from such
studies, by the Seller in connection with the PhosLo Products have been
conducted, kept and maintained by the Seller in a manner that complies in all
material respects with Good Practices and, to the Knowledge of the Seller, all
clinical studies conducted, and all Scientific Data created in such studies, in
connection with PhosLo Products by Braintree or by any third party on behalf of
the Seller or Braintree have been conducted, kept and maintained in a manner
that complies in all material respects with Good Practices.

 

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(d) The Scientific Data is (i) not materially and adversely different from the
presentation thereof contained in the NDA and (ii) does not identify any adverse
event reports that are materially more adverse than those adverse event reports
documented as a result of commercialization of the PhosLo Products.

5.19 Exports and Customs. The Seller is in compliance in all material respects
with applicable export and customs Legal Requirements of the United States and
any applicable Canadian Governmental Authority relating to the PhosLo Products.
Except in connection with its sales in Canada, the Seller is not the exporter of
record of any products or merchandise of the PhosLo Business presently produced,
distributed or sold by the Seller.

5.20 Warranty Claims. Schedule 5.20 sets forth the Seller’s current product
warranty and the aggregate amounts incurred by the Seller in fulfilling warranty
obligations in respect of the PhosLo Products in each full fiscal year since
August 4, 2003 and during the eight-month period ended August 31, 2006. There
are no outstanding material warranty claims. The Seller has no Knowledge of any
reason to believe that amounts expensed in fulfilling warranty obligations in
respect of the PhosLo Products will materially increase as a percentage of sales
of such products in future years.

5.21 Specifications. The specifications attached hereto as Schedule 5.21 (the
“Specifications”) are the specifications that are used by the Seller to
manufacture the PhosLo Products as of the date hereof, and such specifications
comply in all material respects with applicable Legal Requirements relating to
specifications to manufacture the PhosLo Products, and no other specifications
are needed to manufacture the PhosLo Products. The Specifications comply with
the NDAs.

5.22 Labor and Employment Matters.

(a) Schedule 5.22(a) lists as of the date hereof all of the Employees. Schedule
5.22(a) also lists, with respect to each such Employee other than the Employees
listed on Schedule 7.7(a), such Employee’s name, position, current rate of
compensation, and any entitlement to bonus, commission, severance or other
additional compensation, and indicates whether any such Employee is on leave of
absence, short-term disability or other similar status. The Seller is not
delinquent in payments to any Employee for any wages, salaries, commissions,
bonuses or other compensation for any services performed by such Employee or
amounts required to be reimbursed to such Employee.

(b) The Seller has delivered to the Buyer complete and accurate copies of each
written employment, consulting, compensation or similar agreement to which the
Seller is a party relating to the PhosLo Business, other than agreements with
the Employees listed on Schedule 7.7(a), all of which are listed on Schedule
5.22(b).

 

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(c) The Seller is not a party to any collective bargaining agreement that covers
any Employee, and the Seller has not received since August 4, 2003 a demand for
recognition of any collective bargaining representative with respect thereto.
During the past three years, there have been no material labor strikes, disputes
or work stoppages by the Employees and, to the Knowledge of the Seller, no such
actions by the Employees are threatened.

(d) [Intentionally Blank].

(e) [Intentionally Blank].

(f) [Intentionally Blank].

(g) No Employee has informed the Seller of his or her intention to terminate his
or her employment or to refuse employment by the Buyer.

(h) With respect to each Employee (including any eligible spouse and dependent
thereof) who is currently covered under any group health plan (as defined in
ERISA Section 607) of the Seller or one of its ERISA affiliates and incurs a
qualifying event, as defined by Code Section 4980B or Part 6 of Subtitle B of
Title I of ERISA (“COBRA”), as a result of the transactions contemplated by this
Agreement, whether or not hired by the Buyer, or who, regardless of whether
currently covered under any group health plan of the Seller or one of its ERISA
affiliates, incurred or incurs a qualifying event prior to the Closing Date (all
such Employees together with their spouses and eligible dependents being
referred to herein as “Qualified Beneficiaries”), the Seller shall retain the
obligation for providing notices and continuation coverage under COBRA and shall
offer such Qualified Beneficiaries continuation coverage under the Seller’s
group health, dental or other medical plans to the fullest extent required by
COBRA. Further, with respect to the Qualified Beneficiaries, the Seller agrees
to indemnify and hold the Buyer and its group health plan(s) harmless in the
event (i) the Buyer and its group health plans shall be liable for any COBRA
continuation coverage for any of the Seller’s Employees (and their eligible
dependents) or (ii) the Buyer and its group health plans shall be liable for any
claim or liability with respect to COBRA continuation coverage relating to the
Qualified Beneficiaries.

5.23 Employee Benefit Plans; ERISA. Schedule 5.23 lists all material Plans
applicable to the Employees. The Seller has no formal plan or commitment, nor
has the Seller made any announcement of its intentions, whether or not legally
binding, to create any additional material Plan applicable to the Employees or
to modify or change any existing Plan applicable to the Employees in any
material respect. The Seller has made available to the Buyer a copy of the most
recent summary plan description with respect to each material Plan.

5.24 Environmental Matters. The Seller, in connection with the PhosLo Business
(i) has never sent or disposed of, otherwise had taken or transported, arranged
for the taking or disposal of (on behalf of itself, a patient, supplier, or any
other Person) or in any other manner participated or been involved in the taking
of or disposal or release of a Hazardous Material to or at a site that is
contaminated by any Hazardous Material or that, pursuant to any Environmental
Law, (x) has been placed on the “National Priorities List”, the “CERCLIS” list,
or any similar state or federal list, or (y) is subject to or the source of a
claim, an administrative order or other request to take “removal”, “remedial”,
“corrective” or any other “response” action, as defined in any Environmental
Law, or to pay for the costs of any such action at the site; (ii) is and at all
times has been in material compliance with all Environmental Laws in

 

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all of its activities and operations, and is not liable under any Environmental
Law; (iii) is not involved in (and has no basis to expect to be involved in) any
Proceeding and has not received (and has no basis to expect to receive) any
notice, request for information or other communication from any Governmental
Authority or other third party with respect to a release or threatened release
of any Hazardous Material or a violation or alleged violation of any
Environmental Law, and has not received (and has no basis to expect to receive)
notice of any claims from any person or entity relating to property damage or to
personal injuries from exposure to any Hazardous Material; and (iv) has timely
filed every report required to be filed, acquired all material necessary Permits
(all of which are listed on Schedule 5.24), and generated and maintained all
material required data, documentation and records under all Environmental Laws.

5.25 Insurance.

(a) Schedule 5.25(a) lists all of the insurance policies maintained by the
Seller that provide product liability insurance coverage in connection with the
PhosLo Business, and for each indicates the insurer’s name, policy number,
expiration date, amount and type of coverage, and whether such coverage is
provided on an occurrence or claims-made basis. All such policies are in full
force and effect. The Seller is not in default under any provision contained in
any such insurance policy relating to the PhosLo Business which would reasonably
be expected to have a material adverse effect upon the ability of the insured to
collect insurance proceeds under such policy. No written notice of cancellation
or non-renewal with respect to such policy has been received by the Seller.

(b) The Seller is, and has been since August 4, 2003, insured against product
liability in aggregate annual amounts of not less than those shown on Schedule
5.25(a). The Seller has timely filed claims with insurers with respect to all
product liability claims relating to the PhosLo Business for which the Seller
believes it has coverage, and no insurance provider with respect thereto has
claimed any reservation of rights or denied coverage. The Seller has not
received any notification from any insurer regarding a product liability policy
with respect to the PhosLo Business, requiring any action of the Seller that has
not been taken by the Seller.

(c) Schedule 5.25(c) lists all of the Seller’s accident reports and incident
reports relating to the PhosLo Products as well as a description of all claims
against its insurance policies with respect thereto since August 4, 2003.

5.26 Absence of Changes or Events. Since December 31, 2005 the Seller has not
(a) conducted the PhosLo Business other than in the ordinary course consistent
with past practices in substantially the same manner as presently conducted,
with all reasonable efforts made consistent with past practices to preserve the
goodwill of the PhosLo Business and its relationships with the customers,
suppliers and others with whom they deal in connection with the PhosLo Business
and to keep available the services of its officers and Employees; (b) suffered
any Material Adverse Effect; or (c) done any of the following with respect to
the PhosLo Business:

(i) granted any material increase in compensation to any Employees, or paid or
agreed to pay to any such Employee any bonus, severance or termination payment;

 

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(ii) incurred any material change in its overhead costs, Accounts Receivable or
accounts payable;

(iii) waived any material claims or rights of substantial value;

(iv) made any change in any method of accounting for sales;

(v) acquired any assets that are material to the PhosLo Business, except
Inventory acquired in the ordinary course of business consistent with past
practices;

(vi) sold, leased, licensed or otherwise disposed of any of its material assets
or Permits, except Inventory used or sold in the ordinary course of business
consistent with past practices;

(vii) entered into, canceled or modified any material Contract or assumed any
material Liability, other than in the ordinary course of business consistent
with past practices;

(viii) adopted or amended any Plan relating to any Employees; or

(ix) agreed, whether in writing or otherwise, to do any of the foregoing.

5.27 Customers and Suppliers. Schedule 5.27 sets forth a list of (i) the top ten
customers, by revenue, of the PhosLo Business during the fiscal year ended
December 31, 2005 and the eight-month period ended August 31, 2006 and the
amount and percentage of gross sales accounted for by each such customer during
each such period; (ii) the top four suppliers, by volume of purchases, of the
PhosLo Business during the fiscal year ended December 31, 2005 and the
eight-month period ended August 31, 2006; and (iii) each supplier that is the
sole supplier of any material product or service to the PhosLo Business.

5.28 Business Relationships. To the Knowledge of the Seller, no material
supplier intends to cease supplying goods or services or substantially reduce
its supplies in relation to the PhosLo Business.

5.29 Inventory; Pricing; Certain Costs.

(a) All Inventory included in the Purchased Assets will be usable or saleable in
the ordinary course of the PhosLo Business and, in the case of Finished Goods
Inventory, will not have an expiration date earlier than June 2009 in the case
of PhosLo GelCaps and November 2009 in the case of PhosLo Tablets.

(b) The Finished Goods Inventory as of the Closing Date will have been
manufactured in accordance with the Specifications.

(c) The Seller’s wholesale acquisition cost per bottle (200 ct.) of each PhosLo
Product is set forth on Schedule 5.29.

 

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(d) The Seller estimates that the remaining costs to prepare final study reports
for the Care 2 Study and the EPICK Study will not exceed the amount set forth on
Schedule 5.29. The Seller completed Data Lock with respect to the EPICK Study on
September 29, 2006.

5.30 Adjustments. The Seller has no liability for any overpayment, duplicate
payments, refunds, discounts or adjustments due to Medicare, Medicaid, Blue
Cross Blue Shield, or any other reimbursement program, third-party payor or
other Person.

5.31 Certain Interests. To the Knowledge of the Seller, no officer or director
of the Seller or its Affiliates or any Family Member of any such Person (i) has
a beneficial interest in any Assigned Contract, or (ii) otherwise has any
material interest in any of the Purchased Assets, the Assumed Liabilities, or
any property used in or pertaining to the PhosLo Business.

5.32 Commissions. No broker, finder or other Person is entitled to any brokerage
fees, commissions or finder’s fees in connection with the transactions
contemplated hereby by reason of any action taken by the Seller or any Affiliate
thereof for which Seller or any of its Affiliates could be held liable.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller the following:

6.1 Organization and Qualification. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Buyer has full corporate power and authority necessary to enable it to own,
lease or otherwise hold its properties and to carry on its business as presently
conducted.

6.2 Authority Relative to this Agreement. The Buyer has full corporate power and
authority to execute and deliver the Transaction Agreements to which it is a
party and to perform its obligations under such Transaction Agreements and to
consummate the transactions contemplated thereby. The execution, delivery and
performance by the Buyer of the Transaction Agreements to which it is a party
and the consummation by the Buyer of the transactions contemplated thereby have
been duly and validly authorized by all necessary corporate or other action on
the part of the Buyer. The Transaction Agreements to which the Buyer is a party
have been duly executed and delivered by the Buyer and each such agreement
constitutes the legally valid and binding obligation of the Buyer enforceable
against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency or other laws of general
applicability affecting creditors’ rights and by general principles of equity.

6.3 Consents and Approvals; No Violations.

(a) The execution, delivery and performance by the Buyer of the Transaction
Agreements to which it is a party and the Buyer’s compliance with the terms
thereof will not (i) conflict with any provision of the articles of
incorporation or bylaws of the Buyer, or (ii) violate any Legal Requirement.

 

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(b) Subject to compliance with the applicable requirements of the HSR Act there
is no requirement applicable to the Buyer to make any filing with, or to obtain
any permit, authorization, consent or approval of, any Governmental Authority as
a condition to the lawful consummation of the transactions contemplated hereby.

(c) The execution, delivery and performance of each Transaction Agreement by the
Buyer and the Buyer’s compliance with the terms thereof will not: (i) conflict
with any provision of the articles of incorporation, bylaws or other governing
documents of the Buyer; (ii) contravene, conflict with, violate, or give any
Governmental Authority or other Person the right to challenge any of the
transactions contemplated hereby or exercise any remedy (including revocation,
withdrawal, suspension or modification of any Permit) or obtain any relief
under, any Legal Requirement applicable to the Buyer; or (iii) violate any Order
specifically naming the Buyer or any of its properties or assets.

6.4 Litigation. There are no Proceedings or investigations pending or, to the
knowledge of the Buyer, threatened by or against or affecting the Buyer seeking
to enjoin the consummation of the transactions contemplated hereby.

6.5 Commission. No broker, finder or other Person is entitled to any brokerage
fees, commissions or finder’s fees in connection with the transactions
contemplated hereby by reason of any action taken by the Buyer or any Affiliate
thereof.

ARTICLE VII

PRE-CLOSING COVENANTS

7.1 Closing Efforts; HSR Act.

(a) Subject to the terms hereof, including Section 7.1(b), each of the parties
shall use commercially reasonable efforts to take all actions and to do all
things reasonably necessary or advisable to consummate the transactions
contemplated by this Agreement, including using commercially reasonable efforts
to: (i) obtain all waivers, permits, consents, approvals or other authorizations
from Governmental Authorities and from other third Persons (the “Third Party
Consents”), (ii) effect all registrations, filings and notices with or to
Governmental Authorities (the “Governmental Filings”) and (iii) otherwise comply
in all material respects with all applicable Legal Requirements in connection
with the consummation of the transactions contemplated by this Agreement;
provided that neither party shall be required to make any payments in excess of
nominal amounts or agree to any material undertakings in connection therewith.
The Seller shall not, without the prior consent of the Buyer, agree to any
condition for obtaining any of the Third Party Consents that would reasonably be
expected to have a material adverse effect on the Purchased Assets or the PhosLo
Business. Each of the parties shall promptly notify the other party in writing
of any fact, condition or event known to it that would reasonably be expected to
prohibit, make unlawful or delay the consummation of the transactions
contemplated by this Agreement, including (i) any written notice or other
written communication from any third Person alleging that a Third Party Consent
is or may be required in connection with the transactions described in this
Agreement, and (ii) any default under any Assigned Contract to which the Seller
is party and which relates to the PhosLo Business that with notice or lapse of
time or both, would become a material default.

 

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(b) Without limiting the generality of the foregoing, each of the parties shall
(i) promptly file any notification and report forms and related material that it
may be required to file with the Federal Trade Commission and/or the Antitrust
Division of the United States Department of Justice under the HSR Act, (ii) use
commercially reasonable efforts to obtain an early termination of the applicable
waiting period under the HSR Act, (iii) make any further filings or information
submissions pursuant thereto that may be reasonably necessary or advisable and
(iv) promptly make any filings or submissions required under any applicable
foreign antitrust or trade regulation law. The Seller and the Buyer will act
diligently and reasonably, and will cooperate with each other, to transfer all
licenses from any Governmental Authority relating to the Purchased Assets and
secure any approvals of any Governmental Authority required to be obtained by
them that relate to the transactions contemplated by this Agreement. Each of the
parties shall use commercially reasonable efforts to resolve any objections that
may be asserted by any Governmental Authority with respect to the transactions
contemplated hereby, and shall cooperate with each other to contest any
challenges to the transactions contemplated hereby by any Governmental
Authority. Each of the parties shall promptly inform the other party of any
material communication received by such party from the Federal Trade Commission,
the Antitrust Division of the Department of Justice or any other Governmental
Authority regarding any of the transactions contemplated hereby (unless the
provision of such information would (A) violate the provisions of any applicable
Legal Requirements (including those relating to security clearance or export
controls) or any confidentiality agreement or (B) cause the loss of the
attorney-client privilege with respect thereto).

(c) The Seller will request that Braintree execute the Assignment Agreement in
the form attached hereto as Schedule 7.1(c) and thereafter use commercially
reasonable efforts to obtain Braintree’s signature thereto.

(d) Notwithstanding the foregoing, nothing contained in this Agreement will
require or obligate the Buyer or its Affiliates (i) to initiate, pursue or
defend any litigation brought by the Antitrust Division of the Department of
Justice and the Federal Trade Commission, provided that if the Buyer determines
not to initiate, pursue or defend such litigation, it shall notify the Seller in
writing immediately and the Seller shall have the right to terminate this
Agreement immediately upon written notice to the Buyer; (ii) to agree with any
Governmental Authority or otherwise become subject to any material limitations
imposed by a Governmental Authority on (A) the right of the Buyer effectively to
control or operate the PhosLo Business or the Purchased Assets, (B) the right of
the Buyer or its Affiliates to acquire or hold the PhosLo Business, or (C) the
right of the Buyer to exercise full rights of ownership of the PhosLo Business
or all or any material portion of the Purchased Assets; or (iii) to agree with
any Governmental Authority or otherwise be required by any Governmental
Authority to sell or otherwise dispose of, hold separate (through the
establishment of a trust or otherwise), or divest itself of all or any portion
of the business, assets or operations of Buyer, any Affiliate of Buyer or the
PhosLo Business.

 

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7.2 Operation of Business. Except as contemplated by this Agreement or as set
forth on Schedule 7.2, during the period from the date of this Agreement until
the Closing Date, unless the Buyer shall otherwise consent in writing, the
Seller shall operate the PhosLo Business in the ordinary course and
substantially consistent with past practice. Without limiting the generality of
the foregoing:

(a) the Seller shall comply in all material respects with all laws applicable to
the PhosLo Business, and use commercially reasonable efforts to preserve the
goodwill of suppliers, customers and others having business relations with the
PhosLo Business and to maintain the PhosLo Business;

(b) the Seller shall inform the Buyer in writing of any event or circumstance
that has or would reasonably be expected to have a Material Adverse Effect
promptly after the Seller learns of such an event or circumstance;

(c) the Seller shall use commercially reasonable efforts to maintain, in full
force and effect, any material contractor or sub-contractor agreements and
regulatory approvals, including but not limited to ANDA and NDA approvals,
necessary to provide uninterrupted continuation of the PhosLo Business;

(d) except as expressly described in this Agreement, or except with the Buyer’s
express written approval, the Seller shall not:

(i) enter into any contract, agreement or arrangement (oral or written) that
requires the consent or approval of any third party to consummate the
transactions described in this Agreement or any other Transaction Agreement;

(ii) amend, terminate, renew or (except as required by its terms) renegotiate
any Assigned Contract or default (or take or omit to take any action that with
or without the giving of notice or passage of time or both, would constitute a
default) in any of its obligations under any Assigned Contract (including any
lease) or enter into any new Assigned Contract (including any lease);

(iii) terminate, amend or fail to renew or preserve any material Permits;

(iv) sell, lease (as lessor), transfer, license, or otherwise dispose of any
Purchased Assets, other than Inventory sold or used in the ordinary course of
business and in amounts consistent with prior practices;

(v) mortgage or pledge any Purchased Assets or allow any Lien to be placed on
any Purchased Assets, except for Liens for Taxes not yet due and payable;

(vi) to the extent it relates to the PhosLo Business, materially adversely alter
its customary practices with respect to collection of accounts receivable of the
PhosLo Business, billing practices or the provision of discounts, rebates or
allowances;

(vii) grant any general or uniform increase in the rates of pay or benefits to
Employees (or a class thereof) or any material increase in salary or benefits of
any Employee not required by a written employment agreement with such Employee,
pay any bonus to any person (other than consistent with past practices), or
enter into any new employment, collective bargaining or severance agreement; or

 

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(viii) enter into any Contract or commitment to take any action prohibited by
this Section 7.2.

7.3 Access.

(a) Prior to the Closing, the Seller shall permit representatives of the Buyer
to have access (at reasonable times, on reasonable prior written notice and in a
manner so as not to interfere with the normal business operations of the PhosLo
Business) to the premises, properties, financial and accounting records,
contracts, personnel (including senior management of the Seller and persons who
provided diligence information to the Buyer) and other records and documents of
the Seller pertaining to the PhosLo Business. Any such information and documents
made available to the Seller or its representatives shall be provided by the
Seller subject to the terms of the confidentiality letter agreement dated as of
November 10, 2005, as amended between the Buyer and the Seller (the
“Confidentiality Agreement”).

(b) The Buyer and the Seller acknowledge and agree that the Confidentiality
Agreement remains in full force and effect and that information provided by the
Seller to the Buyer pursuant to this Agreement prior to the Closing shall be
treated in accordance with the Confidentiality Agreement. If this Agreement is
terminated prior to the Closing, the Confidentiality Agreement shall remain in
full force and effect in accordance with its terms. If the Closing occurs, the
Confidentiality Agreement, insofar as it covers information relating to the
PhosLo Business or the Purchased Assets, shall terminate effective as of the
Closing, but shall remain in effect insofar as it covers other information
disclosed thereunder.

7.4 Reports. Until the Closing, if the Closing does not occur within fifteen
days of the date of this Agreement, the Seller will furnish to the Buyer such
reports and financial information as the Buyer may reasonably request relating
to the Purchased Assets or the PhosLo Business.

7.5 Exclusivity. Prior to the Closing, the Seller shall neither authorize nor
permit its officers, directors, employees, representatives and agents to
(i) initiate, solicit or encourage any proposal by or offer from any party
(other than the Buyer) concerning any acquisition of the PhosLo Business or the
assets thereof, in any manner, directly or indirectly; (ii) engage in
negotiations with any party (other than the Buyer) concerning any such
transaction; (iii) enter into any agreement relating to or approve any such
transaction; provided, that the foregoing shall not apply to any transaction
involving the sale or merger of the Seller, including the indirect sale of the
PhosLo Business or the sale of substantially all the assets of the Seller.
Without limiting the preceding sentence, the parties agree that any violation of
the restrictions described in the preceding sentence by the Seller and any
officer, employee, financial advisor, attorney, or other advisor or
representative of the Seller, whether or not such Person is purporting to act on
behalf of the Seller, will be deemed to be a breach of this Section 7.5 by the
Seller.

 

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7.6 Notice of Suits. Prior to the Closing, each party shall promptly notify the
other of any Proceeding that is instituted or, to its knowledge, threatened
against such party to restrain, prohibit or otherwise challenge the legality of
any transaction contemplated by this Agreement. Prior to the Closing, the Seller
will promptly notify the Buyer of any Proceeding or investigation that is, to
the Seller’s Knowledge, threatened, brought or asserted against the Seller that
would have been listed in Schedule 5.14 or 5.15 if the Proceeding or
investigation had arisen prior to the date of this Agreement.

7.7 Employees.

(a) The Seller shall use commercially reasonable efforts to assist the Buyer in
obtaining the employment of the Employees whom the Buyer in its sole discretion
desires to employ, other than the Employees listed on Schedule 7.7(a), and the
Seller shall cooperate with and shall make available to the Buyer on a prompt
basis all information and documents as may be necessary to assist and coordinate
the employment by the Buyer of such Employees. The Seller acknowledges that the
Buyer intends, but shall not be obligated, to hire on the Closing Date each of
the Employees in positions with comparable levels of responsibility and
compensation as such Employees have with the Seller (treating service by
Employees from their date of hire by the Seller as service with the Buyer for
determining length of service for purposes of vesting in benefits offered by the
Buyer to its employees), or on other terms mutually acceptable to the Buyer and
the applicable Employee, subject in the case of each Employee to (i) such
Employee releasing his or her personnel files to Buyer prior to Closing as
contemplated in Section 9.3(h), (ii) the receipt of a negative result from a
pre-employment drug screen test, and (iii) such Employee never having been
excluded, suspended, sanctioned or otherwise restricted from participating in
any federal or state health care programs, including Medicare or Medicaid.
Nothing herein shall be deemed to create any third-party beneficiaries of this
Agreement or to constitute an employment agreement or offer of employment. The
Buyer shall disclose to the Seller the compensation packages it will offer to
the Employees prior to the Closing Date.

(b) On the Closing Date, the Seller shall terminate the employment of all of the
Employees who have determined to accept employment with the Buyer. The Seller
shall pay to all such Employees all benefits that have vested under the Seller’s
Plans, including payment for unused vested time off, and the Buyer shall not be
liable to any Employee or any other Person for any severance obligations,
benefit obligations, paid time off or any other similar obligations owing by the
Seller in connection with the termination of any such Employee’s or other
Person’s employment with the Seller.

(c) Prior to the Closing, the Buyer shall not (i) employ or engage as an
employee, an independent contractor or otherwise any individual who was (A) an
Employee of the Seller listed on Schedule 7.7(a) or (B) an employee of the
Seller (other than an Employee of the Seller not listed on Schedule 7.7(a)) with
whom the Buyer had contact or of whom the Buyer became aware in connection with
the Buyer’s investigation of the PhosLo Business or negotiation of the Purchase
Agreement or (ii) in any manner induce or attempt to induce any such employee to
terminate his or her employment with the Seller.

7.8 Updated Schedules. Prior to the Closing the Seller shall give prompt notice
to the Buyer of (i) the existence, occurrence or non-occurrence of any fact,
condition, matter, circumstance, claim or event the existence, occurrence or
non-occurrence of which if not disclosed on the Seller Disclosure Schedule would
cause the representations or warranties of the Seller contained in this

 

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Agreement to be untrue or inaccurate in any material respect at or prior to the
Effective Time and (ii) any material failure of the Seller to perform, comply
with or satisfy any covenant, condition or agreement to be performed, complied
with or satisfied by it hereunder or under any Transaction Agreement; provided,
however, that the Seller Disclosure Schedules shall be deemed to include only
that information contained therein on the date of this Agreement and shall be
deemed to exclude any information contained in any such notice for all purposes
of this Agreement, including Articles IX and X; except that if any such
information would cause a condition to the Buyer’s obligation to close the
transactions contemplated hereby not to be met, in accordance with Section 9.3,
and the Seller admits in such notice that the information has caused a failure
of a condition to be met and the Buyer is not obligated to close, and the Buyer
chooses to waive the condition with respect to such information and close, the
Seller Disclosure Schedules shall be deemed to be amended to reflect such
information for purposes of Article X. If the Seller shall deliver to the Buyer
updated Schedules 5.8(a) and 5.9(a) covering Contracts and Permits entered or
obtained after the date hereof that would have otherwise been included on such
Schedules if entered into prior to the date hereof, the Contracts and Permits
listed on such updated Schedules shall become Assigned Contracts and Assigned
Permits hereunder only to the extent that the Buyer agrees at the Closing that
they shall be treated as such.

7.9 Sales Tax. The Seller shall pay all personal property transfer Taxes, if
any, and all use and other similar Taxes, if any, imposed on or in connection
with the purchase, sale or transfer of the Purchased Assets to, and the
assumption of the Assumed Liabilities by, the Buyer pursuant to this Agreement.
The Seller shall directly pay, on behalf of the Buyer, any such Taxes which,
under applicable Legal Requirements, are imposed upon the Buyer.

7.10 Inventory. Between the date hereof and the Closing Date, the Seller shall
not sell any Finished Goods Inventory to any of [*******] (or any of their
Affiliates).

ARTICLE VIII

POST-CLOSING COVENANTS

8.1 Post-Closing Payments. The Seller shall promptly and in due course pay and
fully discharge all of Excluded Liabilities, including amounts owed by the
Seller to Employees.

8.2 Reports. The Seller agrees to cooperate with the Buyer in preparing and
filing all required cost, government or other reports required under Medicare,
Medicaid and state survey programs due for the period after the Effective Time
subject to the provisions of the Transition Services Agreement, and the Buyer
shall make all such filings required for the period after the Effective Time.
The Seller shall file its closing CMS Form 265, other cost report documents or
any other documents for the period prior to the Effective Time within the time
required by CMS at the Seller’s sole expense. The Seller shall provide to Buyer
copies of all such documents when filed.

8.3 Tail Insurance. The Seller, at the Seller’s expense, will take steps
necessary so that all liability, including products liability, insurance
policies maintained by the Seller with respect to the PhosLo Business will
remain in full force and effect for at least six years after the Closing in
respect of sales of PhosLo Products by the Seller for the period prior to the
Closing. The Seller shall deliver to the Buyer at the Closing and on each of the
six successive anniversaries of the Closing Date a certificate of insurance
evidencing such insurance coverage.

 

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8.4 Intellectual Property.

(a) Non-Disclosure. The Seller acknowledges that in the course of owning and
operating the PhosLo Business, the Seller has been privy to various proprietary
information of the PhosLo Business that is of value to the Buyer. Until
[*******] after the Closing Date, the Seller agrees not to use or to disclose to
any Person any confidential information or trade secrets relating to the PhosLo
Business or the PhosLo Products, including confidential information and/or trade
secrets regarding: the identity and relationships of Employees or of
distributors or vendors, financial data, including pricing information and
information regarding the compensation of Employees and independent contractors;
Scientific Data; Intangible Property Rights; regulatory approval, reimbursement,
and market expansion strategies; marketing and sales programs and data; and
operations and other manuals. Notwithstanding the foregoing, the Seller may use
or disclose such information that is or becomes generally known through no fault
of the Seller or to the extent that such use or disclosure is reasonably
required in connection with or pursuant to (i) an Order or Legal Requirement,
(ii) any investigation or audit by a Governmental Authority, including the
Internal Revenue Service or CMS, (iii) the filing of any Tax Returns, (iv) any
billing activities related to the PhosLo Business, or (v) the Transition
Services Agreement. In all such cases, the Seller shall disclose such
confidential information only to the extent reasonably required to fulfill such
purpose or Legal Requirement or Order. If the Seller becomes legally compelled
to disclose any such confidential information, the Seller shall (to the extent
permitted by Legal Requirements) promptly notify the Buyer of such fact so that
the Buyer may seek an appropriate remedy to prevent such production, and request
the person demanding such production to allow the Buyer a reasonable period of
time to seek such remedy.

(b) Trade Names and Marks. Following the Closing Date, the Seller shall not,
display, publish or otherwise use the phrase “PhosLo” (alone or in combination
with other phrases) or any phrase confusingly similar to PhosLo, as a trade name
or Mark in connection with any other business.

8.5 Access to Information; Record Retention; Cooperation; Confidentiality.

(a) Access to Information. Subject to compliance with contractual obligations
and applicable laws, during the ten-year period following the Closing, after not
less than five days prior written notice, each party shall afford to the other
party and to such party’s authorized accountants, counsel, bank auditors and
other designated representatives during normal business hours in a manner so as
to not unreasonably interfere with the conduct of business (i) reasonable access
and duplicating rights to all non-privileged records, books, contracts,
instruments, documents, correspondence, computer data and other data and
information (collectively, “Information”) within the possession or control of
such party to the extent such access may reasonably be required by the party
seeking access solely in connection with matters relating to or affected by the
operations of the PhosLo Business, as to the Seller, for periods prior to the
Closing Date, and as to the Buyer, for periods on and after the Closing Date and
(ii) reasonable access to the

 

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personnel of such party; provided, however, notwithstanding anything to the
contrary contained in this Section 8.5, this Section 8.5 shall not give the
Seller the right to have access to the Buyer’s Information and personnel for the
purpose of reviewing the accuracy of any payments made pursuant to Section 3.1
beyond what is provided for in Section 3.3 of this Agreement. Requests may be
made under this Section 8.5 for financial reporting and accounting matters,
preparing financial statements, preparing and filing of any Tax Returns,
prosecuting any claims for refund, defending any Tax claims or assessment,
preparing securities law or securities exchange filings, prosecuting, defending
or settling any litigation or insurance claim, performing obligations under this
Agreement and the other Transaction Agreements, and all other proper business
purposes, but may not be made, and access and duplicating rights need not be
afforded, under this Section 8.5 in connection with disputes between the
parties, including disputes as to indemnification hereunder.

(b) Reimbursement. A party making Information or personnel available to the
other party under Section 8.5 shall be entitled to receive from the other party,
upon the presentation of invoices therefor, payments for such amounts relating
to supplies, disbursements and other out-of-pocket expenses, as may reasonably
be incurred in making such Information or personnel available; provided,
however, that no such reimbursements shall be required for the salary or cost of
fringe benefits or similar expenses pertaining to employees of the providing
party.

(c) Retention of Records. Except as may otherwise be required by law or agreed
to in writing by the parties, each party shall use reasonable commercial efforts
to preserve, until five years after the Closing Date, all Information in its
possession or control pertaining to the PhosLo Business after December 31, 2001.
Notwithstanding the foregoing, in lieu of retaining any specific Information,
any party may offer in writing to the other party to deliver such Information to
the other party, and if such offer is not accepted within sixty days, the
offered Information may be disposed of at any time.

(d) Confidentiality.

(i) From and after the Closing, each party shall hold, and shall cause its
respective Affiliates, auditors, attorneys, financial advisors, bankers and
other consultants and advisors, to hold, in strict confidence all Information
concerning the other party furnished to it by the other party or such other
party’s representatives pursuant to this Agreement or the Confidentiality
Agreement except to the extent that such Information:

(A) is or becomes generally available to the public other than as a result of
any breach of the obligations provided for by this Section 8.5(d);

(B) was within the possession of the receiving party prior to it initially being
furnished to the receiving party by or on behalf of the disclosing party; or

(C) is or becomes available on a non-confidential basis to the receiving party
from a source other than the disclosing party, provided that the source of such
Information did not breach any obligation of confidentiality to the disclosing
party.

 

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(ii) Each party shall not release or disclose such Information to any other
Person, except its auditors, attorneys, financial advisors, bankers and other
consultants and advisors, unless compelled to disclose such Information by
judicial or administrative process or by other requirements of law or so as not
to violate the rules of any stock exchange, Legal Requirement or Order of a
Governmental Authority; provided, however, that in the case of disclosure
compelled by judicial or administrative process, the receiving party shall (to
the extent permitted by Legal Requirements) notify the disclosing party promptly
of the request and the documents requested thereby so that the disclosing party
may seek an appropriate protective Order or other appropriate remedy; and
provide further that the receiving party shall use reasonable efforts to avoid
and/or minimize such disclosure.

8.6 Post-Effective Time Receipts and Payments. All cash receipts received by the
Seller at any time in connection with the sale of PhosLo Products prior to the
Effective Time shall be retained by the Seller. All cash receipts received by
the Seller at any time in connection with the sale of PhosLo Products at or
after the Effective Time shall be remitted promptly by the Seller to the Buyer,
and the Seller shall be the Buyer’s agent with respect to the receipt of all
such amounts and shall hold such amounts in trust for the Buyer until paid to
the Buyer. All cash receipts received by the Buyer at any time in connection
with the sale of PhosLo Products prior to the Effective Time shall be remitted
promptly by the Buyer to the Seller, and the Buyer shall be the Seller’s agent
with respect to the receipt of all such amounts and shall hold such amounts in
trust for the Seller until paid to the Seller.

8.7 Use of Name for Transition Period.

(a) Following the Closing, except as otherwise provided herein, the Buyer shall
have no rights to use any trademarks, trade names or logos of the Seller (the
“Retained Marks”) and will not hold itself out as having any affiliations with
the Seller.

(b) Notwithstanding the provisions of this Section 8.7,

(i) for a period of ninety days after the Closing Date, the Buyer may utilize
sale promotional aids, literature and other printed material of the PhosLo
Business, provided such material clearly and prominently displays the following
statement or a statement of similar import: “[the Buyer product name], formerly
a product of Nabi Biopharmaceuticals.” Promptly following the Closing Date, the
Buyer will implement a plan to eliminate the use of all such material within
such ninety-day period; and

(ii) the Buyer may disclose to its customers and potential customers that it is
conducting the PhosLo Business as a successor to the Seller from and after the
Closing Date.

(c) Notwithstanding anything in this Agreement to the contrary, the Buyer may
not use after the Closing Date the Retained Marks or the Seller’s packaging and
labeling, and may not reference the Seller’s NDC numbers, on any PhosLo Products
Inventory, including Finished Goods Inventory, purchased by the Buyer from the
Seller or from Braintree.

 

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(d) The royalty-free licenses to use the Retained Marks set forth in this
Section 8.7(d) shall not prohibit the Seller or any of its Affiliates from using
the Retained Marks (or any similar name or logo) during the term of the
respective license or thereafter in any manner. The Buyer agrees that its use of
the Retained Marks shall be consistent with the past practices of the Seller in
connection with the Seller’s business and operations and, with respect to such
use, the Buyer shall adhere to substantially similar quality standards to which
the Seller adhered immediately prior to the Closing.

8.8 Wholesaler Charges and Rebate Charges. Following the Closing, (i) the Seller
shall be liable for any Wholesaler Charges or Rebate Charges in respect of
PhosLo Products sold with the Seller’s NDC Code and (ii) the Buyer shall be
liable for any Wholesaler Charges or Rebate Charges in respect of PhosLo
Products sold with the Buyer’s NDC Code.

8.9 Assistance with Proceedings. From time to time, as may be reasonably
requested by the Buyer, in connection with claims or actions brought by or
against third parties and arising out of or related to the PhosLo Business
before or after the Closing Date, including in connection with the Roxane
Proceeding, duly authorized representatives of the Buyer shall, upon reasonable
prior notice to the Seller and at the Buyer’s cost and expense, have access to
the Seller’s employees during normal business hours at mutually agreed upon
times; provided, however, that the operations and business of the Seller are not
materially and adversely affected thereby. In addition to the rights of access
provided in this Section, at the request of the Buyer, the Seller shall provide
to the Buyer such information and documents (or reasonable assistance in
collecting such information or documents) in the Seller’s possession as the
Buyer shall reasonably request in connection with the prosecution or defense of
such claims or actions. The Seller shall provide such information and documents
at mutually agreed upon times. In addition, the Seller shall use reasonable
efforts to make its officers and employees available as witnesses in connection
with such claims or actions when reasonably requested by the Buyer. The Buyer
shall reimburse the Seller for all reasonable out-of pocket costs and expenses
incurred by the Seller (excluding salaries and wages and related costs of
benefits of its employees) in providing such assistance. The Buyer shall, and
shall cause its Affiliates to, provide similar rights of access to the Seller
and its Affiliates if and to the extent that the Seller or its Affiliates
require similar rights of access in connection with claims or actions brought by
or against third parties and arising out of or related to the PhosLo Business
prior to the Closing Date.

8.10 Buyer’s Diligence Obligations. Subject to the Seller fulfilling its
obligations under the Transition Services Agreement, the Buyer shall use
commercially reasonable efforts (i) to achieve each of the milestones set forth
in Section 3.1(b) as soon as reasonably practicable after the Closing Date, and
(ii) to obtain an FDA Approval or Foreign Marketing Authorization, as
applicable, for the New Formulation Products, and commercialize and market the
New Formulation Products through the end of the Deferred Payment Period, in the
United States and each country listed on Schedule 8.10 hereto, subject however
to the following provisions:

(a) The Seller may not allege a breach of this Section 8.10 (a “Diligence
Breach”) for the Buyer’s failure to file in the countries listed on Schedule
8.10 the documents necessary to obtain a Foreign Marketing Authorization in
respect of the New Formulation Products until at least the first anniversary of
the date of issuance by the FDA of an “Approvable Letter” in respect of a New
Formulation Product;

 

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(b) The Seller may not allege a Diligence Breach for the Buyer’s failure in any
other respect to use commercially reasonable efforts to obtain a Foreign
Marketing Authorization and/or to commercialize the New Formulation Products in
the countries listed on Schedule 8.10 until at least the second anniversary of
the date of issuance by the FDA of an “Approvable Letter” in respect of a New
Formulation Product;

(c) If the Seller wishes to allege a Diligence Breach it must do so in writing
whereupon the Buyer shall have ninety days following delivery of such written
notice to cure such breach. If the Diligence Breach is not cured within such
period then on a country by country basis the Seller shall be entitled to
require, as its sole and exclusive remedy in respect of such breach, that the
Buyer comply with the provisions of Section 8.1(e) below.

(d) In the event the Buyer determines it is not commercially reasonable to seek
an FDA Approval or a Foreign Marketing Authorization for, or commercialize or
market through the end of the Deferred Payment Period, the New Formulation
Products in the United States or any other country listed on Schedule 8.10 (a
“Commercially Reasonable Discontinuance”), then the Buyer shall give the Seller
written notice of the Buyer’s determination whereupon the Seller shall have
sixty days to acquiesce in such determination or, if the Seller in good faith
determines that it is commercially reasonable to seek such an FDA Approval or
Foreign Market Authorization for, or to commercialize or market, the New
Formulation Products, and decides in good faith to do so, to notify the Buyer of
such determination and to require the Buyer to assign, license or sublicense the
Buyer’s rights with respect to the New Formulation Products in such country.

(e) In the event that on a country by country basis the Buyer has committed a
Diligence Breach or the Seller has elected to obtain an assignment, license or
sublicense to commence upon a Commercially Reasonable Discontinuance, then at
the sole expense of the Buyer:

(i) The Buyer, its subsidiaries and Affiliates and its or their sublicensees,
successors and assigns, upon the request of the Seller and without consideration
being paid to the Buyer, its subsidiaries or Affiliates or its or their
sublicensees, successors or assigns, shall assign, license or sublicense to the
Seller, as reasonably requested by the Seller, all their right title, and
interest in and to the New Formulation Products in respect of such country and
promptly make available to the Seller or its designee all data, studies,
analyses, technological, commercial, business-related and other information
related to the New Formulation Products in such country, including but not
limited to assignable contracts entered into with respect thereto (as well as
amounts payable and statement of accounts with respect to such contracts), any
and all submissions and responses received from any Governmental Authority,
complete documentation and information on completed and ongoing studies,
preclinical and safety data, the status application of a CAS number, if
applicable, all information on orphan drug designation, status of investigators’
brochures, status of the distribution of clinical supplies, as well as all
consents and waivers necessary to have access to the source data documentation
(the “Data”); provided, however, that the sole obligation of the Buyer, its
subsidiaries and Affiliates and its or their sublicensees, successors and
assigns under this section shall be to provide such Data in the form in which it
is maintained and the Buyer, its subsidiaries and Affiliates and its or their
sublicensees, successors and assigns shall in no circumstances be required to
collate, synthesize or re-work any such Data before or after delivery to the
Seller.

 

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(ii) At such time as the Seller may reasonably request, the Buyer, its
subsidiaries and Affiliates and its or their sublicensees, successors and
assigns will, as soon as reasonably practicable under the circumstances, without
consideration being paid by the Seller, execute and/or deliver (or cause to be
executed and/or delivered) to the Seller or its designee all certificates,
instruments and documents as may be necessary to assign, license or sublicense,
to Seller or a party designated by the Seller, as reasonably requested by the
Seller, without representation or warranty, all assignable rights which the
Buyer, its subsidiaries and Affiliates and its or their sublicensees, successors
and assigns may have with respect to:

(A) the New Formulation Products in such country, including the licensing,
marketing, promotion, manufacture and sale thereof;

(B) all submissions to and approvals from the Medical Regulatory Authorities in
such country for the New Formulation Products; and

(C) any IND or marketing approval studies, analyses and/or documents necessary
for the IND or the FDA Approval or Foreign Marketing Regulatory Approval, as
applicable, to be assigned to the Seller.

(iii) The Buyer, its subsidiaries and Affiliates and its or their sublicensees,
successors and assigns will use commercially reasonable efforts to allow the
assumption by the Seller or its designees of all applicable Medical Regulatory
Authority applications and licenses and of any agreements between the Buyer, its
subsidiaries and Affiliates and its or their sublicensees, successors and
assigns and third parties relating to New Formulation Products in the applicable
country, including without limitation agreements with clinical research
organizations, trial sites, investigators and monitors relating to the
development of the New Formulation Products, all without additional
consideration being paid to the Buyer.

(iv) The Buyer, its subsidiaries and Affiliates and its or their sublicensees,
successors and assigns will be responsible for all amounts due and owing to
third parties with respect to the New Formulation Products which have been
incurred by the Buyer, its subsidiaries and Affiliates and its or their
sublicensees, successors or assigns.

(v) The Buyer, its subsidiaries and Affiliates and its or their sublicensees,
successors and assigns will use commercially reasonable efforts to assist the
Seller in obtaining a supply agreement with [*******] for the New Formulation
Products for such country reasonably satisfactory to the Seller and, until such
agreement is obtained by the Seller, to supply to the Seller, at cost, the New
Formulation Products for sale in such country. “Cost” shall include customary
costs of supply (including shipping) and the Transfer Fees and Royalty Fees
(both as defined in the [*******] Agreement) payable under the [*******]
Agreement by the Buyer on the New Formulation Products supplied by the Buyer to
the Seller.

 

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(f) If, with respect to any country, the Seller elects to obtain an assignment,
license or sublicense from the Buyer after a Commercially Reasonable
Discontinuance in accordance with Section 8.10(d) and the Seller should
thereafter determine not to commercialize or market New Formulation Products in
such country, or should abandon or discontinue its efforts to commercialize or
market New Formulation Products in such country, the Seller shall assign to the
Buyer, upon the Buyer’s request, all rights and Data relating to such New
Formulation Products in such country in the same manner and to the same extent
as contemplated by Section 8.10(e)(i) to (iv) with respect to a conveyance by
the Buyer to the Seller, including all Data received by the Seller from the
Buyer and all Data thereafter created by or on behalf of the Seller, all without
consideration being paid to the Seller.

8.11 Non-Competition by the Buyer.

(a) From the Closing Date until [*******] (the “Restricted Period”), none of the
Buyer, its subsidiaries and Affiliates and its or their sublicensees, successors
and assigns shall, without the prior written consent of the Seller (which may be
granted or denied in the sole discretion of the Seller): market, sell,
manufacture for commercial sale or distribute in the United States any
Competitive Product, provided that, (x) the marketing, sale, manufacture for
commercial sale and distribution of Competitive Products by the Buyer, its
subsidiaries and Affiliates and its or their sublicensees, successors and
assigns pursuant to and for the limited period provided in Section 8.11(b) shall
not constitute a default under this Section 8.11 and (y) if the Buyer, its
subsidiaries or Affiliates or its or their sublicensees, successors or assigns
has developed a Competitive Product, each such entity may assign its rights (by
sale or exclusive license for a term which shall not be less the remaining term
of the Restricted Period) in such Competitive Product to a third party (it being
understood that none of the Buyer, its subsidiaries and Affiliates and its or
their sublicensees, successors or assigns shall have any right of ownership or
participation in such third party or the income or profit of such third party
during the Restricted Period other than through a royalty in connection with the
license) and such action shall not constitute a breach of this Agreement for so
long as the Buyer, its subsidiaries and Affiliates and its or their
sublicensees, successors and assigns do not engage in providing any direct or
indirect marketing activity, or provide marketing direction or assistance,
information or data in relation to such Competitive Product.

(b) If the Buyer shall be acquired by a third party who possesses a Competitive
Product at the time of such acquisition or if the Buyer, its subsidiaries or
Affiliates or its or their sublicensees, successors or assigns shall determine
to acquire, by purchase, license or otherwise, in the Territory, one or more
products (whether directly through an acquisition or license of assets or
indirectly through an acquisition of capital stock) and such acquisition
includes a Competitive Product that is sold, marketed or distributed in the
United States, the Buyer shall give the Seller as much advance written notice
thereof as is reasonably feasible under the circumstances, as well as written
notice of the consummation of such acquisition. Any such notice must specify
whether the party acquiring the Buyer, or Buyer, its subsidiaries or Affiliates
or its or their sublicensees, successors or assigns, as applicable, intend
within twelve months of the acquisition to divest their interest in such
Competitive Product in the United States following the acquisition or to
withdraw such Competitive Product from the market in the United States. The
failure to divest or withdraw such a Competitive Product from the market in the
United States within twelve months of its acquisition shall constitute a breach
of this Agreement.

 

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8.12 Seller’s Diligence Obligations. The Seller shall use commercially
reasonable efforts to assist the Buyer in its efforts to achieve each of the
milestones set forth in Section 3.1(b) pursuant to and in accordance with the
terms of the Transition Services Agreement.

8.13 Certain Excluded Liabilities. The Seller shall pay and perform when due,
and shall cause its Affiliates to pay and perform when due, all such Excluded
Liabilities as could reasonably be expected to result in a Material Adverse
Effect after the Effective Time (specifically including Excluded Liabilities
owing by the Seller or its Affiliates to Braintree and Verdugt), except,
however, those Excluded Liabilities that are subject to a bona fide dispute.

8.14 Roxane Proceeding.

(a) Within three days from the Closing Date, the Buyer (FMCNA) shall move under
Fed. R. Civ. P. 25(c) to be joined with Seller as additional plaintiff and
counterclaim defendant in the Roxanne Proceeding and, upon the court’s grant of
such motion, shall assume the sole and absolute right to control, abandon,
negotiate, settle (subject to the provisions of this Section 8.14) and otherwise
deal with the Roxane Proceeding. The Buyer shall keep the Seller reasonably
informed of all developments in the Roxane Proceeding subject to any obligations
of confidentiality required by the Roxane Proceeding and to the preservation of
the attorney-client privilege. Notwithstanding the foregoing, the Seller shall
be entitled to participate in the Roxane Proceeding at its own expense.

(b) The parties hereto agree to cooperate fully with each other in connection
with the defense, negotiation or settlement of the Roxane Proceeding.

(c) The Buyer will not compromise or settle the Roxane Proceeding, or otherwise
terminate the Roxane Proceeding, without the prior written consent of the
Seller, which consent will not be unreasonably withheld, provided, however, that
the Seller’s consent shall not be required for any termination of the litigation
under which (i) the Seller is unconditionally released in writing from all
Liabilities with respect thereto and the claims litigated therein or (ii) the
Buyer assumes an obligation to indemnify the Seller for any Liabilities arising
from the Roxane Proceeding.

(d) Notwithstanding any other provision of this Agreement, the Buyer shall have
no liability or responsibility for actions or omissions by the Seller in
initiating and maintaining the Roxane Proceeding prior to the Buyer’s assumption
of control under Section 8.14(a). The Seller shall be responsible for defending
its own acts or omissions in initiating and maintaining the Roxane Proceeding
occurring prior to the Seller’s assumption of control.

8.15 [*******] Agreement The Buyer agrees that it shall not elect to discontinue
during the Deferred Payment Period [*******]

 

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8.16 Excluded Contracts. After the Effective Time, the Seller shall, upon the
Buyer’s reasonable request, enforce for the benefit of the Buyer any rights that
the Seller may have against third parties under any Excluded Contracts that
relate to the PhosLo Business. The Buyer shall reimburse to the Seller, from
time to time as requested by the Seller, all out-of-pocket expenses and Damanges
incurred by the Seller in connection with any such enforcement. Such requests
for reimbursement shall include reasonably detailed supporting documentation.

8.17 Part D and Commercial Rebate Contracts. Notwithstanding any provision of
this Agreement to the contrary, the assignment to the Buyer of each Part D
Rebate Contract and Commercial Rebate Contract shall be subject to the consent
of the counter party, if required under the terms of the Contract, and the
agreement of the counter party to amend the Contract to provide that the Buyer
shall be responsible for all rebate or discount payments to the counter party
with respect to PhosLo Products bearing the Buyer’s NDC number. For so long as
the Seller continues to have Liability under any Part D Contract or Commercial
Rebate Contract, the Buyer (i) shall provide to the Seller a copy of each
amendment to any such Contract promptly after the effectiveness of any such
amendment and (ii) shall not amend any such Contract without the prior written
consent of the Seller, such consent not to be unreasonably withheld, if such
amendment would increase or extend the Liability of the Seller under such
Contract in any way. The Buyer shall reimburse the Seller promptly upon request
for any expenses incurred by the Seller in connection with obtaining any consent
to assignment of, or any amendment to, any Part D Rebate Contract or Commercial
Rebate Contract.

ARTICLE IX

CLOSING CONDITIONS

9.1 Mutual Conditions. The respective obligations of each party to consummate
the transactions required to be taken by it at the Closing shall be subject to
the fulfillment of the following conditions:

(a) No party to this Agreement shall be subject on the Closing Date to any Order
of a Governmental Authority of competent jurisdiction that enjoins or prohibits
the consummation of the transactions contemplated by this Agreement, nor shall
there be any Proceeding pending or threatened by any Person other than a party
to this Agreement that involves any challenge to, or seeks damages or other
relief in connection with, any of the transactions contemplated hereby, or that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated hereby.

(b) Any applicable waiting period under the HSR Act relating to the transactions
contemplated hereby shall have expired or been terminated.

(c) No Legal Requirement shall have been adopted or promulgated as of the
Closing Date having the effect of making the transactions contemplated herein
illegal or otherwise prohibiting consummation of, or making void or voidable,
the transactions contemplated herein.

 

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9.2 Closing Conditions of the Seller. The obligations of the Seller to effect
the transactions contemplated hereby shall be subject to the fulfillment of the
following conditions, any one or more of which may be waived by the Seller:

(a) Each representation and warranty of the Buyer set forth in Article VI that
is qualified as to materiality shall be true and correct in all respects
(including such materiality limitation) and each other representation and
warranty of the Buyer set forth in Article VI shall be true and correct in all
material respects, in each case as of the date hereof and as of the Closing Date
as if made as of the Closing Date.

(b) The Buyer shall have performed and complied with all of its covenants and
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.

(c) The Buyer shall have delivered to the Seller a certificate (the “Buyer
Certificate”) signed by a duly authorized officer of the Buyer on behalf of the
Buyer to the effect that each of the conditions specified in Sections 9.2(a) and
(b) and Section 9.1(a) (insofar as Section 9.1(a) relates to an Order or
Proceeding against the Buyer) have been satisfied.

(d) All documents required to have been delivered by the Buyer to the Seller at
or prior to the Closing shall have been delivered, and all actions required to
have been taken by the Buyer at or prior to the Closing shall have been taken.

(e) As of the Closing Date, the Seller shall have received from the Buyer the
following documents:

(i) certificates of existence of the Buyer from its state of incorporation, each
as of a date reasonably close to (and in no event more than twenty days prior
to) the Closing Date;

(ii) a copy of the resolutions of the Board of Directors of the Buyer
authorizing the execution and delivery by the Buyer of this Agreement and all
instruments and documents to be delivered by the Buyer in connection herewith,
and the consummation by the Buyer of the transactions contemplated hereby and
thereby, certified by the Secretary of the Buyer;

(iii) a certificate from the Secretary of the Buyer as to the incumbency and
signatures of its officers who will execute documents at the Closing or who have
executed this Agreement and the other Transaction Documents; and

(f) All of the third party consents and Governmental Filings set forth in
Schedule 9.2(f) shall have been obtained or made, as applicable.

(g) The Seller shall have received an opinion from counsel to the Buyer, dated
the Closing Date, in form and substance acceptable to the Buyer, addressing the
matters set forth on Exhibit 9.2(g).

 

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9.3 Closing Conditions of the Buyer. The obligations of the Buyer to effect the
transactions contemplated hereby shall be subject to the fulfillment of the
following conditions, any one or more of which may be waived by the Buyer:

(a) Each representation and warranty of the Seller set forth in Article V that
is qualified as to materiality shall be true and correct in all respects
(including such materiality limitation) and each other representation and
warranty of the Seller set forth in Article V shall be true and correct in all
material respects, in each case as of the date hereof and as of the Closing Date
as if made as of the Closing Date.

(b) The Seller shall have performed and complied with all of its covenants and
agreements contained in this Agreement required to be performed and complied
with by it at or prior to the Closing.

(c) The Seller shall have delivered to the Buyer a certificate (the “Seller
Certificate”) signed by a duly authorized officer of the Seller on behalf of the
Seller to the effect that each of the conditions specified in Sections 9.3(a)
and (b) and Section 9.1(a) (insofar as Section 9.1(a) relates to an Order or
Proceeding against the Seller) have been satisfied.

(d) All documents required to have been delivered by the Seller to the Buyer at
or prior to the Closing shall have been delivered, and all actions required to
have been taken by the Seller at or prior to the Closing shall have been taken.

(e) As of the Closing Date, the Buyer shall have received from the Seller the
following documents:

(i) certificates of existence of the Seller from its state of incorporation,
each as of a date reasonably close to (and in no event more than twenty days
prior to) the Closing Date;

(ii) a copy of the resolutions of the Board of Directors of the Seller
authorizing the execution and delivery by the Seller of this Agreement and all
instruments and documents to be delivered by the Seller in connection herewith,
and the consummation by the Seller of the transactions contemplated hereby and
thereby, certified by the Secretary of the Seller; and

(iii) a certificate from the Secretary of the Seller as to the incumbency and
signatures of its officers who will execute documents at the Closing or who have
executed this Agreement.

(f) The Buyer shall have received an opinion from counsel to the Seller, dated
the Closing Date, in form and substance acceptable to the Buyer, addressing the
matters set forth on Exhibit 9.3(f).

(g) The Buyer shall have received from at least fifty percent (50%) of the
Employees (exclusive of the Employees listed on Schedule 7.7(a)) who have
accepted employment with the Buyer an Employee Consent substantially in the form
attached as Exhibit 9.3(g).

(h) All of the third party consents and Governmental Filings set forth in
Schedule 9.3(h) shall have been obtained or made, as applicable.

 

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(i) No Material Adverse Effect shall have occurred since the date of execution
of this Agreement, other than as contemplated on Schedule 7.2.

(j) The Buyer shall have been issued a Resident Manufacturer/Distributor License
from the Commonwealth of Massachusetts, Department of Public Health, Division of
Food and Drugs.

(k) The Seller shall have assigned the [*******] Agreement to the Buyer.

(l) [Intentionally blank.]

(m) The amount of Finished Goods Inventory held by the Seller’s distributors and
the amount of Inventory of PhosLo Products held by the Seller shall be
consistent with historic inventory levels of the PhosLo Business (but in no
event in the case of Finished Goods Inventory held by the Seller’s distributors
in an aggregate amount equal to more than five months of average in-market sales
by such distributors), and the Seller shall have delivered to the Buyer a letter
from each such distributor, dated within thirty one (31) days before the Closing
Date, confirming the amount of Finished Goods Inventory held by such
distributor.

ARTICLE X

INDEMNIFICATION

10.1 Survival of Representations.

(a) All representations and warranties made by either party in this Agreement,
any other Transaction Agreement, the Seller Certificate and the Buyer
Certificate shall survive the Closing. No such warranty or representation or
right to indemnification shall be deemed to be waived or otherwise diminished as
a result of (i) any due diligence investigation by the party to whom the
warranty or representation was made, or (ii) any actual or constructive
knowledge by such party with respect to any facts, circumstances or claims or by
the actual or constructive knowledge of such person that any warranty or
representation is false at the time of Closing, or (iii) a party’s consummation
of the transactions contemplated hereby after waiving any of the conditions to
its obligation to close (including the condition that the other party’s
representations and warranties be true and correct). All claims made by virtue
of such representations, warranties, covenants and agreements shall be made
under, and subject to the limitations set forth in, this Article X.

(b) EXCEPT AS SET FORTH IN ARTICLE 5, THE OTHER TRANSACTION AGREEMENTS AND THE
SELLER CERTIFICATE, THE SELLER MAKES NO REPRESENTATIONS AND WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING REPRESENTATION OR WARRANTY WITH RESPECT TO MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SALE OF THE PURCHASED
ASSETS OR THE PHOSLO BUSINESS. THE BUYER ACKNOWLEDGES THAT IN ENTERING INTO THIS
AGREEMENT IT IS NOT RELYING ON ANY REPRESENTATION, WARRANTY OR OTHER STATEMENTS
MADE BY OR ON BEHALF OF THE SELLER, OTHER THAN THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN ARTICLE 5 OF THIS AGREEMENT, THE OTHER TRANSACTION
AGREEMENTS AND THE SELLER CERTIFICATE.

 

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10.2 Seller’s Agreement to Indemnify.

(a) The Seller hereby agrees to indemnify, defend and hold harmless the Buyer
and its officers, directors, employees, agents, representations and Affiliates
(collectively, the “Buyer Indemnified Parties”) from and against all demands,
claims, actions, losses, assessments, fees, damages, liabilities, obligations,
judgments, interest, penalties, fines, Taxes, diminutions in value, costs and
expenses (including attorneys’ fees, settlement costs, arbitration costs and any
reasonable legal and other expenses) (“Damages”) incurred by any of the Buyer
Indemnified Parties arising out of or in connection with or resulting from any
of the following (collectively, “Buyer Damages”):

(i) any misrepresentation, inaccuracy, or breach of any representation or
warranty of the Seller contained as of the Closing Date in this Agreement, any
other Transactions Agreement or in the Seller Certificate;

(ii) any breach or nonfulfillment of any covenant or agreement of the Seller
contained in this Agreement or in any other Transaction Agreement;

(iii) any Liability or alleged Liability of the Seller arising from the
operation of the PhosLo Business prior to the Effective Time that is not an
Assumed Liability, whether asserted before or after the Closing, including any
Liability or alleged Liability that becomes, or is alleged to have become, a
Liability of the Buyer under any bulk transfer law of any jurisdiction, under
any common law doctrine of de facto merger or successor liability, or otherwise
by operation of law;

(iv) any Liability to any Governmental Authority in respect of the PhosLo
Business (or regarding the conduct of the PhosLo Business) prior to the
Effective Time, whether asserted before or after the Closing; or

(v) any Liability or alleged Liability incurred or arising in connection with
any demands, claims or actions by or on behalf of any shareholders of the Seller
(including shareholder derivative actions) arising out of or relating to the
transactions contemplated by this Agreement.

(b) Within ten days after the Seller’s receipt from any Buyer Indemnified Party
of a claim for Buyer Damages, Seller shall pay such Buyer Indemnified Party in
cash, subject to the provisions of Section 10.5 in the event of a disagreement
and subject to the other provisions of this Article X, the amount set forth in
such claim for Buyer Damages.

10.3 Buyer’s Agreement to Indemnify.

(a) Buyer hereby agrees to indemnify, defend and hold harmless the Seller and
its officers, directors, employees, agents, representatives and Affiliates (the
“Seller Indemnified Parties”) from and against all Damages incurred by any of
the Seller Indemnified Parties arising out of or in connection with or resulting
from any of the following (collectively, “Seller Damages”):

(i) any misrepresentation, inaccuracy, or breach of any representation or
warranty of the Buyer contained in this Agreement, any other Transaction
Agreement or in the Buyer Certificate;

 

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(ii) any breach or nonfulfillment of any covenant or agreement of the Buyer
contained in this Agreement or in any other Transaction Agreement; or

(iii) any failure by the Buyer to pay, perform or discharge any Assumed
Liability;

(iv) any Liabilities or alleged Liabilities incurred or arising, or alleged to
have occurred or arisen, in connection with the operation of the PhosLo
Business, the condition of the Buyer’s assets or the ownership of the Purchased
Assets after the Effective Time, but excluding those Liabilities excluded from
the Assumed Liabilities pursuant to the exclusion contained in
Section 2.4(a)(i); or

(v) any Liability or alleged Liability incurred or arising in connection with
any demands, claims or actions by or on behalf of any shareholders of the Buyer
(including shareholder derivative actions) arising out of or relating to the
transactions contemplated by this Agreement.

(b) Within ten days after the Buyer’s receipt from any Seller Indemnified Party
of a claim for Seller Damages, the Buyer shall pay such Seller Indemnified Party
in cash, subject to the provisions of Section 10.5 in the event of a
disagreement and subject to the other provisions of this Article X, the amount
set forth in such claim for Seller Damages.

10.4 Procedure for Third-Party Claims.

(a) If any Person shall claim indemnification hereunder arising from any claim
or demand of a third party, the party seeking indemnification (the “Indemnified
Party”) shall, within thirty days after receiving notice thereof, notify the
party or parties from whom indemnification is sought (collectively, the
“Indemnifying Party”) in writing of the basis for such claim or demand setting
forth the nature of the claim or demand in reasonable detail. Notwithstanding
the foregoing, neither the failure of the Indemnified Party to so notify, nor
any delay on the part of the Indemnified Party in so notifying, the Indemnifying
Party of any such claim or demand shall relieve the Indemnifying Party of any
indemnification obligation hereunder in respect thereof, except to the extent
the Indemnifying Party demonstrates that the defense of such claim or demand is
materially prejudiced by such failure or delay (and then only to such extent).

(b) Upon receipt of the foregoing notice, the Indemnifying Party may undertake
the defense of the claim or demand if (i) the Indemnifying Party provides
written notice to the Indemnified Party that the Indemnifying Party intends to
undertake such defense and that the Indemnifying Party will indemnify the
Indemnified Party against all Buyer Damages or Seller Damages, as applicable,
resulting from or relating to such third-party claim for which indemnification
shall be owing pursuant to this Article X; (ii) the

 

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Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the third-party claim and fulfill its
indemnification obligations hereunder; (iii) the third-party claim involves only
money damages and does not seek an injunction or other equitable relief or
involve Taxes of the Indemnified Party in any material respect; (iv) settlement
of, or an adverse judgment with respect to, the third-party claim is not, in the
good faith reasonable judgment of the Indemnified Party, likely to establish a
precedent adverse to the continuing business interests of the Indemnified Party;
(v) if the Indemnifying Party is a party to the Proceeding, the Indemnified
Party has not determined in good faith that the Indemnifying Party’s undertaking
the defense of the claim or demand for itself and the Indemnified Party would be
inappropriate; and (vi) the defense of the third-party claim is conducted
actively and diligently by legal counsel reasonably acceptable to the
Indemnified Party. The Indemnified Party may, by counsel of its choice,
participate in such Proceedings, negotiations or defense, at the expense of the
Indemnified Party.

(c) If (i) notice is given to the Indemnifying Party of a third-party claim as
contemplated above, and the Indemnifying Party does not, within ten days after
such notice is given, give notice to the Indemnified Party of its election to
assume the defense of such Proceeding, or (ii) any of the conditions set forth
in the first sentence of Section 10.3(b) above are or become unsatisfied, the
Indemnified Party shall (upon notice to the Indemnifying Party) have the right
to undertake the defense, compromise or settlement of such claim, and the
Indemnifying Party shall reimburse the Indemnified Party promptly and
periodically for the costs of defending the third-party claim (including the
reasonable attorneys’ fees and expenses of such counsel) and shall remain
responsible for any indemnifiable amounts arising from or related to such
third-party claim to the fullest extent provided in this Article X. The
Indemnifying Party may elect to participate in such Proceedings, negotiations or
defense at any time at its own expense.

(d) If the Indemnifying Party assumes the defense of a third-party claim
hereunder, (i) no compromise or settlement of the claims with respect thereto
may be effected by the Indemnifying Party without the Indemnified Party’s
consent unless (x) there is no finding or admission of any violation of any
Legal Requirement, and (y) the sole relief provided is monetary damages that are
paid in full by the Indemnifying Party, and (ii) the Indemnified Party shall
have no liability with respect to any compromise or settlement of such claims
effected without its consent.

(e) If the Indemnified Party assumes the defense of a third-party claim
hereunder based on the failure of one or more of the conditions set forth in
Section 10.4(b)(ii)-(v), then (i) no compromise or settlement of the claims with
respect thereto may be effected by the Indemnified Party without the
Indemnifying Party’s consent unless and as part of such settlement the
Indemnifying Party is released in writing from all liability with respect to
such third party claim, other than the underlying claim for indemnification
under this Article X and (ii) except as provided in clause (i) hereof, the
Indemnifying Party shall have no liability with respect to any compromise or
settlement of any such claim effected without its consent.

 

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(f) The parties shall cooperate in the defense of all third-party claims that
may give rise to indemnification obligations hereunder. In connection with the
defense of any such claim, each party shall make available to the party
controlling such defense any books, records or other documents within its
control that are reasonably requested in the course of such defense. The parties
shall also keep one another reasonably apprised of the status of all third-party
claims that may be subject to indemnification hereunder.

10.5 Procedure for Direct Claims.

(a) If an Indemnified Party shall claim indemnification hereunder for any claim
other than third-party claims, the Indemnified Party shall notify the
Indemnifying Party in writing of the basis for such claim, setting forth the
nature and amount of the Seller Damages or Buyer Damages, as applicable
resulting from such claim. The Indemnifying Party shall give written notice of
any disagreement with such claim within 15 days following receipt of the
Indemnified Party’s notice of the claim, specifying in reasonable detail the
nature and extent of such disagreement. If the Indemnifying Party and the
Indemnified Party are unable to resolve any disagreement within 30 days
following receipt by the Indemnified Party of the notice referred to in the
preceding sentence, then the parties hereto agree, subject to Section 10.6, to
arbitrate any direct claim for Damages less than $7,500,000 (an “Arbitration
Dispute”) pursuant to this Section 10.5. With respect to any direct claim for
Damages in excess of $7,500,000, the parties are free to pursue recourse in
state or federal courts.

(b) With respect to any Arbitration Dispute, any party may commence arbitration
proceedings with the CPR Institute for Arbitration Dispute Resolution office
(the “CPR”) by filing a demand for arbitration in writing (a “Demand”) with the
CPR and by simultaneously sending a copy of the Demand to the other parties. The
arbitration proceedings shall be governed by and decided in accordance with the
CPR Rules for Non-Administered Arbitration then in effect, unless the parties to
the arbitration shall mutually agree otherwise in writing. Any evidentiary rules
not expressly provided by the CPR Rules shall be determined in accordance with
the Federal Rules of Evidence. The arbitration shall be governed by the U.S.
Arbitration Act, 9 U.S.C. § 1, et seq. and shall be administered under the
procedures set forth herein.

(c) The arbitration panel to be selected (the “Arbitrators”) shall be a balanced
panel, consisting of (i) three independent and impartial arbitrators selected
pursuant to CPR Rule 6.4 in the event the total amount in the Arbitration
Dispute is $3 million or more; or (ii) one independent and impartial arbitrator
selected pursuant to CPR Rule 6.4 in the event the total amount in the
Arbitration Dispute is less than $3 million.

(d) The arbitration shall be conducted in Boston, Massachusetts; provided that
the Arbitrator(s) may, for the convenience of the parties and without changing
the sites of the arbitration proceeding, permit the taking of evidence outside
of Boston.

(e) The Arbitrator(s) shall permit and facilitate discovery pursuant to Rule 11
of the Federal Rules of Civil Procedure, except that for claims involving $1
million or less, no more than two depositions shall be permitted. Within 30 days
after selection of the Arbitrator(s), the party filing the demand for
arbitration shall provide copies of all business documents and other evidence in
its possession that support its demand. Within 30 days of receipt of such
information, the receiving party shall produce all business documents and
evidence that support its defense or response. Thereafter, each party shall have
the right to such other discovery

 

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procedures as the Arbitrator(s) may determine to be reasonably necessary for a
fair understanding of any legitimate issue raised in the arbitration. A party’s
failure to timely disclose documents, witnesses, expert reports, calculations
and other evidence relating to the Arbitration Dispute shall operate as a bar to
the nondisclosing party’s use of such evidence, and, in the discretion of the
Arbitrator(s), be a basis for sanctions, including an award against the
nondisclosing party.

(f) It is the intention of the parties hereto that the arbitration proceeding be
completed through the rendering of the award within six months of the selection
of the Arbitrator(s), and each party hereto shall so instruct the Arbitrator(s)
and take such other actions as may be reasonably required to give effect to such
intention. The award of the Arbitrator(s) may be monetary damages, an order
requiring performance of obligations under this Agreement or any other
appropriate award or remedy. The Arbitrator(s) may not make any ruling, finding
or award that does not conform to the terms and conditions of this Agreement.
Notwithstanding anything to the contrary, the Arbitrator(s) shall not be
authorized or empowered to award punitive, exemplary, consequential or special
damages, and the parties expressly waive any claim to such damages.

(g) The fees and expenses of the Arbitrator shall be shared equally by the
parties and advanced by them from time to time as required; provided that, at
the conclusion of the arbitration, the prevailing party shall be entitled to
recover all attorneys’ fees, filing fees, costs, including the costs of the
arbitration previously advanced, expert fees and costs, and related expenses
from the non-prevailing party and such recovery shall be made part of any
judgment or arbitration award.

(h) The final award rendered by the Arbitrator(s) (after any CPR appeal allowed
herein) shall be final and binding upon the parties and judgment may be entered
by any competent court having jurisdiction thereof. In the event of an
arbitration award of Damages less than $1 million (inclusive of costs, fees and
interest), such award shall not be subject to appeal. In the event the award
exceeds $1 million (inclusive of any award of costs, fees and interest), an
appeal may be taken under the CPR Arbitration Appeal Procedure from any final
award of an arbitral panel arising out of or related to this Agreement. Such
appeal must conform to the requirements of the CPR Arbitration Appeal Procedure.
Notwithstanding anything to the contrary provided in this paragraph and without
prejudice to the above procedures, any of the parties may apply to any court of
competent jurisdiction for temporary injunctive judicial relief if such action
is necessary to avoid irreparable damage or to preserve the status quo until
such time as the arbitration panel is convened and available to hear such
party’s request for temporary relief. The award rendered by the Arbitrator(s),
after any appeal taken pursuant to the foregoing, shall be final and not subject
to judicial review, and judgment thereon may be entered in any court of
competent jurisdiction. The award of the Arbitrator(s) shall be accompanied by a
written explanation of the basis for the award. Any amount owing by any Person
as a result of this Section 10.5 shall be paid within two Business Days after
final determination of such amount.

(i) The parties agree that (i) the provisions of this Section 10.5 shall not
apply to any preliminary or temporary equitable relief sought with respect to
breaches of the obligations set forth in Sections 8.4 (intellectual property),
8.5 (access to information, etc.) and 12.4 (publicity), and (ii) the Arbitrator
shall have no power to grant such preliminary or temporary relief with respect
to breaches of such obligations.

 

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10.6 Limitations on Indemnification. Notwithstanding anything in this Article X
to the contrary:

(a) The Seller shall have no liability under Section 10.2(a)(i) or with respect
to any breach by Seller of its obligations under Section 7.8 unless and until
the aggregate amount of the Buyer Damages under such subsection exceeds
$[*******], and the Seller shall have no obligation to indemnify for $[*******]
of such Buyer Damages after such threshold is reached (but the Seller shall be
liable for the remaining $[*******] of such Buyer Damages); provided that the
foregoing limitation shall not apply to any breach or alleged breach of any
representation or warranty set forth in Section 5.1, 5.2, 5.3(b)(i), 5.4(b),
5.12, 5.30 or 5.32, as to which the Seller shall be liable in full from the
first dollar of loss;

(b) The Seller shall have no liability under Section 10.2(a)(i) or with respect
to any breach by Seller of its obligations under Section 7.8 to the extent, and
only to the extent, that the aggregate amount of the Buyer Damages under such
subsection exceeds the sum of $[*******], provided, that the foregoing
limitation shall not apply to any breach or alleged breach of any representation
or warranty set forth in Section 5.1, 5.2, 5.3(b)(i), 5.4(b), 5.12, 5.30 or 5.32
or any representation or warranty made fraudulently, as to which the Seller
shall be liable in full; and

(c) No indemnification shall be required by the Seller under Section 10.2(a)(i)
or with respect to any breach by Seller of its obligations under Section 7.8
unless the Seller shall have received notice of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by the Buyer
on or before the date 18 months after the Closing Date; provided that (i) with
respect to breaches of the representations and warranties set forth in
Section 5.12, or 5.24, indemnification shall be required if the Seller shall
have received notice of the claim prior to the date thirty days after the
expiration of the statute of limitations applicable to claims by third parties
giving rise to the breach of such representations and warranties; and (ii) the
foregoing limitation shall not apply to any breach or alleged breach of any
representation or warranty set forth in Section 5.1, 5.2, 5.3(b)(i), 5.4(b),
5.30 or 5.32.

(d) The amount of Damages recoverable by an Indemnified Party under this Article
X with respect to a claim for indemnification shall be reduced by (i) the amount
of any payment received from an insurance carrier or other third party
indemnitor by such Indemnified Party (or an Affiliate thereof) with respect to
the Damages to which such claim for indemnification relates. If an Indemnified
Party (or an Affiliate) receives any insurance payment in connection with any
claim for Damages for which it has already received an indemnification or other
third party indemnity payment from the Indemnifying Party, it shall pay to the
Indemnifying Party, within 30 days of receiving such insurance payment, an
amount equal to the excess of (A) the amount previously received by the
Indemnified Party under this Article X with respect to such claim plus the
amount of the insurance payments received, over (B) the amount of Damages with
respect to such claim which the Indemnified Party has become entitled to receive
under this Article X.

 

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10.7 Treatment of Indemnification Payments. All indemnification payments made
under this Agreement shall be treated by the parties as an adjustment to the
Purchase Price to the maximum extent allowable under applicable law.

10.8 Construction. The parties intend that each representation, warranty and
covenant herein shall have independent significance. If any party has breached
any representation, warranty or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant, as the
case may be.

10.9 Interest. Interest shall accrue from the date due on amounts owing under
this Agreement, including all indemnification obligations hereunder, at the
lesser of (i) one-half percent per month and (ii) the highest rate permitted by
law, based on the actual number of days elapsed from the date the amount is due
or owing until paid in full. An amount due or owing pursuant to an
indemnification claim made pursuant to this Article X shall be deemed owing from
the date the Indemnifying Party receives notice of such claim as provided in
this Article X.

10.10 Remedies. Absent fraud, after the Closing the indemnification rights
provided in this Article X, shall be the sole and exclusive remedy available to
a party for any breach or alleged breach of this Agreement by the other party;
provided, that the provisions of this Section 10.10 shall not prevent any party
from seeking the remedies of specific performance or injunctive relief in
connection with a breach of a covenant or agreement of any party contained
herein.

ARTICLE XI

TERMINATION

11.1 Termination. This Agreement may be terminated at any time prior to the
Closing:

(a) by mutual written consent of the Seller and the Buyer;

(b) by the Seller if the Buyer is in breach of any representation, warranty,
covenant or agreement contained in this Agreement and such breach (i) would
cause the conditions set forth in Section 9.2(a) or Section 9.2(b) not to be
satisfied and (ii) is not cured within twenty days following delivery by the
Seller to the Buyer of written notice of such breach;

(c) by the Buyer, if the Seller is in breach of any representation, warranty,
covenant or agreement contained in this Agreement and such breach (i) would
cause the conditions set forth in Section 9.3(a) or Section 9.3(b) not to be
satisfied and (ii) is not cured within twenty days following delivery by the
Buyer to the Seller of written notice of such breach

(d) by the Seller if all the conditions in Section 9.2 shall not have been
fulfilled as of October 31, 2006 or shall have become incapable of fulfillment
(other than through the failure of the Seller to comply fully with any of its
obligations under this Agreement) and such conditions shall not have been waived
by the Seller;

 

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(e) by the Buyer, if all of the conditions set forth in Section 9.3 shall not
have been fulfilled as of October 31, 2006 or shall have become incapable of
fulfillment (other than through the failure of the Buyer to comply fully with
its obligations under this Agreement) and such conditions shall not have been
waived by the Buyer; or

(f) by either the Buyer or the Seller if the Closing has not taken place on or
before October 31, 2006 for any reason other than the failure of the condition
in Section 9.1(b), or if the Closing has not taken place on or before
November 11, 2006 by reason of the failure of the condition in Section 9.1(b),
or such later date agreed to by the parties.

11.2 Procedure and Effect of Termination. In the event of a termination of this
Agreement by any party pursuant to Section 11.1, the terminating party shall
give prompt written notice thereof to the other party, and the transactions
contemplated hereby shall be abandoned, without further action by either of the
parties hereto, and all further obligations hereunder of the parties shall
terminate, except that the obligations in the last sentence of Section 7.3(a),
in Article X and in Section 12.4 and Section 12.5 shall survive, and each party
may seek any remedy under Article X, or the remedies of specific performance or
injunctive relief, for any violation or breach of this Agreement by the other
party.

ARTICLE XII

MISCELLANEOUS PROVISIONS

12.1 Jurisdiction, Venue and Service of Process. Subject to Section 10.5, if any
party commences a Proceeding relating to or arising from this Agreement, the
parties hereto agree that the United States District Court for the Eastern
District of Massachusetts shall have sole and exclusive jurisdiction over any
such Proceeding. If all such courts lack federal subject matter jurisdiction,
the parties agree that the courts of the Commonwealth of Massachusetts in the
city of Boston shall have sole and exclusive jurisdiction. Any of these courts
shall be proper venue for any such Proceeding and the parties hereto waive any
objection to such venue. The parties hereto consent to and agree to submit to
the jurisdiction of any of the courts specified herein in connection with any
such Proceeding and agree to accept service of process to vest personal
jurisdiction over them in any of these courts. Process in any Proceeding
referred to in this Section 12.1 may be served on any party anywhere in the
world.

12.2 Remedies. Unless otherwise stated herein, to the extent permitted by law,
all rights and remedies existing under this Agreement and any related agreements
or documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available under applicable law. The parties acknowledge that the
restrictions and obligations set forth in Sections 8.4 and 8.5, are necessary
for the protection of the parties and that any breach thereof may cause the
affected party irreparable damage, that the affected party’s remedies at law in
the event of such breach would be inadequate, and that, accordingly, the
affected party shall be entitled to the issuance by a court of competent
jurisdiction of an injunction in favor of the affected party enjoining the
breach or threatened breach of such restrictions in the event of such breach.
The foregoing provision shall not constitute a waiver of any other remedies any
party may have in law or in equity.

 

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12.3 Attorneys’ Fees. In the event of any action for the breach of this
Agreement or misrepresentation by any party, the prevailing party shall be
entitled to reasonable attorneys’ fees, costs and expenses incurred in such
action. Attorneys’ fees incurred in enforcing any judgment in respect of this
Agreement are recoverable as a separate item. The preceding sentence is intended
to be severable from the other provisions of this Agreement and to survive any
judgment and, to the maximum extent permitted by law, shall not be deemed merged
into any such judgment.

12.4 Publicity. The Seller and the Buyer shall coordinate all publicity relating
to the transactions contemplated by this Agreement, and no party shall issue any
press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without obtaining
the prior consent of the Seller and the Buyer, except to the extent that either
party and its legal counsel in good faith conclude such release, statement or
notice is required by applicable Legal Requirements.

12.5 Expenses. Whether or not the transactions contemplated hereby are
consummated, each party shall pay all costs and expenses incurred by such party
in connection with this Agreement and the transactions contemplated hereby,
including fees, expenses and disbursements of their respective counsel,
accountants, representatives and investment bankers provided that the Seller has
agreed to pay, and has reimbursed the Buyer for, one-half of the HSR filing fee.

12.6 Waiver of Compliance; Consents. The rights and remedies of the parties are
cumulative and not alternative and may be exercised concurrently or separately.
No failure or delay by any party in exercising any right, power, or privilege
under this Agreement shall operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege shall preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party shall be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party shall be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement. Any consent required or
permitted by this Agreement is binding only if in writing.

 

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12.7 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered by hand or a national over-night
courier service, by facsimile with subsequent telephone confirmation, or three
Business Days after mailing when mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties in the manner provided
below:

 

  (a) If to the Seller:

Nabi Biopharmaceuticals

5800 Park of Commerce Blvd., N.W.

Boca Raton, FL 33487

Facsimile: (561) 989-5801

Attention: Chief Financial Officer

With a copy to the General Counsel at the same address; and

With a copy to:

Nutter McClennen & Fish LLP

World Trade Center West

155 Seaport Blvd.

Boston, MA 02210

Facsimile: (617) 310-9000

Attention: James E. Dawson, Esq.

 

  (b) If to the Buyer, to:

Fresenius USA Manufacturing, Inc.

95 Hayden Avenue

Lexington, Massachusetts 02420

Facsimile: (781) 402-9713

Attention: Law Department

With a copy to:

Robinson, Bradshaw & Hinson, P.A.

101 North Tryon Street, Suite 1900

Charlotte, North Carolina 28426

Facsimile: (704) 378-4000

Attention: Kent J. McCready, Esq.

12.8 Binding Agreement; Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their successors and permitted assigns, and except as provided in Article X
shall not confer upon any other Person any rights or remedies hereunder. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any party hereto without the prior written consent of the other
parties, except that either party may assign its rights and obligations to any
Affiliate of such party, or to any purchaser of the stock of such party or of
substantially all the assets of such party or, in the case of the Buyer, of the
Purchased Assets and Assumed Liabilities; provided, however, that in the case of
an assignment, the assigning party shall remain primarily liable for any breach
or non-performance of its assignee. Nothing in this Agreement is intended to
relieve or discharge the obligation of any third person to any party to this
Agreement.

 

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12.9 Interpretation. This Agreement has been prepared by the Buyer and its
advisors and reviewed by the Seller and their advisors. The parties agree that
this Agreement is the product of all their efforts, and that it should not be
interpreted in favor of any one party merely because of their efforts in
preparing it. Any rule of law or legal decision that would require
interpretation of any claimed ambiguity against the party drafting it shall have
no application to this Agreement and is expressly waived.

12.10 Governing Law. The execution, interpretation and performance of this
Agreement shall (except to the extent that such matter is pre-empted by federal
law) be governed by the internal laws and judicial decisions of the Commonwealth
of Massachusetts applicable to contracts made and to be performed in such state,
without regard to conflict of law principles that would produce a contrary
result.

12.11 Further Assurances. Subject to the terms and conditions of this Agreement,
each of the parties hereto will use all reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Legal Requirement to consummate and make
effective the sale of the Purchased Assets pursuant to this Agreement provided
that neither party shall be required to make any payments in excess of nominal
amounts or undertake any material obligations in connection therewith. From time
to time after the Closing Date, without further consideration, the Seller will,
at its expense, execute and deliver, or cause to be executed and delivered, such
documents to the Buyer as the Buyer may reasonably request in order to more
effectively vest in the Buyer good title to the Purchased Assets provided that
neither party shall be required to make any payments in excess of nominal
amounts or undertake any material obligations in connection therewith. From time
to time after the Closing Date, without further consideration, the Buyer will,
at the Buyer’s expense, execute and deliver such documents to the Seller as the
Seller may reasonably request in order to consummate the purchase of the
Purchased Assets and the assumption by the Buyer of the Assumed Liabilities
pursuant to this Agreement.

12.12 Severability. If any provision contained in this Agreement shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, unless the
invalidity of any such provision substantially deprives either party of the
practical benefits intended to be conferred by this Agreement. Notwithstanding
the foregoing, any provision of this Agreement held invalid, illegal or
unenforceable only in part or degree shall remain in full force and effect to
the extent not held invalid or unenforceable, and the determination that any
provision of this Agreement is invalid, illegal or unenforceable as applied to
particular circumstances shall not affect the application of such provision to
circumstances other than those as to which it is held invalid, illegal or
unenforceable. To the extent permitted by law, the parties hereby to the same
extent waive any Legal Requirement that renders any provision hereof prohibited
or unenforceable in any respect.

12.13 Counterparts; Electronic Signatures. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
be executed on signature pages exchanged by facsimile or other electronic means,
in which event each party shall promptly deliver to the others such number of
original executed copies as the others may reasonably request.

 

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12.14 Merger and Modification; Amendment. This Agreement, including the Exhibits
and Schedules hereto and together with the other Transaction Agreements,
expresses the entire agreement between the parties hereto and supersedes any
prior or contemporaneous written or oral understanding or agreement other than
the Confidentiality Agreement, as provided in Section 7.3(b). This Agreement may
not be modified, amended, supplemented or waived except by a writing signed by
all of the parties to this Agreement, and such writing must refer specifically
to this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

THE BUYER: FRESENIUS USA MANUFACTURING, INC. By:   /s/ Rice Powell

Name:

  Rice Powell

Title:

  President

 

THE SELLER: NABI BIOPHARMACEUTICALS By:   /s/ Thomas H. McLain Name:   Thomas H.
McLain Title:   Chairman, President and Chief Executive Officer