EX-10.1






Exhibit 10.1



AGREEMENT AND PLAN OF MERGER




among




NOVEN PHARMACEUTICALS, INC.,




NOVEN ACQUISITION, LLC,




and




JDS PHARMACEUTICALS, LLC




Dated as of July 9, 2007




1




TABLE OF CONTENTS




Page




	 	 	 	 	 	 	 	 	 
	ARTICLE I. DEFINITIONS
	 	 	2	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Section 1.1.Certain Definitions
	 	 	2	 	 	 	 	 
	Section 1.2.Terms Generally
	 	 	11	 	 	 	 	 
	ARTICLE II. MERGER
	 	 	11	 	 	 	 	 
	Section 2.1.The Merger
	 	 	11	 	 	 	 	 
	Section 2.2.Closing
	 	 	11	 	 	 	 	 
	Section 2.3.Effective Time of the Merger
	 	 	11	 	 	 	 	 
	Section 2.4.Effect of Merger
	 	 	12	 	 	 	 	 
	Section 2.5.Further Actions
	 	 	12	 	 	 	 	 
	Section 2.6.Organizational Documents
	 	 	12	 	 	 	 	 
	Section 2.7.Officers
	 	 	12	 	 	 	 	 
	ARTICLE III. CONVERSION OF UNITS
	 	 	12	 	 	 	 	 
	Section 3.1.Merger Consideration
	 	 	12	 	 	 	 	 
	Section 3.2.Escrow Amount
	 	 	13	 	 	 	 	 
	Section 3.3.Payment
	 	 	13	 	 	 	 	 
	Section 3.4.No Further Rights
	 	 	15	 	 	 	 	 
	Section 3.5.Closing of the Company’s Transfer Books
	 	 	15	 	 	 	 	 
	Section 3.6.Closing Deliveries
	 	 	15	 	 	 	 	 
	Section 3.7.Adjustment to Merger Consideration
	 	 	16	 	 	 	 	 
	Section 3.8.Satisfaction of Conditions
	 	 	17	 	 	 	 	 
	Section 3.9.Transfer Taxes
	 	 	17	 	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY GROUP
	 	 	 	 	 	 	17	 
	Section 4.1.Organization of the Company and the Company Group
	 	 	17	 	 	 	 	 
	Section 4.2.Authorization
	 	 	18	 	 	 	 	 
	Section 4.3.Noncontravention
	 	 	18	 	 	 	 	 
	Section 4.4.Capitalization
	 	 	18	 	 	 	 	 
	Section 4.5.Subsidiaries of the Company
	 	 	20	 	 	 	 	 
	Section 4.6.Consents, Government Authorizations
	 	 	20	 	 	 	 	 
	Section 4.7.Financial Statements
	 	 	20	 	 	 	 	 
	Section 4.8.Absence of Certain Changes
	 	 	20	 	 	 	 	 
	Section 4.9.Tax Matters
	 	 	21	 	 	 	 	 
	Section 4.10.Real Property
	 	 	22	 	 	 	 	 
	Section 4.11.Intellectual Property
	 	 	22	 	 	 	 	 
	Section 4.12.Environmental Matters
	 	 	23	 	 	 	 	 
	Section 4.13.Contracts
	 	 	23	 	 	 	 	 
	Section 4.14.Insurance
	 	 	25	 	 	 	 	 
	Section 4.15.Litigation
	 	 	26	 	 	 	 	 
	Section 4.16.Employee Matters
	 	 	26	 	 	 	 	 
	Section 4.17.Legal Compliance
	 	 	28	 	 	 	 	 
	Section 4.18.Brokers’ Fees
	 	 	28	 	 	 	 	 
	Section 4.19.Permits
	 	 	28	 	 	 	 	 
	Section 4.20.Transaction with Affiliates; Ownership of Assets
	 	 	28	 	 	 	 	 
	Section 4.21.No Additional Representations and Warranties
	 	 	29	 	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES REGARDING BUYER AND MERGER SUB
	 	 	 	 	 	 	29	 
	Section 5.1.Organization
	 	 	29	 	 	 	 	 
	Section 5.2.Authorization
	 	 	29	 	 	 	 	 
	Section 5.3.Noncontravention
	 	 	29	 	 	 	 	 
	Section 5.4.Consents, Government Authorizations
	 	 	30	 	 	 	 	 
	Section 5.5.Financial Capacity
	 	 	30	 	 	 	 	 
	Section 5.6.Litigation
	 	 	30	 	 	 	 	 
	Section 5.7.Brokers’ Fees
	 	 	30	 	 	 	 	 
	Section 5.8.Information
	 	 	30	 	 	 	 	 
	ARTICLE VI. COVENANTS
	 	 	31	 	 	 	 	 
	Section 6.1.Conduct of the Company
	 	 	31	 	 	 	 	 
	Section 6.2.Access to Information; Confidentiality
	 	 	33	 	 	 	 	 
	Section 6.3.Efforts
	 	 	34	 	 	 	 	 
	Section 6.4.Approvals
	 	 	34	 	 	 	 	 
	Section 6.5.Public Announcements
	 	 	35	 	 	 	 	 
	Section 6.6.Notification of Certain Matters
	 	 	35	 	 	 	 	 
	Section 6.7.Director and Officer Indemnification
	 	 	35	 	 	 	 	 
	Section 6.8.Employee Benefit Arrangements
	 	 	36	 	 	 	 	 
	Section 6.9.Post-Closing Access; Preservation of Records
	 	 	37	 	 	 	 	 
	Section 6.10.Further Assurances
	 	 	37	 	 	 	 	 
	Section 6.11.No Solicitation
	 	 	37	 	 	 	 	 
	Section 6.12.Supplemental Disclosure
	 	 	38	 	 	 	 	 
	Section 6.13.Tax Treatment of Transactions.
	 	 	38	 	 	 	 	 
	Section 6.14.Purchase Price Allocation.
	 	 	38	 	 	 	 	 
	ARTICLE VII. CONDITIONS TO CLOSING
	 	 	39	 	 	 	 	 







	 	 	 	Section 7.1. Condition Precedent to Obligations of Buyer, Merger Sub and the Company
39	 





	 	 	 	 	 	 	 	 	 
	 
	 	Section 7.2.Conditions Precedent to Obligation of the Company	 	 	40	 
	 
	 	Section 7.3.Conditions Precedent to Obligations of Buyer and Merger Sub	 	 	40	 
	ARTICLE VIII. INDEMNIFICATION
	 	 	41	 
	 
	 	Section 8.1.Survival	 	 	41	 
	 
	 	Section 8.2.Indemnification	 	 	42	 
	 
	 	Section 8.3.Indemnification Procedures	 	 	43	 
	 
	 	Section 8.4.Limitation on Liability	 	 	45	 
	 
	 	Section 8.5.Calculation of Damages	 	 	45	 
	 
	 	Section 8.6.Exclusive Remedy	 	 	46	 
	 
	 	Section 8.7.Access	 	 	46	 
	 
	 	Section 8.8.Mitigation of Damages	 	 	46	 
	 
	 	Section 8.9.Certain Damages	 	 	46	 
	 
	 	Section 8.10.Release of Escrow Amount	 	 	46	 
	ARTICLE IX. MEMBER REPRESENTATIVE
	 	 	47	 
	 
	 	Section 9.1.Member Representative	 	 	47	 
	 
	 	Section 9.2.Authority and Rights	 	 	47	 
	 
	 	Section 9.3.Limitations on Liability	 	 	48	 
	ARTICLE X. TERMINATION
	 	 	 	 	 	 	49	 
	 
	 	Section 10.1.Termination Events	 	 	49	 
	 
	 	Section 10.2.Effect of Termination	 	 	49	 
	ARTICLE XI. MISCELLANEOUS
	 	 	 	 	 	 	49	 
	 
	 	Section 11.1.Parties in Interest	 	 	49	 
	 
	 	Section 11.2.Assignment	 	 	49	 
	 
	 	Section 11.3.Notices	 	 	50	 
	 
	 	Section 11.4.Amendments and Waivers	 	 	51	 
	 
	 	Section 11.5.Exhibits and Disclosure Schedule	 	 	51	 
	 
	 	Section 11.6.Headings	 	 	52	 
	 
	 	Section 11.7.Construction	 	 	52	 
	 
	 	Section 11.8.No Other Representations or Warranties	 	 	52	 
	 
	 	Section 11.9.Entire Agreement	 	 	52	 
	 
	 	Section 11.10.Severability	 	 	52	 
	 
	 	Section 11.11.Expenses	 	 	53	 
	 
	 	Section 11.12.Governing Law	 	 	53	 
	 
	 	Section 11.13.Consent to Jurisdiction; Waiver of Jury Trial	 	 	53	 
	 
	 	Section 11.14.Equitable Remedies	 	 	53	 
	 
	 	Section 11.15.Counterparts	 	 	54	 
	SCHEDULES
	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	Disclosure Schedule
	 	 	 	 	 	 	 	 
	EXHIBITS
	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	A
	 	Escrow Agreement	 	 	 	 
	B
	 	Non-Compete Agreements	 	 	 	 
	C
	 	Consulting Agreement	 	 	 	 






2




AGREEMENT AND PLAN OF MERGER




Agreement and Plan of Merger, dated as of July 9, 2007 (including the Schedules and Exhibits
hereto, this “Agreement”), is by and among Noven Pharmaceuticals, Inc., a Delaware
corporation (“Buyer”), Noven Acquisition, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Buyer (“Merger Sub”), JDS Pharmaceuticals, LLC, a Delaware
limited liability company (the “Company”), and Satow Associates, LLC, solely in its
capacity as Member Representative. Buyer, Merger Sub, the Company, and solely in its capacity as
such and to the extent applicable, the Member Representative, are referred to collectively herein
as the “Parties” and each individually as a “Party.”



W I T N E S S E T H :




WHEREAS, upon the terms and subject to the conditions of this Agreement and in accordance with
the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq. (the “DLLCA”),
Buyer, Merger Sub and the Company will enter into a business combination transaction pursuant to
which Merger Sub, an entity organized for the sole purpose of entering into the transactions
contemplated hereby, will merge with and into the Company with the Company as the surviving company
and a wholly-owned subsidiary of Buyer (the “Merger”);



WHEREAS, the respective Boards of Directors, Managers or similar governing bodies of Buyer,
Merger Sub and the Company have approved this Agreement, the Merger and the related transactions
contemplated hereby, and have determined that the Merger is advisable to, and in the best interests
of, the respective companies and their respective stockholders and members, as applicable, and have
recommended that their respective stockholders and members, as applicable, consent to and approve
this Agreement, the Merger and the related transactions contemplated hereby upon the terms and
subject to the conditions set forth herein; and



WHEREAS, concurrently with the execution of this Agreement, the Member Representative is
delivering evidence to Buyer that (1) the Company’s Board of Managers has adopted and approved this
Agreement and the transactions contemplated hereby and (2) the Majority AJAC Members, Majority
Galen Members and Majority JED Members (each as defined in the Amended and Restated Limited
Liability Company Agreement of the Company, dated October 31, 2005, as amended (the “LLC
Agreement”)) have each consented in writing to the Company entering into this Agreement and the
transactions contemplated hereby.



NOW, THEREFORE, in consideration of the mutual covenants and promises herein made, and in
consideration of the representations and warranties herein contained, and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties
hereto, intending to become legally bound, hereby agree as follows:



ARTICLE I.




DEFINITIONS




Section 1.1. Certain Definitions. As used in this Agreement, the following terms
shall have the following meanings:



“Accounting Firm” has the meaning set forth in Section 3.7(b).



“Acquisition Transaction” has the meaning set forth in Section 6.11.



“Adjusted Merger Consideration” has the meaning set forth in Section 3.7(c).



“Action” means any action, suit or proceeding by or before any court or other
Governmental Authority.



“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Securities Exchange Act.



“Agreement” has the meaning set forth in the preamble hereto.



“Allocable Closing Merger Consideration” has the meaning set forth in
Section 3.1.



“Allocation” has the meaning set forth in Section 6.14.



“Applicable Percentage” means with respect to any holder of Units or Phantom Units, a
ratio (expressed as a percentage) equal to the aggregate Allocable Closing Merger Consideration to
which such holder is entitled hereunder, divided by the aggregate amount of Allocable Closing
Merger Consideration paid to all holders of Units (other than Preferred Units) and holders of
Phantom Units (other than Preferred Phantom Units).



“Assigned Hurdle Units” has the meaning set forth in Section 4.4.



“Balance Sheet Date” means December 31, 2006.



“Base Merger Consideration” means One Hundred and Twenty-Five Million Dollars
($125,000,000).



“Business” means the business of researching, developing (including through
acquisitions), manufacturing, marketing, selling and distributing pharmaceuticals.



“Business Day” means any day other than Saturday, Sunday or any other day on which
banking institutions in New York are not open for the transaction of normal banking business.



“Buyer” has the meaning set forth in the preamble to this Agreement.



“Buyer Indemnified Parties” has the meaning set forth in Section 8.2(a).



“Certificate” has the meaning set forth in Section 3.3(b).



“Claim Notice” has the meaning set forth in Section 8.3(a).



“Class M Hurdle Units” has the meaning set forth in the LLC Agreement.



“Class N Hurdle Units” has the meaning set forth in the LLC Agreement.



“Class O Hurdle Units” has the meaning set forth in the LLC Agreement.



“Class P Hurdle Units” has the meaning set forth in the LLC Agreement.



“Class Q Hurdle Units” has the meaning set forth in the LLC Agreement.



“Class R Hurdle Units” has the meaning set forth in the LLC Agreement.



“Closing” has the meaning set forth in Section 2.2.



“Closing Date” means the date the Closing occurs pursuant to Section 2.2.



“Closing Date Payment” means the Merger Consideration, minus, if the Estimated Closing
Date Working Capital is less than the Working Capital Target, the amount by which the Estimated
Closing Date Working Capital is less than the Working Capital Target.



“Closing Date Working Capital” has the meaning set forth in Section 3.7(b).



“Code” means the Internal Revenue Code of 1986, as amended.



“Common Phantom Units” has the meaning set forth in the Management Incentive Plan.



“Common Units” has the meaning set forth in the LLC Agreement.



“Commonly Controlled Entity” has the meaning set forth in Section 4.16(a).



“Company” has the meaning set forth in the recitals to this Agreement.



“Company Financial Statements” has the meaning set forth in Section 4.7.



“Company Group” means the Company and the Company’s Subsidiary.



“Company Group Employees” has the meaning set forth in Section 6.8(a).



“Company Plans” has the meaning set forth in Section 4.16(a).



“Company Transaction Expenses” means all fees and expenses incurred or that may be
incurred by the Company or any other member of the Company Group since March 1, 2007 in connection
with the preparation, negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby, including (a) the fees and disbursements of outside counsel to
the Company incurred in connection with the transactions contemplated hereby; (b) the fees and
expenses of all other agents, advisors, consultants and experts employed by the Company in
connection with the transactions contemplated hereby (including fees and expenses of Piper
Jaffray & Co.); (c) all fees and expenses (including premiums) incurred in connection with
obtaining and maintaining directors’ and officers’ liability insurance policies for Indemnified
Officers under Section 6.7; (d) the portion of Liability for Transfer Taxes and other
expenses incurred by the Company under Section 3.9; (e) all amounts paid under the
Company’s “Merger Related Discretionary Bonus Program” as approved by the Company’s Compensation
Committee on May 30, 2007 and (f) all Indebtedness and other Liabilities (including that of any
member of the Company Group) to the Member Representative or any of its Affiliates (other than any
member of the Company Group).



“Confidentiality Agreement” means the Confidentiality Agreement, dated as of February
5, 2007, between the Company and Buyer.



“Consents” means consents, approvals, exemptions, waivers, authorizations, filings and
registrations.



“Damages” means all Liabilities, losses, claims, damages, payments, costs and
expenses, in each case, on a pre-Tax basis (including costs and expenses of Actions, amounts paid
in connection with any assessments, judgments or settlements relating thereto, interest and
penalties recovered by a third party with respect thereto and out-of pocket expenses and reasonable
attorneys’ fees and expenses reasonably incurred in defending against any such Actions or in
enforcing a Party’s rights hereunder).



“Disclosure Schedule” means the disclosure schedule delivered by the Company to Buyer
on the date hereof, as may be supplemented in accordance with the terms hereof.



“Dispute Notice” has the meaning set forth in Section 8.3(e).



“DLLCA” has the meaning set forth in the recitals to this Agreement.



“Effective Time” has the meaning set forth in Section 2.3.



“Environmental Law” means any Law relating to pollution, the protection of the
environment or occupational safety and health.



“Equity Commitment Letter” means that letter agreement entered into by and among
AHP-JDS Acquisition Company, LLC; AIG Healthcare Partners, L.P., as guarantor for AHP-JDS
Acquisition Company, LLC; Galen Partners IV, L.P.; Galen Partners International IV, L.P. and Philip
M. Satow, dated as of August 24, 2005.



“ERISA” means the Employee Retirement Income Security Act of 1974.



“Escrow Agent” has the meaning set forth in Section 3.2.



“Escrow Agreement” has the meaning set forth in Section 3.2.



“Escrow Amount” has the meaning set forth in Section 3.2.



“Estimated Closing Date Working Capital” has the meaning set forth in Section
6.6(b).



“GAAP” means United States generally accepted accounting principles.



“Governmental Approvals” has the meaning set forth in Section 6.4(a).



“Governmental Authority” means any federal, state or local government, court of
competent jurisdiction, administrative agency or commission or other governmental or regulatory
authority or instrumentality.



“Hazardous Materials” means (a) any petroleum or petroleum products, radioactive or
medical materials or wastes, asbestos, and polychlorinated biphenyls and (b) any other chemical,
material, substance or waste that is prohibited or regulated under any Environmental Law.



“HSR Act” means the Hart-Scott Rodino Antitrust Improvements Act of 1976.



“Hurdle Units” has the meaning set forth in Section 4.4.



“Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (d) all unconditional
obligations of such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Liens on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed and (f) all guarantees by
such Person of Indebtedness of others.



“Indemnified Officer” has the meaning set forth in Section 6.7.



“Indemnified Party” has the meaning set forth in Section 8.2(b).



“Indemnifying Party” has the meaning set forth in Section 8.3(a).



“Indemnity Notice” has the meaning set forth in Section 8.3(d).



“Injunction” has the meaning set forth in Section 6.4(a).



“Intellectual Property” means (a) all patents, patent applications and patent
disclosures, (b) all trademarks, service marks, trade dress, logos, trade names, domain names and
corporate names, and all applications, registrations and renewals in connection therewith, (c) all
copyrights and all applications, registrations and renewals in connection therewith, and (d) all
trade secrets and confidential business information (including research and development, know-how,
compositions, manufacturing and production processes, technical (including clinical) data, designs,
specifications and business and marketing plans and proposals).



“Knowledge” means, with respect to the Members or the Company, the actual knowledge of
any individual set forth in Schedule A1 without any implied duty to investigate, and, with
respect to Buyer, the actual knowledge of any individual set forth in Schedule A2 without
any implied duty to investigate.



“Laws” means all laws, statutes, constitutions, rules, regulations, judgments,
rulings, orders, decrees and Injunctions of or by any Governmental Authorities.



“Leased Real Property” has the meaning set forth in Section 4.10(b).



“Liability” means any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for Taxes.



“Lien” means any mortgage, pledge, lien, encumbrance, charge or other security
interest.



“LLC Agreement” has the meaning set forth in the recitals to this Agreement.



“Majority AJAC Members” has the meaning set forth in the LLC Agreement.



“Majority Galen Members” has the meaning set forth in the LLC Agreement.



“Majority JED Members” has the meaning set forth in the LLC Agreement.



“Management Incentive Plan” means the Management Unit Incentive Plan established by
the Company as of August 25, 2004, as provided for in the LLC Agreement.



“Material Adverse Effect” means (a) with respect to the Company Group, a material
adverse effect (1) on the business, assets, operations or financial condition of the Company Group,
taken as a whole or (2) on the ability of any member of the Company Group to timely perform its
obligations under, or to consummate the transactions contemplated by, this Agreement, excluding, in
the case of clause (1), any such effect arising after the date of this Agreement resulting from or
arising out of or in connection with (i) general economic, political, industry (including the
health care and pharmaceutical industries), or financial, securities or banking market events,
occurrences, developments, circumstances or conditions to the extent that such events, occurrences,
developments, circumstances or conditions do not, individually or in the aggregate,
disproportionately impact the Company Group or its Business, (ii) changes in applicable Laws or
regulatory policies generally affecting the industries in which the Company Group operates and that
do not, individually or in the aggregate, disproportionately impact the Company Group or its
Business, (iii) changes in accounting standards, principles or interpretations, (iv) acts of war,
armed hostilities and terrorism, (v) actions taken or not taken at the request of Buyer or Merger
Sub or (iv) (other than with respect to Sections 4.3 and 4.6) changes resulting
from the announcement or pendency of this Agreement or the proposed consummation of the
transactions contemplated hereby, and (b) with respect to Buyer or Merger Sub, a material adverse
effect on the ability of Buyer or Merger Sub to timely perform its obligations under, or to
consummate the transactions contemplated by, this Agreement.



“Material Contracts” has the meaning set forth in Section 4.13(a).



“Member Allocable Expenses” has the meaning set forth in Section 3.2.



“Member Indemnified Parties” has the meaning set forth in Section 8.2(b).



“Member Representative” has the meaning set forth in Section 9.1.



“Members” means the members of the Company.



“Merger” has the meaning set forth in the recitals to this Agreement.



“Merger Consideration” means the Base Merger Consideration minus (without duplication)
(a) any fees and expenses recoverable by the Member Representative pursuant to Article III
or Article IX to the extent known (or, with respect to any fees and expenses recoverable by
the Member Representative in connection with having to deliver the appropriate payments to the
holders of Units or the holders of Phantom Units pursuant to Section 3.3(a), reasonably
estimated by the Member Representative) prior to or at the Closing and communicated to Buyer, (b)
Company Transaction Expenses and (c) the Retained Liabilities.



“Merger Sub” has the meaning set forth in the preamble to this Agreement.



“Notice of Disagreement” has the meaning set forth in Section 3.7(b).



“Ordinary Income Assets” has the meaning set forth in Section 6.14(b).



“Other Parties” has the meaning set forth in Section 4.13(b).



“Participant” has the meaning set forth in Section 4.8.



“Parties” has the meaning set forth in the preamble to this Agreement.



“Permissible Objection” has the meaning set forth in Section 6.14(b).



“Permits” means written permits, licenses, franchises, registrations, variances,
approvals and waivers obtained from or required by any Governmental Authority.



“Permitted Liens” means any (a) mechanic’s, materialmen’s, laborer’s, workmen’s,
repairmen’s, carrier’s and similar Liens, including all statutory Liens, arising or incurred in the
ordinary course of business, (b) Liens for Taxes, assessments and other governmental charges not
yet due and payable or, if due, (i) not delinquent or (ii) being contested in good faith through
appropriate proceedings, (c) purchase money Liens and Liens securing rental payments under capital
lease arrangements as set forth in Section A3 of the Disclosure Schedule, (d) pledges or
deposits under workers’ compensation legislation, unemployment insurance Laws or similar Laws, (e)
good faith deposits in connection with bids, tenders, leases, contracts or other agreements,
including rent security deposits as set forth in Section A3 of the Disclosure Schedule, (f)
pledges or deposits to secure public or statutory obligations or appeal bonds as set forth in
Section A3 of the Disclosure Schedule, (g) Liens disclosed in the Company Financial
Statements, (h) other Liens not incurred in connection with the borrowing of money which do not,
individually or in the aggregate, interfere with or impair, in any material respect, the present
operation of the Business, (i) in the case of property leased by the Company Group, easements,
covenants and other restrictions which do not, individually or in the aggregate, materially impair
the current use, occupancy or value of the property subject thereto and (j) Liens arising under or
created by the Transaction Documents.



“Person” means an individual, partnership, limited liability partnership, corporation,
limited liability company, association, joint stock company, trust, estate, joint venture,
unincorporated organization or Governmental Authority (or any department, agency or political
subdivision thereof).



“Phantom Units” has the meaning set forth in the Management Incentive Plan.



“Pre-Closing Tax Period” means any taxable period (or portion thereof) ending on or
before the Closing Date.



“Pre-Closing Tax Liability” means any liability of any member of the Company Group for
Taxes for any Pre-Closing Tax Period.



“Preferred Phantom Units” has the meaning set forth in the Management Incentive Plan.



“Preferred Units” has the meaning set forth in the LLC Agreement.



“Products” means the pharmaceutical products listed on Section A4 of the
Disclosure Schedule.



“Proposed Allocation” has the meaning set forth in Section 6.14(a).



“Purchase Price Indebtedness” means, without duplication, (a) all obligations of the
Company Group for borrowed money, (b) all obligations of the Company Group evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of others for borrowed money or
evidenced by bonds, debentures, notes or similar instruments that are secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be secured by) any
Liens on property owned or acquired by the Company Group or any member thereof, whether or not the
obligation secured thereby has been assumed and (d) all guarantees by the Company Group of
obligations of others for borrowed money or evidenced by bonds, debentures, notes or similar
instruments.



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



“Release” means any release, discharge, disposal, spill, injection, leak, leaching,
escape, emptying, seeping, migration or emission into or through the environment or within any
building, structure, facility or fixture.



“Remedies Exception” means (a) applicable bankruptcy, insolvency, reorganization,
moratorium and other Laws of general application, heretofore or hereafter enacted or in effect,
affecting the rights and remedies of creditors generally, and (b) the exercise of judicial or
administrative discretion in accordance with general equitable principles, particularly as to the
availability of the remedy of specific performance or other injunctive relief.



“Restricted Common Units” has the meaning set forth in the LLC Agreement.



“Retained Liabilities” means, without duplication, all amounts owed by the Company
Group: (a) pursuant to that certain promissory note of the Company in favor of Solvay
Pharmaceuticals, Inc., dated August 6, 2004, as amended; (b) due to Synthon under section 3.1(b)
(but not including sections 3.1(b)(i) and 3.1(b)(ii)) of that certain Asset Purchase Agreement by
and between Synthon and the Company, dated October 17, 2005; (c) otherwise qualifying (including
the current portion thereof) as “long-term obligations” of the Company Group in the Company
Financial Statements (but excluding the “Additional Fee Aggregate Minimum” under section 3.4(d) of
that certain Asset Purchase Agreement by and between Synthon and the Company, dated October 17,
2005); and (d) as Purchase Price Indebtedness. For the avoidance of doubt, Retained Liabilities
shall not include contingent milestone payments due pursuant to (1) sections 2.2(b), 2.2(c), 2.2(d)
and 2.2(e) of that certain Development, License and Supply Agreement by and between Banner
Pharmacaps Inc. and the Company, dated April 26, 2007; (2) sections 3.1(b)(i), 3.1(b)(ii), 3.1(c)
and 3.1(d) of that certain Asset Purchase Agreement by and between Synthon and the Company, dated
October 17, 2005; (3) paragraph 1 of that certain Side Letter, dated August 22, 2006, to the Supply
Agreement between Valpharma International S.p.A. and the Company, dated April 29, 2004; and (4)
sections 4.1(b), 4.1(c), 4.1(d) and 4.1(e) of that certain Asset Purchase Agreement by and between
Istituto Farmacoterapico Italiano S.p.A., Unihart Corporation and the Company, dated March 19,
2004.



“Right” means any option, warrant, convertible or exchangeable security or other
right, however denominated, to subscribe for, purchase or otherwise acquire any equity interest or
other security of any class, with or without payment of additional consideration in cash or
property, either immediately or upon the occurrence of a specified date or a specified event or the
satisfaction or happening of any other condition or contingency.



“Securities Act” means the Securities Act of 1933.



“Securities Exchange Act” means the Securities Exchange Act of 1934.



“Statement” has the meaning set forth in Section 3.7(b).



“Subsidiary” when used with respect to any Person, means any other Person of which
(a) in the case of a corporation, at least (i) a majority of the equity and (ii) a majority of the
voting interests are owned or controlled, directly or indirectly, by such first Person, by any one
or more of such first Person’s Subsidiaries, or by such first Person and one or more of such first
Person’s Subsidiaries or (b) in the case of any Person other than a corporation, such first Person,
one or more of such first Person’s Subsidiaries, or such first Person and one or more of such first
Person’s Subsidiaries (i) owns a majority of the equity interests thereof and (ii) has the power to
elect or direct the election of a majority of the members of the governing body thereof.



“Survival Date” has the meaning set forth in Section 8.1(a)(i).



“Surviving Company” has the meaning set forth in Section 2.1.



“Surviving Company Group” has the meaning set forth in Section 6.7.



“Synthon” means Synthon Pharmaceuticals Inc.



“Tax” means any federal, state, local or foreign tax, duty, fee, levy or other
assessment, including income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax, imposed by any Governmental Authority, and including any interest,
penalties or additions thereto.



“Tax Return” means any return, declaration, report, claim for refund or information
return or statement relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof, required to be filed with any Governmental Authority.



“Third-Party Claim” has the meaning set forth in Section 8.3(a).



“Transaction Documents” means this Agreement and all other documents delivered or
required to be delivered at Closing by any Party pursuant to this Agreement.



“Transfer Taxes” means all transfer Taxes (excluding, for the avoidance of doubt,
Taxes measured by net income), including sales, property, real estate transfer, use, excise, stock,
stamp, documentary, filing, recording, permit, license, authorization and similar Taxes, filing
fees and similar charges.



“Units” has the meaning set forth in the LLC Agreement and, for the avoidance of
doubt, also means (to the extent not already included in the definition provided in the LLC
Agreement and without duplication) membership interests in the Company, including any securities
issued in respect of or in exchange for membership interests in the Company.



“Waiving Party” has the meaning set forth in Section 8.1(b).



“Working Capital” means, without duplication, (a) the consolidated current assets of
the Company Group (excluding any restricted cash) minus (b) the consolidated current liabilities of
the Company Group (excluding any Retained Liabilities or Company Transaction Expenses), in each
case immediately prior to the Effective Time and calculated in the same way, using the same
methods, as the corresponding line items on the Company Financial Statements at the Balance Sheet
Date and in accordance with GAAP, as consistently applied by the Company.



“Working Capital Target” means negative Seven Million Dollars (-$7,000,000).



Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The words “herein”, “hereof” and “hereunder” and words of similar import refer to
this Agreement (including the Exhibits to this Agreement and the Disclosure Schedule) in its
entirety and not to any part hereof unless the context shall otherwise require. All references
herein to Articles, Sections, Exhibits and the Disclosure Schedule shall be deemed references to
Articles and Sections of, and Exhibits and the Disclosure Schedule to, this Agreement unless the
context shall otherwise require. Unless the context shall otherwise require, any references to any
agreement or other instrument or statute or regulation are to it as amended and supplemented from
time to time (and, in the case of a statute or regulation, to any successor provisions). Any
reference to any federal, state, local or foreign statute or Law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires otherwise. Any
reference in this Agreement to a “day” or a number of “days” (without explicit reference to
“Business Days”) shall be interpreted as a reference to a calendar day or number of calendar days.
If any action is to be taken or given on or by a particular calendar day, and such calendar day is
not a Business Day, then such action may be deferred until the next Business Day. Any reference to
a Person includes such Person’s successors and permitted assigns.



ARTICLE II.




MERGER




Section 2.1. The Merger. Upon the terms and subject to the conditions hereof, at the
Effective Time, Merger Sub shall be merged with and into the Company and the separate existence of
Merger Sub shall thereupon cease, and the Company shall continue as the surviving company in the
Merger (the “Surviving Company”) in accordance with the DLLCA.



Section 2.2. Closing. Unless this Agreement shall have been terminated pursuant to
Article X and subject to the satisfaction or, when permissible, waiver of the conditions
set forth in Article VII, the closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place (a) at the offices of Latham & Watkins LLP, 885 Third
Avenue, New York, New York 10022, commencing at 10:00 a.m. local time on the day which is two (2)
Business Days after the date on which the last of the conditions set forth in Article VII
(other than any such conditions which by their terms are not capable of being satisfied until the
Closing Date) is satisfied or, when permissible, waived, or (b) on such other date and/or at such
other time and/or place as the Parties may mutually determine (the “Closing Date”).



Section 2.3. Effective Time of the Merger. The Merger shall become effective upon the
filing of the certificate of merger with the Secretary of State of the State of Delaware in
accordance with the provisions of the DLLCA, or at such other time as Merger Sub and the Company
shall agree should be specified in the certificate of merger, which filing shall be made as soon as
practicable on the Closing Date. When used in this Agreement, the term “Effective Time”
shall mean the time at which such certificate is accepted for filing by the Secretary of State of
the State of Delaware or such other time as otherwise specified in the certificate of merger.



Section 2.4. Effect of Merger. The Merger shall, from and after the Effective Time,
have all the effects provided herein, in the certificate of merger and in the applicable provisions
of the DLLCA.



Section 2.5. Further Actions. The Parties hereto shall execute and deliver such
certificates and other documents and take such other actions as may be necessary or appropriate in
order to effect the Merger, including, but not limited to, making filings, recordings or
publications required under the DLLCA. If at any time after the Effective Time any further action
is necessary to vest in the Surviving Company the title to all property or rights of Merger Sub or
the Company, the authorized officers and managers of the Surviving Company are fully authorized in
the name of Merger Sub or the Company, as the case may be, to take, and shall take, any and all
such lawful action.



Section 2.6. Organizational Documents. The organizational documents of Merger Sub as
in effect immediately prior to the Effective Time (and containing the provisions required by
Section 6.7) shall be the organizational documents of the Surviving Company after the
Effective Time, until thereafter changed or amended as provided therein or by applicable Law
(subject to Section 6.7).



Section 2.7. Officers. The officers of the Company immediately prior to the Effective
Time shall be the officers of the Surviving Company, each to hold office in accordance with the
organizational documents of the Surviving Company until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, in any case in the manner
provided in the organizational documents of the Surviving Company and in accordance with applicable
Law. The managers of Merger Sub immediately prior to the Effective Time shall become the managers
of the Surviving Company at the Effective Time.



ARTICLE III.




CONVERSION OF UNITS




Section 3.1. Merger Consideration. As of the Effective Time, by virtue of the Merger
and without any further action on the part of any holder of Units or Phantom Units or any member of
Merger Sub, (a) each Unit or Phantom Unit held by Buyer, Merger Sub, or by any member of the
Company Group in treasury, not issued or outstanding or otherwise, shall be canceled and retired
and shall cease to exist, and no consideration shall be delivered or receivable in exchange
therefore, (b) each other Unit or Phantom Unit issued and outstanding immediately prior to the
Effective Time shall be converted into and represent the right, in full satisfaction of the rights
of the holder thereof, to receive (i) an amount in cash equal to the amount that would be
receivable in respect of such Unit or Phantom Unit pursuant to, and in accordance with the rights
and obligations set forth in, the LLC Agreement and the Management Incentive Plan in a complete
liquidation of the Company where the liquidation proceeds are equal to the Adjusted Merger
Consideration less the Escrow Amount (the amount receivable in respect of a particular Unit or
Phantom Unit pursuant to this clause (i), that Unit or Phantom Unit’s “Allocable Closing Merger
Consideration”), and (ii) to the extent applicable, a portion of the balance of the Escrow
Amount in accordance with Section 8.10, in each case after taking into account the
cancellation of Units and Phantom Units pursuant to clause (a) of this Section 3.1 and
determined in accordance with the methodologies used in Section 3.1 of the Disclosure
Schedule (which, by way of example, sets forth a calculation of the Allocable Closing Merger
Consideration, including the amount payable to holders of the Preferred Phantom Units, which derive
their value pursuant to the Management Incentive Plan based on the value of the Adjusted Merger
Consideration, that would be payable if the Effective Time occurred on August 15, 2007 and the
Adjusted Merger Consideration was equal to the Base Merger Consideration) and (c) each issued and
outstanding limited liability company interest of Merger Sub shall be converted into and become one
fully paid and nonassessable limited liability company interest of the Surviving Company.



Section 3.2. Escrow Amount. At the Effective Time, a portion of the Merger
Consideration in an amount equal to $10,000,000 (the “Escrow Amount”) shall be paid by
Buyer to Wells Fargo Bank, N.A., as escrow agent of the Parties (the “Escrow Agent”), to be
held in escrow in accordance with the terms of an Escrow Agreement in the form attached hereto as
Exhibit A (the “Escrow Agreement”). The Escrow Amount shall be held, invested and
distributed in accordance with the terms of the Escrow Agreement and in accordance with this
Section 3.2 and Article VIII hereof. Following the Closing and in accordance with
Section 8.10, the Member Representative shall be entitled to direct the Escrow Agent, at
any time and from time to time, to pay the following fees and expenses that may be incurred by the
Member Representative on behalf of the holders of Units and the holders of Phantom Units out of the
Escrow Amount: (a) the reasonable fees and disbursements of special outside counsel to the Member
Representative incurred in connection with any indemnification claims for Damages pursuant to
Article VIII, (b) the reasonable fees and expenses of any other agents, advisors,
consultants and experts employed by the Member Representative incurred in connection with any
indemnification claims for Damages pursuant to Article VIII, (c) the reasonable fees and
disbursements of the Member Representative’s independent auditors incurred in connection with their
review of the Statement and certification of any Notice of Disagreement under Section
3.7(b) and (d) other reasonable out-of-pocket expenses of the Member Representative incurred in
connection with any indemnification claims for Damages pursuant to Article VIII or the
procedures set forth in Section 3.7(b) (collectively, the “Member Allocable
Expenses”). For the avoidance of doubt, all unpaid Member Allocable Expenses that have been
submitted to the Escrow Agent by the Member Representative for payment and that are permitted
hereby shall be paid out of the Escrow Amount by the Escrow Agent prior to any payment being made
by the Escrow Agent of any portion of the Escrow Amount to any Buyer Indemnified Party or to any
holder of Units (other than Preferred Units) or Phantom Units (other than Preferred Phantom Units)
pursuant to Section 8.10. In no event will Buyer or the Member Representative be
responsible for payment of Member Allocable Expenses in excess of the Escrow Amount.



Section 3.3. Payment.



(a) At the Effective Time, Buyer shall pay to the Member Representative, for the benefit of
the holders of Units and the holders of Phantom Units, an amount in cash equal to the Closing Date
Payment less the Escrow Amount. Other than as set forth in Section 3.3(d), Buyer shall
have fully discharged its obligation to pay the Closing Date Payment upon delivery of payment to
the Member Representative in accordance with this Section 3.3(a), and the Member
Representative shall be solely responsible for the delivery of the appropriate payments to the
holders of Units and the holders of Phantom Units pursuant to the terms of this Agreement.



(b) Promptly after the Effective Time, the Member Representative shall send a notice and a
letter of transmittal in a form reasonably satisfactory to Buyer and the Company to each holder of
certificates formerly evidencing Units or Phantom Units (collectively, the “Certificates”)
and any holders of Units or Phantom Units immediately prior to the Effective Time not evidenced by
Certificates, advising of the effectiveness of the Merger and the procedure for surrendering to the
Member Representative such Certificates, Units and Phantom Units for exchange into the right to
receive the applicable Allocable Closing Merger Consideration and, to the extent applicable, a
portion of the balance of the Escrow Amount in accordance with Section 8.10, and that
delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery to the
Member Representative of such Certificates, Units and Phantom Units and a duly executed letter of
transmittal and any other required documents or evidence of transfer. Each holder of Certificates
or Units or Phantom Units not evidenced by Certificates, upon surrender thereof to the Member
Representative together with such letter of transmittal (duly executed) and any other required
documents or evidence of transfer, shall be entitled to receive in exchange therefore, and in full
satisfaction of any rights thereunder, the right to receive the applicable Allocable Closing Merger
Consideration and, to the extent applicable, a portion of the balance of the Escrow Amount in
accordance with Section 8.10. Upon such surrender but subject to the adjustment provisions
of Section 3.7, the Member Representative shall promptly deliver the applicable Allocable
Closing Merger Consideration (less all applicable withholding and employment taxes) in accordance
with the instructions set forth in the related letter of transmittal, and the Certificates, Units
and Phantom Units so surrendered shall promptly be canceled. On and after the Effective Time, the
Certificates, Units and Phantom Units shall be deemed for all purposes to evidence only the right
to receive the applicable Allocable Closing Merger Consideration and, to the extent applicable, a
portion of the balance of the Escrow Amount in accordance with Section 8.10. No interest
shall accrue or be paid on any cash payable upon the surrender of the Certificates, Units and
Phantom Units.



(c) If any portion of the consideration due pursuant to Section 3.3(b) is to be
delivered to a Person other than the Person in whose name the Certificates, Units or Phantom Units
surrendered in exchange therefor are registered, it shall be a condition to the payment of such
consideration that the Certificates, Units and Phantom Units so surrendered shall be properly
endorsed or accompanied by appropriate powers and otherwise in proper form for transfer, that such
transfer otherwise be proper and that the Person requesting such transfer pay to the Member
Representative any transfer or other Taxes payable by reason of the foregoing or establish to the
satisfaction of the Member Representative that such Taxes have been paid or are not required to be
paid.



(d) Unless required otherwise by applicable Law, any amount held by the Member Representative
that remains undistributed to holders of the Certificates, Units and Phantom Units 180 days after
the Effective Time shall be delivered to the Party who provided such funds to the Member
Representative and any Certificate, Unit or Phantom Unit holder who has not theretofore complied
with the provisions of this Article III shall thereafter look only to the Surviving Company
for payment of the Allocable Closing Merger Consideration to which such Person is entitled pursuant
to this Article III. Neither Buyer nor the Member Representative shall be liable to any
such Certificate, Unit or Phantom Unit holder for any amounts delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law.



Section 3.4. No Further Rights. From and after the Effective Time, holders of
Certificates, Units and Phantom Units theretofore evidencing membership interests in the Company
shall cease to have any rights as members of the Company, the Surviving Company, any member of the
Company Group or the Surviving Company Group or otherwise. All consideration paid pursuant to
Section 3.3 upon the surrender of Certificates, Units and Phantom Units in accordance with
the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to
the Units and Phantom Units (both in Certificate and non-Certificate form).



Section 3.5. Closing of the Company’s Transfer Books. At the Effective Time, the
transfer books of the Company shall be closed and no transfer of Units shall be made thereafter.
If after the Effective Time Certificates, Units or Phantom Units are presented to Buyer or the
Surviving Company, they shall be canceled and exchanged as provided in this Article III.



Section 3.6. Closing Deliveries.



(a) At the Closing, the Company shall deliver or cause to be delivered to Buyer the following:




(i) resignations of the managers or directors set forth in Section 3.6 of the
Disclosure Schedule, from his or her position as manager or director, as applicable, of the
applicable member of the Company Group, effective as of the Closing;




(ii) (A) non-compete agreements, in the form attached hereto as Exhibit B,
executed by each of Philip M. Satow and Michael S. Satow, and (B) a consulting agreement, in
the form attached hereto as Exhibit C, executed by Philip M. Satow;




(iii) the certificates referred to in Sections 7.3(a) and 7.3(b); and




(iv) all other documents required to be delivered by the Company or the Member
Representative to Buyer at the Closing pursuant to this Agreement.



(b) At the Closing, Buyer shall deliver or cause to be delivered the following:




(i) the Closing Date Payment less the Escrow Amount in immediately available funds to
the Member Representative as provided in Section 3.3;




(ii) the Escrow Amount in immediately available funds to the Escrow Agent as provided
in Section 3.2;




(iii) the Company Transaction Expenses in immediately available funds to the Company
for payment in full to the Persons to whom any portion of such Company Transaction Expenses
is owed or, at the request of the Company, directly to such Persons on behalf of the
Company;




(iv) an amount equal to the Retained Liabilities in immediately available funds to the
Company for payment in full to the Persons to whom any portion of the Retained Liabilities
is owed or, at the request of the Company, directly to such Persons on behalf of the
Company;




(v) the certificates referred to in Sections 7.2(a) and 7.2(b); and




(vi) all other documents required to be delivered by Buyer and Merger Sub to the
Company and Member Representative at the Closing pursuant to this Agreement.



Section 3.7. Adjustment to Merger Consideration. (a) Immediately prior to the
Closing, the Company and its Subsidiaries shall bring current (in accordance with then-existing
contract and invoice payment terms) all accounts payable, accrued expenses and other liabilities of
the Company Group to reflect the amounts thereof immediately prior to the Closing.



(b) Within 180 days after the Closing Date, the Surviving Company shall prepare and deliver to
the Member Representative a statement (the “Statement”), certified by an officer of the
Surviving Company, setting forth Working Capital as of the Effective Time (the “Closing Date
Working Capital”). During the 30-day period following the Member Representative’s receipt of
the Statement, the Member Representative shall be permitted to review the working papers relating
to the Statement, and the Statement shall become final and binding upon the Parties hereto on the
30th day following delivery thereof to the Member Representative unless the Member Representative
gives to Buyer written notice of its disagreement (a “Notice of Disagreement”) with the
Statement prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail
the nature of any disagreement so asserted, (ii) only include disagreements based on mathematical
errors or based on Closing Date Working Capital not being calculated in accordance with the terms
of this Agreement, (iii) be accompanied by a certificate of the Member Representative that it has
complied with this Section 3.7 and (iv) be accompanied by a certificate of the Member
Representative’s independent auditors confirming and concurring with each of the positions taken by
the Member Representative in the Notice of Disagreement. If a Notice of Disagreement is received
by Buyer in a timely manner, then the Statement (as revised, if necessary, in accordance with this
sentence) shall become final and binding upon the Parties hereto on the earlier of (A) the date
Buyer and the Member Representative resolve in writing all differences they have with respect to
the matters specified in the Notice of Disagreement and (B) the date all disputed matters are
finally resolved in writing by the Accounting Firm. During the 30-day period following the
delivery of a Notice of Disagreement, Buyer and the Member Representative shall seek in good faith
to resolve in writing all differences that they may have with respect to the matters specified in
the Notice of Disagreement. At the end of such 30-day period, if Buyer and the Member
Representative have not resolved in writing all differences that they have with respect to the
matters specified in the Notice of Disagreement, Buyer and the Member Representative shall submit
to an independent accounting firm (the “Accounting Firm”) for arbitration any and all
matters that remain in dispute and were properly included in the Notice of Disagreement. The
Accounting Firm shall be a nationally recognized independent public accounting firm agreed upon by
Buyer and the Member Representative in writing. Judgment may be entered upon the determination of
the Accounting Firm in any court having jurisdiction over the party against which such
determination is to be enforced. The cost of any arbitration (including the fees and expenses of
the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this
Section 3.7 shall be borne by Buyer and the Member Representative in inverse proportion as
they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall
also be determined by the Accounting Firm at the time the determination of the Accounting Firm is
rendered on the merits of the matters submitted. The fees and disbursements of the Member
Representative’s independent auditors incurred in connection with their review of the Statement and
certification of any Notice of Disagreement shall be borne by the Member Representative, and the
fees and disbursements of Buyer’s independent auditors incurred in connection with their review of
the Statement and any Notice of Disagreement shall be borne by Buyer. Any determinations by the
Accounting Firm, and any work or analyses performed by the Accounting Firm, in connection with its
arbitration of any dispute under this Section 3.7 shall not be admissible in evidence in
any suit, action or proceeding between the Parties hereto other than to the extent necessary to
enforce payment obligations under this Section 3.7(b).



(c) The Merger Consideration shall be decreased by the amount by which Closing Date Working
Capital is less than the Working Capital Target (the Merger Consideration as so decreased, the
“Adjusted Merger Consideration”). If the Adjusted Merger Consideration is greater than the
Closing Date Payment, Buyer shall, within ten business days after the Statement becomes final and
binding on the Parties hereto, make payment to the Member Representative, for the benefit of the
holders of Units and the holders of Phantom Units, by wire transfer in immediately available funds
in the amount of such excess. If Adjusted Merger Consideration is less than the Closing Date
Payment, Buyer shall be entitled to an indemnity payment in the amount of such deficiency in
accordance with Section 8.2(a)(i)(E). Any payment under this Section 3.7(c) shall
be made together with interest thereon at a rate equal to the rate of interest from time to time
announced publicly by Citibank, N.A., as its prime rate, calculated on the basis of the actual
number of days elapsed divided by 365, from the Closing Date to the date of such payment.



Section 3.8. Satisfaction of Conditions. All conditions to the obligations of the
Company, Buyer and Merger Sub to proceed with the Closing under this Agreement shall be deemed to
have been fully and completely satisfied or waived for all purposes upon the Closing.



Section 3.9. Transfer Taxes. Liability for Transfer Taxes incurred in connection with
this Agreement, the transactions contemplated by this Agreement or the documents giving effect to
such transactions shall be shared, 50% by Buyer, on the one hand, and 50% by the Company, on the
other hand.



ARTICLE IV.




REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY GROUP




The Company represents and warrants to Buyer, except as set forth in the Disclosure Schedule
(and subject to Section 11.5), as follows:



Section 4.1. Organization of the Company and the Company Group. The Company is a
limited liability company duly formed, validly existing and in good standing under the laws of
Delaware, and the Company has all requisite limited liability power and authority to carry on its
business as it is currently conducted and to own, lease and operate its properties where such
properties are now owned, leased or operated. Each other member of the Company Group (a) is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization and (b) has all requisite organizational power and authority to carry on its
respective business as it is currently conducted and to own, lease and operate its properties where
such properties are now owned, leased or operated, except in all cases where any failures of the
representations in this sentence to be true would not and would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on the Company Group. Each member
of the Company Group is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or license necessary, except where the failure to be so
duly qualified or licensed or in good standing would not and would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on the Company Group.



Section 4.2. Authorization. The Company has all requisite limited liability company
power and authority to execute and deliver this Agreement and the other Transaction Documents to
which it is or will be party and to perform its obligations hereby and thereby. The execution,
delivery and performance by the Company of this Agreement and the other Transaction Documents to
which the Company is or will be a Party and the consummation of the transactions contemplated
hereby and thereby have been, or will be at the time of execution, duly authorized by the Members,
pursuant to the LLC Agreement and the DLLCA. No other limited liability company or member
proceedings on the part of the Company are necessary to authorize this Agreement, such Transaction
Documents or the consummation of the transactions contemplated hereby or thereby. This Agreement
has been duly executed and delivered by the Company and (assuming this Agreement constitutes a
legal, valid and binding obligation of Buyer and Merger Sub) constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms, subject to
the Remedies Exception.



Section 4.3. Noncontravention. Neither the execution and delivery of this Agreement
by the Company, nor the consummation by the Company of the transactions contemplated hereby will
(a) conflict with the LLC Agreement, (b) subject to the Consents described in Section
4.6(c) of the Disclosure Schedule, violate or result in a breach of any Material Contract, or
(c) subject to the Consents of Governmental Authorities described in Section 4.6(e),
violate any Law to which any member of the Company Group is subject, except, in the case of
clauses (b) and (c), for such violations or breaches which would not and would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect on the Company Group.



Section 4.4. Capitalization. The issued membership interests in the Company consist
of: (a) 57,688,909 Common Units, of which (i) 50,000,000 are straight Common Units, (ii) 6,468,076
are Restricted Common Units and (iii) 1,220,833 are Common Phantom Units; (b) 36,462,810 Preferred
Units, of which 750,000 are Preferred Phantom Units; (c) 3,333,333 Class M Hurdle Units;
(d) 3,809,524 Class N Hurdle Units; (e) 4,395,604 Class O Hurdle Units; (f) 5,128,205 Class P
Hurdle Units; (g) 6,060,606 Class Q Hurdle Units; and (h) 7,272,727 Class R Hurdle Units
(subsections (c), (d), (e), (f), (g) and (h) of this Section 4.4 together, the “Hurdle
Units”). Section 4.4 of the Disclosure Schedule sets forth a true, correct and
complete list of (A) all the outstanding Common Units (including the straight Common Units,
Restricted Common Units and Common Phantom Units), including, if applicable, the grant dates,
expiration dates, exercise prices or exercise equivalent prices and vesting schedules thereof and
the names of the holders thereof, (B) all of the outstanding Preferred Units (including Preferred
Phantom Units), including, if applicable, the grant dates, expiration dates, exercise prices or
exercise equivalent prices and vesting schedules thereof and the names of the holders thereof and
(C) all of the outstanding Hurdle Units (including Hurdle Units assigned or granted in connection
with employment with or service to the Company or its affiliates (the “Assigned Hurdle
Units”)), including the grant dates, assignment dates (if applicable), expiration dates and
vesting schedules thereof and the names of the holders thereof. All outstanding Restricted Common
Units, Phantom Common Units, Preferred Phantom Units and Assigned Hurdle Units are evidenced by
award agreements, in each case substantially in the forms provided to Buyer prior to the date of
this Agreement, and no award agreement contains terms that are materially inconsistent with such
forms. Nothing in any award agreement for outstanding Restricted Common Units, Phantom Common
Units, Preferred Phantom Units or Assigned Hurdle Units prevents the cancellation of such
Restricted Common Units, Phantom Common Units, Preferred Phantom Units or Assigned Hurdle Units
upon, and in exchange for, payments to the holders thereof in accordance with the terms of this
Agreement, and nothing in any such award agreement entitles holders of Restricted Common Units,
Phantom Common Units, Preferred Phantom Units or Assigned Hurdle Units, upon the cancellation of
such Restricted Common Units, Phantom Common Units, Preferred Phantom Units or Assigned Hurdle
Units, to any payment other than payments to such holders in accordance with the terms of this
Agreement. All of the Units have been duly authorized and validly issued. Except as set forth in
Section 4.4 of the Disclosure Schedule, no holder of Units or Phantom Units are party to
any convertible securities, calls, preemptive rights, options, warrants, purchase rights or other
contracts, agreements or commitments (other than this Agreement) that would require any holder of
Units or Phantom Units to sell, transfer or otherwise dispose of the Units or Phantom Units. No
holder of Units or Phantom Units is party to any voting trust, proxy or other agreement or
understanding with respect to the voting of the Units or Phantom Units. Except as set forth in
Section 4.4 of the Disclosure Schedule, there are not any options, warrants, rights,
convertible or exchangeable securities or interests, “phantom” equity rights, unit appreciation
rights, performance units, commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its Subsidiaries is a party or by which any of them is bound (i)
obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional equity interests in, or any security or interest convertible or
exercisable for or exchangeable into any equity interest in, the Company or any of its
Subsidiaries, (ii) obligating the Company or any of its Subsidiaries to issue, grant, extend or
enter into any such option, warrant, call, right, security, interest, commitment, agreement,
arrangement or undertaking or (iii) that give any Person the right to receive any economic benefit
or right similar to or derived from the economic benefits and rights occurring to holders of Units
or Phantom Units. As of the date of this Agreement, there are not any outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any equity of the Company or any of its Subsidiaries. Except as set forth above in this
Section 4.4, (I) no equity interests or voting securities of the Company were issued,
reserved for issuance or outstanding and (II) there are no Common Units (including straight Common
Units, Restricted Common Units and Common Phantom Units), Preferred Units (including Preferred
Phantom Units) or Hurdle Units (including Assigned Hurdle Units) subject to vesting or restrictions
on transfer imposed by the Company, “phantom” equity rights, unit appreciation rights, performance
units, rights to receive Common Units (including straight Common Units, Restricted Common Units and
Common Phantom Units), Preferred Units (including Preferred Phantom Units) or Hurdle Units
(including Assigned Hurdle Units) on a deferred basis or other rights that are linked to the value
of the Company’s equity interests or voting securities.



Section 4.5. Subsidiaries of the Company. Section 4.5 of the Disclosure
Schedule sets forth for each of the Company’s Subsidiaries (a) its name and jurisdiction of
organization, (b) its form of organization and (c) the capital stock, membership interests or units
held by the Company, directly or indirectly, in such Subsidiary. The Company is the sole direct or
indirect beneficial and record owner of the outstanding shares of capital stock or other interests
or units in the Company’s Subsidiaries, free and clear of all Liens, except (i) as may be set forth
in the certificate of formation, limited liability company agreement, limited partnership
agreement, certificate of incorporation or bylaws, or similar governing documents of such
Subsidiary, (ii) for any restrictions on sales of securities under applicable securities Laws,
(iii) for Permitted Liens and (iv) as set forth in Section 4.5 of the Disclosure Schedule.



Section 4.6. Consents, Government Authorizations. Except for (a) compliance with the
HSR Act and the regulations thereunder and any other antitrust or merger notification or control
Laws, (b) compliance with any applicable requirements of the Securities Act and any other
applicable securities Laws, (c) Consents set forth in Section 4.6(c) of the Disclosure
Schedule, (d) Consents that, if not obtained or made, would not and would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect on the Company Group
and (e) those Consents of Governmental Authorities set forth in Section 4.6(e) of the
Disclosure Schedule, no Consent is required to be obtained or made by the Company Group in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, other than any such requirement that is applicable as a result of
the specific legal or regulatory status of Buyer, Merger Sub or any of their respective Affiliates
or as a result of any other facts that specifically relate to the business or activities in which
Buyer, Merger Sub or any of their respective Affiliates is or proposes to be engaged, other than
the Business.



Section 4.7. Financial Statements. Set forth in Section 4.7 of the Disclosure
Schedule are (a) the audited consolidated balance sheets of the Company Group as of December 31,
2005 and 2006, (b) the related audited consolidated statements of operations, Members’ deficit and
cash flows of the Company Group for the years ended on December 31, 2005 and 2006 and (c) the
unaudited consolidated balance sheet of the Company Group as of March 31, 2007 and the related
statements of operations, Members’ deficit and cash flows for the period ended on March 31, 2007
(clauses (a) through (c) collectively, the “Company Financial Statements”). Except as set
forth therein, the Company Financial Statements present fairly, in all material respects, the
combined financial position, results of operations and cash flows of the Company Group, at the
respective dates set forth therein and for the respective periods covered thereby, and were
prepared in accordance with GAAP (except, in the case of the unaudited financial statements, for
the absence of footnotes and any year-end adjustments), consistently applied.



Section 4.8. Absence of Certain Changes. Since the Balance Sheet Date, except as
expressly contemplated by this Agreement or as set forth in Section 4.8 of the Disclosure
Schedule, each member of the Company Group has conducted its business only in the ordinary course,
and there has not been (a) any event, occurrence, development, circumstance or condition that would
or would reasonably be expected to, individually or in the aggregate, have a Material Adverse
Effect on the Company Group, (b) any damage, destruction or loss, whether or not covered by
insurance, that would or would reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect on the Company Group, (c) any change in accounting methods, principles or
practices affecting the Company Group, except as required by GAAP or (d) any (i) adoption, entry
into, termination or amendment of any Company Plan or other agreement, plan or policy involving the
Company Group and one or more current or former director, officer, employee or independent
contractor of any member of the Company Group (each, a “Participant”), (ii) increase in the
compensation, bonus or fringe or other benefits of, or grant or payment of any type of compensation
or benefits to, any Participant not previously receiving or entitled to receive such type of
compensation or benefits, other than, in the case of employees who are neither directors nor
officers, normal increases in base cash compensation in the ordinary course of business consistent
with past practice, (iii) payment of any benefit or amount not required under any Company Plan as
in effect on the date of this Agreement, other than wages and salaries in the ordinary course of
business consistent with past practice, (iv) grant or payment to any Participant of, or grant to
any Participant of any right to receive, any severance, termination, change in control, retention
or similar compensation or benefits or increase in any manner such compensation or benefits,
(v) payment of any benefits, or grant of any awards, under or entry into, amendment or termination
of, any bonus, incentive, performance or other compensation plan or arrangement, Company Plan
(including the grant of any equity, equity-based or equity-related awards or rights or “phantom”
units or the removal of existing restrictions in any Company Plan or agreements or awards made
thereunder), (vi) amendment or modification of any Restricted Common Units, Common Phantom Units,
Preferred Phantom Units or Assigned Hurdle Units, (vii) action to fund or in any other way secure
the payment of compensation or benefits under any employee plan, agreement, contract or arrangement
or Company Plan, (viii) action to accelerate the vesting or payment of any compensation or benefit
under any Company Plan or (ix) change the manner in which contributions to any Company Plan are
made or the basis on which such contributions are determined.



Section 4.9. Tax Matters.



(a) Except as set forth in Section 4.9 of the Disclosure Schedule:




(i) Each member of the Company Group has (A) filed, or caused to be filed, all Tax
Returns that it was required to file and (B) paid or caused to be paid all Taxes due and
payable except Taxes being contested in good faith and adequately reserved against in the
Company Financial Statements in accordance with GAAP. All such Tax Returns were true,
correct and complete in all material respects. There are no Liens for Taxes on any of the
assets of any member of the Company Group other than Liens described in clause (b) of the
definition of Permitted Liens.




(ii) No member of the Company Group has received notice from a Governmental Authority
of a claim with respect to the Taxes of such member of the Company Group, which claim is
still outstanding. No Tax Return of any member of the Company Group is currently, or has
been, the subject of an audit by any Governmental Authority and no notice of such an audit
has been received by any member of the Company Group.




(iii) No member of the Company Group has waived any statute of limitations with respect
to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency
which extension is still in effect. The relevant statute of limitations or reassessment
period is closed with respect to all Tax Returns of each member of the Company Group for all
taxable periods through December 31, 2006.




(iv) No member of the Company Group is participating or has participated in a listed
transaction within the meaning of Treasury Regulation Section 1.6011-4(b)(2).




(v) At all times since its formation, the Company has been treated as a partnership for
U.S. Federal and applicable state income Tax purposes. Neither the Company nor any other
Person on behalf of, or with respect to, the Company has made or filed an election under
Treasury Regulations Section 301.7701-3 for the Company to be treated as an association
taxable as a corporation. Each Subsidiary of the Company is an entity disregarded from the
Company for U.S. Federal and applicable state income Tax purposes.



Section 4.10. Real Property.



(a) No member of the Company Group owns any real property.



(b) Section 4.10(b) of the Disclosure Schedule lists the street address of each parcel
of real property currently leased or subleased by any member of the Company Group (the “Leased
Real Property”). With respect to each Leased Real Property, (i) the Company has delivered to
Buyer a true and complete copy of the lease or sublease in effect on the date hereof relating to
such Leased Real Property, together with all amendments thereto, (ii) there has not been any
sublease or assignment entered into by any member of the Company Group in respect of the lease or
sublease relating to such Leased Real Property, (iii) the lease or sublease relating to such Leased
Real Property is legal, valid, binding and enforceable and is in full force and effect and (iv) no
member of the Company Group and, to the Company’s Knowledge, no lessor, is in default in any
material respect under the lease or sublease relating to such Leased Real Property.



Section 4.11. Intellectual Property.



(a) Set forth on Section 4.11(a) of the Disclosure Schedule are all (i) patents and
patent applications, (ii) trademark and service mark registrations and applications for
registration thereof, and (iii) copyright registrations and applications for registration thereof,
in each case that are owned by a member of the Company Group or licensed from a third party by a
member of the Company Group (as indicated on Section 4.11(a) of the Disclosure Schedule).
With respect to each item of Intellectual Property listed on Section 4.11(a) of the
Disclosure Schedule, except as listed in Section 4.11(a) of the Disclosure Schedule, no
member of the Company Group has received written notice of any pending or threatened Action that
challenges the validity, enforceability, registration or ownership (or license rights) of the item.



(b) Except as would not have a Material Adverse Effect on the Company Group, a member of the
Company Group owns, or is licensed or otherwise possesses sufficient legally enforceable rights to
use, all Intellectual Property that is necessary for or currently used by the Company Group in the
operation of the Business.



(c) To the Company’s Knowledge, the Business of the Company Group is not currently operated in
a manner that infringes upon any Intellectual Property rights of any third parties.



(d) To the Company’s Knowledge, except as would not have a Material Adverse Effect on the
Company Group, no third party is infringing upon any Intellectual Property owned by any member of
the Company Group.



(e) The Company Group is taking commercially reasonable measures to maintain and protect the
confidentiality of the trade secrets owned by any member of the Company Group that are material to
the Business



(f) The Company also makes the additional representations and warranties as to certain
Intellectual Property matters set forth in Section 4.11(f) of the Disclosure Schedule.



Section 4.12. Environmental Matters. Except as would not and would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect on the Company Group:



(a) the Company is, and for the last two (2) years has been, in compliance with all
Environmental Laws, and no member of the Company Group has received any written notice from any
Person alleging that any member of the Company Group is in violation of any Environmental Law;



(b) no member of the Company Group is subject to any outstanding consent decree, compliance
order or administrative order pursuant to any Environmental Law;



(c) no Action is pending or, to the Company’s Knowledge, threatened against any member of the
Company Group pursuant to any Environmental Law; and



(d) there have been no Releases of or exposure to any Hazardous Material that could reasonably
be expected to form the basis of any Action against, or Liability of, any member of the Company
Group under or pursuant to any Environmental Law.



Section 4.13. Contracts.



(a) Section 4.13(a) of the Disclosure Schedule lists the following written contracts
or agreements to which any member of the Company Group is a party and which are in effect on the
date hereof, other than any lease agreements for Leased Real Property (which are addressed in
Section 4.10):




(i) all supply and distribution agreements;




(ii) all swap, exchange, commodity option or hedging agreements;




(iii) any written employment agreement or employment contract that provides for an
annual base salary, and any written change in control, retention, severance or termination
agreement or contract that provides for any Liability of the Company Group, in each case in
excess of $100,000;




(iv) any collective bargaining agreement or other contract with any labor organization,
union or association;




(v) any contract pursuant to which any member of the Company Group has acquired assets
(whether tangible or intangible) material to the Business since the Company’s inception;




(vi) any contract requiring a capital expenditure or known commitment by any member of
the Company Group in excess of $150,000 in any calendar year;




(vii) any contract requiring known or liquidated expenditures or payments to or from
any member of the Company Group in excess of $150,000 in any calendar year, other than those
that can be terminated without material penalty by such member of the Company Group upon not
more than ninety (90) days’ notice;




(viii) any contract that contains a covenant not to compete applicable to a member of
the Company Group;




(ix) any contract or agreement under which any member of the Company Group has (A)
created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee)
Indebtedness, (B) granted a Lien on its assets, whether tangible or intangible (to secure
any Indebtedness or otherwise) or (C) extended credit to any Person, in each case, in an
amount in excess of $100,000 of committed credit;




(x) all consulting, management services or other similar agreements;




(xi) any contract or agreement between or among a member or members of the Company
Group, on the one hand, and any of the Members or their Affiliates (other than any member of
the Company Group), on the other hand;




(xii) any contract or agreement establishing any joint venture, strategic alliance or
other collaboration that is material to the business of the Company Group;




(xiii) any contract or agreement with clinical research organizations pursuant to the
terms of which there is a current obligation or right of the Company to make annual payments
in excess of $150,000 or to receive annual payments in excess of $150,000;




(xiv) any contract or agreement pursuant to which any member of the Company Group
licenses or otherwise obtains Intellectual Property from a third party that is used in any
products of any member of the Company Group (including any asset purchase agreement pursuant
to which any member of the Company Group purchased Intellectual Property);




(xv) any contract pursuant to which a third party manufactures any product or product
candidate of any member of the Company Group;




(xvi) any material contract relating to the design, development, or testing of any
product or product candidate of any member of the Company Group;




(xvii) any contract providing for indemnification of any Person with respect to
material liabilities relating to any current or former business of any member of the Company
Group or any predecessor person;




(xviii) the ten (10) largest contracts, by dollar value, with either a group purchasing
organization, managed care organization or third-party payor or relating to any federal or
state program; and




(xix) any other contract, whether or not made in the ordinary course of business, that
is material to any member of the Company Group or the conduct of the Business.



All contracts and agreements set forth in Section 4.13(a) of the Disclosure Schedule are
referred to herein as “Material Contracts.” The Company has provided Buyer and Merger Sub
a copy of each Material Contract existing on the date hereof.



(b) Except as set forth in Section 4.13(b) of the Disclosure Schedule, (i) subject to
the Remedies Exception, each Material Contract is in full force and effect and is the legal, valid
and binding obligation of the member of the Company Group that is a party to such Material Contract
and, to the Company’s Knowledge, the other parties thereto (the “Other Parties”), and
(ii) no member of the Company Group or, to the Company’s Knowledge, any of the Other Parties to any
Material Contract is in breach, violation or default, and, to the Company’s Knowledge, no event has
occurred which with notice or lapse of time or both would constitute a breach, violation or default
by any such party, or permit termination, modification or acceleration by the Other Parties, under
such Material Contract, except (A) for breaches, violations or defaults which would not and would
not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on
the Company Group, and (B) that, in order to avoid a default, violation or breach under any
Material Contract, the Consent of the Other Parties set forth in Section 4.6(c) of the
Disclosure Schedule may be required solely as a result of the transactions contemplated hereby.



Section 4.14. Insurance. The members of the Company Group maintain insurance policies
in such amounts, with such deductibles and against such risks and losses as are, in the Company’s
judgment, reasonable for the assets of the Company Group and the conduct of the Business. The
Company has provided Buyer with claims information directly from each carrier of such insurance
policies. Except as set forth in Section 4.14 of the Disclosure Schedule, (a) no member of
the Company Group has received any notice from any insurer under any insurance policy applicable to
such member disclaiming coverage, reserving rights with respect to a particular claim or such
policy in general or canceling or materially amending any such policy, (b) there is no claim, suit
or other matter currently pending in respect of which a member of the Company Group has received
such a notice and (c) the insurance policies applicable to the Company Group or extensions or
renewals thereof will be outstanding and duly in full force without interruption until the Closing
Date, with all premiums due and payable thereon having been paid.



Section 4.15. Litigation. Except as set forth in Section 4.15 of the
Disclosure Schedule, (a) there are no Actions pending or, to the Company’s Knowledge, threatened
before any Governmental Authority against any member of the Company Group or a predecessor in
interest of a member of the Company Group which are reasonably likely to result in Liability for
any member of the Company Group that would or would reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect on the Company Group and (b) there are no outstanding
Injunctions, judgments, orders, decrees or rulings to which any member of the Company Group is a
party or by which it is bound by, or with any Governmental Authority that would or would reasonably
be expected to, individually or in the aggregate, have a Material Adverse Effect on the Company
Group.



Section 4.16. Employee Matters.



(a) Section 4.16(a) of the Disclosure Schedule contains a complete and accurate list
of each (i) pension plan (as defined in Section 3(2) of ERISA), “employee benefit plan,” within the
meaning of section 3(3) of ERISA, and bonus, incentive or deferred compensation, retirement,
profit-sharing, savings, equity or equity-based, severance, change in control, retention,
termination, welfare, perquisite, fringe benefit, vacation, disability, death benefit,
hospitalization, medical, welfare benefit or other similar plan, program, policy and arrangement,
in each case, sponsored, maintained, contributed to, or required to be maintained or contributed
to, by any member of the Company Group or any other person or entity that, together with any member
of the Company Group, is treated as a single employer under Section 414 of the Code (each, a
“Commonly Controlled Entity”) for the benefit of any Participant and (ii) (A) employment,
consulting, bonus, incentive or deferred compensation, profit-sharing, savings, equity or
equity-based, severance, change in control, retention, termination, indemnification, loan or
similar other agreement and (B) agreement under which the benefits are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving the Company Group of a
nature contemplated by this Agreement, in each case between the Company Group, on the one hand, and
any Participant, on the other hand (the plans, programs, policies, arrangements and agreements in
clauses (i) and (ii), collectively, the “Company Plans”).



(b) Each Company Plan (and any related trust or other funding vehicle) has been operated and
administered, in all material respects, in accordance with its terms and with applicable Law,
including ERISA and the Code. Each member of the Company Group is in compliance in all material
respects with ERISA, the Code and all other Laws applicable to the Company Plans.



(c) Each Company Plan which is an “employee pension benefit plan” within the meaning of
section 3(2) of ERISA and which is intended to be qualified under section 401(a) of the Code has,
to the extent applicable, received a determination or opinion letter from the Internal Revenue
Service.



(d) There is no pending or, to the Company’s Knowledge, threatened legal Action, suit or
claim, or investigations by any Governmental Authorities, relating to the Company Plans (other than
routine claims for benefits payable in the ordinary course).



(e) No Company Plan is, and no member of the Company Group nor any Commonly Controlled Entity
has sponsored, maintained, contributed to, or been required to maintain or contribute to, or has
any actual or contingent liability under any Company Plan that is, subject to section 302 or Title
IV of ERISA or section 412 of the Code or is otherwise a defined benefit plan. No Company Plan is
a “multiemployer plan” within the meaning of section 3(37) of ERISA. No Company Plan provides
health, medical or other welfare benefits after retirement or other termination of employment
(other than for continuation coverage required under section 4980(B)(f) of the Code), and no
circumstances exist that could result in any member of the Company Group becoming obligated to
provide any such benefits.



(f) With respect to each Company Plan, true and complete copies of the following documents
have been provided or made available to Buyer and Merger Sub, to the extent applicable: (i) the
most recent plan documents and all amendments thereto; (ii) the most recent trust instruments and
insurance contracts; (iii) the two most recent reports on Form 5500 filed with the Internal Revenue
Service; (iv) the most recent summary plan description; (v) the most recent determination or
opinion letter issued by the Internal Revenue Service; and (vi) the most recent financial statement
and actuarial or other valuation reports prepared with respect thereto.



(g) None of the execution and delivery of this Agreement or the consummation of the Merger or
any other transaction contemplated by this Agreement (alone or in conjunction with any other event,
including any termination of employment on or following the Effective Time) will (i) entitle any
Participant to any compensation or benefit, (ii) accelerate the time of payment or vesting, or
trigger any payment or funding, of any compensation or benefits or trigger any other material
obligation under any Company Plan or (iii) result in any breach or violation of, default under or
limit the Company’s right to amend, modify or terminate any Company Plan.



(h) No employees of any member of the Company Group are, or since January 1, 2004 have been,
represented by any union with respect to their employment by any member of the Company Group.
There is not pending and since January 1, 2004 until the date hereof there has not been any
material labor dispute, union organization attempt or work stoppage, slowdown or lockout due to
labor disagreements. There is no, and since January 1, 2004 until the date hereof, there has not
been, any unfair labor practice charge, complaint or other proceeding pending and, to the Knowledge
of the Company, no such charge, complaint or other proceeding is threatened, against any member of
the Company Group before the National Labor Relations Board or any other Governmental Authority.
Each member of the Company Group is, and since January 1, 2004, has been, in compliance in all
material respects with all applicable laws relating to employment and employment practices,
occupational safety and health standards, terms and conditions of employment and wages and hours,
and is not, and since January 1, 2004, has not, engaged in any unfair labor practice. There are no
material complaints, controversies, lawsuits or other proceedings pending or, to the Knowledge of
the Company, threatened against any member of the Company Group brought by or on behalf of any
applicant for employment, any Participant or any class of the foregoing, relating to any such law,
or alleging breach of any express or implied contract of employment or of any other wrongful or
tortious conduct in connection with the employment relationship. There are no pending or, to the
Knowledge of the Company, threatened, investigations, audits, complaints, or proceedings against
any member of the Company Group by or before any Governmental Authority, whether domestic or
foreign, respecting or involving any applicant for employment, any Participant or any class of the
foregoing.



Section 4.17. Legal Compliance. Except with respect to Tax matters (which are
addressed exclusively in Section 4.9), Intellectual Property matters (which are addressed
exclusively in Section 4.11) and employee matters (which are addressed exclusively in
Section 4.16), no member of the Company Group is in violation of any Law applicable to its
business or operations, except for violations and failures to comply that would not and would not
reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the
Company Group. No Governmental Authority has commenced or threatened to initiate any action to
withdraw any approvals or registrations relating to the Business or any Product, or request the
recall of any Product, or commenced or threatened to initiate any action to enjoin production of
any Product.



Section 4.18. Brokers’ Fees. Except as set forth in Section 4.18 of the
Disclosure Schedule, no member of the Company Group has entered into any contract or other
arrangement or understanding (written or oral, express or implied) with any Person which may result
in the obligation of Buyer, Merger Sub or any of their respective Affiliates or the Company to pay
any fees or commissions to any broker or finder as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated by this Agreement.



Section 4.19. Permits. Each material Permit of the Company Group is set forth in
Section 4.19(a) of the Disclosure Schedule. Except as set forth in Section 4.19(b)
of the Disclosure Schedule, the Company Group has all Permits required to conduct the Business as
currently conducted and operated, except for such Permits which the failure to have or obtain would
not and would not reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect on the Company Group. Each such Permit is in full force and effect and the
applicable member of the Company Group is in compliance with all its obligations with respect
thereto, except for such failure to be in full force and effect or non-compliance as would not and
would not reasonably be expected to, individually or in the aggregate, have a Material Adverse
Effect on the Company Group. Notwithstanding the foregoing, each Permit set forth in Section
4.19(c) of the Disclosure Schedule is in full force and effect and the applicable member of the
Company Group is in compliance, in all material respects, with all its obligations with respect
thereto. There are no Actions pending or, to the Company’s Knowledge, threatened which might
reasonably be expected to result in the revocation or termination of any material Permit of the
Company Group.



Section 4.20. Transaction with Affiliates; Ownership of Assets. Except as set forth
in Section 4.20 of the Disclosure Schedule, there is not any contract, agreement or any
other arrangement between any member of the Company Group, on the one hand, and any Member or any
Affiliate of any Member, on the other hand, will continue in effect subsequent to the Closing.
Except as set forth in Section 4.20 of the Disclosure Schedule, after the Closing no Member
and no Affiliate of any Member will have any interest in any asset or property (real or personal,
tangible or intangible) of any member of the Surviving Company Group.



Section 4.21. No Additional Representations and Warranties. Except for the Company’s
representations and warranties provided in this Article IV, none of the Company or the
holders of Units or Phantom Units or any of their respective Affiliates, or any of their respective
directors, officers, employees, stockholders, partners, members or representatives has made, or is
making, any representation or warranty whatsoever to Buyer or any of its Affiliates with respect to
the Company Group.



ARTICLE V.




REPRESENTATIONS AND WARRANTIES REGARDING BUYER AND MERGER SUB




Buyer and Merger Sub jointly and severally represent and warrant to the Company as follows:



Section 5.1. Organization. Each of Buyer and Merger Sub is duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of Buyer and Merger
Sub has all requisite power and authority to carry on its business as it is currently conducted and
to own, lease and operate its properties where such properties are now owned, leased or operated.
Each of Buyer and Merger Sub is duly qualified or licensed to do business and is in good standing
in each jurisdiction in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or license necessary, except where the failure to
be so duly qualified or licensed or in good standing would not and would not reasonably be expected
to, individually or in the aggregate, have a Material Adverse Effect on Buyer or Merger Sub.



Section 5.2. Authorization. Each of Buyer and Merger Sub has all requisite power and
authority to execute and deliver this Agreement and the other Transaction Documents to which it is
or will be party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and performance by Buyer and
Merger Sub of this Agreement and the other Transaction Documents to which Buyer and/or Merger Sub
is or will be a party and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of Buyer and Merger Sub. This Agreement
has been duly executed and delivered by Buyer and Merger Sub and, assuming this Agreement
constitutes a legal, valid and binding obligation of the Company, constitutes a legal, valid and
binding obligation of each of Buyer and Merger Sub, enforceable against each of them in accordance
with its terms, subject to the Remedies Exception.



Section 5.3. Noncontravention. Neither the execution and delivery of this Agreement
by Buyer and Merger Sub, nor the consummation by Buyer and Merger Sub of the transactions
contemplated hereby, will (a) conflict with any provision of the organizational documents of Buyer
or Merger Sub, (b) violate or result in a breach of any material agreement, contract, lease,
license, instrument or other arrangement to which Buyer, Merger Sub or any of their Affiliates is a
party or by which any of their respective properties are bound, or (c) violate any Law to which
Buyer, Merger Sub or any of their Subsidiaries is subject, except, in the case of clauses (b) and
(c), for such violations or breaches which would not and would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on Buyer or Merger Sub.



Section 5.4. Consents, Government Authorizations. Except for (a) compliance with the
HSR Act and the regulations thereunder and any other antitrust or merger notification or control
Laws, (b) compliance with any applicable requirements of the Securities Act and any other
applicable securities Laws, (c) Consents that, if not obtained or made, would not and would not
reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on
Buyer or Merger Sub and (d) those Consents of Government Authorities set forth in Section
5.4 of the Disclosure Schedule, no Consent is required to be obtained or made by Buyer or
Merger Sub in connection with the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.



Section 5.5. Financial Capacity. Buyer has as of the date hereof, and at the Closing
will have, sufficient cash in immediately available funds to pay the Adjusted Merger Consideration
in accordance with the terms of Article III and any other amounts to be paid by it
hereunder.



Section 5.6. Litigation. Except as set forth in Section 5.6 of the Disclosure
Schedule, there are no Actions pending or, to each of Buyer’s and Merger Sub’s Knowledge,
threatened before any Governmental Authority against Buyer, Merger Sub or any of their Affiliates
which would have or would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Buyer or Merger Sub, and there are no outstanding Injunctions,
judgments, orders, decrees, rulings, or charges to which Buyer, Merger Sub or any of their
Affiliates is a party or by which Buyer, Merger Sub or any of their Affiliates is bound, by or with
any Governmental Authority which would have or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on Buyer or Merger Sub.



Section 5.7. Brokers’ Fees. None of Buyer, Merger Sub or any of their Affiliates has
any contract or other arrangement or understanding (written or oral, express or implied) with any
Person which may result in the obligation of the Company, the holders of Units, the holders of
Phantom Units or any of their Affiliates to pay any fees or commissions to any broker or finder as
a result of the execution and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement.



Section 5.8. Information. The Company Group has provided Buyer with such access to
the facilities, books, records and personnel of each member of the Company Group and Affiliates as
Buyer has deemed necessary and appropriate in order for Buyer to investigate to its satisfaction
the Business and properties of each member of the Company Group and their Affiliates sufficiently
to make an informed investment decision to participate in the Merger and to enter into this
Agreement. Buyer (either alone or together with its advisors) has such knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and risks of
participation in the Merger and is capable of bearing the economic risks of such transaction.
Buyer agrees to participate in the Merger based upon its own investigation, examination and
determination with respect thereto as to all matters and without reliance upon any express or
implied representations or warranties of any nature made by or on behalf of or imputed to any
member of the Company Group, except as expressly set forth in this Agreement.



ARTICLE VI.




COVENANTS




Section 6.1. Conduct of the Company. The Company covenants and agrees that, except
(a) as otherwise contemplated by this Agreement (including as described in Section 6.1 of
the Disclosure Schedule and the other matters contemplated by the other Schedules and Exhibits
hereto) and the other Transaction Documents or (b) as otherwise approved in writing by Buyer or
Merger Sub (which approval shall not be unreasonably withheld or delayed), during the period
commencing on the date hereof and ending on the Closing Date, the Company will, and will cause each
other member of the Company Group to, conduct the Business in the ordinary course and use its
commercially reasonable efforts to maintain and preserve intact the business of the Company Group
in all material respects. Until the Closing, except (a) as otherwise contemplated by this
Agreement (including as described in Section 6.1 of the Disclosure Schedule and the other
matters contemplated by the other Schedules and Exhibits hereto) and the other Transaction
Documents, (b) as required by any change in applicable Law or (c) as otherwise approved in writing
by Buyer or Merger Sub (which approval shall not be unreasonably withheld or delayed), the Company
will not, and will cause each other member of the Company Group not to, take any of the following
actions:




(i) (A) amend any organizational documents of a member of the Company Group or (B)
except for issuances of Preferred Units to existing Members in exchange for capital
contributions to the Company by such Members in accordance with the LLC Agreement and the
Equity Commitment Letter, authorize for issuance, issue, grant, sell, deliver, dispose of,
pledge or otherwise encumber any of the membership interests or securities (including any
Phantom Units) or other equity interests of any member of the Company Group or issue any
Rights to subscribe for or acquire any of the membership interests or securities (including
any Phantom Units) or other equity interests of any member of the Company Group (other than
any of such issuances between the Company and/or any wholly owned Subsidiary of the
Company);




(ii) sell, transfer, license or otherwise dispose of or encumber any of the material
assets pertaining to the business of the Company Group;




(iii) fail to exercise any rights of renewal with respect to any lease of any Leased
Real Property that by its terms would otherwise expire, or materially modify, amend,
terminate or permit the lapse of any such lease;




(iv) other than (A) Indebtedness prepayable by the Company without penalty and (B)
incremental Indebtedness in the ordinary course of business pursuant to the terms of
arrangements in existence as of the date hereof, incur or assume Indebtedness;




(v) acquire (by merger, consolidation or combination, or acquisition of stock or
assets) any corporation, partnership or other business organization or division thereof;




(vi) acquire assets (tangible or intangible), except for transactions not in excess of
$100,000;




(vii) except as required by GAAP, change any accounting methods, principles or
practices;




(viii) enter into, modify or terminate a Material Contract; provided,
however, that for purposes of this Section 6.1(viii), references to
“$150,000” in clauses (vi), (vii) and (xiii) of Section 4.13(a) shall be replaced
with references to “$100,000”;




(ix) except as otherwise contemplated by this Agreement or as required to ensure that
any Company Plan is not then out of compliance with applicable Law or to comply with any
Company Plan entered into prior to the date hereof (to the extent complete and accurate
copies of which have been heretofore made available to Parent), (A) adopt, enter into,
terminate or amend any collective bargaining agreement or Company Plan or other agreement,
plan or policy involving any member of the Company Group and one or more Participants,
(B) increase in any manner the compensation, bonus or fringe or other benefits of, or grant
or pay any type of compensation or benefits to, any Participant not previously receiving or
entitled to receive such type of compensation or benefits, other than, in the case of
employees who are neither directors nor officers, normal increases in base cash compensation
in the ordinary course of business consistent with past practice, (C) pay any benefit or
amount not required under any Company Plan as in effect on the date of this Agreement, other
than wages and salaries in the ordinary course of business consistent with past practice,
(D) grant or pay to any Participant, or grant to any Participant the right to receive, any
severance, termination, change in control, retention or similar compensation or benefits or
increase in any manner such compensation or benefits, (E) pay any benefits under or grant
any awards under or enter into, amend or terminate, any bonus, incentive, performance or
other compensation plan or arrangement, Company Plan (including the grant of any Restricted
Common Units, Phantom Units, Assigned Hurdle Units or other equity, equity-based or
equity-related awards or rights or “phantom” units or the removal of existing restrictions
in any Company Plan or agreements or awards made thereunder), (F) amend or modify any
Restricted Common Units, Common Phantom Units, Preferred Phantom Units or Assigned Hurdle
Units, (G) take any action to fund or in any other way secure the payment of compensation or
benefits under any employee plan, agreement, contract or arrangement or Company Plan,
(H) take any action to accelerate the vesting or payment of any compensation or benefit
under any Company Plan or (I) change the manner in which contributions to any Company Plan
are made or the basis on which such contributions are determined;




(x) settle any material Tax dispute or make any material Tax election;




(xi) permit, allow or suffer any of its assets to become subjected to any Lien of any
nature whatsoever, other than Permitted Liens;




(xii) cancel any material Indebtedness (individually or in the aggregate) or waive any
claims or rights of substantial value;




(xiii) make payment on any Company Transaction Expenses, any Retained Liabilities or
any fees or expenses recoverable by the Member Representative pursuant to Article
III or Article IX, other than payment on any Company Transaction Expenses or
Retained Liability due prior to the Closing in accordance with the terms of such Company
Transaction Expenses or Retained Liability as in effect on the date hereof (with Buyer being
notified of each such payment and the terms thereof);




(xiv) enter into any settlement agreement with respect to any claim relating to or
arising from the conduct of the Business or otherwise waive or discharge any such claim, or
pay any material amount, or perform any material obligation, in compromise of any claim that
would be reasonably likely to restrict materially, or have a material adverse effect on, the
future conduct of the Business by the Surviving Company;




(xv) engage in any acceleration or customer orders or sales through the granting of
discounts or financial incentives other than in the ordinary course of business consistent
with past practices; or



	 	 	 
	(xvi)agree, whether in writing or otherwise, to do any of the foregoing.

	Section 6.2.

	 	Access to Information; Confidentiality.
	
 
	 	 






(a) Prior to the Closing Date, or, if earlier, the date this Agreement is terminated pursuant
to Section 10.1, the Company shall, and shall cause each other member of the Company Group
to, permit Buyer and its authorized agents or representatives, including its independent
accountants, to have reasonable access to the properties, books and records of the Company Group
during normal business hours to review information and documentation relative to the properties,
books, contracts, commitments and other records of the Company Group as Buyer may reasonably
request; provided, that such investigation shall only be upon reasonable notice and shall not
disrupt personnel and operations of the business of the Company or the Company Group. All requests
for access to the offices, properties, books and records of the Company Group shall be made to the
Member Representative or such representatives of the Company as the Member Representative shall
designate, who shall be solely responsible for coordinating all such requests and all access
permitted hereunder. It is further agreed that neither Buyer nor any of its Affiliates or their
respective representatives shall contact any of the customers, suppliers, parties that have
business relationships with or are joint venture partners of any member of the Company Group or any
of their respective Affiliates with respect to any member of the Company Group or otherwise in
connection with the transactions contemplated hereby, whether in person or by telephone, mail
(electronic or otherwise) or other means of communication, without the specific prior authorization
of the Member Representative. Any access to the offices, properties, books and records of the
Company Group shall be subject to the following additional limitations: (i) Buyer shall give the
Member Representative notice of at least three (3) Business Days before conducting any inspections
or communicating with any third party relating to any member of the Company Group or any property
of the Company Group, and the Member Representative or a representative of the Company Group
designated by the Member Representative shall have the right to be present when Buyer, any of its
Affiliates or their respective representatives conducts such investigations; and (ii) Buyer, its
Affiliates and their respective representatives shall use its commercially reasonable efforts to
perform all on-site due diligence reviews and all communications with any Person on an expeditious
and efficient basis.



(b) Buyer, Merger Sub and their respective Affiliates and representatives will hold in
confidence all confidential information obtained from any holder of Units, any holder of Phantom
Units, the Company Group or their respective Affiliates, officers, agents, representatives or
employees, whether or not relating to the Business, in accordance with the provisions of the
Confidentiality Agreement which, notwithstanding anything contained therein, shall remain in full
force and effect following the execution of this Agreement and shall survive any termination of
this Agreement in accordance with the terms of the Confidentiality Agreement.



Section 6.3. Efforts. Subject to the terms and conditions of this Agreement and
applicable Law, each of the Parties hereto shall use its commercially reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary,
proper or advisable under applicable Laws and regulations or otherwise to consummate and make
effective the transactions contemplated by this Agreement as soon as practicable, including such
actions or things as any other Party hereto may reasonably request in order to cause any of the
conditions to such other Party’s obligation to consummate such transactions specified in
Article VII to be fully satisfied.



Section 6.4. Approvals. Without limiting the generality of Section 6.3:



(a) The Parties shall (and shall cause their respective directors, officers and Subsidiaries,
and use their commercially reasonable efforts to cause their respective Affiliates, employees,
agents, attorneys, accountants and representatives, to) consult and fully cooperate with and
provide reasonable assistance to each other in (i) obtaining all necessary Consents, including,
without limitation, those Consents set forth in Sections 4.6(c), 4.6(e),
5.4 and 7.1(c) of the Disclosure Schedule, or other permission or action by, and
giving all necessary notices to and making all necessary filings, meetings or appearances with and
applications and submissions to, any Governmental Authority (the “Governmental Approvals”)
or other Person, (ii) lifting any permanent or preliminary injunction or restraining order or other
similar order issued or entered by any court or Governmental Authority (an “Injunction”) of
any type referred to in Section 7.1(a) and (iii) in general, consummating and making
effective the transactions contemplated hereby. Subject to Article X, the Parties and
their Affiliates shall not take any action inconsistent with their obligations under this
Agreement, or enter into or complete any transactions that could reasonably be expected to
materially delay or hinder or prohibit the consummation of the transactions contemplated hereby,
including causing the failure of the closing conditions set forth in Article VII to be
satisfied.



(b) The Company, Buyer and Merger Sub shall timely and promptly cause to be made all filings
with Governmental Authorities which may be required by each of them and their respective Affiliates
in connection with the consummation of the transactions, including the filing of a notification and
report form under the HSR Act within ten (10) days of the date hereof. Each Party shall furnish to
the other Party such necessary information and assistance as such other Party may reasonably
request in connection with the preparation of any necessary filings or submissions by it to any
Governmental Authority.



(c) Each of the Parties shall notify and keep the other Party advised as to (i) any material
communication from any Governmental Authority regarding any of the transactions contemplated hereby
and (ii) any Action pending and known to such Party, or to its Knowledge threatened, which
challenges the transactions contemplated hereby. Without in any way limiting the foregoing, the
Parties will also consult and cooperate with one another, and consider in good faith the views of
one another, in connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any Party in connection with
any Governmental Approvals. Subject to the provisions of Article X, the Company, Buyer and
Merger Sub shall not take any action inconsistent with their obligations under this Agreement or
which would materially hinder or delay the consummation of the transactions contemplated by this
Agreement.



Section 6.5. Public Announcements. Except to the extent otherwise required by
applicable Law or the rules or regulations of any securities exchange (and then only after
consultation with the other Parties hereto), none of the Parties will issue any press release or
make any other public announcements concerning the transactions contemplated hereby or the contents
of this Agreement or the Transaction Documents without the prior written consent of the other
Parties.



Section 6.6. Notification of Certain Matters. (a) Between the date hereof and the
Closing Date, each Party will give prompt written or electronic notice to the other Parties after
it becomes aware of: (i) the occurrence or non-occurrence of any event which will result, or has a
reasonable prospect of resulting, in the failure of any condition, covenant or agreement contained
in this Agreement to be complied with or satisfied, (ii) any failure of a Party to comply with or
satisfy any condition, covenant or agreement to be complied with or satisfied by it hereunder, and
(iii) except for such Consents the necessity of which to obtain, file or give has been disclosed
herein or in the Schedules hereto, any notice or other communication from any third party alleging
that the Consent of such third party is or may be required in connection with the transactions
contemplated by this Agreement or that such transactions otherwise may violate the rights of or
confer remedies upon such third party.



(b) At least three (3) days prior to the Closing, the Company shall furnish to Buyer and the
Merger Sub a statement, certified by the chief executive officer and the chief financial officer of
the Company and reviewed by the Company’s independent auditors (with such independent auditors
expressing in writing that they have no objections to the information contained therein), setting
forth (i) the amounts of Company Transaction Expenses and Retained Liabilities to be funded by
Buyer to the Company at Closing under Section 3.6(b) and (ii) an estimate of the amount of
Working Capital, calculated in accordance with the provisions of Section 3.7 (such
estimate, the “Estimated Closing Date Working Capital”), which statement shall be
reasonably satisfactory to Buyer.



Section 6.7. Director and Officer Indemnification. For six (6) years from and after
the Closing Date, to the fullest extent permitted by applicable Law and the organizational
documents of the Company immediately prior to the date of this Agreement, Buyer shall cause the
Surviving Company and the Surviving Company’s Subsidiaries (collectively, the “Surviving
Company Group”) to indemnify and hold harmless the officers, managers and directors of any
member of the Company Group who held any such position at any time on or prior to the Effective
Time (collectively, “Indemnified Officers”), to the same extent as such Indemnified
Officers are indemnified by the Company Group on the date hereof, in respect of acts or omission
occurring prior to the Closing, and Buyer shall cause the applicable member of the Surviving
Company Group to maintain for six (6) years from and after the Closing indemnification provisions
in its organizational documents that are no less favorable to the Indemnified Officers than those
in effect with respect to such member of the Company Group immediately prior to the date of this
Agreement. Buyer shall cause to be obtained and maintained in effect, for a period of six (6)
years after the Closing, policies of directors’ and officers’ liability insurance protecting the
Indemnified Officers with coverages and containing terms and conditions (including with respect to
deductible, amount and payment of attorneys’ fees) that are no less favorable than those in
existing policies of the Company as of the date hereof. Buyer may, at its option, select the
insurance broker for effecting such insurance policies. The Company shall have the right, but not
the obligation, to acquire a six (6) year tail policy for the Persons currently covered by the
Company’s directors’ and officers’ liability insurance policy that is consistent with the second
preceding sentence. Such policy shall be prepaid at the Closing and shall be non-cancelable.
Notwithstanding any other provision of this Agreement to the contrary, each of the Parties agrees
that from and after the Closing Date each Indemnified Officer shall be a third party beneficiary
under this Agreement for purposes of enforcing this Section 6.7.



Section 6.8. Employee Benefit Arrangements.



(a) From and after the Closing Date, Buyer shall, and shall cause the Surviving Company Group
to, honor, pay, perform and satisfy any and all Liabilities, obligations and responsibilities to or
in respect of each of the employees (including those employees who are full-time, part-time,
temporary, on vacation or on a paid or unpaid leave of absence) of any member of the Company Group
and the directors of any member of the Company Group (in each case, as determined as of the Closing
Date) (collectively, the “Company Group Employees”) arising under the terms of any Company
Plan as in effect immediately prior to the Closing Date, in accordance with the terms of such
Company Plan.



(b) Without limiting the foregoing and notwithstanding anything contained herein to the
contrary, for a period of not less than one (1) year following the Closing Date, Buyer shall, and
shall cause the Surviving Company Group to, provide each Company Group Employee who continues
employment with a member of the Surviving Company Group or any of its Affiliates with compensation
and benefits (including with respect to severance and annual bonus opportunities but excluding
equity or equity-based compensation) that are not less favorable in the aggregate than the
compensation and benefits provided to such Company Group Employee immediately prior to the Closing
Date. Buyer shall, and shall cause the Surviving Company Group to, cause each employee benefit
plan (including, but not limited to, each severance plan or arrangement) maintained or contributed
to by Buyer or any of its Affiliates and in which a Company Group Employee participates, solely to
the extent that Buyer makes such plan available to such Company Group Employee, provide credit for
any employee co-payments or similar amounts and to recognize all service of such Company Group
Employee with any member of the Company Group for purposes of eligibility and vesting (except that
such service (i) shall not be counted to the extent that it would result in a duplication of
benefits, (ii) shall be counted for eligibility only for applicable Buyer severance plans and
arrangements and (iii) shall not be counted for purposes of benefit accrual under any defined
benefit plan) and, if applicable, to waive any exclusions for preexisting conditions under any such
health or welfare plans.



(c) The Company shall ensure that following the Effective Time, no holder of a Restricted
Common Unit, Common Phantom Unit, Preferred Phantom Unit or Assigned Hurdle Unit (or former holder
of a Restricted Common Unit, Common Phantom Unit, Preferred Phantom Unit or Assigned Hurdle Unit)
or any Participant shall have any right under any Company Plan to acquire any equity interests or
voting securities of any member of the Company Group or the Surviving Company Group (including
“phantom” equity or equity appreciation rights).



(d) Notwithstanding the foregoing, no provision of this Section 6.8, whether express
or implied, shall, in and of itself, (i) constitute or create an employment agreement with any
Company Group Employee, (ii) be treated as an amendment or other modification of any Company Plan
or any other plan or arrangement covering the Company Group Employees, or (iii) limit the right of
Buyer to amend, terminate or otherwise modify, or to cause the Surviving Company Group to amend,
terminate or otherwise modify, any existing benefit plan or arrangement following the Closing Date.
Nothing in this Section 6.8 shall create any third party beneficiary rights in any Person
other than the parties to this Agreement, including no third party beneficiary rights in any
current or former Company Group Employee or any beneficiary or dependent thereof.



Section 6.9. Post-Closing Access; Preservation of Records. From and after the
Closing, Buyer will cooperate in good faith with the holders of Units and the holders of Phantom
Units in respect of Tax matters (including Actions with respect to Taxes); provided, however, that
such cooperation shall not interfere with the normal operations of the Surviving Company Group and
the reasonable out-of-pocket expenses of the Surviving Company Group incurred in connection
therewith will be paid by such holder of Units or Phantom Units. Buyer will cause the Surviving
Company Group to maintain and preserve all Tax Returns, books, records and other documents that are
reasonably necessary for such cooperation for the lesser of (i) seven (7) years after the Closing
Date and (ii) any applicable statutory or regulatory retention period, as the same may be extended.



Section 6.10. Further Assurances. Each Party agrees that from time to time after the
Closing Date, it will execute and deliver or cause its respective Affiliates to execute and deliver
such further instruments, and take (or cause their respective Affiliates to take) such other
action, as may be reasonably necessary to carry out the purposes and intents of this Agreement and
the other Transaction Documents.



Section 6.11. No Solicitation. From the date hereof until the Closing Date or the
termination of this Agreement pursuant to Section 10.1, neither the Company nor the Member
Representative will, and the Company shall cause each other member of the Company Group and any
officer, director, employee, representative, agent and advisor of any member of the Company Group
not to (a) directly or indirectly solicit or encourage any inquiries or proposals for, or enter
into or continue any discussions with respect to, the acquisition (including by merger,
recapitalization or similar transaction) by any Person (other than a holder of Units or Phantom
Units, as permitted by Section 6.1) of any of the Units, Phantom Units or other membership
interest (or phantom membership interest) or other securities of any other member of the Company
Group or any of the assets of the Company Group material to the Business (an “Acquisition
Transaction”), or (b) furnish or permit to be furnished any non-public information concerning
the Company Group or its Business to any Person (other than Buyer, Merger Sub or their Affiliates
and respective agents and representatives), other than information furnished in the ordinary course
of business. Each of the Company and the Member Representative shall promptly notify Buyer of any
inquiry or proposal received by it or its representatives with respect to any such Acquisition
Transaction.



Section 6.12. Supplemental Disclosure. Up to five (5) days prior to the scheduled
Closing Date, the Company may correct or supplement in writing any information furnished in the
Disclosure Schedule, including any information that is materially incorrect or incomplete as a
result of any facts or circumstances occurring or arising after the date hereof, and shall promptly
furnish such supplemented information to Buyer. Thereafter, prior to the Closing, the Company
shall promptly notify Buyer in writing of any additional corrections or supplements to the
Disclosure Schedule. Any such corrected or supplemental information shall not be deemed to amend
this Agreement for purposes of determining the satisfaction of the closing condition set forth in
Section 7.3(a) or for purposes of determining whether any person is entitled to
indemnification pursuant to Article VIII.



Section 6.13. Tax Treatment of Transactions. To the extent the Company ceases to be
classified as a partnership for U.S. Federal income Tax purposes as a result of the transactions
contemplated by this Agreement, the transactions contemplated by this Agreement shall be treated
for all U.S. Federal income Tax purposes as a sale by the Members of partnership interests of the
Company and as a purchase by Buyer of the assets and liabilities of the Company.



Section 6.14. Purchase Price Allocation. Buyer and the Member Representative shall
negotiate in good faith to enter into an agreement on or after the Closing Date concerning the
allocation of the Merger Consideration (including any adjustments thereto) and the assumed
liabilities among the assets of the Company for Tax purposes (such allocation, which shall be in
accordance with Federal Tax principles, the “Allocation”), and the Allocation shall be made
pursuant to the following procedure:




	 	(a)	 	as soon as reasonably practicable after the Closing Date, Buyer
shall deliver to the Member Representative a proposed Allocation (such proposed
Allocation, the “Proposed Allocation”);






	 	(b)	 	the Member Representative may object to the Proposed Allocation
in writing within fifteen (15) Business Days of the delivery of the Proposed
Allocation but only if such objection, if sustained, would result in (i) a
reduction of the aggregate amount of the Proposed Allocation that is allocated
to those assets the deemed disposition of which results in short-term capital
gain or ordinary income for tax purposes (“Ordinary Income Assets”) for
the Members and (ii) a corresponding increase in the aggregate amount of the
Proposed Allocation that is allocated to assets other than Ordinary Income
Assets (each such objection, a “Permissible Objection”) (it being
understood that the term Permissible Objection shall encompass an objection
regarding the allocation of a portion of the Merger Consideration to a covenant
not to compete); the Member Representative shall be deemed to have accepted and
agreed to the Proposed Allocation (and the Proposed Allocation shall become the
Allocation and shall be binding on Buyer, the Member Representative and the
Members for all purposes) if such notice is not delivered to the Buyer within
fifteen (15) Business Days of the Buyer’s delivery of the Proposed Allocation;






	 	(c)	 	if the Member Representative provides timely notice to Buyer,
in accordance with Section 6.14(b), that it objects to the Proposed
Allocation, then Buyer and the Member Representative shall negotiate in good
faith about any Permissible Objection for fifteen (15) days after the delivery
of such notice;






	 	(d)	 	if Buyer and the Member Representative agree to amend the
Proposed Allocation as a result of reaching a written agreement about a
Permissible Objection, then the Proposed Allocation, as so amended, shall
become the Allocation and shall be binding on Buyer and the Members for all Tax
purposes;






	 	(e)	 	if Buyer and the Member Representative cannot reach written
agreement amending the Proposed Allocation within the fifteen (15) day period
set forth in Section 6.14(c), then all unresolved Permissible
Objections shall be immediately submitted for resolution to the Accounting
Firm. The Accounting Firm shall make a final determination as to those
unresolved Permissible Objections within thirty (30) days after such
submission. The fees and expenses of the Accounting Firm shall be shared
equally between the Member Representative and the Buyer;






	 	(f)	 	the determinations of the Accounting Firm shall be final and
binding on Buyer, the Members and the Member Representative for all Tax
purposes; and






	 	(g)	 	Buyer, the Members and the Member Representative shall act in
accordance with any Allocation resulting from the procedures set forth in this
Section 6.14 in any Tax Returns or similar filings. In the event that any
Governmental Authority disputes such Allocation, Buyer or the Member
Representative, as the case may be, shall promptly notify the other party of
the nature of such dispute.





ARTICLE VII.




CONDITIONS TO CLOSING




Section 7.1. Condition Precedent to Obligations of Buyer, Merger Sub and the Company.
The respective obligations of each Party to consummate the transactions contemplated by this
Agreement are subject to the satisfaction (or, where legally permissible, waiver by such Party) at
or prior to the Closing Date of the following conditions:



(a) No Adverse Order. There shall be no material Injunction, restraining order or
decree of any nature of any Governmental Authority of competent jurisdiction that is in effect that
prohibits the consummation of the transactions contemplated hereby.



(b) Antitrust Authorizations. All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or been terminated and any other material competition
approvals from any foreign Governmental Authority required to be obtained in connection with the
transactions contemplated hereby shall have been obtained.



(c) Consents. The Consents set forth in Sections 4.6(e), 5.4 and
7.1(c) of the Disclosure Schedule shall have been obtained or made, as applicable.



Section 7.2. Conditions Precedent to Obligation of the Company. The obligation of the
Company to consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver by the Company) at or prior to the Closing Date of each of the following
additional conditions:



(a) Accuracy of Buyer and Merger Sub’s Representations and Warranties. The
representations and warranties of Buyer and Merger Sub contained in Article V, disregarding
all qualifications contained herein relating to materiality or Material Adverse Effect, shall be
true and correct on and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date (except for such representations
and warranties which by their express provisions are made as of an earlier date, in which case they
shall be true and correct as of such date), except to the extent that the failure of such
representations and warranties to be true and correct would not and would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect on Buyer or Merger
Sub; and the Company shall have received a certificate signed by a duly authorized officer of Buyer
and Merger Sub confirming the foregoing as of the Closing Date.



(b) Covenants and Agreements of Buyer and Merger Sub. Each of Buyer and Merger Sub
shall have performed and complied with all of its covenants and agreements hereunder in all
material respects through the Closing Date; and the Company shall have received a certificate
signed by a duly authorized officer of Buyer and Merger Sub confirming the foregoing as of the
Closing Date.



(c) Closing Deliveries. On or prior to the Closing Date, Buyer shall have made or
caused to be made all deliveries required in accordance with Section 3.6(b).



Section 7.3. Conditions Precedent to Obligations of Buyer and Merger Sub. The
obligation of each of Buyer and Merger Sub to consummate the transactions contemplated by this
Agreement is subject to the satisfaction (or waiver by each of Buyer and Merger Sub) at or prior to
the Closing Date of each of the following additional conditions:



(a) Accuracy of the Company’s Representations and Warranties. The representations and
warranties of the Company contained in Article IV, disregarding all qualifications
contained herein relating to materiality or Material Adverse Effect, shall be true and correct on
and as of the Closing Date with the same force and effect as though such representations and
warranties had been made on the Closing Date (except for such representations and warranties which
by their express provisions are made as of an earlier date, in which case they shall be true and
correct as of such date), except to the extent that the failure of such representations and
warranties to be true and correct would not and would not reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect on the Company Group; and Buyer shall have
received a certificate from the Company signed by a duly authorized officer of the Company
confirming the foregoing as of the Closing Date.



(b) Covenants and Agreements of the Company. The Company shall have performed and
complied with all of its covenants and agreements hereunder in all material respects through the
Closing Date; and Buyer shall have received a certificate from the Company signed by a duly
authorized officer of the Company confirming the foregoing as of the Closing Date.



(c) Closing Documents. On or prior to the Closing Date, the Company shall have made
or caused to be made all deliveries required to be delivered by the Company in accordance with
Section 3.6(a).



ARTICLE VIII.




INDEMNIFICATION




Section 8.1. Survival.



(a) (i) The representations and warranties contained in Article IV shall terminate at
5:00 p.m. (Eastern Standard Time) on December 31, 2008 (the “Survival Date”), (ii) the
provisions of Article VIII, Article IX and Article XI shall survive
indefinitely and (iii) after the Closing, the indemnification provisions under Sections
8.2(a)(i)(B) and 8.2(b)(ii) shall apply only to the covenants and other agreements set
forth in Article III and Sections 6.1, 6.2(b), 6.3, 6.4,
6.5, 6.7, 6.8(a), 6.8(b), 6.9, 6.10, 6.13
and 6.14. No other representations, warranties or covenants of the Parties contained in
this Agreement shall survive the Closing. If a notice of a claim with respect to a breach of a
representation or warranty is asserted in writing and delivered prior to the Survival Date, then
such representation or warranty shall survive solely in connection with such claim until such time
as such claim is resolved in accordance with the terms of this Article VIII.



(b) If prior to the Closing any Party (the “Waiving Party”) has knowledge of any
breach by any other Party of any representation, warranty or covenant contained in this Agreement
and, at least five (5) days prior to the Closing, such other Party acknowledges in writing that the
effect of such breach is a failure of any condition to the Waiving Party’s obligations set forth in
this Agreement and the Waiving Party proceeds with the Closing, the Waiving Party shall be deemed
to have waived such breach and the Waiving Party and its successors, assigns and affiliates shall
not be entitled to be indemnified pursuant to this Article VIII, to sue for Damages or to
assert any other right or remedy for any Damages arising from any matters relating to such
condition or breach, notwithstanding anything to the contrary contained herein or in any
certificate delivered pursuant hereto. Except as expressly provided in this Section
8.1(b), the rights of each Buyer Indemnified Party under Sections 8.2(a), and the
rights of each Member Indemnified Party under Section 8.2(b), after the Closing shall not
be affected by any knowledge at or prior to the execution of this Agreement or at or prior to the
Closing of any breach of this Agreement, whether such knowledge came from any member of the Company
Group, the Member Representative or any other Person, or any waiver of Section 7.2(a) or
Section 7.3(a).



Section 8.2. Indemnification.



(a) (i) Subject to the provisions of this Article VIII, after the Closing, Buyer,
Merger Sub and their Affiliates (including the Surviving Company Group) and Buyer’s, Merger Sub’s
and such Affiliates’ respective officers, directors, employees, partners, members, stockholders,
and each of their respective successors and assigns (collectively, the “Buyer Indemnified
Parties”) shall be entitled to indemnification solely from the Escrow Amount against all
Damages (excluding, except in the case of Third-Party Claims, punitive damages or loss of profits)
incurred by the Buyer Indemnified Parties or any of them arising from or as a result of:




(A) subject to the limitations set forth in Section 8.1, the breach of any
representation or warranty of the Company contained in this Agreement;




(B) subject to the limitations set forth in Section 8.1, the breach or
non-performance by the Company of any of its covenants or other agreements contained in this
Agreement;




(C) all Company Transaction Expenses in excess of the amount thereof deducted from the
Base Merger Consideration in arriving at the Merger Consideration;




(D) all Retained Liabilities in excess of the amount thereof deducted from the Base
Merger Consideration in arriving at the Merger Consideration; and




(E) the amount by which the Adjusted Merger Consideration is less than the Closing Date
Payment; and




(F) any Pre-Closing Tax Liability.



(ii) The Buyer Indemnified Parties shall not be entitled to indemnification under Section
8.2(a)(i)(A):




(A) unless the aggregate of all Damages for which the Buyer Indemnified Parties, but
for this Section 8.2(a)(ii)(A), are entitled to indemnification thereunder exceeds
on a cumulative basis an amount equal to $1,250,000, after which the Buyer Indemnified
Parties shall be entitled to indemnification for all Damages for which they are entitled to
indemnification under Section 8.2(a)(i)(A); provided, however, that
this Section 8.2(a)(ii)(A) shall not apply to any claim for indemnification arising
out of a breach or alleged breach of Section 4.1, 4.2, 4.4,
4.5 or 4.7; and




(B) for any individual items where the Damage relating thereto is less than $100,000;
provided, however, that (1) such item shall be aggregated for purposes of
the calculation of cumulative Damages under Section 8.2(a)(ii)(A) and (2) this
clause (B) shall not apply to any claim for indemnification arising out of a breach or
alleged breach of Section 4.1, 4.2, 4.4, 4.5 or 4.7.



(b) Subject to the provisions of this Article VIII, after the Closing, Buyer and
Merger Sub shall indemnify and hold harmless the Member Representative, each holder of Units and
each holder of Phantom Units and each of their officers, directors, employees, partners, members,
stockholders, and each of their respective successors and assigns (where any such status is
applicable before, at or after the Closing) (collectively, the “Member Indemnified
Parties”, and, together with the Buyer Indemnified Parties, the “Indemnified Parties”)
from and against all Damages as incurred by the Company Indemnified Parties or any of them arising
from or as a result of:




(i) subject to the limitations set forth in Section 8.1, the breach of any
representation or warranty of Buyer or Merger Sub contained in this Agreement; and




(ii) subject to the limitations set forth in Section 8.1, the breach or
non-performance by Buyer or Merger Sub of any of its covenants or other agreements contained
in this Agreement.



Section 8.3. Indemnification Procedures. Claims for indemnification under this
Agreement shall be asserted and resolved as follows:



(a) If a claim for indemnification is to be made by an Indemnified Party with respect to any
claims asserted against it by an unaffiliated third-party (a “Third-Party Claim”) that
could give rise to a right of indemnification under this Article VIII, such Indemnified
Party shall promptly (and in any event within ten (10) Business Days following receipt of notice of
the Third-Party Claim) (i) notify the Party from whom indemnification is sought (which, in the case
of the holders of Units and the holders of Phantom Units, shall be, on behalf of the holders of
Units and the holders of Phantom Units, the Member Representative) (such notified Party, the
“Indemnifying Party”) of the Third-Party Claim, and (ii) transmit to the Indemnifying Party
a written notice (a “Claim Notice”) describing in reasonable detail the nature of the
Third-Party Claim, a copy of all papers served with respect to such claim (if any), the basis of
the Indemnified Party’s request for indemnification under this Article VIII, and a
good-faith estimate of the amount of Damages attributable to such claim. Failure to provide such
Claim Notice shall not affect the right of the Indemnified Party’s indemnification hereunder,
except to the extent that the Indemnifying Party is materially prejudiced as a result of such
failure.



(b) The Indemnifying Party shall have the right to defend the Indemnified Party against such
Third-Party Claim, it being understood that such election shall be without prejudice to the right
of the Indemnifying Party to dispute whether such claim involves indemnifiable Damages under this
Article VIII. If the Indemnifying Party notifies the Indemnified Party within thirty (30)
days after receipt of any Claim Notice that the Indemnifying Party elects to assume the defense of
the Third-Party Claim, then the Indemnifying Party shall have the right to defend such Third-Party
Claim with counsel selected by the Indemnifying Party who is reasonably acceptable to the
Indemnified Party, by all appropriate proceedings. The Indemnifying Party shall have full control
of such defense and proceedings, including any compromise or settlement thereof, provided that the
Indemnifying Party shall not consent to the entry of a judgment or enter into any settlement with
respect to the matter without the prior written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed). If an Indemnifying Party assumes such defense, the
Indemnifying Party shall not be liable for any amount required to be paid by the Indemnified Party
that exceeds, where the Indemnified Party has unreasonably withheld or delayed consent in
connection with the proposed compromise or settlement of a Third-Party Claim, the amount for which
that Third-Party Claim could have been settled pursuant to that proposed compromise or settlement.
No Third-Party Claim that is being defended in good faith by the Indemnifying Party shall be
settled or compromised by the Indemnified Party without the written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld or delayed). Notwithstanding any dispute
as to liability under this Article VIII, if requested by the Indemnifying Party, the
Indemnified Party shall act in good faith in responding to, defending against, settling or
otherwise dealing with any Third-Party Claim and the Indemnified Party shall (in addition to, and
not in limitation of, its obligation to act in good faith), at the sole cost and expense of the
Indemnifying Party, cooperate with the Indemnifying Party and its counsel in contesting any
Third-Party Claim which the Indemnifying Party elects to contest, including the making of any
related counterclaim against the Person asserting the Third-Party Claim or any cross complaint
against any Person and making available to the Indemnifying Party all witnesses, records, materials
and information in the Indemnified Party’s possession or under its control (or in the possession or
control of any of its Affiliates or representatives) relating to the Third-Party Claim as may be
reasonably requested by the Indemnifying Party or its counsel. The Indemnified Party may
participate in, but not control, any defense or settlement of any Third-Party Claim controlled by
the Indemnifying Party pursuant to this Section 8.3(b), and the Indemnified Party shall
bear its own costs and expenses with respect to such participation; provided, however, if in the
opinion of outside counsel of the Indemnified Party there is a conflict of interest between the
Indemnifying Party and the Indemnified Party, the Indemnifying Party shall bear the reasonable
costs and expenses of one counsel to the Indemnified Party reasonably acceptable to the
Indemnifying Party in connection with such defense.



(c) If the Indemnifying Party fails to notify the Indemnified Party within thirty (30) days
after receipt of any Claim Notice that the Indemnifying Party elects to defend the Indemnified
Party pursuant to Section 8.3(b), the Indemnified Party shall have the right to defend, at
the sole cost and expense of the Indemnifying Party, the Third-Party Claim by all appropriate
proceedings. The Indemnified Party shall have full control of such defense and proceedings;
provided, however, that the Indemnified Party may not enter into any compromise or settlement of
such Third-Party Claim if indemnification is to be sought hereunder, without the Indemnifying
Party’s consent (which consent shall not be unreasonably withheld or delayed). The Indemnifying
Party may participate in, but not control, any defense or settlement controlled by the Indemnified
Party pursuant to this Section 8.3(c), and the Indemnifying Party shall bear its own costs
and expenses with respect to such participation. If the Indemnifying Party elects not to (or is
deemed to have elected not to) assume the defense of a Third-Party Claim, or elects to assume the
defense of a Third-Party Claim, but reserves the right to dispute whether such claim is an
indemnifiable Damage under this Article VIII, the determination of whether the Indemnified
Party is entitled to indemnification hereunder shall be resolved either by the Parties or in an
appropriate legal proceeding. Upon resolution of such dispute by the Parties or receipt of a final
and non-appealable order or determination from a court of competent jurisdiction setting forth the
resolution of such dispute, the Indemnifying Party shall promptly pay the amount agreed in such
resolution or so ordered to be paid, if any.



(d) With respect to any indemnification sought by an Indemnified Party from the Indemnifying
Party that does not involve a Third-Party Claim, the Indemnified Party shall promptly provide
written notice to the Indemnifying Party of any claim with respect to which the Indemnified Party
believes it is or may be entitled to indemnification pursuant to Section 8.1 hereof (an
“Indemnity Notice”). The Indemnity Notice shall describe in reasonable detail the nature
of the claim, the Indemnified Party’s best estimate of the amount of Damages attributable to such
claim and the basis of the Indemnified Party’s request for indemnification under this Article
VIII.



(e) If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days
from its receipt of the Indemnity Notice that the Indemnifying Party disputes such claim (the
“Dispute Notice”), the Indemnifying Party shall be deemed to have accepted and agreed with
such claim and shall instruct the Escrow Agent in accordance with the Escrow Agreement to pay the
amount set forth in the Indemnity Notice promptly after the expiration of such 30-day period.



(f) If the Indemnifying Party has disputed a claim for indemnification (including any
Third-Party Claim), the Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution to such dispute. If the Indemnifying Party and the Indemnified Party cannot
resolve such dispute in thirty (30) days after delivery of the Dispute Notice, such dispute shall
be resolved by litigation in an appropriate court of law in accordance with the terms of this
Agreement. Upon resolution of such dispute by the Parties or receipt of a final and non-appealable
order or determination from a court of competent jurisdiction setting forth the resolution of such
dispute, the Indemnifying Party shall promptly pay the amount agreed in such resolution or so
ordered to be paid, if any.



(g) The term “Damages” as used in this Article VIII is not limited to matters asserted
by third-parties against an Indemnified Party, but includes Damages incurred or sustained by an
Indemnified Party in the absence of Third-Party Claims. An Indemnified Party’s right to
indemnification pursuant to this Article VIII shall not be conditioned upon the payment of
amounts by such Indemnified Party.



Section 8.4. Limitation on Liability. Notwithstanding anything to the contrary in
this Agreement, to the extent any Buyer Indemnified Party is entitled to indemnification pursuant
to Section 8.2(a), (a) such Buyer Indemnified Party shall be entitled to obtain such
indemnification solely out of the then remaining balance of the Escrow Amount, (b) the aggregate
Liability of the holders of Units and the holders of Phantom Units to the Buyer Indemnified Parties
for indemnification under Section 8.2(a) shall be limited to the then remaining balance of
the Escrow Amount, and (c) such Buyer Indemnified Party shall not have any recourse against the
Member Representative personally for indemnification pursuant to Section 8.2(a) and (d)
such Buyer Indemnified Party shall not be entitled to indemnification to the extent such Damages
were included in the calculation of Closing Date Working Capital.



Section 8.5. Calculation of Damages.



(a) In calculating the amount of the Damages to any Indemnified Party under Section
8.2, the amount of Damages will be net of any amounts recoverable by the Indemnified Party from
any third-party (including insurance proceeds) as a result of the facts or circumstances giving
rise to the Damages (such amounts, a “Reimbursement”). The Indemnified Parties shall
pursue payment under or from any insurer or third-party in respect of such Damages prior to
pursuing payment from any Indemnifying Party. If any Reimbursement is obtained subsequent to
payment to an Indemnified Party in respect of any Damages, then such Reimbursement shall be
promptly paid over to the Indemnifying Party.



(b) Any payment made pursuant to the provisions of this Article VIII shall be deemed
to be and treated, to the extent permitted by Law, as an adjustment to the Merger Consideration for
all purposes.



Section 8.6. Exclusive Remedy. Except for any equitable relief to which any Party may
be entitled and except in the case of fraud or as set forth in Section 6.7, from and after
the Closing, the indemnification provisions of this Article VIII shall be the sole and
exclusive remedy with respect to any and all claims relating to the subject matter of this
Agreement and no Party shall pursue or seek to pursue any other remedy. In furtherance of the
foregoing, Buyer and Merger Sub each hereby waives, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action it or any of its Subsidiaries or
Affiliates (including the Surviving Company Group) may have against the Company arising under or
based upon any Law.



Section 8.7. Access. From and after the delivery of a Claim Notice or an Indemnity
Notice by any Indemnified Party, each Indemnified Party shall grant the Indemnifying Party and its
representatives all reasonable access to the books, records, employees and properties of such
Indemnified Party (including the members of the Company Group) related to the matters to which the
claim relates (provided that, as necessary to protect any attorney-client privilege, the
Indemnified Party and each Indemnified Party shall execute a joint defense agreement containing
customary terms). All such access shall be granted during normal business hours.



Section 8.8. Mitigation of Damages. The Parties shall cooperate with each other to
mitigate any Damages.



Section 8.9. Certain Damages. EXCEPT IN THE CASE OF THIRD-PARTY CLAIMS, IN NO EVENT
SHALL THE INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING UNDER THIS ARTICLE
VIII) OR THE TERM “DAMAGES” COVER OR INCLUDE PUNITIVE DAMAGES OR LOST PROFITS, WHETHER BASED ON
STATUTE, CONTRACT, TORT OR OTHERWISE, AND WHETHER OR NOT ARISING FROM THE INDEMNIFYING PARTY’S
SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT.



Section 8.10. Release of Escrow Amount. On the Survival Date the Escrow Agent shall
release to the Member Representative for distribution to the holders of Units (other than Preferred
Units) and the holders of Phantom Units (other than Preferred Phantom Units) all or any remaining
portion of the Escrow Amount (including any interest thereon), less (a) first, the amount of any
Member Allocable Expenses submitted to the Escrow Agent on or prior to such date and payable to the
Member Representative in accordance with Section 3.2 and the Escrow Agreement, and then
less (b) second, an amount equal to the aggregate amount of all claims for indemnification of the
Buyer Indemnified Parties which are properly asserted and pending on or prior to such date.
Promptly upon the resolution of a pending claim for indemnification related to clause (b) of this
Section 8.10, the Escrow Agent shall release to the Member Representative for distribution
to holders of Units (other than Preferred Units) and the holders of Phantom Units (other than
Preferred Phantom Units) any Escrow Amount (including any interest thereon) retained in respect of
such pending claim for indemnification remaining after the resolution of such pending claim, less
the amount of any Member Allocable Expenses submitted to the Escrow Agent on or prior to such date
and payable to the Member Representative in accordance with Section 3.2 and the Escrow
Agreement. Any distribution pursuant to this Section 8.10 shall be made to each holder of
Units (other than Preferred Units) and each holder of Phantom Units (other than Preferred Phantom
Units) pro rata in accordance with such holder’s Applicable Percentage and shall otherwise be made
in accordance with this Agreement and the Escrow Agreement.



ARTICLE IX.




MEMBER REPRESENTATIVE




Section 9.1. Member Representative. The Parties have agreed that it is desirable to
designate Satow Associates, LLC to act on behalf of the holders of Units and the holders of Phantom
Units for certain limited purposes, as specified herein (the “Member Representative”).



Section 9.2. Authority and Rights. By the Members’ approval of this Agreement and
further each holder of Units and each holder of Phantom Units’ submission of a letter of
transmittal pursuant hereto, each of the holders of Units and the holders of Phantom Units of the
Company immediately prior to the Effective Time irrevocably ratifies the designation of Satow
Associates, LLC (or any successor representative) as Member Representative as provided in this
Agreement. The Member Representative shall have such powers and authority to take any and all
actions specified in or contemplated by this Agreement, the Escrow Agreement and the other
Transaction Documents for and on behalf of the holders of Units and the holders of Phantom Units,
as fully as such holders were acting on their own behalf, and take all actions necessary or
appropriate in the judgment of Member Representative for the accomplishment of the foregoing;
provided, however, that the Member Representative will have no obligation to act on behalf of the
holders of Units or Phantom Units, except as expressly provided herein or therein. Without
limiting the generality of the foregoing, the Member Representative shall have full power,
authority and discretion to estimate and determine the amounts of Member Allocable Expenses, and to
direct the Escrow Agent to pay such Member Allocable Expenses in accordance with Sections
3.2 and 8.10 hereof. The Member Representative will at all times be entitled to rely
on any directions received from the holders of Units or Phantom Units; provided, however, that the
Member Representative shall not be required to follow any such direction, and shall be under no
obligation to take any action in its capacity as Member Representative, unless the Member
Representative is entitled to funds under Sections 3.2 and 8.10 of this Agreement
and/or has been provided with other funds, security or indemnities which, in the sole discretion of
the Member Representative, are sufficient to protect the Member Representative against the costs,
expenses and Liabilities which may be incurred by the Member Representative in responding to such
direction or taking such action. The Member Representative shall be entitled to engage such
counsel, experts and other agents and consultants as it shall deem necessary in connection with
exercising its powers and performing its function hereunder and (in the absence of bad faith on the
part of the Member Representative) shall be entitled to conclusively rely on the opinions and
advice of such Persons. The Member Representative shall be entitled to reimbursement from the
Escrow Amount as set forth in Sections 3.2 and 8.10 of this Agreement and/or from
funds otherwise received by it in its capacity as Member Representative pursuant to or in
connection with this Agreement, for all reasonable expenses, disbursements and advances (including
fees and disbursements of its counsel, experts and other agents and consultants) incurred by the
Member Representative in such capacity, and for indemnification against any loss, Liability or
expenses arising out of actions taken or omitted to be taken in its capacity as Member
Representative (except for those arising out of the Member Representative’s gross negligence or
willful misconduct), including the costs and expenses of investigation and defense of claims for
indemnification. All actions taken by Member Representative under this Agreement, including but
not limited to, actions following the Closing Date with respect to all matters relating to
Section 3.2 and Article VIII hereof and to the Escrow Agreement, shall be binding
upon all holders of Units and all holders of Phantom Units and their successors as if expressly
confirmed and ratified in writing by each of them. Buyer, Merger Sub, the Escrow Agent, and, after
the Closing Date, the Buyer Indemnified Parties shall be entitled to serve notice to, and deal
exclusively with, the Member Representative with respect to any and all matters concerning any of
the holders of Units or Phantom Units arising out of or related to this Agreement or the
Transaction Documents (except as may otherwise expressly be set forth in such Transaction
Documents) or the transactions contemplated hereby or thereby and shall be entitled to rely
conclusively (without further evidence of any kind whatsoever) on any document executed or
purported to be executed on behalf of any holder of Units, holder of Phantom Units or Indemnifying
Party by the Member Representative with respect thereto, and on any other action taken or purported
to be taken on behalf of any holder of Units, holder of Phantom Units or Indemnifying Party by the
Member Representative with respect thereto, as fully binding upon such holder of Units, holder of
Phantom Units or Indemnifying Party. If the Member Representative shall resign, dissolve, cease to
exist or otherwise be unable to fulfill its responsibilities as representative of the holders of
Units and the holders of Phantom Units, the holders of Units and the holders of Phantom Units
shall, within ten (10) days after the occurrence of such event, appoint a successor representative
and, promptly thereafter, shall notify Buyer and the Escrow Agent of the identity of such
successor. Any such successor shall become the “Member Representative” for purposes of this
Agreement and the other Transaction Documents. If for any reason there is no Member Representative
at any time, all references herein or in any other Transaction Document to the Member
Representative shall be deemed to refer to the holders of Units and the holders of Phantom Units.



Section 9.3. Limitations on Liability. Except in cases of willful misconduct or fraud
and except as set forth in Section 3.3(a), the Member Representative will have no Liability
to the holders of Units and the holders of Phantom Units or their successors or assigns with
respect to actions taken or omitted to be taken in its capacity as Member Representative and shall
be entitled to indemnification and reimbursement from the holders of Units and the holders of
Phantom Units (whether from the Escrow Amount or otherwise) against any loss, Liability, fees or
expenses arising out of actions taken or omitted to be taken in its capacity as Member
Representative.



ARTICLE X.




TERMINATION




Section 10.1. Termination Events. Without prejudice to other remedies which may be
available to the Parties by Law or this Agreement, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the Closing:



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



(b) by either the Member Representative or Buyer by giving written notice to the other Party
if the Closing shall not have occurred by October 9, 2007, unless extended by written agreement of
the Member Representative and Buyer; provided that the Party seeking termination pursuant to this
subsection (b) is not in default or breach of any Transaction Document to which it is party and
provided, further, that the right to terminate this Agreement under this subsection (b) shall not
be available to any Party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before such date; or



(c) by either the Member Representative or Buyer by giving written notice to the other Party
if any Governmental Authority shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the consummation of any of the
transactions contemplated by this Agreement, and such order, decree, ruling or other Action shall
not be subject to appeal or shall have become final and non-appealable.



Section 10.2. Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 10.1, all rights and obligations of the Parties hereunder
shall terminate without any Liability on the part of any Party or its Affiliates in respect
thereof, except that (a) the obligations of the Parties under Section 6.2 (Access to
Information; Confidentiality), Section 6.5 (Public Announcements) and Article VIII
of this Agreement shall remain in full force and effect and (b) such termination shall not relieve
any Party of any Liability for any breach prior to termination of this Agreement.



ARTICLE XI.




MISCELLANEOUS




Section 11.1. Parties in Interest. Except as provided in Section 6.7 with
respect to the rights of the Indemnified Officers and in Article VIII with respect to the
rights of the holders of Units and the holders of Phantom Units to receive indemnification
hereunder, nothing in this Agreement, whether express or implied, shall be construed to give any
Person, other than the Parties or their respective successors and permitted assigns, any legal or
equitable right, remedy, claim or benefit under or in respect of this Agreement.



Section 11.2. Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns. No Party may assign
(by contract, stock sale, operation of Law or otherwise) either this Agreement or any of its
rights, interests or obligations hereunder without the express prior written consent of the other
Parties, and any attempted assignment, without such consent, shall be null and void.



Section 11.3. Notices. All notices and other communications required or permitted to
be given by any provision of this Agreement shall be in writing and mailed (certified or registered
mail, postage prepaid, return receipt requested) or sent by hand or overnight courier, or by
facsimile transmission (with acknowledgment received), charges prepaid and addressed to the
intended recipient as follows, or to such other addresses or numbers as may be specified by a Party
from time to time by like notice to the other Parties:




	 	 	 	If to the Company:






JDS Pharmaceuticals, LLC


405 Lexington Avenue, 59th Floor


New York, NY 10174


Attention: Michael Satow


Facsimile: (212) 214-0948




	 	 	 	with copies to:






Latham & Watkins LLP


885 Third Avenue


New York, New York 10022


Attention: Barry A. Bryer and Eric Schwartzman


Facsimile: (212) 751-4864




	 	 	 	If to the Member Representative:






Satow Associates, LLC


158 Mercer Street


New York, NY 10012


Attention: Phillip M. Satow


Facsimile: (914) 238-0108




	 	 	 	with copy to:






Latham & Watkins LLP


885 Third Avenue


New York, New York 10022


Attention: Barry A. Bryer and Eric Schwartzman


Facsimile: (212) 751-4864




	 	 	 	If to Buyer:






Noven Pharmaceuticals, Inc.




11960 SW 144th Street




Miami, Florida 33186




Attention: General Counsel




Facsimile: (305) 232-1836




	 	 	 	with a copy to:






Cravath, Swaine & Moore LLP




825 8th Avenue




New York, New York 10019




Attention: Richard Hall




Facsimile: (212) 474-3700




	 	 	 	If to Merger Sub:






c/o Noven Pharmaceuticals, Inc.




11960 SW 144th Street




Miami, Florida 33186




Attention: General Counsel




Facsimile: (305) 232-1836




	 	 	 	with a copy to:






Cravath, Swaine & Moore LLP




825 8th Avenue




New York, New York 10019




Attention: Richard Hall




Facsimile: (212) 474-3700



All notices and other communications given in accordance with the provisions of this Agreement
shall be deemed to have been given and received when delivered by hand or transmitted by facsimile
(with acknowledgment received), three (3) Business Days after the same are sent by certified or
registered mail, postage prepaid, return receipt requested or one (1) Business Day after the same
are sent by a reliable overnight courier service, with acknowledgment of receipt.



Section 11.4. Amendments and Waivers. This Agreement may not be amended, supplemented
or otherwise modified except in a written instrument executed by each of the Parties. No waiver by
any of the Parties of any default, misrepresentation or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of
any of the provisions hereof shall be effective unless explicitly set forth in writing and executed
by the Party sought to be charged with such waiver.



Section 11.5. Exhibits and Disclosure Schedule.



(a) All Exhibits, Schedules and the Disclosure Schedule attached hereto are hereby
incorporated herein by reference and made a part hereof. Any matter disclosed pursuant to any
Section of or Schedule or Exhibit to this Agreement or the Disclosure Schedule (or any section of
any Schedule or Exhibit to this Agreement or the Disclosure Schedule) whose relevance or
applicability to any representation or warranty made elsewhere in this Agreement or to the
information called for by any other Section of or Schedule or Exhibit to this Agreement or the
Disclosure Schedule (or any other section of any Schedule or Exhibit to this Agreement or the
Disclosure Schedule) is reasonably apparent on its face shall be deemed to be an exception to such
representations and warranties and to be disclosed with respect to all Sections of and Schedules
and Exhibits to this Agreement and the Disclosure Schedule (and all sections of all Schedules and
Exhibits to this Agreement and the Disclosure Schedule), notwithstanding the omission of a
reference or cross-reference thereto; provided, however, that the provisions of
this Section 11.5(a) shall not apply to, or have any effect on, the representations and
warranties made in Sections 4.1 through 4.8 or any Section of or Schedule or
Exhibit to this Agreement or the Disclosure Schedule (or any section of any Schedule or Exhibit to
this Agreement or the Disclosure Schedule) related thereto.



(b) Neither the specification of any dollar amount in any representation or warranty nor the
mere inclusion of any item in a Schedule or in the Disclosure Schedule as an exception to a
representation or warranty shall be deemed an admission by a Party that such item represents an
exception or material fact, event or circumstance or that such item would be reasonably likely to,
individually or in the aggregate, result in a Material Adverse Effect on the Company Group, Buyer
or Merger Sub.



Section 11.6. Headings. The table of contents and section headings contained in this
Agreement are for reference purposes only and shall not be deemed a part of this Agreement or
affect in any way the meaning or interpretation of this Agreement.



Section 11.7. Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement.



Section 11.8. No Other Representations or Warranties. Except for the representations
and warranties expressly set forth in this Agreement, Buyer and Merger Sub acknowledge that none of
the Company or any of its Affiliates nor any other Person makes any representation or warranty,
express or implied, at law or in equity, with respect to the Company Group and its Affiliates, the
Units, the Phantom Units or any of the assets or Liabilities of the Company Group and its
Affiliates, or with respect to any other information provided to Buyer or Merger Sub, whether on
behalf of the Company Group or such other Persons, including as to the probable success or
profitability of the Company Group after the Closing. No holder of Units or Phantom Units or any
other Person will have or be subject to any Liability to Buyer or any other Person resulting from
the distribution to Buyer or Merger Sub, or Buyer or Merger Sub’s use of, any such information,
including any information, document or material made available to Buyer or Merger Sub in certain
“data rooms,” management presentations or in any other form in expectation or contemplation of the
transactions contemplated by this Agreement.



Section 11.9. Entire Agreement. This Agreement (including the Disclosure Schedule and
the Exhibits hereto), the Transaction Documents and the Confidentiality Agreement constitute the
entire agreement among the Parties with respect to the subject matter hereof and thereof and
supersede any prior understandings, negotiations, agreements, discussions or representations among
the Parties of any nature, whether written or oral, to the extent they relate in any way to the
subject matter hereof or thereof.



Section 11.10. Severability. If any provision of this Agreement or the application of
any such provision to any Person or circumstance shall be declared by any court of competent
jurisdiction to be invalid, illegal, void or unenforceable in any respect, all other provisions of
this Agreement, or the application of such provision to Persons or circumstances other than those
as to which it has been held invalid, illegal, void or unenforceable, shall nevertheless remain in
full force and effect and will in no way be affected, impaired or invalidated thereby. Upon such
determination that any provision, or the application of any such provision, is invalid, illegal,
void or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.



Section 11.11. Expenses. Unless otherwise provided herein, each Party agrees to pay,
without right of reimbursement from the other Parties, all costs and expenses incurred by it
incident to the performance of its obligations hereunder, including, without limitation, the fees
and disbursements of counsel, accountants, financial advisors, experts and consultants employed by
it in connection with the transactions contemplated hereby, whether or not the transactions
contemplated by this Agreement are consummated.



Section 11.12. Governing Law. This Agreement and all claims arising out of or
relating to this Agreement and the transactions contemplated hereby shall be governed by the Laws
of the State of Delaware, without regard to the conflicts of law principles that would result in
the application of any Law other than the Law of the State of Delaware.



Section 11.13. Consent to Jurisdiction; Waiver of Jury Trial.



(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) state courts
of the State of Delaware and (ii) the United States District Court for the District of Delaware for
the purposes of any suit, Action or other proceeding arising out of or relating to this Agreement
or any transaction contemplated hereby (and agrees not to commence any Action, suit or proceeding
relating hereto except in such courts). Each of the Parties further agrees that service of any
process, summons, notice or document hand delivered or sent by U.S. registered mail to such Party’s
respective address set forth in Section 11.3 will be effective service of process for any
Action, suit or proceeding in Delaware with respect to any matters to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence. Each of the Parties irrevocably
and unconditionally waives any objection to the laying of venue of any Action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby in (A) state
courts of the State of Delaware or (B) the United States District Court for the District of
Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Action, suit or proceeding brought in any such court has been
brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final
judgment in any Action or proceeding so brought shall be conclusive and may be enforced by suit on
the judgment in any jurisdiction or in any other manner provided in law or in equity. 



(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF THE
PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.



Section 11.14. Equitable Remedies. Each of the Parties acknowledges and agrees that
the other Party would be irreparably damaged in the event that any of the terms or provisions of
this Agreement are not performed in accordance with their specific terms or otherwise are breached.
Therefore, notwithstanding anything to the contrary set forth in this Agreement, each of the
Parties hereby agrees that the other Party shall be entitled to an Injunction or Injunctions to
prevent breaches of any of the terms or provisions of this Agreement, and to enforce specifically
the performance by such first Party under this Agreement, and each Party hereby agrees to waive the
defense in any such suit that the other Party have an adequate remedy at law and to interpose no
opposition, legal or otherwise, as to the propriety of Injunction or specific performance as a
remedy, and hereby agrees to waive any requirement to post any bond in connection with obtaining
such relief. The equitable remedies described in this Section 11.14 shall be in addition
to, and not in lieu of, any other remedies at law or in equity that the Parties may elect to
pursue. The Parties hereby agree that irreparable damage would occur in the event any of the terms
or provisions of this Agreement required to be performed prior to the Closing are not performed in
accordance with the terms of this Agreement and that, prior to the Closing, the Parties shall be
entitled to specific performance of the terms of this Agreement, in addition to any other remedy at
law or in equity.



Section 11.15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which together will constitute
one and the same instrument.



• * * * *

3


IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first above written.



JDS PHARMACEUTICALS, LLC




	 	 	By:  /s/ Phillip M. Satow





Name: Phillip M. Satow

Title: Chairman and Chief Executive Officer



SATOW ASSOCIATES, LLC, solely in its capacity as Member Representative




	 	 	By:  /s/ Michael S. Satow





Name: Michael S. Satow

Title: Managing Member



4



NOVEN PHARMACEUTICALS, INC.




	 	 	By:  /s/ Robert C. Strauss





Name: Robert C. Strauss

Title: President, Chief Executive Officer and



Chairman of the Board



NOVEN ACQUISITION, LLC



By: NOVEN BETA, LLC, as its Sole Member



By: NOVEN ALPHA, LLC, as its Sole Member



	 	 	 
	By:

	 	By: NOVEN PHARMACEUTICALS, INC., as its Sole Member

/s/ Jeff T. Mihm
	
 
	 	 






Name: Jeff T. Mihm

Title: Vice President and General Counsel




5