Unassociated Document


    

      ESCROW
AGREEMENT

       

      This
Escrow Agreement (this “Agreement”), dated as of
January 27, 2009 (the “Closing
Date”), is by and among Piramal Healthcare, Inc. (“Purchaser”), a Delaware
corporation and a direct wholly-owned subsidiary of Piramal Healthcare Limited,
an Indian public limited company, RxElite, Inc., a Delaware corporation (“Seller”), and Citibank, N.A.,
as escrow agent (the “Escrow
Agent”).

       

      RECITALS

       

      A.           Purchaser
and Seller have entered into a Stock Purchase Agreement, dated as of January 27,
2009 (the “Purchase
Agreement”) which provides, among other things, for the purchase by
Purchaser from Seller of all of the issued and outstanding stock of RxElite
Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Seller
(the “Acquired
Company”).

       

      B.           The
Purchase Agreement provides that Seller will indemnify the Purchaser Indemnitees
with respect to certain matters upon the terms and subject to the conditions
provided in the Purchase Agreement and a portion of the consideration to be
delivered thereunder shall be placed in escrow pursuant to the terms and subject
to the conditions of this Agreement.

       

      C.           The
Seller and the Purchaser wish to appoint Citibank, N.A. as Escrow Agent and
Citibank, N.A. is willing to accept such appointment and has agreed to hold the
Escrow Amount (as defined below) in accordance with the terms and provisions
contained herein.

       

      D.           The
parties hereto acknowledge that nothing herein is intended to serve as an
admission or acknowledgement of any potential claim that may be asserted against
the Acquired Company.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as
follows:

       

      AGREEMENT

       

      1.           Definitions.  Except
as hereinafter defined, capitalized terms used in this Agreement will have the
meanings assigned to such terms in the Purchase Agreement.  As used
herein, the following terms shall have the following respective
meanings:

       

      “Claim” means, individually
and not collectively, a claim for Damages incurred by any Purchaser Indemnitee
with respect to the Preferred Stock Liability or the Idaho Tax
Liability.

       

      “Escrow Amount” means an
amount equal to Nine Hundred Thousand Dollars ($900,000).

       

      “Idaho Tax Liability” means
any sales or use taxes, together with any interest, penalties, related
liabilities, fines or additions to such taxes, imposed upon the Acquired
Company by the Idaho State Tax Commission and relating to the purchase
of vaporizers and/or sale of veterinary products by the Acquired Company with
respect to any Pre-Closing Periods and for any Straddle Periods, but only with
respect to the portion of such Straddle Period ending on the Closing Date and as
determined in the manner provided in Section 6.4 of the Purchase
Agreement.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      “Indemnifiable Amount” means
those Damages for which any Purchaser Indemnitee is entitled to indemnification
pursuant to the Purchase Agreement.

       

      “Indemnitor” means the
Seller.

       

      “Preferred Stock Liability”
means any Liabilities relating to or arising out of any shares which were issued
and outstanding at any time prior to the Closing Date of the Series A Preferred
Stock of the Acquired Company, par value $0.01 per share, including any
Liabilities accruing, arising out of, or relating to the First Amended and
Restated Conversion Agreement, dated as of April 26, 2007, by and among the
Acquired Company and each of the persons who were holders of such Series A
Preferred Stock, and any amendment thereto.

       

      “Preferred Stock Release Date”
means fifteen (15) business days following the earlier of: (i) the date of a
final and binding settlement and release of the Acquired Company from the
Preferred Stock Liability, (ii) a final, nonappealable order by a court of
competent jurisdiction or other final, nonappealable adjudication, in either
case releasing the Acquired Company from the Preferred Stock Liability or (iii)
the expiration of the period under which the Preferred Stock Liability can be
asserted.

       

      “Tax Release Date”
means fifteen (15) business days following the earlier of: (i) the date
of a written settlement of the Idaho Tax Liability by the Idaho State Tax
Commission, or (ii) the date of a final, nonappealable order by a court of
competent jurisdiction or other final adjudication of dismissal or
discharge (or comparable release) of the Idaho Tax Liability or (iii) the
expiration of the period of the statute of limitations under which
the Idaho State Tax Commission may bring a claim for the Idaho Tax
Liability, if no Claim is made.

       

      2.           Appointment of the Escrow
Agent.  Purchaser and Seller hereby designate and appoint
Citibank, N.A. as the Escrow Agent for the purposes set forth herein, and the
Escrow Agent hereby accepts such appointment on the terms herein
provided.  The Escrow Agent shall constitute the agent of the parties
hereto solely to the extent required to execute its duties
hereunder.

       

      3.           Deposit of Escrow Amount;
Commencement of Duties.  On the Closing Date, Purchaser shall
deliver to the Escrow Agent the Escrow Amount by wire transfer of immediately
available funds to the following account designated by the Escrow Agent in
accordance with the wire instructions attached hereto as Attachment
A:

       

      
        
          	
                  Account
      Name:

                	
                  Account
      Number:

                
	 	 
	
                  Citibank
      FBO Piramal/RxElite, Inc. Escrow

                	
                  796610

                


        

      

      


       

      Upon
receipt of the Escrow Amount by the Escrow Agent, the duties and obligations of
the parties to this Agreement shall commence. The Escrow Amount, along with any
interest or other investment income earned thereon held in escrow pursuant to
this Agreement shall constitute the indemnification escrow fund (the “Indemnification Escrow Fund”)
with respect to the Indemnitor’s indemnification obligations with respect to the
Preferred Stock Liability and the Idaho Tax Liability.

       

      4.           Maintenance of
Escrow.  During the term of this Agreement, the Escrow Agent
shall hold and safeguard the Indemnification Escrow Fund in accordance with this
Agreement and shall disburse the Indemnification Escrow Fund only in accordance
with this Agreement.  The Escrow Amount shall not be subject to any
lien, attachment, trustee process or any other judicial process of any creditor
of any party, and shall be held and distributed solely for the purposes and in
accordance with this Agreement.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      5.           Investment of Escrow Amount;
Tax Reporting.

       

      (a)           Permitted
Investments.  The Escrow Agent shall invest the Escrow Amount
pursuant to and as directed by a signed written instruction from both Purchaser
and Seller.  The Escrow Agent shall invest the Escrow Amount on the
date of instruction provided that it is received on or before 11:00 a.m. (New
York Time).  Any Escrow Amount received by the Escrow Agent after
11:00 a.m. (New York Time) shall be treated as if received on the following
Business Day.  For purposes of this Agreement “Business Day” shall mean any
day that the Escrow Agent is open for business.  Any investment
direction contained herein may be executed through an affiliated broker dealer
of the Escrow Agent and will be entitled to such usual and customary
fee.  Neither Escrow Agent nor any of its affiliates assume any duty
or liability for monitoring the investment rating.

       

      (b)           Tax
Reporting.  The parties hereto agree that Seller shall be
treated as the owner of the Escrow Amount for federal income tax purposes and
that Seller shall include in taxable income the earnings on the Escrow
Amount.  Such earnings shall be reported on a Form 1099 INT for
interest earned or on a Form 1099 DIV for dividends earned.

       

      (c)           Certification of Tax
Identification Number.  Seller shall promptly provide the
Escrow Agent with a duly completed and properly executed IRS Form W-9 certifying
the Seller’s status as a beneficial owner of the Escrow Amount for federal
income tax purposes.  In the event the payee is not the Seller, the
Seller shall provide the Escrow Agent with a duly completed and properly
executed IRS Form W-9 (or Form W-8 BEN, in case of non-U.S. entity) on such
payee prior to payment being made.  Seller understands that, in the
event tax identification numbers are not certified to the Escrow Agent, the
Internal Revenue Code, as amended from time to time, may require withholding of
a portion of any interest or other income earned on the investment of the Escrow
Amount.

       

      (d)           IRS Circular 230
Disclosure.  Escrow Agent, its affiliates, and its employees
are not in the business of providing tax or legal advice to any taxpayer outside
of Escrow Agent and its affiliates.  This Agreement and any amendments
or attachments are not intended or written to be used, and cannot be used or
relied upon, by any such taxpayer or for the purpose of avoiding tax
penalties.  Any such taxpayer should seek advice based on the
taxpayer’s particular circumstances for an independent tax advisor.

       

      6.           Purchaser Indemnitees’
Rights to Assert Claim to Indemnification Escrow Fund.  Subject
to the terms of the Purchase Agreement, the Purchaser Indemnitees shall have the
right to make one or more Claims related to the Preferred Stock Liability on or
prior to the Preferred Stock Release Date and one or more Claims related to the
Idaho Tax Liability on or prior to the Tax Release Date by delivering a written
notice of such Claim (a “Claim
Notice”) to the Seller and the Escrow Agent prior to the relevant time,
with a copy directed to each party as to which copies shall be directed pursuant
to the notice provisions in Section 8.1 of the Purchase
Agreement.  Each Claim Notice shall be labeled either “Preferred Stock
Liability Claim Notice” or “Idaho Tax Liability Claim Notice”
and  state facts relating to the Claim in reasonable detail so that
the Seller may reasonably evaluate such Claim, including specifying the amount
requested by the Purchaser Indemnitee to be released to the Purchaser Indemnitee
in connection with such Claim, which estimate and statement may be amended or
modified from time to time.

       

      7.           Issuance of Final
Instruction.  For purposes of this Agreement, a “Final Instruction” shall mean
a written notice given to the Escrow Agent directing the disbursement of the
Indemnifiable Amount of a Claim, which shall be signed both by the Purchaser and
the Seller; except as otherwise provided herein.  The parties hereto
agree to execute and deliver to the Escrow Agent a Final Instruction accompanied
by the indicated documentation, under the following circumstances:

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      (a)           If
the Seller disputes the validity, amount and/or calculation of the Claim and/or
the related Indemnifiable Amount, the Seller shall give written notice of such
dispute (a “Dispute
Notice”) to
Purchaser, with a copy to the Escrow Agent, within 30 days after the receipt of
the Claim Notice by the Seller.  In such circumstances, no Final
Instruction may be given to the Escrow Agent except as provided in (d) below and
the Escrow Agent shall not make any disbursement of any portion of the Escrow
Amount.  In the event of a final determination by a court of competent
jurisdiction in respect of the disposition of the Claim and the related
Indemnifiable Amount, Seller and Purchaser shall execute a Final Instruction to
the Escrow Agent providing the Escrow Agent with disbursement instructions
consistent with such final determination.

       

      (b)           If
the Seller does not dispute the Claim and the related Indemnifiable Amount, the
Seller and Purchaser shall execute a Final Instruction to the Escrow Agent
providing the Escrow Agent with disbursement instructions consistent with such
final determination.

       

      (c)           If
the Seller fails to send a Dispute Notice to Purchaser within 30 days after its
receipt of the Claim Notice, Purchaser shall execute a Final Instruction to the
Escrow Agent, with a copy to the Seller, stating that such thirty (30) day
period has expired and providing the Escrow Agent with disbursement instructions
consistent with such final determination.

       

      (d)           If
the Seller and the Purchaser reach an agreement with respect to the proper
determination of the Claim and the related Indemnifiable Amount, the Seller and
the Purchaser shall give to the Escrow Agent a Final Instruction with respect to
the Claim and the related Indemnifiable Amount.

       

      (e)  If
the Seller and the Purchaser agree that a certain amount should be distributed
out of the Indemnification Escrow Fund, then Seller and Purchaser shall execute
a Final Instruction to the Escrow Agent providing the Escrow Agent with
disbursement instructions consistent with such final determination.

       

      (f)  Notwithstanding
anything to the contrary, in no event shall any disbursement be made from the
Indemnification Escrow Fund with respect to the Idaho Tax Liability to the
extent the amount of such disbursement plus all other disbursements with respect
to the Idaho Tax Liability for which Final Instructions have previously or
simultaneously been issued (collectively, the “Cumulative Tax Instruction
Amount”), would in the aggregate exceed $500,000 (i) plus any interest earned on
the Indemnification Escrow Fund and (ii) less the amount, if any, by which the
Cumulative Stock Instruction Amount (as defined below) exceeds $400,000 at such
time.  Similarly, in no event shall any disbursement be made from
Indemnification Escrow Fund with respect to the Preferred Stock Liability to the
extent the amount of such disbursement plus all other disbursements with respect
to the Preferred Stock Liability for which Final Instructions have previously or
simultaneously been issued (collectively, the “Cumulative Stock Instruction
Amount”) would in the aggregate exceed $600,000 (i) plus any interest earned on
the Indemnification Escrow Fund and (ii) less the amount, if any, by which the
Cumulative Tax Instruction Amount exceeds $300,000 at such time.

       

      8.           Distribution of
Indemnification Escrow Fund.

       

      (a)           Receipt of Final
Instruction.  Upon receipt of a Final Instruction in accordance
with Section 7, the Escrow Agent shall disburse such portion of the applicable
Escrow Amount as set forth in the Final Instruction.

       

      (b)           Preferred Stock Release
Date.  On or prior to Preferred Stock Release Date, Purchaser
and Seller shall deliver a Final Instruction to the Escrow Agent notifying the
Escrow Agent of (i) the Preferred Stock Release Date, (ii) whether any Purchaser
Indemnitees have any outstanding Claims relating to the Preferred Stock
Liability, and (iii) the amount and recipient of funds to be disbursed from the
Indemnification Escrow Fund.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      (1)           If,
on the Preferred Stock Release Date, the Purchaser Indemnitees have neither made
any Claims relating to the Preferred Stock Liability in accordance with Section
6 hereof nor indicated in the Final Instruction any outstanding Claims relating
to the Preferred Stock Liability, then the Escrow Agent shall deliver to the
Indemnitor as promptly as practicable after the Preferred Stock Release Date an
amount (the “Preferred Stock
Release Amount”) equal to either (i) if the Tax Release Date has already
occurred, the remaining balance in the Indemnification Escrow Fund
including any interest accrued thereon, or (ii) if the Tax Release Date has
not yet occurred, then the positive difference between (x) $400,000 and (y) the
aggregate amount of any Claims paid out of the Indemnification Escrow Fund with
respect to the Preferred Stock Liability, in accordance with Section 8(d)
hereof.

       

      (2)           If
any Purchaser Indemnitee has made a Claim or Claims relating to the Preferred
Stock Liability on or prior to the Preferred Stock Release Date, and if, upon
the Preferred Stock Release Date, the portion of the Indemnifiable Amount of
such Claim or Claims (the “Preferred Stock Release Deferred Portion”)
(whether or not in dispute) that has not been paid out of the Indemnification
Escrow Fund aggregates less than the Preferred Stock Release Amount, then the
Escrow Agent shall deliver to the Indemnitor, in accordance with Section 8(d)
hereof the Preferred Stock Release Amount less the Preferred Stock Release
Deferred Portion.  The Preferred Stock Release Deferred Portion shall
be retained by the Escrow Agent until each unresolved Claim set forth in a Claim
Notice delivered on or prior to the Preferred Stock Release Date has been
completely and finally determined in accordance with the terms hereof, after
which any portion of the Preferred Stock Release Deferred Portion that is
determined pursuant to this Agreement to not constitute an Indemnifiable
Amount shall be delivered by the Escrow Agent to the Indemnitor, in
accordance with Section 8(d) hereof.

       

      (3)           If
any Purchaser Indemnitee has made a Claim or Claims in accordance with Section 6
hereof and if upon the Preferred Stock Release Date, the portion of the
Indemnifiable Amount of such Claim or Claims that has not been paid out of the
Indemnification Escrow Fund (whether or not in dispute) aggregates more than the
Preferred Stock Release Amount, then upon the Escrow Agent’s receipt of a Final
Instruction pursuant to Section 7, the Escrow Agent shall deliver to such
Purchaser Indemnitee all or such portion of the Claim as is determined pursuant
to this Agreement to constitute an Indemnifiable Amount, in accordance with
Section 8(d) hereof.

       

      (c)           Tax Release
Date.  On or prior to the Tax Release Date, Purchaser and
Seller shall deliver a Final Instruction to the Escrow Agent notifying the
Escrow Agent of (i) the Tax Release Date, (ii) whether any Purchaser Indemnitees
have any outstanding Claims relating to the Idaho Tax Liability, and (iii) the
amount and recipient of funds to be disbursed from the Indemnification Escrow
Fund.

       

      (1)           If,
on the Tax Release Date, the Purchaser Indemnitees have neither made any Claims
related to the Idaho Tax Liability in accordance with Section 6 hereof nor
indicated in the Final Instruction any outstanding Claims relating to the Idaho
Tax Liability, then the Escrow Agent shall deliver to the Indemnitor as promptly
as practicable after the Tax Release Date an amount (the “Tax Release Amount”) equal to
either (i) if the Preferred Stock Release Date has already occurred,
the remaining balance in the Indemnification Escrow Fund including any
interest accrued thereon, or (ii) if the Preferred Stock Release Date
has not yet occurred, the positive difference between (a) $300,000 and (b) the
aggregate amount of any Claims paid out of the Indemnification Escrow Fund with
respect to the Idaho Tax Liability, in accordance with Section 8(d)
hereof.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      (2)           If
any Purchaser Indemnitee has made a Claim or Claims relating to the Idaho Tax
Liability on or prior to the Tax Release Date, and if, upon the Tax Release
Date, the portion of the estimated Indemnifiable Amount of such Claim or Claims
(the “Tax Release Deferred Portion”)
(whether or not in dispute) that has not been paid out of the Indemnification
Escrow Fund aggregates less than the Tax Release Amount, then the Escrow Agent
shall deliver to the Indemnitor, in accordance with Section 8(d) hereof the Tax
Release Amount less the Tax Release Deferred Portion.  The Tax Release
Deferred Portion shall be retained by the Escrow Agent until each unresolved
Claim set forth in a Claim Notice delivered on or prior to the Tax Release Date
has been completely and finally determined in accordance with the terms hereof,
after which any portion of the Tax Release Deferred Portion that is determined
pursuant to this Agreement to not constitute an Indemnifiable Amount shall
be delivered by the Escrow Agent to the Indemnitor, in accordance with Section
8(d) hereof.

       

      (3)           If
any Purchaser Indemnitee has made a Claim or Claims in accordance with Section 6
hereof and if upon the Tax Release Date, the portion of the Indemnifiable Amount
of such Claim or Claims that has not been paid out of the Indemnification Escrow
Fund (whether or not in dispute) aggregates more than the Tax Release Amount,
then upon the Escrow Agent’s receipt of a Final Instruction pursuant to Section
7, the Escrow Agent shall deliver to such Purchaser Indemnitee all or such
portion of the Claim as is determined pursuant to this Agreement to constitute
an Indemnifiable Amount, in accordance with Section 8(d) hereof.

       

      (d)           Distribution
Instructions.  Any distributions of all or a portion of the
Indemnification Escrow Fund made to Purchaser or any Purchaser Indemnitee shall
be made by wire transfer to, or c/o, Purchaser pursuant to the wire instructions
listed on Attachment
A (or such other instructions or address as may be provided in writing to
the Escrow Agent by Purchaser).  Any distributions of all or a portion
of the Indemnification Escrow Fund made to Seller shall be made by wire transfer
to Seller pursuant to the wire instructions listed on Attachment A (or such
other instructions or address as may be provided in writing to the Escrow Agent
by Seller).

       

      9.           Concerning the Escrow
Agent.

       

      (a)           Escrow Agent
Duties.  Each party hereto acknowledges and agrees that (i) the
duties, responsibilities and obligations of the Escrow Agent shall be limited to
those expressly set forth in the Agreement and no duties, responsibilities or
obligations shall be inferred or implied, (ii) the Escrow Agent shall not be
responsible for any of the agreements referred to or described herein (including
without limitation the Purchase Agreement), or for determining or compelling
compliance therewith, and shall not otherwise be bound thereby, (iii) this
Agreement shall constitute the entire agreement of the parties with respect to
the subject matter and supersedes all prior oral or written agreements in regard
thereto, (iv) the Escrow Agent shall not be required to expend or risk any of
its own funds or otherwise incur any financial or other liability in the
performance of any of its duties hereunder and (v) the Escrow Agent shall not be
obligated to take any legal or other action hereunder which might in its
judgment involve or cause it to incur any expense or liability unless it shall
have been furnished with acceptable indemnification.

       

      (b)           Standard of
Care.  The Escrow Agent shall be under no duty to afford the
Indemnification Escrow Fund any greater degree of care than it gives its own
similar property.  The Escrow Agent shall not be liable for any
damage, loss or injury resulting from any action taken or omitted in the absence
of gross negligence or willful misconduct.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      (c)           Limitation on
Liability.  Notwithstanding any other provision of the
Agreement, the Escrow Agent shall not be liable (i) for any indirect,
incidental, consequential, punitive or special losses or damages, regardless of
the form of action and whether or not any such losses or damages were
foreseeable or contemplated, (ii) for the acts or omissions of any
nominees, correspondents, designees, agents, subagents or subcustodians, or
(iii) for the investment or reinvestment of any Escrow Amount, or any
liquidation of such investment or reinvestment, executed in accordance with the
terms of the Agreement, including, without limitation, any liability for any
delays (not resulting from its gross negligence or willful misconduct as
adjudicated by a court of competent jurisdiction) in the investment or
reinvestment of the Escrow Amount, any loss of interest incident to any such
delays, or any loss or penalty as a result of the liquidation of any investment
before its stated maturity date.

       

      (d)           Reliance.  The
Escrow Agent shall be entitled to rely upon any order, judgment, certification,
demand, instruction, notice, instrument, certification, consent, authorization,
receipt, power of attorney, e-mail, .pdf or other writing delivered to it
without being required to determine the authenticity or validity thereof, or the
correctness of any fact stated therein or the propriety or validity or the
service thereof or the jurisdiction of the court issuing any judgment or
order.  The Escrow Agent may act in reliance upon any signature
believed by it to be genuine and may assume that any
person purporting to make any statement or execute any document in connection
with the provisions hereof has been duly authorized to do so.

       

      (e)           Consultation.  The
Escrow Agent may consult with counsel satisfactory to it (who shall not be
counsel to any Purchaser Indemnitee, the Acquired Company or the Seller), and
the written opinion or advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it in good faith and in accordance with the opinion and advice of such
counsel.

       

      10.           Indemnification of the
Escrow Agent.  Each of the Seller and Purchaser covenants and
agrees, jointly and severally, to indemnify the Escrow Agent and its employees,
officers and directors (each, an “Indemnified Party”)
for, hold each Indemnified Party harmless from, and defend each Indemnified
Party against, any and all claims, losses, actions, liabilities, costs, damages
and expenses of any nature incurred by the Escrow Agent arising out of or in
connection with this Agreement or with the administration of its duties
hereunder, including but not limited to attorney’s fees, tax liabilities (other
than income tax liabilities associated with the Escrow Agent’s fees), any
liabilities or damages that may  result from any inaccuracy or
misrepresentation made in any tax certification provided to the Escrow Agent,
and other costs and expenses of defending or preparing to defend against any
claim of liability, except to the extent such loss, liability, damage, cost and
expense shall be caused by the Indemnified Party’s own gross negligence or
willful misconduct. The foregoing indemnification and agreement to hold harmless
shall survive the termination of the Agreement and the resignation or removal of
the Escrow Agent.

       

      11.           Fees and Expenses of the
Escrow Agent.  Seller covenants and agrees to pay the Escrow
Agent’s fees and expenses specified in Attachment
B.  In the event that such fees or expenses, or any other
obligations owed to the Escrow Agent (or its counsel) are not paid to the Escrow
Agent within 30 calendar days following the presentment of an invoice for the
payment of such fees and expenses or the demand for such payment, then the
Escrow Agent may, without further action or notice, pay such fees from the
Indemnification Escrow Fund and may sell, convey or otherwise dispose of any
amounts in the Indemnification Escrow Fund for such purpose.  The
Escrow Agent may in its sole discretion withhold from any distribution of the
Indemnification Escrow Fund an amount of such distribution it reasonably
believes would, upon sale or liquidation, produce proceeds equal to any unpaid
amounts to which the Escrow Agent is entitled to hereunder.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      12.           Resignation and
Removal.

       

      (a)           The
parties hereto may remove the Escrow Agent at any time by giving to the Escrow
Agent thirty (30) calendar days’ prior written notice of removal signed by an
Authorized Person of each of Seller and Purchaser.  The Escrow Agent
may resign at any time by giving to each Seller and Purchaser thirty (30)
calendar days’ prior written notice of resignation.

       

      (b)           Within
thirty (30) calendar days after giving the foregoing notice of removal to the
Escrow Agent or within thirty (30) calendar days after receiving the foregoing
notice of resignation from the Escrow Agent, the Seller and Purchaser shall appoint a
successor escrow agent and give notice of such successor escrow agent to the
Escrow Agent.  If a successor escrow agent has not accepted such
appointment by the end of such (i) 30-day period, in the case of the Escrow
Agent's removal, or (ii) 30-day period, in the case of the Escrow Agent's
resignation, the Escrow Agent may either (x) deliver the Indemnification Escrow
Fund to the Purchaser at the address set forth on the signature page to the
Agreement, or (y) apply to a court of competent jurisdiction for the appointment
of a successor escrow agent or for other appropriate relief.

       

      (c)           Upon
receipt of notice of the identity of the successor escrow agent, the Escrow
Agent shall either deliver the Indemnification Escrow Fund then held hereunder
to the successor escrow agent, less the Escrow Agent’s fees, costs, expenses and
the value of other obligations owed to the Escrow Agent hereunder, or hold such
Indemnification Escrow Fund (or any portion thereof) pending distribution, until
all such fees, costs and expenses or the value of other obligations are paid to
it.

       

      (d)           Upon
delivery of the Indemnification Escrow Fund to the successor escrow agent or to
the Purchaser, the Escrow Agent shall have no further duties, responsibilities
or obligations hereunder.

       

      13.           Notices.  Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted hereunder shall be in writing.  All such
notices shall be delivered personally, by telecopier (but only if followed by
transmittal by reputable overnight courier for delivery on the next business
day), by certified mail, return receipt requested, or by reputable overnight
courier (costs prepaid), and shall be deemed given or made upon receipt
thereof.  All such notices are to be given or made to the parties
hereto at the following addresses (or to such other address as any such party
may designate by a notice given in accordance with the provisions of this
Section 13):

       

      If to
Purchaser, addressed to:

       

       

      
         
Piramal
Healthcare, Inc.

      

      c/o
Piramal Enterprises Ltd.

      D-Mart
Bldg,

      Mulund
Goregaon Link Road

      Mulund
(West)

      Mumbai
400080

      Attention:
Madhu Nair

      Fax:  91-22-3953-6940

      


      With a
copy to:

       

      Waller
Lansden Dortch & Davis, LLP

      511 Union
Street, Suite 2700

      Nashville,
Tennessee  37219-1760

      Attention:  L.
Hunter Rost, Esq.

      Fax:  (615)
244-6804


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      


      If to the
Escrow Agent:

       

      Citibank,
N.A.

      Agency
& Trust

      388
Greenwich Street, 14th
Floor

      New York,
NY  10013

      Attention:  Marie
Ladolcetta, Agency & Trust Dept.

      Fax:  (212)
657-2762

      


      If to the
Seller:

       

       

      
        	 	
                RxElite,
      Inc.

              


      

      
        	
                 
      

              	
                1404
      North Main

              


      

      
        	
                 
      

              	
                Meridian,
      Idaho 83642

              


      

      
        	
                 
      

              	
                Attention:
      President

              


      

      
        	
                 
      

              	
                Fax:  (208)
      288-1191

              


      

      


      With a
copy to:

       

       

      
        	
                 
      

              	
                Haynes
      and Boone, LLP

              


      

      
        	
                 
      

              	
                1221
      Avenue of the Americas

              


      

      
        	
                 
      

              	
                Suite
      2600

              


      

      
        	
                 
      

              	
                New
      York, New York 10020

              


      

      
        	
                 
      

              	
                Attention:  Harvey
      J. Kesner, Esq.

              


      

      
        	
                 
      

              	
                Fax:  (212)
      918-8989

              


      

      


      14.           Assignment.  Neither
this Agreement nor any or all of the rights or obligations hereunder may be
assigned by any party without the prior written consent of the other party;
except that Purchaser may, without such consent, assign any or all such rights
and obligations to an assignee permitted under Section 9.8 of the Purchase
Agreement.  Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other person, shall have any right,
benefit or obligation under this Agreement as a third party beneficiary or
otherwise.

       

      15.           Amendment and Termination;
Waiver.  This Agreement may be amended by and upon written
notice to the Escrow Agent given by Purchaser and the Seller, but the duties and
responsibilities of the Escrow Agent may not be increased without its written
consent.  This Agreement will terminate on the date on which the
entire Escrow Amount has been distributed, except such provisions, including
without limitation Section 10 hereof, which by their terms are intended to
survive any such distribution. No waiver by any party with respect to any
condition, default or breach of covenant hereunder shall be deemed to extend to
any prior or subsequent condition, default or breach of covenant hereunder or
affect in any way any rights arising prior or subsequent to such
occurrence.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      16.           Multiple
Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

       

      17.           Invalidity.  In
the event that any one or more of the provisions contained in this Agreement,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement.

       

      18.           Titles.  The
titles, captions or headings of the sections herein are for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.

       

      19.           Cumulative
Remedies.  All rights and remedies of any party hereto are
cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.

       

      20.           Governing Law; Jurisdiction;
Waivers.

       

      (a)           The
parties agree (pursuant to section 5-1401 of the General Obligations Law of the
State of New York) that, to the extent such laws would otherwise not apply, this
Agreement (including this choice-of-law provision) and the rights and
obligations of the parties to the Agreement shall be governed by, construed in
accordance with, and all controversies and disputes arising under, in connection
with or in relation to this Agreement shall be resolved pursuant to, the laws of
the State of New York applicable to contracts made and to be wholly performed in
the State of New York.

       

      (b)           The
parties irrevocably and unconditionally submit to the exclusive jurisdiction of
the federal and state courts located in the Borough of Manhattan, City, County
and State of New York, for any proceedings commenced regarding this Agreement,
including, but not limited to, any interpleader proceeding or proceeding for the
appointment of a successor escrow agent the Escrow Agent may commence pursuant
to this Agreement.  The parties irrevocably submit to the jurisdiction
of such courts for the determination of all issues in such proceedings and
irrevocably waive any objection to venue or inconvenient forum for any
proceeding brought in any such court.

       

      (c)           The
parties irrevocably and unconditionally waive, to the fullest extent permitted
by law, and agree not to plead or claim, any right of immunity from legal
action, suit or proceeding, from setoff or counterclaim, from the jurisdiction
of any court, from service of process, from attachment upon or prior to
judgment, from attachment in aid of execution or judgment, from execution of
judgment, or from any other legal process or proceeding for the giving of any
relief or for the enforcement of any judgment, and consents to such relief and
enforcement against it, its assets and its revenues in any jurisdiction, in each
case with respect to any matter arising out of, or in connection with, this
Agreement.

       

      (d)           The
parties irrevocably and unconditionally waive any right to trial by jury with
respect to any proceeding relating to this Agreement.

       

      21.           Specific
Performance.  Each party hereto agrees that the other parties
hereto shall be entitled to an injunction or injunctions to prevent material
breaches of the provisions of this Agreement and to enforce specifically
(without posting bond) this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter, in addition to any other remedy to
which they may be entitled, at law or in equity.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      22.           Instructions, Verification,
Communications.

       

      (a)           All
instructions required under the Agreement shall be delivered to the Escrow Agent
in writing, in English, in facsimile form and, if so requested by the Escrow
Agent, an original, executed by an Authorized Person (as hereinafter defined) of
each of the Seller and Purchaser or an entity acting on their
behalf.  The identity of such Authorized Persons, as well as their
specimen signatures, title, telephone number and e-mail address, shall be
delivered to the Escrow Agent in the list of authorized signers form as set
forth on Attachment
C and shall remain in effect until the applicable party, or an entity
acting on its behalf, notifies Escrow Agent of any change thereto (the person(s)
so designated from time to time, the “Authorized
Persons”).  The Escrow Agent and the parties hereto agree that
the above constitutes a commercially reasonable security procedure and further
agree not to comply with any direction or instruction (other than those
contained herein or delivered in accordance with the Agreement) from any
party.

       

      (b)           In
the event funds transfer instructions are given (other than in writing at the
time of execution of this Agreement), whether in writing, by telecopier, .pdf,
e-mail, or otherwise, such funds transfer instructions should contain a selected
test word also evidenced on Attachment
C.   Test Words must contain at least 8 alphanumeric
characters, established at document execution and changed each time Attachment C is
updated in accordance with (a) above.  In addition or in lieu of test
words, the Escrow Agent is authorized to seek confirmation of such instructions
by telephone call back to the applicable person(s) specified to the Escrow Agent
from time to time by an Authorized Person and the Escrow Agent may rely upon the
confirmations of anyone purporting to be the person(s) so
designated.  To ensure the accuracy of the instructions it receives,
the Escrow Agent may record such call backs.  If the Escrow Agent is
unable to verify the instruction, or is not satisfied in its sole discretion
with the verification it receives, it will not execute the instruction until all
issues have been resolved to its satisfaction.  The persons and
telephone numbers for call backs may be changed only in writing, signed by an
Authorized Person, actually received and acknowledged by the Escrow
Agent.  The parties to this Agreement acknowledge that these security
procedures for funds transfers are commercially reasonable.

      


      (c)           To
help the U.S. government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an
account.  When an account is opened, the Escrow Agent will ask for
information that will allow the Escrow Agent to identify relevant
parties.  The parties hereto hereby acknowledge such information
disclosure requirements and agree to comply with all such information disclosure
requests from time to time from the Escrow Agent.

       

      (d)           Notwithstanding
anything to the contrary herein, any and all email communications (both text and
attachments) by or from the Escrow Agent that the Escrow Agent deems to contain
confidential, proprietary, and/or sensitive information shall be
encrypted.  The recipient (the “Email Recipient”) of the encrypted
email communication will be required to complete a registration process.
Instructions on how to register and/or retrieve an encrypted message will be
included in the first secure email sent by the Escrow Agent to the Email
Recipient.  Additional information and assistance on using the
encryption technology can be found at Citibank’s Secure Email website at www.citigroup.com/citigroup/citizen/privacy/email.htm
or by calling (866) 535-2504 (in the U.S.) or (904) 954-6181.

       

      (e)           The
provisions of this Section 11(a)-(d) may be amended by the Escrow Agent
unilaterally upon notice to the parties hereto.

       

      [Signature
Page to Follow]


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


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

       

      
        
          
            
              
                	
                        PIRAMAL
      HEALTHCARE, INC.

                      	 
      
	
                        as
      PURCHASER

                      	 
      
	 
      	 
      	 
      
	
                        By

                      	
                        /s/ Muraj Rajan

                      	 
      
	 
      	
                        Name:
      Muraj Rajan

                      	 
      
	 
      	
                        Title:
      President

                      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                        RXELITE,
      INC.

                      	 
      
	
                        as
      SELLER

                      	 
      
	 
      	 
      	 
      
	
                        By

                      	
                        /s/ Earl Sullivan

                      	 
      
	 
      	
                        Name:
      Earl Sullivan

                      	 
      
	 
      	
                        Title:
      CEO

                      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                        CITIBANK,
      N.A.,

                      	 
      
	
                        as
      ESCROW AGENT

                      	 
      
	 
      	 
      	 
      
	
                        By

                      	
                        /s/ Miriam Molina

                      	 
      
	 
      	
                        Name:
      Miriam Molina

                      	 
      
	 
      	
                        Title:
      Vice President