Document:

STOCK PURCHASE
AGREEMENT

     

    THIS STOCK PURCHASE AGREEMENT
(the “Agreement”) is made
and entered into as of January 27, 2009, by and between Piramal Healthcare, Inc.
(“Purchaser”),
a Delaware corporation and a direct wholly-owned subsidiary of Piramal
Healthcare Limited, an Indian public limited company, and RxElite, Inc., a
Delaware corporation (“Seller”).

     

    RECITALS:

     

    WHEREAS, Seller owns 100% of
the issued and outstanding capital stock (the “Shares”) of RxElite
Holdings Inc., a Delaware corporation (the “Acquired Company”);
and

     

    WHEREAS, Seller, through
ownership of the Acquired Company, is engaged in the marketing and distribution
of generic inhalation anesthetics for use in connection with human and
veterinary procedures (the “Business”);
and

     

    WHEREAS, Purchaser is the
holder of a junior secured promissory note of Seller in the original principal
amount of $3.0 million, pursuant to a Loan and Security Agreement, dated as of
May 30, 2008 (the “Purchaser Loan”),
between Purchaser and Seller; and

     

    WHEREAS, Castlerigg Master
Investments, Ltd. (the “Senior Lender”) is
the holder of a senior secured promissory note of Seller in the original
principal amount of $10.5 million, as to which the Purchaser Loan is fully and
unconditionally subordinated, secured on a senior basis to the Purchaser Loan,
by substantially all of the assets and properties of Seller, including of the
Acquired Company; and

     

    WHEREAS, Seller wishes to sell
the Shares to Purchaser, and Purchaser wishes to purchase the Shares, in order
to acquire the Business, subject, in all cases, to the consent of the Senior
Lender, on the terms and conditions set forth in this Agreement.

     

    NOW, THEREFORE, in
consideration of the foregoing premises, the mutual covenants and other
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties hereto
covenant and agree as follows:

     

    ARTICLE
I

    DEFINITIONS

     

    
      	
               
      

            	
              1.1

            	
              Defined
      Terms.

            

    

     

    As used
in this Agreement, the following defined terms shall have the meanings indicated
below:

     

    “Acquired Company” has
the meaning set forth in the Recitals.

     

    “Affiliate” means any
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified;
provided, however, “Affiliate” shall not include officers, directors or
stockholders of Seller, or the officers and directors of the Acquired Company.
For purposes of this definition, “control” when used
with respect to any specified Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled”
have meanings correlative to the foregoing.

     

    “Agreement” means this
Stock Purchase Agreement, as from time to time amended, modified or supplemented
in accordance with its terms, including the Exhibits and Schedules attached
hereto.

     

    “Assigned Contracts”
has the meaning set forth in Section
2.4.

     

    “Balance Sheet Date”
means January 18, 2009.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    “Books and Records”
means all existing employee, accounting, business, marketing, corporate and
other files, documents, instruments, papers, books and records, including
financial statements, budgets, ledgers, journals, deeds, titles, policies,
manuals, minute books, stock certificates and books, equity transfer ledgers,
contracts, franchises, permits, supplier lists, reports, computer files and
data, retrieval programs and operating data or plans.

     

    “Business” has the
meaning set forth in the Recitals.

     

    “Business Day” means a
day other than Saturday, Sunday, or any day on which the principal commercial
banks located in the State of Delaware or the State of New York are authorized
or obligated to close under the Laws of such states.

     

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

     

    “Closing Date” has the
meaning set forth in Section
2.3.

     

    “Closing Balance
Sheet” means the balance sheet of the Company dated as the Balance Sheet
Date.  Within the Closing Balance Sheet, “column one” shall mean the
first column entitled “RxElite, Inc. as of January 18, 2009” and “column three”
shall mean the third column entitled “Rx Holdings as of January 18,
2009.”

     

    “Code” means the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.

     

    “Company Plans” means
each “employee benefit plan” (within the meaning of Section 3(3) of ERISA) and
each stock purchase, stock option, other stock-based, severance,
change-in-control, disability, vacation, holiday, sick leave, fringe benefit,
bonus, incentive, deferred compensation, welfare and other employee benefit
plan, program, policy or other arrangement; and any employment (including
severance and change of control) agreement; whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transactions contemplated by this Agreement or
otherwise); whether formal or informal, oral or written; under which any
employee or former employee or director (or dependent or beneficiary thereof) of
the Acquired Company has any present or future right to benefits or which has
been sponsored, contributed to or maintained by the Acquired
Company.

     

    “Constituent
Documents” means, for any corporation, partnership, limited partnership,
limited liability company or other organization, its Certificate of
Incorporation, bylaws, partnership agreement, operating agreement, certificate
of limited partnership, certificate of formation and other similar formation and
governance documents, each as amended to the relevant date.

     

    “Contract” means any
agreement, lease, license, sublicense, promissory note, evidence of
indebtedness, or other contract (i) to which Seller or the Acquired Company is a
party and (ii) either (A) binds any assets of the Acquired Company or (B)
relates to the Business as of the Closing Date.

     

    “Controlled Group
Member” means any entity (whether or not incorporated) other than the
Seller and the Acquired Company that, together with the Seller and Acquired
Company, is considered under common control and treated as one employer under
Section 414(b), (c), (m) or (o) of the Code.

     

    “Court Order” means
any judgment, order, award or decree of any federal, state, local or other court
or judicial or quasi-judicial tribunal and any award in any binding arbitration
proceeding.

     

    “Damages” means any
and all damages, claims, costs, fines, fees, expenses, Taxes, penalties,
interest obligations and deficiencies (including reasonable attorneys’ fees and
other necessary expenses of litigation).  Notwithstanding anything in
this Agreement to the contrary, neither party nor any Affiliate thereof shall be
liable for any consequential, incidental, special or punitive
damages.

     

    “Encumbrance” means
any mortgage, pledge, assessment, security interest, lease, sublease, lien,
adverse claim, levy, right of way, easement, covenant, charge or other
encumbrance of any kind, or any conditional sale contract, title retention
contract, or other agreement, arrangement or understanding to give or to refrain
from giving any of the foregoing.

    
      
         

      

      
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    “Equity Security” and
“equity
interest” mean any “equity security” as such term is defined in the
Exchange Act.

     

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

     

    “Escrow Account” has
the meaning set forth in Section
2.2(b)(ii).

     

    “Escrow Agreement”
means the Escrow Agreement of even date herewith by and among Seller, Purchaser
and Citibank, N.A.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

    

    “Excluded Assets” has
the meaning set forth in Exhibit A and are
excluded from the transaction in connection with the
Reorganization.

     

    “Excluded Contracts”
has the meaning set forth in Exhibit B and are
excluded from the transaction in connection with the
Reorganization.

     

    “Excluded Liabilities”
has the meaning set forth in Exhibit B and are
excluded from the transaction in connection with the
Reorganization.

     

    “Excluded Payables”
has the meaning set forth in Exhibit B and are
excluded from the transaction in connection with the
Reorganization.

     

    “GAAP” means
accounting principles generally accepted in the United States of America, as
consistently applied by the Acquired Company.

     

    “Governmental
Authority” means any national, state or local government; any political
subdivision thereof; any other governmental, quasi-governmental, judicial,
public or statutory instrumentality, authority, body, agency, department,
bureau, commission or entity; any entity that contracts with a governmental
entity to administer or assist in the administration of a government program; or
any arbitrator with authority to bind a party at law.

     

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

     

    “Indemnitee” has the
meaning set forth in Section
7.5(a).

     

    “Intellectual
Property” has the meaning set forth in Section
3.13.

     

    “IRS” has the meaning
set forth in Section
6.4(d).

     

    “Knowledge” shall
mean, with respect to a particular fact or other matter: (a) actual awareness of
such fact or other matter; or (b) a prudent individual could be expected to
discover or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or other matter.  A Person (other than an individual) will
be deemed to have “Knowledge” of a particular fact or other matter if any
individual who is serving as a director, officer, partner, executor, or trustee
of such Person (or in any similar capacity) has, or at any time had, knowledge
of such fact or other matter.

     

    “Laws” means all
statutes, laws, ordinances, regulations and other pronouncements of any
Governmental Authority having the effect of law of the United States, any state
or commonwealth of the United States, or any city, county, municipality,
department, commission, board, bureau, agency or instrumentality
thereof.

    
      
         

      

      
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    “Liabilities” has the
meaning set forth in Exhibit
B.

     

    “Material Contracts”
shall have the meaning set forth in Section
3.8(a).

     

    “Multiemployer Plan”
means any “multiemployer plan” within the meaning of Section 3(37) or
Section 4001(a)(3) of ERISA.

     

    “Permits” means all
licenses, permits, franchises, rights, registrations, approvals, authorizations,
consents, waivers, exemptions, releases, certificates of need, variances or
orders of, or filings with, or otherwise issued by, any Governmental Authority
that relate to the Business.

     

    “Permitted
Encumbrance” means (a) any Encumbrance for Taxes or other governmental
charges or assessments which are not delinquent, (b) any Encumbrance of any
landlord, carrier, warehouseman, mechanic or materialman and any like
Encumbrance arising in the ordinary course of business for sums that are not
delinquent more than thirty (30) days, (c) Laws regulating the use or enjoyment
of the applicable property, (d) all pledges or deposits in connection with
workers’ compensation, unemployment insurance and other social security, (e)
with respect to any leased Real Property, Encumbrances which encumber the fee
interest in such property, and (f) any Encumbrance due and owing to Purchaser
and its Affiliates or to Minrad International, Inc. and its
Affiliates.

     

    “Person” means any
natural person, corporation, general partnership, limited partnership, limited
liability company, union, association, court, agency, government, tribunal,
instrumentality, commission, arbitrator, board, bureau or other entity or
authority.

     

    “Pre-Closing Period”
has the meaning set forth in Section
6.4(a)(i).

     

    “Prohibited
Activities” has the meaning set forth in Section
5.1(a).

     

    “Purchase Price” has
the meaning set forth in Section
2.2.

     

    “Purchaser” has the
meaning set forth in the Preamble.

     

    “Purchaser Indemnitee”
has the meaning set forth in Section
7.2.

     

    “Purchaser Loan” has
the meaning set forth in the Recitals.

     

    “Real Property” means
all real property that is occupied or used in connection with the operation of
the Business other than the Excluded Assets, including the real property and
real property interests set forth on Schedule
3.9(a).

     

    “Reorganization”  has
the meaning set forth in Section
2.4.

     

    “Retained Assets” has
the meaning set forth in Exhibit
A.

     

    “Retained Contracts”
has the meaning set forth in Exhibit
A.

     

    “Retained Liabilities”
has the meaning set forth in Exhibit
B.

     

    “Section 1.1502-95
Election” has the meaning set forth in Section
6.4(f).

     

    “Section 338 Election”
has the meaning set forth in Section
6.4(d).

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    
      
         

      

      
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    “Selected Accounting
Firm” means an accounting or consulting firm of recognized national
standing acceptable to Purchaser and Seller.

     

    “Seller” has the
meaning set forth in the Preamble.

     

    “Seller Affiliated
Group” means the affiliated group of corporations (as defined in Section
1504(a) of the Code) of which Seller is the parent.

     

    “Senior Lender” has
the meaning set forth in the Recitals.

     

    “Seller Indemnitee”
has the meaning set forth in Section
7.3.

     

    “Shares” has the
meaning set forth in the Recitals.

     

    “Straddle Period” has
the meaning set forth in Section
6.4(a)(ii).

     

    “Survival Period” has
the meaning set forth in Section
7.1.

     

    “Tax” shall mean all
taxes, charges, fees, levies, imposts, duties, and other assessments, including
any income, alternative minimum or add-on tax, estimated, gross income, gross
receipts, sales, use, transfer, transactions, intangibles, ad valorem,
value-added, franchise, registration, title, license, capital, paid-up capital,
profits, withholding, employee withholding, payroll, worker’s compensation,
unemployment insurance, social security, employment, excise, severance, stamp,
transfer occupation, premium, recording, real property, personal property,
commercial rent, environmental or windfall profit tax, custom, duty or other
tax, fee or other like assessment or charge of any kind whatsoever, together
with any interest, penalties, related liabilities, fines or additions to Tax
that may become payable in respect thereof imposed by any country, any state,
county, provincial or local government or subdivision or agency
thereof.

     

    “Tax Adjustment” has
the meaning set forth in Section
6.4(d).

     

    “Tax Return” shall
mean 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.

     

    “Tax Statement” has
the meaning set forth in Section
6.4(a)(ii).

     

    “Territory” has the
meaning set forth in Section
5.1(a)(i).

     

    1.2           Interpretation.  The
words “hereof,” “herein” and “herewith” and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
paragraph, exhibit and schedule references are to the articles, sections,
paragraphs, Exhibits and Schedules of this Agreement unless otherwise
specified.  Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”  All terms defined in this Agreement shall have
the defined meanings contained herein when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein.  The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and, as appropriate,
to the masculine, feminine and neuter genders of such terms.  Any
reference to this Agreement includes any Exhibits or Schedules hereto.
References to a Person are also to its permitted successors and
assigns.

     

    ARTICLE
II

    PURCHASE
AND SALE; CLOSING

     

    2.1           Sale of the
Shares.  On and subject to the terms and conditions set forth
in this Agreement, at the closing, Seller shall sell, assign, transfer and
deliver to Purchaser, free and clear of all Encumbrances, and Purchaser shall
purchase from Seller, the Shares.  At the closing, title to the Shares
shall pass to Purchaser, as record and beneficial owner.

    
      
         

      

      
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    2.2          Purchase
Price.

     

    (a)           The
consideration to be paid by Purchaser for the Shares shall be Four Million One
Hundred Fifty-Four Thousand Sixty-Nine Dollars and 30/100 ($4,154,069.30) (the
“Purchase
Price”).

     

    (b)           The
Purchase Price shall be payable as follows:

     

    (i)           an
aggregate of Three Million Two Hundred Fifty-Four Thousand Sixty-Nine Dollars
and 30/100 ($3,254,069.30) by wire transfer of immediately available funds at
closing to an account or accounts designated by Seller; and

     

    (ii)           Nine
Hundred Thousand Dollars ($900,000.00) (the “Holdback Amount”)
payable by Purchaser to be held in an escrow account (the “Escrow Account”) and
disbursed pursuant to the terms of the Escrow Agreement; provided, however, that
the Holdback Amount shall be reduced by any amounts owed to or properly payable
to Purchaser pursuant to Article VII of this Agreement.

     

    2.3          Closing.  The
closing of the transactions contemplated by this Agreement shall be deemed to
occur at 11:59 p.m., Central Time, on the Closing Date or at such other time as
shall be mutually agreed upon in writing by the parties hereto.  The
date on which the closing takes place is referred to herein as the “Closing
Date.”

     

    2.4          Reorganization
Transactions.  Prior to the Closing Date, Seller shall have
caused (a) the Acquired Company to transfer or assign the Excluded Assets and
the Excluded Liabilities to Seller or its designated Affiliate, and (b) Seller
or one or more of its designated Affiliates to assume the Excluded Assets and
the Excluded Liabilities from the Acquired Company.  Prior to the
Closing Date, Seller shall have assigned to the Acquired Company (i) the
customer contracts related to the Business that are held by Seller and are set
forth on Schedule
2.4 (the “Assigned Contracts”),
and (ii) the Purchaser Loan.  The transactions described in this Section 2.4 shall be
referred to herein as the “Reorganization”.

     

    2.5          Closing
Deliveries.  At the closing, the following events will
occur:

     

    (a)           Ownership
Interests.  Seller will deliver to Purchaser all certificates
representing the Shares, such certificates representing the Shares to be duly
endorsed by Seller or accompanied by duly executed blank stock powers or other
appropriate instruments of conveyance.

     

    (b)           Payment for
Shares.  At the closing, Purchaser shall pay the Purchase Price
set forth in Section 2.2 in immediately available funds by electronic wire
transfer to an account designated by Seller.

     

    (c)           Good Standing
Certificates.  Seller shall deliver to Purchaser a good
standing certificate issued with respect to Seller and the Acquired Company
issued by the Secretary of State of Delaware dated as of a date that is not more
than thirty (30) days prior to the Closing Date.  Purchaser shall
deliver to Seller a good standing certificate issued with respect to Purchaser
issued by the Secretary of State of Delaware dated as of a date that is not more
than thirty (30) days prior to the Closing Date.

     

    (d)           Books.  Seller
shall deliver to Purchaser the original corporate minute books of the Acquired
Company, including true and complete copies of the Constituent Documents of the
Acquired Company and other records included in the Business.

     

    (e)           Powers of
Attorney.  Seller shall deliver to Purchaser evidence of
termination of all powers of attorney between the Acquired Company and any other
Person.

     

    (f)           Resignations.  Seller
shall deliver to Purchaser resignations, effective as of the Closing Date, of
the officers and directors of the Acquired Company.

     

    (g)           FIRPTA
Certificate.  Seller shall deliver to Purchaser a certificate
of non-foreign status that complies with Treasury Regulation Section
1.1445-2(b)(2).

    
      
         

      

      
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    (h)           Opinion of Delaware
Counsel.  Purchaser shall receive an opinion of Delaware
counsel in customary form for such opinion, that the purchase of the Shares does
not require approval of the shareholders of Seller, and an opinion of counsel
acceptable to Purchaser that the execution, delivery and performance of this
Agreement and any other material agreement to be entered into by Seller pursuant
to the terms of this Agreement have been duly authorized and approved by and on
behalf of Seller.

     

    (i)           Secretary’s
Certificate.  Purchaser and Seller shall deliver copies of the
following, in each case certified as of the Closing Date by a Secretary or an
Assistant Secretary:

     

    (1)           resolutions
of the respective boards of directors of each party authorizing the execution,
delivery and performance of this Agreement and the other agreements that such
party is required to execute and deliver pursuant to the terms of this
Agreement;

     

    (2)           the
signature and incumbency of the officers of such party authorized to execute and
deliver this Agreement and the other agreements and certificates that such party
is required to deliver pursuant to this Agreement; and

     

    (3)           such
party’s Constituent Documents.

     

    (j)           Reorganization
Transactions.  Seller shall consummate or cause the Acquired
Company to consummate, the reorganization transactions described in Section
2.4.

     

    (k)           Escrow Agreement.
Seller and Purchaser shall deliver the fully executed Escrow
Agreement.

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Seller
represents and warrants to Purchaser as follows:

     

    3.1          Organization of
Seller.  Seller is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware.

     

    
      	
               
      

            	
              3.2

            	
              Organization and
      Capitalization of the Acquired
Company.

            

    

     

    (a)           The
Acquired Company (i) is a corporation validly existing and in good standing
under the Laws of the State of Delaware and (ii) has the corporate power and
authority to own or lease and to operate its assets and to conduct its business
as currently conducted.

     

    (b)           The
authorized capital of the Acquired Company consists of 100,000,000 shares of
common stock, $.00237 par value per share, 14,827,754 shares of which are
issued and outstanding as of the date hereof.  The Shares have been
duly authorized, validly issued, fully paid and
non-assessable.  Except for the Shares, there are no outstanding
equity securities of the Acquired Company, including (i) securities that are
convertible into or exchangeable for any capital stock, partnership interests or
membership interests of the Acquired Company, (ii) contracts, arrangements,
commitments or restrictions relating to the issuance, sale, transfer, purchase
or obtaining of capital stock or other equity securities of the Acquired
Company, or (iii) options, warrants, rights, calls or commitments of any
character granted or issued by the Acquired Company governing the issuance of
shares of its capital stock.

     

    (c)           (i)
Seller has good and marketable title to, and owns, the Shares, beneficially and
of record; (ii) the Shares are free of all Encumbrances; (iii) Seller has full
voting power over the Shares, subject to no proxy, stockholders’ agreement,
voting trust or other agreement relating to the voting of any of the Shares; and
(iv) other than this Agreement, there is no agreement between Seller and any
other Person with respect to the disposition of the Shares.

    
      
         

      

      
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    (d)           (i)
No Person has any preemptive right to purchase any equity interests in the
Acquired Company, and (ii) other than the Shares, there are no outstanding
equity interests in the Acquired Company giving the owner or holder thereof the
right to vote on any matters on which stockholders, partners or members of the
Acquired Company may vote.

     

    (e)           The
Acquired Company does not directly or indirectly own, of record or beneficially,
any equity security of any Person.

     

    
      	
               
      

            	
              3.3

            	
              Authorization.

            

    

     

    (a)           The
execution, delivery and performance by Seller of this Agreement and the other
agreements to be entered into by it pursuant to the terms of this Agreement, and
the consummation by Seller of the transactions contemplated hereby and thereby,
are within Seller’s corporate powers, are not in contravention of the terms of
Seller’s Constituent Documents, and have been duly authorized and approved by
the board of directors of Seller.  No other corporate proceedings on
the part of Seller are necessary to authorize the execution, delivery and
performance of this Agreement or any other agreement to be entered into by
Seller pursuant to the terms of this Agreement.

     

    (b)           This
Agreement has been duly and validly executed and delivered by
Seller.  As of the Closing Date, the other agreements to be entered
into by Seller and by the Acquired Company pursuant to the terms of this
Agreement will have been duly and validly executed and delivered by Seller and
the Acquired Company.  This Agreement constitutes (and upon their
execution and delivery by Seller and the Acquired Company, the other agreements
to be entered into pursuant to the terms of this Agreement by Seller and the
Acquired Company will constitute) the legal, valid and binding obligations of
Seller and the Acquired Company enforceable against Seller and the Acquired
Company in accordance with their respective terms (assuming the valid
authorization, execution and delivery hereof and thereof by Purchaser), subject
to bankruptcy, insolvency, reorganization, moratorium and similar Laws of
general application relating to or affecting creditors’ rights and to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing.

     

    3.4          No Conflicting Agreements;
Consents.  Except as set forth in Schedule 3.4, neither
the execution and delivery of this Agreement or any of the other agreements to
be entered into by Seller pursuant to the terms of this Agreement nor the
consummation of any of the transactions contemplated hereby or thereby
will:

     

    (a)           violate,
conflict with, result in a breach or termination of the terms, conditions or
provisions of, constitute a default under, or entitle any party to terminate or
accelerate (i) the Constituent Documents of Seller or the Acquired Company, (ii)
any Material Contract, (iii) any Court Order to which Seller or the Acquired
Company is a party or by which Seller or the Acquired Company is bound, or (iv)
any material requirements of Law affecting Seller;

     

    (b)           result
in the creation or imposition of any Encumbrance upon any of the assets of the
Acquired Company (except for Permitted Encumbrances); or

     

    (c)           require
a permit, approval, consent or authorization from, or the making by Seller of
any declaration, filing or registration with, any Governmental Authority, except
as provided in Section
6.1.

     

    3.5          Closing Balance Sheet;
Accounts Receivable.  Schedule 3.5 sets
forth the Closing Balance Sheet of the Acquired Company.  Column three
of the Closing Balance Sheet fairly presents in all material respects the
financial position of the Acquired Company as of the date indicated after giving
effect to the Reorganization.  All accounts receivable in such column
three of the Closing Balance Sheet are valid obligations and represent bona fide
claims against debtors for sales actually made or services actually performed in
the ordinary course of the Business.  There is no contest, claim or
right of setoff, other than in the ordinary course of the Business, contained in
any agreement with any maker of an account receivable relating to the amount or
validity of such account receivable.

    
      
         

      

      
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              3.6

            	
              Absence of Undisclosed
      Liabilities; No Missing
Assets.

            

    

     

    (a)           Except
as disclosed in Schedule 3.6(a), the
Acquired Company does not have any material liabilities of any nature (whether
accrued, absolute, contingent or otherwise) that are of a type required to be
disclosed or reflected in financial statements of the Acquired Company in
accordance with GAAP after giving effect to the Reorganization except for (i)
liabilities reflected or reserved against in column three of the Closing Balance
Sheet (including the notes thereto, if any) and (ii) liabilities incurred in the
ordinary course of business since the Balance Sheet Date and that are not
(individually or in the aggregate) material to the Acquired
Company.

     

    (b)           (i)
The Acquired Company holds all right, title and interest in the Retained Assets,
(ii) holds no right, title or interest in any assets other than the Retained
Assets, and (iii) has no liabilities other than the Retained
Liabilities.

     

    (c)           As
a result of the consummation of the transactions contemplated hereby, Purchaser
and its Affiliates shall hold all right, title and interest in the Retained
Assets, which constitute all assets, tangible and intangible, real and personal,
currently used in connection with the current operation of the
Business.

     

    3.7          Absence of
Changes.  Except as disclosed in Schedule 3.7, since
September 30, 2008, there has not been any transaction or occurrence in which
the Acquired Company, in connection with the Business, has:

     

    (a)           suffered
any material damage, destruction or loss;

     

    (b)           disposed
of or permitted to lapse any material right to the use of any Retained
Assets;

     

    (c)           made
or entered into a commitment to make any material capital expenditure on behalf
of the Acquired Company;

     

    (d)           terminated
or materially amended any Material Contract or lease to which the Acquired
Company is a party, other than in the ordinary course of business;
or

     

    (e)           agreed,
so as to legally bind Purchaser or the Acquired Company, whether in writing or
otherwise, to take any of the actions set forth in this Section 3.7 and not
otherwise permitted by this Agreement.

     

    
      	
               
      

            	
              3.8

            	
              Contracts.

            

    

     

    (a)           Schedule 3.8(a) sets
forth a true and complete list of each Contract (the “Material Contracts”),
including each Assigned Contract, that relates to the Business and is not an
Excluded Contract, and any Contract with respect to a period following the
Closing Date (i) that provides for aggregate payments to or from the Acquired
Company in excess of $100,000 per contract year; (ii) that is an employment or
severance Contract; (iii) that contains restrictions with respect to payment of
dividends or any other distributions in respect of the capital stock or other
equity interests of the Acquired Company; (iv) that guarantees any indebtedness
or obligation of any Person; (v) that limits the ability of the Acquired Company
to engage freely in any line of business in any geographic area or to compete
with any Person; (vi) under which the Acquired Company has borrowed or loaned
money, or that is a mortgage, note, bond, indenture or other evidence of
indebtedness (excluding advances, deposits, trade payable in the ordinary course
of business, and leases for telephones, copy machines, facsimile machines and
other office equipment); (vii) that establishes any joint venture, partnership
or other similar joint ownership entity or arrangement; (viii) with respect to
the management of the Acquired Company; (ix) that is a consent decree of any
Governmental Authority to which the Acquired Company is bound; (x) that (A)
grants or acquires any right to use any Intellectual Property (other than
Contracts granting rights to use readily available commercial software available
to consumers for a combined license and maintenance fee or subject to “shrink
wrap” or “click through” license agreements) or (B) restricts the right of the
Acquired Company or permits any third Person to use any Intellectual Property;
or (xi) that is an agreement between Seller and the Acquired Company, or their
respective officers or directors.  Copies of all Material Contracts
have been made available to Purchaser.

    
      
         

      

      
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    (b)           Each
Material Contract is valid, binding and enforceable against the Acquired Company
and, to Seller’s Knowledge, against the other party to such Material Contract,
subject to bankruptcy, insolvency, reorganization, moratorium and similar Laws
of general application relating to or affecting creditors’ rights and to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing, and Seller or the Acquired Company has duly performed in
all respects its obligations under each Material Contract to which it is a party
(to the extent that such obligations to perform have arisen).

     

    (c)           Neither
Seller nor the Acquired Company is in breach or default (nor would there be a
breach or default with notice or lapse of time or both as a result of events
that have occurred) under any Material Contract.

     

    3.9          Real
Property.  Schedule 3.9(a) sets
forth the addresses for all Real Property leased by the Acquired Company or used
in connection with the operation of the Business.  Except as set forth
on Schedule
3.9(a), all title, interest and other rights with respect to Real
Property are held by the Acquired Company, which holds good and valid leasehold
title, thereto, subject only to Permitted Encumbrances.  The Acquired
Company owns no Real Property.

     

    3.10        Personal
Property.  Except as set forth on Schedule 3.10, the
Acquired Company is in possession of and, except for Permitted Encumbrances, has
good title to, or valid leasehold interests in or valid rights under contract to
use, all of the personal property used in the conduct of the Business as
presently conducted, including anesthetic vaporizers in the field or held as
inventory.  Except as set forth on Schedule 3.10, no
outstanding rights, agreements or other commitments currently exist (including
purchase options, rights of first refusal or rights of first offers) that give
any Person a right to require the Acquired Company to sell or transfer to a
third party any material interests in the personal property owned by
it.  All personal property used by Seller or its Affiliates in the
conduct of the Business is in good working condition, ordinary wear and tear
excepted.  All inventory of the Acquired Company that is reflected on
the Closing Balance Sheet or on the accounting records of the Company consists
of a quality and quantity usable in the ordinary course of business, ordinary
wear and tear excepted and if installed, subject to the use and control of the
customer.

     

    3.11        Employees; Labor Matters;
Employee Benefit Plans; ERISA.  The Acquired Company is not
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor
organization.  Except as set forth on Schedule 3.8(a), the
employment relationship of any and all employees of the Acquired Company is at
will and is not subject to a Contract or other written employment
agreement.  The Acquired Company does not sponsor, adopt, maintain or
participate in any Company Plan, and the Acquired Company has no liability with
respect to any Company Plan.  Except as disclosed in Schedule 3.11, since
January 1, 2002, none of the Company Plans and no other plan or arrangement
sponsored by, contributed to or maintained by Seller, any Acquired Company or
any Controlled Group Member has been subject to Section 412 of the Code, Section
302 of ERISA and/or Title IV of ERISA or that is a Multiemployer
Plan.

     

    3.12        Taxes.

     

    (a)           Except
as set forth in Schedule 3.12(a), (i)
the Acquired Company has duly filed or caused to be filed, in a timely manner
(taking into account all extensions of due dates) with the appropriate
Governmental Authorities all Tax Returns which are required to be filed by the
Acquired Company, (ii) all such Tax Returns are true, correct and complete in
all material respects, (iii) all Taxes due and owing by, or required to be
withheld by or with respect to, the Acquired Company (whether or not shown on
any Tax Return) have been timely paid or timely withheld and paid and (iv) there
are no Encumbrances on any of the assets of the Acquired Company with respect to
Taxes, other than Permitted Encumbrances.

     

    (b)           Except
as set forth in Schedule 3.12(b), (i)
no deficiencies for Taxes have been claimed, proposed or assessed by any
Governmental Authority for which the Acquired Company may have any liability,
(ii) there are no pending or, to the Seller’s Knowledge, threatened audits,
investigations or claims for or relating to any liability in respect of Taxes
for which the Acquired Company may have any liability, (iii) there are no
matters presently pending, or to Seller’s Knowledge, under discussion by Seller
or the Acquired Company with any Governmental Authorities with respect to Taxes
that may result in an additional amount of Taxes for which the Acquired Company
may have any liability and (iv) no jurisdiction in which the Acquired Company
does not file a Tax Return has made a claim in writing that the Acquired Company
is required to file a Tax Return for such jurisdiction, and Seller has no
Knowledge that any such jurisdiction has otherwise made any such
claim.

    
      
         

      

      
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    (c)           The
Acquired Company has complied with all material applicable Laws relating to the
payment and withholding of Taxes (including, but not limited to, withholding in
connection with payments to employees, independent contractors, creditors,
stockholders, partners or other third parties) and has, within the time and
manner prescribed by Law, withheld and paid over to the proper Governmental
Authorities all amounts required to be withheld and paid over under all
applicable Laws.

     

    (d)           Seller
Affiliated Group has filed all Tax Returns that it was required to file for each
taxable period during which the Acquired Company was a member of the
group.  All such Tax Returns were correct and complete in all material
respects.  All Taxes owed by Seller Affiliated Group (whether or not
shown on any Tax Return) have been paid for each taxable period during which the
Acquired Company was a member of the group.  To the Knowledge of
Seller, no Governmental Authority is expected to assess any additional Taxes
against Seller Affiliated Group for any taxable period during which the Acquired
Company was a member of the group.  There is no dispute or claim
concerning any Tax liability of Seller Affiliated Group for any taxable period
during which the Acquired Company was a member of the group either (A) claimed
or raised by any Governmental Authority in writing or (B) as to which Seller has
Knowledge.

     

    3.13        Intellectual
Property.  The Acquired Company owns or has the right to use
all patents, trademarks, trade names, service marks, trade secrets, copyrights,
software and other intellectual property rights and licenses as are necessary to
conduct the Business as currently conducted (the “Intellectual
Property”).  To the Knowledge of Seller, no infringement exists
by the Acquired Company on the intellectual property rights of any other Person
that results in any way from the operation of the Business.  To
Seller’s Knowledge, there is no infringing use by any other Person of any of the
Intellectual Property owned or used by the Acquired
Company.  Notwithstanding anything herein to the contrary, solely in
the event of the closing of the merger of Minrad International, Inc. with
an Affiliate of Purchaser, the foregoing representation shall not be deemed
to include any Intellectual Property owned by, licensed to or from, or by which
a right has been granted to or from, Minrad International, Inc. or its
Affiliates.

     

    3.14        Permits; Compliance with
Law.  True and complete copies of all Permits issued or granted
by a Governmental Authority and owned or validly held by or issued to the
Acquired Company in connection with the current operation of the Business have
been provided or made available to Purchaser.  Except as described on
Schedule 3.14,
such Permits constitute all Permits necessary for the conduct of the Business as
currently conducted.  Except as would not have a material adverse
effect on the Business or financial condition of the Acquired Company taken as a
whole, the Acquired Company and the Business are in compliance with all Permits
and all Laws.  Neither Seller nor the Acquired Company, nor any of
their respective directors, officers, agents or employees, has engaged in any
conduct that would reasonably be expected to result in any material violation of
any Law.  Except as disclosed on Schedule 3.14,
neither Seller nor the Acquired Company has received any written notification,
correspondence or any other written communication from any Governmental
Authority of potential or actual material non-compliance by, or liability of,
the Acquired Company under any Law. 

     

    3.15        [Reserved].

     

    3.16        Legal Proceedings, Court
Orders.  Schedule 3.16
contains an accurate list of all pending litigation and Court Orders with
respect to the Business or the Acquired Company.  Other than as set
forth in Schedule
3.16, to Seller’s Knowledge, there are no actions, suits, proceedings,
audits or investigations pending or threatened against Seller or any of its
Affiliates with respect to the Business or the Acquired Company.

     

    3.17        Customers and
Suppliers.  Schedule 3.17 hereto
sets forth the five (5) largest suppliers and five (5) largest customers of the
Business as of the date hereof.

     

    3.18        Statements and Other
Documents Not Misleading.  Neither this Agreement, including
all exhibits and schedules hereto, nor the other documents and agreements
contemplated hereby or required to be delivered by the Acquired Company or
Seller contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact required to be stated in order to make
such statement, document or other instrument not misleading.  No other
documents or instruments heretofore or hereafter furnished by the Acquired
Company or  Seller to Purchaser in connection with the transactions
contemplated hereby contains or will contain any such untrue statement or
omission of a material fact.

    
      
         

      

      
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    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES OF PURCHASER

     

    Purchaser
represents and warrants to Seller as follows:

     

    4.1          Organization.  Purchaser
is a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware.

     

    
      	
               
      

            	
              4.2

            	
              Corporate
      Authorization.

            

    

     

    (a)           The
execution, delivery and performance by Purchaser of this Agreement and the other
agreements to be entered into by Purchaser pursuant to this Agreement, and the
consummation by Purchaser of the transactions contemplated hereby and thereby
are within Purchaser’s corporate powers, are not in contravention of the terms
of Purchaser’s Constituent Documents, and have been duly authorized and approved
by the board of directors of Purchaser.  No other corporate
proceedings on the part of Purchaser are necessary to authorize Purchaser’s
execution, delivery and performance of this Agreement or the other agreements to
be entered into by Purchaser pursuant to this Agreement.

     

    (b)           This
Agreement has been duly and validly executed and delivered by Purchaser, and as
of the Closing Date, the other agreements to be entered into by Purchaser
pursuant to the terms of this Agreement will have been duly and validly executed
and delivered by Purchaser.  This Agreement constitutes, and upon
their execution and delivery, such other agreements will constitute, the legal,
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms (assuming the valid authorization,
execution and delivery hereof and thereof by Seller, the Acquired Company and
any other unaffiliated entity that is a party thereto), subject to bankruptcy,
insolvency, reorganization, moratorium and similar Laws of general application
relating to or affecting creditors’ rights and to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing.

     

    4.3           No Conflicting Agreements;
Consents.  Neither the execution and delivery of this Agreement
nor any of the other agreements to be entered into by Purchaser pursuant to this
Agreement nor the consummation of any of the transactions contemplated hereby or
thereby will:

     

    (a)           violate,
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default under (i) the Constituent Documents of Purchaser, (ii) any
material agreement, lease, sublease, license, sublicense, promissory note,
evidence of indebtedness or other contract (whether written or oral) to which
assets of Purchaser are a party or by which Purchaser is bound, except such
violations, conflicts, breaches or defaults which would not materially impair
the ability of Purchaser to perform its obligations hereunder or under the other
agreements contemplated hereby to be entered into by Purchaser or would not
prevent the consummation of the transactions contemplated hereby or thereby,
(iii) any Court Order to which Purchaser is a party or by which Purchaser is
bound or (iv) any material requirements of Law affecting Purchaser, except such
violations, conflicts, breaches or defaults of such requirements of Laws which
would not materially impair the ability of Purchaser to perform its obligations
hereunder or under the other agreements contemplated hereby to be entered into
by Purchaser or which would not prevent the consummation of the transactions
contemplated hereby or thereby; or

     

    (b)           require
a permit, approval, consent or authorization from, or the making by Purchaser of
any declaration, filing or registration with, any Governmental Authority, except
as provided in Section
6.1 and except for such approvals, consents, authorizations,
declarations, filings or registrations, the failure of which to be obtained or
made would not materially impair the ability of Purchaser to perform its
obligations hereunder or under the other agreements contemplated hereby to be
entered into by Purchaser or prevent the consummation of the transactions
contemplated hereby or thereby.

    
      
         

      

      
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    4.4          Legal Proceedings,
etc.  There are no material actions, suits or
proceedings pending or, to Purchaser’s Knowledge, threatened against Purchaser
that would materially impair the ability of Purchaser to perform its obligations
hereunder or under the other agreements contemplated hereby to be entered into
by Purchaser or could reasonably be expected to delay or prevent the
consummation of the transactions contemplated hereby or thereby.

     

    4.5          [Reserved.]

     

    4.6          Solvency.  At
the Closing Date, Purchaser will be solvent and able to pay its debts as they
become due and will not become insolvent or otherwise unable to pay its debts as
they become due as a result of the consummation of the transactions contemplated
by this Agreement.

     

    
      	
               
      

            	
              4.7

            	
              Investment
      Representations.

            

    

     

    (a)           Purchaser
is acquiring the Shares for its own account and not with a view to the
distribution thereof in contravention of the Securities Act.

     

    (b)           In
proceeding with the transactions contemplated hereby, Purchaser is not relying
upon any representation or warranty of Seller, Acquired Company or any of their
officers, directors, employees, agents or representatives thereof, except the
representations and warranties set forth herein.

     

    (c)           Purchaser
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of purchasing the Shares and to
understand the risks of, and other considerations relating to, its purchase of
the Shares.

     

    (d)           Purchaser
is aware that upon closing, (i) the Shares will not have been registered under
the Securities Act or any state’s securities Laws, and (ii) no securities issued
by the Acquired Company will be subject to the reporting requirements of the
Exchange Act.  Purchaser further understands that any certificates
representing the Shares will include an appropriate legend to the effect that
such securities have not been registered under the Securities Act or any state’s
securities Laws and that such securities may not be sold or transferred except
in compliance with the Securities Act and applicable state securities
Laws.

     

    ARTICLE
V

    COVENANTS
OF SELLER

     

    5.1          Non-Competition.

     

    (a)           In
consideration for the benefits Seller will receive in connection with the
transactions contemplated herein, which benefits Seller hereby acknowledges, and
as further consideration for, and as a condition to, the transactions
contemplated hereby, and in order that Purchaser shall receive and be able to
maintain the benefit of the goodwill, trade secrets and confidential information
which Seller enjoys and has enjoyed in connection with its ownership and
operation of the Acquired Company, and recognizing that the covenants contained
herein are not severable from such goodwill and are granted to Purchaser in
order to protect the same, and in order to otherwise protect the legitimate
business interests of Purchaser, Seller covenants and agrees that on behalf of
itself and each of its Affiliates:

     

    (i)           for
a period commencing as of the Closing Date and continuing thereafter for a
period of two (2) years, Seller will not,
directly or indirectly, operate, control, develop or own any interest (other
than the ownership of less than five (5%) percent of the equity securities of a
publicly traded company) or otherwise participate in any business that has
activities relating to ownership of, the management or operation of, or
consultation regarding the manufacturing, distribution or marketing of generic
inhalation anesthetics for use in connection with human and veterinary
procedures, in each State where the Acquired Company currently has operations
(the “Territory”);
and

    
      
         

      

      
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    (ii)           Seller
will not, directly or indirectly, for the purpose of any business or product
competitive with the manufacture, marketing or sale of generic inhalation
anesthetics for use in connection with human and veterinary procedures (A)
interfere with, solicit, disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between Purchaser, the
Acquired Company or their Affiliates, on one hand, and any customer, supplier
(or other person obtaining goods or services from, or providing goods or
services to, the business of the Acquired Company) or employee of Purchaser, the
Acquired Company or their Affiliates (except as otherwise provided by applicable
Law), on the other hand, or (B) solicit any past, present or prospective
employee (including all officers and managers, all regional managers and all
general managers) of Purchaser, the Acquired Company or their Affiliates to
leave his or her employment with Purchaser, the Acquired Company or their
Affiliates.

     

    The
activities described in clauses (i) and (ii) above are collectively referred to
as the “Prohibited
Activities.”  The parties acknowledge that the Territory (with
respect to clause (i) above) and Prohibited Activities substantially cover the
geography and activities that comprise the market in which the Acquired Company
conducts its operations and affairs.

     

    (b)          The
Seller hereby acknowledges that its agreements not to engage in the Prohibited
Activities are manifestly reasonable upon their face and that they are
reasonable as to time and no greater than is required for the reasonable
protection of Purchaser in light of the substantial harm that Purchaser would
suffer should the Seller breach any of the provisions of this Section
5.1.  The Seller further agrees that the nature, kind and
character of the Prohibited Activities are reasonably necessary to protect the
interests of Purchaser.

     

    (c)           If
a judicial determination is made that any of the provisions of this Section 5.1
constitute an unreasonable or otherwise unenforceable restriction against the
Seller, the provisions of this Section 5.1 shall be
rendered void only to the extent that such judicial determination finds such
provisions to be unreasonable or otherwise unenforceable and only with respect
to Seller.  Any judicial authority construing this Section 5.1 shall be
empowered to sever any portion of the Territory or Prohibited Activities from
the coverage of this Agreement and to apply the provisions of this Section 5.1 to the
remaining portion of the Territory or the remaining activities not so severed by
such judicial authority.

     

    (d)          Seller
agrees that any violation of this Section 5.1 will
result in irreparable injury to Purchaser, that a remedy at law for any breach
or threatened breach of the covenants contained herein will be inadequate and
that in the event of any such breach, Purchaser, in addition to any other
remedies or damages available to Purchaser at law or in equity, shall be
entitled to temporary injunctive relief before trial from any court of competent
jurisdiction as a matter of course and to permanent injunctive relief without
the necessity of proving actual damages or securing or posting any
bond.  In the event of any breach of this Section 5.1 and in
addition to an injunction, Purchaser shall also be entitled to recover the
amount of fees and other compensation earned by the Seller as a result of any
such breach, plus any other damages a court of competent jurisdiction may find
appropriate.  The time period set forth in this Section 5.1 shall be
tolled and suspended for a period of time equal to the aggregate quantity of
time during which the Seller violates such prohibitions in any
respect.

     

    ARTICLE
VI

    COVENANTS
OF THE PARTIES

     

    6.1          Regulatory
Approvals.  Purchaser will or will cause its Affiliate to (a)
use commercially reasonable efforts to obtain, as promptly as practicable, all
Permits, approvals, authorizations and clearances of Governmental Authorities
necessary or desirable for the conduct of the Business by the Acquired Company
following the Closing Date and shall make the filings and declarations with
Governmental Authorities required therefor at Purchaser’s sole cost and expense,
including filing applications for the licenses described on Schedule 6.1 within
90 days following the Closing Date and (b) provide such information and
communications to applicable Governmental Authorities as is necessary in
connection with the foregoing.  Seller will cooperate with the
Purchaser to obtain all Permits, approvals, authorizations and clearances of
Governmental Authorities listed in Schedule 6.1, but
shall not be required to undertake any expense or obligation in connection
therewith unless reimbursed by Purchaser.

    
      
         

      

      
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    6.2          Post-Closing Access.
Purchaser and Seller acknowledge that, subsequent to the Closing Date, Purchaser
and Seller may each need access to information, documents or computer data in
the control or possession of the other (or their respective Affiliates), and
Seller may need access to the assets of the Acquired Company for purposes of
concluding the transactions contemplated herein and for audits, investigations,
compliance with governmental requirements, regulations and requests, preparation
of Tax Returns and filings and the prosecution or defense of third party
claims.  Purchaser agrees that it will make available to Seller and
shall cause the Acquired Company to make available to Seller, its Affiliates and
their respective representatives, agents and independent auditors such documents
and information as may be in the possession of Purchaser and its Affiliates
relating to periods prior to the Closing Date and will permit Seller, its
Affiliates and their respective representatives, agents and independent auditors
to make copies of such documents and information during business hours upon
reasonable prior notice to Purchaser.  Seller agrees that Seller will
make available to Purchaser, its Affiliates and their respective
representatives, agents and independent auditors such documents and information
as may be in the possession of Seller and its Affiliates relating to periods
prior to the Closing Date and will permit Purchaser, its Affiliates and their
respective representatives, agents and independent auditors to make copies of
such documents and information.  Purchaser agrees to retain all
documents related to the Business for a minimum of three (3) years following the
Closing Date.

     

    6.3          Employee
Matters.  Seller and the Acquired Company shall have taken all
necessary and appropriate actions, to be effective prior to or at the Closing
Date, to (i) transfer employment of all employees of the Acquired Company to
another affiliate of Seller, other than those employees identified on Schedule 6.3, without
having incurred a termination of employment or separation from service, and (ii)
transfer all obligations under any Contract or employment agreement from the
Acquired Company to another affiliate of Seller other than for those employees
identified on Schedule
6.3.  Notwithstanding anything herein to the contrary, the
Sellers and the Acquired Company shall take all necessary and appropriate
actions to amend, merge, terminate or otherwise transfer the sponsorship of all
Company Plans before the Closing Date to Seller or another affiliate of
Seller.

     

    6.4          Tax
Matters.

     

    (a)          Payment of
Taxes.

     

    (i)           Seller
shall prepare and file, or cause to be prepared and filed, all Tax Returns of or
which include the Acquired Company (including any amendments thereto) with
respect to any taxable period ending at or prior to the Closing Date (a “Pre-Closing
Period”).  Seller shall provide Purchaser with copies of all
such Tax Returns at least ten (10) days prior to the due date for the filing of
such Tax Returns (including any extension thereof) for its review and
comment.  Notwithstanding anything to the contrary in this Agreement,
Seller shall pay any and all Taxes imposed on or with respect to the Acquired
Company for a Pre-Closing Period (including any and all Taxes imposed on the
Acquired Company as a result of having been a member of the Seller Affiliated
Group).  Purchaser shall prepare and file, or cause to be prepared and
filed, all Tax Returns of or which include the Acquired Company and shall pay
all Taxes of the Acquired Company for all taxable periods other than a
Pre-Closing Period, except to the extent provided in paragraph (ii)
below.

     

    (ii)          For
purposes of the immediately preceding paragraph (i) and this paragraph (ii), if
the taxable period of the Acquired Company that includes the Closing Date does
not terminate on the Closing Date (a “Straddle Period”),
the parties hereto will, to the extent permitted by applicable Law, elect with
the relevant Governmental Authority to treat a portion of any such Straddle
Period as a short taxable period ending as of the Closing Date and such short
taxable period shall be treated as a Pre-Closing Period for purposes of this
Agreement.  In any case where applicable Law does not permit such an
election to be made then, for purposes of this Agreement, Taxes with respect to
the Acquired Company for the Straddle Period shall be allocated to the
Pre-Closing Period using an interim closing-of-the-books method that complies
with Treas. Reg. Section 1.1502-76(b)(2)(i) (assuming that such taxable period
ended on the Closing Date) and treating such period as a Pre-Closing Period for
purposes of this Agreement, except that (A) exemptions, allowances or deductions
that are calculated on an annual basis (such as the deduction for depreciation)
shall be apportioned on a per diem basis, and (B) in the case of any Taxes not
based on income, gain or receipts or specific purchases or sales, the portion of
the Tax attributable to the Pre-Closing Period shall equal the Taxes for the
entire Straddle Period, multiplied by a fraction the numerator of which is the
total number of days in the Straddle Period through the Closing Date and the
denominator of which is the total number of days in the Straddle
Period.   In the case of any Straddle Period described in the
preceding sentence, Purchaser shall provide Seller and its authorized
representatives with copies of the completed Tax Return for such period and a
statement certifying the amount of Taxes shown on such Tax Return that are
chargeable to Seller (the “Tax Statement”) at
least twenty (20) days prior to the due date for the filing of such Tax Return
(including any extension thereof), and Seller and its authorized representatives
shall have the right to review and comment on, at Seller’s expense, each such
Tax Return and Tax Statement prior to the timely filing of such Tax
Return.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (iii)         For
all taxable periods of the Acquired Company ending on or before the Closing
Date, Seller shall cause the Acquired Company to join in Seller’s consolidated
federal income Tax Return. Seller shall include the income of the Acquired
Company (including any deferred items triggered into income by Treasury
Regulation Section 1.1502-13 and any excess loss account taken into income
under Treasury Regulation Section 1.1502-19) on Seller’s consolidated
federal income Tax Returns for all periods through the Closing Date and pay any
Taxes attributable to such income. Such Tax Returns shall be prepared and filed
in a manner consistent with prior practice, except as required by a change in
applicable Laws.  Purchaser shall have the right to review and comment
on any such Tax Returns prepared by Seller.  The consolidated federal
income Tax Returns that include the Acquired Company for its taxable period that
ends on the Closing Date and its taxable period that begins the day after the
Closing Date shall be prepared in accordance with Treasury Regulations
Section 1.1502-76(b)(1)(ii)(A). Purchaser and Seller further agree that the
Acquired Company shall become a member of the federal income consolidated tax
group of which Purchaser is the common parent on the day after the Closing Date.
To the extent applicable, any state or local income Tax Returns shall be
prepared in accordance with provisions comparable to Treasury Regulations
Section 1.1502-76(b)(1)(ii)(A) under state or local Law.

     

    (b)          Cooperation.  Following
the Closing, Seller, on the one hand, and Purchaser and the Acquired Company, on
the other hand, agree to furnish or cause to be furnished to each other or their
respective representatives, upon request, as promptly as practicable, such
information and assistance (including access to Books and Records) relating to
the Acquired Company as is reasonably necessary for the preparation of any Tax
Return, claim for refund, audit or similar matter, the prosecution or defense of
any claim, suit or proceeding relating to any Taxes of the Acquired
Company.  If Seller and Purchaser disagree as to the matters governed
by this Section
6.4, Seller and Purchaser shall promptly consult with each other in an
effort to resolve such dispute.  If any such disagreement cannot be
resolved within thirty (30) days after either party asserts in writing that such
dispute cannot be resolved, the Selected Accounting Firm shall act as an
arbitrator to resolve such disagreement.  The Selected Accounting
Firm’s determination shall be binding and conclusive, and any expenses relating
to the engagement of such Selected Accounting firm shall be shared equally by
Seller and Purchaser.

     

    (c)          Termination of Existing Tax
Sharing Agreements.  All tax sharing agreements or similar
arrangements with respect to or involving the Acquired Company shall be
terminated effective as of the Closing Date without any liability to the
Acquired Company.

     

    (d)          Section 338
Election.  At Purchaser’s option, Seller will join with
Purchaser in making an election under Section 338(h)(10) of the Code, and
any corresponding elections under state, local or foreign tax law (collectively,
a “Section 338
Election”), with respect to the purchase and sale of the Shares pursuant
hereto.  If the Section 338 Election is made, Seller and Purchaser and
their respective Affiliates shall report the sale of the Shares pursuant to this
Agreement consistent with the Section 338 Election and shall take no position
contrary thereto in any Tax Return.  If the Section 338 Election is
made and IRS Form 8023 is filed with the Internal Revenue Service (“IRS”), Purchaser
shall pay to Seller the amount of additional consideration necessary to cause
Seller’s after-Tax net proceeds from the sale of the Shares with the Section 338
Election to be equal to the after-Tax net proceeds that Seller would have
received had the Section 338 Election not been made, taking into account all
appropriate state, federal and local Tax implications (the “Tax
Adjustment”).  Seller and Purchaser shall cooperate in
computing the amount of such Tax Adjustment after the parties have agreed to the
allocation of the Purchase Price.

     

    (e)          Refunds and
Carrybacks.  Any and all refunds of Taxes relating to the
Acquired Company for any period ending prior to the Closing Date shall be
retained by Seller and for the account of Seller, and Purchaser shall pay over
to Seller any such refund within twenty (20) days after receipt by Purchaser or
the Acquired Company of any such amount.  Notwithstanding the
foregoing, Seller shall pay to Purchaser any Tax refund (or reduction in Tax
liability) resulting from a carryback of a net operating loss or other Tax
attribute of the Acquired Company that accrues following the Closing, and is
carried back into the Seller’s consolidated Tax Return, when such refund (or
reduction) is received or realized by Seller Affiliated Group.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (f)           NOLs.  At
Purchaser’s option, Seller shall timely file an election under Treasury
Regulations Section 1.1502-95(f), and any corresponding elections under state,
local or foreign tax law (collectively, a “Section 1.1502-95
Election”), to apportion all of the Seller Affiliated Group’s annual
consolidated Code Section 382 limitation, if any, to the Acquired
Company.  If the Section 1.1502-95 Election is made, Seller and
Purchaser shall cause the Acquired Company to join with Seller in making such
Section 1.1502-95 Election.

     

    ARTICLE
VII

    INDEMNIFICATION

     

    7.1          Survival.  Except
as otherwise provided in this Article VII, (a) each
representation and warranty contained in Articles III and
IV shall
survive the closing for one (1) year after the Closing Date, and (b) covenants
in this Agreement shall survive the closing.  The period from the date
hereof until the last date on which a representation, warranty, covenant or
other obligation survives pursuant to this Section 7.1 shall be
known as the “Survival
Period.”

     

    7.2          Indemnification by
Seller.  Subject to the provisions of this Article VII, Seller
shall indemnify and hold harmless Purchaser, any Affiliate of Purchaser, and
their respective officers, directors, stockholders, employees, agents and
representatives (each, a “Purchaser
Indemnitee”) from and after the Closing Date, from and against any
Damages actually incurred by such Purchaser Indemnitee as a result
of:

     

    (a)           the
Excluded Assets and Excluded Liabilities;

     

    (b)           any
breach, misrepresentation, or inaccuracy in any of the representations and
warranties made herein by Seller;

     

    (c)           any
breach of any of the covenants or agreements made herein by Seller;

     

    (d)           any
Claims relating to the operations of the Acquired Company prior to the Closing
Date; and

     

    (e)           any
Claims relating to or arising out 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.

     

    7.3          Indemnification by
Purchaser.  Purchaser shall indemnify and hold harmless Seller,
any Affiliate of Seller, and their respective officers, directors, stockholders,
employees, agents and representatives (each a “Seller Indemnitee”)
from and after the Closing Date from and against any Damages actually incurred
by such Seller Indemnitee as a result of:

     

    (a)           any
breach, misrepresentation, or inaccuracy in any of the representations and
warranties made herein by Purchaser;

     

    (b)           any
breach of any of the covenants or agreements made herein by Purchaser;
and

     

    (c)           any
Claims relating to the operations of the Acquired Company after the Closing
Date; provided that nothing herein shall relieve Seller of its indemnification
obligations pursuant to Section
7.2.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              7.4

            	
              Limitations on
      Claims.

            

    

     

    (a)          Notwithstanding
anything in this Article VII to the
contrary, the rights of the parties to be indemnified and held harmless under
this Agreement shall be limited as follows:

     

    (i)           no
claims for indemnity by a Purchaser Indemnitee pursuant to Section 7.2(b) shall
be made unless and until the aggregate of all Claims exceeds $200,000, in which
case Seller shall be obligated to indemnify, defend and hold harmless the
Purchaser Indemnitee for all Damages;

     

    (ii)           the
maximum aggregate liability of Seller for Claims pursuant to Section 7.2(a)-(d)
shall be limited to $1 million;

     

    (iii)           the
maximum aggregate liability of Purchaser for Claims pursuant to Section 7.3(a) and
(b) shall be
limited to $1 million; and

     

    (iv)           no
claims for indemnity pursuant to Section 7.2(a)-(d)
shall first be made by any party after the first anniversary of the Closing
Date.

     

    (b)          The
liability of a party with respect to any claim for indemnity by an Indemnitee
pursuant to this Article VII shall be
offset dollar for dollar by (i) any insurance proceeds actually received and
retained by such Indemnitee after the Closing Date in respect of the Damages
involved, and (ii) any other recovery made by such Indemnitee from any third
party on account of the Damages involved.

     

    (c)          The
parties’ right to indemnification will not be affected or limited by any
investigation conducted by or on behalf of such party, any preparation of
compilation by such party of schedules to this Agreement or any knowledge
acquired (or capable of being acquired) at any time.

     

    (d)          For
purposes of calculating the amount of Damages to which a party is entitled under
this Article VII (but not for determining whether a representation or warranty
has been breached), the terms “material,” “materiality,” and other qualifiers,
modifiers or limitations (including qualifiers as to “Knowledge”) shall be
disregarded.

     

     (e)          In
the event of payment of any Claim, the Indemnifying Party (as defined below)
shall be subrogated to any and all claims and causes of action of the Indemnitee
(as defined below) and shall have the right to seek and retain the proceeds of
any and all actions in furtherance thereof.

     

    
      	
               
      

            	
              7.5

            	
              Claims
      Procedures.

            

    

     

    (a)          If
a party seeks indemnification for Damages hereunder, the party seeking
indemnification (the “Indemnitee”) shall
promptly notify the party from whom indemnification is sought (the “Indemnifying Party”)
in writing of the existence and nature of such Damages (a “Claim”), and shall
include in the Claim a reasonably detailed description of all related claims,
demands, actions or proceedings, if any, out of which the Damages arise;
provided, however, that so long as a Claim is delivered within the applicable
Survival Period, failure or delay by the Indemnitee to deliver a Claim in
compliance with this provision shall only reduce the obligation of the
Indemnifying Party to the extent that such failure impairs the Indemnifying
Party’s ability to defend the claim or mitigate Damages, in which case the
Indemnifying Party shall have no obligation to indemnify the Indemnitee to the
extent of Damages caused by such failure.

     

    (b)          In
the event of a Claim related to a claim by a third party, the Indemnifying Party
may elect to retain counsel of its choice to represent the Indemnitee in
connection with such Claim and shall pay the fees, charges and disbursements of
such counsel.  The Indemnitee may participate, at its own expense and
through legal counsel of its choice, provided that (i) the Indemnifying Party
may elect to control the defense of the Indemnitee in connection with such Claim
and (ii) the Indemnitee and their counsel shall cooperate with the Indemnifying
Party and its counsel in connection with such Claim.  The Indemnifying
Party shall not settle any such proceeding without the relevant Indemnitees’
prior written consent (which shall not be unreasonably withheld),
unless  the terms of such settlement provide for no relief other than
the payment of monetary damages.  Notwithstanding the foregoing, if
the Indemnifying Party elects not to retain counsel and assume control of such
defense or if both the Indemnifying Party and any Indemnified Party are parties
to or subjects of such proceeding and conflicts of interests exist between the
Indemnifying Party and such Indemnitee, then the Indemnitee shall retain counsel
reasonably acceptable to the Indemnifying Party in connection with such
proceeding and assume control of the defense in connection therewith, and the
fees, charges and disbursements of no more than one such counsel per
jurisdiction selected by the Indemnitee shall be reimbursed by the Indemnifying
Party.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    (c)           If
the Indemnifying Party shall, within a reasonable time after said notice, fail
to defend, the Indemnitee shall have the right, but not the obligation, and
without waiving any rights against the Indemnifying Party, to undertake the
defense of, and with the consent of the Indemnifying Party (such consent not to
be withheld unreasonably), to compromise or settle the Claim on behalf, for the
account, and at the risk and expense, of the Indemnifying Party and shall be
entitled to collect the amount of any settlement or judgment or decree and all
costs and expenses (including reasonable attorneys’ fees) in connection
therewith from the Indemnifying Party.  Under no circumstances will
the Indemnifying Party have any liability in connection with any settlement of
any proceeding that is entered into without its prior written consent (which
shall not be unreasonably withheld).  Except as provided in this Section 7.5(c), the
Indemnitee shall not compromise or settle any Claim.

     

    (d)           From
and after the delivery of a Claim, at the reasonable request of the Indemnifying
Party, each Indemnitee shall grant the Indemnifying Party and its counsel,
experts and representatives full access, during normal business hours, to the
books, records, personnel and properties of the Indemnitee to the extent
reasonably related to the Claim at no cost to the Indemnifying
Party.

     

    (e)           If
the Indemnitee or its Affiliates subsequently recover all or part of a
third-party claim from any other Person legally obligated to pay the claim, the
Indemnitee shall repay to the Indemnifying Party the amounts recovered up to an
amount not exceeding the payment made by the Indemnifying Party to the
Indemnitee by way of indemnity.

     

    7.6          Investigations.  The
respective representations and warranties of the parties contained in this
Agreement and the rights to indemnification set forth in Article VII shall not
be deemed waived or otherwise affected by any investigation made, or knowledge
acquired, by a party.

     

    7.7          Reserved.

     

    7.8          Tax
Indemnification.

     

    (a)           Seller
shall indemnify, defend and hold each Purchaser Indemnitee and the Acquired
Company harmless from and against any and all Damages for: (i) Taxes of or
imposed upon 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
this Agreement; (ii) Taxes imposed on the Acquired Company under Treas. Reg.
Section 1.1502-6 (and corresponding provisions of state, local, or foreign Law)
as a result of having been a member of any federal, state, local or foreign
consolidated, unitary, combined or similar group for any taxable period ending
on or before, or that includes, the Closing Date, or as a transferee or
successor, pursuant to any tax indemnification or sharing agreement, or similar
contract or arrangement, or otherwise; (iii) any breach by Seller or its
Affiliates of any of the covenants and obligations contained in Section 6.4 of this
Agreement; (iv) the breach or inaccuracy of the representations and warranties
set forth in Section
3.12 of this Agreement; and (v) Taxes imposed on or related or
attributable to the Excluded Assets or the Reorganization.

     

    (b)           Purchaser shall
indemnify, defend and hold each Seller Indemnitee harmless from and against any
and all Damages for: (i) Taxes of or imposed upon the Acquired Company with
respect to any taxable period beginning after the Closing Date, and for any
Straddle Period but only with respect to the portion of such Straddle
Period beginning after the Closing Date and as determined in the
manner provided in Section 6.4 of this
Agreement; and (ii) any breach by Purchaser of any of the covenants and
obligations contained in Sections 6.4(d) and
(e) of this
Agreement.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (c)           The
amount of any Taxes for which indemnification is provided under this Section 7.8 shall not
be (A) increased to take account of any net Tax cost incurred by the Indemnitee
arising from the receipt of indemnity payments hereunder or (B) reduced to take
account of any net Tax benefit realized by the Indemnitee arising from the
incurrence or payment of any such Taxes.  Any indemnity payment under
this Agreement shall be treated as an adjustment to the Purchase Price for
United States federal income tax purposes.

     

    (d)           Any
indemnity payment required to be made pursuant to this Section 7.8 shall be
paid within 30 days after the Indemnitee makes written demand upon the
Indemnifying Party, but in no case earlier than five (5) Business Days prior to
the date on which the relevant Taxes are required to be paid to the relevant
Governmental Authority (including estimated Tax payments).

     

    (e)           In
no event shall the indemnities provided for in this Section 7.8 be
subject to the provisions of Section 7.4 of this
Agreement.

     

    ARTICLE
VIII

    NOTICES

     

    8.1          Notices.  All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person, when delivered by
reputable overnight courier, or if mailed, five (5) days after being deposited
in the United States mail, certified or registered mail, first-class postage
prepaid, return receipt requested, to the parties at the following addresses or
facsimile numbers:

     

    
      	
               
      

            	
              If
      to Seller, to:

            	
              RxElite,
      Inc.

            

    

    
      	
               
      

            	
              1404
      North Main

            

    

    
      	
               
      

            	
              Meridian,
      Idaho 83642

            

    

    
      	
               
      

            	
              Attention:
      President

            

    

     

    
      	
               
      

            	
              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.

            

    

     

    
      	
               
      

            	
              If
      to Purchaser, to:

            	
              Piramal
      Healthcare, Inc.

            

    

    
      	
               
      

            	
              c/o
      Piramal Enterprises Ltd.

            

    

    
      	
               
      

            	
              D-Mart
      Bldg,

            

    

    
      	
               
      

            	
              Mulund
      Goregaon Link Road

            

    

    
      	
               
      

            	
              Mulund
      (West)

            

    

    
      	
               
      

            	
              Mumbai
      400080

            

    

    
      	
               
      

            	
              Attention:
      Madhu Nair

            

    

    

    
      	
               
      

            	
              With
      a copy to:

            	
              Waller
      Lansden Dortch & Davis, LLP

            

    

    
      	
               
      

            	
              511
      Union Street, Suite 2700

            

    

    
      	
               
      

            	
              Nashville,
      Tennessee  37219-1760

            

    

    
      	
               
      

            	
              Attention:  L.
      Hunter Rost, Esq.

            

    

    

    Any party
from time to time may change its address for the purpose of  receipt
of notices to that party by giving a similar notice specifying a new address to
the other notice parties listed above in accordance with the provisions of this
Section
8.1.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    ARTICLE
IX

    MISCELLANEOUS

     

    9.1           Fees and
Expenses.  Except as otherwise provided in this Agreement,
Seller shall pay its own expenses (including those expenses of Seller and the
Acquired Company in connection with this Agreement and the transactions
contemplated hereby incurred prior to the Closing Date) and Purchaser shall pay
its own expenses (including those of the Acquired Company in connection with
this Agreement and the transactions contemplated hereby incurred after the
Closing Date).  Seller and Purchaser each shall pay one-half of all
documentary or stamp taxes, if any, relating to the sale and the transactions
provided for herein.

     

    9.2           Entire
Agreement.  Except for documents and agreements executed
pursuant hereto, and the other documents and agreements contemplated hereby,
this Agreement supersedes all prior oral discussions and written agreements
between the parties with respect to the subject matter of this Agreement
(including any term sheet or similar agreement or document relating to the
transactions contemplated hereby).  This Agreement, including the
Exhibits and Schedules hereto and other documents delivered in connection
herewith, contains the sole and entire agreement between the parties hereto with
respect to the subject matter hereof.

     

    9.3           Waiver.  Any
term or condition of this Agreement may be waived at any time by the party which
is entitled to the benefit thereof.  Any such waiver must be in
writing and must be duly executed by such party.  A waiver on one
occasion shall not be deemed to be a waiver of the same or any other breach,
provision or requirement on any other occasion.

     

    9.4           Amendment.  This
Agreement may be modified or amended only by a written instrument duly executed
by each of the parties hereto.

     

    9.5           Counterparts; Facsimile
Signatures.  This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.  Facsimile
signatures on this Agreement shall be deemed to be original signatures for all
purposes.

     

    9.6           No Third Party
Beneficiary.  The terms and provisions of this Agreement are
intended solely for the benefit of Seller, Purchaser and their respective
Affiliates, successors or assigns, and it is not the intention of the parties to
confer third party beneficiary rights upon any other Person.

     

    9.7           Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO A CONTRACT
EXECUTED AND PERFORMED IN SUCH STATE. The parties hereto agree that no
provisions of this Agreement or any related document shall be construed for or
against or interpreted to the advantage or disadvantage of any party hereto by
any court or other Governmental Authority by reason of any party’s having or
being deemed to have structured or drafted such provision, each party having
participated equally in the structuring and drafting hereof.  The
parties’ consent to the exclusive jurisdiction in any claim or proceeding
relating to this Agreement or any matter involving the parties’ relationship to
the United States District Court located in Wilmington, Delaware.

     

    9.8           No
Assignment.  Neither this Agreement nor any right hereunder or
part hereof may be assigned by any party hereto without the prior written
consent of the other party hereto; provided, however, that Purchaser may assign
this Agreement to an Affiliate that agrees to be bound by the terms and
conditions of this Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns, including successors by merger or otherwise.

     

    9.9           Severability; Invalid
Provisions.  If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, (a) such
provisions will be fully severable; (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom; and (d) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms and effect to such illegal, invalid or unenforceable provision as may
be possible.

     

    9.10         Waiver of Jury
Trial.  EACH OF
THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION
WITH ANY LITIGATION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    9.11         Further Assurances.
On and after the Closing Date, Seller, the Acquired Company and Purchaser will
take all appropriate action and execute all documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the provisions hereof, including (i) putting Purchaser in possession
and operating control of the Business and the Acquired Company and (ii) putting
Seller in possession of and party to all of the Excluded Assets and Excluded
Contracts.

     

    9.12         Specific
Performance.  The parties acknowledge and agree that any breach
of the terms of this Agreement would give rise to irreparable harm for which
money damages would not be an adequate remedy.  Accordingly, the
parties agree that, in addition to any other remedies, each party shall be
entitled to enforce the terms of this Agreement by decrees of specific
performance without the necessity of proving actual damages or posting
bond.

     

    9.13         Brokers.  No
Person (other than UBS Securities LLC, as financial advisor to Purchaser, and
Oppenheimer & Co., Inc., as financial advisor to Seller and the Acquired
Company) is entitled to receive any brokerage, finder’s or other fee or
commission in connection with this Agreement or the transactions contemplated
hereby.

     

    [The
following page is the signature page.]

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have caused this Stock Purchase Agreement to be
executed as of the date first above written.

    

    
      
        
          
            	
                    PIRAMAL
      HEALTHCARE, INC.

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Muraj Rajan

                  
	 
      	
                    Murari
      Rajan

                  
	 
      	
                    President

                  
	 
      	 
      
	
                    RXELITE,
      INC.

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Earl Sullivan

                  
	
                    Name:
      Earl Sullivan

                  
	
                    Title:   CEO

                  

          

        

      

    

    
      
         

      

      
        23Unassociated 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

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