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STOCK AND ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

STOCK AND ASSET PURCHASE AGREEMENT | Document Parties: ALPHARMA INC | 3i Europartners Va LP, 3i Europartners Vb LP, 3i Pan European Buyouts 2006-08A LP, 3i Pan European Buyouts 2006-08B LP | 3i Pan European Buyouts 2006-08C LP | Otdelholdco Inc | Target Companies You are currently viewing:
This Asset Purchase Agreement involves

ALPHARMA INC | 3i Europartners Va LP, 3i Europartners Vb LP, 3i Pan European Buyouts 2006-08A LP, 3i Pan European Buyouts 2006-08B LP | 3i Pan European Buyouts 2006-08C LP | Otdelholdco Inc | Target Companies

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Title: STOCK AND ASSET PURCHASE AGREEMENT
Governing Law: New York     Date: 2/7/2008
Industry: Biotechnology and Drugs     Law Firm: Cravath Swaine     Sector: Healthcare

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EXHIBIT 10.1

 


 
 
 
STOCK AND ASSET PURCHASE AGREEMENT
 
 
 
AMONG
 
 
ALPHARMA INC.,
 
 
ALPHARMA (LUXEMBOURG) S.ÀR.L.,
 
 
ALPHARMA BERMUDA G.P.,
 
 
ALPHARMA INTERNATIONAL (LUXEMBOURG) S.ÀR.L.,
 
 
ALFANOR 7152 AS (UNDER CHANGE OF NAME TO OTNORBIDCO AS),
 
 
OTDENHOLDCO APS
 
 
AND
 
 
OTDELHOLDCO INC.
 
 
February 6, 2008
 
 
 
 


 


 
 

 
 
 
 
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iii

 

 
EXHIBITS
 
Exhibit A Form of Bill of Sale
Exhibit B Form of Transition Services Agreement
 
 
 
STOCK AND ASSET PURCHASE AGREEMENT (this “ Agreement ”) is entered into as of February 6, 2008, by and among Alfanor 7152 AS (under change of name to Otnorbidco AS), a private limited liability company organized under the laws of Norway with Organization Number 992 106 034 (“ Otnorbidco ”), Otdelholdco Inc., a Delaware corporation (“ Otdelholdco ”), Otdenholdco ApS, a private limited company organized under the laws of Denmark with Registration Number 31 08 95 06 (“ Otdenholdco ”, collectively, with Otnorbidco and Otdelholdco, the “ Buyer ”), Alpharma Inc., a Delaware corporation (“ Parent ”), Alpharma (Luxembourg) S.àr.l., a private limited liability company organized under the laws of Luxembourg, Alpharma Bermuda G.P., an exempt general partnership organized under the laws of Bermuda (with Parent and Alpharma (Luxembourg) S.àr.l. (acting through its Swiss finance branch), the “ Asset Sellers ”), and Alpharma International (Luxembourg) S.àr.l., a private limited liability company organized under the laws of Luxembourg (the “ Share Seller ”).  Buyer, the Asset Sellers and the Share Seller are referred to collectively herein as the “ Parties ”.
 
Parent indirectly owns, and the Share Seller directly owns, all of the outstanding capital stock of the entities listed as Target Companies in Section 4(b) of the Disclosure Schedule (the “ Target Companies ”), except as disclosed in Section 4(b) of the Disclosure Schedule.  Parent indirectly owns, and the Target Companies directly or indirectly own, all of the outstanding capital stock or equity interests (as the case may be) of the entities listed as Target Subsidiaries in Section 4(b) of the Disclosure Schedule (the “ Target Subsidiaries ”), except as disclosed in Section 4(b) of the Disclosure Schedule.
 
This Agreement contemplates a transaction (the “ Transaction ”) in which (i) Otnorbidco will purchase from the Share Seller (and any other entity which Parent may designate as an additional Share Seller as a result of the Pre-Closing Restructuring), and the Share Seller (and any other entity which Parent may designate as an additional Share Seller as a result of the Pre-Closing Restructuring) will sell to Otnorbidco, all of the outstanding capital stock of the Target Companies in return for cash and (ii) Otdelholdco will purchase from Asset Sellers, and Asset Sellers will sell to Otdelholdco, certain assets of Asset Sellers in return for cash and the assumption of certain liabilities.
 
3i Europartners Va LP, 3i Europartners Vb LP, 3i Pan European Buyouts 2006-08A LP, 3i Pan European Buyouts 2006-08B LP and 3i Pan European Buyouts 2006-08C LP (collectively, the “ Sponsor Funds ”) and Buyer have executed and delivered to the Sellers, in connection with the execution and delivery of this Agreement, a commitment letter dated as of the date of this Agreement pursuant to which the Sponsor Funds have issued equity commitments to Buyer, the proceeds of which will be used to pay a portion of the Purchase Price and the fees and expenses relating to the transactions contemplated by this Agreement (such commitment letter is referred to as the “ Equity Financing Commitments ”).
 
 
Certain financial institutions have executed and delivered to Buyer, and Buyer has delivered to Parent in connection with the execution and delivery of this Agreement, a commitment letter dated January 23, 2008, as amended by the letter dated February 6, 2008 (the “ Commitment Letter ”) (which includes an executed and effective Interim Loan Agreement, as amended by the letter dated February 6, 2008 (the “ Interim Loan Agreement ”)), pursuant to which such financial institutions have issued lending commitments to Buyer, the proceeds of which will be used to pay a portion of the Purchase Price and the fees and expenses relating to the transactions contemplated by this Agreement (the Commitment Letter, together with the Interim Loan Agreement and the condition satisfaction letter dated February 6, 2008, is referred to as the “ Debt Financing Commitments ”; the Debt Financing Commitments and the Equity Financing Commitments are referred to as the “ Financing Commitments ”).
 
NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.
 
 
Accounting Firm ” has the meaning set forth in Section 2(g)(iii) below.
 
Acquired Assets ” has the meaning set forth in Section 1(A) of the Disclosure Schedule.
 
Affiliate ” means, with respect to any Person, another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.
 
Agreement ” has the meaning set forth in the preface above.
 
AH Competitive Activities ” has the meaning set forth in Section 6(e)(ii) below.
 
Alpharma Credit Agreement Lien ” means any security interest, pledge or other Lien in existence immediately prior to the Closing under the Credit Agreement as amended and restated as of March 10, 2006, by and among Parent and certain of its Subsidiaries and Bank of America, N.A., as Administrative Agent, and the lenders party thereto from time to time, as amended, supplemented or otherwise modified from time to time, with respect to the Acquired Assets, Target Shares, shares of the Target Subsidiaries or any assets of the Target Companies or the Target Subsidiaries.
 
Alpharma Global Insurance Program ” means the portfolio of property, casualty and executive liability insurance policies of Parent and its Subsidiaries with respect to the operations of Parent and its Subsidiaries which are negotiated and administered by Parent’s corporate risk management department (including the Global Liability, Global Property, Global Transit, Surety, Director’s and Officer’s Liability and other executive management liabilities policies, and the U.S. Casualty program).
 
 
 
Allocation ” has the meaning set forth in Section 9(l)(i) below.
 
Allocation Schedule ” has the meaning set forth in Section 9(l)(ii) below.
 
Alternative Structuring ” has the meaning set forth in Section 5(a) of the Disclosure Schedule .
 
Ancillary Agreements ” means the other agreements and instruments (including any foreign transfer agreements which shall conform to the provisions hereof except as may be necessary to comply with applicable Law) executed and delivered in connection with the transactions contemplated by this Agreement.
 
API Competitive Activities ” has the meaning set forth in Section 6(e)(i) below.
 
Asset Sellers ” has the meaning set forth in the preface above.
 
Assumed Employees ” shall have the meaning set forth in Section 6(g)(ii) below.
 
Assumed Intercompany Receivables ” means the receivables described in Section 1(B) of the Disclosure Schedule that are owed by the Target Companies or Target Subsidiaries to the Asset Sellers.
 
Assumed Liabilities ” has the meaning set forth in Section 1(C) of the Disclosure Schedule.
 
BRO ” has the meaning set forth in Section 6(k) below.
 
Bonus Obligations ” means any cash bonus payment accrued in respect of Employees of the Business under the short-term incentive plan of Parent for calendar year 2007.
 
Business ” means (A) the business of Parent and certain of its Subsidiaries as of the Closing Date that develops, manufactures and markets active pharmaceutical ingredients which are sold to third parties that formulate and manufacture finished dose human pharmaceutical products comprised of such active pharmaceutical ingredients and (B) the business of the Target Companies and the Target Subsidiaries as of the Closing Date that develops, manufactures and markets the finished pharmaceuticals set forth on Section 1(D) of the Disclosure Schedule.
 
Business Contracts ” has the meaning set forth in Section 1(A) of the Disclosure Schedule.
 
Buyer ” has the meaning set forth in the preface above.
 
Buyer Entities ” means, as of and from the Closing Date, Buyer and its Affiliates and the Target Companies and Target Subsidiaries.
 
 
 
 
Buyer Indemnitee ” has the meaning set forth in Section 8(b) below.
 
Chinese Sub ” means Alpharma (Taizhou) Pharmaceuticals Co., Ltd.
 
Closing ” has the meaning set forth in Section 2(e) below.
 
Closing Date ” has the meaning set forth in Section 2(e) below.
 
Closing Net Cash Balance ” has the meaning set forth in Section 2(g)(i) below.
 
Closing Working Capital ” has the meaning set forth in Section 2(g)(i) below.
 
Code ” means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder by the United States Department of Treasury from time to time.
 
Collective Bargaining Agreements ” has the meaning set forth in Section 4(p)(i) below.
 
Commitment Letter ” has the meaning set forth in the preface above.
 
Confidential Business Information ” has the meaning set forth in Section 6(i) below.
 
Confidentiality Agreement ” has the meaning set forth in Section 5(e) below.
 
Controlling Party ” has the meaning set forth in Section 9(f)(iii) below.
 
Debt Financing ” means the debt financing provided to Buyer or its designees pursuant to the Debt Financing Commitments (or any replacement commitments obtained by Buyer in compliance with this Agreement).
 
Debt Financing Commitments ” has the meaning set forth in the preface above.
 
Disclosure Schedule ” has the meaning set forth in Section 3(a) below.
 
Early Retirement Obligations ” means the payment obligations in respect of the letter agreements issued to Employees of the Business and listed in Section 6(g)(xi)(D) of the Disclosure Schedule.
 
Employee Benefit Plan ” means any “employee benefit plan” (as such term is defined in ERISA Section 3(3)) and any other plan, program, arrangement, practice or agreement providing for compensation, severance, termination pay, deferred compensation, retirement, pension, bonus awards, performance awards, retention or other change in control awards, incentive compensation, stock or stock-related awards, fringe
 
 
 
benefits, social insurance or other material employee benefits of any kind, whether written or unwritten or otherwise, funded or unfunded.
 
Employees of the Business ” means (i) all Persons employed on the Closing Date by the Target Companies and the Target Subsidiaries and (ii) those employees of Parent and its Subsidiaries who on the Closing Date work in the operation of the Business, including in all cases, any employees who as of the Closing Date are on approved leave of absence (including medical leave and short-term or long-term disability) or vacation; provided that such Person returns to work within 180 days after the Closing or is otherwise entitled to reinstatement under any applicable Law upon presenting themselves for duty to the Business.
 
Environmental Claim ” mean any administrative, regulatory or judicial action, suit, order, demand, claim, proceeding or written notice of noncompliance or violation by or from any Person alleging liability arising out of, based on or resulting from (a) any past or present release or threatened release of, or exposure to, any Hazardous Substances at any location or (b) the failure to comply with any Environmental Law.
 
Environmental Laws ” means any applicable Law or Judgment issued, promulgated or entered into, by or with any Governmental Entity relating to pollution, the protection of the environment (including ambient air, surface water, groundwater, soils, land surface or subsurface strata) or preservation or reclamation of natural resources, including Laws relating to the use, generation, management, handling, transport, treatment, disposal, storage, release or threatened release of hazardous or toxic materials or wastes.
 
Environmental Permits ” has the meaning set forth in Section 4(o)(ii) below.
 
Equity Financing ” means the equity financing to be provided to Buyer or its designees pursuant to the Equity Financing Commitments (or any replacement commitments obtained by Buyer in compliance with this Agreement).
 
Equity Financing Commitments ” has the meaning set forth in the preface above.
 
ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
 
Estimated Closing Net Cash Balance ” shall have the meaning set forth in Section 2(b)(ii).
 
Estimated Closing Working Capital ” shall have the meaning set forth in Section 2(b)(iii).
 
Exception Products ” has the meaning set forth in Section 6(e)(ii) below.
 
 
 
\
Exception Product Sales Cap ” has the meaning set forth in Section 6(e)(ii) below.
 
Excluded Assets ” has the meaning set forth in Section 1(E) of the Disclosure Schedule.
 
Excluded Liabilities ” has the meaning set forth in Section 1(F) of the Disclosure Schedule.
 
Extended Outside Date ” has the meaning set forth in Section 10(a)(i)(D).
 
FDA ” means the United States Food and Drug Administration, and any successor agency or entity thereto that may be established hereafter.
 
FDA Act ” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301, et   seq. , as amended.
 
Financial Statements ” has the meaning set forth in Section 4(f)(i) below.
 
Financing ” means the Debt Financing and the Equity Financing.
 
Financing Commitments ” has the meaning set forth in the preface above.
 
Foreign Merger Control Laws ” has the meaning set forth in Section 3(a)(iv) below.
 
FX Amount ” has the meaning set forth in Section 2(g)(ii) below.
 
FX Contracts ” has the meaning set forth in Section 2(g)(ii) below.
 
FX Notice of Disagreement ” has the meaning set forth in Section 2(g)(iii) below.
 
FX Statement ” has the meaning set forth in Section 2(g)(ii) below.
 
GAAP ” means generally accepted accounting principles in the United States.
 
Governmental Entity ” means any domestic or foreign government, court, administrative or regulatory body or agency or other governmental authority.
 
Hart-Scott-Rodino Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
 
Hazardous Substance ” means any pollutant, contaminant, chemical, petroleum or any fraction thereof, asbestos or asbestos-containing-material, polychlorinated biphenyls, or toxic, infectious, biohazardous or otherwise hazardous substance, material or waste, including all substances, materials or wastes (whether in the form of solid, liquid, gas or vapor) defined as a “hazardous substance”, a “toxic
 
 
 
 
substance” or with words of similar import by, or regulated or giving rise to liability under, any Environmental Law.
 
Income Tax ” means any U.S. federal, state or local, or non-U.S. Tax measured by (or imposed on) net income and any interest, penalty, fine, charge, or addition thereto, whether disputed or not.
 
Income Tax Return ” means any Tax Return relating to Income Taxes.
 
Indebtedness ” means, of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money (other than accounts payable for goods and services incurred in the ordinary course of business and payable in accordance with customary practices), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all liabilities in respect of capital and finance leases and (d) all obligations of such Person in respect of letters of credit and acceptances for instruments serving a similar function) issued or created for the account of such Person.
 
Indemnified Party ” has the meaning set forth in Section 8(d)(i)(A) below.
 
Indemnifying Party ” has the meaning set forth in Section 8(d)(i)(A) below.
 
Initial Outside Date ” has the meaning set forth in Section 10(a)(i)(D).
 
Insurance ” means all insurance benefits, including rights and proceeds, resulting from any liabilities of any of the Asset Sellers or any of the Target Companies or Target Subsidiaries arising out of any personal injury and/or death or damage to property relating to or arising in connection with Products developed, manufactured, marketed, distributed, sold or otherwise provided by, or on behalf of, any of the Asset Sellers, the Target Companies or the Target Subsidiaries that Seller has Knowledge of prior to the Closing.
 
Insurance Policies ” has the meaning set forth in Section 4(q) below.
 
Intellectual Property ” has the meaning set forth in Section 4(k)(iii) below.
 
Intercompany Assumed Agreement ” shall have the meaning set forth in Section 4(t) below.
 
Intercompany Payables ” means obligations owed by an Asset Seller (primarily relating to the Business) or a Target Company or Target Subsidiary to Parent or any of its Affiliates, other than an Assumed Intercompany Receivable.
 
Intercompany Receivables ” means obligations owed to an Asset Seller (primarily relating to the Business) or a Target Company or Target Subsidiary by Parent or any of its Affiliates, other than an Assumed Intercompany Receivable.
 
 
 
 
Interim Loan Agreement ” has the meaning set forth in the preface above.
 
Inventory ” means all finished goods, work in process and raw materials of the Business.
 
Judgment ” means any judgment, order, decision, writ, injunction, legally binding agreement with a Governmental Entity, stipulation, decree or similar legal restraint.
 
Knowledge ” means, with respect to Parent, the actual knowledge after reasonable inquiry of Donald Buzinkai, Carl-Aake Carlsson, Jeffrey Campbell, Mikkel Lyager-Olsen, Thomas J. Spellman III, Peter Watts, Frode Johansen, Stig Jarle Pettersen, Maria Gobbi, Hans Nielsen, Steen Rasmussen and Torben Jung Laursen.
 
Law ” means any statute, law, ordinance, rule, regulation, order or other binding directive issued by any Governmental Entity.
 
Leased Real Property ” means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures, or other interest in real property that is primarily used in the Business.
 
Leases ” means all leases, subleases, licenses and occupancy agreements, including all amendments, extensions, renewals, guaranties, and other agreements with respect thereto, pursuant to which an Asset Seller (to the extent primarily used in the Business) or any of the Target Companies or any of the Target Subsidiaries holds any material Leased Real Property.
 
Lien ” means any mortgage, pledge, lien, security interest, easement, adverse claim, right of first refusal, or similar encumbrance, restriction or limitation, other than (i) liens for Taxes not yet due and payable or for Taxes that the taxpayer is contesting through appropriate proceedings and (ii) restrictions under the Securities Act and state securities Laws regarding the transfer of securities.
 
Losses ” means all loss, liability, claim, damage or expense, including reasonable legal fees, costs and expenses, whether or not relating to Third Party Claims, incurred in the investigation or defense of any of the same.
 
Manufacturing Facilities ” means the facilities of the Target Companies or the Target Subsidiaries located in Copenhagen, Denmark; Oslo, Norway; Budapest, Hungary; and Taizhou, People’s Republic of China.
 
Marketing Material ” has the meaning set forth in Section 6(f) below.
 
Material Adverse Effect ” or “ Material Adverse Change ” means any effect or change that is or would reasonably be expected to be materially adverse to the business, assets, results of operations or financial condition of the Business, taken as a whole; provided that none of the following shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been, a Material
 
 
 
Adverse Effect or Material Adverse Change:  any adverse change or effect arising from or relating to (1) the economy in general, (2) the economic, business, financial or regulatory environment generally affecting the industry in which the Business operates, (3) an act of terrorism or an outbreak or escalation of hostilities or war (whether declared or not declared) or any natural disasters or any national or international calamity or crisis, except to the extent such effect involves the properties or assets of the Business, (4) changes in applicable Law or GAAP or the enforcement thereof after the date of this Agreement, (5) the failure of the Business to meet projections or forecasts, in and of itself (for the avoidance of doubt, any underlying cause for any such failure shall not be excluded by this clause (5)), (6) the announcement or pendency of the Transaction or this Agreement or the performance of and compliance with the terms of this Agreement, including any loss of employees, any cancellation of or delay in customer orders or any disruption in supplier, distributor, partner or similar relationships, (7) any labor strikes, (8) currency fluctuations or (9) any change or fluctuations in Parent’s share price in and of itself (for the avoidance of doubt, any underlying cause for any such change or fluctuation arising from or relating to the business, assets, results of operations or financial condition of the Business shall not be excluded from this clause (9)); except in the case of clauses (1) and (2) to the extent that such effect has a materially disproportionate impact on the Business relative to other participants in the industry in which the Business operates.
 
Material Contract ” has the meaning set forth in Section 4(l) below.
 
Material Intellectual Property ” has the meaning set forth in Section 4(k)(i) below.
 
Material Technology ” has the meaning set forth in Section 4(k)(ii) below.
 
Maximum Working Capital Amount ” has the meaning set forth in Section 2(b)(iii) below.
 
Minimum Working Capital Amount ” has the meaning set forth in Section 2(b)(iv) below.
 
Negative Initial Adjustment ” has the meaning set forth in Section 2(b)(iv) below.
 
Net Cash Balance ” has the meaning set forth in Section 2(g)(v) below.
 
Notice of Disagreement ” has the meaning set forth in Section 2(g)(iii) below.
 
Noncontrolling Party ” has the meaning set forth in Section 9(f)(iv) below.
 
Non-Income Taxes ” means Taxes other than Income Taxes.
 
Otdelholdco ” has the meaning set forth in the preface above.
 
 
 
 
Otdenholdco ” has the meaning set forth in the preface above.
 
Otnorbidco ” has the meaning set forth in the preface above.
 
Owned Real Property ” means all land, together with all buildings, structures, improvements, and fixtures located thereon, and all easements and other rights and interests appurtenant thereto, owned by an Asset Seller or any of the Target Companies or the Target Subsidiaries and primarily used in the Business, other than any Retained Real Property.
 
Parent ” has the meaning set forth in the preface above.
 
Party ” has the meaning set forth in the preface above.
 
Pension Obligations ” means the unfunded portion of the pension obligations of the Target Companies and Target Subsidiaries calculated on a projected benefit obligation basis; provided , that for the purposes of determining the amount of such liabilities as of any date, the methods and assumptions used in calculating such amount shall be the same methods and assumptions employed by Parent in preparing Parent’s audited financial statements (including the footnotes thereto) as of December 31, 2007.
 
Permitted Liens ” means (i) such Liens as are set forth in Section 1(G) of the Disclosure Schedule (all of which shall be discharged at or prior to Closing), (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business, Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business and Liens for Taxes, (iii) other imperfections of title or encumbrances, if any, that, individually or in the aggregate, do not impair, and are not reasonably likely to impair, the continued use and operation of the assets to which they relate in the conduct of the Business as currently conducted, (iv) leases, subleases and similar agreements set forth on Section 4(j) of the Disclosure Schedule or  that may be entered into consistent with Section 5(d) of the Disclosure Schedule, (v) easements, covenants, rights-of-way and other similar restrictions of record and (vi) (A) zoning, building and other similar restrictions and (B) Liens that have been placed by any developer, landlord or other third party on property over which Parent or one of its Subsidiaries has easement rights or on any Leased Real Property and subordination or similar agreements relating thereto.
 
Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity or a Governmental Entity (or any department, agency, or political subdivision thereof).
 
Positive Initial Adjustment ” has the meaning set forth in Section 2(b)(iii) below.
 
 
 
 
Post-Closing Tax Period ” means all Tax periods beginning on or after the Closing Date and the portion of any Straddle Period beginning on and including such Closing Date.
 
Pre-Closing Restructuring ” has the meaning set forth in Section 5(a) of the Disclosure Schedule .
 
Pre-Closing Restructuring Denial ” has the meaning set forth in Section 5(a) of the Disclosure Schedule .
 
Pre-Closing Tax Period ” means all Tax periods ending before the Closing Date and the portion of any Straddle Period ending before and excluding such Closing Date.
 
Preliminary Purchase Price ” has the meaning set forth in Section 2(b) below.
 
Products ” means the products of the Business for which a filing or submission has been made to a Regulatory Authority or an approval or certification has been received from a Regulatory Authority.
 
Property Taxes ” has the meaning set forth in Section 9(d)(i) below.
 
Proposed Allocation ” has the meaning set forth in Section 9(l)(ii) below.
 
Purchase Price ” has the meaning set forth in Section 2(g)(iv) below.
 
Quotaholders Agreement ” has the meaning set forth in Section 5(a) of the Disclosure Schedule .
 
Real Property ” means, collectively, the Leased Real Property and the Owned Real Property.
 
Records ” has the meaning set forth in Section 1(A) of the Disclosure Schedule.
 
Regulatory Authority ” has the meaning set forth in Section 4(s)(i) below.
 
Required Financial Information ” means financial and other information regarding the Business of the type and in the form customarily included in confidential information memoranda used to syndicate bank credit facilities similar to the Debt Financing and customary “know your customer” and similar requirements; provided , however , that Required Financial Information shall not include any audited financial information.
 
Restricted Assets ” shall have the meaning set forth in Section 2(d).
 
 
 
Retained Real Property ” means the following facilities used in the Business, which are owned by Parent or its Affiliates and shall not be transferred to Buyer:  Parent’s Warehouse and Distribution Facility located at 400 State Street, Chicago Heights, Illinois 60411, in which Parent’s animal health division performs certain services for the Business.
 
Retention Arrangements ” means those letter agreements issued to Employees of the Business and listed in Section 6(g)(xi)(A) of the Disclosure Schedule.
 
Retention Threshold ” has the meaning set forth in Section 6(g)(xi)(A) of the Disclosure Schedule.
 
SEC ” has the meaning set forth in Section 3(a) below.
 
Securities Act ” means the Securities Act of 1933, as amended.
 
Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended.
 
Seller Employee Benefit Plan ” means each Employee Benefit Plan that (a) any of the Asset Sellers or the Target Companies or the Target Subsidiaries maintains or which any of the Asset Sellers or the Target Companies or the Target Subsidiaries participates in or to which they contribute and (b) covers any Employees of the Business or their beneficiaries.
 
Seller Indemnitee ” has the meaning set forth in Section 8(c) below.
 
Seller Name ” has the meaning set forth in Section 6(f) below.
 
Sellers ” means the Asset Sellers and the Share Seller, collectively.
 
September Financial Statements ” has the meaning set forth in Section 4(f)(i) below.
 
Severance Obligations ” means the unpaid portion of the liabilities of the Target Companies and Target Subsidiaries under the contracts listed in Section 1(H) of the Disclosure Schedule.
 
Share Seller ” has the meaning set forth in the preface above.
 
Sponsor Funds ” has the meaning set forth in the preface above.
 
Statement ” has the meaning set forth in Section 2(g)(i) below.
 
Straddle Period ” has the meaning set forth in Section 9(d) below.
 
Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without
 
 
 
 
 
regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be or control any managing director or general partner of such business entity (other than a corporation).  The term “ Subsidiary ” shall include all Subsidiaries of such Subsidiary.
 
Target Companies ” has the meaning set forth in the preface above.
 
Target Company Benefit Plan ” shall have the meaning set forth in Section 4(n)(i) below.
 
Target Company Severance Plans ” shall have the meaning set forth in Section 6(g)(v) below.
 
Target Shares ” means the shares of capital stock of the Target Companies.
 
Target Subsidiaries ” has the meaning set forth in the preface above.
 
Tax ” or “ Taxes ” means any U.S. federal, state or local, or non-U.S. tax, including taxes with respect to income, profits, gains, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), capital duty, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, duties resulting from liability assessments by a Taxing Authority or other tax, including any interest, penalty, or addition thereto.
 
Tax Indemnified Party ” has the meaning set forth in Section 9(f)(i) below.
 
Tax Indemnifying Party ” has the meaning set forth in Section 9(f)(i) below.
 
Tax Proceeding ” has the meaning set forth in Section 9(f)(i) below.
 
Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
 
 
 
Taxing Authority ” means any Governmental Entity exercising any authority to impose, regulate or administer the imposition of Taxes.
 
Technology ” has the meaning set forth in Section 4(k)(iv) below.
 
Termination Fee ” has the meaning set forth in Section 1(I) of the Disclosure Schedule .
 
Third Party Claim ” has the meaning set forth in Section 8(d)(i)(A) below.
 
TOGC ” means the transfer by any Asset Seller of assets within Article 5(8) of European Union Directive 77/388 which is as a consequence of the relevant national Law not subject to VAT.
 
Transaction ” has the meaning set forth in the preface above.
 
Transfer Taxes ” has the meaning set forth in Section 9(k) below, and for the avoidance of doubt does not include VAT.
 
Transferred Employees ” means those Employees of the Business who, as of the Closing Date, remain or become employees of the Buyer Entities whether by operation of Law or by acceptance of the Buyer Entities’ offer of employment pursuant to Section 6(g).
 
Transition Services Agreement ” shall have the meaning set forth in Section 5(j).
 
United States ” or “ U.S. ” means the United States of America and its territories and possessions.
 
VAT ” means value added Tax applied by any jurisdiction pursuant to European Union Directives 67/227 and 77/388, as amended or any similar value-added Tax imposed by a jurisdiction outside the European Union.
 
Working Capital ” has the meaning set forth in Section 2(g)(v) below.
 
Working Capital Principles ” has the meaning set forth in Section 2(g)(v) below.
 
Working Capital Schedule ” has the meaning set forth in Section 2(g)(v) below.
 
 
(a)   Basic Transaction .   On and subject to the terms and conditions of this Agreement, for the consideration specified below in Section 2(b), (i) Otnorbidco agrees to purchase from the Share Seller (and any other entity which Parent may designate as an
 
 
 
additional Share Seller as a result of the Pre-Closing Restructuring), and the Share Seller agrees to sell to Otnorbidco (and Parent agrees to cause any other entity that is designated by Parent as an additional Share Seller as a result of the Pre-Closing Restructuring to sell), all of the Target Shares free and clear of all Liens, (ii) Otnorbidco agrees to purchase from the Asset Sellers, and the Asset Sellers agree to sell to Otnorbidco, the Assumed Intercompany Receivables free and clear of all Liens (other than Permitted Liens), (iii) Otdelholdco agrees to purchase from the Asset Sellers, and the Asset Sellers agree to sell to Otdelholdco, the Acquired Assets (other than the Acquired Intercompany Receivables) free and clear of all Liens (other than Permitted Liens), and (iv) Buyer agrees to assume and become responsible for all of the Assumed Liabilities at the Closing, without recourse to Parent or its Subsidiaries (other than the Target Companies or Target Subsidiaries), except as otherwise expressly set forth in this Agreement, and thereafter to pay, perform and discharge when due, the Assumed Liabilities.
 
(b)   Preliminary Purchase Price.   Buyer agrees to pay to the Asset Sellers and the Share Seller (and any other entity which Parent may designate as an additional Share Seller as a result of the Pre-Closing Restructuring), at the Closing, by delivery of cash payable by wire transfer or delivery of other immediately available funds, an amount equal to:
 
(i)  $395,000,000,
 
(ii)  plus, if the estimate of the Net Cash Balance as of the close of business on the last business day prior to the Closing Date prepared by Parent and delivered to Buyer at least three business days prior to the Closing Date (the “ Estimated Closing Net Cash Balance ”) is positive, an amount equal to the Estimated Closing Net Cash Balance, or minus, if the Estimated Closing Net Cash Balance is negative, an amount equal to the Estimated Closing Net Cash Balance,
 
(iii)  plus, if the estimate of the Working Capital as of the close of business on the last business day prior to the Closing Date prepared by Parent and delivered to Buyer at least three business days prior to the Closing Date (the “ Estimated Closing Working Capital ”) exceeds $41,600,000   (the “ Maximum Working Capital Amount ”), the amount by which the Estimated Closing Working Capital exceeds the Maximum Working Capital Amount (such amount, if any, the “ Positive Initial Adjustment ”),
 
(iv)  minus, if the Estimated Closing Working Capital is less than $39,600,000   (the “ Minimum Working Capital Amount ”), the amount by which the Minimum Working Capital Amount exceeds the Estimated Closing Working Capital (such amount, if any, the “ Negative Initial Adjustment ”),
 
(such amount as adjusted, the “ Preliminary Purchase Price ”) allocated among the Target Shares and the Acquired Assets in accordance with the Allocation (set forth in Section 9(l) below) if the Allocation is completed on or prior to the Closing Date. If the Allocation is not completed on the Closing Date, the Preliminary Purchase Price shall be paid in such amounts and to such accounts as the Asset Sellers and the Share Seller (and
 
 
 
 
any other entity which Parent may designate as an additional Share Seller as a result of the Pre-Closing Restructuring) shall direct.  The Preliminary Purchase Price shall be subject to post-Closing adjustment as set forth below in Section 2(g).
 
(c)   Pre-Closing Transfers.    Upon the terms and subject to the conditions set forth in this Agreement, prior to the Closing, Parent shall, and shall cause its Subsidiaries (including the Target Companies and Target Subsidiaries) to, make such contributions, transfers, assignments and acceptances, such that, upon the consummation of such contributions, transfers, assignments and acceptances, Parent or its designees shall own the Excluded Assets and shall be responsible for the Excluded Liabilities, without further recourse to any Target Company or Target Subsidiary, other than as contemplated by Section 6(a).  In furtherance of the foregoing, (i) Parent shall retain, and neither Buyer nor any Target Company or Target Subsidiary shall acquire, and no Target Company or Target Subsidiary shall retain, any interest in the Excluded Assets and (ii) Parent shall retain, and neither Buyer nor any Target Company or Target Subsidiary shall assume, and no Target Company or Target Subsidiary shall retain, any Excluded Liability, in each case, other than as contemplated by Section 6(a).
 
(d)   Restricted Assets.    Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign or transfer any interest in any asset, claim, right or benefit the assignment or transfer of which is otherwise contemplated by this Agreement if such assignment or transfer (or attempt to make such an assignment or transfer) without the consent or approval of a third party would constitute a breach or other contravention of the rights of such third party, or affect adversely the rights of any Party or their Affiliates thereunder (such assets being collectively referred to herein as “ Restricted Assets ”); and any assignment or transfer of a Restricted Asset shall be made subject to such consent or approval being obtained.  If any such consent or approval is not obtained prior to the Closing, (i) Parent shall continue, upon request of Buyer, to use its reasonable best efforts to cooperate with Buyer in attempting to obtain any such consent or approval and (ii) to the extent practicable, the Buyer and Parent agree to negotiate in good faith with respect to alternative arrangements (such as a license, sublease or operating agreement) until such time as such consent or approval has been obtained which result in Buyer or its Affiliates receiving all the benefits and bearing all the costs, liabilities and burdens with respect to any such Restricted Asset; provided that Buyer shall pay or satisfy all the reasonable and documented out-of-pocket costs, expenses, obligations and liabilities incurred by Parent or its Affiliates in connection with any such alternative arrangements; provided further that Parent shall have no obligation to pay money or make any concessions to obtain consents.  Nothing in this Section 2(d) shall be deemed a waiver by Buyer to receive an effective assignment of the Acquired Assets upon the receipt of any such consent or approval nor shall any of the Restricted Assets be deemed Excluded Assets for any other purposes hereunder.
 
(e)   The Closing.    The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Cravath, Swaine & Moore LLP in New York, New York commencing at 10:00 a.m. local time on the fifth business day following the satisfaction or waiver of all conditions to the obligations of the Parties
 
 
 
 
to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself) or such other date as Buyer and Parent may mutually determine (the “ Closing Date ”).  The Closing shall be deemed to occur and be effective in each relevant jurisdiction as of the close of business on the last business day prior to the Closing Date in each such jurisdiction and Buyer will be deemed to have acquired all the Acquired Assets and Target Shares and assumed all the Assumed Liabilities as of such time.
 
(f)   Deliveries at Closing.   At the Closing, (i) Parent will deliver to Buyer the certificates referred to in Section 7(a) below, (ii) Buyer will deliver to Parent the certificates referred to in Section 7(b) below, (iii) Parent will deliver to Buyer stock certificates representing all of the Target Shares, endorsed in blank or accompanied by duly executed assignment documents or a certified true copy of the shareholders register evidencing the registered transfer of the Target Shares and such other documents as may be required to evidence the transfer of the Target Shares by applicable Law, (iv) Parent or Parent’s Subsidiaries shall execute, acknowledge (if appropriate), and deliver to Buyer (A) assignments in reasonable form, including a Bill of Sale in the form attached hereto as Exhibit A and (B) such other documents as Buyer and its counsel may reasonably request to demonstrate satisfaction of the conditions and compliance with the covenants set forth in this Agreement, including the sale, transfer, delivery and assumption of the Target Shares, the Acquired Assets and the Assumed Liabilities to or by Buyer or its designees; (v) Parent shall deliver to Buyer the written resignation of each member of the Board of Directors, Board of Managers or the equivalent governing body, as applicable, of each of the Target Companies and the Target Subsidiaries; (vi) Buyer will execute, acknowledge (if appropriate), and deliver to Parent (A) a Bill of Sale in the form attached hereto as Exhibit A and (B) such other documents as Parent and its counsel may reasonably request to demonstrate satisfaction of the conditions and compliance with the covenants set forth in this Agreement, including the sale, transfer, delivery and assumption of the Target Shares, the Acquired Assets and the Assumed Liabilities to or by Buyer or its designees; and (vii) Buyer will deliver to Parent the consideration specified in Section 2(b) above.
 
(g)   Post-Closing Purchase Price Adjustment.    (i)  Within 60 days after the Closing Date, Buyer shall prepare and deliver to Seller a statement (the “ Statement ”) setting forth (A) an unaudited balance sheet of the Business as of the close of Business on the last business day prior to the Closing Date, (B) the Working Capital as of the close of business on the last business day prior to the Closing Date (the “ Closing Working Capital ”) and (C) the Net Cash Balance of the Business as of the close of business on the last business day prior to the Closing Date (the “ Closing Net Cash Balance ”).
 
(ii)  Parent shall use reasonable best efforts to close out all foreign exchange contracts held by any Target Company or Target Subsidiary prior to the Closing Date.  In the event Parent is unable to cause any such contracts to be closed out prior to the Closing Date, on the Closing Date Parent shall deliver to Buyer a list of the foreign exchange contracts held by any Target Company or Target Subsidiary as of the close of business on the business day prior to the Closing Date as part of the treasury activities of Parent and its Subsidiaries (the
 
 
 
        
“FX Contracts”).  Buyer and its Subsidiaries shall maintain the FX Contracts for their duration, including paying any notional amounts due or receiving any notional amounts from the counterparty under the FX Contracts and closing out the positions as required pursuant to the terms of the FX Contracts.  Within 60 days following the Closing Date, and only after all positions under the FX Contracts are closed, the Buyer shall deliver to Parent a statement showing all notional amounts paid and received under each of the FX Contracts (including amounts paid or received when the contract is closed) (the “FX Statement”) and the aggregate amount of the net gain or loss reflected by such notional amounts paid and received (the “FX Amount”).
 
(iii)  During the 30 day period following Parent’s receipt of the Statement, Parent and its accountants shall be permitted to review the working papers of Buyer and its accountants relating to the Statement; provided that Parent and its advisors, including its accountants, shall have executed all release letters reasonably requested by Buyer’s accountants in connection therewith.  During the 30 day period following Parent’s receipt of the FX Statement, Parent shall be permitted to review the books and records of Buyer and its Subsidiaries relating to the FX Statement.  The Statement shall become final and binding upon the Parties on the 30th day following delivery thereof to Parent, unless Parent gives written notice of its disagreement with the Statement (the “ Notice of Disagreement ”) to Buyer prior to such date.  Any Notice of Disagreement shall be signed by Parent and shall (A) specify in reasonable detail the nature of any disagreement so asserted, (B) only include disagreements based on mathematical errors or based on the Closing Working Capital or Closing Net Cash Balance not being calculated in accordance with this Section 2(g) and (C) specify what Parent reasonably believes is the correct amount of the Closing Working Capital and Closing Net Cash Balance based on the disagreements set forth in the Notice of Disagreement, including a reasonably detailed description of the adjustments applied to the Statement in calculating such amount.  The FX Statement shall become final and binding upon the Parties on the 30th day following delivery thereof to Parent, unless Parent gives written notice of its disagreement with the FX Statement (the “ FX Notice of Disagreement ”) to Buyer prior to such date.  Any FX Notice of Disagreement shall be signed by Parent and shall (A) specify in reasonable detail the nature of any disagreement so asserted, (B) only include disagreements based on mathematical errors or based on the FX Amount being incorrectly calculated and (C) specify what Parent reasonably believes is the correct FX Amount based on the disagreements set forth in the FX Notice of Disagreement, including a reasonably detailed description of the adjustments applied to the FX Statement in calculating such amount.  If the Notice of Disagreement or the FX Notice of Disagreement, as applicable, is received in a timely manner, then the Statement or the FX Statement, as applicable (as revised in accordance with this sentence), shall become final and binding upon Buyer and Parent on the earlier of (A) the date Buyer and Parent resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or the FX Notice of Disagreement, as applicable, or (B) the date any disputed matters are finally resolved in writing by the Accounting Firm.  During the 30 day periods following
 
 
 
 
the delivery of the Notice of Disagreement and the FX Notice of Disagreement, Buyer and Parent shall seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement or the FX Notice of Disagreement, as applicable.  During the 30 day period following delivery of the Notice of Disagreement, Buyer and its accountants shall have access to the working papers of Parent prepared in connection with the Notice of Disagreement; provided that Buyer and its advisors, including its accountants, shall have executed all release letters reasonably requested by Parent’s accountants in connection therewith.  At the end of such 30 day periods, Buyer and Parent shall submit to an independent accounting firm (the “ Accounting Firm ”) for resolution any matters that remain in dispute and which were properly included in the Notice of Disagreement and the FX Notice of Disagreement, in the form of a written brief. The Accounting Firm shall be KPMG or, if such firm is unable or unwilling to act, such other internationally recognized independent public accounting firm as shall be agreed upon by Parent and Buyer in writing.  Buyer and Parent shall jointly instruct the Accounting Firm that it (i) shall review only the matters that were properly included in the Notice of Disagreement and the FX Notice of Disagreement and which remain unresolved, (ii) shall make its determination in accordance with the requirements of this Section 2(g) and (iii) shall render its decision within 30 days from the submission of such matters.  Judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The fees, costs and expenses of the Accounting Firm incurred pursuant to this Section 2(g) shall be borne 50% by Parent and 50% by Buyer.
 
The fees, costs and expenses of Parent incurred in connection with its review of the Statement, its preparation and certification of any Notice of Disagreement, its review of the FX Statement, its preparation and certification of any FX Notice of Disagreement and its preparation of any written brief submitted to the Accounting Firm shall be borne by Parent, and the fees, costs and expenses of Buyer incurred in connection with its preparation of the FX Statement, its review of any FX Notice of Disagreement, its preparation of the Statement, its review of any Notice of Disagreement and its preparation of any written brief submitted to the Accounting Firm shall be borne by Buyer.
 
(iv)  The Preliminary Purchase Price shall be adjusted as follows:
 
(A)  if the Closing Working Capital exceeds the Maximum Working Capital Amount, the Preliminary Purchase Price shall be increased by the sum of (I) the amount by which the Closing Working Capital exceeds the Maximum Working Capital Amount minus (II) the Positive Initial Adjustment (if any) plus (III) the Negative Initial Adjustment (if any), or decreased by the absolute value of such sum if such sum is a negative amount,
 
 
 
 
(B)  if the Closing Working Capital is less than the Minimum Working Capital Amount, the Preliminary Purchase Price shall be decreased by the sum of (I) the amount by which the Minimum Working Capital Amount exceeds the Closing Working Capital minus (II) the Negative Initial Adjustment (if any) plus (III) the Positive Initial Adjustment (if any), or increased by the absolute value of such sum if such sum is a negative amount,
 
(C)  if the Closing Working Capital is between the Minimum Working Capital Amount and the Maximum Working Capital Amount, the Preliminary Purchase Price shall be increased by the amount of the Negative Initial Adjustment (if any) or decreased by the amount of the Positive Adjustment (if any),
 
(D)  if the Closing Net Cash Balance exceeds the Estimated Closing Net Cash Balance, the Preliminary Purchase Price shall be increased by such excess,
 
(E)  if the Estimated Closing Net Cash Balance exceeds the Closing Net Cash Balance, the Preliminary Purchase Price shall be decreased by such excess, and
 
(F)  the Preliminary Purchase Price shall be increased by the FX Amount if a net gain or decreased by the FX Amount if a net loss,
 
(the Preliminary Purchase Price as so adjusted shall hereinafter be referred to as the “ Purchase Price ”).  If the Preliminary Purchase Price is less than the Purchase Price, Buyer shall, and if the Preliminary Purchase Price is more than the Purchase Price, Parent shall, within 10 business days after the Statement becomes final and binding on the Parties, make payment by wire transfer of immediately available funds of the amount of such difference, together with interest thereon at a rate equal to the rate of interest from time to time announced publicly by Citibank, N.A., as its prime rate, calculated on the basis of the actual number of days elapsed divided by 365, from (and including) the Closing Date through (but not including) the date of payment.  The difference between the Purchase Price and the Preliminary Purchase Price shall be allocated among the Target Shares and the Acquired Assets in accordance with the Allocation (set forth in Section 9(l) below) if the Allocation is completed at the time such difference is paid.  If the purchase price adjustment contemplated by this Section 2(g) has to be paid by Buyer and the Allocation is not completed at the time such purchase price adjustment is paid, the difference between the Purchase Price and the Preliminary Purchase Price shall be paid in such amounts and to such accounts as Sellers shall direct.
 
(v)  “ Working Capital ” means, as of any date, the sum of net accounts receivable, inventories, prepaid expenses and other current assets, accounts payable and accrued expenses of the Business as adjusted in accordance with Section 2(g)(v) of the Disclosure Schedule, in each case, as of the close of business on such date; provided , that “Working Capital” shall not include any
 
 
 
 
item included in the Net Cash Balance, any gains or losses under an FX Contract, any refund, credit, or other asset relating to any Income Tax or any accrual with respect to Income Taxes for any Pre-Closing Tax Period, deferred tax assets or liabilities, accrued amounts for prepaid insurance, any amount payable or receivable pursuant to Intercompany Receivables, Intercompany Payables or Assumed Intercompany Receivables, or any liabilities under the Retention Arrangements or in respect of Severance Obligations, Bonus Obligations, Early Retirement Obligations or Pension Obligations. The term “ Net Cash Balance ” means, as of any date, (i) all cash and cash equivalents minus (ii) any outstanding short term debt and long term debt (which shall not include trade payables or capital or finance lease obligations related to the Business, or any amounts payable or receivable pursuant to Intercompany Receivables, Intercompany Payables, Assumed Intercompany Receivables or any Intercompany Assumed Agreement) minus (iii) any accrued liabilities with respect to the Bonus Obligations to the extent the Bonus Obligations are not paid prior to Closing minus (iv) liabilities in respect of the Severance Obligations, the Pension Obligations and the Early Retirement Obligations, in each case as of the close of business on such date.   Working Capital and Net Cash Balance shall be calculated in accordance with GAAP but subject to the methods, procedures, adjustments and practices, consistently applied, as the corresponding line items of the working capital and net cash balance statement as of September 30, 2007 set forth in Section 2(g)(v) of the Disclosure Schedule (the “ Working Capital Schedule ”), which shows the calculation of Working Capital and Net Cash Balance based on the unaudited September 30, 2007 balance sheet included as part of the September Financial Statements (except as otherwise provided in Section 2(g)(v) of the Disclosure Schedule), whether or not such methods, procedures, adjustments and practices are in accordance with GAAP (it being understood that, in the event of any inconsistency between GAAP and the methods, procedures, adjustments and practices pursuant to which the Working Capital Schedule is prepared, the latter shall prevail).  The foregoing principles are referred to in this Agreement as the “ Working Capital Principles ”.  The scope of the disputes to be resolved by the Accounting Firm shall be limited to whether there were mathematical errors in the Statement or the FX Statement and whether the calculation of the Closing Working Capital and Closing Net Cash Balance was done in accordance with the Working Capital Principles and the FX Amount was calculated in accordance with this Section 2(g), and the Accounting Firm is not to make any other determination, including any determination as to whether GAAP was followed in calculating the Maximum Working Capital Amount, the Minimum Working Capital Amount, the FX Amount, the Estimated Closing Working Capital, the Estimated Closing Net Cash Balance, the Working Capital Schedule, the Financial Statements or the FX Statement or as to whether the Maximum Working Capital Amount or Minimum Working Capital Amount was correctly determined, or conduct any review of or make any adjustments to the methods or assumptions used to calculate the Pension Obligations.  Any item included in, or any omission from, the line items of the Working Capital Schedule that is based upon errors of fact or mathematical errors or that is not in accordance with GAAP
 
 
 
 
shall be retained for purposes of calculating the Closing Working Capital and the Closing Net Cash Balance, except as provided in Section 2(g)(v) of the Disclosure Schedule.
 
(vi)  Following the Closing, Buyer shall not take any action with respect to the accounting books and records of the Business on which the Statement and the FX Statement is to be based that would obstruct, prevent or otherwise affect the results of the procedures set forth in this Section 2(g) (including the amount of the Closing Working Capital, Closing Net Cash Balance, the FX Amount or any other amount included Statement or the FX Statement or the preparation or review of the Statement or the FX Statement).  From and after the Closing Date through the resolution of any adjustment to the Preliminary Purchase Price contemplated by this Section 2(g), Buyer shall (i) assist, and shall cause its Subsidiaries (including the Target Companies and the Target Subsidiaries) to assist, Parent, its accountants, advisors and other representatives in its review of the Statement and the FX Statement and (ii) afford to Parent, its accountants, advisors and other representatives, reasonable access during normal business hours to the personnel, properties, books and records of the Business to the extent relevant to the review of the Statement and the FX Statement or the adjustment to the Preliminary Purchase Price contemplated by this Section 2(g).
 
 
(a)   Parent’s Representations and Warranties.    Except (a) as set forth in the disclosure schedule delivered by Parent to Buyer on the date hereof (the “ Disclosure Schedule ”) (each section of which qualifies the correspondingly numbered representation, warranty or covenant and such other representations, warranties or covenants to the extent it is reasonably apparent on the face of such disclosure that a matter is relevant to the information called for by such other representation, warranty or covenant) or (b) as disclosed in the reports, schedules, forms, statements and other documents filed or furnished by Parent with or to the United States Securities and Exchange Commission (the “ SEC ”) since January 1, 2007 and publicly available prior to the date of this Agreement, Parent hereby represents and warrants to Buyer as of the date of this Agreement and as of the Closing Date (except to the extent a representation or warranty is expressly made as of an earlier date, in which case such representation or warranty shall be deemed made as of that earlier date) as follows:
 
(i)   Organization of Parent and Certain of its Subsidiaries.   Each Asset Seller and Share Seller is duly organized, validly existing, and in good standing under the Laws of the jurisdiction of its incorporation (or other formation).
 
(ii)   Authorization of Transaction.   Parent and each of its Subsidiaries has full power and authority (including full corporate or other entity power and authority) to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to perform its obligations hereunder and thereunder.  The execution, delivery and performance of this Agreement and each of the Ancillary Agreements and all other agreements contemplated hereby and
 
 
 
 
thereby have been duly authorized by Parent and its Subsidiaries that are party thereto.  The board of directors of Parent has adopted a resolution approving this Agreement and the transactions contemplated hereby.  Each of the Asset Sellers and the Share Seller has duly executed and delivered this Agreement and, prior to the Closing, each of Parent’s Subsidiaries will have duly executed and delivered each Ancillary Agreement to which it is, or is specified to be, a party, and, assuming their due execution and delivery by Buyer or its Affiliates, as applicable, this Agreement constitutes each of the Asset Sellers’ and the Share Seller’s, and each Ancillary Agreement to which any of them is, or is specified to be, a party will, after execution and delivery by Parent and/or each such Subsidiary, constitute Parent’s and/or such Subsidiary’s, legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
 
(iii)   Brokers’ Fees.   Except for Banc of America Securities LLC, whose fees and commissions will be paid by Parent, neither Parent nor any of Parent’s Subsidiaries has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement or the Ancillary Agreements.
 
(iv)   Noncontravention.   The Sellers are not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Entity in connection with the transactions contemplated by this Agreement or the Ancillary Agreements, other than (A) compliance with and filings under the Hart-Scott-Rodino Act and compliance with and filings and approvals under applicable foreign merger control or competition Laws (the “ Foreign Merger Control Laws ”), (B) compliance with and filings under the Securities Exchange Act and the rules and regulations promulgated thereunder, (C) compliance with and filings or notices required by the rules and regulations of the New York Stock Exchange, (D) compliance with and filings with the relevant Chinese authorities in respect of the equity transfer of the Chinese Sub, (E) those that may be required solely by reason of Buyer’s (as opposed to any third party’s) participation in the Transaction and the other transactions contemplated by this Agreement and by the Ancillary Agreements, (F) the filing of the relevant instruments in the requisite jurisdictions in order to effect guarantees in respect of, or to create or perfect Liens granted to secure, the Indebtedness and other obligations incurred as a result of the consummation of the Debt Financing and (G) those the failure of which to be obtained or made would not, individually and in the aggregate, have or reasonably be expected to have a material adverse effect on the ability of Parent to perform its obligations under this Agreement or prevent or materially delay the consummation of the Transaction and the other transactions contemplated by this Agreement.  Neither the execution and delivery of this Agreement and the Ancillary Agreements, nor the consummation of the transactions contemplated hereby or thereby, will (i) subject to the governmental filings or other matters referred to in the immediately preceding sentence, violate
 
 
 
 
(A) any Judgment or Law applicable to the Sellers or (B) any provision of the charter or bylaws, or other governing documents, of any Seller or (ii) conflict with, result in a breach of, constitute a default under (with or without notice or lapse of time or both), result in the acceleration of or the loss of any benefit under, require any third party consent under, or create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument, or other arrangement to which any of the Sellers is a party, other than, in the case of clauses (i)(A) and (ii) above, any such instances that would not have or reasonably be expected to have a material adverse effect on the ability of Sellers to perform their obligations under this Agreement or prevent or materially delay the consummation of the Transactions and the other transactions contemplated by this Agreement.
 
(v)   Target Shares.   Except for the Alpharma Credit Agreement Lien (which shall be released as of the Closing Date), each of the Target Shares is held of record and owned beneficially by the Share Seller (and any other entity which Parent may designate as an additional Share Seller as a result of the Pre-Closing Restructuring) free and clear of any Liens and all capital stock of the Target Subsidiaries is held of record and owned beneficially by the Target Companies or Target Subsidiaries free and clear of any Liens.  Upon delivery of any payment for the Target Shares at Closing, Buyer will acquire good and valid title to all of the Target Shares, free and clear of any Liens (other than those Liens created by Buyer).  Except for the Alpharma Credit Agreement Lien, neither Parent nor any of its Subsidiaries is a party to any option, warrant, purchase right, or other contract or commitment (other than this Agreement) that could require Parent or any of its Subsidiaries to sell, transfer, or otherwise dispose of any capital stock or equity interests (as the case may be) of the Target Companies or Target Subsidiaries.  Neither Parent nor any of its Subsidiaries is a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any capital stock of the Target Companies or Target Subsidiaries.
 
(vi)   Litigation .  As of the date of this Agreement, there are not any (a) outstanding Judgments applicable to the Sellers, (b) suits, actions or other proceedings pending or, to the Knowledge of Parent, threatened against the Sellers or (c) investigations by any Governmental Entity that are, to the Knowledge of Parent, pending or threatened against the Sellers that, individually or in the aggregate, are reasonably likely to have a material adverse effect on the ability of the Sellers to perform their obligations under this Agreement or prevent or materially delay the consummation of the Transaction and the other transactions contemplated by this Agreement.
 
 
 
 
(b)   Buyer’s Representations and Warranties .    Buyer hereby represents and warrants to Sellers as of the date of this Agreement and as of the Closing Date (except to the extent a representation or warranty is expressly made as of an earlier date, in which case such representation or warranty shall be deemed made as of that earlier date) as follows:
 
(i)   Organization of Buyer.   Buyer is a corporation (or other entity) duly organized, validly existing, and in good standing under the Laws of the jurisdiction of its incorporation (or other formation).
 
 (ii)   Authorization of Transaction.   Buyer has full power and authority (including full corporate or other entity power and authority) to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to perform its obligations hereunder and thereunder and to consummate the Financing.  Buyer has duly executed and delivered this Agreement and, prior to the Closing, will have duly executed and delivered each Ancillary Agreement to which it is, or is specified to be, a party, and, assuming their due execution and delivery by Sellers, this Agreement constitutes, and each Ancillary Agreement to which it is, or is specified to be, a party will, after execution and delivery by Buyer, constitute, its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at Law.  The execution, delivery and performance of this Agreement and each of the Ancillary Agreements and all other agreements contemplated hereby or thereby, including the Financing have been duly authorized by Buyer.
 
(iii)   Non-contravention.   Neither the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party, nor the consummation of the transactions contemplated hereby or thereby, including the Financing, will (A) violate any Law or Judgment to which Buyer is subject (subject to the governmental filings and other matters referred to in the immediately following sentence) or any provision of its charter, bylaws, or other governing documents or (B) conflict with, result in a breach of, constitute a default under (with or without notice or lapse of time or both), result in the acceleration of or the loss of any benefit under, require any third party consent under, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Buyer is a party or by which it is bound or to which any of its assets is subject, except for such instances which would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or prevent or materially delay the consummation of the Transaction and the other transactions contemplated by this Agreement, including the Financing.  Buyer need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Entity in connection
 
 
 
 
 
with the transactions contemplated by this Agreement or any Ancillary Agreement, including the Financing or the other transactions contemplated hereby and thereby, other than (A) compliance with and filings under the Hart-Scott-Rodino Act and compliance with and filings and approvals under Foreign Merger Control Laws, (B) the filing of the relevant instruments in the requisite jurisdictions in order to effect guarantees in respect of, or to create or perfect Liens granted to secure, the Indebtedness and other obligations incurred as a result of the consummation of the Debt Financing and (C) those the failure of which to be obtained or made would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or prevent or materially delay the consummation of the Transaction and the other transactions contemplated by this Agreement, including the Financing.
 
(iv)   Litigation.   As of the date of this Agreement, there are not any (a) outstanding Judgments applicable to Buyer or any of its Affiliates, (b) suits, actions or other proceedings pending or, to the knowledge of Buyer, threatened against Buyer or any of its Affiliates or (c) investigations by any Governmental Entity that are, to the knowledge of Buyer, pending or threatened against Buyer or any of its Affiliates that would, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or prevent or materially delay the consummation of the Transaction and the other transactions contemplated by this Agreement, including the Financing.
 
(v)   Securities Act.   The Target Shares are being acquired for investment only and not with a view to any public distribution thereof, and Buyer shall not offer to sell or otherwise dispose of the Target Shares so acquired by it in violation of any of the registration requirements of the Securities Act.
 
(vi)   Financing.   Complete and correct executed copies of the Financing Commitments have been delivered to Parent on or prior to the date of this Agreement.  Buyer has delivered to Parent all written agreements, arrangements or understandings related to the Financing (a) in the case of any such agreements, arrangements or understandings entered into on or prior to the date of this Agreement, on or prior to the date of this Agreement and (b) in the case of any such agreements, arrangements or understandings entered into after the date of this Agreement, within three business days after the entry thereof; provided that Buyer may redact from any such documents, and omit from any such descriptions, the fee amounts payable to their Financing sources.  There are no conditions or other contingencies to the funding of the Financing (including in any oral agreements) other than those contained in the Financing Commitments (or in replacement commitments obtained by Buyer in compliance with Section 5(c)).  Except to the extent permitted by Section 5(c), none of the Financing Commitments (or any of the replacement commitments obtained by Buyer in compliance with Section 5(c)) has been amended, supplemented or otherwise modified and the commitments contained in the Financing Commitments (or the
 
 
 
 
 
commitments contained in replacement commitments obtained by Buyer in compliance with Section 5(c)) have not been reduced, terminated, withdrawn or rescinded in any respect.  The Financing Commitments (or replacement commitments obtained by Buyer in compliance with Section 5(c)) are in full force and effect and are the legal, valid and binding obligations of Buyer and, to Buyer’s knowledge, the applicable counterparties thereto.  No event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of Buyer under any term or condition of the Financing Commitments (or the replacement commitments obtained by Buyer in compliance with Section 5(c)) that would constitute the failure of any of the conditions to the Financing Commitments or would reasonably be expected to impair or delay the funding of the Financing Commitments.  Buyer has fully paid any commitment fees or other fees incurred in connection with the Financing that have become due and payable as of the date of this Agreement and will have fully paid all such fees due and payable as of the Closing Date on or prior to the Closing Date.  The Financing, when funded in accordance with the Financing Commitments (or replacement commitments obtained by Buyer in compliance with Section 5(c)), will provide funds at the Closing sufficient to consummate the Transaction and the other transactions contemplated by this Agreement and to pay the related fees and expenses associated therewith.  As of the date of this Agreement, Buyer has no reason to believe that any of the conditions or other contingencies to the Financing will not be satisfied upon the satisfaction or (to the extent permitted by applicable Law) waiver of the conditions set forth in Section 7 or that the Financing will not be available to Buyer at the Closing.
 
(vii)   Activities of Buyer.   Buyer was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, has not engaged in any business activities or conducted any operations (other than in connection with the transactions contemplated by this Agreement) and, prior to the Closing, will not have incurred liabilities or obligations of any nature (other than in connection with the transactions contemplated by this Agreement).
 
(viii)   No Knowledge of Misrepresentation or Omission.  As of the date of this Agreement, none of Buyer, its employees, agents or representatives has actual knowledge that any representation or warranty of Parent in this Agreement is not true and correct or there are any errors in or omissions from the Disclosure Schedule.
 
(ix)   No Other Representations and Warranties.   Except for the representations and warranties contained in Sections 3(a) and 4 or in any certificate delivered by Parent pursuant to this Agreement, Buyer acknowledges that none of Sellers nor any Person on behalf of Parent makes or has made any other express or implied representation or warranty with respect to the Transaction or the other transactions contemplated by this Agreement, with respect to Sellers or the Business or with respect to any other information provided or made available to Buyer in connection with the transactions contemplated by this Agreement (including in any “data rooms” or management
 
 
 
presentations).  None of Parent or its Affiliates shall have or be subject to any liability or indemnification obligation to Buyer or any other Person resulting from the distribution to Buyer, or Buyer’s use of, any such information.  Buyer acknowledges that, should the Closing occur, Buyer shall acquire the Target Shares and the Acquired Assets without any representation or warranty (including as to merchantability or fitness for any particular purpose), express or implied, at law or in equity, in an “as is” condition and on a “where is” basis, except as otherwise expressly represented or warranted in Sections 3(a) or 4 or in any certificate delivered by Parent pursuant to this Agreement.
 
(x)   Brokers’ Fees.   Except for Merrill Lynch International, whose fees and commissions will be paid by Buyer, Buyer and its Affiliates have no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement or the Ancillary Agreements.
 
SECTION 4.   Representations and Warranties Concerning the Business and the Target Companies and Target Subsidiaries .    Except (a) as set forth in the Disclosure Schedule (each section of which qualifies the correspondingly numbered representation, warranty or covenant and such other representations, warranties or covenants to the extent it is reasonably apparent on the face of such disclosure that a matter is relevant to the information called for by such other representation, warranty or covenant) or (b) as disclosed in the reports, schedules, forms, statements and other documents filed or furnished by Parent with or to the SEC since January 1, 2007 and publicly available prior to the date of this Agreement, Parent hereby represents and warrants to Buyer as of the date of this Agreement and as of the Closing Date (except to the extent a representation or warranty is expressly made as of an earlier date, in which case such representation or warranty shall be deemed made as of that earlier date) as follows:
 
(a)   Organization, Qualification, and Corporate Power .    Each of the Target Companies and the Target Subsidiaries are corporations duly organized, validly existing, and, to the extent applicable in such jurisdiction, in good standing under the Laws of the jurisdiction of their incorporation.  Each of the Target Companies and the Target Subsidiaries are duly authorized to conduct business and are in good standing (or of similar status to the extent such status exists in such company’s jurisdiction of formation) under the Laws of each jurisdiction where such qualification is required.  Each of the Target Companies and the Target Subsidiaries have full corporate power and authority to carry on the business in which they are engaged and to own, lease and use the properties owned and used by them.
 
(b)   Capitalization.   (i)  Section 4(b) of the Disclosure Schedule sets forth for each of the Target Companies and Target Subsidiaries (A) its name and jurisdiction of incorporation and (B) the entity which owns the capital stock of or equity interests (as the case may be) in each such Target Company or Target Subsidiary.
 
 
 
 
(ii)  All of the issued and outstanding Target Shares of the Target Companies have been duly authorized, are validly issued, fully paid, and non-assessable (or of similar status to the extent such status exists in such company’s jurisdiction of formation), and are held of record and owned beneficially by the Share Seller (and such other entity which Parent may designate as an additional Share Seller as a result of the Pre-Closing Restructuring) as set forth in Section 4(b) of the Disclosure Schedule and were not issued in contravention of any preemptive rights, rights of first refusal or first offer or similar rights or applicable foreign, federal or state securities laws.  All of the issued and outstanding shares of capital stock of the Target Subsidiaries have been duly authorized, are validly issued, fully paid, and non-assessable (or of similar status to the extent such status exists in such company’s jurisdiction of formation), and are held of record and owned beneficially by the Target Companies or Target Subsidiaries as set forth in Section 4(b) of the Disclosure Schedule.  There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require any of the Target Companies or Target Subsidiaries to issue, sell, or otherwise cause to become outstanding any of its capital stock or to make any further capital contribution.  There are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of the Target Companies or Target Subsidiaries. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to any of the Target Companies or Target Subsidiaries.  None of the Target Companies or the Target Subsidiaries owns any material amount of shares of capital stock of, or other equity interests (or any other securities convertible into or exchangeable for such shares or interests) in any other Person.
 
(c)   Non-contravention .   Neither the execution and delivery of this Agreement and the Ancillary Agreements, nor the consummation of the transactions contemplated hereby or thereby, will (i) subject to the governmental filings or other matters referred to in the immediately following sentence, violate (A) any Judgment or Law applicable to any of the Target Companies or the Target Subsidiaries or (B) any provision of the charter or bylaws, or other governing documents, of such Person (ii) conflict with, result in a breach of, constitute a default under (with or without notice or lapse of time or both), result in the acceleration of or the loss of any benefit under, require any third party consent under, or create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument, or other arrangement to which any of the Target Companies or Target Subsidiaries is a party or by which any of the assets or properties of the Business is subject or (iii) result in the imposition or creation of any Lien, other than Permitted Liens, upon or with respect to the Target Shares or the Acquired Assets or any of the assets or properties of the Target Companies or Target Subsidiaries, other than, in the case of clauses (i)(A), (ii) and (iii) above, any such instances that would not, individually and in the aggregate, have a Material Adverse Effect.  The Target Companies and the Target Subsidiaries are not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Entity in connection with the transactions contemplated by this Agreement or the Ancillary
 
 
 
 
Agreements, other than (A) compliance with and filings under the Hart-Scott-Rodino Act and compliance with and filings and approvals under the Foreign Merger Control Laws, (B) compliance with and filings under the Securities Exchange Act and the rules and regulations promulgated thereunder, (C) compliance with and filings or notices required by the rules and regulations of the New York Stock Exchange, (D) compliance with and filings with the relevant Chinese authorities in respect of the equity transfer of the Chinese Sub, (E) those that may be required solely by reason of Buyer’s (as opposed to any third party’s) participation in the Transaction and the other transactions contemplated by this Agreement and by the Ancillary Agreements, (F) the filing of the relevant instruments in the requisite jurisdictions in order to effect guarantees in respect of, or to create or perfect Liens granted to secure, the Indebtedness and other obligations incurred as a result of the consummation of the Debt Financing and (G) those the failure of which to be obtained or made would not, individually and in the aggregate, have a Material Adverse Effect.
 
(d)   Title to Tangible Assets.   The Target Companies and the Target Subsidiaries have good and valid title to, or a valid leasehold interest in, the material tangible assets used primarily in the conduct of the Business.  The Asset Sellers have good  and valid title to, or a valid leasehold interest in, the material tangible Acquired Assets.
 
(e)   Sufficiency of Assets.    The Acquired Assets, the assets and properties that will be owned by the Target Companies and Target Subsidiaries immediately following the Closing, the assets and properties of which any Target Company or Target Subsidiary will be a lessee, sublessee or licensee immediately following the Closing and the assets and properties which Buyer and its Affiliates, including the Target Companies and Target Subsidiaries, will have the right to use pursuant to the Transition Services Agreement, comprise all the assets and properties (tangible or intangible) primarily employed by the Business.  Such assets and properties will be sufficient for the conduct of the Business immediately following the Closing in substantially the same manner as currently conducted.
 
(f)   Financial Statements ; No Undisclosed Liabilities .   (i)  Section 4(f)(i) of the Disclosure Schedule includes copies of the following financial statements (collectively the “ Financial Statements ”): (A) an unaudited consolidated balance sheet of the Business, as of December 31, 2006, (B) an unaudited statement of operations and cash flow for the fiscal year ended December 31, 2006, with respect to the Business, (C) an unaudited consolidated balance sheet of the Business as of September 30, 2007, and (D) an unaudited statement of operations and cash flow for the nine months ended September 30, 2007, with respect to the Business (such Financial Statements referred to in clauses (C) and (D) above, the “ September Financial Statements ”).  The Financial Statements (including the notes thereto) have been prepared in accordance with GAAP on the basis of the same accounting principles, policies, methods and procedures consistently applied throughout the periods covered thereby and present fairly in all material respects the financial condition of the Business as of such dates and the results of operations of the Business for such periods; provided , however , that the September
 
 
 
 
 
Financial Statements are subject to normal and recurring year-end adjustments and lack footnotes and other presentation items.
 
(ii)  None of the Target Companies or Target Subsidiaries is party to any material “off-balance-sheet arrangements” (as defined in Item 303(a) of Regulation S-K under the Securities Act) attributable to the Business.
 
(iii)  None of the Asset Sellers (to the extent such liabilities primarily relate to the Business) or any of the Target Companies or the Target Subsidiaries has any liabilities, whether accrued, contingent, absolute, determined, determinable or otherwise except (A) to the extent such liabilities are accrued or reserved against in the Financial Statements, or reflected in the footnotes thereto, (B) liabilities that were incurred in the ordinary course of business since the date of such Financial Statements, (C) liabilities that are for Taxes, (D) liabilities that would not, individually and in the aggregate, have a Material Adverse Effect or (E) liabilities that are Excluded Liabilities.
 
(g)   Events Subsequent to September 30, 2007.    Since September 30, 2007, to the date of this Agreement, the Business has been conducted in the ordinary course and there has not been any Material Adverse Change.  Without limiting the generality of the foregoing, since September 30, 2007 to the date of this Agreement:
 
(i)  none of the Target Companies or any of the Target Subsidiaries has issued, sold, or otherwise disposed of any of its capital stock or equity interests (as the case may be), or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock or any stock appreciation, phantom stock, profit participation, registered capital or similar rights;
 
(ii)  none of the Target Companies or any of the Target Subsidiaries has declared, set aside, or paid any dividend or made any distribution with respect to its capital stock or equity interests (as the case may be) (whether in cash or in kind) (other than dividends or distributions paid or payable to Parent or any of its other Subsidiaries pursuant to cash sweeps done in the ordinary course of business or to another Target Company or Target Subsidiary) or redeemed, purchased, or otherwise acquired any of its capital stock;
 
(iii)  none of the Asset Sellers (to the extent such change relates to the Business) or any of the Target Companies or the Target Subsidiaries has made any material change in any accounting principles, practice, policy, method or procedure except as may be appropriate to conform to GAAP;
 
(iv)  none of the Asset Sellers (to the extent such litigation relates to the Business) or any of the Target Companies or the Target Subsidiaries has settled or compromised any material litigation or claim against it, other than settlements or compromises of litigation in the ordinary course of business;
 
 
 
 
(v)  none of the Asset Sellers (to the extent such acquisition or license relates to the Business) or any of the Target Companies or the Target Subsidiaries has acquired or licensed (whether by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any material assets thereof or equity interests therein, other than purchases of Inventory and other assets in the ordinary course of business;
 
(vi)  other than in the ordinary course of business or as required under the terms of any applicable Collective Bargaining Agreement or as required under applicable Law, none of the Asset Sellers or the Target Companies or any of the Target Subsidiaries has (A) made any changes to the Target Company Benefit Plans or entered into or adopted any new Target Company Benefit Plans; (B) entered into any collective bargaining or other labor agreement covering any Employees of the Target Companies or Target Subsidiaries; (C) altered, amended, or created any obligations with respect to compensation, severance, change in control payments or any other payments or benefits to executive-level Employees of the Target Companies or Target Subsidiaries; or (D) except, with respect to non-officers of th

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