Delaware
(State or other jurisdiction
of incorporation)

001-38163
(Commission
File Number)

35-2554312
(I.R.S. Employer
Identification No.)

(Address of principal executive offices)

923 S. Bridgeway Pl.

Eagle, Idaho
(Address of principal executive offices)

83616
(Zip Code)

Title of Each Class

Trading Symbol

Name of Exchange on Which Registered

Class A common stock, par value $0.001 per share

PETQ

NYSE

(d)

Exhibits:

   Exhibit No.

Description

2.1

99.1

Purchase and Sale Agreement dated May 8, 2019

Press Release dated May 8, 2019 

PETQ, INC.

Dated: May 8, 2019 

By

/s/ John Newland

Name:

John Newland

Title:

Chief Financial Officer

PURCHASE AND SALE AGREEMENT

by and among

PETIQ, LLC,

L. PERRIGO COMPANY,

Solely for purposes of ‎Section 9.13, PERRIGO COMPANY PLC

and

Solely for purposes of ‎Section 9.14, PETIQ, INC.

Dated as of May 8, 2019

Page

ARTICLE I DEFINITIONS

Section 1.1    Definitions

ARTICLE II PURCHASE AND SALE

Section 2.1    Purchase and Sale of the Purchased Interests

Section 2.2    Closing

Section 2.3    Transactions to Be Effected at the Closing

Section 2.4    Purchase Price Adjustment

Section 2.5 Withholding

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER

Section 3.1    Organization and Existence

Section 3.2    Authority and Enforceability

Section 3.3    Capitalization of the Company; Title to Purchased Interests

Section 3.4    Company Subsidiaries

Section 3.5    Noncontravention

Section 3.6    Financial Statements

Section 3.7    Absence of Undisclosed Liabilities

Section 3.8    Absence of Changes

Section 3.9    Proceedings and Orders

Section 3.10    Compliance with Laws; Permits

Section 3.11    Material Contracts

Section 3.12    Real and Personal Property

Section 3.13    Employee Benefits

Section 3.14    Labor and Employment Matters

Section 3.15    Environmental Matters

Section 3.16    Insurance

Section 3.17    Taxes.

Section 3.18    Intellectual Property

Section 3.19    Affiliate Transactions

Section 3.20    Major Customers and Major Vendors

Section 3.21    Brokers

Section 3.22    Product Liability

Section 3.23    Accounts and Notes Receivable; Accounts Payable

Section 3.24    Inventory

Section 3.25    Disclaimer of Warranties

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER

Section 4.1    Good Standing; Organization

Section 4.2    Authority and Enforceability

Section 4.3    Noncontravention

Section 4.4    Proceedings and Orders

Section 4.5    Financing; Sufficient Funds

Section 4.6    Investment Representations

Section 4.7    Brokers

Section 4.8    Independent Investigation; Acknowledgements and Confirmations

ARTICLE V COVENANTS

Section 5.1    Access to Information

Section 5.2    Conduct of Business Pending the Closing

Section 5.3    Publicity

Section 5.4    Exclusivity

Section 5.5    Expenses

Section 5.6    HSR Filings

Section 5.7    Transfer Taxes

Section 5.8    Tax Matters

Section 5.9    Further Actions

Section 5.10    Releases

Section 5.11    Employee Matters

Section 5.12    D&O Indemnification and Insurance

Section 5.13    Insurance

Section 5.14    Financial Statements

Section 5.15    Confidentiality

Section 5.16    Intercompany Balances Arrangements

Section 5.17    R&W Policy

Section 5.18    Financing

Section 5.19    Seller Restrictive Covenants

Section 5.20    Payments from Third Parties

Section 5.21    Litigation Matters

Section 5.22    Last Quarter Financials

Section 5.23    Perrigo Marks

Section 5.24    Non-US Trademarks

ARTICLE VI CLOSING CONDITIONS

Section 6.1    The Buyer’s Conditions to Closing

Section 6.2    The Seller’s Conditions to Closing

Section 6.3    Mutual Conditions to Closing

ARTICLE VII TERMINATION

Section 7.1    Grounds for Termination

Section 7.2    Effect of Termination

ARTICLE VIII SURVIVAL; INDEMNIFICATION

Section 8.1    Survival of Representations, Warranties and Covenants; Recourse

Section 8.2    Indemnification by the Seller

Section 8.3    Indemnification by the Buyer

Section 8.4    Indemnification Procedure for Third-Party Claims

Section 8.5    Indemnification Procedures for Non-Third-Party Claims

Section 8.6    Calculation of Indemnity Payments

Section 8.7    Characterization of Indemnification Payments

ARTICLE IX MISCELLANEOUS

Section 9.1    Notices

Section 9.2    Severability

Section 9.3    Entire Agreement; Third-Party Beneficiaries

Section 9.4    Governing Law

Section 9.5    Consent to Jurisdiction; Waiver of Jury Trial

Section 9.6    Right to Specific Performance

Section 9.7    Assignment

Section 9.8    Headings

Section 9.9    Construction

Section 9.10    Amendments and Waivers

Section 9.11    Appendices, Schedules and Exhibits

Section 9.12    Counterparts

Section 9.13    Seller Parent Guarantee

Section 9.14    Buyer Guarantor Guarantee

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.  Capitalized terms used in this Agreement have the meanings ascribed to them in Appendix A to this Agreement.

ARTICLE II

PURCHASE AND SALE

Section 2.1 Purchase and Sale of the Purchased Interests.  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Seller will sell, transfer and deliver to the Buyer, and the Buyer will purchase and acquire from the Seller, the Purchased Interests for an aggregate purchase price (the “Purchase Price”) equal to the sum of: 

(a) $185,000,000 (the “Base Purchase Price”), plus 

(b) an amount (which may be positive or negative) equal to (i) the Final Closing Working Capital, minus (ii) the Target Working Capital, plus

(c) the lesser of (x) Final Closing Cash or (y) $5,000,000,  minus 

(d) the Final Closing Indebtedness, minus 

(e) the Final Closing Transaction Costs.

Section 2.2 Closing.  The closing of the Transactions (the “Closing”) shall take place at 10:00 a.m. Eastern Time at the offices of Morgan, Lewis & Bockius LLP (the “Firm”), 101 Park Avenue, New York, New York 10178, or remotely in virtual electronic form via the exchange of documents and signatures in PDF format or by facsimile, on the third Business Day following the satisfaction or waiver of the conditions set forth in Article ‎VI (except for those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at the Closing), or at such other time, date and place as may be mutually agreed upon in writing by the Parties (the date on which the Closing actually occurs being referred to in this Agreement as the “Closing Date”);  provided that in no event shall the Buyer be obligated to effect the Closing prior to the third Business Day following the final day of the Marketing Period, unless the Buyer shall request an earlier date on three Business Days’ prior written notice.  The Closing will be deemed effective as of 12:01 a.m. Eastern Time on the Closing Date.  All actions to be taken and all documents to be executed and delivered by the Parties at the Closing shall be deemed to have been taken and executed simultaneously, and no actions shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered.

Section 2.3 Transactions to Be Effected at the Closing.    

(a) At the Closing, the Buyer will: 

(i) pay to the Seller (by wire transfer of immediately available funds to the account designated by the Seller in the Estimated Closing Statement) an amount equal to the Closing Payment as set forth on the Estimated Closing Statement;

(ii) pay an amount equal to the estimated Closing Indebtedness to the applicable payees, as set forth on the Estimated Closing Statement; 

(iii) subject to ‎Section 2.3(c), pay the estimated Closing Transaction Costs to the applicable payees, as set forth on the Estimated Closing Statement;

(iv) deliver to the Seller true and correct copies of the R&W Policy; 

(v) deliver to the Seller a counterpart to the Transition Services Agreement, in substantially the form attached to this Agreement as Exhibit B as may be modified by Section 5.9(d) (the “Transition Services Agreement”), duly executed by the Buyer; and 

(vi) deliver to the Seller a certificate duly executed by an authorized officer of the Buyer, dated as of the Closing Date, stating that the conditions specified in ‎Section 6.2(a) and ‎Section 6.2(b) have been satisfied.

(b) At the Closing, the Seller will deliver, or cause to be delivered, to the Buyer:

(i) certificates representing the Purchased Interests, each duly endorsed by the Seller or accompanied by separate stock powers attached thereto and signed in blank; 

(ii) a properly prepared certificate of non-foreign status under Treas. Reg. § 1.1445-2(b)(2) and an IRS Form W-9, in each case, duly executed by the Seller;

(iii) a certificate, duly executed by an authorized officer of the Seller, dated as of the Closing Date, stating that the conditions specified in ‎Section 6.1(a) and ‎Section 6.1(b) have been satisfied; 

(iv) resignations from office, to be effective as of the Closing, each in substantially the form attached to this Agreement as Exhibit C,  of each of the directors, managers and officers or other representatives of each of the Company Entities designated by the Buyer in writing prior to the Closing; 

(v) a counterpart to the Transition Services Agreement, duly executed by the Seller;

(vi) a certificate, dated as of the Closing Date, signed by a duly authorized officer of the Seller, certifying to and attaching the resolutions of the board of directors of the Seller authorizing the execution and delivery of this Agreement and each Ancillary Agreement to which the Seller is a party and the consummation of the transactions contemplated hereby and thereby; 

(vii) a certificate of good standing with respect to each of the Company Entities that is not a foreign entity, issued by the Secretary of State of the State of formation or incorporation, as applicable, of each of the Company Entities, dated no earlier than 10 days prior to the Closing Date;

(viii) properly completed and duly executed Section 336(e) Election statements with respect to the sale of Company Entities that are domestic corporations within the meaning of Sections 7701(a)(3) and (4) of the Code that comply with Treasury Regulation Sections 1.336-(h)(5)-(6) and are in form and substance reasonably satisfactory to the Buyer; 

(ix) customary payoff letters from the holders of the Indebtedness of the Company Entities set forth on ‎Section 2.3(b)(ix) of the Disclosure Schedule; which payoff letters will provide for (A) the termination of any applicable Liens at the Closing and (B) the filing of customary Lien releases as soon as practicable following the Closing, in each case, subject to the receipt by the holders of such Indebtedness of the applicable payoff amounts; and

(x) an unaudited, pre-tax balance sheet of the Company Entities, as of the end of the calendar quarter immediately preceding the Closing Date (provided that if the end of such calendar quarter ends within 45 days prior to the Closing, then such balance sheet shall be as of the end of the prior calendar quarter) and the related unaudited pre-tax statements of income, pre-tax cash flows and pre-tax equity for the applicable year-to-date period (provided that if such calendar quarter ends within 45 days prior to the Closing, then such statements of income, cash flows and equity shall be as of the period ending on the last day of the prior calendar quarter) (the balance sheet and statements described in this Section 2.3(b)(x), the  “Last Quarter Financials”). 

(c) To the extent that any component of a Closing Amount is identified on the Estimated Closing Statement as components to be paid to Employees through a Company Entity’s regular payroll (each, an “Employee Payment”), the Buyer shall pay those amounts to the applicable Company Entity at the Closing, and such Company Entity shall, and following the Closing the Buyer shall cause the applicable Company Entity to, pay the Employee Payments to the applicable Employees on the Closing Date or, if the Closing Date is not a regular payroll date for the applicable Company Entity, not later than the applicable Company Entity’s next regular payroll date.  Notwithstanding the foregoing, if any Employee Payment is not paid to the applicable Employee, whether due to the termination of the applicable Company Entity’s obligation to make such Employee Payment or for any other reason, the applicable Company Entity shall, and the Buyer shall cause the applicable Company Entity to, pay to the Seller (by wire transfer of immediately available funds to the account(s) designated by the Seller in the Estimated Closing Statement) such Employee Payment on the earlier of (i) the Business Day following the date on which such Employee Payment was due to be made to the applicable Employee and (ii) the date on which the applicable Company Entity’s obligation to make such Employee Payment is terminated.

Section 2.4 Purchase Price Adjustment.    

(a) No later than five calendar days prior to the Closing Date, the Seller shall deliver to the Buyer a statement (the “Estimated Closing Statement”) setting forth the Seller’s good faith estimate of: 

(i) the Closing Working Capital; 

(ii) the Closing Cash;

(iii) the Closing Indebtedness;

(iv) the Closing Transaction Costs; and 

(v) the Closing Payment.    

(b) As soon as reasonably practicable following the Closing, but in any event no later than 90 days after the Closing Date, the Buyer will prepare, or cause to be prepared, and deliver to the Seller an unaudited statement (the “Closing Statement”), setting forth the Buyer’s good faith calculation of each of the Closing Amounts and the Closing Payment.  The Closing Statement shall be prepared and calculated using the applicable definitions contained in this Agreement, in accordance with the Accounting Principles and in the same format as the Sample Calculation.  In the event that the Buyer does not deliver the Closing Statement during such 90-day period, the Closing Amounts set forth in the Estimated Closing Statement shall be deemed final and binding and no Purchase Price Adjustment shall be payable.   

(c) Upon receipt from the Buyer, the Seller shall have 45 days to review the Closing Statement (the “Review Period”).  At the request of the Seller, the Buyer shall: 

(i) reasonably cooperate with and assist, and shall cause the Company Entities and each of their respective Representatives to reasonably cooperate with and assist, the Seller and its Representatives in the review of the Closing Statement (including by taking actions as may be reasonably required to cause the Buyer and the Company Entities and their respective accountants to deliver to the Seller and its Representatives copies of their work papers relating to the preparation of the Closing Statement); and 

(ii) provide the Seller and its Representatives with any information reasonably requested by the Seller that is necessary for its review of the Closing Statement. 

(d) If the Seller does not deliver a Notice of Objection to the Buyer with respect to an item contained in the Closing Statement within the Review Period, the Seller shall be deemed to have accepted the Buyer’s calculation of such item in the Closing Statement, and such calculation shall be final, conclusive and binding.  If the Seller delivers a Notice of Objection to the Buyer within the Review Period, the Buyer and the Seller shall, during the 30 days following such delivery or any mutually agreed extension thereof, use their good faith efforts to reach agreement on the disputed items and amounts in order to determine the amount of the disputed Closing Amounts, as applicable, and the Closing Payment.  If, at the end of such 30-day period or any mutually agreed extension thereof, the Buyer and the Seller are unable to resolve their

disagreements, they shall jointly retain and refer their disagreements to the Chicago office of Grant Thornton, LLP, or if such Person refuses such engagement or is no longer independent, a nationally recognized independent accounting firm mutually acceptable to the Buyer and the Seller (the “Independent Expert”), which shall act as an expert in accounting and not as an arbitrator.  The Buyer and the Seller shall instruct the Independent Expert promptly to review this ‎Section 2.4, as well as the Closing Statement, Notice of Objection and any other materials reasonably requested by the Independent Expert, and to determine, solely with respect to the disputed items and amounts so submitted, whether and to what extent, if any, the Closing Amounts set forth in the Closing Statement require adjustment.  The Independent Expert shall base its determination solely on written submissions by the Buyer and the Seller and the terms of this Agreement and not on an independent review.  The Parties shall make available to the Independent Expert all relevant books and records and other items reasonably requested by the Independent Expert.  As promptly as practicable, but in no event later than 45 days after its retention, the Independent Expert shall deliver to the Buyer and the Seller a report that sets forth its resolution of the disputed items and amounts and its calculation of the Closing Amounts; provided,  however, that the Independent Expert may not assign a value to any item greater than the greatest value for such item claimed by the Buyer, on the one hand, and the Seller, on the other hand, nor less than the smallest value for such item claimed by the Buyer, on the one hand, and the Seller, on the other hand.  The decision of the Independent Expert shall be final, conclusive and binding on the Parties, and no determinations by the Independent Expert, including any work or analyses performed by the Independent Expert in connection with its resolution of any dispute under this ‎Section 2.4(d), shall be admissible as evidence in any Proceeding among the Parties, except to the extent necessary to enforce payment obligations under this ‎Section 2.4.  The costs and expenses of the Independent Expert shall be allocated between the Buyer, on the one hand, and the Seller, on the other hand, based upon the percentage that the portion of the aggregate contested amount not awarded to such Party bears to the aggregate amount actually contested by such Party, as determined by the Independent Expert.  For example, if (i) the Seller submits a Notice of Objection for $1,000, (ii) the Buyer contests only $500 of the amount claimed by the Seller, and (iii) the Independent Expert ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of the Independent Expert would be allocated 60% (i.e., 300/500) to the Buyer and 40% (i.e., 200/500) to the Seller.  The Buyer and the Seller agree to execute, if requested by the Independent Expert, a reasonable engagement letter, including customary indemnities in favor of the Independent Expert.

(e) For purposes of this Agreement:

(i) the “Final Closing Working Capital,” the “Final Closing Cash,” the “Final Closing Indebtedness” and the “Final Closing Transaction Costs” mean (A) if the Seller does not timely deliver a Notice of Objection pursuant to ‎Section 2.4(c), the amounts of such items in the Closing Statement, or (B) if the Seller does timely deliver a Notice of Objection, the amount of such items (I) as agreed by the Buyer and the Seller pursuant to ‎Section 2.4(d) or (II) in the absence of such agreement, as set forth in the Independent Expert’s report delivered pursuant to ‎Section 2.4(d); and

(ii) “Purchase Price Adjustment” means the amount (which may be positive or negative) equal to (x) the Purchase Price, as finally determined in accordance with this ‎Section 2.4,  minus (y) the Closing Payment. 

(f) Within three Business Days after the Purchase Price Adjustment has been finally determined pursuant to this ‎Section 2.4:

(i) if the Purchase Price Adjustment is a negative number, the Seller shall pay to the Buyer an amount equal to the absolute value of the Purchase Price Adjustment (by wire transfer of immediately available funds to the account designated by the Buyer at least two Business Days prior to the date of payment); and

(ii) if the Purchase Price Adjustment is a positive number, the Buyer shall pay to the Seller an amount equal to the Purchase Price Adjustment (by wire transfer of immediately available funds to the account designated by the Seller in the Estimated Closing Statement).

(g) Notwithstanding the foregoing, to the extent that the Seller notifies the Buyer in writing that any amounts otherwise due to the Seller pursuant to ‎Section 2.4(f)(i) or ‎Section 2.4(f)(ii) are to be paid to Employees, (A) the Seller shall pay such amounts to the Buyer, (B) the Buyer shall pay such amounts to the applicable Company Entity, and (C) such Company Entity shall, and the Buyer shall cause the applicable Company Entity to, pay to each applicable Employee the amount designated by Seller through such Company Entity’s next regular payroll (less any applicable withholding).

Section 2.5 Withholding.  The Buyer and the Company will be entitled to deduct and withhold from any amount payable pursuant to this Agreement (including payments of purchase price) such amounts as the Buyer or the Company (or any Affiliate thereof) are required to deduct and withhold with respect to the making of such payment under the Code or any other provision of applicable Laws;  provided that there shall be no withholding on account of U.S. federal income Taxes on payments to the Seller so long as the Seller complies with the provisions of ‎Section 2.3(b)(ii) of this Agreement, unless such withholding is required as a result of a change in Law after the date of this Agreement.  Subject to the foregoing sentence, if  the Buyer or the Company is required to deduct or withhold from any amount payable pursuant to this Agreement (other than payments of wages or other compensation for services), the Buyer or the Company, as applicable, will use commercially reasonable efforts to provide the Seller with at least three Business Days’ notice of its determination that is required to make such deduction or withholding and shall cooperate with the Seller to reduce or eliminate such deduction or withholding. To the extent that amounts are so withheld by the Buyer or the Company, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction and withholding were made.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE Seller

Section 3.1 Organization and Existence.    

(a) The Seller is duly incorporated, validly existing and in good standing under the Laws of the State of Michigan and has all corporate power and authority and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business in all material respects as and to the extent now being conducted.  The Seller Parent is duly formed and validly existing under the laws of the Republic of Ireland.

(b) The Company is a corporation, duly incorporated, validly existing and in good standing under the Laws of Michigan, and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as it is now being conducted.    

(c) The Company is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties or assets owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(d) True, correct and complete copies of the Organizational Documents of the Company and each other Company Entity, as well as the corporate or other organizational record books, as applicable, with respect to actions taken by the respective equity holders and boards of directors of the Company and each other Company Entity or other governing bodies, as applicable, have been made available to the Buyer. The books of account, minute books, stock record books and other records of the Company and each other Company Entity are complete and correct in all material respects.

Section 3.2 Authority and Enforceability.  The Seller has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the Transactions.  The execution, delivery and performance by the Seller of this Agreement, and the consummation by the Seller of the Transactions, have been duly authorized by all necessary corporate action on the part of the Seller, and no other corporate action is necessary on the part of the Seller to authorize this Agreement or to consummate the Transactions.  This Agreement and each other agreement, document, instrument and/or certificate contemplated by this Agreement to be executed in connection with the Transactions (the “Ancillary Agreements”) have been, or at the Closing will be, duly executed and delivered by the Seller, and, assuming the due and valid authorization, execution and delivery by each other Party, this Agreement and the Ancillary Agreements constitute or will constitute, as applicable, a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors’ rights generally and (b) general principles of equity, whether such enforceability is considered in a Proceeding in equity or at law.

Section 3.3 Capitalization of the Company; Title to Purchased Interests.    

(a) The Purchased Interests represent all of the issued and outstanding Capital Interests of the Company and have been duly authorized, are validly issued, fully paid and non-

assessable, and are owned of record and beneficially by the Seller.  There are no outstanding restrictions on transfers or voting of the Purchased Interests.  The Company has not granted to any Person any Contract, warrant or option, or any other conversion right or right to purchase, subscribe for or receive an issuance of, any Equity Securities of the Company.

(b) The Seller owns (of record and beneficially) the Purchased Interests, free and clear of all Liens, except for Liens:

(i) arising pursuant to, or as a result of the Transactions:

(ii) arising under the Organizational Documents of the Company: 

(iii) being released in connection with the Closing: or 

(iv) arising pursuant to applicable securities Laws ((i) through (iv) collectively, the “Transaction Permitted Liens”).    

Section 3.4 Company Subsidiaries.

(a) The jurisdiction of incorporation or formation, as applicable, and the authorized, issued and outstanding Capital Interests of each Company Subsidiary is set forth on ‎Section 3.4(a) of the Disclosure Schedule.  All of the Capital Interests of each Company Subsidiary are owned (of record and beneficially), directly or indirectly, by the Company, free and clear of all Liens other than Transaction Permitted Liens.  Except for the Capital Interests in the Company Subsidiaries, the Company does not own, directly or indirectly, any Capital Interests in any other Person.

(b) Each Company Subsidiary is a corporation or limited liability company, as applicable, duly incorporated or formed, as applicable, validly existing and in good standing under the Laws of its jurisdiction of incorporation or formation, as applicable, and has all requisite corporate or limited liability company power and authority, as applicable, and all material governmental licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and to carry on its business as now being conducted.  Each Company Subsidiary is duly qualified or licensed as a foreign corporation or limited liability company, as applicable, to do business, and is in good standing, in each jurisdiction where the character of its properties or assets owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(c) No Company Subsidiary has granted to any Person any Contract, warrant or option, or any other conversion right or right to purchase, redeem, subscribe for or receive an issuance of, any Equity Securities of such Company Subsidiary.

(d) Sergeant’s Pet Care Products Mexico, S, DE R.L.DE C.V. does not engage, and for the past three years has not engaged, in any business activities or operations and currently has no assets or Liabilities other than Liabilities imposed by Laws (including Tax Liabilities).

Section 3.5 Noncontravention.    

(a) Neither the execution, delivery or performance of this Agreement and the Ancillary Agreements, nor the consummation of the Transactions by the Seller, will (with or without the giving of notice or the lapse of time or both): 

(i) violate the Organizational Documents of the Seller or any Company Entity;

(ii) violate in any material respect any Law or Order applicable to the Seller or any Company Entity; 

(iii) create or impose a Lien (other than Permitted Liens) on any Purchased Interests or asset of any Company Entity; or 

(iv) result in a material breach of or material default under, require consent under or violate in any material respect any Material Contract or Real Property Lease or any material Contract to which the Seller is a party.

(b) Except for compliance with any applicable requirements of the HSR Act, no material Permit or material Filing is required by the Seller or any Company Entity in connection with the execution and delivery by the Seller of this Agreement, the performance by the Seller of its obligations under this Agreement and the consummation of the Transactions.

Section 3.6 Financial Statements.    

(a) ‎Section 3.6 of the Disclosure Schedule contains true, correct and complete copies of the following financial information:

(i) (A) the unaudited combined balance sheet of the Company Entities, as of December 31, 2018 (the “Balance Sheet Date”), and (B) the related unaudited statement of income for the year ending on the Balance Sheet Date (the “Annual Financial Statements”); and 

(ii) (A) the unaudited combined balance sheet of the Company Entities, as of February 28, 2019 (the “Interim Balance Sheet Date”) and (B) the related unaudited statement of income for the period commencing on January 1, 2019 and ending on the Interim Balance Sheet Date (the “Interim Financial Statements” and, together with the Annual Financial Statements, the “Financial Statements”).    

(b) The books and records of the Seller Parent have been prepared in accordance with GAAP as consistently applied for the relevant period.  The Financial Statements have been extracted from the books and records of the Seller Parent, which are subject to the controls and procedures of the Seller Parent’s accounting systems.  The Financial Statements were

prepared in good faith, are not misleading and do not materially misstate the financial position or results of operation of the Seller Business as of the dates thereof and the respective periods covered thereby. 

(c) The books of account and other financial records of the Company Entities: (i) are in all material respects complete and correct, and do not contain or reflect any material inaccuracies or discrepancies and (ii) have been maintained in accordance with good business and accounting practices.

(d) The Seller Parent has implemented disclosure controls and procedures reasonably designed to ensure that all material information required to be disclosed by the Seller or the Seller Parent with respect to the Company Entities in the reports that the Seller or the Seller Parent files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Seller’s and the Seller Parent’s management as appropriate to allow timely decisions regarding disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. During the three-year period prior to the date of this Agreement, none of the Seller, the Seller Parent or the Company Entities has received any written complaint, allegation, assertion or claim that any of the Seller, with respect to the Seller Business, or the Company Entities have engaged in improper financial reporting, accounting or auditing practices. To the Knowledge of the Seller, there has not been any fraud (meaning, for purposes of this sentence, those matters described in Statement on Auditing Standards No. 99 and interpretations thereof), whether or not material, that involved the officers or other employees and former employees of the Seller, with respect to the Seller Business.

Section 3.7 Absence of Undisclosed Liabilities.    No Company Entity has any material liabilities or obligations, whether or not accrued, contingent or otherwise, except liabilities (a) as and to the extent disclosed or reserved against in the Financial Statements, (b) that were incurred after the Interim Balance Sheet Date in the ordinary course of business (none of which are material individually or relate to breach of contract, breach of warranty, tort, infringement, violation of law, order, Permit or any Proceeding) or (c) that were incurred as a result of the Transactions and constitute Transaction Costs.

Section 3.8 Absence of Changes.  During the period commencing on December 31, 2018 and ending on the date of this Agreement:

(a) the business of the Company Entities has been conducted in accordance with the ordinary course of business consistent with past practices, except in connection with the Transactions, including entering into this Agreement and as otherwise contemplated by this Agreement;

(b) there has not been any Material Adverse Effect;

(c) there has been no incurrence of additional Indebtedness by any Company Entity in excess of $250,000, other than in the ordinary course of business or as provided for in the Company Entities’ existing credit facilities;

(d) no sale, lease or other disposition of any properties or assets of any Company Entity has occurred that is material to its business, other than in the ordinary course of business; 

(e) there has been no grant, issuance, sale or other disposition of any of the Equity Securities of any Company Entity; 

(f) there has been no merger or consolidation with or into any other Person, dissolution or liquidation; 

(g) there has been no amendment, termination (other than a termination related to a default by the counterparty under the applicable Material Contract) or waiver of any material term under any Material Contract; 

(h) no Company Entity has sold, transferred, leased, subleased, licensed or otherwise disposed of any material properties or assets, real, personal or mixed (including leasehold interests and Intellectual Property), other than the sale of inventory or otherwise in the ordinary course of business consistent with past practice;

(i) neither the Seller nor any Company Entity has issued or sold any Purchased Interests, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of any Company Entity, except pursuant to this Agreement;

(j) neither the Seller nor any Company Entity has redeemed any of the Purchased Interests, or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of Capital Interests, of any Company Entity or otherwise, other than dividends, distributions and redemptions declared, made or paid by any Company Entity solely to another Company Entity;

(k) no Company Entity has made any capital expenditure or commitment for any capital expenditure in excess of $50,000 individually or $250,000 in the aggregate other than any capital expenditure that will be paid in full at or prior to the Closing;

(l) neither the Seller nor any Company Entity has made any material change in the customary methods of operations of any Company Entity, including practices and policies relating to manufacturing, purchasing, inventories, marketing, selling and pricing;

(m) there has been no change in the material accounting principles or practices of the Company Entities, except as required by GAAP or applicable Law; 

(n) except as required by the terms and provisions of any Seller Benefit Plan, Company Benefit Plan, Foreign Benefit Plan or Contract, there has been no (i) adoption of, material amendment to, or termination of,  any Seller Benefit Plan, Foreign Benefit Plan, or Company Benefit Plan, (ii) increase to the base salary, bonus or incentive compensation, severance or benefits of any current or former Employee, other than increases in the ordinary course of business consistent with past practice, (iii) entrance into any collective bargaining agreement, (iv) entrance into any employment, consulting, labor, or independent contractor agreement related to the Seller Business with any individual whose annual base compensation is, or annual fees are

expected to be, at least $100,000, (v) entrance into any severance, retention, or change in control agreement or arrangement with any current or former Employee or independent contractor, or (vi) termination of any Employee, other than termination for cause, whose annual base compensation was at least $100,000;

(o) neither the Seller nor any Company Entity has allowed any Permit or Environmental Permit that was issued to any Company Entity or otherwise relates to the Seller Business to lapse or terminate that was necessary for the conduct of the Seller Business;

(p) neither the Seller nor any Company Entity has amended or restated the certificate of incorporation, bylaws, certificate of formation or limited liability company agreement (or other organizational documents, as applicable) of any Company Entity; or

(q) neither the Seller nor any Company Entity has agreed, whether in writing or otherwise, to take any of the actions specified in this ‎Section 3.8 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this ‎Section 3.8, except as expressly contemplated by this Agreement and the Ancillary Agreements.

Section 3.9 Proceedings and Orders.    There are no material Proceedings pending or threatened in writing against the Seller or any Company Entity or, to the Knowledge of the Seller, any manager or officer of a Company Entity with respect to such person’s capacity as such, and neither the Seller nor any Company Entity is subject to any outstanding Order, in each case, that (a) challenges or seeks to enjoin, alter or materially delay the consummation of the Transactions or (b) that constitutes or would result in equitable relief against the Company Entities or would reasonably be expected to result in liability to the Company Entities in excess of $100,000. There have been no Proceedings that (x) resulted in any criminal sanctions or (y) during the three-year period prior to the date of this Agreement, resulted in any payments in excess of $100,000, in each case by or against a Company Entity, or, to the Knowledge of the Seller, with respect to such person’s capacity as such, any manager or officer of the Company Entity. 

Section 3.10 Compliance with Laws; Permits.

(a) Each Company Entity is currently in compliance in all material respects with all Laws applicable to it or its business or properties, and has been in compliance in all material respects with all Laws applicable to its business or properties during the three-year period prior to the date of this Agreement.  There is no Proceeding pending, or to the Knowledge of the Seller, threatened, with respect to any failure to comply with any provision of applicable Law. Neither the Seller nor any Company Entity is in receipt of any written notice with respect to any failure to comply with any provision of applicable Law in any material respect.

(b) ‎Section 3.10(b) of the Disclosure Schedule sets forth, as of the date of this Agreement and for the past three years, a list of, and the Company Entities hold in the name or as a distributor, all material Permits required by the United States Food and Drug Administration (“FDA”), the United States Environmental Protection Agency (“EPA”), the United States Department of Agriculture and any other Governmental Entity to own, operate and lease the Company Entities’ properties and assets and to conduct the business of the Company Entities as

currently conducted (collectively, the “Approvals”). Each Approval is valid, binding and in full force and effect, except as would not reasonably be expected to be material to the Company Entities taken as a whole.  The Company Entities have been in compliance in all material respects with the terms and conditions of each Approval since such Approval was obtained, and the Company Entities are currently in compliance in all material respects with the terms and conditions of each Approval.    

(c) None of the Company Entities has had any Product or owned any manufacturing facility subject to a shutdown or import or export prohibition by any Governmental Entity, nor received any FDA Form 483 or other written notice of inspectional observations, “warning letters,” or requests or requirements by a Governmental Entity to make changes to the products developed, marketed or sold by one of the Company Entities during the three-year period prior to the date of this Agreement.

(d) Except as would not reasonably be expected to be material to the Company Entities taken as a whole, each EPA-regulated Product of the business currently sold, marketed, promoted or distributed by the Company Entities is the subject of a current EPA registration and state registration or is exempt from the need for an EPA or state registration.    

(e) No Company Entity nor, to the Knowledge of the Seller, any of their respective Affiliates or any other Persons acting on their behalf has, in the past six years in connection with the operation of the business of the Company Entities, (i) used any corporate or other funds to offer, pay, promise to pay or authorize the payment of anything of value, including cash, checks, wire transfers, tangible and intangible gifts, favors, services and entertainment and travel expenses, to (A) an executive, official, employee or agent of a Governmental Entity, (B) a director, officer, employee or agent of a wholly or partially government-owned or -controlled company or business, (C) a political party or official thereof, or candidate for political office or (D) an executive, official, employee or agent of a public international organization (e.g., the United Nations, World Bank or International Monetary Fund), in each case in order to obtain or retain business or direct business to the Company Entities or to secure any improper advantage for the Company Entities, (ii) made any expenditures, whether, inter alia, in the form of money, products, services, facilities, discounts or anything of value relating to political activity to government officials, candidates or members of political parties or organizations, except to the extent permitted by applicable Law, (iii) or established or maintained any unlawful or unrecorded funds in violation of Section 104 of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other similar Law or (iv) paid, accepted or received any unlawful contributions, payments, expenditures, gifts or anything of value. 

(f) The Company Entities and, to the Knowledge of the Seller, their respective directors, managers, officers, employees and agents, have been in compliance in all material respects with Anti-Corruption Laws applicable to the Company Entities.  No part of the consideration to be paid in connection with the Transactions shall be used for any purpose that would constitute a violation of any Anti-Corruption Law.

(g) Neither the Company Entities, nor, to the Knowledge of the Seller, any of their respective directors or officers or any employee, agent, distributor, reseller or other third-party representative acting on behalf of the Company Entities, is currently, or has been in the last

six years: (i) a Sanctioned Person, (ii) organized, resident or located in a Sanctioned Country, (iii) engaging in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, to the extent such activities violate applicable Sanctions Laws or Ex-Im Laws or (iv) otherwise in material violation of applicable Sanctions Laws, Ex-Im Laws or the anti-boycott Laws administered by the U.S. Department of Commerce and the U.S. Department of Treasury Internal Revenue Service.

(h) The Company Entities are in compliance in all material respects, and have been in compliance in all material respects during the three-year period prior to the date of this Agreement, with all Laws governing the export and importation of products into the United States. Further, the Seller has made available to Buyer true and complete copies of all material issued and pending export or import licenses and other authorizations, and all material documentation required by, and necessary to evidence compliance with, all applicable Laws and regulations governing the importation of products into the United States.

(i) (i)  The Company Entities are in compliance in all material respects, and have been in compliance in all material respects during the three-year period prior to the date of this Agreement, with all Laws applicable to the Seller Business with respect to the advertising, marketing and communication services (“Regulated Product Marketing Services”) they provide for products regulated by the Federal Trade Commission (“FTC”) and under the Federal Trade Commission Act, including all applicable Laws related to unfair and deceptive trade, advertising and marketing; and (ii) no Company Entity has received or is subject to any administrative or regulatory action, or other similar written or other notice, complaint or inquiry made by the FTC or any comparable Governmental Entity asserting that any element of the Regulated Product Marketing Services is not in compliance with any applicable Laws, and, to the Knowledge of the Seller, no violation is threatened.

Section 3.11 Material Contracts.

(a) ‎Section 3.11(a) of the Disclosure Schedule sets forth a list (including all amendments and supplements), as of the date of this Agreement, of all of the following types of Contracts (except for any Real Property Leases) to which any Company Entity is a party:

(i) any Contract that limits in any material respect the ability of any Company Entity from operating or doing business in any location, other than any Contract disclosed in ‎Section 3.11(a)(viii) of the Disclosure Schedule;

(ii) any Contract that resulted in payments to or by the Company Entities in excess of $250,000 in the aggregate during calendar year 2018, excluding (A) Company Benefit Plans, Seller Benefit Plans, and Foreign Benefit Plans and (B) Contracts that are terminable on 90 days’ or less notice without material penalty and purchase orders entered into in the ordinary course of business;

(iii) any Contract for Indebtedness for borrowed money involving amounts in excess of $100,000 or any Contract providing for the deferred purchase price of assets, property or services, including earnouts, payments under notes payable (other

than trade payables and other liabilities incurred in the ordinary course of business), including all seller notes, earnout payments and purchase price adjustments;

(iv) any Contract (or series of related Contracts) entered into since January 1, 2012 relating to the material acquisition or disposition of any Person, business or material real property or other assets (whether by merger, sale of stock, sale of assets or otherwise), excluding leases and acquisitions or dispositions in the ordinary course of business;

(v) any Contract establishing any material partnership or joint venture;

(vi) any Contract with any Governmental Entity;

(vii) any broker, distributor or manufacturer’s representative Contract involving payments in excess of $250,000 per annum;

(viii) any Contract relating to the development, ownership, use, registration, enforcement or exercise of any rights under any Intellectual Property, excluding licenses or shrink wrap Contracts for commercially available, unmodified, off-the-shelf software with a replacement cost of less than $25,000;

(ix) any Contract with any Major Customer or Major Vendor;

(x) any Contract with any employee, independent contractor, consultant or similar service provider providing services to any Company Entity or the Seller Business that provides for an annual rate of compensation of at least $75,000 per year; 

(xi) any Contract with any staffing, temporary labor or similar agency providing services to any Company Entity or the Seller Business;

(xii) any Contract that requires any Company Entity to deal exclusively or on a “sole source” basis with another Person for the purchase of any material component, raw material, product or service that is used or provided by the Company Entities;

(xiii) Contracts including “most favored nations” provisions (either in favor of any Company Entity or otherwise) or an option or a first refusal, first-offer or similar preferential right to purchase or acquire any material assets of the Company;

(xiv) all Contracts for management services, financial advisory services or similar arrangements;

(xv) Affiliate Agreements; and

(xvi) Contracts for any settlement agreement in respect of a Proceeding.

(b) The Contracts set forth on ‎Section 3.11(a) of the Disclosure Schedule are collectively referred to in this Agreement as the “Material Contracts.”  No Company Entity is in, or, during the three-year period prior to the date of this Agreement, has received written notice of,

any material violation of or material default under, any Material Contract.  A copy of each Material Contract (subject to redaction or non-disclosure to protect proprietary or confidential information concerning the Company Entities or as otherwise necessary to comply with the confidentiality obligations of the Company Entities) has previously been made available to the Buyer.  Each Material Contract is a valid and binding agreement of the applicable Company Entity and is in full force and effect, except (i) to the extent such Material Contract terminates or expires after the date of this Agreement in accordance with its terms, (ii) as limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors’ rights generally, and (iii) as limited by general principles of equity, whether such enforceability is considered in a Proceeding in equity or at law.

Section 3.12 Real and Personal Property.

(a) Owned Real Property.  ‎Section 3.12(a) of the Disclosure Schedule contains a list, as of the date of this Agreement, of the street address of each parcel of real property owned by any Company Entity (the “Owned Real Property” and, together with the Leased Real Property, the “Real Property”).  The applicable Company Entity has good and marketable fee simple title to each Owned Real Property free and clear of all Liens, except for Permitted Liens.  There are no leases, subleases, licenses, concessions or other agreements entered into by the Company Entities granting to any Person (other than another Company Entity) the right of use or occupancy of any portion of such Owned Real Property, except for those constituting Permitted Liens.  The Real Property constitutes all of the real property interests owned or leased by the Company Entities and used in the conduct of the business and operations of the Company Entities as now being conducted.  Each Company Entity has good and insurable fee simple title to its Owned Real Property and good and valid title and interest to the leasehold estates in its Leased Real Property.  The buildings and other improvements located on the Real Property are in good condition.  There are no pending or threatened proceedings to condemn, take or demolish any Real Property or part thereof.  All facilities located on or comprising the Real Property have received all material Permits required in connection with the operation thereof and have been operated and maintained in all material respects in accordance with all applicable Laws.  All facilities located on or comprising the Real Property are supplied with utilities and other services necessary for the operation of such facilities.  The Company has not assigned, transferred, conveyed, mortgaged, leased, deeded in trust or encumbered any interest in the Real Property.  There are no outstanding options, rights of first offer or rights of first refusal to purchase the Real Property or any portion thereof or interest therein.    

(b) Leased Real Property.  ‎Section 3.12(b) of the Disclosure Schedule contains a list, as of the date of this Agreement, of all leases, subleases, licenses, concessions and other similar agreements (written or oral) of real property under which any Company Entity is lessee (collectively, the “Real Property Leases” and the real property subject to such Real Property Leases, the “Leased Real Property”).  No Company Entity is in, or, during the three-year period prior to the date of this Agreement, has received written notice of any, material violation of or material default under any Real Property Lease.  A true and complete copy of each Real Property Lease (subject to redaction or non-disclosure to protect proprietary or confidential information concerning the Company Entities or as otherwise reasonably necessary to comply with the confidentiality obligations of the Company Entities) has previously been made available to the Buyer.  Each Real Property Lease is a valid and binding agreement of the applicable Company Entity and is in full force and effect, except (i) to the extent such Real Property Lease terminates

or expires after the date of this Agreement in accordance with its terms, (ii) as limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors’ rights generally, and (iii) as limited by general principles of equity, whether such enforceability is considered in a Proceeding in equity or at law.

(c) Title to and Condition of Assets. 

(i) The Company Entities have good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of the material items of tangible personal property that are purported to be owned, leased or licensed by the Company Entities, free and clear of any and all Liens, except for Permitted Liens.  All such items of tangible personal property that are material to the operation of the business of the Company Entities are in reasonably good condition and in a state of reasonably good maintenance and repair (ordinary wear and tear excepted) and are suitable for the purposes used.

(ii) At the Closing, the Buyer will, taking into account all of the Ancillary Agreements, own or have the right to use all of the assets (tangible or intangible) or obtain services (on the terms and subject to the conditions of the Contracts governing the provision of such services) used in, held for use or that are necessary to conduct in all material respects the Seller Business as conducted in all material respects as it has been conducted during the 12 months prior to the Closing. 

Section 3.13 Employee Benefits.

(a) ‎Section 3.13(a) of the Disclosure Schedule includes a list, as of the date of this Agreement, of (i) all Company Benefit Plans, (ii) all Seller Benefit Plans, and (iii) all Foreign Benefit Plans. 

(b) No Company Benefit Plan or Seller Benefit Plan is (i) subject to Section 302 or Title IV of ERISA or Section 412 of the Code, (ii) a multiemployer plan as defined under Section 3(37) of ERISA, (iii) a multiple employer plan within the meaning of Section 413(c) of the Code or Sections 4063, 4064 or 4066 of ERISA, or (iv) a multiple employer welfare arrangement within the meaning of Section 3(40)(A) of ERISA, and no Company Entity nor any ERISA Affiliate of any Company Entity has any Liability with respect to any plan described in (i) through (iv) herein.

(c) No Foreign Benefit Plan is a defined benefit pension plan, and no Company Entity has any Liability with respect to any defined benefit pension plan.

(d) Each Company Benefit Plan and Seller Benefit Plan that is intended to be qualified under Section 401(a) of the Code is subject to a favorable determination letter from the IRS, and, to the Knowledge of the Seller, no event has occurred and no condition exists that is reasonably likely to result in the revocation of any such determination. Each Foreign Benefit Plan is registered and approved, as required, by any applicable Governmental Entity.

(e) Each Company Benefit Plan, Seller Benefit Plan, and Foreign Benefit Plan has been maintained, funded and administered in material compliance with its terms and in compliance with applicable Law, including applicable provisions of ERISA and the Code, except,

with respect to each Seller Benefit Plan and Foreign Benefit Plan, as would not reasonably be expected to result in Liability to any Company Entity or any Employee.

(f) No non-exempt prohibited transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Seller Benefit Plan or any Company Benefit Plan.

(g) None of the Company Benefit Plans, Seller Benefit Plans, nor any administrator or sponsor thereof is or has been required to report any excise Tax due to violation of Laws applicable to group health plans on Form 8928, except, with respect to the Seller Benefit Plans, as would not reasonably be expected to result in Liability to any Company Entity.

(h) With respect to each Company Benefit Plan and the obligations of any Company Entity under each Seller Benefit Plan and Foreign Benefit Plan, there are no material benefit obligations for which contributions, payments, premiums or reimbursements have not been made or properly accrued and there are no unfunded benefit obligations that have not been accounted for by reserves or otherwise properly footnoted in the financial statements of the Company, to the extent required by the Company’s usual method of accounting.

(i) There are no pending or, to the Knowledge of Seller, threatened (A) audits or investigations by any Governmental Entity involving any Company Benefit Plan, Foreign Benefit Plan, or Seller Benefit Plan that would reasonably be expected to result in Liability to any Company Entity, or (B) claims (except for individual claims for benefits payable in the normal operation), suits or proceedings involving any Company Benefit Plan, Foreign Benefit Plan, or Seller Benefit Plan, or any service provider thereto, that would reasonably be expected to result in Liability to any Company Entity.

(j) No Company Benefit Plan, Seller Benefit Plan, or Foreign Benefit Plan provides post-employment or retiree welfare benefits to any current or former Employees, except, as applicable, to the extent required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code or applicable state Law.

(k) Neither the Seller nor any Company Entity has any obligation to gross up, indemnify or otherwise reimburse any current or former director or Employee for any Tax incurred under Section 409A, 457A or 4999 of the Code.  Each Company Benefit Plan and each Seller Benefit Plan that is subject to Section 409A of the Code is, in all material respects, in documentary and operational compliance with Section 409A of the Code or an available exemption therefrom.

(l) Neither the execution of this Agreement nor the consummation of the Transactions (whether alone or together with any other events) will (i) entitle any current or former director of any Company Entity or any current or former Employee to any payment or benefit, including any bonus, retention, severance, retirement or job security payment or benefit, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation, severance or benefits under, or increase the amount payable or trigger any other obligation under, any Seller Benefit Plan, Company Benefit Plan, or Foreign Benefit Plan or (iii) result in the payment of any amount that would not be deductible under Section

280G of the Code (determined without regard to the exceptions set forth in Section 280G(b)(5) of the Code).

(m) As applicable with respect to each of the Company Benefit Plans,  Seller has made available to Buyer true and correct copies of (i) the applicable plan document (including all amendments and modifications thereof), or in the absence of a plan document, a written description of the underlying Company Benefit Plan, (ii) the most recent summary plan description, (iii) the three most recently filed Form 5500 series and all schedules thereto, (iv) the most recent determination, opinion or advisory letter issued by the IRS, (v) the three most recent summary annual reports, financial statements, and/or trustee reports, (vi) the three most recent compliance testing results, and (vii) any material correspondence with or from the IRS, the Department of Labor, or any other Governmental Entity. With respect to each Seller Benefit Plan and each Foreign Benefit Plan, Seller has made available to Buyer true and correct copies of the applicable plan document (including all amendments and modifications thereof).

Section 3.14 Labor and Employment Matters.

(a) ‎Section 3.14(a)(i) of the Disclosure Schedule sets forth a list of the names, job titles, employing entity, locations, hire dates, current annual base salary or hourly wage rate, 2018 base salary or hourly wage rate, 2018 and 2019 bonus and commission compensation paid or payable, status (as exempt or non-exempt under the Fair Labor Standards Act, active or a description of leave and full-time or part-time) and the amounts of accrued and unused vacation time (for non-exempt employees only) of all Employees of the Company Entities. ‎Section 3.14(a)(ii) of the Disclosure Schedule sets forth any individual who is listed on ‎Section 3.14(a)(i) of the Disclosure Schedule who is not entirely dedicated to the Seller Business and the percentage of time spent by such individual performing work for the Seller Business on an annual basis. ‎Section 3.14(a)(iii) of the Disclosure Schedule sets forth any employee of the Seller or an Affiliate of Seller (other than any Company Entity) who is dedicated to the Seller Business, and includes such individual’s title and employing entity.  All current Employees in the United States are “at will” employees, and except for employee offer letters entered into in the ordinary course of business, no Company Entity is party to any written employment agreements.

(b) As of the date of this Agreement, there are no pending or, to the Knowledge of the Seller, threatened strikes, labor disputes, work stoppages, requests for representation, pickets, unfair labor practices, work slow-downs due to labor disagreements or any actions or arbitrations that involve the labor or employment relations of any Company Entity or any Employee.  Neither the Seller (with respect to any current or former Employee) nor any Company Entity is party to any collective bargaining agreement or similar agreement for labor representation, and there is no organizing activity by any labor union with respect to any Employees.  The consummation of the Transactions shall not create any notice or consent rights with respect to any union, works council, employee representative or other labor representative body.

(c) During the three-year period prior to the date of this Agreement, all independent contractors, subcontractors, and consultants utilized by the Seller or any Company Entity to provide services to the Seller Business have been properly characterized as independent contractors.

(d) During the three-year period prior to the date of this Agreement, the Seller (with respect to any current or former Employee or any current or former independent contractor or consultant dedicated to the Seller Business) and each Company Entity have complied in all material respects, with all applicable Laws which relate to employment or labor, including those concerning wages, hours, occupational safety and health, work authorization, equal employment opportunity, immigration, labor relations, discrimination, harassment, plant layoffs or closings, temporary workers, independent contractors, disability, employment practices, employment taxes, worker classification, collective bargaining, unemployment compensation and worker’s compensation.  During the three-year period prior to the date of this Agreement, the Seller (with respect to any current or former Employee dedicated to the Seller Business) and each Company Entity have complied in all material respects, with all requirements related to the proper classification of employees as exempt or non-exempt under the Fair Labor Standards Act and similar state Laws. 

(e) There are no pending or, to the Knowledge of the Seller, threatened material Proceedings (i) against any Company Entity relating to employees or employment practices or with respect to breaches of any such employment or labor Law, or (ii) against the Seller or an Affiliate of the Seller (except for any Company Entity) with respect to any current or former Employee.

(f) During the three-year period prior to the date of this Agreement, neither the Seller nor any Company Entity has taken any action that would constitute a “mass layoff” or “plant closing” within the meaning of the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “WARN Act”), and any similar foreign, state or local statute, rule or regulation, nor has any such mass layoff or plant closing with respect to the Seller (with respect to any current or former Employee) or any Company Entity been planned or announced.

(g) Neither the Seller nor any Company Entity has sought to enforce any confidentiality, intellectual property assignment, non-competition, non-solicitation or non-disparagement Contract covering a former Employee during the three-year period prior to the date of this Agreement.

(h) During the three-year period prior to the date of this Agreement, the Seller (with respect to any current or former Employee or any independent contractor or consultant dedicated to the Seller Business) and each Company Entity, as applicable, has, in all material respects, paid in full all payments due or owing to any of its current and former Employees, consultants or independent contractors for any wages, salaries, commissions, bonuses or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants or independent contractors.

Section 3.15 Environmental Matters.    

(a) Each Company Entity is in compliance with all Environmental Laws, except for any non-compliance that would not result in a material liability to the Company. 

(b) Within the last three years, no Company Entity has received any written notice of any alleged material violation of any Environmental Law that is unresolved.

(c) There are no Proceedings pending or, to the Knowledge of the Seller, threatened in writing against any Company Entity alleging a material violation of any Environmental Law.

(d) No Company Entity, and to the Knowledge of the Seller, no other Person, has Released any Hazardous Material at the Owned Real Property or Leased Real Property that the Company is required to remediate or that otherwise would reasonably be expected to result in material liability to the Company under any applicable Environmental Laws.

(e) The Company has not received any written notice that it has transported or arranged for the treatment, storage, handling, disposal or transportation of any Hazardous Material to an off-site location in violation of Environmental Laws that remains unresolved.

(f) No Company Entity is subject to any consent decree or order which imposes material obligations on any Company Entity under any Environmental Laws.

(g) No underground storage tanks are, or, to the Knowledge of the Seller, were in the past, located at any Owned Real Property and the Company does not currently and, to the Knowledge of the Seller, did not in the past operate any underground storage tanks on the Leased Real Property.

(h) The Seller and the Company have made available to Buyer copies of all Phase I and Phase II Environmental Site Assessments and other material environmental site assessment reports relating to the environmental condition of the Owned Real Property and the Leased Real Property that are in the possession of the Seller or the Company. 

Section 3.16 Insurance.  ‎Section 3.16 of the Disclosure Schedule sets forth a true, correct and complete list, as of the date of this Agreement, of each insurance policy maintained by a Company Entity or with respect to which a Company Entity is a named insured (including policy number, amount and type of coverage, deductible amount (if any) and including an indication of whether the coverage was on a claims made, occurrence or some other basis).  All such insurance policies are valid, binding and enforceable in accordance with their terms against the respective insurers. There have been no Proceedings against any such insurance policy by a Company Entity as to which the insurers have denied coverage or otherwise reserved rights.  No written notice of cancellation or termination has been received by the Company with respect to any such insurance policies that have not been replaced on substantially similar terms prior to the date of such cancellation or termination.  No coverage limits of any insurance policy have been exhausted and no policies existing as of the date hereof will expire prior to the Closing (or if such policies are canceled or lapse prior to Closing, renewals or replacements thereof will be entered into in the ordinary course of business). All premiums on such insurance policies due and payable as of the date of this Agreement have been paid.    

Section 3.17 Taxes. 

(a) All U.S. federal income and other material Tax Returns required to have been filed by any Company Entity have been duly and timely filed, and each such Tax Return was true, correct and complete in all material respects.  All material Taxes of each Company Entity

due and payable with respect to any such Tax Returns (or otherwise payable by a Company Entity) have been timely paid.

(b) There is no audit or other Proceeding in progress, pending or, to the Knowledge of the Seller, threatened against any Company Entity in respect of any U.S. federal income or other material Taxes or U.S. federal income or other material Tax Returns.  Neither the Seller nor any Company Entity has received in the past three years a notice from any Governmental Entity that any Company Entity is required to pay Taxes or file Tax Returns in a jurisdiction in which such Company Entity does not file Tax Returns or pay Taxes.  No Company Entity has commenced a voluntary disclosure proceeding in any state or local or non-U.S. jurisdiction that has not been fully resolved or settled.

(c) There are no Liens for Taxes on any of the assets of any Company Entity except for Permitted Liens.

(d) The Company Entities have withheld and timely remitted to the appropriate Governmental Entity in compliance in all material respects with all applicable Laws: (i) all required amounts from payments to its employees, agents, contractors, nonresidents, shareholders, lenders and other Persons and (ii) all sales, use, ad valorem and value added Taxes.

(e) No Company Entity has waived or extended any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency,  except for ordinary course extensions of time to file Tax Returns that have since been filed.  Neither the Seller nor any Company Entity has a request for a private letter ruling, a request for administrative relief, a request for technical advice, a request for a change of any method of accounting or other request pending with any Governmental Entity that relates to the Taxes or Tax Returns of any Company Entity.  No power of attorney granted by any Company Entity with respect to any Taxes is currently in force.    

(f) The Company and the Seller are eligible to make an election under Section 336(e) of the Code with respect to the sale of the Purchased Interests.

(g) The aggregate unpaid Taxes of each Company Entity do not exceed the reserves for current Taxes (excluding any reserve established to reflect timing differences between book and Tax items) set forth on the Annual Financial Statements (without regard to any notes thereto) as adjusted for the passage of time through the Closing Date. 

(h) No Company Entity has,  within the past six years,  been a member of any Affiliated Group (except for a Seller Affiliated Group).  No Company Entity is liable for Taxes of any other Person (except for another member of a Seller Affiliated Group) as a result of successor liability, transferee liability, joint or several liability or otherwise.  No Company Entity is party to any Tax Sharing Agreements that will not be terminated at Closing.

(i) The Company is not (and has never been) a “United States real property holding corporation” within the meaning of Code Section 897(c).

(j) No Company Entity has been, in the past three years, a party to a transaction reported or intended to qualify as a reorganization under Code Section 368.  No Company Entity

has constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Code Section 355(a)(1)(A)) in a distribution of shares that was reported or otherwise constitute a distribution of shares under Code Section 355(i) in the two years prior to the date of this Agreement or that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Code Section 355(e)) that includes the transactions contemplated by this Agreement.

(k) No Company Entity has engaged in any transaction that could affect the Income Tax liability for any taxable year not closed by the applicable statute of limitations (i) which is a “reportable transaction” or (ii) a “significant purpose of which is the avoidance or evasion of United States federal income tax” within the meanings of Code Sections 6662, 6662A, 6011, 6012, 6111 or 6707A or Treasury Regulations promulgated thereunder or pursuant to notices or other guidance published by the Internal Revenue Service (irrespective of the effective dates).

(l) No Company Entity owns an interest in any Flow-Thru Entity other than American Business Sergeant’s Pet Care Products Trade (Shanghai) Co, Ltd.

(m) Each Company Subsidiary organized under the Laws of a non-U.S. jurisdiction is treated for U.S. federal Income Tax purposes as a corporation under Treasury Regulations Section 301.7701-3 (by default status) and no election has been made (or is pending) to change the U.S. federal Income Tax treatment of any Company Subsidiary.

(n) No Company Entity engages in (or has engaged) in a trade or business in a country other than the country in which such Company Entity is incorporated or otherwise organized.

(o) No Company Subsidiary organized under the Laws of a non-U.S. jurisdiction owns any interest in “United States real property” with the meaning of Code Section 897 or “United States property” for purposes of Code Section 956.

(p) There are no gain recognition agreements under Code Section 367 that were entered into with respect to, by or otherwise related to any gain deferred by any Company Entity.

(q) Each Company Entity has complied in all material respects with all transfer pricing rules (including maintaining appropriate documentation for all transfer pricing arrangements for purposes of Code Section 482 (or any similar provision of non-U.S. Law)).

Section 3.18 Intellectual Property.    

(a) ‎Section 3.18(a) of the Disclosure Schedule identifies all Owned Intellectual Property that is (i) subject to an application, certificate, filing, registration or other document issued by, filed with or recorded by any Governmental Entity, quasi-governmental authority or registrar (by name, owner and, where applicable, registration or application number and jurisdiction) (the “Registered Intellectual Property”), (ii) a material unregistered Trademark or (iii) Software;  provided that, as of the date hereof, ‎Section 3.18(a) of the Disclosure Schedule consists only of Registered Intellectual Property registered or applied for in the United States.    One of the Company Entities is the record title owner of each item of Registered Intellectual Property.  All Registered Intellectual Property has been maintained effective by the filing of all necessary filings, maintenance and renewals, and timely payment of requisite fees. No loss or expiration of any

Registered Intellectual Property or, to the Knowledge of the Seller, any other Owned Intellectual Property is threatened, pending or reasonably foreseeable, except for patents expiring at the end of their statutory terms (and not as a result of any act or omission by the Company Entities, including failure by a Company Entity to pay any required maintenance fees).

(b) The Company Entities own all right, title and interest in, or have a valid and enforceable license or right to use, all Company Entity Intellectual Property.  One of the Company Entities is the sole and exclusive owner of each item of Owned Intellectual Property free and clear of all Liens.  All Registered Intellectual Property is valid and enforceable.

(c) The Company Entities have not used, incorporated, distributed or combined any open source, copyleft or community source code in such a way that requires, as a condition of use, modification and/or distribution of such open source, copyleft or community source code, that the Owned Software be (i) disclosed or distributed in source code form, (ii) be licensed for the purpose of making derivative works, or (iii) be redistributable at no charge. All Owned Software does not contain any Unauthorized Code or any back door, time bomb, drop dead device or other Software routine designed to disable a computer program.  No Person other than a Company Entity possesses a copy, in any form (print, electronic, or otherwise), of any source code for any Owned Software, and all such source code is in the sole possession of the Company Entities and has been maintained strictly confidential. The Company Entities have no obligation to afford any Person access to any such source code. The Company Entities are in possession of all other material relating to the Software used in the business of the Company Entities, including installation and user documentation, engineering specifications, flow charts and know-how, reasonably necessary for the use, maintenance, enhancement, development and other exploitation of such Software as used in, or currently under development for, the business of the Company Entities.  

(d) The IT Assets are operational, fulfill the purposes for which they were acquired or developed, have security, back-ups and disaster recovery arrangements in place and hardware and Software capacity, support, maintenance and trained personnel which are sufficient in all material respects for the current needs of the business of the Company Entities. The Company Entities have disaster recovery and security plans, procedures and facilities and have taken reasonable steps consistent with or exceeding industry standards to safeguard the availability, security and integrity of the IT Assets and all data and information stored thereon, including from unauthorized access and infection by Unauthorized Code. The Company Entities have maintained in the ordinary course of business all required licenses and service contracts, including the purchase of a sufficient number of license seats for all Software, with respect to the IT Assets. The IT Assets have not suffered any security breach or material failure within the past three years.

(e) The Company Entities and their Affiliates have taken commercially reasonable  action to maintain and protect all of the Company Entity Intellectual Property. The Company Entities and their Affiliates have taken commercially reasonable measures to protect the confidentiality of all trade secrets and any other confidential information that are Company Entity Intellectual Property (and any confidential information owned by any Person to whom the Company Entities have a confidentiality obligation).  No such trade secrets or other confidential information have been disclosed by the Company Entities or their Affiliates to any Person other than pursuant to a written agreement restricting the disclosure and use of such trade secrets or any other confidential information by such Person.  No current or former employee, contractor or

consultant of a Company Entity or any Affiliate of any Company Entity has any right, title or interest, directly or indirectly, in whole or in part, in any Owned Intellectual Property. The Company Entities have obtained from all Persons (including all current and former employees and contractors) who have created any Owned Intellectual Property valid and enforceable written assignments of any such Intellectual Property to the Company Entities, and the Seller has delivered true and complete copies of such assignments to the Buyer.  To the Knowledge of the Seller, no Person is in violation of any such written confidentiality or assignment agreements.

(f) The Company Entities and the current products and services, products and services sold during the three-year period prior to the date of this Agreement, current conduct of the business of the Company Entities and the conduct of the business of the Company Entities during the three-year period prior to the date of this Agreement, in each case including the manufacture, importation, use, offer for sale, sale, licensing, distribution or other commercial exploitation thereof have not infringed, misappropriated or otherwise violated, and do not infringe, misappropriate or otherwise violate, any Intellectual Property rights or rights of publicity of any Person. No Company Entity is the subject of any pending Proceeding that (i) alleges a claim of infringement, misappropriation or other violation of any Intellectual Property rights of any Person; or (ii) challenges the ownership, use, patentability, registration, validity or enforceability of any Owned Intellectual Property; and no such claim has been asserted or threatened against a Company Entity at any time during the three-year period prior to the date of this Agreement.  During the three-year period prior to the date of this Agreement, no Person has notified a Company Entity that any of such Person’s Intellectual Property rights are infringed, misappropriated or otherwise violated by a Company Entity or that a Company Entity requires a license to any of such Person’s Intellectual Property rights. To the Knowledge of the Seller, no third party is infringing, misappropriating or otherwise violating any of the Owned Intellectual Property, and no written claims alleging such infringement, misappropriation or other violation have been made against any Person by a Company Entity. 

(g) No Company Entity has agreed to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to any of the Company Entity Intellectual Property or any Intellectual Property that was formerly Company Entity Intellectual Property.

(h) No funding, facilities or personnel of any Governmental Entity or university has been used in connection with the development of any Owned Intellectual Property.

(i) The Company Entities have complied and are in compliance, in each case, in all material respects with all applicable Laws relating to patent marking with respect to the products and services of the business of the Company Entities.

(j) As of the Closing, none of the Seller nor any of its Affiliates (other than the Company Entities) shall have any right, title or interest in or to any Owned Intellectual Property.    

(k) The consummation of the Transactions will not result in the loss or impairment of, or any additional fees associated with, a Company Entity’s right to own or use any Company Entity Intellectual Property.  Immediately subsequent to the Closing, the Company Entity Intellectual Property will be owned or available for use by the Company Entities on terms

and conditions identical to those under which the Company Entities own or use the Company Entity Intellectual Property immediately prior to the Closing, without payment of additional fees, and such Company Entity Intellectual Property is sufficient to enable the Company Entities to continue to operate their business immediately subsequent to the Closing in the same manner as their business was operated immediately prior to the Closing.

(l) During the past three years, (i) the Company Entities have not experienced any Security Breaches or material Security Incidents, and the Company Entities have not received any notices or complaints from any Person regarding such a Security Breach or material Security Incident and (ii) the Company Entities have not received any complaints, claims, demands, inquiries or other notices, including a notice of investigation, from any Person (including any Governmental Authority or self-regulatory authority) regarding the Company Entities’ Processing of Personal Information or compliance with applicable Privacy and Security Requirements. 

(m) During the past three years, the Company Entities have been in compliance in all material respects with their Privacy Policies and Privacy Contracts. The Company Entities have delivered to the Buyer true, correct and complete copies of all Privacy Policies and Privacy Contracts.  

(n) The Company Entities are, and during the past three years, always have been in compliance in all material respects with all applicable Privacy and Security Requirements. The Company Entities do not have any legal or contractual obligation to comply with non-United States Privacy Laws, including the European Union’s General Data Protection Regulation.

(o) The Company Entities maintain industry standard data back-up and/or contingency operations plans and have proven such plans effective through periodic testing. The Company Entities and, to the Knowledge of the Seller, all third parties that receive Personal Information from or on behalf of the Company Entities have implemented industry standard physical, technical and administrative safeguards that are designed to protect Personal Information from unauthorized access by any Person and that comply in all material respects with all applicable Privacy and Security Requirements. The Company Entities do not have any obligation, contractual or otherwise, to comply with the Payment Card Industry Data Security Standard.

Section 3.19 Affiliate Transactions.    There are no Contracts in effect between or among any Company Entity, on the one hand, and any existing or former officer, director, manager or Affiliate of any Company Entity or, to the Knowledge of the Seller, any Affiliate of any officer, director, manager or Affiliate of any Company Entity, on the other hand,  except for (a) employment Contracts or relationships, the provision of compensation and benefits to officers, directors, managers or Employees of the Company Entities and powers of attorney and similar grants of authority, in each case, made or entered into by any Company Entity in the ordinary course of business, and (b) Intercompany Contracts. 

Section 3.20 Major Customers and Major Vendors. 

(a) ‎Section 3.20(a) of the Disclosure Schedule sets forth a list of the Major Customers.  In the last 12 months, no Company Entity has received any written notice that any Major Customer (i) has cancelled or terminated, or intends to cancel or terminate, any Material

Contract with any Company Entity, or (ii) intends to (x) materially limit its purchase of, or cease to purchase, goods or services from the Company Entities or (y) otherwise materially modify its business relationship with the Company Entities.  To the Knowledge of the Seller, no event has occurred that would reasonably be expected to materially and adversely affect a Company Entity’s relationship with a Major Customer. No Company Entity provides any special rebate, discount or similar programs (whether or not in writing) to any of the Major Customers. 

(b) ‎Section 3.20(b) of the Disclosure Schedule sets forth a list of the Major Vendors.  In the last 12 months, no Company Entity has received any written notice that any Major Vendor (i) has cancelled or terminated, or intends to cancel or terminate, any Material Contract with any Company Entity, or (ii) intends to (x) materially limit its supply or sale of, or cease supplying or selling, products or services to the Company Entities or (y) otherwise materially modify its business relationship with the Company Entities.  To the Knowledge of the Seller, no event has occurred that would reasonably be expected to materially and adversely affect a Company Entity’s relationship with a Major Vendor.   During the three-year period prior to the date of this Agreement, the Company Entities have not experienced, and to the Knowledge of the Seller there do not currently exist, any material quality control or similar problems with the products currently being supplied or on order from any of the Major Vendor. 

Section 3.21 Brokers.  Except for fees or commissions for which the Seller will be solely responsible, no Company Entity has any liability or obligation to pay fees or commissions to any broker, finder or agent with respect to the Transactions.

Section 3.22 Product Liability. Each product developed, sold or delivered by each Company Entity during the three-year period prior to the date of this Agreement has been in conformity in all material respects with all product specifications and all express and implied warranties.  Each of the products sold by the Company Entities (i) has been in conformity in all material respects with all product specifications and all express and implied warranties, (ii) has been in compliance in all material respects with all applicable Laws, and (iii) is safe and effective for use when used in accordance with the approved label instructions. To the Knowledge of the Seller, there is no defect with respect to any of such products and each of such products contains adequate warnings, presented in a reasonably prominent manner, in accordance with applicable Laws and current industry practice with respect to its contents and use.  To the Knowledge of the Seller, no Company Entity has committed any act or failed to commit any act, which act or failure would result in any product Liability or Liability for breach of warranty (whether covered by insurance or not) on the part of any Company Entity.

Section 3.23 Accounts and Notes Receivable; Accounts Payable. 

(a) Subject to reserves reflected on the Interim Financial Statements, the Accounts Receivable accounts and notes receivable of the Company Entities as of the date hereof (the “Accounts Receivable”) represent valid obligations and bona fide transactions made in the ordinary course of business collectible in the ordinary course of business without resort to Proceedings or collection agencies, subject to the amount of reserves therefor.  The aggregate amount of any counterclaims or offsetting claims that are pending or have been threatened in writing with respect to the Accounts Receivable do not exceed the aggregate amount of the reserves therefor. 

(b) All of such Accounts Receivable relate solely to sales of goods or services to the customers of a Company Entity, none of whom are Affiliates of any Company Entity. No Account Receivable has been pledged to any third party by a Company Entity.

(c) To the Knowledge of the Seller (i) no account debtor or note debtor has refused or threatened to refuse to pay its obligations to a Company Entity for any reason and (ii) no account debtor or note debtor is insolvent or bankrupt.

(d) All accounts payable by each Company Entity to third parties arose in the ordinary course of business.

Section 3.24 Inventory.  All inventories of the Company Entities set forth in the Financial Statements were properly stated at the lesser of cost or fair market value in accordance with past practices. All such inventories are owned free and clear of all Liens (other than Permitted Liens). All of the inventories recorded on the Financial Statements consist of items of a good and merchantable quality usable or saleable in the ordinary course of business with a shelf life of no less than six months and are in quantities sufficient for the normal operation of the business of the Company Entities in accordance with past practice, including packaging, raw materials, work in progress and finished products (in each case, designated as such). The values at which inventories are stated in the Financial Statements were calculated in accordance with the inventory valuation policy of the Company Entities.  No previously sold inventory is subject to returns in excess of those historically experienced by the Company Entities.

Section 3.25 Disclaimer of Warranties.  Except as set forth in this Article ‎III (as qualified or modified by the Disclosure Schedule):

(a) the Purchased Interests (including, indirectly through the sale of the Purchased Interests, the assets, properties, liabilities, condition, operations or prospects of the Company Entities) are being sold on an “as is, where is” basis as of the Closing; and 

(b) none of the Seller, the Company, their respective Affiliates or any of their respective Representatives have made, or shall be deemed to have made, any other representation or warranty, express or implied, at law or in equity, in respect of the Purchased Interests or the assets, properties, liabilities, condition, operations or prospects of the Company Entities, including with respect to (i) the operation or profitability of the Seller Business after the Closing; or (ii) the accuracy or completeness of any information, documents or materials regarding the Seller Business, the Purchased Interests or the assets and properties of the Company Entities, including any information furnished or made available to the Buyer, its Affiliates or their respective Representatives) in any confidential information memorandum or presentation, “data room,” “virtual data room,” management presentation or in any other form in expectation of, or in connection with, the Transactions (collectively, the “Evaluation Material”); or projections, predictions, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) that may be in the Evaluation Material.    Any such other representations or warranties are expressly disclaimed.    

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER

Section 4.1 Good Standing; Organization.  The Buyer is duly formed, validly existing and in good standing under the Laws of the State of Idaho.    The Buyer Guarantor is duly incorporated and validly existing under the laws of Delaware.

Section 4.2 Authority and Enforceability.  The Buyer has all requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the Transactions.  The execution, delivery and performance by the Buyer of this Agreement, and the consummation by the Buyer of the Transactions, have been duly authorized by all necessary corporate action on the part of the Buyer, and no other corporate action is necessary on the part of the Buyer to authorize this Agreement or to consummate the Transactions.  This Agreement and each Ancillary Agreement has been, or at the Closing will be, duly executed and delivered by the Buyer, and, assuming the due authorization, execution and delivery by the Seller, this Agreement and the Ancillary Agreements constitutes or will constitute, as applicable, a valid and binding obligation of the Buyer, enforceable against the Buyer, in accordance with its terms, except as limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors’ rights generally and (b) general principles of equity, whether such enforceability is considered in a Proceeding in equity or at law.

Section 4.3 Noncontravention.    

(a) Neither the execution, delivery and performance by the Buyer of this Agreement and the Ancillary Agreements, nor the consummation of the Transactions by the Buyer, will (with or without the giving of notice or the lapse of time or both): 

(i) violate the Organizational Documents of the Buyer; 

(ii) violate any Law or Order applicable to the Buyer, except to the extent that any such violation would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Buyer’s ability to perform its obligations under this Agreement; or 

(iii) result in a breach of or default under, require consent under or violate any material Contract to which the Buyer is a party, except to the extent that any such breach, default or consent would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Buyer’s ability to perform its obligations under this Agreement.

(b) Except for compliance with any applicable requirements of the HSR Act, no Permit or Filing is required by the Buyer in connection with the execution and delivery by the

Buyer of this Agreement, the performance by the Buyer of its obligations under this Agreement and the consummation by the Buyer of the Transactions, except for Permits and Filings the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Buyer’s ability to perform its obligations under this Agreement.

Section 4.4 Proceedings and Orders.  There are no Proceedings pending or, to the Knowledge of the Buyer, threatened in writing against the Buyer, and the Buyer is not subject to any outstanding Orders, in each case, that (a) challenge or seek to enjoin, alter or materially delay the consummation of the Transactions or (b) could adversely affect the Buyer’s ability to perform its obligations under this Agreement.    

Section 4.5 Financing; Sufficient Funds. 

(a) Exhibit A to this Agreement sets forth a  true, accurate and complete executed copy of the commitment letter, dated as of the date hereof, by and among Ares Capital Management LLC (together with its affiliates, and its and its affiliates’ officers, directors, employees, controlling persons, trustees, advisors, agents and representatives and their respective successors and assigns, collectively, the “Financing Source”) and the Buyer (such letter, together with all annexes, exhibits, schedules and other attachments thereto, as may be amended or modified to the extent permitted hereunder, the “Debt Financing Commitment”), pursuant to which the Financing Source party thereto have arranged and committed, subject to the terms and conditions set forth therein, to lend the amount set forth therein for the purposes of financing the Transactions and related fees and expenses (the “Debt Financing”). 

(b) As of the date hereof, (i) the Debt Financing Commitment is in full force and effect, (ii) the Debt Financing Commitment has not been amended or modified in any respect, (iii) no provisions or rights therein have been waived, (iv) the commitments contained in the Debt Financing Commitment have not been withdrawn, terminated, rescinded or otherwise modified in any respect, and (v) no amendment, modification, withdrawal or rescission is currently contemplated.  The Debt Financing Commitment is a valid, binding and enforceable obligation of the Buyer and, to the Knowledge of the Buyer, each other party thereto except (i) as limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws relating to creditors’ rights generally, and (ii) as limited by general principles of equity, whether such enforceability is considered in a Proceeding in equity or at law.    

(c) Except for fee letters relating to fees with respect to the Debt Financing (complete copies of which have been provided to the Seller, with only fee, flex and certain other economic terms redacted (as the same may be amended or modified to the extent permitted hereunder, the “Redacted Fee Letters”); provided that such redactions do not relate to any terms that would adversely affect the conditionality, enforceability, availability, termination or aggregate principal amount of the Debt Financing), as of the date of this Agreement there are no side letters or other Contracts or understandings related to the funding of the Debt Financing other than the Debt Financing Commitment and the Redacted Fee Letters delivered to the Buyer prior to the date of this Agreement. 

(d) As of the date hereof, no event has occurred that, with or without notice, lapse of time or both, would reasonably be expected to constitute a default or breach on the part of the Buyer or, to the Knowledge of the Buyer, any other party thereto under the Debt Financing Commitment. As of the date hereof, to the Knowledge of the Buyer, there is no fact, event or other occurrence that makes any of the representations or warranties of the Buyer under the Debt Financing Commitment inaccurate in any respect taking into account any materiality or other qualifications set forth therein. There are no conditions precedent or contingencies directly or indirectly related to the funding of the full amount of the Debt Financing (including any flex provisions) other than the conditions precedent expressly set forth in the Debt Financing Commitment and to the Knowledge of the Buyer, the Buyer has no reason to believe that it will be unable to satisfy on a timely basis any condition precedent to funding contained in the Debt Financing Commitment.

(e) Assuming the commitments contained in the Debt Financing Commitment are funded in accordance with their terms (after giving effect to the flex provisions), the Buyer will have at the Closing funds sufficient to (i) pay the Purchase Price in accordance with Article ‎II, (ii) pay any and all fees and expenses required to be paid by the Buyer or its Affiliates in connection with the Transactions and the consummation of the Debt Financing, (iii) satisfy all of the other payment obligations of the Buyer contemplated hereunder (whether payable before, at or after the Closing) and (iv) otherwise consummate the Transactions. 

Section 4.6 Investment Representations.  The Buyer acknowledges that the Purchased Interests being acquired pursuant to this Agreement have not been registered under the Securities Act, as amended, or under any state or foreign securities Laws, and that the Purchased Interests may not be sold, transferred, assigned, offered for sale, pledged, hypothecated or otherwise disposed of unless such sale, transfer, assignment, offer for sale, pledge, hypothecation or other disposition is completed pursuant to the terms of an effective registration under the Securities Act and in compliance with any applicable state and foreign securities Laws or pursuant to an exemption from registration under the Securities Act and any applicable state or foreign securities Laws.  The Buyer is purchasing the Purchased Interests for its own account and not with a view to any public resale or other distribution thereof, except in compliance with applicable securities Laws.  The Buyer is an “accredited investor” as defined in Regulation D under the Securities Act. 

Section 4.7 Brokers.  Neither the Buyer nor any of its Affiliates has any liability or obligation to pay fees or commissions to any broker, finder or agent with respect to the Transactions other than to Jefferies, LLC.

Section 4.8 Independent Investigation; Acknowledgements and Confirmations. 

(a) The Buyer has conducted to its satisfaction its own independent review and analysis of, and based thereon has formed an independent judgment concerning the Transactions, the Purchased Interests and the assets, properties, liabilities, condition, operations and prospects of the business of the Company Entities.  In entering into this Agreement, the Buyer has relied solely upon its own review and analysis and the specific representations and warranties of the Seller expressly set forth in Article ‎III (as qualified or modified by the Disclosure Schedule) and not on any other representations, warranties, statements or omissions (whether by another Person, the Seller or the Company) or the Evaluation Material. 

(a) The Buyer acknowledges and confirms that, except for the representations and warranties expressly set forth in Article ‎III (as qualified or modified by the Disclosure Schedule), none of the Seller, the Company, their respective Affiliates or any of their respective Representatives have made, or shall be deemed to have made, and the Buyer has not relied on, is not relying on and disclaims reliance upon, any other representation or warranty, express or implied, at law or in equity, in respect of the Purchased Interests or the assets and properties of the Company Entities, including with respect to: (i) the operation or profitability of the Seller Business after the Closing; or (ii) the accuracy or completeness of any Evaluation Material or the appropriateness or suitability of such information for the purposes of enabling the Buyer to evaluate the consummation of the Transactions. 

ARTICLE V

COVENANTS

Section 5.1 Access to Information.

(a) During the Interim Period (and, solely in connection with the preparation of the Rule 3-05 Financial Statements, for an additional period of 45 days following the Closing Date), the Seller shall, and shall cause the Company Entities and each of their officers, employees, agents, representatives, accountants and counsel to (i) upon reasonable notice, give Buyer, its counsel and other authorized Representatives (including the Financing Source) reasonable access to  the properties, offices, plants, other facilities, books and records of the Company Entities, (ii) upon reasonable notice, furnish to the Buyer, its counsel and other authorized Representatives (including the Financing Source) such financial and operating data and other information regarding the assets, properties, and liabilities relating to the Company Entities as such Persons may reasonably request and (iii) reasonably cooperate with the Buyer in its investigation of the Company Entities; provided,  however, Seller shall not be required to provide information:

(i) that the Seller reasonably believes the Seller or any Company Entity is prohibited from providing to the Buyer by reason of applicable Law;

(ii) that constitutes, or allows access to, information protected by attorney-client privilege; provided,  further, that such access shall: 

(b) Seller shall deliver, or cause to be delivered, to the Buyer, at the Closing, all material files, books, records, information and data relating to the Seller Business that are in the possession or control of the Seller; provided that such access shall not be construed to require the disclosure of records that would cause the waiver of any attorney-client, work product or like privilege; provided, further that in the event of any Proceeding, nothing herein shall limit any Party’s rights of discovery under applicable Law.

(c) For a period of six years after the Closing, the Buyer will, and will cause its subsidiaries and Representatives to, afford to the Seller, reasonable access to the books, records, files and documents of, or relating to, the Company Entities in order to permit such Persons to:

(i) prepare for, participate in and defend any Proceedings relating to or involving such Persons; 

(ii) discharge their obligations under this Agreement; and 

(iii) comply with financial and Tax reporting requirements, and will afford such Persons reasonable assistance in connection therewith; provided,  however, that such access shall:

Section 5.2 Conduct of Business Pending the Closing.  During the Interim Period, and except as (i) required by Law or expressly required by this Agreement, (ii) set forth on ‎Section 5.2 of the Disclosure Schedule or (iii) consented to by the Buyer, the Seller shall cause each Company Entity to (x) conduct its business in the ordinary course of business consistent with past practices, (y) use its respective commercially reasonable efforts to (A) preserve intact the Company Entities’ business, operations, organization, goodwill and reputation, and (B) maintain substantially the same levels of coverage of insurance as provided on the date hereof, and (z) not:

(a) incur any additional Indebtedness in excess of $250,000, except for Indebtedness with the Company Entities’ Affiliates that will be cancelled at Closing;

(b) sell, lease or otherwise dispose of any of its properties or assets that are material to its business other than the sale of inventory in the ordinary course of business;

(c) grant, issue, sell or otherwise dispose of any of the Equity Securities of any Company Entity;

(d) split, combine, redeem or reclassify, or purchase or otherwise acquire, any Equity Securities, shares of its capital stock or its other securities, as applicable;

(e) write-off or otherwise reduce the amount of any receivables, except in the ordinary course of business and at levels which are consistent with reserves for uncollectible amounts included in the Interim Financial Statements;

(f) pay, discharge or satisfy any claims or liabilities in excess of $500,000 or forgive, cancel, compromise, waive or release any debts, claims or rights in excess of $250,000; provided, that nothing herein will prohibit the discharge of any Closing Indebtedness or the settlement and termination of any Affiliate Agreement;

(g) merge or consolidate with or into any other Person, dissolve or liquidate;

(h) amend, terminate or waive any material term under any Material Contract or enter into a Contract which, had it been entered into prior to the date hereof, would have been a Material Contract; provided,  however, that this provision will not limit the Company Entities’ ability to (i) negotiate the terms, including price, of its Contracts with its customers, or (ii) enter into Contracts, in each case, in the ordinary course of business consistent with past practice;

(i) make any change in its material accounting principles or practices, except as required by GAAP or applicable Law or as otherwise apply generally to the Seller and its Affiliates;

(j) except as required by the terms and provisions of any Seller Benefit Plan, Company Benefit Plan, or Foreign Benefit Plan or Contract, (i) adopt, amend or terminate any Company Benefit Plan, (ii) adopt, amend or terminate any Seller Benefit Plan or Foreign Benefit Plan in a manner that would result in disproportionate Liability to any Company Entity, (iii) increase the base salary, bonus or incentive compensation, severance or benefits of any current or former Employee other than (x) in connection with any promotions with respect to any Employees whose base compensation (after such promotion) does not exceed $100,000, and provided that the

aggregate amount of such increases in connection with such promotions does not exceed $100,000 on an annualized basis, or (y) in the ordinary course of business, or (iv) enter into any employment, consulting, collective bargaining, labor, independent contractor, severance, retention or change in control agreement or arrangement with any current or former Employee or any independent contractor providing services to any Company Entity or to the Seller Business, except with respect to consulting agreements providing for an annual rate of compensation less than $75,000;

(k) (i) hire any Employee or (ii) terminate the employment of any Employee, except for cause or as already determined prior to the date of this Agreement, in the case of each of the preceding clauses (i) and (ii), to the extent such Employee has an annual rate of base compensation in excess of $100,000;

(l) amend or modify its Organizational Documents; 

(m) mortgage, pledge or subject to any Lien (other than Permitted Liens) any of its material assets;

(n) purchase any Equity Securities of any Person other than another Company Entity, except for short-term investments or cash equivalents made in the ordinary course of business consistent with past practices; or 

(o) (i) change any method of accounting of any Company Entity for Tax purposes; (ii) enter into any agreement with any Governmental Authority (including a “closing agreement” under Code Section 7121) with respect to any Tax or Tax Returns of any Company Entity; (iii) surrender a right of any Company Entity to a Tax refund; (iv) change an accounting period of any Company Entity with respect to any Tax; (v) file an amended Tax Return; (vi) change or revoke any election with respect to Taxes that would be binding on such Company Entity for a taxable period ending after the Closing Date; (vii) make any election with respect to Taxes that is inconsistent with past practices that would be binding on such Company Entity for a taxable period ending after the Closing Date; or (viii) enter into any agreement to extend or waive the applicable statute of limitations with respect to any Taxes other than in connection with an audit disclosed in the Disclosure Schedule or with the consent of the Buyer, such consent not to be unreasonably withheld, delayed or conditioned; or 

(p) agree or commit to do any of the foregoing.

Section 5.3 Publicity.  The Buyer and the Seller shall reasonably cooperate to prepare, and mutually agree to the text of, a public announcement regarding the Transactions immediately following the execution of this Agreement.  Notwithstanding the foregoing, none of the Parties

will make any public announcement or issue any public communication regarding this Agreement or the Transactions or any matter related to the foregoing, without the prior written consent of the Seller, in the case of a public announcement or communication by the Buyer, or the Buyer, in the case of a public announcement or communication by the Seller (such consents, in either case, not to be unreasonably withheld, conditioned or delayed), except (a) if such announcement or other communication is required by applicable Law or Order, in which case the disclosing Party shall, to the extent permitted by applicable Law or Order, first allow the Buyer or the Seller, as applicable, to review such announcement or communication and comment thereon, and the disclosing Party shall consider such comments in good faith, (b) internal announcements to Employees of the Company Entities made by the Seller or a Company Entity or employees of the Buyer and its Affiliates made by the Buyer and (c) announcements and communications to Governmental Entities in connection with Filings or Permits relating to the Transactions required to be made under this Agreement.  For the avoidance of doubt, the Seller, the Buyer and each Company Entity may make such announcements from time to time to their respective employees, customers, suppliers and other business relations as the Seller, the Buyer or such Company Entity may reasonably determine is necessary to (i) comply with the requirements of any agreement to which the Seller, the Buyer or such Company Entity is a party or (ii) consummate the Transactions; provided, however, none of the Parties will make any announcements related to non-public information without the prior written consent of the Seller, in the case of an announcement or communication by the Buyer, or the Buyer, in the case of a announcement or communication by the Seller (such consents, in either case, not to be unreasonably withheld, conditioned or delayed).

Section 5.4 Exclusivity.  During the Interim Period, the Seller shall not, and shall cause the Company Entities and their respective Representatives not to, solicit, initiate, encourage, discuss or negotiate with any other Person a possible sale (directly or indirectly) of the Seller Business, in the form of a sale of all or any material portion of the Seller’s assets related to the Seller Business, including any sale of the Company Entities (other than the sale of inventory in the ordinary course of business) (an “Acquisition Proposal”), provide any information to any other Person concerning such business (other than information which the Company Entities provides to other Persons in the ordinary course of business, so long as the Seller has no reason to believe that the information may be utilized to evaluate an Acquisition Proposal) or enter into an agreement, arrangement or understanding, whether written or oral, with any Person (other than the Buyer) relating to an Acquisition Proposal.  The Seller and the Company Entities shall, and shall cause each of their Representatives to, immediately cease and cause to be terminated all existing discussions, negotiations and other communications with any Person conducted heretofore with respect to any such Acquisition Proposal and promptly (but in any event within five Business Days) after the date of this Agreement, if not already done so prior to the date of this Agreement, instruct any Person who entered into a confidentiality agreement with the Seller that has not expired or been terminated in connection with any actual or potential Acquisition Proposal to return or destroy all such information or documents in accordance with the terms of such confidentiality agreement.  From and after the date hereof, the Seller shall promptly inform the Buyer of any contact with any third party relating to the foregoing, and promptly communicate to the Buyer the terms of any proposal or inquiry which a Company Entity may receive after the date hereof with respect to an Acquisition Proposal.

Section 5.5 Expenses.  Except as otherwise expressly provided in this Agreement, whether or not the Transactions are consummated, each Party will pay its own costs and expenses

incurred in anticipation of, relating to and in connection with the negotiation and execution of this Agreement, the performance of the obligations under this Agreement and the consummation of the Transactions; provided, however, that, at the Closing, the Closing Transaction Costs as set forth in the Estimated Closing Statement shall be paid in accordance with Article ‎II.  Notwithstanding the immediately preceding sentence, (a) the Buyer and the Seller shall each pay one-half of all filing fees required by Governmental Entities with respect to Filings or Permits required in connection with the execution and delivery of this Agreement, the performance of the obligations under this Agreement and the consummation of the Transactions; provided, however, that the Buyer shall pay 100% of all filing fees in connection with Filings under the HSR Act, and (b) the Buyer and the Seller shall each pay one-half of the premium and other fees payable with respect to the R&W Policy to the R&W Insurer and any taxes thereon as set forth in ‎Section 5.17. 

Section 5.6 HSR Filings.

(a) Obligations of Both Parties.  Without limiting the generality of ‎Section 5.9(a), each Party must: 

(i) as soon as reasonably practicable following the execution of this Agreement, use their best efforts to file with the United States Federal Trade Commission and the United States Department of Justice, the Notification and Report Form required for the Transactions pursuant to the HSR Act;

(ii) supply as promptly as practicable any additional information or documents that may be requested pursuant to the HSR Act; 

(iii) use its reasonable best efforts to take all other actions necessary to cause the expiration or termination of the applicable waiting periods and to obtain any Permit required under the HSR Act as soon as practicable; 

(iv) comply substantially with any additional requests for information, including requests for production of documents and production of witnesses for interviews, investigational hearings or depositions, made by the applicable Antitrust Authorities and take all other reasonable actions to obtain all applicable consents, approvals, clearances or waivers from the applicable Antitrust Authorities required under the HSR Act at the earliest practicable dates;

(v) promptly inform the other Party of any material communication regarding this Agreement or any of the Transaction:

(vi) permit the other Party to review and consult in advance on any material communication given by it in response to any Governmental Entity or in connection with any Proceeding by a private party referred to in ‎Section 5.6(a)(v); 

(vii) consult in advance and, to the extent permitted by such Governmental Entity or other Person, permit the other Party to attend and participate in any meetings and conferences with any Governmental Entity or in connection with any Proceeding by a private party referred to in ‎Section 5.6(a)(v);

(viii) instruct its respective counsel to cooperate with the other Parties and use its reasonable best efforts to facilitate and expedite the identification and resolution of any issues arising under the HSR Act at the earliest practicable dates.  Reasonable best efforts and cooperation include such counsel’s undertaking (to the extent permitted by applicable Law and in each case regarding the Transactions and without waiving attorney-client or any other applicable privilege) to: 

(ix) not directly or indirectly through any of their respective Affiliates or Representatives independently contact any Antitrust Authority or participate in any meeting or discussion (or any other communication by any means) with any Antitrust Authority in respect of any such Filings, applications, investigations or other inquiry under the HSR Act without giving the other Party: 

(b) Obligations of Buyer.  The Buyer must and must cause its Affiliates and subsidiaries to:

(i) use reasonable best efforts to promptly take or cause to be taken any and all action necessary to secure satisfaction of the mutual Closing conditions set forth in ‎Section 6.3 as promptly as practicable and to avoid, eliminate and resolve any and all impediments under the HSR Act with respect to the Transactions contemplated by this Agreement. 

(ii) In connection with resolving any impediments under the HSR Act, the Buyer shall not directly or indirectly:

(iii) if any Proceeding is instituted (or threatened) challenging the Transactions as violating the HSR Act or if any decree, order, judgment, or injunction (whether temporary, preliminary or permanent) is entered, enforced, or attempted to be entered or enforced by any Governmental Entity that would make the Transactions illegal or otherwise delay or prohibit the consummation of the Transactions, take any and all actions to contest and defend any such claim, cause of action or Proceeding to avoid entry of, or to have vacated, lifted, reversed, repealed, rescinded or terminated any decree, order, judgment or injunction (whether temporary, preliminary, or permanent) that prohibits, prevents or restricts consummation of the Transactions upon the Seller’s request; and

(iv) during the Interim Period, except with the consent of the Seller, not take any action, including entering into any transaction, that could reasonably be expected to prevent, delay or make it more difficult to (A) file or obtain any Filings or Permits required under the HSR Act with or from any Antitrust Authority to consummate the Transactions or (B) secure satisfaction at the mutual conditions set forth in ‎Section 6.3, or agree, in writing or otherwise, to do any of the foregoing.

Section 5.7 Transfer Taxes.  Notwithstanding any provision of this Agreement to the contrary, all Transfer Taxes incurred in connection with this Agreement and the Transactions shall be paid 50% by the Buyer and 50% by the Seller,  other than interest and penalties imposed by the People’s Republic of China as a result of the Buyer not making a timely filing with respect to the transactions contemplated by this Agreement as contemplated by the last sentence of Section 5.8(b).  The Buyer and the Seller shall cooperate in timely making and filing all Filings, Tax Returns, reports and forms as may be required to comply with the provisions of applicable Tax Laws relating to Transfer Taxes. 

Section 5.8 Tax Matters. 

(a) Tax Returns.

(i) The Seller, at its sole cost and expense, shall prepare and timely file, or cause to be prepared and timely filed,  (x) all Tax Returns with respect to any Seller Affiliated Group (such Tax Returns, the “Company Consolidated Tax Returns”), (y) all Tax Returns with respect to the Company Entities that are required to be filed on or prior to the Closing Date, and (z)  all separate Income Tax Returns of any Company Entity (other than Company Consolidated Tax Returns) for any Pre-Closing Tax Period (other than a Straddle Period) (collectively, the Tax Returns described in clauses (y) and (z), the “Seller-Filed Tax Returns”).  All Seller-Filed Tax Returns that are not Income Tax Returns shall be prepared in a manner consistent with past practice, except as otherwise required by Law, and without a change of any election or any accounting method of any Company Entity.  The Seller shall provide a draft of each Seller-Filed Tax Return to be filed after the Closing Date to the Buyer for its review and comment, along with any relevant accompanying schedules, documents and work papers prepared by the Seller, at least 30 days prior to the due date (including extensions) of such Tax Returns.  The Seller shall incorporate all timely and reasonable comments of the Buyer into such Tax Returns filed after the Closing Date received in writing within ten days following receipt.  Notwithstanding the foregoing, the Buyer shall cause the applicable Company Entity to file all such Seller-Filed Tax Returns prepared by the Seller and timely delivered to the Buyer in accordance with this ‎Section 5.8.  The Seller shall pay to the Buyer an amount equal to any Indemnified Taxes shown as due and payable on any Seller-Filed Tax Return to be filed by the Buyer at least five days prior to the date on which such Taxes are due and payable by Buyer or the applicable Company Entity.

(ii) The Buyer shall prepare, or cause to be prepared, and timely file, or cause to be timely filed, all Tax Returns of each Company Entity due after the Closing Date that are not Seller-Filed Tax Returns or Company Consolidated Tax Returns (each, a “Buyer-Filed Tax Return”).  To the extent a Buyer-Filed Tax Return relates to a Pre-Closing Tax Period, it shall be prepared in a manner consistent with the Company Entities’ past practice and without a change of any election or any accounting method of any Company Entity,  except in each case as otherwise required by applicable Law.  The Buyer shall provide a draft of each Buyer-Filed Tax Return that is an Income Tax Return (or pro forma returns in the case of a Straddle Period) to the Seller for its review and comment, along with any relevant accompanying schedules, documents and work papers, at least 30 days prior to the due date (including extensions) of such Tax Returns, and shall provide a draft of any other Buyer-Filed Tax Return that was not prepared consistently with past practices as a result of not being in compliance with applicable Law to the Seller within a reasonable time prior to the due date of such Tax Return.  The Buyer shall incorporate all timely and reasonable comments of the Seller into such Tax Returns and schedules.  The Seller shall pay to the Buyer an amount equal to any Indemnified Taxes shown as due and payable on any Buyer-Filed Tax Return by the later of (A) ten Business Days after receiving notice of such Taxes and (B) five days prior to the date on which such Taxes are due and payable by the Buyer or the applicable Company Entity.

(iii) The Seller shall include the Company Entities on the U.S. federal Income Tax Return for the Seller Affiliated Group through the close of business on the Closing Date.

(b) Cooperation. The Parties shall, and shall each cause their respective Affiliates to, provide to the other Party such cooperation and information, as and to the extent reasonably requested, in connection with preparing, reviewing and filing of any Tax Return, amended Tax Return or claim for refund, determining liabilities for Taxes or a right to refund of Taxes, or in conducting any audit or other action with respect to Taxes, with respect to the Company Entities and relating to a Pre-Closing Tax Period, in each case, at the expense of the requesting Party.  Such cooperation and information shall include providing copies of all relevant portions of relevant Tax Returns, together with relevant accompanying schedules and relevant work papers and documents relating to rulings and other determinations by Governmental Entities relating to Taxes, and relevant records concerning the ownership and Tax basis of property, that any such Party may possess.  Each Party will retain all Tax Returns, schedules, work papers, material records and other documents relating to Tax matters of the Company Entities for the Tax period first ending after the Closing Date and for all prior Tax periods until the later of (i) the expiration of the applicable statute of limitations (and, to the extent notice is provided with respect thereto, any extensions thereof) for the Tax periods to which the Tax Returns and other documents relate and (ii) eight years following the due date (without extension) for such Tax Returns.  After such eight-year period, the Party holding such Tax Returns or other documents may dispose of them.  Each Party shall make its employees reasonably available on a mutually convenient basis at its cost to provide an explanation of any documents or information so provided. Without limiting the foregoing, the Buyer reserves the right to report the transactions contemplated by this Agreement to the Taxing authorities of the People’s Republic of China pursuant to Announcement 7 within thirty days of the date of this Agreement, at its sole expense, and the Seller shall cooperate with the Buyer in any such filings. 

(c) Straddle Periods. If a Company Entity is permitted, but not required, under applicable foreign, state or local Tax Laws to treat the Closing Date as the last day of a taxable period, such day shall be treated as the last day of a taxable period.  For all purposes of this Agreement, including and for purposes of calculating the Closing Amounts:

(i) Except as otherwise provided in this Agreement, any Taxes for a taxable period including but not ending on the Closing Date (a “Straddle Period”) with respect to the Company Entities shall be apportioned between the portion of the period ending on the Closing Date and the portion of the period commencing on the day immediately following the Closing Date, based on the actual operations of the Company Entities, as the case may be, by a closing of the books of the Company Entities, as if the Closing Date were the end of a Tax year, and each such portion of such period shall be deemed to be a taxable period (whether or not it is in fact a taxable period).  For purposes of computing the Taxes attributable to the two portions of a taxable period pursuant to this ‎Section 5.8(c), the amount of any item that is taken into account only once for each taxable period (e.g., the benefit of graduated Tax rates, exemption amounts, etc.) shall be allocated between the two portions of the period in proportion to the number of days in each such portion.

(ii) In the case of any property Taxes or other similar Taxes imposed on a periodic basis that are payable during the Straddle Period, the portion of such Tax that relates to the portion of such taxable period ending on the Closing Date shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on (and including) the Closing Date and the denominator of which is the number of days in the entire taxable period.

(iii) In the case of Taxes imposed on any Company Entity, the Buyer, or any Buyer Indemnitees as a result of income of any Flow-Thru Entity realized prior to the Closing Date (such income being computed assuming the Flow-Thru Entity had a year that ends on the Closing Date and closed its books), such Taxes shall be treated as Taxes of the applicable Company Entity for a Pre-Closing Tax Period.

(iv) Notwithstanding anything else in this Agreement, (A) Transaction Tax Deductions, shall, to the extent permitted by applicable Law, be allocated to the Pre-Closing Tax Period, and (B) any Taxes attributable to any action taken by the Buyer or any Company Entity on or after the Closing that is not in the ordinary course of business shall be allocated to the taxable period beginning after the Closing Date.

(d) Tax Refunds. 

(i) Subject to ‎Section 5.8(d)(iii), to the extent not taken into account in calculating the Closing Amounts, the Buyer shall, or shall cause the Company Entities to, pay the Seller the amount of any cash Tax refunds or credits of Taxes actually received by the Company Entities that arise with respect to any Pre-Closing Tax Period (including any such amount that is credited against the year in which an audit is settled or ultimately concluded) and the amount of any benefit of any overpayment actually received with respect to any Pre-Closing Tax Period (including any such amount that is credited against the year in which an audit is settled or ultimately concluded) that is applied in a taxable period (or portion thereof) beginning on or after the Closing Date (other than, in each case, refunds, credits or overpayments attributable to the carryback of losses, credits or similar items from a taxable period or portion thereof beginning on or after the Closing Date), in each case, net of any reasonable costs or Taxes incurred in connection therewith.  Such payments shall be made within 15 days of receipt of any such refund or credit or application of any such overpayment by the Buyer or the Company Entities.  All other refunds and credits shall be retained by the Buyer or the Company Entities.

(ii) If, subsequent to the payment by Buyer to Seller of any refund or credit there shall be (A) a determination within the meaning of Section 1313 of the Code (or an analogous provision of state and local law) which results in a disallowance or a reduction of the refund or credit so carried forward or (B) a reduction or disallowance of any Tax refund or credit, Seller shall repay to Buyer any amount which would not have been payable to the Seller pursuant to this ‎Section 5.8(d) had the amount of the payment been determined in light of such determination.

(iii) Nothing in this ‎Section 5.8(d) shall require that Buyer make any payment with respect to any refund for a Tax (and such refunds shall be for the benefit of the Buyer and the Company Entities) that is with respect to (A) any refund of Tax paid after the Closing Date to the extent Seller has not indemnified Buyer or the applicable Company Entity for such Taxes or (B) any refund for Tax that gives rise to a payment obligation by any Company Entity to any Person under applicable Law or pursuant to a provision of a contract or other agreement entered (or assumed) by any Company Entity on or prior to the Closing Date.

(e) Tax Claims.

(i) If a written notice of any Proceeding with respect to Taxes owed by any Company Entity is received by a the Buyer or Company Entity for a Pre-Closing tax Period or Straddle Period (a “Tax Claim”), the Buyer shall give the Seller prompt written notice, no later than ten days after receipt by such notified Party of such written notice, of such Tax Claim; provided, that the failure or delay by the Buyer to provide notice of such Tax Claim to the Seller shall not affect the rights or obligations of the Parties under this Agreement except to the extent the Seller has been actually prejudiced as a result of such failure or delay.    

(ii) After the Closing, upon the Seller delivery of notice to the Buyer within 30 days of the Seller’s receipt of written notice of such Tax Claim, the Seller shall have the right (at its option) to represent the interests of the applicable Company Entity in any Tax Claim relating to a Pre-Closing Tax Period (other than a Straddle Period.  In connection with such Seller-controlled Tax Claim (A) the Seller shall keep the Buyer reasonably informed and consult in good faith with the Buyer with respect to any issue relating to such Tax Claim; (B) the Seller shall provide the Buyer with copies of all correspondence, notices and other written material received from any Governmental Entity with respect to such Tax Claim; (C) the Seller shall provide the Buyer with a copy of, and an opportunity to review and comment on, all submissions made to any Governmental Entity in writing in connection with such Tax Claim; (D) the Seller shall allow the Buyer to participate in the defense of such Tax Claim (including employing counsel separate from the counsel employed by the Seller); and (E) the Seller shall not agree to a settlement or compromise thereof without the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed.

(iii) If (A) the Seller does not notify the Buyer of its election to control a Tax Claim with respect to a Pre-Closing Tax Period within 30 days following receipt by the Seller of written notice of such Tax Claim or (B) such Tax Claim relates to a Straddle Period, the Buyer shall, or shall cause the applicable Company Entity to, control such Tax Claim.  In connection with such Buyer-controlled Tax Claim with respect to a Straddle Period (A) the Buyer shall keep the Seller reasonably informed and consult in good faith with the Seller with respect to any issue relating to such Tax Claim; (B) the Buyer shall provide the Seller with copies of all correspondence, notices and other written material received from any Governmental Entity with respect to such Tax Claim; (C) the Buyer shall provide the Seller with a copy of, and an opportunity to review and comment on, all submissions made to any Governmental Entity in writing in connection with such Tax

Claim; (D) the Buyer shall allow the Seller to participate in the defense of such Tax Claim (including employing counsel separate from the counsel employed by the Buyer); and (E) the Buyer and the Company Entity shall not agree to a settlement or compromise thereof without the prior written consent of the Seller, which consent shall not be unreasonably withheld, conditioned or delayed.    In connection with any other Buyer-controlled Tax Claim, the Buyer shall not (and shall not allow the applicable Company Entity to) agree to a settlement or compromise thereof without the prior written consent of the Seller, which consent shall not be unreasonably withheld, conditioned or delayed.

(iv) Notwithstanding anything to the contrary, the Seller shall control any claim, suit, action, litigation or Proceeding (including any Tax audit) with respect to any Company Consolidated Tax Return and shall timely pay all resulting Taxes.

(f) Section 336(e) Elections; Section 338(g) Elections.

(i) The Seller shall join (and as necessary, cause any Person that is treated as the owner of the stock for Income Tax purposes to join) in an appropriate and timely manner, with the Company (and each applicable Company Entity that is a domestic corporation within the meaning of Sections 7701(a)(3) and (4) of the Code) in (A) entering into a written, binding agreement to make an election under Section 336(e) as set forth in Treasury Regulation Section 1.336-2(h) in substantially the form attached hereto as Exhibit 5.8(f) (the “Section 336(e) Agreement”); and (B) making an election under Code Section 336(e) (in the form prescribed under Treasury Regulation Section 1.336-2(h)(5)-(6)) and any corresponding election under state, local, and foreign Law with respect to the purchase and sale of the Purchased Interests (collectively, a “Section 336(e) Election”).  The Seller and the Company shall (and, to the extent a Seller is not treated as the owner of the shares treated for Income Tax purposes, such Seller shall cause the Person that is treated as the owner of such Seller’s share of the Company for Income Tax purposes to) take all actions necessary or appropriate to effect and preserve a timely Section 336(e) Election with respect to the Buyer’s acquisition of the shares of the Company, including, but not limited to, participating in the timely filing of the Section 336(e) Election as set forth in Treasury Regulation Section 1.336-2(h) and related or comparable forms for state, local or foreign law purposes (collectively, the “Section 336(e) Forms”).  The Seller and the Company shall retain a copy of the Section 336(e) Agreement and the Section 336(e) Forms and attach a copy of such Section 336(e) Forms to the applicable Tax Return as required under Treasury Regulation Section 1.336-2(h).

(ii) The Buyer shall be permitted to make an election under Section 338(g) in respect of its deemed acquisition of the stock of American Business Sergeant’s Pet Care Products Trade (Shanghai) Co, Ltd. and, if not liquidated prior to the Closing Date, Sergeant’s Pet Care Products Mexico, S, DE R.L.DE C.V.

(iii) Within 60 days of determination of the Closing Working Capital, the Buyer shall provide to the Seller a schedule allocating the “adjusted gross-up basis” (as defined in Treasury Regulations Section 1.336-4, but computed without regard to any transaction costs) among the assets of the Company and the Company Subsidiaries (the “Purchase Price Allocation Schedule”).  The Purchase Price Allocation Schedule shall

be prepared in accordance with the applicable provisions of the Code.  If within 30 days Seller objects to the Purchase Price Allocation Schedule, Seller and Buyer shall cooperate in good faith to resolve their differences, provided that if after 30 days, Seller and Buyer are unable to agree, the parties shall engage the Independent Accountants to resolve any dispute in accordance with the procedures described in ‎Section 2.4(d).

(iv) The Buyer and the Seller shall file all Tax Returns (and cause their respective Affiliates and persons that are treated as owning the shares of the Company for Income Tax purposes to file all Tax Returns) consistently with Section 336(e) Election, the Section 336(e) Forms, and the agreed Purchase Price Allocation Schedule (as appropriately adjusted) and to not take any position during the course of any audit or other legal proceeding that is inconsistent with such election, forms or schedule, unless required by a determination of the applicable Governmental Entity that is final.

(v) The Buyer shall cause the Company to either liquidate or convert into a limited liability company characterized as a partnership or disregarded entity effective as of the Closing Date.

(g) Tax Sharing Agreement.  Any and all existing Tax Sharing Agreements between any Company Entity and any member of a Seller Affiliated Group shall be terminated as of the Closing Date and none of the Company Entities, Seller or any Affiliate of Seller shall have any further rights or liabilities thereunder.

Section 5.9 Further Actions.

(a) Subject to the terms and conditions of this Agreement, each Party shall cooperate with the other Party and shall use (and cause its Affiliates to use) its reasonable best efforts (except where a different efforts standard is specifically contemplated by this Agreement, in which case such different standard shall apply):

(i) to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to promptly comply with all requirements that may be imposed on such Party or its Affiliates under applicable Law with respect to this Agreement and, subject to the conditions set forth in Article ‎VI, to consummate the Transactions as soon as practicable, including: 

(ii) not to take any action, or fail to take any action, that could reasonably be expected to prevent, delay or make it more difficult to consummate the Transactions.  

(b) Subject to the terms and conditions of this Agreement, at any time and from time to time after the Closing, at a Party’s request and without further consideration, the other Parties shall execute and deliver to such requesting Party such other instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and information and take such other actions as may be reasonably necessary in order to consummate the Transactions. 

(c) During the Interim Period, the Seller shall give prompt notice to the Buyer, and the Buyer shall give prompt notice to the Seller, of (i) any notice or other communication received by such Party from any Governmental Entity in connection with the Transactions or from any Person alleging that the consent of such Person is or may be required in connection with the Transactions, (ii) Proceedings commenced or threatened against, relating to or involving or otherwise affecting such Party that relate to the Transactions, (iii) any Proceedings that, if pending on the date of this Agreement, would have been required to be disclosed pursuant to, in the case of the Seller, ‎Section 3.9, or, in the case of the Buyer, ‎Section 4.4 or (iv) any fact or occurrence of which any such Party obtains knowledge after the date hereof that would cause the failure of any condition to the consummation of the Transactions set forth in Article ‎VI.  No notice under this ‎Section 5.9(c) shall impact in any way the rights of the Parties to indemnification as set forth in Article ‎VIII hereto.

(d) During the Interim Period, the Parties shall discuss in good faith any reasonable request by the Buyer for access to any additional services that are necessary for the operation of the Company Entities and which are not currently contemplated on Schedule 1 to the Transition Services Agreement, including such services relating to current duties performed by the individual set forth on Section 3.14(a)(ii) of the Disclosure Schedule for the Company Entities, at a price to be agreed upon after good faith negotiations between the Parties, and shall amend the Transition Services Agreement to reflect such additional services and fees.

Section 5.10 Releases.    

(a) Effective upon and as of the Closing, the Buyer on behalf of each Company Entity, generally, irrevocably, unconditionally and completely releases, acquits and forever discharges the Seller, its Representatives and their respective Affiliates, and each of their respective Related Parties, and each of the successors and assigns of any of the foregoing (collectively, the “Seller Parties”), from all past, present and future Losses of every kind, nature, description or character, whether known or unknown, liquidated or unliquidated, that such Company Entity has, owns or holds, or claims to have, own or hold, or may have, own or hold, in each case, arising from the beginning of time through the Closing Date relating to any matter involving the Purchased Interests, the Company Entities or their respective businesses arising on or prior to the Closing, including for any controlling equityholder liability and breach of any fiduciary duty relating to any pre-Closing actions or failures to act by any Seller Party; provided,  however, that nothing in this ‎Section 5.10(a) shall constitute a release or waiver of any rights provided for under this Agreement. 

(b) Effective upon and as of the Closing, the Seller generally, irrevocably, unconditionally and completely releases, acquits and forever discharges the Company Entities, its Representatives and their respective Affiliates, and each of their respective Related Parties, and each of the successors and assigns of any of the foregoing (the “Buyer Parties”), from all past, present and future Losses of every kind, nature, description or character, whether known or unknown, liquidated or unliquidated, that the Seller has, owns or holds, or claims to have, own or hold, or may have, own or hold, in each case, arising from the beginning of time through the Closing Date relating to any matter involving the Purchased Interests, the Company Entities or their respective businesses arising on or prior to the Closing, including breach of any fiduciary duty relating to any pre-Closing actions or failures to act by any Buyer Party; provided,  however, that nothing in this ‎Section 5.10(b) shall constitute a release or waiver of (i) any rights provided under this Agreement; and (ii) any rights for indemnification or exculpation that its Representatives may have as directors or officers of the Company Entities pursuant to such Company Entity’s Organizational Documents.

Section 5.11 Employee Matters.

(a) (i) Prior to the Closing, the Seller and any Company Entity, as applicable, shall transfer the employment of those individuals set forth on ‎Section 3.14(a)(ii) of the Disclosure Schedule out of the Company Entity employing such individual, or to otherwise terminate the employment of such individuals with the Company Entity, and Seller shall be solely responsible for all liabilities, costs and expenses related to such actions and all liabilities, costs and expenses related to such individuals, irrespective of when such liabilities, costs and/or expenses may arise. Any employees disclosed on ‎Section 3.14(a)(i) or ‎Section 3.14(a)(ii) of the Disclosure Schedule who are on long-term disability or short-term disability as of the Closing will either remain employed by Seller or an Affiliate of Seller (excluding any Company Entity), or, if employed by a Company Entity, will be transferred to Seller or an Affiliate of Seller (excluding any Company Entity) immediately prior to the Closing. Those employees listed in ‎Section 3.14(a)(i) or ‎Section 3.14(a)(ii) of the Disclosure Schedule who are on short-term or long-term disability as of the Closing will be provided with offers of employment from a Company Entity, Buyer, or an Affiliate of Buyer if they return to active employment within the six months following the Closing Date or as otherwise required by Law and following an individual assessment of such Employee’s circumstances.  Such offers of employment shall be on the terms set forth in Sections ‎5.11(c) and ‎5.11(e) through ‎5.11(i) as if such Employee were a Continuing Employee.  The Buyer shall be exclusively responsible for any and all liability, and shall indemnify and hold the Seller harmless from and against, any claims arising out of or in connection with the failure of the Buyer to make an offer of employment to any such Employee.

(ii) The Seller and its Affiliates (excluding any Company Entity) shall transfer the employment of those individuals set forth on ‎Section 3.14(a)(iii) of the Disclosure Schedule who are dedicated to the Seller Business to a Company Entity prior to the Closing, and the Seller shall be solely responsible for all liabilities, costs, and expenses related to such actions. 

(b) Notwithstanding anything herein to the contrary, the Company Entities shall not have Liability with respect to the Foreign Benefit Plans or the Seller Benefit Plans, and the Seller shall retain all such Liabilities, other than in respect of contributions due to the Foreign

Benefit Plans or the Seller Benefit Plans related to the pre-Closing period and included in the calculation of the Closing Working Capital or as otherwise expressly provided in this ‎Section 5.11.  The Seller shall retain Liability for claims incurred under the Foreign Benefit Plans and the Seller Benefit Plans irrespective of whether such claims arise prior to, on, or after the Closing.  Effective as of the Closing, each Continuing Employee shall cease participation in, and shall have no further rights under (except as a former participant), all Seller Benefit Plans and Foreign Benefit Plans.  For purposes of the foregoing, (i) a medical or dental claim shall be considered incurred when the medical services are rendered or medical supplies are provided, and not when the condition arose; and (ii) a disability or workers’ compensation claim shall be considered incurred on or prior to the Closing if the injury or condition giving rise to the claim occurs prior to the Closing.

(c) For the 12-month period following the Closing Date (the “Continuation Period”), the Buyer shall provide, or shall cause the Company Entities to continue providing, to each individual who is employed by the Company Entities immediately prior to the Closing (each, a “Continuing Employee”):  

(i) a base salary or hourly wage rate, as applicable, that is at least equal to the base salary or hourly wage rate provided to such Continuing Employee immediately prior to the Closing;

(ii) annual cash bonus opportunities (excluding change in control bonuses and retention bonuses) that are no less favorable than the annual cash bonus opportunities (excluding change in control bonuses and retention bonuses) provided to such Continuing Employee immediately prior to the Closing; and

(iii) employee benefits that are substantially equivalent in the aggregate to those employee benefits that are offered to similarly situated employees of Buyer or an Affiliate of Buyer;  provided that, this ‎Section 5.11(c)(iii) shall not apply to any equity or phantom equity, change in control bonuses, retention bonuses or severance benefits.

(d) With respect to each Continuing Employee whose employment is terminated on, or during the 12-month period following, the Closing under circumstances that would entitle a participant in the U.S. Severance Policy to receive severance benefits, the Buyer shall provide such Continuing Employee with severance benefits equal to the value of the severance benefits contemplated by the U.S. Severance Policy, taking into account such Continuing Employee’s service with the Seller and its Affiliates prior to the Closing and with the Buyer and its Affiliates on and after the Closing.

(e) The Buyer shall cause each Continuing Employee who is covered by a Seller Benefit Plan, other than any Foreign Benefit Plan, providing group health insurance immediately prior to the Closing (and his or her eligible dependents) to be covered on and after the Closing by a group health plan or plans maintained by the Buyer or any of its Affiliates that does not limit or exclude coverage on any basis, including on the basis of any preexisting condition of such Continuing Employee or dependent or any waiting period. The Buyer shall use commercially reasonable efforts to cause such group health plan or plans to provide each Continuing Employee with full credit for the year in which the Closing Date occurs for any deductible or co-payment already incurred by the Continuing Employee under the applicable Seller

Benefit Plan, other than any Foreign Benefit Plan, and for any other out-of-pocket expenses that count against any maximum out-of-pocket expense provision of the applicable group Seller Benefit Plan, other than any Foreign Benefit Plan, or the Buyer’s or such Affiliate’s group health plans.

(f) The Buyer and its Affiliates shall be responsible for all bonuses and commissions for all Continuing Employees in respect of the performance period in which the Closing Date occurs; provided that, for the portion of such performance period preceding the Closing Date, the Buyer shall be liable for such amounts and the employer Taxes attributable thereto only to the extent they have been accrued in the Closing Working Capital calculation.  The Buyer or its Affiliates shall timely remit all such amounts to the Continuing Employees.  

(g) Effective as of the Closing, the Buyer shall make available to each Continuing Employee who, as of immediately prior to the Closing, was eligible to participate in a tax-qualified defined contribution plan maintained by the Seller or its Affiliates (collectively, the “Seller 401(k) Plans”) the Buyer’s tax-qualified defined contribution plan or plans with a cash or deferred feature (the “Buyer 401(k) Plan”).  As soon as practicable after the Closing Date, the Seller 401(k) Plans shall, to the extent permitted by Section 401(k)(10) of the Code, make distributions available to the applicable Continuing Employees, and the Buyer 401(k) Plan shall accept any such distribution (including loans) as a rollover contribution if so directed by such Continuing Employees.

(h) The Seller and the Buyer shall take all actions necessary or reasonably appropriate so that, effective as of the Closing Date:

(i) the account balances (whether positive or negative) (the “Transferred FSA Balances”) under the applicable flexible spending plan of the Seller or its Affiliates (collectively, the “Seller FSA Plan”) of the Continuing Employees will be transferred to one or more comparable plans of the Buyer or its Affiliates (collectively, the “Buyer FSA Plan”); 

(ii) the elections, contribution levels and coverage levels of such Continuing Employees will apply under the Buyer FSA Plan in the same manner as under the Seller FSA Plan; and

(iii) such Continuing Employees will be reimbursed from the Buyer FSA Plan for claims incurred at any time during the plan year of the Seller FSA Plan in which the Closing Date occurs that are submitted to the Buyer FSA Plan from and after the Closing Date on the same basis and the same terms and conditions as under the Seller FSA Plan. 

(i) As of, and after Closing, the Buyer and its Affiliates shall provide credit to each Continuing Employee for vesting, eligibility and, with respect to severance and vacation benefits only, benefits calculation  purposes under the benefit plans of the Buyer or its Affiliates (as applicable) providing benefits to Continuing Employees after the Closing for such Continuing Employee’s service prior to the Closing with the Seller or any of its Affiliates (and their respective predecessors) to the same extent as such Continuing Employee was entitled to credit for such service under any similar Seller Benefit Plan or Foreign Benefit Plan prior to Closing;  provided,  however, that the foregoing shall not apply to the extent that its application would result in a duplication of benefits with respect to the same period of service.    

(j) Following the Closing Date and only to the extent such vacation, personal days, and sick days are included in the Closing Working Capital calculation, for each Continuing Employee, the Buyer shall, or shall cause an Affiliate of the Buyer to, honor all unused vacation, personal days and sick days of each Continuing Employee during the calendar year in which the Closing Date occurs, and immediately following the Closing Date, the Buyer shall cause the Continuing Employees to be subject to, and commence to accrue benefits under, the vacation, sick leave and other personal time off policies of the Buyer or an Affiliate of the Buyer applicable to the respective Continuing Employees. To the extent it is required under applicable Law that, in connection with the Transactions, the Seller or any Company Entity make a payment to any Continuing Employees with respect to his or her unused vacation, personal days or sick days related to the pre-Closing period, the Seller shall be responsible for such payment and the Buyer and its Affiliates shall not be required to honor such unused vacation, personal days or sick days to the extent they were covered by such payment.

(k) A group health plan of the Seller or an Affiliate of the Seller will be responsible for providing COBRA continuation coverage with respect to any and all “M & A qualified beneficiaries,” as defined in Treasury Regulation Section 54.4980B-9, with respect to the Transactions whose “qualifying event” as defined in Treasury Regulation Section 54.4980B-4 occurs upon or prior to the Closing, irrespective of when such “M & A qualified beneficiaries” elects COBRA continuation coverage. A group health plan of the Buyer or an Affiliate of the Buyer will be responsible for providing COBRA continuation coverage with respect to any and all “M & A qualified beneficiaries” whose “qualifying event” occurs following the Closing.

(l) Immediately prior to the Closing, the Seller shall provide the Buyer with a list of all employees of each Company Entity and of the Seller Business who were terminated by the Seller, an Affiliate of the Seller (other than any Company Entity) or any Company Entity within 90 days of the Closing Date.  The Buyer shall be solely responsible for any liabilities under the WARN Act or any other Law relating to reductions in work force or the impact on employees of plant closings or sales of business for any actions taken by the Buyer or any of its Affiliates (including any Company Entity) after the Closing.

(m) Seller and its Affiliates (excluding any Company Entity) shall assign to the Buyer on the Closing Date (to the extent not already assigned to any Company Entity in connection with the transfer of such Employees to the Company Entity) all restrictive covenant agreements by and between any former Employee or current Employee who transfers to the Buyer, independent contractor or consultant of the Seller Business and the Seller or any Affiliate (other than any Company Entity).

(n) The Seller shall remain responsible for the payment of all nonqualified deferred compensation due to the Continuing Employees under any Seller Benefit Plan or Foreign Benefit Plan.  For the avoidance of doubt, Seller may, in its sole discretion, determine to terminate and liquidate, with respect to any Employees, any such Seller Benefit Plan or Foreign Benefit Plan providing for deferred compensation, including in accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(B).

(o) The Seller agrees that, as soon as reasonably practicable after the date hereof,  but in any event prior to the Closing, the Seller will provide current vacation accruals for exempt employees.

(p) The Seller shall retain all Liability for the agreements set forth on ‎Section 3.13(l) of the Disclosure Schedule and shall pay to the applicable Continuing Employees any amounts which become payable in respect of such agreements directly to each applicable Continuing Employee in such Employee’s payroll payment covering the period through the Closing.  To the extent the Seller cannot make the payments required by the agreements set forth on ‎Section 3.13(l) of the Disclosure Schedule in the payroll period on or following the Closing Date, such payments and the employer Taxes related thereto shall be taken into account in the calculation of Closing Working Capital and the Buyer shall remit such payments to the applicable Continuing Employees.

(q) The Seller shall take all actions necessary and appropriate so that outstanding and unvested equity or equity-based incentive awards granted to the Employees pursuant to the Seller Benefit Plans will vest at the Closing.

(r) Prior to the Closing, the Seller shall, at the request of the Buyer, use commercially reasonable efforts to assign, transfer and convey (or cause to be assigned, transferred and conveyed) all of the Seller’s or its applicable Affiliates’ rights, interests and obligations under the agreements set forth on ‎Section 5.11(r) of the Disclosure Schedule to one or more Company Entities.

(s) Nothing contained in this ‎Section 5.11 or elsewhere in this Agreement, express or implied, shall confer upon any current or former Employee, director, manager, officer or consultant of any Company Entity any right to continued employment or service (or resumed employment or service) subsequent to the Closing or any third-party beneficiary rights under this Agreement (except as provided for in ‎Section 5.12).

Section 5.12 D&O Indemnification and Insurance.

(a) The Buyer agrees that all rights to exculpation, indemnification, advancement of expenses and insurance coverage now existing in favor of each current and former director, manager, officer or employee of the Company Entities and each Person who served as a director, manager, officer, stockholder, member, trustee or other fiduciary of a pension or other Benefit Plan or another enterprise or Person at the request or for the benefit of a Company Entity (each, together with such Person’s heirs, executors or administrators, a “D&O Indemnified Party”), as provided in their respective Organizational Documents or in any Contract with any Company Entity shall survive the Closing and shall continue in full force and effect.  For a period

of six years from the Closing Date, the Buyer shall cause each Company Entity to maintain in effect the exculpation, indemnification, advancement of expenses and insurance coverage provisions of such Company Entity’s Organizational Documents as in effect immediately prior to the Closing or in any indemnification agreements of any Company Entity with any D&O Indemnified Party as in effect immediately prior to the Closing, and the Buyer shall not, and shall cause the Company Entities not to, amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any D&O Indemnified Party; provided,  however, that all rights to exculpation, indemnification, advancement of expenses or insurance coverage in respect of any Proceedings pending or asserted or any claim made within such period shall continue until the disposition of such Proceeding or resolution of such claim.  From and after the Closing, the Buyer shall cause the Company Entities to honor, in accordance with their respective terms, each of the covenants contained in this ‎Section 5.12. 

(b) The provisions of this ‎Section 5.12 shall survive the Closing and expressly are intended to benefit, and are enforceable by, each of the D&O Indemnified Parties, each of whom is an intended third-party beneficiary of this ‎Section 5.12. 

(c) In the event the Buyer, any Company Entity or any of their respective successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving Person in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of the Buyer or such Company Entity, as the case may be, shall assume the obligations set forth in this ‎Section 5.12.

Section 5.13 Insurance.  From and after the Closing, the Company Entities shall cease to be insured by the Seller’s or any of its Affiliates’ insurance policies or by any of their respective self-insurance programs, if any, that provide coverage to any Company Entity.  For the avoidance of doubt, the Seller and its Affiliates shall retain all rights to control their respective insurance policies and self-insurance programs, including the right to negotiate, exhaust, settle, release, commute, buy back or otherwise resolve disputes with respect to any of such insurance policies and self-insurance programs, and the Seller and its Affiliates shall retain any premiums or other amounts applied toward applicable retention amounts paid by any Company Entity prior to the Closing in respect of any such insurance coverage.

Section 5.14 Financial Statements. The Seller will use commercially reasonable efforts to deliver to the Buyer as soon as practicable after the date hereof but in any event by the date that is 45 days after the Closing:

(a) an audited balance sheet of the Company Entities as of December 31, 2018 and December 31, 2017 and the related audited statements of income, cash flows and equity for the fiscal year then ended (including any notes thereto), together with an auditor’s audit report relating thereto that complies with Regulation S-X, which auditor shall be chosen and engaged by the Seller, (collectively, the “Audited Financial Statements”); and

(b) an unaudited balance sheet of the Company Entities, as of the end of a calendar quarter and the related unaudited statements of income, cash flows and equity for such year-to-date period, in each case, as required by Articles 3-01 and 3-02 of Regulation S-X

(collectively, the “Unaudited Financial Statements” and together with the Audited Financial Statements, the “Rule 3-05 Financial Statements”).    

(c) The Rule 3-05 Financial Statements will be prepared in accordance with (i) the books and records of the Company Entities and (ii) Regulation S-X to comply with the requirements of Rule 3-05 and GAAP.  The Seller agrees to provide the Buyer with (A) an opportunity to review and comment on drafts of the Rule 3-05 Financial Statements, the form and substance of which shall be reasonably acceptable to the Buyer, and (B) reasonable access in accordance with and subject to the provisions of Section 5.1 to the documents, schedules and work papers of the Seller that are reasonably necessary for purposes of such review. 

(d) Whether or not the Buyer is ultimately required to file the Rule 3-05 Financial Statements with the Securities and Exchange Commission under applicable Law, the Buyer shall reimburse the Seller, within 30 days of receipt of detailed invoices, for 50% of the amount of all reasonable out-of-pocket costs, fees and expenses incurred by the Seller in connection with the preparation of the Rule 3-05 Financial Statements, including any such costs, fees and expenses paid or payable to third-party consultants (in each case without markup and on a pass through basis); provided that the Buyer shall not be obligated to reimburse the Seller for an aggregate amount of costs, fees and expenses under this ‎Section 5.14(d) in excess of $250,000.

Section 5.15 Confidentiality.  The Parties acknowledge and agree that the Confidentiality Agreement shall survive the execution and delivery of this Agreement and any termination of this Agreement in accordance with the terms of such Confidentiality Agreement. Following the Closing, the Seller shall not, and shall cause its controlled Affiliates not to, directly or indirectly, without Buyer’s consent, disclose to any third party (other than each other and their respective Representatives) any confidential or proprietary information related to the Company Entities; provided that the foregoing restriction shall not (a) apply to any information (i) generally available to, or known by, the public (other than as a result of disclosure in violation of this ‎Section 5.15), (ii) independently developed by the Seller or any of its Affiliates (other than by the Company Entities prior to the Closing), or (iii) that is subsequently acquired by the Seller or its Affiliates from a third party under no obligation of confidentiality with respect to such information, or (b) prohibit any disclosure (i) required by applicable Law,  regulatory or judicial process, or audit or inquiries by a Governmental Entity or pursuant to the rules or regulations of any stock or securities trading exchange, so long as, to the extent practicable and legally permissible, the Seller provides the Buyer with reasonable prior notice of such disclosure and a reasonable opportunity (at the Buyer’s sole expense) to contest such disclosure or (ii) made in connection with the enforcement of any right or remedy or defense of any claim relating to this Agreement or any of the Ancillary Agreements.

Section 5.16 Intercompany Balances Arrangements.    

(a) Prior to the Closing, all intercompany balances and accounts owed between the Seller or any of its Affiliates (other than the Company Entities) and any of the Company Entities, will be settled or otherwise eliminated in such a manner as the Seller shall determine in its sole discretion (including by the Seller or its Affiliates removing from any Company Entity all cash amounts or funds from cash pools by means of dividends, distributions, contributions, the creation or repayment of intercompany debt, increasing or decreasing of cash pool balances or

otherwise).  Intercompany balances and accounts solely among any of the Company Entities shall not be affected by this ‎Section 5.16.

(b) Prior to the Closing, except for this Agreement and the other documents and instruments contemplated hereby and except as set forth in ‎Section 5.16(a), all intercompany arrangements and Contracts, including all obligations to provide, lease or license goods or services, tangible or intangible properties or joint activities, between any of the Seller or any of its Affiliates (other than the Company Entities) on the one hand, and any of the Company Entities on the other hand (each, an “Affiliate Agreement”), will automatically be terminated without further payment or performance and cease to have any further force and effect, such that no Party thereto shall have any further obligations for such arrangements and Contracts after the Closing.

Section 5.17 R&W Policy.

(a) On or prior to the date of this Agreement, the Buyer has bound the R&W Policy with the R&W Insurer and provided a true and correct copy of the R&W Policy to the Seller.    

(b) The costs of the R&W Policy will be shared by the Parties in accordance with Section 5.5.

(c) The Buyer will not, without the consent of the Seller, permit the R&W Policy to be terminated, nor to be amended or modified in a manner adverse to the Seller, nor will the Buyer waive or permit to be waived any right under the R&W Policy in a manner adverse to the Seller; provided, that, for the avoidance of doubt, the R&W Policy shall provide that the insurer shall have no, and shall waive and not pursue any and all, subrogation rights against the Seller except for fraud in respect of the making of any of the representations or warranties set forth in Article ‎III. 

Section 5.18 Financing.    

(a) The Buyer shall not permit any amendment or modification to be made to, or any waiver of any provision or remedy under, or any replacements of, the Debt Financing Commitment if such amendment, modification, waiver or replacement (i) reduces the aggregate amount of the Debt Financing (including by changing the amount of any fees to be paid or original issue discount of the Debt Financing) to an amount that would be less than an amount that would be required to consummate the Transactions on the Closing Date and make the other payments required to be made by Buyer or any of its Affiliates hereunder on the Closing Date or (ii) imposes new or additional conditions or otherwise expands, amends or modifies any of the terms of the Debt Financing or conditions to the receipt of the Debt Financing in a manner that would reasonably be expected to (A) delay or prevent the Closing, or (B) make the funding of any portion of the Debt Financing (or satisfaction of the conditions to obtaining the Debt Financing) materially less likely to occur or (C) adversely impact the ability of the Buyer to enforce its rights in any material respect, as applicable, against the other parties to the Debt Financing Commitment or the definitive agreements with respect thereto.

(b) The Buyer shall use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, customary or advisable to arrange and obtain the Debt Financing on the terms and conditions described in or contemplated by the Debt  

Financing Commitment, including using reasonable best efforts to (i) maintain in full force and effect the Debt Financing Commitment, (ii) satisfy on a timely basis all conditions and covenants applicable to the Buyer or any of its Affiliates in the Debt Financing Commitment and otherwise ensure compliance with the obligations of the Buyer or any of its Affiliates thereunder, (iii) enter into definitive agreements with respect thereto on the terms and conditions contemplated by the Debt Financing Commitment (including with respect to any “flex” provisions contained therein), (iv) in the event that all conditions in the Debt Financing Commitment have been satisfied or waived (other than conditions that the Buyer or any of its Affiliates solely control the satisfaction of and other than those conditions that by their nature are to be satisfied at the Closing), consummate the Debt Financing contemplated by the Debt Financing Commitment at or prior to the Closing and (v) enforce its rights under the Debt Financing Commitment in the event that all conditions in the Debt Financing Commitment have been satisfied (other than conditions that the Buyer or any of its Affiliates solely control the satisfaction of and other than those conditions that by their nature are to be satisfied at the Closing), to cause the Financing Source and other Persons providing the Debt Financing to fund on the Closing Date the Debt Financing required to consummate the Transactions. 

(c) Without limiting the generality of the immediately preceding clause (b), the Buyer shall give the Seller prompt (and, in any event within one Business Day) written notice: (i) of any amendment, modification, waiver or replacement to the Debt Financing Commitment (together with a copy of such amendment, modification, waiver or replacement); (ii) of any material breach or material default (or any event or circumstance that, with or without notice, lapse of time or both, could give rise to any material breach or material default) by any party to the Debt Financing Commitment or definitive document related to the Debt Financing of which the Buyer becomes aware; (iii) of the receipt of any notice or other communication from any party to the Debt Financing Commitment with respect to any actual expiration, lapse, withdrawal, breach, default, termination or repudiation by any party to the Debt Financing Commitment or any definitive document related to the Debt Financing or any provisions of the Debt Financing Commitment or any definitive document related to the Debt Financing; or (iv) if the Buyer does not expect to be able to obtain all or any portion of the Debt Financing on the terms, in the manner or from the sources contemplated by the Debt Financing Commitment or the definitive documents related to the Debt Financing. 

(d) If any portion of the Debt Financing becomes unavailable on the terms and conditions contemplated in the Debt Financing Commitment, the Buyer shall use its reasonable best efforts to arrange and obtain alternative financing from alternative sources in an amount sufficient to consummate the Transactions as soon as practicable following the occurrence of such event, but no later than the Business Day immediately prior to the Closing Date.  The Buyer shall promptly deliver to the Seller true and complete copies of all agreements pursuant to which any such alternative financing source shall have committed to provide the Buyer or its Affiliates with any portion of the Debt Financing, and all of the provisions of this ‎Section 5.18 shall apply to such alternate financing, mutatis mutandis.

(e) From and after the date hereof until the Closing, the Seller shall provide, and shall use commercially reasonable efforts to cause its Affiliates, Representatives and advisors, including tax advisors, to provide customary cooperation and assistance in connection with the arrangement of the Debt Financing, as may be reasonably requested by the Buyer, including: 

(i) causing the Company Entities to execute and deliver customary guarantee, pledge and security documents or other definitive financing documents or other certificates, legal opinions and documents as may be reasonably requested by the Buyer, provided,  however, that no obligation of any of the Company Entities, under any such document or agreement, as applicable, is effective until the Closing;

(ii) furnishing the Buyer and the Financing Source with the most recent combined financial statements, financial data and other information of the Company Entities available and reasonably requested by the Buyer or the Financing Source in connection with the Debt Financing, including the combined unaudited balance sheet of the Company Entities as of the last day of each fiscal quarter (from and after the fiscal quarter ending March 31, 2019) within 60 days following the end of each such fiscal quarter and the related unaudited statements of income as prepared by management for each such fiscal quarter then ended, other than the Last Quarter Financials;