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Exhibit 10.1
 
 
STOCK PURCHASE AGREEMENT
 
BY AND AMONG
 
CHURCH & DWIGHT CO., INC.
 
AVID HEALTH, INC.,
 
THE SELLERS LISTED ON THE SIGNATURE PAGES HERETO
 
AND
 
THE SELLER REPRESENTATIVE
 
 
 
Dated as of August 17, 2012
 
 
 
 
 
 

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TABLE OF CONTENTS    
Page
Article 1 DEFINITIONS
1
   
Article 2 CANCELLATION OF STOCK OPTIONS
12
   
Article 3 PURCHASE AND SALE OF SECURITIES
12
 
3.1 Purchase and Sale of Shares
12
 
3.2 Estimated Purchase Price Calculation Statement
12
   
Article 4 CLOSING; POST-CLOSING PURCHASE PRICE TRUE-UP
13
 
4.1 Closing
13
 
4.2 Payment of Closing Indebtedness and Company Transaction Expenses
13
 
4.3 Closing Transactions
13
 
4.4 Post-Closing Purchase Price True-Up
15
 
4.5 Withholding
18
   
Article 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER
18
 
5.1 Organization and Standing
18
 
5.2 Authority, Authorization; Enforceability
18
 
5.3 Noncontravention
19
 
5.4 Governmental Approvals
19
 
5.5 Brokers
19
 
5.6 Securities Act
19
 
5.7 Source of Funds
19
 
5.7 Purchaser Acknowledgment
19
   
Article 6 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
19
 
6.1 Organization and Valid Existence
20
 
6.2 Authority to Conduct Business
20
 
6.3 Organizational Documents
20
 
6.4 Authority; Authorization; Enforceability
20
 
6.5 Noncontravention
20
 
6.6 Governmental Approvals
21
 
6.7 Investments in Other Persons
21
 
6.8 Capitalization of Company and Company Subsidiaries
21
 
6.9 Rights and Stock Options
22
 
6.10 Financial Statements
22
 
6.11 Internal Controls
23
 
6.12 No Undisclosed Liabilities
23
 
6.13 Absence of Changes
23
 
6.14 The Company
24
 
6.15 Tangible Personal Property
24
 
6.16 Real Property
25
 
6.17 Condition and Sufficiency of Assets
25
 
6.18 Intellectual Property
26

 
 
 
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6.19 Insurance
28
 
6.20 Labor Relations
28
 
6.21 Permits; Compliance With Law
29
 
6.22 Litigation
31
 
6.23 List of Accounts
31
 
6.24 List of Personnel
31
 
6.25 Employee Benefit Plans; ERISA
32
 
6.26 Tax Matters
34
 
6.27 Environmental Matters
36
 
6.28 Material Contracts
37
 
6.29 Transactions with Affiliates
39
 
6.30 Powers of Attorney
39
 
6.31 Major Customers and Suppliers
39
 
6.32 Warranties; Product Liability
40
 
6.33 Brokers
40
 
6.34 Receivables; Payables
40
 
6.35 Inventories
40
 
6.36 Certain Business Practices
40
   
Article 7 REPRESENTATIONS AND WARRANTIES OF SELLERS
41
 
7.1 Organization and Standing
41
 
7.2 Authority; Authorization; Capacity
41
 
7.3 Enforceability
41
 
7.4 Ownership of Shares
41
 
7.5 Noncontravention
42
 
7.6 Governmental Approvals
42
 
7.7 Brokers, Finders
42
 
7.8 Litigation
42
   
Article 8 PRE-CLOSING COVENANTS
42
 
8.1 Access to Information
42
 
8.2 Pre-Closing Activities
43
 
8.3 Efforts to Consummate
45
 
8.4 Exclusive Dealing
45
 
8.5 Supplementation and Amendment of Schedules
45
 
8.6 Confidentiality
46
 
8.7 Termination of Certain Agreements
46
 
8.8 Additional Financial Statements
46
   
Article 9 CONDITIONS TO CLOSING
46
 
9.1 Conditions to Obligations of Purchaser
46
 
9.2 Conditions to Obligations of the Sellers and the Company
49
 
9.3 Waiver of Closing Conditions
50
   
Article 10 ADDITIONAL AGREEMENTS
50
 
10.1 Further Assurances
50
 
10.2 Publicity
50

 
 
 
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10.3 Business Records; Attorney Records
50
 
10.4 Tax Matters
51
 
10.5 Indemnification; Exculpation of Liability
55
 
10.6 Obligations to Continuing Employees
55
 
10.7 Excluded Property
56
 
10.8 Investigation; No Reliance by Purchaser
56
 
10.9 Limitation of Representations and Warranties
56
 
10.10 Confidentiality
57
   
Article 11 REMEDIES FOR BREACH OF THIS AGREEMENT
57
 
11.1 Survival
58
 
11.2 Indemnification
58
 
11.3 Third Party Claims
59
 
11.4 Limitations on Indemnification
60
 
11.5 Other Limitations
62
 
11.6 Limitation of Remedies
63
 
11.7 Payment from Escrow
63
   
Article 12 TERMINATION
63
 
12.1 Termination
63
 
12.2 Effect of Termination
64
   
Article 13 MATTERS RELATING TO SELLER REPRESENTATIVE
64
 
13.1 Appointment of the Seller Representative
64
 
13.2 Reliance by the Seller Representative
65
 
13.3 Expenses of the Seller Representative
65
 
13.4 Indemnification
66
 
13.5 Substitute Seller Representative
66
 
13.6 Reliance by Purchaser
66
   
Article 14 MISCELLANEOUS
66
 
14.1 Notices
66
 
14.2 Entire Agreement
67
 
14.3 Amendment and Waiver
67
 
14.4 Benefits; Binding Effect; Assignment
68
 
14.5 No Third Party Beneficiary
68
 
14.6 Severability
68
 
14.7 Expenses
68
 
14.8 Counterparts
69
 
14.9 Purchaser's Review
69
 
14.10 Remedies Cumulative
69
 
14.11 Governing Law; Waiver of Jury Trial
69
 
14.12 Fulfillment of Obligations
70
 
14.13 Interpretation
70

 
 
 
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EXHIBITS AND SCHEDULES
   
SCHEDULE 1(A)
List of Shareholders
SCHEDULE 1(B)
Optionholders and Stock Options
EXHIBIT A
Form of Escrow Agreement
EXHIBIT B
Form of Stock Option Cancellation Agreement
EXHIBIT C
Disclosure Schedule
EXHIBIT D
Forms of Restrictive Covenants Agreement
EXHIBIT E
Form of Opinion
EXHIBIT F
Form of Master Estoppel and Lease Modification Agreement
SCHEDULE 1.1
Net Working Capital Target Items
SCHEDULE 3.2
Estimated Purchase Price Calculation Statement
SCHEDULE 5.4
Governmental Approvals
SCHEDULE 8.1(B)
Certain Suppliers and Customers
SCHEDULE 8.2
Pre-Closing Activities
SCHEDULE 8.3
Third Party Consents and Approvals of Authorities
SCHEDULE 8.7
Termination of Certain Agreements
SCHEDULE 10.2
Approved Press Release
SCHEDULE 10.6
Benefit Plans
SCHEDULE 11.2(A)
Certain Indemnification Matters

 
 
 
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STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (this "Agreement") is made and entered into as of
August 17, 2012, by and among: (i) Church & Dwight Co., Inc., a Delaware
corporation (the "Purchaser"); (ii) Avid Health, Inc., a Washington corporation
(the "Company"); (iii) the Persons listed on Schedule 1(A) to this Agreement
(each individually, a "Seller" and collectively, the "Sellers"); and (iv) the
individual executing a joinder agreement to this Agreement on and as of the date
hereof as the initial Seller Representative.
 
Preliminary Statements
 
A. The Sellers, collectively, own all of the issued and outstanding shares of
the capital stock of the Company (the "Shares").
 
B. The Sellers desire to sell to Purchaser all of the Shares and Purchaser
desires to purchase all of the Shares from the Sellers, upon the terms and
subject to the conditions contained in this Agreement.
 
C. Certain employees of the Company and of its subsidiaries own stock options to
purchase Class C Stock (defined below) of the Company.  Such stock options are
to be cancelled and the optionholders are to receive consideration therefor
under this Agreement as if such stock options were exercised immediately before
Closing.
 
Agreement
 
In consideration of the premises and the respective mutual agreements,
covenants, representations and warranties contained herein, the parties to this
Agreement agree as follows:
 
ARTICLE 1
DEFINITIONS
 
In addition to terms defined elsewhere in this Agreement, the following terms
when used in this Agreement, unless the context otherwise requires, shall have
the meanings indicated:
 
"Acquisition Proposal" is defined in Section 8.4.
 
"Adjustment Escrow Amount" means a portion of the Escrow Amount equal to
$3,500,000.
 
"Affiliate" means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with such
Person.  "Control" means the ownership, directly or indirectly, of voting
securities representing the right generally to elect a majority of the directors
(or similar officials) of a Person or the possession, by contract or otherwise,
of the authority to direct the management and policies of a Person.
 
"Affiliated Group" means any affiliated group within the meaning of Section 1504
of the Code.
 
"Agreement" is defined in the preamble of this Agreement.
 
"Attorney Records" means, with respect to the Company, the Company Subsidiaries,
the Sellers and the Optionholders, all of the books, files, documents and
records of attorneys or accountants relating to their respective representations
of the Company, any Company Subsidiary, any Seller or any Optionholder to the
extent relating to the negotiation, execution and delivery of this Agreement and
the
 
 
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transactions contemplated by this Agreement and the Transaction Documents; for
the avoidance of doubt, Attorney Records shall not include work papers,
schedules and calculations used in the preparation of the Estimated Purchase
Price Calculation Statement, the Most Recent Balance Sheet and the Interim
Financial Statements.

 
"Audit" is defined in Section 10.4(f)(i).
 
"Benefit Plan" is defined in Section 6.25(a).
 
"Business Day" means any day other than Saturday, Sunday or any other day on
which commercial banks located in Vancouver, Washington are authorized or
required by Law to be closed.
 
"Cash" means the cash and cash equivalents of the Company and the Company
Subsidiaries (including marketable securities, short term investments and
reserves for "cut" but uncashed checks).
 
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
 
"Claim Threshold" is defined in Section 11.4(a)(i).
 
"Class B Stock" means the Company's Class B Common Stock, par value $0.01 per
share.
 
"Class C Stock" means the Company's Class C Common Stock, par value $0.01 per
share.
 
"Closing" is defined in Section 4.1.
 
"Closing Cash" means the aggregate Cash balances of the Company and the Company
Subsidiaries as of immediately prior to the Closing.
 
"Closing Date" is defined in Section 4.1.
 
"Closing Indebtedness" means the aggregate amount of all Indebtedness of the
Company and the Company Subsidiaries (other than Intercompany Indebtedness) that
is outstanding as of immediately prior to the Closing.
 
"Closing Net Working Capital" means the amount of the Net Working Capital as of
12:01 a.m., Pacific Time, on the Closing Date.
 
"Code" means the U.S. Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
 
"Company" is defined in the preamble of this Agreement.
 
"Company Common Stock" means, collectively, the Class B Stock and Class C Stock.
 
"Company Confidential Information" is defined in Section 10.10.
 
"Company Special Representations" means those representations and warranties
made by the Company and the Keen Managed Reserve Trust in Sections 6.1
(Organization and Valid Existence), 6.2 (Authority to Conduct Business),
6.4 (Authority; Authorization; Enforceability), 6.5 (clause (i) only)
 
 
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(Noncontravention), 6.7 (Investments in Other Persons), 6.8 (Capitalization of
Company and Company Subsidiaries), 6.9 (Rights and Stock Options), 6.26 (Tax
Matters) and 6.33 (Brokers).
 
"Company Subsidiary" means each of the wholly owned subsidiaries set forth on
Schedule 6.2 of the Disclosure Schedule.
 
"Company Transaction Expenses" means all expenses of the Company, the Company
Subsidiaries and the Sellers incurred, to be incurred or arising at or prior to
the Closing in connection with the preparation, negotiation, execution or
consummation of this Agreement, the transactions contemplated by this Agreement
and the Transaction Documents, including (a) fees and disbursements of brokers
(including any fees of Houlihan Lokey Capital, Inc. and Sawaya Segalas & Co.,
LLC), attorneys, accountants and other advisors and service providers, and (b)
compensation payable under the Employee Compensation Recognition Agreements
identified in Item 14 of Schedule 6.25 of the Disclosure Schedule.
 
"Confidentiality Agreement" is defined in Section 14.2.
 
"Damages" means all damages, dues, penalties, fines, amounts paid in settlement,
Taxes, costs, obligations, losses, expenses, claims, Liabilities and fees
(including court costs, consulting fees, expert witness fees and reasonable
attorneys' fees and expenses), including, as the context may require, any of the
foregoing that arise out of or in connection with any actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees or rulings.
 
"Deductible" is defined in Section 11.4(a)(ii).
 
"Deficiency" is defined in Section 4.4(c)(ii).
 
"Disclosure Schedule" is defined in Article 6.
 
"Employer Taxes" means the aggregate employer portions of all payroll Taxes,
employment, unemployment, disability and similar Taxes required to be paid by
the Company and/or the Company Subsidiaries in respect of (a) all bonus and
other compensation arising as a result of, or in connection with, the Closing
and paid or accrued prior to or payable at the Closing to employees of the
Company and/or the Company Subsidiaries, and (b) all payments and amounts
payable to Optionholders under the terms of this Agreement (including Article
2).
 
"Environmental, Health and Safety Laws" means all existing and applicable Laws
concerning pollution or protection of the environment or public health and
safety, including Laws relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern into ambient air, indoor air,
surface water, ground water, soil or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.
 
"ERISA Affiliate" means, with respect to any Person, any other Person that,
together with such Person, is treated as, or would be deemed to be, a single
employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of
ERISA. Any former ERISA Affiliate of the Company or any Company Subsidiary
during the previous six (6) years shall continue to be considered an ERISA
Affiliate of such Company or Company Subsidiary (as applicable) within the
meaning of this definition with respect to the
 
 
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period such entity was an ERISA Affiliate of such Company or Company Subsidiary
(as applicable) and with respect to liabilities arising after such period for
which the Company or any Company Subsidiary could reasonably be expected to be
liable under the Code or ERISA.
 
"Escrow Account" means the account established pursuant to the Escrow Agreement.
 
"Escrow Agent" means Wells Fargo Bank, National Association.
 
"Escrow Agreement" means the Escrow Agreement, in the form attached hereto as
Exhibit A, by and among Purchaser, the Seller Representative and the Escrow
Agent, including any amendment, modification, supplement or replacement thereto.
 
"Escrow Amount" means $97,500,000.
 
"Escrow Release Dates" consist of the Initial Escrow Release Date and the Final
Escrow Release Date.
 
"Estimated Purchase Price Calculation Statement" is defined in Section 3.2.
 
"Excess Amount" is defined in Section 4.4(c)(i).
 
"Exercise Amount" means an amount equal to the aggregate exercise prices for all
Stock Options of a Person cancelled at the Closing pursuant to such Person’s
Stock Option Cancellation Agreement.
 
"FDA" is defined in Section 6.21(c).
 
"FDC Act" is defined in Section 6.21(c).
 
"Final Escrow Release Date" is defined in Section 4.3(d)(iii).
 
"Final Purchase Price Calculation Statement" is defined in Section 4.4(b)(iii).
 
"Financial Statements" is defined in Section 6.10.
 
"Food Safety Laws" is defined in Section 6.21(c).
 
"Former Property" is defined in Section 6.27(c).
 
"Forward-Looking Statements" is defined in Section 10.8.
 
"Fraud" means fraud committed with the actual knowledge of the Person alleged to
have committed fraud.  For purposes hereof, (a) with respect to the Company or
any Company Subsidiary, or with respect to the Keen Managed Reserve Trust with
respect to Article 6, the “actual knowledge” of such Person shall mean the
Knowledge of the Company, and (b) any negligent action or omission by such
Person shall not constitute “Fraud.”
 
"Fully Diluted Shares" means the aggregate number of shares of Company Common
Stock outstanding as of immediately prior to the Closing assuming exercise of
all of the Stock Options then outstanding.
 
 
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"Fully Diluted Pro Rata Share" means, for each Seller and Optionholder, an
amount equal to the quotient (expressed as a percentage carried to four decimal
points) of: (a) the total number of Shares held by such Seller and that would be
issued to such Optionholder upon the exercise of Stock Options held by such
Optionholder immediately prior to the Closing; divided by (b) the number of
Fully Diluted Shares.
 
"GAAP" means United States generally accepted accounting principles as applied
by the Company on a consistent basis for the period from January 1, 2010 through
12:01 a.m., Pacific Time, on the Closing Date (except for such changes as
resulted in 2012 upon the election by the Company to be taxed as an S
corporation effective January 1, 2012) including as to the Company's methods,
policies, practices, estimations and judgments, including materiality standards,
adjustments and reserves.
 
"General Enforceability Exceptions" is defined in Section 5.2.
 
"Governmental Authority" means any federal, state, local or foreign governmental
regulatory agency, commission, bureau, authority, court, arbitrator or tribunal.
 
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
"Income Tax" means any federal, state, local or foreign Tax based on or measured
by or with respect to gross or net income, net worth or capital, including any
interest, penalty or addition thereto (including any Taxes imposed under Section
1374 of the Code (or any equivalent provision under state, local or foreign
Law)).
 
"Income Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Income Taxes, including any schedule
or attachment thereto and any amendments thereof.
 
"Indebtedness" as applied to any Person means (without duplication) all
indebtedness of such Person, whether secured or unsecured, including: (a) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments or debt securities; (b) all indebtedness of such Person
created, issued, assumed or arising as the deferred purchase price of property,
assets or services (excluding obligations of such Person to creditors for
inventory, services and supplies incurred in the ordinary course of such
Person's business) or under any conditional sale or other title retention
agreement with respect to property or assets acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property or
assets); (c) all indebtedness of such Person secured by a purchase money
mortgage or other Lien to secure all or part of the purchase price of the
property subject to such Lien; (d) all obligations under leases that have been
or must be, in accordance with GAAP, recorded as capital leases in respect of
which such Person is liable as lessee; (e) any Liability of such Person in
respect of banker's acceptances or letters of credit; (f) all obligations of
such person under interest rate or currency hedging transactions (valued at the
termination value thereof); (g) all obligations under any receivables financing
arrangements; (h) all interest, fees, prepayment or change of control penalties,
fees or premiums and other expenses deferred or owed with respect to the
indebtedness referred to above; and (i) all indebtedness referred to above that
is directly or indirectly guaranteed by such Person or that such Person has
agreed (contingently or otherwise) to purchase or otherwise acquire or in
respect of which it has otherwise assured a creditor against loss.  For the
avoidance of doubt, "Indebtedness" does not include any trade payables, accrued
expenses, Company Transaction Expenses or "cut" but uncashed checks to the
extent the calculation of Closing Cash reflects an offsetting reserve for such
checks.
 
"Independent Accounting Firm" is defined in Section 4.4(b)(v).
 
 
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"Indemnified Party" is defined in Section 11.3(a).
 
"Indemnifying Party" is defined in Section 11.3(a).
 
"Initial Escrow Release Date" is defined in Section 4.3(d)(ii).
 
"Initial Purchase Price Calculation Statement" is defined in Section 4.4(b).
 
"Insurance Policies" is defined in Section 6.19.
 
"Intellectual Property Rights" means, collectively, (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice) and all
improvements thereto; (b) all patents and pending applications for patents of
the United States and all countries foreign thereto, including regional patents,
certificates of invention and utility models, and all reissues, reexaminations,
divisions, continuations and extensions thereof; (c) all registered and
unregistered trademarks and service marks, trademark and service mark
applications (and all goodwill associated with such trademarks, service marks
and related applications), domain names (and web site urls), logos, trade names,
trade dress, fictitious names, brand names, brand marks, and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof, and all applications, registrations and renewals in connection
therewith; (d) all copyrightable works, all registered copyrights, copyright
applications, computer software, mask works, unregistered copyrights, and all
applications, registrations and renewals in connection therewith; (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, methodologies, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals); (f) all moral rights, author's
rights, right of publicity, contract and licensing rights, rights in packaging,
rights of priority and all other proprietary rights; (g) all copies and tangible
embodiments of any of the foregoing (in whatever form of medium); and (h) any
and all rights to sue for claims and remedies against past, present and future
infringement, dilution or misappropriations of any or all of the foregoing, and
rights for priority and protection of interests therein under the laws of any
jurisdiction.
 
"Intercompany Indebtedness" means Indebtedness of the Company or any Company
Subsidiary with respect to which the obligee is the Company or any Company
Subsidiary.
 
"Interim Financial Statements" is defined in Section 6.10.
 
"IP License" is defined in Section 6.18(a).
 
"IRS" means the U.S. Internal Revenue Service.
 
"Keen Managed Reserve Trust" means the Keen Managed Reserve Trust UA Restated
12/14/11.
 
"Knowledge of the Company" means the knowledge of those individuals identified
as such in Schedule 6.2 of the Disclosure Schedule.   Any such individual shall
be deemed to have knowledge of a particular fact or matter if: (a) such
individual is actually aware of such fact or matter, or (b) such fact or matter
should reasonably have been known by an individual in a like position in the
reasonable performance of such individual's job.
 
 
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"Law" means any statute, law, ordinance, rule, regulation, code, order,
constitution, treaty, common law, judgment, decree or rule of law of any
Governmental Authority, in each case to the extent generally available.
 
"Leased Real Property" is defined in Section 6.16(b).
 
"Liability" means any Indebtedness, liability or obligation, whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due.
 
"Licensed IP" is defined in Section 6.18(a).
 
"Lien" means any mortgage, lien, pledge, charge, encumbrance, options, rights of
first refusal, easements, restrictive covenants or other security interest.
 
"Listed Intellectual Property" is defined in Section 6.18(a).
 
"Major Customer" is defined in Section 6.31(a).
 
"Major Supplier" is defined in Section 6.31(b).
 
"Material Adverse Change" or "Material Adverse Effect" means any fact, event,
condition, circumstance, development, change or effect that, individually or in
the aggregate with any other fact, event, condition, circumstance, development,
change or effect, is or would reasonably be expected to (a) be materially
adverse to the business, operations, assets, properties, results of operations
or financial condition of the Company and the Company Subsidiaries, taken as a
whole, or (b) materially impair the ability of the Company or any Seller to
consummate timely the transactions contemplated by this Agreement or to fulfill
their respective obligations hereunder; provided, that none of the following
shall be deemed to constitute a Material Adverse Effect or Material Adverse
Change: any adverse fact, event, condition, circumstance, development, change or
effect arising from or relating to (i) general business or economic conditions,
(ii) national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military or
terrorist attack upon the United States or any of its territories, possessions
or diplomatic or consular offices, or upon any military installation, equipment
or personnel of the United States, (iii) conditions in any financial, banking or
securities markets (including any disruption thereof and any decline in the
price of any security or any market index), (iv) changes in United States
generally accepted accounting principles, (v) changes in Laws,  (vi) compliance
by any party with the terms of, or the taking of any action required by, this
Agreement or any of the Transaction Documents, or (vii) any announcement or the
pendency of the transactions contemplated by this Agreement; except in the case
of clauses (i)-(v) to the extent any such change, event, development or effect
has a materially disproportionate effect on the Company and the Company
Subsidiaries, taken as a whole.
 
"Material Contract" is defined in Section 6.28.
 
"Materials of Environmental Concern" means any hazardous waste, as defined by
42 U.S.C. Section 6903(5), any hazardous substance as defined by 42 U.S.C.
Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C. Section
9601(33) and any toxic substance, oil or hazardous material or other chemical or
substance regulated by any Environmental, Health and Safety Laws.
 
"Most Recent Balance Sheet" is defined in Section 6.10.
 
 
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"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
 
"Multiple Employer Plan" is defined in Section 6.25(b).
 
"Net Working Capital" means the excess of (a) all current assets (including
accounts receivable, inventory, and prepaid expenses and deposits) of the
Company and the Company Subsidiaries, other than (i) Cash included in current
assets, and (ii) accrued Income Tax receivables and deferred Tax assets, over
(b) all current Liabilities (including “cut” but uncashed checks to the extent
the calculation of Closing Cash does not reflect an offsetting reserve for such
checks, trade accounts payable, and accrued expenses) of the Company and the
Company Subsidiaries, other than (i) accrued Income Taxes payable and deferred
Tax liabilities, (ii) accrued interest expense to the extent included in Closing
Indebtedness, (iii) the current portion of Indebtedness to the extent included
in Closing Indebtedness, all determined on a consolidated basis in accordance
with GAAP, and (iv) accrued expenses for payments to be made at Closing pursuant
to Stock Option Cancellation Agreements and Employee Compensation Recognition
Agreements.
 
"Net Working Capital Adjustment" means (a) if the amount of the Closing Net
Working Capital is less than the Net Working Capital Target, a reduction to the
Purchase Price equal to the amount of such deficiency; and (b) if the amount of
the Closing Net Working Capital is greater than the Net Working Capital Target,
an increase to the Purchase Price equal to the amount of such excess.
 
"Net Working Capital Target" means the amount of $41,000,000.  Schedule 1.1
includes the balance sheet items and computation used by the parties to
determine the Net Working Capital Target.
 
"Optionholder" or "Optionholders" means the holder or holders of Stock Options
as set forth on attached Schedule 1(B).
 
"Ordinary Course of Business" means the ordinary course of business consistent
with the past custom and practice of the Company and the Company Subsidiaries,
as applicable, in the operation of their respective businesses since December
31, 2010 (including with respect to quantity and frequency).
 
"Organizational Documents" means: (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the certificate of formation
or articles of organization and the operating agreement of a limited liability
company; (c) the trust agreement or other constituent documents of any trust;
and (d) any charter or similar document adopted or filed in connection with the
creation, formation or organization of any other Person, including any amendment
to or restatement of any of the foregoing.
 
"Owned IP" is defined in Section 6.18(a).
 
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
 
"Permits" means licenses, permits, orders, approvals, registrations,
authorizations, certificates, variances, qualification filings with all
Governmental Authorities and similar rights required under Laws in connection
with the operation of the business of the Company or any Company Subsidiary.
 
"Permitted Liens" means: (a) Liens, if any, set forth on Schedule 6.15 of the
Disclosure Schedule or identified in the Financial Statements (other than Liens
securing Indebtedness that will be released at Closing in connection with
repayment of such Indebtedness); (b) Liens for Taxes, assessments and other
governmental charges that are not yet due and payable; (c) Liens arising under
original purchase price conditional sales contracts and equipment leases with
third parties that were entered into in the
 
 
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Ordinary Course of Business and for which the underlying obligations are not
Indebtedness; (d) easements, rights of way and other similar encumbrances of
record affecting real property and to which no material violation or
encroachment exists; (e) zoning or other governmentally established restrictions
or encumbrances affecting real property; (f) pledges or deposits to secure
obligations under workers or unemployment compensation Laws or similar
legislation or to secure public or statutory obligations; (g) mechanics',
warehousemens', materialmens', suppliers', vendors' or similar Liens arising or
incurred in the Ordinary Course of Business securing amounts that are not
overdue for a period of more than 60 days and that are not, individually or in
the aggregate, material to the business of the Company and the Company
Subsidiaries; (h) railroad trackage agreements, utility, slope and drainage
easements, right-of-way easements and leases regarding signs; and (i) other
imperfections of title or encumbrances, if any, that do not materially impair
the continued use and operation of the assets to which they relate in the
conduct of the business of the Company and the Company Subsidiaries as conducted
as of the date of this Agreement.
 
"Per Share Purchase Price" means an amount equal to the quotient of: (a)(i) the
Purchase Price plus (ii) the aggregate of all Exercise Amounts; divided by (b)
the number of Fully Diluted Shares.
 
"Person" means any natural person, corporation, limited liability company,
unincorporated organization, partnership, association, joint-stock company,
joint venture, trust or Governmental Authority.
 
"Pre-Closing Tax Period" is defined in Section 10.4(a)(iii).
 
"Post-Closing Tax Period" is defined in Section 10.4(b)(ii).
 
"Pro Rata Share" means, for each Seller, an amount equal to the quotient
(expressed as a percentage carried to four decimal points) of: (a) the total
number of Shares held by such Seller immediately prior to the Closing; divided
by (b) the aggregate number of shares of Class B Stock and Class C Stock that
are issued and outstanding immediately prior to the Closing.
 
"Product" means a preparation for human or animal use that is manufactured,
offered for sale, marketed or sold by the Company or any Company Subsidiary.
 
"Purchase Price" means an amount, without duplication, equal to the sum of:
 
(a) $650,000,000;
 
(b) plus the Closing Cash;
 
(c) minus the Closing Indebtedness;
 
(d) minus the amount of all Company Transaction Expenses not paid at or prior to
Closing;
 
(e) plus the amount of the Net Working Capital Adjustment (if a positive
amount);
 
(f) minus the absolute value of the amount of the Net Working Capital Adjustment
(if a negative amount); and
 
(g) minus the amount of all Employer Taxes.
 
"Purchaser" is defined in the preamble of this Agreement.
 
 
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"Purchaser Benefit Plan" is defined in Section 10.6(a).
 
"Purchaser's Proposed Calculations" is defined in Section 4.4(b).
 
"Purchaser Indemnitee(s)" means Purchaser and, following the Closing, the
Company and the Company Subsidiaries and each of their respective directors,
officers, partners, employees, Affiliates, controlling persons, shareholders,
agents and other Representatives, and their respective successors and assigns,
as the case may be; provided, that no director, officer or employee of Purchaser
or any of its Affiliates following the Closing who is also a Seller or
Optionholder shall be deemed to be a Purchaser Indemnitee in his or her capacity
as a Seller or Optionholder under this Agreement or any Stock Option
Cancellation Agreement.
 
"Realty Lease" is defined in Section 6.16(b)(i).
 
"Remaining Disputed Items" is defined in Section 4.4(b)(v).
 
"Representative" means, with respect to any Person, such Person's officers,
directors, employees, trustees, consultants, financial advisors, financing
sources, counsel, accountants and other agents.
 
"Required Consent" is defined in Section 8.3.
 
"Restrictive Covenants Agreements" means a Restrictive Covenants Agreement
substantially in the form of Exhibit D attached hereto to be entered into by
Purchaser and each of the persons identified as such on Schedule 6.2 of the
Disclosure Schedule.
 
"Securities Act" means the Securities Act of 1933, as amended.
 
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.
 
"Seller" and "Sellers" are defined in the preamble of this Agreement.
 
"Seller Indemnitee(s)" means the Sellers and their respective trustees,
Affiliates (other than the Company or any Company Subsidiary after the Closing),
controlling persons, agents and representatives, as the case may be; provided,
that no director, officer or employee of Purchaser or any of its Affiliates
following the Closing who is also a Seller or Optionholder shall be deemed to be
a Seller Indemnitee in his or her capacity as a director, officer or employee of
Purchaser or any of its Affiliates following the Closing.
 
"Seller Representative" is defined in Section 13.1.
 
"Sellers’ Confidential Information" is defined in Section 10.10.
 
"Sellers’ Proposed Calculations" is defined in Section 4.4(b)(iv).
 
"Shares" is defined in the Preliminary Statements of this Agreement.
 
"Stock Options" means options to purchase shares of Class C Stock.
 
"Stock Option Cancellation Agreement" is defined in Article 2.
 
 
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"Straddle Period" means a taxable period that begins on or before the Closing
Date and ends after the Closing Date.
 
"Stub Period" means the partial tax year ending at the close of business on the
day immediately preceding the Closing Date.
 
"Subsidiary" means, with respect to any Person, each other Person (other than a
natural person) of which the Person owns, beneficially and of record, securities
or interests representing 50.0% or more of the aggregate ordinary voting power
(without regard to the occurrence of any contingencies affecting voting power).
"Substantiation of Claims Laws" is defined in Section 6.21(b).
 
"Tax Authority" means any Governmental Authority with regulatory authority to
assess, assert or otherwise impose Tax adjustments, conduct Audits, review Tax
claims or collect unpaid Taxes of any Person.
 
"Tax Benefit" means all Tax benefits actually realized by an Indemnified Party
(including as part of a consolidated tax group) as a result of incurring or
paying Damages under this Agreement within the first five (5) taxable years
following the incurring or paying of such Damages.  For purposes of this
Agreement, the amount of such Tax Benefits shall be the difference between (a)
the amount of Taxes that the Indemnified Party or any of its Affiliates would
pay to a Governmental Authority without taking into account any deductions,
credits, losses or other Tax attributes resulting from the Damages at issue and
(b) the amount of Taxes that the Indemnified Party or its Affiliates actually
pay after taking into account the deductions, credits, losses or other Tax
attributes resulting from the Damages.  To the extent Tax Benefits are not
actually realized in the year in which Damages are paid to an Indemnifying
Party, the Indemnified Party shall pay in subsequent year(s) to the Seller
Representative, in the case of Damages paid by or on behalf of the Sellers, or
to the Purchaser, in the case of Damages paid by or on behalf of the Purchaser,
the amount of such Tax Benefits actually realized in such subsequent year(s)
within sixty (60) days following the end of the Tax year in which any such Tax
Benefits are actually realized.  A Tax Benefit shall be realized upon receipt of
a refund of Taxes paid or the filing of a Tax Return (excluding an estimated Tax
Return) showing a Tax Benefit.
 
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement (a) relating to Taxes, or (b) filed or required
to be filed pursuant to section 5314 of Title 31 of the United States Code or
any related or similar provision of Law, including, with respect to both (a) and
(b), any schedule or attachment thereto and any amendments thereof.
 
"Tax" or "Taxes" means: all federal, state, local and foreign taxes (including
premium taxes, excise taxes, sales taxes, use taxes, gross receipts taxes,
franchise taxes, ad valorem taxes, registration taxes, severance taxes, windfall
profits taxes, stamp taxes, capital levy taxes, transfer taxes, value added
taxes, employment and payroll-related taxes, property taxes, escheat taxes,
business license taxes, occupation taxes, environmental taxes (including taxes
under Section 59A of the Code), import duties, custom duties and other
governmental charges and assessments), of any kind whatsoever, including
interest, additions to tax and penalties with respect thereto, and any interest
in respect of such additions or penalties.  For the avoidance of doubt, the
foregoing shall include all Income Taxes and all Taxes other than Income Taxes.
 
"Tax Withholding Amount" means the withholding Taxes owed to any Tax Authority
as a result of the transactions contemplated by this Agreement with respect to
the cancellation of a Stock Option pursuant to a Stock Option Cancellation
Agreement.
 
 
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"Third Party Claim" is defined in Section 11.3(a).
 
"Transaction Documents" means the Stock Option Cancellation Agreements, the
Escrow Agreement, the Restrictive Covenants Agreements and each other agreement,
document, instrument or certificate contemplated by this Agreement or to be
executed by any of the parties in connection with the consummation of the
transactions contemplated by this Agreement, in each case only as applicable to
the relevant party or parties to such Transaction Documents.
 
ARTICLE 2
CANCELLATION OF STOCK OPTIONS
 
Schedule 1(B) to this Agreement sets forth a listing of all outstanding Stock
Options and the related Optionholders.  Each Stock Option outstanding
immediately prior to the Closing shall become fully vested to the extent the
related Optionholder remains a service provider to the Company or a Company
Subsidiary as of the Closing.  Each vested Stock Option to purchase one share of
Class C Stock shall, pursuant to the applicable Stock Option Cancellation
Agreement entered into on or prior to the date of this Agreement between the
Company and the Optionholder substantially in the form of attached Exhibit B
(each, a "Stock Option Cancellation Agreement"), be converted into the right to
receive the Per Share Purchase Price payable with respect to one Share under
this Agreement, less the applicable Exercise Amount and Tax Withholding
Amount.  Any compensation expense attributable to the cancellation of the Stock
Options shall be deemed to have been recognized by the Company during the Stub
Period for all Tax purposes.  Without limiting the foregoing, the Company and
the board of directors of the Company shall adopt any resolutions, provide any
required notices and take any and all actions which are necessary so that each
Stock Option remaining unexercised and outstanding  immediately prior to the
Closing shall, by virtue of the Closing, and without any further action on the
part of the holder thereof, be cancelled and no longer be outstanding without
payment of consideration therefor except as provided in this Article 2, and each
holder of a Stock Option shall cease to have any rights with respect thereto
other than as set forth in this Agreement and his or her Stock Option
Cancellation Agreement. The right of any Optionholder to receive the Per Share
Purchase Price or any other amounts under this Agreement shall be subject to and
reduced by the amount of any withholding that is required under any applicable
Law relating to Taxes.
 
ARTICLE 3
PURCHASE AND SALE OF SECURITIES
 
3.1 Purchase and Sale of Shares.  On the terms and subject to the conditions set
forth in this Agreement, at the Closing each Seller agrees to sell to Purchaser,
free and clear of Liens and restrictions on transfer (other than any
restrictions under the Securities Act and applicable state securities Laws), and
Purchaser agrees to purchase from such Seller, all of the Shares owned by such
Seller.
 
3.2 Estimated Purchase Price Calculation Statement.  No less than three (3)
Business Days prior to  the Closing, the Company shall deliver to Purchaser an
estimated unaudited consolidated balance sheet of the Company as of the Closing
Date and a written statement (together, the "Estimated Purchase Price
Calculation Statement") setting forth:  (a) the Company's good faith estimate of
(i) the amount of the Closing Cash, (ii) the amount of the Closing Indebtedness,
(iii) the amount of the unpaid Company Transaction Expenses, (iv) the amount of
the Employer Taxes, and (v) the amount of the Closing Net Working Capital and
the Net Working Capital Adjustment calculated by reference thereto; and (b) the
Company's calculation of the estimated Purchase Price based
thereon.  Schedule 3.2 hereto sets forth a calculation of the amounts described
in this Section 3.2 and the payments to be made pursuant to Section 4.3(b) based
on information available as of the date of this Agreement and certain
assumptions as to items that cannot be determined until the Closing Date.
 
 
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ARTICLE 4
CLOSING; POST-CLOSING PURCHASE PRICE TRUE-UP
 
4.1 Closing.  Subject to the fulfillment or waiver of the conditions precedent
set forth in Article 9, the closing of the transactions contemplated by this
Agreement (the "Closing") shall take place remotely via the electronic exchange
of documents and signatures on the later of October 1, 2012 and the second
Business Day following the satisfaction or waiver of each of the conditions set
forth in Article 9 (other than those conditions that are to be satisfied at the
Closing), or on such other date or at such other time and place as the parties
mutually agree (the "Closing Date").  Except as otherwise provided in this
Agreement, all proceedings to be taken and all documents to be executed at the
Closing shall be deemed to have been taken, delivered and executed
simultaneously, and no proceeding shall be deemed taken nor documents deemed
executed or delivered until all have been taken, delivered and executed.
 
4.2 Payment of Closing Indebtedness and Company Transaction Expenses.  At the
Closing, Purchaser shall pay and discharge, or cause to be paid and discharged,
all Closing Indebtedness and all unpaid Company Transaction Expenses identified
on the Estimated Purchase Price Calculation Statement by wire transfer of
immediately available funds pursuant to written instructions provided to
Purchaser by the Company concurrently with the delivery of the Estimated
Purchase Price Calculation Statement.  On or before the Closing Date, the
Company shall provide Purchaser with customary pay-off letters from all holders
of Closing Indebtedness, and shall make arrangements reasonably satisfactory to
Purchaser for such holders to provide to Purchaser recordable form lien
releases, canceled notes and other documents reasonably requested by Purchaser
simultaneously with or promptly following the Closing.  Without limiting the
foregoing, neither the Company nor Purchaser shall have any liability or
obligation for any bill or invoice or amount due with respect to unpaid Company
Transaction Expenses, whether arising or received before, on or after the
Closing Date, that are not paid at Closing, and the Sellers and the
Optionholders shall indemnify and hold harmless the Company and Purchaser with
respect thereto pursuant to Article 11.
 
4.3 Closing Transactions.
 
(a) Delivery of Stock Certificates.  At the Closing, (i) the Sellers shall
deliver to Purchaser, free and clear of any Lien and restriction on transfer
(other than any restrictions under the Securities Act and applicable state
securities Laws), all certificates representing the Shares, each duly endorsed
in blank or with duly executed stock powers attached and (ii) the Seller
Representative shall deliver to Purchaser executed counterparts of the Stock
Option Cancellation Agreements for all of the Optionholders.
 
(b) Funds Flow.  Following or contemporaneously with the payment of all amounts
in accordance with Section 4.2, Purchaser shall at Closing pay all amounts owing
with respect to the Shares and under the executed Stock Option Cancellation
Agreements by wire transfer of immediately available funds the estimated amount
of the Purchase Price as set forth on the Estimated Purchase Price Calculation
Statement, as follows:
 
(i) first, a portion of the Purchase Price in the amount of the Escrow Amount to
the Escrow Agent for deposit in the Escrow Account; and
 
(ii) second, to Keen Managed Reserve Trust, an amount equal to (A) (1) the Per
Share Purchase Price multiplied by (2) the number of its Shares, as set forth on
the Estimated Purchase Price Calculation Statement, less (B) the Escrow Amount;
 
 
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(iii) third, to each Seller other than the Keen Managed Reserve Trust, an amount
equal to (A) the Per Share Purchase Price multiplied by (B) the number of its or
his Shares, each as set forth on the Estimated Purchase Price Calculation
Statement;  and
 
(iv) fourth, to the Company on behalf of each Optionholder who has executed a
Stock Option Cancellation Agreement, an amount equal to (A) the Per Share
Purchase Price; multiplied by (B) the total number of Shares that would be
issued to all Optionholders upon the exercise of all Stock Options held by all
Optionholders immediately prior to the Closing; less the aggregate of all
Exercise Amounts and less the aggregate Tax Withholding Amounts applicable to
all Stock Options.  Such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to such Optionholders in respect of which
such withholding was made.  Prior to the Closing, the Company shall establish a
special payroll to be used by the Company on the Closing Date to pay the
applicable amounts calculated pursuant to this clause (iv) to each such
Optionholder who has properly executed and delivered a Stock Option Cancellation
Agreement in accordance with Article 2 hereof.
 
(c) Other Closing Deliveries.  The Sellers (or the Seller Representative on
behalf of the Sellers) shall deliver to Purchaser the other certificates and
documents referred to in Section 9.1, and Purchaser shall deliver to the Seller
Representative the other certificates and documents referred to in Section 9.2.
 
(d) Escrow.   With respect to the Escrow Amount paid by Purchaser to the Escrow
Agent on the Closing Date for deposit in the Escrow Account pursuant to Section
4.3(b)(i), an amount up to the Adjustment Escrow Amount shall serve as security
for the Keen Managed Reserve Trust's obligation to pay any Deficiency pursuant
to Section 4.4(c)(ii) and the balance of the Escrow Amount shall serve as
security for the Keen Management Reserve Trust's obligation to make indemnity
payments under Section 10.4 or Article 11, and for the Sellers’ obligation to
make indemnity payments under Article 11.  Funds on deposit in the Escrow
Account shall be released as follows:
 
(i) Upon final determination, in accordance with Section 4.4(b), of the Final
Purchase Price Calculation Statement, if Purchaser is entitled to receive any
cash in connection with an adjustment of the Purchase Price, such amount shall
be paid to Purchaser from the Escrow Account in an amount not exceeding the
Adjustment Escrow Amount (plus any interest earned thereon) as provided in
Section 4.4(c)(ii).
 
(ii) On May 1, 2013, or such later date on which an amount is released from the
Escrow Account pursuant to this Section 4.3(d)(ii) (the "Initial Escrow Release
Date"), the Escrow Agent shall release to the Seller Representative funds from
the Escrow Account in an amount (plus any interest earned thereon) equal to
$48,750,000, less (A) the amount, if any, paid to Purchaser from the Escrow
Account as provided in Section 4.4(c)(ii), less (B) the aggregate amount claimed
by any Purchaser Indemnitee(s) in connection with any claim or claims for
indemnification pursuant to Section 10.4 or Article 11 against any Seller(s)
that, as of such date, is unresolved by non-appealable judicial determination or
otherwise, less (C) the aggregate amount, if any, of any claim(s) paid to any
Purchaser Indemnitee(s) prior to the Initial Escrow Release Date for
indemnification pursuant to Section 10.4 or Article 11 from the Escrow Account;
provided, however, that if the amount set forth in clause (B) is not reasonably
determinable to be less than an amount equal to $48,750,000 less the sum of the
amounts set forth in clauses (A) and (C), then the release of funds from the
Escrow Account pursuant to this Section 4.3(d)(ii) shall be delayed until the
date on which the amount set forth in clause (B) is determined to be less than
an amount equal to $48,750,000 less the sum of the then applicable amounts set
forth in clauses (A) and (C).
 
 
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(iii) On the date that is eighteen (18) months from and after the Closing
Date,  or such later date on which an amount is released from the Escrow Account
pursuant to this Section 4.3(d)(iii) (the "Final Escrow Release Date"), the
Escrow Agent shall release all funds remaining on deposit in the Escrow Account
(including any interest earned thereon) to the Seller Representative; provided,
however, that if prior to the Final Escrow Release Date a Purchaser Indemnitee
gives notice of a claim or claims for indemnification pursuant to Section 10.4
or Article 11, then: (A) if such claim is resolved prior to the Final Escrow
Release Date, by non-appealable judicial determination or otherwise, any sums
due to Purchaser shall be paid from the Escrow Account (including any interest
earned thereon); and (B) if any such claim is not resolved prior to the Escrow
Release Date, the amount of such claim shall be retained in the Escrow Account
until such claim is resolved.
 
(iv) The Escrow Amount shall not be subject to any Lien, attachment, trustee
process or any other judicial process of any creditor of any party hereto, and
shall be held and disbursed solely for the purposes stated in, and in accordance
with the terms of, the Escrow Agreement.  Obligations of the Sellers to
Purchaser pursuant to the terms of this Agreement or any Transaction Document
shall not be limited at any time to the Escrow Amount or the funds on deposit in
the Escrow Account.  The Sellers and Purchaser acknowledge and agree that
Purchaser's exercise of its rights under the Escrow Agreement shall not limit
Purchaser's right to recover any amounts owed to it that exceed the Escrow
Amount and application of funds on deposit in the Escrow Account shall not be in
substitution of or in any way limit Purchaser's exercise of its other rights and
remedies hereunder or otherwise.  Each of the Seller Representative and
Purchaser agree that it will instruct the Escrow Agent promptly with respect to
the release of any amounts to which either of them is entitled pursuant to this
Agreement.  If there should be a dispute as to the amount or manner of
determination of any indemnity obligation owed under this Agreement, the Seller
Representative and the Purchaser shall issue joint written instructions to the
Escrow Agent to pay when due such portion, if any, of the obligation as shall
not be subject to dispute.  In the event the Seller Representative and the
Purchaser do not submit joint written instructions when required by the terms of
this Section 4.3(d), the parties shall submit to a court of competent
jurisdiction, as provided in this Agreement, upon the request of either the
Seller Representative or the Purchaser to settle any dispute or unresolved
issue.
 
4.4 Post-Closing Purchase Price True-Up.
 
(a) On a date that is mutually agreed to by the parties and in no event, later
than seven (7) Business Days following the Closing, representatives of Purchaser
and the Seller Representative will jointly proceed with a physical stocktaking
of the inventory (including raw materials, componentry, work in process and
finished Products) of the Company and the Company Subsidiaries, consistent with
GAAP and the Company’s historical procedures for the taking of a full year-end
physical inventory count, including the Company’s inventory reserve policies. At
the end of the physical count, on the same day if practicable and at the latest
on the following Business Day, Purchaser and Seller Representative shall prepare
and sign a certificate, stating in reasonable detail the quantities of each
product or each product family and reflecting all shipments of finished Products
made by, or shipments of raw materials inventories received by, the Company or
any Company Subsidiary on and after the Closing Date.  In the absence of
manifest error, such certificate shall be binding upon the parties and shall be
used for purposes of the Initial Purchase Price Calculation Statement.
 
(b) Within sixty (60) days after the Closing Date, Purchaser shall prepare and
deliver to the Seller Representative a written statement (the "Initial Purchase
Price Calculation Statement") setting forth Purchaser's calculations (the
"Purchaser's Proposed Calculations") of: (i) the amount of
 
 
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the Closing Cash; (ii) the amount of the Closing Indebtedness; (iii) the amount
of all Employer Taxes; and (iv) the amount of the Closing Net Working Capital
and the Net Working Capital Adjustment (the adjustment will not reflect any
adjustment for trade and coupon accruals, which will be finalized ninety (90)
days after the Closing Date in accordance with the guidelines identified below
in this clause (b)) calculated by reference thereto, which calculations shall be
made as of 12:01 a.m., Pacific Time, on the Closing Date in accordance with
GAAP.  The Initial Purchase Price Calculation Statement shall contain a
recalculation of the estimated Purchase Price used at Closing based on the
foregoing amounts.
 
(i) Purchaser shall be entitled to a payment from the Escrow Account in an
amount equal to the positive amount, if any, of (1) the expense incurred by the
Company and the Company Subsidiaries with respect to coupons issued prior to
Closing that are redeemed in the Ordinary Course of Business during the initial
ninety (90) days following Closing minus (2) the amount of reserves on the
accounting records of the Company and the Company Subsidiaries immediately prior
to Closing with respect to such expense.
 
(ii) Purchaser shall be entitled to a payment from the Escrow Account in an
amount equal to the positive amount, if any, of (1) the aggregate expense
incurred by the Company and the Company Subsidiaries for trade promotions
reimbursements that are requested during the  initial ninety (90) days following
Closing by Costco, Target and BJs in the Ordinary Course of Business with
respect to trade promotions conducted by such customers prior to Closing minus
(2) the aggregate amount of reserves on the accounting records of the Company
and the Company Subsidiaries immediately prior to Closing with respect to trade
promotions expense for such three customers.
 
(iii) Within thirty (30) days after its receipt of the Initial Purchase Price
Calculation Statement, the Seller Representative shall notify the Purchaser in
writing of its agreement or disagreement with the Initial Purchase Price
Calculation Statement and the accuracy of any of the Purchaser's Proposed
Calculations (and during such 30-day period, the Purchaser shall grant the
Seller Representative and its accountants reasonable access to all work papers,
schedules and calculations used in the preparation of the Initial Purchase Price
Calculation Statement).  If the Seller Representative does not dispute any
aspect of the Initial Purchase Price Calculation Statement or the amount of any
of the Purchaser's Proposed Calculations within such 30-day period, then the
Initial Purchase Price Calculation Statement and the Purchaser's Proposed
Calculations shall be conclusive and binding upon Purchaser and the Sellers (the
"Final Purchase Price Calculation Statement").
 
(iv) If the Seller Representative disputes any aspect of the Initial Purchase
Price Calculation Statement or the amount of any of the Purchaser's Proposed
Calculations within such 30-day period, then the Seller Representative shall
have the right to direct its independent accountants, at the Seller
Representative's expense, to review and verify the accuracy of the Initial
Purchase Price Calculation Statement.  In such event, the Seller Representative
and its accountants shall complete their review and verification of the Initial
Purchase Price Calculation Statement within sixty (60) days after the Seller
Representative's receipt thereof and, if the Seller Representative and its
accountants, after such review and verification, still disagree with the
Purchaser's Proposed Calculations, the Seller Representative shall submit its
proposed alternative calculations ("Sellers' Proposed Calculations") of the
amount of the Closing Cash, the amount of the Closing Indebtedness, the amount
of the Employer Taxes, the amount of the Closing Net Working Capital and the Net
Working Capital Adjustment calculated by reference thereto, and containing a
recalculation of the estimated Purchase Price used at Closing based on the
foregoing amounts, to Purchaser in writing within sixty-five (65) days after the
Seller Representative's receipt of the Initial Purchase Price Calculation
Statement.
 
 
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(v) If Purchaser agrees to such changes, or fails to object within thirty (30)
days after its receipt of Sellers' Proposed Calculations, Sellers' Proposed
Calculations shall be used to determine the Final Purchase Price Calculation
Statement.  If, however, Purchaser objects to Sellers' Proposed Calculations
within thirty (30) days after its receipt thereof, then, within a 30-day period
after the date of Purchaser's objection to Sellers' Proposed Calculations, the
Seller Representative and Purchaser shall seek in good faith to resolve any
differences which they may have with respect to any matter specified in the
Sellers' Proposed Calculations.  If the Seller Representative and Purchaser do
not resolve all such objections to Sellers' Proposed Calculations on a mutually
agreeable basis within such 30-day period, any such objection to Sellers'
Proposed Calculations as to which Purchaser and the Seller Representative cannot
agree upon may be submitted by Purchaser or Seller Representative to KPMG, LLP,
which the parties acknowledge is a mutually acceptable firm (such firm, the
"Independent Accounting Firm") to resolve the remaining disputed items (the
"Remaining Disputed Items") by conducting the Independent Accounting Firm's own
review and verification of the Initial Purchase Price Calculation Statement, and
thereafter selecting either Sellers' Proposed Calculations of the Remaining
Disputed Items or the Purchaser's Proposed Calculations of the Remaining
Disputed Items or an amount in between the two.  The Sellers and Purchaser shall
be bound by the determination of the Remaining Disputed Items by the Independent
Accounting Firm and such determination shall be used to determine the Final
Purchase Price Calculation Statement.
 
(vi) Purchaser and the Seller Representative agree to execute, if requested by
the Independent Accounting Firm, an engagement letter containing reasonable and
customary terms.  Purchaser shall pay its own costs and expenses incurred under
this Section 4.4(b) and the Seller Representative shall pay its own costs and
expenses incurred under this Section 4.4(b) on behalf of the Sellers.  The costs
and expenses of the Independent Accounting Firm shall be borne one-half by
Purchaser and one-half by the Sellers, and paid by the Seller Representative on
behalf of the Sellers.  The Independent Accounting Firm shall act as an
arbitrator to determine, based upon the provisions of this Section 4.4(b), only
the Remaining Disputed Items and the determination of each amount of the
Remaining Disputed Items shall be made in accordance with the procedures set
forth in this Section 4.4(b) and, in any event, shall be no less than the lesser
of the amount claimed by either Purchaser or the Seller Representative, and
shall be no greater than the greater of the amount claimed by either Purchaser
or the Seller Representative.
 
(c) Upon the determination, in accordance with Section 4.4(b), of the Final
Purchase Price Calculation Statement and the final calculations of the amounts
of the Closing Cash, the Closing Indebtedness, the Employer Taxes, the Closing
Net Working Capital and the Net Working Capital Adjustment calculated by
reference thereto, the Purchase Price shall be recalculated using such finally
determined amounts in lieu of the estimates of such amounts used in the
calculation of the estimated Purchase Price payable at Closing:
 
(i) If the Purchase Price as recalculated pursuant to this Section 4.4(c) is
greater than the estimated Purchase Price set forth on the Estimated Purchase
Price Calculation Statement (the "Excess Amount"), then Purchaser shall cause to
be paid to the Seller Representative (for distribution to Sellers) and to the
Company (on behalf of each Optionholder), in cash, their respective Fully
Diluted Pro Rata Share of the Excess Amount (subject to Tax Withholdings with
respect to payments of the Excess Amount to Optionholders).
 
(ii) If the Purchase Price as recalculated pursuant to this  Section 4.4(c) is
less than the estimated Purchase Price set forth on the Estimated Purchase Price
Calculation Statement (the "Deficiency"), then the Seller Representative and the
Purchaser shall jointly direct the Escrow Agent to release funds to be paid to
or as directed by Purchaser out of the Escrow
 
 
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  Account  up to the Adjustment Escrow Amount no later than three (3) Business
Days after the Final Purchase Price Calculation Statement shall have become
final and binding on the parties.  To the extent the Adjustment Escrow Amount is
insufficient to cover the full amount of the Deficiency, the Keen Managed
Reserve Trust shall be liable for such insufficiency and pay such amount to or
as directed by Purchaser simultaneously with the payment from the Escrow
Account.

 
 
(iii) Any payments made by Purchaser to the Seller Representative, the Sellers
or the Optionholders, or by the Sellers and the Optionholders to Purchaser,
pursuant to this Section 4.4(c) shall be deemed to be adjustments to the
Purchase Price for all Tax purposes.
 
(d) Prior to the determination of the Final Purchase Price Calculation
Statement, Purchaser shall not directly or indirectly make any changes to the
books and records of the Company or the Company Subsidiaries relating to periods
prior to the Closing.  Subject to this Section 4.4, no change to the accounting
methods, policies, practices or procedures made with respect to the Company or
any of the Company Subsidiaries made after Closing shall give rise to any
Liability of any Seller under this Agreement, whether pursuant to Article 11 or
otherwise.
 
4.5 Withholding. To the extent not otherwise withheld by the Company or any
Company Subsidiary, Purchaser shall be entitled to retain and withhold from the
amounts payable pursuant to this Agreement to any Seller or Optionholder such
amounts as Purchaser is required to retain and withhold with respect to the
making of such payment under the Code, or any provision of foreign, state or
local Law and instead shall pay such amount to the applicable Governmental
Authority.  To the extent that amounts are properly so withheld by Purchaser and
paid to the applicable Governmental Authority, such amounts withheld shall be
treated for all purposes of this Agreement as having been paid to such Seller or
Optionholder in respect of which such retention and withholding was made by
Purchaser.
 
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
To induce the Company and the Sellers to enter into this Agreement and to
consummate the transactions contemplated by this Agreement, Purchaser hereby
represents and warrants to the Company and the Sellers as of the date hereof and
as of the Closing Date as follows:
 
5.1 Organization and Standing.  Purchaser is a corporation duly incorporated,
validly existing and in good standing under the Laws of the state of
Delaware.  Copies of Purchaser's Organizational Documents and all amendments
thereto as in effect on the date of this Agreement have been delivered to the
Seller Representative and are complete and correct in all material respects with
respect to the periods covered therein.  Purchaser is not in default under or in
violation of its Organizational Documents.
 
5.2 Authority, Authorization; Enforceability.  Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and the
Transaction Documents to which it is a party, to perform its obligations
hereunder and under each such Transaction Document, and to consummate the
transactions contemplated by this Agreement and each such Transaction Document.
The execution, delivery and performance by Purchaser of this Agreement and each
of the Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Purchaser.  This
Agreement and each other Transaction Document to which Purchaser is a party is,
or upon its execution and delivery by all parties hereto and thereto shall be, a
valid and binding obligation of Purchaser enforceable against it
 
 
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in accordance with the terms hereof and thereof, except as such enforceability
may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance and
other similar Laws affecting creditors' rights generally and by general
principles of equity (the "General Enforceability Exceptions").
 
5.3 Noncontravention.  Except for compliance with any applicable requirements of
the HSR Act, neither the execution, delivery or performance by Purchaser of this
Agreement or any Transaction Document to which it is a party, nor Purchaser's
consummation of the transactions contemplated hereby or thereby, nor Purchaser's
compliance with any of the provisions hereof or thereof shall: (a) violate, or
result in the violation of, the Organizational Documents of Purchaser or any
resolutions adopted by the stockholders, board of directors or other governing
body of Purchaser; (b) violate any Law, writ, injunction or decree of any
Governmental Authority, in each case applicable to Purchaser or its assets or
properties; or (c) with or without the passage of time or the giving of notice
or both, result in the breach of, or constitute a default or require any consent
under, or result in the creation of any Lien upon any property or assets of
Purchaser pursuant to, any material instrument or agreement to which Purchaser
is a party or by which Purchaser or its properties may be bound or affected,
except (in the case of clauses (b) and (c)) where the violation, breach or
default would not reasonably be expected to have a material adverse effect on
Purchaser's ability to consummate timely the transactions contemplated by this
Agreement.
 
5.4 Governmental Approvals.  Except for: (a) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities Laws; and (b) compliance with any
applicable requirements of the HSR Act, no filing with, and no permit,
authorization, consent or approval of, any Governmental Authority is necessary
for the consummation by Purchaser of the transactions contemplated by this
Agreement.
 
5.5 Brokers.  Other than Moelis & Company, Purchaser has not retained, utilized
or been represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
 
5.6 Securities Act.  Purchaser is acquiring the Shares solely for the purpose of
investment and not with a view to, or in connection with, any distribution
thereof in violation of the Securities Act.  Purchaser acknowledges that the
Shares are not registered under the Securities Act or any applicable state
securities Laws, and that the Shares may not be sold except pursuant to the
registration provisions of the Securities Act or pursuant to an applicable
exemption therefrom and pursuant to state securities Laws and regulations as
applicable or pursuant to an applicable exemption therefrom.
 
5.7 Source of Funds.  As of the Closing, Purchaser will have sufficient cash
available to enable it to pay the full Purchase Price payable hereunder and to
make all other necessary payments by it in connection with the transactions
contemplated by this Agreement.  The source of funds for payment of the Purchase
Price shall not violate any Law, and Purchaser shall not fund the Purchase Price
in violation of any Law.
 
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE KEEN MANAGED RESERVE TRUST
 
The Company and the Keen Managed Reserve Trust, jointly and severally, make the
following representations and warranties to Purchaser as of the date hereof and
as of the Closing Date, subject to such exceptions and qualifications as are set
forth in the disclosure schedule delivered by the Company to Purchaser, which is
dated as of the date of this Agreement and attached to this Agreement as Exhibit
C (the "Disclosure Schedule").  The Disclosure Schedule is arranged in
paragraphs corresponding to the lettered and numbered sections contained in this
Agreement and includes sections not specifically
 
 
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referenced in the text of the section.  If an item is disclosed in one section
of the Disclosure Schedule, it shall be deemed to have been disclosed in any
other section of the Disclosure Schedule to the extent the content and context
of such disclosure makes it readily apparent, when read in the context of such
other sections, that such disclosure is applicable to such other sections.  The
disclosure of information in the Disclosure Schedule shall not be construed as
an admission that any such information is material to the business or operations
of the Company or the Company Subsidiaries.  None of the disclosures contained
in the Disclosure Schedule are intended to constitute, and shall not be
construed as constituting, representations or warranties except as and to the
extent specifically provided in this Agreement, nor shall any of the disclosures
in the Disclosure Schedule be deemed to expand in any way the scope or effect of
the representations made by the Company in this Agreement.
 
6.1 Organization and Valid Existence.  The Company and each Company Subsidiary
(other than International Supplement Sciences, Inc.) is a corporation duly
incorporated and validly existing under the Laws of the State of
Washington.  International Supplement Sciences, Inc. is a corporation duly
incorporated and validly existing under the Laws of the province of British
Columbia, Canada.
 
6.2 Authority to Conduct Business.  Each of the Company and the Company
Subsidiaries has the requisite corporate power and authority to own, lease and
operate its properties and assets and to conduct its business as currently being
conducted.  Each of the Company and the Company Subsidiaries is duly licensed or
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the nature of its properties and assets or the
conduct of its business requires it to be so licensed or qualified, except where
the failure to be in good standing or to be duly licensed or qualified to do
business would not reasonably be expected to have a Material Adverse
Effect.  Schedule 6.2 of the Disclosure Schedule sets forth a list of each
jurisdiction in which each of the Company and the Company Subsidiaries is
licensed or qualified to do business as a foreign corporation.
 
6.3 Organizational Documents.  Copies of the Organizational Documents of the
Company and each Company Subsidiary and all amendments thereto as in effect on
the date of this Agreement have been delivered or made available to Purchaser
and are complete and correct.  None of the Company and the Company Subsidiaries
is in default under, or in violation of, its Organizational Documents.  The
stock books of each of the Company and the Company Subsidiaries have been made
available to the Purchaser for its inspection and are true and complete. The
minute books of each of the Company and the Company Subsidiaries have been made
available to Purchaser for its inspection and contain accurate records of all
meetings of and resolutions of, or written consents by, their shareholder(s) and
boards of directors and committees thereof since January 1, 2005.
 
6.4 Authority; Authorization; Enforceability.  The Company has the requisite
corporate power and authority to execute and deliver this Agreement and the
Transaction Documents to which it is a party, to perform its obligations under
this Agreement and each such Transaction Document, and to consummate the
transactions contemplated by this Agreement and each such Transaction Document.
The execution, delivery and performance by the Company of this Agreement and
each Transaction Document to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Company. This
Agreement and each Transaction Document to which the Company is a party is, or
upon its execution and delivery by all parties hereto and thereto shall be, a
valid and binding obligation of the Company, enforceable against it in
accordance with the terms hereof and thereof, except as such enforceability may
be limited by the General Enforceability Exceptions.
 
6.5 Noncontravention.  Except: (a) for compliance with any applicable
requirements of the HSR Act; (b) for notices, consents or approvals required
under agreements or commitments evidencing, or entered into by the Company or
any of the Company Subsidiaries in connection with, Indebtedness of
 
 
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the Company or any Company Subsidiary to be paid and discharged at Closing
pursuant to Section 4.2; and (c) as otherwise set forth on Schedule 6.5 of the
Disclosure Schedule, none of the execution, delivery or performance by the
Company of this Agreement or any Transaction Document to which it is a party,
nor the consummation by the Company of the transactions contemplated hereby or
thereby, nor compliance by the Company with any of the provisions hereof or
thereof shall: (i) conflict with, violate, or result in the violation of, the
Organizational Documents of the Company or any Company Subsidiary or any
resolutions adopted by the shareholders or board of directors of the Company or
any Company Subsidiary; (ii) conflict with or violate any Law, writ, injunction
or decree of any Governmental Authority, in each case applicable to the Company
or any Company Subsidiary or their respective assets or properties; or
(iii) with or without the passage of time or the giving of notice or both,
result in the breach of, constitute a default or require any consent or other
action by any Person under, give rise to any right of termination, cancellation
or acceleration of any material right or obligation to which Company or any
Company Subsidiary is entitled under, or result in the creation of any Lien upon
the property, shares of capital stock or assets of the Company or any Company
Subsidiary pursuant to, any instrument or agreement to which the Company or such
Company Subsidiary is a party or by which the Company or such Company Subsidiary
or their respective properties, assets or shares of capital stock may be bound
or affected, except (in the case of clause (ii)) where the conflict, violation,
breach or default would not reasonably be expected to have a Material Adverse
Effect.
 
6.6 Governmental Approvals.  Except for: (a) such consents, approvals, orders,
authorizations, registrations, declarations and filing as may be required under
applicable federal and state securities Laws; and (b) such filings as may be
necessary under the HSR Act, no filing with, and no permit, authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby.
 
6.7 Investments in Other Persons.  Other than the Company Subsidiaries, none of
the Company or the Company Subsidiaries has any direct or indirect equity,
voting, or other ownership or beneficial interest by stock ownership or
otherwise in any other Person, and is not a member or participant in any
partnership, joint venture or similar Person.
 
6.8 Capitalization of Company and Company Subsidiaries.
 
(a) The authorized shares and issued and outstanding shares of each class of
capital stock of the Company and the record owners (which to the Knowledge of
the Company are also the beneficial owners), and the number of shares owned by
each such owner, of all such issued and outstanding shares of capital stock are
as set forth on Schedule 6.8(a) of the Disclosure Schedule.  The Shares
constitute all of the issued and outstanding shares of capital stock of the
Company and (i) are duly authorized, validly issued, fully paid and
nonassessable; (ii) are held of record by the Sellers as set forth on
Schedule 1(A); and (iii) were not issued in violation of the preemptive rights
of any Person or any agreement or Law by which the Company at the time of
issuance was bound.  None of the outstanding equity securities of the Company
has been issued in violation of the Securities Act or applicable state
securities Laws.
 
(b) The authorized shares and issued and outstanding shares of each class of
capital stock of each Company Subsidiary are as set forth on Schedule 6.8(b) of
the Disclosure Schedule.  The Company owns (of record and beneficially) all of
the issued and outstanding shares of capital stock of each Company Subsidiary,
all of which issued and outstanding shares of capital stock of each Company
Subsidiary (i) are owned free and clear of any Lien or restriction on transfer
(other than any restrictions under the Securities Act and applicable state
securities Laws (and, in the case of International Supplement Sciences, Inc.,
other than any restrictions under applicable Canadian and British Columbia
securities
 
 
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Laws)) and (ii) are duly authorized, validly issued, fully paid and
nonassessable. None of such shares were issued in violation of the preemptive
rights of any Person or any agreement or Law by which any such Company
Subsidiary at the time of issuance was bound.  None of the outstanding equity
securities of any of the Company Subsidiaries have been issued in violation of
the Securities Act or applicable state securities Laws (and, in the case of
International Supplement Sciences, Inc., in violation of applicable Canadian and
British Columbia securities Laws).  There are no authorized, issued or
outstanding preferred stock, bonds, debentures, notes, debt instruments,
evidences of indebtedness or other securities of any kind that are convertible
into or exercisable for any capital stock of the Company or any Company
Subsidiary.
 
(c) No former holder of shares of capital stock of the Company or any of the
Company Subsidiaries has any suit, judgment, damage, right, cause of action or
claim for liabilities, of any kind or nature, against the Company or any of the
Company Subsidiaries as a result of or in connection with such former holder
holding such shares of capital stock.
 
6.9 Rights and Stock Options.  Except for the Stock Options set forth on
Schedule 1(B) to this Agreement, or except as otherwise set forth on Schedule
6.9 of the Disclosure Schedule, there are no (a)  issued, outstanding or
authorized subscriptions, warrants, options or other agreements or rights of any
kind to purchase, otherwise receive or be issued, or otherwise with respect to,
any shares of capital stock or any other security of the Company or any Company
Subsidiary or (b) securities or obligations of any kind convertible into or
otherwise with respect to any shares of capital stock or any other security of
the Company or any Company Subsidiary.  At the Closing, the Per Share Purchase
Price will be greater than the exercise price per share of each Stock Option set
forth on Schedule 1(B).  Except for the Stock Options set forth on Schedule 1(B)
to this Agreement, or except as otherwise set forth on Schedule 6.9 of the
Disclosure Schedule, there is no outstanding contract or other agreement of the
Company or any Company Subsidiary to purchase, redeem or otherwise acquire, or
otherwise with respect to any outstanding shares of the capital stock of the
Company or any Company Subsidiary, or securities or obligations of any kind
convertible into shares of the capital stock of the Company or any Company
Subsidiary.  There are no outstanding or authorized stock appreciation, phantom
stock, stock plans or similar rights with respect to the Company or any Company
Subsidiary. There are no options outstanding to purchase any shares of the
Company's capital stock, other than the Stock Options set forth on Schedule 1(B)
to purchase the Class C Stock.  No Stock Options or other grants of stock-based
awards have been granted at less than fair market value at the time of the
grant.  There are no voting agreements, voting trusts, proxies or other similar
agreements or understandings with respect to the equity interests of the Company
or any Company Subsidiary.  There are no obligations, contingent or otherwise,
of the Company or any Company Subsidiary to repurchase, redeem or otherwise
acquire any of their respective equity interests.
 
6.10 Financial Statements.  The Company has delivered the following financial
statements (the "Financial Statements") to Purchaser, which are attached as
Schedule 6.10 of the Disclosure Schedule: (a) the audited consolidated balance
sheets of the Company and the Company Subsidiaries as of December 31, 2010 and
December 31, 2011 (including the notes thereto), and the related audited
consolidated statements of income, shareholders' equity and cash flows of the
Company and the Company Subsidiaries for each of the years then ended; and
(b) the unaudited consolidated balance sheet of the Company and the Company
Subsidiaries as of June 30, 2012 (the "Most Recent Balance Sheet"), and the
related unaudited consolidated statements of income and cash flows of the
Company and the Company Subsidiaries for the six (6) months then ended (the
"Interim Financial Statements").  Each of the Financial Statements has been
prepared in accordance with GAAP (except as may be indicated in any notes
thereto).  Each of the balance sheets in the Financial Statements fairly
presents in all material respects the consolidated financial condition of the
Company and the Company Subsidiaries as of its respective date.  Each of the
statements of income and cash flows in the Financial Statements fairly
 
 
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presents in all material respects the consolidated results of operations and
cash flows, respectively, of the Company and the Company Subsidiaries for the
periods covered thereby.  Notwithstanding the foregoing, the Interim Financial
Statements are subject to normal, recurring year-end adjustments and lack
footnotes and other presentation items required by GAAP.  The Financial
Statements were prepared on a consistent basis and are consistent in all
material respects with the books and records of the Company and the Company
Subsidiaries, and such books and records are true, correct and complete in all
material respects.
 
6.11 Internal Controls. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that: (a) transactions are
executed in accordance with management's general or specific authorizations; (b)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (c)
access to assets is permitted only in accordance with management's general or
specific authorization; and (d) the recorded accounting for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.  Notwithstanding the foregoing, (i) none of the
Company or any Company Subsidiary has implemented any system of "internal
control over financial reporting" as defined in the rules promulgated under the
Securities Exchange Act and (ii) the internal accounting controls of the Company
and the Company Subsidiaries have been designed, implemented and maintained in
light of the size of the Company and the Company Subsidiaries, the nature of
their respective  operations and the fact that none of them is a reporting
company under the Securities Exchange Act.
 
6.12 No Undisclosed Liabilities.  Except (a) as reflected or reserved against in
the Financial Statements (including the notes thereto) and (b) Liabilities
incurred in the Ordinary Course of Business since the date of the Most Recent
Balance Sheet, none of the Company and the Company Subsidiaries has any material
Liabilities of the type required by GAAP to be reflected or reserved against in
the Financial Statements. The Company and the Company Subsidiaries have no
off-balance sheet Liabilities of any nature to, or any financial interest in,
any Person, the purpose or effect of which is to defer, postpone, reduce or
otherwise avoid or adjust the recording of debt or expenses by the Company or
any of the Company Subsidiaries.
 
6.13 Absence of Changes.  Except for the transactions contemplated by this
Agreement or as disclosed on Schedule 6.13 of the Disclosure Schedule, since
December 31, 2011, the Company and the Company Subsidiaries have conducted their
business and operations in all material respects in the Ordinary Course of
Business and have not:
 
(a) suffered any Material Adverse Change;
 
(b) except in the Ordinary Course of Business, acquired any properties or assets
or sold, assigned, transferred, conveyed, leased, licensed or otherwise disposed
of any of the properties or assets of the Company;
 
(c) made any capital expenditures or commitments therefor in excess of $50,000
for any individual commitment and $250,000 for all commitments in the aggregate;
 
(d) waived or released any right of substantial value;
 
(e) loaned or advanced any money or other property to any present or former
director, officer or employee (except for travel and other similar advances in
the Ordinary Course of Business);
 
 
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(f) issued any guaranty of any obligation of any other Person other than
guarantees of obligations of the Company or any Company Subsidiary incurred in
the Ordinary Course of Business;
 
(g) (i) entered into any transaction or agreement other than in the Ordinary
Course of Business, or (ii) received any notice of termination of, or suffered
any termination of, any Material Contract;
 
(h) suffered any damage, destruction or loss (whether or not covered by
insurance), in any case or in the aggregate, in excess of $50,000;
 
(i) transferred or granted any rights under, or entered into any settlement
regarding the breach or infringement of, any Owned IP, or modified any existing
rights with respect thereto;
 
(j) made, revoked or amended any material Tax election, changed any annual Tax
accounting period, adopted or changed any method of Tax accounting, filed any
amended Tax Return, settled any Tax claim or assessment, surrendered any right
to claim a Tax refund, offset or other reduction in Tax liability, consented to
any extension or waiver of the limitations period applicable to any Tax claim or
assessment, made a request for a written ruling of a Tax Authority, or entered
into a written and legally binding agreement with a Tax Authority;
 
(k) declared or paid any dividends or made any distributions on or in respect of
the Company or any Company Subsidiary's capital stock or other securities
(whether in cash, stock or other property);
 
(l) directly or indirectly redeemed, retired, acquired or purchased any shares
of or interests in equity securities of the Company or any Company Subsidiary,
or any other securities or rights convertible or exercisable into, exchangeable
for or conferring the right to purchase shares of or interests in equity
securities of the Company or any Company Subsidiary;
 
(m) except in the Ordinary Course of Business, had any change in its relations
with its employees, distributors, brokers, agents, customers or suppliers;
 
(n) (i) made any grant of credit or rebate to any customer or distributor on
terms or in amounts materially more favorable than had been extended to that
customer or distributor in the past or (ii) initiated a product promotion not in
the Ordinary Course of Business;
 
(o) amended their Organizational Documents; or
 
(p) taken any action or omitted to take any action that would reasonably be
expected to result in the occurrence of any of the foregoing.
 
6.14 The Company.  The Company has not engaged in any business (other than its
ownership of the stock of each Company Subsidiary and activities reasonably
related thereto), owns no assets (other than the stock of each Company
Subsidiary) and has no material Liabilities (other than as guarantor of
liabilities of the Company Subsidiaries and as a co-borrower of Indebtedness
that will be paid at Closing).  The Company Subsidiaries have not engaged in any
business other than the vitamin, mineral and supplement business.
 
6.15 Tangible Personal Property.  The Company and the Company Subsidiaries have:
(a) good and valid title to all of the tangible personal property and assets
that are used in the operation of their respective businesses as currently
operated and that they own or purport to own; and (b) valid
 
 
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leasehold interests in all tangible personal property and assets that are used
in the operation of their respective businesses as currently operated and that
they lease or purport to lease; and, in each case, free and clear of any Liens
other than Permitted Liens.  The Company and the Company Subsidiaries enjoy
peaceful and undisturbed possession under all of such leases of personal
property.  There are no existing defaults or events that, with the passage of
time or the giving of notice or both, would constitute defaults by the Company
or any such Company Subsidiary under any material provision of such lease or, to
the Knowledge of the Company, by any other party to any such lease, in each case
except for such defaults and events as to which requisite waivers or consents
have been obtained.  All of the material tangible personal property used by the
Company and the Company Subsidiaries in their respective businesses is located
at the Leased Real Property.
 
6.16 Real Property.
 
(a) Neither the Company nor any Company Subsidiary owns or has owned a fee title
interest in any real property.
 
(b) Schedule 6.16(b) of the Disclosure Schedule sets forth a list of all real
property leased or subleased to the Company or any Company Subsidiary (the
"Leased Real Property"), indicating the nature of the respective interests of
the Company or such Company Subsidiary therein. With respect to the Leased Real
Properties:
 
(i) each lease or sublease of Leased Real Property and any assignment thereof
pursuant to which the Company or any Company Subsidiary leases any Leased Real
Property (each, a "Realty Lease") is a legal, valid and binding obligation of
the applicable Company or Company Subsidiary, is in full force and effect, and
is enforceable against the Company or Company Subsidiary, as the case may
be,  and, to the Knowledge of the Company, against the other party or parties
thereto, in each case except as enforceability may be limited by the General
Enforceability Exceptions;
 
(ii) none of the Company, the applicable Company Subsidiary or, to the Knowledge
of the Company, any other party to any such Realty Lease is in breach of or
default of a material provision of such Realty Lease, and no event has occurred
that, with notice or lapse of time or both, would constitute such a breach or
default by the Company or the applicable Company Subsidiary or, to the Knowledge
of the Company, any other party to such Realty Lease, or that would permit
termination, modification or acceleration under such Realty Lease, in each case
except for such defaults and events as to which requisite waivers or consents
have been obtained; and
 
(iii) the buildings, fixtures and other improvements located at each Leased Real
Property: (x) are in compliance in all material respects with all requirements
of applicable zoning code and similar Laws; and (y) benefit from all required
material certificates of occupancy, building, safety, fire and health approvals.
 
6.17 Condition and Sufficiency of Assets.  The buildings, plants, structures,
leasehold improvements, furniture, fixtures, machinery, equipment, vehicles and
other items of tangible personal property owned or leased by the Company and the
Company Subsidiaries in the operation of their businesses: (a) are in reasonably
good operating condition, ordinary wear and tear excepted (which, for the
avoidance of doubt, includes equipment breakdowns that occur in the Ordinary
Course of Business and do not impair in any material respect the operation of
the business of the Company or any Company Subsidiary); and (b) are adequate and
sufficient for the continued conduct of the businesses of the Company and the
Company Subsidiaries as currently conducted, and constitute all of the
buildings,
 
 
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plants, structures, leasehold improvements, furniture, fixtures, machinery,
equipment, vehicles and other items of tangible personal property necessary for
the continued conduct of the businesses of the Company and the Company
Subsidiaries as currently conducted.
 
6.18 Intellectual Property.
 
(a) Schedule 6.18(a) of the Disclosure Schedule contains a complete and correct
list of: (i) all issued patents and patent applications, registered copyrights
and pending applications therefor, registered and unregistered trademarks,
service marks, trade names, logos, trade dress and pending applications therefor
and Internet domain names, owned by the Company or any Company Subsidiary, that
are used or held for use in their respective businesses as currently conducted
(the "Owned IP"); and (ii) all agreements, contracts, licenses, sublicenses,
assignments, co-existence, escrow or other agreements (other than non-negotiated
licenses of commercially available software licensed for a one time or annual
fee of less than $10,000) (each, an "IP License") pursuant to which any third
party has granted the Company or the Company Subsidiaries rights to use
Intellectual Property Rights (the "Licensed IP", and together with the Owned IP,
the "Listed Intellectual Property").  Although not listed on Schedule 6.18(a) of
the Disclosure Schedule, unregistered copyrights that the Company or the Company
Subsidiaries own are included within the definition of "Owned IP."
 
(b) Schedule 6.18(b)(1) of the Disclosure Schedule identifies: (i) the place and
Governmental Authority of filing for each item of Owned IP which is the subject
of an application; and (ii) the Governmental Authority that has issued a
registration with respect to any registered Owned IP.  Except as set forth on
Schedule 6.18(b)(2) of the Disclosure Schedule, (x) each item of Owned IP which
is the subject of an application or a registration has been duly submitted to
(as an application), or registered or issued by, the Governmental Authority set
forth on Schedule 6.18(b)(1) of the Disclosure Schedule, has not been abandoned,
revoked or withdrawn, and, to the Knowledge of the Company, is in good standing
and is valid in the applicable jurisdiction as of the Closing Date; (y) the
Company has not received any written, or to the Knowledge of the Company oral,
notice that any Person is seeking to cancel, modify or challenge any Listed
Intellectual Property, including any applications therefor and (z) the Company
has not received any written, or to the Knowledge of the Company oral, notice of
any objection or rejection from a Governmental Authority, pertaining to any
pending application for Listed Intellectual Property.
 
(c) Except as set forth on Schedule 6.18(c) of the Disclosure Schedule, each IP
License is currently valid and enforceable, subject to the General
Enforceability Exceptions, and in full force and effect and binding on the
Company, the applicable Company Subsidiary and, to the Knowledge of the Company,
all other parties thereto.  The Company and the applicable Company Subsidiary is
not and, to the Knowledge of the Company, no other party to any IP License is in
material default thereunder.  The Company and the Company Subsidiaries have not
received any written, or to the Knowledge of the Company, oral notice of
material default from any third party with respect to any IP License.  The
Company and the Company Subsidiaries have not given any written or oral, notice
of material default to any third party with respect to any IP License within the
last thirty-six (36) months.  Except as set forth on Schedule 6.18(c) of the
Disclosure Schedule, the execution, delivery and performance of this Agreement
and the Company's obligations hereunder and under the Transaction Documents will
not result in such a default.
 
(d) The Company or the applicable Company Subsidiary exclusively owns, free and
clear of all Liens other than Permitted Liens, or has the exclusive or
nonexclusive right to use pursuant to valid and effective agreements, all
Intellectual Property Rights used in connection with its business, and the
consummation of the transactions contemplated by this Agreement shall not alter
or impair any such rights.  The operation of the businesses of the Company and
the Company Subsidiaries and their use of
 
 
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Intellectual Property Rights therein have not and do not violate, infringe,
misuse or misappropriate any Intellectual Property Right of any third party.  No
claims are pending or, to the Knowledge of the Company, threatened, against the
Company or any of the Company Subsidiaries by any Person with respect to the
Company's or any Company Subsidiaries' use of any Intellectual Property Rights
in connection with its business, challenging the validity or effectiveness of
any license or agreement described in Schedule 6.18(a)(ii) of the Disclosure
Schedule, alleging any violation, infringement, misuse or misappropriation of
Intellectual Property Rights or indicating that the failure to take a license
would result in any such claim.  To the Knowledge of the Company, no Person has
or is violating, infringing upon, misusing or misappropriating any Owned IP or
any Licensed IP.  There are no pending claims brought or threatened in writing
by the Company or the Company Subsidiaries against any Person with respect to
such Person's use of any Owned IP.
 
(e) The Listed Intellectual Property constitutes all Intellectual Property
Rights necessary for the continued conduct and operation of the businesses of
the Company and the Company Subsidiaries as currently conducted.  Except as set
forth on Schedule 6.18(e) of the Disclosure Schedule, immediately following the
Closing Date, the Purchaser will be permitted to exercise all Intellectual
Property Rights used by the Company and Company Subsidiaries in connection with
each of their businesses, including under all contracts, licenses and
agreements, to the same extent the Company or the applicable Company Subsidiary
would have been able to had the transactions contemplated by this Agreement not
occurred.  Without limiting the foregoing, the Company owns or holds licenses
for all manufacturing codes and product codes necessary for the continued
conduct and operation of the businesses of the Company and the Company
Subsidiaries as currently conducted, including all UPC manufacturer ID codes,
EAN codes and other manufacturer codes, websites and website URLs used in the
business of the Company and the Company Subsidiaries.
 
(f) The Company and the Company Subsidiaries have secured from all consultants,
employees and independent contractors of the Company and the Company
Subsidiaries who independently or jointly created any portion of, contributed to
the conception, reduction to practice, creation or development of, or who
otherwise would have any rights in any Owned IP, exclusive ownership of all such
third party's rights in and to such Owned IP that the Company or the Company
Subsidiaries do not already own by operation of Law.
 
(g) The Company has taken commercially reasonable measures to protect its
ownership of, and rights in, all Owned IP.  Without limiting the foregoing, the
Company has not made any of its trade secrets or other confidential or
non-public proprietary information available to any other Person except pursuant
to written agreements requiring such Person to maintain the confidentiality of
such information.
 
(h) Except as set forth on Schedule 6.18(h) of the Disclosure Schedule or in the
registration issued by the Governmental Authority for a Listed Intellectual
Property Right, there is no governmental prohibition or restriction on the use
of any Listed Intellectual Property in any jurisdiction in which the Company or
any Company Subsidiary currently conducts or has conducted business since
January 1, 2007 or on the export or import of any of the Listed Intellectual
Property from or to any such jurisdiction.
 
(i) Since January 1, 2007, (i) there has been no unauthorized or improper access
to the software, databases, systems, networks, and Internet sites and
information of the Company and the Company Subsidiaries, including any customer
data or personally identifiable information stored or contained therein or
transmitted thereby; and (ii) the Company and the Company Subsidiaries have
collected, stored, maintained, used and processed all customer data and
personally identifiable information in accordance with all applicable privacy,
security, data protection, direct marketing,
 
 
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consumer protection and workplace privacy laws, rules and regulations.  None of
the Company or any Company Subsidiary accepts online credit card payments for
Products.
 
6.19 Insurance.  Schedule 6.19 of the Disclosure Schedule sets forth a list of
all current policies of fire, liability, product liability, workmen's
compensation, life, property and casualty, directors' and officers' liability
and other insurance currently  maintained, owned or held by, or for the benefit
of, the Company or any Company Subsidiary (the "Insurance Policies").  To the
Knowledge of the Company, all of the Insurance Policies are, and following the
consummation of the transactions contemplated by this Agreement, will remain in
full force and effect and neither the Company nor any Company Subsidiary is in
default in any material respect under any Insurance Policy.  There are no open
claims with respect to the Insurance Policies, and to the Knowledge of the
Company, no event or circumstance exists that could give rise to a claim under
any Insurance Policy.  Since the respective dates of the Insurance Policies, no
notice of cancellation or non-renewal with respect to, or disallowance of any
claim under, any such Insurance Policy has been received by the Company or any
Company Subsidiary.  All premiums due and payable under the Insurance Policies
have been fully paid.   Complete and accurate copies of all Insurance Policies
have been made available to Purchaser.
 
6.20 Labor Relations.
 
(a) Except as set forth on Schedule 6.20(a) of the Disclosure Schedule: (i)
neither the Company nor any Company Subsidiary is party to a collective
bargaining agreement or other union, labor or similar contracts having
provisions or otherwise covering its employees or is currently negotiating such
an agreement nor is any of the employees represented in his or her capacity as
an employee of the Company or any Company Subsidiary by any labor organization,
works council or other employee representative body; (ii) there is no union
organization activity or representation questions involving any employee of the
Company or any Company Subsidiary pending or, to the Knowledge of the Company,
threatened, and none has occurred during the past three (3) years at any
facility of the Company or any Company Subsidiary; (iii) no complaint, charge or
claim against the Company or any Company Subsidiary is currently pending or, to
the Knowledge of the Company, threatened before the National Labor Relations
Board or the Equal Employment Opportunity Commission or before any analogous
Governmental Authority in any country; (iv) since January 1, 2010, neither the
Company nor any Company Subsidiary has experienced (nor to the Knowledge of the
Company has there been threatened) any labor dispute, strike, slowdown, work
stoppage or other labor disputes (and there is no such dispute, strike,
slowdown, work stoppage or other labor dispute currently pending); (v) there are
no pending or, to the Knowledge of the Company threatened, claims or arbitration
proceedings arising out of or under any collective bargaining or other union
agreement to which the Company or any Company Subsidiary is a party or is bound;
(vi) there are no proceedings pending or, to the Knowledge of the Company,
threatened, between the Company or any of the Company Subsidiaries, on the one
hand, and any or all of its current or former employees, directors, officers,
consultants, independent contractors or other service providers, on the other
hand; (vii) there are no claims pending, or, to Knowledge of the Company,
threatened, against the Company or any of the Company Subsidiaries under any
workers' compensation or long-term disability plan or policy that is not fully
offset by insurance; (viii) the Company and the Company Subsidiaries have no
material unsatisfied obligations to any employees, former employees, or
qualified beneficiaries pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Family and Medical Leave Act or any state or
foreign law governing health care, retirement or pension schemes or coverage or
the extension or continuation of any such schemes or coverage; and (ix) there
has been no "mass layoff" or "plant closing" as defined under the Worker
Adjustment and Retraining Notification Act and any similar state or local "mass
layoff" or "plant closing" law with respect to the Company or any Company
Subsidiary within the ninety (90) days prior to Closing.
 
 
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(b) Except as set forth on Schedule 6.20(b) of the Disclosure Schedule, all U.S.
employees of the Company and the Company Subsidiaries are employed on an at-will
basis and have no entitlement to contractual severance or notice if terminated
for any reason. All U.S. employees of the Company and the Company Subsidiaries
are correctly classified as exempt or non-exempt from state and federal overtime
laws.  All contractors and/or consultants of the Company and the Company
Subsidiaries are correctly classified as independent contractors under U.S. and
state law, or foreign statutes, Laws or regulations.  The Company and the
Company Subsidiaries have complied in all material respects with the
requirements of the Immigration Reform and Control Act of 1986, as amended, and
other United States immigration laws related to the verification of citizenship
or legal permission to work in the United States with respect to all of the U.S.
employees of the Company and the Company Subsidiaries as well as foreign
statutes, laws or regulations related to the verification of legal permission to
work in non-U.S. jurisdictions with respect to all non-U.S. employees of the
Company and any Company Subsidiary.
 
6.21 Permits; Compliance With Law.
 
(a) The Company and each of the Company Subsidiaries:  (i) holds all Permits
that are required in the conduct of each of their respective businesses as
presently conducted, except to the extent not material to their respective
businesses and (ii) are in compliance in all material respects with the terms of
such Permits, which are in full force and effect.  A list of all Permits held by
the Company and each Company Subsidiary as of the date of this Agreement is set
forth on Schedule 6.21 of the Disclosure Schedule.  The transactions
contemplated by this Agreement, including change of control, will not cause a
cancellation or otherwise adversely affect the validity of such Permits.
 
(b) The Company and each of the Company Subsidiaries are, and have been since
January 1, 2007, in material compliance with all applicable Laws.  To the
Company's Knowledge, no proposed Law exists that would be applicable to the
Company or any of the Company Subsidiaries that could reasonably be expected to
have a Material Adverse Effect (without giving effect to clause (v) of the
definition of Material Adverse Effect).  No written, or to the Knowledge of the
Company oral, notice has been received by the Company since January 1, 2007
alleging a material violation of applicable Laws other than as set forth on
Schedule 6.21(b) of the Disclosure Schedule, including any FDA Form 483,
"warning letter," "untitled letter" or other similar governmental or regulatory
notice of inspectional observations or deficiencies.
 
(c) Without limiting the generality of the foregoing, and except as set forth on
Schedule 6.21(c) of the Disclosure Schedule, the Company and each Company
Subsidiary since January 1, 2007 has materially complied with: (i) the Federal
Food, Drug and Cosmetic Act (the "FDC Act"), or similar legal provisions in any
domestic or foreign jurisdiction, (ii) the Food and Drug Administration (the
"FDA") regulations promulgated thereunder, or similar legal provisions in any
domestic or foreign jurisdiction, (iii) all applicable Laws enforced by the
United States Department of Agriculture, (iv) the Federal Trade Commission Act
and all applicable state and foreign Laws with respect to the truthfulness and
substantiation of all Product labeling and advertising claims for Products
manufactured, distributed or sold prior to the Closing Date, and (v) all Laws
governing the manufacturing, testing, processing, packaging, labeling,
marketing, selling, holding and/or distribution of food products (clauses (i),
(ii), (iii) and (v) collectively, the "Food Safety Laws", and clause (iv) the
"Substantiation of Claims Laws").  Schedule 6.21(c) of the Disclosure Schedule
identifies all branded Product label representations or claims (excluding
representations or claims made with respect to private label Products) made by
the Company or any Company Subsidiary with respect to Products manufactured,
distributed or sold from January 1, 2012 through the date of this
Agreement.  Since January 1, 2007, neither the Company nor any Company
Subsidiary has engaged in any conduct or taken any action, and to the Knowledge
of the Company, there has been no event, that would reasonably be expected to
result in any Damages for the Company or any of the Company Subsidiaries as a
result of, relating to or in connection with any representations or claims
 
 
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made by the Company or any Company Subsidiary prior to the Closing Date in or on
any media or Product labeling, including print, television and other
advertising, with respect to Products manufactured, distributed or sold by the
Company or any Company Subsidiary prior to the Closing Date.
 
(d) Other than as set forth on Schedule 6.21(d) of the Disclosure Schedule,
since January 1, 2007: (i) neither the Company nor any Company Subsidiary has
received any written, or to the Knowledge of the Company oral, notice of any
actions, suits, proceedings, orders, or investigations from the FDA or any other
Governmental Authority charged with enforcing the Food Safety Laws, or from the
FTC or any state or foreign Governmental Authority charged with enforcing
Substantiation of Claims Laws and (ii) no claims have been filed against the
Company or any Company Subsidiary alleging a violation of any Food Safety Law or
Substantiation of Claims Laws.
 
(e) Except as set forth on Schedule 6.21(e) of the Disclosure Schedule, since
January 1, 2007, each Product subject to the Food Safety Laws and Substantiation
of Claims Laws that was manufactured, assembled or sold by the Company or any
Company Subsidiary prior to the Closing Date was developed, manufactured,
tested, packaged, held, marketed, sold and/or distributed by the Company or a
Company Subsidiary in material compliance with all applicable requirements of
the Food Safety Laws and Substantiation of Claims Laws.
 
(f) All manufacturing operations conducted by the Company and any Company
Subsidiary since January 1, 2007 have been conducted in material compliance with
applicable FDA good manufacturing practices.  To the Company's Knowledge, the
Company does not import from any foreign country any ingredients except as set
forth on Schedule 6.21(f) of the Disclosure Schedule, which schedule includes,
to the Company's Knowledge, the country of origin of such imported
ingredients.  All ingredients, whether imported or domestic, are accompanied by
a certificate of analysis upon delivery to the Company or a Company
Subsidiary.  All ingredients that are used to manufacture Products that are
dietary supplements are subjected in all material respects to the testing
required under the FDA regulations for good manufacturing practices for dietary
supplements, as contained in 21 C.F.R. Part 111.
 
(g) Neither the Company nor any Company Subsidiary, nor, to the Knowledge of the
Company, any of the Company's or any Company Subsidiary's directors, officers or
employees, has ever been: (i) convicted of any crime or engaged in any conduct
for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar law or
authorized by 21 U.S.C. § 335a(b) or (ii) convicted of any other crime as a
result of any violation of Food Safety Laws.
 
(h) Except as set forth on Schedule 6.21(h) of the Disclosure Schedule, since
January 1, 2007: (i) neither the Company nor any Company Subsidiary has
initiated, conducted or issued any recall, market withdrawal or replacement with
respect to any Product manufactured, distributed or sold prior to the Closing
Date and (ii) no Product manufactured, distributed or sold prior to the Closing
Date has been discontinued (whether voluntarily or otherwise) due to concerns
over potential harm to human health or safety.  No proceedings (whether
completed or pending) initiated by the FDA or any other Governmental Authority
charged with enforcing the Food Safety Laws seeking the recall, withdrawal,
suspension or seizure of any Product manufactured, distributed or sold prior to
the Closing Date are pending or, to the Knowledge of the Company, threatened
against the Company or any Company Subsidiary, nor have any such proceedings
been pending at any time during the twelve (12) months prior to the Closing
Date, including any "warning letters" or "untitled letters" issued by the FDA.
 
(i) Since January 1, 2007, the Company and the Company Subsidiaries have been in
material compliance with the requirements for reporting serious adverse events
for Products that are dietary supplements, as contained in Section 716 of the
FDC Act.
 
 
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(j) To the Knowledge of the Company, none of the Products manufactured,
distributed or sold prior to the Closing Date has included any new dietary
ingredient, as that term is defined in Section 4.13(c) of the FDC Act, that is
subject to notification under the new dietary ingredient notification
requirements of the FDC Act for which the Company has failed to file a
notification with the FDA.
 
(k) To the Knowledge of the Company, since January 1, 2007, the Company and the
Company Subsidiaries have complied in all material respects with all labeling
requirements for “dietary supplements,” as that term is defined in Section
201(ff) of the FDC Act, that are contained in the FDC Act and applicable FDA
regulations.  Since January 1, 2007, none of the Company or the Company
Subsidiaries has received any written or, to the Knowledge of the Company, oral
notice that any Products manufactured, distributed or sold prior to the Closing
Date that the Company labels and sells as dietary supplements fail in any
material respect to meet the definition of “dietary supplement” in the FDC Act,
or any written or, to the Knowledge of the Company, oral notice that any dietary
supplement Product manufactured, distributed or sold prior to the Closing Date
is in fact a “conventional food” under the FDC Act rather than a “dietary
supplement.”
 
This Section 6.21 contains the sole and exclusive representations and warranties
of the Company with respect to any matters relating to Permits, Food Safety Laws
or Substantiation of Claims Laws.
 
6.22 Litigation.  Except as identified on Schedule 6.22 of the Disclosure
Schedule, there has not been since January 1, 2007, nor is there currently
pending or, to the Knowledge of the Company threatened, any action, suit, claim
or proceeding involving the Company or any of the Company Subsidiaries
(including any matter with respect to which the Company or any of the Company
Subsidiaries has agreed to indemnify another party whether or not a party to
such matter), any of their respective assets or properties or any of their
respective current or former directors, officers or employees (in their
capacities as such).  To the Knowledge of the Company, since January 1, 2007, no
event has occurred that would reasonably be expected to result in such an
action, suit, claim or proceeding.  There are no currently pending actions,
suits, claims or proceedings or outstanding orders, judgments, injunctions,
stipulations, awards or decrees before or of any Governmental Authority
involving or against the Company or any of the Company Subsidiaries, or any of
their respective assets or properties, that (a) challenge or seek to prevent,
enjoin or otherwise delay the consummation of the transactions contemplated by
this Agreement or (b) would reasonably be expected to have a Material Adverse
Effect.
 
6.23 List of Accounts.  Schedule 6.23 of the Disclosure Schedule contains a list
of all bank and securities accounts, and all safe deposit boxes, maintained by
the Company and each of the Company Subsidiaries, including the following
information for each such account and safe deposit box: (a) the name and
location of the institution at which such account and safe deposit box is
maintained; (b) the account number of such account and safe deposit box; (c) a
brief description of such account and safe deposit box; and (d) Persons
authorized to act or sign on behalf of the Company in respect of the
foregoing  and a listing of the Persons authorized to draw thereon or make
withdrawals therefrom or, in the case of safe deposit boxes, with access
thereto.
 
6.24 List of Personnel.  The Company has provided to Purchaser a schedule
setting forth as of the date hereof: (a) the name, position and total
compensation of each employee of the Company and the Company Subsidiaries as of
July 31, 2012; (b) all wage or salary increases, bonuses or other compensation
received since December 31, 2011 with respect to periods beginning after
December 31, 2011 by persons whose total annual compensation for the twelve (12)
months ended December 31, 2011 exceeded, or whose total annual compensation for
the twelve (12) months ending December 31, 2012 is expected to exceed, $50,000;
and (c) all commitments or agreements by the Company or any Company
 
 
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Subsidiary to increase the wages or modify the conditions or terms of employment
of any of their respective employees other than in the Ordinary Course of
Business.
 
6.25 Employee Benefit Plans; ERISA.
 
(a) Schedule 6.25(a) of the Disclosure Schedule lists all "employee benefit
plans" within the meaning of Section 3(3) of ERISA (whether or not subject to
ERISA), and any and all other retirement, employment, collective bargaining,
welfare, life, insurance, post-retirement, disability, vacation, unemployment,
bonus, pension, change in control, profit sharing, equity, stock option, stock
bonus or deferred compensation, severance, sick leave or other material plan or
arrangement providing benefits to current or former employees, officers,
directors or other service providers of the Company or the Company Subsidiaries,
in each case whether terminated or not terminated, written or unwritten, insured
or not insured or foreign or domestic, of the Company or the Company
Subsidiaries (collectively, the "Benefit Plans") currently maintained, sponsored
or contributed to or required to be maintained, sponsored or contributed to by
the Company, any Company Subsidiary or their respective ERISA Affiliates or
under which the Company or any Company Subsidiary or their respective ERISA
Affiliates otherwise have or could reasonably be expected to have, or had, any
obligations or liabilities.
 
(b) All Benefit Plans comply and have been maintained and operated in all
material respects in accordance with all Laws (including, without limitation,
ERISA and the Code) applicable to such plans and the terms and conditions of the
respective plan documents. The Benefit Plans that are intended to qualify under
Section 401 of the Code are so qualified and the trusts maintained pursuant
thereto are exempt from federal income taxation under Section 501 of the Code,
and the IRS has issued a favorable determination letter or prototype or volume
submitter plan opinion letter with respect to each such Benefit Plan, and to the
Knowledge of the Company nothing has occurred with respect to such plans which
could reasonably be expected to cause the loss of such qualification or
exemption or the imposition of any material liability, penalty or Tax under
ERISA, the Code or other applicable Law. No Benefit Plan is subject to Title IV
or Section 302 of ERISA or Section 412 of the Code.  No Benefit Plan is a
Multiemployer Plan or a plan that has two or more contributing sponsors at least
two of whom are not under common control, within the meaning of Section 4063 of
ERISA (a "Multiple Employer Plan"). Except for continuation coverage as required
by Section 4980(B) of the Code or by applicable state insurance Laws, no Benefit
Plan provides life, health, medical or other welfare benefits to any current or
former employees, officers, directors or other service providers (including
their respective beneficiaries and dependents) of the Company or the Company
Subsidiaries following any such Person's retirement or termination of employment
or service with the Company or any Company Subsidiary. To the Knowledge of the
Company, none of the Company, any Company Subsidiary or any of their respective
ERISA Affiliates has contributed to a nonconforming group health plan (as
defined in Section 5000(c)) of the Code and none of the Company, any Company
Subsidiary or any of their respective ERISA Affiliates has incurred a Tax under
Section 5000(a) of the Code.  No Benefit Plan is under or, to the Knowledge of
the Company, expected to be under, nor has the Company or any Company Subsidiary
been notified of any impending, audit or investigation by the IRS, United States
Department of Labor, or any other Governmental Authority and no such completed
audit, if any, has resulted in the imposition of any unpaid Tax liability.  With
respect to each Benefit Plan that is funded mostly or partially through an
insurance policy, neither the Company nor any Company Subsidiary has any
material liability in the nature of retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring on or before the Closing Date. No trust providing
funding to any Benefit Plan is intended to meet the requirements of Section
501(c)(9) of the Code and no amounts payable under any Benefit Plan will fail to
be deductible for federal income tax purposes by virtue of Sections 280G and
4999 of the Code.
 
 
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(c) The Company has delivered or made available to Purchaser true, correct and
complete copies of each Benefit Plan (or if such plan is unwritten, then a
summary of the material terms of such Benefit Plan), and, to the extent
applicable, correct and complete copies of the current plan documents,
amendments, summary plan descriptions, summaries of material modifications, the
most recent determination letter received from the IRS, the two most recent
Form 5500 Annual Reports and all financial statements and accompanying
schedules, and all related trust agreements, insurance contracts and other
funding arrangements that implement each Benefit Plan. The Company has also
delivered or made available to Purchaser true, correct and complete copies of
each employee handbook and all material written communications applicable to
employees of the Company and the Company Subsidiaries.
 
(d) All contributions (including all employer contributions and employee salary
reduction contributions, if any) that are due and payable have been made within
the time period prescribed by ERISA to each Benefit Plan that is an Employee
Pension Benefit Plan (within the meaning of Section 3(2) of ERISA). With respect
to each other Benefit Plan, all contributions required to be made under the
terms of any such Benefit Plan as of the date hereof have been timely made or,
if not yet due, have been fully reserved for and specifically identified in the
Most Recent Balance Sheet.  None of the Company, any Company Subsidiary or any
of their respective ERISA Affiliates has incurred, or is reasonably likely to
incur, any unfunded liabilities in relation to any Benefit Plan that have not
been properly accounted for under GAAP.
 
(e) None of the Company and the Company Subsidiaries, or to the Knowledge of the
Company any trustee or administrator of any Benefit Plan, has engaged in any
transaction with respect to such Benefit Plan that would subject the Company or
any Company Subsidiary to either a civil penalty assessed pursuant
Section 502(i) of ERISA or a Tax or penalty on prohibited transactions imposed
by Section 4975 of the Code.  No fiduciary of any Benefit Plan has any liability
for breach of fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of any Benefit Plan. No
actions, suits or claims with respect to the assets of any Benefit Plan (other
than routine claims for benefits) are pending or, to the Knowledge of the
Company threatened or reasonably anticipated.
 
(f) None of the Company, any Company Subsidiary or any of their respective ERISA
Affiliates has incurred any Liability, directly or indirectly, to the PBGC or
otherwise, under any Multiemployer Plan, Multiple Employer Plan or any other
plan subject to Section 412 of the Code, or Title IV or Sections 302, 4063, or
4064 of ERISA (including any withdrawal liability as defined in Section 4201 of
ERISA).
 
(g) None of the Company or a Company Subsidiary maintains or is obligated to
contribute to any Benefit Plan maintained outside the jurisdiction of the United
States, subject to the laws of a jurisdiction outside of the United States, or
covering any employee residing or working outside the United States.
 
(h) Except as set forth on Schedule 6.25(h), neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will give rise to or result in (i) any payment becoming due to any current or
former employee, officer, director, or other service provider (or their
respective beneficiaries or dependents) solely by reason of such transactions or
by reason of a termination of employment following such transactions) of the
Company or any Company Subsidiary, (ii) increase any benefits otherwise payable
under any Benefit Plan, or (iii) result in the acceleration of the time of
payment or vesting of any such benefits under any such plan.
 
(i) No Benefit Plan is or ever was a "non-qualified deferred compensation plan"
as defined under Section 409A of the Code and the regulations thereunder.  No
Person is entitled to any
 
 
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gross-up, make-whole or other additional payment from the Company or any Company
Subsidiary in respect of any Tax (including federal, state, local and foreign
income, excise and other Taxes (including Taxes imposed under Code Section 409A
or 4999)) or interest or penalty related thereto.
 
(j) Neither the Company nor any Company Subsidiary or any of their respective
officers has made any promises or commitments, to create any employee benefit
plan or agreement, or modify or change any Benefit Plan.  To the Knowledge of
the Company, no event, condition, or circumstance exists that could reasonably
be expected to result in an increase of the benefits provided under any Benefit
Plan or the expense of maintaining any Benefit Plan from the level of benefits
or expense incurred for the most recent fiscal year ended before the Closing
Date. To the Knowledge of the Company, no event, condition, or circumstance
exists that would prevent the amendment or termination of any Benefit Plan other
than in accordance with its terms.
 
This Section 6.25 contains the sole and exclusive representations and warranties
of the Company with respect to any Employee Benefit Plan matters with respect to
the Company and the Company Subsidiaries, including any arising under ERISA.
 
6.26 Tax Matters.
 
(a) All Income Tax Returns and all other material Tax Returns required to be
filed with respect to the business and assets of the Company and the Company
Subsidiaries have been duly prepared and timely (within any applicable extension
periods) filed with the appropriate Governmental Authorities in jurisdictions in
which such returns are required to be filed, and all such Tax Returns are true,
correct and complete in all material respects.   The Company and each Company
Subsidiary have timely and properly paid all Taxes due (whether or not shown to
be due and payable on any Tax Returns).  The Company and the Company
Subsidiaries have set up adequate reserves on the appropriate Financial
Statements for the payment of all Taxes properly accrued under GAAP but not yet
due and payable, and no Taxes outside the Ordinary Course of Business will be
incurred between the last day of the time period covered by the most recent
Financial Statement and the Closing Date. All Taxes that the Company or any
Company Subsidiary are required by Law to withhold or collect have been duly
withheld or collected and have been timely paid over to the appropriate Tax
Authority to the extent due and payable.
 
(b) There is no claim or assessment pending or, to the Knowledge of the Company,
threatened, against the Company or any Company Subsidiary for any alleged
deficiency in Taxes.
 
(c) Neither the Company nor any Company Subsidiary has for any Tax year
remaining subject to audit: (i) executed a waiver or consent extending any
statute of limitations for the assessment or collection of any Taxes that
remains outstanding; (ii) applied for a ruling relative to Taxes; or
(iii) entered into a closing agreement with any Tax Authority.
 
(d) None of the Tax Returns of the Company and the Company Subsidiaries filed
after 2007 with respect to any Tax year has been or is currently being examined
by the IRS or relevant Tax Authorities.  There are no examinations or other
administrative or court proceedings relating to Taxes in progress or pending
with respect to which the Company or any Company Subsidiary has received written
notice.
 
(e) Neither the Company nor any Company Subsidiary is a party to any written
agreement providing for the allocation, sharing or indemnification of Taxes.
Neither the Company nor any Company Subsidiary is liable for the Taxes of any
other Person (except for Tax liabilities of any member of the Affiliated Group
of which the Company is the common parent).
 
 
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(f) No payment made or to be made to any current or former employee or director
of the Company or any Company Subsidiary by reason of the transactions
contemplated by this Agreement (whether alone or in connection with any other
event) shall constitute an "excess parachute payment" within the meaning of
Section 280G of the Code.
 
(g) Neither the Company nor any Company Subsidiary is or has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the period specified in Section 897(c)(1)(A)(ii) of the Code.
 
(h) Neither the Company nor any Company Subsidiary has received notice or
inquiry from any jurisdiction where the Company or such Company Subsidiary does
not currently file Tax Returns to the effect that such filings may be required
with respect to the Company or such Company Subsidiary, or that the Company or
such Company Subsidiary may otherwise be subject to taxation by such
jurisdiction.
 
(i) Neither the Company nor any Company Subsidiary will be required to include
amounts in income, or exclude items of deduction, in a Post-Closing Tax Period
as a result of (i) any installment sale or open transaction disposition made in
a Pre-Closing Tax Period, (ii) the application of the long-term contract method
of accounting in a Pre-Closing Tax Period, (iii) any agreement with a
Governmental Authority entered into in a Pre-Closing Tax Period, or (iv) any
adjustments under Section 481 of the Code (or any similar provision of Law
relating to Taxes of any jurisdiction) pursuant to a change in method of
accounting made in, or for, a Pre-Closing Tax Period.  Except as provided in the
Financial Statements, neither the Company nor any Company Subsidiary has
received prepaid amounts or deposits in a Pre-Closing Tax Period that would be
required to be included in income in a Post-Closing Tax Period.
 
(j) There are no Tax rulings, requests for rulings, closing agreements or other
similar agreements or requests (including any gain recognition agreements under
Section 367 of the Code and applications for a change in accounting method or to
change the basis for determining items under Section 481 of the Code) in effect
or filed with any Tax Authority relating to the Company or any Company
Subsidiary which could materially affect the Company's or such Company
Subsidiary's liability for Taxes in a Post-Closing Tax Period.
 
(k) There are no Liens in connection with Taxes (other than Permitted Liens)
upon any of the assets or properties of the Company or any Company Subsidiary.
 
(l) Neither the Company nor any Company Subsidiary has participated in a
"reportable transaction" within the meaning of Section 1.6011-4 of the United
States Treasury regulations promulgated pursuant to the Code (or any similar
provision of state, local or non-U.S. law).  The Company and each Company
Subsidiary have disclosed on their U.S. federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of U.S.
federal income Tax within the meaning of Section 6662 of the Code.
 
(m) Any transaction between the Company or any Company Subsidiary and any Person
that is related to or under common control with the Company or such Company
Subsidiary within the meaning of Section 482 of the Code or any similar
provision of state, local or non-U.S. Law relating to Taxes, or any transaction
between such related or commonly controlled Persons, have at all times been at
arm's length or, to the Knowledge of the Company, otherwise satisfy the
requirements of Section 482 of the Code or any similar provision of state, local
or non-U.S. Law relating to Taxes, as the case may be.
 
 
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(n) Neither the Company nor any Company Subsidiary has constituted a
"distributing corporation" or a "controlled corporation" in a distribution of
stock to which Section 355 of the Code applied or was intended to apply.
 
(o) No power of attorney, which is currently in effect, has been granted with
respect to any matter relating to Taxes of the Company or any Company
Subsidiary.
 
(p) No Company Subsidiary that is a foreign corporation for U.S. federal income
tax purposes (i) has an investment in U.S. property within the meaning of
Section 956 of the Code, (ii) is engaged in a United States trade or business
for U.S. federal income tax purposes, or (iii) is a passive foreign investment
company within the meaning of the Code.
 
(q) The Company has made available to Purchaser correct and complete copies of
all Income Tax Returns and material sales and use Tax Returns and property Tax
Returns of the Company and the Company Subsidiaries for the last three years,
and material examination reports, and material statements of deficiencies
assessed against or agreed to by, or with respect to, the Company and the
Company Subsidiaries with respect to such Taxes for the last five taxable years.
 
(r) The Company and each Company Subsidiary have collected and remitted all
applicable sales or use Taxes to the appropriate Tax Authority, or have
obtained, in good faith, any applicable sales or use Tax exemption certificates
or otherwise qualify for exemption if no exemption certificate is required.
 
This Section 6.26 contains the sole and exclusive representations and warranties
of the Company with respect to any Tax matters with respect to the Company and
the Company Subsidiaries, other than the representations and warranties
contained in Sections 6.10, 6.12, 6.13, 6.25 and 6.36.
 
6.27 Environmental Matters.
 
(a) The Company and the Company Subsidiaries are and at all times have been in
material compliance with all Environmental, Health and Safety Laws. The Company
and the Company Subsidiaries hold and are in compliance with all Permits
required to be held by them under Environmental, Health and Safety Laws.
 
(b) Neither the Company nor any Company Subsidiary has received written notice
from any third party, including any Governmental Authority, that the Company or
any Company Subsidiary (i) is in violation of, or non-compliance with,
Environmental, Health, and Safety Laws, (ii) is liable for personal injury,
property damage, natural resource damages, or obligations to conduct or bear the
cost of investigation, remediation, monitoring or corrective action, in each
case, arising under or related to Environmental, Health and Safety Laws, or
(iii) has been identified by the United States Environmental Protection Agency
as a potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 300 Appendix B, or any state
equivalent thereof.
 
(c) There has been no emission, discharge, release, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Materials of Environmental Concern in, on, under, at or from any Leased Property
or any property, formerly owned, leased or occupied by the Company or any
Company Subsidiary (the "Former Property"), except as would not reasonably be
expected to result in material Damages (including, obligations to conduct, or
bear the cost of, investigation, remediation, cleanup, monitoring or corrective
action) to the Company or any Company Subsidiary under Environmental, Health and
Safety Laws.
 
 
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(d) The Company and the Company Subsidiaries have delivered or made available to
Purchaser correct and complete copies of any reports, studies, analyses and test
or monitoring results initiated by the Company or the Company Subsidiaries or in
the possession, custody or control of them (i) pertaining to Materials of
Environmental Concern in, on, under, at or from any facility presently or
formerly occupied by any of them or (ii) concerning compliance with any
Environmental, Health and Safety Laws by the Company or the Company Subsidiaries
or any Person for whose conduct they may be held responsible.
 
(e) To the Knowledge of the Company, no underground storage tanks are located on
the Leased Real Property that contain or previously contained any Materials of
Environmental Concern.
 
This Section 6.27 contains the sole and exclusive representations and warranties
of the Company with respect to any environmental matters with respect to the
Company and the Company Subsidiaries, including any arising under any
Environmental, Health and Safety Laws.
 
6.28 Material Contracts.  Schedule 6.28 of the Disclosure Schedule sets forth a
list of the contracts or agreements (whether written or oral, and including any
and all amendments thereto) to which the Company or any Company Subsidiary is a
party (collectively, the "Material Contracts") and which:
 
(a) relates to Indebtedness or is a letter of credit, pledge, bond or similar
arrangement running to the account of or for the benefit of the Company or any
Company Subsidiary;
 
(b) relates to the purchase, maintenance, acquisition, sale or furnishing of
materials, supplies, merchandise, machinery, equipment, parts or any other
property or services (excluding any such contract made in the Ordinary Course of
Business and which is expected to be fully performed within 120 days of the date
hereof or which involves annual revenues or expenditures of less than $100,000);
 
(c) obligates the Company or any Company Subsidiary not to compete with any
business, or to conduct any business with only certain parties, or which
otherwise restrains or prevents the Company or any Company Subsidiary from
carrying on any lawful business or which restricts the right of the Company or
any Company Subsidiary to use or disclose any information in its possession
(excluding in each case customary restrictive covenants contained in agreements
entered into in the Ordinary Course of Business);
 
(d) relates to (i) employment, compensation, severance or consulting between the
Company or any Company Subsidiary and any of their respective officers or
directors or (ii) other employees or consultants of the Company or any Company
Subsidiary who are entitled to annual compensation thereunder in excess of
$50,000;
 
(e) is a lease or sublease of real property;
 
(f) is a lease, sublease or other title retention agreement or conditional sales
agreement involving annual payments in excess of $50,000 or aggregate payments
at any time in excess of $100,000 for any machinery, equipment, vehicle or other
tangible personal property (whether the Company or any Company Subsidiary is a
lessor or lessee);
 
(g) is a contract for capital expenditures or the acquisition or construction of
fixed assets for or in respect of any real property involving annual payments in
excess of $50,000 or aggregate payments at any time in excess of $100,000;
 
 
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(h) is a contract granting any Person a Lien on any of the assets of the Company
or any Company Subsidiary, in whole or in part (other than Permitted Liens);
 
(i) is a contract by which the Company or any Company Subsidiary retains any
manufacturer's representatives, broker or other sales agent, distributor or
representative, or advertising or marketing entity or through which the Company
or any Company Subsidiary is appointed or authorized as a sales agent,
distributor or representative;
 
(j) is a contract under which the Company or any Company Subsidiary has granted
or received a license or sublicense or under which the Company or any Company
Subsidiary is obligated to pay or has the right to receive a royalty, license
fee or similar payment (excluding off-the-shelf or "shrink wrap" software
license agreements);
 
(k) is an agreement or arrangement with any Seller or any Affiliate of any
Seller (other than agreements or arrangements that will terminate upon Closing);
 
(l) relates to a joint venture, partnership or similar arrangement involving the
sharing of profits, losses, costs or liabilities by the Company or any Company
Subsidiary with any other Person; or
 
(m) is a contract with a Major Customer or Major Supplier;
 
(n) is a contract that includes “most favored nation,” “meet or release” or
similar pricing or delivery arrangements or which have a “cost-savings” or other
similar performance or financial goals, the satisfaction or non-satisfaction, of
which may impact the revenues or profitability to the Company or any Company
Subsidiary under such agreement and all agreements for the purchase of materials
or supplies involving payment of amounts in excess of $50,000 that include “take
or pay” or similar pricing or delivery arrangements;
 
(o) other than any contract specified in or excluded by clauses (a) through (n)
above, involve either (i) payments by or to the Company or any Company
Subsidiary of $50,000 or more in any calendar year or (ii) aggregate payments by
or to the Company or any Company Subsidiary of $100,000 or more.
 
Each Material Contract is a legal, valid and binding obligation of the Company
or the Company Subsidiary party thereto, enforceable against the Company or the
Company Subsidiary party thereto and, to the Knowledge of the Company, the other
party or parties thereto in accordance with its terms (except as enforceability
may be limited by the General Enforceability Exceptions) and is in full force
and effect.  None of the Company, the applicable Company Subsidiary or, to the
Knowledge of the Company, any other party to any Material Contract is in breach
of or default under such Material Contract, and, to the Knowledge of the
Company, no event has occurred that, with notice or lapse of time or both, would
constitute such a breach of or default under, or permit the termination,
modification or acceleration of, such Material Contract or would otherwise
reasonably be expected to have a Material Adverse Effect.  None of the Company,
any Company Subsidiary or, to the Knowledge of the Company, any other party to
any Material Contract has repudiated any provision of such Material
Contract.  None of the Company and the Company Subsidiaries is disputing and, to
the Knowledge of the Company, no other party to any Material Contract is
disputing, and there are no forbearance programs in effect with respect to, any
material provision of such Material Contract.  The Company has made available to
the Purchaser true and complete copies of all Material Contracts (or written
summaries of any oral Contracts).  Except as disclosed on Schedule 6.28 of the
Disclosure Schedule, there are no amendments, written or oral, or practices or
course of conduct (including with respect to commissions) that are materially
different from
 
 
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the terms set forth in copies of the contracts or agreements provided or made
available to Purchaser.  None of the Company, the applicable Company Subsidiary
or, to the Knowledge of the Company, any other party to any amendment disclosed
on Schedule 6.28 of the Disclosure Schedule is in breach of or default under any
such amendment.
 
6.29 Transactions with Affiliates.  Except for: (a) normal advances to employees
of the Company or any Company Subsidiary in the Ordinary Course of Business not
exceeding $10,000; (b) payment of compensation for employment to employees of
the Company or any Company Subsidiary in the Ordinary Course of Business;
(c) participation in the Benefit Plans by employees of the Company or any
Company Subsidiary; (d) transactions between or among the Company and the
Company Subsidiaries; and (e) the Realty Leases with entities controlled by or
affiliated with any Seller (which Realty Leases are set forth on Schedule 6.29
of the Disclosure Schedule), since January 1, 2010 none of the Company or any of
the Company Subsidiaries has purchased, acquired or leased any property, goods
or services from, or sold, transferred or leased any property, goods or services
to, or loaned or advanced any money to, or borrowed any money from, or entered
into or been subject to any agreement (including any management, consulting or
similar agreement, but other than agreements related to their employment) with
(i) any  officer, director, shareholder, beneficiary or family member
(including, by way of example, in-laws and cousins) of any officer, director or
shareholder of the Company, any Company Subsidiary or Affiliate of the Company
or any Company Subsidiary (including each Seller, each Seller’s beneficiaries
and such beneficiaries’ family members), or (ii) any entities controlled by or
affiliated with any Person described in clause (i).  No Person described in
clauses (i) or (ii) of the preceding sentence is indebted to the Company or any
Company Subsidiary for money borrowed or other loans or advances, and none of
the Company and the Company Subsidiaries is indebted to any such Person for
money borrowed or other loans or advances (except for normal advances to
employees of the Company or any Company Subsidiary in the Ordinary Course of
Business and Intercompany Indebtedness).
 
6.30 Powers of Attorney.  Except for powers of attorney granted to attorneys,
accountants or others in connection with matters relating to Taxes, Benefit
Plans, or Intellectual Property Rights, neither the Company nor any Company
Subsidiary has granted any power of attorney to any Person for any purpose
whatsoever, which power of attorney is currently in force.
 
6.31 Major Customers and Suppliers.
 
(a) Schedule 6.31(a) of the Disclosure Schedule contains a list of the top
twenty (20) customers of the Company and the Company Subsidiaries (by volume in
dollars of sales to such customers) for the 12-month period ended December 31,
2011 (the "Major Customers").  Since January 1, 2012, none of the Company or any
Company Subsidiary has received any notice or communication (in writing or, to
the Knowledge of the Company, orally) from any Major Customer to the effect that
such Major Customer is threatening to or will cancel, terminate or materially
reduce its purchases from or relationship with the Company or any Company
Subsidiary (including with respect to any promotional agreements, discounts,
allowances or similar arrangements).
 
(b) Schedule 6.31(b) of the Disclosure Schedule contains a list of the top
twenty (20) suppliers of the Company and the Company Subsidiaries (by volume in
dollars of purchases from such suppliers) for the 12-month period ended December
31, 2011 (the "Major Suppliers"). Since January 1, 2012, none of the Company or
any Company Subsidiary has received any notice or communication (in writing or,
to the Knowledge of the Company, orally) from any Major Supplier to the effect
that such Major Supplier is threatening to or will cancel, terminate or
materially reduce  the aggregate volume of its supply of materials, products or
services to or its relationship with the Company or any Company Subsidiary
(including with respect to any promotional agreements, discounts, allowances or
similar arrangements).
 
 
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6.32 Warranties; Product Liability.  Since January 1, 2007 with respect to any
Product manufactured, distributed or sold prior to the Closing Date, none of the
Company or any Company Subsidiary has received any written, or to the Knowledge
of the Company oral, notice relating to any claim involving: (a) any Product
resulting from any alleged breach of contractual requirements, express or
implied, applicable to such Product; (b) any breach of any product warranty
(whether express or implied), strict liability in tort, negligent design,
specification, processing or manufacture of product or negligent provision of
services, defective design, specification, processing or manufacture of product
or failure to warn or absence of or defective or inadequate warnings or
instructions; or (c) any alleged noncompliance with any applicable governmental,
trade association or regulatory specifications or standards for any Product.
Since January 1, 2007, no claim for product liability has been asserted in
writing or, to the Knowledge of the Company orally, against the Company or any
Company Subsidiary, and, to the Knowledge of the Company, since January 1, 2007,
no event has occurred that would reasonably be expected to result in such a
claim.
 
6.33 Brokers.  Except for Houlihan Lokey Capital, Inc. and Sawaya Segalas & Co.,
LLC, which have been retained by the Company, none of the Company or any Company
Subsidiary has retained, utilized or been represented by any broker or finder in
connection with the transactions contemplated by this Agreement.
 
6.34 Receivables; Payables.
 
(a) The accounts receivable reflected on the Most Recent Balance Sheet and the
accounts receivable arising after the date thereof (i) have or will have arisen
only from bona fide transactions of the Company and the Company Subsidiaries in
the Ordinary Course of Business, and (ii) constitute only valid, undisputed
claims of the Company and the Company Subsidiaries, except as may be disputed
from time to time in the Ordinary Course of Business.  There has not been any
material adverse change in the collectability of the accounts receivable of the
Company and the Company Subsidiaries since January 1, 2012.  Schedule 6.34 of
the Disclosure Schedule sets forth, as of July 31, 2012, a list of all accounts
receivable that are more than sixty (60) days past due and of all accounts
receivable classified by the Company or any Company Subsidiary as doubtful
accounts.
 
(b) All accounts payable reflected on the Most Recent Balance Sheet have arisen
in the Ordinary Course of Business.
 
6.35 Inventories.  All inventory (including raw materials, componentry, work in
process and finished Products) of the Company and the Company Subsidiaries,
whether or not reflected on the Most Recent Balance Sheet, is of such quality as
to meet the quality control standards of the Company, net of reserves on the
accounting records of the Company and the Company Subsidiaries.  The Company and
the Company Subsidiaries have good and valid title to all inventory, free and
clear of all Liens except Permitted Liens.  All inventory (other than goods in
transit) are held at facilities of the Company or the Company Subsidiaries.
 
6.36 Certain Business Practices.    Neither the Company nor any Company
Subsidiary, nor to the Knowledge of the Company, any Representative of the
Company or any Company Subsidiary, has, directly or indirectly: (a) used any
Company or Company Subsidiary funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses; made any unlawful payment to
government officials or employees or to political parties or campaigns;
established or maintained any unlawful fund of corporate monies or other assets;
(b) made or received any bribe, or any unlawful rebate, payoff, influence
payment, kickback or other payment; (c) given any favor or gift which is not
deductible for federal income Tax purposes; (d) made any bribe, kickback, or
other payment of a similar or comparable nature, to any governmental or
non-governmental Person, regardless of form, whether in money, property, or
services,
 
 
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to obtain favorable treatment in securing business or to obtain special
concessions, or to pay for favorable treatment for business or for special
concessions secured; or (e) engaged in any conduct constituting a violation of
the Foreign Corrupt Practices Act of 1977.
 
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLERS
 
To induce Purchaser to enter into this Agreement, and to consummate the
transactions contemplated by this Agreement, each Seller, severally as to itself
only and not jointly as to or with any other Seller, represents and warrants to
Purchaser as of the date hereof and as of the Closing Date as follows:
 
7.1 Organization and Standing.  With respect to each Seller that is a trust,
such Seller is a Washington trust duly formed, validly existing and in good
standing under the Laws of the State of Washington.  With respect to each Seller
that is a limited liability company, such Seller is a limited liability company
duly formed, validly existing and in good standing under the Laws of the state
of Delaware.
 
7.2 Authority; Authorization; Capacity.  Such Seller has the requisite trust,
limited liability company or individual, as the case may be, right, capacity,
power and authority to execute and deliver this Agreement and the Transaction
Documents to which it is a party, to perform its obligations hereunder and under
each such Transaction Document, and to consummate the transactions contemplated
by this Agreement and each such Transaction Document. The execution, delivery
and performance by such Seller of this Agreement and each other Transaction
Document to which it is a party and the consummation by such Seller of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary trust or limited liability company action, as the
case may be, on the part of such Seller.  Copies of the Organizational Documents
of each Seller and all amendments thereto have been delivered or made available
to Purchaser and are complete and correct.  Such Seller is not in default under,
or in violation of, its Organizational Documents.
 
7.3 Enforceability.  This Agreement and each other Transaction Document to which
such Seller is a party is, or upon its execution and delivery by all parties
hereto and thereto shall be, a valid and binding obligation of such Seller,
enforceable against such Seller in accordance with the terms hereof and thereof,
except as such enforceability may be limited by the General Enforceability
Exceptions.
 
7.4 Ownership of Shares.  Such Seller holds of record, owns beneficially and has
good and valid title to such Seller's Shares as set forth opposite such Seller's
name on Schedule 1(A) hereto, free and clear of Liens and restrictions on
transfer (other than any restrictions under the Securities Act and applicable
state securities Laws), and such Shares set forth opposite such Seller's name on
Schedule 1(A) constitute all of the Shares owned beneficially or held of record
by such Seller.  Upon delivery to the Purchaser at the Closing of certificates
representing the Shares held by such Seller, duly endorsed in blank, or
accompanied by stock powers duly endorsed in blank, in proper form for transfer,
good and valid title to such Shares will pass to the Purchaser, free and clear
of all Liens and restrictions on transfer (other than any restrictions under the
Securities Act and applicable state securities Laws).  Except as set forth on
Schedule 7.4 of the Disclosure Schedule, there are no contracts, commitments,
agreements, understandings or arrangements of any kind relating to such Seller's
Shares (including any voting agreements, voting trusts, proxies or other similar
agreements or understandings, or any agreements to purchase, redeem, otherwise
acquire such Seller's Shares, or securities or obligations of any kind
convertible into such Seller's Shares).
 
 
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7.5 Noncontravention.  Except for: (a) compliance with any applicable
requirements of the HSR Act; and (b) notices, consents or approvals required
under agreements or commitments evidencing, or entered into by the Company or
any of the Company Subsidiaries in connection with, Indebtedness of the Company
or any of the Company Subsidiaries to be paid and discharged at Closing pursuant
to Section 4.2, neither the execution, delivery or performance by such Seller of
this Agreement or any other Transaction Document to which such Seller is a
party, nor the consummation by such Seller of the transactions contemplated
hereby or thereby, nor compliance by such Seller with any of the provisions
hereof or thereof shall: (i) in the case of each Seller that is a trust,
conflict with, violate, or result in the violation of, its Organizational
Documents; (ii) conflict with or violate any Law, writ, injunction or decree of
any Governmental Authority, in each case applicable to such Seller or such
Seller's Shares, assets or properties; or (iii) with or without the passage of
time or the giving of notice or both, result in the breach of, constitute a
default or require any consent under, or result in the creation of any Lien upon
any property or assets of such Seller, including such Seller's Shares, pursuant
to any instrument or agreement to which such Seller is a party or by which such
Seller or such Seller's properties may be bound or affected.
 
7.6 Governmental Approvals.  Except for: (a) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws; and (b) compliance with any
applicable requirements of the HSR Act, no filing by such Seller with, and no
permit, authorization, consent or approval, in each case, of or with respect to
such Seller, of any Governmental Authority is necessary for the consummation by
such Seller of the transactions contemplated by this Agreement.
 
7.7 Brokers, Finders.  Except for Houlihan Lokey Capital, Inc. and Sawaya
Segalas & Co., LLC, no Seller nor any of its Affiliates has employed any broker,
finder, advisor or intermediary in connection with the transactions contemplated
by this Agreement who would be entitled to a broker's, finder's, advisor's,
intermediary's or similar fee or commission in connection therewith or upon the
consummation thereof.
 
7.8 Litigation.  There are no actions, suits, claim, proceedings, orders or
investigations pending or, to the knowledge of such Seller, threatened against,
affecting or involving such Seller, such Seller's Shares or any of its
properties or assets that relate to or could otherwise hinder the execution,
delivery or performance by such Seller or the Company of this Agreement and the
transactions contemplated hereby.  To the knowledge of such Seller, no event has
occurred or circumstances exist that may give rise to, or serve as a basis for,
any such action, suit, claim, proceeding, order or investigation.  There are no
pending actions, suits, claims or proceedings or outstanding orders, judgments,
injunctions, stipulations, awards or decrees before or of any Governmental
Authority involving or against such Seller that prohibit or challenge or seek to
prevent, enjoin or otherwise delay the consummation of the transactions
contemplated by this Agreement.
 
ARTICLE 8
PRE-CLOSING COVENANTS
 
8.1 Access to Information.
 
(a) Subject to the limitations on the exchange of competitively sensitive
information pursuant to the HSR Act or other applicable Laws, from the date of
this Agreement until the earlier of the Closing Date or the termination of this
Agreement in accordance with the provisions hereof, the Company shall give to
Purchaser and its authorized representatives promptly upon request reasonable
access during normal business hours to the Company's offices, books and records,
Tax Returns, contracts, commitments, officers, facilities, properties, personnel
and accountants, and shall furnish and make
 
 
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available to Purchaser and its authorized representatives all such documents and
copies of documents and all such additional financial and operating data and
other information pertaining to the affairs of the Company and the Company
Subsidiaries as Purchaser and its authorized representatives may reasonably
request.  In furtherance and not in limitation of the foregoing, the Company
shall, and shall cause the Company Subsidiaries to, cooperate, assist, arrange
and provide access to Purchaser to the extent necessary for Purchaser to prepare
for the implementation of internal financial controls and procedures and
disclosure controls in accordance with Purchaser's policies and in compliance
with the Sarbanes Oxley Act of 2002 (including compliance with the requirements
of the certifications required under Sections 302 and 906 of Sarbanes Oxley Act
of 2002), and for the preparation of any required pro forma financial
statements.  The activities of Purchaser and its representatives contemplated by
this Section 8.1(a) shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of the Company and the Company
Subsidiaries, and nothing in this Section 8.1 entitles Purchaser or its
representatives to access or review the Attorney Records.
 
(b) Prior to the Closing Date, without the prior written consent of the Company,
which may be withheld in its sole discretion, none of Purchaser or its
Representatives shall contact any suppliers to, or employees or customers of,
the Company or the Company Subsidiaries in connection with or pertaining to any
subject matter of this Agreement or the transactions contemplated by this
Agreement.  Notwithstanding the foregoing, the Company shall cooperate, assist
and arrange for Purchaser to have opportunity to meet, in person or
telephonically, with the customers and suppliers of the Company and the Company
Subsidiaries set forth on attached Schedule 8.1(b); provided, however, that
Purchaser shall give the Company reasonable prior written notice before it
contacts (whether in person, by telephone or otherwise) any such supplier,
employee or customer and allow at least one Representative of the Company to
participate in any meeting (whether conducted in person, by telephone or
otherwise) with such supplier, employee or customer.
 
8.2 Pre-Closing Activities.  Except as otherwise permitted, required or
contemplated by this Agreement or as set forth on Schedule 8.2, until the
earlier of the Closing Date or the termination of this Agreement in accordance
with the provisions hereof, the Company shall and shall cause the Company
Subsidiaries to (i) operate their respective businesses in the Ordinary Course
of Business, (ii) use commercially reasonable efforts to preserve intact their
respective businesses and relationships with customers, suppliers, distributors,
brokers, employees, and other Persons having business relationships with them
and (iii) maintain their respective assets and properties in good operating
order and condition, reasonable wear and tear excepted, in a manner consistent
with past practice.  Without limiting the foregoing, except as otherwise
expressly permitted by this Agreement or as set forth on Schedule 8.2, from the
date hereof to the Closing Date or the termination of this Agreement in
accordance with the provisions hereof, the Company and the Company Subsidiaries
shall not:
 
(a) issue or grant any equity securities or any subscriptions, warrants, options
or other agreements or rights of any kind whatsoever to purchase or otherwise
receive or be issued any equity securities or any securities or obligations of
any kind convertible into, or exercisable or exchangeable for, any equity
securities of the Company or any of the Company Subsidiaries, or permit the
exercise of any Stock Options by the holders thereof;
 
(b) effect any recapitalization, reclassification, stock split or like change in
the capitalization of the Company;
 
(c) amend the Organizational Documents of the Company or any Company Subsidiary;
 
 
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(d) (i) grant any increase in the salary, wage or other compensation payable to
any current or former officers, directors, employees, consultants, and/or other
service providers of the Company or any Company Subsidiary, including modifying
any existing compensation, severance or equity arrangements with any such
individuals or declaring or making a payment, commitment or obligation of any
kind for the payment by the Company of a bonus or other additional salary or any
other compensation whatsoever other than any increases to non-management
employees in the Ordinary Course of Business;  (ii) grant any bonus, benefit or
other direct or indirect compensation to any current or former officers,
directors, employees, consultants and/or other service providers of the Company
or take any action to amend or waive any performance or vesting criteria or
accelerate the vesting, exercisability or funding under any Benefit Plan;
(iii) enter into, adopt or amend any severance, termination, retention, deferred
compensation, bonus or other incentive compensation, profit sharing, stock
option, stock appreciation right, restricted stock, stock equivalent, stock
purchase, pension, retirement, medical, hospitalization, life or other insurance
or other employee benefit plan (including any agreement or plan which would
constitute a Benefit Plan if entered into as of the date hereof) for the benefit
of any current or former officers, directors, employees, consultants and/or
other service providers of the Company or any Company Subsidiary; (iv) enter
into any collective bargaining agreement or other agreements with labor
organizations; or (v) terminate the employment or services of any officer or
conduct any layoffs of a material number of employees;
 
(e) except for transfers of cash pursuant to normal cash management practices in
the Ordinary Course of Business or in compliance with the Company's loan
agreements, permit the Company to make any investments in or loans to, or pay
any fees or expenses to, or enter into or modify any contract with, any Seller
or any Affiliate of any Seller;
 
(f) enter into any contract or commitment that restrains, restricts, limits or
impedes the ability of the Company or any Company Subsidiary to compete with any
Person or conduct any business or line of business in any geographic area;
 
(g) (i) amend, terminate, or waive compliance with the terms of or breaches
under any Material Contract, or (ii) enter into a new contract, agreement or
arrangement that, if entered into prior to the date of this Agreement, would
have been required to be listed on Schedule 6.28 of the Disclosure Schedule;
 
(h) make, revoke or amend any Tax election, change any annual Tax accounting
period, adopt or change any method of Tax accounting, file any amended Tax
Return, settle any Tax claim or assessment, surrender any right to claim a Tax
refund, offset or other reduction in Tax liability, consent to any extension or
waiver of the limitations period applicable to any Tax claim or assessment, make
a request for a written ruling of a Tax Authority, or enter into a written and
legally binding agreement with a Tax Authority;
 
(i) take any action or omit to take any action that would cause any of the
representations or warranties contained herein of the Sellers or the Company not
to be true and correct at any time between the date hereof and the Closing Date;
 
(j) engage in any transaction or take any action, or omit to take any action, as
a result of which any of the transactions, occurrences, facts, effects, changes,
circumstances, conditions or events listed in Section 6.13 would occur or would
be likely to occur; or
 
(k) authorize, agree or commit to do any of the foregoing.
 
 
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Notwithstanding the foregoing, nothing in this Section 8.2 shall prohibit the
Company or any of the Company Subsidiaries from taking any action or omitting to
take any action approved in writing by Purchaser.  No Seller will have any
Liability to any Purchaser Indemnitee with respect to actions taken with the
consent of Purchaser under this Section 8.2 prior to Closing, notwithstanding
that taking any such action may cause a breach of any representation or warranty
in Section 6.13.
 
8.3 Efforts to Consummate.  Each party hereto shall use its commercially
reasonable efforts to take, or cause to be taken, all lawful and reasonable
actions within such party's control and to do, or cause to be done, all lawful
and reasonable things within such party's control necessary to fulfill the
conditions precedent to the obligations of the other party(ies) hereunder and to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement and to cooperate with each other in connection
with the foregoing. Without limiting the generality of the foregoing: (a) the
Company shall use  commercially reasonable efforts to obtain those third party
consents and other items set forth on Schedule 8.3 (the "Required Consents");
(b) the Company shall give the notices to, make the filings with, and use
commercially reasonable efforts to obtain the authorizations, consents and
approvals of, Governmental Authorities set forth on Schedule 8.3; and (c) each
party shall prepare and file any Notification and Report Forms and related
material that such party may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act, provided that no party shall request a waiver of the
applicable waiting period, and shall make any further filings pursuant thereto
that may be necessary, proper or advisable in connection therewith. Purchaser
and its external counsel shall control and direct the antitrust approval
strategy.  In connection with the foregoing clause (c), the Company, the Company
Subsidiaries, the Sellers and their Affiliates (x) shall promptly notify
Purchaser in writing of any communication it receives from any Governmental
Authority having jurisdiction over such filings, and subject to applicable Law
and any applicable privilege, provide Purchaser with a copy of any such written
communication (or written summary of any oral communication), and (y) shall not
make submissions to or participate in any substantive meeting, discussion or
other communication with any Governmental Authority having jurisdiction over
such filings concerning the transactions contemplated by this Agreement unless
it consults with Purchaser in advance, and to the extent not prohibited by such
Governmental Authority, gives a Representative of Purchaser the opportunity to
attend.  Nothing in this Agreement shall be construed as an attempt or an
agreement by the Company or any of the Company Subsidiaries to assign or cause
the assignment of any contract or agreement that is by Law or contractual
provision non-assignable without the consent of the other party or parties
thereto, unless such consent shall have been given. In no event shall
"commercially reasonable efforts" be deemed to require the payment of any cash
or other consideration by the Company, the Company Subsidiaries or any Seller.
 
8.4 Exclusive Dealing.  From the date of this Agreement until the earlier of the
Closing Date or the termination of this Agreement in accordance with the
provisions hereof, the Company and the Sellers shall not, and shall use
commercially reasonable efforts to cause their respective Representatives not
to, directly or indirectly, take or continue any action to solicit, initiate,
encourage or facilitate the making of any Acquisition Proposal or any inquiry
with respect to an Acquisition Proposal or engage in substantive discussions or
negotiations, or enter into any agreements with any Person with respect to an
Acquisition Proposal.  For purposes of this Agreement, "Acquisition Proposal"
means any offer or proposal from a third party for, or any written indication of
interest by a third party in, any acquisition or purchase of the Shares or all
or any part of the assets or properties of the Company or any Company Subsidiary
(other than the sale or other material disposition of assets or properties in
the Ordinary Course of Business) or the sale or issuance of any capital stock of
any of the Company Subsidiaries, or any merger, consolidation, liquidation,
recapitalization, share exchange or other business combination transaction
involving the Company or any of the Company Subsidiaries.  The Company and
Sellers shall promptly (and in any event within two (2) Business Days after
receipt thereof by the Company, Sellers or their Representatives) advise
Purchaser orally and in writing of any Acquisition Proposal, any request for
 
 
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information with respect to any Acquisition Proposal, or any inquiry with
respect to or which could reasonably be expected to result in an Acquisition
Proposal, the material terms and conditions of such request, Acquisition
Proposal or inquiry, and the identity of the Person making the same.
 
8.5 Supplementation and Amendment of Schedules.  From time to time prior to the
Closing, the Company and Sellers shall promptly supplement or amend the
Schedules (including, for the avoidance of doubt, the Disclosure Schedule) with
respect to any matter arising after the delivery of the Schedules pursuant to
this Agreement that, if occurring prior to the date of this Agreement, would
have been required to be set forth or described in such Schedules.  Any such
supplement or amendment shall not be deemed to have cured any inaccuracy in or
breach of any representation or warranty contained in this Agreement for
purposes of the satisfaction of the condition to closing set forth in
Section 9.1(a) or the termination rights set forth in Section 12.1(b).  
 
8.6 Confidentiality.  Unless and until the transactions contemplated by this
Agreement have been consummated, Purchaser shall, and shall ensure that its
Representatives shall, hold in strict confidence and not use in any way except
in connection with the consummation of the transactions contemplated hereby, all
confidential information obtained in connection with the transactions
contemplated hereby from the Company, the Company Subsidiaries, the Sellers or
any of their respective Representatives (including the Seller Representative),
in accordance with and subject to the terms of the Confidentiality Agreement.
The covenants contained in this Section 8.6 are independent covenants and shall
be enforceable by each disclosing party regardless of any claims that any
non-disclosing party shall have against the disclosing party or any of such
disclosing party's Affiliates, whether under this Agreement or otherwise.
 
8.7 Termination of Certain Agreements.  Each of the Company, the Company
Subsidiaries and the Sellers agree that, effective for all periods beginning at
or after the Closing, the agreements listed on Schedule 8.7 hereto to which such
Person is a party shall be terminated and of no further force or effect (and no
further payment shall be due or payable thereunder), subject to any exceptions
to termination set forth on Schedule 8.7. All amounts payable under any such
agreement shall be paid on or before the Closing Date.
 
8.8 Additional Financial Statements.  The Company shall prepare and furnish to
Purchaser as soon as they become available, and in any event not later than ten
(10) days after the end of each month, an unaudited balance sheet and an
unaudited income statement for the Company and the Company Subsidiaries for each
full monthly period prior to the Closing.  The Company shall prepare each such
additional unaudited financial statement on a basis consistent with the Interim
Financial Statements.
 
ARTICLE 9
CONDITIONS TO CLOSING
 
9.1 Conditions to Obligations of Purchaser.  The obligations of Purchaser to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or, if permitted by applicable Law, written waiver by Purchaser of
each of the following conditions at or before the Closing:
 
(a) The representations and warranties of the Company set forth in Article 6 and
the representations and warranties of each Seller set forth in Article 7 that
are qualified by any reference to Material Adverse Effect or other materiality
qualifications shall each be true and correct on the Closing Date with the same
force and effect as though made on and as of the Closing Date, except to the
extent that any representation or warranty is limited by its terms to a specific
date (in which case such representation and warranty need only be true and
correct on the date so specified). All other representations and warranties of
the Company set forth in Article 6 and of each Seller set forth in Article 7
 
 
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shall be true and correct in all material respects on the Closing Date as though
made on the Closing Date, except to the extent that any representation or
warranty is limited by its terms to a specific date (in which case such
representation and warranty need only be true and correct in all material
respects on the date so specified).
 
(b) The Company and each Seller shall have performed and complied in all
material respects with all of the other agreements, covenants and obligations
required under this Agreement to be performed or complied with by such Person
before or at the Closing; provided, however, that, with respect to agreements,
covenants and obligations that are qualified by materiality, the Company and
each Seller shall have performed such agreements, covenants and obligations, as
so qualified, in all respects.
 
(c) The Company shall have delivered to Purchaser (i) a certificate, executed by
a duly authorized officer of the Company in his or her capacity as such,
certifying that the conditions specified in Section 9.1(a) and Section 9.1(b)
(insofar as they are to be performed by the Company) have been fulfilled, and
(ii) a certificate, executed by each Seller (or, for each Seller that is a
trust, the trustee of such Seller in his or her capacity as such) certifying
that the conditions specified in Section 9.1(a) and Section 9.1(b) (insofar as
they are to be performed by such Seller) have been fulfilled.
 
(d) The Company shall have delivered to Purchaser, with respect to the Company
and each Company Subsidiary, copies of (i) certificates of existence from the
Secretary of State of the State of Washington and (ii) certificates of foreign
qualification from each state in which the Company or any Company Subsidiary is
qualified to do business, in each case dated as of a recent date.
 
(e) All applicable waiting periods (and any extensions thereof) under the HSR
Act shall have expired or otherwise been terminated, and all other required
authorizations, consents and approvals of Governmental Authorities shall have
been obtained.
 
(f) There shall be in force no injunction, judgment, order, decree or ruling by
or before any Governmental Authority of competent jurisdiction restraining,
enjoining, prohibiting, invalidating or otherwise preventing the consummation of
the transactions contemplated by this Agreement.
 
(g) The Company shall have delivered to Purchaser such resignations of the
officers of the Company and the Company Subsidiaries as Purchaser may request
and resignations of all of the directors of the Company and the Company
Subsidiaries, in each case in form and substance reasonably acceptable to
Purchaser and releasing all claims that such individual may have against the
Company and the Company Subsidiaries out of any occurrence arising on or before
the Closing Date other than claims covered by the insurance referred to in
Section 10.5(c).
 
(h) The relevant parties to each of the Transaction Documents (other than
Purchaser or any of its Affiliates) shall have entered into such Transaction
Documents and (but for execution and/or delivery of such Transaction Documents
by Purchaser or any of its Affiliates), such Transaction Documents shall be in
full force and effect.
 
(i) All of the Required Consents shall have been obtained and shall be in form
and substance reasonably satisfactory to Purchaser.
 
(j) Each Seller shall have delivered to Purchaser a certificate in the form of
U.S. Treasury Regulations Section 1.1445-2(b)(2)(iv)(A) or (B), as the case may
be.
 
 
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(k) From the date of this Agreement, there shall not have occurred any Material
Adverse Effect.
 
(l) The Sellers shall have delivered to Purchaser the certificates described in
Section 4.3(a).
 
(m) The Company shall have delivered to Purchaser payoff and termination letters
from the applicable secured parties or other holders of Closing Indebtedness, in
form and substance reasonably acceptable to Purchaser, which shall include the
release of all Liens of such parties or holders on the assets and properties of
the Company and the Company Subsidiaries upon receipt of the amounts indicated
in such payoff and termination letters;
 
(n) The Company shall have delivered to Purchaser certificates of the
Secretary(ies) of the Company and each Company Subsidiary certifying that
attached thereto are true and complete copies of:  (i) the certificates
described in Section 9.1(d), (ii) resolutions of the Boards of Directors of the
Company and, as applicable, each Company Subsidiary authorizing the execution
and delivery by the Company and such Company Subsidiary of this Agreement and
the other Transaction Documents to which it is a party by it and the performance
of its obligations hereunder and thereunder and (iii) the incumbency and
signatures of the officers of the Company and each Company Subsidiary.
 
(o) Purchaser shall have received an opinion covering the matters set forth on
Exhibit E, dated the Closing Date, from counsel to each Seller that is a trust.
 
(p) The Sellers and the Company shall have delivered to Purchaser evidence of
termination, in form and substance reasonably acceptable to Purchaser, of all
agreements set forth on Schedule 8.7.
 
(q) Purchaser shall have received a properly executed and delivered Stock Option
Cancellation Agreement from each Optionholder in accordance with Article 2.
 
(r) The Company or the Company Subsidiary, as applicable, shall have entered
into a master estoppel and lease modification agreement substantially in the
form attached hereto as Exhibit F for the Realty Leases set forth as items 1-8
of Schedule 6.16(b) of the Disclosure Schedule.
 
(s) The Company or the Company Subsidiary, as applicable, shall have delivered
to Purchaser, in form and substance reasonably acceptable to Purchaser, a duly
executed landlord consent and estoppel certificate with respect to each of the
Realty Leases set forth as items 9, 10 and 11 on Schedule 6.16(b) of the
Disclosure Schedule.
 
(t) The Company shall have delivered to Purchaser copies of assignments or other
instruments of transfer evidencing the assignment of all domain names that are
used or held for use in the respective businesses of the Company or the Company
Subsidiaries to the Company or the Company Subsidiaries.
 
(u) Intentionally Omitted.
 
(v) Purchaser shall have received a certificate of all the trustees of each
Seller that is a trust certifying that (i) such trustees are the current
trustees of such Seller, (ii) attached thereto is a true and complete copy of
the trust agreement of such Seller, which has not been revoked, amended,
restated or otherwise modified, (iii) attached thereto is a true and complete
copy of resolutions of all of the trustees of such Seller authorizing the
execution, delivery and performance by the Trust of the
 
 
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Transaction Documents and the consummation of the transactions contemplated by
the Transaction Documents.
 
(w) The Sellers and the Company shall have delivered to Purchaser such other
documents as Purchaser may reasonably request for the purpose of facilitating
the consummation or performance of any of the transactions contemplated by this
Agreement.
 
9.2 Conditions to Obligations of the Sellers and the Company.  The obligations
of the Sellers and the Company to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or, if permitted by applicable
Law, written waiver by the Seller Representative and the Company of each of the
following conditions at or before the Closing:
 
(a) The representations and warranties of Purchaser set forth in Article 5 that
are qualified by any reference to material adverse effect or other materiality
qualifications shall each be true and correct on the Closing Date with the same
force and effect as though made on and as of the Closing Date, except to the
extent that any representation or warranty is limited by its terms to a specific
date (in which case such representation and warranty need only be true and
correct on the date so specified). All other representations and warranties of
Purchaser set forth in Article 5 shall be true and correct in all material
respects on the Closing Date as though made on the Closing Date, except to the
extent that any representation or warranty is limited by its terms to a specific
date (in which case such representation and warranty need only be true and
correct in all material respects on the date so specified).
 
(b) Purchaser shall have performed and complied in all material respects with
all of the agreements, covenants and obligations required under this Agreement
to be performed or complied with by it prior to or at the Closing, including the
payments identified in Article 4; provided, however, that, with respect to
agreements, covenants and obligations that are qualified by materiality, the
Purchaser shall have performed such agreements, covenants and obligations, as so
qualified, in all respects.
 
(c) Purchaser shall have delivered to the Seller Representative and the Company
a certificate, executed by a duly authorized officer of Purchaser in his or her
capacity as such, certifying that the conditions specified in Section 9.2(a) and
Section 9.2(b) have been fulfilled.
 
(d) All applicable waiting periods (and any extensions thereof) under the HSR
Act shall have expired or otherwise been terminated, and all other required
authorizations, consents and approvals of Governmental Authorities shall have
been obtained.
 
(e) There shall be in force no injunction, judgment, order, decree or ruling by
or before any Governmental Authority of competent jurisdiction restraining,
enjoining, prohibiting, invalidating or otherwise preventing the consummation of
the transactions contemplated by this Agreement.
 
(f) The relevant parties to each of the Transaction Documents (other than the
Company, any of the Company Subsidiaries or the Sellers or any of their
Affiliates) shall have entered into such Transaction Documents and (but for
execution and/or delivery of such Transaction Documents by the Company, any of
the Company Subsidiaries or the Sellers or any of their Affiliates), such
Transaction Documents shall be in full force and effect.
 
(g) Purchaser shall have delivered to the Seller Representative such other
documents as the Seller Representative may reasonably request for the purpose of
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.
 
 
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9.3 Waiver of Closing Conditions.  If the Closing occurs, all conditions to the
Closing shall be deemed to have been satisfied or waived.
 
ARTICLE 10
ADDITIONAL AGREEMENTS
 
10.1 Further Assurances.  Purchaser, the Company, Company Subsidiaries and
Sellers shall, and shall cause their respective Affiliates and Representatives
to, deliver any and all other instruments or documents required to be delivered
pursuant to, or necessary or proper in order to give effect to, all of the terms
and provisions of this Agreement.
 
10.2 Publicity.  Except as otherwise contemplated by this Agreement, or in
connection with any financing, other than in connection with any filings,
reports or disclosures of Purchaser under the Securities Exchange Act or
pursuant to New York Stock Exchange rules, and except for Purchaser's employee
or other internal communications, no publicity release or announcement or other
disclosure concerning this Agreement or the transactions contemplated by this
Agreement shall be made by a party (or any of its Affiliates or Representatives)
without the advance written approval thereof by Purchaser and the Seller
Representative (which, after the Closing, shall not be unreasonably withheld,
conditioned or delayed); provided, that Purchaser and the Seller Representative
have approved a press release to be issued by Purchaser in the form of attached
Schedule 10.2 and have acknowledged that Purchaser may conduct a conference call
regarding the transaction contemplated by this Agreement substantially in
accordance with the script previously provided to the Seller Representative, and
including a question and answer session.  Purchaser and the Seller
Representative shall each furnish to the other drafts of all such press releases
or announcements prior to their release.  Purchaser shall use its commercially
reasonable efforts to furnish to Seller Representative a draft of the initial
filing, report or disclosure of Purchaser under the Securities Exchange Act or
New York Stock Exchange rules relating to this Agreement or the transactions
contemplated herein at least forty-eight (48) hours prior to their release and
provide Seller Representative the opportunity during such period to review and
comment on such filings, reports or disclosures.  Seller Representative shall be
furnished with a draft of and be provided with the opportunity to review and
comment on any subsequent filing, report or disclosure containing information
relating to this Agreement or the transactions contemplated herein if such
information is materially different from the initial filing, report or
disclosure.  Nothing contained in this Section 10.2 shall prevent any party from
(a) at any time furnishing any information to any Governmental Authority or from
making any disclosures required under the Securities Exchange Act, or under the
rules and regulations of any national securities exchange on which such party's
shares of capital stock are listed or (b) furnishing any information concerning
the transactions contemplated by this Agreement to such party's Representatives.
 
10.3 Business Records; Attorney Records.
 
(a) Business Records.  Purchaser acknowledges that the business records of the
Company and each of the Company Subsidiaries relating to their respective
operations prior to Closing shall be acquired by Purchaser in connection with
the consummation of the transactions contemplated by this Agreement, and that
the Sellers may from time to time after the Closing require access to or copies
of such records.  Purchaser agrees that upon reasonable prior notice from the
Seller Representative, it shall, during normal business hours, provide or cause
to be provided to the Seller Representative access to or copies of such records
(at Seller Representative's cost) in connection with audits, investigations,
litigations or for other reasonable business purposes relating to the business
or operations of the Company and the Company Subsidiaries on or before the
Closing Date.  Purchaser agrees that it shall not (and shall cause each of its
Affiliates, including the Company and the Company Subsidiaries not to), for a
period of  six (6) years from and after the Closing Date, destroy any material
business records of the Company or any Company Subsidiary prepared on or before
the Closing without first notifying the Seller
 
 
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Representative and affording the Seller Representative reasonable opportunity to
remove or copy such records at Seller Representative's cost.
 
(b) Attorney Records.  Notwithstanding Section 10.3(a), Purchaser and the
Company each agree that the Attorney Records shall belong solely to the Sellers,
and none of Purchaser or, from and after the Closing, the Company or any Company
Subsidiary, shall have any right to review, access or obtain copies of the
Attorney Records.  The Company waives, for itself and each Company Subsidiary,
any and all rights any of them may have with respect to the Attorney
Records.  All Attorney Records in the possession of the Company or any Company
Subsidiary on the Closing Date shall be immediately delivered to the Seller
Representative.
 
10.4 Tax Matters.
 
(a) Pre-Closing Taxes.
 
(i) Keen Managed Reserve Trust shall be liable for and indemnify Purchaser for
any and all Damages arising out of or resulting from (i) any and all liabilities
of the Company or any Company Subsidiary for Taxes in respect of Pre-Closing Tax
Periods except to the extent such liabilities are included in the Closing Net
Working Capital as finally determined pursuant to Section 4.4(b), (ii) any and
all liabilities of the Company or any Company Subsidiary for Taxes in respect of
the portion of any Straddle Period that ends on the Closing Date, (iii) any and
all liabilities of the Company or any Company Subsidiary pursuant to Treasury
Regulation Section 1.1502-6 (or any corresponding or similar provision under
state, local or foreign Law) for Taxes of any affiliated, consolidated,
combined, unitary or similar group of which the Company or any Company
Subsidiary (or any predecessor) has been a member prior to the Closing, and any
and all liabilities for Taxes of any Person (other than the Company or any
Company Subsidiary) otherwise imposed on the Company or any Company Subsidiary
for a Pre-Closing Tax Period and (iv) any and all liabilities for Taxes imposed
on the Company or any Company Subsidiary for any Post-Closing Tax Period as a
result of any agreement for the allocation, sharing or indemnification of Taxes
entered into by the Company or any Company Subsidiary (or any predecessor) prior
to the Closing.
 
(ii) Keen Managed Reserve Trust shall pay Purchaser any amount required to be
paid by Sellers pursuant to Section 10.4(a)(i) (including any Taxes that are
contested in an Audit and that must be paid prior to or upon the commencement of
such Audit) within the latter of (x) five days after it receives written notice
from Purchaser requesting such payment and (y) two days prior to the date that
the indemnified Tax or related expense is required to be paid.  The amount of
indemnification for Taxes pursuant to Section 10.4(a)(i) shall be net of any Tax
Benefit.
 
(iii) The Seller Representative shall control the preparation of any Tax Returns
of the Company or any Company Subsidiary for any taxable period ending on or
before the Closing Date (the "Pre-Closing Tax Period") and the Company or any
Company Subsidiary, as applicable, shall file such Tax Returns.  The Keen
Management Reserve Trust shall pay or cause to be paid all Taxes shown due
thereon except to the extent the liability for such Taxes are included in the
Closing Net Working Capital as finally determined pursuant to Section
4.4(b).  All such Tax Returns shall be prepared in a manner consistent with
prior practice of the Company except as otherwise required by applicable
Law.  Before the filing of any Tax Returns for the Pre-Closing Tax Period, such
Tax Returns shall be submitted to Purchaser for review and approval by
Purchaser, which approval may not be unreasonably withheld, conditioned or
delayed.  The Seller Representative and Purchaser shall attempt in good faith to
resolve any disagreements regarding
 
 
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  such Tax Returns prior to the due date for filing, including any applicable
extensions.  If the Seller Representative and Purchaser are unable to resolve
any dispute with respect to such Tax Return before the due date for filing,
including any applicable extensions, such dispute shall be submitted to the
Independent Accounting Firm for resolution (if practicable, ten (10) days before
such due date for filing, but in any event such submission to the Independent
Accounting Firm shall be made sufficiently in advance of such due date for
filing to permit a full review by the Independent Accounting Firm), which
resolution shall be conclusive and binding on all parties.  If for any reason,
the dispute cannot be resolved at least two days before the Tax Return is due,
the Tax Return will be filed in the manner that the Seller Representative
reasonably deems to be correct.  After the Independent Accounting Firm's
determination, if needed, the Company and each applicable Company Subsidiary
shall cause an amended Tax Return to be filed in accordance with such
determination.

 
(b) Post-Closing Taxes.
 
(i) For purposes of determining the attribution of Taxes to Pre-Closing Tax
Periods, Post-Closing Tax Periods, or to the portion of a Straddle Period up to
and including the close of business on the Closing Date allocations of items of
income, gain, loss, credit or deductions required to determine such Taxes shall
be made by means of a closing of the books and records of the Company and each
Company Subsidiary as of the close of business on the Closing Date; provided,
that for Straddle Periods, exemptions, allowances or deductions that are
calculated on an annual basis (including depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period beginning the day after the Closing Date in proportion to the number
of days in each such period.  Property, ad valorem and similar Taxes shall be
apportioned between the period ending on the Closing Date and the period
beginning the day after the Closing Date in proportion to the number of days in
each such period.
 
(ii) Purchaser shall prepare or cause to be prepared and file or cause to be
filed all Tax Returns of the Company for the Straddle Period and for all taxable
periods beginning on and after the Closing Date ("Post-Closing Tax
Periods").  All Tax Returns for any Straddle Period shall be prepared in a
manner consistent with prior practice of the Company except as otherwise
required by applicable Law.  If any Tax Return for the Straddle Period affects
the interests of Sellers and Optionholders, such Tax Returns shall be submitted
to Seller Representative before filing by Purchaser for review and approval,
which approval may not be unreasonably withheld, conditioned or
delayed.  Purchaser and Seller Representative shall attempt in good faith to
resolve any disagreements regarding such Tax Returns before the due date for
filing.  If Purchaser and Seller Representative are unable to resolve any
dispute with respect to such Tax Return before the due date for filing, such
dispute shall be submitted to the Independent Accounting Firm for resolution (if
practicable, 10 days before such due date for filing, but in any event such
submission to the Independent Accounting Firm shall be made sufficiently in
advance of such due date for filing to permit a full review by the Independent
Accounting Firm), which resolution shall be conclusive and binding on all
parties.  If for any reason, the dispute cannot be resolved at least two days
before the Tax Return is due, the Tax Return will be filed in the manner that
the Purchaser deems to be correct. After the Independent Accounting Firm's
determination, if needed, the Purchaser shall cause an amended Tax Return to be
filed in accordance with such determination.
 
(c) Tax Refunds.  Except to the extent included in the Closing Net Working
Capital as finally determined pursuant to Section 4.4(b), any Tax refunds and
any amounts credited against Tax that are received by the Company, any Company
Subsidiary or the Purchaser, or to which any of them
 
 
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become entitled, that relate to any Pre-Closing Tax Period or the portion of any
Straddle Period ending on the Closing Date (excluding any refund or credit
attributable to any loss carry back from a period beginning after the Closing
Date) shall be for the account of the Sellers and Optionholders, and the
Purchaser shall pay over to the Seller Representative any such refund or the
amount of any such credit (net of any Taxes payable by the Company or the
Purchaser attributable to such refund or credit) within 15 days after receipt or
entitlement thereto.  For purposes of this Section 10.4(c), the amount
reimbursed to any party for credits shall equal only the actual cash benefit
generated by such credits.  For avoidance of doubt, nothing in this Agreement
requires Purchaser to file any Tax Return or to amend any Tax Return to create
or increase any Tax refund or amounts to credit against Taxes.
 
(d) Amendments.  Purchaser shall not amend, and shall not permit the Company or
any of the Company Subsidiaries to amend, any Income Tax Return or election made
in connection with such Income Tax Return for any Pre-Closing Tax Period without
the prior written consent of the Seller Representative, which consent shall not
be unreasonably withheld or delayed, if such amendment would have the effect of
materially reducing the amount of any refunds to which the Sellers would
otherwise be entitled pursuant to Section 10.4(c), unless such amendment is
otherwise required by applicable Law.
 
(e) Tax Cooperation.  Purchaser and the Sellers shall reasonably cooperate with
each other in connection with the preparation of Tax Returns related to the
Company and the Company Subsidiaries and shall preserve all information,
returns, books, records and documents relating to any liabilities for Taxes
relating to any Pre-Closing Tax Period or other tax period ending on or before
the Closing Date until the later of the expiration of all applicable statutes of
limitation and extensions thereof, or a final determination with respect to
Taxes for such period and shall not destroy or otherwise dispose of any record
relating to any Pre-Closing Tax Period or other tax period, ending on or before
the Closing Date without first providing the other party a reasonable
opportunity to review and copy the same.  As soon as practicable after the
Closing Date, but not later than thirty (30) days thereafter, Sellers and the
Seller Representative will cause to be delivered to Purchaser all of the
original books and records (including work papers) and Tax Returns of the
Company and any Company Subsidiary which are in the possession of Sellers or the
Seller Representative, any Affiliates of any of the Sellers or the Seller
Representative, any accountants or other advisors of any of the Sellers or the
Seller Representative.
 
(f) Post-Closing Audits.
 
(i) Purchaser shall notify the Seller Representative in writing within twenty
(20) days after receipt by Purchaser, the Company or any Company Subsidiary of
any official inquiry, examination, audit or proceeding ("Audit") regarding any
Tax Return or period with respect to which the Sellers may have a right to a
refund under Section 10.4(c), an additional obligation for Taxes, an indemnity
obligation under Section 10.4(a)(i), or an indemnity obligation under Section
11.2.  Except as otherwise provided in this Section 10.4(f), the Seller
Representative shall have the right to exercise, on behalf of the Sellers and at
the expense of the Sellers, control at any time over the handling, disposition
and/or settlement of any issue raised in any Audit regarding any taxable period
that ends on or before the Closing Date (other than an Audit involving a
Straddle Period), provided that the Seller Representative has acknowledged in
writing the Seller indemnification obligation under Section 10.4(a)(i) in
respect of the Taxes at issue in such Audit if such Audit is resolved adversely,
by notifying Purchaser in writing within fifteen (15) days from the receipt from
Purchaser of the notice described in the first sentence of this
Section 10.4(f)(i) (or within such shorter period of time as may be required by
such notice) of its intention to assume control of the conduct of such
Audit.   Purchaser shall be entitled (at Purchaser's expense) to participate in
such Audit (whether such Audit is conducted in person, by telephone or
otherwise) with its representatives, to receive copies of all written
communications, materials and submissions related to such Audit received from,
or provided to, any Governmental
 
 
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 Authority involved with such Audit, and to have a reasonable opportunity to
comment on any such written materials to be provided to any such Government
Entity.  The Seller Representative shall keep Purchaser informed on a timely
basis of all developments and shall not resolve such Audit without Purchaser's
prior written consent, which shall not be unreasonably withheld, conditioned or
delayed.

 
 
(ii) Purchaser shall have the right, with counsel of its choice, to represent
the interests of the Company or any Company Subsidiary in any Audit involving a
Straddle Period.  The Seller Representative may participate in any such Audit at
its own expense and the Seller Representative shall be kept informed of the
progress of such Audit.  Purchaser shall keep the Seller Representative informed
on a timely basis of all developments and the Seller Representative's written
consent shall be required prior to the settlement of any Audit relating to a
Straddle Period if the settlement would materially negatively affect the
Sellers, which consent shall not be unreasonably withheld, conditioned or
delayed.
 
(iii) Except as provided in Sections 10.4(f)(i) and 10.4(f)(ii), Purchaser shall
have the right, at its own expense, to exercise control at any time over the
handling, disposition and/or settlement of any issue raised in any Audit
regarding any Tax Return or regarding any Tax matter (including the right to
settle or otherwise terminate any contest with respect thereto).
 
(iv) If the Seller Representative declines in writing to assume the control or
joint control of an Audit or otherwise fails to take control or joint control of
or timely defend an Audit for a Pre-Closing Tax Period as described herein,
Purchaser shall have the right, to assume control of the conduct and resolution
of such Audit.
 
(g) No Tax Elections. Purchaser covenants that neither Purchaser nor any of its
Affiliates shall make an election under Section 338 of the Code with respect to
the transactions contemplated by this Agreement. The Sellers shall have no
Liability, and Purchaser shall indemnify, defend and hold harmless Sellers, with
respect to any Taxes resulting by reason of any election made or deemed to be
made by Purchaser or any of its Affiliates subsequent to the Closing, whether
express or implied, under Section 338 of the Code (or any similar state or
foreign statute).
 
(h) Transfer Taxes. All sales, use, stamp, documentary, filing, recording,
transfer or similar fees or taxes or governmental charges (together with any
interest or penalty, addition to tax or additional amount imposed) as levied by
any taxing authority in connection with transactions contemplated by this
Agreement, along with all out-of-pocket costs associated with the preparation
and filing of the Tax Returns under this Section 10.4(h), shall be borne fifty
percent (50%) percent by Purchaser and fifty percent (50%) by
Sellers.  Purchaser shall timely file or cause to be filed all necessary
documentation and Tax Returns with respect to such Transfer Taxes and Sellers
will cooperate with Purchaser.
 
(i) Tax Sharing Agreements.  Prior to the Closing, all agreements entered into
by the Company or any Company Subsidiary with any Person (other than the Company
or any Company Subsidiary) for the sharing or allocating of Taxes shall be
terminated, and no additional payments shall be required to be made thereunder
by the Company or any Company Subsidiary.
 
(j) Survival.  The terms, conditions, rights, obligations, covenants,
indemnification obligations and other provisions contained in this Section 10.4
shall survive indefinitely.
 
(k) Interaction with Article 11.  Notwithstanding any provision herein to the
contrary, to the extent that a provision of this Section 10.4 directly conflicts
with a provision of Article XI,
 
 
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this Section 10.4 shall govern.  For avoidance of doubt, none of the limitations
under Section 11.4(a) or (b) shall apply to any claim arising under this Section
10.4.
 
10.5 Indemnification; Exculpation of Liability.
 
(a) For a period of six (6) years from and after the Closing Date, Purchaser
shall not permit the Company or any of the Company Subsidiaries to amend, repeal
or modify any provision in their respective Organizational Documents relating to
exculpation or indemnification of former officers and directors holding office
on or before the Closing Date, it being the intent of the parties that the
officers and directors of the Company and each of the Company Subsidiaries on or
before the Closing Date shall continue to be entitled to such exculpation and
indemnification to the greatest extent permitted under the Laws of the State of
Washington; provided, however, that nothing herein shall restrict or prevent
Purchaser or the Company from changing its corporate structure, including by way
of merger.
 
(b) The obligations of Purchaser under this Section 10.5 shall not be terminated
or modified in such a manner as to adversely affect any Person to whom this
Section 10.5 applies without the consent of the affected Person, it being
expressly agreed that each such Person to whom this Section 10.5 applies shall
be a third party beneficiary of this Section 10.5.
 
(c) Prior to the Closing, the Company shall purchase a prepaid tail policy to
the current policy of directors’ and officers’ liability insurance maintained by
the Company and the Company Subsidiaries for all persons who are currently
covered by such current policy with respect to claims arising from facts or
events that occurred on or before the Closing Date for a claims reporting or
discovered period of not less than six (6) years from the Closing Date.
 
10.6 Obligations to Continuing Employees.
 
(a) Following Closing, Purchaser shall cause the Company and the Company
Subsidiaries to honor and satisfy all of their respective obligations and
liabilities with respect to any Benefit Plan set forth on Schedule 10.6 and
existing as of the date hereof.  Notwithstanding the foregoing, neither the
Company nor any Company Subsidiary shall be required to continue any such
Benefit Plan after the Closing, and any such Benefit Plan may be amended or
terminated in accordance with its terms and applicable Law.  To the extent that
any Benefit Plan described in the first sentence of this Section 10.6(a) is
terminated or amended after the Closing and prior to the first anniversary of
the Closing so as to eliminate the future benefits that are being provided with
respect to participants thereunder, Purchaser shall use commercially reasonable
efforts to arrange for each individual who is then a participant in such
terminated or amended Benefit Plan to participate in an alternative benefit plan
of Purchaser or one of its Affiliates ("Purchaser Benefit Plan") subject to the
terms and conditions of the Purchaser Benefit Plan, including any eligibility
requirements, Purchaser's or one of its Affiliates right to amend or terminate
the Purchaser Benefit Plan, and the required approval of any applicable
insurance provider; provided, however, that, upon participation by such
participant in any such Purchaser Benefit Plan: (i) such participant shall
receive full credit for years of service performed with the Company or the
applicable Company Subsidiary prior to the Closing to the same extent and for
the same purposes for which such service was recognized under the applicable
Benefit Plan except to the extent such service credit will result in benefit
accruals under a defined benefit plan, and provided that no such service
recognition shall result in any duplication of benefits or be required under a
newly established plan for which prior service is not taken into account for
employees of Purchaser or any of its Affiliates (including the Company and the
Company Subsidiaries); (ii) Purchaser shall use commercially reasonable efforts
to cause any and all pre-existing condition limitations (but solely to the
extent such limitations were satisfied or did not apply with respect to a
pre-existing condition under the applicable Benefit Plan) under any group health
plans to be waived with respect to such participant and his or her eligible
dependents; and (iii) except as would not
 
 
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result in the duplication of benefits to any participant, Purchaser shall use
commercially reasonable efforts to cause such Purchaser Benefit Plan that is a
group welfare plan to provide such participant with credit towards any
applicable deductibles, co-payments and similar exclusions for expenses incurred
and paid by such participant under the applicable Benefit Plan prior to the
Closing with respect to the plan year in which the Closing occurs, as if such
amounts had been paid in accordance with such Purchaser Benefit Plan.
 
(b) Notwithstanding the foregoing, nothing in this Agreement shall obligate
Purchaser, the Company or any Company Subsidiary to employ any employee of the
Company or any Company Subsidiary for any period of time.
 
(c) No provision in this Section 10.6 shall:  (i) create any third-party
beneficiary or other rights or remedies in any current or former employee,
director, officer, consultant, independent contractor or other service provider
(including any beneficiary or dependent thereof) of the Company, any Company
Subsidiary or any other Person other than the parties and their respective
successors and permitted assigns; (ii) constitute or create an employment
agreement or rights to continued employment with Purchaser, the Company, any
Company Subsidiary or any of their respective Affiliates; or (iii) constitute or
be deemed to constitute an amendment, termination or modification of any Benefit
Plan, Purchaser Benefit Plan or any other employee benefit plan sponsored or
maintained by Purchaser, the Company, any Company Subsidiary or any of their
respective Affiliates.
 
(d) At least three (3) Business Days before the Closing Date, the Company shall
provide Purchaser with resolutions of the sponsoring company's board of
directors providing for the termination, effective as of immediately prior to
Closing, of all Benefit Plans that are intended to be qualified under Section
401(a) of the Code (unless Purchaser provides written notice to the Company no
later than five (5) Business Days prior to the Closing that any such Benefit
Plan shall not be terminated).  The form and substance of such resolutions shall
be subject to review and prior approval of Purchaser. In the event that
termination of any such Benefit Plan would reasonably be anticipated to trigger
liquidation or surrender charges, or other fees, then the Company shall take (or
cause to be taken) such actions as are necessary to reasonably estimate the
amount of such charges and/or fees and provide such estimate in writing to
Purchaser no later than ten (10) Business Days prior to the Closing.
 
10.7 Intentionally Omitted.
 
10.8 Investigation; No Reliance by Purchaser.  Purchaser acknowledges that it
and its Representatives have undertaken an independent investigation and
verification of the business, assets, operations, financial condition and
prospects of the Company and the Company Subsidiaries.  In connection with such
investigation, Purchaser and its Representatives have received from or on behalf
of the Sellers and/or the Company and the Company Subsidiaries certain
estimates, forecasts, plans and financial projections ("Forward-Looking
Statements").  Purchaser acknowledges that: (a) there are uncertainties inherent
in making Forward-Looking Statements; and (b) it is familiar with such
uncertainties and it is taking full responsibility for making its own evaluation
of the adequacy and accuracy of all Forward-Looking Statements so furnished to
it and its Representatives (including the reasonableness of the assumptions
underlying Forward-Looking Statements where such assumptions are explicitly
disclosed).  Except in the case of Fraud, none of the Sellers, the Company nor
any other Person shall have or be subject to any Liability to Purchaser or any
other Person resulting from the distribution to Purchaser, or its use of,
Forward-Looking Statements.
 
10.9 Limitation of Representations and Warranties.  Except for the
representations and warranties set forth in Article 6 and in Article 7
(including the Disclosure Schedule), the Company and the Sellers are not making
and shall not be liable for any other representations or warranties, written or
 
 
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oral, statutory, express or implied, concerning the Shares, the Company, the
Company Subsidiaries or the business, assets or Liabilities of the Company and
the Company Subsidiaries.  Without limiting the foregoing, neither the Company
nor the Sellers are making any representation or warranty to Purchaser with
respect to the information set forth in the Confidential Information Memorandum
prepared by the Company and previously delivered to Purchaser, except if and to
the extent such information is specifically included in this Agreement or any
Schedule to this Agreement.
 
10.10 Confidentiality.  From and after the Closing, (a) Seller Representative
and each Seller shall, and shall cause their respective Representatives and
Affiliates (and their respective Representatives) to, (i) hold in confidence any
and all nonpublic information, whether written or oral, concerning the Company
and the Company Subsidiaries, including all customer lists, price lists,
marketing methods, technologies, processes, know-how or other trade secrets, the
terms of this Agreement and all non-public information that it has acquired
about the Purchaser and its respective Affiliates ("Company Confidential
Information") and (ii) not to, directly or indirectly, use any Company
Confidential Information for any reason or purpose other than for the sole
purpose of performing the Sellers' obligations under this Agreement; and (b)
Purchaser shall, and shall cause its Representatives and Affiliates (and their
respective Representatives) to, hold in confidence the terms of this Agreement
and all information that it has acquired about the Sellers and their respective
Affiliates, including the identity of any Seller or any direct or indirect owner
of any Seller ("Sellers’ Confidential Information"), except, in each case, to
the extent that such Person can show that such Company Confidential Information
or Sellers’ Confidential Information, as the case may be: (i) is generally
available to and known by the public through no fault of such Person, any of its
Affiliates or their respective Representatives, (ii) is independently developed
by such Person, any of its Affiliates or their respective Representatives from
and after the Closing without using the other Person's confidential information
or (iii) is acquired by such Person, any of its Affiliates or their respective
Representatives from sources which are not prohibited from disclosing such
information by a legal, contractual or fiduciary obligation (it being
acknowledged and agreed that current and former employees of the Company and the
Company Subsidiaries have such a legal or contractual obligation).  If such
Person or any of its Affiliates or their respective Representatives are
compelled to disclose any Company Confidential Information or Sellers’
Confidential Information, as the case may be, by judicial or administrative
process or by other requirements of Law, such Person shall promptly notify the
Sellers' Representative or the Purchaser, as applicable, in writing and shall
disclose only that portion of such Company Confidential Information or Sellers’
Confidential Information, as applicable, which such Person is advised by its
counsel in writing is legally required to be disclosed; provided that such
Person shall use reasonable best efforts to obtain an appropriate protective
order or other reasonable assurance that confidential treatment will be accorded
such Company Confidential Information or Sellers’ Confidential Information, as
applicable.  Any breach of the confidentiality obligations set forth in this
Section 10.10 would cause irreparable injury.  Accordingly, each party agrees
that the other party may enforce the provisions hereof and, in addition to
pursuing any other remedies it may have in law or in equity, may seek an
injunction against the breaching party from any court having jurisdiction over
the matter restraining any violation by such party of its confidentiality
without having to prove actual damages.  Each party agrees that the existence of
any claim or cause of action by it against the other party shall not constitute
a defense to the enforcement of such obligations.
 
10.11 Certification Regarding Tax Benefits.  At the written request of the
Seller Representative, the Chief Financial Officer of Purchaser shall, as soon
as reasonably practicable after the request is made and after the information is
available, provide to the Seller Representative a certification of the actual
Tax Benefits realized in a calendar year with respect to any Damages incurred in
a calendar year for which any Seller has any indemnity obligation under this
Agreement.
 
ARTICLE 11
REMEDIES FOR BREACH OF THIS AGREEMENT
 
 
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11.1 Survival.  The representations and warranties in this Agreement shall
survive the Closing for a period of eighteen (18) months from and after the
Closing Date, except that:
 
(a) the following representations and warranties shall survive indefinitely: (i)
the representations and warranties of Purchaser made in Sections 5.1
(Organization and Standing), 5.2 (Authority; Authorization; Enforceability) and
5.5 (Brokers); (ii) the Company Special Representations; and (iii) the
representations and warranties of each Seller made in Sections 7.1 (Organization
and Standing), 7.2 (Authority; Authorization; Capacity), 7.3 (Enforceability),
7.4 (Ownership of Shares), 7.5 (Noncontravention), 7.6 (Governmental Approvals)
and 7.7 (Brokers and Finders);
 
(b) the representations and warranties of the Company made in Section 6.25
(Employee Benefit Plans; ERISA) and 6.26 (Tax Matters) shall survive for a
period of ninety (90) days following the expiration of the applicable statute of
limitations; and
 
(c) the representations and warranties of the Company made in Section 6.27
(Environmental Matters) shall survive the Closing for a period of six (6) years
from and after the Closing Date. 
 
All: (x) covenants and agreements that by their terms apply or are to be
performed in whole or in part after the Closing will survive for the period
provided in such covenants and agreements, if any, or until fully performed; (y)
covenants and agreements that by their terms apply or are to be performed in
their entirety on or before the Closing shall terminate at the Closing; and (z)
obligations to indemnify pursuant to Section 11.2(a)(vi) with respect to the
matters identified on Schedule 11.2(a) shall survive the Closing for a period of
eighteen (18) months from and after the Closing Date.
 
11.2 Indemnification.
 
(a) Subject to the terms and conditions set forth herein, from and after the
Closing, the Keen Managed Reserve Trust shall defend, indemnify and hold
harmless the Purchaser Indemnitees from and against any and all Damages that any
such Purchaser Indemnitee shall suffer, sustain or become subject to, arising
from, as a result of or in connection with:
 
(i) any inaccuracy in or breach of any of the representations and warranties
contained in Article 6 or made by the Company in any other Transaction Documents
(including any exhibit, schedule or certificate hereto or thereto);
 
(ii) a breach by the Company or any Company Subsidiary of any of its covenants
contained in this Agreement or the other Transaction Documents (including any
exhibit, schedule or certificate hereto or thereto) that are to be performed
prior to the Closing;
 
(iii) any Liabilities of the Company and the Company Subsidiaries for
Indebtedness outstanding as of the Closing (other than Intercompany
Indebtedness) or for any distributions payable to any Seller and, in each case,
not reflected as Closing Indebtedness on the Final Purchase Price Calculation
Statement;
 
(iv) any inaccuracy or breach of Section 6.8(c) and the matters set forth on
Schedule 6.8(c) of the Disclosure Schedule;
 
(v) any Liability of the Company or any Company Subsidiary with respect to the
indemnification of former officers and directors of the Company and the Company
Subsidiaries holding office on or before the Closing Date; or
 
 
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(vi) the matters identified on Schedule 11.2(a).
 
(b) Subject to the terms and conditions set forth herein, from and after the
Closing, each of the Sellers, severally as to itself only and not jointly as to
or with any other Seller, shall defend, indemnify and hold harmless the
Purchaser Indemnitees from and against any and all Damages that any such
Purchaser Indemnitee shall suffer, sustain or become subject to, arising from,
as a result of or in connection with:
 
(i) any inaccuracy in or the breach of any of the representations and warranties
made by such Seller in Article 7; or
 
(ii) a breach by such Seller of any of its covenants contained in this Agreement
or the other Transaction Documents (including any exhibit, schedule or
certificate hereto or thereto).
 
(c) Subject to the terms and conditions set forth herein, from and after the
Closing, Purchaser and the Company, jointly and severally, shall defend,
indemnify and hold harmless the Seller Indemnitees from and against any and all
Damages that any such Seller Indemnitee shall suffer, sustain or become subject
to, arising from, as a result of or in connection with:
 
(i) any inaccuracy in or the breach of the representations and warranties
contained in Article 5;
 
(ii) a breach by Purchaser of any of its covenants contained in this Agreement
or the other Transaction Documents (including any exhibit, schedule or
certificate hereto or thereto); or
 
(iii) a breach by the Company or any Company Subsidiary of any of its respective
covenants contained in this Agreement or the other Transaction Documents
(including any exhibit, schedule or certificate hereto or thereto) that are to
be performed after the Closing.
 
11.3 Third Party Claims.
 
(a) If any Purchaser Indemnitee desires to make a claim against the Sellers or
any Seller Indemnitee desires to make a claim against Purchaser (such Purchaser
Indemnitee or Seller Indemnitees an "Indemnified Party") under Section 11.2 in
connection with any action, suit, investigation, proceeding or demand at any
time instituted against or made upon the Indemnified Party by any third party
for which the Indemnified Party may seek indemnification hereunder (a "Third
Party Claim"), such Indemnified Party shall promptly notify in writing (i) in
the case of a claim under Section 11.2(a), the Seller Representative, (ii) in
the case of a claim under Section 11.2(b), the relevant Seller or (iii) in the
case of a claim under Section 11.2(c), Purchaser (in each case, an "Indemnifying
Party") of such Third Party Claim and of the Indemnified Party's claim of
indemnification with respect thereto; provided, that the failure to so notify
shall not relieve the Indemnifying Party(ies) of their obligations hereunder,
except to the extent that the Indemnified Party(ies) are materially prejudiced
by such failure. The Indemnifying Party(ies) shall have thirty (30) days after
receipt of such notice to notify such Indemnified Party if the applicable
Indemnifying Party(ies) (or, in the case of a claim under Section 11.2(a), the
Seller Representative on behalf of the Sellers) have elected to assume the
defense of such Third Party Claim. If the applicable Indemnifying Party(ies)
(or, in the case of a claim under Section 11.2(a), the Seller Representative on
behalf of the Sellers) elect to assume the defense of such Third Party Claim,
such Indemnifying Party(ies) (or, in the case of a claim under Section 11.2(a),
the Seller Representative on behalf of the Sellers) shall be entitled at their
own expense to conduct and
 
 
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control the defense and settlement of such Third Party Claim through counsel of
their own choosing on behalf of the applicable Indemnified Party; provided, that
the counsel for the Indemnifying Party who shall conduct the defense of such
claim or litigation shall be subject to the approval of the Indemnified Party
(which approval shall not be unreasonably withheld, conditioned or delayed); and
provided further that the Indemnified Party shall have the right to participate
in the defense of any Third Party Claim with counsel selected by it (at the
expense of the Indemnified Party) subject to the Indemnifying Party's right to
control the defense thereof; and provided further that if and to the extent the
Indemnifying Party cannot defend such Third Party Claim on behalf of the
Indemnifying Party as a result of a conflict of interest between the
Indemnifying Party and the Indemnified Party that cannot be waived, then the
Indemnifying Party shall be liable for the reasonable fees and expenses of one
(1) counsel to the Indemnified Party.  If the Indemnifying Party(ies) (or, in
the case of a claim under Section 11.2(a), the Seller Representative on behalf
of the Sellers) fail to notify the Indemnified Party within thirty (30) days
after receipt of notice of a Third Party Claim that the applicable Indemnifying
Party(ies) (or, in the case of a claim under Section 11.2(a), the Seller
Representative on behalf of the Sellers) have elected to assume the defense of
such Third Party Claim, the Indemnified Party shall be entitled to assume the
defense of such Third Party Claim at the expense of the applicable Indemnifying
Party(ies); provided, that the Indemnified Party may not compromise or settle
any Third Party Claim except as provided in Section 11.3(b).
 
(b) Any compromise, settlement or offer of settlement of any Third Party Claim
shall require the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld, conditioned or delayed. Unless such consent
is obtained, the applicable Indemnifying Party(ies) (or, in the case of a claim
under Section 11.2(a), the Seller Representative on behalf of the Sellers) shall
continue the defense of such claim; provided, that if any Indemnified Party
withholds its consent to a bona fide offer of settlement that the applicable
Indemnifying Party(ies) (or, in the case of a claim under Section 11.2(a), the
Seller Representative on behalf of the Sellers) wish to accept and that involves
no payment of money by such Indemnified Party, and further involves no
injunctive or other non-monetary relief affecting the Indemnified Party or
otherwise limits the future operation of the business, assets or property of the
Company or any of the Company Subsidiaries, and that releases such Indemnified
Party from all Liability in connection with such claim, the applicable
Indemnifying Party(ies) (or, in the case of a claim under Section 11.2(a), the
Seller Representative on behalf of the Sellers) may reassign the defense of such
claim to such Indemnified Party, who may then continue to pursue the defense of
such matter, free of any participation by the Indemnifying Party(ies) (and, in
the case of a claim under Section 11.2(a), the Seller Representative on behalf
of the Sellers), at the sole cost and expense of such Indemnified Party.  In
such event, the Liability of the applicable Indemnifying Party(ies) with respect
thereto shall not exceed the amount of the offer of settlement that such
Indemnified Party refused to accept plus the costs and expenses of such
Indemnified Party prior to the date such Indemnifying Party(ies) (or, in the
case of a claim under Section 11.2(a), the Seller Representative on behalf of
the Sellers) notified such Indemnified Party of the offer of settlement.
 
(c) If the Indemnifying Party makes any payment on any Third Party Claim, the
Indemnifying Party shall be subrogated, to the extent of such payment, to all
rights and remedies of the Indemnified Party to any insurance benefits or other
claims of the Indemnified Party with respect to such Third Party Claim.
 
11.4 Limitations on Indemnification.
 
(a) Thresholds.  Subject to the other provisions of this Section 11.4:
 
(i) Except to the extent a claim arises from Fraud on the part of a breaching
party, no claim for indemnification under Section 11.2(a)(i) (other than with
respect to Company Special Representations) shall be made by a Purchaser
Indemnitee with respect to any breach
 
 
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resulting in an individual item of Damages, or related items of Damages arising
out of substantially similar facts and circumstances, unless and until the
amount of the Damages suffered by the Purchaser Indemnitee in connection with
such breach exceeds $15,000 (the "Claim Threshold"), it being understood that
such Damages with respect to such breach may not be applied toward satisfaction
of the Deductible unless the amount of the Damages with respect to such breach
exceeds the Claim Threshold; and

 
 
(ii) Except to the extent a claim arises from Fraud on the part of the breaching
party, no claim for indemnification under Section 11.2(a)(i) (other than with
respect to Company Special Representations) shall be made by a Purchaser
Indemnitee unless and until the aggregate amount of all Damages that exceed the
Claim Threshold for which Purchaser Indemnitees are otherwise entitled to
indemnification under this Article 11 exceeds $3,500,000 (the "Deductible"), and
then only to the extent the aggregate amount of all such Damages exceeds the
Deductible.
 
(b) Caps.
 
(i) The maximum aggregate amount of all Damages payable with respect to all
claims for indemnification hereunder pursuant to Section 11.2(a)(i) with respect
to the Company Special Representations shall not exceed $650,000,000 less the
aggregate of all amounts previously paid or to be paid pursuant to
Sections 11.2(a)(i) and 11.2(a)(vi).
 
(ii) The maximum aggregate amount of all Damages payable with respect to all
claims for indemnification hereunder pursuant to (A) Section 11.2(a)(i) with
respect to representations and warranties of the Company other than the Company
Special Representations and (B) Section 11.2(a)(vi) shall not exceed $97,500,000
less the aggregate of all amounts previously paid or to be paid pursuant to
Sections 11.2(a)(i) and 11.2(a)(vi).
 
(iii) The maximum aggregate amount of all Damages payable by any Seller with
respect to all claims with respect to indemnification hereunder pursuant to
Section 11.2(b)(i) shall not exceed an amount equal to $650,000,000 multiplied
by such Seller's Pro Rata Share less all amounts previously paid or to be paid
by such Seller pursuant to Section 11.2.
 
(c) Acknowledgment Regarding Seller Representations.  The parties acknowledge
that the representations and warranties contained in Article 7 and the covenants
made by each Seller in this Agreement are made severally by each Seller as to
itself only, and any Seller who has breached any such representation, warranty
or covenant as to itself (but only such Seller) shall, subject to the provisions
of this Article 11, be liable with respect to all Damages arising from the
breach thereof.
 
(d) Time Limit.  No Person shall be liable for any claim for indemnification
hereunder unless written notice of a claim for indemnification is delivered by
the Person seeking indemnification to the Person from whom indemnification is
sought with respect to any such breach before the date on which the
representation, warranty or covenant on which such claim is based ceases to
survive as set forth in Section 11.1 (in which case such indemnification
obligation shall survive the time at which it would otherwise terminate pursuant
to this Article 11 regardless of when any Damages in respect thereof may
actually be incurred).  All notices given pursuant hereto shall set forth with
reasonable specificity the basis for such claim for indemnification.
 
(e) Closing Net Working Capital.  Notwithstanding any provision of this
Agreement to the contrary, Purchaser for itself and each Purchaser Indemnitee
waives and releases, and Purchaser Indemnitees shall not be entitled to
indemnification hereunder for, any Damages arising from a
 
 
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breach of any representation or warranty of the Company under Article 6, and the
amount of any Damages incurred in respect of any such breach shall not be
included in the calculation of aggregate Damages subject to the Deductible, to
the extent that the amount of any Liability arising as a result of such breach
is expressly (i) disclosed or reflected and (ii) taken into account as a current
Liability for purposes of determining the Closing Net Working Capital and such
amount is included in the calculation of the Purchase Price (as finally
determined pursuant to Section 4.4).  Without limiting the foregoing, the
determination of Closing Net Working Capital and the calculation of the Purchase
Price pursuant to Section 4.4 shall not be subject to any of the limitations set
forth in this Section 11.4.
 
(f) Insurance and Tax Benefits.  The amount of any Damages subject to
indemnification by the Sellers hereunder shall be calculated (i) net of any
amounts that have been previously recovered or are recoverable by a Purchaser
Indemnitee under insurance policies or other collateral sources (such as
contractual indemnities of any Person that are contained outside this
Agreement), and (ii) net of any Tax Benefit.
 
(g) Mitigation.  Purchaser Indemnitees shall take and shall cause their
Affiliates to take all reasonable steps to mitigate any Damages upon becoming
aware of any event that gives rise to, or  that would reasonably be expected to
give rise to, such Damages, including incurring costs only to the minimum extent
necessary to remedy the breach that gives rise to such Damages.
 
(h) No Special Damages.  Notwithstanding anything to the contrary elsewhere in
this Agreement, no party shall, in any event, be liable to any other Person for
any damages other than direct damages, which shall exclude, to the extent not
constituting direct damages, any consequential, incidental, indirect, special or
punitive damages (including, for the avoidance of doubt, loss of revenue or
income, cost of capital, loss of profits, loss of goodwill or loss of business
reputation or opportunity to the extent not constituting direct damages);
provided, that, the limitations in this Section 11.4(h) shall not apply to any
otherwise excluded Damages that are awarded to, recovered or recoverable by any
third party that is not an Affiliate of the Person seeking indemnification.
 
(i) No Multiple Recovery.  No Purchaser Indemnitee shall be entitled to recover
any Damages relating to any breach of a representation or warranty or otherwise
arising under one provision of this Agreement to the extent that the Purchaser
Indemnitee has already recovered Damages with respect to such breach pursuant to
another representation, warranty or other provision of this Agreement.
 
(j) Treatment of Indemnification Payments.  Any indemnification payments made by
Purchaser, the Company or any of the Sellers pursuant to this Article 11 or
pursuant to Section 10.4 shall be treated by all parties as an adjustment to the
Purchase Price hereunder.
 
(k) Tax Matters.   Section 11.4(a) and Section 11.4(b) shall not apply to any
claim for indemnification with respect to Tax matters.
 
11.5 Other Limitations.  Notwithstanding any of the foregoing: (a) Purchaser
shall have no recourse against the Company's officers, directors or agents other
than in their capacities as Sellers or as trustors, trustees or beneficiaries of
any trust that is a Seller or Optionholders; and (b) indemnification owing from
any Seller, such Seller's beneficial owner(s) or such Person who is or was an
officer or director of the Company shall not be deemed for any purpose to be a
claim covered by indemnification owing to such Person by the Company under any
Law, by-law or agreement whatsoever; and (c) no Damages will be recoverable by
any Purchaser Indemnitee with respect to any Products manufactured, distributed
or sold later than the twelve (12) month anniversary of the Closing Date with
respect to, arising out of, or relating in any way to, any breach of the
representations and warranties made in the final
 
 
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sentence of Section 6.21(c) or the first sentence of Section 6.21(f); provided,
that the recoverability of any such Damages identified in this clause (c) shall
be subject to Purchaser complying in all material respects with its obligations
as identified in Item 3 of Schedule 11.2(a)
 
11.6 Limitation of Remedies.  Except as provided in Section 10.4, or in
connection with the determination of Closing Net Working Capital and the
calculation of the Purchase Price pursuant to Section 4.4 or in instances of
Fraud, the rights of the parties for indemnification relating to this Agreement
or the transactions contemplated by this Agreement shall be strictly limited to
those contained in this Article 11 and, subject to the second to last sentence
of this Section 11.6 and except with respect to equitable relief, such
indemnification rights shall be the exclusive remedies of the parties subsequent
to the Closing Date with respect to any matter in any way relating to this
Agreement or arising in connection herewith. Except as provided in Section 10.4,
to the maximum extent permitted by Law, Purchaser and the Company hereby waive
and shall cause their respective Affiliates to waive all other rights and
remedies with respect to any such matter, whether under any Laws (including any
right or remedy under CERCLA or any other Environmental, Health and Safety Law),
at common law or otherwise. Nothing in this Agreement shall be deemed to prevent
or restrict the bringing or maintenance of any claim or action, or the granting
of any remedy, to the extent that the same shall have been the result of Fraud,
and in the event of Fraud, recourse shall only extend to those Persons
committing Fraud.  Anything in this Agreement to the contrary notwithstanding,
the Sellers shall not be liable to, and shall not indemnify, any Purchaser
Indemnitee for any Damages that result solely from the acts or omissions of a
Purchaser Indemnitee or its Affiliates, including the Company and the Company
Subsidiaries, on or after the Closing Date; provided, however, that this last
sentence of this Section 11.6 shall not limit or alter the liability of any
Seller to any Purchaser Indemnitee with respect to the (a) the items identified
in Schedule 11.2(a); (b) Damages with respect to any Products manufactured,
distributed or sold prior to Closing or  prior to the twelve (12) month
anniversary of the Closing Date with respect to, arising out of, or relating in
any way to, breaches of representations and warranties made in the final
sentence of Section 6.21(c) or the first sentence of Section 6.21(f); provided,
that the recoverability of any such Damages identified in this clause (b) shall
be subject to Purchaser complying in all material respects with its obligations
as identified in Item 3 of Schedule 11.2(a); or (c) for direct Damages as
permitted under Section 11.4(h) caused by the breach of any representations or
warranties made by any of the Company or the Sellers (other than the
representations and warranties identified in the foregoing clause (b)), or with
respect of any covenants to be performed by any of them, prior to or as of the
Closing.
 
11.7 Payment from Escrow.  All indemnification obligations of the Sellers under
Section 10.4 or this Article 11 shall be satisfied first out of funds on deposit
in the Escrow Account in accordance with the terms of the Escrow Agreement.
 
11.8 Effect of Investigation. The representations, warranties and covenants of
the Indemnifying Party, and the Indemnified Party's right to indemnification
with respect thereto, shall not be affected or deemed waived by reason of any
investigation made by or on behalf of the Indemnified Party (including by any of
its Representatives) or by reason of the fact that the Indemnified Party or any
of its Representatives knew or should have known that any such representation or
warranty is, was or might be inaccurate or by reason of the Indemnified Party's
waiver of any condition set forth in Section 9.1 or Section 9.2, as the case may
be.
 
ARTICLE 12
TERMINATION
 
12.1 Termination.  This Agreement may be terminated at any time prior to the
Closing:
 
(a) by the mutual written consent of Purchaser and the Seller Representative; or
 
 
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(b) by Purchaser by giving written notice to the Seller Representative at any
time (i) in the event any Seller or the Company has breached any representation,
warranty or covenant contained in this Agreement in any material respect,
Purchaser has notified the Seller Representative of the breach and the breach
has continued uncured for a period of thirty (30) days after the notice of
breach or (ii) if the Closing shall not have occurred on or before October 31,
2012, by reason of the failure of any condition precedent under
Section 9.1 hereof, or, if the Closing has not occurred solely because the
conditions set forth in Section 9.1(e) have not been satisfied, November 30,
2012 (unless the failure results primarily from Purchaser breaching any
representation, warranty or covenant contained in this Agreement); or
 
(c) by the Seller Representative by giving written notice to Purchaser at any
time (i) in the event Purchaser has breached any representation, warranty or
covenant contained in this Agreement in any material respect, the Seller
Representative has notified Purchaser of the breach and the breach has continued
uncured for a period of thirty (30) days after the notice of breach, or (ii) if
the Closing shall not have occurred on or before October 31, 2012, by reason of
the failure of any condition precedent under Section 9.2 hereof, or, if the
Closing has not occurred solely because the conditions set forth in Section
9.2(d) have not been satisfied, November 30, 2012 (unless the failure results
primarily from a Seller or the Company breaching any representation, warranty or
covenant contained in this Agreement).
 
12.2 Effect of Termination.  Termination of this Agreement pursuant to
Section 12.1 shall terminate all obligations of the parties hereunder, without
liability of any party to any other party (except for the liability of any party
then in breach), except for the obligations under the Confidentiality Agreement
(which shall survive in accordance with the terms thereof) and this
Section 12.2.
 
 
ARTICLE 13
MATTERS RELATING TO SELLER REPRESENTATIVE
 
13.1 Appointment of the Seller Representative.  Each Seller does hereby
irrevocably appoint the individual executing a joinder agreement to this
Agreement on and as of the date hereof as the initial “Seller Representative” as
its true and lawful attorney-in-fact and agent, with full power of substitution
or re-substitution, to act on behalf of such Seller with respect to the transfer
of the Shares owned by such Seller to Purchaser in accordance with the terms and
provisions of this Agreement, and to act on behalf of such Seller in any
litigation or arbitration involving this Agreement (other than any litigation or
arbitration involving the indemnification obligation of such Seller under
Section 11.2(b)), to do or refrain from doing all such further acts and things,
and to execute all such documents as the Seller Representative shall deem
necessary or appropriate in connection with the transactions contemplated by
this Agreement, including the power:
 
(a) to act for such Seller with regard to matters pertaining to indemnification
referred to in this Agreement (other than any indemnification obligation of such
Seller under Section 11.2(b)), including the power to compromise any indemnity
claim on behalf of such Seller and to transact matters of litigation (other than
with respect to indemnification obligations of such Seller under
Section 11.2(b));
 
(b) to execute and deliver all amendments, waivers, ancillary agreements, stock
powers, certificates and documents that the Seller Representative deems
necessary or appropriate in connection with the consummation of the transactions
contemplated by this Agreement;
 
(c) to receive funds, make payments of funds, and give receipts for funds;
 
 
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(d) to receive funds for the payment of expenses of such Seller and apply such
funds in payment for such expenses;
 
(e) to do or refrain from doing any further act or deed on behalf of such Seller
that the Seller Representative deems necessary or appropriate in his or her sole
discretion relating to the subject matter of this Agreement as fully and
completely as such Seller could do if personally present;
 
(f) to execute and deliver the Escrow Agreement and to act for such Seller with
regard to all matters pertaining to the Escrow Agreement; and
 
(g) to receive service of process in connection with any claims under this
Agreement.
 
The appointment of the Seller Representative shall be deemed coupled with an
interest and shall be irrevocable, and Purchaser, the Company and any other
Person may conclusively and absolutely rely, without inquiry, upon any action of
the Seller Representative in all matters referred to herein.  Any action taken
by the Seller Representative must be in writing signed by the Seller
Representative. All notices required to be made or delivered by Purchaser to the
Sellers described above in this Section 13.1 shall be made to the Seller
Representative for the benefit of such Sellers and shall discharge in full all
notice requirements of Purchaser to such Sellers with respect thereto. The
Seller Representative shall promptly provide the applicable Sellers with copies
of all such notices. The Sellers hereby confirm all that the Seller
Representative shall do or cause to be done by virtue of his or her appointment
as the representative of the Sellers hereunder. The Seller Representative shall
act for the Sellers on all of the matters set forth in this Agreement in the
manner the Seller Representative believes to be in the best interest of the
Sellers and consistent with the obligations of the Sellers under this Agreement,
but the Seller Representative shall not be responsible to any Seller for any
loss or damages that such Seller may suffer by the performance of the Seller
Representative's duties under this Agreement, other than loss or damages arising
from intentional violations of Law or gross negligence in the performance of
such duties under this Agreement. The Seller Representative shall not have any
duties or responsibilities except those expressly set forth in this Agreement,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or shall otherwise exist against
the Seller Representative.
 
13.2 Reliance by the Seller Representative.  The Seller Representative shall be
entitled to rely, and shall be fully protected in relying, upon any statements
furnished to it by any Seller, Purchaser or the Company, or any other evidence
reasonably deemed by the Seller Representative to be reliable, and the Seller
Representative shall be entitled to act on the advice of counsel selected by
him.  The Seller Representative shall be fully justified in failing or refusing
to take any action under this Agreement unless he shall have received such
advice or concurrence of any Seller as he deems appropriate or he shall have
been expressly indemnified to his or her satisfaction by the Sellers (severally
as to each Seller only and not jointly as to or with any other Seller) according
to their respective Pro Rata Shares against any and all Liability and expense
that the Seller Representative may incur by reason of taking or continuing to
take any such action. The Seller Representative shall in all cases be fully
protected in acting, or refraining from acting, under this Agreement in
accordance with a request of Sellers whose aggregate Pro Rata Shares exceeds
fifty percent (50%), and such request, and any action taken or failure to act
pursuant thereto, shall be binding upon all of the Sellers to the extent
otherwise permitted hereunder.
 
13.3 Expenses of the Seller Representative.  The Seller Representative shall be
entitled to retain counsel and to incur such expenses (including court costs and
reasonable attorneys' fees and expenses) as the Seller Representative deems to
be necessary or appropriate in connection with the performance of his or her
obligations under this Agreement, and all such fees and expenses incurred by
 
 
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the Seller Representative shall be borne by the Sellers (severally as to each
Seller only and not jointly as to or with any other Seller) according to their
respective Pro Rata Shares.
 
13.4 Indemnification.  The Sellers hereby agree (severally as to each Seller
only and not jointly as to or with any other Seller) to indemnify the Seller
Representative (in his or her capacity as such) ratably according to their
respective Pro Rata Shares against, and to hold the Seller Representative (in
his or her capacity as such) harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of whatever kind which may at any time be imposed
upon, incurred by or asserted against the Seller Representative in such capacity
in any way relating to or arising out of the Seller Representative's action or
failure to take action pursuant to this Agreement or in connection herewith in
such capacity; provided, that no Seller shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or intentional misconduct of the Seller Representative or any
violation by the Seller Representative of his or her obligations under this
Agreement.  The agreements in this Article 13 shall survive termination of this
Agreement.
 
13.5 Substitute Seller Representative.  If the individual appointed pursuant to
Section 13.1 shall die, become disabled, resign or otherwise be unable to
fulfill his or her responsibilities as agent of the Sellers, then the Sellers
whose aggregate Pro Rata Shares exceeds 50.0% shall, as soon as practicable and
with Purchaser’s written approval (which approval shall not be unreasonably
withheld, conditioned or delayed), appoint a successor agent for the
Sellers.  The Seller Representative may resign at any time by written notice to
Purchaser and the Sellers.  All power, authority, rights and privileges
conferred in this Agreement to the initial Seller Representative shall apply to
any successor Seller Representative.
 
13.6 Reliance by Purchaser.  Purchaser and the other Purchaser Indemnified
Parties may rely on the appointment and authority of the Seller Representative
granted pursuant to this Article 13 until receipt of written notice of the
appointment of a successor Seller Representative made in accordance with Section
13.5.  In so doing, Purchaser and the other Purchaser Indemnified Parties shall
be entitled to deal exclusively with and may rely conclusively (without further
evidence whatsoever) on any and all actions taken by and decisions of the Seller
Representative on any matter relating to this Agreement or the other Transaction
Documents.
 
ARTICLE 14
MISCELLANEOUS
 
14.1 Notices.  All notices, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or by overnight courier, if mailed by certified mail, return receipt requested,
postage prepaid, or if sent by facsimile, each case addressed to the applicable
party as follows:
 
If to the Company at any time prior to the Closing, to:
 
Avid Health, Inc.
6350 NE Campus Drive
Vancouver, WA 98661
Attention:  President
Fax: (360) 735-0681
 
with a copy sent contemporaneously to (which shall not constitute notice):
 
 
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Tonkon Torp LLP
1600 Pioneer Tower
888 SW Fifth Avenue
Portland, OR 97204
Attention:  Kurt W. Ruttum
Fax:  (503) 972-3743
 
If to the Sellers, or any of them, or to the Seller Representative:
 
Keen Managed Reserve Trust
1600 Pioneer Tower
888 SW Fifth Avenue
Portland, OR 97204
Attention:  Kurt W. Ruttum
Fax:  (503) 972-3743
 
If to Purchaser or to the Company at any time after the Closing, to:
 
Church & Dwight Co., Inc.
469 North Harrison Street
Princeton, New Jersey 08543
Attention:  Executive Vice President and General Counsel
Fax:  609.497.7177
 
with a copy sent contemporaneously to (which shall not constitute notice):
 
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036-8299
Attention:  Ronald R. Papa
Fax:  (212) 969-2900
 
Any such notice, demand or other communication shall be effective:  (a) if
delivered personally, when received; (b) if sent by a nationally recognized
overnight courier, when receipted for; (c) if mailed, five (5) Business Days
after being mailed; or (d) if sent by facsimile, the issuance by the
transmitting machine of a confirmation slip confirming that the number of pages
constituting the notice have been transmitted without error.
 
14.2 Entire Agreement.  This Agreement, the Transaction Documents and the
Confidentiality Agreement, dated March 1, 2012 between Purchaser  and Houlihan
Lokey Capital, Inc., as agent for the Company (the "Confidentiality Agreement"),
constitute the entire agreement among the parties with respect to subject matter
set forth herein and therein and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions, both written and oral,
among the parties with respect to such subject matter.  In the event of any
inconsistency between the statements in the body of this Agreement and those in
the Transaction Documents, the Exhibits and Disclosure Schedule (other than an
exception expressly set forth in such Disclosure Schedule), the statements in
the body of this Agreement shall control.
 
14.3 Amendment and Waiver.  Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Seller Representative, the Company and
Purchaser, or in the case of a waiver, by the party against whom
 
 
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the waiver is to be effective. No waiver by any party shall operate or be
construed as a waiver in respect of any failure, breach or default not expressly
identified in a written waiver, whether of a similar or different character, and
whether occurring before or after that waiver.  No failure or delay by any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall any amendment to this Agreement that would increase the liability or
potential liability of any Seller hereunder or amend the provisions of Article
13 be effective as against such Seller without the written consent of such
Seller to such amendment.
 
14.4 Benefits; Binding Effect; Assignment.  This Agreement shall be binding upon
and inure to the benefit of the parties and their respective heirs, successors
and permitted assigns.  Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other parties; provided, that (a) Purchaser and, after
the Closing, the Company shall each have the right to assign any of its rights
under this Agreement to any of its Affiliates and to any purchaser of a material
portion of its assets, so long as such party remains liable for such Affiliate's
or purchaser's obligations hereunder and (b) Purchaser and, after the Closing,
the Company may each assign its rights hereunder for collateral security
purposes to any lender or lenders (including any agent for any such lender or
lenders) providing financing to Purchaser in connection with the transactions
contemplated by this Agreement, or to any assignee or assignees of any such
lender, lenders or agent.
 
14.5 No Third Party Beneficiary.  Except as provided in Section 10.5(b), nothing
in this Agreement, express or implied, is intended or shall be interpreted to
confer upon any Person other than Purchaser, the Purchaser Indemnitees, the
Sellers, the Seller Indemnitees, the Seller Representative and their respective
successors, heirs, personal representatives or permitted assigns, any rights or
remedies under or by reason of this Agreement.
 
14.6 Severability.  The parties desire and intend that the provisions of this
Agreement be enforced to the fullest extent permissible under the Laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, illegal or unenforceable for
any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
 
14.7 Expenses.  Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated by this Agreement are consummated,
the parties shall bear their own respective expenses (including all compensation
and expenses of counsel, financial advisors, consultants, actuaries and
independent accountants) incurred in connection with the preparation,
negotiation, execution and consummation of this Agreement and of the
transactions contemplated by this Agreement. Notwithstanding the foregoing,
Purchaser acknowledges and agrees that (a) the Company and the Company
Subsidiaries have incurred certain of the costs and expenses of the Sellers in
connection with this Agreement and the transactions contemplated by this
Agreement and (b) such costs and expenses shall be included in the Company
Transaction Expenses and shall be taken into account for purposes of determining
the Purchase Price payable at Closing pursuant to Section 4.3(b). Purchaser
shall not have any Liability for any such costs or expenses of the Sellers after
the Closing.  Purchaser shall be
 
 
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responsible for any filing or similar fees in connection with any filings or
submissions under the HSR Act.
 
14.8 Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall be deemed to
be one and the same instrument.  A signed copy of this Agreement delivered by
facsimile or electronic mail shall have the same legal effect as delivery of an
original signed copy of this Agreement.
 
14.9 Purchaser's Review.
 
(a) Purchaser has reviewed and has had access to all documents, records and
information that it has desired to review, and has had the opportunity to ask
questions in connection with its decision to enter into this Agreement, and to
consummate the transactions contemplated by this Agreement.  In connection with
the execution and delivery of this Agreement and the consummation of
transactions contemplated by this Agreement, Purchaser has not relied upon, and
Purchaser expressly waives and releases Sellers from any Liability for any
claims relating to or arising from, any representation, warranty, statement,
advice, document, projection, or other information of any type provided by the
Sellers or their Affiliates or any of their representatives, except for those
representations and warranties of the Company and Sellers expressly set forth in
Article 6 and Article 7.  In deciding to enter into this Agreement, and to
consummate the transactions contemplated by this Agreement, Purchaser has relied
solely upon its own knowledge, investigation, judgment and analysis (and that of
its Representatives) and not on any disclosure or representation made by, or any
duty to disclose on the part of, Sellers, their Affiliates or any of their
Representatives, other than the express representations and warranties of the
Company and Sellers set forth in Article 6 and Article 7.
 
(b) Any and all duties and obligations that any party hereto may have to any
other party hereto with respect to or in connection with the Shares, this
Agreement or the transactions contemplated by this Agreement are limited to
those specifically set forth in this Agreement.  Neither the duties nor
obligations of any party, nor the rights of any party, shall be expanded beyond
the terms of this Agreement on the basis of any legal or equitable principle or
on any other basis whatsoever.  Neither any equitable or legal principle nor any
implied obligation of good faith or fair dealing nor any other matter requires
any party to incur, suffer or perform any act, condition or obligation contrary
to the terms of this Agreement, whether or not existing and whether foreseeable
or unforeseeable.  Each of the parties acknowledges that it would be unfair, and
that it does not intend, to increase any of the obligations of any other party
under this Agreement on the basis of any implied obligation or otherwise.
 
14.10 Remedies Cumulative.  Except as set forth in Section 11.6, no remedy made
available by any of the provisions of this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity.
 
14.11 Governing Law; Waiver of Jury Trial.
 
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF WASHINGTON, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF WASHINGTON OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF WASHINGTON TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL
LAWS OF THE STATE OF WASHINGTON SHALL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF
 
 
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LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION
WOULD ORDINARILY APPLY.
 
(b) ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF, RELATING TO OR BASED ON THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE HEARD
AND/OR TRIED IN WASHINGTON, AND EACH PARTY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE FEDERAL AND STATE COURTS LOCATED IN WASHINGTON.  SERVICE OF PROCESS,
SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO A PARTY'S ADDRESS AS SET FORTH
HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER
PROCEEDING BROUGHT IN ANY SUCH COURT.  THE PARTIES IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION
OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
 
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE OUT
OF, RELATE TO OR BE BASED UPON THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES.  ACCORDINGLY, EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT SUCH PARTY MAY LEGALLY AND
EFFECTIVELY DO SO, TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF, RELATING TO OR BASED UPON THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.
 
(d) EACH PARTY HERETO ACKNOWLEDGES THAT (i) NO REPRESENTATIVE OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO
ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (ii) SUCH PARTY HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN SECTION
14.11(c) AND THIS SECTION 14.11(d).
 
14.12 Fulfillment of Obligations.  Any obligation of any party to this Agreement
to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
 
14.13 Interpretation.  As used in this Agreement:  (a) the words "include,"
"includes" and  "including" shall be deemed to be followed by the words "without
limitation"; (b) the word "or" is not exclusive; (c) the words "will" and
"shall" have the same meaning; and (d) the words "herein," "hereof," "hereby,"
"hereto" and "hereunder" refer to this Agreement as a whole.  All terms and
words used in this Agreement, regardless of the number or gender in which they
are used, shall be deemed to include any other number and any other gender as
the context may require. Each defined term used in this Agreement shall have a
comparable meaning when used in its plural or singular form. Unless the context
otherwise requires, references herein: (i) to a "party" or the "parties" shall
mean, as applicable, a party or the parties to this Agreement; (ii) to Articles,
Sections, Exhibits and Schedules mean the Articles and Sections of, and the
Exhibits and Schedules attached to, this Agreement; (iii) to an agreement,
instrument or document means such agreement, instrument or document as amended,
supplemented and modified from time to time to the extent permitted by the
provisions thereof and not prohibited by this Agreement; (iv) to a statute means
such statute as amended from time to time and includes any successor legislation
thereto;
 
 
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and (v) to dollars (or the symbol "$") shall be deemed to refer to United States
dollars. The headings and captions used in this Agreement, in any Schedule,
Exhibit or index hereto, or in the table of contents are for convenience of
reference only and do not constitute a part of this Agreement and shall not be
deemed to limit, characterize or in any way affect any provision of this
Agreement or any Schedule or Exhibit hereto, and all provisions of this
Agreement and the Schedules and Exhibits hereto shall be enforced and construed
as if no caption or heading had been used herein or therein.  The phrase "the
consummation of the transactions contemplated by this Agreement" or such similar
phrases includes the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby.  Any
capitalized terms used in any Schedule or Exhibit attached hereto and not
otherwise defined therein shall have the meanings set forth in this Agreement
(or, in the absence of any ascribed meaning, the meaning customarily ascribed to
any such term in the Company's industry or in general commercial usage).  The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein.  The parties have participated jointly in the negotiation and
drafting of this Agreement.  If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
 
 
[Signatures on following page]
 
 
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IN WITNESS WHEREOF, the parties have each executed and delivered this Stock
Purchase Agreement as of the day and year set forth in the preamble to this
Agreement.
 
 

  PURCHASER:          CHURCH & DWIGHT CO., INC.          By:    /s/ James R.
Craigie    Name:   James R. Craigie    Title:    Chairman and Chief Executive
Officer

 
                                                        
 

  COMPANY:       AVID HEALTH, INC.          By:   /s/ Richard Falconer    Name: 
Richard Falconer    Title:   Chief Financial Officer

 
   
 

  SELLERS:       KEEN MANAGED RESERVE TRUST UA RESTATED 12/14/11          By:  
/s/ David M. Kaye     David M. Kaye, Trustee               EQUITY RESERVE, LLC  
       By: /s/ David M. Kaye     David M. Kaye, Manager               CAPITAL
RESERVE, LLC          By: /s/ David M. Kaye      David M. Kaye, Manager        
      /s/ Kurt W. Ruttum    Kurt W. Ruttum

 
 
 
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