EXHIBIT 10.1

 

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

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TABLE OF CONTENTS
 
Page      
 
SECTION 1.
Definitions.
2
     
SECTION 2.
Purchase and Sale of the Target Shares and the Acquired Assets.
14
       
(a)  Basic Transaction
14
 
(b)  Preliminary Purchase Price
15
 
(c)  Pre-Closing Transfers
16
 
(d)  Restricted Assets
16
 
(e)  The Closing
16
 
(f)  Deliveries at Closing
17
 
(g)  Post-Closing Purchase Price Adjustment
17
     
SECTION 3.
Representations and Warranties Concerning Transaction.
22
       
(a)  Parent’s Representations and Warranties
22
 
(b)  Buyer’s Representations and Warranties
25
     
SECTION 4.
Representations and Warranties Concerning the Business and the Target Companies
and Target Subsidiaries
28
       
(a)  Organization, Qualification, and Corporate Power
28
 
(b)  Capitalization
28
 
(c)  Non-contravention
29
 
(d)  Title to Tangible Assets
30
 
(e)  Sufficiency of Assets
30
 
(f)  Financial Statements; No Undisclosed Liabilities
30
 
(g)  Events Subsequent to September 30, 2007
31
 
(h)  Legal Compliance
33
 
(i)  Tax Matters
33
 
(j)  Real Property
34
 
(k)  Intellectual Property
35
 
(l)  Contracts
36
 
(m)  Litigation
37
 
(n)  Employee Benefits
38
 
(o)  Environmental Matters
39
 
(p)  Labor Matters
40
 
(q)  Insurance
40
 
(r)  Product Liability
41
 
(s)  Regulatory Matters
41
 
(t)  Certain Business Relationships with the Asset Sellers, the Target Companies
and the Target Subsidiaries
42
 
(u)  Customers and Suppliers
42

 
 

 
 

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Page      
 

     
SECTION 5.
Pre-Closing Covenants
42
       
(a)  General
42
 
(b)  Notices and Consents
43
 
(c)  Financing
43
 
(d)  Operation of Business
46
 
(e)  Full Access; Pre-Closing Confidentiality
49
 
(f)  Release of Guarantees and Letters of Credit
49
 
(g)  Repayment of Indebtedness; Intercompany Accounts
50
 
(h)  Alpharma Credit Agreement Lien
51
 
(i)  Capitalization of Intercompany Loan
51
 
(j)  Transition Services Agreement
51
     
SECTION 6.
Post-Closing Covenants
51
       
(a)  General
51
 
(b)  Closing Date
52
 
(c)  Section 338 (g) Elections
52
 
(d)  Post-Closing Cooperation
52
 
(e)  Non-Competition; Non-Solicitation
52
 
(f)  Use of Name and Trademarks
54
 
(g)  Employee Benefits Matters
55
 
(h)  Insurance
58
 
(i)  Confidentiality
59
 
(j)  Transition Services Agreement
59
 
(k)  Closure of Beijing Representative Office
59
 
(l)  Patent Licenses
59
     
SECTION 7.
Conditions to Obligation to Close.
60
       
(a)  Conditions to Buyer’s Obligation
60
 
(b)  Conditions to Sellers’ Obligation
61
 
(c)  Frustration of Closing Conditions
62
     
SECTION 8.
Remedies for Breaches of This Agreement
62
       
(a)  Survival
62
 
(b)  Indemnification by Parent
62
 
(c)  Indemnification by Buyer
62
 
(d)  Procedures
63
 
(e)  Limitations on Indemnification
64
 
(f)  Calculation of Losses
65
 
(g)  Exclusive Remedy; No Consequential Damages; Mitigation
65
 
(h)  Tax Treatment of Indemnity Payments
66
 
(i)  No Duplicative Payments
66
     
SECTION 9.
Tax Matters.
66
     

 
 
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(a)  Tax Sharing Agreements
66
 
(b)  Tax Indemnification by Parent
66
 
(c)  Tax Indemnification by Buyer
68
 
(d)  Straddle Periods
68
 
(e)  Tax Returns; Tax Payments
68
 
(f)  Tax Proceedings
69
 
(g)  Tax Refunds and Credits
72
 
(h)  Cooperation
72
 
(i)  VAT
73
 
(j)  Coordination; Exclusive Tax Remedy
74
 
(k)  Transfer Taxes
74
 
(l)  Allocation of Purchase Price
74
 
(m)  Certain Danish Income Tax Matters
75
     
SECTION 10.
Termination.
75
       
(a)  Termination of Agreement
75
 
(b)  Effect of Termination; Termination Fee
76
     
SECTION 11.
Miscellaneous.
77
       
(a)  Press Releases and Public Announcements
77
 
(b)  No Third Party Beneficiaries
77
 
(c)  Entire Agreement
78
 
(d)  Succession and Assignment
78
 
(e)  Counterparts
78
 
(f)  Headings
78
 
(g)  Notices
78
 
(h)  Governing Law
80
 
(i)  Consent to Jurisdiction
80
 
(j)  Waiver of Jury Trial
80
 
(k)  Enforcement
81
 
(l)  Amendments and Waivers
81
 
(m)  Severability
81
 
(n)  Expenses
81
 
(o)  Construction
81
 
(p)  Incorporation of Exhibits, Annexes, and Schedules
82

 

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EXHIBITS
 
Exhibit A — Form of Bill of Sale
Exhibit B — Form of Transition Services Agreement
 

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STOCK AND ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of
February 6, 2008, by and among Alfanor 7152 AS (under change of name to
Otnorbidco AS), a private limited liability company organized under the laws of
Norway with Organization Number 992 106 034 (“Otnorbidco”), Otdelholdco Inc., a
Delaware corporation (“Otdelholdco”), Otdenholdco ApS, a private limited company
organized under the laws of Denmark with Registration Number 31 08 95 06
(“Otdenholdco”, collectively, with Otnorbidco and Otdelholdco, the “Buyer”),
Alpharma Inc., a Delaware corporation (“Parent”), Alpharma (Luxembourg) S.àr.l.,
a private limited liability company organized under the laws of Luxembourg,
Alpharma Bermuda G.P., an exempt general partnership organized under the laws of
Bermuda (with Parent and Alpharma (Luxembourg) S.àr.l. (acting through its Swiss
finance branch), the “Asset Sellers”), and Alpharma International (Luxembourg)
S.àr.l., a private limited liability company organized under the laws of
Luxembourg (the “Share Seller”).  Buyer, the Asset Sellers and the Share Seller
are referred to collectively herein as the “Parties”.
 
Parent indirectly owns, and the Share Seller directly owns, all of the
outstanding capital stock of the entities listed as Target Companies in Section
4(b) of the Disclosure Schedule (the “Target Companies”), except as disclosed in
Section 4(b) of the Disclosure Schedule.  Parent indirectly owns, and the Target
Companies directly or indirectly own, all of the outstanding capital stock or
equity interests (as the case may be) of the entities listed as Target
Subsidiaries in Section 4(b) of the Disclosure Schedule (the “Target
Subsidiaries”), except as disclosed in Section 4(b) of the Disclosure Schedule.
 
This Agreement contemplates a transaction (the “Transaction”) in which
(i) Otnorbidco will purchase from the Share Seller (and any other entity which
Parent may designate as an additional Share Seller as a result of the
Pre-Closing Restructuring), and the Share Seller (and any other entity which
Parent may designate as an additional Share Seller as a result of the
Pre-Closing Restructuring) will sell to Otnorbidco, all of the outstanding
capital stock of the Target Companies in return for cash and (ii) Otdelholdco
will purchase from Asset Sellers, and Asset Sellers will sell to Otdelholdco,
certain assets of Asset Sellers in return for cash and the assumption of certain
liabilities.
 
3i Europartners Va LP, 3i Europartners Vb LP, 3i Pan European Buyouts 2006-08A
LP, 3i Pan European Buyouts 2006-08B LP and 3i Pan European Buyouts 2006-08C LP
(collectively, the “Sponsor Funds”) and Buyer have executed and delivered to the
Sellers, in connection with the execution and delivery of this Agreement, a
commitment letter dated as of the date of this Agreement pursuant to which the
Sponsor Funds have issued equity commitments to Buyer, the proceeds of which
will be used to pay a portion of the Purchase Price and the fees and expenses
relating to the transactions contemplated by this Agreement (such commitment
letter is referred to as the “Equity Financing Commitments”).
 

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Certain financial institutions have executed and delivered to Buyer, and Buyer
has delivered to Parent in connection with the execution and delivery of this
Agreement, a commitment letter dated January 23, 2008, as amended by the letter
dated February 6, 2008 (the “Commitment Letter”) (which includes an executed and
effective Interim Loan Agreement, as amended by the letter dated February 6,
2008 (the “Interim Loan Agreement”)), pursuant to which such financial
institutions have issued lending commitments to Buyer, the proceeds of which
will be used to pay a portion of the Purchase Price and the fees and expenses
relating to the transactions contemplated by this Agreement (the Commitment
Letter, together with the Interim Loan Agreement and the condition satisfaction
letter dated February 6, 2008, is referred to as the “Debt Financing
Commitments”; the Debt Financing Commitments and the Equity Financing
Commitments are referred to as the “Financing Commitments”).
 
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows.
 
SECTION 1.  Definitions.
 
“Accounting Firm” has the meaning set forth in Section 2(g)(iii) below.
 
“Acquired Assets” has the meaning set forth in Section 1(A) of the Disclosure
Schedule.
 
“Affiliate” means, with respect to any Person, another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person.
 
“Agreement” has the meaning set forth in the preface above.
 
“AH Competitive Activities” has the meaning set forth in Section 6(e)(ii) below.
 
“Alpharma Credit Agreement Lien” means any security interest, pledge or other
Lien in existence immediately prior to the Closing under the Credit Agreement as
amended and restated as of March 10, 2006, by and among Parent and certain of
its Subsidiaries and Bank of America, N.A., as Administrative Agent, and the
lenders party thereto from time to time, as amended, supplemented or otherwise
modified from time to time, with respect to the Acquired Assets, Target Shares,
shares of the Target Subsidiaries or any assets of the Target Companies or the
Target Subsidiaries.
 
“Alpharma Global Insurance Program” means the portfolio of property, casualty
and executive liability insurance policies of Parent and its Subsidiaries with
respect to the operations of Parent and its Subsidiaries which are negotiated
and administered by Parent’s corporate risk management department (including the
Global Liability, Global Property, Global Transit, Surety, Director’s and
Officer’s Liability and other executive management liabilities policies, and the
U.S. Casualty program).
 
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“Allocation” has the meaning set forth in Section 9(l)(i) below.
 
“Allocation Schedule” has the meaning set forth in Section 9(l)(ii) below.
 
“Alternative Structuring” has the meaning set forth in Section 5(a) of the
Disclosure Schedule.
 
“Ancillary Agreements” means the other agreements and instruments (including any
foreign transfer agreements which shall conform to the provisions hereof except
as may be necessary to comply with applicable Law) executed and delivered in
connection with the transactions contemplated by this Agreement.
 
“API Competitive Activities” has the meaning set forth in Section 6(e)(i) below.
 
“Asset Sellers” has the meaning set forth in the preface above.
 
“Assumed Employees” shall have the meaning set forth in Section 6(g)(ii) below.
 
“Assumed Intercompany Receivables” means the receivables described in
Section 1(B) of the Disclosure Schedule that are owed by the Target Companies or
Target Subsidiaries to the Asset Sellers.
 
“Assumed Liabilities” has the meaning set forth in Section 1(C) of the
Disclosure Schedule.
 
“BRO” has the meaning set forth in Section 6(k) below.
 
“Bonus Obligations” means any cash bonus payment accrued in respect of Employees
of the Business under the short-term incentive plan of Parent for calendar year
2007.
 
“Business” means (A) the business of Parent and certain of its Subsidiaries as
of the Closing Date that develops, manufactures and markets active
pharmaceutical ingredients which are sold to third parties that formulate and
manufacture finished dose human pharmaceutical products comprised of such active
pharmaceutical ingredients and (B) the business of the Target Companies and the
Target Subsidiaries as of the Closing Date that develops, manufactures and
markets the finished pharmaceuticals set forth on Section 1(D) of the Disclosure
Schedule.
 
“Business Contracts” has the meaning set forth in Section 1(A) of the Disclosure
Schedule.
 
“Buyer” has the meaning set forth in the preface above.
 
“Buyer Entities” means, as of and from the Closing Date, Buyer and its
Affiliates and the Target Companies and Target Subsidiaries.
 
 
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“Buyer Indemnitee” has the meaning set forth in Section 8(b) below.
 
“Chinese Sub” means Alpharma (Taizhou) Pharmaceuticals Co., Ltd.
 
“Closing” has the meaning set forth in Section 2(e) below.
 
“Closing Date” has the meaning set forth in Section 2(e) below.
 
“Closing Net Cash Balance” has the meaning set forth in Section 2(g)(i) below.
 
“Closing Working Capital” has the meaning set forth in Section 2(g)(i) below.
 
“Code” means the United States Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder by the United States Department of
Treasury from time to time.
 
“Collective Bargaining Agreements” has the meaning set forth in Section 4(p)(i)
below.
 
“Commitment Letter” has the meaning set forth in the preface above.
 
“Confidential Business Information” has the meaning set forth in Section 6(i)
below.
 
“Confidentiality Agreement” has the meaning set forth in Section 5(e) below.
 
“Controlling Party” has the meaning set forth in Section 9(f)(iii) below.
 
“Debt Financing” means the debt financing provided to Buyer or its designees
pursuant to the Debt Financing Commitments (or any replacement commitments
obtained by Buyer in compliance with this Agreement).
 
“Debt Financing Commitments” has the meaning set forth in the preface above.
 
“Disclosure Schedule” has the meaning set forth in Section 3(a) below.
 
“Early Retirement Obligations” means the payment obligations in respect of the
letter agreements issued to Employees of the Business and listed in
Section 6(g)(xi)(D) of the Disclosure Schedule.
 
“Employee Benefit Plan” means any “employee benefit plan” (as such term is
defined in ERISA Section 3(3)) and any other plan, program, arrangement,
practice or agreement providing for compensation, severance, termination pay,
deferred compensation, retirement, pension, bonus awards, performance awards,
retention or other change in control awards, incentive compensation, stock or
stock-related awards, fringe
 
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benefits, social insurance or other material employee benefits of any kind,
whether written or unwritten or otherwise, funded or unfunded.
 
“Employees of the Business” means (i) all Persons employed on the Closing Date
by the Target Companies and the Target Subsidiaries and (ii) those employees of
Parent and its Subsidiaries who on the Closing Date work in the operation of the
Business, including in all cases, any employees who as of the Closing Date are
on approved leave of absence (including medical leave and short-term or
long-term disability) or vacation; provided that such Person returns to work
within 180 days after the Closing or is otherwise entitled to reinstatement
under any applicable Law upon presenting themselves for duty to the Business.
 
“Environmental Claim” mean any administrative, regulatory or judicial action,
suit, order, demand, claim, proceeding or written notice of noncompliance or
violation by or from any Person alleging liability arising out of, based on or
resulting from (a) any past or present release or threatened release of, or
exposure to, any Hazardous Substances at any location or (b) the failure to
comply with any Environmental Law.
 
“Environmental Laws” means any applicable Law or Judgment issued, promulgated or
entered into, by or with any Governmental Entity relating to pollution, the
protection of the environment (including ambient air, surface water,
groundwater, soils, land surface or subsurface strata) or preservation or
reclamation of natural resources, including Laws relating to the use,
generation, management, handling, transport, treatment, disposal, storage,
release or threatened release of hazardous or toxic materials or wastes.
 
“Environmental Permits” has the meaning set forth in Section 4(o)(ii) below.
 
“Equity Financing” means the equity financing to be provided to Buyer or its
designees pursuant to the Equity Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this Agreement).
 
“Equity Financing Commitments” has the meaning set forth in the preface above.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“Estimated Closing Net Cash Balance” shall have the meaning set forth in
Section 2(b)(ii).
 
“Estimated Closing Working Capital” shall have the meaning set forth in
Section 2(b)(iii).
 
“Exception Products” has the meaning set forth in Section 6(e)(ii) below.
 
 
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\
“Exception Product Sales Cap” has the meaning set forth in Section 6(e)(ii)
below.
 
“Excluded Assets” has the meaning set forth in Section 1(E) of the Disclosure
Schedule.
 
“Excluded Liabilities” has the meaning set forth in Section 1(F) of the
Disclosure Schedule.
 
“Extended Outside Date” has the meaning set forth in Section 10(a)(i)(D).
 
“FDA” means the United States Food and Drug Administration, and any successor
agency or entity thereto that may be established hereafter.
 
“FDA Act” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301,
et seq., as amended.
 
“Financial Statements” has the meaning set forth in Section 4(f)(i) below.
 
“Financing” means the Debt Financing and the Equity Financing.
 
“Financing Commitments” has the meaning set forth in the preface above.
 
“Foreign Merger Control Laws” has the meaning set forth in Section 3(a)(iv)
below.
 
“FX Amount” has the meaning set forth in Section 2(g)(ii) below.
 
“FX Contracts” has the meaning set forth in Section 2(g)(ii) below.
 
“FX Notice of Disagreement” has the meaning set forth in Section 2(g)(iii)
below.
 
“FX Statement” has the meaning set forth in Section 2(g)(ii) below.
 
“GAAP” means generally accepted accounting principles in the United States.
 
“Governmental Entity” means any domestic or foreign government, court,
administrative or regulatory body or agency or other governmental authority.
 
“Hart-Scott-Rodino Act” means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
 
“Hazardous Substance” means any pollutant, contaminant, chemical, petroleum or
any fraction thereof, asbestos or asbestos-containing-material, polychlorinated
biphenyls, or toxic, infectious, biohazardous or otherwise hazardous substance,
material or waste, including all substances, materials or wastes (whether in the
form of solid, liquid, gas or vapor) defined as a “hazardous substance”, a
“toxic
 
 
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substance” or with words of similar import by, or regulated or giving rise to
liability under, any Environmental Law.
 
“Income Tax” means any U.S. federal, state or local, or non-U.S. Tax measured by
(or imposed on) net income and any interest, penalty, fine, charge, or addition
thereto, whether disputed or not.
 
“Income Tax Return” means any Tax Return relating to Income Taxes.
 
“Indebtedness” means, of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money (other than accounts payable for
goods and services incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument, (c) all
liabilities in respect of capital and finance leases and (d) all obligations of
such Person in respect of letters of credit and acceptances for instruments
serving a similar function) issued or created for the account of such Person.
 
“Indemnified Party” has the meaning set forth in Section 8(d)(i)(A) below.
 
“Indemnifying Party” has the meaning set forth in Section 8(d)(i)(A) below.
 
“Initial Outside Date” has the meaning set forth in Section 10(a)(i)(D).
 
“Insurance” means all insurance benefits, including rights and proceeds,
resulting from any liabilities of any of the Asset Sellers or any of the Target
Companies or Target Subsidiaries arising out of any personal injury and/or death
or damage to property relating to or arising in connection with Products
developed, manufactured, marketed, distributed, sold or otherwise provided by,
or on behalf of, any of the Asset Sellers, the Target Companies or the Target
Subsidiaries that Seller has Knowledge of prior to the Closing.
 
“Insurance Policies” has the meaning set forth in Section 4(q) below.
 
“Intellectual Property” has the meaning set forth in Section 4(k)(iii) below.
 
“Intercompany Assumed Agreement” shall have the meaning set forth in
Section 4(t) below.
 
“Intercompany Payables” means obligations owed by an Asset Seller (primarily
relating to the Business) or a Target Company or Target Subsidiary to Parent or
any of its Affiliates, other than an Assumed Intercompany Receivable.
 
“Intercompany Receivables” means obligations owed to an Asset Seller (primarily
relating to the Business) or a Target Company or Target Subsidiary by Parent or
any of its Affiliates, other than an Assumed Intercompany Receivable.
 
 
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“Interim Loan Agreement” has the meaning set forth in the preface above.
 
“Inventory” means all finished goods, work in process and raw materials of the
Business.
 
“Judgment” means any judgment, order, decision, writ, injunction, legally
binding agreement with a Governmental Entity, stipulation, decree or similar
legal restraint.
 
“Knowledge” means, with respect to Parent, the actual knowledge after reasonable
inquiry of Donald Buzinkai, Carl-Aake Carlsson, Jeffrey Campbell, Mikkel
Lyager-Olsen, Thomas J. Spellman III, Peter Watts, Frode Johansen, Stig Jarle
Pettersen, Maria Gobbi, Hans Nielsen, Steen Rasmussen and Torben Jung Laursen.
 
“Law” means any statute, law, ordinance, rule, regulation, order or other
binding directive issued by any Governmental Entity.
 
“Leased Real Property” means all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures,
or other interest in real property that is primarily used in the Business.
 
“Leases” means all leases, subleases, licenses and occupancy agreements,
including all amendments, extensions, renewals, guaranties, and other agreements
with respect thereto, pursuant to which an Asset Seller (to the extent primarily
used in the Business) or any of the Target Companies or any of the Target
Subsidiaries holds any material Leased Real Property.
 
“Lien” means any mortgage, pledge, lien, security interest, easement, adverse
claim, right of first refusal, or similar encumbrance, restriction or
limitation, other than (i) liens for Taxes not yet due and payable or for Taxes
that the taxpayer is contesting through appropriate proceedings and
(ii) restrictions under the Securities Act and state securities Laws regarding
the transfer of securities.
 
“Losses” means all loss, liability, claim, damage or expense, including
reasonable legal fees, costs and expenses, whether or not relating to Third
Party Claims, incurred in the investigation or defense of any of the same.
 
“Manufacturing Facilities” means the facilities of the Target Companies or the
Target Subsidiaries located in Copenhagen, Denmark; Oslo, Norway; Budapest,
Hungary; and Taizhou, People’s Republic of China.
 
“Marketing Material” has the meaning set forth in Section 6(f) below.
 
“Material Adverse Effect” or “Material Adverse Change” means any effect or
change that is or would reasonably be expected to be materially adverse to the
business, assets, results of operations or financial condition of the Business,
taken as a whole; provided that none of the following shall be deemed to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Material
 
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Adverse Effect or Material Adverse Change:  any adverse change or effect arising
from or relating to (1) the economy in general, (2) the economic, business,
financial or regulatory environment generally affecting the industry in which
the Business operates, (3) an act of terrorism or an outbreak or escalation of
hostilities or war (whether declared or not declared) or any natural disasters
or any national or international calamity or crisis, except to the extent such
effect involves the properties or assets of the Business, (4) changes in
applicable Law or GAAP or the enforcement thereof after the date of this
Agreement, (5) the failure of the Business to meet projections or forecasts, in
and of itself (for the avoidance of doubt, any underlying cause for any such
failure shall not be excluded by this clause (5)), (6) the announcement or
pendency of the Transaction or this Agreement or the performance of and
compliance with the terms of this Agreement, including any loss of employees,
any cancellation of or delay in customer orders or any disruption in supplier,
distributor, partner or similar relationships, (7) any labor strikes, (8)
currency fluctuations or (9) any change or fluctuations in Parent’s share price
in and of itself (for the avoidance of doubt, any underlying cause for any such
change or fluctuation arising from or relating to the business, assets, results
of operations or financial condition of the Business shall not be excluded from
this clause (9)); except in the case of clauses (1) and (2) to the extent that
such effect has a materially disproportionate impact on the Business relative to
other participants in the industry in which the Business operates.
 
“Material Contract” has the meaning set forth in Section 4(l) below.
 
“Material Intellectual Property” has the meaning set forth in Section 4(k)(i)
below.
 
“Material Technology” has the meaning set forth in Section 4(k)(ii) below.
 
“Maximum Working Capital Amount” has the meaning set forth in Section 2(b)(iii)
below.
 
“Minimum Working Capital Amount” has the meaning set forth in Section 2(b)(iv)
below.
 
“Negative Initial Adjustment” has the meaning set forth in Section 2(b)(iv)
below.
 
“Net Cash Balance” has the meaning set forth in Section 2(g)(v) below.
 
“Notice of Disagreement” has the meaning set forth in Section 2(g)(iii) below.
 
“Noncontrolling Party” has the meaning set forth in Section 9(f)(iv) below.
 
“Non-Income Taxes” means Taxes other than Income Taxes.
 
“Otdelholdco” has the meaning set forth in the preface above.
 
 
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“Otdenholdco” has the meaning set forth in the preface above.
 
“Otnorbidco” has the meaning set forth in the preface above.
 
“Owned Real Property” means all land, together with all buildings, structures,
improvements, and fixtures located thereon, and all easements and other rights
and interests appurtenant thereto, owned by an Asset Seller or any of the Target
Companies or the Target Subsidiaries and primarily used in the Business, other
than any Retained Real Property.
 
“Parent” has the meaning set forth in the preface above.
 
“Party” has the meaning set forth in the preface above.
 
“Pension Obligations” means the unfunded portion of the pension obligations of
the Target Companies and Target Subsidiaries calculated on a projected benefit
obligation basis; provided, that for the purposes of determining the amount of
such liabilities as of any date, the methods and assumptions used in calculating
such amount shall be the same methods and assumptions employed by Parent in
preparing Parent’s audited financial statements (including the footnotes
thereto) as of December 31, 2007.
 
“Permitted Liens” means (i) such Liens as are set forth in Section 1(G) of the
Disclosure Schedule (all of which shall be discharged at or prior to Closing),
(ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising
or incurred in the ordinary course of business, Liens arising under original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business and Liens for Taxes,
(iii) other imperfections of title or encumbrances, if any, that, individually
or in the aggregate, do not impair, and are not reasonably likely to impair, the
continued use and operation of the assets to which they relate in the conduct of
the Business as currently conducted, (iv) leases, subleases and similar
agreements set forth on Section 4(j) of the Disclosure Schedule or  that may be
entered into consistent with Section 5(d) of the Disclosure Schedule,
(v) easements, covenants, rights-of-way and other similar restrictions of record
and (vi) (A) zoning, building and other similar restrictions and (B) Liens that
have been placed by any developer, landlord or other third party on property
over which Parent or one of its Subsidiaries has easement rights or on any
Leased Real Property and subordination or similar agreements relating thereto.
 
“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity or a Governmental Entity
(or any department, agency, or political subdivision thereof).
 
“Positive Initial Adjustment” has the meaning set forth in Section 2(b)(iii)
below.
 
 
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“Post-Closing Tax Period” means all Tax periods beginning on or after the
Closing Date and the portion of any Straddle Period beginning on and including
such Closing Date.
 
“Pre-Closing Restructuring” has the meaning set forth in Section 5(a) of the
Disclosure Schedule.
 
“Pre-Closing Restructuring Denial” has the meaning set forth in Section 5(a) of
the Disclosure Schedule.
 
“Pre-Closing Tax Period” means all Tax periods ending before the Closing Date
and the portion of any Straddle Period ending before and excluding such Closing
Date.
 
“Preliminary Purchase Price” has the meaning set forth in Section 2(b) below.
 
“Products” means the products of the Business for which a filing or submission
has been made to a Regulatory Authority or an approval or certification has been
received from a Regulatory Authority.
 
“Property Taxes” has the meaning set forth in Section 9(d)(i) below.
 
“Proposed Allocation” has the meaning set forth in Section 9(l)(ii) below.
 
“Purchase Price” has the meaning set forth in Section 2(g)(iv) below.
 
“Quotaholders Agreement” has the meaning set forth in Section 5(a) of the
Disclosure Schedule.
 
“Real Property” means, collectively, the Leased Real Property and the Owned Real
Property.
 
“Records” has the meaning set forth in Section 1(A) of the Disclosure Schedule.
 
“Regulatory Authority” has the meaning set forth in Section 4(s)(i) below.
 
“Required Financial Information” means financial and other information regarding
the Business of the type and in the form customarily included in confidential
information memoranda used to syndicate bank credit facilities similar to the
Debt Financing and customary “know your customer” and similar requirements;
provided, however, that Required Financial Information shall not include any
audited financial information.
 
“Restricted Assets” shall have the meaning set forth in Section 2(d).
 
 
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“Retained Real Property” means the following facilities used in the Business,
which are owned by Parent or its Affiliates and shall not be transferred to
Buyer:  Parent’s Warehouse and Distribution Facility located at 400 State
Street, Chicago Heights, Illinois 60411, in which Parent’s animal health
division performs certain services for the Business.
 
“Retention Arrangements” means those letter agreements issued to Employees of
the Business and listed in Section 6(g)(xi)(A) of the Disclosure Schedule.
 
“Retention Threshold” has the meaning set forth in Section 6(g)(xi)(A) of the
Disclosure Schedule.
 
“SEC” has the meaning set forth in Section 3(a) below.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Seller Employee Benefit Plan” means each Employee Benefit Plan that (a) any of
the Asset Sellers or the Target Companies or the Target Subsidiaries maintains
or which any of the Asset Sellers or the Target Companies or the Target
Subsidiaries participates in or to which they contribute and (b) covers any
Employees of the Business or their beneficiaries.
 
“Seller Indemnitee” has the meaning set forth in Section 8(c) below.
 
“Seller Name” has the meaning set forth in Section 6(f) below.
 
“Sellers” means the Asset Sellers and the Share Seller, collectively.
 
“September Financial Statements” has the meaning set forth in Section 4(f)(i)
below.
 
“Severance Obligations” means the unpaid portion of the liabilities of the
Target Companies and Target Subsidiaries under the contracts listed in Section
1(H) of the Disclosure Schedule.
 
“Share Seller” has the meaning set forth in the preface above.
 
“Sponsor Funds” has the meaning set forth in the preface above.
 
“Statement” has the meaning set forth in Section 2(g)(i) below.
 
“Straddle Period” has the meaning set forth in Section 9(d) below.
 
“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association, or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without
 
 
 
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regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof and for this purpose,
a Person or Persons own a majority ownership interest in such a business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of such business entity’s gains or losses or shall be or control any
managing director or general partner of such business entity (other than a
corporation).  The term “Subsidiary” shall include all Subsidiaries of such
Subsidiary.
 
“Target Companies” has the meaning set forth in the preface above.
 
“Target Company Benefit Plan” shall have the meaning set forth in
Section 4(n)(i) below.
 
“Target Company Severance Plans” shall have the meaning set forth in
Section 6(g)(v) below.
 
“Target Shares” means the shares of capital stock of the Target Companies.
 
“Target Subsidiaries” has the meaning set forth in the preface above.
 
“Tax” or “Taxes” means any U.S. federal, state or local, or non-U.S. tax,
including taxes with respect to income, profits, gains, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code Section 59A), capital duty,
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, duties resulting from liability assessments by a Taxing Authority or
other tax, including any interest, penalty, or addition thereto.
 
“Tax Indemnified Party” has the meaning set forth in Section 9(f)(i) below.
 
“Tax Indemnifying Party” has the meaning set forth in Section 9(f)(i) below.
 
“Tax Proceeding” has the meaning set forth in Section 9(f)(i) below.
 
“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
 
 
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“Taxing Authority” means any Governmental Entity exercising any authority to
impose, regulate or administer the imposition of Taxes.
 
“Technology” has the meaning set forth in Section 4(k)(iv) below.
 
“Termination Fee” has the meaning set forth in Section 1(I) of the Disclosure
Schedule.
 
“Third Party Claim” has the meaning set forth in Section 8(d)(i)(A) below.
 
“TOGC” means the transfer by any Asset Seller of assets within Article 5(8) of
European Union Directive 77/388 which is as a consequence of the relevant
national Law not subject to VAT.
 
“Transaction” has the meaning set forth in the preface above.
 
“Transfer Taxes” has the meaning set forth in Section 9(k) below, and for the
avoidance of doubt does not include VAT.
 
“Transferred Employees” means those Employees of the Business who, as of the
Closing Date, remain or become employees of the Buyer Entities whether by
operation of Law or by acceptance of the Buyer Entities’ offer of employment
pursuant to Section 6(g).
 
“Transition Services Agreement” shall have the meaning set forth in
Section 5(j).
 
“United States” or “U.S.” means the United States of America and its territories
and possessions.
 
“VAT” means value added Tax applied by any jurisdiction pursuant to European
Union Directives 67/227 and 77/388, as amended or any similar value-added Tax
imposed by a jurisdiction outside the European Union.
 
“Working Capital” has the meaning set forth in Section 2(g)(v) below.
 
“Working Capital Principles” has the meaning set forth in Section 2(g)(v) below.
 
“Working Capital Schedule” has the meaning set forth in Section 2(g)(v) below.
 
SECTION 2.  Purchase and Sale of the Target Shares and the Acquired Assets.
 
(a)  Basic Transaction.  On and subject to the terms and conditions of this
Agreement, for the consideration specified below in Section 2(b), (i) Otnorbidco
agrees to purchase from the Share Seller (and any other entity which Parent may
designate as an
 
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additional Share Seller as a result of the Pre-Closing Restructuring), and the
Share Seller agrees to sell to Otnorbidco (and Parent agrees to cause any other
entity that is designated by Parent as an additional Share Seller as a result of
the Pre-Closing Restructuring to sell), all of the Target Shares free and clear
of all Liens, (ii) Otnorbidco agrees to purchase from the Asset Sellers, and the
Asset Sellers agree to sell to Otnorbidco, the Assumed Intercompany Receivables
free and clear of all Liens (other than Permitted Liens), (iii) Otdelholdco
agrees to purchase from the Asset Sellers, and the Asset Sellers agree to sell
to Otdelholdco, the Acquired Assets (other than the Acquired Intercompany
Receivables) free and clear of all Liens (other than Permitted Liens), and
(iv) Buyer agrees to assume and become responsible for all of the Assumed
Liabilities at the Closing, without recourse to Parent or its Subsidiaries
(other than the Target Companies or Target Subsidiaries), except as otherwise
expressly set forth in this Agreement, and thereafter to pay, perform and
discharge when due, the Assumed Liabilities.
 
(b)  Preliminary Purchase Price.  Buyer agrees to pay to the Asset Sellers and
the Share Seller (and any other entity which Parent may designate as an
additional Share Seller as a result of the Pre-Closing Restructuring), at the
Closing, by delivery of cash payable by wire transfer or delivery of other
immediately available funds, an amount equal to:
 
(i)  $395,000,000,
 
(ii)  plus, if the estimate of the Net Cash Balance as of the close of business
on the last business day prior to the Closing Date prepared by Parent and
delivered to Buyer at least three business days prior to the Closing Date (the
“Estimated Closing Net Cash Balance”) is positive, an amount equal to the
Estimated Closing Net Cash Balance, or minus, if the Estimated Closing Net Cash
Balance is negative, an amount equal to the Estimated Closing Net Cash Balance,
 
(iii)  plus, if the estimate of the Working Capital as of the close of business
on the last business day prior to the Closing Date prepared by Parent and
delivered to Buyer at least three business days prior to the Closing Date (the
“Estimated Closing Working Capital”) exceeds $41,600,000 (the “Maximum Working
Capital Amount”), the amount by which the Estimated Closing Working Capital
exceeds the Maximum Working Capital Amount (such amount, if any, the “Positive
Initial Adjustment”),
 
(iv)  minus, if the Estimated Closing Working Capital is less than
$39,600,000 (the “Minimum Working Capital Amount”), the amount by which the
Minimum Working Capital Amount exceeds the Estimated Closing Working Capital
(such amount, if any, the “Negative Initial Adjustment”),
 
(such amount as adjusted, the “Preliminary Purchase Price”) allocated among the
Target Shares and the Acquired Assets in accordance with the Allocation (set
forth in Section 9(l) below) if the Allocation is completed on or prior to the
Closing Date. If the Allocation is not completed on the Closing Date, the
Preliminary Purchase Price shall be paid in such amounts and to such accounts as
the Asset Sellers and the Share Seller (and
 
 
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any other entity which Parent may designate as an additional Share Seller as a
result of the Pre-Closing Restructuring) shall direct.  The Preliminary Purchase
Price shall be subject to post-Closing adjustment as set forth below in
Section 2(g).
 
(c)  Pre-Closing Transfers.  Upon the terms and subject to the conditions set
forth in this Agreement, prior to the Closing, Parent shall, and shall cause its
Subsidiaries (including the Target Companies and Target Subsidiaries) to, make
such contributions, transfers, assignments and acceptances, such that, upon the
consummation of such contributions, transfers, assignments and acceptances,
Parent or its designees shall own the Excluded Assets and shall be responsible
for the Excluded Liabilities, without further recourse to any Target Company or
Target Subsidiary, other than as contemplated by Section 6(a).  In furtherance
of the foregoing, (i) Parent shall retain, and neither Buyer nor any Target
Company or Target Subsidiary shall acquire, and no Target Company or Target
Subsidiary shall retain, any interest in the Excluded Assets and (ii) Parent
shall retain, and neither Buyer nor any Target Company or Target Subsidiary
shall assume, and no Target Company or Target Subsidiary shall retain, any
Excluded Liability, in each case, other than as contemplated by Section 6(a).
 
(d)  Restricted Assets.  Notwithstanding any other provision in this Agreement
to the contrary, this Agreement shall not constitute an agreement to assign or
transfer any interest in any asset, claim, right or benefit the assignment or
transfer of which is otherwise contemplated by this Agreement if such assignment
or transfer (or attempt to make such an assignment or transfer) without the
consent or approval of a third party would constitute a breach or other
contravention of the rights of such third party, or affect adversely the rights
of any Party or their Affiliates thereunder (such assets being collectively
referred to herein as “Restricted Assets”); and any assignment or transfer of a
Restricted Asset shall be made subject to such consent or approval being
obtained.  If any such consent or approval is not obtained prior to the Closing,
(i) Parent shall continue, upon request of Buyer, to use its reasonable best
efforts to cooperate with Buyer in attempting to obtain any such consent or
approval and (ii) to the extent practicable, the Buyer and Parent agree to
negotiate in good faith with respect to alternative arrangements (such as a
license, sublease or operating agreement) until such time as such consent or
approval has been obtained which result in Buyer or its Affiliates receiving all
the benefits and bearing all the costs, liabilities and burdens with respect to
any such Restricted Asset; provided that Buyer shall pay or satisfy all the
reasonable and documented out-of-pocket costs, expenses, obligations and
liabilities incurred by Parent or its Affiliates in connection with any such
alternative arrangements; provided further that Parent shall have no obligation
to pay money or make any concessions to obtain consents.  Nothing in this
Section 2(d) shall be deemed a waiver by Buyer to receive an effective
assignment of the Acquired Assets upon the receipt of any such consent or
approval nor shall any of the Restricted Assets be deemed Excluded Assets for
any other purposes hereunder.
 
(e)  The Closing.  The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Cravath, Swaine
& Moore LLP in New York, New York commencing at 10:00 a.m. local time on the
fifth business day following the satisfaction or waiver of all conditions to the
obligations of the Parties
 
 
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to consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as Buyer and Parent may mutually determine (the “Closing
Date”).  The Closing shall be deemed to occur and be effective in each relevant
jurisdiction as of the close of business on the last business day prior to the
Closing Date in each such jurisdiction and Buyer will be deemed to have acquired
all the Acquired Assets and Target Shares and assumed all the Assumed
Liabilities as of such time.
 
(f)  Deliveries at Closing.  At the Closing, (i) Parent will deliver to Buyer
the certificates referred to in Section 7(a) below, (ii) Buyer will deliver to
Parent the certificates referred to in Section 7(b) below, (iii) Parent will
deliver to Buyer stock certificates representing all of the Target Shares,
endorsed in blank or accompanied by duly executed assignment documents or a
certified true copy of the shareholders register evidencing the registered
transfer of the Target Shares and such other documents as may be required to
evidence the transfer of the Target Shares by applicable Law, (iv) Parent or
Parent’s Subsidiaries shall execute, acknowledge (if appropriate), and deliver
to Buyer (A) assignments in reasonable form, including a Bill of Sale in the
form attached hereto as Exhibit A and (B) such other documents as Buyer and its
counsel may reasonably request to demonstrate satisfaction of the conditions and
compliance with the covenants set forth in this Agreement, including the sale,
transfer, delivery and assumption of the Target Shares, the Acquired Assets and
the Assumed Liabilities to or by Buyer or its designees; (v) Parent shall
deliver to Buyer the written resignation of each member of the Board of
Directors, Board of Managers or the equivalent governing body, as applicable, of
each of the Target Companies and the Target Subsidiaries; (vi) Buyer will
execute, acknowledge (if appropriate), and deliver to Parent (A) a Bill of Sale
in the form attached hereto as Exhibit A and (B) such other documents as Parent
and its counsel may reasonably request to demonstrate satisfaction of the
conditions and compliance with the covenants set forth in this Agreement,
including the sale, transfer, delivery and assumption of the Target Shares, the
Acquired Assets and the Assumed Liabilities to or by Buyer or its designees; and
(vii) Buyer will deliver to Parent the consideration specified in Section 2(b)
above.
 
(g)  Post-Closing Purchase Price Adjustment.  (i)  Within 60 days after the
Closing Date, Buyer shall prepare and deliver to Seller a statement (the
“Statement”) setting forth (A) an unaudited balance sheet of the Business as of
the close of Business on the last business day prior to the Closing Date, (B)
the Working Capital as of the close of business on the last business day prior
to the Closing Date (the “Closing Working Capital”) and (C) the Net Cash Balance
of the Business as of the close of business on the last business day prior to
the Closing Date (the “Closing Net Cash Balance”).
 
(ii)  Parent shall use reasonable best efforts to close out all foreign exchange
contracts held by any Target Company or Target Subsidiary prior to the Closing
Date.  In the event Parent is unable to cause any such contracts to be closed
out prior to the Closing Date, on the Closing Date Parent shall deliver to Buyer
a list of the foreign exchange contracts held by any Target Company or Target
Subsidiary as of the close of business on the business day prior to the Closing
Date as part of the treasury activities of Parent and its Subsidiaries (the
 
 
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“FX Contracts”).  Buyer and its Subsidiaries shall maintain the FX Contracts for
their duration, including paying any notional amounts due or receiving any
notional amounts from the counterparty under the FX Contracts and closing out
the positions as required pursuant to the terms of the FX Contracts.  Within 60
days following the Closing Date, and only after all positions under the FX
Contracts are closed, the Buyer shall deliver to Parent a statement showing all
notional amounts paid and received under each of the FX Contracts (including
amounts paid or received when the contract is closed) (the “FX Statement”) and
the aggregate amount of the net gain or loss reflected by such notional amounts
paid and received (the “FX Amount”).
 
(iii)  During the 30 day period following Parent’s receipt of the Statement,
Parent and its accountants shall be permitted to review the working papers of
Buyer and its accountants relating to the Statement; provided that Parent and
its advisors, including its accountants, shall have executed all release letters
reasonably requested by Buyer’s accountants in connection therewith.  During the
30 day period following Parent’s receipt of the FX Statement, Parent shall be
permitted to review the books and records of Buyer and its Subsidiaries relating
to the FX Statement.  The Statement shall become final and binding upon the
Parties on the 30th day following delivery thereof to Parent, unless Parent
gives written notice of its disagreement with the Statement (the “Notice of
Disagreement”) to Buyer prior to such date.  Any Notice of Disagreement shall be
signed by Parent and shall (A) specify in reasonable detail the nature of any
disagreement so asserted, (B) only include disagreements based on mathematical
errors or based on the Closing Working Capital or Closing Net Cash Balance not
being calculated in accordance with this Section 2(g) and (C) specify what
Parent reasonably believes is the correct amount of the Closing Working Capital
and Closing Net Cash Balance based on the disagreements set forth in the Notice
of Disagreement, including a reasonably detailed description of the adjustments
applied to the Statement in calculating such amount.  The FX Statement shall
become final and binding upon the Parties on the 30th day following delivery
thereof to Parent, unless Parent gives written notice of its disagreement with
the FX Statement (the “FX Notice of Disagreement”) to Buyer prior to such
date.  Any FX Notice of Disagreement shall be signed by Parent and shall
(A) specify in reasonable detail the nature of any disagreement so asserted,
(B) only include disagreements based on mathematical errors or based on the FX
Amount being incorrectly calculated and (C) specify what Parent reasonably
believes is the correct FX Amount based on the disagreements set forth in the FX
Notice of Disagreement, including a reasonably detailed description of the
adjustments applied to the FX Statement in calculating such amount.  If the
Notice of Disagreement or the FX Notice of Disagreement, as applicable, is
received in a timely manner, then the Statement or the FX Statement, as
applicable (as revised in accordance with this sentence), shall become final and
binding upon Buyer and Parent on the earlier of (A) the date Buyer and Parent
resolve in writing any differences they have with respect to the matters
specified in the Notice of Disagreement or the FX Notice of Disagreement, as
applicable, or (B) the date any disputed matters are finally resolved in writing
by the Accounting Firm.  During the 30 day periods following
 
 
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the delivery of the Notice of Disagreement and the FX Notice of Disagreement,
Buyer and Parent shall seek in good faith to resolve in writing any differences
that they may have with respect to the matters specified in the Notice of
Disagreement or the FX Notice of Disagreement, as applicable.  During the 30 day
period following delivery of the Notice of Disagreement, Buyer and its
accountants shall have access to the working papers of Parent prepared in
connection with the Notice of Disagreement; provided that Buyer and its
advisors, including its accountants, shall have executed all release letters
reasonably requested by Parent’s accountants in connection therewith.  At the
end of such 30 day periods, Buyer and Parent shall submit to an independent
accounting firm (the “Accounting Firm”) for resolution any matters that remain
in dispute and which were properly included in the Notice of Disagreement and
the FX Notice of Disagreement, in the form of a written brief. The Accounting
Firm shall be KPMG or, if such firm is unable or unwilling to act, such other
internationally recognized independent public accounting firm as shall be agreed
upon by Parent and Buyer in writing.  Buyer and Parent shall jointly instruct
the Accounting Firm that it (i) shall review only the matters that were properly
included in the Notice of Disagreement and the FX Notice of Disagreement and
which remain unresolved, (ii) shall make its determination in accordance with
the requirements of this Section 2(g) and (iii) shall render its decision within
30 days from the submission of such matters.  Judgment may be entered upon the
determination of the Accounting Firm in any court having jurisdiction over the
Party against which such determination is to be enforced. The fees, costs and
expenses of the Accounting Firm incurred pursuant to this Section 2(g) shall be
borne 50% by Parent and 50% by Buyer.
 
The fees, costs and expenses of Parent incurred in connection with its review of
the Statement, its preparation and certification of any Notice of Disagreement,
its review of the FX Statement, its preparation and certification of any FX
Notice of Disagreement and its preparation of any written brief submitted to the
Accounting Firm shall be borne by Parent, and the fees, costs and expenses of
Buyer incurred in connection with its preparation of the FX Statement, its
review of any FX Notice of Disagreement, its preparation of the Statement, its
review of any Notice of Disagreement and its preparation of any written brief
submitted to the Accounting Firm shall be borne by Buyer.
 
(iv)  The Preliminary Purchase Price shall be adjusted as follows:
 
(A)  if the Closing Working Capital exceeds the Maximum Working Capital Amount,
the Preliminary Purchase Price shall be increased by the sum of (I) the amount
by which the Closing Working Capital exceeds the Maximum Working Capital Amount
minus (II) the Positive Initial Adjustment (if any) plus (III) the Negative
Initial Adjustment (if any), or decreased by the absolute value of such sum if
such sum is a negative amount,
 
 
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(B)  if the Closing Working Capital is less than the Minimum Working Capital
Amount, the Preliminary Purchase Price shall be decreased by the sum of (I) the
amount by which the Minimum Working Capital Amount exceeds the Closing Working
Capital minus (II) the Negative Initial Adjustment (if any) plus (III) the
Positive Initial Adjustment (if any), or increased by the absolute value of such
sum if such sum is a negative amount,
 
(C)  if the Closing Working Capital is between the Minimum Working Capital
Amount and the Maximum Working Capital Amount, the Preliminary Purchase Price
shall be increased by the amount of the Negative Initial Adjustment (if any) or
decreased by the amount of the Positive Adjustment (if any),
 
(D)  if the Closing Net Cash Balance exceeds the Estimated Closing Net Cash
Balance, the Preliminary Purchase Price shall be increased by such excess,
 
(E)  if the Estimated Closing Net Cash Balance exceeds the Closing Net Cash
Balance, the Preliminary Purchase Price shall be decreased by such excess, and
 
(F)  the Preliminary Purchase Price shall be increased by the FX Amount if a net
gain or decreased by the FX Amount if a net loss,
 
(the Preliminary Purchase Price as so adjusted shall hereinafter be referred to
as the “Purchase Price”).  If the Preliminary Purchase Price is less than the
Purchase Price, Buyer shall, and if the Preliminary Purchase Price is more than
the Purchase Price, Parent shall, within 10 business days after the Statement
becomes final and binding on the Parties, make payment by wire transfer of
immediately available funds of the amount of such difference, together with
interest thereon at a rate equal to the rate of interest from time to time
announced publicly by Citibank, N.A., as its prime rate, calculated on the basis
of the actual number of days elapsed divided by 365, from (and including) the
Closing Date through (but not including) the date of payment.  The difference
between the Purchase Price and the Preliminary Purchase Price shall be allocated
among the Target Shares and the Acquired Assets in accordance with the
Allocation (set forth in Section 9(l) below) if the Allocation is completed at
the time such difference is paid.  If the purchase price adjustment contemplated
by this Section 2(g) has to be paid by Buyer and the Allocation is not completed
at the time such purchase price adjustment is paid, the difference between the
Purchase Price and the Preliminary Purchase Price shall be paid in such amounts
and to such accounts as Sellers shall direct.
 
(v)  “Working Capital” means, as of any date, the sum of net accounts
receivable, inventories, prepaid expenses and other current assets, accounts
payable and accrued expenses of the Business as adjusted in accordance with
Section 2(g)(v) of the Disclosure Schedule, in each case, as of the close of
business on such date; provided, that “Working Capital” shall not include any
 
 
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item included in the Net Cash Balance, any gains or losses under an FX Contract,
any refund, credit, or other asset relating to any Income Tax or any accrual
with respect to Income Taxes for any Pre-Closing Tax Period, deferred tax assets
or liabilities, accrued amounts for prepaid insurance, any amount payable or
receivable pursuant to Intercompany Receivables, Intercompany Payables or
Assumed Intercompany Receivables, or any liabilities under the Retention
Arrangements or in respect of Severance Obligations, Bonus Obligations, Early
Retirement Obligations or Pension Obligations. The term “Net Cash Balance”
means, as of any date, (i) all cash and cash equivalents minus (ii) any
outstanding short term debt and long term debt (which shall not include trade
payables or capital or finance lease obligations related to the Business, or any
amounts payable or receivable pursuant to Intercompany Receivables, Intercompany
Payables, Assumed Intercompany Receivables or any Intercompany Assumed
Agreement) minus (iii) any accrued liabilities with respect to the Bonus
Obligations to the extent the Bonus Obligations are not paid prior to Closing
minus (iv) liabilities in respect of the Severance Obligations, the Pension
Obligations and the Early Retirement Obligations, in each case as of the close
of business on such date.  Working Capital and Net Cash Balance shall be
calculated in accordance with GAAP but subject to the methods, procedures,
adjustments and practices, consistently applied, as the corresponding line items
of the working capital and net cash balance statement as of September 30, 2007
set forth in Section 2(g)(v) of the Disclosure Schedule (the “Working Capital
Schedule”), which shows the calculation of Working Capital and Net Cash Balance
based on the unaudited September 30, 2007 balance sheet included as part of the
September Financial Statements (except as otherwise provided in Section 2(g)(v)
of the Disclosure Schedule), whether or not such methods, procedures,
adjustments and practices are in accordance with GAAP (it being understood that,
in the event of any inconsistency between GAAP and the methods, procedures,
adjustments and practices pursuant to which the Working Capital Schedule is
prepared, the latter shall prevail).  The foregoing principles are referred to
in this Agreement as the “Working Capital Principles”.  The scope of the
disputes to be resolved by the Accounting Firm shall be limited to whether there
were mathematical errors in the Statement or the FX Statement and whether the
calculation of the Closing Working Capital and Closing Net Cash Balance was done
in accordance with the Working Capital Principles and the FX Amount was
calculated in accordance with this Section 2(g), and the Accounting Firm is not
to make any other determination, including any determination as to whether GAAP
was followed in calculating the Maximum Working Capital Amount, the Minimum
Working Capital Amount, the FX Amount, the Estimated Closing Working Capital,
the Estimated Closing Net Cash Balance, the Working Capital Schedule, the
Financial Statements or the FX Statement or as to whether the Maximum Working
Capital Amount or Minimum Working Capital Amount was correctly determined, or
conduct any review of or make any adjustments to the methods or assumptions used
to calculate the Pension Obligations.  Any item included in, or any omission
from, the line items of the Working Capital Schedule that is based upon errors
of fact or mathematical errors or that is not in accordance with GAAP
 
 
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shall be retained for purposes of calculating the Closing Working Capital and
the Closing Net Cash Balance, except as provided in Section 2(g)(v) of the
Disclosure Schedule.
 
(vi)  Following the Closing, Buyer shall not take any action with respect to the
accounting books and records of the Business on which the Statement and the FX
Statement is to be based that would obstruct, prevent or otherwise affect the
results of the procedures set forth in this Section 2(g) (including the amount
of the Closing Working Capital, Closing Net Cash Balance, the FX Amount or any
other amount included Statement or the FX Statement or the preparation or review
of the Statement or the FX Statement).  From and after the Closing Date through
the resolution of any adjustment to the Preliminary Purchase Price contemplated
by this Section 2(g), Buyer shall (i) assist, and shall cause its Subsidiaries
(including the Target Companies and the Target Subsidiaries) to assist, Parent,
its accountants, advisors and other representatives in its review of the
Statement and the FX Statement and (ii) afford to Parent, its accountants,
advisors and other representatives, reasonable access during normal business
hours to the personnel, properties, books and records of the Business to the
extent relevant to the review of the Statement and the FX Statement or the
adjustment to the Preliminary Purchase Price contemplated by this Section 2(g).
 
SECTION 3.  Representations and Warranties Concerning Transaction.
 
(a)  Parent’s Representations and Warranties.  Except (a) as set forth in the
disclosure schedule delivered by Parent to Buyer on the date hereof (the
“Disclosure Schedule”) (each section of which qualifies the correspondingly
numbered representation, warranty or covenant and such other representations,
warranties or covenants to the extent it is reasonably apparent on the face of
such disclosure that a matter is relevant to the information called for by such
other representation, warranty or covenant) or (b) as disclosed in the reports,
schedules, forms, statements and other documents filed or furnished by Parent
with or to the United States Securities and Exchange Commission (the “SEC”)
since January 1, 2007 and publicly available prior to the date of this
Agreement, Parent hereby represents and warrants to Buyer as of the date of this
Agreement and as of the Closing Date (except to the extent a representation or
warranty is expressly made as of an earlier date, in which case such
representation or warranty shall be deemed made as of that earlier date) as
follows:
 
(i)  Organization of Parent and Certain of its Subsidiaries.  Each Asset Seller
and Share Seller is duly organized, validly existing, and in good standing under
the Laws of the jurisdiction of its incorporation (or other formation).
 
(ii)  Authorization of Transaction.  Parent and each of its Subsidiaries has
full power and authority (including full corporate or other entity power and
authority) to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party and to perform its obligations hereunder and
thereunder.  The execution, delivery and performance of this Agreement and each
of the Ancillary Agreements and all other agreements contemplated hereby and
 
 
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thereby have been duly authorized by Parent and its Subsidiaries that are party
thereto.  The board of directors of Parent has adopted a resolution approving
this Agreement and the transactions contemplated hereby.  Each of the Asset
Sellers and the Share Seller has duly executed and delivered this Agreement and,
prior to the Closing, each of Parent’s Subsidiaries will have duly executed and
delivered each Ancillary Agreement to which it is, or is specified to be, a
party, and, assuming their due execution and delivery by Buyer or its
Affiliates, as applicable, this Agreement constitutes each of the Asset Sellers’
and the Share Seller’s, and each Ancillary Agreement to which any of them is, or
is specified to be, a party will, after execution and delivery by Parent and/or
each such Subsidiary, constitute Parent’s and/or such Subsidiary’s, legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other Laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
 
(iii)  Brokers’ Fees.  Except for Banc of America Securities LLC, whose fees and
commissions will be paid by Parent, neither Parent nor any of Parent’s
Subsidiaries has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement or the Ancillary Agreements.
 
(iv)  Noncontravention.  The Sellers are not required to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
Governmental Entity in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements, other than (A) compliance with and
filings under the Hart-Scott-Rodino Act and compliance with and filings and
approvals under applicable foreign merger control or competition Laws (the
“Foreign Merger Control Laws”), (B) compliance with and filings under the
Securities Exchange Act and the rules and regulations promulgated thereunder,
(C) compliance with and filings or notices required by the rules and regulations
of the New York Stock Exchange, (D) compliance with and filings with the
relevant Chinese authorities in respect of the equity transfer of the Chinese
Sub, (E) those that may be required solely by reason of Buyer’s (as opposed to
any third party’s) participation in the Transaction and the other transactions
contemplated by this Agreement and by the Ancillary Agreements, (F) the filing
of the relevant instruments in the requisite jurisdictions in order to effect
guarantees in respect of, or to create or perfect Liens granted to secure, the
Indebtedness and other obligations incurred as a result of the consummation of
the Debt Financing and (G) those the failure of which to be obtained or made
would not, individually and in the aggregate, have or reasonably be expected to
have a material adverse effect on the ability of Parent to perform its
obligations under this Agreement or prevent or materially delay the consummation
of the Transaction and the other transactions contemplated by this
Agreement.  Neither the execution and delivery of this Agreement and the
Ancillary Agreements, nor the consummation of the transactions contemplated
hereby or thereby, will (i) subject to the governmental filings or other matters
referred to in the immediately preceding sentence, violate
 
 
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(A) any Judgment or Law applicable to the Sellers or (B) any provision of the
charter or bylaws, or other governing documents, of any Seller or (ii) conflict
with, result in a breach of, constitute a default under (with or without notice
or lapse of time or both), result in the acceleration of or the loss of any
benefit under, require any third party consent under, or create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice under
any material agreement, contract, lease, license, instrument, or other
arrangement to which any of the Sellers is a party, other than, in the case of
clauses (i)(A) and (ii) above, any such instances that would not have or
reasonably be expected to have a material adverse effect on the ability of
Sellers to perform their obligations under this Agreement or prevent or
materially delay the consummation of the Transactions and the other transactions
contemplated by this Agreement.
 
(v)  Target Shares.  Except for the Alpharma Credit Agreement Lien (which shall
be released as of the Closing Date), each of the Target Shares is held of record
and owned beneficially by the Share Seller (and any other entity which Parent
may designate as an additional Share Seller as a result of the Pre-Closing
Restructuring) free and clear of any Liens and all capital stock of the Target
Subsidiaries is held of record and owned beneficially by the Target Companies or
Target Subsidiaries free and clear of any Liens.  Upon delivery of any payment
for the Target Shares at Closing, Buyer will acquire good and valid title to all
of the Target Shares, free and clear of any Liens (other than those Liens
created by Buyer).  Except for the Alpharma Credit Agreement Lien, neither
Parent nor any of its Subsidiaries is a party to any option, warrant, purchase
right, or other contract or commitment (other than this Agreement) that could
require Parent or any of its Subsidiaries to sell, transfer, or otherwise
dispose of any capital stock or equity interests (as the case may be) of the
Target Companies or Target Subsidiaries.  Neither Parent nor any of its
Subsidiaries is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of the Target
Companies or Target Subsidiaries.
 
(vi)  Litigation.  As of the date of this Agreement, there are not any (a)
outstanding Judgments applicable to the Sellers, (b) suits, actions or other
proceedings pending or, to the Knowledge of Parent, threatened against the
Sellers or (c) investigations by any Governmental Entity that are, to the
Knowledge of Parent, pending or threatened against the Sellers that,
individually or in the aggregate, are reasonably likely to have a material
adverse effect on the ability of the Sellers to perform their obligations under
this Agreement or prevent or materially delay the consummation of the
Transaction and the other transactions contemplated by this Agreement.
 
 
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(b)  Buyer’s Representations and Warranties.  Buyer hereby represents and
warrants to Sellers as of the date of this Agreement and as of the Closing Date
(except to the extent a representation or warranty is expressly made as of an
earlier date, in which case such representation or warranty shall be deemed made
as of that earlier date) as follows:
 
(i)  Organization of Buyer.  Buyer is a corporation (or other entity) duly
organized, validly existing, and in good standing under the Laws of the
jurisdiction of its incorporation (or other formation).
 
 (ii)  Authorization of Transaction.  Buyer has full power and authority
(including full corporate or other entity power and authority) to execute and
deliver this Agreement and each of the Ancillary Agreements to which it is a
party and to perform its obligations hereunder and thereunder and to consummate
the Financing.  Buyer has duly executed and delivered this Agreement and, prior
to the Closing, will have duly executed and delivered each Ancillary Agreement
to which it is, or is specified to be, a party, and, assuming their due
execution and delivery by Sellers, this Agreement constitutes, and each
Ancillary Agreement to which it is, or is specified to be, a party will, after
execution and delivery by Buyer, constitute, its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
Law.  The execution, delivery and performance of this Agreement and each of the
Ancillary Agreements and all other agreements contemplated hereby or thereby,
including the Financing have been duly authorized by Buyer.
 
(iii)  Non-contravention.  Neither the execution and delivery of this Agreement
and the Ancillary Agreements to which it is a party, nor the consummation of the
transactions contemplated hereby or thereby, including the Financing, will
(A) violate any Law or Judgment to which Buyer is subject (subject to the
governmental filings and other matters referred to in the immediately following
sentence) or any provision of its charter, bylaws, or other governing documents
or (B) conflict with, result in a breach of, constitute a default under (with or
without notice or lapse of time or both), result in the acceleration of or the
loss of any benefit under, require any third party consent under, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Buyer is a party or by which it is bound or to which any of
its assets is subject, except for such instances which would not, individually
or in the aggregate, have or reasonably be expected to have a material adverse
effect on the ability of Buyer to perform its obligations under this Agreement
or prevent or materially delay the consummation of the Transaction and the other
transactions contemplated by this Agreement, including the Financing.  Buyer
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Entity in connection
 
 
 
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with the transactions contemplated by this Agreement or any Ancillary Agreement,
including the Financing or the other transactions contemplated hereby and
thereby, other than (A) compliance with and filings under the Hart-Scott-Rodino
Act and compliance with and filings and approvals under Foreign Merger Control
Laws, (B) the filing of the relevant instruments in the requisite jurisdictions
in order to effect guarantees in respect of, or to create or perfect Liens
granted to secure, the Indebtedness and other obligations incurred as a result
of the consummation of the Debt Financing and (C) those the failure of which to
be obtained or made would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the ability of Buyer
to perform its obligations under this Agreement or prevent or materially delay
the consummation of the Transaction and the other transactions contemplated by
this Agreement, including the Financing.
 
(iv)  Litigation.  As of the date of this Agreement, there are not any (a)
outstanding Judgments applicable to Buyer or any of its Affiliates, (b) suits,
actions or other proceedings pending or, to the knowledge of Buyer, threatened
against Buyer or any of its Affiliates or (c) investigations by any Governmental
Entity that are, to the knowledge of Buyer, pending or threatened against Buyer
or any of its Affiliates that would, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the ability of Buyer
to perform its obligations under this Agreement or prevent or materially delay
the consummation of the Transaction and the other transactions contemplated by
this Agreement, including the Financing.
 
(v)  Securities Act.  The Target Shares are being acquired for investment only
and not with a view to any public distribution thereof, and Buyer shall not
offer to sell or otherwise dispose of the Target Shares so acquired by it in
violation of any of the registration requirements of the Securities Act.
 
(vi)  Financing.  Complete and correct executed copies of the Financing
Commitments have been delivered to Parent on or prior to the date of this
Agreement.  Buyer has delivered to Parent all written agreements, arrangements
or understandings related to the Financing (a) in the case of any such
agreements, arrangements or understandings entered into on or prior to the date
of this Agreement, on or prior to the date of this Agreement and (b) in the case
of any such agreements, arrangements or understandings entered into after the
date of this Agreement, within three business days after the entry thereof;
provided that Buyer may redact from any such documents, and omit from any such
descriptions, the fee amounts payable to their Financing sources.  There are no
conditions or other contingencies to the funding of the Financing (including in
any oral agreements) other than those contained in the Financing Commitments (or
in replacement commitments obtained by Buyer in compliance with
Section 5(c)).  Except to the extent permitted by Section 5(c), none of the
Financing Commitments (or any of the replacement commitments obtained by Buyer
in compliance with Section 5(c)) has been amended, supplemented or otherwise
modified and the commitments contained in the Financing Commitments (or the
 
 
 
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commitments contained in replacement commitments obtained by Buyer in compliance
with Section 5(c)) have not been reduced, terminated, withdrawn or rescinded in
any respect.  The Financing Commitments (or replacement commitments obtained by
Buyer in compliance with Section 5(c)) are in full force and effect and are the
legal, valid and binding obligations of Buyer and, to Buyer’s knowledge, the
applicable counterparties thereto.  No event has occurred which, with or without
notice, lapse of time or both, would constitute a default or breach on the part
of Buyer under any term or condition of the Financing Commitments (or the
replacement commitments obtained by Buyer in compliance with Section 5(c)) that
would constitute the failure of any of the conditions to the Financing
Commitments or would reasonably be expected to impair or delay the funding of
the Financing Commitments.  Buyer has fully paid any commitment fees or other
fees incurred in connection with the Financing that have become due and payable
as of the date of this Agreement and will have fully paid all such fees due and
payable as of the Closing Date on or prior to the Closing Date.  The Financing,
when funded in accordance with the Financing Commitments (or replacement
commitments obtained by Buyer in compliance with Section 5(c)), will provide
funds at the Closing sufficient to consummate the Transaction and the other
transactions contemplated by this Agreement and to pay the related fees and
expenses associated therewith.  As of the date of this Agreement, Buyer has no
reason to believe that any of the conditions or other contingencies to the
Financing will not be satisfied upon the satisfaction or (to the extent
permitted by applicable Law) waiver of the conditions set forth in Section 7 or
that the Financing will not be available to Buyer at the Closing.
 
(vii)  Activities of Buyer.  Buyer was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement, has not engaged in any
business activities or conducted any operations (other than in connection with
the transactions contemplated by this Agreement) and, prior to the Closing, will
not have incurred liabilities or obligations of any nature (other than in
connection with the transactions contemplated by this Agreement).
 
(viii)  No Knowledge of Misrepresentation or Omission. As of the date of this
Agreement, none of Buyer, its employees, agents or representatives has actual
knowledge that any representation or warranty of Parent in this Agreement is not
true and correct or there are any errors in or omissions from the Disclosure
Schedule.
 
(ix)  No Other Representations and Warranties.  Except for the representations
and warranties contained in Sections 3(a) and 4 or in any certificate delivered
by Parent pursuant to this Agreement, Buyer acknowledges that none of Sellers
nor any Person on behalf of Parent makes or has made any other express or
implied representation or warranty with respect to the Transaction or the other
transactions contemplated by this Agreement, with respect to Sellers or the
Business or with respect to any other information provided or made available to
Buyer in connection with the transactions contemplated by this Agreement
(including in any “data rooms” or management
 
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presentations).  None of Parent or its Affiliates shall have or be subject to
any liability or indemnification obligation to Buyer or any other Person
resulting from the distribution to Buyer, or Buyer’s use of, any such
information.  Buyer acknowledges that, should the Closing occur, Buyer shall
acquire the Target Shares and the Acquired Assets without any representation or
warranty (including as to merchantability or fitness for any particular
purpose), express or implied, at law or in equity, in an “as is” condition and
on a “where is” basis, except as otherwise expressly represented or warranted in
Sections 3(a) or 4 or in any certificate delivered by Parent pursuant to this
Agreement.
 
(x)  Brokers’ Fees.  Except for Merrill Lynch International, whose fees and
commissions will be paid by Buyer, Buyer and its Affiliates have no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement or the Ancillary
Agreements.
 
SECTION 4.  Representations and Warranties Concerning the Business and the
Target Companies and Target Subsidiaries.  Except (a) as set forth in the
Disclosure Schedule (each section of which qualifies the correspondingly
numbered representation, warranty or covenant and such other representations,
warranties or covenants to the extent it is reasonably apparent on the face of
such disclosure that a matter is relevant to the information called for by such
other representation, warranty or covenant) or (b) as disclosed in the reports,
schedules, forms, statements and other documents filed or furnished by Parent
with or to the SEC since January 1, 2007 and publicly available prior to the
date of this Agreement, Parent hereby represents and warrants to Buyer as of the
date of this Agreement and as of the Closing Date (except to the extent a
representation or warranty is expressly made as of an earlier date, in which
case such representation or warranty shall be deemed made as of that earlier
date) as follows:
 
(a)  Organization, Qualification, and Corporate Power.  Each of the Target
Companies and the Target Subsidiaries are corporations duly organized, validly
existing, and, to the extent applicable in such jurisdiction, in good standing
under the Laws of the jurisdiction of their incorporation.  Each of the Target
Companies and the Target Subsidiaries are duly authorized to conduct business
and are in good standing (or of similar status to the extent such status exists
in such company’s jurisdiction of formation) under the Laws of each jurisdiction
where such qualification is required.  Each of the Target Companies and the
Target Subsidiaries have full corporate power and authority to carry on the
business in which they are engaged and to own, lease and use the properties
owned and used by them.
 
(b)  Capitalization.  (i)  Section 4(b) of the Disclosure Schedule sets forth
for each of the Target Companies and Target Subsidiaries (A) its name and
jurisdiction of incorporation and (B) the entity which owns the capital stock of
or equity interests (as the case may be) in each such Target Company or Target
Subsidiary.
 
 
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(ii)  All of the issued and outstanding Target Shares of the Target Companies
have been duly authorized, are validly issued, fully paid, and non-assessable
(or of similar status to the extent such status exists in such company’s
jurisdiction of formation), and are held of record and owned beneficially by the
Share Seller (and such other entity which Parent may designate as an additional
Share Seller as a result of the Pre-Closing Restructuring) as set forth in
Section 4(b) of the Disclosure Schedule and were not issued in contravention of
any preemptive rights, rights of first refusal or first offer or similar rights
or applicable foreign, federal or state securities laws.  All of the issued and
outstanding shares of capital stock of the Target Subsidiaries have been duly
authorized, are validly issued, fully paid, and non-assessable (or of similar
status to the extent such status exists in such company’s jurisdiction of
formation), and are held of record and owned beneficially by the Target
Companies or Target Subsidiaries as set forth in Section 4(b) of the Disclosure
Schedule.  There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require any of the Target Companies or
Target Subsidiaries to issue, sell, or otherwise cause to become outstanding any
of its capital stock or to make any further capital contribution.  There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting stock of the Target Companies or Target Subsidiaries. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to any of the Target Companies or
Target Subsidiaries.  None of the Target Companies or the Target Subsidiaries
owns any material amount of shares of capital stock of, or other equity
interests (or any other securities convertible into or exchangeable for such
shares or interests) in any other Person.
 
(c)  Non-contravention.  Neither the execution and delivery of this Agreement
and the Ancillary Agreements, nor the consummation of the transactions
contemplated hereby or thereby, will (i) subject to the governmental filings or
other matters referred to in the immediately following sentence, violate (A) any
Judgment or Law applicable to any of the Target Companies or the Target
Subsidiaries or (B) any provision of the charter or bylaws, or other governing
documents, of such Person (ii) conflict with, result in a breach of, constitute
a default under (with or without notice or lapse of time or both), result in the
acceleration of or the loss of any benefit under, require any third party
consent under, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material agreement, contract,
lease, license, instrument, or other arrangement to which any of the Target
Companies or Target Subsidiaries is a party or by which any of the assets or
properties of the Business is subject or (iii) result in the imposition or
creation of any Lien, other than Permitted Liens, upon or with respect to the
Target Shares or the Acquired Assets or any of the assets or properties of the
Target Companies or Target Subsidiaries, other than, in the case of clauses
(i)(A), (ii) and (iii) above, any such instances that would not, individually
and in the aggregate, have a Material Adverse Effect.  The Target Companies and
the Target Subsidiaries are not required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any Governmental
Entity in connection with the transactions contemplated by this Agreement or the
Ancillary
 
 
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Agreements, other than (A) compliance with and filings under the
Hart-Scott-Rodino Act and compliance with and filings and approvals under the
Foreign Merger Control Laws, (B) compliance with and filings under the
Securities Exchange Act and the rules and regulations promulgated thereunder,
(C) compliance with and filings or notices required by the rules and regulations
of the New York Stock Exchange, (D) compliance with and filings with the
relevant Chinese authorities in respect of the equity transfer of the Chinese
Sub, (E) those that may be required solely by reason of Buyer’s (as opposed to
any third party’s) participation in the Transaction and the other transactions
contemplated by this Agreement and by the Ancillary Agreements, (F) the filing
of the relevant instruments in the requisite jurisdictions in order to effect
guarantees in respect of, or to create or perfect Liens granted to secure, the
Indebtedness and other obligations incurred as a result of the consummation of
the Debt Financing and (G) those the failure of which to be obtained or made
would not, individually and in the aggregate, have a Material Adverse Effect.
 
(d)  Title to Tangible Assets.  The Target Companies and the Target Subsidiaries
have good and valid title to, or a valid leasehold interest in, the material
tangible assets used primarily in the conduct of the Business.  The Asset
Sellers have good  and valid title to, or a valid leasehold interest in, the
material tangible Acquired Assets.
 
(e)  Sufficiency of Assets.  The Acquired Assets, the assets and properties that
will be owned by the Target Companies and Target Subsidiaries immediately
following the Closing, the assets and properties of which any Target Company or
Target Subsidiary will be a lessee, sublessee or licensee immediately following
the Closing and the assets and properties which Buyer and its Affiliates,
including the Target Companies and Target Subsidiaries, will have the right to
use pursuant to the Transition Services Agreement, comprise all the assets and
properties (tangible or intangible) primarily employed by the Business.  Such
assets and properties will be sufficient for the conduct of the Business
immediately following the Closing in substantially the same manner as currently
conducted.
 
(f)  Financial Statements; No Undisclosed Liabilities.  (i)  Section 4(f)(i) of
the Disclosure Schedule includes copies of the following financial statements
(collectively the “Financial Statements”): (A) an unaudited consolidated balance
sheet of the Business, as of December 31, 2006, (B) an unaudited statement of
operations and cash flow for the fiscal year ended December 31, 2006, with
respect to the Business, (C) an unaudited consolidated balance sheet of the
Business as of September 30, 2007, and (D) an unaudited statement of operations
and cash flow for the nine months ended September 30, 2007, with respect to the
Business (such Financial Statements referred to in clauses (C) and (D) above,
the “September Financial Statements”).  The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP on the basis of the
same accounting principles, policies, methods and procedures consistently
applied throughout the periods covered thereby and present fairly in all
material respects the financial condition of the Business as of such dates and
the results of operations of the Business for such periods; provided, however,
that the September
 
 
 
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Financial Statements are subject to normal and recurring year-end adjustments
and lack footnotes and other presentation items.
 
(ii)  None of the Target Companies or Target Subsidiaries is party to any
material “off-balance-sheet arrangements” (as defined in Item 303(a) of
Regulation S-K under the Securities Act) attributable to the Business.
 
(iii)  None of the Asset Sellers (to the extent such liabilities primarily
relate to the Business) or any of the Target Companies or the Target
Subsidiaries has any liabilities, whether accrued, contingent, absolute,
determined, determinable or otherwise except (A) to the extent such liabilities
are accrued or reserved against in the Financial Statements, or reflected in the
footnotes thereto, (B) liabilities that were incurred in the ordinary course of
business since the date of such Financial Statements, (C) liabilities that are
for Taxes, (D) liabilities that would not, individually and in the aggregate,
have a Material Adverse Effect or (E) liabilities that are Excluded Liabilities.
 
(g)  Events Subsequent to September 30, 2007.  Since September 30, 2007, to the
date of this Agreement, the Business has been conducted in the ordinary course
and there has not been any Material Adverse Change.  Without limiting the
generality of the foregoing, since September 30, 2007 to the date of this
Agreement:
 
(i)  none of the Target Companies or any of the Target Subsidiaries has issued,
sold, or otherwise disposed of any of its capital stock or equity interests (as
the case may be), or granted any options, warrants, or other rights to purchase
or obtain (including upon conversion, exchange, or exercise) any of its capital
stock or any stock appreciation, phantom stock, profit participation, registered
capital or similar rights;
 
(ii)  none of the Target Companies or any of the Target Subsidiaries has
declared, set aside, or paid any dividend or made any distribution with respect
to its capital stock or equity interests (as the case may be) (whether in cash
or in kind) (other than dividends or distributions paid or payable to Parent or
any of its other Subsidiaries pursuant to cash sweeps done in the ordinary
course of business or to another Target Company or Target Subsidiary) or
redeemed, purchased, or otherwise acquired any of its capital stock;
 
(iii)  none of the Asset Sellers (to the extent such change relates to the
Business) or any of the Target Companies or the Target Subsidiaries has made any
material change in any accounting principles, practice, policy, method or
procedure except as may be appropriate to conform to GAAP;
 
(iv)  none of the Asset Sellers (to the extent such litigation relates to the
Business) or any of the Target Companies or the Target Subsidiaries has settled
or compromised any material litigation or claim against it, other than
settlements or compromises of litigation in the ordinary course of business;
 
 
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(v)  none of the Asset Sellers (to the extent such acquisition or license
relates to the Business) or any of the Target Companies or the Target
Subsidiaries has acquired or licensed (whether by merger, consolidation or
acquisition of stock or assets or otherwise) any corporation, partnership or
other business organization or division thereof or any material assets thereof
or equity interests therein, other than purchases of Inventory and other assets
in the ordinary course of business;
 
(vi)  other than in the ordinary course of business or as required under the
terms of any applicable Collective Bargaining Agreement or as required under
applicable Law, none of the Asset Sellers or the Target Companies or any of the
Target Subsidiaries has (A) made any changes to the Target Company Benefit Plans
or entered into or adopted any new Target Company Benefit Plans; (B) entered
into any collective bargaining or other labor agreement covering any Employees
of the Target Companies or Target Subsidiaries; (C) altered, amended, or created
any obligations with respect to compensation, severance, change in control
payments or any other payments or benefits to executive-level Employees of the
Target Companies or Target Subsidiaries; or (D) except, with respect to
non-officers of the Target Companies or Target Subsidiaries hired or terminated
in the ordinary course of business, hired any new Employees of the Target
Companies or Target Subsidiaries (other than hires to replace any existing
Employees that may have retired, resigned or otherwise ceased to be employed by
the Target Companies or Target Subsidiaries other than through a breach of this
clause (D)) or fired any existing Employees of a Target Company or a Target
Subsidiary;
 
(vii)  none of the Target Companies or any of the Target Subsidiaries has filed
any amended Tax Returns, filed any Tax Returns inconsistent with prior
practices, made any changes in the tax reporting or payment policy, changed tax
residence or changed any tax election or tax claim, except, in each case, in the
ordinary course of business;
 
(viii)  none of the Asset Sellers (to the extent related to the Business) or any
of the Target Companies or any of the Target Subsidiaries has incurred, assumed
or guaranteed any Indebtedness other than Intercompany Payables, Intercompany
Receivables, or Assumed Intercompany Receivables or other than in the ordinary
course of business;
 
(ix)  none of the Asset Sellers (to the extent related to the Business) or the
Target Companies or any of the Target Subsidiaries has created or incurred any
Lien on any material asset, other than Permitted Liens; and
 
(x)  none of the Asset Sellers  (to the extent related to the Business) or the
Target Companies or any of the Target Subsidiaries has agreed or committed to do
any of the foregoing, or any action or omission that would reasonably be
expected to result in any of the foregoing.
 
 
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(h)  Legal Compliance.  The Asset Sellers (to the extent related to the
Business) and each of the Target Companies and the Target Subsidiaries have,
since January 1, 2006 (or its date of formation, if later), complied in all
material respects with all applicable Laws.  The Asset Sellers (to the extent
related to the Business) and each of the Target Companies and the Target
Subsidiaries have all permits, approvals, registrations, licenses, grants,
easements, authorizations, exemptions, orders and consents with respect to the
Business as it is now being conducted, each of which is valid and in full force
and effect, in each case, except for instances where the failure to do so would
not, individually and in the aggregate, have a Material Adverse Effect.  None of
the Asset Sellers (to the extent related to the Business), the Target Companies
or the Target Subsidiaries has received any written notice or other written
communication relating to any alleged violation of any applicable Law from any
Governmental Entity, or of any investigation with respect thereto, except for
violations, if any, that, individually and in the aggregate, would not have a
Material Adverse Effect.  None of the Asset Sellers (to the extent related to
the Business), the Target Companies or the Target Subsidiaries has violated any
applicable export control, money laundering or anti-terrorism Law or taken any
action that could reasonably be expected, individually or in the aggregate, to
cause any of the Asset Sellers (to the extent related to the Business), the
Target Companies or the Target Subsidiaries to be in violation of the U.S.
Foreign Corrupt Practices Act of 1977, as amended, any act enforced by the
Office of Foreign Asset Control of the U.S. Department of Treasury or any
applicable Law of similar effect. This representation does not relate to Tax
matters, intellectual property matters, employee benefit matters, environmental
matters, labor matters or regulatory matters relating to the Business, which are
covered by Sections 4(i), (k), (n), (o), (p) and (s), respectively.
 
(i)  Tax Matters.  (i)  As of the date of this Agreement, each Target Company
and Target Subsidiary has timely filed all material Income Tax Returns that it
was required to file with respect to the Business, all such Tax Returns are
true, correct and complete in all material respects, and all Income Taxes shown
to be payable on such Income Tax Returns and all assessments of Income Tax made
against any Target Company or Target Subsidiary have been paid when due, except
for amounts which are being or have been contested by appropriate proceedings.
 
(ii)  As of the date of this Agreement, none of the Asset Sellers or any of the
Target Companies or Target Subsidiaries has waived any statute of limitations in
respect of Income Taxes or agreed to any extension of time with respect to an
Income Tax assessment or deficiency.
 
(iii)  Except for Nippon Alpharma Co., Ltd, each Target Company and Target
Subsidiary has filed an election, in effect as of the Closing Date, pursuant to
Treasury Regulation §301.7701-3 to be disregarded as an entity separate from its
owner for U.S. Federal Income Tax purposes and each such election will be in
effect prior to and as of the Closing Date.
 
(iv)  Each of the Target Companies and Target Subsidiaries has complied in all
material respects with all material laws relating to the payment and withholding
of Taxes.
 
 
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(v)  Within the five-year period ending on the date of this Agreement, no claim
has been made in writing addressed to any Target Company or Target Subsidiary by
any Taxing Authority in a jurisdiction where any such entity does not file
Income Tax Returns that any such entity is or may be subject to Income Tax in
such jurisdiction.
 
(vi)  As of the date of this Agreement, there are no pending actions, suits,
audits or proceedings for the assessment or collection of Taxes with respect to
any Target Company or any of the Target Subsidiaries, and no Taxing Authority
has proposed or asserted any material deficiency for any material Taxes against
any of the Target Companies or any of the Target Subsidiaries.
 
(vii)  There are no Liens with respect to any Taxes upon any of the Acquired
Assets, and there are no Liens with respect to any Taxes on any of the assets of
the Target Companies and Target Subsidiaries (other than Permitted Liens).
 
(viii)  Notwithstanding any provision in this Section 4 to the contrary, no
representations and warranties by Parent (other than those in this Section 4(i))
shall apply to any Tax matters.
 
(j)  Real Property.  (i)  Section 4(j)(i) of the Disclosure Schedule sets forth
a schedule, as of the date of this Agreement, of each material parcel of Owned
Real Property (or each group of parcels comprising one operating unit),
including with respect to each such property, the name of the owner of such
property, the address and use.  With respect to each material parcel of Owned
Real Property:
 
(A)  The Asset Sellers or the applicable Target Company or Target Subsidiary
thereof listed in Section 4(j)(i) of the Disclosure Schedule has good and valid
fee simple title, free and clear of all Liens, except Permitted Liens and the
Alpharma Credit Agreement Lien, subject to Parent’s obligations under
Section 5(h) hereof to cause the Alpharma Credit Agreement Lien to be released
as of the Closing Date with respect to all of the Owned Real Property;
 
(B)  as of the date of this Agreement, except as set forth in Section 4(j)(i) of
the Disclosure Schedule, none of the Asset Sellers or any of the Target
Companies or Target Subsidiaries has leased or otherwise granted to any Person
the right to use or occupy such Owned Real Property or any portion thereof;
 
(C)  to the Knowledge of Parent, there are no unrecorded outstanding options,
rights of first offer or rights of first refusal to purchase such Owned Real
Property or any portion thereof or interest therein; and
 
(D)  as of the date of this Agreement, there are no pending or, to the Knowledge
of Parent, threatened condemnation proceedings before any Governmental Entity.
 
 
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(ii)  Section 4(j)(ii) of the Disclosure Schedule sets forth a schedule, as of
the date of this Agreement, of each material parcel of Leased Real Property (or
each group of parcels comprising one operating unit), including a true and
complete list of all Leases for each such parcel of Leased Real
Property.  Parent has made available to Buyer a true and complete copy of each
such Lease document.  With respect to each of the Leases: (A) such Lease is a
legal, valid and binding obligation of the applicable Asset Seller, Target
Company or Target Subsidiary party thereto; and (B) the Asset Sellers or the
applicable Target Company or Target Subsidiary party thereto listed on
Section 4(j)(ii) of the Disclosure Schedule is not in breach or default under
such Lease, and to Parent’s Knowledge, no event has occurred or circumstance
exists which, with the delivery of notice, the passage of time or both, would
constitute such a breach or default, in each case, except for breaches or
defaults which would not, individually and in the aggregate, have Material
Adverse Effect.  None of the Asset Sellers or any of the Target Companies or
Target Subsidiaries has subleased or otherwise granted to any Person the right
to possess, lease, use or occupy such Leased Real Property or any portion
thereof.
 
(k)  Intellectual Property.  (i)  Section 4(k)(i) of the Disclosure Schedule
sets forth a complete and correct list, as of the date of this Agreement, of all
material formally registered Intellectual Property owned by or licensed to
Parent or its Subsidiaries and used or held for use in the Business.  The
Intellectual Property set forth in Section 4(k)(i) of the Disclosure Schedule is
referred to as the “Material Intellectual Property”.  Section 4(k)(i) of the
Disclosure Schedule sets forth a list, as of the date of this Agreement, of all
jurisdictions in which such Material Intellectual Property is registered or
registrations have been applied for and all registration and application
numbers.  Parent or one of its Subsidiaries is the sole and exclusive owner of,
or has the right to use, the trademarks that are part of the Material
Intellectual Property in connection with the goods and services recited in the
applicable registrations relating thereto.  Parent or one of its Subsidiaries is
the sole and exclusive owner of, or has the right to reproduce, display,
perform, modify, enhance, distribute, prepare derivative works of and
sublicense, without payment to any other person, the copyrights that are part of
the Material Intellectual Property. The consummation of the Transaction and the
other transactions contemplated by this Agreement does not conflict with, alter
or impair any such rights.  Parent or one of its Subsidiaries is the sole and
exclusive owner of, or has the right to use, the patents that are part of the
Material Intellectual Property.  The Material Intellectual Property and the
Material Technology, together with any Intellectual Property or Technology that
the Target Companies and the Target Subsidiaries have a right to use under valid
licenses, constitutes all of the Intellectual Property or Technology that is
used or held for use in the conduct of the Business as it is currently
conducted.
 
(ii)  To the Knowledge of Parent, none of the Target Companies or Target
Subsidiaries has pledged any rights it may have to any Material Technology other
than Permitted Liens or the Alpharma Credit Agreement Lien.  None of the Asset
Sellers, any Target Company or any Target Subsidiary has granted any license
relating to any material Technology that is owned by or licensed to Parent or
its Subsidiaries and used or held for use in the Business (the “Material
Technology”)
 
 
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or Material Intellectual Property, or the marketing or distribution thereof,
except for non-exclusive licenses to end-users in the ordinary course of
business.  To the Knowledge of Parent, the Intellectual Property and Material
Technology used or held for use in the Business does not infringe or violate in
any material respect the rights of any Person.  No material claims are pending
or, to the Knowledge of Parent, threatened, against Parent or one of its
Subsidiaries by any person with respect to the ownership, validity,
enforceability or effectiveness of any Intellectual Property used or held for
use in the Business and, since January 1, 2006 (or its date of formation, if
later), none of the Asset Sellers, any Target Company or any Target Subsidiary
has received any written communication alleging that the Business violated in
any material respect any material rights relating to Intellectual Property of
any person.  As of the date of this Agreement, to the Knowledge of Parent, no
Person is infringing or misappropriating any of the Material Intellectual
Property.  All Material Technology has been maintained in confidence in
accordance with protection procedures customarily used in the industry to
protect rights of like importance.
 
(iii)  “Intellectual Property” means all intellectual property and other similar
proprietary rights in any jurisdiction, whether registered or unregistered,
including such rights in and to: any patent (including all reissues, divisions,
continuations, continuations-in-part and extensions thereof), patent
application, patent right; any trademark, trademark registration, trademark
application, servicemark, trade name, business name, brand name; any copyright,
copyright registration, design, design registration, database rights; any
software; any internet domain names; or any right to any of the foregoing.
 
(iv)  “Technology” means all trade secrets, confidential information, inventions
whether patentable or not, formulae, processes, procedures, research records,
records of inventions, test information, data, technology and know-how; data
exclusivity; product and regulatory files including new drug
applications/submissions or other applications related to the approval to
manufacture and/or sell a pharmaceutical product whether abbreviated, abridged
or full; market surveys and marketing information.
 
(l)  Contracts.  Section 4(l) of the Disclosure Schedule lists as of the date of
this Agreement, all contracts and other agreements to which an Asset Seller (to
the extent primarily related to the Business) or any of the Target Companies or
the Target Subsidiaries is a party:
 
(i)  the performance of which is reasonably expected to involve annual
consideration in excess of $2,000,000 (excluding sales orders and purchase
orders issued in the ordinary course of business);
 
(ii)  with respect to a joint venture, partnership, limited liability or other
similar agreement;
 
 
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(iii)  with Parent or any of its Affiliates (other than the Target Companies and
the Target Subsidiaries), including any contract or other agreement pursuant to
which any Target Company or Target Subsidiary is expressly jointly and severally
liable for the obligations of Parent or any of its Affiliates;
 
(iv)  non-compete or similar agreements which limit or purport to limit the
ability of the Target Companies or the Target Subsidiaries to compete in any
line of business or with any other Person or in any geographic area or during
any period of time;
 
(v)  with respect to employment or retention agreements (other than any
employment agreement that is required by applicable Law) that are not terminable
at will or without material costs;
 
(vi)  relating to the incurrence of Indebtedness with outstanding obligations or
commitments in excess of $1,000,000, other than Intercompany Payables,
Intercompany Receivables and Assumed Intercompany Receivables;
 
(vii)  relating to the acquisition or disposition of any Person, business or
other material assets, in each case entered into outside the ordinary course of
business, and pursuant to which any Target Company or Target Subsidiary has any
continuing obligations; and
 
(viii)  under which (A) any Person has directly or indirectly guaranteed any
liabilities or obligations of the Asset Sellers (to the extent primarily related
to the Business), the Target Companies or the Target Subsidiaries or (B) the
Asset Sellers (to the extent primarily related to the Business), the Target
Companies or the Target Subsidiaries have directly or indirectly guaranteed
liabilities or obligations of any other Person.
 
Each such Contract described in clauses (i) through (viii) is referred to herein
as a “Material Contract”.  Each of the Material Contracts is valid and binding
on the Asset Sellers, the Target Companies or the Target Subsidiaries party
thereto.  There is no breach or default under any Material Contract by any of
the Asset Sellers or any of the Target Companies or the Target Subsidiaries or,
to the Knowledge of Parent, by any other party, and no event has occurred that
with the lapse of time or the giving of notice or both would constitute a breach
or default thereunder by any of the Asset Sellers or any of the Target Companies
or the Target Subsidiaries or, to the Knowledge of Parent, by any other party,
other than breaches or defaults that would not, individually and in the
aggregate, have a Material Adverse Effect.  Parent has made available to Buyer a
correct and complete copy of each written Material Contract (as amended to the
date of this Agreement) listed in Section 4(l) of the Disclosure Schedule;
provided, that information in such Contracts has been redacted to the extent
necessary to enable compliance with Laws relating to antitrust or the
safeguarding of data privacy.
 
(m)  Litigation.  None of the Asset Sellers (to the extent related to the
Business) or any of the Target Companies or the Target Subsidiaries is subject
to (i) any
 
 
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outstanding Judgment or (ii) any pending or, to the Knowledge of Parent,
threatened, action, suit, claim, proceeding, hearing, or investigation, in each
case, except for those that would not, individually and in the aggregate, have a
Material Adverse Effect.  As of the date of this Agreement, there are no
settlement agreements or similar written contracts with any Governmental Entity
and no outstanding orders entered or issued by any Governmental Entity against
the Asset Sellers (to the extent related to the Business), Target Companies or
Target Subsidiaries.  This representation does not relate to Tax matters,
employee benefit matters, environmental matters, labor matters or regulatory
matters relating to the Business, which are covered by Sections 4(i), (n), (o),
(p) and (s), respectively.
 
(n)  Employee Benefits.  (i)  Section 4(n)(i) of the Disclosure Schedule lists
each material Employee Benefit Plan that any of the Target Companies or the
Target Subsidiaries maintains or which any of the Target Companies or the Target
Subsidiaries participate in or to which they contribute (each such plan, a
“Target Company Benefit Plan”) and each Target Company Benefit Plan sponsored or
maintained by any of the Target Companies or the Target Subsidiaries is
separately identified.
 
(ii)  Where applicable, with respect to each of the Target Company Benefit
Plans, true and complete copies of (A) all plan documents (including all
amendments and modifications thereof) or, if none, a summary thereof, and all
related trust agreements, insurance contracts and other funding arrangements;
and (B) the most recent actuarial report, if applicable has been made available
to Buyer.
 
(iii)  Each Target Company Benefit Plan (and each related trust, insurance
contract, or fund) has been maintained, funded, operated and administered in all
material respects in accordance with the terms of such Target Company Benefit
Plan and complies in form and operation in all material respects in accordance
with the applicable requirements of applicable Law.
 
(iv)  Except as would not, indirectly or in the aggregate, have a Material
Adverse Effect, each Target Company Benefit Plan for which approval from a
Taxing Authority is necessary or appropriate under applicable Law has received
such approval and no event has occurred or circumstance exists that could
reasonably be expected to give rise to the loss of such approval.
 
(v)  All contributions (including all employer contributions and employee salary
reduction contributions) and premiums or other payments that are required to be
made by the Closing Date to each Target Company Benefit Plan have been made.
 
(vi)  With respect to each Target Company Benefit Plan, no action, suit,
proceeding, hearing, or investigation (other than routine claims for benefits
payable in the ordinary course of business) involving any such Target Company
Benefit Plan is pending, or to the Knowledge of Parent, threatened.
 
 
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(vii)  Except as set forth in Section 4(n)(vii) of the Disclosure Schedule, with
respect to any Target Company Benefit Plan subject to funding requirements, the
fair market value of the assets of such plan equals or exceeds the actuarial
present value of all accrued benefits under such plan (whether or not vested,
each as determined under the assumptions and valuation method of the latest
actuarial valuation of such plan).
 
(viii)  There has been no amendment to, announcement by Parent or any of the
Target Companies or the Target Subsidiaries relating to, or change in employee
participation or coverage under, any Target Company Benefit Plan which would
increase materially the expense of maintaining such plan above the level of the
expense incurred therefor for the fiscal year ended December 31, 2007. Neither
the execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereby will, pursuant to the terms of any Target
Company Benefit Plan, (A) entitle any of the Employees of the Business to
severance pay, unemployment compensation or any other payment or any increase in
severance pay, unemployment compensation or any other payment upon any
termination of employment after the date hereof, (B) accelerate the time of
payment or vesting or increase the amount of compensation due any such employee,
(C) result in any payment or funding (through a grantor trust or otherwise) of
compensation or benefits under, increase the amount payable or result in any
other material obligation pursuant to, any of the Target Company Benefit Plan,
(D) limit or restrict the right of Parent, any of the Target Companies or the
Target Subsidiaries or, after the consummation of the transactions contemplated
hereby, Buyer, to merge, amend or terminate any of the Target Company Benefit
Plan, subject to terms of this Agreement.
 
(o)  Environmental Matters.  (i)  The Asset Sellers (to the extent primarily
related to the Business) and the Target Companies and the Target Subsidiaries
have complied and are in compliance with Environmental Laws, except for such
noncompliance that would not, individually and in the aggregate, have a Material
Adverse Effect.
 
(ii)  The Asset Sellers, the Target Companies and the Target Subsidiaries have
obtained and are in compliance in all material respects with all material
permits, licenses, registrations and other authorizations required for the
operation of the Business as currently conducted pursuant to any Environmental
Laws (“Environmental Permits”), and all such Environmental Permits are valid and
in full force and effect.
 
(iii)  There are no Environmental Claims pending or, to the Knowledge of Parent
threatened, against any of the Asset Sellers (to the extent primarily related to
the Business) or the Target Companies or the Target Subsidiaries, except for
such Environmental Claims that would not, individually and in the aggregate,
have a Material Adverse Effect.  None of the Asset Sellers (to the extent
primarily related to the Business) or any of the Target Companies or the Target
Subsidiaries is subject to any material outstanding Judgment relating to
Environmental Laws.  
 
 
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This representation does not relate to any product liability matters which are
covered by Section 4(r).
 
(iv)  None of the Asset Sellers, the Target Companies or the Target Subsidiaries
has released any Hazardous Substance at, on, under or from any Real Property or
any other location, and to the Knowledge of Parent, there has been no release by
any other person of any Hazardous Substance at, on, under or from any Real
Property, in each case except as would not, individually and in the aggregate,
have a Material Adverse Effect on the Business.
 
(v)  Parent has provided to Buyer all material environmental site assessments,
audits, investigations and studies prepared in the last five years and in the
possession, custody or control of Parent, the Asset Sellers, the Target
Companies or any of the Target Subsidiaries relating to the Owned Real Property.
 
                     (p)  Labor Matters.  (i)  Section 4(p)(i) of the Disclosure
Schedule contains a complete and accurate list of each collective bargaining,
worker’s counsel or other labor union contract or arrangement to which any of
the Target Companies or the Target Subsidiaries is a party (the “Collective
Bargaining Agreements”).  No other union or labor organization is currently
certified and, to the Knowledge of Parent, there is no activity or proceeding of
any union or labor organization to organize any Employees of the Target
Companies or Target Subsidiaries.
 
(ii)  Each of the Asset Sellers, the Target Companies and the Target
Subsidiaries has complied in all material respects with the terms of the
Collective Bargaining Agreements and all applicable Laws pertaining to the
employment or termination of employment of current or former employees of the
Target Companies and Target Subsidiaries, including all such Laws relating to
labor relations, equal employment opportunities, fair employment practices,
prohibited discrimination or distinction, wages, hours, safety and health,
workers’ compensation and the collection and payment of withholding and/or
social security Taxes.  None of the Target Companies or any of Target
Subsidiaries has, currently or within the past year, experienced any strikes.
 
(q)  Insurance.Section 4(q) of the Disclosure Schedule contains a complete and
accurate list as of the date of this Agreement of each currently effective
material insurance policy covering the Asset Sellers (to the extent material to
the Business) or any of the Target Companies or the Target Subsidiaries or any
of their properties or assets (collectively, the “Insurance Policies”),
including the underwriter of such policies, the type of coverage, the limits of
coverage thereunder and any deductible and/or retention amount.  All premiums
due under the Insurance Policies have been paid when due since January 1,
2006.  All of the Insurance Policies are in full force and effect and Parent has
not received any written notice of termination or non-renewal of any of the
Insurance Policies, in each case other than any denials of claims or reservation
of rights by any insurer.
 
 
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(r)  Product Liability.  No Person has made (or to the Knowledge of Parent,
threatened to make) any claim against any of the Asset Sellers or any of the
Target Companies or the Target Subsidiaries since January 1, 2006 (or its date
of formation, if later) arising out of any personal injury and/or death or
damage to property proximately caused by the use of the Products developed,
manufactured, marketed, distributed, sold or otherwise provided by, or on behalf
of, any of the Asset Sellers or any of the Target Companies or the Target
Subsidiaries, except for claims which would not, individually and in the
aggregate, have a Material Adverse Effect.  Sellers have made appropriate
notifications under the Insurance Policies with respect to each such claim made
against any of the Asset Sellers or any of the Target Companies and the Target
Subsidiaries since January 1, 2006.
 
(s)  Regulatory Matters.  (i)  The Asset Sellers and each of the Target
Companies and the Target Subsidiaries are in compliance with all applicable Laws
of the United States and each foreign jurisdiction, including of the rules and
regulations of the FDA and any governmental agency of any other country having
jurisdiction of the Manufacturing Facilities or the manufacture, sale, labeling,
storing, testing and distribution of the Products, as applicable (each, a
“Regulatory Authority”), with respect to the manufacture, sale, labeling,
storing, testing and distribution of the Products, except for such instances of
noncompliance that would not, individually and in the aggregate, have a Material
Adverse Effect.  Each of the Target Companies and the Target Subsidiaries have
all material permits, approvals, registrations and licenses related to the
Manufacturing Facilities from the Regulatory Authorities to conduct the Business
as currently conducted.
 
(ii)  Since January 1, 2003 (or its date of formation, if later), none of the
Asset Sellers or any of the Target Companies or the Target Subsidiaries is in
receipt of notice of, has been or is subject to, any adverse inspection,
compelled or voluntary recall, investigation, penalty for corrective or remedial
action or corrective action plan, in each case relating to the Products or the
Manufacturing Facilities by the Regulatory Authorities, including compliance
with current good manufacturing practices as regulated and/or required by the
Regulatory Authorities, except for such instances which would not, individually
and in the aggregate, have a Material Adverse Effect.
 
(iii)  As of the date of this Agreement, there are no pending actions, suits,
proceedings, hearings, investigations, charges, claims, demands, notices or
complaints by the Regulatory Authorities relating to the Manufacturing
Facilities or the Products.
 
(iv)  None of the Asset Sellers or any of the Target Companies or the Target
Subsidiaries has received, since January 1, 2003 (or its date of formation, if
later), any written notification, that remains unresolved, from any Regulatory
Authorities indicating that any Product is misbranded or adulterated as defined
in the FDA Act and the rules and regulations promulgated thereunder or any
similar Law, except for such instances which would not, individually and in the
aggregate, have a Material Adverse Effect.  The Asset Sellers and the Target
 
 
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Companies and the Target Subsidiaries have properly handled and stored all
Products included in the Inventory in compliance in all material respects with
all applicable Laws and none of the Products included in the Inventory are
misbranded or adulterated as defined in the FDA Act and the rules and
regulations promulgated thereunder or any similar Law, except for such instances
which would not, individually and in the aggregate, have a Material Adverse
Effect.
 
(v)  This representation does not relate to Tax matters, employee benefit
matters, environmental matters or labor matters, which are covered by
Sections 4(i), (n), (o) and (p), respectively.
 
(t)  Certain Business Relationships with the Asset Sellers, the Target Companies
and the Target Subsidiaries.  Except as otherwise contemplated in this Agreement
or the Ancillary Agreements and the agreements set forth on Section 4(t) of the
Disclosure Schedule (the “Intercompany Assumed Agreements”) which Buyer
acknowledges shall continue in force after Closing, no material business
arrangement or agreement exists between a Target Company or Target Subsidiary,
on the one hand, and Parent or any of its Affiliates (other than a Target
Company or Target Subsidiary), on the other hand, that will continue in effect
subsequent to Closing.
 
(u)  Customers and Suppliers.  (i)  Section 4(u)(i) of the Disclosure Schedule
sets forth a complete and correct list of the top twenty customers of the
Business (based on the aggregate purchase price of products provided) for the
year ended December 31, 2007.  As of the date of this Agreement, no such
customer has canceled or otherwise terminated, or to the Knowledge of Parent,
has indicated an intent to cancel or otherwise terminate its relationship with
the Business or to materially decrease the volume of business, or substantially
amend the terms on which it conducts with the Business.
 
(ii)  Section 4(u)(ii) of the Disclosure Schedule sets forth a complete and
correct list of the top ten suppliers of raw materials and packaging materials
to the Business (based on the aggregate purchase price of raw materials and
packaging materials; for the avoidance of doubt, excluding any purchases of
utilities or products purchased from contract manufacturers) for the year ended
December 31, 2007.  As of the date of this Agreement, no such supplier has
canceled or otherwise terminated, or to the Knowledge of Parent, has indicated
an intent to cancel or otherwise terminate its relationship with the Business or
to materially decrease the volume of business, or substantially amend the terms
on which it conducts with the Business.
 
SECTION 5.  Pre-Closing Covenants.  Parent and Buyer agree as follows with
respect to the period between the execution of this Agreement and the Closing.
 
(a)  General.  Each of Parent and Buyer will use reasonable best efforts,
including taking the actions set forth on Section 5(a) of the Disclosure
Schedule, to take all actions and to do all things necessary, proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction,
 
 
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but not waiver, of the Closing conditions set forth in Section 7 below) and as
soon as practicable after the date hereof.
 
(b)  Notices and Consents.  Parent shall, and shall cause each of the Target
Companies and the Target Subsidiaries to, give any notices to third parties, and
shall, and shall cause each of the Target Companies and the Target Subsidiaries
to, use reasonable best efforts to obtain any third party consents referred to
in Section 4(c) of the Disclosure Schedule; provided that Parent shall have no
obligation to pay money or make any concessions to obtain such consents.  Buyer
acknowledges that certain consents and waivers with respect to the transactions
contemplated by this Agreement may be required from parties to the Business
Contracts and that such consents and waivers may not be obtained prior to
Closing.  Buyer acknowledges that, subject to compliance with Section 2(d) and
this Section 5, Parent and its Affiliates shall not have any liability
whatsoever to Buyer arising out of or relating to the failure to obtain any
consents or waivers that may be required in connection with the transactions
contemplated by this Agreement or because of the termination of any Business
Contract as a result thereof.  Buyer acknowledges that no representation,
warranty or, subject to compliance with Section 2(d) and this Section 5,
covenant of the Sellers contained herein shall be breached or deemed breached,
and no condition shall be deemed not satisfied, as a result of (i) the failure
to obtain any such consent or waiver, (ii) any such termination or (iii) any
lawsuit, action, proceeding or investigation commenced or threatened by or on
behalf of any Person arising out of or relating to the failure to obtain any
such consent or any such termination.  Subject to the terms and conditions
herein, Parent and Buyer agree to use their reasonable best efforts to take, or
cause to be taken, all actions necessary to expeditiously consummate the
transactions contemplated by this Agreement, including using reasonable best
efforts to make all necessary domestic and foreign government filings, including
filings under the Hart-Scott-Rodino Act and any Foreign Merger Control Law,
respond to government requests for information, and obtain all necessary
governmental, judicial or regulatory actions or non-actions, orders, waivers,
consents, clearances, extensions and approvals.
 
(c)  Financing.  (i)  Buyer shall, and shall cause its Affiliates to, use
reasonable best efforts to take, or cause to be taken, all appropriate action,
do, or cause to be done, all things necessary, proper or advisable under
applicable Laws, and to execute and deliver, or cause to be executed and
delivered, such instruments and documents as may be required, to arrange the
Financing as promptly as reasonably practicable on the terms and subject only to
the conditions contained in the Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this paragraph (c)), including,
in the case of the Debt Financing, to (A) negotiate and enter into definitive
agreements with respect to the Debt Financing on the terms and subject only to
the conditions contained in the Debt Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this paragraph (c)) or on other
terms acceptable to Buyer so long as such definitive agreements (1) do not
contain any additional or modified conditions or other contingencies to the
funding of the Debt Financing that are more favorable in any respect to the Debt
Financing sources than those contained in the Debt Financing Commitments (or any
replacement commitments obtained by Buyer in compliance with this paragraph (c))
and (2) are in a form that is
 
 
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otherwise not reasonably likely to impair or delay the funding of the Debt
Financing or the Closing, (B) satisfy, and cause its Affiliates to satisfy, on a
timely basis all conditions applicable to Buyer or its Affiliates contained in
the Debt Financing Commitments (or any replacement commitments obtained by Buyer
in compliance with this paragraph (c)) and (C) consummate the Debt Financing
contemplated by the Debt Financing Commitments (or any replacement commitments
obtained by Buyer in compliance with this paragraph (c)) at the Closing,
including using its reasonable best efforts to cause the financial institutions
providing the Debt Financing to fund the Debt Financing (including by taking
specific or other equitable enforcement action to cause such financial
institutions to fund the Debt Financing, subject to the satisfaction of the
conditions precedent to the initial funding of the Debt Financing
Commitments).  Buyer shall, and shall cause its Affiliates to, refrain from
taking, directly or indirectly, any action that is reasonably likely to result
in the failure of any of the conditions contained in the Financing Commitments
(or replacement commitments obtained by Buyer in compliance with this
paragraph (c)) or in any definitive agreement related to the Financing.
 
(ii)  Buyer shall not agree to or permit any amendment, supplement or other
modification of, or waive any of its rights under, any Financing Commitments (or
replacement commitments obtained by Buyer in compliance with this paragraph (c))
or the definitive agreements relating to the Financing without Parent’s prior
written consent, except that Buyer may amend, supplement or otherwise modify the
Debt Financing Commitments (or replacement commitments obtained by Buyer in
compliance with this paragraph (c)) if such amendment, supplement or other
modification (1) does not contain additional or modified conditions or other
contingencies to the funding of the Debt Financing that are more favorable in
any respect to the Debt Financing sources than those contained in Debt Financing
Commitments and (2) is otherwise not reasonably likely to impair or delay the
funding of the Debt Financing or the Closing (it being understood that, subject
to the requirements of this clause (ii), such amendment, supplement or other
modification of the Debt Financing Commitments (or any replacement commitments
obtained by Buyer in compliance with this paragraph (c)) may provide for the
assignment of a portion of the Debt Financing Commitment (or replacement
commitments obtained by Buyer in compliance with this paragraph (c)) to
additional agents or arrangers and grant such Persons approval rights with
respect to certain matters as are customarily granted to additional agents or
arrangers).  Notwithstanding anything to the contrary in this Agreement, Buyer
shall not amend the Interim Loan Agreement in the manner set forth in Section
(A) of the side letter relating thereto dated as of the date of this Agreement,
unless Buyer delivers to Parent in connection therewith a condition satisfaction
letter executed by the lenders under the Debt Financing in form and substance
similar to the condition satisfaction letter delivered to Parent on the date of
this Agreement in respect of the Interim Loan Agreement and providing that all
opinions, pledge agreements, corporate documents, instruments or other documents
related to the additional conditions precedent in such amendment are in agreed
form.
 
(iii)  If any portion of the Debt Financing becomes unavailable on the terms and
conditions contained in the Financing Commitments (or any replacement
commitments obtained by Buyer in compliance with this paragraph (c)), Buyer
shall
 
 
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promptly notify Parent, and Buyer shall use its reasonable best efforts to
obtain, as promptly as practicable following the occurrence of such event,
replacement commitments on terms that will enable Buyer to consummate the
transactions contemplated by this Agreement and that are not less favorable in
the aggregate (as determined by Buyer in its reasonable judgment) to Buyer and
Parent than those contained in the Financing Commitments; provided that such
replacement commitments shall not (A) be subject to any additional or modified
conditions or other contingencies to the funding of the Financing that are more
favorable in any respect to the Financing sources than those contained in the
Financing Commitments or (B) otherwise be reasonably likely to impair or delay
the funding of the Financing or the Closing.  Buyer shall deliver to Parent
complete and correct copies of all amendments, supplements, other modifications
or agreements pursuant to which any amended, supplemented, modified or
replacement commitments shall provide Buyer with any portion of the Financing;
provided that Buyer may redact from any such copies the fee amounts payable to
their Financing sources.
 
(iv)  Parent shall, and shall cause its Subsidiaries to, and shall use its
reasonable best efforts to cause its and its Subsidiaries’ accountants, legal
counsel and other advisors to, provide such reasonable cooperation in connection
with the arrangement of the Debt Financing as may be reasonably requested by
Buyer, including (A) participation in a reasonable number of meetings, drafting
sessions, “road show” presentations and due diligence sessions, (B) using
reasonable best efforts to furnish Buyer and its Debt Financing sources with the
Required Financial Information and such other information reasonably requested
by Buyer in connection with the Debt Financing, (C) assisting Buyer and its Debt
Financing sources in the preparation of materials for rating agency
presentations, (D) reasonably cooperating with the marketing efforts of Buyer
and its Debt Financing sources, (E) reasonably facilitating the pledging of
collateral and execution and delivery of definitive agreements relating to the
Financing and (F) using reasonable best efforts to obtain accountants’ “comfort
letters”, legal opinions, surveys and title insurance as reasonably requested by
Buyer; provided that (I) none of Parent nor any of its Subsidiaries shall be
required to pay any commitment or other fee or incur any other liability in
connection with the Debt Financing, (II) such requested cooperation shall not
unreasonably interfere with the ongoing operations of Parent and its
Subsidiaries and (III) Parent and its Subsidiaries shall not be required to take
any action that would be prohibited by applicable Law, including financial
assistance restrictions applicable to any Target Company or Target
Subsidiary.  Buyer shall, promptly upon request by Parent, reimburse Parent for
all reasonable and documented out-of-pocket costs incurred by Parent or any of
its Subsidiaries in connection with such cooperation.  Buyer and its Affiliates
shall, on a joint and several basis, indemnify and hold harmless Parent and its
Affiliates from and against any Losses suffered or incurred by them in
connection with providing cooperation in respect of the Debt Financing pursuant
to this Section 5(c) and any information utilized in connection
therewith.  Parent shall have the right to consent to the use of its and its
Subsidiaries’ logos in connection with the Debt Financing.
 
(v)  Buyer shall keep Parent reasonably informed on a timely basis of the status
of the Financing and any material developments relating to the Financing.
 
 
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(vi)  Buyer acknowledges that the information being provided to it in connection
with the Financing is subject to the terms of Section 5(e).
 
(d)  Operation of Business.  Except as disclosed on Section 5(d) of the
Disclosure Schedule, as otherwise expressly permitted by the terms of this
Agreement or with the prior written consent of Buyer (which consent shall not be
unreasonably withheld or delayed), from the date of this Agreement through the
Closing Date, Parent shall (to the extent primarily related to the Business) use
its reasonable best efforts to, and to cause each of the other Asset Sellers (to
the extent primarily related to the Business) and each of the Target Companies
and the Target Subsidiaries to use their reasonable best efforts to, (i) conduct
their respective businesses only in the ordinary course of business consistent
with past practice, (ii) (A) preserve their respective business organizations
substantially intact, (B) maintain their respective present relationships with
customers, suppliers, distributors, employees and other Persons with which they
have significant business relations and (C) maintain and keep properties and
assets material to the Business in working order, except for any defects which
would not materially impair the use or, with respect to the Real Property,
occupancy of such properties or assets in the operation of the
Business.  Without limiting the generality of the foregoing, except as disclosed
on Section 5(d) of the Disclosure Schedule or otherwise expressly contemplated
or permitted by the terms of this Agreement, from the date of this Agreement
through the Closing Date, Parent shall not (to the extent primarily related to
the Business), and shall cause each of the other Asset Sellers (to the extent
primarily related to the Business) and each of the Target Companies and the
Target Subsidiaries not to, without the prior written consent of Buyer (which
consent shall not be unreasonably withheld or delayed):
 
(i)  pledge, sell, lease, transfer, license, assign or otherwise make subject to
a Lien (other than the Alpharma Credit Agreement Lien or any Permitted Liens),
any material assets, tangible or intangible, other than the sale of Inventory in
the ordinary course of business;
 
(ii)  enter into or materially amend, terminate or cancel any Material Contract
calling for future payments on receipts of greater than $2,000,000 in any year,
other than supply agreements with customers for the supply of products from the
Target Companies or the Target Subsidiaries entered into in the ordinary course
of business;
 
(iii)  terminate or cancel any Material Contract outside the ordinary course of
business;
 
(iv)  make or commit to make any capital expenditures outside the ordinary
course of business or delay any capital expenditures in each case, in excess of
$500,000 individually or $1,000,000 in the aggregate, except to the extent that
such capital expenditure is disclosed in Section 5(d)(iv) of the Disclosure
Schedule;
 
 
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(v)  make any material change in its selling, distribution or pricing practices,
including by accelerating the delivery of products, other than in the ordinary
course of business;
 
(vi)  make any material capital investment in, or any material loan to, any
other Person other than (A) advances in the ordinary course of business,
(B) loans, advances, investments or capital contributions to or in a Target
Company or Target Subsidiary, provided that no disposal of any existing shares
in or increase in the capital of Alpharma Fine Chemicals, Kft. (Hungary) may be
made, or (C) loans or advances that are Intercompany Receivables;
 
(vii)  transfer, assign, or grant any license or sublicense of any material
rights under or with respect to any Material Intellectual Property or Material
Technology;
 
(viii)  issue, sell, or otherwise dispose of any of the capital stock or equity
interests (as the case may be) of the Target Companies or any of the Target
Subsidiaries, or grant any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of the capital
stock or equity interests (as the case may be) of the Target Companies or any of
the Target Subsidiaries, any stock appreciation, phantom stock, profit
participation or similar rights of the Target Companies or any of the Target
Subsidiaries;
 
(ix)  declare, set aside, or pay any dividend or make any distribution with
respect to the capital stock or equity interests (as the case may be) of the
Target Companies or any of the Target Subsidiaries (whether in cash or in kind)
(other than dividends or distributions paid or payable to Parent or any of its
other Subsidiaries pursuant to cash sweeps done in the ordinary course of
business or to another Target Company or Target Subsidiary) or redeem, purchase,
or otherwise acquire any of the capital stock of the Target Companies or any of
the Target Subsidiaries;
 
(x)  make any loan to, or enter into any other transaction with, any of the
directors, officers, and employees of the Business outside the ordinary course
of business;
 
(xi)  create, incur, assume or guarantee any Indebtedness by the Target
Companies or any of the Target Subsidiaries other than Intercompany Payables,
Intercompany Receivables, or Assumed Intercompany Receivables or other than in
the ordinary course of business;
 
(xii)  make any material change in any accounting principles, practice, policy
or procedure, except as may be required to conform to changes in GAAP;
 
(xiii)  acquire or license (whether by merger, consolidation, acquisition of
stock or assets or otherwise) any corporation, partnership or other business
organization or division thereof or any material assets thereof or equity
interests
 
 
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therein, other than purchases of Inventory and other assets in the ordinary
course of business;
 
(xiv)  forgive, cancel or compromise any Indebtedness outside the ordinary
course of business;
 
(xv)  settle or compromise any material litigation or claim relating to the
Business;
 
(xvi)  purchase any material Real Property, enter into any leases of material
Real Property, or materially amend any leases of material Real Property;
 
(xvii)  other than in the ordinary course of business or to the extent required
under the terms of any applicable Collective Bargaining Agreement or as required
under applicable Law, (A) make any changes to the Target Company Benefit Plans
or enter into or adopt any new Target Company Benefit Plans; (B) enter into any
collective bargaining or other labor agreement covering any Employees of the
Target Companies or Target Subsidiaries; (C) alter, amend, or create any
obligations with respect to compensation, severance, change in control payments
or any other payments or benefits to executive-level Employees of the Target
Companies or Target Subsidiaries; or (D) except, with respect to non-officers of
the Target Companies or Target Subsidiaries hired or terminated in the ordinary
course of business, hire any new Employees of the Target Companies or Target
Subsidiaries (other than hires to replace any existing Employee that retires,
resigns or otherwise ceases to be employed by a Target Company or a Target
Subsidiary other than through a violation of this clause (D)) or fire any
existing Employees of the Target Companies or Target Subsidiaries;
 
(xviii)  make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, enter into any closing
agreement, settle any material claim or assessment in respect of Taxes, or
consent to any extension or waiver of any statute of limitation applicable to
any material claim or assessment in respect of Taxes, in each case, if such
action would be outside the ordinary course of business and would result in an
increased Tax liability of Buyer or any of its Affiliates in respect of a
Post-Closing Tax Period; or
 
(xix)  agree or commit to do any of the foregoing;
 
provided that, notwithstanding the foregoing, nothing herein will prohibit or
prevent the Asset Sellers or any of the Target Companies and the Target
Subsidiaries from (i) repaying, collecting or otherwise extinguishing any
Intercompany Receivables, Assumed Intercompany Receivables or Intercompany
Payables, (ii) declaring, setting aside, or paying any cash dividend,
(iii) making any distribution of cash, (iv) redeeming or purchasing, or
otherwise acquiring, any of its capital stock for cash, (v) repaying any of its
Indebtedness or (vi) engaging in any transaction referred to in Section 5(d) of
the Disclosure Schedule.
 
 
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(e)  Full Access; Pre-Closing Confidentiality.  The Asset Sellers will permit,
and the Share Seller (and any other entity which Parent may designate as an
additional Share Seller as a result of the Pre-Closing Restructuring) will cause
each of the Target Companies and the Target Subsidiaries to permit,
representatives of Buyer (including legal counsel, prospective financing sources
and accountants) to have reasonable access, upon reasonable notice during normal
business hours, to all premises, properties, personnel, books, records
(including Tax records (other than any Income Tax records of Parent)),
contracts, work papers (subject to the receipt of consent from Sellers’
auditors) and documents of or pertaining to the Asset Sellers (to the extent
related to the Business) and each of the Target Companies and the Target
Subsidiaries; provided, however, that (i) such access shall not permit any
representatives of Buyer to conduct any environmental testing or sampling,
(ii) such access does not unreasonably disrupt the normal operations of the
Sellers, the Target Companies and the Target Subsidiaries and (iii) Parent shall
not be obligated to afford to Buyer or any of its representatives (including
legal counsel, prospective financing sources and accountants) any access to any
Contract or information the disclosure of which (A) is restricted by
confidentiality obligations or applicable Law, including, without limitation,
Laws relating to antitrust or (B) would jeopardize the legal privilege accorded
to such Contract or information, provided that promptly after execution of this
Agreement the Sellers shall provide Buyer written notice of the nature and
substance of any such information or Contracts that are withheld (to the
greatest extent possible under such confidentiality obligations or applicable
Law or as would not, in the judgment of Parent, jeopardize any such legal
privilege) and the basis for such withholding.  Buyer will, and will cause its
representatives (including legal counsel, prospective financing sources and
accountants), to treat and hold any information received from the Sellers or any
of the Target Companies or the Target Subsidiaries in the course of the reviews
contemplated by this Section 5(e) in accordance with the Confidentiality
Agreement, dated October 16, 2007, between Parent and Buyer (the
“Confidentiality Agreement”) which Confidentiality Agreement shall remain in
full force and effect in accordance with its terms; provided, that the
obligations of Buyer with respect to confidential information relating solely to
the Business shall terminate on the Closing Date.  For three (3) years from the
date of this Agreement, Parent shall, and shall cause the Asset Sellers to,
retain all books and records that are related to the Business in accordance with
Parent’s record retention policies as in effect at such time.  During the
three-year period beginning on the date of this Agreement, Parent shall not
dispose, or permit the Asset Sellers to dispose, any books and records not
required to be retained under such policies without giving 60 days’ written
notice to Buyer offering to deliver the same to Buyer at Buyer’s expense.
 
(f)  Release of Guarantees and Letters of Credit.  (i)  Other than as
contemplated by the following sentence, at or prior to the Closing, Buyer shall
use its reasonable best efforts to cause (i) to be unconditionally released or
extinguished in full all guarantees or sureties (whether or not of Indebtedness)
set forth on Section 4(c) of the Disclosure Schedule or entered into after the
date of this Agreement not in violation of Section 5(d), together with any
ancillary obligations thereto, issued by Parent or any of its Affiliates (other
than the Target Companies or Target Subsidiaries) on behalf of the Business or
any Target Company or any Target Subsidiary, without further recourse to Parent
or its applicable Affiliate and (ii) Parent and its Affiliates (other than the
Target
 
 
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Companies or Target Subsidiaries) to be unconditionally released in full from
any liability or obligation in respect of any letter of credit issued for the
account of the Business or in connection with any liability or obligation of the
Business, without further recourse to Parent or its applicable Affiliate. Buyer
and its Affiliates shall, on a joint and several basis, indemnify and hold
harmless Parent and its Affiliates from and against any Losses suffered or
incurred by them in connection with any of the foregoing guarantees, sureties,
liabilities or obligations from and after the Closing Date.
 
(ii)  At or prior to the Closing, Parent shall use its reasonable best efforts
to cause (i) to be unconditionally released or extinguished in full all
guarantees or sureties (whether or not of Indebtedness), together with any
ancillary obligations thereto, issued by any Target Company or Target
Subsidiaries on behalf of Parent or any of its Affiliates (other than guarantees
or sureties issued on behalf of another Target Company or Target Subsidiary or
in respect of the Business), without further recourse to the applicable Target
Company and Target Subsidiaries and (ii) the Target Companies and Target
Subsidiaries to be unconditionally released in full from any liability or
obligation in respect of any letter of credit issued for the account of Parent
or any of its Affiliates (other than letters of credit issued for the account of
the Business or in connection with any liability or obligation of the Business),
without further recourse to the applicable Target Company or Target
Subsidiary.  Parent and its Affiliates shall, on a joint and several basis,
indemnify and hold harmless Buyer and its Affiliates from and against any Losses
suffered or incurred by them in connection with any of the foregoing guarantees,
sureties, liabilities or obligations from and after the Closing Date.
 
(g)  Repayment of Indebtedness; Intercompany Accounts.  (i)  Prior to the
Closing, Parent (i) shall assume, extinguish, repay or contribute as equity, or
shall cause to be assumed, extinguished, repaid or contributed as equity, all
Indebtedness and ancillary obligations thereto (including all interest accrued
thereon and all fees or charges associated therewith) owed by any Target Company
or any Target Subsidiary to any Person (including Parent and its Affiliates),
other than Indebtedness owed to another Target Company or Target Subsidiary,
Indebtedness that is an Assumed Intercompany Receivable, that is incurred
pursuant to an Intercompany Assumed Agreement or letters of credit issued for
the account of the Business or in connection with any liability or obligation of
the Business and (ii) shall, and shall cause its Affiliates to, repay in full
all Indebtedness and ancillary obligations thereto (including all interest
accrued thereon and all fees or charges associated therewith) it or they owe to
any Target Company or Target Subsidiary, other than Indebtedness and ancillary
obligations thereto owed by one Target Company or Target Subsidiary to another
Target Company or Target Subsidiary or Indebtedness that is incurred pursuant to
an Intercompany Assumed Agreement.
 
(ii)  Prior to the Closing, Parent shall, and shall cause its Affiliates
(including the Target Companies and Target Subsidiaries) to, settle or
extinguish all Intercompany Receivables and Intercompany Payables that were
incurred on or prior to the Closing and that arose from trade transactions
between Parent or its Affiliates (other than the Target Companies and Target
Subsidiaries), on the one
 
 
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hand, and the Target Companies or Target Subsidiaries, on the other hand;
provided, that all amounts owing pursuant to any Intercompany Assumed Agreement
as of the Closing and all Assumed Intercompany Receivables shall remain
outstanding.
 
(h)  Alpharma Credit Agreement Lien.  Parent shall cause the Alpharma Credit
Agreement Lien to be released as of or prior to the Closing Date with respect to
the Acquired Assets, the Target Shares and the assets of the Target Companies
and the Target Subsidiaries.
 
(i)  Capitalization of Intercompany Loan.  Prior to the Closing Date, Alpharma
Bermuda G.P. shall assign to Alpharma International (Luxembourg) S.àr.l. a
portion of the Assumed Intercompany Receivables held by it, and Alpharma
International (Luxembourg) S.àr.l. shall capitalize such assigned portion of the
Assumed Intercompany Receivables prior to Closing as a contribution to the
capital of Alpharma AS, with the amount of such assigned and capitalized portion
of the Assumed Intercompany Receivables (including accrued interest) to be not
less than an amount such that, after giving effect to such capitalization,
Alpharma AS shall have a positive enterprise value net of debt, as determined in
Parent’s reasonable judgment; provided, that Parent shall not be required to
assign or capitalize any amount in excess of the amount of the Assumed
Intercompany Receivables held by Alpharma Bermuda G.P. at the time of such
assignment.  The amount of such assigned and capitalized portion of the Assumed
Intercompany Receivables shall be determined between the date of this Agreement
and the Closing Date by Buyer, subject to and consistent with the foregoing
sentence, after reasonable consultation with Parent.
 
(j)  Transition Services Agreement.  From the date of this Agreement until the
Closing, Buyer and Parent shall cooperate and use reasonable best efforts to
develop reasonably detailed service specifications with respect to the services
to be provided pursuant to the Transition Services Agreement in the form
attached hereto as Exhibit B (the “Transition Services Agreement”) following
input from the information technology representatives of both Parties.  Prior to
Closing, Parent shall provide Buyer with an allocation of the price for each
“Service” as defined in the Transition Services Agreement.
 
SECTION 6.  Post-Closing Covenants.  Parent and Buyer agree as follows with
respect to the period following the Closing.
 
(a)  General.  In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of
Parent and Buyer will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request (for no further consideration) to more effectively
consummate the purchase and sale of Target Shares and Acquired Assets and the
assumption of the Assumed Liabilities, including (i) transferring back to Parent
any Excluded Asset or Excluded Liability and (ii) transferring to the applicable
Target Company or Target Subsidiary any Acquired Asset or Assumed Liability (or
any asset or liability that would be an Acquired Asset or
 
 
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Acquired Liability if the Target Companies or Target Subsidiaries were Asset
Sellers) contemplated hereby to be transferred at the Closing which was not so
transferred at the Closing.  In furtherance of the foregoing, in the event that
Parent is unable to make such transfers or assignments contemplated by
Section 2(c) prior to Closing, after the Closing Date Buyer shall take all
actions (or shall cause its Affiliates to take all actions) reasonably requested
by Parent to give effect to Section 2(c).
 
(b)  Closing Date.  On the Closing Date, Buyer shall cause each Target Company
and each Target Subsidiary to conduct its business in the ordinary course in
substantially the same manner as currently conducted and on the Closing Date
shall not permit any Target Company or Target Subsidiary to effect any
extraordinary transactions (other than any such transactions expressly required
by applicable Law or by this Agreement) that could result in Tax liability to
any Target Company or Target Subsidiary in excess of Tax liability associated
with the conduct of its business in the ordinary course.
 
(c)  Section 338(g) Elections.  Buyer shall not make an election under
Section 338(g) of the Code for any Target Company or Target Subsidiary.
 
(d)  Post-Closing Cooperation.  (i)  Buyer, on the one hand, and Parent, on the
other hand, shall cooperate with each other, and shall cause their Affiliates
and their officers, employees, agents, auditors and representatives to cooperate
with each other, after the Closing to facilitate the orderly transition of the
Business to Buyer after the Closing and to minimize any disruption to the
Business that might result from the transactions contemplated by this
Agreement.  After the Closing, upon reasonable written notice, Buyer, on the one
hand, and Parent, on the other hand, shall furnish or cause to be furnished to
the other and the other’s Affiliates and their officers, employees, counsel,
auditors and representatives access, during normal business hours, to such
information and assistance relating to the Business (to the extent within the
control of such Party) as is reasonably necessary for financial reporting,
accounting and Tax matters.
 
(ii)  Buyer, on the one hand, and Parent, on the other hand, shall reimburse the
other for reasonable and documented out-of-pocket costs and expenses incurred in
assisting the other pursuant to this Section 6(d).  Neither Party shall be
required by this Section 6(d) to take any action that would unreasonably
interfere with the conduct of its business or unreasonably disrupt its normal
operations (or, in the case of Buyer, those of the Business).
 
(e)  Non-Competition; Non-Solicitation.  (i)  For a period of three years from
and after the Closing Date (or, solely in the case of the active pharmaceutical
ingredients bacitracin and bacitracin zinc, five years), neither Parent nor any
of its Subsidiaries or Affiliates (in their capacity as such) will, directly or
indirectly, manufacture or sell the active pharmaceutical ingredients set forth
on Section 6(e)(i) of the Disclosure Schedule primarily for incorporation into
finished dose human pharmaceutical products (the “API Competitive Activities”);
provided, however, that it shall not be a violation of this Section 6(e)(i) for
Parent or any of its Affiliates or Subsidiaries to (A) own or acquire any equity
securities (or securities convertible into
 
 
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equity securities) of any Person which invests in, manages or operates a
business that engages in API Competitive Activities, in each case, provided that
such equity securities (or securities convertible into equity securities)
represent less than 5% of the outstanding capital stock of such Person, (B) own
or acquire all or a majority of the stock or assets of any Person that derives
10% or less of its annual consolidated revenues from API Competitive Activities,
(C) develop, manufacture or sell active pharmaceutical ingredients primarily
intended for incorporation into finished dose non-human pharmaceutical products,
(D) operate Parent’s animal health division or any other business consisting of
the research, development, manufacture, distribution or sale of animal health
products or (E) consummate any of the transactions contemplated by this
Agreement, any Ancillary Agreement and any Intercompany Assumed Agreement and
comply with the terms of this Agreement, each Ancillary Agreement and each
Intercompany Assumed Agreement.  Subject to Section 11(d), nothing in this
Section 6(e)(i) shall prevent any sale of all or substantially all of the assets
or the business of Parent’s animal health division by Parent and its Affiliates
to any Person; provided such purchaser shall be subject to the provisions of
this Section 6(e)(i).
 
                    (ii)  For a period of three years from and after the Closing
Date (or, solely in the case of the active pharmaceutical ingredients bacitracin
and bacitracin zinc, five years), neither Buyer nor any of its Subsidiaries or
Affiliates (in their capacity as such) will, directly or indirectly, manufacture
or sell active pharmaceutical ingredients that are set forth on Section 6(e)(ii)
of the Disclosure Schedule primarily intended for incorporation into the
finished dose animal pharmaceutical products (the “AH Competitive Activities”);
provided, however, that it shall not be a violation of this Section 6(e)(ii) for
Buyer or any of its Affiliates to (A) own or acquire any equity securities (or
securities convertible into equity securities) of any Person which invests in,
manages or operates a business that engages in AH Competitive Activities, in
each case, provided that such equity securities (or securities convertible into
equity securities) represent less than 5% of the outstanding capital stock of
such Person, (B) own or acquire all or a majority of the stock or assets of any
Person that derives 10% or less of its annual consolidated revenues from AH
Competitive Activities, (C) develop, manufacture or sell active pharmaceutical
ingredients primarily intended for incorporation into finished dose human
pharmaceutical products, (D) operate the Business in the manner it is conducted
as of the date of this Agreement, (E) consummate any of the transactions
contemplated by this Agreement, any Ancillary Agreement and any Intercompany
Assumed Agreement and comply with the terms of this Agreement, each Ancillary
Agreement and each Intercompany Assumed Agreement or (F) manufacture or sell any
of the Products listed on Section 6(e)(ii)(F) of the Disclosure Schedule in
human grade (the “Exception Products”); provided that none of Buyer nor its
Subsidiaries or Affiliates may knowingly manufacture the Exception Products for
or sell the Exception Products to customers who intend to incorporate the
Exception Products into finished dose non-human pharmaceutical products, except
for annual sales of the Exception Products in any fiscal year in an aggregate
amount no greater than an amount equal to 105% of the average of the aggregate
yearly sales of the Exception Products by the Business for the 2006 and 2007
fiscal years (the “Exception Product Sales Cap”); provided however that for the
fiscal year commencing on January 1, 2009 the Exception Product Sales Cap shall
increase by  5%, and shall increase by an
 
 
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additional 5% for each fiscal year thereafter. Prior to the Closing Date, Parent
shall deliver to Buyer a list of the customers who incorporated the Exception
Products into finished dose non-human pharmaceutical products, together with a
statement setting out total sales by the Business in each of 2006 and 2007 of
the Exception Products that were used in connection with finished dose non-human
pharmaceutical products.  Subject to Section 11(d), nothing in this Section
6(e)(ii) shall prevent any sale of all or substantially all of the assets or the
business of the Business by the Buyer Entities to any Person; provided such
purchaser shall be subject to the provisions of this Section 6(e)(ii).
 
(iii)  For a period of twelve (12) months following the Closing Date, none of
Parent nor any of its Subsidiaries shall induce, solicit or encourage any Person
who is at such time a Transferred Employee to leave or curtail his or her
employment with the Buyer Entities; provided, however, that it shall not be a
violation of this Section 6(e)(iii) for Parent or any of its Subsidiaries to
engage in general advertising or employee search activities targeted to a broad
pool of potential applicants for a position (and not specifically targeting
employees of the Buyer Entities).
 
(iv)  Except as otherwise specifically required by this Agreement, from the date
of this Agreement until twelve (12) months following the Closing Date, the Buyer
Entities shall not induce, solicit or encourage any Person who is an employee of
Parent or its Affiliates, other than the Transferred Employees, to leave or
curtail his or her employment with Parent or its Affiliates; provided, however,
that it shall not be a violation of this Section 6(e)(iv) for any of the Buyer
Entities to engage in general advertising or employee search activities targeted
to a broad pool of potential applicants for a position (and not specifically
targeting employees of Parent or its Subsidiaries).
 
(f)  Use of Name and Trademarks. Buyer shall promptly, and in any event within
twelve (12) months after the Closing Date, revise product literature and
labeling to (a) delete all references to the Seller Name and (b) delete all
references to Parent’s or any of its Affiliates’ customer service address or
phone number; provided, however, that (i) for a period no longer than twelve
(12) months after the Closing Date, Buyer and its Affiliates shall have the
right to use, solely in connection with the operation of the Business, printed
purchase orders, sales invoices, marketing materials, stationary, printed forms,
other documents and office supplies, in each case, on hand on the Closing Date,
containing the Seller Name thereon, and (ii) for the shorter of twenty-four (24)
months after the Closing Date or such time as the use of packaging materials,
stocks and shipping supplies is necessary to comply with applicable marketing
authorizations, Buyer and its Affiliates shall have the right to use, solely in
connection with the operation of the Business, packaging materials, stocks and
shipping supplies (collectively, together with the materials described in
clause (i) above, the “Marketing Material”), in each case, on hand on the
Closing Date, containing the Seller Name thereon.  Buyer shall promptly, and in
any event within one-hundred-eighty (180) days after the Closing Date, amend the
certificate of incorporation, approval certificate, business license or other
relevant corporate documentation of the Target Companies and Target Subsidiaries
(as the case may be) to delete any references to the Seller Name in the names of
the Target Companies and Target Subsidiaries.  In no event shall Buyer use the
Seller Name (or any name confusingly similar thereto), or any of Parent’s or its
Affiliates’ addresses, phone
 
 
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numbers or the Marketing Materials after the Closing in any manner or for any
purpose different from the use of the Seller Name, addresses, phone numbers or
Marketing Materials by the Business during the 180-day period preceding the
Closing Date.  With respect to the Inventory being transferred as part of the
Acquired Assets and any Inventories of the Target Companies and Target
Subsidiaries as of the Closing Date, Buyer may continue to sell such Inventory,
notwithstanding that it bears the Seller Name, for a reasonable time after the
Closing Date, not to exceed twenty-four (24) months.  “Seller Name” means
“Alpharma”, any variations and derivatives thereof and any other logos or
trademarks of Parent or its Affiliates not included in the Intellectual Property
that is owned by the Target Companies or Target Subsidiaries and primarily used
in or related to the Business.  Buyer shall use its reasonable best efforts to
cause any marketing authorizations of the Business to be revised to remove any
references to the Seller Name as soon as practicable but in no event less than
twenty-four (24) months after the Closing Date.  After the Closing, none of
Parent nor any of the Subsidiaries shall, directly or indirectly, use or do
business, or allow any of its Affiliates to use or do business under the names
and marks “A.L. Laboratories” and Apothekernes Laboratorium” (or any other name
confusingly similar to such names and marks).
 
(g)  Employee Benefits Matters.(i)  From and after the date hereof until the
Closing, Buyer shall reasonably consult with Parent before distributing any
communications to any Employees of the Business relating to employee benefits or
post-Closing terms of employment.  From after the date hereof, Sellers shall
reasonably consult with Buyer before distributing any communications to any
Employees of the Business regarding or relating to the transactions contemplated
hereby, and shall incorporate Buyer’s reasonable comments in such
communications.  Parent shall reasonably consult with Buyer before any
negotiations or consultation process with works councils that are required to
accomplish the transfer of any Employees of the Business to the Buyer Entities.
 
(ii)  Prior to the Closing and effective on the Closing Date, Buyer or its
Affiliates will offer employment to each of the Employees set forth on
Section 6(g)(ii) of the Disclosure Schedule (the “Assumed Employees”) at the
same wage or salary levels, as applicable, and with employee benefits that are
no less favorable in the aggregate than the employee benefits of such Assumed
Employees as of the date hereof.  The Buyer Entities shall bear 100% of the
costs relating to, and shall indemnify and hold harmless Parent and its
Subsidiaries from and against, any claims made by any Assumed Employee for any
statutory or common law severance or other separation benefits, any contractual
or other severance or separation benefits and any other legally mandated payment
obligations (including any compensation payable during a mandatory termination
notice period and any payments pursuant to a Judgment of a court having
jurisdiction over the Parties), in each case, arising out of or in connection
with the failure of the Buyer Entities to make an offer of employment to or
continue the employment of any Assumed Employee in accordance with this
Agreement.
 
(iii)  For a period of two years immediately after the Closing Date, the Buyer
Entities shall provide to Transferred Employees the same base salary or
 
 
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wage rates, as applicable, and employee benefits under plans, programs and
arrangements (other than equity-based plans) which, in the aggregate, will
provide benefits to the Transferred Employees which are no less favorable in the
aggregate to the benefits provided by Parent and its Subsidiaries immediately
prior to the Closing Date (excluding any equity-based compensation or
benefits).  Notwithstanding the foregoing, nothing contemplated by this
Agreement shall be construed as requiring either Buyer, its Affiliates or the
Target Companies and the Target Subsidiaries to be obligated to continue the
employment of any Transferred Employees for any period after the Closing Date.
 
(iv)  Notwithstanding Section 6(g)(iii) above, effective from and after the
Closing Date, (1) with respect to non-U.S. Transferred Employees, the Buyer
Entities shall provide to such Transferred Employees the same terms and
conditions of employment (including Employee Benefit Plans, programs, social
insurance contribution or arrangements) to the extent required by applicable Law
in any non-U.S. jurisdiction such that Parent and Parent’s Subsidiaries shall
avoid any liability that would otherwise result from a failure to maintain the
same terms and conditions (including Employee Benefit Plans, programs or
arrangements), and (2) with respect to Transferred Employees covered by
Collective Bargaining Agreements, the Buyer Entities shall remain bound by or,
as applicable, assume such Collective Bargaining Agreements and provide to such
Transferred Employees the same terms and conditions of employment (including
Employee Benefit Plans, programs or arrangements) to the extent required by the
applicable Collective Bargaining Agreements or by applicable Law.
 
(v)  For the two-year period immediately following the Closing Date, the Buyer
Entities shall provide severance or similar termination benefits to each
Transferred Employee who is covered by the Retention Arrangements, Alpharma
Severance Plan included in Section 6(g)(v) of the Disclosure Schedule or any
severance plan maintained by any of the Target Companies (the “Target Company
Severance Plans”) immediately prior to the Closing Date and whose employment is
terminated by the Buyer Entities within such two-year period for reasons other
than for “cause” (as defined in the Alpharma Severance Plan) at least as
favorable to the Transferred Employees as those contained in the Retention
Arrangements, the Alpharma Severance Plan or the Target Company Severance Plans.
 
(vi)  Effective from and after the Closing Date, the Buyer Entities shall
(A) recognize, for all purposes (other than benefit accrual under a defined
benefit pension plan other than any Target Company Benefit Plan) under all
Employee Benefit Plans, programs and arrangements established or maintained by
the Buyer Entities for the benefit of the Transferred Employees, service with
the Asset Sellers, the Target Companies and the Target Subsidiaries prior to the
Closing Date to the extent such service was recognized under the corresponding
Seller Employee Benefit Plan covering such Transferred Employees including, for
purposes of eligibility, vesting and benefit levels and accruals, and (B) waive
any pre-existing condition, exclusion, actively-at-work requirement or waiting
period under all employee health and other welfare benefit plans established or
 
 
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maintained by the Buyer Entities for the benefit of the Transferred Employees,
except to the extent such pre-existing condition, exclusion, requirement or
waiting period would have applied to such individual under the corresponding
Seller Employee Benefit Plan and (C) provide full credit for any co-payments,
deductibles or similar payments made or incurred prior to the Closing Date for
the plan year in which the Closing occurs.
 
(vii)  Effective from and after the Closing Date, the Buyer Entities shall
assume, honor, and perform all obligations and liabilities in respect of any
Transferred Employee for (A) all accrued but unused flex time, vacation days and
sick days to which any Transferred Employee is entitled as of the Closing Date
under the Seller Employee Benefit Plans and (B) claims for hospital, medical,
dental or other health benefits, expenses or other reimbursements relating to
any medical service, product or confinement provided to or in respect of any
Transferred Employee (or his or her eligible dependents) incurred on or after
the Closing Date or prior to the Closing Date to the extent accrued on the
Statement.
 
(viii)  As a result of Buyer’s acquisition of the outstanding stock or equity
interests (as the case may be) of the Target Companies and the Target
Subsidiaries, the Buyer Entities shall retain and be liable for all of the
Seller Employee Benefit Plans sponsored by the Target Companies and the Target
Subsidiaries, including the defined benefit pension plans and defined
contribution plans set forth on Section 6(g)(viii) of the Disclosure
Schedule.  Buyer shall assume any liabilities with respect to (i) any early
retirement pension plans for the benefit of Employees of the Business and former
employees of the Business in Norway and Denmark and (ii) any severance plans or
arrangements for the benefit of any Employees of the Business or any former
employees of the Business in Norway and Denmark.
 
(ix)  For the two-year period immediately following the Closing Date, the Buyer
Entities shall maintain the defined contribution plans sponsored by the Target
Companies and the Target Subsidiaries, and shall provide to each of the
Transferred Employees who participates in any such plan immediately prior to the
Closing Date with a level of benefits pursuant to such plan that is no less
favorable than the level of benefits provided under such plan immediately prior
to the Closing Date.
 
(x)  Effective as of the Closing Date, Seller shall cause all U.S. Transferred
Employees to be 100% vested in their benefits under the Alpharma Inc. Pension
Plan; the A.L. Pharma Supplemental Pension Plan; the Alpharma Inc. Savings Plan
and the Alpharma Inc. Prior Supplemental Savings Plan, the Alpharma Inc. 2005
Supplemental Savings Plan and the Alpharma Inc. 2007 Supplemental Savings Plan
and shall permit distributions in accordance with the terms of such plans.  No
assets or liabilities from the Alpharma Inc. Pension Plan or the A.L. Pharma
Supplemental Pension Plan shall be transferred to the Buyer Entities or to any
pension plan maintained by Buyer or one of its Subsidiaries, and Seller shall
remain responsible for any and all liabilities to Employees of the Business in
 
 
 
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respect of the Alpharma Inc. Pension Plan or the A.L. Pharma Supplemental
Pension Plan.  As of the Closing Date, Seller shall contribute, to the extent
not already contributed prior thereto, an aggregate cash amount to the Alpharma
Inc. Savings Plan on behalf of the Transferred Employees equal to the “employer
matching contributions” payable for the calendar year in which the Closing
occurs under the Alpharma Inc. Savings Plan with respect to the elective
deferred contributions actually made by the Transferred Employees to such plans
prior to the Closing Date.
 
(xi)  Effective from and after the Closing Date, the Buyer Entities shall
assume, honor, and perform all obligations and liabilities under (A) the
Retention Arrangements listed on Section 6(g)(xi)(A) of the Disclosure Schedule;
provided that Parent shall reimburse Buyer to the extent that amounts paid
pursuant to the Retention Arrangements exceed the Retention Threshold; provided
further, that Parent shall not be obligated to reimburse Buyer under any
Retention Arrangement to the extent any Buyer Entity amends any such Retention
Arrangement, (B) the Bonus Obligations (to the extent such obligations have not
been paid as of the Closing Date), (C) the Pension Obligations, (D) the Early
Retirement Obligations listed on Section 6(g)(xi)(D) of the Disclosure Schedule
and (E) the Severance Obligations.
 
(xii)  The provisions of this Section 6(g) are solely contractual commitments
between the parties to this Agreement that may be waived or amended at any time
by the parties hereto without regard to the impact of such waiver or amendment
on any employee, former employee or other third party.  The provisions of this
Section 6(g) are solely for the benefit of the parties to this Agreement, and no
employee or former employee or any other individual associated therewith shall
be regarded for any purpose as a third party beneficiary of this Agreement, and
nothing herein shall be construed as an amendment to any Employee Benefit Plan
or Collective Bargaining Agreement for any purpose.  For the avoidance of doubt,
nothing herein is or shall be deemed a guarantee of continued employment with
respect to any Employee of the Business.
 
(h)  Insurance.  (A)    From and after the Closing Date for a period of not less
than five (5) years, Buyer will maintain product liability insurance policies
with insurance companies that have a current Best’s or Standard & Poor’s rating
of not less than “A-” and a current policyholder’s surplus of not less than
$1,000,000,000 (or the equivalent if a non-U.S. insurer).  Such insurance
policies will designate Parent as an additional insured.  Furthermore, the
policies shall provide for a waiver of subrogation in favor of Parent.  The
limits of liability, deductibles or retentions of such product liability
insurance will be similar in all material respects to the limits of liability,
deductibles or retentions maintained by companies of a similar financial size
and a similar business purpose as that conducted by the Business after giving
effect to the transactions contemplated hereby.
 
(B)  From and after the Closing Date, Parent will maintain the interest and
rights of the Target Companies and Target Subsidiaries up to the Closing Date as
 
 
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additional insureds as their interests may appear or beneficiaries or in any
other capacity under the “claims made” or “occurrence reported” policies within
the Alpharma Global Insurance Program in respect of claims made or occurrences
reported during the period prior to the Closing Date.  Any Insurance proceeds
received by Seller after the Closing under such policies and programs in respect
of the Target Companies and the Target Subsidiaries with respect to liabilities
that Parent has Knowledge of prior to the Closing that would be Assumed
Liabilities if the Target Companies and Target Subsidiaries were Asset Sellers
shall be for the benefit of Buyer and its Subsidiaries; provided that
liabilities or expenses resulting from deductibles, self-insurance retentions,
or other amounts, including allocated and unallocated loss expenses, as defined
in the policies governing such benefits, shall be borne by Buyer and its
Subsidiaries; provided further that 50% of any liabilities resulting from
product liability claims made between the date of this Agreement and the Closing
Date under Parent’s U.S. product liabilities policy that would be reimbursable
under the terms of such policy except for the deductible on such policy shall be
borne by Parent, provided however that the aggregate amount of such liabilities
to be borne by Parent for all claims under this proviso will be limited to
$2,500,000 in aggregate.
 
(i)  Confidentiality.  Except to the extent disclosure is required by applicable
Law, Parent shall keep confidential, and shall cause its Subsidiaries to keep
confidential, all information relating to the Business (“Confidential Business
Information”), except with respect to Confidential Business Information (A) that
is available to the public prior to the Closing Date, or thereafter becomes
available to the public other than as a result of a breach of this Section 6(i)
or (B) that becomes available to Parent or its Subsidiaries after the Closing
Date on a non-confidential basis from a source other than Buyer or its
Subsidiaries; provided that such source was not known by the recipient to be
bound by a confidentiality obligation to Buyer with respect to such
information.  Notwithstanding the foregoing sentence, Parent shall be permitted
disclose Confidential Business Information to the extent such information is
related to a business other than the Business.  The covenant set forth in this
Section 6(i) shall terminate on the first anniversary after the Closing Date.
 
(j)  Transition Services Agreement.  At the Closing, Buyer and Parent shall
enter into, execute and deliver the Transition Services Agreement.
 
(k)  Closure of Beijing Representative Office.  From and after the Closing Date,
Buyer and Parent and each of their Affiliates shall cooperate in closing the
Beijing Representative Office of Alpharma AS (“BRO”).  At Buyer's request,
Parent shall permit its or its Subsidiary’s employee or agent to be the
representative officer of the BRO for the sole purpose of winding down the
office, in which event Buyer shall incur no employment related liability for
such designated employee or agent, who shall remain at all times the employee or
agent of Parent or its Subsidiary.
 
(l)  Patent Licenses. Effective as of the Closing, the Buyer Entities hereby
grant to Sellers and their Affiliates a perpetual, transferable, nonexclusive,
worldwide,
 
 
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paid-up, royalty-free license to the Non-Exclusive Patents as defined in Section
4(k)(i) of the Disclosure Schedule.
 
SECTION 7.  Conditions to Obligation to Close.
 
(a)  Conditions to Buyer’s Obligation.  Buyer’s obligation to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
 
(i)  the representations and warranties set forth in Section 3(a) and Section 4
shall be true and correct as of the Closing Date (except to the extent expressly
made as of an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date), except to the extent that
the facts or matters as to which such representations and warranties are not so
true and correct as of the Closing Date (without giving effect to any
qualifications and limitations as to “materiality,” “Material Adverse Effect”
and “Material Adverse Change” set forth therein) would not, individually or in
the aggregate, have a Material Adverse Effect;
 
(ii)  Sellers shall have performed and complied with all of their covenants
hereunder in all material respects through the Closing required by this
Agreement to be performed or complied with by Sellers by the time of Closing;
 
(iii)  there shall not be any Judgment in effect preventing consummation of any
of the transactions contemplated by this Agreement and no action, suit, claim or
proceeding shall be pending that would reasonably be expected to prohibit or
enjoin the consummation of the transactions contemplated by this Agreement;
 
(iv)  Parent shall have delivered a waiver of the non-competition and
non-solicitation provisions in respect of Parent set out in the Agreement
between Alpharma AS and Carl-Aake Carlsson dated November 9, 2007; provided that
such waiver shall only be required to be delivered pursuant to this clause (iv)
to the extent necessary to allow Carl-Aake Carlsson to continue to be employed
by the Business following the Closing;
 
(v)  Parent shall have delivered to Buyer a certificate executed by an
authorized officer of Parent to the effect that each of the conditions specified
above in Sections 7(a)(i) and (ii) is satisfied in all respects;
 
(vi)  all applicable waiting periods (and any extensions thereof) or required
approvals, authorizations or consents under the Hart-Scott-Rodino Act or any
material Foreign Merger Control Law shall have expired, been obtained or
otherwise been terminated, as applicable;
 
(vii)  Parent shall have delivered to Buyer certificates complying with the Code
and Treasury Regulations, in form and substance reasonably satisfactory to
Buyer, duly executed and acknowledged, certifying that none of the Acquired
Assets is a U.S. real property interest; if no such certificate is received by
the
 
 
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Closing, there shall be withholding to the extent required by Section 1445 of
the Code (and the amount of any such withholding shall be treated as part of the
Purchase Price);
 
(viii)  since the date of this Agreement, there shall not have occurred a
Material Adverse Effect; and
 
(ix)  completion of the Pre-Closing Restructuring, unless Buyer waives such
condition and the Parties agree to proceed with the Alternative Structuring.
 
Buyer may waive any condition specified in this Section 7(a) if it executes a
writing so stating at or prior to the Closing.
 
(b)  Conditions to Sellers’ Obligation.  Sellers’ obligation to consummate the
transactions to be performed by them in connection with the Closing is subject
to satisfaction of the following conditions:
 
(i)  the representations and warranties set forth in Section 3(b) above shall be
true and correct as of the Closing Date immediately before the Closing (except
to the extent expressly made as of an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date), except to the extent that the facts or matters as to which such
representations and warranties are not so true and correct as of the Closing
Date (without giving effect to any qualifications and limitations as to
“materiality” or “material adverse effect” set forth therein) would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the ability of Buyer to perform its obligations under
this Agreement or prevent or materially impede, interfere with, hinder or delay
the consummation of the Transaction and the other transactions contemplated by
this Agreement, including the Financing;
 
(ii)  Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing required by this
Agreement to be performed or complied with by Buyer by the time of Closing;
 
(iii)  there shall not be any Judgment in effect preventing consummation of any
of the transactions contemplated by this Agreement and no action, suit, claim or
proceeding shall be pending that would reasonably be expected to prohibit or
enjoin the consummation of the transactions contemplated by this Agreement;
 
(iv)  Buyer shall have delivered to Parent a certificate executed by an
authorized officer of Buyer to the effect that each of the conditions specified
above in Sections 7(b)(i) and (ii) is satisfied in all respects; and
 
(v)  all applicable waiting periods (and any extensions thereof) or required
approvals, authorizations or consents under the Hart-Scott-Rodino Act or any
material Foreign Merger Control Law shall have expired, been obtained or
otherwise been terminated, as applicable.
 
 
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Sellers may waive any condition specified in this Section 7(b) if Parent
executes a writing so stating at or prior to the Closing.
 
(c)  Frustration of Closing Conditions.  Neither Buyer, on the one hand, nor
Sellers, on the other hand, may rely on the failure of any condition set forth
in this Section 7 to be satisfied if such failure was caused by such Party’s
failure to act in good faith or to comply with its obligations under this
Agreement, including using its reasonable best efforts to cause the Closing to
occur and to arrange the Financing as required by Section 5(c).
 
SECTION 8.  Remedies for Breaches of This Agreement.
 
(a)  Survival.  All of the representations and warranties in Sections 3 and 4 of
this Agreement (other than Section 4(i)) and the covenants contained in Section
5 shall survive the Closing and continue in full force and effect for a period
of 18 months thereafter; provided, that all of the representations and
warranties of Parent or Buyer, as the case may be, contained in
Sections 3(a)(ii), 3(a)(iii), 3(b)(ii), 3(b)(x), 4(b) and 4(o) shall survive the
Closing and continue in full force and effect for a period of three years
thereafter.  The representations and warranties in Section 4(i) shall not
survive the Closing.  The covenants contained herein (other than those contained
in Section 5) shall survive indefinitely except as otherwise specified herein.
 
(b)  Indemnification by Parent.  Subject to Section 8(e) below, in the event of
any breach or inaccuracy of any of the representations, warranties or covenants
made by Parent or any Seller (other than a breach or inaccuracy of a
representation, warranty or covenant in respect of Taxes, which shall be subject
exclusively to Section 9(b) below) contained herein, provided that Buyer makes a
written claim for indemnification against Parent pursuant to Section 8(d) below
within the applicable survival period, Parent shall indemnify Buyer, its
Affiliates (including, after the Closing Date, the Target Companies and the
Target Subsidiaries) and each of their stockholders, members, partners,
directors, officers, employees, agents and representatives (the “Buyer
Indemnitees”) from and against any Losses any of them has suffered through and
after the date of the claim for indemnification by Buyer caused by or arising
from Parent’s or such Seller’s breach or inaccuracy.  In addition, Parent agrees
to indemnify the Buyer Indemnitees from and against any Losses any of them shall
suffer caused by or arising from any liability that is an Excluded Liability.
 
(c)  Indemnification by Buyer.  In the event of any breach of inaccuracy of any
of the representations, warranties and covenants made by Buyer contained herein,
provided that Parent makes a written claim for indemnification against Buyer
pursuant to Section 8(d) below, Buyer shall indemnify Parent, its Affiliates and
each of their stockholders, members, partners, directors, officers, employees,
agents and representatives (the “Seller Indemnitees”) from and against any
Losses any of them has suffered through and after the date of the claim for
indemnification by Parent caused by or arising from Buyer’s breach or
inaccuracy.  Buyer agrees to indemnify the Seller Indemnitees from and against
any Losses any of them shall suffer caused by or arising
 
 
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from any liability that is an Assumed Liability or any liability that would be
an Assumed Liability if the Target Companies or Target Subsidiaries were Asset
Sellers.
 
(d)  Procedures.  (i)  Third Party Claims.  (A)  In order for a Person (the
“Indemnified Party”) to be entitled to any indemnification provided for under
Section 8(b) or (c) in respect of, arising out of or involving a claim made by
any Person against the Indemnified Party (a “Third Party Claim”), such
Indemnified Party must notify the Person from whom it is requesting
indemnification (the “Indemnifying Party”) in writing (and in reasonable detail)
of the Third Party Claim promptly following receipt by such Indemnified Party of
notice of the Third Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder except to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the Indemnified Party
failed to give such notice).  Thereafter, the Indemnified Party shall deliver to
the Indemnifying Party, promptly following the Indemnified Party’s receipt
thereof, copies of all material notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim.
 
(B)  If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnified Party.  Should the Indemnifying Party so elect to assume the
defense of a Third Party Claim, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof.  If the Indemnifying
Party assumes such defense, the Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense.  The
Indemnifying Party shall be liable for the fees, costs and expenses of counsel
employed by the Indemnified Party for any period during which the Indemnifying
Party has not assumed the defense thereof (other than during any period in which
the Indemnified Party shall have failed to give notice of the Third Party Claim
as provided above).  If both the Indemnifying Party and the Indemnified Party
are parties to or subjects of a Third Party Claim and the Indemnified Party
shall have been advised by counsel that there are one or more legal or equitable
defenses available to it that are different from or in addition to those
available to the Indemnifying Party, and, in the reasonable opinion of the
Indemnified Party, counsel for the Indemnifying Party could not adequately
represent the interests of the Indemnified Party because such interests could be
in conflict with those of the Indemnifying Party, then the Indemnified Party
shall be entitled to retain its own counsel, at the expense of the Indemnifying
Party; provided that in any case the Indemnifying Party shall not be obligated
to pay the expenses of more than one separate counsel for all Indemnified
Parties, taken together.  Each Party shall cooperate in the defense or
prosecution of any Third Party Claim and the Party controlling the defense
thereof shall keep the other party reasonably advised of the status of such
defense.  Such cooperation shall include the retention and (upon the
Indemnifying Party’s request) the provision to the Indemnifying
 
 
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Party of records and information that are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.  Whether or not the Indemnifying Party assumes the defense of a Third
Party Claim, the Indemnified Party shall not admit any liability with respect
to, or settle, compromise or discharge, such Third Party Claim without the
Indemnifying Party’s prior written consent.  If the Indemnifying Party assumes
the defense of a Third Party Claim, the Indemnified Party shall agree to any
settlement, compromise or discharge of a Third Party Claim that the Indemnifying
Party may recommend and that by its terms obligates the Indemnifying Party to
pay the full amount of the liability in connection with such Third Party Claim
and which unconditionally and irrevocably releases the Indemnified Party
completely in connection with such Third Party Claim.  All claims under
Section 8(b) and (c) other than Third Party Claims shall be governed by
Section 8(d)(ii).
 
(ii)  Other Claims.  If any Indemnified Party should have a claim against any
Indemnifying Party under Section 8(b) and (c) that does not involve a Third
Party Claim being asserted against or sought to be collected from such
Indemnified Party, the Indemnified Party shall promptly deliver notice of such
claim to the Indemnifying Party after obtaining knowledge of such claim.  The
failure by any Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability that it may have to such
Indemnified Party under Section 8(b) and (c), except to the extent that the
Indemnifying Party shall have been actually prejudiced by such failure.  If the
Indemnifying Party does not notify the Indemnified Party within 60 calendar days
following its receipt of such notice that the Indemnifying Party disputes its
liability to the Indemnified Party under Section 8(b) and (c), such claim
specified by the Indemnified Party in such notice shall be conclusively deemed a
liability of the Indemnifying Party under Section 8(b) and (c) and the
Indemnifying Party shall pay the amount of such liability to the Indemnified
Party on demand or, in the case of any notice in which the amount of the claim
(or any portion thereof) is estimated, on such later date when the amount of
such claim (or such portion thereof) becomes finally determined.
 
(e)  Limitations on Indemnification.  (i)  Notwithstanding anything to the
contrary herein, Parent shall not be required to indemnify any Buyer Indemnitee
for any Losses arising from any breach or inaccuracy of any representations or
warranties contained in Sections 3(a) and 4 unless and until the aggregate
amount of all such claims is at least equal to $4,100,000 (and Parent shall only
be required to indemnify Buyer for such claims in excess of such
amount).  Parent’s aggregate amount of liability under Section 8(b) for breaches
and inaccuracies of any representations or warranties contained in Sections 3(a)
and 4 is limited to an amount equal to $60,000,000.  Parent shall not have any
liability under Section 8(b) for any individual item where the Loss relating
thereto is less than $75,000.
 
(ii)  Notwithstanding anything to the contrary herein, Parent shall not be
obligated to indemnify Buyer against any Losses arising from or relating to any
claim or liability to the extent such claim or liability or the Losses therefrom
as and to the extent such liabilities are reflected in the Statement or the FX
Statement.
 
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(f)  Calculation of Losses.  (i)  The amount of any Loss for which
indemnification is provided under this Section 8 and under Section 9 shall be
net of any amounts actually recovered by the Indemnified Party under insurance
policies with respect to such Loss less the aggregate cost and expense of
pursuing any such insurance claims.
 
(ii)  The amount of any Loss for which indemnification is provided under this
Section 8 and under Section 9 shall be reduced to take account of any net Tax
benefit realized by the Indemnified Party arising from the incurrence or payment
of any such Loss and shall be increased by the amount of the Income Tax, if any,
attributable to the receipt of such indemnity payment subject to the Parties’
compliance with Section 8(h).  Tax benefits are to be determined using the
assumptions that each Party pays federal, state, local and foreign Tax at the
highest applicable corporate Tax rate and can fully utilize any available Tax
benefits.
 
(iii)  Except as otherwise provided in this Section 8(f), in any case where the
Indemnified Party subsequently recovers from third parties any amount in respect
of a matter with respect to which an Indemnifying Party has indemnified it
pursuant to Section 8 or Section 9, such Indemnified Party shall promptly pay
over to the Indemnifying Party the amount so recovered (after deducting
therefrom the full amount of the expenses incurred by it in procuring such
recovery), but not in excess of any amount previously so paid by the
Indemnifying Party to or on behalf of the Indemnified Party in respect of such
matter.
 
(g)  Exclusive Remedy; No Consequential Damages; Mitigation.  (i)  Subject to
Section 11(k), the Parties acknowledge and agree that, after the Closing, the
foregoing indemnification provisions in this Section 8 and, with respect to
Taxes, the provisions of Section 9, shall be the exclusive remedy of the Parties
with respect to claims relating to this Agreement, the transactions contemplated
by the Agreement, and the Business and its assets and liabilities (other than
for fraud).  Without limiting the generality of the foregoing, Buyer
acknowledges and agrees that it shall not have any remedy after the Closing for
any breach of the representations and warranties in Sections 3(a) and 4 above,
with respect to which Buyer fails to make a written claim for indemnification
within the applicable survival period set forth in Section 8(a) above (other
than for fraud).  In furtherance of the foregoing, each of Buyer and Parent, for
itself and its Affiliates (including the Target Companies and Target
Subsidiaries), waives, from and after the Closing, to the fullest extent
permitted under applicable Law, any and all rights, claims and causes of action
(other than claims of, or causes of action arising from, fraud) for damages it
may have against the other or its Affiliates arising under this Agreement, any
document or certificate delivered in connection herewith, any applicable Law
(including the United States Comprehensive Environmental Response, Compensation,
and Liability Act and any other Environmental Law), common law or otherwise,
except pursuant to the indemnification provisions set forth in this Section 8.
 
 
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(ii)  None of Buyer, any Target Company, any Target Subsidiary, any Asset Seller
or any of their respective Subsidiaries shall be liable or otherwise responsible
to any other Person for consequential, incidental, special or punitive damages
arising out of, or relating to, this Agreement or the transactions contemplated
by this Agreement, the performance or breach of this Agreement or any liability
or obligation retained or assumed under this Agreement, other than any such
consequential, incidental, special or punitive damages that are the subject of a
Third Party Claim for which indemnification is available hereunder.
 
(iii)  Buyer and Parent shall cooperate with each other with respect to
resolving any claim or liability with respect to which one Party is obligated to
indemnify the other Party hereunder, including by using its reasonable best
efforts to mitigate or resolve any such claim or liability.  In the event that
Buyer or Parent shall fail to use such reasonable best efforts to mitigate or
resolve any claim or liability, then notwithstanding anything else to the
contrary contained herein, the other Party shall not be required to indemnify
any Person for any loss, liability, claim, damage or expense that could
reasonably be expected to have been avoided if Buyer or Parent, as the case may
be, had made such efforts.
 
(iv)  The rights to indemnification under this Section 8 shall not be adversely
affected or deemed waived by reason of the fact that Buyer, its employees,
agents or representatives became aware after the date of this Agreement that any
representation or warranty is or might be breached or inaccurate; provided that
the forgoing limitation on indemnification shall not apply to the knowledge of
Buyer, its employees, agents and representatives of any breach or inaccuracy of
any representation or warranty as of the date of this Agreement.
 
(h)  Tax Treatment of Indemnity Payments.  Any indemnity payment under this
Agreement shall be treated as an adjustment to the Purchase Price for Tax
purposes unless there is no reasonable basis for doing so under the applicable
Tax Law.
 
(i)  No Duplicative Payments.  Notwithstanding anything to the contrary in this
Agreement, it is intended that the provisions of this Agreement will not result
in a duplicative payment of any amount required to be paid under this Agreement,
and this Agreement shall be construed accordingly.
 
SECTION 9.  Tax Matters.
 
(a)  Tax Sharing Agreements.  Any Tax sharing agreement between Sellers and
their Subsidiaries (other than the Target Companies and the Target Subsidiaries)
on the one hand and any of the Target Companies or the Target Subsidiaries on
the other hand shall be terminated as of the Closing Date.
 
(b)  Tax Indemnification by Parent.  (i)  From and after the Closing, Parent
shall indemnify the Buyer Indemnitees against and hold them harmless from any
Losses to the extent attributable to:
 
 
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(A)  except as provided in Section 9(c), any Income Taxes imposed on the Target
Companies or the Target Subsidiaries, or imposed with respect to the Acquired
Assets, for any Pre-Closing Tax Period,
 
(B)  except as provided in Section 9(c), any Non-Income Taxes imposed on the
Target Companies or the Target Subsidiaries or imposed with respect to the
Acquired Assets, for any Pre-Closing Tax Period, but only to the extent the
aggregate amount of such Non-Income Taxes is in excess of the aggregate reserves
for Non-Income Tax liabilities included in the Statement,
 
(C)  any Taxes that may be imposed on any Target Company or any Target
Subsidiary as a result of being a member of a consolidated, combined, unitary or
similar group of corporations or other taxpayers at any time on or prior to the
Closing Date other than a group consisting solely of Target Companies and/or
Target Subsidiaries,
 
(D)  any Taxes for any Pre-Closing Tax Period of any Person (other than any
Target Company or Target Subsidiary) imposed on any Target Company or Target
Subsidiary as a transferee or successor, by contract or pursuant to any law,
 
(E)  all liability from any breach of Sellers’ covenants in this Section 9
relating to Taxes,
 
(F)  any Transfer Taxes for which Parent is liable under Section 9(k),
 
(G)  any non-U.S. Taxes (other than Transfer Taxes and VAT) of any Seller,
Target Company or Target Subsidiary arising solely on the Closing Date solely by
reason of the transfers of the Target Shares and the Acquired Assets
contemplated by this Agreement,
 
(H)  any reasonable legal and accounting expenses related thereto, and
 
(I)  any liability resulting from any obligation of a Target Company or Target
Subsidiary under any stock purchase, asset purchase, merger or other similar
agreement entered into before the date hereof to indemnify any other Person
(other than a Target Company or Target Subsidiary) for any Taxes attributable to
a Pre-Closing Tax Period, provided that after the Closing Date such Target
Company or such Target Subsidiary has not waived any defense it may have against
any such obligation without the prior consent of Parent.
 
(ii)  Any amount payable under subparagraphs 9(b)(i)(A) and 9(b)(i)(C) above
shall be reduced by any Tax benefit attributable to any net operating losses (or
similar Tax attributes) or any Tax credit of any Target Company or any Target
 
 
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Subsidiary to which Buyer succeeded.  Such Tax benefit is to be determined using
the assumptions that each Party pays federal, state, local or foreign Tax at the
highest applicable corporate Tax rate and can fully utilize any available Tax
benefits.
 
(iii)  Notwithstanding the foregoing, Parent shall not indemnify any Buyer
Indemnitee for any Tax in respect of any Pre-Closing Tax Period that is (A) an
Assumed Liability or (B) recoverable by any Buyer Indemnitee in a Post-Closing
Tax Period (including, for the avoidance of doubt, Taxes attributable to timing
differences).
 
(c)  Tax Indemnification by Buyer.  From and after the Closing, Buyer, the
Target Companies and the Target Subsidiaries shall, jointly and severally,
indemnify the Seller Indemnitees and hold them harmless from (i) any Taxes
imposed on any Seller Indemnitee (as they relate to the Business), the Target
Companies, or the Target Subsidiaries, or imposed with respect to the Acquired
Assets, for any Post-Closing Tax Period, (ii) any Transfer Taxes for which Buyer
is liable under Section 9(k), (iii) any breach by Buyer or any of its Affiliates
of any covenant contained in Section 6(b) or 6(c), (iv) all liability from any
breach of Buyer’s covenants in this Section 9 relating to Taxes, and (v) any
reasonable legal and accounting expenses related thereto.
 
(d)  Straddle Periods.  In the case of any taxable period that includes (but
does not end on) the Closing Date (a “Straddle Period”):
 
(i)  real, personal and intangible property Taxes (“Property Taxes”) of the
Target Companies, or the Target Subsidiaries, or imposed with respect to the
Acquired Assets, for the Pre-Closing Tax Period shall be allocated to the
Pre-Closing Tax Period on a pro rata basis (based on the number of days during
such taxable period elapsed prior to the Closing Date).  If at the time of
Closing, the tax rate or the assessed valuation for the year in which the
Closing occurs has not yet been fixed, Property Taxes shall be prorated based
upon the tax rate and the assessed valuation established for the previous tax
year; and
 
(ii)  the Taxes (other than Property Taxes) of the Target Companies, or the
Target Subsidiaries, or imposed with respect to the Acquired Assets, for the
Pre-Closing Tax Period shall be computed as if such taxable period ended as of
the close of business on the day immediately preceding the Closing Date.
 
(e)  Tax Returns; Tax Payments.  (i)  Parent shall be responsible for the
preparation and filing (taking into account any extensions received from the
relevant Taxing Authorities) of all Tax Returns required by Law to (A) be filed
by Parent or any of its Subsidiaries, or (B) be filed by any of the Target
Companies or Target Subsidiaries prior to the Closing Date.
 
(ii)  Buyer, the Target Companies and the Target Subsidiaries shall be
responsible for the preparation and filing (or causing to be filed) of all other
Tax Returns related to Target Companies or the Target Subsidiaries.  Buyer, the
 
 
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Target Companies and the Target Subsidiaries shall not, without the prior
consent of Parent, engage any outside service provider in connection with any
Tax Return of any Target Company or any Target Subsidiary for any tax year that
ends before the Closing Date to be filed after the Closing Date, and Buyer, the
Target Companies and the Target Subsidiaries shall not, without the prior
consent of Parent, engage Ernst & Young for purposes of preparing any Tax Return
of any Target Company or any Target Subsidiary that relates to a Straddle
Period.  In the case of a Tax Return (A) for a Straddle Period or (B) for a
Pre-Closing Tax Period filed after the Closing Date, Buyer shall prepare such
Tax Return on a basis consistent with past practice and submit such Tax Return
to Parent at least forty-five (45) calendar days prior to the due date for
filing such Tax Return (it being understood that (A) this clause shall not limit
Buyer’s right to reorganize the business arrangements of the Target Companies or
the Target Subsidiaries with effect after the Closing Date, including the
implementation of (or amendments to) any transfer pricing arrangements involving
the Target Companies or Target Subsidiaries, and (B) Buyer shall, for purposes
of preparing and filing the 2007 Norwegian Income Tax Return of Alpharma AS,
cause Alpharma AS to opt out of “installment sale” treatment in respect of any
transaction that occurred in 2007 and that would otherwise qualify for such
treatment and shall cause Alpharma AS to apply any of its net operating losses
against any gain realized from such transaction). If Parent objects to any item
on such Tax Return, it shall, within thirty (30) days after delivery of such Tax
Return, notify Buyer in writing that it so objects. If a notice of objection is
duly delivered, Buyer and Parent shall negotiate in good faith and use their
reasonable best efforts to resolve such items and, if they are unable to do so
within ten (10) calendar days, the disputed items shall be resolved (within a
reasonable time, taking into account the deadline for filing such Tax Return) by
an accounting firm mutually selected by Buyer and Parent the cost of which shall
be borne 50% by Parent and 50% by Buyer. Upon resolution of all disputed items,
the relevant Tax Return shall be adjusted to reflect such resolution and shall
be binding upon the Parties without further adjustment.
 
(iii)  All Taxes due and payable with respect to such Tax Returns will be paid
by filer, subject to reimbursement by the other Party pursuant to Sections 9(b),
9(c) and 9(d).
 
(iv)  Buyer and Parent further agree, upon reasonable request, to use reasonable
efforts to obtain any certificate or other document from any Governmental Entity
or any other Person as may be necessary to mitigate, reduce or eliminate any Tax
that could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).
 
(f)  Tax Proceedings.  (i)  If any Taxing Authority shall notify any Person
entitled to indemnification under this Section 9 (the “Tax Indemnified Party”)
of any Tax audit or proceeding, proposed Tax assessment or other Tax matter (a
“Tax Proceeding”) which may give rise to a claim for indemnification against any
other Party (the “Tax Indemnifying Party”) under this Section 9, then the Tax
Indemnified Party shall promptly
 
 
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(and in any event within 10 business days after receiving notice of the Tax
Proceeding, with an expedited time frame where necessary to comply with
governmental deadlines in connection with such Tax Proceeding) notify the Tax
Indemnifying Party thereof in writing; provided, however, that failure to timely
give such notification shall not affect the indemnification provided under this
Agreement except to the extent the Indemnifying Party has been prejudiced as a
result of such failure (except that the Tax Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnified
Party failed to give such notice).  Any such notice shall describe in reasonable
detail the type of Tax involved in the Tax Proceeding, the tax year(s) at issue
and the basis for the Tax claim against the Tax Indemnifying Party, and shall
include a copy of any materials received from the applicable Taxing Authority in
connection therewith.
 
(ii)  In the case of any Tax Proceeding:
 
(A)  the Controlling Party shall be entitled to appoint as lead counsel any
legal counsel of its choice and shall control the conduct of the Tax Proceeding;
 
(B)  the Controlling Party shall provide the Noncontrolling Party with a timely
and reasonably detailed account of each stage of the Tax Proceeding and a copy
of the portions of all documents relating to the Tax Proceeding that are
relevant to any Tax for which the Noncontrolling Party may be required to
indemnify or may otherwise be liable;
 
(C)  the Controlling Party shall consult with the Noncontrolling Party before
taking any significant action in connection with the Tax Proceeding that might
adversely affect the Noncontrolling Party;
 
(D)  the Controlling Party shall consult with the Noncontrolling Party and offer
the Noncontrolling Party a reasonable opportunity to comment before submitting
any written materials prepared or furnished in connection with the Tax
Proceeding (including, to the extent practicable, any documents furnished to the
applicable Taxing Authority in connection with any discovery request) to the
extent such materials concern matters in the Tax Proceeding that could adversely
affect the Noncontrolling Party;
 
(E)  the Controlling Party shall defend the Tax Proceeding diligently and in
good faith;
 
(F)  the Noncontrolling Party shall reasonably facilitate to the extent
requested by the Controlling Party, and shall not impede, the Tax Proceeding;
 
(G)  the Controlling Party and the Noncontrolling Party shall cooperate
reasonably and in good faith in connection with any Tax Proceeding; and
 
 
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(H)  the Controlling Party shall not settle, compromise or abandon any such Tax
Proceeding without obtaining the prior written consent, which consent shall not
be unreasonably withheld, delayed or conditioned, of the Noncontrolling Party if
such settlement, compromise or abandonment would have an unindemnified adverse
impact on the Noncontrolling Party.  If the Noncontrolling Party reasonably
withholds such consent pursuant to the preceding sentence, the Parties shall
negotiate in good faith to resolve their differences and, failing that, shall
submit the matter to binding arbitration with a mutually acceptable arbitrator
(with expedited time frames where necessary to comply with governmental
deadlines in connection with such Tax Proceeding) to resolve the Parties’
dispute in connection with the Tax Proceeding.
 
(iii)  For purposes of this Section 9(f) and subject to subparagraph (v) below,
“Controlling Party” means:
 
(A)  Parent for any Tax Proceeding relating to any Pre-Closing Tax Period other
than a Straddle Period;
 
(B)  Parent for any Tax Proceeding concerning any consolidated, combined,
unitary or group Tax Return that includes solely Parent or any of its
Subsidiaries (except for a consolidated, combined, unitary or group Tax Return
that includes Buyer or any of its Subsidiaries); and
 
(C)  Buyer for any Tax Proceeding relating to a Straddle Period with respect to
Buyer or the applicable Subsidiary (including any Target Company or Target
Subsidiary), or any Post-Closing Tax Period with respect to Buyer or the
applicable Subsidiary (including any Target Company or Target Subsidiary) (other
than a Tax Proceeding of which Parent is the Controlling Party pursuant to the
preceding clause (B)).
 
(iv)  For purposes of this Section 9(f), “Noncontrolling Party” means:
 
(A)  Parent in the case of a Tax Proceeding with respect to which Buyer is the
Controlling Party; and
 
(B)  Buyer in the case of a Tax Proceeding with respect to which Parent is the
Controlling Party.
 
(v)  Notwithstanding the foregoing, the Tax Indemnifying Party may elect to
control any Tax Proceeding which might result in a claim for indemnification
being sought from it and may participate in the Tax Proceeding regardless of
whether it chooses to control such Tax Proceeding.
 
(vi)  Notwithstanding any other provision of this Agreement to the contrary,
neither Buyer, any Affiliate of Buyer, nor any other Person shall have any right
to receive or obtain any information relating to, or have any rights with
respect to, any consolidated, combined, unitary or group Taxes or Tax Returns of
Parent or
 
 
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any of its Subsidiaries (other than information and rights relating solely to
items of the Target Companies, the Target Subsidiaries and the Acquired
Assets).  Furthermore, any rights of Buyer with respect to any consolidated,
combined, unitary or group Taxes or Tax Returns of Parent or any of its
Subsidiaries shall apply only to the extent that Buyer might be adversely
affected, it being understood that any claim or issue that would increase Tax
for which Parent is responsible and liable hereunder and decrease Tax for which
Buyer is responsible and liable hereunder would not adversely affect Buyer.
 
(g)  Tax Refunds and Credits.  (i)  Any Income Tax refunds that are received by
Buyer or any Target Company or any Target Subsidiary or any other Affiliate, and
any amounts credited against Income Tax to which Buyer or any Target Company or
any Target Subsidiary or any other Affiliate becomes entitled, that relate to a
Pre-Closing Tax Period of any Target Company or any Target Subsidiary shall be
for the account of Parent, and Buyer shall pay over to Parent any such refund or
the amount of any such credit within fifteen (15) days after receipt or
entitlement thereto.
 
(ii)  Any Non-Income Tax refunds that are received by Buyer or any Target
Company or any Target Subsidiary or any other Affiliate, and any amounts
credited against Non-Income Tax to which Buyer or any Target Company or any
Target Subsidiary or any other Affiliate becomes entitled, that relate to a
Pre-Closing Tax Period of any Target Company or any Target Subsidiary shall be
for the account of Parent, and Buyer shall pay over to Parent any such refund or
the amount of any such credit within fifteen (15) days after receipt or
entitlement thereto, to the extent such refund or credit is attributable to
Non-Income Taxes paid by Parent or any of its Affiliates or for which Buyer was
indemnified pursuant to Section 9(b)(i)(B) above.
 
(iii)  To the extent requested by Parent, and at Parent’s expense, Buyer shall
reasonably cooperate with Parent in applying for and obtaining any available Tax
refunds with respect to Pre-Closing Tax Periods, provided however, none of
Buyer, any Target Company or any Target Subsidiary shall be required to take any
action or position, that would materially adversely affect any of Buyer or any
of its Affiliates or any Target Company or any Target Subsidiary.
 
(h)  Cooperation.  Buyer, on the one hand, and Parent (on behalf of its
Affiliates), on the other hand, agree, in each case to the extent reasonably
requested by the other Party and at no cost to the other Party, to
 
(i)  furnish to the other Party in a timely manner information and documents for
purposes of preparing any original or amended Tax Returns to which
Section 9(d)(ii) applies and contesting or defending any Tax Proceeding;
 
(ii)  cooperate in good faith in any Tax Proceeding;
 
(iii)  retain and provide on demand books, records, documentation or other
information relating to any Tax Return until the later of (A) the expiration of
the
 
 
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applicable statute of limitations (giving effect to any extension, waiver, or
mitigation thereof) and (B) in the event any claim is made under this Agreement
for which such information is relevant, until a final determination, as defined
under Section 1313(a) of the Code or similar provision of non-U.S. law, with
respect to such claim; and
 
(iv)  take such action as such other Party may deem appropriate in connection
therewith, including cooperation with respect to the preparation of financial
statements as they relate to Taxes and related matters.
 
(i)  VAT.  (i)  Subject to Section 9(i)(ii), the consideration specified for all
supplies made or deemed to be made under or in connection with this Agreement
shall be exclusive of VAT.  Parent and Buyer shall procure that any of their
respective Affiliates receiving the supply in question shall pay to the Person
making that supply (in addition to the specified consideration) all VAT for
which the Person making the supply is required by any Taxing Authority to charge
in relation to that supply.  All VAT payable under this Agreement shall be paid
two business days before that Person has to account for the same and the
supplier shall provide a VAT invoice.
 
(ii)  The Parties intend that any sale of the Acquired Assets within the
European Union will be treated by the relevant Taxing Authority as a TOGC and
the Parties shall use their reasonable efforts to procure that any such sale is
so treated.  This obligation shall not require Parent to make any appeal to any
tribunal or court of law against any determination of any Taxing Authority that
the sale does not amount to a TOGC, unless Buyer shall by such date as shall
reasonably allow Parent to make such appeal or challenge within any applicable
time limit give written notice to Parent that it requires such appeal or
challenge to be made and shall first agree to indemnify Parent against all
irrecoverable costs and expenses that Parent may incur by taking any such
action.
 
(iii)  Parent and Buyer shall procure that the Person retaining at the Closing
the VAT records relating to a Business that is sold shall preserve such records
for such periods as may be required by the relevant Law and during such periods
shall permit the other Party or its agents at all reasonable times and subject
to reasonable written notice to inspect and take copies of such records at the
cost of the Person requesting such inspection and/or copies.
 
(iv)  If it is finally determined by the relevant Taxing Authority that any sale
of the Acquired Assets under this Agreement does not constitute a TOGC, then
Buyer shall procure that VAT chargeable shall be paid by the relevant Affiliate
to Parent two business days before Parent has to account for the same and
against production of a valid VAT invoice and any VAT records provided by Parent
to Buyer or Buyer’s Affiliate shall be returned to Parent.  Buyer shall
indemnify or procure that such Affiliate shall indemnify Parent on an after Tax
basis against any penalty and interest charges incurred by Parent to any Taxing
Authority in relation to such VAT.
 
 
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(j)  Coordination; Exclusive Tax Remedy.  The rights and obligations of the
Parties with respect to indemnification for any and all Tax matters shall be
governed solely by the provisions of this Section 9.
 
(k)  Transfer Taxes.  (i)  All recoverable and non-recoverable transfer,
documentary, sales, use, stamp, registration, and other such Taxes, and all
conveyance fees, recording charges and other fees and charges (including any
penalties and interest) (such Taxes, fees and charges, together with any
penalties or interest, “Transfer Taxes”) incurred in connection with the
transfer of the Target Shares and the Acquired Assets contemplated by this
Agreement, as well as the cost of the filing of all necessary Tax Returns and
other documentation with respect to all such Taxes, fees and charges, shall be
borne 50% by Buyer and 50% by Parent, and Parent and Buyer shall each file all
necessary Tax Returns and other documentation required to be filed by it with
respect to all such Taxes, fees and charges, and, if required by applicable Law,
the Parties will, and will cause their Affiliates to, join in the execution of
any such Tax Returns and other documentation.
 
(ii)  If there is any available sales Tax exemption in relation to any Acquired
Assets, Buyer shall timely deliver to the relevant Asset Seller the relevant
sales Tax exemption certificate.
 
(l)  Allocation of Purchase Price.  (i)  Buyer and Sellers shall use their
reasonable best efforts to agree on an allocation of the Purchase Price (the
“Allocation”) prior to the Closing Date.  The Allocation shall allocate for all
purposes (including Tax and financial accounting purposes) the Purchase Price
(including liabilities and other capitalized costs) among the Acquired Assets
and the Target Shares.
 
(ii)  At least 30 calendar days prior to the Closing Date, Sellers shall deliver
a draft of the Allocation (the “Proposed Allocation”) to Buyer for its consent,
which consent shall not be unreasonably withheld, delayed or
conditioned.  Except as provided in subparagraphs (iii), (iv) and (v) of this
Section 9(l), at the close of business on the 30th day after delivery of the
Proposed Allocation, the Proposed Allocation shall become binding upon Buyer and
Sellers, shall be set forth in an allocation schedule which shall be deemed to
be part of this Agreement (the “Allocation Schedule”), and shall be the
Allocation.
 
(iii)  Buyer shall raise any objection to the Proposed Allocation in writing
within 30 calendar days of the delivery of the Proposed Allocation.  Buyer and
Sellers shall negotiate in good faith to resolve any differences until the
Closing Date.  If Buyer and Sellers reach written agreement amending the
Proposed Allocation prior to the Closing Date, the Proposed Allocation, as so
amended, shall become binding upon Buyer and Sellers, shall be set forth in the
Allocation Schedule, and shall be the Allocation.
 
(iv)  If Buyer and Sellers cannot agree on the Allocation before the Closing
Date, they shall continue to negotiate in good faith to resolve any differences
until the date on which the purchase price adjustment contemplated by
Section 2(g)
 
 
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above is payable.  If Buyer and Sellers reach written agreement amending the
Proposed Allocation prior to that date, the Proposed Allocation, as so amended,
shall become binding upon Buyer and Sellers, shall be set forth in the
Allocation Schedule, and shall be the Allocation.
 
(v)  If Buyer and Sellers cannot agree on the Allocation before the date on
which the purchase price adjustment contemplated by Section 2(g) above is
payable, then each Party shall use its own allocation, as each such Party shall
deem appropriate.
 
(vi)  The Allocation shall be amended (in a manner agreed by Buyer and Sellers
consistent with the methodology previously used) to reflect any adjustments to
the Preliminary Purchase Price and the Purchase Price under this Agreement.
 
(vii)  Except as provided in subparagraph (v) above, each of Sellers, Buyer and
their respective Affiliates shall report, act and file Tax Returns (including
Internal Revenue Service Form 8594) in all respects and for all purposes
consistent with the Allocation.
 
(m)  Certain Danish Income Tax Matters.  Parent and Buyer acknowledge that, on
March 20, 2008, Alpharma ApS will be required to make an advance payment in
respect of its 2008 Danish Income Taxes.  In the event that the Closing will
occur after the date such advance will be due, Parent shall pay the full amount
of such advance to the Danish Taxing Authorities, and Buyer and Parent agree
that the Preliminary Purchase Price shall be increased by an amount equal to
Buyer’s share of such advance (which share shall be determined on a per diem
basis with respect to the period starting January 1, 2008 and ending on June 30,
2008).  In the event that the Closing will occur prior to the date such advance
will be due, Buyer shall pay the full amount of such advance to the Danish
Taxing Authorities, and Parent shall pay to Buyer an amount equal to Parent’s
share of such advance (which share shall be determined on a per diem basis with
respect to the period starting January 1, 2008 and ending on June 30, 2008)
within (10) days after Buyer’s payment of such advance.
 
SECTION 10.  Termination.
 
(a)  Termination of Agreement.  (i)  Notwithstanding any other provision in this
Agreement to the contrary, this Agreement may be terminated and the Transaction
and the other transactions contemplated by this Agreement abandoned at any time
prior to the Closing:
 
(A)  by mutual written consent of Buyer and Parent;
 
(B)  by Parent if any of the conditions set forth in Section 7(b) shall have
become incapable of fulfillment, and shall not have been waived by Parent;
 
 
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(C)  by Buyer if any of the conditions set forth in Section 7(a) shall have
become incapable of fulfillment, and shall not have been waived by Buyer;
 
(D)  by Buyer or Parent, if the Closing does not occur on or prior to April 21,
2008 (the “Initial Outside Date”); provided, that if the Closing does not occur
by such date, solely due to the failure to have obtained any approvals of any
Governmental Entities that are required to complete the Pre-Closing
Restructuring, but all other conditions to Closing shall have been fulfilled or
shall be capable of being fulfilled as of such date, then such date shall be
extended for an additional 90-day period (the “Extended Outside Date”); or
 
(E)  by Buyer or Parent, if a final, nonappealable Judgment shall have been
entered by any Governmental Entity preventing the consummation of the
Pre-Closing Restructuring;
 
provided, however, that the Party seeking termination pursuant to clause (B),
(C) or (D) is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
 
(ii)  If this Agreement is terminated by Buyer or Parent pursuant to this
Section 10(a), written notice thereof shall forthwith be given to the other
Party and the transactions contemplated by this Agreement shall be terminated,
without further action by any Party.  If the transactions contemplated by this
Agreement are terminated as provided herein:
 
(A)  Buyer shall return all documents and other material received from Parent,
its Affiliates or their advisors or representatives relating to the transactions
contemplated by this Agreement, whether so obtained before or after the
execution of this Agreement, to Parent; provided that Buyer or its
representatives may retain documents and other material as a result of customary
electronic back-up procedures or as required by Law, subject to clause (B)
below; and
 
(B)  all confidential information received by Buyer with respect to the Business
shall be treated in accordance with the Confidentiality Agreement, which shall
remain in full force and effect notwithstanding the termination of this
Agreement.
 
(b)  Effect of Termination; Termination Fee.  (i)  If this Agreement is
terminated pursuant to Section 10(a), this Agreement shall become null and void
and of no further force and effect, except for the provisions of (A)
Sections 3(a)(iii) and 3(b)(x) relating to brokers and finders, (B) Section 5(e)
relating to the obligation of Buyer to keep confidential certain information and
data obtained by it, (C) Section 10(a) and this Section 10(b) and
(D) Section 11.  Nothing in this Section 10(b) shall be deemed to release any
Party from any liability for any breach by such Party of the terms and
 
 
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provisions of this Agreement or to impair the right of any Party to compel
specific performance by any other Party of its obligations under this Agreement.
 
(ii)  If (A) this Agreement is terminated by Buyer or Parent pursuant to
Section 10(a)(i)(D) solely as a result of the failure to have obtained any
approvals of any Governmental Entities that are required to complete the
Pre-Closing Restructuring prior to the Extended Outside Date; (B) Buyer has not
entered into the Quotaholders Agreement prior to the Extended Outside Date; and
(C) there has not been a Pre-Closing Restructuring Denial, then Buyer shall pay,
by wire transfer of immediately available funds, the Termination Fee to Parent
as promptly as reasonably practicable (and, in any event, within five business
days) following such termination.
 
(iii)  Buyer and Parent acknowledge and agree that (A) the agreements contained
in this Section 10(b) are an integral part of the transactions contemplated by
this Agreement, (B) without these agreements, neither Buyer nor Parent would
have entered into this Agreement and (C) the damages resulting from termination
of this Agreement under circumstances where a Termination Fee is payable are
uncertain and incapable of accurate calculation and the amounts payable pursuant
to paragraph (ii) of this Section 10(b) are reasonable forecasts of the actual
damages which may be incurred and constitute liquidated damages and not a
penalty.
 
(iv)  If Buyer fails to pay the Termination Fee due pursuant to paragraph (ii)
of this Section 10(b) when due, and, in order to obtain such payment, Parent
commences a suit, action or other proceeding that results in a Judgment against
Buyer for the Termination Fee, Buyer shall pay to Parent its costs and expenses
(including attorneys’ fees and expenses) in connection with such suit, action or
other proceeding, together with interest on the Termination Fee from (and
including) the date such payment was required to be made through (but not
including) the date of payment at the prime rate of Citibank, N.A. in effect on
the date such payment was required to be made.
 
SECTION 11.  Miscellaneous.
 
(a)  Press Releases and Public Announcements.  Parent and Buyer shall not issue
any press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the other Party;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable Law or any listing or trading agreement
concerning its publicly traded securities (in which case the disclosing Party
will use its reasonable best efforts to advise the other Parties prior to making
the disclosure) and any Party may issue a press release upon entering into this
Agreement after reasonable consultation with the other Parties.
 
(b)  No Third Party Beneficiaries.  Other than as explicitly set forth herein,
including in Sections 8(b) and 8(c), this Agreement shall not confer any rights
or
 
 
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remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
 
(c)  Entire Agreement.  This Agreement, the Ancillary Agreements, the
Confidentiality Agreement, the Disclosure Schedule, the Equity Financing
Commitments and exhibits hereto and thereto constitutes the entire agreement
among the Parties and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof.
 
(d)  Succession and Assignment.  This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns.  No Party may assign either this Agreement or any of his,
her, or its rights, interests, or obligations hereunder without the prior
written approval of Buyer and Parent; provided, however, that Buyer may assign
its rights under this Agreement to any lender providing the Debt Financing to
Buyer and any individual Buyer may assign its rights to another individual
Buyer, but no assignment pursuant to this proviso shall relieve Buyer of its
obligations under this Agreement.  For the avoidance of doubt, no lender shall
be entitled to make a claim under this Agreement or enforce any provision of
this Agreement as a result of an assignment pursuant to the foregoing sentence
other than in connection with the exercise of lender subrogation or other
enforcement rights following an event of default under the definitive Debt
Financing agreements.  The Buyer Entities shall be entitled to assign their
rights under Section 6(e)(i) to any purchaser which acquires all or
substantially all the assets or business of the Business and Sellers and their
Affiliates shall be entitled to enforce Section 6(e)(ii) against any such
purchaser.  The Sellers and their Affiliates shall be entitled to assign their
rights under Section 6(e)(ii) to any purchaser which acquires all or
substantially all the assets or business of the animal health business of Parent
and its Affiliates and the Buyer Entities shall be entitled to enforce Section
6(e)(i) against any such purchaser.
 
(e)  Counterparts.  This Agreement may be executed in one or more counterparts
(including by means of facsimile, PDF or other electronic transmission), each of
which shall be deemed an original but all of which together will constitute one
and the same instrument.
 
(f)  Headings.  The section headings contained in this Agreement in any Exhibit,
Annex or Schedule to this Agreement and in the table of contents hereto are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
 
(g)  Notices.  All notices, requests, demands, claims, and other communications
hereunder shall be in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) when delivered personally
to the recipient, (ii) one business day after being sent to the recipient by
reputable overnight courier service (charges prepaid), (iii) one business day
after being sent to the recipient by facsimile transmission or electronic mail,
or (iv) four business days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, and addressed to
the intended recipient as set forth below:
 
 
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If to Sellers (or any of them):
 
Alpharma Inc.
440 Route 22 East
Bridgewater, New Jersey USA 08807
Attention: Executive Vice President and Chief Financial Officer
Facsimile: (908) 566-4137
 
with a copy to:
 
Alpharma Inc.
440 Route 22 East
Bridgewater, New Jersey USA 08807
Attention: Executive Vice President and Chief Legal Officer
Facsimile: (908) 566-4139
 
and a copy to:
 
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention:   Robert I. Townsend, III, Esq.
            Damien R. Zoubek, Esq.
Facsimile: (212) 474-3700
 
If to Buyer:
 
3i Nordic plc (UK) Filiale Sverige
Box 7847
SE-10399 Stockholm, Sweden
Attention: Tomas Ekman
Facsimile: (46-8) 506 211 60
 
with a copy to:
 
Linklaters Advokatbyrå Aktiebolag
Regeringsgatan 67
Box 7833
103 98 Stockholm, Sweden
Attention: Peter Högström
Facsimile: (46-8) 667 6883
 
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
 
 
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(h)  Governing Law.  This Agreement shall be governed by and construed in
accordance with the domestic Laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the Laws
of any jurisdiction other than the State of New York.
 
(i)  Consent to Jurisdiction.  (i)  Each Party irrevocably submits to the
exclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court for the Southern
District of New York, and any appellate court from any thereof, in any suit,
action or other proceeding arising out of or relating to this Agreement or any
transaction contemplated by this Agreement, or for recognition or enforcement of
any Judgment, and each Party irrevocably and unconditionally agrees that all
claims in respect of any such suit, action or other proceeding may be heard and
determined in such court.  The Parties agree that a final judgment in any such
suit, action or other proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the Judgment or in any other manner provided by
applicable Law.
 
(ii)  Each Party irrevocably and unconditionally waives, to the fullest extent
permitted by applicable Law, any objection which it may now or hereafter have to
the laying of venue of any suit, action or other proceeding arising out of or
relating to this Agreement or any transaction contemplated by this Agreement in
any court referred to in the first sentence of paragraph (i) of this
Section 11(i).  Each Party irrevocably and unconditionally waives, to the
fullest extent permitted by applicable Law, the defense of an inconvenient forum
to the maintenance of any suit, action or other proceeding arising out of or
relating to this Agreement or any transaction contemplated by this Agreement in
any court referred to in the first sentence of paragraph (i) of this
Section 11(i).
 
(iii)  Each Party consents, to the fullest extent permitted by applicable Law,
to service of any process, summons, notice or document in the manner provided
for notices in Section 11(g).  Nothing in this Agreement will affect the right
of any Party to serve process in any other manner permitted by applicable Law.
 
(iv)  This Section 11(i) shall not apply to any dispute under Section 2(g) that
is required to be decided by the Accounting Firm.
 
(j)  Waiver of Jury Trial.  Each Party hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by jury in respect
to any litigation, directly or indirectly, arising out of or relating to this
Agreement or any transaction contemplated by this Agreement.  Each Party
(i) certifies that no representative, agent or attorney of any other Party has
represented, expressly or otherwise, that such other Party would not, in the
event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other Parties have been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications in this Section 11(j).
 
 
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(k)  Enforcement.  The Parties agree that irreparable damage would occur and
that the Parties would not have any adequate remedy at Law if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in addition to any other remedy to which any Party is
entitled at Law or in equity.
 
(l)  Amendments and Waivers.  No amendment or modification of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
Buyer and Sellers.  No waiver by any Party of any provision of this Agreement or
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless the same shall be in writing
and signed by the Party making such waiver, nor shall such waiver be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
 
(m)  Severability.  Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.  If any provision of this Agreement shall be adjudged
to be excessively broad as to duration, geographical scope, activity or subject,
the Parties intend that such provision shall be deemed modified to the minimum
degree necessary to make such provision valid and enforceable under applicable
Law and that such modified provision shall thereafter be enforced to the further
extent possible.
 
(n)  Expenses.  Except as otherwise expressly provided herein, Buyer and Sellers
each will bear their own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.
 
(o)  Construction.  The Parties have participated jointly in the negotiation and
drafting of this Agreement.  In the event 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.  Any reference in this Agreement to any federal, state, local,
or foreign Law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.  When a reference
is made in this Agreement to a party or to an Article, Section, Annex, Exhibit
or Schedule, such reference shall be to a party to, an Article or Section of, or
an Annex, Exhibit or Schedule to, this Agreement, unless otherwise
indicated.  All terms defined in this Agreement shall have their defined
meanings when used in any Annex, Exhibit or Schedule to this Agreement or any
certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein.  Whenever the words “include”, “includes”,
“including” or “such as” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”.  The word “will” shall be construed
to have the same meaning and effect as the word “shall.”  The words “hereof”,
 
 
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“herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement.  The word “or” when used in this Agreement is not
exclusive.  The word “extent” in the phrase “to the extent” shall mean the
degree to which a subject or other thing extends, and such phrase shall not mean
simply “if”.  Whenever used in this Agreement, any noun or pronoun shall be
deemed to include the plural as well as the singular and to cover all
genders.  Any agreement, instrument or statute defined or referred to herein
means such agreement, instrument or statute as from time to time amended,
supplemented or modified, including (x) (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and (y) all attachments thereto and instruments
incorporated therein.  The words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.  References to “Buyer” in this Agreement shall refer to each of
the Persons included in the definition of  “Buyer” in the preface of this
Agreement and all obligations of Buyer in this Agreement shall be the joint and
several obligation of each such Person. References to a Person are also to its
permitted successors and assigns.  When a reference is made in this Agreement to
the Business, such reference shall also be a reference to the Target Companies
and Target Subsidiaries if the context so requires.  Except as otherwise
expressly provided herein, all references to “dollars” or “$” will be deemed
references to the lawful money of the United States of America.
 
(p)  Incorporation of Exhibits, Annexes, and Schedules.  The Exhibits, Annexes,
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
 
 
* * * * *

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

   
ALPHARMA INC.,
         
 
by:
/s/ Thomas J. Spellman        Name        Title           

 
 
 

 
 
ALPHARMA (LUXEMBOURG) S.ÀR.L.,
         
 
by:
/s/ Thomas J. Spellman         Name:        Title:           

 
 

 
 
ALPHARMA BERMUDA G.P.,
         
 
by:
/s/ Thomas J. Spellman         Name:        Title:           

 
 

 
 
ALPHARMA INTERNATIONAL (LUXEMBOURG) S.ÀR.L.,
         
 
by:
/s/ Thomas J. Spellman         Name:        Title:           

 
 
 

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ALFANOR 7152 AS (UNDER CHANGE OF
NAME TO OTNORBIDCO AS),
         
 
by:
/s/ Joshua Berick         Name:   Joshua Berick       Title:  Attorney-In-Fact  
       

 
 
 

 
OTDENHOLDCO APS,
         
 
by:
/s/ Joshua Berick          Name:   Joshua Berick        Title: 
Attorney-In-Fact           

 
 
 

 
 
OTDELHOLDCO INC.,
         
 
by:
/s/ Joshua Berick          Name:   Joshua Berick        Title: 
Attorney-In-Fact           

 
 
 

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