Exhibit 10.63

 

STOCK PURCHASE AGREEMENT

 

by and between

 

GLOBAL POWER EQUIPMENT GROUP INC.

 

and

 

CHART LIFECYCLE, INC.

 

Dated as of

 

JANUARY 13, 2017

 

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TABLE OF CONTENTS

 

 

ARTICLE I DEFINITIONS

1

 

 

ARTICLE II PURCHASE AND SALE OF SHARES

12

 

 

 

2.1

Basic Transaction

12

2.2

Purchase Price; Payment at Closing

12

2.3

Pre-Closing Adjustment to the Purchase Price

12

2.4

Post-Closing Adjustment to the Purchase Price

13

2.5

Closing

15

2.6

Deliveries at Closing

15

2.7

Accounting Procedures

15

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

16

 

 

 

3.1

Organization

16

3.2

Authorization of Transaction

16

3.3

Noncontravention

16

3.4

Brokers’ Fees

17

3.5

Ownership of Shares

17

3.6

Litigation

17

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER

17

 

 

 

4.1

Organization

17

4.2

Authorization of Transaction

17

4.3

Noncontravention

17

4.4

Brokers’ Fees

18

4.5

Investment

18

4.6

Financial Ability to Perform

18

4.7

Litigation

18

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES ABOUT THE COMPANY AND THE OPERATING
COMPANY

18

 

 

 

5.1

Organization, Qualification, Corporate Power and Authorization

18

5.2

Capitalization

19

5.3

Noncontravention

19

5.4

Brokers’ Fees

19

5.5

Real Property

19

5.6

Subsidiaries

21

5.7

Financial Statements

21

5.8

Absence of Certain Changes and Events

22

5.9

Legal Compliance

23

5.10

Permits

24

5.11

Undisclosed Liabilities

24

5.12

Environmental Matters

24

5.13

Taxes

26

5.14

Intellectual Property

27

5.15

Contracts

29

5.16

Insurance

31

5.17

Litigation

31

5.18

Labor and Employment Matters

31

5.19

Employee Benefits

32

5.20

Customers and Suppliers

34

 

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5.21

Personal Property, Machinery, and Equipment; Sufficiency of Assets

35

5.22

Accounts Receivable; Accounts Payable; Inventory

35

5.23

Warranties; Product and Service Liability

36

5.24

Affiliate Transactions

37

5.25

Books and Records

37

5.26

Disclosure

37

 

 

ARTICLE VI COVENANTS AND AGREEMENTS

37

 

 

 

6.1

Cooperation

37

6.2

Expenses

38

6.3

No Public Announcement

38

6.4

Directors’ and Officers’ Indemnification and Insurance

38

6.5

Employment Matters

39

6.6

Preservation of Books and Records

40

6.7

Transfer Taxes

40

6.8

Further Assurances

41

6.9

Tax Matters

41

6.10

Restrictive Provisions

43

6.11

Release

45

6.12

Seller Confidential Information

45

6.13

Termination of Intercompany Accounts

46

6.14

Insurance Policies.

46

6.15

Accounts Receivable

48

 

 

ARTICLE VII CLOSING DELIVERIES

48

 

 

 

7.1

Closing Deliveries of Seller

48

7.2

Closing Deliveries of Buyer

50

7.3

Frustration of Closing Conditions

50

 

 

ARTICLE VIII INDEMNIFICATION

50

 

 

 

8.1

Survival of Representations, Warranties, and Covenants

50

8.2

Indemnification by Seller

51

8.3

Indemnification by Buyer

52

8.4

Matters Involving Third Party Claims

52

8.5

Matters not Involving Third Party Claims

53

8.6

Limitations on Indemnification

53

8.7

Exclusive Remedy; Waiver of Certain Damages

55

8.8

Mitigation

55

8.9

Adjustments to Purchase Price

55

 

 

ARTICLE IX INTENTIONALLY OMITTED

55

 

 

ARTICLE X MISCELLANEOUS

55

 

 

 

10.1

No Third Party Beneficiaries

55

10.2

Entire Agreement

56

10.3

Succession and Assignment

56

10.4

Counterparts; Signatures

56

10.5

Headings

56

10.6

Notices

56

10.7

Amendments and Waivers

57

10.8

Severability

57

10.9

Construction

57

 

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10.10

Incorporation of Exhibits and Schedules

57

10.11

Specific Performance

57

10.12

Governing Law

58

10.13

Submission to Jurisdiction; Waiver of Jury Trial

58

10.14

Disclosure Schedule

58

 

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EXHIBITS AND SCHEDULES

 

Exhibit A

Agreed Accounting Policies and Principles

Exhibit B

The Reference Statement

Exhibit C

Form of Escrow Agreement

Exhibit D

Form of Transition Services Agreement

 

Disclosure Schedule

 

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STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) effective as of January 13,
2017 is entered into by and between Global Power Equipment Group Inc., a
Delaware corporation (“Seller”), and Chart Lifecycle, Inc., a Delaware
corporation (“Buyer”).  Each of Seller and Buyer is referred to in this
Agreement individually as a “Party” and together as the “Parties.”

 

RECITALS

 

WHEREAS, Seller owns all of the issued and outstanding shares of capital stock
(the “Shares”) of Hetsco Holdings, Inc., a Delaware corporation (the “Company”);
and

 

WHEREAS, the Parties desire that, upon the terms and subject to the conditions
set forth in this Agreement, Buyer will purchase from Seller, and Seller will
sell to Buyer, all of the Shares in return for cash.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained in this Agreement, the Parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Unless otherwise expressly provided in this Agreement, the following terms, as
used in this Agreement, have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person.  For purposes of this definition, “control” of any Person means
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting capital stock, by contract, or otherwise.

 

“Agreed Accounting Policies and Principles” means GAAP as in effect at the date
of the financial statement to which it refers, using and applying the same
accounting principles, practices, procedures, policies, and methods (with
consistent classifications, judgments, elections, inclusions, exclusions, and
valuation and estimation methodologies) used and applied by the Company and the
Operating Company in the preparation of the Financial Statements, subject in all
respects to the principles, adjustments, notes, and assumptions set forth on
Exhibit A.

 

“Agreement” has the meaning set forth in the preamble.

 

“Allocation Statement” has the meaning set forth in Section 6.9(g).

 

“Base Amount” has the meaning set forth in Section 2.2(a).

 

“Base Working Capital” means Two Million Nine Hundred Thousand Dollars
($2,900,000) (U.S.).

 

“Business” means the business of providing (i) on site and shop repair,
maintenance, safety and installation services for brazed-aluminum plate-fin heat
exchangers used in all applications including industrial gas, natural gas
processing, liquefied natural gas and petrochemical facilities; (ii) on site and
shop repair, maintenance, safety and installation services for pressure vessels,
(iii) on site and

 

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shop repair, maintenance, safety and installation services for steam methane
reformers, (iv) any shop construction and fabrication services related to
services provided, (v) related field construction and plant relocation services,
and (vi) specialty welding, repairs and other services for the power generation
industry, all as conducted by the Company (either directly or through the
Operating Company) and/or the Operating Company on the date of this Agreement.

 

“Business Day” means any day other than a Saturday, a Sunday, or a U.S. federal
or Delaware banking holiday.

 

“Buyer” has the meaning set forth in the preamble.

 

“Buyer Ancillary Agreements” has the meaning set forth in Section 4.2.

 

“Buyer Indemnitees” has the meaning set forth in Section 8.2.

 

“Cap” has the meaning set forth in Section 8.6(a)(ii).

 

“Cash” means, as of any time, with respect to any Person, the aggregate amount
of cash and cash equivalents on hand of such Person, plus checks presented by
the Company and/or Operating Company for deposit but not yet credited to deposit
accounts determined in accordance with the Agreed Accounting Policies and
Principles.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.

 

“Claim for Indemnification” means a written notice by Buyer to Seller or Seller
to Buyer, as the case may be, asserting a claim under Article VIII delivered in
accordance with Section 10.6.  Such notice shall provide, in reasonable detail,
(i) a general description of the Losses that the Indemnified Party has suffered,
or is reasonably likely to suffer, (ii) the dollar amount of such Losses (or an
estimate thereof, if reasonably determinable), (iii) the breach of
representation, warranty, covenant, or agreement set forth in this Agreement
giving rise to such Losses, and (iv) the facts and circumstances underlying such
asserted breach.

 

“Closing” has the meaning set forth in Section 2.5.

 

“Closing Date” has the meaning set forth in Section 2.5.

 

“Closing Indebtedness” means, without duplication, all Indebtedness, including
any amounts due and payable by the Company or the Operating Company to the
Seller or its Affiliates (other than the Company or the Operating Company)
whether pursuant to contract or otherwise, as of the Closing Date; provided that
any amount of Indebtedness taken into account in determining Working Capital
shall not be taken into account in determining the Closing Indebtedness.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commitment” means any:  (i) option, warrant, convertible security, exchangeable
security, subscription right, conversion right, exchange right, or other right
that requires a Person to issue or sell any Equity Interests or other interests
of an Entity; (ii) other security convertible into, exchangeable or exercisable
for, or representing the right to subscribe for, any Equity Interests or other
interests of an Entity; (iii) pre-emptive right granted under an Entity’s
Organizational Documents; and

 

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(iv) stock appreciation right, phantom stock, profit participation, or other
similar right with respect to an Entity.

 

“Company” has the meaning set forth in the recitals.

 

“Company Indemnified Persons” has the meaning set forth in Section 6.4(a).

 

“Company Intellectual Property” has the meaning set forth in Section 5.14(a).

 

“Company IP Agreements” has the meaning set forth in Section 5.14(b).

 

“Company Transaction Expenses” means, without duplication and whether or not
disclosed, all amounts due and payable (and not previously paid) by the Company
and the Operating Company for all costs and expenses incurred by them in
connection with the negotiation and preparation of this Agreement and the
consummation of the transactions contemplated hereby with respect to services
provided by third party brokers, attorneys, accountants, or other
representatives; it being understood that no Company Transaction Expenses shall
be taken into account in determining Working Capital; it being further
understood that the following are considered Company Transaction Expenses:
(a) the amount of any unpaid director or management fees or expenses owed by the
Company and the Operating Company related to the period of time prior to and
including the Closing Date (whether accrued or unaccrued); (b) the amount of any
obligations of the Company and the Operating Company consisting of transaction
bonuses or other compensatory payments or payment obligations to Employees or
other Persons that will become due and payable as a result of the consummation
of the transactions contemplated by this Agreement; and (c) the amount of any
change in control, phantom stock, severance payment or other similar obligations
of the Company and the Operating Company that will become due and payable as a
result of the consummation of the transactions contemplated by this Agreement.

 

“Confidential Information” has the meaning set forth in Section 6.10(e).

 

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated
September 14, 2016, by and between TM Capital Corp. and Chart Industries Inc.

 

“Contract” means any contract, agreement, purchase and sales order, lease,
license or other legally binding commitment, whether written or oral, to which
the Company or the Operating Company is a party or by which any assets of the
Company or the Operating Company is bound or is subject.

 

“Copyrights” has the meaning set forth in the definition of “Intellectual
Property.”

 

“Current Assets” means, in respect of the Company and the Operating Company as
of any date, the aggregate amount of each of the line items (and no others)
under the heading “Current Assets” set forth on the Reference Statement as of
such date, determined in accordance with Section 2.7 and the Agreed Accounting
Policies and Principles.

 

“Current Liabilities” means, in respect of the Company and the Operating Company
as of any date, the aggregate amount of each of the line items (and no others)
under the heading “Current Liabilities” set forth on the Reference Statement as
of such date, determined in accordance with Section 2.7 and the Agreed
Accounting Policies and Principles.

 

“Decree” means any injunction, judgment, order, decree, writ, stipulation,
determination, award, or ruling entered by or with any applicable Governmental
Authority.

 

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“Deductible Amount” has the meaning set forth in Section 8.6(a)(i).

 

“Disclosure Schedule” has the meaning set forth in Article III.

 

“Disposal,” “Storage” and “Treatment” shall have the meanings assigned them in
the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et. seq. (“RCRA”)
or any similar state or local Law, provided, however, that such terms shall be
applied to all “Hazardous Materials,” not solely to “hazardous waste,” as
defined in RCRA.

 

“Employee” means any individual who, as reflected in the payroll records of the
Company and the Operating Company, is, as of a specified date, (i) employed by
and rendering personal services for the Company or the Operating Company,
(ii) receiving short-term or long-term disability benefits from the Company or
the Operating Company under an Employee Benefit Plan, or (iii) on vacation or an
approved leave of absence from his or her employment with the Company or the
Operating Company.

 

“Employee Benefit Plans” has the meaning set forth in Section 5.19(a).

 

“Encumbrance” means, with respect to any asset, any mortgage, pledge, lien,
encumbrance, easement, right of way, restriction, security interest, matrimonial
or community interest, tenancy by the entirety claim, adverse claim, or defect
in title or restriction of any kind in respect of such asset.  For the avoidance
of doubt, the term “Encumbrance” shall not include any license of any
Intellectual Property.

 

“Entity” means a partnership, a corporation, a limited liability company, an
association, a trust, a joint venture, an unincorporated organization, or other
entity.

 

“Environment” means any soil, land surface or subsurface strata, surface water
(including navigable waters, ocean waters, streams, ponds, drainage basins and
wetlands), ground water, drinking water supply, stream sediments, ambient or
indoor air, plant and animal life and any other environmental medium or natural
resource.

 

“Environmental Laws” means all Laws, Decrees and Permits issued to the Company
or the Operating Company relating to pollution, contamination, human health or
safety, the Environment, natural resources or natural resource damages or to the
presence, use, management, handling, generation, importing, distribution,
manufacturing, processing, production, recycling, reclaiming, Storage, Disposal,
Treatment, transportation, Release or threatened Release of any Hazardous
Substance.

 

“Equity Interest” means (i) with respect to a corporation, any share of its
capital stock, (ii) with respect to a limited liability company, any of its
units or other limited liability company interests, and (iii) any other direct
equity ownership in an Entity.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
(i) under common control within the meaning of Section 4001(b)(1) of ERISA with
the Company and/or the Operating Company or (ii) which together with the Company
and/or the Operating Company is treated as a single employer under
Section 414(t) of the Code.

 

“Escrow Agent” means US Bank National Association.

 

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“Escrow Agreement” means an escrow agreement by and among the Seller, the Escrow
Agent and Buyer substantially in the form attached hereto as Exhibit C.

 

“Escrow Amount” means an amount equal to One Million Five Hundred Thousand
Dollars ($1,500,000), together with all interest, dividends, and other income
earned with respect thereto, less amounts disbursed therefrom in accordance with
this Agreement and the Escrow Agreement.

 

“Estimated Balance Sheet” means a good faith estimated balance sheet of the
Company and the Operating Company as of 11:59 p.m. on the Closing Date, which
shall be prepared by Seller in accordance with Section 2.7 and the Agreed
Accounting Policies and Principles.

 

“Estimated Cash” means the estimated aggregate amount of Cash of the Company and
the Operating Company as of 11:59 p.m. on the Closing Date, as set forth on the
Estimated Balance Sheet.

 

“Estimated Change in Working Capital” means (i) the Estimated Working Capital
minus (ii) the Base Working Capital.

 

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

 

“Estimated Outstanding Checks” means the estimated aggregate amount of
outstanding checks and other negotiable instruments of the Company and the
Operating Company as of 11:59 p.m. on the Closing Date, as set forth on the
Estimated Balance Sheet.

 

“Estimated Purchase Price” means an amount equal to the Base Amount, as adjusted
pursuant to Section 2.3.

 

“Estimated Working Capital” means the Working Capital of the Company and the
Operating Company as of 11:59 p.m. on the Closing Date, calculated based on the
Estimated Balance Sheet.

 

“Final Adjustment Amount” has the meaning set forth in Section 2.4(c).

 

“Final Balance Sheet” means a balance sheet of the Company and the Operating
Company as of 11:59 p.m. on the Closing Date, which shall be prepared by Buyer
in accordance with Section 2.7 and the Agreed Accounting Policies and
Principles.

 

“Final Cash” means the aggregate amount of Cash of the Company and the Operating
Company as of 11:59 p.m. on the Closing Date, as set forth on the Final Balance
Sheet.

 

“Final Change in Working Capital” means (i) the Final Working Capital minus
(ii) the Base Working Capital.

 

“Final Closing Statement” has the meaning set forth in Section 2.4(a).

 

“Final Outstanding Checks” means the aggregate amount of outstanding checks and
other negotiable instruments of the Company and the Operating Company as of
11:59 p.m. on the Closing Date, as set forth on the Final Balance Sheet.

 

“Final Purchase Price” means the Base Amount, as adjusted pursuant to
Section 2.4(a).

 

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“Final Working Capital” means the Working Capital of the Company and the
Operating Company as of 11:59 p.m. on the Closing Date, calculated based on the
Final Balance Sheet.

 

“Financial Statements” has the meaning set forth in Section 5.7.

 

“Flow of Funds Memo” has the meaning set forth in Section 7.1(m).

 

“Fraud Claims” means claims relating to intentional fraud.

 

“GAAP” means U.S. generally accepted accounting principles as in effect from
time to time.

 

“Governmental Authority” means any federal, state, local, or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations, or orders of such organization or authority
have the force of Law), or any arbitrator, court, or tribunal of competent
jurisdiction.

 

“Hazardous Substance” means any chemical, substance, waste, material, pollutant
or contaminant, the use, management, handling, generation, importing,
distribution, manufacturing, processing, production, recycling, reclaiming,
Storage, Disposal, Treatment, transportation or Release of which is regulated
under Law, or which is listed, defined, designated, or classified as, or
otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any Law, including any admixture or solution
thereof, and specifically including petroleum and all petroleum derivatives
thereof or synthetic substitutes therefor (including, without limitation, crude
oil or any fraction thereof, gasoline or diesel fuel, all forms of natural gas,
and petroleum products, by-products or waste); polychlorinated biphenyls;
asbestos and asbestos containing materials (whether friable or non-friable);
lead and lead-based paint or other lead containing materials; urea formaldehyde;
liquid solvents or similar chemicals; radon gas; radioactive material or waste;
and infectious waste, regardless of whether specifically listed or designated as
a hazardous material, hazardous substance or hazardous waste under any
Environmental Law.

 

“Indebtedness” means, as of any particular time, the outstanding principal
amount of, accrued and unpaid interest on, and other payment obligations
(including any prepayment fees, make-whole premiums or other similar fees,
premiums or amounts payable as a result of the consummation of the transactions
contemplated by this Agreement) arising under, any obligations of the Company
and the Operating Company consisting of, without duplication:  (i) indebtedness
for borrowed money, including all liabilities generally regarded as indebtedness
for borrowed money in accordance with GAAP; (ii) indebtedness evidenced by any
note, bond, debenture, mortgage, or other debt security; (iii) obligations under
capitalized leases with respect to which a Person is liable, contingently or
otherwise, as obligor, guarantor, or otherwise, or with respect to which
obligations a Person assures a creditor against loss; (iv) indebtedness secured
by an Encumbrance on a Person’s assets or properties; (v) obligations under any
performance bond or letter of credit, but only to the extent drawn or called
prior to the Closing Date; (vi) swap or derivative transactions, including the
market value of any swap or derivative transaction and any amounts payable in
connection therewith, whether reflecting fair value or other termination fees
necessary to terminate the relevant transaction; and (vii) any guaranty with
respect to any indebtedness, obligation, or liability of any other Person of a
type described in clauses (i) through (vi) above; provided that Indebtedness
shall not include the Current Liabilities, except to the extent said Current
Liabilities are amounts payable to Seller or its Affiliates (other than the
Company or the Operating Company) by the Company or the Operating Company
pursuant to contract or otherwise.

 

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“Indemnified Party” has the meaning set forth in Section 8.4(a).

 

“Indemnifying Party” has the meaning set forth in Section 8.4(a).

 

“Insurance Coverage Claim” has the meaning set forth in Section 6.14(d).

 

“Insurance Policies” has the meaning set forth in Section 5.16.

 

“Intellectual Property” means all rights arising from or in respect of any of
the following in any jurisdiction throughout the world (i) patents, patent
applications, patent disclosures and inventions, including any continuations,
divisionals, continuations-in-part, renewals and reissues for any of the
foregoing (collectively “Patents”), (ii) internet domain names and web pages,
trademarks, service marks, trade names, trade dress, brand names, slogans, logos
and corporate names and business names, and all registrations and applications
therefor, together with all of the goodwill associated therewith (collectively,
“Marks”), (iii) copyrights (registered or unregistered), copyright registrations
and applications and copyrightable works and registrations and applications for
registration thereof, and mask works and registrations and applications for
registration thereof (“Copyrights”), (iv) software, (v) all inventions,
invention disclosures, trade secrets, know-how, and proprietary information
(including ideas, formulas, compositions, and inventions whether patentable or
unpatentable and whether or not reduced to practice), in each case, to the
extent protectable by applicable Law or Decree (collectively, “Trade Secrets”),
and (vi) copies and tangible embodiments thereof (in whatever form or medium).

 

“Intercompany Agreements” has the meaning set forth in Section 6.13.

 

“Inventories” has the meaning set forth in Section 5.22(c).

 

“IRS” means the U.S. Internal Revenue Service.

 

“Knowledge of Seller” means actual knowledge of W. Samuel Willard, Scott Gill,
William Moultrie, Scott O’Donnell, Damien Vassall, Erin Gonzalez and Brian
Payton after due and reasonable inquiry into the relevant matter including of
such individual’s direct reports.

 

“Law” means any constitution, statute, treaty, code, ordinance, law, common law,
rule or regulation of any applicable Governmental Authority.

 

“Liability Claim” has the meaning set forth in Section 5.23.

 

“Losses” has the meaning set forth in Section 8.2.

 

“Marks” has the meaning set forth in the definition of “Intellectual Property.”

 

“Made Available” means posted on the electronic data site hosted by Intralinks
at least three (3) Business Days prior to the date hereof.

 

“Material Adverse Change” or “Material Adverse Effect” means a fact, condition,
change, event, or occurrence that individually, or together with any other fact,
condition, change, event or occurrence, has or would reasonably be expected to
have a material adverse effect on the financial condition, business, or results
of operations of the Company and the Operating Company, taken as a whole or
would prevent, materially delay or materially impair the consummation of the
transactions contemplated hereby; provided, however, that the term “Material
Adverse Change” or “Material Adverse Effect” shall not include, alone or in
combination, and no fact, condition, change, event, or occurrence

 

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arising from or relating to any of the following shall be taken into account in
determining whether there has been a “Material Adverse Change” or “Material
Adverse Effect”:  (i) conditions generally affecting the industries in which the
Company or the Operating Company operates, the U.S. economy or financial
markets, or foreign markets or foreign economies or financial markets where the
Company or the Operating Company has material operations; (ii) an outbreak or
escalation of hostilities, acts of terrorism, military acts, political
instability or other national or international calamity, crisis or emergency, or
any governmental or other response to the foregoing, in each case, involving the
U.S.; (iii) the public announcement or pendency of this Agreement or any
transactions contemplated by this Agreement; (iv) any breach by Buyer of this
Agreement or the Confidentiality Agreement; (v) any changes in GAAP imposed upon
the Company or the Operating Company or any changes in applicable Laws; or
(vi) any failure by the Company or the Operating Company to meet any
projections, forecasts, or revenue or earnings predictions for any period ending
(or for which revenues or earnings are released) on or after the date of this
Agreement; provided that any fact, condition, change, event, or occurrence
(other than those set forth in clauses (i) through (vi) of this definition) that
caused or contributed to such failure to meet projections, forecasts, or
predictions may be taken into account in determining whether a “Material Adverse
Change” or “Material Adverse Effect” has occurred; provided, further, that in
each of the cases of clauses (i) and (ii) above, only to the extent any such
fact, condition, change, event, or occurrence, either alone or in combination,
does not have a materially disproportionate effect on the financial condition,
business, or results of operations of Company and the Operating Company, taken
as a whole, relative to other similar industry participants.

 

“Material Contracts” has the meaning set forth in Section 5.15(a).

 

“Material Personal Property” has the meaning set forth in Section 5.21.

 

“Most Recent Balance Sheet” has the meaning set forth in Section 5.7.

 

“Most Recent Financial Statements” has the meaning set forth in Section 5.7.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) of
ERISA.

 

“Neutral Auditor” has the meaning set forth in Section 2.4(b).

 

“New Plans” has the meaning set forth in Section 6.5(a).

 

“Objection Notice” has the meaning set forth in Section 2.4(b).

 

“Operating Company” means Hetsco, Inc., a Delaware corporation.

 

“Ordinary Course of Business” means the conduct of the Business in a manner
substantially consistent with the regular conduct thereof by the Company and the
Operating Company.

 

“Organizational Documents” means (i) in the case of a corporation, the articles
of incorporation or certificate of incorporation and code of regulations or
bylaws of such corporation, (ii) in the case of a limited liability company, the
articles of organization or certificate of formation and operating agreement or
limited liability company agreement of such limited liability company, and
(iii) in the case of any other Entity, the applicable organizational documents
of such Entity, including, in each case, any amendments thereto.

 

“Party/Parties” has the meaning set forth in the preamble.

 

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“Patents” has the meaning set forth in the definition of “Intellectual
Property.”

 

“Pay-Off Documents” has the meaning set forth Section 2.3(c).

 

“Permits” means written permits, consents, licenses, orders, certificates,
registrations, approvals, and similar rights and authorizations issued by a
Governmental Authority.

 

“Permitted Encumbrances” means any of the following:  (i) any liens for Taxes
and assessments of Governmental Authorities not yet due and payable or that are
being contested in good faith by appropriate proceedings, and for which
appropriate reserves have been established in accordance with the Agreed
Accounting Policies and Principles; (ii) any liens in favor of vendors,
carriers, warehousemen, repairmen, mechanics, workmen, materialmen, construction
or similar liens arising by operation of law or in the Ordinary Course of
Business in respect of obligations that are not yet due and payable, or that are
being contested in good faith by appropriate proceeding and for which
appropriate reserves have been established in accordance with the Agreed
Accounting Policies and Principles; (iii) subject to subsection (vii) hereof,
any zoning, building code, land use, planning, zoning, entitlement,
environmental or similar laws or regulations imposed by any Governmental
Authority acceptable to Buyer; (iv) workers’ or unemployment compensation liens
arising in the Ordinary Course of Business; (v) any liens disclosed on
Section 1.1 of the Disclosure Schedule that will be discharged or released
either prior to, or simultaneous with, the Closing and any other liens disclosed
on Section 1.1 of the Disclosure Schedule; (vi) any liens created by Buyer or
its Affiliates; and (vii) any such other Encumbrances that do not, individually
or in the aggregate, materially impair the current use or value of any material
property or assets (including any Real Property) of the Company or the Operating
Company.

 

“Person” means an individual, an Entity, or a Governmental Authority.

 

“Post-Closing Taxable Periods” means all taxable periods (or portions thereof)
beginning after the Closing Date; in the case of a Straddle Period, the portion
of the Straddle Period that begins immediately after the Closing Date shall
constitute a Post-Closing Tax Period.

 

“Pre-Closing Taxable Periods” means all taxable periods (or portions thereof)
ending on or before the Closing Date; in the case of a Straddle Period, the
portion of the Straddle Period that ends on and includes the Closing Date shall
constitute a Pre-Closing Taxable Period.

 

“Pre-Closing Taxes” means all Taxes of the Company and the Operating Company for
Pre-Closing Taxable Periods.

 

“Proceeding” means any action, cause of action, litigation, arbitration,
mediation, suit, claim, dispute, demand, investigation, inquiry, audit, review,
hearing, charge, notice of violation, citation, summons, subpoena, complaint, or
other judicial or administrative proceeding, at law or in equity, including any
before or by any Governmental Authority.

 

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

 

“R&W Insurance Coverage Claim” has the meaning set forth in Section 6.14(a).

 

“R&W Insurance Policy” means a buyer-side representations and warranties
insurance policy issued by Ambridge Partners LLC for the benefit of Buyer with a
retention amount equal to the R&W Insurance Policy Retention Amount and a
coverage limit equal to the R&W Insurance Policy Coverage Limit.

 

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“R&W Insurance Policy Coverage Limit” means Five Million Dollars ($5,000,000).

 

“R&W Insurance Policy Retention Amount” means the “Retention” as that term is
defined in the R&W Insurance Policy.

 

“RCRA” has the meaning set forth in the definition of “Disposal,” “Storage” and
“Treatment.”

 

“Real Property” means the real property leased by the Company or the Operating
Company under the Real Property Leases.

 

“Real Property Lease” has the meaning set forth in Section 5.5(b).

 

“Reference Statement” has the meaning set forth in Section 2.7.

 

“Related Person” has the meaning set forth in Section 5.24.

 

“Release” means any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, threat of release, or other releasing of Hazardous
Substances into the Environment, whether intentional or unintentional, known or
unknown, and including all releases as defined under Environmental Law.

 

“Removal,” “Remedial” and “Response” actions shall include the types of
activities covered by CERCLA, RCRA and other comparable Laws, whether the
activities are those that might be taken by a Governmental Authority or those
that a Governmental Authority might seek to require of third parties under
“removal,” “remedial” or other “response” actions.

 

“Representatives” has the meaning set forth in Section 6.10(e).

 

“Restricted Person(s)” has the meaning set forth in Section 6.10(a).

 

“Sale Agreement” has the meaning set forth in the Disclosure Schedule.

 

“Section 338(h)(10) Election” has the meaning set forth in Section 6.9(g).

 

“Section 338(h)(10) Forms” has the meaning set forth in Section 6.9(g).

 

“Securities Act” means the Securities Act of 1933, as amended.

 

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

 

“Seller Ancillary Agreements” has the meaning set forth in Section 3.2.

 

“Seller Confidential Information” has the meaning set forth in Section 6.12.

 

“Seller Indemnitees” has the meaning set forth in Section 8.3.

 

“Seller’s Fundamental Representations and Warranties” has the meaning set forth
in Section 8.1(a)(i).

 

“Seller’s GL Stack” has the meaning set forth in Section 6.14(b).

 

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“Seller’s Taxes” has the meaning set forth in Section 6.9(b).

 

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

 

“Straddle Period” has the meaning set forth in Section 6.9(a).

 

“Tail Policy” has the meaning set forth in Section 6.14(c).

 

“Tax” or “Taxes” means any U.S. federal, state, local, or non-U.S. income, gross
receipts, profits, capital, net worth, payroll, employment, license, FICA,
Unclaimed Property, occupation, windfall profits, capital stock, estimated,
premium, environmental, custom, duty, excise, severance, stamp, franchise,
withholding, social security (or similar), workers’ compensation, unemployment,
disability, sales, use, value added, commercial activity, business and
occupation, transfer, property, ad valorem, intangible or other tax assessment
or charge of any kind whatsoever, including any interest, penalty (including any
penalty for failure to file a Tax Return), or addition thereto, whether disputed
or not and including any obligations to indemnify or otherwise assume or succeed
to the Tax liability of any other Person by reason of contract (whether written
or oral), assumption, transferee liability, operation of law, Section 1.1502-6
of the Treasury Regulations (or any predecessor or successor thereof or any
analogous or similar provision under Law) or otherwise.

 

“Tax Benefit” means, in respect of any Post-Closing Taxable Period, any tax
savings actually realized, specifically (i) in the case of a separate U.S.
federal, state, local, or non-U.S. Tax Return, the amount by which the tax
liability of Buyer, the Company, or the Operating Company to the appropriate
Governmental Authority is actually reduced (including by Tax refund), and
(ii) in the case of any consolidated U.S. federal income Tax Return or similar
state, local, or non-U.S. Tax Return, the amount by which the tax liability of
the affiliated group of companies (of which the Buyer, the Company, and/or the
Operating Company are included) to the appropriate Governmental Authority is
actually reduced (including by Tax refund).

 

“Tax Contest” has the meaning set forth in Section 6.9(h).

 

“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.

 

“Territory” has the meaning set forth in Section 6.10(a).

 

“Third Party Claim” means any Proceeding made or brought by any Person who is
not a Party or an Affiliate of a Party.

 

“Trade Secrets” has the meaning set forth in the definition of “Intellectual
Property.”

 

“Transfer Taxes” has the meaning set forth in Section 6.7.

 

“Transition Services Agreement” means a transition services agreement by and
between Seller and Buyer substantially in the form attached hereto as Exhibit D.

 

“Treasury Regulations” means the final and temporary regulations promulgated
under the Code.

 

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“Unclaimed Property” means property that has gone unclaimed or abandoned by the
rightful owner (including, without limitation, any uncashed dividend or payroll
checks, customer deposit, customer overpayment, credit or refund, supplier
payment or other tangible or intangible asset held by the Company), which
property is required by applicable Law to be either reported, escheated or
otherwise remitted to the applicable Governmental Authority that administers
unclaimed or abandoned property or funds.

 

“Uncollected AR” has the meaning set forth in Section 6.15.

 

“WARN Act” has the meaning set forth in Section 5.18(e).

 

“Working Capital” means, for any specified date, an amount (which may be a
positive or negative number) equal to (i) the total Current Assets of the
Company and the Operating Company as of such specified date minus (ii) the total
Current Liabilities of the Company and the Operating Company as of such
specified date.

 

ARTICLE II
PURCHASE AND SALE OF SHARES

 

2.1                               Basic Transaction.  Upon the terms and subject
to the conditions of this Agreement, Buyer agrees to purchase from Seller, and
Seller agrees to sell to Buyer free and clear of all Encumbrances, all of
Seller’s right, title and interest in and to all of the Shares for the
consideration specified in this Article II.

 

2.2                               Purchase Price; Payment at Closing.  In
consideration for the Shares purchased pursuant to this Article II, Buyer shall
pay, in accordance with the terms of this Article II:

 

(a)                                 Twenty Two Million Seventy Seven Thousand
Five Hundred Dollars ($22,077,500 U.S.) (the “Base Amount”),

 

(b)                                 plus the amount of Final Cash,

 

(c)                                  minus the amount of Final Outstanding
Checks, Closing Indebtedness and Company Transaction Expenses, and

 

(d)                                 plus (if positive) or minus (if negative) an
amount equal to the Final Change in Working Capital.

 

The Base Amount will be adjusted pursuant to the terms of this Agreement,
including Sections 2.3 and 2.4 (as so adjusted, the “Purchase Price”).  At
Closing, Buyer shall (i) pay to Seller an amount equal to the Estimated Purchase
Price less the Escrow Amount, by wire transfer of immediately available funds,
in accordance with the instructions provided by Seller no later than two
(2) Business Days prior to the Closing, (ii) deliver the Escrow Amount to the
Escrow Agent to be held pursuant to the Escrow Agreement, by wire transfer of
immediately available funds, in accordance with the instructions provided by the
Escrow Agent no later than two (2) Business Days prior to the Closing, and
(iii) on behalf of the Company and the Operating Company, pay or cause to be
paid the Closing Indebtedness and the Company Transaction Expenses as described
in the Estimated Closing Statement.

 

2.3                               Pre-Closing Adjustment to the Purchase Price. 
No later than two (2) Business Days prior to the Closing, Seller shall deliver
to Buyer in good faith (and based on the Pay-Off Documents) the Estimated
Balance Sheet and a written statement (the “Estimated Closing Statement”)
setting forth the

 

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estimated Closing Indebtedness, the estimated Company Transaction Expenses, the
Estimated Cash, the Estimated Change in Working Capital, the Estimated
Outstanding Checks, and the calculation of such amounts.  The Estimated Closing
Statement shall be used to determine the Estimated Purchase Price, by adjusting
the Base Amount payable to Seller as follows:

 

(a)                                 the Base Amount shall be increased on a
dollar-for-dollar basis by the following:

 

(i)                                     an amount equal to the Estimated Change
in Working Capital, if such amount is positive; and

 

(ii)                                  an amount equal to the Estimated Cash; and

 

(b)                                 the Base Amount shall be decreased on a
dollar-for-dollar basis by the following:

 

(i)                                     an amount equal to the Estimated Change
in Working Capital, if such amount is negative; and

 

(ii)                                  an amount equal to the Estimated
Outstanding Checks, the estimated Closing Indebtedness and the estimated Company
Transaction Expenses.

 

(c)                                  Prior to Closing and prior to delivery of
the Estimated Closing Statement, Seller shall deliver to Buyer (i) invoices for
the Company Transaction Expenses and (ii) payoff letters relating to the
Indebtedness of the Company and the Operating Company in a form reasonably
satisfactory to Buyer (collectively, the “Pay-Off Documents”), which Pay-Off
Documents shall (a) provide that, upon payment of a specified amount, all
agreements, including pledges, mortgages and security interests evidencing such
Indebtedness shall terminate, without any continuing liability of the Company or
the Operating Company thereunder, (b) include appropriate evidence of such
termination, cancellation or repayment (including UCC-3 termination statements
and payoff letters in a form satisfactory to Buyer) and release and reconvey to
the Company or Operating Company, as the case may be, any intellectual property
rights previously conveyed to the lenders of the Company or the Operating
Company to secure repayment of such Indebtedness, and (c) cause the redelivery
of all stock certificates of the Company held pursuant to any terminated stock
pledge agreements.

 

2.4                               Post-Closing Adjustment to the Purchase Price.

 

(a)                                 No later than seventy five (75) days
following the Closing Date, Buyer shall prepare and deliver to Seller the Final
Balance Sheet and a written statement (such statement, as it may be adjusted
pursuant to this Section 2.4, the “Final Closing Statement”) setting forth the
Final Cash, the Final Change in Working Capital, the Final Outstanding Checks,
the Closing Indebtedness and the Company Transaction Expenses, each as of 11:59
p.m. on the Closing Date and the calculation of such amounts.  The Final Closing
Statement shall be used to determine the “Final Purchase Price”, by adjusting
the Base Amount (without application of any adjustments to the Base Amount
pursuant to Section 2.3) as follows:

 

(i)                                     the Base Amount shall be increased on a
dollar-for-dollar basis by the following:

 

(A)                               an amount equal to the Final Change in Working
Capital, if such amount is positive; and

 

(B)                               an amount equal to the Final Cash; and

 

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(ii)                                  the Base Amount shall be decreased on a
dollar-for-dollar basis by the following:

 

(A)                               an amount equal to the Final Change in Working
Capital, if such amount is negative; and

 

(B)                               an amount equal to the Final Outstanding
Checks, the Closing Indebtedness and the Company Transaction Expenses.

 

(b)                                 Within thirty (30) days following delivery
of the Final Balance Sheet and the Final Closing Statement to Seller, Seller
shall notify Buyer (i) that Seller accepts the Final Balance Sheet and the Final
Closing Statement or (ii) that Seller objects (an “Objection Notice”) to an item
or items reflected thereon.  Such Objection Notice, if any, shall set forth
Seller’s objections to the Final Balance Sheet and the Final Closing Statement
in reasonable detail.  If Buyer and Seller are unable to resolve the issues in
dispute within thirty (30) days after delivery of the Objection Notice, such
disputed issues will be submitted for resolution to the Chicago office of
PriceWaterhouseCoopers LLP (the “Neutral Auditor”).  The Neutral Auditor shall
be engaged within forty-five (45) days after delivery of the Objection Notice. 
If either Party fails to take action with respect to any matter referred to in
the previous sentences of this Section 2.4(b), then the other Party may engage
the Neutral Auditor on behalf of both Parties.  The Neutral Auditor shall make
such review and examination of the relevant facts and documents as the Neutral
Auditor deems appropriate, and shall permit each of Buyer and Seller to make a
written presentation of their respective positions; provided, however, that the
Neutral Auditor shall require all facts, documents, and written presentations
from Buyer and Seller to be completely submitted within thirty (30) days after
the Neutral Auditor has been engaged.  Within thirty (30) days after the date
required for submission of such facts, documents, and written presentations, and
regardless of whether such submissions shall have been made, the Neutral Auditor
shall resolve all disputed items in writing and shall prepare and deliver its
decision, which shall be final and binding upon the Parties without further
recourse or collateral attack and, as to each disputed matter, which shall
accept (x) either Buyer’s or Seller’s position on each disputed matter set forth
in the Objection Notice or (y) the stipulated position of Buyer and Seller with
respect to any matter that prior to such stipulation was disputed.  The costs
and expenses of the Neutral Auditor shall be borne by the Party who is the least
successful in such process, which shall be determined by comparing (A) the
position asserted by each Party on all disputed matters taken together to
(B) the final decision of the Neutral Auditor on all disputed matters taken
together.  For purposes of the immediately preceding sentence, the “disputed
matters” shall be all matters raised in the Objection Notice, and the “position
asserted” by each of Buyer and Seller shall be determined by reference to their
respective written presentations submitted to the Neutral Auditor pursuant to
this Section 2.4(b).  The Neutral Auditor shall not preside over any hearing of
the Parties nor permit the Parties to make any oral arguments to the Neutral
Auditor.

 

(c)                                  As used in this Agreement, “Final
Adjustment Amount” means, (i) if Seller fails to deliver an Objection Notice or
accepts the Final Balance Sheet and the Final Closing Statement in accordance
with Section 2.4(b), then an amount (which may be a positive or a negative
number) equal to (x) the Final Purchase Price, calculated in accordance with the
Final Closing Statement (without adjustment), minus (y) the Estimated Purchase
Price, or (ii) if the amount of the Final Purchase Price is resolved by Buyer
and Seller or by submission of any disputed matters to the Neutral Auditor in
accordance with Section 2.4(b), then an amount (which may be a positive or a
negative number) equal to (x) the Final Purchase Price, as so resolved, minus
(y) the Estimated Purchase Price.  If the Final Adjustment Amount is a positive
number, then Buyer shall promptly, but in any event within five (5) Business
Days after the final and binding determination of the Final Purchase Price in
accordance with Section 2.4(b), pay to Seller an amount equal to the Final
Adjustment Amount.  If the Final Adjustment Amount is a negative number, then
Seller shall promptly, but in any event within five (5) Business Days

 

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after the final and binding determination of the Final Purchase Price in
accordance with Section 2.4(b), pay to Buyer an amount equal to the Final
Adjustment Amount (or, at Buyer’s or Seller’s option, such payment may be made
by way of a disbursement from the Escrow Amount).  All amounts to be paid
pursuant to this Section 2.4(c) shall be made by wire transfer of immediately
available funds to such bank account as the receiving Party shall specify within
three (3) Business Days after the final and binding determination of the Final
Purchase Price in accordance with Section 2.4(b).

 

(d)                                 Except for the costs and expenses of the
Neutral Auditor as set forth in Section 2.4(b), each of Buyer and Seller shall
bear its own expenses incurred in connection with the preparation and review of
the Final Balance Sheet and the Final Closing Statement and any dispute related
thereto.  For Tax purposes, any payment by Buyer or Seller under this Agreement,
including pursuant to this Section 2.4 or pursuant to Article VIII, shall be
treated as an adjustment to the Purchase Price, unless a contrary treatment is
required by Law.

 

2.5                               Closing.  The closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place at the offices
of Thompson Hine LLP in Cleveland, Ohio at 9:00 a.m., local time, on the later
of (i) January 13, 2017 and (ii) the second (2nd) Business Day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated by this Agreement (other than
conditions with respect to actions each Party will take at the Closing itself),
or such other date as the Parties may mutually determine (the “Closing Date”). 
The transfers and deliveries described in Article VII shall be mutually
interdependent and shall be regarded as occurring simultaneously, and, any other
provision of this Agreement notwithstanding, no such transfer or delivery shall
become effective or shall be deemed to have occurred until all of the other
transfers and deliveries provided for in Article VII shall also have occurred or
been waived in writing by the Party entitled to waive the same.  Such transfers
and deliveries shall be deemed to have occurred and the Closing shall be
effective as of 11:59 p.m. on the Closing Date.

 

2.6                               Deliveries at Closing.  At Closing: 
(a) Seller will deliver to Buyer the stock certificates representing the Shares,
together with duly executed stock powers with respect to the Shares, a
certificate, dated as of the Closing Date, setting forth, pursuant to Treasury
Regulations Section 1.1445-2(b), that Seller is not a foreign person within the
meaning of Section 1445 of the Code, an IRS Form 8023 (Elections under
Section 338 for Corporations Making Qualified Stock Purchases) with respect to
the Company and the Operating Company, duly executed by the Seller and any other
analogous or corresponding form requested by Buyer and required to be filed with
any state, local or foreign Governmental Authority to effect the
Section 338(h)(10) Election, and the various certificates, documents, and
instruments referred to in Section 7.1; (b) Buyer will deliver to Seller an
amount equal to the Estimated Purchase Price less the Escrow Amount and the
various certificates, documents, and instruments referred to in Section 7.2,
(c) Buyer will deliver to the Escrow Agent the Escrow Amount, and (d) on behalf
of the Company and the Operating Company, Buyer will pay or cause to be paid the
Closing Indebtedness and the Company Transaction Expenses as described in the
Estimated Closing Statement.

 

2.7                               Accounting Procedures.  Exhibit B (the
“Reference Statement”) sets forth (i) the various line items used (or to be
used) in, and illustrating as of the date of the Most Recent Financial
Statements, the calculation of (A) Current Assets, (B) Current Liabilities, and
(C) Working Capital, in each case, prepared and calculated for the Company and
the Operating Company in accordance with this Agreement and the Agreed
Accounting Policies and Principles, and (ii) for illustration purposes only, the
balances reported by the Operating Company for each such line item as of
October 30, 2016.  Each of the Estimated Balance Sheet, the Estimated Closing
Statement, the Final Balance Sheet, and the Final Closing Statement, and all
determinations and calculations by any Person (including the Neutral Auditor) of
Current Assets, Current Liabilities, and Working Capital, shall be prepared and
calculated solely in

 

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accordance with the manner of calculation and determination shown on the
Reference Statement using the same line items, accounting principles, practices,
procedures, policies, and methods (with consistent classifications, judgments,
elections, inclusions, exclusions, and valuation and estimation methodologies)
used and applied in preparing the Reference Statement; provided, however, that
such calculations and determinations:  (i) shall not include any purchase
accounting or other adjustment arising out of the consummation of the
transactions contemplated by this Agreement; (ii) shall be based on facts and
circumstances as they exist prior to the Closing and shall exclude the effect of
any act, decision, or event occurring on or after the Closing; (iii) shall
adhere to the defined terms contained in this Agreement whether or not the
definitions thereof are consistent with GAAP; and (iv) shall calculate any
reserves, accruals, or other non-cash expense items on a pro rata (as opposed to
monthly accrual) basis to account for a Closing that occurs on any date other
than the last day of a calendar month.  Each of the Estimated Balance Sheet, the
Estimated Closing Statement, the Final Balance Sheet, and the Final Closing
Statement shall be prepared and calculated without regard to any changes in GAAP
made or taking effect after the date that the Reference Statement was prepared;
provided that any such changes in GAAP shall be provided to Buyer in writing
after the date of the Reference Statement and before delivery of the Estimated
Balance Sheet, the Estimated Closing Statement, the Final Balance Sheet, and the
Final Closing Statement.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Buyer that the statements contained in this
Article III are correct as of the date of this Agreement, except as set forth in
the applicable referenced disclosure schedule delivered by Seller to Buyer on
the date of this Agreement (the “Disclosure Schedule”).

 

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

 

3.2                               Authorization of Transaction.  Seller (a) has
all requisite right, power and authority to execute and deliver this Agreement
and each other agreement, instrument and document to be executed and delivered
by Seller in connection herewith (collectively, the “Seller Ancillary
Agreements”), to perform its obligations under this Agreement and each Seller
Ancillary Agreement, and to consummate the transactions contemplated hereby, and
(b) the execution and delivery by Seller of this Agreement and each Seller
Ancillary Agreement, the performance by Seller of its obligations hereunder and
thereunder, and the consummation by Seller of the transactions contemplated
hereby have been duly authorized by all corporate action on the part of Seller. 
This Agreement and each Seller Ancillary Agreement has been duly and validly
executed and delivered by Seller and, assuming the due authorization, execution,
and delivery by Buyer, this Agreement and each Seller Ancillary Agreement
constitutes the valid and legally binding obligation of Seller, enforceable
against Seller in accordance with its terms and conditions, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
Laws affecting creditors’ rights generally and general principles of equity.

 

3.3                               Noncontravention.  Except as set forth in
Section 3.3 of the Disclosure Schedule, neither the execution, the delivery, or
the performance of this Agreement or any Seller Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will
(a) conflict with or result in a violation of any Law, Permit or Decree to which
Seller is subject, (b) conflict with or result in a violation or breach of any
provision of the Organizational Documents of Seller, or (c) conflict with,
result in a violation or breach of, result in the creation of any Encumbrance
upon the Shares (except for any Encumbrances created by Buyer or its
Affiliates), constitute a default or an event that, with or without notice,
lapse of time, or both, would constitute a default under, result in the
acceleration of any obligation under, create in any party the right to
accelerate, terminate, modify, or cancel, or require any consent or

 

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notice under, any Contract to which Seller is a party or by which it is bound or
to which any of its assets is subject.  Seller is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority or any other Person in order to
consummate the transactions contemplated by this Agreement or any Seller
Ancillary Agreement.

 

3.4                               Brokers’ Fees.  Seller has 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 any Seller
Ancillary Agreement for which Buyer, the Company, or the Operating Company could
become liable or obligated.

 

3.5                               Ownership of Shares.  Seller holds of
record and owns beneficially and has good and marketable title to all of the
Shares, free and clear of any Encumbrances (other than any restrictions under
the Securities Act and state securities Laws).  Upon consummation of the
transactions contemplated by this Agreement, Buyer shall acquire good and valid
title to all of the Shares, free and clear of any Encumbrances (other than any
restrictions under the Securities Act and state securities Laws).  Seller is not
a party to any option, warrant, purchase right, Commitment, or agreement (other
than this Agreement) that could require Seller to sell, transfer, or otherwise
dispose of any of the Shares.  Seller is not a party to any voting trust, proxy,
or other agreement with respect to the voting of any of the Shares.

 

3.6                               Litigation.  There is no Decree or Proceeding
pending or, to the Knowledge of Seller, threatened against or by Seller that
challenges or seeks to prevent, enjoin, alter, or materially delay any of the
transactions contemplated by this Agreement or any Seller Ancillary Agreement,
which would give any Person the right to enjoin or rescind the transactions
contemplated by this Agreement or any Seller Ancillary Agreement or otherwise
prevent Seller from complying with the terms and provisions of this Agreement or
any Seller Ancillary Agreement.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller that the statements contained in this
Article IV are correct as of the date of this Agreement.

 

4.1                               Organization.  Buyer is duly organized,
validly existing, and in good standing under the Laws of Delaware.

 

4.2                               Authorization of Transaction.  Buyer (a) has
the requisite right, power and authority to execute and deliver this Agreement
and each other agreement, instrument and document to be executed and delivered
by Buyer in connection herewith (collectively, the “Buyer Ancillary
Agreements”), to perform its obligations under this Agreement and each Buyer
Ancillary Agreement, and to consummate the transactions contemplated hereby and
thereby, and (b) the execution and delivery by Buyer of this Agreement and each
Buyer Ancillary Agreement, the performance by Buyer of its obligations hereunder
and thereunder, and the consummation by Buyer of the transactions contemplated
hereby and thereby have been duly authorized by all requisite action on the part
of Buyer.  This Agreement and each Buyer Ancillary Agreement has been duly and
validly executed and delivered by Buyer and, assuming the due authorization,
execution, and delivery by Seller, this Agreement and each Buyer Ancillary
Agreement constitutes the valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms and conditions, subject
to applicable bankruptcy, insolvency, reorganization, moratorium, and other
similar Laws affecting creditors’ rights generally and general principles of
equity.

 

4.3                               Noncontravention.  Neither the execution, the
delivery, or the performance of this Agreement or any Buyer Ancillary Agreement,
nor the consummation of the transactions contemplated

 

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hereby or thereby, will (a) conflict with or result in a violation of any Law,
Permit or Decree to which Buyer is subject, (b) conflict with or result in a
violation or breach of any provision of the Organizational Documents of Buyer,
or (c) conflict with, result in a violation or breach of, constitute a default
or an event that, with or without notice, lapse of time, or both, would
constitute a default under, result in the acceleration of any obligation under,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any consent or notice under, any Contract to which Buyer is a party or
by which it is bound or to which any of its assets is subject.  Buyer is not
required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority or any other
Person in order to consummate the transactions contemplated by this Agreement or
any Buyer Ancillary Agreement.

 

4.4                               Brokers’ Fees.  Buyer has 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 any Buyer
Ancillary Agreement for which Seller could become liable or obligated.

 

4.5                               Investment.  Buyer:  (a) has sufficient
knowledge and experience in investment and financial matters so as to be capable
of evaluating the risks and merits of its purchase of the Shares;
(b) understands that the purchase of the Shares involves certain business and
other risks; (c) is financially able to bear the risks of purchasing the Shares;
(d) is acquiring the Shares for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof;
(e) understands that the Shares have not been registered under the Securities
Act or the applicable securities or Blue Sky Laws of any state and, accordingly,
must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or qualified under such Blue Sky Laws or is exempt from
such registration or qualification; (f) is an “accredited investor” as defined
in Rule 501(a) under the Securities Act; and (g) understands that the exemptions
from registration under the Securities Act relied upon by Seller in connection
with the transactions contemplated by this Agreement are based in part on the
fact that Buyer is an “accredited investor” as defined in Rule 501(a) under the
Securities Act.  Buyer has conducted its own independent investigation, review
and analysis of the Company and the Operating Company.

 

4.6                               Financial Ability to Perform.  Buyer has, and
will have as of the Closing, available cash funds, credit facilities, or other
sources of immediately available funds sufficient to pay the full Purchase Price
to Seller in accordance with this Agreement and to consummate the transactions
contemplated by this Agreement.  Buyer’s obligations to consummate the
transactions contemplated by this Agreement are not subject to any financing
condition.

 

4.7                               Litigation.  There is no Decree or Proceeding
pending or, to the knowledge of Buyer, threatened against or by Buyer that
challenges or seeks to prevent, enjoin, alter, or materially delay any of the
transactions contemplated by this Agreement or any Buyer Ancillary Agreement,
which would give any Person the right to enjoin or rescind the transactions
contemplated by this Agreement or any Buyer Ancillary Agreement or otherwise
prevent Buyer from complying with the terms and provisions of this Agreement or
any Buyer Ancillary Agreement.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES ABOUT THE COMPANY AND THE OPERATING COMPANY

 

Seller represents and warrants to Buyer that the statements contained in this
Article V are, except as set forth in the applicable referenced Disclosure
Schedule, (a) correct as of the date of this Agreement or (b) to the extent made
as of or with respect to a specific date, correct as of such date.

 

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5.1                               Organization, Qualification, Corporate Power
and Authorization.  Each of the Company and the Operating Company is duly
organized, validly existing, and in good standing under the Laws of its
jurisdiction of organization.  Each of the Company and the Operating Company is
licensed or qualified to do business and is in good standing in each
jurisdiction where the character of the assets and properties owned, leased, or
used by it or the nature of its activities makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not
reasonably be expected to have a Material Adverse Effect.  Each of the Company
and the Operating Company has all requisite corporate power and authority to
carry on the business in which it is engaged and to own, lease, and use the
properties owned, leased, and used by it.  Section 5.1 of the Disclosure
Schedule sets forth a true and complete list of (a) all jurisdictions in which
the Company and the Operating Company is qualified or licensed to do business as
a foreign corporation, (b) all directors and officers of each of the Company and
the Operating Company, (c) all bank, payroll and securities brokerage accounts
of each of the Company and the Operating Company and all authorized signers for
each such account, and (d) all powers of attorney granted by the Company or the
Operating Company to any third party that are currently in effect.  All
necessary corporate action on the part of the Company and the Operating Company
with respect to the consummation of the transactions contemplated hereby has
been taken.  The Seller has provided to Buyer a true, complete and correct copy
of the Organizational Documents of the Company and the Operating Company, each
as currently in effect and reflecting any and all amendments thereto.  The
Organizational Documents of the Company and the Operating Company are in full
force and effect, and neither the Company nor the Operating Company is in
violation of any provision thereof.

 

5.2                               Capitalization.  Section 5.2 of the Disclosure
Schedule sets forth (a) the number of authorized shares for each class of the
Company’s capital stock and (b) the number of issued and outstanding shares of
each class of the Company’s capital stock, all of which have been duly
authorized and are validly issued, fully paid, and non-assessable and constitute
the Shares.  The Shares have been duly authorized and validly issued, are fully
paid and nonassessable, and were issued in compliance with applicable Laws. 
None of the Shares were issued in violation of any agreement or Commitment to
which the Company is a party or is subject or in violation of any preemptive or
similar rights of any Person.  There are no outstanding Commitments that would
require the Company to issue, sell, or otherwise cause to become outstanding any
of its Equity Interests or other interests in the Company.  There are no voting
trusts, proxies, or other agreements with respect to the voting or transfer of
the Shares.

 

5.3                               Noncontravention.  Except as set forth in
Section 5.3 of the Disclosure Schedule, neither the execution, the delivery, or
the performance of this Agreement or any Seller Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will
(a) conflict with or result in a violation or breach of any Law, Permit or
Decree to which the Company or the Operating Company is subject, (b) conflict
with or result in a violation or breach of any provision of the Organizational
Documents of the Company or the Operating Company, (c) conflict with, result in
a violation or breach of, constitute a default or an event that, with or without
notice, lapse of time, or both, would constitute a default under, result in the
acceleration of any obligation under, create in any party the right to
accelerate, terminate, modify, or cancel, or require any consent or notice
under, any Contract to which the Company or the Operating Company is a party, or
(d) result in the imposition of an Encumbrance on the Shares (except for any
Encumbrances created by Buyer or its Affiliates) or any of the assets of the
Company or the Operating Company.  Neither the Company nor the Operating Company
is required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority or any other
Person in order for the Parties to consummate the transactions contemplated by
this Agreement or any Seller Ancillary Agreement.

 

5.4                               Brokers’ Fees.  Neither the Company nor the
Operating Company 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.

 

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5.5                               Real Property.

 

(a)                                 Section 5.5(a)(i) of the Disclosure Schedule
sets forth the street address and legal description of each parcel of Real
Property.  The Company or the Operating Company, as applicable, has a valid and
subsisting leasehold interest in, all Real Property, free and clear of all
Encumbrances other than Permitted Encumbrances.  Neither the Company nor the
Operating Company has leased, subleased, licensed, assigned, or otherwise
granted to any Person the right to use or occupy the Real Property or any
portion thereof.  Except as set forth in Section 5.5(a)(i) of the Disclosure
Schedule, neither the Company nor the Operating Company has pledged, mortgaged,
or otherwise granted an Encumbrance on its interest in any Real Property. The
Real Property constitutes all real property used and necessary for the operation
of the Business as currently conducted.  Section 5.5(a)(ii) of the Disclosure
Schedule sets forth any Real Property formerly owned or leased by the Company or
the Operating Company in the last five (5) years.

 

(b)                                 Section 5.5(b) of the Disclosure Schedule
contains a list of each real property lease to which the Company or the
Operating Company is a party (each, a “Real Property Lease”).  Each Real
Property Lease is valid, binding, and enforceable and in full force and effect,
and no rent payment, required deposits additional rents or other charge payable
thereunder by the Company or the Operating Company is past due.  Neither the
Company nor the Operating Company is in default under any Real Property Lease,
nor, to the Knowledge of Seller, is any lessor of such Real Property Lease in
default thereunder, and no action has been taken or omitted by the Company or
the Operating Company and, to the Knowledge of Seller, no other act, occurrence
or event has occurred or condition exists (including the transactions
contemplated by this Agreement), that constitutes, or after notice or lapse of
time or both, would constitute, a default under any Real Property Lease by any
party.  The Company and the Operating Company have not received any written
notice alleging that it is in default under any Real Property Lease and the
Company and Operating Company have not received any written notice that the
owner of the real property subject to the applicable Real Property Lease has
made any assignment, mortgage, pledge or hypothecation of such Real Property
Lease or the rents or use fees due thereunder.  The Real Property Leases
provided to Buyer are true and correct copies of all of the leases and rental
agreements, together with all amendments thereto, to which the Company and/or
the Operating Company is a party, and no Real Property Lease has been amended,
modified or terminated other than amendments or modifications provided to Buyer.

 

(c)                                  The Real Property and the buildings,
fixtures, improvements, and heating, cooling, electrical, and plumbing systems
located thereon are in good operating condition and repair, ordinary wear and
tear excepted.  Since December 31, 2013, neither the Company nor the Operating
Company has received any written notice of nor are there any (i) existing
material violations of Laws, including, without limitation, building codes
and/or zoning ordinances, affecting the Real Property, (ii) existing, pending,
or threatened condemnation, requisition or taking proceedings affecting the Real
Property, or (iii) material existing, pending, or threatened zoning, building
code, or other moratorium proceedings, or (iv) to the Knowledge of Seller,
public improvements proposed or in progress that will result in special
assessments against or otherwise adversely affect any of the Real Property and
neither Company nor Operating Company have been notified in writing of future
improvements by any public authority, any part of the cost of which would be
asserted against the Company or Operating Company.  Except as set forth in
Section 5.5(c) of the Disclosure Schedule, no construction activities in excess
of $50,000 have occurred with respect to the Real Property within the past one
(1) year period, and any amounts owed by the Company or the Operating Company
with respect to any construction activities completed before such one (1) year
period have been paid in full.

 

(d)                                 Except as set forth in Section 5.5(d) of the
Disclosure Schedule, to the Knowledge of Seller, no Real Property is subject to
any unrecorded options, purchase or sale contracts,

 

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leases, subleases, licenses or rights of occupancy or other agreements not
otherwise identified in this Agreement.

 

(e)                                  None of the buildings, structures or
improvements situated on the Real Property, during the period of time during
which such Real Property has been leased or owned by the applicable Company or
Operating Company, has been damaged by fire or other casualty, except for such
damage as has been fully repaired and restored.  To the Knowledge of Seller,
each of the buildings, structures and improvements situated on the Real Property
are located within the required set back, side yard and other conditions and
requirements imposed by applicable Law with respect to such buildings,
structures and improvements and the zoning of each parcel of Real Property
permits existing improvements and uses.

 

(f)                                   All utilities servicing the Real Property
are publicly provided and maintained and such utilities are separately metered
within each Real Property.  All of the driveways, parking areas, and loading
docks located at the Real Property are not shared with any third parties nor
subject to any easements or common use agreements, other than Permitted
Encumbrances.  To the Knowledge of Seller, all of the streets, roads and avenues
adjoining or adjacent to the Real Property are publicly owned and maintained
without assessment or charge to the Company or Operating Company.

 

5.6                               Subsidiaries.  Section 5.6 of the Disclosure
Schedule sets forth for the Operating Company:  (a) its jurisdiction of
incorporation; (b) the number of authorized shares for each class of its capital
stock; and (c) the number of issued and outstanding shares of each class of its
capital stock, the names of the holders thereof, and the number of shares held
by each such holder.  All of the issued and outstanding shares of capital stock
of the Operating Company have been duly authorized and are validly issued, fully
paid, and non-assessable.  The Operating Company is a wholly-owned subsidiary of
the Company.  Other than with respect to the Company’s ownership of the
outstanding capital stock of the Operating Company, neither the Company nor the
Operating Company owns or has any right to acquire any Equity Interests or other
interest in any Person.  There are no outstanding Commitments that would require
the Operating Company to issue, sell, or otherwise cause to become outstanding
any of its capital stock or other interests in the Operating Company.  There are
no voting trusts, proxies, or other agreements or understandings with respect to
the voting or transfer of the capital stock of the Operating Company.

 

5.7                               Financial Statements.  Section 5.7 of the
Disclosure Schedule sets forth true and complete copies of the following
financial statements:  (a) unaudited balance sheets and statements of income and
cash flow for the Company and the Operating Company as of and for the years
ended December 31, 2014 and 2015 (the “Financial Statements”); and (b) an
unaudited balance sheet (the “Most Recent Balance Sheet”) and statements of
income and cash flow for the Company and the Operating Company (together with
the Most Recent Balance Sheet, the “Most Recent Financial Statements”) as of and
for the 10 months ended October 30, 2016.  The Financial Statements present
fairly, in all material respects, the financial position and results of
operation and cash flows of the Company and the Operating Company as of the
dates and for the periods covered thereby and have been prepared in accordance
with the Agreed Accounting Policies and Principles, applied on a consistent
basis throughout the periods covered thereby, subject to the absence of notes. 
The Most Recent Financial Statements present fairly, in all material respects,
the financial position and results of operation and cash flows of the Company
and the Operating Company as of the date and for the period covered thereby and
have been prepared in accordance with the Agreed Accounting Policies and
Principles, applied on a consistent basis throughout the period covered thereby,
subject to normal and recurring quarter-end and year-end adjustments the effect
of which will not be materially adverse and the absence of notes.  The Financial
Statements and the Most Recent Financial Statements are based on the books and
records of the Company and the Operating Company, which books and records are
true and complete in all material respects.

 

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5.8                               Absence of Certain Changes and Events.  Except
as set forth in Section 5.8 of the Disclosure Schedule, from December 31, 2015
to the date of this Agreement, the business and operations of the Company and
the Operating Company has been conducted in the Ordinary Course of Business in
all material respects.  Without limiting the generality of the immediately
preceding sentence, from December 31, 2015 to the date of this Agreement, except
as set forth in Section 5.8 of the Disclosure Schedule, neither the Company nor
the Operating Company has:

 

(a)                                 had any fact, event, development or
circumstance that constitutes or is reasonably likely to result in a Material
Adverse Change;

 

(b)                                 amended its Organizational Documents;

 

(c)                                  issued, sold, or otherwise disposed of any
of its Equity Interests or granted any Commitments;

 

(d)                                 effected any recapitalization,
reclassification, stock split, or like change in its capitalization;

 

(e)                                  declared or paid any dividends or
distributions on or in respect of any of its Equity Interests or redeemed,
purchased, or acquired any of its Equity Interests;

 

(f)                                   had any Encumbrance imposed upon any of
its Equity Interests or had any Encumbrances (other than Permitted Encumbrances)
imposed upon any of its assets or properties or discharged or satisfied any
Encumbrance, or paid any obligation or liability, except in the Ordinary Course
of Business;

 

(g)                                  adopted any plan of merger, consolidation,
reorganization, liquidation, or dissolution;

 

(h)                                 incurred any Indebtedness other than
(i) drawings under existing lines of credit or under new working capital or
revolving lines of credit or (ii) unsecured current obligations incurred in the
Ordinary Course of Business or assumed, gave a guaranty or endorsed the
indebtedness of any other Person, or canceled any debt owed to any of them or
released any claim possessed by any of them, other than in the Ordinary Course
of Business;

 

(i)                                     sold, assigned, leased, or transferred
any of its tangible assets having a value in excess of $50,000 other than sales
of inventory in the Ordinary Course of Business;

 

(j)                                    sold, assigned, licensed-out or
transferred-out any Intellectual Property or granted any license or sublicense
of any rights under or with respect to any Intellectual Property;

 

(k)                                 purchased, leased, or acquired the right to
own, lease, or use any assets or properties having a value in excess of $50,000,
except for purchases of supplies in the Ordinary Course of Business;

 

(l)                                     made any capital expenditure (or series
of related capital expenditures) involving more than $50,000;

 

(m)                             incurred any damage, destruction, theft or loss
(whether or not covered by insurance) to its assets or properties with value in
excess of $50,000;

 

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(n)                                 made any capital investment in, any loan to,
or any acquisition (whether by merger, consolidation, purchase of a substantial
portion of assets or securities, or any other manner) of, any other business or
Person (or series of related capital investments, loans, or acquisitions);

 

(o)                                 granted any increase in the base
compensation of or bonuses payable to any of its directors, officers, or
employees, made any change in severance terms for any of its directors, officers
or employees, in each case, outside the Ordinary Course of Business, or adopted,
amended or terminated any Employee Benefit Plan, program or arrangement, or
entered into, amended or terminated any employment agreement, deferred
compensation arrangement, collective bargaining agreement or other similar
arrangement with any of their respective directors, officers, employees,
independent contractors, consultants or stockholders;

 

(p)                                 (i) made any material change in its Tax
reporting or accounting methods, principles, or practices for financial
accounting (except for those changes required to comply with the Agreed
Accounting Policies and Principles or applicable Law), including practices with
respect to (y) depreciation or amortization polices or rates or (z) the payment
of accounts payable or the collection of accounts receivable; and (ii) neither
the Company nor the Operating Company has taken any actions which have
accelerated sales into periods prior to the Closing that would otherwise
reasonably be expected to occur following the Closing;

 

(q)                                 entered into any Material Contract;

 

(r)                                    amended, modified, terminated, or
cancelled any Material Contract or had any Material Contract amended, modified,
terminated, or cancelled;

 

(s)                                   amended, modified, terminated, or
cancelled any lease of Real Property or granted or suffered any Encumbrance
affecting the Real Property, other than Permitted Encumbrances;

 

(t)                                    entered into any Contract with any
Affiliate;

 

(u)                                 made any loans, advances or capital
contributions to, or investments in, any Person or paid any fees or expenses to
Seller or any employee, director or officer of the Company or the Operating
Company, except with respect to payments and reimbursement of fees and expenses
of employees, directors and officers of the Company or the Operating Company in
the Ordinary Course of Business;

 

(v)                                 instituted or settled any action, claim,
suit or Proceeding that involved stated claims of more than $25,000 or became
aware of any action, claim, suit or Proceeding related to any transaction that
it was involved in; or

 

(w)                               agreed to do any of the foregoing.

 

5.9                               Legal Compliance.  Except as set forth in
Section 5.9 of the Disclosure Schedule, the Company and the Operating Company
are in compliance, in all material respects, with all applicable Laws and
Decrees.  Except as set forth in Section 5.9 of the Disclosure Schedule, in the
past three (3) years, neither the Company nor the Operating Company has received
any written notice from any Person alleging any material noncompliance with any
applicable Law, Decree or Permit.  In the past five (5)  years, neither the
Company nor the Operating Company, nor any of the officers, executives,
representatives, agents or employees of the Seller (pertaining to the Company or
the Operating Company), the Company or the Operating Company (i) has used or is
using any corporate funds for any illegal contributions, gifts, entertainment or
other unlawful expenses relating to political activity, (ii) has

 

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used or is using any corporate funds for any direct or indirect unlawful
payments to any foreign or domestic government officials or employees, (iii) has
violated or is violating any provision of the United States Foreign Corrupt
Practices Act of 1977, as amended, or any similar Law under any jurisdiction,
(iv) has established or maintained, or is maintaining, any unlawful fund of
corporate monies or other properties, (v) has made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment of any nature or
(vi) has violated any anti-boycott provisions of any applicable Law or other
applicable Laws relating to exports and embargos, including the United States
Export Administration Act of 2001, as amended, and Foreign Assets Control
Regulations, and all other applicable import/export Laws in other countries in
which of any of the Company or the Operating Company conducts business.

 

5.10                        Permits.  Except as set forth in Section 5.10 of the
Disclosure Schedule, the Company and the Operating Company possess all Permits
necessary to carry on the Business in the manner presently conducted and such
Permits are valid and in full force and effect.  Section 5.10 of the Disclosure
Schedule lists all current Permits issued to either the Company or the Operating
Company, including the names of such Permits and their respective dates of
issuance and expiration and, none of the Permits will lapse, terminate, or
expire as a result of the performance of this Agreement, or the consummation of
the transactions contemplated hereby.  Neither the Company nor the Operating
Company is in material default under, or material violation of, any Permit held
by it.

 

5.11                        Undisclosed Liabilities Except for (a) liabilities
reflected on or reserved against in the Most Recent Financial Statements,
(b) liabilities that have arisen since the date of the Most Recent Financial
Statements in the Ordinary Course of Business (none of which relates to breach
of Contract, breach of warranty, tort, infringement, or violation of Law), and
(c) liabilities set forth in Section 5.11 of the Disclosure Schedule, neither
the Company nor the Operating Company has any material liability, debt or
obligations whatsoever (whether or not accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due and regardless of when
asserted).

 

5.12                        Environmental Matters.

 

(a)                                 Except as set forth in Section 5.12 of the
Disclosure Schedule:

 

(i)                                     the Business and the operations of the
Company and the Operating Company are currently, and for the past three
(3) years have been, conducted in compliance, in all material respects, with all
applicable Environmental Laws;

 

(ii)                                  for the past three (3) years, the Company
and the Operating Company have timely obtained all Permits required to be held
by the Company and the Operating Company under applicable Environmental Laws in
order to operate the Business as currently conducted;

 

(iii)                               the Business and the operations of the
Company and the Operating Company are, and for the past three (3) years have
been, in compliance, in all material respects, with the terms and conditions of
such Permits;

 

(iv)                              since December 31, 2013 or, if unresolved, or
the source of ongoing obligations or requirements as of the Closing Date, any
prior time, neither the Company nor the Operating Company has received any
written notice, order, demand, inquiry, summons, complaint, directive, warning,
request for information or similar written communication from any Governmental
Authority or any other Person that the Company or the Operating Company is or
may be liable for:  (A) any actual or alleged violation of or noncompliance with
any Environmental Law; (B) any actual or alleged obligation to undertake or bear
the cost of any Losses under any Environmental Law with respect to the Real

 

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Property, any real property formerly owned or leased by the Company or the
Operating Company or any other facility or property at or to which Hazardous
Substance generated, manufactured stored, handled, imported, used or processed
have been transported, Treated, Stored, transferred, Disposed, recycled or
received; or (C) any personal injury or property damage related to any release,
Treatment, Storage or Disposal of, or exposure to, any Hazardous Substance;

 

(v)                                 to the Knowledge of Seller, the Real
Property is not subject to any Lien, environmental covenant, engineering or
institutional control, activity and use limitation or other environmental
restriction, nor is the Company or the Operating Company subject to any Decree, 
proceeding, investigation, settlement or schedule of compliance under
Environmental Law;

 

(vi)                              neither the Company nor the Operating Company
has generated, used, manufactured, transported, treated, stored, Released, or
disposed of any Hazardous Substances in violation of any applicable
Environmental Laws and no Hazardous Substances have been generated, used,
manufactured, treated, stored, Released, or disposed on, under, or about the
Real Property or, to the Knowledge of Seller, any real property formerly owned
or leased by the Company or the Operating Company in violation of applicable
Environmental Laws;

 

(vii)                           neither the Company nor the Operating Company
has stored, treated, recycled, or disposed at, or arranged for the storage,
treatment, recycling, or disposal, of Hazardous Substances to any site listed or
proposed for listing on the National Priorities List promulgated pursuant
CERCLA, listed on the CERCLA Information System, or included on any similar list
maintained by any Governmental Authority;

 

(viii)                        there has been no Release of any Hazardous
Substance by the Company or the Operating Company or, to the Knowledge of
Seller, by any other Person, at, on, under or from the Real Property or any real
property formerly owned or leased by the Company or the Operating Company in an
amount or concentration that could reasonably be expected to require any
reporting, investigation, assessment, clean-up, Removal, Response or any other
Remedial action, or to pay for the cost of any such action, pursuant to any
Environmental Law; and

 

(ix)                              to the Knowledge of Seller and except in
compliance with applicable Environmental Law, there are no:  (i) underground
storage tank systems; (ii) polychlorinated biphenyls; (iii) asbestos or
asbestos-containing materials; (iv) urea-formaldehyde insulation; (v) sumps;
(vi) surface impoundments; (viii) landfills; or (ix) septic systems located on
the Real Property or, to the Knowledge of Seller, any real property formerly
owned or leased by the Company or the Operating Company, nor, to the Knowledge
of Seller, have any such structures or materials been removed from, the Real
Property or any real property formerly owned or leased by the Company or the
Operating Company; and

 

(x)                                 in the past three (3) years, neither the
Company nor the Operating Company has assumed or accepted any express
indemnification obligation with respect to any liability under Environmental Law
by contract, other than general indemnification obligations and other than
related to Permits.

 

(b)                                 The Company has Made Available to Buyer
(i) all environmental reports, audits, documents, and studies in the possession
or control of the Company and the Operating Company with respect to the Business
or the Real Property relating to Hazardous Substances or concerning compliance
with Environmental Laws; and (ii) all Permits issued by any Governmental
Authority to the Company and the Operating Company under applicable
Environmental Laws within the past three (3) years.

 

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(c)                                  None of the Company or the Operating
Company have ever sold any product containing asbestos, lead or silica and no
raw material used by any of the Company or the Operating Company in the
manufacture of its products contains or contained asbestos, lead or silica.

 

5.13                        Taxes.

 

(a)                                 Except as set forth in Section 5.13(a) of
the Disclosure Schedule, all Tax Returns filed or required to be filed on or
before the date of this Agreement (taking into account extensions of time to
file) by or on behalf of the Company or the Operating Company have been duly
filed; each such Tax Return is true, correct, and complete in all material
respects; and all Taxes (including estimated Taxes) owed by the Company or the
Operating Company, whether or not shown on any Tax Return, have been paid in
full, for all taxable periods, or portions thereof, ending on or before the date
of this Agreement.

 

(b)                                 There are no Encumbrances with respect to
Taxes (other than Permitted Encumbrances) on any of the assets or properties of
the Company or the Operating Company.

 

(c)                                  The Company and the Operating Company have
duly and timely withheld from salaries, wages, cross border payments, and other
amounts paid or owing and deposited with and reported to the appropriate taxing
authorities all amounts required to be so withheld, deposited, or reported for
all periods under all applicable Laws.  All sales and use Taxes required to be
collected and paid over to any taxing authority have been properly collected and
paid over.

 

(d)                                 Neither the Company nor the Operating
Company is the beneficiary of any extension of time (other than an automatic
extension of time not requiring the consent of the IRS or any other taxing
authority) within which to file any Tax Return, make any elections,
designations, or similar filings relating to Taxes for which it is or may be
liable, or to pay or remit any Taxes or amounts on account of Taxes for which it
is or may be liable.  Neither the Company nor the Operating Company has extended
any statute of limitations with respect to the determination or assessment of
any Taxes for which it may be liable.

 

(e)                                  Neither the Company nor the Operating
Company is a party to any agreement, arrangement, or plan that has resulted or
could result, separately or in the aggregate, in the payments of any “excess
parachute payment” within the meaning of Section 280G of the Code (or any
corresponding provision of state, local, or non-U.S. Law).

 

(f)                                   Except as set forth in Section 5.13(f) of
the Disclosure Schedule, neither the Company nor the Operating Company is a
party to or bound by any Tax allocation agreement, Tax indemnity agreement, Tax
sharing agreement or similar agreements.

 

(g)                                  There is no Tax deficiency or delinquency
asserted or, to the Knowledge of Seller, threatened against the Company or the
Operating Company and no audit, examination, investigation, or administrative or
judicial Tax proceeding is pending, being conducted or, to the Knowledge of
Seller, threatened with respect to the Company or the Operating Company. 
Section 5.13(g) of the Disclosure Schedule identifies all Tax Returns of or with
respect to the Company or the Operating Company that have been examined, or that
are currently under examination, by a taxing authority.  Except as set forth in
Section 5.13(g) of the Disclosure Schedule, neither the Company nor the
Operating Company has received any written request for information related to
Tax matters.  No claim has been made by any taxing authority in a jurisdiction
where the Company or the Operating Company does not file a Tax Return that the
Company or the Operating Company, was, is, or may be subject to taxation by, or
required to file a Tax Return in, that jurisdiction.

 

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(h)                                 Neither the Company nor the Operating
Company has engaged in any “reportable transaction” as defined in Treasury
Regulation Section 1.6011-4(b).

 

(i)                                     Neither the Company nor the Operating
Company has had, and neither currently has, a permanent establishment in any
foreign country, as defined in any applicable Tax treaty or convention between
the United States and such foreign country, and neither the Company nor the
Operating Company is subject to taxation in any country other than the United
States as a result of being engaged in a trade or business in any such foreign
country.

 

(j)                                    There are no outstanding rulings of, or
requests for rulings by, any Governmental Authority addressed to the Company or
the Operating Company that are, or if issued would be, binding on the Company or
the Operating Company.

 

(k)                                 Neither the Company nor the Operating
Company has been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code.

 

(l)                                     The Company and the Operating Company
have disclosed on their federal income Tax Returns all positions taken therein
that could give rise to a substantial understatement of federal income Tax
within the meaning of Section 6662 of the Code.

 

(m)                             Neither the Company nor the Operating Company
will be required to include any item of income in, or exclude any item of
deduction from, Taxable income for any taxable period ending after the Closing
Date as a result of any:

 

(i)                                     “closing agreement” as described in
Section 7121 of the Code or any predecessor provision thereof or any similar
provision of any Law; or

 

(ii)                                  deferred intercompany transaction or
excess loss account described in the Treasury Regulations under Section 1502 of
the Code (or any corresponding or similar provision of state, local, or foreign
income Tax law).

 

(n)                                 Neither the Company nor the Operating
Company has distributed stock of another Person, or had its stock distributed by
another Person, in a transaction that was purported or intended to be governed
in whole or in part by Section 355 or Section 361 of the Code.

 

(o)                                 The Company and the Operating Company are
members of a “selling consolidated group” as that term is used in
Section 1.338(h)(10)-1 of the Treasury Regulations.

 

5.14                        Intellectual Property.

 

(a)                                 The Company and the Operating Company own,
or have a valid license or other right to use, all of the Intellectual Property
used in or necessary for the operation of the Business as currently conducted,
in each case free and clear of all Encumbrances other than Permitted
Encumbrances (the “Company Intellectual Property”).  Section 5.14(a) of the
Disclosure Schedule sets forth a list of (i) all Intellectual Property owned by
the Company or the Operating Company that is subject to any issuance,
registration, or application with any Governmental Authority; and (ii) all
material unregistered Company Intellectual Property.

 

(b)                                 Section 5.14(b) of the Disclosure Schedule
contains a list of (i) all licenses granted by the Company or the Operating
Company to any third party with respect to any Company

 

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Intellectual Property; (ii) all licenses granted by any third party to the
Company or the Operating Company with respect to any licensed Company
Intellectual Property, excluding “off-the-shelf” or “shrink wrap” software
licensed by or to the Company or the Operating Company in the Ordinary Course of
Business; and (iii) all other material agreements which otherwise relate to the
Company’s ownership or right to use any Intellectual Property (the “Company IP
Agreements”).  Each Company IP Agreement is in full force and effect, is a valid
and binding obligation of the Company or the Operating Company, and, to the
Knowledge of Seller, the other party thereto, and is enforceable in accordance
with its terms (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar Laws affecting creditors’ rights
generally and general principles of equity).  Neither the Company nor the
Operating Company, nor, to the Knowledge of Seller, any other party thereto, is
in breach of, or default under, or has provided or received any written notice
of breach of, default under, or intention to terminate (including by
non-renewal), any Company IP Agreement.

 

(c)                                  To the Knowledge of Seller, (i) the Company
Intellectual Property does not include any inventions of any employees made
prior to their employment by the Company or Operating Company and (ii) all
current and former employees who have or had developed Intellectual Property
(other than non-trade-secret proprietary information) for the Company or the
Operating Company, and all consultants who have been engaged to develop
Intellectual Property (other than non-trade-secret proprietary information) for
the Company or Operating Company have assigned in writing all of their rights in
such Intellectual Property to the Company or the Operating Company.

 

(d)                                 The operation of the Business as it is
currently conducted does not infringe, dilute, misappropriate, or otherwise
violate the Intellectual Property of any other Person.

 

(e)                                  To the Knowledge of Seller, no Person has
been or is infringing, diluting, misappropriating, or otherwise violating any
Company Intellectual Property.

 

(f)                                   There are no, and in the past three
(3) years there have been no, legal actions (including any opposition,
cancellation, revocation, review, or other proceeding), whether settled,
pending, or, to the Knowledge of Seller, threatened (including in the form of
offers to obtain a license), (i) alleging any infringement, misappropriation, or
other violation by the Company or the Operating Company of the Intellectual
Property of any Person; (ii) challenging the validity, enforceability,
registrability, patentability, or ownership of any Intellectual Property owned
by or exclusively licensed to the Company or the Operating Company or
challenging the Company’s or the Operating Company’s right, title, or interest
in or to any such Intellectual Property; or (iii) by the Company or the
Operating Company alleging any infringement, misappropriation, or other
violation by any Person of the Company Intellectual Property.  To the Knowledge
of Seller, there are no facts or circumstances that could reasonably be expected
to give rise to any such legal action.

 

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5.15                        Contracts.

 

(a)                                 Section 5.15(a) of the Disclosure Schedule
lists the following Contracts (excluding (A) Contracts that have been performed
in all respects and for which there are ongoing warranty obligations and no
further liabilities or obligations outstanding other than liabilities or
obligations that survive completion, expiration, or termination in the Ordinary
Course of Business and (B) Contracts that have been performed in all respects
and for which there are no further liabilities or obligations outstanding other
than liabilities or obligations that survive completion, expiration, or
termination in the Ordinary Course of Business; provided that Contracts
contemplated by clauses (A) and (B) shall not be excluded for purposes of
Sections 5.15(a)(ii) through (xx) unless otherwise responsive to Contracts
listed in such sections) (collectively, the “Material Contracts”):

 

(i)                                     all Contracts to which the Company or
the Operating Company is a party that are with customers, suppliers, or vendors
providing for aggregate or annual receipts or payments by the Company or the
Operating Company of $50,000 or more;

 

(ii)                                  all Contracts to which the Company or the
Operating Company is a party relating to Indebtedness of the Company or the
Operating Company or the granting by the Company or the Operating Company of an
Encumbrance on its assets, or any guaranty by the Company or any Operating
Company;

 

(iii)                               all Contracts to which the Company or the
Operating Company is a party relating to employment or compensation of any
salaried (rather than hourly-based) Employee or containing any change-in-control
or severance payment obligations or any non-competition Contracts with any
Employee;

 

(iv)                              all Contracts to which the Company or the
Operating Company is a party that are with independent contractors or
consultants providing for annualized remuneration in excess of (or that is
reasonably expected to be in excess of) $50,000;

 

(v)                                 all agency, marketing, and advertising
Contracts to which the Company or the Operating Company is a party;

 

(vi)                              all Contracts to which the Company or the
Operating Company is a party relating to equity grants, or equity options;

 

(vii)                           all lease agreements (whether of real or
personal property) to which the Company or the Operating Company is a party
providing for annual rentals in excess of $50,000;

 

(viii)                        all Contracts to which the Company or the
Operating Company is a party that is with any Affiliate of the Seller, the
Company or the Operating Company or any current or former officer, director or
stockholder thereof;

 

(ix)                              all Contracts to which the Company or the
Operating Company is a party restricting the ability of the Company or the
Operating Company to engage in any line of business or to compete with any
Person;

 

(x)                                 all Contracts to which the Company or the
Operating Company is a party that provide for the indemnification by the Company
or the Operating Company of any current or former director or officer of the
Company or the Operating Company;

 

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(xi)                              all Contracts to which the Company or the
Operating Company is a party that relate to the acquisition or disposition of
any business, a stock or assets (in the case of assets, other than the
acquisition or disposition of inventory in the Ordinary Course of Business) of
any other Person, or any real property (whether by merger, sale of stock, sale
of assets, or otherwise);

 

(xii)                           all Contracts to which the Company or the
Operating Company is a party that are with any Governmental Authority;

 

(xiii)                        all Contracts to which the Company or the
Operating Company is a party that provide for any joint venture, partnership, or
similar arrangement;

 

(xiv)                       all Contracts for which the Company or the Operating
Company would not have at least standard form commercial general liability
insurance coverage available pursuant to the terms of said polic(ies) as
disclosed in Section 5.16 of the Disclosure Schedule;

 

(xv)                          all Contracts to which the Company or the
Operating Company is a party that are with dealers, agents, distributors or
sales representatives;

 

(xvi)                       all Contracts under which the Company or the
Operating Company has made advances or loans to any other Person;

 

(xvii)                    each Contract containing a “most-favored nation”
pricing agreement, special warranties, rebate arrangements, mark-down
arrangements, agreements to take back or exchange goods, consignment
arrangements or similar understandings with a customer or supplier of the
Company;

 

(xviii)                 any other Contract that requires the Company or the
Operating Company to make payments in excess of $50,000 that is not terminable
by the Company or the Operating Company without penalty upon less than sixty
(60) days’ prior written notice;

 

(xix)                       any Intercompany Agreements; and

 

(xx)                          all other Contracts to which the Company or the
Operating Agreement is a party that are not made in the Ordinary Course of
Business or are otherwise material to the Company or the Operating Company.

 

(b)                                 Except as set forth in Section 5.15(b) of
the Disclosure Schedule, each of the Material Contracts is in full force and
effect, is a valid and binding obligation of the Company or the Operating
Company, and, to the Knowledge of Seller, the other party thereto, and is
enforceable in accordance with its terms (except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other similar Laws
affecting creditors’ rights generally and general principles of equity).  Except
as set forth in Section 5.15(b) of the Disclosure Schedule, neither the Company
nor the Operating Company, nor, to the Knowledge of Seller, any other party
thereto, is in breach of, or default under, or has provided or received any
written notice of any intention to terminate or materially amend, any Material
Contract.  Except as set forth in Section 5.15(b) of the Disclosure Schedule, to
the Knowledge of Seller, no event or circumstance has occurred that, with notice
or lapse of time or both, would (i) constitute an event of default under any
Material Contract or (ii) cause or permit the acceleration of any material
obligation, or the loss of any material benefit, of the Company or the Operating
Company thereunder.  Except with respect to the Contracts listed in Section 5.3
of the Disclosure Schedule or Section 5.15(b) of the Disclosure Schedule, each
of the Material Contracts will remain in full force and effect upon the
consummation of the transactions contemplated by this Agreement.  Complete and
correct copies of each Material Contract (including all material modifications,
amendments, and supplements

 

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thereto and waivers thereunder) have been Made Available to Buyer.  In the case
of each oral Material Contract, Section 5.15(a) of the Disclosure Schedule also
includes a brief description of such Contract.

 

5.16                        Insurance.  Section 5.16 of the Disclosure Schedule
sets forth a list of each insurance policy (collectively, the “Insurance
Policies”) currently owned or held by or applicable to the Company or the
Operating Company, including the policy limits thereunder, as well as all
self-insured, retained limit, deductible or co-insurance programs, and all of
said Insurance Policies have been Made Available to Buyer.  No written notice of
cancellation, denial of coverage or termination of any Insurance Policy has been
received by the Company or the Operating Company, and all premiums due on the
Insurance Policies have been paid.  The Insurance Policies are in full force and
effect and are valid and binding in accordance with their terms and will remain
in effect following the Closing and the applicable limits under such policies
have not been exhausted.  Except as set forth on Section 5.16 of the Disclosure
Schedule, there are no claims related to the Company, the Operating Company or
the Business pending under the Insurance Policies as to which coverage has been
denied or disputed or in respect of which there is an outstanding reservation of
rights.  Neither the Company nor the Operating Company is in default under, or
has otherwise failed to comply with, in any material respect, the Insurance
Policies, including with regard to any required notices under said policies
related to the matters referenced in Sections 8.2(e) and (f).  To the Knowledge
of Seller, in the past twelve (12) months, no event specific to the Company, the
Operating Company or the Business has occurred which could reasonably be
expected to result in a material retroactive upward adjustment in premiums under
any such Insurance Policies or which could reasonably be expected to result in a
material prospective upward adjustment in such premiums.  Neither the Company,
the Operating Company nor the Seller has received written notice of cancellation
of any such Insurance Policies in the last two (2) years, and, to the Knowledge
of Seller, no threat has been made to cancel any Insurance Policy of the Company
or the Operating Company during such period.  Section 5.16 of the Disclosure
Schedule sets forth a list of all pending claims made by the Company and the
Operating Company under the Insurance Policies and all past claims submitted to
its insurance carriers since September 3, 2008. All claims subject to a retained
amount, self-insurance or deductible clause or agreement contained in any
Insurance Policy since April 30, 2013 have either been (i) paid or closed prior
to Closing or (ii) subject to a reserve calculated in accordance with the Agreed
Accounting Policies and Principles.  Since April 30, 2013, there have been no
gaps in the insurance coverage of the Company or the Operating Company.

 

5.17                        Litigation.  Except as set forth on Section 5.17 of
the Disclosure Schedule, there is no Proceeding pending or, to the Knowledge of
Seller, threatened against, by, or otherwise directly involving the Company, the
Operating Company, or any of their respective assets or properties or, to the
Knowledge of Seller, job-sites (even if they are not named in such Proceeding)
nor is there any Decree of any Governmental Authority outstanding against or
directly involving the Company, the Operating Company, or any of their
respective assets or properties.  Except as set forth on Section 5.17 of the
Disclosure Schedule, in the past five (5) years, neither the Company nor the
Operating Company has been party to any Proceeding by or before a Governmental
Authority.

 

5.18                        Labor and Employment Matters.

 

(a)                                 Section 5.18(a) of the Disclosure Schedule
sets forth a correct and complete list of each Employee’s name, title or
position held, base salary, wage or other pay rate, annual bonus target for 2016
(if applicable), date of hire, exempt or non-exempt status under the Fair Labor
Standards Act, employment status, whether such Employee is on disability leave
or any other extended leave as of the Closing Date, and years of service or
vesting service credit for any Employee Benefit Plan (as defined in
Section 5.19) and any accrued and unused vacation for such Employee.

 

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(b)                                 Neither the Company nor the Operating
Company is a party to any collective bargaining agreement or other labor union
contract.

 

(c)                                  Except as set forth on Section 5.18(c) of
the Disclosure Schedule, the Company and the Operating Company are, in all
material respects, in compliance with all applicable Laws and Decrees pertaining
to employment, including all such Laws and Decrees relating to labor relations,
equal employment, fair employment practices, entitlements, workers’
compensation, prohibited discrimination, payment of wages, civil rights, safety
and health, engagement of independent contractors (including the classification
of individuals as employees or independent contractors) and the withholding and
payment of income and employment Taxes and any similar Tax or other similar
employment practices or acts.

 

(d)                                 There are no pending nor, to the Knowledge
of Seller, threatened strikes, work stoppages, slowdowns, or lockouts against
the Company or the Operating Company by any Employees, and, to the Knowledge of
Seller, there are no labor disputes currently subject to any grievance
procedure, arbitration, or litigation.  Neither the Company nor the Operating
Company is subject to any charge, demand, petition, or representation proceeding
seeking to compel, require, or demand it to bargain with any labor union or
organization, and none of the employees of the Company or the Operating Company
are represented by any labor union or organization.

 

(e)                                  Each of the Company and the Operating
Company is, and for the past three (3) years has been, in compliance in all
material respects with the Worker Adjustment and Retraining Notification Act of
1988, as amended (the “WARN Act”).  There has been no “mass layoff” or “plant
closing” as defined by the WARN Act or any similar layoff or closing as defined
by any local, state or foreign Law with respect to the Company or the Operating
Company in the past three (3) years.

 

(f)                                   The Company and Operating Company are, and
for the past three (3) years have been, in compliance in all material respects
with the requirements of the Immigration Reform Control Act of 1986.

 

(g)                                  Other than as contemplated by this
Agreement, there are no changes pending or, to the Knowledge of Seller,
threatened with respect to (including, without limitation, the resignation of)
the senior management or key supervisory personnel of the Operating Company nor
has either the Company or the Operating Company received any written notice
concerning any prospective retirement or voluntary termination with respect to
such senior management or key supervisory personnel.

 

5.19                        Employee Benefits.

 

(a)                                 Section 5.19 of the Disclosure Schedule
contains a list of (i) all “employee benefit plans”, as defined in
Section 3(3) of ERISA, (ii) all other severance pay, salary continuation, bonus,
incentive, stock option, retirement, pension, profit sharing or deferred
compensation plans, contracts, programs, funds, or arrangements of any kind, and
(iii) all other employee benefit plans, contracts, programs, funds, or
arrangements (whether written or oral, qualified or nonqualified, funded or
unfunded, foreign or domestic, currently effective or terminated) and any trust,
escrow, or similar agreement related thereto, whether or not funded, that is
sponsored, maintained or contributed to by the Seller, the Company or the
Operating Company for which the Company and/or the Operating Company have any
current and on-going liability (collectively, the “Employee Benefit Plans”).

 

(b)                                 Each Employee Benefit Plan (and each related
trust, insurance contract, or fund) has been maintained, funded, and
administered, in all material respects, in accordance with the terms of such
Employee Benefit Plan and complies in form and in operation, in all material
respects, with the applicable requirements of ERISA and the Code.  There is no
pending or, to the Knowledge of Seller,

 

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threatened Proceeding relating to an Employee Benefit Plan (other than routine
claims for benefits), nor, to the Knowledge of Seller, is there any basis for
one.  There have been no prohibited transactions or breaches of any of the
duties imposed on “fiduciaries” (within the meaning of Section 3(21) of ERISA)
by ERISA with respect to the Employee Benefit Plans that could result in any
liability or excise tax under ERISA or the Code being imposed on the Company or
the Operating Company.

 

(c)                                  Neither Seller, the Company, the Operating
Company nor any ERISA Affiliate currently has, and at no time in the past has
had, an obligation to contribute to a “defined benefit plan” as defined in
Section 3(35) of ERISA, a pension plan subject to the funding standards of
Section 302 of ERISA or Section 412 of the Code, a “multiemployer plan” as
defined in Section 3(37) of ERISA or Section 414(f) of the Code or a “multiple
employer plan” within the meaning of Section 210(a) of ERISA or
Section 413(c) of the Code.

 

(d)                                 All contributions and premiums due and owing
to or in respect of any Employee Benefit Plan prior to the Closing have been
paid in full prior to the Closing in accordance with the terms of such Employee
Benefit Plan.

 

(e)                                  Except to the extent prohibited by
applicable Law, the Seller, the Company or the Operating Company have the right
at any time to amend in any manner or terminate any Employee Benefit Plan or to
terminate their participation in any Employee Benefit Plan.

 

(f)                                   Copies of the following materials have
been Made Available to Buyer:  (i) all current and prior plan documents for each
Employee Benefit Plan or, in the case of an unwritten Employee Benefit Plan, a
written description thereof, (ii) all determination letters from the IRS with
respect to any of the Employee Benefit Plans, (iii) all current and prior
summary plan descriptions, summaries of material modifications, annual reports,
and summary annual reports with respect to any of the Employee Benefit Plans,
and (iv) any other documents, forms or other instruments relating to any
Employee Benefit Plan reasonably requested by Buyer.

 

(g)                                  Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code is so qualified and has been
determined by the IRS to be so qualified, and each trust created thereunder has
been determined by the IRS to be exempt from tax under the provisions of
Section 501(a) of the Code, and nothing has occurred since the date of any such
determination that could reasonably be expected to give the IRS grounds to
revoke such determination.

 

(h)                                 With respect to each group health plan
benefiting any current or former employee of the Company, the Operating Company
or any ERISA Affiliate that is subject to Section 4980B of the Code, the
Company, the Operating Company or such ERISA Affiliate has complied with the
continuation coverage requirements of Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.

 

(i)                                     No Employee Benefit Plan provides
benefits, including, without limitation, death or medical benefits, beyond
termination of service or retirement other than (i) coverage mandated by law or
(ii) death or retirement benefits under any Employee Plan that is intended to be
qualified under Section 401(a) of the Code.

 

(j)                                    Execution and performance of this
Agreement will not (i) constitute a stated triggering event under any Employee
Benefit Plan that will result in any payment (whether of severance pay or
otherwise) becoming due from the Seller, the Company or the Operating Company to
any current or former officer, employee, director or consultant (or dependents
of such Persons) of the Company or the Operating Company, or (ii) accelerate the
time of payment or vesting, or increase the amount of

 

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compensation due under any Employee Benefit Plan to any current or former
officer, employee, director or consultant (or dependents of such Persons) of the
Company or the Operating Company.

 

(k)                                 Neither the Seller, the Company nor the
Operating Company has agreed or committed to institute any plan, program,
arrangement or agreement for the benefit of employees or former employees of the
Company or the Operating Company other than the Employee Benefit Plans, or to
make any amendments to any of the Employee Benefit Plans.

 

(l)                                     No Employee Benefit Plan provides
benefits to any individual who is not a current or former employee of the
Company or the Operating Company, or the dependents or other beneficiaries of
any such current or former employee.

 

(m)                             No amount that could be received (whether in
cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or director
of the Seller, the Company, the Operating Company or any of their affiliates who
is a “disqualified individual” (as such term is defined in Treasury Regulation
Section 1.280G-1) under any employment, severance or termination agreement,
other compensation arrangement or Employee Benefit Plan currently in effect
would be characterized as an “excess parachute payment” (as such term is defined
in Section 280G(b)(1) of the Code).

 

(n)                                 Each service provider to the Company and the
Operating Company, including any employee, director, leased employee, temporary
employee, independent contractor and consultant, has been properly identified
and classified for purposes of eligibility and participation under the terms of
each Employee Benefit Plan and provisions of all applicable Laws.

 

(o)                                 Each Employee Benefit Plan that is a
“nonqualified deferred compensation plan” within the meaning of, and subject to
the requirements of, Code Section 409A has been operated and administered in
compliance with Code Section 409A and other authoritative and binding guidance
thereunder since January 1, 2005 (or, if later, the date of its adoption), and
has been in documentary compliance with Code Section 409A and other
authoritative and binding guidance thereunder since January 1, 2009 (or, if
later, the date of its adoption), and neither the Company nor the Operating
Company has any liability for Taxes due under Section 409A or indemnity
obligations for any such Taxes whether under a Plan described in this subsection
(o) or otherwise.

 

5.20                        Customers and Suppliers.

 

(a)                                 Section 5.20(a)(i) of the Disclosure
Schedule contains a list of the names of all customers of the Company and the
Operating Company for the last five (5) years.  Section 5.20(a)(ii) of the
Disclosure Schedule contains a list of the names of the twenty (20) most
significant customers (by dollar amount of sales) of the Company and the
Operating Company, as a whole, for each of the years ended December 31, 2014 and
2015 and the dollar amount of sales for each such customer during such periods. 
Neither the Company nor the Operating Company has received any written notice
that any said customer has ceased or will cease, other than in the Ordinary
Course of Business, or, to the Knowledge of Seller, threatened to cease, to
purchase products or services of the Company or the Operating Company or has
substantially reduced or intends to substantially reduce, other than in the
Ordinary Course of Business, or, to the Knowledge of Seller, threatened to
substantially reduce, the purchase of products or services from the Company or
the Operating Company or changed or, to the Knowledge of Seller, threatened to
change, its payment or pricing terms with respect to the Company or the
Operating Company or otherwise materially and adversely alter its current
agreements, programs or commitments with the Company or the Operating Company.

 

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(b)                                 Section 5.20(b) of the Disclosure Schedule
contains a list of the names of the twenty (20) most significant suppliers (by
dollar amount of purchases) of the Company and the Operating Company, as a
whole, for each of the years ended December 31, 2014 and 2015 and the dollar
amount of purchases from each such supplier during such periods.  Neither the
Company nor the Operating Company has received any written notice that any said
supplier has ceased or will cease, other than in the Ordinary Course of
Business, or, to the Knowledge of Seller, threatened to cease, to sell materials
to the Company or the Operating Company or has substantially reduced or intends
to substantially reduce, other than in the Ordinary course of Business, or, to
the Knowledge of Seller, threatened to substantially reduce, the sale of
materials to the Company or the Operating Company or raised or, to the Knowledge
of Seller, threatened to raise, its prices to the Company or the Operating
Company or otherwise materially and adversely alter its current agreements,
programs or commitments with the Company or the Operating Company.

 

5.21                        Personal Property, Machinery, and Equipment;
Sufficiency of Assets.  The Company and the Operating Company have good and
marketable title to, or a valid leasehold interest or license in, each item of
personal property, machinery, and equipment reflected in the Most Recent
Financial Statements or acquired thereafter (collectively, the “Material
Personal Property”), free and clear of all Encumbrances other than Permitted
Encumbrances.  The Material Personal Property is in good working condition and
repair (ordinary wear and tear excepted) and is not in need of maintenance or
repair, except for ordinary, routine maintenance and repair in the Ordinary
Course of Business.  The Material Personal Property constitutes all of the
personal property, machinery, and equipment necessary to conduct the Business as
currently conducted.  The Material Personal Property owned and leased by the
Company are located at the locations set forth in Section 5.21 of the Disclosure
Schedule.  Except as set forth in Section 5.21 of the Disclosure Schedule, the
Company or the Operating Company own, or have a valid leasehold interest in, or
have a valid license of all of the tangible and intangible property used by
Company and the Operating Company in their current conduct of the Business and,
except as set forth in Section 5.21 of the Disclosure Schedule, said assets,
when combined with all other properties and assets of the Company and the
Operating Company and the services provided pursuant to the Transition Services
Agreement, will enable the Company and the Operating Company to continue the
conduct of the Business in substantially the same manner as it is currently
being conducted by the Company and the Operating Company.

 

5.22                        Accounts Receivable; Accounts Payable; Inventory.

 

(a)                                 The accounts receivable shown on the face of
the Most Recent Balance Sheet and the accounts receivable shown on the face of
the Estimated Balance Sheet represent bona fide and valid receivables arising
from sales made or services performed (or being performed) by the Company or the
Operating Company in the Ordinary Course of Business, and the accounts
receivable shown on the face of the Estimated Balance Sheet will be collected by
the Company or the Operating Company, or collected by Seller and paid to Buyer
as contemplated by the Transition Services Agreement, within ninety (90) days
following the Closing Date.  To the Knowledge of Seller, there is no contest,
claim, or right of set off, other than returns in the Ordinary Course of
Business, under any Contract with any obligor of any such accounts receivable
relating to the amount or validity of such accounts receivable.  Except as set
forth in Section 5.22 of the Disclosure Schedule, no customer of the Company or
the Operating Company has, and neither the Company nor the Operating Company has
permitted any customer to have, any rebates, volume discounts, or mark-downs
with respect to their accounts receivable.  No Person has any Encumbrance (other
than Permitted Encumbrances) on such accounts receivable or any part thereof,
and no agreement for deduction, free goods, rebate, discount or other deferred
price or quantity adjustment has been made to such accounts receivable.

 

(b)                                 Except as set forth in Section 5.22(b) of
the Disclosure Schedule, the accounts payable shown on the face of the Most
Recent Balance Sheet have arisen in the Ordinary Course of

 

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Business.  The accounts payable shown on the face of the Most Recent Balance
Sheet represent bona fide and valid accounts payable to be paid by the Company
and the Operating Company to third parties not less than thirty (30) days
following the Closing Date and no obligation for which an invoice has been
received or otherwise has become due is more than ninety (90) days in arrears. 
All of the Company’ and the Operating Company’s accounts payable and accrued
liabilities related to the Business are included in the calculation of Working
Capital.

 

(c)                                  All raw materials, components, work in
process, spare parts, and finished goods inventories (“Inventories”) of the
Company and the Operating Company are owned by the Company or the Operating
Company free and clear of all Encumbrances other than Permitted Encumbrances,
and no such inventory is held on a consignment basis.  All Inventories are
usable and saleable in the Ordinary Course of Business, except to the extent of
the reserve reflected on the Most Recent Balance Sheet.  The Inventories on the
Most Recent Balance Sheet and Inventories arising after the date thereof and
reflected on the books and records of the Company and the Operating Company are
stated thereon in accordance with the Agreed Accounting Policies and Principles.

 

5.23                        Warranties; Product and Service Liability.  There
are no outstanding claims against the Company or the Operating Company with
respect to any warranties provided to customers by the Company or the Operating
Company other than routine warranty chargebacks assessed by customers in the
Ordinary Course of Business.  Except as set forth in Section 5.23 of the
Disclosure Schedule, in the past three (3) years, there have been no product
warranty or service warranty claims in excess of $50,000 made against the
Company or the Operating Company alleging that any products designed, assembled,
manufactured, installed, serviced, distributed, sold, resold, leased, provided
or delivered or any services designed, provided or delivered by the Company or
the Operating Company are defective or improperly designed or manufactured, and
no such claims are currently pending or, to the Knowledge of Seller, threatened
against the Company or the Operating Company.  Except as set forth in
Section 5.23 of the Disclosure Schedule, in the past three (3) years, there have
been no product recalls by the Company or the Operating Company.  Except
pursuant to the applicable Contract, which has been disclosed in Section 5.15 of
the Disclosure Schedule and Made Available to Buyer if required to be disclosed
in Section 5.15 of the Disclosure Schedule and Made Available to Buyer, neither
the Company nor the Operating Company has given a condition, warranty, indemnity
or made a representation in respect of products or services supplied,
manufactured, sold, leased or delivered by the Company or the Operating
Company.  Since April 30, 2013, each product and service manufactured, sold,
leased, provided or delivered by the Company or the Operating Company has been
in conformity with all applicable contractual commitments, and all express and
implied warranties, in all material respects. Except as set forth in Schedule
5.23 of the Disclosure Schedule, neither the Company nor the Operating Company
has any liability (and, to the Knowledge of Seller there is no basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against the Company or the Operating Company giving
rise to any liability) for replacement or repair of any product designed,
assembled, manufactured, installed, serviced, distributed, sold, resold, leased,
provided or delivered or any services designed, provided or delivered by the
Company or the Operating Company or other damages in connection therewith. 
Except as set forth in Schedule 5.23 of the Disclosure Schedule, no claims
alleging bodily injury or property damage as a result of any defect in any
product designed, assembled, manufactured, installed, serviced, distributed,
sold, resold, leased, provided or delivered or any services designed, provided
or delivered by the Company or the Operating Company or the breach of any duty
to warn, test, inspect or instruct of dangers therein (each a “Liability
Claim”), have been made in the past three (3) years, are currently pending or,
to the Knowledge of Seller, threatened against the Company or the Operating
Company.  There are no material defects in the design, installation, service or
manufacture of products designed, assembled, manufactured, installed, serviced,
distributed, sold, resold, leased, provided or delivered or any services
designed, provided or delivered by the Company or the Operating Company which
could result in a Liability Claim, and, to the Knowledge of Seller, there has
not been any

 

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failure by the Company or the Operating Company to warn, test, inspect or
instruct of dangers which could form the basis for a product recall or any
Liability Claim against any the Company or the Operating Company.

 

5.24                        Affiliate Transactions.  Except as set forth in
Section 5.24 of the Disclosure Schedule, no shareholder, member, employee,
officer, manager or director of the Company or the Operating Company or any
member of his or her immediate family, or any Affiliate of the Company or the
Operating Company (each a “Related Person”):  (a) owes any amount to the Company
or the Operating Company nor does the Company or the Operating Company owe any
amount to, or has the Company or the Operating Company committed to make any
loan or extend or guaranty credit to or for the benefit of, any Related Person
(other than any participant loans under any Employee Benefit Plan and any
payments to, and reimbursement of fees and expenses of, employees, directors and
officers of the Company or the Operating Company in the Ordinary Course of
Business), (b) owns any property or right, tangible or intangible, that is used
by the Company or the Operating Company in the Business, (c) has any claim or
cause of action against the Company or the Operating Company pending or to the
Knowledge of Seller threatened, other than claims for accrued compensation or
benefits arising in the ordinary course of employment or under any Employee
Benefit Plans, or (d) has any ownership interest in, directly or indirectly, any
customer, supplier or licensor of the Company or the Operating Company (other
than the ownership of up to (but not more than) three percent (3%) of any class
of securities of any such customer, supplier or licensor if such securities are
listed on any national or regional securities exchange or have been registered
under Section 12(g) of the Securities Exchange Act of 1934).  All charges,
including rent, management fees or other charges from any Related Person are at
arms’ length and are representative of the fair market value for the services
provided.

 

5.25                        Books and Records.  Complete and correct copies of
the minute books and stock record books of the Company and the Operating Company
have been Made Available to Buyer and are maintained in all material respects in
accordance with good business practice and applicable Laws At or promptly
following the Closing, the minute books and stock record books of the Company
and the Operating Company will be delivered to Buyer or its designee.  At the
Closing, the books and records and Contracts of the Company and the Operating
Company will be in the possession of the Company or the Operating Company.

 

5.26                        Disclosure.  Except for the representations and
warranties contained in Article III and this Article V, neither Seller nor any
other Person has made or makes any representation or warranty, either written or
oral, express or implied, on behalf of Seller, to Buyer or any of its
Affiliates, including any representation or warranty as to the future revenue,
sales, profitability, financial performance, or success of the Company or the
Operating Company.

 

ARTICLE VI
COVENANTS AND AGREEMENTS

 

6.1                               Cooperation.  Subject to the terms and
conditions of this Agreement, each Party shall use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things reasonably necessary, proper, or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement (including the satisfaction, but not waiver, of the closing conditions
set forth in Article VII).

 

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6.2                               Expenses.  Except as otherwise provided in
this Agreement, each Party shall pay its costs and expenses in connection with
the negotiation and preparation of this Agreement and its performance hereunder,
including fees, expenses, and disbursements of third party brokers, attorneys,
and accountants.

 

6.3                               No Public Announcement.  Unless otherwise
required by applicable Law, any Governmental Authority or the rules and
regulations of any stock exchange or national market system upon which the
securities of Seller or Buyer are listed, no press release or public
announcement related to this Agreement or the transactions contemplated hereby,
or, prior to the Closing, any other announcement or communication to the
employees, customers, suppliers, or vendors of the Company or the Operating
Company, shall be issued or made by either Party without the approval of the
other Party, which approval shall not be unreasonably withheld, conditioned, or
delayed.  The Parties shall cooperate as to the timing and contents of any such
press release or public announcement.  Notwithstanding the foregoing, each Party
shall be entitled to disclose or comment to any Person the fact that a
transaction has been consummated to the extent such Party reasonably determines
in good faith that such disclosure or comment is necessary or advisable.  In
addition, nothing herein shall preclude communications or disclosures regarding
general information about the subject matter of this Agreement as reasonably
necessary to implement the provisions of this Agreement, and Buyer, the Seller
and their respective Affiliates may make such disclosures regarding general
information about the subject matter of this Agreement as they may consider
reasonably necessary in order to satisfy their legal or contractual obligations
to their lenders, shareholders, investors or other interested parties, or for
general marketing purposes, without the prior written consent of the Seller or
Buyer, as the case may be.  Except as required by applicable Law, each Party
agrees that the terms (but not the existence) of this Agreement shall, from and
after the date hereof, be kept in strict confidence by such Party and such Party
shall not disclose such information to any third party.

 

6.4                               Directors’ and Officers’ Indemnification and
Insurance.

 

(a)                                 During the six (6) years following the
Closing Date, (i) all rights to indemnification or exculpation now existing in
favor of the current and former directors and officers of the Company and the
Operating Company and other Persons (the “Company Indemnified Persons”), as
provided in their respective Organizational Documents as of the date of this
Agreement, with respect to any matters occurring prior to the Closing, shall
survive the transactions contemplated by this Agreement, and (ii) Buyer shall
not permit the Organizational Documents of the Company or the Operating Company
to be amended in any respect to the contrary.  To the maximum extent permitted
by applicable Law, such indemnification shall be mandatory rather than
permissive, and the Company or the Operating Company shall advance expenses in
connection with such indemnification if provided in the Organizational Documents
of the Company or the Operating Company as of the date of this Agreement.

 

(b)                                 During the six (6) years following the
Closing Date, Seller shall cause to be maintained in full force and effect the
director and officers liability coverage in effect immediately prior to the
Closing Date with regard to coverage related to the directors and officers of
the Company and the Operating Company prior to the Closing Date, except that
Seller may renew said policies related to said coverage annually or to replace
said policies related to said coverage with other insurance policies on equal or
better coverage terms, but may reduce the applicable limits of liability to not
less than twenty five million dollars ($25,000,000).

 

(c)                                  Subject to Section 10.1, the Company
Indemnified Persons entitled to the indemnification, liability limitation,
exculpation, and insurance described in this Section 6.4 and Article VIII are
intended to be third party beneficiaries of this Section 6.4.  This Section 6.4
shall survive the consummation of the transactions contemplated by this
Agreement for a period of six (6) years and shall be binding on all successors
and assigns of Buyer, Seller, the Company and the Operating Company.  If

 

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Buyer, the Seller, the Company, the Operating Company, or any of their
respective successors or assigns, proposes to (i) consolidate with or merge into
any other Person, or (ii) transfer all or substantially all of its assets or
properties to any Person, then, and in each case, Buyer shall cause proper
provision to be made prior to or concurrently with the consummation of such
transaction so that the surviving corporation or entity in such proposed
transaction, or the successors and assigns of Buyer, the Seller, the Company or
the Operating Company, as the case may be, shall, from and after the
consummation of such transaction, assume and comply with the agreements,
covenants and obligations set forth in this Section 6.4 and Article VIII.

 

6.5                               Employment Matters.

 

(a)                                 Except as otherwise contemplated by the
terms of the Transition Services Agreement, at Closing, Buyer shall provide
Employees who continue to be employed by the Company and the Operating Company
with at least the same salary or hourly wage rate as provided to such Employees
immediately prior to the Closing Date (unless Buyer in good faith concludes that
the manner or amount of payment is not consistent with applicable Law) and with
employee benefits (excluding equity arrangements) that are at least as favorable
in the aggregate to the Employee Benefit Plans maintained by the Buyer for
similarly situated Employees as of the date of this Agreement.  Buyer further
agrees that, from and after the Closing Date, Buyer shall cause the Company and
the Operating Company to grant all of their employees credit for any service
with the Company and the Operating Company earned prior to the Closing Date
(i) for eligibility and vesting purposes under any benefit or compensation plan,
program, agreement, or arrangement that may be established or maintained by
Buyer or the Company or the Operating Company on or after the Closing Date
(collectively, the “New Plans”) and (ii) for purposes of vacation accrual and
severance benefit determinations under any New Plans that is a vacation or
severance plan or policy, except as would result in duplication of benefits.  In
addition, Buyer shall use commercially reasonable efforts to (A) cause to be
waived all pre-existing condition exclusions and actively at work requirements
and similar limitations, eligibility waiting periods, and evidence of
insurability requirements under any New Plans to the extent waived or satisfied
by an Employee under any Employee Benefit Plan as of the Closing Date, and
(B) cause any deductible, co-insurance, and covered out-of-pocket expenses paid
during the calendar year of the Closing and on or before the Closing Date by any
Employee (or covered dependent thereof) to be taken into account for purposes of
satisfying the corresponding deductible, coinsurance, and maximum out of pocket
provisions after the Closing Date under any applicable New Plan in the year of
initial participation.

 

(b)                                 Seller shall retain the obligations to
satisfy the health benefit continuation requirements of Sections 6.01, et seq.
of ERISA or Section 4980B of the Code with respect to all of their eligible
current and former employees of the Company or Operating Company (and their
eligible dependents) who participated in any group health plan sponsored by
Seller prior to the Closing and whose “qualifying event” (as such terms are
defined in Code Section 4980B or the applicable state Law) occurs prior to or at
the Closing.

 

(c)                                  After the Closing, Buyer shall ensure that
neither the Company nor the Operating Company shall, at any time within
ninety (90) days after the Closing Date, effectuate a “plant closing” or “mass
layoff” as those terms are defined in the U.S. Worker Adjustment and Retraining
Notification Act, as amended, and the rules and regulations promulgated
thereunder.

 

(d)                                 The Company and the Operating Company will
cease to be participating employers in the 401(k) plan maintained by Seller
effective as of the Closing Date, and Buyer agrees to establish or make
available to the employees of the Company and the Operating Company as soon as
administratively practicable after the Closing Date a defined contribution plan
that is qualified under Sections 401(a) and 401(k) of the Code that will accept
rollovers from the 401(k) plan maintained by

 

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Seller in which employees of the Company and the Operating Company participate,
including, to the extent permitted by the 401(k) plan maintained by Seller,
rollovers of promissory notes that represent participant loans of such
employees.

 

(e)                                  To the extent that the Company or the
Operating Company have any annual bonus or incentive compensation earned, but
unpaid, with respect to any performance period ending on or prior to
December 31, 2017 and/or the Closing Date, whether or not such amounts are
accrued on the Company or Operating Company’s financial statements, said amounts
shall be deemed Company Transaction Expenses and paid at or before Closing or
otherwise included in the calculation of the Working Capital.  In addition, to
the extent that the performance period for any such annual bonus or incentive
compensation extends past December 31, 2017 and/or the Closing Date, Seller
shall, or shall cause the Company or the Operating Company, to accelerate and
pay such annual bonus or incentive compensation prior to the Closing or
otherwise included in the calculation of the Working Capital, which amount shall
be based on the financial or operational performance of the Seller, the Company
and/or the Operating Company, as applicable, up to the Closing Date and said
amounts shall be deemed Company Transaction Expenses and paid at or before
Closing or otherwise included in the calculation of the Working Capital.

 

(f)                                   Nothing contained in this Section 6.5,
express or implied, is intended to confer upon any Employee any right to
continued employment for any period or continued receipt of any specific
employee benefit, nor shall constitute an amendment to or any other modification
of any New Plan or existing Employee Benefit Plan.  Furthermore, this
Section 6.5 shall be binding upon and inure solely to the benefit of each of the
Parties, and nothing in this Section 6.5, express or implied, is intended to
confer upon any other Person any rights or remedies of any nature whatsoever.

 

6.6                               Preservation of Books and Records.  After the
Closing Date, Buyer shall, and shall cause the Company and the Operating Company
to, consistent with its record keeping policies but not less than until the
third anniversary of the Closing Date, retain all books, records, and other
documents of the Company and the Operating Company relating to periods prior to
the Closing and, except as prohibited by applicable Law, make the same available
for inspection and copying by Seller (at Seller’s expense) during normal
business hours, upon reasonable request, and upon reasonable notice; provided
that Buyer shall, and shall cause the Company and the Operating Company to, make
the same available for inspection and copying within two (2) Business Days
following the date Seller’s request is received by Buyer.  Buyer shall not, and
shall cause the Company and the Operating Company not to, destroy or permit to
be destroyed any such books, records, or documents after said anniversary of the
Closing Date without first advising Seller in writing and giving Seller a
reasonable opportunity to obtain possession thereof.  After the Closing Date,
Seller shall, and shall cause its applicable Affiliates to, consistent with its
record keeping policies but not less than until the third anniversary of the
Closing Date, retain all books, records, and other documents of the Company and
the Operating Company, if any, relating to periods prior to the Closing which
are not purchased by Buyer hereunder and, except as prohibited by applicable
Law, make the same available for inspection and copying by Buyer (at Buyer’s
expense) during normal business hours, upon reasonable request, and upon
reasonable notice; provided that Seller shall make the same available for
inspection and copying within two (2) Business Days following the date Buyer’s
request is received by Seller.  Seller shall not, and shall cause its applicable
Affiliates not to, destroy or permit to be destroyed any such books, records, or
documents after said anniversary of the Closing Date without first advising
Buyer in writing and giving Buyer a reasonable opportunity to obtain possession
thereof.

 

6.7                               Transfer Taxes.  The Party responsible under
applicable Law for filing any Tax Return and other documentation with respect to
any transfer (including stock transfer), recording, documentary, sales, use,
stamp, registration, severance, and other Taxes and fees (“Transfer Taxes”)
shall prepare and file such Tax Return.  Except with regard to any Transfer
Taxes in connection with the Sale Agreement

 

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which shall be exclusively borne by Seller, any such Transfer Taxes shall be
borne equally by Buyer, on the one hand, and by Seller, on the other hand. 
Buyer or Seller, as the case may be, shall promptly remit payment for fifty
percent (50%) of any such Transfer Taxes to the other Party.

 

6.8                               Further Assurances.  Subject to the terms and
conditions of this Agreement, each Party agrees, from time to time as and when
requested by the other Party, to execute and deliver, or cause to be executed
and delivered, all such documents, and to use its commercially reasonable
efforts to take, or cause to be taken, all such further or other appropriate
actions and to do, or cause to be done, all other things, as such other Party
may reasonably deem necessary or desirable to carry out the provisions of this
Agreement and give effect to the transactions contemplated hereby.

 

6.9                               Tax Matters.

 

(a)                                 Seller shall be responsible for all Taxes of
the Company and the Operating Company for all Pre-Closing Taxable Periods.  In
the case of any Taxes of the Company or the Operating Company that are payable
with respect to any Tax period that begins on or before and ends after the
Closing Date (a “Straddle Period”), the portion of any such Taxes that are
allocable to the portion of the Straddle Period ending on the Closing Date
shall:  (i) in the case of Taxes that are either (A) based upon or related to
income, receipts, or expenditures or (B) imposed in connection with any sale,
transfer, or assignment or any deemed sale, transfer, or assignment of property
(real or personal, tangible or intangible), or (C) required to be withheld, be
deemed equal to the amount that would be payable if the Tax year or period ended
on the Closing Date; and (ii) in the case of all other Taxes, be deemed to be
the amount of such Taxes for the entire Straddle Period multiplied by a
fraction, the numerator of which is the number of calendar days in the portion
of the Straddle Period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire Straddle Period.  Without limiting
the generality of the immediately preceding sentence, any transaction bonuses or
other compensatory payments or payment obligations of the Company or the
Operating Company to Employees or other Persons that will become due and payable
as a result of the consummation of the transactions contemplated by this
Agreement shall be considered to have been paid in the portion of the Straddle
Period ending on the Closing Date to the extent permitted by Law.

 

(b)                                 Seller shall prepare (or cause to be
prepared), and Buyer shall cause the Company and the Operating Company to timely
file, all Tax Returns of the Company and the Operating Company for all
Pre-Closing Taxable Periods (including their 2016 operations through and
including the Closing Date in the 2016 consolidated U.S. federal income Tax
Return for the affiliated group for which the Company and the Operating Company
are members during the period of January 1, 2016 through and including the
Closing Date).  Buyer shall prepare and timely file (or cause to be prepared and
filed) Tax Returns of the Company and the Operating Company for Straddle
Periods.  For Tax Returns described in the preceding two (2) sentences, (i) each
such Tax Return shall be prepared on a basis consistent with the prior Tax
Returns of the Company and the Operating Company, except as required by
applicable Law, and (ii) the preparing Party shall provide a copy of any such
Tax Return to the other Party at least thirty (30) days before it is due, taking
into consideration extensions of time to file, for the other Party’s review and
approval, which approval shall not be unreasonably withheld, conditioned, or
delayed.  With respect to any Tax Returns filed with respect to any Pre-Closing
Taxable Periods, or with respect to any Straddle Period, Seller shall be
responsible for the Pre-Closing Taxes due in respect of such Tax Returns and the
Taxes properly allocable to the portion of the Straddle Period ending on the
Closing Date (“Seller’s Taxes”), to the extent not previously taken into account
as a Current Liability in calculating the Final Working Capital.  Buyer shall
notify Seller of the amount due in respect of any such Straddle Period Tax
Return no later than fifteen (15) Business Days prior to the date on which such
Tax Return is due.  To the extent that the aggregate Seller’s Taxes exceeds the
amount of Taxes included as Current Liabilities in the calculation of Final
Working Capital, Seller shall promptly remit such excess to Buyer.  To the
extent

 

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that the amount of Taxes included as Current Liabilities in the calculation of
Final Working Capital exceeds the aggregate Seller’s Taxes, Buyer shall promptly
remit such excess to Seller.

 

(c)                                  Any refund of Taxes paid to the Company or
the Operating Company with respect to a Pre-Closing Taxable Period or the
portion of the Straddle Period for which Seller is responsible for Taxes, other
than a refund (i) attributable to a carryback of losses incurred in periods
after the Closing or (ii) included as a Current Asset in the calculation of
Final Working Capital, shall be for the benefit of Seller and shall be paid to
Seller no later than ten (10) Business Days after receipt of payment by the
Company or the Operating Company.  Subject to Seller’s responsibility to prepare
Tax Returns pursuant to the first (1st) sentence of Section 6.9(b), Buyer shall
use commercially reasonable efforts (including filing any necessary amendments
of Tax Returns) to carryback any losses incurred during any Pre-Closing Taxable
Period or portion of the Straddle Period for which Seller is responsible to
prior taxable periods, and to seek refunds in order to maximize the potential
refunds of Taxes payable to Seller pursuant to this Section 6.9(c).

 

(d)                                 All Tax allocation agreements, Tax indemnity
agreements, Tax sharing agreements, or similar agreements of which either the
Company or the Operating Company were a party to prior to the Closing Date shall
terminate and have no force or effect on or after the Closing Date.

 

(e)                                  Each of Seller and Buyer shall provide the
other with such assistance as may reasonably be requested by either of them in
connection with the preparation of any Tax Return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and provide
the other with any records or information that may be relevant to such Tax
Return, audit or examination, or proceedings.  Such assistance shall include
(i) making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided under this
Section 6.9(e) and (ii) providing copies of any relevant Tax Return and
supporting work schedules.  The Party requesting assistance pursuant to this
Section 6.9(e) shall reimburse the other Party for reasonable out-of-pocket
expenses incurred in providing such assistance.

 

(f)                                   Each of Seller and Buyer shall report all
transactions not in the ordinary course of business occurring on the Closing
Date on the Company’s federal income Tax Return for its taxable year ending on
the Closing Date to the extent permitted by Treasury Regulations
Section 1.1502-76(b)(1)(ii)(A).

 

(g)                                  Seller agrees to join, in an appropriate
and timely manner, with Buyer in making an election under Section 338(h)(10) of
the Code and any corresponding election permitted under any state, local or
foreign jurisdiction (collectively, the “Section 338(h)(10) Election”) with
respect to Buyer’s acquisition of the Shares and the shares of the Operating
Company.  Seller shall cooperate with Buyer to take all actions necessary or
appropriate to effect and preserve a timely Section 338(h)(10) Election,
including participating in the timely filing of IRS Form 8023 and related or
comparable forms for state, local or foreign Law purposes (collectively, the
“Section 338(h)(10) Forms”).  Buyer shall prepare all Section 338(h)(10) Forms
(other than sections that relate to information regarding Seller and parties in
Seller’s control) and shall provide the Section 338(h)(10) Forms to Seller prior
to the Closing.  Seller shall promptly and properly complete and execute all of
the forms Buyer provides and return the appropriately executed copies to Buyer
at the Closing.  Within thirty (30) days after the finalization of the Final
Closing Statement, Buyer will deliver or cause to be delivered to Seller a
statement containing the allocation of the Purchase Price (including assumed
liabilities and other relevant items) among the assets of the Company and the
Operating Company and the restrictive covenants in this Agreement (the
“Allocation Statement”).  The Allocation Statement will be prepared in
accordance with Section 338 and Section 1060 of the Code and any comparable
provisions of Law, as appropriate.  Seller will be entitled to

 

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review, comment on, and approve the Allocation Statement before it is
finalized.  If Seller and Buyer are unable to agree upon the allocations in the
Allocation Statement within thirty (30) days after delivery of the Allocation
Statement provided by Buyer to Seller, either Buyer or Seller may require the
resolution of such dispute by submitting such matter to the Neutral Auditor for
a determination pursuant to the procedures set forth in Section 2.4(b), which
determination will be final and binding upon Buyer and Seller.  Seller and
Buyer, and their Affiliates, will report the allocation of the total
consideration among the assets of Company and the Operating Company in a manner
consistent with the final Allocation Statement and will act in accordance with
the final Allocation Statement in the preparation and timely filing of all Tax
Returns (including filing Form 8883 with their respective federal income Tax
Returns for the taxable year that includes the Closing Date and any other forms
or statements required by the Code, Treasury Regulations, the IRS or any
applicable state or local Governmental Authority).  Any adjustments to the
Purchase Price pursuant to this Agreement shall result in an adjustment to the
final Allocation Statement to reflect the proportionate change amongst those
classes of assets (or assets that correspond to the liabilities), including
goodwill, that caused the adjustment to the Purchase Price.  Buyer and Seller
shall file all Tax Returns (including amended returns and claims for refunds)
and information reports in a manner consistent with the final Allocation
Statement, as adjusted.

 

(h)                                 After the Closing Date, except as set forth
in this Section 6.9(h), Buyer shall control the conduct, through counsel of its
own choosing, of any audit, claim for refund, or administrative or judicial
proceeding involving any asserted Tax liability or refund with respect to the
Company or the Operating Company (each a “Tax Contest”).  In the case of a Tax
Contest after the Closing Date that relates exclusively to a Pre-Closing Taxable
Period (but not a Straddle Period), Seller may elect to control the conduct of
such Tax Contest, but Buyer shall have the right to participate in such Tax
Contest at its own expense, and Seller shall not settle, compromise and/or
concede any portion of such Tax Contest that could affect the Tax liability of
the Company or the Operating Company for any taxable year (or portion thereof)
after the Closing Date without the written consent of Buyer, which consent will
not be unreasonably withheld, delayed or conditioned.  In the case of any Tax
Contest relating to any Pre-Closing Taxable Period (including a Straddle Period)
that is not controlled by Seller pursuant to this Section 6.9(h), (i) Seller
shall have the right to participate in such Tax Contest at its own expense and
(ii) Buyer shall not allow the Company or the Operating Company to settle or
otherwise resolve such Tax Contest without the prior written consent of Seller,
which consent shall not be unreasonably withheld, delayed, or conditioned, in
each case only to the extent such Tax Contest could result in Seller being
liable pursuant to this Agreement or otherwise.  The provisions of Article VIII
shall not apply to Tax Contests, which shall be governed exclusively by this
Section 6.9(h).

 

6.10                        Restrictive Provisions.

 

(a)                                 For a period of five (5) years commencing on
the Closing Date, neither Seller nor any of its wholly-owned subsidiaries (each,
a “Restricted Person,” and, collectively, the “Restricted Persons”) shall,
directly or indirectly, (i) solicit or engage in or assist others in soliciting
or engaging in the Business (as conducted at the Closing) in the countries in
which either the Company or the Operating Company as of the Closing does
business (the “Territory”), (ii) have an interest in any Person that engages
directly or indirectly in the Business (as conducted at the Closing) in the
Territory in any capacity, including as a partner, stockholder, member, agent,
or consultant, or (iii) adversely interfere with the business relationships, in
the case of business relationships formed prior to the date of this Agreement,
or adversely interfere in any material respect with the business relationships,
in the case of business relationships formed after the date of this Agreement,
between the Company or the Operating Company and customers or suppliers of the
Company or the Operating Company, or (iv) engage in any practice the purpose of
which is to evade the provisions of this covenant.  Notwithstanding the
foregoing, each of the Restricted Persons may (A) own, directly or indirectly,
solely as an investment, securities of any Person traded on any national
securities exchange if such Restricted Person is not a controlling person

 

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of, or a member of a group that controls, such Person and does not, directly or
indirectly, own two percent (2%) or more of any class of securities of such
Person or (B) merge with or acquire any business in which the Business (as
conducted at the Closing) constitutes ten percent (10%) or less of the earnings,
revenue, or assets of such business (or more than ten percent (10%) so long as
such Restricted Person shall use commercially reasonable efforts to divest, as
soon as reasonably practicable, its interest in such business relating to the
Business (as conducted at the Closing)).

 

(b)                                 For a period of five (5) years commencing on
the Closing Date, the Restricted Persons shall not, directly or indirectly,
solicit or entice, or attempt to solicit or entice, any customers of the Company
or the Operating Company as of the Closing for purposes of diverting their
business or services from the Company or the Operating Company.

 

(c)                                  For a period of five (5) years commencing
on the Closing Date, the Restricted Persons shall not, directly or indirectly,
hire or solicit any employees of the Company or the Operating Company as of
immediately following the Closing; provided that the foregoing shall not
prohibit (i) general solicitations of employment not specifically targeted to
such employees and any hiring resulting therefrom, (ii) solicitations of such
employees following termination of their employment by the Company or the
Operating Company and any hiring resulting therefrom.

 

(d)                                 [intentionally omitted]

 

(e)                                  Seller covenants and agrees that, from and
after the Closing Date, Seller shall not disclose or use any Confidential
Information; provided, however, that (i) Seller may disclose and use
Confidential Information in order to enforce its rights and perform its
obligations under this Agreement and the Seller Ancillary Agreements,
(ii) Seller may disclose Confidential Information to (x) its directors,
managers, officers, employees, lenders, agents, advisors, attorneys, or other
representatives (“Representatives”) who legitimately need to know such
Confidential Information and who agree to keep such Confidential Information
confidential and are made aware of Seller’s obligations of confidentiality under
this Agreement and (y) the extent requested by a Governmental Authority or
required by applicable Law (in which case Seller shall, to the extent reasonably
practicable and legally permissible, provide Buyer with advance notice of such
disclosure, shall use commercially reasonable efforts to resist such disclosure,
and, at the request of Buyer, shall reasonably cooperate with Buyer, at Buyer’s
sole cost and expense, to limit or prevent such disclosure) and (iii) Seller may
disclose and use Confidential Information as necessary or required to complete
the restatement of financial statements of Seller and its Affiliates.  Seller
agrees that it shall be responsible for and shall indemnify Buyer for any breach
of this Section 6.10 by its Representatives.  For purposes of this Section 6.10,
“Confidential Information” means all information on the date of this Agreement
belonging to, used by, or which is in the possession of, the Company or the
Operating Company relating to the Business or the Company’s or the Operating
Company’s assets, to the extent such information is not generally available to
the public, specifically including, without limitation, information relating to
the Company’s or the Operating Company’s products, services, strategies,
pricing, customers, representatives, suppliers, distributors, technology,
finances, employee compensation, computer software and hardware, inventions,
developments, or Trade Secrets.  Confidential Information does not include any
information that becomes publicly available without breach of this Agreement by
Seller or its Representatives.  Seller acknowledges that all of the Confidential
Information is, and after the Closing will continue to be, the exclusive
proprietary property of the Company or the Operating Company, whether or not
prepared in whole or in part by Seller and whether or not disclosed to or
entrusted to the custody of the Seller.  Notwithstanding anything contained in
this Agreement to the contrary, the Confidential Information does not include
any Seller Confidential Information.

 

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(f)                                   If Seller breaches, or threatens to commit
a breach of, any of the provisions of this Section 6.10, Buyer shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available to
Buyer under law or in equity:  (i) the right and remedy to have such provision
specifically enforced by any court having jurisdiction, it being acknowledged
and agreed that any such breach or threatened breach may cause irreparable
injury to Buyer and that money damages may not provide an adequate remedy; and
(ii) the right and remedy to recover from Seller all monetary damages suffered
by Buyer as a result of any acts or omissions constituting a breach of this
Section 6.10.

 

(g)                                  Seller acknowledges that the restrictions
contained in this Section 6.10 are reasonable and necessary to protect the
legitimate interests of Buyer, the Company, and the Operating Company and
constitute a material inducement to Buyer to enter into this Agreement and
consummate the transactions contemplated hereby.  In the event that any covenant
contained in this Section 6.10 should be adjudicated to exceed the time,
geographic, product or service, or other limitations permitted by applicable Law
in any jurisdiction, then any court is expressly empowered to reform such
covenant, and such covenant shall be deemed reformed, in such jurisdiction to
the maximum time, geographic, product or service, or other limitations permitted
by applicable Law.  The covenants contained in this Section 6.10 and each
provision hereof are severable and distinct covenants and provisions.  The
invalidity or unenforceability of any such covenant or provision as written
shall not invalidate or render unenforceable the remaining covenants or
provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such covenant or
provision in any other jurisdiction.

 

6.11                        Release.  Effective as of the Closing, Seller fully,
unconditionally, irrevocably and forever releases, waives, acquits, and
discharges forever, unconditionally and irrevocably, the Company and the
Operating Company, their successor and assigns, and their present or former
directors, officers, employees and agents from, against, and with respect to any
and all Losses that Seller ever had, now has, or may hereafter have or acquire
against the Company or the Operating Company for or by reason of any matter,
cause, or thing whatsoever occurring on or prior to the Closing and relating to
the Company or the Operating Company; provided that the foregoing shall not
apply to, or restrict in any way, (a) Losses expressly contemplated by this
Agreement (including, for the avoidance of doubt, indemnification under
Article VIII), (b) claims for indemnification or reimbursement under the
Organizational Documents of the Company or the Operating Company as contemplated
by Section 6.4, and (c) items set forth in Section 6.11 of the Disclosure
Schedule.

 

6.12                        Seller Confidential Information.  Buyer covenants
and agrees that, from and after the Closing Date, Buyer shall not disclose or
use any Seller Confidential Information; provided, however, that (a) Buyer may
disclose and use Seller Confidential Information in order to enforce its rights
and perform its obligations under this Agreement and (b) Buyer may disclose
Seller Confidential Information to (i) its Representatives who legitimately need
to know such Seller Confidential Information and who agree to keep such Seller
Confidential Information confidential and are made aware of Buyer’s obligations
of confidentiality under this Agreement and (ii) the extent requested by a
Governmental Authority or required by applicable Law (in which case Buyer shall,
to the extent reasonably practicable and legally permissible, provide Seller
with advance notice of such disclosure, shall use commercially reasonable
efforts to resist such disclosure, and, at the request of Seller, shall
reasonably cooperate with Seller, at Seller’s sole cost and expense, to limit or
prevent such disclosure).  Buyer agrees that it shall be responsible for and
shall indemnify Seller for any breach of this Section 6.12 by its
Representatives.  For purposes of this Section 6.12, “Seller Confidential
Information” means all information on the date of this Agreement belonging to,
used by, or which is in the possession of, Seller or its Affiliates relating to
Seller’s or its Affiliates’ businesses or assets to the extent such information
is not generally available to

 

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the public.  Seller Confidential Information does not include any information
that becomes publicly available without breach of this Agreement by Buyer or its
Representatives.  Buyer acknowledges that all of the Seller Confidential
Information is, and after the Closing will continue to be, the exclusive
proprietary property of Seller and its Affiliates, whether or not prepared in
whole or in part by the Company or the Operating Company and whether or not
disclosed to or entrusted to the custody of the Company or the Operating
Company.

 

6.13                        Termination of Intercompany Accounts.  Prior to or
at the Closing and except as contemplated by the Transition Service Agreement,
Seller shall take all necessary action to cause all Contracts, commitments, or
transactions, including all amounts payable or receivable resulting therefrom,
between Seller or any of its Affiliates (other than the Company or the Operating
Company), on the one hand, and the Company or the Operating Company, on the
other hand (collectively, “Intercompany Agreements”), to be satisfied as of the
Closing; provided, however, that Seller and its Affiliates (other than the
Company and the Operating Company), on the one hand, and the Company and the
Operating Company, on the other hand, shall be permitted to enter into
Contracts, commitments, or transactions with one another following the Closing.

 

6.14                        Insurance Policies.

 

(a)                                 Buyer covenants and agrees that following
Closing, Buyer will not amend or modify the R&W Insurance Policy in any manner
whatsoever that would adversely affect Seller, including with respect to
subrogation.  Buyer covenants and agrees that with respect to any Claim for
Indemnification for which coverage may reasonably be available under the R&W
Insurance Policy, Buyer shall give prompt notice of that Claim for
Indemnification under the R&W Insurance Policy (an “R&W Insurance Coverage
Claim”).  Buyer further covenants and agrees that it shall use commercially
reasonable efforts to pursue to a favorable conclusion any R&W Insurance
Coverage Claim, including complying with all applicable terms and conditions
under the R&W Insurance Policy and shall supplement such R&W Insurance Coverage
Claim as reasonably warranted.  However, Buyer shall not be required to initiate
any Proceeding in connection with any R&W Insurance Coverage Claim.  In the
event that Seller reasonably requests that Buyer initiate a Proceeding in
connection with an R&W Insurance Coverage Claim, Buyer shall initiate such
Proceeding, and Seller will assume the conduct and control, through counsel of
its own choice reasonably satisfactory to Buyer and at the sole expense of
Seller, the prosecution of such Proceeding.  Seller shall permit Buyer to
participate in such prosecution through counsel chosen by Buyer; provided that
the fees and expenses of such counsel chosen by Buyer shall be borne solely by
Buyer.  Seller covenants and agrees to keep Buyer promptly informed of all
material developments with respect to such Proceeding and to not take any action
that would be detrimental to otherwise adversely affect Buyer in connection with
such Proceeding.  Any settlement or compromise of such Proceeding by Seller
shall require the prior written consent of Buyer, which consent shall not be
unreasonably withheld, conditioned or delayed.  Buyer covenants and agrees to
keep Seller promptly informed of all material developments with respect to any
R&W Insurance Coverage Claim.

 

(b)                                 Seller covenants and agrees that for a
period of five (5) years following Closing, Seller will cause to be maintained
in full force and effect and will not amend or modify any of the Insurance
Policies set forth in Section 5.16 of the Disclosure Schedule with regard to
commercial general liability, umbrella, or excess coverage for the Seller, the
Company or the Operating Company (“Seller’s GL Stack”), except to renew Seller’s
GL Stack annually or to replace Seller’s GL Stack with other insurance policies
on equal or better terms, including with respect to coverage grants, per
occurrence limits and aggregate limits, but not deductibles or retentions;
provided that Seller shall be solely responsible for any deductibles or
retentions in connection therewith.  Seller further covenants and agrees to
provide Buyer with a complete copy of all such insurance policies, including
their Declarations page and all Endorsements, promptly upon their issuance in a
manner consistent with the Notice provisions of

 

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Section 10.6.  Seller acknowledges that none of Buyer, the Company or the
Operating Company, nor any of their Affiliates, shall have any obligation or
liability to pay any of the premiums or deductibles/retentions that may
accompany Seller’s obligations under this Section 6.14(b) or Article VIII
hereof.

 

(c)                                  On or prior to the Closing Date, Buyer
covenants and agrees to purchase a tail policy with regard to pollution legal
liability pertaining to certain of the operations of the Operating Company (the
“Tail Policy”).  Seller will reimburse Buyer for Two Thousand Five Hundred
Dollars ($2,500) related thereto.

 

(d)                                 Seller covenants and agrees that with
respect to any Claim for Indemnification for which coverage may reasonably be
available under Seller’s GL Stack, regardless of whether Seller disputes the
Claim for Indemnification, Seller shall give prompt notice of that Claim for
Indemnification under Seller’s GL Stack (an “Insurance Coverage Claim”).  Seller
further covenants and agrees that it shall use commercially reasonable efforts
to pursue to a favorable conclusion any Insurance Coverage Claim, including
complying with all applicable terms and conditions under Seller’s GL Stack and
shall supplement such Insurance Coverage Claim as reasonably warranted. 
However, Seller shall not be required to initiate any Proceeding in connection
with any Insurance Coverage Claim.  In the event that Buyer reasonably requests
that Seller initiate a Proceeding in connection with an Insurance Coverage
Claim, Seller shall initiate such Proceeding, and Buyer will assume the conduct
and control, through counsel of its own choice reasonably satisfactory to Seller
and at the sole expense of Buyer, the prosecution of such Proceeding.  Buyer
shall permit Seller to participate in such prosecution through counsel chosen by
Seller; provided that the fees and expenses of such counsel chosen by Seller
shall be borne solely by Seller.  Buyer covenants and agrees to keep Seller
promptly informed of all material developments with respect to such Proceeding
and to not take any action that would be detrimental to otherwise adversely
affect Seller in connection with such Proceeding.  Any settlement or compromise
of such Proceeding by Buyer shall require the prior written consent of Seller,
which consent shall not be unreasonably withheld, conditioned or delayed. 
Seller covenants and agrees to keep Buyer promptly informed of all material
developments with respect to any Insurance Coverage Claim.  Seller further
covenants, agrees, intends and acknowledges that Seller’s GL Stack shall be
primary and noncontributory with respect to any other insurance that may be
available to the Indemnified Party making the Claim for Indemnification, and
that other insurance shall be excess and not primary nor shall contribute with
respect to Seller’s GL Stack.

 

(e)                                  The Parties further covenant, agree, intend
and acknowledge that no waiver, release, limitation or exclusion of liability in
this Agreement or otherwise shall reduce or limit any insurance coverage
otherwise available under any insurance policy to which the Buyer Indemnified
Parties or the Seller Indemnified Parties have access pursuant to the terms of
this Agreement, including Seller’s GL Stack, the R&W Insurance Policy and the
Tail Policy.

 

(f)                                   With respect to any Losses associated with
an Insurance Coverage Claim that are indemnified by Seller directly or otherwise
indemnified under Seller’s GL Stack or other applicable insurance policy, Seller
hereby fully and unconditionally releases, waives and covenants not to assert
any claim of any kind against any of Buyer, the Company or the Operating
Company, or any of their Affiliates, and Seller intends that there shall not be
any rights of subrogation by any of Seller’s insurers with respect thereto
against any of those Persons, and any such rights of subrogation are hereby
explicitly waived.

 

(g)                                  Subject to Section 10.1, the Persons
entitled to the indemnification in Article VIII and the benefit of performance
of the insurance and other related obligations described in this Section 6.14
and Article VIII are intended to be third party beneficiaries of said sections. 
This Section 6.14 shall

 

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survive the consummation of the transactions contemplated by this Agreement in
accordance with its terms and shall be binding on all successors and assigns of
Buyer, Seller, the Company and the Operating Company.  If Buyer or the Seller,
or any of their respective successors or assigns, proposes to (i) consolidate
with or merge into any other Person, (ii) transfer all or substantially all of
its assets or properties to any Person, or (iii) dissolve, liquidate, or file
for bankruptcy, then, and in each case, Buyer or Seller shall cause proper
provision to be made prior to or concurrently with the consummation of such
transaction so that the surviving corporation or entity in such proposed
transaction, or the successors and assigns of Buyer, the Seller, the Company or
the Operating Company, as the case may be, shall, from and after the
consummation of such transaction, assume and comply with the agreements,
covenants and obligations set forth in this Section 6.14 and Article VIII.

 

6.15                        Accounts Receivable.  In the event that Buyer
asserts a Claim for Indemnification related to a breach of the representation
and warranty of Seller contained in the first sentence of Section 5.22(a) in
respect of any accounts receivable shown on the face of the Estimated Balance
Sheet not collected within ninety (90) days following the Closing Date (the
“Uncollected AR”), then, as a condition precedent to the satisfaction of such
Claim for Indemnification, Buyer will cause the Company and/or the Operating
Company (as applicable) to assign, transfer, convey, and deliver such
Uncollected AR to Seller.  In the event that such Claim for Indemnification is
satisfied prior to the assignment, transfer, conveyance, and delivery of such
Uncollected AR to Seller, then Buyer will cause the Company and/or the Operating
Company (as applicable) to assign, transfer, convey, and deliver such
Uncollected AR to Seller promptly following such satisfaction.  Buyer will cause
the Company and the Operating Company to take any action and execute any
agreement, document, or instrument reasonably necessary to assign, transfer,
convey, and deliver such Uncollected AR to Seller.  For the avoidance of doubt,
none of the Company, the Operating Company, or Buyer will be entitled to receive
any of the funds collected by the Seller on such Uncollected AR.

 

ARTICLE VII
CLOSING DELIVERIES

 

7.1                               Closing Deliveries of Seller.  The obligation
of Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction or waiver of the following conditions to
Buyer’s reasonable satisfaction:

 

(a)                                 Seller shall have delivered to Buyer the
deliveries set forth in Section 2.6(a);

 

(b)                                 all approvals, consents, and waivers that
are listed in Section 7.1(b) of the Disclosure Schedule shall have been received
and copies provided to Buyer;

 

(c)                                  Seller shall have delivered to Buyer a good
standing certificate for each of the Company and the Operating Company from the
Secretary of State of the State of Delaware;

 

(d)                                 Seller shall have delivered to Buyer a
certificate of an officer of Seller certifying that the board of directors of
Seller authorized the execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby;

 

(e)                                  Seller shall have caused the Company to
deliver to Buyer a certificate of an officer of the Company certifying that
attached thereto are true, correct, and complete copies of the Organizational
Documents of the Company;

 

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(f)                                   Seller shall have caused the Operating
Company to deliver to Buyer a certificate of an officer of the Operating Company
certifying that attached thereto are true, correct, and complete copies of the
Organizational Documents of the Operating Company;

 

(g)                                  Seller shall have delivered to Buyer the
resignations of the directors and officers of the Company and the Operating
Company set forth in Section 7.1(g) of the Disclosure Schedule;

 

(h)                                 [intentionally omitted];

 

(i)                                     at or promptly following the Closing,
the minute books and stock record books of the Company and the Operating Company
will be delivered to Buyer or its designee, and, at the Closing, the books and
records and Contracts of the Company and the Operating Company will be in the
possession of the Company or the Operating Company;

 

(j)                                    Seller shall have delivered to Buyer the
Pay-Off Documents;

 

(k)                                 Seller shall have delivered to Buyer
evidence that all documents listed on Section 7.1(k) of the Disclosure Schedule
have been terminated;

 

(l)                                     Seller shall have delivered to Buyer a
counterpart signature page to the Escrow Agreement, duly executed by it;

 

(m)                             Seller shall have delivered to Buyer a
counterpart signature page to a flow of funds memorandum (the “Flow of Funds
Memo”), duly executed by it;

 

(n)                                 [intentionally omitted];

 

(o)                                 Seller shall have delivered to Buyer a disk
containing all of the due diligence Made Available to Buyer on the Intralinks
electronic data site;

 

(p)                                 Seller shall have delivered to Buyer a
counterpart signature page to the Transition Services Agreement, duly executed
by it;

 

(q)                                 Seller shall have paid for the R&W Insurance
Policy and provided Buyer with evidence of the same;

 

(r)                                    Seller shall have provided confirmation
and documentation to evidence payment of the final settlement amount to Jeffrey
Stafford in connection with the settlement related to his injury in April 2016;

 

(s)                                   Seller shall have reimbursed Buyer Two
Thousand Five Hundred Dollars ($2,500) for the Tail Policy;

 

(t)                                    [intentionally omitted];

 

(u)                                 Seller shall have caused W. Samuel Willard
to enter into an employment agreement with Buyer or its designee; and

 

(v)                                 Seller shall have provided an assignment to
the Operating Company of all assets used exclusively in the Business set forth
on Section 7.1(v) of the Disclosure Schedule and all books and records related
exclusively to the Business set forth on Section 7.1(v) of the Disclosure
Schedule, in each case, that were owned by Seller prior to the date hereof.

 

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7.2                               Closing Deliveries of Buyer.  The obligation
of Seller to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction or waiver of the following
conditions to Seller’s reasonable satisfaction:

 

(a)                                 Buyer shall have delivered to the applicable
Persons the deliveries set forth in Sections 2.6(b), 2.6(c), and 2.6(d);

 

(b)                                 Buyer shall have delivered to Seller a
Guaranty to GP North LLC in a form reasonably satisfactory to Seller, duly
executed by Chart Industries, Inc.;

 

(c)                                  Buyer shall have delivered to Seller an
amendment to the lease of the Operating Company’s Franklin, Indiana facility,
duly executed by the Operating Company;

 

(d)                                 Buyer shall have delivered to Seller a good
standing certificate for Buyer from the Secretary of State of the State of
Delaware;

 

(e)                                  Buyer shall have delivered to Seller a
certificate of an officer of Buyer certifying that the board of directors or
other governing body of Buyer authorized the execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby;

 

(f)                                   Buyer shall have delivered to Seller a
counterpart signature page to the Escrow Agreement, duly executed by it and the
Escrow Agent;

 

(g)                                  Buyer shall have delivered to Seller a
counterpart signature page to the Flow of Funds Memo, duly executed by it;

 

(h)                                 Buyer shall have delivered to Seller a
counterpart signature page to the Transition Services Agreement, duly executed
by it; and

 

(i)                                     The R&W Insurance Policy shall have been
issued to Buyer.

 

7.3                               Frustration of Closing Conditions.  No Party
may rely on the failure of any condition set forth in this Article VII to be
satisfied if such failure was caused by such Party’s failure to use commercially
reasonable efforts to cause the Closing to occur, as required by Section 6.1.

 

ARTICLE VIII
INDEMNIFICATION

 

8.1                               Survival of Representations, Warranties, and
Covenants.

 

(a)                                 All of the representations and warranties
contained in Articles III, IV, and V shall survive the Closing and continue in
full force and effect for a period of eighteen (18) months thereafter; provided
that:

 

(i)                                     (A) the representations and warranties
of Seller contained in Sections 3.2 (Authorization of Transaction), 3.4
(Brokers’ Fees), 3.5 (Ownership of Shares), 5.1 (Organization, Qualification,
Corporate Power and Authorization), 5.2 (Capitalization), 5.4 (Brokers’ Fees),
and 5.6 (Subsidiaries) shall survive the Closing and continue in full force and
effect indefinitely, (B) the representations and warranties of Seller contained
in Section 5.13 (Taxes) and the last sentence of Section 5.9 (Legal Compliance)
shall survive the Closing and continue in full force and effect until the date
that is forty-five (45) days following the expiration of the statute of
limitations applicable to the subject matter

 

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thereof, (C) the representations and warranties of Seller contained in
Section 5.12 (Environmental Matters) and Section 5.23 (Warranties; Product and
Service Liability) shall survive the Closing and continue in full force and
effect for a period of five (5) years thereafter, and (D) Fraud Claims shall
survive the Closing and continue in full force and effect until the expiration
of the applicable statute of limitations (all of the representations and
warranties set forth in clauses (A) and (B) are collectively referred to herein
as the “Seller’s Fundamental Representations and Warranties”); and

 

(ii)                                  the representations and warranties of
Buyer contained in Sections 4.2 (Authorization of Transaction) and 4.4 (Brokers’
Fees) shall survive the Closing and continue in full force and effect
indefinitely.

 

(b)                                 Except as otherwise specifically provided in
this Agreement, all covenants and agreements contained in this Agreement to be
performed before or at the Closing shall not survive the Closing and all
covenants and agreements contained in this Agreement to be performed after the
Closing shall survive the Closing in accordance with their respective terms.

 

(c)                                  No Claim for Indemnification or other claim
may be brought in respect of a breach of any representation, warranty, covenant,
or agreement contained in this Agreement after the expiration of the survival
period applicable to such representation, warranty, covenant, or agreement as
set forth in this Section 8.1; provided that if a Claim for Indemnification or
other claim is brought within said survival period it shall continue to survive
for any subsequent period until fully and finally resolved.

 

8.2                               Indemnification by Seller.  From and after the
Closing and subject to the limitations set forth in this Article VIII, Seller
shall indemnify Buyer and each of its Affiliates (which shall include, following
the Closing, the Company and the Operating Company) and each of their respective
directors, managers, officers, employees, successors, and assigns (collectively,
the “Buyer Indemnitees”) in respect of any and all claims, losses, damages,
liabilities, deficiencies, Proceedings, judgments, interest, awards, penalties,
fines, costs, and expenses of whatever kind (including reasonable attorneys’
fees and expenses and amounts paid in settlement) (collectively, “Losses”)
incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon,
arising out of, or resulting from:

 

(a)                                 a breach of any representation or warranty
of Seller contained in Articles III or V (it being understood that for purposes
of determining Losses, any materiality qualifications, including the terms
“material” and “Material Adverse Effect” shall be disregarded);

 

(b)                                 a breach of any covenant or agreement of
Seller contained in this Agreement;

 

(c)                                  regardless of any disclosures in the
Disclosure Schedule and irrespective of any pre-Closing investigation by Buyer,
the matter(s) set forth on Section 8.2(c) of the Disclosure Schedule;

 

(d)                                 regardless of any disclosures in the
Disclosure Schedule and irrespective of any pre-Closing investigation by Buyer,
the matter(s) set forth on Section 8.2(d) of the Disclosure Schedule;

 

(e)                                  regardless of any disclosures in the
Disclosure Schedule and irrespective of any pre-Closing investigation by Buyer,
the matter(s) set forth on Section 8.2(e) of the Disclosure Schedule;

 

(f)                                   regardless of any disclosures in the
Disclosure Schedule and irrespective of any pre-Closing investigation by Buyer,
the matter(s) set forth on Section 8.2(f) of the Disclosure Schedule;

 

(g)                                  regardless of any disclosures in the
Disclosure Schedule and irrespective of any pre-Closing investigation by Buyer,
the matter(s) set forth on Section 8.2(g) of the Disclosure Schedule;

 

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(h)                                 regardless of any disclosures in the
Disclosure Schedule and irrespective of any pre-Closing investigation by Buyer,
the matter(s) set forth on Section 8.2(h) of the Disclosure Schedule;

 

(i)                                     for a period of ten (10) years following
the Closing Date, regardless of any disclosures in the Disclosure Schedules and
irrespective of any pre-Closing investigation by Buyer, the matter(s) set forth
on Section 8.2(i) of the Disclosure Schedule, subject to the limitations set
forth therein; and

 

(j)                                    for a period of five (5) years following
the Closing Date, and regardless of any disclosures in the Disclosure Schedule
and irrespective of any pre-Closing investigation by Buyer, any Losses based
upon, arising out of or resulting from any Third Party Claim (including any
Liability Claim) asserted on or after the Closing Date relating in any way or
alleging any relation to any product designed, assembled, manufactured,
installed, serviced, distributed, sold, resold, leased, provided or delivered or
any services designed, provided or delivered by the Company or the Operating
Company at any time on or before the Closing Date; provided, however, that this
Section 8.2(j) shall be limited to available and applicable coverage and the
related policy limits available under the Seller’s GL Stack and the provisions
of Section 8.6(e) and Section 8.6(f) hereof.

 

8.3                               Indemnification by Buyer.  From and after the
Closing and subject to the limitations set forth in this Article VIII, Buyer
shall indemnify Seller and its Affiliates and each of their respective
directors, managers, officers, employees, successors, and assigns (collectively,
the “Seller Indemnitees”) in respect of any and all Losses incurred or sustained
by, or imposed upon, the Seller Indemnitees based upon, arising out of, or
resulting from:

 

(a)                                 a breach of any representation or warranty
of Buyer contained in Article IV; and

 

(b)                                 a breach of any covenant or agreement of
Buyer contained in this Agreement.

 

8.4                               Matters Involving Third Party Claims.

 

(a)                                 If any third party shall notify a Party (the
“Indemnified Party”) with respect to a Third Party Claim that may give rise to a
Claim for Indemnification against the other Party (the “Indemnifying Party”)
under this Article VIII, then the Indemnified Party shall promptly provide a
Claim for Indemnification to the Indemnifying Party.  Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly following
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to any such Third Party Claim.

 

(b)                                 The Indemnifying Party shall have the right
(but not the obligation), upon written notice to the Indemnified Party delivered
no later than twenty (20) days after receipt by the Indemnifying Party of the
Claim for Indemnification, to assume the conduct and control, through counsel of
its choice reasonably satisfactory to the Indemnified Party, and at the expense
of the Indemnifying Party, of the settlement or defense of the Third Party
Claim.  The Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in connection therewith and the Indemnifying Party shall permit the
Indemnified Party to participate in such settlement or defense through counsel
chosen by the Indemnified Party; provided that the fees and expenses of such
counsel shall be borne solely by the Indemnified Party.  So long as the
Indemnifying Party is reasonably contesting any such Third Party Claim in good
faith, the Indemnified Party shall not pay or settle such Third Party Claim.  If
the Indemnifying Party does not notify the Indemnified Party in writing within
twenty (20) days after receipt of the Claim for Indemnification that it elects
to undertake the defense of the Third Party Claim or fails to defend in good
faith such Third-Party Claim, then the Indemnified Party shall have the right to
defend, contest, settle, or compromise such Third Party Claim but shall not
thereby waive any right to seek indemnity therefor

 

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pursuant to this Article VIII.  Any settlement or compromise of any Third Party
Claim by the Indemnifying Party shall require the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld,
conditioned, or delayed; provided that no such consent shall be required for any
such settlement or compromise that (i) is exclusively monetary and will be paid
by the Indemnifying Party (rather than the Indemnified Party), (ii) does not
contain an admission of liability on the part of any Indemnified Party, and
(iii) will not have an adverse impact on Buyer’s ability to operate the Business
in the ordinary course of business consistent with past practice.

 

(c)                                  The Parties shall reasonably cooperate in
the defense or prosecution of any Third Party Claim in respect of which
indemnity may be sought hereunder and Buyer and Seller (or a duly authorized
representative of such Party) shall (and Buyer shall cause the Company and the
Operating Company to) furnish such records, information, and testimony, and
attend such conferences, discovery proceedings, hearings, trials, and appeals,
as may be reasonably requested in connection therewith.

 

(d)                                 If any of the Buyer Indemnitees shall notify
Seller of a Claim for Indemnification under Section 8.2(j) or any other policy
pursuant to which Company, Operating Company or Buyer is entitled to coverage
available, Seller shall give prompt notice of that Claim for Indemnification
under Seller’s Insurance Policies in accordance with this Agreement, including
Section 6.14 and said applicable policy.

 

8.5                               Matters not Involving Third Party Claims.  An
Indemnified Party may make a claim for any matter that does not involve a Third
Party Claim in any amount to which it may be entitled under this Article VIII by
providing a Claim for Indemnification against the Indemnifying Party promptly
after the Indemnified Party has notice of any Losses that may give rise to a
Claim for Indemnification.  The Indemnifying Party shall have thirty (30) days
to object to the Claim for Indemnification by delivery of a written notice of
such objection to the Indemnified Party.  If an objection is delivered by the
Indemnifying Party, then the Indemnified Party and the Indemnifying Party shall
negotiate in good faith for a period of thirty (30) Business Days from the date
the Indemnified Party receives such objection prior to commencing any Proceeding
with respect to such Claim for Indemnification.

 

8.6                               Limitations on Indemnification.

 

(a)                                 Notwithstanding anything to the contrary in
this Agreement, the right of Buyer Indemnitees to indemnification in respect of
Losses under Section 8.2 shall be subject to the following limitations:

 

(i)                                     the Buyer Indemnitees will not be
entitled to indemnification pursuant to Section 8.2(a) until the aggregate
amount of all Losses in respect of indemnification under Section 8.2(a) exceeds
$220,000 (the “Deductible Amount”), in which case Buyer Indemnitees shall have
the right to seek indemnification for Losses in excess of, but not including,
the Deductible Amount; provided, however, that the limitation set forth in this
Section 8.6(a)(i) shall not apply to Losses arising out of or resulting from a
breach of the Seller’s Fundamental Representations and Warranties or a Fraud
Claim; and

 

(ii)                                  in no event shall Seller’s aggregate
liability pursuant to Section 8.2(a) and Section 8.2(j) exceed $1,100,000 (the
“Cap”); provided, however, that the limitation set forth in this
Section 8.6(a)(ii) shall not apply to Losses arising out of or resulting from a
breach of the Seller’s Fundamental Representations and Warranties or a Fraud
Claim; and

 

(iii)                               the Parties acknowledge and agree that no
waiver, release, limitation or exclusion of liability in this Agreement or
otherwise, including the Cap, survival periods or limitations on

 

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types of damages available, does not apply to or limit recovery for any Losses
for which there is coverage available under the R&W Insurance Policy, the Tail
Policy, the Seller’s GL Stack or any insurance policy maintained by Seller or
any of its Affiliates where the Seller, the Company or the Operating Company is
a named insured or which otherwise has coverage available for the Seller,
Company or the Operating Company, whether directly or indirectly as a result of
this Agreement being an “insured contract”.

 

(b)                                 The Parties acknowledge that the R&W
Insurance Policy has been issued to Buyer by Ambridge Partners LLC for coverage
of Seller’s indemnification obligations hereunder with respect to
Section 8.2(a).  Prior to the Closing Date, Seller has paid one hundred percent
(100%) of the total premium of the R&W Insurance Policy.  Subject to
Section 8.6(a)(i), any Losses payable for any Claims for Indemnification under
Section 8.2(a) shall be satisfied:  (i) first, from the Escrow Amount, but only
up to an amount equal to the R&W Insurance Policy Retention Amount less the
Deductible Amount; (ii) second, to the extent coverage is available under the
R&W Insurance Policy, pursuant to the R&W Insurance Policy, up to the R&W
Insurance Policy Coverage Limit; (iii) third, from the Escrow Amount; and
(iv) finally, from Seller, subject to the Cap.

 

(c)                                  Subject to Section 8.6(b) and
Section 8.6(f), the amount of any and all Losses shall be determined net of
(i) any amounts actually recovered by the Buyer Indemnitees or the Seller
Indemnitees, as applicable, under insurance policies or from other collateral
sources (such as contribution agreements or contractual indemnities of any
Person that are contained outside of this Agreement) with respect to such Losses
and (ii) any Tax Benefits actually realized by the Buyer Indemnitees or the
Seller Indemnitees, as applicable, with respect to such Losses.  If an
Indemnified Party receives a Tax Benefit or recovers any amount under insurance
policies or from other collateral sources after an indemnification payment is
made to him, her, or it pursuant to this Article VIII, the Indemnified Party
shall promptly pay to the Indemnifying Party that made such indemnification
payment the amount of such Tax Benefit or recovered amount; provided that in no
event shall the amount of such payment to the Indemnifying Party exceed the
amount of such indemnification payment.  For purposes of determining when an
Indemnified Party recognizes a Tax Benefit from the utilization of any tax
losses recognized as a result of a Loss, all tax losses shall be deemed to be
used on a first-in, first-out basis.  The determination of any Losses pursuant
to this subsection (c) shall reflect any increase in costs or liabilities
associated with any mitigating actions taken under insurance policies.

 

(d)                                 If any Losses result from any matter that
resulted in a reduction in the Final Working Capital as determined pursuant to
Section 2.4, then Buyer Indemnitees’ recovery under Section 8.2 in respect of
such Losses shall be reduced by the amount of such reduction in the Final
Working Capital.

 

(e)                                  Subject to Section 8.6(b) and
Section 8.6(f), the Escrow Amount held by the Escrow Agent pursuant to the
Escrow Agreement shall be the first source for satisfaction of all Claims for
Indemnification payable by Seller pursuant to Section 8.2.  Notwithstanding the
foregoing any release of the Escrow Amount pursuant to the terms of the Escrow
Agreement shall not impact Buyer’s right to proceed against Seller directly
pursuant to the terms hereof.

 

(f)                                   The Parties acknowledge that the Escrow
Amount is being held by the Escrow Agent, in part, as security that Seller will
maintain the Seller’s GL Stack pursuant to the terms of Section 6.14 hereof.  In
the event the Seller’s GL Stack is not maintained in any of the five policy
years pursuant to the terms of Section 6.14 hereof, the Parties shall cause the
Escrow Agent to release to Buyer the lesser of the actual cost for Buyer to
purchase its GL stack for said policy period and the remaining Escrow Amount for
said year and any following year.  Any Losses payable for any Claims for
Indemnification or any other claims under Section 8.2(j) and
Section 8.2(a) solely with regard to a breach of Section 5.23 (Warranties;
Product and Service Liability) shall be satisfied from any applicable coverage
from the

 

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Seller’s GL Stack, and only if the Seller’s GL Stack has not been maintained
pursuant to the terms of Section 6.14 hereof, then, from any applicable
insurance coverage, and, only if such coverage is unavailable, from the Escrow
Amount up to the Cap.

 

(g)                                  Subject to Section 8.8, the Parties
acknowledge that the indemnification obligations of Seller and Buyer set forth
in this Article VIII shall apply regardless of the fault or negligence,
including that which is active, passive, sole, joint or concurrent, of a Buyer
Indemnitee or a Seller Indemnitee; provided, however, that this
Section 8.6(g) shall not limit a claim by Seller or Buyer, as applicable,
against such Buyer Indemnitee or such Seller Indemnitee, as applicable, with
respect to such fault or negligence (other than the Company or the Operating
Company with respect to such fault or negligence which occurred on or prior to
Closing).

 

8.7                               Exclusive Remedy; Waiver of Certain Damages. 
Except (a) in the case where a Party seeks to obtain specific performance
pursuant to Section 6.10, Section 6.12 or Section 10.11, (b) for the Purchase
Price adjustment procedures set forth in Section 2.4, and (c) for claims arising
out of a Fraud Claim, willful misconduct or criminal activity, from and after
the Closing, the rights of the Parties to indemnification pursuant to the
provisions of this Article VIII shall be the sole and exclusive remedy for the
Parties, and each Party fully and unconditionally releases, waives and covenants
not to assert any claim for any other remedies with respect to any matter in any
way arising from or relating to this Agreement or its subject matter, including
the Business and the transactions contemplated by this Agreement. 
Notwithstanding anything to the contrary in this Agreement, in no event shall
either Party be liable for special, punitive, exemplary or consequential
damages, whether based on contract, tort (regardless of the fault or negligence
whether active, passive, sole, joint or concurrent of the Buyer Indemnitee or
Seller Indemnitee), strict liability or otherwise; provided, however, that this
sentence shall not limit a Party’s right to recover under this Article VIII for
any such Losses to the extent that such Party is required to pay such Losses to
a third party in connection with a matter for which such Party is otherwise
entitled to indemnification pursuant to this Article VIII or in the case of
Fraud.

 

8.8                               Mitigation.  Subject to the provisions of this
Article VIII, Buyer shall (and shall cause the other Buyer Indemnitees to), and
Seller shall (and shall cause the other Seller Indemnitees to), use commercially
reasonable efforts to mitigate all Losses, including, subject to Section 6.14,
using commercially reasonable efforts to pursue to a favorable conclusion
recovery under any insurance policies that may be applicable to any Losses;
provided that such Indemnified Party shall nevertheless be entitled to bring a
Claim for Indemnification under this Article VIII in respect of such Losses.

 

8.9                               Adjustments to Purchase Price.  All
indemnification payments under this Article VIII shall be deemed adjustments to
the Purchase Price.

 

ARTICLE IX
INTENTIONALLY OMITTED

 

ARTICLE X
MISCELLANEOUS

 

10.1                        No Third Party Beneficiaries.  Except for the
provisions of Section 6.4 and Section 6.14 and except in respect of
Article VIII, as it relates to the Buyer Indemnitees and the Seller Indemnitees
who are not otherwise parties to this Agreement (provided that only a Party can
make a Claim for Indemnification against the other Party), this Agreement shall
not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.

 

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10.2                        Entire Agreement.  This Agreement, together with the
Exhibits and Disclosure Schedules, constitutes the entire agreement between the
Parties with respect to the subject matter of this Agreement, and supersede any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter of
this Agreement.

 

10.3                        Succession and Assignment.  This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns.  No Party may assign either this Agreement or
any of its rights or obligations hereunder without the prior written consent of
the other Party; provided that (a) Buyer may assign any of its rights or
delegate any of its duties under this Agreement to any Affiliate of Buyer;
provided further that, no such assignment shall relieve Buyer of its obligations
hereunder; (b) Buyer may assign its rights, but not its obligations, under this
Agreement to any of its financing sources; and (c) Buyer and its successors and
permitted assigns may assign their rights, but not their obligations, under this
Agreement in connection with a transfer of all or substantially all of the
assets of Buyer, the Company or the Operating Company.

 

10.4                        Counterparts; Signatures.  This Agreement may be
executed in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  A manual signature
on this Agreement, an image of which shall have been transmitted electronically,
shall constitute an original signature for all purposes.  The delivery of copies
of this Agreement, including executed signature pages where required, by
electronic transmission will constitute effective delivery of this Agreement for
all purposes.

 

10.5                        Headings.  The article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

 

10.6                        Notices.  All notices, requests, demands, claims,
and other communications under this Agreement shall be in writing and shall be
deemed duly given when (a) delivered personally, (b) sent by facsimile
transmission (with confirmation by the transmitting equipment), (c) three
(3) Business Days after sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) Business Day after being sent by a
nationally recognized overnight delivery service (receipt requested), in each
case, to the appropriate addresses set forth below:

 

If to Seller, to Seller at:

 

Global Power Equipment Group Inc.
400 E. Las Colinas Boulevard, Suite No. 400
Irving, Texas 75039
Attn:  Corporate Secretary
Facsimile:  (214) 853-4744

 

With a copy to:

 

Thompson Hine LLP
335 Madison Avenue, 12th Floor
New York, New York 10017
Attn:  Stuart Welburn
Facsimile:  (212) 344-6101

 

If to Buyer, to Buyer at:

 

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Chart Lifecycle, Inc.
8665 New Trails Drive, Suite 100

The Woodlands, TX 77381
Attn: General Counsel
Facsimile:  281.296.4055

 

With a copy to:

 

Calfee, Halter & Griswold LLP

1405 East 6th Street
Cleveland, Ohio 44114-1607
Attn:  Jennifer L. Vergilii
Facsimile:  216.241.0816

 

Either Party may change the address to which communications under this Agreement
are to be delivered by giving the other Party notice in the manner set forth in
this Section 10.6.

 

10.7                        Amendments and Waivers.  No amendment or waiver of
any provision of this Agreement shall be valid unless the same shall be in a
writing referring to this Agreement signed by Buyer and Seller.  No waiver by
either Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall 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 occurrence.

 

10.8                        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.

 

10.9                        Construction.  Any reference to any federal, state,
local, or foreign Law or Decree shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The
word “including” (and variations thereof) shall mean “including, without
limitation.”  All accounting terms used in this Agreement shall have the
meanings given to them in accordance with GAAP.  All monetary amounts set forth
in this Agreement are in U.S. Dollars.  All words used in this Agreement will be
construed to be of such gender or singular or plural as the circumstances
require.  All references to “Article” or “Section” shall be deemed to refer to
the provisions of this Agreement unless otherwise expressly provided.  The words
“this Agreement,” “hereof,” “hereunder,” “herein,” “hereby,” or words of similar
import shall refer to this Agreement as a whole and not to a particular article,
section, subsection, clause, or other subdivision of this Agreement, unless the
context otherwise requires.  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 either Party by virtue of the authorship of any of
the provisions of this Agreement.

 

10.10                 Incorporation of Exhibits and Schedules.  The Exhibits and
Disclosure Schedule identified in this Agreement are incorporated into this
Agreement by reference and made a part of this Agreement.

 

10.11                 Specific Performance.  Each Party acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly, each Party agrees that the other
Party shall be entitled, in addition to any other remedy at law or in equity, to
an injunction or injunctions to

 

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prevent breaches of the provisions of this Agreement and to enforce the terms of
this Agreement by a decree of specific performance without the necessity of
proving the inadequacy of money damages as a remedy.  Each Party hereby waives
any requirement for securing or posting of any bond in connection with such
remedy.

 

10.12                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule that would cause the
application of the Laws of any jurisdiction other than the State of Delaware.

 

10.13                 Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)                                 Any Proceeding arising out of or based upon
this Agreement or the transactions contemplated hereby may be instituted in the
federal and state courts located in the State of Delaware, and each Party
irrevocably submits to the exclusive jurisdiction of such courts in any
Proceeding.  Service of process, summons, notice, or other document by mail to
such Party’s address set forth herein shall be effective service of process for
any Proceeding brought in any such court.  The Parties irrevocably and
unconditionally waive any objection to the laying of venue of any Proceeding in
such courts and irrevocably waive and agree not to plead or claim in any such
court that any such Proceeding brought in any such court has been brought in an
inconvenient forum.

 

(b)                                 EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND, THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF THE
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A PROCEEDING, (B) SUCH
PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.13(b).

 

10.14                 Disclosure Schedule.  The specification of any dollar
amount in the representations and warranties contained in this Agreement or the
inclusion of any specific item in the Disclosure Schedule is not intended to
imply that such amounts (or higher or lower amounts) or such items are or are
not material, and no Party shall use the fact of the setting of such amounts or
the fact of the inclusion of any such item in the Disclosure Schedule in any
dispute, claim, or controversy as to whether any obligation, item, or matter not
described herein or included in the Disclosure Schedule is or is not material
for purposes of this Agreement.  Any item of information, matter, or document
disclosed or referenced in, or attached to, the Disclosure Schedule shall not
(a) be used as a basis for interpreting the terms “material,” “Material Adverse
Change,” “Material Adverse Effect” or other similar terms in this Agreement or
to establish a standard of materiality, (b) represent a determination that such
item or matter did not arise in the Ordinary Course of Business, or
(c) constitute, or be deemed to constitute, an admission to any third party
concerning such item or matter.  The inclusion of any item or matter in any part
of the Disclosure Schedule with respect to a representation and warranty shall
also be deemed to be an inclusion for the purposes of any other representation
and warranty to which it is readily apparent that such item or matter relates.

 

[signature page follows]

 

58

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

 

 

SELLER:

 

 

 

Global Power Equipment Group Inc.

 

 

 

 

 

 

By:

/s/ Tracy D. Pagliara

 

Name:

Tracy D. Pagliara

 

Title:

Chief Administrative Officer

 

 

 

 

 

BUYER:

 

 

 

Chart Lifecycle, Inc.

 

 

 

 

 

 

By:

/s/ Samuel D. Thigpen

 

Name:

Samuel D. Thigpen

 

Title:

President

 

 

[Signature Page to Stock Purchase Agreement]

 

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