Exhibit 10.1

 

EXECUTION VERSION

 

 

AGREEMENT AND PLAN OF MERGER

by and among

ENNIS, INC.,

CASCADIA MERGER SUB, INC.,

CASCADIA MERGER SUB II LLC

WRIGHT BUSINESS FORMS, INC.,

THE SHAREHOLDERS

OF WRIGHT BUSINESS FORMS, INC.,

for the limited purposes set forth herein,

NCF CORPORATION,

as the sole trustee for the NCF Charitable Trust

and

JAMES T. WRIGHT,

as representative of the Sellers

Dated July 16, 2018

 

 

 

 

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE I CERTAIN DEFINITIONS

 

2

Section 1.1

 

Certain Definitions

 

2

Section 1.2

 

Interpretation

 

12

 

 

 

ARTICLE II MERGER AND LLC SUB MERGER

 

12

Section 2.1

 

Closing of the Merger

 

12

Section 2.2

 

Pre-Closing Deliveries

 

13

Section 2.3

 

Closing Deliverables

 

14

Section 2.4

 

Post-Closing Adjustments

 

17

Section 2.5

 

Withholding

 

20

Section 2.6

 

Post-Closing Merger

 

20

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS RELATING TO THE
COMPANY

 

20

Section 3.1

 

Organization and Qualification

 

20

Section 3.2

 

Authorization

 

20

Section 3.3

 

Non-contravention

 

20

Section 3.4

 

Governmental Consents

 

21

Section 3.5

 

Capitalization; Subsidiaries

 

21

Section 3.6

 

Financial Statements; Undisclosed Liabilities

 

22

Section 3.7

 

Absence of Certain Developments

 

22

Section 3.8

 

Compliance with Laws; Governmental Authorizations; Licenses; Etc.

 

24

Section 3.9

 

Litigation

 

25

Section 3.10

 

Taxes

 

25

Section 3.11

 

Environmental Matters

 

27

Section 3.12

 

Employee Matters

 

28

Section 3.13

 

Employee Benefit Matters

 

29

Section 3.14

 

Intellectual Property Rights

 

31

Section 3.15

 

Contracts

 

31

Section 3.16

 

Insurance

 

32

Section 3.17

 

Real Property

 

33

Section 3.18

 

Condition and Sufficiency of Assets

 

33

Section 3.19

 

Related Party Transactions

 

33

Section 3.20

 

Brokers

 

34

Section 3.21

 

Inventory

 

34

Section 3.22

 

Accounts Receivable

 

34

Section 3.23

 

Customers and Suppliers

 

34

Section 3.24

 

Books and Records

 

34

Section 3.25

 

Product Warranties and Services

 

35

Section 3.26

 

Banking Facilities

 

35

Section 3.27

 

No Additional Representations

 

35

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE REPRESENTATIVE
RELATING TO THE SELLERS AND THE SECURITIES OF THE COMPANY

 

36

Section 4.1

 

Organization; Authorization; No Conflicts

 

36

Section 4.2

 

Execution; Delivery; Enforceability

 

36

-i-

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Table of Contents

(continued)

Page

 

Section 4.3

 

Filings and Approvals

 

37

Section 4.4

 

Title to the Shares

 

37

Section 4.5

 

Litigation

 

37

Section 4.6

 

Securities Law Matters

 

37

 

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT

 

41

Section 5.1

 

Organization

 

41

Section 5.2

 

Authorization

 

41

Section 5.3

 

Non-contravention

 

41

Section 5.4

 

No Consents

 

42

Section 5.5

 

Litigation

 

42

Section 5.6

 

Financial Ability

 

42

Section 5.7

 

Acknowledgement by Parent

 

42

Section 5.8

 

Brokers

 

43

 

 

 

ARTICLE VI COVENANTS AND AGREEMENTS

 

43

Section 6.1

 

Interim Operating Covenant

 

43

Section 6.2

 

Confidentiality; Access and Information

 

43

Section 6.3

 

Public Announcements

 

43

Section 6.4

 

Employee Benefits

 

44

Section 6.5

 

Indemnification of Directors and Officers; Tail Policy

 

44

Section 6.6

 

Exclusivity

 

45

Section 6.7

 

Interim Tax Covenant

 

45

Section 6.8

 

Further Assurances

 

45

Section 6.9

 

Resignations

 

45

Section 6.10

 

Legend and Securities Compliance

 

45

Section 6.11

 

Supplemental Disclosure

 

46

 

 

 

ARTICLE VII TAX MATTERS

 

47

Section 7.1

 

Tax Matters

 

47

Section 7.2

 

Tax Indemnification

 

47

Section 7.3

 

Contests

 

48

Section 7.4

 

Tax Characterization and Reporting of Merger and LLC Sub Merger

 

48

Section 7.5

 

Cooperation and Exchange of Information

 

49

Section 7.6

 

No Section 338 Elections.

 

49

Section 7.7

 

Survival.

 

49

Section 7.8

 

Overlap

 

49

 

 

 

ARTICLE VIII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

 

50

Section 8.1

 

Survival

 

50

Section 8.2

 

General Indemnification

 

50

Section 8.3

 

Notice of Claims

 

51

Section 8.4

 

Third Party Claims

 

51

Section 8.5

 

Limitations on Indemnification Obligations

 

52

Section 8.6

 

Special Indemnity

 

54

Section 8.7

 

Exclusive Remedy

 

55

Section 8.8

 

Distributions from the Escrow Account

 

55

 

 

 

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Table of Contents

(continued)

Page

 

ARTICLE IX CONDITIONS TO CLOSING

 

56

Section 9.1

 

Conditions to Each Party’s Obligations

 

56

Section 9.2

 

Conditions to the Company’s Obligations

 

56

Section 9.3

 

Conditions to Parent’s Obligations

 

57

 

 

 

ARTICLE X TERMINATION

 

58

Section 10.1

 

Termination

 

58

Section 10.2

 

Effect of Termination

 

59

 

 

 

ARTICLE XI REPRESENTATIVE OF THE SELLERS

 

59

Section 11.1

 

Authorization of Representative

 

59

 

 

 

ARTICLE XII MISCELLANEOUS

 

61

Section 12.1

 

Notices

 

61

Section 12.2

 

Exhibits and Schedules

 

62

Section 12.3

 

Time of the Essence; Computation of Time

 

63

Section 12.4

 

Expenses

 

63

Section 12.5

 

Governing Law

 

63

Section 12.6

 

Assignment; Successors and Assigns; No Third Party Rights

 

63

Section 12.7

 

Counterparts

 

64

Section 12.8

 

Titles and Headings

 

64

Section 12.9

 

Entire Agreement

 

64

Section 12.10

 

Severability

 

64

Section 12.11

 

No Strict Construction

 

64

Section 12.12

 

Specific Performance

 

64

Section 12.13

 

Waiver of Jury Trial

 

64

Section 12.14

 

Amendments

 

64

Section 12.15

 

No Third Party Liability

 

65

Section 12.16

 

Representation and Confidential Information

 

65

Section 12.17

 

Charitable Seller

 

66

 

EXHIBIT A – Sample Closing Working Capital Statement

EXHIBIT B – Articles of Merger

EXHIBIT C – Escrow Agreement

EXHIBIT D – LLC Sub Merger Agreement

EXHIBIT E – Daniel C. Adkison Noncompetition Agreement

EXHIBIT F – Stephan Lutter Noncompetition Agreement

 

 

 

iii

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is entered into as of July
16, 2018, by and among Ennis, Inc., a Texas corporation (“Parent”), Cascadia
Merger Sub, Inc., an Oregon corporation (“Merger Sub”), Cascadia Merger Sub II
LLC, an Oregon limited liability company (“LLC Sub”), Wright Business Forms,
Inc., an Oregon corporation (the “Company”), solely for the limited purposes set
forth in Section 12.17, NCF Corporation, a Florida corporation, as the sole
trustee for the NCF Charitable Trust (the “Charitable Seller), each of the other
shareholders of the Company listed on the signature pages hereto (together with
the Charitable Seller, individually, a “Seller”, and collectively, the
“Sellers”), and James T. Wright, an individual resident of the state of Oregon,
in his capacity as (i) representative of the Sellers and (ii) purchaser
representative for the Non-Accredited Investor Sellers for purposes of
Regulation D under the Securities Act.

RECITALS

WHEREAS, the Sellers collectively own beneficially and of record all of the
outstanding shares of Common Stock (as defined below);

WHEREAS, Parent desires to acquire the Company and has formed Merger Sub for the
purpose of merging it with and into the Company (the “Merger”), with the Company
continuing as the corporation surviving the Merger;

WHEREAS, Parent and the Company have determined that immediately after the
effectiveness of the Merger, the Company shall be merged with and into LLC Sub,
a wholly-owned subsidiary of Parent (such merger being referred to herein as the
“LLC Sub Merger”), with LLC Sub continuing as the surviving entity in the LLC
Sub Merger as a direct wholly-owned subsidiary of Parent;

WHEREAS, for U.S. federal income tax purposes (and, where applicable, state and
local income tax purposes), the parties intend that (i) the Merger and the LLC
Sub Merger constitute an integrated plan described in Rev. Rul. 2001-46, 2001-2
C.B. 321, (ii) the Merger and the LLC Merger, taken together, qualify as a
“reorganization” described in Section 368(a)(1)(A) of the Code and (iii) this
Agreement be, and is hereby adopted as, a “plan of reorganization” within the
meaning of Sections 354, 361 and 368 of the Code and the Treasury Regulations
promulgated thereunder;

WHEREAS, pursuant to the Oregon Business Corporation Act (the “Act”): (i) the
board of directors and shareholders of each of Merger Sub and the Company has by
sufficient consents adopted resolutions approving this Agreement and declaring
it advisable and recommending this Agreement to their respective shareholders
and (ii) this Agreement, having been so approved, has been executed and
acknowledged by each constituent corporation and has been approved by written
consent by the shareholders thereof entitled to vote for its approval and
adoption;

WHEREAS. the board of directors of Parent has by written consent adopted
resolutions approving this Agreement and, having been so approved, this
Agreement has been executed and acknowledged by Parent; and

WHEREAS, Parent and the Sellers shall enter into the Escrow Agreement (as
defined herein), pursuant to which Parent shall deposit the Escrow Amount, which
amount shall be credited against the Base Purchase Price as set forth in Section
2.3.

 

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AGREEMENT

NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

Article I

CERTAIN DEFINITIONS

Section 1.1Certain Definitions.  As used in this Agreement, the following terms
have the respective meanings set forth below.

“Accounting Principles” means in accordance with GAAP, consistently applied,
using the same accounting methods, principles, practices, procedures and
estimation methodologies used in and on a basis consistent with those applied by
the Company in preparing its consolidated reviewed financial statements
(including calculating accounting reserves, accruals and write-offs in
accordance with the same methodology used to calculate such reserves, accruals
and write-offs in preparation of the Company’s consolidated audited financial
statements).

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

“Accredited Investor Seller” has the meaning set forth in Section 4.6(a).

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration,
inquiry, audit, notice of violation, proceeding, litigation, citation, summons,
subpoena or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether at law or in equity.

“Adkison Noncompetition Agreement” means the Noncompetition Agreement among
Parent, the Surviving Corporation and Daniel C. Adkison in the form of Exhibit E
hereto.

“Affiliate” of a Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

“Affiliated Group” means any affiliated, consolidated, combined, unitary or
similar group within the meaning of Section 1504(a) of the Code or any
applicable state, local, or non-U.S. Law.

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

“Articles of Incorporation” means the Company’s Certificate of Incorporation as
in effect from time to time.

“Articles of Merger” has the meaning set forth in Section 2.1(b).

“Base Purchase Price” means (i) the Base Cash Purchase Price, plus (ii) the Base
Equity Purchase Price.

“Base Cash Purchase Price” means $21,450,000.00.

“Base Equity Purchase Price” means $17,550,000.00.

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“Business Day” means a day, other than a Saturday or Sunday, on which commercial
banks in Dallas, Texas are open for the general transaction of business.

“Cash and Cash Equivalents” means, as of immediately prior to the Closing, the
sum of the fair market value (expressed in United States dollars) of all cash
and cash equivalents of any kind (including, without limitation, all bank
account balances, marketable securities, short term investments and certificates
of deposit) of the Company and its Subsidiaries; provided that cash and cash
equivalents received through 11:59 p.m., Dallas time, (including cash in
transit, such as wires or checks received through 11:59 p.m., Dallas time) on
the day immediately preceding the Closing Date in the Company’s or any of its
Subsidiaries’ bank accounts or lockbox accounts on the Closing Date or otherwise
received, or other items otherwise convertible into cash (including but not
limited to checks deposited but not cleared), in each case, through 11:59 p.m.,
Dallas time, on the day immediately preceding the Closing Date) shall be
included as Cash and Cash Equivalents; provided, however, for the avoidance of
doubt Cash and Cash Equivalents shall be reduced by checks written against the
Company’s or any of its Subsidiaries’ accounts and not yet cleared.

“Certificates” means the outstanding certificates which immediately prior to the
Closing represent shares of Common Stock.

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

“Claim” has the meaning set forth in Section 11.1(a)(iii).

“Claim Notice” has the meaning set forth in Section 8.3.

“Closing” has the meaning set forth in Section 2.1(a).

“Closing Cash Consideration” means an amount equal to: (a) (i) the Initial
Purchase Price, minus (ii) the Escrow Amount, multiplied by (b) fifty-five
percent (55%).

“Closing Consideration” means an amount equal to the Closing Cash Consideration
plus the Closing Equity Consideration.

“Closing Equity Consideration” means an amount equal to: (a) (i) the Initial
Purchase Price, minus (ii) the Escrow Amount, if any, multiplied by
(b) forty-five percent (45%).

“Closing Date” has the meaning set forth in Section 2.1(a).

“Closing Working Capital” means, with respect to the Company on a consolidated
basis with its Subsidiaries, (i) Current Assets (as reported on the Company
Financial Statements), other than Cash and Cash Equivalents; provided, that
Current Assets shall include an amount of cash agreed upon by Parent and the
Company sufficient to cover (1) all obligations of the Company and its
Subsidiaries owed as of the Closing Date with respects to checks written against
any of the Company’s or any of its Subsidiaries’ bank accounts and (2) all
prepaid deposits not otherwise securing accounts receivable and other credits
with right of offset received from any customer or any other third party that
have not been offset as of the Closing); less (ii) Current Liabilities (as
reported on the Company Financial Statements), other than notes payable and the
current portion of long-term debt, in each case as determined as of the close of
business on the Closing Date and in accordance with the Accounting
Principles.  For the avoidance of doubt, Closing Working Capital shall include
only those line items included in the Sample Closing Working Capital
Statement.  For the avoidance of doubt, while Income Tax Receivable and Tax
payables are included in the calculation of Closing Working Capital, the parties
agree the Seller has the sole right to the Income Tax Receivable and the Sellers
have the sole responsibility with respect to any Tax payables in respect of any
period ending on or before the Closing Date.

3

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

“Common Stock” means the Common Stock, no par value per share, of the Company.

“Company” has the meaning set forth in the preamble (For “Companies” see the
definition of Subsidiary, below).

“Company Benefit Plan” has the meaning set forth in Section 3.13(a).

“Company Financial Statements” has the meaning set forth in Section 3.6(a).

“Company Intellectual Property Rights” means Intellectual Property Rights owned
by the Company or any of its Subsidiaries.

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

“Continuing Employees” has the meaning set forth in Section 6.4(a).

“Contracts” has the meaning set forth in Section 3.15.

“DCA” has the meaning set forth in Section 12.16(a).

“Disputed Amount Range” has the meaning set forth in Section 2.4(c).

“Disputed Items” has the meaning set forth in Section 2.4(b).

“Effective Time” has the meaning set forth in Section 2.1(b).

“Environment” means the system of natural and artificial or man induced elements
such as air (including air in buildings and natural or man-made structures below
or above ground), water, surface water, groundwater and any and all sources of
water of whatever jurisdiction (including without limitation water under or
within land or in drains and sewers and coastal and inland waters and water
bodies), land (including soil whether at or below surface) wetland, sediment,
soil, subsoil or subsurface strata, and any and all natural resources, forestry
resources, habitat, ecosystems, florae and fauna, and in general the environment
as defined in Environmental Laws.

“Environmental Claim” means any Action, Order, lien, fine, penalty,
administrative proceeding, or, as to each, any settlement or judgment arising
therefrom, by or from any Person alleging liability of whatever kind or nature
(including liability or responsibility for the costs of enforcement proceedings,
investigations, clean-up, governmental response, removal or remediation, natural
resources damages, property damages, personal injuries, medical monitoring,
penalties, contribution, indemnification and injunctive relief) arising out of,
based on or resulting from: (a) the presence, Release of, or exposure to, any
Hazardous Substances; or (b) any non-compliance with any Environmental Law or
term or condition of any Environmental Permit.

“Environmental Laws” means all applicable federal, state and local statutes,
regulations and ordinances having the force or effect of law concerning
pollution or protection of the environment.

“Environmental Notice” means any written directive, notice of violation or
infraction, or notice respecting any Environmental Claim relating to actual or
alleged noncompliance with any Environmental Law or any term or condition of any
Environmental Permit.

4

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“Environmental Permit” means any permit, clearance, consent, waiver, or
exemption, required under or issued, granted, given, authorized by or made by a
Governmental Authority pursuant to Environmental Law.

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

“ERISA Affiliate” means any entity (other than the Company or any of its
Subsidiaries) that is considered a single employer with the Company or any of
its Subsidiaries under Section 414 of the Code.

“Escrow Account” has the meaning set forth in Section 2.3(c)(vi)(A).

“Escrow Agent” means Citibank, National Association, the fees of which shall be
split one half to the Sellers and one half Parent.  

“Escrow Agreement” has the meaning set forth in Section 2.3(c)(vi)(A).

“Escrow Amount” has the meaning set forth in Section 2.3(c)(vi)(A).

“Escrow Funds” has the meaning set forth in Section 2.3(c)(vi)(A).

“Estimated Closing Statement” has the meaning set forth in Section 2.2(a).

“Estimated Working Capital” has the meaning set forth in Section 2.2(a).

“Expense Funds” has the meaning set forth in Section 11.1(b).

“Final Adjustment Payment” has the meaning set forth in Section 2.4(f).

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

“Final Escrow Funds Distribution Date” has the meaning set forth in Section
8.8(b).

“Fundamental Representations” has the meaning set forth in Section 8.1.

“GAAP” means generally accepted accounting principles, consistently applied, in
the United States on the date of this Agreement.

“Governmental Authority” means any national, federal, state, provincial, county,
municipal or local government, foreign or domestic, or the government of any
political subdivision of any of the foregoing, or any entity, authority, agency,
ministry or other similar body exercising executive, legislative, judicial,
regulatory or administrative authority or functions of or pertaining to
government, including any quasi-governmental entity established to perform any
of such functions, or any arbitrator, court or tribunal of competent
jurisdiction.

“Governmental Consents” has the meaning set forth in Section 3.4.

“Hazardous Substances” shall mean hazardous or toxic substances or materials,
hazardous wastes, pollutants or contaminants as said terms are defined by
Environmental Laws or with respect to which liability or standards of conduct
are imposed under any Environmental Laws, including, without limitation,
petroleum or petroleum constituents, friable asbestos-containing material or
polychlorinated biphenyls.

5

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“Income Tax” means any Tax (i) based upon, measured by, or calculated with
respect to, net income or net receipts, proceeds or profits, or (ii) based upon,
measured by, or calculated with respect to multiple bases (including, but not
limited to, any corporate franchise and occupation Tax) if such Tax is primarily
based upon, measured by, or calculated with respect to one or more bases
described in clause (i) above.

“Income Tax Receivable” means an amount equal to $640,000 included in the
Company Financial Statements as Refundable Income Taxes, which amount represents
a refund of income Taxes payable to the Company in respect of the Company’s Tax
Return for the fiscal year ended March 31, 2018.

“Indebtedness” means, collectively, with respect to the Company and its
Subsidiaries, without duplication, the outstanding principal amount and accrued
and unpaid interest on and other payment obligations (other than contingent
obligations not yet owing as of the Closing) in respect of indebtedness for
borrowed money, capital leases and accrued and unpaid Taxes to the extent not
included in Closing Working Capital and any other obligations properly
classified as indebtedness in accordance with the Accounting Principles;
provided that Indebtedness shall not include: (i) any amount of indebtedness or
obligations owed, owing or payable by any Subsidiary to either any other
Subsidiary or the Company, or by the Company to any Subsidiary; (ii) any
breakage costs, penalties, additional interest, premiums, fees and other costs
and expenses payable in connection with any indebtedness or obligations that
will not become due, payable or paid (in each case, whether at maturity,
acceleration or otherwise) in connection with or as a result of the transactions
contemplated by this Agreement (whether before or after the Closing); (iii) any
indebtedness or obligations arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn by any Person in the ordinary course of business against insufficient
funds, or in respect of netting services, overdraft protections, the endorsement
of instruments or otherwise in connection with customary deposit accounts; (iv)
any indebtedness or obligations in respect of workers’ compensation claims,
health, disability or other employee benefits; property casualty or liability
insurance; take-or-pay obligations in supply arrangements; self-insurance
obligations; performance, bid, surety, custom, utility and advance payment bonds
or performance and completion guaranties (in each case to the extent entered
into in the ordinary course of business and for which no obligations are then
owing or outstanding); and/or (v) any indebtedness or obligations in the form of
customary obligations under indemnification, incentive, non-compete, consulting,
deferred compensation, customary indemnification obligations to purchasers in
connection with dispositions or divestitures, or other similar arrangements,
that are not incurred in connection with indebtedness for borrowed money.

“Indemnified Party” has the meaning set forth in Section 8.3.

“Indemnifying Party” has the meaning set forth in Section 8.5(h).

“Initial Purchase Price” shall be an amount equal to: (a) the Base Purchase
Price, plus (b) the Price Adjustment Increase, if any, minus (c) the Price
Adjustment Decrease, if any, minus (d) the Indebtedness remaining outstanding
immediately prior to the Closing, if any, minus (e) the Seller Expenses that
remain due but unpaid immediately prior to the Closing, if any, plus (f) the
Income Tax Receivable.

“Insurance Policies” has the meaning set forth in Section 3.16.

“Intellectual Property Rights” means all patents, patent applications,
trademarks and service marks, and all registrations and applications therefor,
copyrights, copyright registrations and applications, domain names and trade
secrets.

“Interim Escrow Funds Distribution Date” has the meaning set forth in Section
8.8(b).

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“Knowledge” means, with respect to any Person, actual knowledge after reasonable
investigation; provided that in the case of the Sellers with respect to (a) the
representations and warranties in Article III, such knowledge shall be limited
to the Knowledge of the following executive officers of the Company:  James T.
Wright, Dan Adkison, Stephan Lutter, Brian Cicerchi and Gordon Klepec; and (b)
the representations and warranties in Article IV, such knowledge shall be
limited to the Knowledge of the applicable Seller.

“JTW Transfer” has the meaning set forth in Section 9.3(h).

“Leased Property” has the meaning set forth in Section 3.17.

“Lien” means any charge, claim, mortgage, pledge, security interest, monetary
encumbrance, lien or charge of any kind.

“LLC Sub” has the meaning set forth in the recitals.

“LLC Sub Merger” has the meaning set forth in the recitals.

“Loss” has the meaning set forth in Section 8.2(a).

“Lutter Noncompetition Agreement” means the Noncompetition Agreement among
Parent, the Surviving Corporation and Stephan Lutter in the form of Exhibit F
hereto.

“Material Adverse Effect” means a material adverse effect upon the financial
condition, business, or results of operations of the Company or the ability of
the Sellers and the Company to consummate the transactions contemplated hereby
on a timely basis; provided, however, that any adverse change, event or effect
arising from or related to: (a) conditions generally affecting the United States
economy or generally affecting one or more industries in which the Company or
its Subsidiaries operate; (b) national or international political or social
conditions, including terrorism or the engagement by the United States in
hostilities or acts of war; (c) financial, banking or securities markets
(including any disruption thereof and any decline in the price of any security
or any market index); (d) changes in GAAP or other accounting requirements, or
the interpretation thereof; (e) changes in any laws, rules, regulations, orders,
or other binding directives issued by any Governmental Authority; (f) any action
taken by a party hereto in accordance with this Agreement; (g) any adverse
change in or effect on the business of the Company that is cured by the Company
before the Closing; (h) the public announcement, pendency or completion of the
transactions contemplated by this Agreement; or (i) any failure, in and of
itself, by the Company to meet any internal or disseminated projections,
forecasts or revenue or earnings predictions for any period (it being understood
that the facts and circumstances giving rise or contributing to such failure may
be taken into account in determining whether there has been a Material Adverse
Effect), shall not be taken into account in determining whether a “Material
Adverse Effect” has occurred or could or would reasonably be expected to occur.
References in this Agreement to dollar amount thresholds shall not be deemed to
be evidence of a Material Adverse Effect or materiality, provided further,
however, that any event, occurrence, fact, condition or change referred to in
clauses (a) through (e) immediately above shall be taken into account in
determining whether a Material Adverse Effect has occurred or could reasonably
be expected to occur to the extent that such event, occurrence, fact, condition
or change has a disproportionate effect on the Company and its Subsidiaries
compared to other participants in the industry in which the Company and its
Subsidiaries conducts its businesses.

“Material Customers” has the meaning set forth in Section 3.23(b).

“Material Lease” has the meaning set forth in Section 3.17.

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“Material Suppliers” has the meaning set forth in Section 3.23(a).

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

“Merger Sub” has the meaning set forth in the preamble.

“Mini-Basket” has the meaning set forth in Section 8.5(c)(ii).

“Neutral Arbitrator” means BDO USA LLP.

“New Plans” has the meaning set forth in Section 6.4(b).

“Non-Accredited Investor Sellers” has the meaning set forth in Section 4.6(b).

“Non-Permitted Testing” means any environmental sampling or testing following
the Closing that is not required to be performed by the Company (i) by
applicable Environmental Laws, (ii) at the direction of a Governmental Authority
in the exercise of its jurisdiction (absent the suggestion or invitation of
Parent, the Sellers, the Company, or anyone acting on their behalf) or (iii) to
respond to a threat of imminent harm to human health.

“Order” means any order, judgment, ruling, injunction, decree or writ of any
Governmental Authority.

“Ownership Percentage” means, for each Seller, the percentage determined by
dividing (x) the number of shares of Common Stock held by such Seller
immediately prior to the Closing by (y) the number of Total Outstanding Shares.

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

“Parent Common Stock” means the Common Stock, $2.50 par value per share, of
Parent.

“Parent Common Stock Conversion Price” means $19.56.

“Parent Indemnitee” has the meaning set forth in Section 8.2(a).

“Per Share Cash Consideration” means the amount of cash obtained by dividing (i)
the Base Cash Purchase Price by (ii) the Total Outstanding Shares.

“Per Share Equity Consideration” means the number of shares of Parent Common
Stock equal to the result obtained by (i) dividing (A) the Base Equity Purchase
Price by (B) the Parent Common Stock Conversion Price, and (ii) dividing the
result obtained in clause (i) by the Total Outstanding Shares.

“Per Share Merger Consideration” has the meaning set forth in Section 2.1(c)(v).

“Permitted Liens” means (a) landlords’, lessors’, mechanics’, materialmens’,
carriers’, workmens’, repairmens’, contractors’ or other similar Liens arising
or incurred in the ordinary course of business and for amounts which are not
delinquent and which would not be reasonably expected to have a Material Adverse
Effect, (b) easements, quasi-easements, licenses, covenants, rights-of-way,
rights of re-entry, restrictions and other similar charges and encumbrances of
record not interfering materially with the ordinary conduct of the business of
the Company and its Subsidiaries or detracting materially from the use,
occupancy, value or marketability of title of the assets subject thereto, (c)
zoning, building, subdivision or other similar requirements or restrictions, (d)
any and all service contracts and agreements affecting any

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real property, in each case, which do not impair in any material respect the
current use or occupancy of the real property subject thereto, (e) leases,
subleases, licenses and occupancy and/or use agreements affecting any real or
personal property (or any portion thereof) set forth in any Schedule, (f) Liens
for Tax assessments and other governmental charges not yet due and payable or
for Taxes that the taxpayer is contesting in good faith by appropriate
procedures and for which there are adequate accruals or reserves on the Company
Financial Statements, (g) purchase money Liens securing rental payments under
capital lease arrangements, (h) Liens reflected or reserved against or otherwise
disclosed in any balance sheet that is part of the Company Financial Statements,
(i) with respect to Intellectual Property Rights, (A) licenses and (B) gaps in
the chain of title or other Liens that are readily apparent from the records of
the applicable intellectual property registries, (j) Liens to lenders incurred
in deposits made in the ordinary course in connection with maintaining bank
accounts, (k) deposits or pledges to secure the payment of workers’
compensation, unemployment insurance, social security benefits or obligations
arising under similar Laws, or to secure the performance of public or statutory
obligations, surety or appeal bonds, and other obligations of a like nature, (l)
Liens created by this Agreement or any of the Transaction Documents, or in
connection with the transactions contemplated hereby or thereby by Parent and
(k) Liens set forth on Schedule 1.1.

“Person” means an individual, partnership, corporation, limited liability
company, joint stock company, unincorporated organization or association, trust,
joint venture, association or other organization, whether or not a legal entity,
or a Governmental Authority.

“Post-Closing Tax Period” means any Tax period (including the portion of any
Straddle Period beginning after the Closing Date) that begins after the Closing
Date.

“Pre-Closing Tax Period” means any Tax period (including the portion of any
Straddle Period ending on the Closing Date) ending on or before the Closing
Date.

“Price Adjustment Decrease” has the meaning set forth in Section 2.2(b).

“Price Adjustment Increase” has the meaning set forth in Section 2.2(b).

“Privileged Communications” has the meaning set forth in Section 12.16(b).

“Proceeding” means any suit, legal proceeding or administrative enforcement
proceeding before any Governmental Authority.

“Purchase Price” means (i) the Closing Consideration, plus (ii) the Final
Adjustment Payment (if such payment is made by Parent to the Representative),
minus (iii) the Final Adjustment Payment (if such payment is made by the
Representative to Parent), plus (iv) the Base Equity Purchase Price.

“Qualified Benefit Plan” has the meaning set forth in Section 3.13(c).

“Release” means any actual or threatened release, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, depositing, dispersing, injecting,
escaping, leaching, dumping, abandonment, disposing, allowing to escape or
migrating of any Hazardous Substance, whether intentional or unintentional, into
or through the indoor and outdoor Environment.

“Remedial Action” means any and all actions necessary to comply with, or
discharge any obligation under, Environmental Laws to (i) clean up, remove,
treat, restore, remedy, contain, fight, abate, recycle, treat, or cover
Hazardous Substances in the indoor or outdoor Environment; (ii) prevent, control
or minimize the Release of Hazardous Substances so that they do not migrate or
endanger or threaten to endanger public health or welfare or the Environment; or
(iii) perform remedial studies, investigations, restoration and post-remedial
studies (or post-clean-up care), assessments, testing, or monitoring on, about
or in any real property.

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“Representative” has the meaning set forth in Section 11.1(a).

“Responsible Party” has the meaning set forth in Section 8.3.

“Resolution Period” has the meaning set forth in Section 2.4(b).

“Sample Closing Working Capital Statement” means the statement attached hereto
as Exhibit A setting forth a sample calculation of Closing Working Capital.

“SEC” has the meaning set forth in Section 4.6(a)(iii).

“Securities Act” means the Securities Act of 1933, as amended (together with the
rules and regulations promulgated thereunder).

“Seller Affiliates” has the meaning set forth in Section 12.15.  

“Seller Expenses” means the out-of-pocket fees and expenses incurred on or
before the Closing Date and payable by the Company or the Sellers in connection
with the transactions contemplated by this Agreement, including but not limited
to out-of-pocket fees and expenses payable to the Company’s advisors (including,
without limitation, legal, consulting, accounting and financial advisors) and in
respect of the Tail Policy, in each case solely insofar as the same have not
been paid prior to the Closing.

“Seller Indemnitee” has the meaning set forth in Section 8.2(b).

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

“Special Indemnified Matters” has the meaning set forth in Section 8.5(c)(ii).

“Statement of Objections” has the meaning set forth in Section 2.4(b).

“Straddle Period” means any Tax period that includes (but does not end on) the
Closing Date. For purposes of determining the amount of any Taxes arising in any
Straddle Period which relate to a Pre-Closing Tax Period, the amount of any
Taxes based on or measured by income or receipts of the Company (including its
Subsidiaries) for the Pre-Closing Tax Period shall be determined based on an
interim closing of the books as of the close of business on the Closing Date,
and the amount of other Taxes of the Company (including its Subsidiaries) for
the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period; provided,
however, that any item determined on an annual or periodic basis (such as
deductions for depreciation or real estate Taxes) shall be apportioned on a
daily basis.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
association or other business entity of which (a) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (b) if a partnership, association or other business
entity, a majority of the partnership or other similar ownership interests
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more Subsidiaries of that Person or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be

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allocated a majority of partnership, association or other business entity gains
or losses or shall be or control the managing director, managing member, general
partner or other managing Person of such partnership, association or other
business entity. Unless the context requires otherwise, each reference to a
Subsidiary shall be deemed to be a reference to a Subsidiary of the Company; and
the Company and its Subsidiaries are sometimes referred to herein as the
“Companies.”

“Survival Period” has the mean set forth in Section 8.1.

“Surviving Corporation” has the meaning set forth in Section 2.1(b).

“Tail Policy” has the meaning set forth in Section 6.5.

“Tax” or “Taxes” means any federal, state, or local income, gross receipts,
franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer,
real property gains, registration, value added, excise, severance, stamp,
occupation, windfall profits, customs, duties, real property, personal property,
capital stock, social security (or similar), unemployment, disability, payroll,
license, employee or other withholding, or other tax, including any interest,
penalties or additions to tax in respect of the foregoing.

“Tax Authority” means any domestic or foreign, local, municipal, governmental,
state, provincial, territorial, national or federal authority, body or officials
(or any entity or individual acting on behalf of such authority, body or
officials) anywhere in the world, with responsibility for the imposition,
collection or administration of any form of Tax.

“Tax Claim” has the meaning set forth in Section 7.3.

“Tax Representations” has the meaning set forth in Section 3.10.

“Tax Return” means any return (including returns for estimated Taxes), report,
declaration, claim for refund, information return or other document (including
any related or supporting schedule, statement or information) filed or required
to be filed in connection with the determination, assessment or collection of
any Tax of any party or the administration of any laws, regulations or
administrative requirements relating to any Tax (including any amendment
thereof).

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

“Third Party Source” has the meaning set forth in Section 8.5(c)(i).

“Threshold” has the meaning set forth in Section 8.5(c)(ii).

“Total Outstanding Shares” means the sum of the number of shares of Common Stock
outstanding immediately prior to the Closing (other than treasury shares).

“Transaction Documents” means, collectively, this Agreement and all other
agreements and documents entered into in connection with the transactions
contemplated hereby.

“Transfer Taxes” has the meaning set forth in Section 7.1(a).

“Union” has the meaning set forth in Section 3.12(b).

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988,
as amended.

“WEL Contribution” has the meaning set forth in Section 9.3(i).

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“Working Capital Cap” means an amount equal to $5,632,843.

“Working Capital Threshold” means an amount equal to $4,608,690.

Section 1.2Interpretation.  Unless otherwise indicated to the contrary herein by
the context or use thereof: (a) the words, “hereby”, “herewith”, “herein,”
“hereto,” “hereof” and words of similar import refer to this Agreement as a
whole and not to any particular Section or paragraph hereof; (b) the words
“include,” “includes” or “including” shall be deemed to be followed by the words
“without limitation”; (c) masculine gender shall also include the feminine and
neutral genders, and vice versa; (d) words importing the singular shall also
include the plural, and vice versa; (e) references to “Articles,” “Exhibits,”
“Sections” or “Schedules” shall be to Articles, Exhibits, Sections or Schedules
of or to this Agreement; (f) except as otherwise provided herein, any agreement,
instrument or statute defined or referred to herein means such agreement,
instrument or statute as from time to time amended, modified, supplemented or
restated, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and references to all attachments thereto and instruments incorporated
therein; and (g) any payments or release of funds from the Escrow Account to
Parent or any other Parent Indemnitee (or any of their respective designees)
shall be deemed to be a payment made by one or more of the Sellers, and shall be
deemed to satisfy the corresponding obligation of the Sellers, as the case may
be.

Article II

MERGER AND LLC SUB MERGER

Section 2.1Closing of the Merger.

(a)The closing (the “Closing”) of the Merger and other transactions contemplated
hereby shall take place at the offices of Baker Botts L.L.P., 2001 Ross Avenue,
Suite 1000, Dallas, Texas 75201, at 10:00 a.m. Dallas time on July 31, 2018, if
the conditions set forth in Article IX (other than those conditions that by
their terms are to be satisfied at the Closing, but subject to the satisfaction
or waiver of such conditions) have been satisfied or waived in writing by the
appropriate party on such date, or at such other place, time and date as the
Representative and Parent shall mutually agree. The time and date of the Closing
is herein called the “Closing Date.”  Upon the occurrence of the Closing, the
parties hereto agree that the transactions contemplated by this Agreement shall
be deemed effective for all purposes (including, without limitation, title,
possession, financial reporting and tax purposes) as of 11:59 p.m. Dallas time
on the Closing Date

(b)The Merger will become effective upon the filing of articles of merger in
substantially the form attached hereto as Exhibit B with the Secretary of State
of the State of Oregon (“Articles of Merger”) in accordance with the Act. Upon
such filing, Merger Sub will be merged with and into the Company, the separate
existence of Merger Sub will cease and the Company will continue as the
surviving corporation (“Surviving Corporation”). The date and time when the
Merger becomes effective is hereinafter referred to as the “Effective Time.”

(c)At the Effective Time, by virtue of the Merger:

(i)all the properties, rights, privileges, powers and franchises of the Company
and Merger Sub will vest in the Surviving Corporation and all debts,
liabilities, obligations and duties of the Company and Merger Sub shall become
debts, liabilities, obligations and duties of the Surviving Corporation;

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(ii)(A) the Articles of Incorporation of Merger Sub as in effect immediately
prior to the Effective Time shall become the Articles of Incorporation of the
Surviving Corporation as of the Effective Time and (B) the bylaws of Merger Sub
as in effect immediately prior to the Effective Time shall become the bylaws of
the Surviving Corporation;

(iii)(A) the directors of Merger Sub shall be the initial directors of the
Surviving Corporation and (B) the officers of Merger Sub shall be the initial
officers of the Surviving Corporation;

(iv)each share of common stock of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and become one validly
issued, fully paid and non-assessable share of common stock of the Surviving
Corporation; and

(v)each share of Common Stock of the Company issued and outstanding immediately
prior to the Effective Time and all rights in respect thereof shall forthwith
cease to exist and be converted into and represent the right to receive (i) the
Per Share Cash Consideration and (ii) a number of shares of Parent Common Stock
equal to the Per Share Equity Consideration (together, the “Per Share Merger
Consideration”).

(d)Each share of Common Stock, upon being converted into the right to receive
the Per Share Merger Consideration pursuant to Section 2.1(c)(v), shall cease to
be outstanding and shall be cancelled and retired and shall cease to exist, and
each Seller immediately prior to the Effective Time shall thereafter cease to be
a shareholder of the Company or have any rights with respect to such Common
Stock, except the right to receive the Per Share Merger Consideration with
respect to each share of Common Stock held by such Seller immediately prior to
the Closing.  Each Seller shall surrender the stock certificates representing
all of the outstanding shares of Common Stock to Parent immediately prior to the
Effective Time.

(e)The outstanding shares of capital stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into an aggregate
number of shares of common stock of the Surviving Corporation equal to the
number of shares of Common Stock that are converted into the right to receive
the Per Share Merger Consideration pursuant to Section 2.1(c)(v).  At the
Effective Time, the books and records of the Company shall be revised to reflect
the cancellation and retirement of all shares of Common Stock and the conversion
of the equity interest in Merger Sub to common units of the Surviving
Corporation, and the existence of the Company (as the Surviving Corporation)
shall continue without dissolution.

Section 2.2Pre-Closing Deliveries.

(a)At least three Business Days prior to the Closing Date, the Chief Financial
Officer of the Company shall prepare and deliver to Parent a statement
(“Estimated Closing Statement”) setting forth the Company’s good faith estimate
of the amount of Closing Working Capital as of June 30, 2018 (“Estimated Working
Capital”) and the components thereof.  The Estimated Closing Statement and the
determinations and calculations contained therein shall be prepared and
calculated in good faith in accordance with the Accounting Principles. The
Estimated Closing Statement shall also include the Company’s calculation of
(i) the Initial Purchase Price; (ii) the Escrow Amount, (iii) the Closing
Consideration; and (iv) the aggregate amount payable to each Seller at the
Closing.  The Estimated Closing Statement and the determinations and
calculations contained therein shall be calculated in accordance with the
Accounting Principles and in the same manner as set forth in the Sample Closing
Working Capital Statement.

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(b)In the event that the Estimated Working Capital is greater than the Working
Capital Cap, the Base Purchase Price shall be increased by an amount equal to
the positive difference between the Estimated Working Capital and the Working
Capital Cap (a “Price Adjustment Increase”).  In the event that the Estimated
Working Capital is less than the Working Capital Threshold, the Base Purchase
Price shall be reduced by an amount equal to the positive difference between the
Estimated Working Capital and the Working Capital Threshold (a “Price Adjustment
Decrease”).

(c)For the avoidance of doubt, if the Estimated Working Capital is an amount (1)
equal to or greater than the Working Capital Threshold and (2) equal to or less
than the Working Capital Cap, there shall be no adjustment to the Base Purchase
Price at the Closing.

Section 2.3Closing Deliverables.

(a)At the Closing, the Company will file the Articles of Merger with the
Secretary of State of the State of Oregon and request that the Secretary of
State provide evidence of such filing on the most expedited basis when
available.

(b)As soon as practicable after the Closing on the Closing Date, the
Representative shall pay to each Seller such Seller’s pro rata portion of an
aggregate amount equal to (i) the Closing Cash Consideration, minus (ii) an
amount of cash equal to the Expense Funds, in each case as set forth in the
Estimated Closing Statement.

(c)Parent Deliverables.  Subject to the terms hereof, at the Closing Parent
shall:

(i)deliver or cause to be delivered a counterpart signature page to the Escrow
Agreement, dated as of the Closing Date and duly executed by an authorized
officer of Parent;

(ii)deliver counterpart signature pages to the Adkison Noncompetition Agreement,
duly executed by Parent and the Surviving Corporation;

(iii)deliver counterpart signature pages to the Lutter Noncompetition Agreement,
duly executed by Parent and the Surviving Corporation;

(iv)to the extent that there shall be any Indebtedness outstanding as of
immediately prior to the Closing, pay all such Indebtedness in accordance with
wiring instructions delivered to Parent by the Company prior to the Closing,
which amounts shall be deducted from the Base Cash Purchase Price.  The parties
hereby agree that: (A) the Sellers may cause the Company and the Subsidiaries to
use Cash and Cash Equivalents to pay, on or prior to the Closing, all
Indebtedness; and (B) the Subsidiaries may make cash advances, cash dividend
payments or other cash distributions to the Company and/or its Subsidiaries for
purposes of the Company’s or any of its Subsidiaries’ paying, on or prior to the
Closing, such Indebtedness;

(v)to the extent that there shall be any Seller Expenses outstanding and unpaid
as of immediately prior to the Closing, pay all such Seller Expenses in
accordance with wiring instructions delivered to Parent by the Company prior to
the Closing, which amounts shall be deducted from the Base Cash Purchase
Price.  The parties hereby agree that: (A) the Sellers may cause the Company and
the Subsidiaries to use Cash and Cash Equivalents to pay, on or prior to the
Closing, all Seller Expenses; and (B) the Subsidiaries may make cash advances,
cash dividend payments or other cash distributions to the Company and/or its
Subsidiaries for purposes of the Company’s or any of its Subsidiaries’ paying,
on or prior to the Closing, such Seller Expenses;

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(vi)pay the Initial Purchase Price to the applicable Persons in cash and Parent
Common Stock as follows;

(A)an amount of cash and Parent Common Stock equal to ten percent (10%) of the
Initial Purchase Price in the same ratio as the Base Cash Purchase Price and the
Base Equity Purchase Price bear to the Base Purchase Price, for the purpose of
securing (1) the post-Closing adjustments of the Closing Consideration and (2)
the indemnity obligations of the Sellers under Article VIII (the “Escrow Amount”
and such cash the “Escrow Funds”), shall be deposited into an interest-bearing
escrow account (the “Escrow Account”), which shall be established pursuant to an
escrow agreement in the form of Exhibit C (the “Escrow Agreement”), which Escrow
Agreement shall also (x) be entered into on the Closing Date among Parent, the
Representative (on behalf of the Sellers) and the Escrow Agent and (y) provide
that (1) all interest and other income earned on the Escrow Funds shall be the
property of the Sellers;

(B)an amount of cash equal to the Closing Cash Consideration to the
Representative for payment to the Sellers in accordance with wire instructions
delivered at least two Business Days prior to the Closing by the Representative;
and

(C)to the Representative, on behalf of each Seller, a certificate evidencing the
number of shares of Parent Common Stock representing each such Seller’s pro rata
portion of the Closing Equity Consideration, in each case as set forth in the
Estimated Closing Statement.

(vii)deliver a certificate from the secretary of Parent, dated as of the date
hereof, attaching and certifying the charter, bylaws and authorizing resolutions
of Merger Sub and certifying the incumbency and signatures of the persons
executing this agreement and any other closing documents on behalf of Parent and
Merger Sub;

(viii)a certificate of Parent certifying that the conditions set forth in
Sections 9.2(a) and (c) have been satisfied, dated as of the Closing and signed
on behalf of Parent by a duly authorized officer of Parent; and

(ix)deliver all such other documents relating to the transactions contemplated
by this Agreement as the Sellers may reasonably request.

(d)Seller Deliverables.  Subject to the terms hereof, the Sellers shall have
delivered, or caused the Company to deliver to Parent, the following additional
documents and instruments:

(i)subject to Section 2.1(d), the Certificates representing the shares of Common
Stock owned by such Seller, accompanied by instruments of transfer or assignment
endorsed in blank and dated the Closing Date, in form reasonably satisfactory to
Parent;

(ii)with respect to any shares of Common Stock represented by a certificate
which has been lost, stolen or destroyed, an affidavit of the applicable Seller
in form and substance reasonably satisfactory to Parent stating that such
certificate has been lost, stolen or destroyed, and such other documentation
(including an indemnity, in form and substance satisfactory to Parent and the
Representative, against any claim that may be made against the Company or any
security holder with respect to such certificate) that Parent and the
Representative shall require with respect to the shares of Common Stock formerly
represented by such lost, stolen or destroyed certificate (but in no event shall
such Seller be obligated to post a bond with respect to such lost, stolen or
destroyed certificate);

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(iii)counterpart signature pages to the Escrow Agreement, duly executed and
attested by appropriate officers of the Company and the Representative;

(iv)counterpart signature pages to the Adkison Noncompetition Agreement, duly
executed by Daniel C. Adkison;

(v)counterpart signature pages to the Lutter Noncompetition Agreement, duly
executed by Stephan Lutter;

(vi)certificates (dated not more than ten days prior to the Closing) as to the
good standing of each of the Company and the Subsidiaries in its jurisdiction of
organization and each other jurisdiction in which it is qualified to do business
as a foreign entity;

(vii)all payoff letters (and related UCC-3 termination statements) relating to
the payment in full of all Indebtedness, and receipts or other acknowledgments
reasonably acceptable to Parent that all Seller Expenses have been paid;

(viii)a certificate from the secretary of the Company, dated as of the Closing,
certifying the charter and bylaws, authorizing resolutions, and the incumbency
of the persons executing any Closing documents on behalf of the Company;

(ix)a certificate from an officer of each Seller that is not an individual,
dated as of the Closing, certifying the charter and bylaws, authorizing
resolutions, and the incumbency of the persons executing any Closing documents
on behalf of such Seller;

(x)the resignations, effective upon the Closing, of each officer and director of
each of the Company and the Subsidiaries other than those designated by Parent
to remain in office, if any;

(xi)appropriate documents reasonably requested by Parent with respect to the
transfer or establishment of bank accounts, signing authority, etc.;

(xii)evidence reasonably satisfactory to Parent that the agreements between the
Company and any Seller or any affiliates of any Seller listed on Schedule
2.3(d)(xi) have been terminated;

(xiii)each of the consents, approvals, orders or authorizations of, or
registrations, declarations or filings with, or notices to, any Governmental
Authority or other Person set forth on Schedule 2.3(d)(xii);

(xiv)evidence that the Company has obtained and paid for the Tail Policy;

(xv)a certificate of the Company certifying that the conditions set forth in
Sections 9.3(a) and (c) have been satisfied, dated as of the Closing and signed
on behalf of the Company by a duly authorized officer of the Company;

(xvi)a certificate of each Seller who is claiming an exemption from tax
withholding under Section 1445 of the Code certifying that such Shareholder is
not a foreign person (which certificate shall be in the form set forth in
Treasury Regulation Section 1.1445-2(b)(2)(iv)); and

(xvii)such other documents relating to the transactions contemplated by this
Agreement as Parent may reasonably request.

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Section 2.4Post-Closing Adjustments.

(a)Within ninety (90) calendar days following the Closing Date, Parent shall
prepare, or cause to be prepared, and deliver to the Representative a statement
(the “Final Closing Statement”), certified by the Chief Financial Officer of
Parent, setting forth Parent’s good faith calculation of Closing Working Capital
as of the Closing Date.  The Final Closing Statement and the determinations and
calculations contained therein shall be prepared and calculated in good faith,
and shall be in the same form and include the same line items as the Estimated
Closing Statement (except that in calculating such component line items, no
effect shall be given to (i) the transactions contemplated hereby, (ii) any
purchase accounting or other similar adjustments resulting from the consummation
of the transactions contemplated hereby or (iii) any financing or other changes
made by or at the request of Parent).  If the Final Closing Statement is not so
timely delivered, the Estimated Working Capital shall be deemed to be the
Closing Working Capital, absent manifest error.  The Final Closing Statement and
the determinations and calculations contained therein shall be calculated in
accordance with the Accounting Principles and in the same manner as set forth in
the Sample Closing Working Capital Statement

(b)After receipt of the Final Closing Statement, the Representative will have
until 5:00 p.m. Dallas time on the date that is forty-five (45) calendar days
following the delivery by Parent of the Final Closing Statement to review the
Final Closing Statement and make any objections thereto. Unless the
Representative delivers written notice (which notice shall include the items and
amounts in dispute) to Parent setting forth the items disputed by the
Representative with respect thereto on or prior to 5:00 p.m. Dallas time on
the  forty-fifth (45th) calendar day following the Representative’s receipt of
the Final Closing Statement, the Representative will be deemed to have accepted
and agreed to the Final Closing Statement and such statement (and the
calculations contained therein) will be final, binding and conclusive, absent
manifest error. If the Representative delivers a written notification (a
“Statement of Objections”) to Parent of its objections to items contained in the
Final Closing Statement (or calculations contained therein) on or prior to 5:00
p.m. Dallas time on the forty-fifth (45th) day following the delivery by Parent
of the Final Closing Statement, Parent and the Representative shall, during the
twenty (20) calendar days following delivery of such Statement of Objections (or
such longer period as they may mutually agree in writing) (the “Resolution
Period”), attempt in good faith to resolve their differences with respect to the
disputed items (or calculations) in such notice (the “Disputed Items”), and all
other items in the Final Closing Statement (and all calculations relating
thereto) will be final, binding and conclusive, absent manifest error. Any
resolution by Parent and the Representative during the Resolution Period as to
any Disputed Item shall be set forth in writing and shall be final, binding and
conclusive on the date of such written resolution, absent manifest error.

(c)If Parent and the Representative do not resolve all Disputed Items by the end
of the Resolution Period, then all Disputed Items remaining in dispute will be
submitted to the Neutral Arbitrator. The Neutral Arbitrator shall request a
statement from Parent and the Representative regarding such Disputed Items. The
scope of the disputes to be decided by the Neutral Arbitrator shall be limited
to only those items or calculations specifically in dispute between Parent and
the Representative, and the Neutral Arbitrator is not to make any other
determination, including not making any determination as to whether the Final
Closing Statement, Cash and Cash Equivalents, Closing Date Indebtedness or
Seller Expenses were prepared in accordance with GAAP.  In resolving each
Disputed Item, the parties shall cause the Neutral Arbitrator to be bound by the
principles set forth in this Section 2.4, and direct the Neutral Arbitrator not
to assign a value to any Disputed Item greater than the greatest value for such
Disputed Item claimed by any party or less than the lowest value for such
Disputed Item claimed by any party (such range, the “Disputed Amount Range”),
and any value assigned in contravention of the foregoing shall not be binding on
the parties.

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(d)All fees and expenses relating to the work, if any, to be performed by the
Neutral Arbitrator will be allocated between Parent and the Representative
(which, in the case of the Representative, shall be payable by the
Representative solely out of the Expense Funds) in the same proportion that the
aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator
that is unsuccessfully disputed by each such party (as finally determined by the
Neutral Arbitrator) bears to the total amount of such Disputed Items so
submitted.  The parties shall direct the Neutral Arbitrator to deliver to Parent
and the Representative a written determination (such determination to include a
work sheet setting forth all material calculations used in arriving at such
determination and to be based solely on information provided to the Neutral
Arbitrator by the Representative and Parent) of the Disputed Items submitted to
the Neutral Arbitrator within twenty (20) calendar days of receipt of such
Disputed Items, which determination will be final, binding and conclusive on the
date of delivery of such written resolution, absent manifest error.  

(e)The final, binding and conclusive Final Closing Statement based either upon
agreement by the parties, or deemed agreement by Parent and the Representative
in accordance with this Section 2.4, or the written determination delivered by
the Neutral Arbitrator in accordance with Section 2.4(c) will be the “Conclusive
Final Closing Statement.” If any party fails to submit a statement regarding any
Disputed Item submitted to the Neutral Arbitrator within the time determined by
the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access
as reasonably requested, then the Neutral Arbitrator shall render a decision
based solely on the evidence timely submitted and the access afforded to the
Neutral Arbitrator by the other party.  

(f)No later than five Business Days following the date on which the Conclusive
Final Closing Statement becomes binding:

(i)if the Closing Working Capital is neither greater than the Working Capital
Cap nor less than the Working Capital Threshold, and no adjustment was effected
pursuant to Section 2.2(b), then no amount shall be payable after Closing in
respect of the Closing Working Capital;

(ii)if the Closing Working Capital is neither greater than the Working Capital
Cap nor less than the Working Capital Threshold, and a Price Adjustment Increase
was effected pursuant to Section 2.2(b), then Sellers shall pay to Parent an
amount equal to such Price Adjustment Increase;

(iii)if the Closing Working Capital is neither greater than the Working Capital
Cap nor less than the Working Capital Threshold, and a Price Adjustment Decrease
was effected pursuant to Section 2.2(b), then Parent shall pay to Sellers an
amount equal to such Price Adjustment Decrease;

(iv)if the Closing Working Capital is greater than the Working Capital Cap, and
no adjustment was effected pursuant to Section 2.2(b), then Parent shall pay to
Sellers an amount equal to the difference between the Closing Working Capital
and the Working Capital Cap;

(v)if the Closing Working Capital is less than the Working Capital Threshold,
and no adjustment was effected pursuant to Section 2.2(b), then Sellers shall
pay to Parent an amount equal to the difference between the Closing Working
Capital and the Working Capital Threshold;

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(vi)if the Closing Working Capital is greater than the Working Capital Cap and a
Price Adjustment Increase was effected pursuant to Section 2.2(b), then an
amount equal to the result obtained by subtracting (x) the Price Adjustment
Increase from (y) an amount equal to the difference between the Closing Working
Capital and the Working Capital Cap, shall be paid (1) by Parent to Sellers if
such amount is a positive number, or (2) by Sellers to Parent, if such amount is
a negative number;

(vii)if the Closing Working Capital is greater than the Working Capital Cap and
a Price Adjustment Decrease was effected pursuant to Section 2.2(b), then an
amount equal to the sum of (x) the Price Adjustment Decrease plus (y) an amount
equal to the difference between the Closing Working Capital and the Working
Capital Cap, shall be paid by Parent to Sellers;

(viii)if the Closing Working Capital is less than the Working Capital Threshold
and a Price Adjustment Decrease was effected pursuant to Section 2.2(b), then an
amount equal to the result obtained by subtracting (x) the Price Adjustment
Decrease from (y) an amount equal to the difference between the Closing Working
Capital and the Working Capital Threshold, shall be paid (1) by Sellers to
Parent if such amount is a negative number, or (2) by Parent to Sellers if such
amount is a positive number; and

(ix)if the Closing Working Capital is less than the Working Capital Threshold
and a Price Adjustment Increase was effected pursuant to Section 2.2(b), then
Sellers shall pay to Parent an amount equal to the sum of (x) the Price
Adjustment Increase plus (y) an amount equal to the difference between the
Closing Working Capital and the Working Capital Threshold.

All payments pursuant to this Section 2.4(f) (the “Final Adjustment Payment”)
shall be made by wire transfer of immediately available funds.

(g)Any payments made pursuant to Section 2.4(f) shall be treated as an
adjustment to the Purchase Price by the parties for Tax purposes, unless
otherwise required by Law.

(h)After the delivery by Parent of the Final Closing Statement and until each of
the items set forth therein have been determined to be final in accordance with
this Section 2.4, Parent shall, and shall cause the Company and its Subsidiaries
and their respective officers, employees, agents and representatives to, provide
to the Representative and its employees, advisors and representatives reasonable
access to their books and records solely insofar as such books and records
pertain to the items and calculations set forth in the Final Closing Statement
and to any other information, including work papers of their respective
accountants, and to any employees and premises during regular business hours and
on reasonable advance notice, to the extent necessary for the Representative to
dispute or object to all or any part of the Final Closing Statement, and to
prepare materials for presentation to the Neutral Arbitrator in connection with
this Section 2.4.

(i)Parent agrees, solely with respect to the calculations required pursuant to
this Section 2.4, that following the Closing until the date the Conclusive Final
Closing Statement becomes final, binding and conclusive, Parent will not take
any actions with respect to the Surviving Corporation’s or any of its
Subsidiary’s books and records that would reasonably be expected to affect the
ability of the Representative, the Neutral Arbitrator or Parent to make any
calculation under this Section 2.4; provided, however, that nothing in this
Section 2.4(i) shall be construed to prevent Parent from keeping post-Closing
books and records in the ordinary course of business so long as Parent preserves
a copy of all such books and records necessary to make such calculations until
the date the Conclusive Final Closing Statement becomes final, binding and
conclusive.

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Section 2.5Withholding.  Parent and any other Person acting on Parent’s behalf
shall be entitled to deduct and withhold from the amounts otherwise payable
pursuant to this Agreement such amounts as they are required to deduct and
withhold with respect to the making of such payments under the Code, or any
provision of state, local or foreign Tax law.  Any amounts that are so deducted,
withheld and paid to the appropriate Taxing Authority shall be treated for all
purposes of this Agreement as having been paid to the Person in respect of which
the deduction, withholding and payment was made.

Section 2.6Post-Closing Merger.  Immediately following the Effective Time,
Parent shall cause the Surviving Corporation to merge with and into LLC Sub,
with LLC Sub continuing as the surviving entity in such merger as a direct
wholly-owned subsidiary of Parent, substantially in accordance with the terms of
the merger agreement attached hereto as Exhibit D. From and after such merger,
LLC Sub shall be the Surviving Corporation for purposes of this Agreement. After
such merger, Parent shall own all the membership interests and other equity in
LLC Sub, and LLC Sub shall be disregarded for United States federal income tax
purposes.

Article III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

RELATING TO THE COMPANY

Each Seller, severally but not jointly, represents and warrants to Parent, on
and as of the date of this Agreement (except that with respect to any
representation or warranty that is made as of a specific date, such
representation and warranty is made solely as of such date) as follows:

Section 3.1Organization and Qualification.  Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation specified on
Schedule 3.1 and has the corporate power and authority necessary to own, lease
or operate its property and assets and to carry on its business as presently
conducted.  Schedule 3.1 sets forth each jurisdiction in which the Company and
each of its Subsidiaries is licensed or qualified to do business  and the
Company is in good standing in each jurisdiction wherein the nature of its
business or the ownership of its assets makes such qualification necessary,
except where the failure to have such power and authority, to be so qualified
and/or to be in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Sellers have
previously provided or made available to Parent true and complete copies of (i)
the Company’s Articles of Incorporation and its bylaws as currently in effect
and (ii) the articles of incorporation and bylaws (or comparable organizational
documents) as currently in effect of each of its Subsidiaries.

Section 3.2Authorization.  The Company has the right, power and necessary
corporate authority to execute and deliver the Transaction Documents, and to
perform its obligations thereunder and to consummate the transactions
contemplated thereby.  The execution and delivery of the Transaction Documents
and the consummation of the transactions contemplated thereby have been duly
authorized by the Company’s Board of Directors.  This Agreement has been duly
executed and delivered by the Company and the Sellers and constitutes (or will,
when executed and delivered as contemplated herein, constitute) the valid and
binding obligation of the Company and the Sellers enforceable against the
Company and the Sellers in accordance with its terms, except as the same may be
limited under Schedule 3.2 and by bankruptcy, insolvency, reorganization or
other laws affecting the enforcement of creditors’ rights generally now or
hereafter in effect, and subject to the availability of equitable remedies.

Section 3.3Non-contravention.  Except as set forth on Schedule 3.3, neither the
execution and delivery of this Agreement by the Sellers or any other Transaction
Document by Sellers, the consummation of the transactions contemplated hereby or
thereby nor the fulfillment of and the performance by the Sellers of their
respective obligations hereunder or thereunder will (i) conflict with or result
in a violation or breach

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of, or constitute a default under, any provision contained in the Company’s
Articles of Incorporation or bylaws, (ii) conflict with or result in a violation
of or breach (with or without the lapse of time, the giving of notice or both)
of, or constitute a default (with or without the lapse of time, the giving of
notice or both) under, or require the consent or approval of any third party
under, (A) any contract, agreement, commitment, indenture, mortgage, lease,
pledge, note, bond, license, permit or other instrument or obligation or (B)
assuming the receipt, filing or satisfaction of the Governmental Consents set
forth in Section 3.4, any judgment, order, decree, statute, law, rule or
regulation or other restriction of any Governmental Authority, in each case to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of their respective assets
or properties are subject, (iii) except as contemplated herein, result in the
creation or imposition of any Lien on any of the assets or properties of the
Company or its Subsidiaries, or (iv) result in the acceleration of, or permit
any Person to terminate, modify, cancel, accelerate or declare due and payable
prior to its stated maturity, any obligation of the Company or any Subsidiaries,
except in the case of clauses (ii) through (iv) above as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.4Governmental Consents.  Schedule 3.4 sets forth each consent,
approval, order, permit or authorization of, or registration, declaration,
notice or filing with, any Governmental Authority (“Governmental Consents”) or
required by applicable law to be obtained in respect of the Company or any of
the Sellers in connection with the execution and delivery of this Agreement by
the Company and the Sellers or the consummation of the transactions contemplated
hereby.

Section 3.5Capitalization; Subsidiaries.

(a)The authorized capital of the Company consists of 1,000,000 shares of capital
stock, all of which are designated as Common Stock. On the date hereof,
92,743.02 shares of Common Stock are issued and outstanding. The outstanding
shares of Common Stock are held of record and beneficially by the Persons set
forth on Schedule 3.5(a) in the amounts set forth opposite such Person’s name.
All of the issued and outstanding shares of capital stock of the Company have
been duly authorized, validly issued, are fully paid and are non-assessable, and
are free from any Liens, other than Permitted Liens.  None of the outstanding
shares of capital stock of the Company were issued in violation of any
agreement, arrangement or commitment to which the Sellers or the Company is a
party or is subject to or in violation of any preemptive or similar rights of
any Person.

(b)Except as set forth in Schedule 3.5(b), there are no (i) outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
capital stock of the Company, (ii) voting trusts, proxies or other agreements
among the Company’s shareholders with respect to the voting or transfer of the
Company’s capital stock, or (iii) outstanding or authorized options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the capital stock of the Company or obligating the
Company or the Sellers to issue or sell any shares of capital stock of, or any
other interest in, the Company.

(c)All Subsidiaries of the Company are listed on Schedule 3.5(c). Except as set
forth on Schedule 3.5(c), all of the issued and outstanding equity interests of
each Subsidiary of the Company are free and clear of all Liens except for
Permitted Liens. Except as set forth in Schedule 3.5(c), no Subsidiary of the
Company has any outstanding options or warrants relating to its equity interests
or any outstanding securities or obligations convertible into or exchangeable
for, or giving any Person any right to subscribe for or acquire from it, any of
its equity interests. Except as set forth in Schedule 3.5(c), with respect to
each Subsidiary there are no (i) outstanding obligations of any Subsidiary of
the Company to repurchase, redeem or otherwise acquire any of its equity
interests, (ii) voting trusts, proxies or other agreements among its
shareholders with respect to the voting or transfer of the equity interests or
(iii) outstanding or authorized

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options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to the equity interests of
any Subsidiary or obligating any of the Sellers, the Company or any Subsidiary
to issue or sell any equity interests of, or any other interest in, any
Subsidiary. All of the issued and outstanding equity interests of each
Subsidiary of the Company have been duly authorized, validly issued, are fully
paid and are non-assessable and are free from any Liens, other than Permitted
Liens.

Section 3.6Financial Statements; Undisclosed Liabilities.

(a)The Sellers have delivered to Parent the (i) (A) reviewed consolidated
statements of income, changes in stockholder’s equity and cash flows of the
Company and its Subsidiaries for the fiscal years ended March 31, 2016, 2017 and
2018 and (B) reviewed consolidated balance sheets of the Company and its
Subsidiaries as at such dates, and (ii) (A) unaudited interim consolidated
comparative statements of income, changes in stockholder’s equity and cash flows
for the period ending May 31, 2018 and (B) an unaudited interim comparative
consolidated balance sheet as of the end of such date (the financial statements
described in the foregoing clauses (i) and (ii), collectively, the “Company
Financial Statements”).  The Company Financial Statements were derived from the
books and records of the Company and its Subsidiaries and present fairly, in all
material respects, the consolidated financial position and consolidated results
of operations and cash flows of the Company and its consolidated Subsidiaries as
of the respective dates or for the respective periods set forth therein, all in
conformity with GAAP, except as otherwise noted therein or on Schedule 3.6(a),
and subject, in the case of the unaudited interim financial statements, to the
absence of footnotes and to normal year-end adjustments.

(b)Except as disclosed in the Company Financial Statements or in Schedule
3.6(b), the Company and the Subsidiaries have no liabilities or financial
commitments or obligations of any nature whatsoever, asserted or unasserted,
known or unknown, absolute or contingent, accrued or unaccrued, matured or
unmatured, required to be reflected or reserved on a balance sheet (or disclosed
in the footnotes thereto) prepared in accordance with GAAP, except for (i) those
which have been incurred in the ordinary course of business in a manner
consistent with the Company’s or the applicable Subsidiary’s past practices;
(ii) liabilities or obligations for performance under Contracts; or
(iii) liabilities, potential liabilities or financial obligations disclosed
specifically as such in this Agreement or the Schedules to this Agreement.

Section 3.7Absence of Certain Developments.  Other than the sale process
conducted by the Company and its affiliates (including the transactions
contemplated by this Agreement), as expressly permitted by this Agreement, or in
the ordinary course of business consistent with past practice or as set forth in
Schedule 3.7, since April 1, 2018 until the date hereof, there has not been,
with respect to the Company, any:

(a)event, occurrence or development that has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)amendment of the Articles of Incorporation, bylaws or other organizational
documents of the Company;

(c)split, combination or reclassification of any shares of capital stock of the
Company (or, in the case of the Subsidiaries, the equity securities of each such
Subsidiary);

(d)issuance, sale or other disposition of any of its capital stock, or grant of
any options, warrants or other rights to purchase or obtain (including upon
conversion, exchange or exercise) any of its capital stock;

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(e)declaration or payment of any cash or non-cash dividends or distributions on
or in respect of the capital stock of the Company (or, in the case of the
Subsidiaries, the equity securities of each such Subsidiary);

(f)material change in any method of accounting or accounting practice of the
Company, except as required by GAAP or as disclosed in the notes to the Company
Financial Statements;

(g)material change in the Company’s cash management practices and its policies,
practices and procedures with respect to collection of accounts receivable,
establishment of reserves for uncollectible accounts, accrual of accounts
receivable, inventory control, prepayment of expenses, payment of trade accounts
payable, accrual of other expenses, deferral of revenue and acceptance of
customer deposits;

(h)incurrence, assumption or guarantee of any indebtedness for borrowed money
except unsecured current obligations or liabilities incurred in the ordinary
course of business consistent with past practice;

(i)transfer, assignment, sale or other disposition of any of the assets shown or
reflected in the Company Financial Statements or cancellation of any debts or
entitlements;

(j)transfer, assignment or grant of any license or sublicense of any material
rights under or with respect to any Company Intellectual Property Rights (other
than non-exclusive licenses granted by the Company or any of its Subsidiaries in
the ordinary course of business);

(k)material damage, destruction or loss (whether or not covered by insurance) to
its property;

(l)capital investment in, or any loan to, any other Person;

(m)acceleration, termination, material modification to or cancellation of any
material Contract (other than any Company Benefit Plan) to which the Company is
a party or by which it is bound, or entry into a material Contract (other than
any Company Benefit Plan);

(n)capital expenditures in excess of $75,000;

(o)imposition of any Lien upon any of the Company properties, units or assets,
tangible or intangible;

(p)except as otherwise specified on Schedule 3.7(p) (i) grant of any bonuses,
whether monetary or otherwise, or increase in any wages, salary, severance,
pension or other compensation or benefits in respect of its employees, officers,
directors, consultants or independent contractors, other than (A) as provided
for in any written agreements, programs or policies or Company Benefit Plan, (B)
as required by applicable Law or (C) in connection with a new hire or a
promotion, (ii) entry into or amendment of any written employment agreement or
change in the written terms of employment for any employee (other than in
connection with a new hire, a promotion or a demotion) or any involuntary
termination of any employees (other than for cause), or (iii) acceleration of
the vesting or payment of any compensation or benefit for any employee, member,
manager, consultant or independent contractor, other than as provided for in any
written agreements, programs or policies or Company Benefit Plan or as required
by applicable Law;

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(q)except as otherwise specified on Schedule 3.7(q), adoption, modification or
termination of any: (i) written Company policies concerning employment,
severance or retention of employees, (ii) written Contracts or other written
agreements concerning the officers of the Company with respect to such officers’
employment with the Company, (iii) Company Benefit Plan or (iv) collective
bargaining or other agreements with a Union other than as provided for in any
written agreements or required by applicable Law, in each case, the effect of
which would have a material effect on the Company’s business;

(r)loan to (or forgiveness of any loan to) any of its shareholders, directors,
officers or employees;

(s)except as otherwise specified on Schedule 3.7(s), entry into a new line of
business or abandonment or discontinuance of existing lines of business;

(t)adoption of any plan of merger, consolidation, reorganization, liquidation or
dissolution or filing of a petition in bankruptcy under any provisions of
federal or state bankruptcy Law or consent to the filing of any bankruptcy
petition against it under any similar Law;

(u)except as set forth in Schedule 3.7(u), purchase, lease or other acquisition
of the right to own, use or lease any property or assets for an amount in excess
of $200,000.00 (in the case of a lease, per annum), except in the ordinary
course of business consistent with past practice;

(v)acquisition by merger or consolidation with, or by purchase of a substantial
portion of the assets or stock of, any business or any Person or any division
thereof;

(w)action by the Company or any of its Subsidiaries to make, change or rescind
any Tax election, amend any Tax Return or take any other similar action that
would have the effect of causing a material change in any Tax liability or Tax
asset of Parent, the Company or any of its Subsidiaries in respect of any
Post-Closing Tax Period; or

(x)taking of any action or omitting to take any action that would result in any
of the foregoing.

Section 3.8Compliance with Laws; Governmental Authorizations; Licenses;
Etc.  Except as set forth in Schedule 3.8, the Company and its Subsidiaries are
in compliance with all applicable laws, rules, regulations, codes, ordinances or
orders of all Governmental Authorities, except for noncompliance which would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 3.8, the Company and its
Subsidiaries have all permits, licenses, approvals, certificates and other
authorizations, and have made all notifications, registrations, certifications
and filings with all Governmental Authorities, required for the operation of its
business as currently conducted, except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except as
set forth in Schedule 3.8, there is no action, case or Proceeding pending or, to
the Sellers’ Knowledge, threatened by any Governmental Authority or other Person
with respect to (i) any alleged violation by the Company or its Subsidiaries of
any statute, law, rule, regulation, code, ordinance or order of any Governmental
Authority, or (ii) any alleged failure by the Company or its Subsidiaries to
have any permit, license, approval, certification or other authorization
required in connection with the operation of the business of the Company and its
Subsidiaries, except, in case of clause (i) and (ii), for any such violation or
failure as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

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Section 3.9Litigation.  Except as set forth in Schedule 3.9, there are no
material lawsuits, actions, Proceedings, claims or complaints by or before any
Governmental Authority, pending or, to the Sellers’ Knowledge, threatened
against the Sellers, the Company or its Subsidiaries (i) relating to the
Company, its Subsidiaries or their business or properties, or (ii) seeking to
challenge, prevent, enjoin  or otherwise delay the transactions contemplated
hereby. Except as set forth in Schedule 3.9, neither the Company nor its
Subsidiaries are subject to any order, writ, judgment, investigation or decree
of any court or Governmental Authority.

Section 3.10Taxes.

(a)Except as set forth on Schedule 3.10(a), (i) the Company and its Subsidiaries
have duly and timely filed, or caused to be filed, all Tax Returns required to
be filed by or with respect to them on or before the Closing Date (including any
Tax Returns of an Affiliated Group of which the Company or any of its
Subsidiaries was a member on or prior to the Closing Date), (ii) all such Tax
Returns have been prepared in compliance with all applicable laws and
regulations and are true, correct and complete and (iii) all Taxes owed by the
Company, any of its Subsidiaries or any Affiliated Group of which the Company or
any of its Subsidiaries was a member on or prior to the Closing Date (whether or
not shown as due on any Tax Return) have been timely paid, except any of the
foregoing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

(b)The Company and each of its Subsidiaries has withheld and paid all material
Taxes required to have been withheld and paid in connection with amounts paid or
owing by the Company or such Subsidiaries to any employee, independent
contractor, creditor, customer, shareholder or other party.

(c)Neither the Company nor any of its Subsidiaries (i) has been a member of an
Affiliated Group filing Tax Returns on an affiliated, consolidated, combined,
unitary or similar basis (other than a group the common parent of which was the
Company) or (ii) has any liability for the Taxes of any Person (other than the
Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local, or non-U.S. law), as a transferee or
successor.

(d)No claim has been made by any Tax Authority in any jurisdiction where the
Company (or any of its Subsidiaries) does not file Tax Returns that the Company
(or such Subsidiary) is, or may be, subject to Tax by that jurisdiction.

(e)No extensions or waivers of statutes of limitations have been given or
requested in writing with respect to any Taxes of the Company or any of its
Subsidiaries (except for any such extensions or waivers that have expired).

(f)All deficiencies asserted, or assessments made, against the Company or any of
its Subsidiaries as a result of any examinations by any Tax Authority have been
fully paid.

(g)Neither the Company nor any of its Subsidiaries has been a party during the
past five (5) years or is a party to any Action by any Tax Authority. There are
no Actions pending or threatened in writing by any Taxing Authority against the
Company or any of its Subsidiaries.

(h)Prior to the date hereof, the Company has delivered to Parent copies of all
federal, state, local and foreign income, franchise and similar Tax Returns of
the Company for all Tax periods ending after January 1, 2011.

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(i)There are no Liens for Taxes (other than for current Taxes not yet due and
payable or being contested in good faith by appropriate procedures and for which
there are adequate accruals or reserves on the Company Financial Statements)
upon the assets of the Company or any of its Subsidiaries.

(j)Neither the Company nor any of its Subsidiaries is a party to, or bound by,
any Tax indemnity, Tax-sharing or Tax allocation agreement.

(k)Neither the Company nor any of its Subsidiaries is a party to, or bound by,
any closing agreement or offer in compromise with any Tax Authority.

(l)No private letter rulings, technical advice memoranda or similar agreement or
rulings have been requested, entered into or issued by any Tax Authority with
respect to the Company or any of its Subsidiaries, which such ruling or
agreement will have continuing effect after the Closing Date.

(m)Neither the Company nor any of its Subsidiaries has agreed to make, or is
required to make, any adjustment under Section 481(a) of the Code or any
comparable provision of state, local or foreign Tax Laws by reason of a change
in accounting method or otherwise, nor has the Company agreed to make, or is
required to make, any such adjustment as a result of a change in accounting
method that could adversely affect the Company or any of its Subsidiaries.

(n)None of the Sellers are a “foreign person” as that term is used in Treasury
Regulations Section 1.1445-2.

(o)Neither the Company nor any of its Subsidiaries has, in the past five years,
been a “distributing corporation” or a “controlled corporation” in connection
with a distribution described in Section 355 or 361 of the Code.

(p)Neither the Company nor any of its Subsidiaries has engaged in any
transaction that could affect its Income Tax liability for any taxable year not
closed by the statute of limitations which is a “listed transaction” within the
meaning of Treasury Regulations Section 1.6011-4(b)(2).

(q)Neither the Company nor any of its Subsidiaries is required to include an
item of income, or exclude an item of deduction, for Tax purposes for any period
ending on or after the Closing Date as a result of (i) an installment sale
transaction occurring on or before the Closing Date governed by Section 453 of
the Code (or any similar provision of foreign, state or local Law); (ii) a
transaction occurring on or before the Closing Date reported as an open
transaction for U.S. federal Income Tax purposes (or any similar doctrine for
foreign, state or local Tax purposes); or (iii) prepaid amounts received on or
prior to the Closing Date. Neither the Company nor any of its Subsidiaries has
made an election (including a protective election) under Section 108(i) of the
Code to defer any income.

(r)The representations and warranties in Section 3.7(w), this Section 3.10,
Section 3.13, and Section 3.15(g) are the sole and exclusive representations and
warranties of the Sellers concerning Tax matters.

For the avoidance of doubt, the representations and warranties made in Sections
3.7(w), 3.13(c), 3.15(g) and this Section 3.10, in each case to the extent such
representations and warranties explicitly relate to Taxes (such representations
and warranties, to such extent, the “Tax Representations”), are true and correct
and are the only representations and warranties made by the Company with respect
to matters related to Taxes.  Nothing in this Article III or otherwise in this
Agreement shall be construed as a representation or warranty with respect to (i)
the amount or availability of any credit, loss or other Tax attribute of the
Company or any of its Subsidiaries for any Tax period (or portion thereof)
beginning after

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the Closing Date, (ii) except with respect to Section 3.10(j), (k), (l), (m) and
(o) the Taxes attributable to any Tax period (or a portion thereof) beginning
after the Closing Date, (iii) whether any particular Tax position that may be
taken (or any particular determination that may be made as to whether any
particular Tax may apply) after the Closing will be respected, or (iv) the Tax
Returns for, or Taxes required to be paid with respect to, any taxable period
which begins before and end on or after the Closing Date.  

Section 3.11Environmental Matters.

(a)Except as set forth on Schedule 3.11(a) and except as would not reasonably be
expected to have a Material Adverse Effect, the Company and its Subsidiaries are
and have been in compliance with all Environmental Laws (including those
relating to the use, supply, treatment and discharge of water and waste water to
and from any real property currently owned, operated or leased by the Company)
and have not, and the Sellers have not, received from any Person any: (i)
Environmental Notice or written notice of Environmental Claim; or (ii) written
request for information pursuant to Environmental Law, which, in each case,
either remains pending or unresolved, or is the source of ongoing obligations or
requirements beyond those imposed by Environmental Law.

(b)Except as set forth on Schedule 3.11(b), the Company and its Subsidiaries
have obtained and are in material compliance with all Environmental Permits, and
have made all notifications, registrations, certifications and filings with all
Governmental Authorities, required by Environmental Law for the ownership,
lease, operation or use of the business or assets of the Company as currently
conducted and all such Environmental Permits are valid and in full force and
effect, except for any failures to so comply as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.  There
is no condition, event or circumstance that exists and no event has occurred
that would reasonably be expected to prevent or impede, after the Closing Date,
the ownership, lease, operation or use of the business or assets of the Company
as currently conducted under the existing Environmental Permits.  No event has
occurred that, with or without notice or lapse of time or both, would reasonably
be expected to result in the revocation, suspension, lapse or limitation of any
Environmental Permit currently possessed by the Company or its Subsidiaries.

(c)Except as set forth on Schedule 3.11(c), there has been no release of
Hazardous Substances directly caused by the Company, its Subsidiaries or, to the
Sellers’ Knowledge, any other Person at any of the Owned Property or Leased
Property, in each case which would reasonably be expected to (i) result in an
Environmental Claim against the Sellers or the Company, (ii) require Remedial
Action by the Company under Environmental Law or (iii) result in a violation by
the Company or any of its Subsidiaries of Environmental Law or the terms of any
Environmental Permit, in each case of (i), (ii) and (iii) which would reasonably
be expected to have a Material Adverse Effect.

(d)Except as set forth on Schedule 3.11(d) and except as would not reasonably be
expected to have a Material Adverse Effect, to the Seller’s Knowledge, the
Company has not directly transported, stored, treated or disposed of, and the
Company has not arranged or granted express permission for any other Person to
transport, store, treat or dispose of, any Hazardous Substances related or not
to the business to or at any location designated for Remedial Action pursuant to
Environmental Laws.

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(e)The Company has been in material compliance with Environmental Laws and all
agreements with, and permits issued by, any Governmental Authority relating to
the use, supply, treatment and discharge of water and waste water to and from
any real property currently owned, operated or leased by the Company.  For the
avoidance of doubt, the representations and warranties in this Section 3.11
shall apply solely and exclusively to actions taken or controlled directly by
the Seller or the Company and shall not be deemed to apply to any actions taken
or controlled by any third party, including any Governmental Authority.

(f)The representations and warranties in this Section 3.11 are the sole and
exclusive representations and warranties of the Sellers and the Company
concerning environmental matters including, without limitation, matters arising
under Environmental Laws.

Section 3.12Employee Matters.

(a)Sellers have made available to Parent a list of all persons who are
employees, consultants, or independent contractors of the Company as of the date
hereof and sets forth for each such individual the following: (i) name; (ii)
title or position (including whether full or part time); (iii) hire date; (iv)
current annual base compensation rate; (v) commission, bonus or other
incentive-based compensation; and (vi) employer.  At least five Business Days
prior to the Closing Date, Seller shall make available to Parent any updated
list to reflect any newly hired employees, and any employees who have suffered
an employment loss within the meaning of the WARN Act between the date hereof
and the Closing Date.  All compensation, including wages, commissions and
bonuses, payable to employees, consultants, or independent contractors of the
Company and its Subsidiaries for services performed on or prior to the date
hereof have been paid in all material respects (or accrued in all material
respects consistent with past practice on the balance sheet of the Company and
otherwise accrued on the books of the Company and its Subsidiaries as of the
Closing Date).

(b)Except as set forth in Schedule 3.12(b), the Company is not, and has not been
for the past three years, a party to, bound by, or negotiating any collective
bargaining agreement or other Contract with a union, works council or labor
organization (collectively, “Union”), and there is not, and has not been for the
past three years, any Union representing or purporting to represent any employee
of the Company, and, to Seller’s Knowledge, no Union or group of employees is
seeking or has sought within the past three years to organize employees for the
purpose of collective bargaining.  For the past three (3) years, there has not
been to Seller’s Knowledge any threat of, any strike, slowdown, work stoppage,
lockout, concerted refusal to work overtime or other similar labor disruption or
dispute affecting the Company or any of its employees pending or, to the
Seller’s Knowledge, threatened.

(c)The Company is and has been in compliance in all material respects with the
terms of the collective bargaining agreements and other Contracts listed on
Schedule 3.12(c) and all applicable Laws pertaining to employment and employment
practices, including all Laws relating to labor relations, equal employment
opportunities, fair employment practices, employment discrimination, harassment,
retaliation, reasonable accommodation, disability rights or benefits,
immigration, wages, hours, overtime compensation, child labor, hiring, promotion
and termination of employees, working conditions, meal and break periods,
privacy, health and safety, workers’ compensation, paid sick leave, leaves of
absence and unemployment insurance. All individuals characterized and treated by
the Company as consultants or contractors are properly treated as independent
contractors under all applicable laws.  Except as required by applicable law,
all employees classified as exempt under the Fair Labor Standards Act and state
and local wage and hour laws are properly classified in all material
respects.  There are no Actions against the Company pending, or to Seller’s
Knowledge, threatened to be brought or filed, by or with any Governmental
Authority or arbitrator in connection with the employment of any current or
former applicant, employee, consultant or independent contractor of the Company,
including, without limitation,

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any claim relating to unfair labor practices, employment discrimination,
harassment, retaliation, equal pay, wage and hours or any other employment
related matter arising under applicable laws.

(d)The Company has complied with the WARN Act, and it has no plans to undertake
any action in the future that would trigger the WARN Act (excluding any actions
taken after the Closing at the direction of Parent).

Section 3.13Employee Benefit Matters.

(a)Schedule 3.13(a) contains a true and complete list, as of the date of this
Agreement, of each pension, benefit, retirement, compensation, profit-sharing,
deferred compensation, incentive, performance award, phantom equity, change in
control, retention, severance, vacation, paid time off, employment, material
fringe benefit and other similar agreement, plan, policy, program or
arrangement, in each case, whether or not reduced to writing and whether funded
or unfunded, including each “employee benefit plan” within the meaning of
Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject
to ERISA, which is maintained, sponsored, contributed to, or required to be
contributed to by the Company or an ERISA Affiliate thereof for the benefit of
any current or former employee, officer, director, independent contractor or
consultant of the Company or any spouse or dependent of such individual, or
under which the Company has any material liability, or with respect to which
Parent would reasonably be expected to have any material liability following the
Closing, contingent or otherwise (each, a “Company Benefit Plan”).

(b)With respect to each Company Benefit Plan, prior to the date hereof the
Company has made available to Parent accurate, current and complete copies of
each of the following: (i) where the Company Benefit Plan has been reduced to
writing, the plan document together with all amendments thereto; (ii) where the
Company Benefit Plan has not been reduced to writing, a written summary of all
material plan terms; (iii) where applicable, copies of any trust agreements or
other funding arrangements, custodial agreements, insurance policies and
contracts, and administration agreements and similar agreements, currently in
effect; (iv) copies of any current summary plan description and summaries of
material modifications thereto, and current employee handbooks; (v) in the case
of any Company Benefit Plan that is intended to be qualified under Section
401(a) of the Code, a copy of the most recent determination, opinion or advisory
letter from the Internal Revenue Service; (vi) in the case of any Company
Benefit Plan for which a Form 5500 is required to be filed, a copy of the most
recently filed Form 5500, with schedules thereto attached; (vii) actuarial
valuations and audit reports, as applicable, related to any Company Benefit Plan
with respect to the two most recently completed plan years; and (viii) copies of
material written notices, letters or other correspondence from the Internal
Revenue Service, Department of Labor or Pension Benefit Guaranty Corporation
relating to the Company Benefit Plan.

(c)Except as set forth in Schedule 3.13(c), each Company Benefit Plan has been
established, administered and maintained in accordance, in all material
respects, with its terms and in compliance, in all material respects, with all
applicable Laws (including ERISA and the Code) and, if applicable, its
respective funding requirements. Each Company Benefit Plan that is intended to
be qualified under Section 401(a) of the Code (a “Qualified Benefit Plan”) is so
qualified and has received a favorable and current determination letter from the
Internal Revenue Service, or with respect to a prototype or volume submitter
plan, can rely on an opinion or advisory letter from the Internal Revenue
Service, to the effect that such Qualified Benefit Plan is so qualified and that
the plan and the trust related thereto are exempt from federal income taxes
under Sections 401(a) and 501(a), respectively, of the Code, and nothing has
occurred within the past three years that would reasonably be expected to cause
the revocation of such letter from the Internal Revenue Service.

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(d)Except as set forth in Schedule 3.13(d), neither the Company nor any of its
Subsidiaries has incurred or reasonably expects to incur, as of the date of this
Agreement, either directly or indirectly, any material liability under Title I
or Title IV of ERISA or Section 4975 or Section 412 of the Code. Except as set
forth in Schedule 3.13(d), neither the Company nor any of its Subsidiaries
participates in a multiemployer plan as defined in Section 3(37) of ERISA, and
the transactions contemplated by this Agreement will not trigger multiemployer
plan withdrawal liability.

(e)Except as set forth in Schedule 3.13(e), with respect to each Company Benefit
Plan: (i) no such plan is a “multiple employer plan” within the meaning of
Section 413(c) of the Code or a “multiple employer welfare arrangement” (as
defined in Section 3(40) of ERISA); (ii) no such plan is a “defined benefit
plan” within the meaning of Section 3(35) of ERISA, and at no time in the past
six years has the Company or any Subsidiary been obligated to contribute to any
such plan, (iii) each plan that provides health benefits has been maintained and
operated in accordance with the applicable provisions of the Patient Protection
and Affordable Care Act of 2010, (iv) no Action has been initiated by the
Pension Benefit Guaranty Corporation to terminate any such plan or to appoint a
trustee for any such plan; (v) no such plan has failed to satisfy the minimum
funding standards of Section 302 or ERISA or Section 412 of the Code; and
(vi) no “reportable event,” as defined in Section 4043 of ERISA, has occurred
with respect to any such plan.

(f)Other than as required under Section 601 et. seq. of ERISA or other
applicable Law or as otherwise set forth in Schedule 3.13(f) , no Company
Benefit Plan provides post-termination or retiree health benefits to any
individual for any reason, and neither the Company nor any of its ERISA
Affiliates has any liability to provide post-termination or retiree health
benefits to any individual or has ever contracted or, to Seller’s Knowledge, has
ever represented or promised to any individual that such individual would be
provided with post-termination or retiree health benefits.

(g)Except as set forth in Schedule 3.13(g), there is no pending or, to Seller’s
Knowledge, threatened Action relating to a Company Benefit Plan (other than
routine claims for benefits), and no Company Benefit Plan has, within the three
years prior to the date hereof, been the subject of an examination or audit by a
Governmental Authority or the subject of an application or filing under, or is a
participant in, an amnesty, voluntary compliance, self-correction or similar
program sponsored by any Governmental Authority, in any case, that would
reasonably be expected to subject the Company or, with respect to any period on
or after the Closing Date, Parent or any of its affiliates, to a material
liability.

(h)Except as set forth in Schedule 3.13(h), each Company Benefit Plan that is
subject to Section 409A of the Code has been operated in compliance, in all
material respects, with Section 409A of the Code and all applicable regulatory
guidance.

(i)Except as required by this Agreement or as otherwise set forth in Schedule
3.13(i), neither the execution of this Agreement nor the consummation of any of
the transactions contemplated by this Agreement will (either alone or upon the
occurrence of any additional or subsequent events): (i) entitle any current or
former director, officer, employee, contractor or consultant of the Company to
any material severance pay or any other material payment; (ii) accelerate the
time of payment, funding or vesting, or increase the amount of, any material
compensation due to any such individual; (iii) limit or restrict the right of
the Company to merge, amend or terminate any Company Benefit Plan; (iv)
materially increase the amount payable under, or result in any other material
obligation pursuant to, any Company Benefit Plan; or (v) result in “excess
parachute payments” to any director, officer, employee, contractor or consultant
of the Company within the meaning of Section 280G(b) of the Code.

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Section 3.14Intellectual Property Rights.

(a)Except as set forth in Schedule 3.14(a), to the Sellers’ Knowledge, the
Company and its Subsidiaries own and possess all right, title and interest in
(other than license agreements executed in the normal course of business), or
have a license to use, all of the material Intellectual Property Rights used in
the conduct of the business of the Company and its Subsidiaries as currently
conducted, free and clear of Liens (other than Permitted Liens).  The Company
and its Subsidiaries have taken commercially reasonable actions to maintain
their ownership of the Company Intellectual Property Rights. The Company and its
Subsidiaries are in material compliance with all legal requirements applicable
to the Company Intellectual Property Rights and their ownership and use thereof.

(b)Schedule 3.14(b) sets forth a list of all Company Intellectual Property
Rights that are subject to any issuance, registration, application or other
filing by, to or with any Governmental Authority or authorized private registrar
in any jurisdiction, including registered trademarks, domain names and
copyrights, issued and reissued patents and pending applications for any of the
foregoing, in any case used in or necessary for the Company’s current business
or operations.  All required filings and fees related to Company Intellectual
Property Rights have been timely filed with and paid to the relevant
Governmental Authorities and authorized registrars, except to the extent that
any failure of the foregoing, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, and, to the Sellers’
Knowledge, all Company Intellectual Property Rights are otherwise in good
standing.

(c)Except as set forth in Schedule 3.14(c), as of the date hereof, there is no
pending written, or to the Sellers’ Knowledge, threatened claim against the
Company or any of its Subsidiaries by any third party contesting the validity,
enforceability, or ownership of any Company Intellectual Property Right. Except
as set forth on Schedule 3.14(c), the Company and its Subsidiaries in the past
five (5) years have not received any written notice that any of them has
infringed any Intellectual Property Rights of any third party, in any material
respect. Except as set forth in Schedule 3.14(c), to the Sellers’ Knowledge no
third party is infringing or misappropriating any of the Company Intellectual
Property Rights.

Section 3.15Contracts.  Schedule 3.15 sets forth all material contracts (except
for (i) purchase or service orders executed in the normal course of business
concerning amounts of less than $75,000 and (ii) any customer contracts
concerning amounts of less than $200,000), agreements, leases, permits or
licenses, to which, as of the date hereof, the Company or any Subsidiary is a
party or is otherwise bound, of the type described below (the “Contracts”):  

(a)all agreements or commitments for the purchase or lease by the Company or any
Subsidiary of vehicles, machinery, equipment, supplies or other personal
property other than those that are for amounts not in excess of $75,000;

(b)all material license, royalty or other agreements relating to any of the
Company Intellectual Property Rights;

(c)all agreements prohibiting the Company or any Subsidiary from freely engaging
in any material business;

(d)all agreements that require the Company to purchase its total requirements of
any product or service from a third party or that contain “take or pay”
provisions;

(e)all mortgages, indentures, notes, bonds or other agreements relating to
indebtedness (including, without limitation, guarantees) incurred or provided by
the Company or any Subsidiary in an amount in excess of $125,000;

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(f)all partnership agreements, joint venture agreements and franchise agreements
relating to the Company and its Subsidiaries;

(g)all agreements that provide for the indemnification by the Company or any of
its Subsidiaries of any Person or the assumption of any Tax, environmental or
other Liability of any Person;

(h)all contracts that relate to the acquisition or disposition of any business,
a material amount of stock or assets of any other Person or any real property
(whether by merger, sale of stock, sale of assets or otherwise), other than
non-disclosure or similar confidentiality agreements;

(i)all broker, distributor, dealer, manufacturer’s representative, franchise,
agency, sales promotion, market research, marketing consulting and advertising
Contracts to which the Company is a party and in which the amount remaining to
be paid by the Company is greater than $200,000;

(j)all agreements with employees, other than Company Benefit Plans;

(k)all contracts with independent contractors or consultants (or similar
arrangements) to which the Company is a party and which are not cancellable
without material penalty or without more than 90 days’ notice;

(l)all contracts that limit or purport to limit the ability of the Company to
compete in any line of business or with any Person or in any geographic area or
during any period of time;

(m)any agreements to which the Company is a party that provide for any joint
venture, partnership or similar arrangement by the Company;

(n)all collective bargaining agreements or contracts with any union or similar
labor organization to which the Company is a party;

(o)Material Leases;

(p)all shareholders’ agreements or other similar agreements, including the
Shareholders Agreement; and

(q)any other Contract that is material to the Company and not previously
disclosed pursuant to this Section 3.15.

Each Contract is a valid and binding agreement of the Company or a Subsidiary,
as applicable, enforceable against such Person in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting generally the enforcement of creditors’ rights and subject
to general principles of equity). Except as set forth in Schedule 3.15, the
Company or a Subsidiary and, to the Sellers’ Knowledge, each of the other
parties thereto, have performed all obligations required to be performed by them
under, and are not in default under, any of such Contracts and no event has
occurred which, with notice or lapse of time, or both, would constitute such a
default, except for any such non-performance or defaults which would not,
individually or in the aggregate, reasonably be expected to be material to the
Company and its Subsidiaries taken as a whole. The Sellers have made available
to Parent true and complete copies of all Contracts, including all amendments
thereto.

Section 3.16Insurance.  Schedule 3.16 sets forth a true and complete description
of all current policies or binders of fire, liability, product liability,
umbrella liability, real and personal property, workers’ compensation,
vehicular, directors’ and officers’ liability, fiduciary liability, property,
casualty and other

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forms of insurance maintained by the Company and its Subsidiaries as of the date
hereof relating to the assets, business, operations, employees, officers and
directors of the Company, other than any insurance relating to any Company
Benefit Plan (collectively, the “Insurance Policies”) and true and complete
copies of such Insurance Policies have been made available to Parent prior to
the date hereof. Neither the Sellers nor the Company has received any written
notice of cancellation of, premium increase with respect to, or alteration of
coverage under, any of such Insurance Policies. All premiums due on such
Insurance Policies have either been paid or, if due and payable prior to
Closing, will be paid prior to the Closing in accordance with the payment terms
of each Insurance Policy for the applicable time period prior to and ending on
the Closing Date.  All such Insurance Policies (a) are valid and binding in
accordance with their terms; and (b) have not been subject to any lapse in
coverage. Except as set forth on Schedule 3.16, there are no claims related to
the business of the Company pending under any such Insurance Policies as to
which coverage has been questioned, denied or disputed or in respect of which
there is an outstanding reservation of rights. None of the Sellers or the
Company is in default under, or has otherwise failed to comply with, in any
material respect, any provision contained in any such Insurance Policy. All such
Insurance Policies are in full force and effect as of the date hereof and will
continue in effect until Closing (or if such Insurance Policies are canceled or
lapse prior to Closing, renewals or replacements thereof will be entered into in
the ordinary course of business to the extent available on commercially
reasonable terms).  

Section 3.17Real Property.  Neither the Company nor any of its Subsidiaries owns
any real property. Schedule 3.17 sets forth (whether as lessee or lessor) a list
of all leases of real property (such real property, the “Leased Property”) to
which the Company or any Subsidiary is a party or by which it is bound, in each
case as of the date hereof (each a “Material Lease”, and collectively the
“Material Leases”) and the street address and lessee under each Material Lease.
Except as set forth on Schedule 3.17, each Material Lease is valid and binding
on the Company or a Subsidiary and, to the Sellers’ Knowledge, on the other
parties thereto (in each case, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting generally the enforcement of
creditors’ rights and subject to general principles of equity) and is in full
force and effect. Except as set forth on Schedule 3.17, the Company or a
Subsidiary and, to the Sellers’ Knowledge, each of the other parties thereto has
performed in all material respects all material obligations required to be
performed by it under each Material Lease. To the Sellers’ Knowledge, the Leased
Property complies with all applicable laws and is benefited by those licenses or
permits required to be maintained for the development, or use or occupancy of
any portion of Leased Property, except to the extent such failures to comply or
failures to benefit, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.  

Section 3.18Condition and Sufficiency of Assets.  The buildings, plants,
structures, furniture, fixtures, machinery, equipment, vehicles and other items
of tangible personal property of the Company are structurally sound, are in good
operating condition and repair (ordinary wear and tear excepted), and are
adequate for the uses to which they are being put, and none of such buildings,
plants, structures, furniture, fixtures, machinery, equipment, vehicles and
other items of tangible personal property is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are not material in
nature or cost. The buildings, plants, structures, furniture, fixtures,
machinery, equipment, vehicles and other items of tangible personal property
currently owned or leased by the Company, together with all other properties and
assets of the Company, are sufficient for the continued conduct of the Company’s
business after the Closing in substantially the same manner as conducted prior
to the Closing and constitute all of the rights, property and assets necessary
to conduct the business of the Company as currently conducted.

Section 3.19Related Party Transactions.  Except as set forth on Schedule 3.19,
none of the Company’s directors, executive officers or Sellers owning greater
than 5% of the issued and outstanding Common Stock is involved in any business
arrangement or relationship with the Company or any Subsidiary other than the
ownership of the Company’s capital stock and matters related thereto and other
than compensation arrangements entered into in the ordinary course of business,
and none of the

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Company’s directors, executive officers or 5% holders of Common Stock owns any
material property or right, tangible or intangible, which is used by the Company
or its Subsidiaries.

Section 3.20Brokers.  No Person is or will be entitled to a broker’s, finder’s,
investment banker’s, financial adviser’s or similar fee or commission from the
Company or its Subsidiaries in connection with this Agreement or any of the
transactions contemplated hereby.

Section 3.21Inventory.  All inventory of the Company, whether or not reflected
in the Company Financial Statements, consists of a quality and quantity usable
and salable in the ordinary course of business consistent with past practice,
except for obsolete, damaged, defective or slow moving items that have been
written off or written down to fair market value or for which adequate reserves
have been established.  All such inventory is owned by the Company free and
clear of all Liens, and no inventory is held on a consignment basis.  The
quantities of each item of inventory (whether raw materials, work-in-process or
finished goods) are not excessive, but are reasonable in the present
circumstances of the Company.

Section 3.22Accounts Receivable.  The accounts receivable reflected in the
balance sheet included in the most recent Company Financial Statements and the
accounts receivable arising after the date thereof (a) have arisen from bona
fide transactions entered into by the Company or its Subsidiaries involving the
sale of goods or the rendering of services in the ordinary course of business
consistent with past practice; (b) constitute only valid, undisputed claims of
the Company not subject to claims of set-off or other defenses or counterclaims
other than normal cash discounts or returns accrued in the ordinary course of
business consistent with past practice; and (c) subject to a reserve for bad
debts shown in the Company Financial Statements or, with respect to accounts
receivable arising after May 31, 2018, on the accounting records of the Company,
are collectible by their terms within 120 days after the due date for such
accounts receivable.  The reserve for bad debts shown in the Company Financial
Statements or, with respect to accounts receivable arising after May 31, 2018,
on the accounting records of the Company, have been determined in accordance
with GAAP, consistently applied, subject to normal year-end adjustments and the
absence of disclosures normally made in footnotes to the Company Financial
Statements.

Section 3.23Customers and Suppliers.

(a)Schedule 3.23(a) lists the ten largest suppliers (by aggregate dollar amount)
of goods and/or services to the Company during the twelve-month period ended May
31, 2018 (collectively, the “Material Suppliers”), and provides the aggregate
amount for which the Company was invoiced during such period by each such
Material Supplier.  Except as set forth on Schedule 3.23(a), to the Seller’s
Knowledge, the Company has not received any notice that any of its Material
Suppliers has ceased, or intends to cease, to supply goods or services to the
Company or to otherwise terminate or materially reduce its relationship with the
Company

(b)Schedule 3.23(b) lists the ten largest customers (by aggregate dollar amount)
of goods and/or services purchased from the Company during the twelve-month
period ended May 31, 2018 (collectively, the “Material Customers”), and provides
the aggregate amount for which such Material Customer was invoiced for such
period by the Company.  Except as set forth on Schedule 3.23(b), to the Seller’s
Knowledge, the Company has not received any notice that any of its Material
Customers has ceased, or intends to cease after the Closing, to use its goods or
services or to otherwise terminate or materially reduce its relationship with
the Company.

Section 3.24Books and Records.  True, correct and complete copies of all of the
minute books of the Company and the Subsidiaries have been made available to
Parent prior to the date hereof.  The minute books of the Company contain
accurate and complete records of all meetings, and actions taken by

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written consent of, the Board of Directors of the Company, and no meeting, or
action taken by written consent, of the Board of Directors of the Company has
been held for which minutes have not been prepared and are not contained in such
minute books.  At the Closing, all of the books and records referred to in this
Section 3.24 will be in the possession of the Company and such records will be
in compliance with applicable Law in all material respects.

Section 3.25Product Warranties and Services.  Except for routine customer
inquiries, service requests, complaints and returns which have not involved,
individually or in the aggregate, material obligations or sums of money, all
products distributed, sold or delivered by the Company or Subsidiaries since
January 1, 2016, have been in conformity in all material respects with all
express warranties made by the Company or its Subsidiaries. There are no
material written claims pending, or to the Knowledge of the Sellers threatened,
against the Company for any warranty obligations. The Company has made available
to Parent complete copies of all of the current forms of product warranties of
the Company or Subsidiaries, and, except as set forth in such current product
warranties, neither the Company nor any Subsidiary is obligated to indemnify any
Person for any breach of warranty related to the sale of any products or
services provided by the Company or Subsidiaries. Since January 1, 2016, there
have been no recalls ordered by any Governmental Authority or voluntary
withdrawals with respect to any product of the Company or its Subsidiaries, and
except as disclosed in Schedule 3.25 since January 1, 2016, there has been no
proceeding against or involving the Company or its Subsidiaries, arising out of
injury to person or property alleged to be caused either by failure of the
Company’s or Subsidiaries’ products to conform to express or implied warranties
or by the Company’s or Subsidiaries’ failure to warn of defects in such
products, which has given rise or is likely to give rise to material liability
on the part of the Company or Subsidiaries. To the Knowledge of Sellers, there
is no fact relating to any product of the Company or Subsidiaries that would
reasonably be expected to lead to a product recall or voluntary withdrawal.

Section 3.26Banking Facilities.  Schedule 3.26 sets forth a true, correct and
complete list of (i) each bank, trust company or similar financial institution
with which the Company has an account or safety deposit box or other
arrangement, (ii) any numbers or other identifying codes of such accounts,
safety deposit boxes or such other arrangements maintained by Company thereat,
(iii) the name of each Person authorized to draw thereon or have access thereto,
and (iv) the name of each Person holding a power of attorney from the Company
and a summary of the terms or copy thereof.

Section 3.27No Additional Representations.  EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN ARTICLE III OF THIS AGREEMENT OR IN ANY OFFICER’S CERTIFICATE DELIVERED
AT THE CLOSING, THE SELLERS EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES
OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, INCLUDING AS TO THE CONDITION, VALUE
OR QUALITY OF THE BUSINESS OR THE ASSETS OF THE COMPANY AND/OR ITS SUBSIDIARIES,
AND THE SELLERS SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY OF
MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH
RESPECT TO SUCH ASSETS OR BUSINESS, OR ANY PART THEREOF, OR AS TO THE
WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR
PATENT, IT BEING UNDERSTOOD THAT SUCH SUBJECT ASSETS ARE BEING ACQUIRED “AS IS,
WHERE IS” ON THE CLOSING DATE, AND IN THEIR PRESENT CONDITION, AND PARENT SHALL
RELY ON ITS OWN EXAMINATION AND INVESTIGATION THEREOF.

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Article IV

REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE

REPRESENTATIVE RELATING TO THE SELLERS

AND THE SECURITIES OF THE COMPANY

Each Seller, and, solely with respect to Section 4.6(c), the Representative,
severally but not jointly, represents and warrants to Parent, solely with
respect to such Seller or the Representative, as applicable, as of the date of
this Agreement (except that with respect to any representation or warranty that
is made as of a specific date, such representation and warranty is made solely
as of such date) as follows:

Section 4.1Organization; Authorization; No Conflicts.

(a)If such Seller is an individual, such Seller has the right, power and legal
capacity to execute and deliver the Transaction Documents to which he or she
will be a party, and to perform his or her respective obligations thereunder and
to consummate the transactions contemplated hereby.  

(b)If such Seller is not an individual: (i) such Seller is duly formed, validly
existing and in good standing under the laws of the state of its formation; (ii)
such Seller has the requisite power and authority to execute and deliver this
Agreement and the other Transaction Documents (to the extent a party thereto)
and to perform its respective obligations hereunder and thereunder; (iii) the
execution, delivery and performance of this Agreement and the other Transaction
Documents (to the extent a party thereto) by such Seller have been duly
authorized by all necessary corporate (or equivalent) action on the part of such
Seller; and (iv) the execution, delivery and performance of this Agreement and
the Transaction Documents (to the extent a party thereto) by such Seller and the
consummation of the transactions contemplated hereby and thereby do not and will
not conflict with or violate the formation or governing documents of such
Seller.

(c)The execution, delivery and performance by such Seller of this Agreement and
each other Transaction Documents to which such Seller is a party, and the
consummation of the transactions contemplated hereby do not and will not (i) if
such Seller is not an individual, contravene any provision contained in such
Seller’s charter or other organizational documents, (ii) violate or result in a
breach (with or without the lapse of time, the giving of notice or both) of or
constitute a default (with or without the lapse of time, the giving of notice or
both) under, or require the consent or approval of any third party under (A) any
contract, agreement, commitment, indenture, mortgage, lease, pledge, note, bond,
license, permit or other instrument or obligation to which such Seller is a
party or (B) assuming receipt, filing or satisfaction of the Consents set forth
in Section 4.3, any judgment, order, decree, statute, law, rule or regulation or
other restriction of any Governmental Authority, in each case to which such
Seller is a party or by which he or it is bound or to which any of his or its
assets or properties are subject, or (iii) result in the acceleration of, or
permit any Person to terminate, modify, cancel, accelerate or declare due and
payable prior to its stated maturity any material obligation of such Seller,
except in the case of clauses (ii) and (iii) above as would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
such Seller’s ability to consummate the transactions contemplated by this
Agreement or the other Transaction Documents (to the extent a party thereto).

Section 4.2Execution; Delivery; Enforceability.  This Agreement has been, and
the Transaction Documents to which such Seller is a party will be, duly executed
and delivered by such Seller and, when duly executed and delivered by the other
parties hereto and thereto, will constitute the legal, valid and binding
obligations of such Seller, enforceable against such Seller in accordance with
their respective terms (subject to Schedule 3.2 and applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting generally the
enforcement of creditors’ rights and subject to general principles of equity).

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Section 4.3Filings and Approvals.  Except for filings and approvals set forth in
Schedule 4.3, no notice to, filing with, or authorization, registration, consent
or approval of any Governmental Authority is necessary for the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby by such Seller.

Section 4.4Title to the Shares.  Such Seller owns and has good and valid title
to the shares of Common Stock set forth opposite such Seller’s name on Schedule
3.5(a), free and clear of all Liens except as set forth on Schedule 4.4, under
the Shareholders’ Agreement, or as may be imposed under federal or state
securities laws.

Section 4.5Litigation.  There are no lawsuits, actions, Proceedings, claims or
complaints by or before any Governmental Authority, pending or, to such Seller’s
Knowledge, threatened against such Seller seeking to challenge, prevent, enjoin
or otherwise delay the consummation of the transactions contemplated hereby or
under any other Transaction Document to which such Seller is a party.

Section 4.6Securities Law Matters.

(a)In the case of (1) WBF, LLC, (2) Stephan Lutter, (3) Tracie Jo Wright,
(4) Kellie Sue Lutter, (5) Pamela Lynne Lambert, (6) Daniel C. and Susan J.
Adkison, Trustees of the Adkison Family Trust UAD June 13, 2017, (7) James T.
Wright and Sondra S. Wright, Trustees of the James T. Wright Revocable Trust UAD
1/23/17, (8) James T. Wright and Sondra S. Wright, Trustees of the Sondra S.
Wright Revocable Trust UAD 1/23/17, and (9) the Charitable Seller (collectively,
the “Accredited Investor Sellers”):

(i)Such Accredited Investor Seller is a knowledgeable, sophisticated and
experienced investor and has sufficient knowledge and experience in evaluating
and making, and is qualified to evaluate and make, decisions with respect to
private investments in and dispositions of securities, including investments in
and dispositions of securities issued by Parent and Persons engaged in similar
activities, and is capable of evaluating the risks and merits associated with
the Parent Common Stock.

(ii)Such Accredited Investor Seller is an “accredited investor” as defined in
Rule 501(a) of Regulation D under the Securities Act.

(iii)Such Accredited Investor Seller acknowledges that it has received and had
the opportunity to review Parent’s most recent Annual Report on Form 10-K,
definitive proxy statement filed in connection with Parent’s most recent Annual
Report on Form 10-K, each of Parent’s Current Reports on Form 8-K filed with the
Securities and Exchange Commission (the “SEC”) since the date of filing of
Parent’s most recent Annual Report on Form 10-K, and the other information
required to be furnished to such Accredited Investor Seller pursuant to Rule
502(b) of Regulation D under the Securities Act.  Such Seller acknowledges and
agrees that it has had sufficient time and opportunity to ask questions and
receive answers from Parent concerning the terms of the issuance of Parent
Common Stock pursuant to this Merger Agreement and to obtain any additional
information pursuant to Rule 502(b)(v) of Regulation D under the Securities Act.

(iv)Such Accredited Investor Seller has sought independent legal, investment and
tax advice in connection with such Seller’s decision to acquire its share of the
Parent Common Stock.

(v)The financial situation of such Accredited Investor Seller is such that such
Seller can afford to bear the economic risk of holding the Parent Common Stock
for an indefinite period of time, and such Seller can afford to suffer the
complete loss of the Parent Common Stock to be issued to such Seller pursuant to
this Agreement and such Seller’s investment in Parent.

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(vi)Such Accredited Investor Seller acknowledges and understands that the Parent
Common Stock has not been and will not be registered with the SEC under the
Securities Act and has not been and will not be registered or qualified under
the securities laws of any U.S. or non-U.S. jurisdiction.

(vii)Such Accredited Investor Seller understands that the issuance of the Parent
Common Stock to the Sellers pursuant to this Agreement is intended to be exempt
from registration under the Securities Act and the securities laws of any U.S.
or non-U.S. jurisdiction. Such Seller further understands that the availability
of the exemptions from registration under the Securities Act relied upon by
Parent is based in part on the representations and warranties made by such
Seller in this Section 4.6.

(viii)Such Accredited Investor Seller is acquiring its share of the Parent
Common Stock solely for such Seller’s own account, for investment purposes, and
not with a view to, or for resale in connection with, any distribution of the
Parent Common Stock. Such Seller has not offered or sold, nor has such Seller
entered into any contract, undertaking, agreement or arrangement with any Person
to offer or sell, all or any portion of the Parent Common Stock to be issued to
such Seller pursuant to this Agreement and has no current intention of doing so.
Such Seller does not anticipate a need, either now or in the foreseeable future,
to sell the Parent Common Stock issued to such Seller pursuant to this
Agreement.

(ix)Such Accredited Investor Seller acknowledges that its share of the Parent
Common Stock is subject to substantial restrictions on transfer under applicable
law and, in particular, that such stock may not be sold, transferred or
otherwise disposed of by such Seller or such Seller’s successors or assigns
except as permitted under the Securities Act and the securities laws of any U.S.
jurisdiction pursuant to registration or exemption therefrom. In addition, such
Seller acknowledges that there is no obligation on the part of Parent or any
other Person to take any action to cause such stock to be registered under the
Securities Act or the securities laws of any U.S. jurisdiction or to facilitate
the sale, transfer or other disposition of such stock in compliance with any
such laws.

(x)Such Accredited Investor Seller acknowledges that, as a result of the
substantial restrictions on the transferability of its share of the Parent
Common Stock, such Seller will be required to bear the financial risks of an
investment in such stock for an indefinite period of time.

(xi)To the degree that an Accredited Investor Seller has appointed
Representative as such Seller’s “purchaser representative” (as such term is
defined in Rule 501(i) of Regulation D under the Securities Act), the foregoing
representations and warranties shall be modified and the provisions of Section
4.6(b) shall apply as if such Accredited Investment Seller was a Non-Accredited
Investor Seller, below.

(b)In the case of each of the Sellers other than the Accredited Investor Sellers
(collectively, the “Non-Accredited Investor Sellers”):

(i)Such Non-Accredited Investor Seller is relying on Representative and has
appointed Representative as such Non-Accredited Investor Seller’s “purchaser
representative” (as such term is defined in Rule 501(i) of Regulation D under
the Securities Act), in each case connection with evaluating the merits and
risks of such Non-Accredited Investor Seller’s decision to acquire its share of
the Parent Common Stock.

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(ii)Such Non-Accredited Investor Seller has sought, or has caused the
Representative to seek on such Non-Accredited Investor Seller’s behalf,
independent legal, investment and tax advice in connection with such
Non-Accredited Investor Seller’s decision to acquire its share of the Parent
Common Stock.

(iii)Such Non-Accredited Investor Seller acknowledges that it has received and
had the opportunity to review Parent’s most recent Annual Report on Form 10-K,
definitive proxy statement filed in connection with Parent’s most recent Annual
Report on Form 10-K, each of Parent’s Current Reports on Form 8-K filed with the
SEC since the date of filing of Parent’s most recent Annual Report on Form 10-K,
and the other information required to be furnished to such Non-Accredited
Investor Seller pursuant to Rule 502(b) of Regulation D under the Securities
Act.  Such Seller acknowledges and agrees that it has had sufficient time and
opportunity to ask questions and receive answers from Parent concerning the
terms of the issuance of Parent Common Stock pursuant to this Merger Agreement
and to obtain any additional information pursuant to Rule 502(b)(v) of
Regulation D under the Securities Act.

(iv)Such Non-Accredited Investor Seller is acquiring its share of the Parent
Common Stock solely for such Seller’s own account, for investment purposes, and
not with a view to, or for resale in connection with, any distribution of the
Parent Common Stock. Such Seller has not offered or sold, nor has such Seller
entered into any contract, undertaking, agreement or arrangement with any Person
to offer or sell, all or any portion of the Parent Common Stock to be issued to
such Seller pursuant to this Agreement and has no current intention of doing so.
Such Seller does not anticipate a need, either now or in the foreseeable future,
to sell the Parent Common Stock issued to such Seller pursuant to this
Agreement.

(c)In the case of the Representative:

(i)The Representative is a knowledgeable, sophisticated and experienced investor
and has sufficient knowledge and experience in evaluating and making, and is
qualified to evaluate and make, decisions with respect to private investments in
and dispositions of securities, including investments in and dispositions of
securities issued by Parent and Persons engaged in similar activities, and is
capable of evaluating the risks and merits associated with the Parent Common
Stock.

(ii)The Representative acknowledges and agrees that the Representative has been
appointed by each of the Non-Accredited Investor Sellers as such Non-Accredited
Investor Sellers’ “purchaser representative” (as such term is defined in Section
501(i) of Regulation D under the Securities Act) and that each such
Non-Accredited Investor Seller is relying on the Representatives representations
and warranties set forth in this Section 4.6(c) and on the knowledge,
sophistication and experience of the Representative in evaluating and making
decisions with respect to private investments in and dispositions of securities,
including investments in and dispositions of securities issued by Parent and
Persons engaged in similar activities.

(iii)The Representative has sought independent legal, investment and tax advice
in connection with the decision to acquire on behalf of the Non-Accredited
Investor Sellers such Non-Accredited Investor Sellers’ share of the Parent
Common Stock.

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(iv)The Representative has received and had the opportunity to review Parent’s
most recent Annual Report on Form 10-K, definitive proxy statement filed in
connection with Parent’s most recent Annual Report on Form 10-K, each of
Parent’s Current Reports on Form 8-K filed with the SEC since the date of filing
of Parent’s most recent Annual Report on Form 10-K, and the other information
required to be furnished to such the Sellers pursuant to Rule 502(b) of
Regulation D under the Securities Act.  The Representative acknowledges and
agrees that it has had sufficient time and opportunity to ask questions and
receive answers from Parent concerning the terms of the issuance of Parent
Common Stock pursuant to this Merger Agreement and to obtain any additional
information pursuant to Rule 502(b)(v) of Regulation D under the Securities Act.

(v)The Representative acknowledges and understands on behalf of the
Non-Accredited Investor Sellers that the Parent Common Stock has not been and
will not be registered with the SEC under the Securities Act and has not been
and will not be registered or qualified under the securities laws of any U.S. or
non-U.S. jurisdiction.

(vi)The Representative acknowledges on behalf of the Non-Accredited Investor
Sellers that the issuance of the Parent Common Stock to the Sellers pursuant to
this Agreement is intended to be exempt from registration under the Securities
Act and the securities laws of any U.S. or non-U.S. jurisdiction. The
Representative further acknowledges on behalf of the Non-Accredited Investor
Sellers that the availability of the exemptions from registration under the
Securities Act relied upon by Parent is based in part on the representations and
warranties made by the Sellers and the Representative in this Section 4.6.

(vii)The Representative acknowledges on behalf of the Non-Accredited Investor
Sellers that such Non-Accredited Investor Sellers’ share of the Parent Common
Stock is subject to substantial restrictions on transfer under applicable law
and, in particular, that such stock may not be sold, transferred or otherwise
disposed of by such Seller or such Seller’s successors or assigns except as
permitted under the Securities Act and the securities laws of any U.S.
jurisdiction pursuant to registration or exemption therefrom. In addition, the
Representatives acknowledges on behalf of the Non-Accredited Investor Sellers
that there is no obligation on the part of Parent or any other Person to take
any action to cause such stock to be registered under the Securities Act or the
securities laws of any U.S. jurisdiction or, except as set forth in Section
6.10(b), to facilitate the sale, transfer or other disposition of such stock in
compliance with any such laws.

(viii)The foregoing duties, obligations, representations and warranties of the
Representative on behalf of the Non-Accredited Investor Seller and the reliance
upon the Representative may also apply to any Accredited Investor Seller who has
appointed the Representative as the Accredited Investor Seller’s “purchaser
representative” (as such term is defined in Rule 501(i) of Regulation D under
the Securities Act).

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Article V

REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to each Seller as of the date of this Agreement
(except that with respect to any representation or warranty that is made as of a
specific date, such representation and warranty is made solely as of such date)
as follows:

Section 5.1Organization.

(a)Parent is a Texas corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation and has the corporate
power and authority to own or lease its property and assets and to carry on its
business as presently conducted. Parent has delivered or made available to the
Sellers true and complete copies of its charter and other organizational
documents (as currently in effect).

(b)Merger Sub is an Oregon corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of formation and has the
corporate power and authority to own or lease its property and assets and to
carry on its business as presently conducted. Parent has delivered or made
available to the Sellers true and complete copies of the charter and other
organizational documents (as currently in effect) of Merger Sub.

(c)LLC Sub is an Oregon limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation
and has the corporate power and authority to own or lease its property and
assets and to carry on its business as presently conducted. Parent has delivered
or made available to the Sellers true and complete copies of the charter and
other organizational documents (as currently in effect) of LLC Sub.

Section 5.2Authorization.  Each of Parent, Merger Sub and LLC Sub has the
corporate and limited liability company power and authority to execute and
deliver this Agreement and each Transaction Document to be executed by Parent,
Merger Sub or LLC Sub in connection herewith and to perform each of their
obligations hereunder and thereunder, all of which have been duly authorized by
all requisite corporate or limited liability company action, as applicable
(including any required board approvals). This Agreement and each other
agreement or instrument to be executed by Parent, Merger Sub or LLC Sub in
connection herewith has been duly authorized, executed and delivered by Parent,
Merger Sub or LLC Sub, as applicable, and, assuming that this Agreement has been
duly and validly authorized, executed and delivered by the Sellers and the
Representative, constitutes a valid and binding agreement of Parent and Merger
Sub, enforceable against Parent and Merger Sub in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting generally the enforcement of creditors’ rights and subject
to general principles of equity).

Section 5.3Non-contravention.  The execution, delivery and performance by
Parent, Merger Sub and LLC Sub of this Agreement and each other Transaction
Document, and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a violation or breach of, or
constitute a default under, any provision contained in the charter or other
organizational documents Parent, Merger Sub and LLC Sub, (ii) conflict with or
result in a violation or breach (with or without the lapse of time, the giving
of notice or both) of or constitute a default (with or without the lapse of
time, the giving of notice or both) under, or require the consent or approval of
any third party under (A) any contract, agreement, commitment, indenture,
mortgage, lease, pledge, note, bond, license, permit or other instrument or
obligation or (B) assuming receipt, filing or satisfaction of the Consents set
forth in Section 5.4, any judgment, order, decree, statute, law, rule or
regulation or other restriction of any Governmental Authority, in each case to
which Parent, Merger Sub or LLC Sub is a party or by which it is bound or to
which any of

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its assets or properties are subject, or (iii) result in the acceleration of, or
permit any Person to terminate, modify, cancel, accelerate or declare due and
payable prior to its stated maturity any material obligation of Parent, Merger
Sub or LLC Sub, except in the case of clauses (ii) and (iii) above as would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Parent, Merger Sub and LLC Sub to consummate
the transactions contemplated by this Agreement or the other Transaction
Documents (to the extent a party thereto).

Section 5.4No Consents.  No notice to, filing with, or authorization,
registration, consent or approval of any Governmental Authority is necessary for
the execution, delivery or performance of this Agreement or the consummation of
the transactions contemplated hereby by Parent, Merger Sub and/or LLC Sub.

Section 5.5Litigation.  There are no lawsuits, actions, Proceedings, claims or
complaints by or before any Governmental Authority, pending or, to the Knowledge
of Parent, Merger Sub or LLC Sub, threatened against Parent, Merger Sub or LLC
Sub seeking to challenge, prevent, enjoin or otherwise delay the consummation of
the transactions contemplated hereby or under any other Transaction Document to
which Parent, Merger Sub or LLC Sub is a party.

Section 5.6Financial Ability.  As of the date hereof, Parent has immediately
available funds necessary to consummate the transactions contemplated by this
Agreement.

Section 5.7Acknowledgement by Parent.

(a)Parent acknowledges that it has conducted an investigation, analysis and
evaluation of the business, assets, condition, operations and prospects of the
Company and its Subsidiaries based on documents and information obtained from
the Company and other sources and, in making its determination to enter into
this Agreement and to proceed with the transactions contemplated hereby, Parent
has relied on the results of such investigation, analysis and evaluation and the
representations, warranties, covenants and agreements expressly set forth in the
Transaction Documents.  

(b)Parent acknowledges and agrees that none of the Company, its affiliates nor
any other Person acting on behalf of the Company has made any representation or
warranty, express or implied except as expressly set forth in this Agreement or
the Schedules hereto or any other Transaction Document.  Parent further agrees
that none of the Company, its affiliates nor any other Person acting on behalf
of the Company will have or be subject to any liability, except as specifically
set forth in this Agreement, to Parent or any other Person resulting from the
distribution to Parent, for Parent’s use, of any such information, including any
information, document or material made available to Parent on CD-ROM, in certain
“data rooms,” management presentations or any other form in expectation of this
Agreement or the transactions contemplated hereby.  

(c)Parent acknowledges and agrees, on behalf of itself and each Parent
Indemnitee, that (i) it is reasonable for Parent to rely solely on the
representations or warranties of the Sellers specifically contained in this
Agreement; (ii) none of Parent or any of its affiliates are affiliated with,
related to, or have a fiduciary relationship with, any Seller or any of its
respective affiliates; and (iii) the Parent Indemnitees shall have a right to
indemnification solely as provided in Article VIII and shall have no claim or
right to indemnification with respect to any information, documents or materials
furnished by the Seller, the Company, any of their respective affiliates or any
of their respective representatives or otherwise made available to Parent,
except as set forth expressly in this Agreement or the Schedules.  

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Section 5.8Brokers.  No Person is or will be entitled to a broker’s, finder’s,
investment banker’s, financial adviser’s or similar fee from Parent, Merger Sub
or LLC Sub in connection with this Agreement or any of the transactions
contemplated hereby.

Article VI

COVENANTS AND AGREEMENTS

Section 6.1Interim Operating Covenant.  From the date hereof until the Closing,
unless Parent shall otherwise consent in writing and other than as required to
satisfy the conditions to Closing set forth in Sections 9.3(h) and (i), the
Company shall, and shall cause its Subsidiaries to, (a) operate its business in
accordance with applicable law and in the ordinary course of business, including
with respect to making capital expenditures and managing cash and working
capital, and use reasonable best efforts to preserve intact its current business
organization, maintain its material rights, and use reasonable best efforts to
keep available the services of its current officers and employees and preserve
its relationships with its customers, suppliers and others having business
dealings with it in such a manner that, in each case, its goodwill and ongoing
businesses are not impaired in any material respect and (b) not take any action
that, if taken prior to the date hereof, would have required disclosure pursuant
to Section 3.7.

Section 6.2Confidentiality; Access and Information.

(a)For a period of seven (7) years from and after the Closing, each Seller and
the Representative shall hold, and shall use its reasonable best efforts to
cause its or their respective representatives to hold, in confidence any and all
confidential information of the Company, whether written or oral, except to the
extent such information: (i) is, was or becomes generally available to or known
by the public other than as a result of a breach by such Seller of this Section
6.2; (ii) is, was or becomes available to such Seller on a nonconfidential basis
from a source other than the Company, its officers, directors, employees, agents
or advisors; or (iii) is required by law or judicial process to be disclosed;
provided that nothing in this Section 6.2(a) shall prohibit any Seller or the
Representative from disclosing any information of the Company to such Seller’s
or the Representative’s respective officers, directors, employees, investors,
agents, counsel or advisors.

(b)For a period of seven (7) years following the Closing, Parent shall retain
the books and records (including personnel files) of the Company relating to
periods prior to the Closing in a manner reasonably consistent with the past
practices of the Company. Parent shall make available and shall cause the
Company to make available to the Representative and its accountants, agents and
representatives, upon reasonable notice, all such books and records of the
Company and its Subsidiaries during normal business hours to the extent
requested by the Representative in connection with any purposes contemplated by
this Agreement.

Section 6.3Public Announcements.  The timing and content of all announcements
regarding any aspect of this Agreement or the transactions contemplated hereby
to the financial community, government agencies, employees or the general public
shall be mutually agreed upon in advance by the Representative and Parent;
provided that each party hereto may make any such announcement which it in good
faith believes, based on advice of counsel, is required by law (including the
Securities Exchange Act of 1934 and applicable stock exchange requirements).
Notwithstanding the foregoing, each party shall use its reasonable best efforts
to consult with the other parties prior to any such announcement to the extent
practicable, and shall in any event promptly provide the other parties hereto
with copies of any such announcement.

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Section 6.4Employee Benefits.

(a)Parent hereby agrees that, for a period of at least twelve (12) months
following the Closing Date, Parent shall or shall cause its affiliates, the
Surviving Corporation and its Subsidiaries to provide to employees of the
Company and its Subsidiaries who are employed by the Surviving Corporation,
Parent or their affiliates immediately following the Closing Date (the
“Continuing Employees”) employee benefit plans, programs and arrangements that
are materially consistent with the employee benefit plans, programs and
arrangements provided by Company and its Subsidiaries to Continuing Employees
immediately prior to the Closing Date; provided, however, that, nothing in this
Agreement shall be construed to impose any additional obligation on Parent or
the Surviving Corporation to retain any of the Continuing Employees after the
Closing Date.

(b)Parent hereby agrees that, from and after the Closing Date, Parent shall
cause all Continuing Employees to receive credit for all service with the
Company or its Subsidiaries prior to the Closing Date (i) for eligibility,
vesting and benefit accrual purposes and (ii) for purposes of vacation and
severance benefits, under any employee benefit plan, program or arrangement
established or maintained by the Company or any of its Subsidiaries or by Parent
or any of its affiliates on or after the Closing Date, whether or not such plan,
program or arrangement is a Company Benefit Plan (the “New Plans”). In addition,
Parent hereby agrees that Parent shall, or shall cause its affiliates, the
Surviving Corporation and its Subsidiaries to (i) cause to be to waived all
pre-existing condition exclusions, coverage exclusions, actively-at-work
requirements, eligibility waiting periods, evidence of insurability requirements
and other similar limitations under any New Plan to the extent waived or
satisfied under a comparable Company Benefit Plan, and (ii) cause any covered
expenses incurred or payments made under any Company Benefit Plans on or before
the Closing Date by any Continuing Employee (or covered dependent thereof) to be
taken into account for purposes of satisfying applicable deductible, coinsurance
and maximum out-of-pocket provisions after the Closing Date under any applicable
New Plan.

(c)Parent hereby agrees to cause the Surviving Corporation and its Subsidiaries,
from and after the Closing, to continue to be bound by and comply with the terms
of all agreements, written employment agreements and severance agreements of the
Company and its Subsidiaries existing on the date hereof except to the extent
this Agreement calls for a termination of such agreement.

(d)Nothing contained herein shall be deemed to be the adoption of, or an
amendment to, any employee benefit plan (as that term is defined in Section 3(3)
of ERISA), or otherwise limit the right of the Company, Parent or any of their
respective affiliates to amend, modify or terminate any such employee benefit
plan.

(e)This Section 6.4 shall not create any third party beneficiary or other rights
in any Continuing Employee or any other employee or former employee of the
Company or any of its Subsidiaries (including any beneficiary or dependent of
any of the foregoing) in respect of continued employment (or resumed employment)
with, or any pay or employee benefits from, Parent, the Company or any of their
respective affiliates.

Section 6.5Indemnification of Directors and Officers; Tail Policy.  For a period
of six years after the Effective Time, the Surviving Corporation shall honor to
honor all rights to indemnification, advancement of expenses, elimination of
liability and exculpation from liabilities for acts or omissions occurring at or
prior to the Effective Time (including the transactions contemplated by this
Agreement) now existing in favor of the directors and officers of the Company as
and to the extent provided in the governing documents of the Company as in
effect on the date hereof and set forth in Schedule 6.5, and shall not amend,
repeal or otherwise modify such governing documents in any manner that would
adversely affect any such rights thereunder without the written consent of the
person benefited thereby, in each case

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unless and to the extent otherwise provided by applicable law. Further, the
Company shall obtain prior to the Closing an irrevocable six (6) year “tail” or
“run-off” insurance policy with respect to directors' and officers' fiduciary
liability that is tied to, and has the same general terms and limits as, the
existing directors’ and officers’ fiduciary liability policy (the “Tail Policy”)
in form and substance reasonably acceptable to the Representative.

Section 6.6Exclusivity.  Until the Closing or the earlier termination of this
Agreement, none of Representative, the Company or the Sellers shall discuss,
negotiate or enter into any agreement with any Person other than Parent
regarding the terms of any sale of the Company or any of its Subsidiaries or any
securities or assets thereof, whether such transaction is structured as a sale
of stock or assets, a merger, reorganization, recapitalization or otherwise.

Section 6.7Interim Tax Covenant.  Until the Closing, the Company shall not, and
shall cause its Subsidiaries not to, without the prior written consent of Parent
(which consent shall not be unreasonably withheld), make any material election
relating to Taxes, change any election relating to Taxes, enter into any closing
agreement, surrender any right to claim a refund of an amount of Taxes, settle
or compromise any Tax claim or assessment, file any amended Tax Return, consent
to any extension or waiver of the limitation period applicable to any Tax claim
or assessment, incur any liability for Taxes outside the ordinary course of
business, fail to pay any Tax that becomes due and payable (including any
estimated Tax payments), or adopt or change any Tax accounting method, provided
that if such election, change, agreement, surrender, settlement, compromise,
amendment, consent, incurrence, failure, adoption or change is required by
applicable law, then the Parent’s refusal to provide written consent to such
would not be reasonable.

Section 6.8Further Assurances.  Each of Parent, Representative and the Company
shall execute and deliver such further instruments of conveyance and transfer
and take such additional action as reasonably requested by each other party, to
consummate, confirm or evidence the transactions contemplated hereby and carry
out the purposes of this Agreement.

Section 6.9Resignations.  The Sellers shall deliver to Parent written
resignations, effective as of the Closing, of the members of the Board of
Directors of the Company, the governing board of each of the Subsidiaries,
except those designated by Parent in writing prior to the Closing Date that
shall continue as directors or members of the governing board of the Company or
any of its Subsidiaries following the Closing.

Section 6.10Legend and Securities Compliance.

(a)The Sellers agree that all certificates or other instruments representing the
Parent Common Stock subject to this Agreement will bear legends substantially to
the following effect:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

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(b)In connection with a sale or transfer of the Parent Common Stock by a Seller
in reliance on Rule 144 promulgated under the Securities Act, the applicable
Seller or its broker shall deliver to the transfer agent (which, for the
avoidance of doubt, may be the Parent with respect to the Parent Common Stock)
and Parent a representation letter providing to the transfer agent and Parent
any information Parent deems necessary to determine that the sale of such Parent
Common Stock is made in compliance with Rule 144 promulgated under the
Securities Act, including, as may be appropriate, a certification that the
Seller is not an “affiliate’ of Parent (as defined in Rule 144 promulgated under
the Securities Act) and a certification as to the length of time the Parent
Common Stock has been held.  Upon receipt of such representation letter and such
determination, Parent shall promptly direct its transfer agent to remove the
notation of a restrictive legend to the extent relating to securities law
compliance in such Seller’s or the book-entry account maintained by the transfer
agent, including the legend referred to in ‎Section 6.10(a) to the extent
relating to securities law compliance, and Parent shall bear all costs
associated with the removal of such legend in Parent’s books.  At such time as
the Parent Common Stock has been sold pursuant to an effective registration
statement under the Securities Act permitting the public resale of the Parent
Common Stock, if any, or has been held by any Seller for more than one year
where such Seller is not, and has not been in the preceding three months, an
“affiliate” of Parent (as defined in Rule 144 promulgated under the Securities
Act), if the book-entry account of such Seller still bears the notation of the
restrictive legend referred to in ‎Section 6.10(a), Parent agrees, upon request
of the Seller or its permitted assignee, to take all steps necessary to promptly
effect the removal of the legend described in‎ Section 6.10(a) to the extent
relating to securities law compliance and Parent shall bear all costs associated
with the removal of such legend in Parent’s books, regardless of whether the
request is made in connection with a sale or otherwise, so long as such Seller
or its permitted assignee provides to Parent any information Parent deems
reasonably necessary to determine that the legend is no longer required under
the Securities Act or applicable state Laws, including (if there is no such
registration statement) a certification that the holder is not an “affiliate” of
Parent (as defined in Rule 144 promulgated under the Securities Act) and
regarding the length of time the Parent Common Stock has been held, a covenant
to inform Parent if it should thereafter become an “affiliate” (as defined in
Rule 144 promulgated under the Securities Act) and to consent to the notation of
an appropriate restriction, and a certification as to the length of time such
Parent Common Stock has been held.  Parent shall cooperate with each Seller to
effect the removal of the legend referred to in Section 6.10(a) at any time such
legend is no longer appropriate.

Section 6.11Supplemental Disclosure.  Prior to Closing, the Company will be
permitted to supplement (including by the addition of new Schedules) or amend in
writing the Schedules hereto with respect to any matter, event, condition, fact,
circumstance or development that arises from or relates to the period of time
beginning after the date of this Agreement or that should have been disclosed
prior to the date hereof but was omitted from the appropriate Schedules;
provided, however, if such matter, event, condition, fact, circumstances or
development set forth in any supplement or amendment (i) would be required to be
included in the Schedules in order for the representations and warranties of the
Company to be accurate at Closing and (ii) would constitute a material breach of
any representation or warranty if such supplement or amendment were not made,
then Parent shall be entitled to terminate this Agreement as provided in Section
10.1(b)(iii).  If the Closing is thereafter consummated, then the supplement or
amendment shall be deemed to have been included in the Schedules, to have
modified or amended the applicable representation or warranty and to have cured
any misrepresentation or breach of this Agreement, and the Parent Indemnified
Parties shall be deemed to have waived any rights for indemnification under this
Agreement arising from or relating to the matter, event, condition, fact,
circumstance or development that is the subject of such supplement or
amendment.  Notwithstanding anything to the contrary set forth herein and for
the avoidance of doubt, any supplement or amendment to any Schedules with
respect to a matter that, on an individual basis or collectively with any
related matters, results or would result in a liability to the Company or the
Surviving Corporation of greater than $200,000, shall de deemed to be “material”
for purposes of the proviso set forth in the first sentence of this Section
6.11.

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Article VII

TAX MATTERS

Section 7.1Tax Matters.

(a)The Sellers shall be responsible for all local, foreign or other excise,
sales, use, value added, transfer (including real property transfer or gains),
stamp, documentary, filing, recordation and other similar Taxes and fees that
may be imposed or assessed as a result of the transactions contemplated by this
Agreement (the “Transfer Taxes”), together with any inflation adjustment,
interest, additions or penalties with respect thereto and any inflation
adjustment or interest with respect to such additions or penalties.  Any Tax
Returns that must be filed in connection with such Transfer Taxes shall be
prepared and filed by Parent and, if required by applicable law, the parties
hereto shall, and shall cause their affiliates to, join in the execution of any
such Tax Returns or other documentation.

(b)The Sellers shall cause the Company to file all material Tax Returns of the
Company and its Subsidiaries required to be filed on or before the Closing Date
and pay all Taxes due and payable by the Company on or prior to the Closing
Date. Parent shall cause the Surviving Corporation to prepare (using Ford Black
& Co., P.C., the accounting firm used by the Company prior to the Closing) and
Parent shall be responsible for filing (or causing the Company and its
Subsidiaries’ to file), all Tax Returns relating to a Pre-Closing Tax Period of
the Company and its Subsidiaries required to be filed after the Closing Date
including any Tax Returns relating to a Straddle Period.  Parent shall provide
the Representative with copies of any Tax Return relating to a Pre-Closing Tax
Period by the date that is thirty (30) days prior to the filing of such Tax
Return for its review and comment.  Sellers retain the right to any refund of
Income Taxes in respect of any Tax Return relating to a Straddle Period to the
extent such refund relates to a Pre-Closing Tax Period or any Tax return
relating to any period ending on or before the Closing Date, which refund shall
be paid over to the Representative on behalf of the Sellers promptly following
receipt by the Surviving Corporation or its successor of such refund.

(c)Unless otherwise required by applicable law or Governmental Authority, Parent
will not (i) file, or cause or permit the Surviving Corporation or any of its
Subsidiaries to file, an amended Tax Return with respect to the Company or any
of its Subsidiaries for any Pre-Closing Tax Period without the prior written
consent of the Representative, or (ii) cause or permit the Surviving Corporation
or any of its Subsidiaries to make any Tax election that has retroactive effect
to any Tax period ending on or before the Closing Date without the prior written
consent of the Representative (which consent shall not be unreasonably withheld
or delayed).

Section 7.2Tax Indemnification.  The Sellers shall indemnify the Company,
Parent, the Surviving Corporation, and each Parent Indemnitee and hold them
harmless from and against (a) any Loss attributable to any breach of or
inaccuracy in any of the representations and warranties set forth in Section
3.10; (b) any Loss attributable to any breach or violation by the Sellers of, or
failure of the Sellers to fully perform, any covenant, agreement, undertaking or
obligation in this Article VII; (c) all Taxes of the Company or relating to the
business of the Company for all Pre-Closing Tax Periods; (d) all income or
franchise Taxes of any member of an Affiliated Group (other than an Affiliated
Group that includes Parent or any of its Affiliates (other than the Company and
its Subsidiaries)) of which the Company or any of its Subsidiaries (or any
predecessor of the Company or its Subsidiaries) is or was a member on or prior
to the Closing Date that are imposed on the Company or its Subsidiaries under
Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign,
state or local Law (but excluding any such liability for such Taxes to the
extent directly or indirectly attributable to membership in any Affiliated Group
for any period (or any portion of a period) beginning after the Closing Date);
and (e) any and all Taxes of any Person imposed on the Company or its
Subsidiaries arising under the principles of transferee or successor liability
or by contract, if the liability for such Taxes relates to an event or
transaction both occurring before

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the Closing Date and effected or entered into by the Company or any of its
Subsidiaries prior to the Closing Date, in each of the above cases, together
with any out-of-pocket fees and expenses (including attorneys’ and accountants’
fees) incurred in connection therewith; provided, however, that the Sellers
shall not be responsible for, and shall have no obligation to indemnify and hold
the Company, Parent, the Surviving Corporation or any Parent Indemnitee harmless
from and against (1) Taxes resulting from any breach by Parent of Section
7.1(c), or (2) Taxes, to the extent such Taxes are treated as a liability in the
calculation of Closing Working Capital. The Representative and the Sellers shall
reimburse Parent for any Taxes of the Company that are the responsibility of the
Sellers pursuant to this Section 7.2 within ten (10) Business Days after payment
of such Taxes by Parent or the Company.  Notwithstanding anything to the
contrary set forth herein, the obligation of the Sellers to indemnify and hold
harmless the Company, Parent, the Surviving Corporation and each Parent
Indemnitee, from and against any of the matters set forth in the first sentence
of this Section 7.2 shall be governed solely by this Section 7.2.

Section 7.3Contests.  After the Closing Date, Parent shall promptly notify the
Representative of the receipt of any written notice by the Surviving
Corporation, Parent or any of Parent’s affiliates which involves the assertion
of any claim, or the commencement of any Action, in respect of which an
indemnity may be sought by Parent pursuant to Article VIII (a “Tax Claim”);
provided, that failure to comply with this provision shall not affect Parent’s
right to indemnification hereunder, except to the extent the Sellers shall have
been materially prejudiced by such failure. The Representative shall be entitled
(at the Sellers’ expense) to participate and, at its option, take control of the
defense of any pending or threatened Tax Claim, in whole or in part (including
any resulting litigation), and to employ counsel of its choice at its expense.
If the Representative elects to assume the defense of a Tax Claim, the
Representative shall keep Parent reasonably informed of all material
developments relating to such Tax Claim, and shall allow Parent sufficient
notice and opportunity to participate in the Tax Claim to the extent of any
claims for Taxes for which Parent (or the Company or any Subsidiary) may be
liable. Neither Parent nor the Representative shall settle or compromise (or
cause to be settled or compromised) a matter involving a claim for Taxes for
which the other party may be liable under this Agreement without the prior
written consent of such other party, which consent shall not be unreasonably
delayed, conditioned or withheld, unless Parent or the Representative, as the
case may be, waives the right to be indemnified for the issue being conceded or
settled. To the extent the Representative elects to control a Tax Claim pursuant
to this Section 7.3, the Representative shall use (and shall cause the Sellers
and their affiliates to use) its commercially reasonable efforts to separate
from any such Tax Claim any item in respect of which an indemnity is not sought
by Parent pursuant to Article VIII, and to permit, to the greatest extent
possible, Parent to control the contest of any such item.

Section 7.4Tax Characterization and Reporting of Merger and LLC Sub Merger.

(a)This Agreement is intended to constitute a “plan of reorganization” within
the meaning of Treas. Reg. Section 1.368-2(g) and the Merger and the LLC Sub
Merger are intended to constitute steps in an integrated plan, within the
meaning of Rev. Rul. 2001-46, which, taken together, qualify as a reorganization
described in Section 368(a)(1)(A) of the Code. Until the Effective Time, each
party hereto shall use its reasonable best efforts to cause the Merger and the
LLC Sub Merger to qualify, and no party hereto will knowingly (i) take any
action or cause any action to be taken that causes the Merger and the LLC Sub
Merger not to qualify, as a reorganization described in Section 368(a)(1)(A) of
the Code or (ii) fail to take any action, or cause any action to fail or to be
taken, which if taken would prevent the Merger and the LLC Sub Merger from not
qualifying as such a reorganization.  Following the Effective Time, neither
Parent, the Company, LLC Sub nor any affiliate thereof shall (a) knowingly take
any action or cause any action to be taken that causes the Merger and the LLC
Sub Merger not to qualify as such a reorganization or (b) knowingly fail to take
any action or fail to cause any action to be taken if the taking of

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such action would prevent the Merger and the LLC Sub Merger from failing to
qualify as such a reorganization.  Notwithstanding the foregoing, under no
circumstances shall Parent or Merger Sub be required to alter or amend the
Merger Consideration to cause the Merger to qualify as a reorganization within
the meaning of Section 368(a) of the Code, and under no circumstances shall the
failure so to alter or amend the Merger Consideration be deemed a breach of this
Section 7.4.  

(b)For federal income tax (and, where applicable, state and local income tax)
purposes, (i) the parties shall treat and report the Merger and the LLC Sub
Merger in a manner consistent with the intended tax treatment described in
subsection (a) above and (ii) no party shall take any position for U.S. federal
income Tax purposes (and, where applicable, state and local income Tax purposes)
which is inconsistent therewith, except to the extent otherwise required
pursuant to a “determination” within the meaning of Section 1313(a) of the
Code.  If a “determination” within the meaning of Section 1313(a) of the Code is
made that the Merger does not qualify as a reorganization described in Section
368(a) of the Code, the parties shall treat the Merger as a taxable sale of the
stock of the Company by the Sellers to Parent.

Section 7.5Cooperation and Exchange of Information.  The Representative and
Parent shall provide each other with such cooperation and information as either
of them reasonably may request of the other in filing any Tax Return pursuant to
this Article VII or in connection with any audit or other proceeding in respect
of Taxes of the Company or any of its Subsidiaries. Such cooperation and
information shall include providing copies of relevant Tax Returns or portions
thereof, together with accompanying schedules, related work papers and documents
relating to rulings or other determinations by any Tax Authority. Each of the
Representative and Parent shall retain all Tax Returns, schedules and work
papers, records and other documents in its possession relating to Tax matters of
the Company and any of its Subsidiaries for any taxable period beginning before
the Closing Date until the expiration of the statute of limitations of the
taxable periods to which such Tax Returns and other documents relate, without
regard to extensions except to the extent notified by the other party in writing
of such extensions for the respective Tax periods. Prior to transferring,
destroying or discarding any Tax Returns, schedules and work papers, records and
other documents in its possession relating to Tax matters of the Company or any
of its Subsidiaries for any taxable period beginning before the Closing Date,
the Representative or Parent (as the case may be) shall provide the other party
with reasonable written notice and offer the other party the opportunity to take
custody of such materials. Notwithstanding anything in this Section 7.5 or
elsewhere in this Agreement to the contrary, the Representative shall not be
required to furnish to Parent any Tax Returns (or information related thereto)
of the Sellers or their affiliates (other than the Company and its
Subsidiaries), including any Tax Return of an Affiliated Group of which the
Sellers or any affiliate of any Seller (other than the Company or any of its
Subsidiaries) is a member.

Section 7.6No Section 338 Elections.  None of Parent, the Company, Merger Sub or
the Selling Shareholders shall make any elections under Section 338 of the Code
with respect to the Merger or any of the other transactions described in this
Agreement.

Section 7.7Survival.  Notwithstanding anything in this Agreement to the
contrary, the representations and warranties set forth in Section 3.10 and this
Article VII shall survive for the full period of all applicable statutes of
limitations (giving effect to any waiver, mitigation or extension thereof) plus
60 days.

Section 7.8Overlap.  To the extent that any obligation or responsibility
pursuant to Article VIII may overlap with an obligation or responsibility
pursuant to this Article VII, the provisions of this Article VII shall govern.

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Article VIII

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

Section 8.1Survival.  The representations and warranties of the Company and the
Sellers contained in Article III and Article IV of this Agreement (other than
the Tax Representations, which shall be governed by Section 7.2) and the
representations and warranties of Parent contained in Article V of this
Agreement shall survive the Closing for eighteen (18) months following the
Closing Date; provided, however, that (a) the representations and warranties in
Sections 3.1, 3.2, 3.5, 3.10, 3.11, 3.21, 3.22, 4.1(a), 4.1(b)(ii), 4.1(b)(iii),
4.2 and 4.4 (the “Fundamental Representations”) and in Sections 5.1, 5.2 and
5.3(i) shall survive until the expiration of the applicable statute of
limitations (such eighteen (18) month period or period ending on the expiration
of the applicable statute of limitations, as applicable, the “Survival
Period”).  The covenants and agreements of the parties that require performance
on or after the Closing shall expire in accordance with their terms and claims
in respect thereof shall survive until the later to occur of (a) when
performance is no longer required or (b) ninety (90) days after expiration of
the applicable statute of limitations. No claim for indemnification pursuant to
this Article VIII shall or may be made after the date on which the applicable
Survival Period has expired. Notwithstanding the foregoing, in the event that
notice of a claim for indemnification under this Article VIII is given in
accordance with this Article VIII before the expiration of the applicable
Survival Period, and such claim shall not have been resolved prior to such
applicable date, the representations, warranties, covenants or agreements that
are the subject of such claim shall survive solely with respect to such claim.
No claim for indemnification pursuant to this Article VIII shall or may be made
after the date on which the applicable Survival Period has expired.

Section 8.2General Indemnification.

(a)Subject to Section 8.5 and the other provisions of this Article VIII, after
the Closing, each of the Sellers, severally and not jointly, agrees to
indemnify, defend and hold Parent, the Surviving Corporation, and each of their
officers, directors and/or employees (each a “Parent Indemnitee” and together
the “Parent Indemnitees”) harmless from any damages, losses, liabilities,
obligations, claims of any kind, interest or expenses (including, without
limitation, reasonable attorneys’ fees and expenses, but excluding punitive,
exemplary, special or consequential damages, or any damages measured by lost
profits or a multiple of earnings; provided, however, that the foregoing
exclusions shall not apply to the extent such damages are asserted by a third
party in claims for indemnification with respect to Third Party Claims) (each a
“Loss” and, collectively, “Losses”) as a result of or arising out of:

(i)the breach of any representation or warranty made by the Company or the
Sellers in Article III (other than the breach of the Tax Representations, which
shall be governed by Section 7.2) or by the applicable Seller in Article IV of
this Agreement as of the date such representation or warranty was made (except
for representations and warranties that expressly relate to a specified date,
the inaccuracy in or breach of which will be determined with reference to such
specified date),

(ii)any breach or non-fulfillment of any covenant, agreement or obligation to be
performed by the Sellers pursuant to this Agreement;

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(iii)the breach by such Seller of any of its covenants or agreements contained
herein that are required to be performed after the Closing Date (other than the
breach by such Seller of any covenants or agreements set forth in Article VII,
which shall be governed exclusively by Section 7.2); or

(iv)any Seller Expenses or Indebtedness of the Company outstanding as of the
Closing to the extent not paid or satisfied by the Company at or prior to the
Closing, or if paid by Parent at the Closing, in each case, to the extent not
taken into account in the determination of the Closing Consideration.

(b)Subject to Section 8.5 and the other provisions of this Article VIII, after
the Closing, Parent agrees to indemnify, defend and hold each of the Sellers and
their respective officers, directors, employees, partners and members (each a
“Seller Indemnitee” and together the “Seller Indemnitees”) harmless from any
Loss as a result of or arising out of (i) the breach of any representation or
warranty made by Parent in Article V of this Agreement, (ii) any breach by
Parent of any of its covenants or agreements contained herein that are required
to be performed after the Closing Date, and (iii) any breach by the Company of
any of its covenants or agreements contained herein that are required to be
performed after the Closing.

(c)All indemnification payments under this Article VIII shall be adjustments to
the Purchase Price except as otherwise required by applicable law.

Section 8.3Notice of Claims.  Any party seeking indemnification under this
Article VIII (the “Indemnified Party”) shall, within the relevant limitation
period provided for in Section 8.1, promptly notify the party obligated to
indemnify such Indemnified Party (or, in the case of a Parent Indemnitee seeking
indemnification, such Parent Indemnitee shall promptly notify the
Representative) (such notified party, the “Responsible Party”) in writing (a
“Claim Notice”) describing in reasonable detail the facts giving rise to any
claims for indemnification hereunder and shall include in such Claim Notice (if
then known) the amount and the method of computation of the amount of such claim
and a reference to the provision of this Agreement upon which such claim is
based; provided that a Claim Notice in respect of any action at law or suit in
equity by or against a third Person as to which indemnification will be sought
shall be given promptly after the action or suit is commenced; provided,
further, that failure to give such written notice shall not relieve the
Responsible Party of its obligations hereunder, except to the extent that the
Responsible Party shall have been materially prejudiced by such failure. The
Indemnified Party shall give the Responsible Party reasonable access to the
books, records and assets of the Indemnified Party (and, in the case the
Indemnified Party is a Parent Indemnitee, of the Company and its Subsidiaries)
which evidence or support such claim or the act, omission or occurrence giving
rise to such claim and the right, upon reasonable prior notice during normal
business hours, to interview any appropriate personnel of the Indemnified Party
(or the Company or its Subsidiaries, as applicable) related thereto.

Section 8.4Third Party Claims.

(a)In the case of a claim, action, suit or proceeding by a third party (a “Third
Party Claim”) as to which indemnification is sought by an Indemnified Party, the
Responsible Party shall have ninety (90) days after receipt of the Claim Notice
to assume the conduct and control, through counsel reasonably acceptable to the
Indemnified Party at the expense of the Responsible Party, of the settlement or
defense thereof, and the Indemnified Party shall reasonably cooperate with it in
connection therewith; provided that the Responsible Party may not assume control
of the defense of Third Party Action involving criminal liability or in which
equitable relief is sought against the Indemnified Party. If the Responsible
Party assumes the defense of a Third Party Claim, the fees and expenses of
counsel chosen by the Representative shall be paid using the funds in the Escrow
Account, and the Indemnified Party shall have

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the right to participate in but not control such defense through counsel chosen
by such Indemnified Party; provided that the fees and expenses of such counsel
shall be borne by such Indemnified Party; provided further, however, that if in
the reasonable opinion of counsel to the Indemnified Party, (A) There are legal
defenses available to an Indemnified Party that are different from or additional
to those available to the Indemnifying Party, or (B) there exists a conflict of
interest between the Indemnifying Party and the Indemnified Party that cannot be
waived, the Indemnifying Party shall be liable for the reasonable fees and
expenses of counsel to the Indemnified Party in each jurisdiction for which the
Indemnified Party reasonably determines counsel is required, provided that the
Indemnifying Party shall not be responsible for more than one (1) such counsel
for all the Indemnified Parties and such counsel shall be selected by the
Indemnifying Party. So long as the Responsible Party is reasonably contesting
any such claim in good faith, the Indemnified Party shall not pay or settle any
such claim except with the prior written consent of the Responsible Party (not
to be unreasonably withheld, conditioned or delayed). Notwithstanding the
foregoing, the Indemnified Party shall have the right to pay or settle any such
claim without the prior consent of the Responsible Party; provided that in such
event it shall waive any right to indemnity by the Responsible Party or from the
Escrow Account, as the case may be, for such claim. If the Responsible Party
does not notify the Indemnified Party within ninety (90) days after the receipt
of the Claim Notice that it elects to undertake the defense thereof or is
otherwise prohibited from doing so pursuant to the terms hereof, the Indemnified
Party shall have the right to contest, settle or compromise the claim without
consent and shall not thereby waive any right to indemnity pursuant to this
Agreement. The Responsible Party shall not, except with the consent of the
Indemnified Party, either (i) enter into any settlement that does not include as
an unconditional term thereof the giving by the Person or Persons asserting such
claim to all Indemnified Parties of an unconditional release from all liability
with respect to such claim, or (ii) consent to the entry of any judgment.

(b)The Parties shall cooperate with each other in all reasonable respects in the
investigation, trial and defense of any Third Party Claim and any appeal arising
therefrom and shall furnish such records, information and testimony, and attend
such conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested in connection therewith. Such cooperation shall include
access during normal business hours afforded to each party and its agents and
representatives to, and reasonable retention by each party of records and
information which have been identified by the other party as being reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The parties shall cooperate with each other in any
notifications to insurers.

Section 8.5Limitations on Indemnification Obligations.

(a)Indemnification under this Article VIII shall not be available to any
Indemnified Party unless such Indemnified Party first uses commercially
reasonable efforts to obtain recovery from any Third Party Source (as defined
below) for the applicable claim or Loss before making any claim for
indemnification against the Responsible Party. The Responsible Party may, in its
sole discretion, require any Indemnified Party to grant an assignment of the
right of such Indemnified Party to assert a claim against any Third Party
Source. If the amount to be netted hereunder from any payment required under
Section 8.2(a) is determined after payment of any amount otherwise required to
be paid to an Indemnified Party under this Article VIII, the Indemnified Party
shall repay to the Responsible Parties, promptly after such determination, any
amount that the Responsible Parties would not have had to pay pursuant to this
Article VIII had such determination been made at the time of such payment.

(b)The Parent Indemnitees shall not have a right to assert claims under any
provision of this Agreement for any Losses to the extent that such Losses relate
to actions taken by or omitted to be taken by Parent or the Company after the
Closing Date.

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(c)The rights of the Parent Indemnitees to indemnification pursuant to the
provisions of Section 8.2(a) are subject to the following limitations:

(i)The amount of any and all Losses will be determined net of any (A) accruals
or reserves on the Company Financial Statements or the Conclusive Final Closing
Statement, (B) amounts recovered by the Parent Indemnitees under indemnification
agreements or arrangements with third parties or under insurance policies with
respect to such Losses (and no right of subrogation shall accrue to any such
third party indemnitor or insurer hereunder) (each such source named in this
clause (B) a “Third Party Source”) and (C) an amount equal to any Tax savings or
benefits realized or realizable by the Indemnified Party as calculated on a with
or without basis. Each Indemnified Party shall use its commercially reasonable
efforts to recover all amounts payable from a Third Party Source under any
insurance policy or any other Contract prior to seeking indemnification
hereunder.

(ii)The Parent Indemnitees shall not be entitled to recover for any Losses
pursuant to Section 8.2(a)(i) unless the Loss resulting from such claim or
series of related claims equals or exceeds $15,000 (the “Mini-Basket”); provided
that this limitation shall not apply with respect to (A) breaches of the
Fundamental Representations and any covenants contained herein or (B) the
indemnification obligations set forth in Section 8.6 ((A) and (B) collectively,
“Special Indemnified Matters”).  In addition, the Parent Indemnitees shall not
be entitled to recover any Loss pursuant to Section 8.2(a)(i) in excess of the
Mini-Basket unless and until the aggregate amount of all Losses (both before and
after the relevant Mini-Basket shall have been exceeded) exceeds $390,000.00
(the “Threshold”), after which the Parent Indemnitees shall be entitled to
recover all Losses in excess of both the Mini-Basket and the Threshold; provided
that the limitations set forth in this Section 8.5(c)(ii) shall not apply with
respect to Losses arising out of or resulting from Special Indemnified Matters.

(iii)Notwithstanding anything to the contrary herein, other than with respect to
Special Indemnified Matters, in no event shall the Parent Indemnitees be
entitled to recover more than the amount of cash and shares of Parent Common
Stock then in the Escrow Account; provided that the maximum aggregate liability
of each of the Sellers for Losses arising out of or resulting from claims in
respect of Special Indemnified Matters (including with respect to claims of
Fraud with respect to Special Indemnified Matters) shall be an amount equal to
the Purchase Price actually received by such Seller hereunder, provided, further
however, that Parent Indemnities shall first recover Losses for Special
Indemnified Matters from the Escrow Account.

(iv)The Parent Indemnitees shall not be entitled to recover from the Sellers,
collectively, pursuant to this Article VIII more than once in respect of the
same Losses suffered.

(d)Notwithstanding anything contained herein to the contrary, other than with
respect to Special Indemnified Matters, after the Closing, on the date that the
amount of cash and shares of Parent Common Stock in the Escrow Account is
reduced to zero, the Parent Indemnitees shall have no further rights to
indemnification under this Agreement.

(e)For purposes of this Article VIII, any inaccuracy in or breach of any
representation or warranty shall be determined without regard to any
materiality, Material Adverse Effect or other similar qualification contained in
or otherwise applicable to such representation or warranty.

(f)Notwithstanding anything to the contrary contained herein, upon any
Indemnified Party becoming aware of any claim as to which indemnification may be
sought by such Indemnified Party pursuant to this Article VIII, such Indemnified
Party shall utilize commercially reasonable efforts,

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consistent with normal practices and policies, to mitigate such Losses, and any
Losses to the extent directly resulting from such Indemnified Party’s failure to
comply with the foregoing shall be excluded from the Losses recoverable by such
Indemnified Party from the Responsible Party hereunder.

(g)No Responsible Party shall be liable for any Losses in respect of any
liability or Loss which is contingent unless and until such contingent liability
or Loss becomes an actual liability or Loss and is due and payable. No
Responsible Party shall be liable to pay any amount in discharge of a claim
under this Article VIII unless and until the liability or Loss in respect of
which the claim is made has become due and payable.

(h)No Indemnified Party shall have any right to assert any claim against any
indemnifying party hereunder (an “Indemnifying Party”) with respect to any Loss,
cause of action or other claim to the extent such Loss, cause of action or claim
is a Loss, cause of action or claim: (i) with respect to which such Indemnified
Party or any of its affiliates has taken action (or caused to be taken) with the
primary intent of accelerating the time period in which such matter is asserted
or payable in order to cause a claim to be made prior to the applicable Survival
Date; or (ii) arising from or related to Non-Permitted Testing.

Section 8.6Special Indemnity.

(a)Parent shall have no liability for, and the Sellers shall, severally and not
jointly, indemnify Parent from and against, any Loss arising as a result of or
in connection with a claim by a Seller against Parent for any actions taken by
the Representative with respect to the allocation and distribution to the
Sellers of the cash proceeds received by the Representative pursuant to this
Agreement or the Escrow Agreement.

(b)Parent, the Surviving Corporation and LLC Sub shall have no liability for,
and the Sellers shall, severally and not jointly, indemnify Parent, the
Surviving Corporation and LLC Sub from and against, any Loss (i) arising as a
result of or in connection with the JTW Transfer, (ii) related to or in
connection with the operation of the business carried on by JTW Partners, LLC
prior to, on and after the Closing and (iii) arising with respect to any
individual performing services as an employee or independent contractor of JTW
Partners, LLC, the Company or any of their affiliates prior to the Closing Date,
and whose duties primarily related to the business of JTW Partners, LLC, whether
or not such individual was employed by, engaged by or paid by the Company or
participated in any Company Benefit Plan prior to the Closing Date.

(c)Parent, the Surviving Corporation and LLC Sub shall have no liability for,
and the Sellers shall, severally and not jointly, indemnify Parent, the
Surviving Corporation and LLC Sub from and against, any Loss (i) arising as a
result of or in connection with the WEL Contribution and (ii) related to or in
connection with the operation of the business carried on by Wright Equipment &
Leasing, LLC prior to the Closing.

(d)The Sellers shall, severally and not jointly, indemnify Parent, the Surviving
Corporation and LLC Sub from and against any Loss as a result of the refund of
Income Taxes received by the Surviving Corporation in respect of the Tax Return
of the Company for the fiscal year ended March 31, 2018 being in an amount less
than the Income Tax Receivable, in which case Parent shall have the right to
receive from the Escrow Account an amount equal to the difference between the
Income Tax Receivable and the refund of income Taxes actually received in
respect of the Tax Return of the Company for the fiscal year ended March 31,
2018.  In the event that the refund of Income Taxes received by the Surviving
Corporation in respect of the Tax Return of the Company for the fiscal year
ended March 31, 2018 is greater than the amount of the Income Tax Receivable,
the Surviving Corporation shall pay such difference to the

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Representative for further distribution to the Sellers promptly following
receipt by the Surviving Corporation of such refund.

Section 8.7Exclusive Remedy.

(a)Notwithstanding anything else contained in this Agreement to the contrary,
but except to the extent provided in Section 10.1, after the Closing, (a) other
than with respect to claims in respect of Section 6.5 and/or Section 10.1,
indemnification pursuant to the provisions of this Article VIII shall be the
sole and exclusive remedy with respect to any and all claims by Parent
Indemnitees (whether in contract or tort) relating to this Agreement or any
other Transaction Document, the Sellers, the Company, the shares of Common
Stock, the events giving rise to or subject matter of this Agreement and/or the
transactions contemplated hereby, and the parties hereto expressly disclaim that
they are owed any duties or obligations other than the indemnification
obligations expressly set forth in this Article VIII, and (b) other than with
respect to claims in respect of Section 6.5 and/or Section 10.1, making a claim
for a proper distribution from the Escrow Account shall be the sole and
exclusive remedy available to the Parent Indemnitees for any Loss, Losses or
other amounts arising under the indemnification obligations set forth herein, or
otherwise in respect of any Transaction Document and/or the transactions
contemplated hereby or thereby other than with respect to claims for Losses with
respect to Special Indemnified Matters as set forth in Section
8.5(c)(iii).  Without limiting the generality or effect of the foregoing, as a
material inducement to the Sellers entering into this Agreement, Parent hereby
waives, from and after the Closing, any claim or cause of action (including,
without limitation, any tort claim or cause of action based upon, arising out of
or related to any representation or warranty made in connection with this
Agreement or any other Transaction Document or as an inducement to enter into
this Agreement or any other Transaction Document) known and unknown, foreseen
and unforeseen, which it or any of its affiliates (including after the Closing,
the Company) may have against the other parties hereto or their directors,
officers or shareholders, including without limitation under the common law or
federal or state securities laws, trade regulation laws or other laws (including
any relating to tax, environmental or employee matters), by reason of this
Agreement, the events giving rise to or subject matter of this Agreement and the
transactions contemplated hereby, except for claims pursuant to Section 12.12 or
brought under and subject to the terms, conditions and limitations of the
provisions contained in this Article VIII.  

(b)For the avoidance of doubt, liabilities for fraud shall not be subject to the
limitations in Section 8.5(c)(ii).

Section 8.8Distributions from the Escrow Account.

(a)In the event that, following the Closing Date, any Parent Indemnitee incurs
Losses for which it believes it is entitled to indemnification pursuant to this
Article VIII, then promptly after Parent’s submission to the Representative of a
Claim Notice and Parent’s and the Representative’s mutual agreement regarding an
amount of indemnifiable Losses, Parent and the Representative promptly shall
deliver joint written instructions to the Escrow Agent instructing the Escrow
Agent to deliver to Parent from the Escrow Account such funds and shares of
Parent Common Stock as, in the aggregate, are equal to the undisputed
amount.  For purposes of determining the number of shares of Parent Common Stock
to be released to the Representative pursuant to this Article VIII, such shares
of Parent Common Stock shall be valued at the Parent Common Stock Conversion
Price.  In the event that Parent and the Representative do not agree that the
Parent Indemnitee is entitled to indemnification under this Article VIII, or
Parent and the Representative do not agree to an undisputed amount of such
indemnifiable Losses, then the Representative shall be entitled to contest the
Parent Indemnitee’s claim for indemnification by submitting a written response
to Parent.

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(b)On the twelve (12)-month anniversary of the Closing Date (the “Interim Escrow
Funds Distribution Date”), the Escrow Agent shall disburse to the Representative
(for the ratable benefit of the Sellers) an amount equal to (i) one-half of the
Escrow Amount, less (ii) the amount of any disbursement of funds out of the
Escrow Account prior to the date thereof, less (iii) such portion of the Escrow
Amount subject to any outstanding unresolved Claim Notice delivered prior to the
Interim Escrow Funds Distribution Date. On the eighteen (18)-month anniversary
of the Closing Date (the “Final Escrow Funds Distribution Date”), the Escrow
Agent shall disburse to the Representative (for the ratable benefit of the
Sellers) an amount equal to (i) the remaining balance of the Escrow Amount, less
(ii) such portion of the Escrow Amount subject to any outstanding unresolved
Claim Notice delivered prior to the Final Escrow Funds Distribution Date.  In
each case, after receipt of such funds, the Representative shall distribute to
each Seller its portion of the Escrow Account. Any amounts in the Escrow Account
after the resolution of all of the matters subject to any outstanding unresolved
Claim Notice delivered prior to the Escrow Funds Distribution Date shall be
distributed to the Representative for ratable distribution to the Sellers in
accordance with the terms of the Escrow Agreement.

(c)Any amount to be released to the Sellers pursuant to this Article VIII shall
be satisfied by releasing cash and shares of Parent Common Stock in the same
ratio as the Base Cash Purchase Price and the Base Equity Purchase Price,
respectively, bear to the Base Purchase Price.  For purposes of determining the
number of shares of Parent Common Stock to be released from the Escrow Account
at any time, each share of Parent Common Stock shall be valued at an amount
equal to the Parent Common Stock Conversion Price.

Article IX

Conditions to Closing

Section 9.1Conditions to Each Party’s Obligations.  The obligation of the
parties hereto to proceed with the Closing is subject to the satisfaction on or
prior to the Closing Date of all of the following conditions, any one or more of
which may be waived (to the extent legally permissible) in writing, in whole or
in part, as to a party by such other parties:

(a)Company Approval.  The shareholders of the Company, acting at a duly called
meeting or by sufficient written consent, shall have approved the Merger, this
Agreement and the transactions contemplated hereby.

(b)No Governmental Restraint.  No order, decree or injunction of any
Governmental Authority shall be in effect, and no Laws shall have been enacted
or adopted, that enjoin, prohibit or make illegal the consummation of any of the
transactions contemplated by this Agreement, and no action, Proceeding or
investigation by any Governmental Authority with respect to the Merger or the
other transactions contemplated by this Agreement shall be pending that seeks to
restrain, enjoin, prohibit or delay consummation of the Merger or such other
transactions or to impose any material restrictions or requirements thereon or
on the Parent with respect thereto.

Section 9.2Conditions to the Company’s Obligations.  The obligation of the
Company and each of the Sellers to proceed with the Closing is subject to the
satisfaction on or prior to the Closing Date of all of the following conditions,
any one or more of which may be waived (to the extent legally permissible) in
writing, in whole or in part, as to a party by such other parties:

(a)Representations and Warranties.  (i) The representations and warranties of
Parent set forth in Article V shall be true and correct in all respects as of
the Closing Date as if made as of the Closing Date (except to the extent such
representations and warranties expressly relate to an earlier date, in which
case as of such earlier date), and (ii) Parent and Merger Sub shall have
performed or complied with

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all agreements and covenants required to be performed by it hereunder prior to
the Closing Date that have materiality, “Material Adverse Effect” or similar
qualifiers, and shall have performed or complied in all material respects with
all other agreements and covenants required to be performed by it hereunder
prior to the Closing Date that are not so qualified.

(b)Closing Deliverables.  Each of Parent and Merger Sub shall have delivered, or
caused to be delivered, to Company each of the agreements, certificates and
other documents required to be delivered by it at the Closing pursuant to
Section 2.3(c).

(c)No Material Adverse Effect.  Since the date of this Agreement, no Material
Adverse Effect shall have occurred, and no circumstances shall exist that can
reasonably be expected to result in a Material Adverse Effect.

Section 9.3Conditions to Parent’s Obligations.  The obligation of Parent to
proceed with the Closing is subject to the satisfaction on or prior to the
Closing Date of all of the following conditions, any one or more of which may be
waived in writing, in whole or in part, by Parent (in its sole discretion):

(a)Representations and Warranties.  (i) The representations and warranties of
the Company set forth in Article III and of the Sellers set forth in Article IV
shall be true and correct in all respects as of the Closing Date as if made as
of the Closing Date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier date), and
(ii) each of the Company and the Sellers shall have performed or complied with
all agreements and covenants required to be performed by it hereunder prior to
the Closing Date that have materiality, “Material Adverse Effect” or similar
qualifiers, and shall have performed or complied in all material respects with
all other agreements and covenants required to be performed by it hereunder
prior to the Closing Date that are not so qualified.

(b)Closing Deliverables.  Each of the Company and the Sellers shall have
delivered, or caused to be delivered, to Parent each of the agreements,
certificates and other documents required to be delivered by it at the Closing
pursuant to Section 2.3(d).

(c)No Material Adverse Effect.  Since the date of this Agreement, no Material
Adverse Effect shall have occurred and no circumstances shall exist that can
reasonably be expected to result in a Material Adverse Effect.

(d)Consents.  Parent shall have received each of the consents, approvals, orders
or authorizations set forth on Schedule 2.3(d)(xii).

(e)Contract Terminations. Parent shall have received each of the contract
terminations set forth on Schedule 2.3(d)(xi).

(f)Transfer of Assets.  The Company shall have delivered to Parent evidence in a
form and substance reasonably satisfactory to Parent that (i) each piece of
leased equipment set forth on Schedule 9.3(f) has been irrevocably transferred
to the Company by Wright Equipment & Leasing, LLC and (ii) each of the related
lease agreements set forth on Schedule 9.3(f) have been terminated.

(g)Certificates.  Parent shall have received Certificates representing 100% of
the outstanding shares of Common Stock.

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(h)JTW Transfer.  Parent shall have received evidence in form and substance
reasonably satisfactory to Parent that the entire interest in JTW Partners, LLC,
an Oregon limited liability company, held by the Company prior to the Closing
Date (including all related assets, liabilities, contracts, benefit plans,
employees) has been transferred to a Person other than the Company and that the
outstanding intercompany payable between the Company and JTW Partners, LLC, in
the aggregate amount of $2.1 million as of the date hereof, has been forgiven
and extinguished (the “JTW Transfer”).

(i)WEL Transfer.  Parent shall have received evidence in form and substance
reasonably satisfactory to Parent that the entire interest in Wright Equipment &
Leasing, LLC, an Oregon limited liability company, outstanding prior to the
Closing Date (including all related assets, including the assets set forth on
Schedule 9.3(i), but specifically excluding any employees, benefit plans and any
liabilities other than Indebtedness to be repaid at the Closing out of the Base
Cash Purchase Price) has been contributed to the Company prior to the Closing
(the “WEL Contribution”).

(j)Wright Note.  Parent shall have received evidence in form and substance
reasonably satisfactory to Parent that the promissory note, issued by James T.
Wright in favor of the Company, in the aggregate principal amount of
approximately $500,000 outstanding as of the date hereof, has been repaid in
full and any Liens on the assets of the Company in connection with such
promissory note have been extinguished prior to the Closing Date.

Article X

TERMINATION

Section 10.1Termination.  This Agreement may be terminated at any time prior to
the Closing:

(a)by the mutual written consent of Parent and the Company;

(b)by Parent by written notice to the Company:

(i)if Parent is not then in material breach of any provision of this Agreement
and there has been a breach, inaccuracy in or failure to perform any
representation, warranty, covenant or agreement made by the Company or any of
the Sellers pursuant to this Agreement that would give rise to the failure of
any of the conditions specified in Section 2.3(c) and such breach, inaccuracy or
failure has not been cured by the Company or the applicable Seller within 30
days of written notice of such breach from Parent;

(ii)if any of the conditions set forth in Section 2.3(c) or Section 2.3(d) shall
not have been, or if it becomes apparent that any of such conditions will not
be, fulfilled by September 30, 2018, unless such failure shall be due to the
failure of Parent to perform or comply with any of the covenants, agreements or
conditions hereof to be performed or complied with by it prior to the Closing;
or

(iii)in the circumstances described in the proviso to the first sentence of
Section 6.11.

(c)by the Company by written notice to Parent if:

(i)neither the Company nor any of the Sellers are then in material breach of any
provision of this Agreement and there has been a breach, inaccuracy in or
failure to perform any representation, warranty, covenant or agreement made by
Parent pursuant to this Agreement that would give rise to the failure of any of
the conditions specified in Section 2.3(c) and such breach, inaccuracy or
failure has not been cured by Parent within 30 days of Parent’s receipt of
written notice of such breach from the Company; or

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(ii)any of the conditions set forth in Section 2.3(c) or Section 2.3(d) shall
not have been, or if it becomes apparent that any of such conditions will not
be, fulfilled by September 30, 2018, unless such failure shall be due to the
failure of the Company or any of the Sellers to perform or comply with any of
the covenants, agreements or conditions hereof to be performed or complied with
by it prior to the Closing.

(d)by Parent or the Company in the event that (i) there shall be any Law that
makes consummation of the transactions contemplated by this Agreement illegal or
otherwise prohibited or (ii) any Governmental Authority shall have issued a
Governmental Order restraining or enjoining the transactions contemplated by
this Agreement, and such Governmental Order shall have become final and
non-appealable.

Section 10.2Effect of Termination.  In the event of the termination of this
Agreement pursuant to Section 10.1, this Agreement shall immediately become null
and void, and of no further force and effect (other than Section 6.5, this
Section 10.2 and Article XII (except for Section 12.12), which shall survive any
termination of this Agreement and remain in full force and effect), and there
shall be no liability on the part of any party to any other party, provided that
nothing herein shall relieve any party from any liability resulting from any
willful and material breach of this Agreement by such Party prior to such
termination.

Article XI

REPRESENTATIVE OF THE SELLERS

Section 11.1Authorization of Representative.

(a)Each Seller hereby appoints, authorizes and empowers James T. Wright as a
representative (the “Representative”), for the benefit of such Seller, as the
exclusive agent and attorney-in-fact to act on behalf of such Seller, in
connection with and to facilitate the consummation of the transactions
contemplated hereby, including pursuant to the Escrow Agreement, which shall
include the power and authority:

(i)to execute and deliver the Escrow Agreement (with such modifications or
changes therein as to which the Representative, in its sole discretion, shall
have consented) and to agree to such amendments or modifications thereto as the
Representative, in its sole discretion, determines to be desirable;

(ii)to execute and deliver such waivers and consents in connection with this
Agreement and the Escrow Agreement and the consummation of the transactions
contemplated hereby and thereby as the Representative, in its sole discretion,
may deem necessary or desirable;

(iii)as Representative, to enforce and protect the rights and interests of the
Sellers (including the Representative, in its capacity as a shareholder in the
Company) and to enforce and protect the rights and interests of the
Representative arising out of or under or in any manner relating to this
Agreement and the Escrow Agreement, and each other agreement, document,
instrument or certificate referred to herein or therein or the transactions
provided for herein or therein (including, without limitation, in connection
with any and all claims for indemnification brought under Article VIII), and to
take any and all actions which the Representative believes are necessary or
appropriate under the Escrow Agreement and/or this Agreement for and on behalf
of any Seller, including, without limitation, asserting or pursuing any claim,
action, proceeding or investigation (a “Claim”) against Parent and/or Company,
defending any Third Party Claims or Claims by the Parent Indemnitees, consenting
to, compromising or settling any such Claims, conducting negotiations with
Parent, Company and their respective

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representatives regarding such Claims, and, in connection therewith, to (A)
assert any claim or institute any action, proceeding or investigation; (B)
investigate, defend, contest or litigate any claim, action, proceeding or
investigation initiated by Parent, the Company or any other Person, or by any
federal, state or local Governmental Authority against the Representative and/or
any of the Sellers, and/or the Escrow Funds, and receive process on behalf of
any or all of the Sellers in any such claim, action, proceeding or investigation
and compromise or settle on such terms as the Representative shall determine to
be appropriate, and give receipts, releases and discharges with respect to, any
such claim, action, proceeding or investigation; (C) file any proofs of debt,
claims and petitions as the Representative may deem advisable or necessary; (D)
settle or compromise any claims asserted under the Escrow Agreement; (E) to
finalize any post-Closing adjustments pursuant to Section 2.4, and (F) file and
prosecute appeals from any decision, judgment or award rendered in any such
action, proceeding or investigation, it being understood that the Representative
shall not have any obligation to take any such actions, and shall not have any
liability for any failure to take any such actions;

(iv)to refrain from enforcing any right of the Sellers or any of them and/or the
Representative arising out of or under or in any manner relating to this
Agreement, the Escrow Agreement or any other agreement, instrument or document
in connection with the foregoing;

(v)(A) to accept any portion of the Purchase Price payable to the Sellers (on
behalf of the Sellers ) and to deliver wire instructions to Parent in connection
therewith; (B) to supervise the Closing; (C) to take any and all actions that
may be necessary or desirable, as determined by the Representative in its sole
discretion, in connection with indemnification under Article VIII and the Escrow
Agreement; and (D) to take any and all actions that may be necessary or
desirable, as determined by the Representative in its sole discretion, in
connection with the payment of the costs and expenses incurred with respect to
the Company or the Sellers in connection with the Transaction Documents and the
transactions contemplated thereby; and

(vi)to make, execute, acknowledge and deliver all such other agreements,
guarantees, orders, receipts, endorsements, notices, requests, instructions,
certificates, stock powers, letters and other writings, and, in general, to do
any and all things and to take any and all action that the Representative, in
its sole and absolute discretion, may consider necessary or proper or convenient
in connection with or to carry out the transactions contemplated by this
Agreement, the Escrow Agreement, and all other agreements, documents or
instruments referred to herein or therein or executed in connection herewith and
therewith.

(b)The Representative shall not be entitled to any success fee for the
performance of its services hereunder but shall be entitled to the payment of
all costs and expenses incurred as the Representative. In connection with the
foregoing, at the Closing, the Sellers shall transfer an amount in cash
designated by the Representative in writing to Parent prior to the Closing (such
amount, the “Expense Funds”) of the Purchase Price otherwise payable at Closing
pursuant to Section 2.3(c)(iv) to the Representative, to be used by the
Representative to pay the costs and expenses that it incurs in its capacity as
the Representative. In addition, to the extent that the Expense Funds are at any
time insufficient (as determined by the Representative in its sole discretion)
to cover all of the costs and expenses incurred by the Representative in its
capacity as the Representative, then the Representative may, at its option, (x)
retain such portion of the Escrow Amount distributed to the Representative
pursuant to the terms hereof and of the Escrow Agreement (only when such portion
of the Escrow Amount is released to the Representative in accordance with the
Escrow Agreement) as determined by the Representative in its sole discretion for
purposes of reimbursement of such costs and expenses; (y) retain such amount of
the proceeds received by the Sellers after the Closing Date under any term or
provision of this Agreement; and (z) seek reimbursement of such costs and
expenses from the Sellers. Once the Representative determines, in its sole

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discretion, that the Representative will not incur any additional expenses in
its capacity as the Representative, then the Representative will distribute the
remaining unused Expense Funds (if any) pro rata to the Sellers in accordance
with their respective Ownership Percentages. In connection with this Agreement,
the Escrow Agreement and any instrument, agreement or document relating hereto
or thereto, and in exercising or failing to exercise all or any of the powers
conferred upon the Representative hereunder (i) the Representative shall incur
no responsibility whatsoever to any Seller by reason of any error in judgment or
other act or omission performed or omitted hereunder or in connection with the
Escrow Agreement or any such other agreement, instrument or document and (ii)
the Representative shall be entitled to rely in good faith on the advice of
counsel, public accountants or other experts experienced in the matter at issue,
and any error in judgment or other act or omission of the Representative
pursuant to such advice shall in no event subject the Representative to
liability to any Seller. Each Seller shall indemnify, pro rata based upon their
respective Ownership Percentages, the Representative against all losses,
damages, liabilities, claims, obligations, costs and expenses, including
reasonable attorneys’, accountants’ and other experts’ fees and the amount of
any judgment against them, of any nature whatsoever (including, but not limited
to, any and all expense whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened or any claims
whatsoever), arising out of or in connection with any claim, investigation,
subpoena, challenge, action or proceeding, or in connection with any appeal
thereof, relating to the acts or omissions of the Representative hereunder, or
under the Escrow Agreement or otherwise. In the event of any indemnification
hereunder, upon written notice from the Representative to the Sellers as to the
existence of a deficiency toward the payment of any such indemnification amount,
each Seller shall promptly deliver to the Representative full payment of his or
her ratable share of the amount of such deficiency (pro rata based upon such
Seller’s Ownership Percentage); provided that no such Seller shall be liable for
that portion of any claim of indemnification, individually or in the aggregate,
that is in excess of such Seller’s pro rata portion of the Purchase Price to
which such holder is entitled pursuant to this Agreement.

(c)All of the indemnities, immunities and powers granted to the Representative
under this Agreement shall survive the Closing Date and/or any termination of
the Escrow Agreement.

(d)Parent and the Company shall have the right to rely upon all actions taken or
omitted to be taken by the Representative pursuant to this Agreement and the
Escrow Agreement, all of which actions or omissions shall be legally binding
upon the Sellers.

(e)The grant of authority provided for herein (i) is coupled with an interest
and shall be irrevocable and survive the death, incompetency, bankruptcy or
liquidation of any Seller; and (ii) shall survive the Closing.

Article XII

MISCELLANEOUS

Section 12.1Notices.  All notices, requests, consents, claims, demands, waivers
or other communications required or permitted hereunder shall be in writing and
shall be delivered personally, by facsimile, by electronic mail or sent by
certified, registered or express air mail, postage prepaid, and shall be deemed
given when so delivered personally, or by facsimile upon electronic confirmation
of receipt, or by electronic mail on the date such electronic mail is sent (with
confirmation of transmission) if sent during normal business hours of the
recipient, and on the next Business Day if sent after normal business hours of
the Recipient, if mailed by overnight courier service guaranteeing next day
delivery, one day after mailing, or if mailed in any other way, then upon
receipt, as follows:

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If to Parent and Merger Sub (and the Surviving Corporation after the Closing):

Ennis, Inc.

2441 Presidential Parkway

Midlothian, Texas 76065

Attention: Michael Magill

Facsimile: 800-759-4271

Email: Michael_Magill@ennis.com

with a copy to (which shall not constitute notice):

Baker Botts, L.L.P.

2001 Ross Avenue

Dallas, Texas 75201

Attention: Neel Lemon

Facsimile: 214-661-4954

Email: neel.lemon@bakerbotts.com

If to the Company (prior to the Closing):

Wright Business Forms, Inc.

18440 NE San Rafael

Portland, Oregon 97230

Facsimile: (503) 661-0515

Email: jwright@wrightbg.com

Attention: James T. Wright

with a copy to (which shall not constitute notice):

Dunn Carney LLP

851 SW Sixth Avenue

Suite 1500

Portland, Oregon 97204

Facsimile: (503) 224-7324

Email: rkw@dunn-carney.com

Attention: Robert K. Winger

If to the Representative:

James T. Wright

425 Twilight Trail

West Linn, Oregon

Email: jimwright@verizon.net

or to such other address as any party hereto shall notify the other parties
hereto (as provided above) from time to time.

Section 12.2Exhibits and Schedules.  All Exhibits and Schedules hereto, or
documents expressly incorporated into this Agreement, are hereby incorporated
into this Agreement and are hereby made a part hereof as if set out in full in
this Agreement. For the purposes of this Agreement, any matter that is disclosed
in a particular Schedule to this Agreement shall be deemed to have been included
in the other

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Schedules, notwithstanding the omission of a cross reference thereto, to the
extent the relevance of such matter to such other Schedules is reasonably
apparent on the face of such Schedule. Disclosure of any fact or item in any
Schedule shall not necessarily mean that such fact or item is material to the
Company or its Subsidiaries individually or taken as a whole. In particular, (i)
certain matters may be disclosed on Schedules that may not be required to be
disclosed because of certain minimum thresholds or materiality standards set
forth in this Agreement, (ii) the disclosure of any such matter does not mean
that it meets or surpasses any such minimum thresholds or materiality standards
and (iii) no disclosure in Schedules relating to any possible breach or
violation of any Contract or law shall be construed as an admission or
indication that any such breach or violation exists or has actually occurred. In
no event shall the listing of such matters in any Schedule be deemed or
interpreted to expand the scope of any Seller’s representations and warranties
contained in this Agreement. Each Schedule is qualified in its entirety by
reference to specific provisions of the Agreement and does not constitute, and
shall not be construed as constituting, representations, warranties or covenants
of Parent or any Seller or their respective affiliates, except as and to the
extent provided in this Agreement. Matters reflected in a Schedule are not
necessarily limited to matters or Contracts required by this Agreement to be
disclosed in such Schedules.  

Section 12.3Time of the Essence; Computation of Time.  Time is of the essence
for each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge or any duty hereunder shall fall upon
a Saturday, Sunday or any date on which banks in Dallas, Texas are authorized to
be closed, the party having such privilege or duty may exercise such privilege
or discharge such duty on the next succeeding day which is a regular Business
Day.

Section 12.4Expenses.  Regardless of whether the transactions provided for in
this Agreement are consummated, except as otherwise provided herein, each party
hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated herein. The Sellers understand and acknowledge that
all out-of-pocket fees and expenses incurred or to be incurred by the Company in
connection with the transactions contemplated hereby (including, without
limitation, the Seller Expenses) that are not paid as of the Closing Date shall
be paid by Parent and deducted from the Base Purchase Price pursuant to Section
2.3.

Section 12.5Governing Law.  This Agreement, and all claims or causes of action
(whether in contract or tort) that may be based upon, arise out of or relate in
any way to this Agreement or the negotiation, execution or performance of this
Agreement (including any claim or cause of action based upon, arising out of or
related in any way to any representation or warranty made in or in connection
with this Agreement or as an inducement to enter into this Agreement), shall be
governed by the internal laws of the State of Oregon, without reference to the
choice of law or conflicts of law principles thereof.  Any action, suit or other
proceeding relating to this Agreement may only be brought in any federal or
state court located in Portland, Oregon as the party bringing such action, suit
or proceeding shall elect, having jurisdiction over the subject matter thereof.

Section 12.6Assignment; Successors and Assigns; No Third Party Rights.  Except
as otherwise provided herein, this Agreement may not, without the prior written
consent of the other parties hereto, be assigned by operation of law or
otherwise. Any attempted assignment in violation of the foregoing shall be null
and void. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, permitted assigns and legal representatives. Except to the extent
set forth in Sections 6.5, 11.1, 12.15 and/or Article VIII, this Agreement shall
be for the sole benefit of the parties to this Agreement and their respective
heirs, successors, permitted assigns and legal representatives and is not
intended, nor shall be construed, to give any Person, other than the parties
hereto and their respective heirs, successors, assigns and legal
representatives, any legal or equitable right, remedy or claim hereunder.

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Section 12.7Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart. Delivery of a copy of this Agreement
bearing an original signature by facsimile transmission or by electronic mail in
“portable document format” shall have the same effect as physical delivery of
the paper document bearing the original signature.

Section 12.8Titles and Headings.  The titles, captions and table of contents in
this Agreement are for reference purposes only, and shall not in any way define,
limit, extend or describe the scope of this Agreement or otherwise affect the
meaning or interpretation of this Agreement.

Section 12.9Entire Agreement.  This Agreement, including the Exhibits and
Schedules attached hereto, and the other Transaction Documents, constitute the
entire agreement among the parties with respect to the matters covered hereby
and supersedes all previous and contemporaneous understandings and agreements,
both written and oral, or implied understandings among them with respect to such
matters.  In the event of any inconsistency between the statements in the body
of this Agreement and those in the other Transaction Documents, the Exhibits and
Schedules (other than an exception expressly set forth as such in the
Schedules), the statements in the body of this Agreement will control.

Section 12.10Severability.  If any term or provision of this Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction. Upon such determination that any term or other provision
is invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

Section 12.11No Strict Construction.  Each of the parties hereto acknowledges
that this Agreement has been prepared jointly by the parties hereto and shall
not be strictly construed against any party.

Section 12.12Specific Performance.  Subject to Section 10.2, the parties agree
that: (i) irreparable damage would occur if any provision of this Agreement were
not performed by the parties in accordance with the terms hereof; (ii) there
would be no adequate remedy at law or in damages to compensate for such
performance failure; and (iii) the parties shall be entitled (without the
requirement to post a bond) to an injunction or injunctions to prevent breaches
of this Agreement, or to enforce specifically the performance of the terms and
provisions hereof, in binding arbitration in accordance with Section 12.5 of
this Agreement, in addition to any other remedy to which they are entitled by
applicable law or in equity.

Section 12.13Waiver of Jury Trial.  Each of the parties hereto waives any right
it may have to trial by jury in respect of any litigation based on, arising out
of, under or in connection with this Agreement or any course of conduct, course
of dealing, verbal or written statement or action of any party hereto.

Section 12.14Amendments.  This Agreement may be amended, modified or
supplemented by a written instrument authorized and executed on behalf of Parent
and the Representative (on behalf of the Sellers) at any time with respect to
any of the terms contained herein.  No waiver by any party shall operate or be
construed as a waiver in respect of any failure, breach or default not expressly
identified by such written waiver, whether of a similar or different character,
and whether occurring before or after that waiver. No failure to exercise, or
delay in exercising, any right, remedy, power or privilege arising from this
Agreement shall operate or be construed as a waiver thereof; nor shall any
single or partial exercise of any

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right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  Except as provided in Section 12.6, all rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

Section 12.15No Third Party Liability.  This Agreement may only be enforced
against the named parties hereto.  All claims or causes of action (whether in
contract or tort) that may be based upon, arise out of or relate to this
Agreement, or the negotiation, execution or performance of this Agreement
(including any representation or warranty made in or in connection with this
Agreement or as an inducement to enter into this Agreement), may be made only
against the Persons that are expressly identified as parties
hereto.  Notwithstanding anything that may be expressed or implied in this
Agreement, any Transaction Document or any document, certificate or instrument
delivered in connection herewith or therewith, each party hereby acknowledges
and agrees that it has no right of recovery against, and no personal liability
shall attach to, the former, current or future direct or indirect equity
holders, directors, officers, employees, incorporators, agents, attorneys,
representatives, affiliates, members, managers, general or limited partners or
assignees of any Seller or any former, current or future direct or indirect
equity holder, director, officer, employee, incorporator, agent, attorney,
representative, general or limited partner, member, manager, affiliate, agent,
assignee or representative of any of the foregoing (collectively, the “Seller
Affiliates”), through any Seller or otherwise, whether by or through attempted
piercing of the corporate, partnership, limited partnership or limited liability
company veil, by or through a claim by or on behalf of Parent against any Seller
or Seller Affiliate by the enforcement of any assessment or by any legal or
equitable action or proceeding, by virtue of any law, or otherwise, except for
Parent’s rights to recover from the Sellers (but not any of the Seller
Affiliates) under and to the extent provided in this Agreement subject to the
limitations described herein.  Recourse against the Sellers under and to the
extent provided in this Agreement, subject to the limitations described herein,
shall be the sole and exclusive remedy of Parent and each Parent Indemnitee
against the Sellers or any Seller Affiliate in respect of any Losses,
liabilities or obligations arising under, or in connection with, this Agreement,
any Transaction Document or any document, certificate or instrument delivered in
connection herewith or therewith, or the transactions contemplated hereby or
thereby.  Parent hereby covenants and agrees, on behalf of itself and each
Parent Indemnitee, that it and they shall not institute, and it and they shall
cause their respective affiliates not to institute, any action or proceeding or
bring any other claim arising under, or in connection with, this Agreement, any
Transaction Document or any document, certificate or instrument delivered in
connection herewith or therewith, or the transactions contemplated hereby or
thereby against the Sellers or any Seller Affiliates except for claims against
the Sellers under and to the extent provided in this Agreement, subject to the
limitations described herein.

Section 12.16Representation and Confidential Information.  To the fullest extent
permissible under the Oregon Rules of Professional Conduct and the law:

(a)Representation, Withdrawal and Continuation.  The parties to this Agreement
acknowledge that Dunn Carney Allen Higgins & Tongue LLP (“DCA”) currently serves
as counsel to both (i) the Company on the one hand, and (ii) the Representative
and/or certain of the Sellers on the other hand, in each case including in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement.  There may come a time, including after the consummation of the
transactions contemplated by this Agreement, when the interests of the
Representative and/or Sellers on the one hand, and the Company on the other
hand, may no longer be aligned or when, for any reason, the Representative, DCA
and/or the Company believes that DCA cannot any longer, or should no longer,
represent both the Representative and/or the Sellers on the one hand and the
Company on the other.  The parties understand and specifically agree that DCA
may withdraw from representing the Company and continue to represent the
Representative and/or the Sellers even if the interests of the Representative
and/or the Sellers on the one hand and the interests of the Company on the

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other hand are or may be adverse, including and in connection with any dispute
arising out of or relating to this Agreement or the transactions contemplated by
this Agreement and even though DCA may have represented the Company in a manner
substantially related to such dispute, and Purchaser and the Company hereby
consent to and waive any conflict of interest arising therefrom.

(b)Reservation and Protection of Confidentiality Post Closing.  Each of the
parties further agrees that as to all communications occurring among DCA, the
Company, the Representative and the Sellers relating to this Agreement or the
transactions contemplated hereby, the attorney-client privilege, the expectation
of client confidence and all other rights to any evidentiary privilege that
attach as a result of DCA representing the Company in connection with this
Agreement and the transactions contemplated hereby shall survive the Closing and
shall remain in effect, provided that any such privilege, from and after the
Closing shall belong to the Representative and/or the Sellers and shall not pass
to or be claimed by the Company or any of its Affiliates.  In furtherance of the
foregoing, each of the parties hereby agrees to take the steps necessary to
ensure that any privilege attaching as a result of DCA representing the Company
in connection with this Agreement and the transactions contemplated hereby shall
survive the Closing, remain in effect and be controlled by the Representative
and/or Sellers.  As to any privileged attorney-client communications between DCA
on the one hand and the Company on the other hand prior to the closing date
relating to this Agreement or the transactions contemplated hereby (collectively
the “Privileged Communications”), Parent agrees not to, and agrees to cause the
Surviving Corporation and LLC Sub, together with any of their respective
Affiliates, successors or assigns, not to, access, use or rely on any of the
Privileged Communications in any action or claim against or involving any of the
parties hereto after the Closing.  In addition, if the transactions contemplated
by this Agreement are consummated, the Company shall have no right of access to
or control over any of DCA’s records related to the transactions contemplated by
this Agreement which shall become the property and be controlled by the
Representative and/or the Sellers.  Furthermore, in the event of a dispute
between the Representative and/or the Sellers on the one hand and the Company on
the other hand, arising out of or relating to any matter in which DCA acted for
them both, none of the attorney-client privilege, the expectation of client
confidence or any other rights to any evidentiary privilege will protect from
disclosure to the Representative and/or Sellers any information or documents
developed or shared during the course of DCA’s representation of the
Representative and/or the Sellers on the one hand and the Company on the other
hand, in connection with this Agreement and the transactions contemplated
thereby.

Section 12.17Charitable Seller.  Each of the parties hereto agree that the
Charitable Seller shall be deemed to be a Seller for all purposes hereunder;
provided, however, that the Charitable Seller shall not be deemed to make any
representation or warranty hereunder, other than the representations and
warranties set forth in Article IV; and provided further, that, with respect to
the representations and warranties set forth in Section 4.4, the Charitable
Seller shall be deemed to have made such representations and warranties solely
with respect to the period of time prior to the Closing during which the
Charitable Seller was the owner of record or beneficial owner of the shares of
Common Stock held by the Charitable Seller as of the date
hereof.  Notwithstanding anything to the contrary set forth in Article VIII, the
Charitable Seller shall have no liability to indemnify any Parent Indemnitee
from any against any Losses pursuant to Section 8.2 in excess of the Charitable
Seller’s pro rata portion of the Base Cash Purchase Price and Base Equity
Purchase Price actually received by the Charitable Seller in connection with the
transactions contemplated by this Agreement or any of the other Transaction
Documents.

* * * * * * *

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be duly executed as of the day and year first above written.

 

PARENT:

 

 

 

ENNIS, INC.

 

 

 

By:

 

/s/ Keith S. Walters

Name:

 

Keith S. Walters

Title:

 

President, Chief Executive Officer and

 

 

Chairman of the Board

 

MERGER SUB:

 

 

 

CASCADIA MERGER SUB, INC.

 

 

 

By:

 

/s/ Keith S. Walters

Name:

 

Keith S. Walters

Title:

 

President

 

LLC SUB:

 

 

 

CASCADIA MERGER SUB II LLC

 

 

 

By:

 

/s/ Keith S. Walters

Name:

 

Keith S. Walters

Title:

 

President

 

 

 

[Signature Page to Agreement and Plan of Merger]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be duly executed as of the day and year first above written.

 

COMPANY:

 

 

 

WRIGHT BUSINESS FORMS, INC.

 

 

 

 

 

/s/ James T. Wright

Name:

 

James T. Wright

Title:

 

Chairman and Chief Executive Officer

 

REPRESENTATIVE:

 

 

 

 

 

/s/ James T. Wright

Name:

 

James T. Wright

 

PURCHASER REPRESENTATIVE:

 

 

 

 

 

/s/ James T. Wright

Name:

 

James T. Wright

 

 

 

[Signature Page to Agreement and Plan of Merger]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be duly executed as of the day and year first above written.

 

SELLERS:

 

 

 

JAMES T. WRIGHT REVOCABLE TRUST

 

 

 

 

 

/s/ James T. Wright

Name:

 

James T. Wright

Title:

 

Co-Trustee

 

SONDRA S. WRIGHT REVOCABLE TRUST

 

 

 

 

 

/s/ James T. Wright

Name:

 

James T. Wright

Title:

 

Co-Trustee

 

WBF, LLC

 

 

 

 

 

/s/ James T. Wright

Name:

 

James T. Wright

Title:

 

Manager

 

ADKISON FAMILY TRUST

 

 

 

 

 

/s/ Daniel C. Adkison

Name:

 

Daniel C. Adkison

Title:

 

Co-Trustee

 

 

 

 

 

/s/ Susan J. Adkison

Name:

 

Susan J. Adkison

Title:

 

Co-Trustee

 

 

 

[Signature Page to Agreement and Plan of Merger]

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be duly executed as of the day and year first above written.

 

SELLERS:

 

 

 

 

 

/s/ Pamela Lynne Lambert

Name:

 

Pamela Lynne Lambert

 

 

 

 

 

/s/ Tracie Jo Wright

Name:

 

Tracie Jo Wright

 

 

 

 

 

/s/ Kellie Sue Lutter

Name:

 

Kellie Sue Lutter

 

 

 

 

 

/s/ Stephan Lutter

Name:

 

Stephan Lutter

 

 

 

[Signature Page to Agreement and Plan of Merger]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be duly executed as of the day and year first above written.

 

CHARITABLE SELLER:

 

 

 

NCF CORPORATION,

as sole trustee for the NCF Charitable Trust

 

 

 

 

 

/s/ Dick Peterson

Name:

 

Dick Peterson

Title:

 

President

 

 

 

[Signature Page to Agreement and Plan of Merger]

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EXHIBIT A

Sample Closing Working Capital Statement(1)

 

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EXHIBIT B

Articles of Merger

 

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EXHIBIT C

Escrow Agreement

 

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EXHIBIT D

LLC Sub Merger Agreement

 

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EXHIBIT E

Daniel C. Adkison Noncompetition Agreement

 

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EXHIBIT F

Stephan Lutter Noncompetition Agreement