EXHIBIT 10.10

 

STOCK PURCHASE AGREEMENT

 

dated as of November 12, 2018

 

among

 

1847 CB, Inc.

 

CORNERSTONE BUILDERS OF SW FLORIDA, INC.

 

AND

 

ANTHONY LEOPARDI

 

   

   

 

TABLE OF CONTENTS

 

 

 

Page

 

ARTICLE I DEFINITIONS

 

1

 

1.1

Certain Definitions.

 

1

 

 

ARTICLE II PURCHASE AND SALE OF THE SHARES

5

 

2.1

Purchase and Sale of the Shares.

 

5

 

2.2

Adjustments to Purchase Price.

 

5

 

2.3

Closing.

 

6

 

2.4

Transactions to be Effected at the Closing.

 

6

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER

7

 

3.1

Authority and Enforceability.

 

7

 

3.2

Noncontravention.

 

7

 

3.3

The Shares.

 

7

 

3.4

Brokers’ Fees.

 

8

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY

8

 

4.1

Organization, Qualification and Corporate Power; Authority and Enforceability.

 

8

 

4.2

Subsidiaries.

 

8

 

4.3

Capitalization.

 

9

 

4.4

Noncontravention.

 

9

 

4.5

Financial Statements.

 

10

 

4.6

Taxes.

 

10

 

4.7

Compliance with Laws and Orders; Permits.

 

10

 

4.9

Tangible Personal Assets.

 

11

 

4.10

Real Property.

 

11

 

4.11

Intellectual Property.

 

13

 

4.12

Absence of Certain Changes or Events.

 

14

 

4.13

Contracts.

 

15

 

4.14

Litigation.

 

15

 

4.15

Employee Benefits.

 

15

 

4.16

Labor and Employment Matters.

 

15

 

4.17

Environmental.

 

16

 

4.18

Insurance.

 

16

 

4.19

Inventory.

 

16

 

4.20

Notes and Accounts Receivable.

 

16

 

4.21

Powers of Attorney.

 

16

 

4.22

Product Warranty.

 

16

 

4.23

Product Liability.

 

17

 

4.24

Brokers’ Fees.

 

17

 

4.25

Certain Business Relationships with the Company.

 

17

 

4.26

Disclosure.

 

17

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER

17

 

5.1

Organization.

 

18

 

5.2

Authorization.

 

18

 

5.3

Noncontravention.

 

18

 

 

i

   

 

ARTICLE VI COVENANTS

 

18

 

6.1

Consents.

 

18

 

6.2

Operation of the Company’s Business.

 

19

 

6.3

Access.

 

19

 

6.4

Transfer of Cash and Cash Equivalents.

 

20

 

6.5

Notice of Developments.

 

20

 

6.6

No Solicitation.

 

20

 

6.7

Taking of Necessary Action; Further Action.

 

20

 

6.8

Covenant not to Compete.

 

20

 

6.10

Financial Information.

 

21

 

6.11

Disclosure Schedule.

 

21

 

 

 

ARTICLE VII CONDITIONS TO OBLIGATIONS TO CLOSE

 

21

 

7.1

Conditions to Obligation of the Buyer.

21

 

7.2

Conditions to Obligation of the Seller.

23

 

 

 

ARTICLE VIII TERMINATION; AMENDMENT; WAIVER

 

24

 

8.1

Termination of Agreement.

24

 

8.2

Effect of Termination.

24

 

8.3

Amendments.

24

 

8.4

Waiver.

25

 

 

 

ARTICLE IX INDEMNIFICATION

 

25

 

9.1

Survival.

 

25

 

9.2

Indemnification by Seller.

 

25

 

9.3

Indemnification by Buyer.

 

26

 

9.4

Indemnification Procedure.

 

26

 

9.5

Failure to Give Timely Notice.

 

27

 

9.6

Limited on Indemnification Obligation.

 

27

 

9.7

Payments.

 

27

 

 

 

ARTICLE X MISCELLANEOUS

 

27

 

10.1

Press Releases and Public Announcement.

 

27

 

10.2

No Third-Party Beneficiaries.

 

27

 

10.3

Entire Agreement.

 

27

 

10.4

Succession and Assignment.

 

28

 

10.5

Construction.

 

28

 

10.6

Notices.

 

28

 

10.7

Governing Law.

 

29

 

10.8

Consent to Jurisdiction and Service of Process.

 

29

 

10.9

Headings.

 

29

 

10.10

Severability.

 

30

 

10.11

Expenses.

 

30

 

10.12

Incorporation of Exhibits and Schedules.

 

30

 

10.13

Counterparts.

 

30

 

Disclosure Schedule

 

 

ii

   

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT, dated as of November 12, 2018 (the “Agreement”), among
1847 CB, Inc., a Delaware corporation (the “Buyer”), Cornerstone Builders of SW
Florida, Inc., a Florida corporation (the “Company”), and Anthony Leopardi (the
“Seller”).

 

BACKGROUND

 

The Seller is the record and beneficial owner of all of the outstanding shares
(the “Shares”) of Common Stock of the Company (the “Common Stock”). The Shares
constitute 100% of the issued and outstanding shares of Common Stock of the
Company. The Seller desires to sell all of the Shares to the Buyer, and the
Buyer desires to purchase all of the Shares from the Seller, upon the terms and
subject to the conditions set forth in this Agreement (such sale and purchase of
the Shares, the “Acquisition”).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein, the
parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1 Certain Definitions.

 

(a) When used in this Agreement, the following terms will have the meanings
assigned to them in this Section 1.1(a):

 

“Action” means any claim, action, suit, inquiry, hearing, proceeding or other
investigation.

 

“Affiliate” means, with respect to a Person, any other Person that, directly or
indirectly, through one or more intermediaries, Controls, is Controlled by or is
under common Control with, such Person. For purposes of this definition,
“Control” (including the terms “Controlled by” and “under common Control with”)
means possession of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of stock, as trustee or
executor, by Contract or otherwise.

 

“Benefit Plan” means any “employee benefit plan” as defined in ERISA Section
3(3), including any (a) nonqualified deferred compensation or retirement plan or
arrangement which is an Employee Pension Benefit Plan (as defined in ERISA
Section 3(2)), (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan (as defined in ERISA Section 3(37)), (d)
Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material
fringe benefit plan or program, or (e) stock purchase, stock option, severance
pay, employment, change-in-control, vacation pay, company award, salary
continuation, sick leave, excess benefit, bonus or other incentive compensation,
life insurance, or other employee benefit plan, contract, program, policy or
other arrangement, whether or not subject to ERISA, under which any present or
former employee of the Company has any present or future right to benefits
sponsored or maintained by the Company or any ERISA Affiliate.

 

  1

   

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
banks located in New York, NY are authorized or required by Law to close.

 

“Closing Working Capital” means the difference, as of the Closing Date, between
(a) the sum of the cash, accounts receivable, inventory, capitalized work in
process, prepaid expenses and other current assets of the Company, as reflected
on the Closing Date Balance Sheet, less (b) the accounts payable, customer
deposits, sales taxes payable, and other current liabilities of the Company as
reflected on the Closing Date Balance Sheet, in each case, determined in
accordance with GAAP.

 

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

 

“Contract” means any written agreement, contract, commitment, arrangement or
understanding.

 

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

 

“ERISA Affiliate” means any Person who is, or at any time was, a member of a
“controlled group of corporations” within the meaning of Section 414(b) or (c)
of the Code and, for the purpose of Section 302 of ERISA and/or Section 412,
4971, 4977, 4980D, 4980E and/or each “applicable section” under Section
414(f)(2) of the Code, within the meaning of Section 412(n)(6) of the Code that
includes, or at any time included, the Company or any Affiliate thereof, or any
predecessor of any of the foregoing.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means United States generally accepted accounting principles.

 

“Governmental Entity” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state or local government or foreign, international,
multinational or other government, including any department, commission, board,
agency, bureau, official or other regulatory, administrative or judicial
authority thereof.

 

“Independent Accounting Firm” means any nationally recognized independent
registered public accounting firm which has not represented the Company or the
Seller or any of their Affiliates for the past five years as will be agreed by
the Company and the Buyer in writing.

 

“IRS” means the Internal Revenue Service.

 

“Knowledge of the Seller” or any similar phrase means the actual knowledge of
each Seller, in each case without obligation of inquiry.

 

“Law” means any statute, law, ordinance, rule, regulation of any Governmental
Entity.

 

  2

   

 

“Liability” means all indebtedness, obligations and other liabilities and
contingencies of a Person, whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due.

 

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, hypothecation or other encumbrance in respect of such
property or asset.

 

“Material Adverse Effect” means any material adverse effect on the assets,
properties, condition (financial or otherwise), operations of the Company and
any of its Subsidiaries, taken as a whole.

 

“Minimum Working Capital” is equal to $300,000.

 

“Order” means any award, injunction, judgment, decree, order, ruling, subpoena
or verdict or other decision issued, promulgated or entered by or with any
Governmental Entity of competent jurisdiction.

 

“Permit” means any authorization, approval, consent, certificate, license,
permit or franchise of or from any Governmental Entity of competent jurisdiction
or pursuant to any Law.

 

“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association, a Governmental Entity or any
agency, instrumentality or political subdivision of a Governmental Entity, or
any other entity or body.

 

“Preliminary Working Capital” means the difference, as of the date of the
Preliminary Balance Sheet, between (a) the sum of the cash, accounts receivable,
inventory, capitalized work in process, prepaid expenses and other current
assets of the Company, as reflected on the Preliminary Balance Sheet, less (b)
the accounts payable, customer deposits, sales taxes payable, and other current
liabilities of the Company as reflected on the Preliminary Balance Sheet, in
each case, determined in accordance with GAAP.

 

“Representatives” means, with respect to any Person, the respective directors,
officers, employees, counsel, accountants and other representatives of such
Person.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture or other legal entity of which such Person (either alone or
through or together with any other Subsidiary), owns, directly or indirectly,
more than 50% of the stock or other equity interests, the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of a non-corporate Person.

 

“Taxes” means all federal, state, local and foreign income, profits, franchise,
gross receipts, environmental, customs duty, capital stock, severance, stamp,
payroll, sales, transfer, employment, unemployment, disability, use, property,
withholding, excise, production, value added, occupancy and other taxes, duties
or assessments of any nature whatsoever.

 

  3

   

 

“Taxing Authority” means any Governmental Entity having or purporting to
exercise jurisdiction with respect to any Tax.

 

“Tax Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

 

“Transaction Proposal” means any unsolicited written bona fide proposal made by
a third party relating to (i) any direct or indirect acquisition or purchase of
all or substantially all assets of the Company, (ii) any direct or indirect
acquisition or purchase of a majority of the combined voting power of the
Shares, (iii) any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company in which
the other party thereto or its stockholders will own 51% or more of the combined
voting power of the parent entity resulting from any such transaction, or (iv)
any other transaction that is inconsistent with the intent and purpose of this
Agreement.

 

“Transfer Taxes” means sales, use, transfer, recording, documentary, stamp,
registration and stock transfer Taxes and any similar Taxes.

 

“$” means United States dollars.

 

(b) For purposes of this Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires: (i) the meaning assigned to
each term defined herein will be equally applicable to both the singular and the
plural forms of such term and vice versa, and words denoting any gender will
include all genders as the context requires; (ii) where a word or phrase is
defined herein, each of its other grammatical forms will have a corresponding
meaning; (iii) the terms “hereof”, “herein”, “hereunder”, “hereby” and
“herewith” and words of similar import will, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement; (iv) when a reference is made in this Agreement to
an Article, Section, paragraph, Exhibit or Schedule without reference to a
document, such reference is to an Article, Section, paragraph, Exhibit or
Schedule to this Agreement; (v) a reference to a subsection without further
reference to a Section is a reference to such subsection as contained in the
same Section in which the reference appears, and this rule will also apply to
paragraphs and other subdivisions; (vi) the word “include”, “includes” or
“including” when used in this Agreement will be deemed to include the words
“without limitation”, unless otherwise specified; (vii) a reference to any party
to this Agreement or any other agreement or document will include such party’s
predecessors, successors and permitted assigns; (viii) a reference to any Law
means such Law as amended, modified, codified, replaced or reenacted as of the
date hereof, and all rules and regulations promulgated thereunder as of the date
hereof; and (ix) all accounting terms used and not defined herein have the
respective meanings given to them under GAAP.

 

  4

   

 

ARTICLE II

PURCHASE AND SALE OF THE SHARES

 

2.1 Purchase and Sale of the Shares.

 

Upon the terms and subject to the conditions set forth in this Agreement, at the
Closing the Seller will sell, transfer and deliver, and the Buyer will purchase
from the Seller, all of the Shares for an aggregate purchase price of Eighteen
Million Dollars ($18,000,000) in cash (the “Purchase Price”), payable by the
Buyer at the Closing through the delivery to the Seller of cash in immediately
available funds. The Purchase Price assumes that the Buyer will be able to
verify through its accounting due diligence that the Company is trending to
achieve at least $5,500,000.00 of EBITDA on an adjusted basis as mutually agreed
upon between the Buyer and the Seller. The Purchase Price shall not be adjusted
without the written consent of Seller including based on the determined EBITDA
with the exception of adjustments pursuant to Paragraphs 2.2(a)(iii), 2.2 (b),
and 2.2 (c).

 

2.2 Adjustments to Purchase Price.

 

(a) Working Capital Adjustment.

 

(i) At the Closing, the Seller shall deliver to the Buyer an unaudited balance
sheet of the Company (the “Preliminary Balance Sheet”) as at the Closing
together with a certificate of the Seller stating that the Preliminary Balance
Sheet was prepared in accordance with GAAP so as to present fairly in all
material respects the financial condition of Company as of such date.

 

(ii) As soon as practicable following the Closing Date (but not later than
seventy-five (75) days after the Closing Date), the Buyer shall cause its
auditor to prepare and deliver to the Seller an audited balance sheet of the
Company (the “Closing Date Balance Sheet”) as of the Closing Date. The Closing
Date Balance Sheet shall be prepared in accordance with GAAP in a manner
consistent with the Preliminary Balance Sheet so as to present fairly in all
material respects the financial condition of the Company.

 

(iii) If the Closing Working Capital exceeds the Preliminary Working Capital,
then the Buyer (or, at the Buyer’s direction, the Company) shall pay promptly
(and, in any event, within seven (7) days) to the Seller an amount in cash that
is equal to the excess. If the Preliminary Working Capital differs from the
Closing Working Capital, then the Seller or Buyer shall pay promptly (and, in
any event, within seven (7) days) to the Buyer or Seller an amount in cash that
is equal to such difference. Any such adjustment shall be treated as an
adjustment to the Purchase Price.

 

(iv) In the event the Seller does not agree with the Closing Working Capital as
reflected on the Closing Date Balance Sheet, the Seller shall so inform the
Buyer in writing within fifteen (15) days of the Seller’s receipt thereof, such
writing to set forth the objections of the Seller in reasonable detail. If the
Seller and the Buyer cannot reach agreement as to any disputed matter relating
to the Closing Working Capital within fifteen (15) days after notification by
the Seller to the Buyer of a dispute, they shall forthwith refer the dispute to
an Independent Accounting Firm mutually agreeable to the Seller and the Buyer
for resolution, with the understanding that such firm shall resolve all disputed
items within twenty (20) days after such disputed items are referred to it. If
the Buyer and the Seller are unable to agree on the choice of an Independent
Accounting Firm, they shall select an Independent Accounting Firm by lot (after
excluding their respective regular outside accounting firms). The Seller, on the
one hand, and the Buyer, on the other hand, shall bear one-half of the costs of
such accounting firm. The decision of the accounting firm with respect to all
disputed matters relating to the Closing Working Capital shall be deemed final
and conclusive and shall be binding upon the Seller and the Buyer. In addition,
if the Seller does not object to the Closing Working Capital within the 15-day
period referred to above, the Closing Working Capital, as reflected on the
Closing Date Balance Sheet as so prepared, shall be deemed final and conclusive
and binding upon the Seller and the Buyer.

 

  5

   

 

(v) The Seller shall be entitled to have access to the books and records of the
Company and the Buyer’s work papers prepared in connection with the Closing Date
Balance Sheet and shall be entitled to discuss such books and records and work
papers with the Buyer and those persons responsible for the preparation thereof.

 

(b) Minimum Working Capital Adjustment. If the Minimum Working Capital exceeds
the Preliminary Working Capital, then the Purchase Price shall be reduced at the
Closing by an amount equal to such difference. If the Preliminary Working
Capital exceeds $300,000.00 at Closing, the Purchase Price shall be increased by
the amount the Preliminary Working Capital exceeds $300,000.00 or all cash and
cash equivalents shall be disbursed to Seller in any amounts that exceeds
$300,000.00.

 

(c) Adjustment for Outstanding Indebtedness. The Purchase Price shall be
decreased by the amount of any outstanding indebtedness of the Company existing
as of the Closing Date and the deducted amount shall be utilized to pay off such
outstanding indebtedness.

 

2.3 Closing. The consummation of the Acquisition (the “Closing”) will take place
by the reciprocal delivery of closing documents by electronic mail, regular
mail, fax or any other means mutually agreed upon by the parties hereto on a
date that is no later than two (2) Business Days immediately following the day
on which the last of the conditions to closing contained in Article VII (other
than any conditions that by their nature are to be satisfied at the Closing) is
satisfied or waived in accordance with this Agreement or at such other location
or on such other date as the Buyer and the Company may mutually determine (the
date on which the Closing actually occurs is referred to as the “Closing Date”).

 

2.4 Transactions to be Effected at the Closing.

 

(a) At the Closing, the Buyer will (i) pay to the Seller the Purchase Price,
adjusted in accordance with subsection 2.2(b) above and less the amounts paid
pursuant to subsection 2.2(c) above by paying such sum to the Seller by transfer
of immediately available funds in accordance with instructions provided by the
Seller and (ii) deliver to the Seller all other documents, instruments or
certificates required to be delivered by the Buyer at or prior to the Closing
pursuant to this Agreement.

 

(b) At the Closing, the Seller will deliver to the Buyer (i) a certificate or
certificates representing the Shares duly endorsed or accompanied by stock
powers duly endorsed in blank and (ii) all other documents, instruments or
certificates required to be delivered by the Seller at or prior to the Closing
pursuant to this Agreement.

 

  6

   

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Seller represents and warrants to the Buyer that each statement contained in
this Article III is true and correct as of the date hereof, except as set forth
in the schedule accompanying this Agreement (the “Disclosure Schedule”). The
Disclosure Schedule has been arranged for purposes of convenience only, in
sections corresponding to the Sections of this Article III and Article IV. Each
section of the Disclosure Schedule will be deemed to incorporate by reference
all information disclosed in any other section of the Disclosure Schedule.

 

3.1 Authority and Enforceability. The Seller has the requisite legal capacity to
execute and deliver this Agreement, to perform the Seller’s obligations
hereunder and to consummate the Acquisition and the other transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Seller and, assuming the due authorization, execution and delivery by each other
party hereto, constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as limited
by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar Laws relating to creditors’ rights generally and (b) general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at Law.

 

3.2 Noncontravention.

 

(a) Neither the execution and the delivery of this Agreement nor the
consummation of the Acquisition or the other transactions contemplated by this
Agreement will, with or without the giving of notice or the lapse of time or
both, (i) to the actual knowledge of the Seller and assuming compliance with the
filing and notice requirements set forth in Section 3.2(b)(i), violate any Law
applicable to the Seller or (ii) violate any Contract to which the Seller is a
party, except to the extent that any such violation would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(b) The execution and delivery of this Agreement by the Seller does not, and the
performance of this Agreement by the Seller will not, require any consent,
approval, authorization or Permit of, or filing with or notification to, any
Governmental Entity, except for (i) the filings set forth in Section 3.2(b) of
the Disclosure Schedule or (ii) where the failure to take such action would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

3.3 The Shares.

 

(a) The Seller holds of record and owns beneficially all of the issued and
outstanding shares of capital stock of the Company free and clear of all Liens,
other than (a) Liens for current real or personal property Taxes that are not
yet due and payable or that may hereafter be paid without material penalty or
that are being contested in good faith, (b) statutory Liens of landlords and
workers’, carriers’ and mechanics’ or other like Liens incurred in the ordinary
course of business or that are being contested in good faith, (c) Liens and
encroachments which do not materially interfere with the present or proposed use
of the properties or assets they affect, (d) Liens that will be released prior
to or as of the Closing, (e) Liens arising under this Agreement, (f) Liens
created by or through the Buyer, and (g) Liens set forth on Section 3.3(a) of
the Disclosure Schedule (the “Permitted Liens”).

 

  7

   

 

(b) Except as set forth in this Agreement, the Seller is not party to any
Contract obligating the Seller to vote or dispose of any shares of the capital
stock of, or other equity or voting interests in, the Company.

 

3.4 Brokers’ Fees. Except as set forth in Section 3.4 of the Disclosure
Schedule, the Seller does not have any Liability to pay any fees or commissions
to any broker, finder or agent with respect to this Agreement, the Acquisition
or the transactions contemplated by this Agreement.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY

 

The Seller represents and warrants to the Buyer that each statement contained in
this Article IV is true and correct as of the date hereof, except as set forth
in the Disclosure Schedule.

 

4.1 Organization, Qualification and Corporate Power; Authority and
Enforceability.

 

(a) The Company is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Florida, and has all requisite corporate
power and authority, directly or indirectly, to own, lease and operate its
properties and assets and to carry on its business as it is now being conducted.
The Company is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties or assets owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

(b) The Company has the requisite power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Company, and no other action is necessary on the part
of the Company to authorize this Agreement or to consummate the Acquisition or
the other transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by each other party hereto, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar Laws relating
to creditors’ rights generally and (b) general principles of equity, whether
such enforceability is considered in a proceeding in equity or at Law.

 

4.2 Subsidiaries. The Company does not have any Subsidiaries.

 

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4.3 Capitalization.

 

(a) The authorized capital stock of the Company and the issued and outstanding
capital stock of the Company are all as disclosed in Section 4.3 of the
Disclosure Schedule. No other capital stock of the Company is authorized, issued
or outstanding.

 

(b) There are no outstanding options, warrants or other securities or
subscription, preemptive or other rights convertible into or exchangeable or
exercisable for any shares of capital stock or other equity or voting interests
of the Company and there are no “phantom stock” rights, stock appreciation
rights or other similar rights with respect to the Company. There are no
Contracts of any kind to which the Company is a party or by which the Company is
bound, obligating the Company to issue, deliver, grant or sell, or cause to be
issued, delivered, granted or sold, additional shares of capital stock of, or
other equity or voting interests in, or options, warrants or other securities or
subscription, preemptive or other rights convertible into, or exchangeable or
exercisable for, shares of capital stock of, or other equity or voting interests
in, the Company, or any “phantom stock” right, stock appreciation right or other
similar right with respect to the Company, or obligating the Company to enter
into any such Contract.

 

(c) There are no securities or other instruments or obligations of the Company,
the value of which is in any way based upon or derived from any capital or
voting stock of the Company or having the right to vote (or convertible into, or
exchangeable or exercisable for, securities having the right to vote) on any
matters on which the Company’s stockholders may vote.

 

(d) There are no Contracts, contingent or otherwise, obligating the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of, or other
equity or voting interests in, the Company. There are no voting trusts,
registration rights agreements or stockholder agreements to which the Company is
a party with respect to the voting of the capital stock of the Company or with
respect to the granting of registration rights for any of the capital stock of
the Company. There are no rights plans affecting the Company.

 

(e) Except as set forth in Section 4.3(e) of the Disclosure Schedule, there are
no bonds, debentures, notes or other indebtedness of the Company.

 

4.4 Noncontravention.

 

(a) Neither the execution and delivery of this Agreement nor the consummation of
the Acquisition and the other transactions contemplated by this Agreement will,
with or without the giving of notice or the lapse of time or both, (i) violate
any provision of the articles of incorporation or bylaws (or comparable
organization documents, as applicable) of the Company, (ii) to the Knowledge of
the Seller and assuming compliance with the filing and notice requirements set
forth in Section 4.4(b)(i), violate any Law applicable to the Company on the
date hereof or (iii) except as set forth in Section 4.4(a) of the Disclosure
Schedule, violate any Contract to which the Company is a party, except in the
case of clauses (ii) and (iii) to the extent that any such violation would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

(b) The execution and delivery of this Agreement by the Company does not, and
the performance of this Agreement by the Company will not, require any consent,
approval, authorization or Permit of, or filing with or notification to, any
Governmental Entity, except for (i) the filings set forth in Section 4.4(b) of
the Disclosure Schedule or (ii) where the failure to take such action would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

  9

   

 

4.5 Financial Statements. Section 4.5 of the Disclosure Schedule contains true
and complete copies of (i) the unaudited balance sheet of the Company as of
December 31, 2017 and December 31, 2016 and the related unaudited statements of
income, stockholders’ equity and cash flows for the two years ended December 31,
2017 and December 31, 2016 (the “Annual Financial Statements”) and (ii) the
unaudited balance sheet of the Company as of September 30, 2018 and the related
statements of income, stockholders’ equity and cash flows for the nine-month
period ended September 30, 2018 (the “Interim Financial Statements” and,
together with the Annual Financial Statements, the “Financial Statements”). The
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto) and, on that basis, fairly present, in all material respects,
the financial condition, results of operations and cash flows of the Company as
of the indicated dates and for the indicated periods (subject, in the case of
the Interim Financial Statements, to normal year-end adjustments and the absence
of notes).

 

4.6 Taxes.

 

(a) All material Tax Returns required to have been filed by the Company have
been filed, and each such Tax Return reflects the liability for Taxes in all
material respects. All Taxes shown on such Tax Returns as due have been paid or
accrued.

 

(b) To the Knowledge of the Seller, there is no audit pending against the
Company in respect of any Taxes. There are no Liens on any of the assets of the
Company that arose in connection with any failure (or alleged failure) to pay
any Tax, other than Liens for Taxes not yet due and payable.

 

(c) The Company has withheld and paid or accrued for all material Taxes required
to have been withheld and paid or accrued for in connection with amounts paid or
owing to any third party.

 

(d) The Company has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.

 

(e) The Company is not a party to any Tax allocation or sharing agreement.

 

4.7 Compliance with Laws and Orders; Permits.

 

(a) The Company is in compliance with all Laws and Orders to which the business
of the Company is subject, except where such failure to comply would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

(b) The Company owns, holds, possesses or lawfully uses in the operation of its
business all Permits that are necessary for it to conduct its business as now
conducted, except where such failure to own, hold, possess or lawfully use such
Permit would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

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4.8 No Undisclosed Liabilities. The Company does not have any Liability, except
for (i) Liabilities set forth on the Interim Financial Statements (rather than
in any notes thereto) and (ii) Liabilities which have arisen since the date of
the Interim Financial Statements in the ordinary course of business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

 

4.9 Tangible Personal Assets.

 

(a) The Company has good title to, or a valid interest in, all of its tangible
personal assets, free and clear of all Liens, other than (i) Permitted Liens or
(ii) Liens that, individually or in the aggregate, do not materially interfere
with the ability of the Company thereof to conduct its business as currently
conducted and do not adversely affect the value of, or the ability to sell, such
personal properties and assets.

 

(b) The Company’s tangible personal assets are in good operating condition,
working order and repair, subject to ordinary wear and tear, free from defects
(other than defects that do not interfere with the continued use thereof in the
conduct of normal operations) and are suitable for the purposes for which they
are currently being used.

 

4.10 Real Property.

 

(a) Owned Real Property. Section 4.10(a)(i) of the Disclosure Schedule lists and
describes briefly all real property that the Company used in the Business. The
real property described on Schedule 4.10(a)(i) of the Disclosure Schedule is
owned by 3910 Veronica Shoemaker, LLC and Anthony Leopardi, Sr. and Gina Leeber
as Co-Trustees of the Leopardi-Leeer Revocable Joint Trust, dated October 20,
2017 (collectively, the “Real Estate Sellers”). With respect to each such parcel
of owned real property:

 

(i) the Real Estate Sellers have good and marketable title to the parcel of real
property, free and clear of any Lien or other restriction, except for
installments of special assessments not yet delinquent and recorded easements,
covenants, and other restrictions which do not impair the current use,
occupancy, or value, or the marketability of title, of the property subject
thereto;

 

(ii) there are no pending or, to the Knowledge of the Seller, threatened
condemnation proceedings, lawsuits, or administrative actions relating to the
property or other matters affecting adversely the current use, occupancy, or
value thereof;

 

(iii) the legal description for the parcel contained in the deed thereof
describes such parcel fully and adequately, the buildings and improvements are
located within the boundary lines of the described parcels of land, are not in
violation of applicable setback requirements, zoning laws, and ordinances (and
none of the properties or buildings or improvements thereon are subject to
“permitted non-conforming use” or “permitted non-conforming structure”
classifications), and do not encroach on any easement which may burden the land,
and the land does not serve any adjoining property for any purpose inconsistent
with the use of the land, and the property is not located within any flood plain
or subject to any similar type restriction for which any permits or licenses
necessary to the use thereof have not been obtained;

 

  11

   

 

(iv) all facilities have received all approvals of governmental authorities
(including licenses and permits) required in connection with the ownership or
operation thereof and have been operated and maintained in accordance with
applicable laws, rules, and regulations;

 

(v) there are no leases, subleases, licenses, concessions, or other agreements,
written or oral, granting to any party or parties the right of use or occupancy
of any portion of the parcel of real property;

 

(vi) there are no outstanding options or rights of first refusal to purchase the
parcel of real property, or any portion thereof or interest therein;

 

(vii) there are no parties (other than the Company or the Real Estate Sellers)
in possession of the parcel of real property, other than tenants under any
leases disclosed in Section 4.10(b) of the Disclosure Schedule who are in
possession of space to which they are entitled;

 

(viii) all facilities located on the parcel of real property are supplied with
utilities and other services necessary for the operation of such facilities,
including gas, electricity, water, telephone, sanitary sewer, and storm sewer,
all of which services are adequate in accordance with all applicable laws,
ordinances, rules, and regulations and are provided via public roads or via
permanent, irrevocable, appurtenant easements benefitting the parcel of real
property; and

 

(ix) each parcel of real property abuts on and has direct vehicular access to a
public road, or has access to a public road via a permanent, irrevocable,
appurtenant easement benefitting the parcel of real property, and access to the
property is provided by paved public right of way with adequate curb cuts
available.

 

(b) Leased Real Property. Section 4.10(b) of the Disclosure Schedule contains a
list of all leases and subleases (collectively, the “Real Property Leases”)
under which the Company is either lessor or lessee (the “Real Property”). The
Seller has heretofore made available to the Buyer true and complete copies of
each Real Property Lease. To the Knowledge of the Seller, (i) all Real Property
Leases are valid and binding Contracts of the Company and are in full force and
effect (except for those that have terminated or will terminate by their own
terms), and (ii) neither the Company or any other party thereto, is in violation
or breach of or default (or with notice or lapse of time, or both, would be in
violation or breach of or default) under the terms of any such Contract, in each
case, except where such default would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

  12

   

 

4.11 Intellectual Property.

 

(a) “Intellectual Property” means (i) trade secrets, inventions, confidential
and proprietary information, know-how, formulae and processes, (ii) patents
(including all provisionals, reissues, divisions, continuations and extensions
thereof) and patent applications, (iii) trademarks, trade names, trade dress,
brand names, domain names, trademark registrations, trademark applications,
service marks, service mark registrations and service mark applications (whether
registered, unregistered or existing at common law, including all goodwill
attaching thereto), (iv) copyrights, including copyright registrations,
copyright applications and unregistered common law copyrights; (v) and all
licenses for the Intellectual Property listed in items (i) – (iv) above.

 

(b) Section 4.11(b) of the Disclosure Schedule sets forth a list that includes
all material Intellectual Property owned by the Company (the “Company-Owned
Intellectual Property”) that is registered or subject to an application for
registration (including the jurisdictions where such Company-Owned Intellectual
Property is registered or where applications have been filed, and all
registration or application numbers, as appropriate).

 

(c) All necessary registration, maintenance and renewal fees have been paid and
all necessary documents have been filed with the United States Patent and
Trademark Office or foreign patent and trademark office in the relevant foreign
jurisdiction for the purposes of maintaining the registered Company-Owned
Intellectual Property.

 

(d) Except as set forth on Section 4.11(d) of the Disclosure Schedule, (i) the
Company is the exclusive owner of the Company-Owned Intellectual Property free
and clear of all Liens (other than Permitted Liens); (ii) to the Knowledge of
the Seller no proceedings have been instituted, are pending or are threatened
that challenge the rights of the Company in or the validity or enforceability of
the Company-Owned Intellectual Property; (iii) to the Knowledge of the Seller,
neither the use of the Company-Owned Intellectual Property as currently used by
the Company in the conduct of the Company’s business, nor the conduct of the
business as presently conducted by the Company infringes, dilutes,
misappropriates or otherwise violates in any material respect the Intellectual
Property rights of any Person; and (iv) as of the date of this Agreement, the
Company has made no claim of a violation, infringement, misuse or
misappropriation by any Person, of their rights to, or in connection with, the
Company-Owned Intellectual Property.

 

(e) Except as set forth in Section 4.11(e) of the Disclosure Schedule, the
Company has not permitted or licensed any Person to use any Company-Owned
Intellectual Property.

 

(f) Section 4.11(f) of the Disclosure Schedule sets forth a complete and
accurate list of all licenses, other than “off the shelf” commercially available
software programs, pursuant to which the Company licenses from a Person
Intellectual Property that is material to and used in the conduct of the
business by the Company.

 

(g) To the Knowledge of the Seller, the Company is not in default in the
performance, observance or fulfillment of any obligation, covenant or condition
contained in any Contract pursuant to which any third party is authorized to use
any Company-Owned Intellectual Property or pursuant to which the Company is
licensed to use Intellectual Property owned by a third party, except where such
default would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

  13

   

 

4.12 Absence of Certain Changes or Events. Since the date of the Interim
Financial Statements, no event has occurred that has had, individually or in the
aggregate, a Material Adverse Effect. Without limiting the generality of the
foregoing, since that date:

 

(a) the Company has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, other than for a fair consideration in the
ordinary course of business;

 

(b) the Company has not entered into any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses) either
involving more than $50,000 or outside the ordinary course of business;

 

(c) no party (including the Company) has accelerated, terminated, modified, or
cancelled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $50,000 to
which the Company is a party or by which any of them is bound;

 

(d) the Company has not imposed any Liens upon any of its assets, tangible or
intangible;

 

(e) the Company has not made any capital expenditure (or series of related
capital expenditures) either involving more than $50,000 or outside the ordinary
course of business;

 

(f) the Company has not made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) either involving more than
$50,000 or outside the ordinary course of business;

 

(g) the Company has not transferred, assigned, or granted any license or
sublicense of any rights under or with respect to any Intellectual Property;

 

(h) there has been no change made or authorized in the certificate of
incorporation or bylaws of the Company;

 

(i) the Company has not issued, sold, or otherwise disposed of any of its
capital stock, or granted any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its capital
stock;

 

(j) the Company has not made any loan to, or entered into any other transaction
with, any of its directors, officers, and employees outside the ordinary course
of business;

 

(k) the Company has not entered into any employment contract or modified the
terms of any existing such contract or agreement;

 

(l) the Company has not granted any increase in the base compensation of any of
its directors, officers, and employees outside the ordinary course of business;

 

(m) the Company has not committed to any of the foregoing.

 

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4.13 Contracts.

 

(a) Except as set forth in Section 4.13(a) of the Disclosure Schedule, as of the
date hereof, the Company is not a party to or bound by any: (i) Contract not
contemplated by this Agreement that materially limits the ability of the Company
to engage or compete in any manner of the business presently conducted by the
Company; (ii) Contract that creates a partnership or joint venture or similar
arrangement with respect to any material business of the Company; (iii)
indenture, credit agreement, loan agreement, security agreement, guarantee,
note, mortgage or other evidence of indebtedness or agreement providing for
indebtedness in excess of $50,000; (iv) Contract that relates to the acquisition
or disposition of any material business (whether by merger, sale of stock, sale
of assets or otherwise) other than this Agreement; and (v) Contract that
involves performance of services or delivery of goods or materials by or to the
Company in an amount or with a value in excess of $50,000 in any 12-month period
(which period may extend past the Closing).

 

(b) The Seller has heretofore made available to the Buyer true and complete
copies of each of the Contracts set forth in Section 4.13(a) of the Disclosure
Schedule. To the Knowledge of the Seller, (i) all such Contracts are valid and
binding, (ii) all such Contracts are in full force and effect (except for those
that have terminated or will terminate by their own terms), and (iii) neither
the Company nor any other party thereto, is in violation or breach of or default
under (or with notice or lapse of time, or both, would be in violation or breach
of or default under) the terms of any such Contract, in each case, except where
such default would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

4.14 Litigation. Except as set forth in Section 4.14 of the Disclosure Schedule,
there is no Action pending or, to the Knowledge of the Seller, threatened
against the Company that (a) challenges or seeks to enjoin, alter or materially
delay the Acquisition or (b) would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

 

4.15 Employee Benefits.

 

(a) Section 4.15(a) of the Disclosure Schedule includes a list of all Benefit
Plans maintained or contributed to by the Company (the “Company Benefit Plans”).
The Seller has delivered or made available to the Buyer copies of (i) each
Company Benefit Plan, (ii) the most recent summary plan description for each
Company Benefit Plan for which such a summary plan description is required and
(iii) the most recent favorable determination letters from the IRS with respect
to each Company Benefit Plan intended to qualify under Section 401(a) of the
Code.

 

(b) Except as set forth in Section 4.15(b) of the Disclosure Schedule, (i) none
of the Company Benefit Plans is subject to Title IV of ERISA; (ii) each Company
Benefit Plan that is intended to be qualified under Section 401(a) of the Code
is subject to a favorable determination letter from the IRS and, to the
Knowledge of the Seller, no event has occurred and no condition exists that is
reasonably likely to result in the revocation of any such determination; and
(iii) each Company Benefit Plan is in compliance with all applicable provisions
of ERISA and the Code, except for instances of noncompliance that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

  15

   

 

4.16 Labor and Employment Matters. Section 4.16 of the Disclosure Schedule sets
forth a list of all written employment agreements that obligate the Company to
pay an annual salary of $50,000 or more and to which the Company is a party. To
the Knowledge of the Seller, there are no pending labor disputes, work
stoppages, requests for representation, pickets, work slow-downs due to labor
disagreements or any actions or arbitrations that involve the labor or
employment relations of the Company. The Company is not party to any collective
bargaining agreement.

 

4.17 Environmental. Except (i) as set forth in Section 4.17 of the Disclosure
Schedule or (ii) for any matter that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (a) the Company is
in compliance with all applicable Laws relating to protection of the environment
(“Environmental Laws”), (b) the Company possesses and is in compliance with all
Permits required under any Environmental Law for the conduct of its operations
and (c) there are no Actions pending against the Company alleging a violation of
any Environmental Law. No property currently or formerly owned or operated by
the Company or has been contaminated with any Hazardous Substance in a manner
that could reasonably be expected to require remediation or other action
pursuant to any Environmental Law. Neither the Seller, nor the Company has
received any written notice, demand, letter, claim or request for information
alleging that the Company or the Seller is in violation of or liable under any
Environmental Law. For purposes of this Agreement, “Hazardous Substance” means
any substance that is: (i) listed, classified, regulated or defined pursuant to
any Environmental Law or (ii) any petroleum product or by-product,
asbestos-containing material, polychlorinated biphenyls or radioactive material.

 

4.18 Insurance. Section 4.18 of the Disclosure Schedule sets forth a list of
each insurance policy that covers the Company or its businesses, properties,
assets, directors, officers or employees (the “Policies”). Such Policies are in
full force and effect in all material respects and the Company is not in
violation or breach of or default under any of its obligations under any such
Policy, except where such default would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

4.19 Inventory. The inventory of the Company consists of raw materials and
supplies, manufactured and purchased parts, goods in process, and finished
goods, all of which is merchantable and fit for the purpose for which it was
procured or manufactured, and none of which is slow moving, obsolete, damaged,
or defective, subject only to the reserve for inventory write down set forth on
the face of the balance sheet included in the Interim Financial Statements
(rather than in any notes thereto) as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the Company.

 

4.20 Notes and Accounts Receivable. All notes and accounts receivable of the
Company are reflected properly on their books and records, are valid receivables
subject to no setoffs or counterclaims, are current and collectible, and will be
collected in accordance with their terms at their recorded amounts, subject only
to the reserve for bad debts set forth on the face of the balance sheet included
in the Interim Financial Statements (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of the Company.

 

4.21 Powers of Attorney. There are no outstanding powers of attorney executed on
behalf of any of the Company.

 

  16

   

 

4.22 Product Warranty. Each product manufactured, sold, leased, or delivered by
the Company has been in conformity with all applicable contractual commitments
and all express and implied warranties, and the Company has no Liability (and
there is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability) for replacement or repair thereof or other damages in
connection therewith, subject only to the reserve for product warranty claims
set forth on the face of the balance sheet included in the Interim Financial
Statements (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
the Company. No product manufactured, sold, leased, or delivered by the Company
is subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease. Section 4.22 of the Disclosure
Schedule includes copies of the standard terms and conditions of sale or lease
for the Company (containing applicable guaranty, warranty, and indemnity
provisions).

 

4.23 Product Liability. The Company has no Liability (and there is no basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any Liability)
arising out of any injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured, sold, leased, or
delivered by the Company.

 

4.24 Brokers’ Fees. Except as set forth in Section 4.24 of the Disclosure
Schedule, which such fees shall be paid prior to or at Closing with the
Company’s cash, the Company has no Liability to pay any fees or commissions to
any broker, finder or agent with respect to this Agreement, the Acquisition or
the transactions contemplated by this Agreement.

 

4.25 Certain Business Relationships with the Company. Except as set forth in
Section 4.20 of the Disclosure Schedule, neither the Seller, nor any Affiliate
of the Seller, has been involved in any business arrangement or relationship
with the Company within the past 12 months, and neither the Seller, nor any
Affiliate of the Seller, owns any asset, tangible or intangible, which is used
in the Business.

 

4.26 Disclosure. The representations and warranties contained in this Article IV
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Article IV not misleading.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

 

The Buyer represents and warrants to the Seller that each statement contained in
this Article V is true and correct as of the date hereof.

 

5.1 Organization. The Buyer is a corporation, duly organized, validly existing
and in good standing under the laws of the state of Delaware.

 

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5.2 Authorization. The Buyer has the requisite power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by the Buyer of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
action, and no other action on the part of the Buyer is necessary to authorize
this Agreement or to consummate the transactions contemplated hereby (other than
compliance with the filing and notice requirements set forth in Section
5.3(b)(i)). This Agreement has been duly executed and delivered by the Buyer
and, assuming the due authorization, execution and delivery by each of the other
parties hereto, constitutes a legal, valid and binding obligation of the Buyer
enforceable against the Buyer in accordance with its terms, except as limited by
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar Laws relating to creditors’ rights generally and (b) general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at Law.

 

5.3 Noncontravention.

 

(a) Neither the execution and the delivery of this Agreement, nor the
consummation of the Acquisition and the other transactions contemplated by this
Agreement, will, with or without the giving of notice or the lapse of time or
both, (i) violate any provision of the certificate of incorporation or bylaws
(or comparable organization documents, as applicable) of the Buyer, (ii) violate
any Law applicable to the Buyer on the date hereof or (iii) violate any Contract
to which the Buyer is a party, except in the case of clauses (ii) and (iii) to
the extent that any such violation would not reasonably be expected to prevent
or materially delay the consummation of the Acquisition and the other
transactions contemplated by this Agreement.

 

(b) The execution and delivery of this Agreement by the Buyer does not, and the
performance of this Agreement by the Buyer will not, require any consent,
approval, authorization or Permit of, or filing with or notification to, any
Governmental Entity, except for (i) the filings set forth in Section 3.2(b)(i)
or (ii) where the failure to take such action would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

 

(c) Brokers’ Fees. The Buyer has no Liability to pay any fees or commissions to
any broker, finder or agent with respect to this Agreement, the Acquisition or
the transactions contemplated by this Agreement that could result in any
Liability being imposed on the Seller or the Company.

 

ARTICLE VI

COVENANTS

 

6.1 Consents. The Company will use its commercially reasonable efforts to obtain
any required third-party consents to the Acquisition and the other transactions
contemplated by this Agreement in writing from each Person.

 

6.2 Operation of the Company’s Business. During the period commencing on the
date hereof and ending at the earlier of the Closing and the termination of this
Agreement in accordance with Article VIII, the Company, except (i) as otherwise
contemplated by this Agreement, (ii) as required by applicable Law or (iii) with
the prior written consent of the Buyer (which consent will not be unreasonably
withheld or delayed), will use commercially reasonable efforts to carry on its
business in a manner consistent with past practice and not take any action or
enter into any transaction that would result in the following:

 

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(a) any change in the articles of incorporation or bylaws of the Company or any
amendment of any material term of any outstanding security of the Company;

 

(b) any issuance or sale of any additional shares of, or rights of any kind to
acquire any shares of, any capital stock of any class of the Company (whether
through the issuance or granting of options or otherwise);

 

(c) any incurrence, guarantee or assumption by the Company of any indebtedness
for borrowed money other than in the ordinary course of business in amounts and
on terms consistent with past practice;

 

(d) any change in any method of accounting, accounting principle or accounting
practice by the Company which would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect;

 

(e) except in the ordinary course of business (i) any adoption or material
amendment of any Company Benefit Plan, (ii) any entry into any collective
bargaining agreement with any labor organization or union, (iii) any entry into
an employment agreement or (iv) any increase in the rate of compensation to any
employee in an amount that exceeds 10% of such employee’s current compensation;
provided, that the Company may (A) take any such action for employees in the
ordinary course of business or pursuant to any existing Contracts or Company
Benefit Plans and (B) adopt or amend any Company Benefit Plan if the cost to
such Person of providing benefits thereunder is not materially increased;

 

(f) except in the ordinary course of business, any cancellation, modification,
termination or grant of waiver of any material Permits or Contracts to which the
Company is a party, which cancellation, modification, termination or grant of
waiver would, individually or in the aggregate, have a Material Adverse Effect;

 

(g) any change in the Tax elections made by the Company or in any accounting
method used by the Company for Tax purposes, where such Tax election or change
in accounting method may have a material effect upon the Tax Liability of the
Company for any period or set of periods, or the settlement or compromise of any
material income Tax Liability of the Company;

 

(h) except in the ordinary course of business, any acquisition or disposition of
any business or any material property or asset of any Person (whether by merger,
consolidation or otherwise) by the Company;

 

(i) any grant of a Lien on any properties and assets of the Company that would
have, individually or in the aggregate, a Material Adverse Effect;

 

(j) any entry into any agreement or commitment to do any of the foregoing.

 

6.3 Access. The Company will permit the Buyer and its Representatives to have
reasonable access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Company, to the premises,
properties, personnel, books, records (including Tax records), Contracts and
documents of or pertaining to the Company.

 

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6.4 Transfer of Cash and Cash Equivalents. On or prior to the Closing, the
Company and Seller will transfer, or cause to be distributed all cash and cash
equivalents of the Company to, among other things, pay any fees owed by Company
to brokers or advisors (including termination fees under any advisory agreement)
and any indebtedness for borrowed money; provided, however, that the Company
shall have an amount in cash in its corporate bank account and on hand at its
store locations at the Closing that is equal to $100,000 in the aggregate.

 

6.5 Notice of Developments. The Seller and the Company will give prompt written
notice to the Buyer of any event that would reasonably be expected to give rise
to, individually or in the aggregate, a Material Adverse Effect or would
reasonably be expected to cause a breach of any of its respective
representations, warranties, covenants or other agreements contained herein. The
Buyer will give prompt written notice to the Seller and the Company of any event
that could reasonably be expected to cause a breach of any of its
representations, warranties, covenants or other agreements contained herein or
could reasonably be expected to, individually or in the aggregate, prevent or
materially delay the consummation of the Acquisition and the other transactions
contemplated by this Agreement. The delivery of any notice pursuant to this
Section 6.5 will not limit, expand or otherwise affect the remedies available
hereunder (if any) to the party receiving such notice.

 

6.6 No Solicitation.

 

(a) The Seller and the Company will, and will cause each of their
Representatives to, cease immediately any existing discussions regarding a
Transaction Proposal.

 

(b) From and after the date of this Agreement, without the prior consent of the
Buyer, none of the Seller nor the Company will, nor will they authorize or
permit any of their respective Representatives to, directly or indirectly
through another Person to, (i) solicit, initiate or encourage (including by way
of furnishing information), or take any other action designed to facilitate any
inquiries, proposals or offers from any Person that constitute, or would
reasonably be expected to constitute, a Transaction Proposal, (ii) participate
in any discussions or negotiations (including by way of furnishing information)
regarding any Transaction Proposal or (iii) otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other Person to do or seek any of the foregoing.

 

(c) In addition, the Seller shall immediately communicate to the Buyer that a
Transaction Proposal was received by the Seller or the Company, or any of their
Representatives.

 

6.7 Taking of Necessary Action; Further Action. Subject to the terms and
conditions of this Agreement, the Seller, the Company and the Buyer will take
all such reasonable and lawful action as may be necessary or appropriate in
order to effectuate the Acquisition in accordance with this Agreement as
promptly as practicable.

 

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6.8 Covenant not to Compete. For a period of three years from and after the
Closing (the “Noncompetition Period”), the Seller shall not engage directly or
indirectly in any business that is competitive with the current business of the
Company (the “Business”) within an area of one hundred miles of any geographic
area in which the Business is conducted or in which the Buyer plans to conduct
the Business as of the Closing Date; provided, however, that no owner of less
than 1% of the outstanding stock of any publicly-traded corporation shall be
deemed to engage solely by reason thereof in any of its businesses. During the
Noncompetition Period, the Seller shall not induce or attempt to induce any
customer, or supplier of the Buyer or any affiliate of the Buyer to terminate
its relationship with the Buyer or any Affiliate of the Buyer or to enter into
any business relationship to provide or purchase the same or substantially the
same services as are provided to or purchased from the Business which might harm
the Buyer or any Affiliate of the Buyer. During the Noncompetition Period, the
Seller shall not, on behalf of any entity other than the Buyer or an Affiliate
of the Buyer, hire or retain, or attempt to hire or retain, in any capacity any
Person who is, or was at any time during the preceding twelve (12) months, an
employee or officer of the Buyer or an Affiliate of the Buyer. If the final
judgment of a court of competent jurisdiction declares that any term or
provision of this Section 6.8 is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.

 

6.10 Financial Information. The Seller shall cooperate with the Buyer and the
Buyer’s independent certified public accounting firm in order to enable the
Buyer to create audited financial statements prepared in accordance with the
GAAP for the two full fiscal years preceding the Closing Date and for the
calendar year 2018, by making available the Seller’s records as they are
maintained in the ordinary course of business and answering reasonable
questions.

 

6.11 Disclosure Schedule. The parties acknowledge and agree that (i) the Seller
and the Company have not yet delivered a definitive Disclosure Schedule to this
Agreement to the Buyer, and (ii) the Buyer has not been provided with copies of,
nor had an opportunity to review, the items to be referred to on the Disclosure
Schedule. The Seller shall deliver (and shall cause the Company to deliver) to
the Buyer all of the schedules, including a definitive Disclosure Schedule to
the Agreement, and documents referred to thereon, in final form within 15 days
of the date hereof. The Buyer shall have 15 days following delivery of such
schedules and such documents in which to terminate this Agreement if the Buyer
objects to any information contained in such schedules or the contents of any
such document and Buyer and Seller cannot agree on mutually satisfactory
modifications thereto.

 

ARTICLE VII

CONDITIONS TO OBLIGATIONS TO CLOSE

 

7.1 Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the Acquisition is subject to the satisfaction or waiver by the Buyer
of the following conditions:

 

(a) The representations and warranties of the Seller set forth in this Agreement
will be true and correct in all respects as of the date of this Agreement and as
of the Closing Date (except to the extent such representations and warranties
speak as of another date, in which case such representations and warranties will
be true and correct as of such other date), except where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to “materiality” or “Material Adverse Effect” set forth
therein) does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The Buyer will have
received a certificate signed by the Seller to such effect.

 

  21

   

 

(b) The Seller and the Company will have performed all of the covenants required
to be performed by it under this Agreement at or prior to the Closing, except
where the failure to perform does not have, and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect or
materially adversely affect the ability of the Seller and the Company to
consummate the Acquisition or perform its other obligations hereunder. The Buyer
will have received a certificate signed by the Seller to such effect.

 

(c) The Buyer shall have completed its business, accounting and legal due
diligence review of the Company and the Business, its assets and liabilities,
and the results thereof shall be reasonably satisfactory to the Buyer.

 

(d) There shall not have been any occurrence, event, incident, action, failure
to act, or transaction since the date of the Interim Financial Statements which
has had or is reasonably likely to cause a Material Adverse Effect.

 

(e) All applicable waiting periods (and any extensions thereof) will have
expired or otherwise been terminated, and the parties hereto will have received
all other authorizations, consents and approvals of all Governmental Entities in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.

 

(f) No temporary, preliminary or permanent restraining Order preventing the
consummation of the Acquisition will be in effect.

 

(g) Each party, as appropriate, shall have obtained any required consents,
permits, licenses, approvals or notifications of any lenders, lessors,
suppliers, customers or other third parties for which the Buyer will assume
responsibility for properly completing any and all necessary forms required when
applying for and securing any necessary transfers.

 

(h) The Seller shall have obtained releases of any liens, charges or
encumbrances against any of the assets of the Company, at the Seller’s expense.

 

(i) The Buyer shall have received such pay-off letters and releases relating to
the indebtedness as it shall have requested and such pay-off letters shall be in
form and substance satisfactory to it.

 

(j) The Buyer shall have received from counsel to the Seller an opinion in form
and substance reasonably satisfactory to the Buyer, addressed to the Buyer and
dated as of the Closing Date.

 

(k) The Buyer shall have received fully-executed employment and non-competition
agreements with key Company executives (including a part-time consulting or
employment agreement with the Seller) as reasonably requested by the Buyer.

 

  22

   

 

(l) The Company shall have delivered evidence reasonably satisfactory to the
Buyer of the Company’s corporate organization and proceedings and its existence
in the jurisdiction in which it is incorporated, including evidence of such
existence as of the Closing.

 

(m) The Buyer shall have obtained on terms and conditions satisfactory to it all
of the financing it needs in order to consummate the transactions contemplated
hereby and fund the working capital requirements of the Company after the
Closing.

 

(n) The Real Estate Sellers shall have transferred to the Buyer all of the owned
real property described in Section 4.10(a)(i) of the Disclosure Schedule at no
cost in addition to the purchase price payable hereunder or, alternatively, the
owners of the Real Estate Sellers shall have transferred ownership of the Real
Estate Sellers to the Buyer at no cost in addition to the purchase price payable
hereunder.

 

(o) All actions to be taken by the Seller in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby will
be satisfactory in form and substance to the Buyer.

 

7.2 Conditions to Obligation of the Seller. The obligation of the Seller to
consummate the Acquisition is subject to the satisfaction or waiver by the
Seller of the following conditions:

 

(a) The representations and warranties of the Buyer set forth in this Agreement
will be true and correct in all respects as of the date of this Agreement and as
of the Closing Date (except to the extent such representations and warranties
speak as of another date, in which case such representations and warranties will
be true and correct as of such other date), except where the failure of such
representations and warranties to be so true and correct does not adversely
affect the ability of the Buyer to consummate the Acquisition and the other
transactions contemplated by this Agreement. The Seller will have received a
certificate signed on behalf of the Buyer by a duly authorized officer of the
Buyer to such effect.

 

(b) The Buyer will have performed in all material respects all of the covenants
required to be performed by it under this Agreement at or prior to the Closing
except such failures to perform as do not materially adversely affect the
ability of the Buyer to consummate the Acquisition and the other transactions
contemplated by this Agreement. The Seller will have received a certificate
signed on behalf of the Buyer by a duly authorized officer of the Buyer to such
effect.

 

(c) All applicable waiting periods (and any extensions thereof) will have
expired or otherwise been terminated and the parties hereto will have received
all other authorizations, consents and approvals of all Governmental Entities in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.

 

(d) No temporary, preliminary or permanent restraining Order preventing the
consummation of the Acquisition will be in effect.

 

(e) Each party, as appropriate, shall have obtained any required consents,
permits, licenses, approvals or notifications of any Governmental Entities,
lenders, lessors, suppliers, customers or other third parties for which the
Buyer will assume responsibility for properly completing any and all necessary
forms required when applying for and securing any necessary transfers.

 

  23

   

 

(f) All actions to be taken by the Buyer in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby will
be satisfactory in form and substance to the Seller.

 

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

 

8.1 Termination of Agreement. This Agreement may be terminated as follows:

 

(a) by mutual written consent of the Buyer and the Seller at any time prior to
the Closing;

 

(b) by either the Buyer or the Seller if any Governmental Entity will have
issued an Order or taken any other action permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated by this Agreement;

 

(c) by either the Buyer or the Seller if the Closing does not occur on or before
the date that is the ninetieth (90th) day following the date that the Seller
delivers to the Buyer the Disclosure Schedule as required by Section 6.11
hereof; provided that the right to terminate this Agreement under this Section
8.1(c) will not be available to any party whose breach of any provision of this
Agreement results in the failure of the Closing to occur by such time;

 

(d) by the Buyer if the Seller or the Company has breached their respective
representations and warranties or any covenant or other agreement to be
performed by it in a manner such that the Closing conditions set forth in
Section 7.1(a) or 7.1(b) would not be satisfied; or

 

(e) by the Seller if the Buyer has breached its representations and warranties
or any covenant or other agreement to be performed by it in a manner such that
the Closing conditions set forth in Section 7.2(a) or 7.2(b) would not be
satisfied.

 

8.2 Effect of Termination. In the event of termination of this Agreement by
either the Seller or the Buyer as provided in Section 8.1, this Agreement will
forthwith become void and have no effect, without any Liability (other than with
respect to any suit for breach of this Agreement) on the part of the Buyer, the
Company or the Seller (or any stockholder, agent, consultant or Representative
of any such party); provided, that the provisions of Sections 10.1, 10.6, 10.7,
10.8, 10.11, 10.13, 10.14 and this Section 8.2 will survive any termination
hereof pursuant to Section 8.1.

 

8.3 Amendments. This Agreement may not be amended except by an instrument in
writing signed on behalf of the Buyer, the Company and the Seller.

 

  24

   

 

8.4 Waiver. At any time prior to the Closing, the Buyer may (a) extend the time
for the performance of any of the covenants, obligations or other acts of the
Seller and the Company or (b) waive any inaccuracy of any representations or
warranties or compliance with any of the agreements, covenants or conditions of
the Seller or any conditions to its own obligations. Any agreement on the part
of the Buyer to any such extension or waiver will be valid only if such waiver
is set forth in an instrument in writing signed on its behalf by its duly
authorized officer. At any time prior to the Closing, the Seller and the
Company, may (a) extend the time for the performance of any of the covenants,
obligations or other acts of the Buyer or (b) waive any inaccuracy of any
representations or warranties or compliance with any of the agreements,
covenants or conditions of the Buyer or any conditions to their own obligations.
Any agreement on the part of the Seller and the Company to any such extension or
waiver will be valid only if such waiver is set forth in an instrument in
writing signed by the Seller and the Company. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise will not
constitute a waiver of such rights. The waiver of any such right with respect to
particular facts and other circumstances will not be deemed a waiver with
respect to any other facts and circumstances, and each such right will be deemed
an ongoing right that may be asserted at any time and from time to time.

 

ARTICLE IX

INDEMNIFICATION

 

9.1 Survival. The representations and warranties made herein and in any
certificate delivered in connection herewith shall survive for a period of
twelve (12) months following the Closing Date, at which time they shall expire;
provided, however, that (i) the representations and warranties set forth in
Sections 3.1 (Authority and Enforceability), 3.3 (The Shares), 3.4 (Broker’s
Fees), 4.1 (Organization, Qualification and Corporate Power; Authority and
Enforceability), 4.3 (Capitalization), and 4.17 (Environmental) of this
Agreement (the “Fundamental Representations”) shall survive for a period of 2
(two) years (other than the Fundamental Representations set forth in Sections
3.3 (The Shares) and 4.3 (Capitalization), which shall survive indefinitely) and
(ii) the representations and warranties in Section 4.6 (Taxes) of this Agreement
shall survive until the expiration of the applicable statute of limitations. If
written notice of a claim has been given prior to the expiration of the
applicable representations and warranties, then notwithstanding any statement
herein to the contrary, the relevant representations and warranties shall
survive as to such claim, until such claim is finally resolved. Unless a
specified period is set forth in this Agreement (in which event such specified
period will control), all agreements and covenants contained in this Agreement
will survive the Closing and remain in effect indefinitely.

 

9.2 Indemnification by Seller. From and after the Closing, the Seller agrees to
indemnify, defend and save Buyer and its Affiliates, stockholders, officers,
directors, employees, agents and representatives (each, a “Buyer Indemnified
Party” and collectively, the “Buyer Indemnified Parties”) harmless from and
against any and all liabilities, deficiencies, demands, claims, Actions,
assessments, losses, costs, expenses, interest, fines, penalties and damages
(including fees and expenses of attorneys and accountants and costs of
investigation) (individually and collectively, the “Losses”) suffered, sustained
or incurred by any Buyer Indemnified Party arising out of or otherwise by virtue
of: (a) any breach of any of the representations or warranties of the Seller or
the Company contained in Article III or IV of this Agreement or (b) the failure
of the Seller to perform any of his covenants or obligations contained in this
Agreement.

 

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9.3 Indemnification by Buyer. From and after the Closing, the Buyer agrees to
indemnify, defend and save the Seller and to the extent applicable, the Seller’s
Affiliates, employees, agents and representatives (each, a “Seller Indemnified
Party” and collectively the “Seller Indemnified Parties”) harmless from and
against any and all Losses sustained or incurred by any Seller Indemnified Party
arising out of or otherwise by virtue of: (a) any breach of any of the
representations and warranties of Buyer contained in Article V of this Agreement
or (b) the failure of Buyer to perform any of its covenants or obligations
contained in this Agreement.

 

9.4 Indemnification Procedure.

 

(a) If a Buyer Indemnified Party or a Seller Indemnified Party seeks
indemnification under this Article IX, such party (the “Indemnified Party”)
shall give written notice to the other party (the “Indemnifying Party”) of the
facts and circumstances giving rise to the claim. In that regard, if any Action,
Liability or obligation shall be brought or asserted by any third party which,
if adversely determined, would entitle the Indemnified Party to indemnity
pursuant to this Article IX (a “Third-Party Claim”), the Indemnified Party shall
promptly notify the Indemnifying Party of such Third-Party Claim in writing,
specifying the basis of such claim and the facts pertaining thereto, and the
Indemnifying Party, if the Indemnifying Party so elects, shall assume and
control the defense thereof (and shall consult with the Indemnified Party with
respect thereto), including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all necessary expenses. If the
Indemnifying Party elects to assume control of the defense of a Third-Party
Claim, the Indemnified Party shall have the right to employ counsel separate
from counsel employed by the Indemnifying Party in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
employed by the Indemnified Party shall be at the expense of the Indemnified
Party unless (i) the Indemnifying Party has been advised by the Indemnifying
Party’s counsel that a reasonable likelihood exists of a conflict of interest
between the Indemnifying Party and the Indemnified Party, or (ii) the
Indemnifying Party has failed to assume the defense and employ counsel; in which
case the fees and expenses of the Indemnified Party’s counsel shall be paid by
the Indemnifying Party. All claims other than Third-Party Claims (a “Direct
Claim”) may be asserted by the Indemnified Party giving notice to the
Indemnifying Party. Absent an emergency or other extenuating circumstance, the
Indemnified Party shall give written notice to the Indemnifying Party of such
Direct Claim prior to taking any material actions to remedy such Direct Claim.

 

(b) In no event shall the Indemnified Party pay or enter into any settlement of
any claim or consent to any judgment with respect to any Third-Party Claim
without the prior written consent of the Indemnifying Party (which consent shall
not be unreasonably withheld, conditioned or delayed) if such settlement or
judgment would require the Indemnifying Party to pay any amount. The
Indemnifying Party may enter into a settlement or consent to any judgment
without the consent of the Indemnified Party so long as (i) such settlement or
judgment involves monetary damages only and (ii) a term of the settlement or
judgment is that the Person or Persons asserting such Third-Party Claim
unconditionally release all Indemnified Parties from all liability with respect
to such claim; otherwise the consent of the Indemnified Party shall be required
in order to enter into any settlement of, or consent to the entry of a judgment
with respect to, any Third-Party Claim, which consent shall not be unreasonably
withheld, conditioned or delayed.

 

  26

   

 

9.5 Failure to Give Timely Notice. A failure by an Indemnified Party to provide
notice as provided in Section 9.4 will not affect the rights or obligations of
any Person except and only to the extent that, as a result of such failure, any
Person entitled to receive such notice was damaged as a result of such failure
to give timely notice. Nothing contained in this Section 9.4 shall be deemed to
extend the period for which Seller’s representations and warranties will survive
Closing as set forth in Section 9.1 above.

 

9.6 Limited on Indemnification Obligation. Notwithstanding anything in this
Agreement to the contrary, the liability of the Seller to the Buyer Indemnified
Parties with respect to claims for indemnification pursuant to Section 9.2(a)
(but not with respect to the Fundamental Representations for which recovery
shall not be so limited) is subject to the following limitations:

 

(a) The Seller shall not, in the aggregate, be liable to the Buyer Indemnified
Parties for Losses arising under Section 9.2(a) (other than with respect to
Fundamental Representations for which recovery shall not be so limited) to the
extent that the amounts otherwise indemnifiable for such breaches exceeds the
Purchase Price.

 

(b) The Seller shall not be liable to the Buyer Indemnified Parties for Losses
arising under Section 9.2(a) (other than with respect to Fundamental
Representations for which recovery shall not be so limited) until and unless the
aggregate amounts indemnifiable for such breaches exceeds $100,000.

 

(c) The Seller shall not be liable to the Buyer Indemnified Parties for Losses
arising under Section 9.2 unless the claim therefor is asserted in writing on or
prior to the expiration of the applicable representations and warranties.

 

9.7 Payments. Payments of all amounts owing by an Indemnifying Party under this
Article IX shall be made promptly upon the determination in accordance with this
Article IX that an indemnification obligation is owing by the Indemnifying Party
to the Indemnified Party.

 

ARTICLE X

MISCELLANEOUS

 

10.1 Press Releases and Public Announcement. Neither the Buyer on the one hand,
nor the Seller or the Company on the other, will issue any press release or make
any public announcement relating to this Agreement, the Acquisition or the other
transactions contemplated by this Agreement without the prior written approval
of the other party; provided, however, that the Buyer may make regulatory
filings referring to this Agreement or attaching a copy hereof as may be
required by applicable law.

 

10.2 No Third-Party Beneficiaries. This Agreement will not confer any rights or
remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns.

 

10.3 Entire Agreement. This Agreement (including the Exhibits and the Schedules
hereto) constitutes the entire agreement among the parties hereto and supersedes
any prior understandings, agreements or representations by or among the parties
hereto, written or oral, to the extent they related in any way to the subject
matter hereof.

 

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10.4 Succession and Assignment. This Agreement will be binding upon and inure to
the benefit of the parties named herein and their respective successors and
permitted assigns. No party hereto may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval, in the case of assignment by the Buyer, by the Seller, and, in the
case of assignment by the Seller or the Company, the Buyer.

 

10.5 Construction. The parties have participated jointly in the negotiation and
drafting of this Agreement, and, in the event an ambiguity or question of intent
or interpretation arises, this Agreement will be construed as if drafted jointly
by the parties, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

 

10.6 Notices. All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission or mailed (by
registered or certified mail, postage prepaid, return receipt requested) or
delivered by reputable overnight courier, fee prepaid, to the parties hereto at
the addresses of the parties as specified below:

 

 

If to the Buyer:

1847 CB, Inc.

c/o 1847 Holdings LLC

590 Madison Avenue, 21st Floor

New York, NY 10022

Attn: Ellery W. Roberts, CEO

Facsimile:

 

 

 

 

with a copy to:

Bevilacqua PLLC

1050 Connecticut Avenue, NW

Suite 500

Washington, DC 20036

Attn: Louis A. Bevilacqua

Email: lou@bevilacquapllc.com

Facsimile: 202-869-0889

 

 

 

 

If to the Company:

Cornerstone Builders of SW Florida, Inc.

3150 Old Metro Pkwy

Ft. Myers, Florida 33916

Attn: Anthony Leopardi

 

 

 

 

with a copy to:

Charles Capps, Esq.

Pavese Law Firm

1833 Hendry Street

Fort Myers, Florida 33901

cbc@paveselaw.com

 

 

 

 

If to the Seller:

Anthony Leopardi

12851 Vista Pine Cir

Fort Myers, Florida 33913

 

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Any party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other parties
notice in the manner set forth herein.

 

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

 

10.8 Consent to Jurisdiction and Service of Process. EACH OF THE PARTIES HERETO
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
STATE OF NEW YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS
RELATING TO THIS AGREEMENT, THE ACQUISITION OR THE OTHER TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH OF THE
PARTIES HERETO ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS RESPECTIVE
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY FINAL AND NONAPPEALABLE JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT, THE ACQUISITION OR THE OTHER TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT THE ADDRESS SPECIFIED IN THIS
AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 15 CALENDAR DAYS AFTER SUCH MAILING.
NOTHING HEREIN WILL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY
HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO
BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OTHER PARTY HERETO IN SUCH OTHER
JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLE LAW.

 

10.9 Headings. The descriptive headings contained in this Agreement are included
for convenience of reference only and will not affect in any way the meaning or
interpretation of this Agreement.

 

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10.10 Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future Law (a) such provision will
be fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms of such
illegal, invalid or unenforceable provision as may be possible.

 

10.11 Expenses. Except as otherwise provided in this Agreement, whether or not
the Acquisition is consummated, all expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the party
incurring such expenses. As used in this Agreement, “expenses” means the
out-of-pocket fees and expenses of the financial advisor, counsel and
accountants incurred in connection with this Agreement and the transactions
contemplated hereby.

 

10.12 Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

 

10.13 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts may be
delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

 

BUYER:

 

 

 

 

1847 CB, Inc.

 

        By: /s/ Ellery W. Roberts

 

Name:

    Title:          

 

COMPANY:

 

 

 

 

 

CORNERSTONE BUILDERS OF SW FLORIDA, INC.

 

 

 

 

 

 

By:

/s/ Anthony Leopardi

 

 

Name:

Anthony Leopardi

 

 

Title:

Owner

 

 

 

 

 

 

SELLER:

 

 

 

 

 

ANTHONY LEOPARDI

 

 

 

 

 

/s/ Anthony Leopardi

 

 

 

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