Exhibit 10.1

BUSINESS SALE AND MEMBERSHIP INTEREST

PURCHASE AGREEMENT

AMONG

PENFORD CAROLINA, LLC

AND

R. BENTLEY CHEATHAM, DWIGHT L. CARLSON,

AND STEVEN P. BROWER

AND

KEYSTONE STARCHES, LLC,

7675 SOUTH RAIL ROAD, LLC AND

1 FREAS AVENUE, LLC

November 9, 2011

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TABLE OF CONTENTS

 

§1. Definitions

     5   

§2. Purchase and Sale of Target Membership Interests

     10   

(a) Basic Transaction

     10   

(b) Purchase Price

     10   

(c) Closing

     10   

(d) Deliveries at Closing

     11   

§3. Representations and Warranties Concerning Transaction

     11   

(a) Sellers’ Representations and Warranties

     11   

(b) Buyer’s Representations and Warranties

     11   

§4. Representations and Warranties Concerning Target

     12   

(a) Organization, Qualification, and Corporate Power

     12   

(b) Capitalization

     13   

(c) Non-contravention

     13   

(d) Brokers’ Fees

     13   

(e) Title to Assets

     13   

(f) Subsidiaries

     13   

(g) Financial Statements

     13   

(h) Events Subsequent to Most Recent Fiscal Year End

     13   

(i) Undisclosed Liabilities

     15   

(j) Legal Compliance

     15   

(k) Tax Matters

     15   

(l) Real Property

     17   

(m) Intellectual Property

     20   

(n) Tangible Assets

     22   

(o) Inventory

     22   

(p) Contracts

     23   

(q) Notes and Accounts Receivable

     24   

(r) Powers of Attorney

     24   

(s) Insurance

     24   

(t) Litigation

     24   

(u) Product Warranty

     24   

(v) Product Liability

     25   

(w) Employees

     25   

(x) Employee Benefits

     25   

(y) Guaranties

     27   

(z) Environmental, Health, and Safety Matters

     27   

(aa) Business Continuity

     28   

(bb) Computer and Technology Security

     28   

(cc) Certain Business Relationships with Target

     28   

(dd) Customers and Suppliers

     28   

(ee) Data Privacy

     28   

(ff) Disclosure

     28   

§5. Pre-Closing Covenants

     29   

(a) General

     29   

(b) Notices and Consents

     29   

(c) Operation of Business

     29   

(d) Preservation of Business

     29   

(e) Full Access

     29   

(f) Notice of Developments

     29   

(g) Exclusivity

     30   

(h) Maintenance of Real Property

     30   

(i) Leases

     30   

(j) Title Insurance and Surveys

     30   

(k) Tax Matters

     30   

 

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§6. Post-Closing Covenants

     30   

(a) General

     30   

(b) Litigation Support

     30   

(c) Transition

     31   

(d) Confidentiality

     31   

(e) Covenant Not to Compete

     31   

§7. Conditions to Obligation to Close

     31   

(a) Conditions to Buyer’s Obligation

     31   

(b) Conditions to Sellers’ Obligation

     35   

§8. Remedies for Breaches of This Agreement

     35   

(a) Survival of Representations and Warranties

     35   

(b) Indemnification Provisions for Buyer’s Benefit

     36   

(c) Indemnification Provisions for Sellers’ Benefit

     36   

(d) Matters Involving Third Parties

     36   

(e) Determination of Adverse Consequences

     37   

(f) Intentionally Deleted

     37   

(g) Other Indemnification Provisions

     37   

§9. Tax Matters

     38   

(a) Tax Indemnification

     38   

(b) Straddle Period

     38   

(c) Responsibility for Filing Tax Returns

     38   

(d) Cooperation on Tax Matters

     38   

(e) Tax-Sharing Agreements

     39   

(f) Certain Taxes and Fees

     39   

§10. Termination

     39   

(a) Termination of Agreement

     39   

(b) Effect of Termination

     39   

§11. Miscellaneous

     39   

(a) Nature of Sellers’ Obligations

     39   

(b) Press Releases and Public Announcements

     40   

(c) No Third-Party Beneficiaries

     40   

(d) Entire Agreement

     40   

(e) Succession and Assignment

     40   

(f) Counterparts

     40   

(g) Headings

     40   

(h) Notices

     40   

(i) Governing Law

     41   

(j) Amendments and Waivers

     41   

(k) Severability

     41   

(l) Expenses

     41   

(m) Construction

     41   

(n) Incorporation of Exhibits, Annexes, and Schedules

     41   

(o) Specific Performance

     41   

(p) Submission to Jurisdiction

     42   

(q) Governing Language

     42   

 

3

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EXHIBITS

 

Exhibit A—Historical Financial Statements

Exhibit B—Forms of Side Agreements:

B-1: Stock Option Agreement

B-2: Asset Purchase Agreement between Buyer and Keystone Starches

B-3: Asset Purchase Agreement between Buyer and 7675 South Rail Road

B-4: Lease Agreement for Berwick, Pennsylvania Site

B-5: Purchase Option Agreement for Berwick, Pennsylvania Site

Exhibit C—Form of Opinion of Sellers’ Counsel

Exhibit D—Form of Opinion of Buyer’s Counsel

Annex I—Exceptions to Sellers’ Representations and Warranties Concerning
Transaction

Annex II—Exceptions to Buyer’s Representations and Warranties Concerning
Transaction

Disclosure Schedule—Exceptions to Representations and Warranties Concerning
Target

 

4

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BUSINESS SALE AND MEMBERSHIP INTEREST PURCHASE AGREEMENT

This Business Sale and Membership Interest Purchase Agreement (this “Agreement”)
is entered into on November 9, 2011, by Penford Carolina, LLC, a Delaware
limited liability company (“Buyer”), and R. Bentley Cheatham, Dwight L. Carlson
and Steven P. Brower (each a Seller and collectively, “Sellers”), and Keystone
Starches, LLC, a South Carolina limited liability company, and 7675 South Rail
Road, LLC, a South Carolina limited liability company (each an “Asset Selling
Entity” and collectively the “Asset Selling Entities”) are signatories to this
Agreement to acknowledge and agree to the representations, conditions and
obligations contained herein applicable to the Asset Purchase Agreements. 1
Freas Avenue is a signatory to this Agreement to acknowledge and agree to the
representations, conditions and obligations contained herein with respect to the
Pennsylvania Lease Agreement and the Option Agreement. Buyer, Sellers, the Asset
Selling Entities and 1 Freas Avenue are referred to collectively herein as the
“Parties.”

Sellers in the aggregate own all of the outstanding membership interests of
Carolina Starches (the “Target”).

In addition, Sellers in the aggregate own all of the outstanding membership
interests of Keystone Starches, 1 Freas Avenue and 7675 South Rail Road.

This Agreement contemplates a transaction in which Buyer will purchase from
Sellers, and Sellers will sell to Buyer, all of the outstanding membership
interests of Target in return for cash.

At the Closing, Buyer will enter into (i) the Asset Purchase Agreement with
Keystone Starches and the Asset Purchase Agreement with 7675 South Rail Road
(collectively, the “Asset Purchase Agreements”), (ii) the Lease Agreement,
(iii) the Option Agreement with 1 Freas Avenue and (iv) the Stock Option
Agreement with the Sellers.

This Agreement, the Asset Purchase Agreements, the Lease Agreement, the Option
Agreement and the Stock Option Agreement (collectively, the “Transaction
Agreements”) document a single unified transaction (the “Transaction”) between
Buyer, Sellers, and the Asset Selling Entities.

The Parties agree that, pursuant to the terms and conditions of the Transaction
Agreements, the Transaction and Closings contemplated in the Agreements will
either be consummated in their entirety or not at all.

Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows.

§1. Definitions.

“1 Freas Avenue” means 1 Freas Avenue, LLC, a South Carolina limited liability
company.

“7675 South Rail Road” means 7675 South Rail Road, LLC, a South Carolina limited
liability company.

“Accredited Investor” has the meaning set forth in Regulation D promulgated
under the Securities Act.

“Adverse Consequences” means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys’ fees and expenses.

“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

 

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“Affiliated Group” means any affiliated group within the meaning of Code
§1504(a) or any similar group defined under a similar provision of state, local,
or non-U.S. law.

“Applicable Rate” means the prime rate of interest publicly announced from time
to time by the Wall Street Journal.

“Basis” means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.

“BIDA Lease” means that certain Lease Agreement between Keystone Starches and
Berwick Industrial Development Authority dated May 5, 2011, as amended July 1,
2011.

“Buyer” has the meaning set forth in the preface above.

“Carolina Starches” means Carolina Starches, LLC, a South Carolina limited
liability company.

“Closing” has the meaning set forth in §2(c) below.

“Closing Date” has the meaning set forth in §2(c) below.

“Closing Purchase Price” has the meaning set forth in §2(b) below.

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code §4980B and of any similar state law.

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

“Confidential Information” means any information concerning the businesses and
affairs of Target that is not already generally available to the public.

“Consolidated Debt” means SunTrust bank debt of Keystone Starches, 7675 South
Rail Road and Carolina Starches combined under Carolina Starches.

“Controlled Group” has the meaning set forth in Code §1563.

“Contaminant” means any material that is or contains any (i) “hazardous
substance,” “toxic substance,” “regulated substance,” “pollutant,”
“contaminant,” “solid waste,” “residual waste,” “hazardous waste,” or
“petroleum” as defined pursuant to any Environmental Law; (ii) gasoline, diesel
fuel, motor oil, waste or used oil, heating oil, kerosene and any other
petroleum product or fraction of petroleum; (iii) any polychlorinated biphenyls
(“PCBs”) or substances containing PCBs; (iv) any urea formaldehyde foam; (v) any
asbestos or materials containing asbestos (“ACMs”); and (vi) any other substance
regulated pursuant to any Environmental, Health and Safety Requirement.

“Data Laws” means laws, regulations, guidelines, and rules in any jurisdiction
(federal, state, local, and non-U.S.) applicable to data privacy, data security,
and/or personal information, including the Federal Trade Commission’s Fair
Information Principles.

“Disclosure Schedule” has the meaning set forth in §4 below.

“Employee Benefit Plan” means any “employee benefit plan” (as such term is
defined in ERISA §3(3)) and any other material employee benefit plan, program or
arrangement of any kind.

“Employee Pension Benefit Plan” has the meaning set forth in ERISA §3(2).

“Employee Welfare Benefit Plan” has the meaning set forth in ERISA §3(1).

“Encumbrance Documents” has the meaning set forth in §4(l) below.

“Environmental Condition” means the presence of any Contaminant on or at the
Property, including, but not limited to, the presence in surface water,
groundwater, soils or subsurface strata, or in abandoned tanks or other
containers.

 

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“Environmental, Health, and Safety Requirements” means, whenever in effect, all
federal, state, local, and non-U.S. statutes, regulations, ordinances, and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations, and all common law
concerning public health and safety, worker health and safety, pollution, or
protection of the environment, including, without limitation, all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, exposure to, or cleanup of any
hazardous materials, substances, wastes, chemical substances, mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise, odor, mold, or
radiation.

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

“ERISA Affiliate” means each entity that is treated as a single employer with
Target for purposes of Code §414.

“Estoppel Certificates” has the meaning set forth in §7(a) below.

“Fiduciary” has the meaning set forth in ERISA §3(21).

“Financial Statements” has the meaning set forth in §4(g) below.

“FIRPTA Affidavit” has the meaning set forth in §7(a) below.

“GAAP” means United States generally accepted accounting principles as in effect
from time to time, consistently applied.

“Governmental Authorizations” means all permits, licenses, consents,
notifications, franchises, privileges, registrations, certifications, orders,
approvals and authorizations, required under, or otherwise made available by or
under the authority of, any applicable legal requirement.

“Improvements” has the meaning set forth in §4(l) below.

“Indemnified Party” has the meaning set forth in §8(d) below.

“Indemnifying Party” has the meaning set forth in §8(d) below.

“Intellectual Property” means all of the following in any jurisdiction
throughout the world: (a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
continuations, divisions, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
slogans, trade names, corporate names, Internet domain names, other source
identifiers, and rights in telephone numbers, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and confidential, technical, and business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer
software (including source code, executable code, data, databases, and related
documentation), (g) all advertising and promotional materials, (h) all other
proprietary rights, and (i) all copies and tangible embodiments thereof (in
whatever form or medium).

“Keystone Starches” means Keystone Starches, LLC, a South Carolina limited
liability company.

“Knowledge” means actual knowledge after reasonable investigation.

 

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“Lease Agreement” means a lease agreement substantially in the form attached
hereto as Exhibit B-4 and satisfactory to Buyer in its sole discretion.

“Lease Consents” has the meaning set forth in §7(a) below.

“Leased Real Property” means all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures,
or other interest in real property held by Target.

“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals, guaranties,
and other agreements with respect thereto, pursuant to which Target holds any
Leased Real Property, including the right to all security deposits and other
amounts and instruments deposited by or on behalf of Target thereunder.

“Liability” means any liability or obligation of whatever kind or nature
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes.

“Lien” means any mortgage, pledge, lien, encumbrance, charge, or other security
interest, other than (a) liens for Taxes not yet due and payable or for Taxes
that the taxpayer is contesting in good faith through appropriate proceedings,
(b) purchase money liens and liens securing rental payments under capital lease
arrangements, and (c) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.

“Material Adverse Effect” or “Material Adverse Change” means any effect or
change that would be (or could reasonably be expected to be) materially adverse
to the business, assets, condition (financial or otherwise), operating results,
operations, or business prospects (including as projected in any revenue,
earnings, or other forecast, whether internal or published) of Target, taken as
a whole, or to the ability of Sellers to consummate timely the transactions
contemplated hereby (regardless of whether or not such adverse effect or change
can be or has been cured at any time or whether Buyer has knowledge of such
effect or change on the date hereof), including any adverse change, event,
development, or effect arising from or relating to (a) general business or
economic conditions, including such conditions related to the business of
Target, (b) national or international political or social conditions, including
the engagement by the United States in hostilities, whether or not pursuant to
the declaration of a national emergency or war, or the occurrence of any
military or terrorist attack upon the United States, or any of its territories,
possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, (c) financial,
banking, or securities markets (including any suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange, American
Stock Exchange, or Nasdaq Stock Market for a period in excess of three hours or
any decline of either the Dow Jones Industrial Average or the Standard & Poor’s
Index of 500 Industrial Companies by an amount in excess of 15% measured from
the close of business on the date hereof), (d) changes in United States
generally accepted accounting principles, (e) changes in laws, rules,
regulations, orders, or other binding directives issued by any governmental
entity, and (f) the taking of any action contemplated by this Agreement and the
other agreements contemplated hereby. In no event need any effect or change
adversely affect a party’s long-term earnings power or potential in a
durationally significant manner in order to constitute a Material Adverse Effect
or a Material Adverse Change, it being understood and agreed that a short-term
adverse effect may constitute a Material Adverse Effect or a Material Adverse
Change.

“Material Leased Real Property” has the meaning set forth in §7(a) below.

“Most Recent Balance Sheet” means the balance sheet contained within the Most
Recent Financial Statements.

“Most Recent Financial Statements” has the meaning set forth in §4(g) below.

“Most Recent Fiscal Month End” has the meaning set forth in §4(g) below.

“Most Recent Fiscal Year End” has the meaning set forth in §4(g) below.

 

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“Multiemployer Plan” has the meaning set forth in ERISA §3(37).

“Non-Disturbance Agreements” has the meaning set forth in §7(a) below.

“Option Agreement” means a purchase option agreement substantially in the form
attached hereto as Exhibit B-5 and satisfactory to Buyer in its sole discretion.

“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).

“Owned Real Property” means all land, together with all buildings, structures,
improvements, and fixtures located thereon, including all electrical,
mechanical, plumbing and other building systems, fire protection, security and
surveillance systems, telecommunications, computer, wiring, and cable
installations, utility installations, water distribution systems, and
landscaping, together with all easements and other rights and interests
appurtenant thereto (including air, oil, gas, mineral, and water rights), owned
by Target.

“Party” has the meaning set forth in the preface above.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Permitted Encumbrances” means with respect to each parcel of Real Property:
(a) real estate taxes, assessments and other governmental levies, fees, or
charges imposed with respect to such Real Property that are (i) not due and
payable as of the Closing Date or (ii) being contested in good faith and for
which appropriate reserves have been established in accordance with GAAP;
(b) mechanics’ liens and similar liens for labor, materials, or supplies
provided with respect to such Real Property incurred in the Ordinary Course of
Business for amounts that are (i) not due and payable as of the Closing Date or
(ii) being contested in good faith and for which appropriate reserves have been
established in accordance with GAAP; (c) zoning, building codes and other land
use laws regulating the use or occupancy of such Real Property or the activities
conducted thereon which are imposed by any governmental authority having
jurisdiction over such Real Property and are not violated by the current use or
occupancy of such Real Property or the operation of Target’s business as
currently conducted thereon; and (d) easements, covenants, conditions,
restrictions, and other similar matters of record affecting title to such Real
Property that do not or would not impair the use or occupancy of such Real
Property in the operation of Target’s business as currently conducted thereon.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity, or a governmental entity
(or any department, agency, or political subdivision thereof).

“Process Agent” has the meaning set forth in §11(p) below.

“Prohibited Transaction” has the meaning set forth in ERISA §406 and Code §4975.

“Purchase Price” has the meaning set forth in §2(b) below.

“Real Estate Impositions” has the meaning set forth in §4(l) below.

“Real Property” has the meaning set forth in §4(l) below.

“Real Property Laws” has the meaning set forth in §4(l) below.

“Real Property Permits” has the meaning set forth in §4(l) below.

“Reportable Event” has the meaning set forth in ERISA §4043.

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

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

“Seller” has the meaning set forth in the preface above.

 

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“Source Code” means human-readable computer software and code, in a form other
than Object Code form or machine-readable form, including related programmer
comments and annotations, help text, data and data structures, object-oriented
and other code, which may be printed out or displayed in human-readable form,
and, for purposes of this Source Code definition, “Object Code” means computer
software code, substantially or entirely in binary form, which is intended to be
directly executable by a computer after suitable processing and linking but
without the intervening steps of compilation or assembly.

“Stock Option” or “Stock Option Agreement” means a stock option agreement
substantially in the form attached hereto as Exhibit B-1 and satisfactory to
Buyer in its sole discretion.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association, or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of capital
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a limited
liability company, partnership, association, or other business entity (other
than a corporation), a majority of the partnership or other similar ownership
interests thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof
and for this purpose, a Person or Persons own a majority ownership interest in
such a business entity (other than a corporation) if such Person or Persons
shall be allocated a majority of such business entity’s gains or losses or shall
be or control any managing director or general partner of such business entity
(other than a corporation). The term “Subsidiary” shall include all Subsidiaries
of such Subsidiary.

“Surveys” has the meaning set forth in §7(a) below.

“Systems” has the meaning set forth in §4(aa) below.

“Target” has the meaning set forth in the preface above. Any reference to
“Target” shall be deemed to be a reference to Carolina Starches.

“Target Membership Interests” means any share of the Membership Interest of
Target.

“Tax” or “Taxes” means any federal, state, local, or non-U.S. income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code §59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and including any obligations to
indemnify or otherwise assume or succeed to the Tax liability of any other
Person.

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

“Third-Party Claim” has the meaning set forth in §8(d) below.

“Title Commitments” has the meaning set forth in §7(a) below.

“Title Company” has the meaning set forth in §7(a) below.

“Title Policies” has the meaning set forth in §7(a) below.

“WARN Act” has the meaning set forth in §4(h) below.

§2. Purchase and Sale of Target Membership Interests.

(a) Basic Transaction. On and subject to the terms and conditions of this
Agreement, Buyer agrees to purchase from each Seller, and each Seller agrees to
sell to Buyer, all of his or her or its Target Membership Interests for the
consideration specified below in this §2.

 

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(b) Purchase Price. Buyer agrees to pay to Sellers at the Closing Six Million
Dollars ($6,000,000) (the “Purchase Price”) by delivery of cash for the Closing
Purchase Price payable by wire transfer or delivery of other immediately
available funds and the assumption of Consolidated Debt of no more than Three
Million Five Hundred Thousand Dollars ($3,500,000) to be paid at Closing
pursuant to a Pay-off letter from SunTrust. The Closing Purchase Price shall be
allocated among Sellers as set forth in §4(b) of the Disclosure Schedule.

(c) Closing. The closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place at the offices of Nelson Mullins, in Charleston,
South Carolina, commencing at 9:00 a.m. local time on the fifth business day
following the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as Buyer and Requisite Sellers may mutually
determine (the “Closing Date”). The Parties shall use commercially reasonable
efforts and proceed in good faith to cause the Closing to occur on December 6,
2011.

(d) Deliveries at Closing. At the Closing, (i) Sellers will deliver to Buyer the
various certificates, instruments, and documents referred to in §7(a) below,
(ii) Buyer will deliver to Sellers the various certificates, instruments, and
documents referred to in §7(b) below, (iii) each Seller will deliver to Buyer
unit certificates representing all of his, her, or its Target Membership
Interests, endorsed in blank or accompanied by duly executed assignment
documents, and (iv) Buyer will deliver to each Seller the consideration
specified in §2(b) above.

§3. Representations and Warranties Concerning Transaction.

(a) Sellers’ Representations and Warranties. Each Seller represents and warrants
to Buyer that the statements contained in this §3(a) are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this §3(a)) with respect to himself,
except as set forth in Annex I attached hereto.

(i) Organization of Sellers. Seller is an individual.

(ii) Authorization of Transaction. Seller has full power and authority to
execute and deliver this Agreement and to perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of Seller,
enforceable in accordance with its terms and conditions. Seller need not give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement. The execution, delivery, and
performance of this Agreement and all other agreements contemplated hereby have
been duly authorized by Seller.

(iii) Non-contravention. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (A) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which Seller is subject, (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Seller is a party or by which he is bound or to which any
of his assets are subject, or (C) result in the imposition or creation of a Lien
upon or with respect to the Target Membership Interests.

(iv) Brokers’ Fees. Seller has no Liability to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.

(v) Investment. INTENTIONALLY DELETED.

 

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(vi) Target Membership Interests. Seller holds of record and owns beneficially
the percentage of Target Membership Interests set forth next to his name in
§4(b) of the Disclosure Schedule, free and clear of any restrictions on transfer
(other than any restrictions under the Securities Act and state securities
laws), Taxes, Liens, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. Seller is not a party to any option, warrant,
purchase right, or other contract or commitment (other than this Agreement) that
could require Seller to sell, transfer, or otherwise dispose of any of his
Membership Interest of Target. Seller is not a party to any voting trust, proxy,
or other agreement or understanding with respect to the voting of any Membership
Interest of Target.

(b) Buyer’s Representations and Warranties. Buyer represents and warrants to
Sellers that the statements contained in this §3(b) are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this §3(b)), except as set forth in Annex
II attached hereto.

(i) Organization of Buyer. Buyer is a limited liability company duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation.

(ii) Authorization of Transaction. Buyer has full power and authority (including
full corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Buyer, enforceable in accordance with its terms
and conditions. Buyer need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.
The execution, delivery, and performance of this Agreement and all other
agreements contemplated hereby have been duly authorized by Buyer.

(iii) Non-contravention. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (A) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which Buyer is subject or any provision of its charter,
bylaws, or other governing documents or (B) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Buyer is a party or by which it is bound or to which any of
its assets are subject.

(iv) Brokers’ Fees. Buyer has no Liability to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement for which any Seller could become liable or obligated.

(v) Investment. Buyer is not acquiring the Target Membership Interests with a
view to or for sale in connection with any distribution thereof within the
meaning of the Securities Act.

§4. Representations and Warranties Concerning Target. Sellers represent and
warrant to Buyer that the statements contained in this §4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this §4), except as set
forth in the disclosure schedule delivered by Sellers to Buyer on the date
hereof and initialed by the Parties (the “Disclosure Schedule”). Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Disclosure Schedule
identifies the exception with particularity and describes the relevant facts in
detail. Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate to
disclose an exception to a representation or warranty made herein (unless the
representation or warranty pertains to the existence of the document or other
item itself). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this §4.

 

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(a) Organization, Qualification, and Power. Target is a limited liability
company duly organized, validly existing, and in good standing under the laws of
South Carolina. Target is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required. Target has full power and authority and all licenses, permits, and
authorizations necessary to carry on the businesses in which they are engaged
and to own and use the properties owned and used by them. §4(a) of the
Disclosure Schedule lists the directors and officers of Target. Sellers have
delivered to Buyer correct and complete copies of the articles of formation and
operating agreement for Target (as amended to date). The minute books
(containing the records of meetings of the Members, the board of directors, and
any committees of the board of directors), the Membership Interest certificate
books, and the Membership Interest record books for Target are correct and
complete. Target is not in default under or in violation of any provision of its
operating agreement or articles of formation.

(b) Capitalization. All of the issued and outstanding Target Membership
Interests have been duly authorized, are validly issued, fully paid, and
non-assessable, and are held of record by the respective Sellers as set forth in
§4(b) of the Disclosure Schedule. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require Target to
issue, sell, or otherwise cause to become outstanding any of its Membership
Interest. There are no outstanding or authorized Membership Interest
appreciation, phantom Membership Interest, profit participation, or similar
rights with respect to Target. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the Membership
Interest of Target.

(c) Non-contravention. Except as provided in §3(c) of the Disclosure Schedule,
neither the execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
Target is subject or any provision of the articles of formation and/or operating
agreement of Target or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Target is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Lien upon any of its assets). Target
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.

(d) Brokers’ Fees. Target does not have any Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

(e) Title to Assets. Target has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it, located on its
premises, or shown on the Most Recent Balance Sheet or acquired after the date
thereof, free and clear of all Liens, except for properties and assets disposed
of in the Ordinary Course of Business since the date of the Most Recent Balance
Sheet and noted on the Disclosure Schedule.

(f) Subsidiaries. Target does not have any Subsidiaries.

(g) Financial Statements. Attached hereto as Exhibit A are the following
financial statements (collectively the “Financial Statements”): (i) reviewed
consolidated and unaudited consolidating balance sheets and statements of
income, changes in members’ equity, and cash flow as of and for the fiscal years
ended December 31, 2007, December 31, 2008, December 31, 2009, and December 31,
2010 (the “Most Recent Fiscal Year End”) for Target; and (ii) unaudited
consolidated and consolidating balance sheets and

 

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statements of income, changes in Member’s Membership Interest, and cash flow
(the “Most Recent Financial Statements”) as of and for the month ended
September 30, 2011 (the “Most Recent Fiscal Month End”) for Target. The
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP throughout the periods covered thereby, present fairly the
financial condition of Target as of such dates and the results of operations of
Target for such periods, are correct and complete, and are consistent with the
books and records of Target (which books and records are correct and complete).

(h) Events Subsequent to Most Recent Fiscal Year End. Since the Most Recent
Fiscal Year End, there has not been any Material Adverse Change. Without
limiting the generality of the foregoing, since that date:

(i) Target 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;

(ii) Target has not entered into any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) either involving
more than $1,000.00 or outside the Ordinary Course of Business;

(iii) no party (including Target) has accelerated, terminated, modified, or
cancelled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $1,000.00 to
which Target is a party or by which any of them is bound;

(iv) Target has not imposed any Liens upon any of its assets, tangible or
intangible;

(v) Target has not made any capital expenditure (or series of related capital
expenditures) either involving more than $1,000.00 or outside the Ordinary
Course of Business;

(vi) Target 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
$1,000.00 or outside the Ordinary Course of Business;

(vii) Target has not issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed money or a
capitalized lease obligation;

(viii) Target has not delayed or postponed the payment of accounts payable and
other Liabilities outside the Ordinary Course of Business;

(ix) Target has not cancelled, compromised, waived, or released any right or
claim (or series of related rights and claims) either involving more than
$1,000.00 or outside the Ordinary Course of Business;

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

(xi) there has been no change made or authorized in the articles of organization
and operating agreement of Target;

(xii) Target has not issued, sold, or otherwise disposed of any of its
membership interest, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any of its
membership interest;

(xiii) Target has not declared, set aside, or paid any dividend or made any
distribution with respect to its membership interest (whether in cash or in
kind) or redeemed, purchased, or otherwise acquired any of its membership
interest;

(xiv) Target has not experienced any damage, destruction, or loss (whether or
not covered by insurance) to its property;

 

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(xv) Target has not made any loan to, or entered into any other transaction
with, any of its members, managers, directors, officers, and employees outside
the Ordinary Course of Business;

(xvi) Target has not entered into or terminated any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement, or become bound by any collective
bargaining relationship;

(xvii) Target has not granted any increase in the base compensation of any of
its managers, directors, officers, and employees outside the Ordinary Course of
Business;

(xviii) Target has not adopted, amended, modified, or terminated any bonus,
profit sharing, incentive, severance, or other plan, contract, or commitment for
the benefit of any of its managers, directors, officers, and employees (or taken
any such action with respect to any other Employee Benefit Plan);

(xix) Target has not made any other change in employment terms for any of its
directors, officers, and employees outside the Ordinary Course of Business;

(xx) Target has not implemented any employee layoffs that could implicate the
Worker Adjustment and Retraining Notification Act of 1988, as amended, or any
similar state, local, or non-U.S. law, regulation, or ordinance (collectively
the “WARN Act”);

(xxi) Target has not made or pledged to make any charitable or other capital
contribution outside the Ordinary Course of Business;

(xxii) there has not been any occurrence, event, incident, action, failure to
act, or transaction outside the Ordinary Course of Business involving Target;

(xxiii) Target has not discharged a material Liability or Lien outside the
Ordinary Course of Business;

(xxiv) Target has not made any loans or advances of money;

(xxv) Target has not disclosed any Confidential Information; and

(xxvi) Target has not committed to any of the foregoing.

(i) Undisclosed Liabilities. Target does not have any 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), except for (i) Liabilities set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and
(ii) Liabilities that have arisen after the Most Recent Fiscal Month End 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).

(j) Legal Compliance. Target and its respective predecessors and Affiliates have
complied with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder and
including the Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1 et seq.) of
federal, state, local, and non-U.S. governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply.

(k) Tax Matters.

(i) Target has filed all Tax Returns that it was required to file under
applicable laws and regulations. All such Tax Returns were correct and complete
in all respects and were prepared in substantial compliance with all applicable
laws and regulations. All Taxes due and owing by Target (whether or not shown on
any Tax Return) have been paid. Target is not currently the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever been
made by an

 

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authority in a jurisdiction where Target does not file Tax Returns that is or
may be subject to taxation by that jurisdiction. There are no Liens for Taxes
(other than Taxes not yet due and payable) upon any of the assets of Target.

(ii) Target has withheld and paid all Taxes required to have been withheld and
paid in connection with any amounts paid or owing to any employee, independent
contractor, creditor, member, or other third party.

(iii) No Seller or director or officer (or employee responsible for Tax matters)
of Target expects any authority to assess any additional Taxes for any period
for which Tax Returns have been filed. No federal, state, local, or non-U.S. tax
audits or administrative or judicial Tax proceedings are pending or being
conducted with respect to Target. Target has not received from any federal,
state, local, or non-U.S. taxing authority (including jurisdictions where Target
has not filed Tax Returns) any (i) notice indicating an intent to open an audit
or other review, (ii) request for information related to Tax matters, or
(iii) notice of deficiency or proposed adjustment for any amount of Tax
proposed, asserted, or assessed by any taxing authority against Target.
§4(k)(iii) of the Disclosure Schedule lists all federal, state, local, and
non-U.S. income Tax Returns filed with respect to Target for taxable periods
ended on or after December 31, 2008, indicates those Tax Returns that have been
audited, and indicates those Tax Returns that currently are the subject of
audit. Sellers have delivered to Buyer correct and complete copies of all
federal income Tax Returns, examination reports, and statements of deficiencies
assessed against or agreed to by Target filed or received since December 31,
2008.

(iv) Target 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.

(v) Target is not a party to any agreement, contract, arrangement or plan that
has resulted or could result, separately or in the aggregate, in the payment of
(i) any “excess parachute payment” within the meaning of Code §280G (or any
corresponding provision of state, local, or non-U.S. Tax law) and (ii) any
amount that will not be fully deductible as a result of Code §162(m) (or any
corresponding provision of state, local, or non-U.S. Tax law). Target has been a
United States real property holding corporation within the meaning of Code
§897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii).
Target has disclosed on their federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Code §6662. Target is not a party to or bound by any
Tax allocation or sharing agreement. Target (A) has not been a member of an
Affiliated Group filing a consolidated federal income Tax Return (other than a
group the common parent of which was Target) or (B) has no Liability for the
Taxes of any Person (other than Target) under Reg. §1.1502-6 (or any similar
provision of state, local, or non-U.S. law), as a transferee or successor, by
contract, or otherwise.

(vi) §4(k) of the Disclosure Schedule sets forth the following information with
respect to each Target as of the most recent practicable date (as well as on an
estimated pro forma basis as of the Closing giving effect to the consummation of
the transactions contemplated hereby): (A) the basis of Target in its assets;
(B) the amount of any net operating loss, net capital loss, unused investment or
other credit, unused foreign tax credit, or excess charitable contribution
allocable to Target; and (C) the amount of any deferred gain or loss allocable
to Target arising out of any intercompany transaction.

(vii) The unpaid Taxes of Target (A) did not, as of the Most Recent Fiscal Month
End, exceed the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income) set
forth on the face of the Most Recent Balance Sheet (rather than in any notes
thereto) and (B) do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of
Target in filing their Tax Returns. Since the date of the Most Recent Balance
Sheet, Target has not incurred any liability for Taxes arising from
extraordinary gains or losses, as that term is used in GAAP, outside the
Ordinary Course of Business consistent with past custom and practice.

 

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(viii) Target will not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any:

(A) change in method of accounting for a taxable period ending on or prior to
the Closing Date;

(B) “closing agreement” as described in Code §7121 (or any corresponding or
similar provision of state, local, or non-U.S. income Tax law) executed on or
prior to the Closing Date;

(C) intercompany transaction or excess loss account described in Treasury
Regulations under Code §1502 (or any corresponding or similar provision of
state, local, or non-U.S. income Tax law);

(D) installment sale or open transaction disposition made on or prior to the
Closing Date;

(E) prepaid amount received on or prior to the Closing Date; or

(F) election under Code §108(i).

(ix) Target has not distributed interests of another Person (whether capital
stock, membership interests, or otherwise), or has had its Membership Interest
distributed by another Person, in a transaction that was purported or intended
to be governed in whole or in part by Code §355 or Code §361.

(x) Target is not and has not been a party to any “reportable transaction,” as
defined in Code §6707A(c)(1) and Reg. §1.6011-4(b).

(xi) Target (A) is not a “controlled foreign corporation” as defined in Code
§957, (B) is a “passive foreign investment company” within the meaning of Code
§1297, or (C) has not established a permanent establishment (within the meaning
of an applicable Tax treaty) or otherwise has an office or fixed place of
business in a country other than the country in which it is organized.

(xii) Target has not received any private letter ruling from the Internal
Revenue Service (or any comparable ruling from any other taxing authority).

(l) Real Property.

(i) §4(l)(i) of the Disclosure Schedule sets forth the address and description
of each parcel of Owned Real Property. With respect to each parcel of Owned Real
Property:

(A) Target has good and marketable indefeasible fee simple title, free and clear
of all Liens, except Permitted Encumbrances;

(B) except as set forth in §4(l)(i)(B) of the Disclosure Schedule, Target has
not leased or otherwise granted to any Person the right to use or occupy such
Owned Real Property or any portion thereof; and

(C) other than the right of Buyer pursuant to this Agreement, there are no
outstanding options, rights of first offer or rights of first refusal to
purchase such Owned Real Property or any portion thereof or interest therein.

 

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(ii) §4(l)(ii) of the Disclosure Schedule sets forth the address of each parcel
of Leased Real Property, and a true and complete list of all Leases for each
such Leased Real Property (including the date and name of the parties to such
Lease document). Target has delivered to Buyer a true and complete copy of each
such Lease document, and in the case of any oral Lease, a written summary of the
material terms of such Lease. Except as set forth in §4(l)(ii) of the Disclosure
Schedule, with respect to each of the Leases:

(A) such Lease is legal, valid, binding, enforceable and in full force and
effect;

(B) the transactions contemplated by this Agreement do not require the consent
of any other party to such Lease (except for those Leases for which Lease
Consents (as hereinafter defined) are obtained), will not result in a breach of
or default under such Lease, and will not otherwise cause such Lease to cease to
be legal, valid, binding, enforceable and in full force and effect on identical
terms following the Closing;

(C) Target’s possession and quiet enjoyment of the Leased Real Property under
such Lease has not been disturbed and there are no disputes with respect to such
Lease;

(D) neither Target nor any other party to the Lease is in breach of or default
under such Lease, and no event has occurred or circumstance exists that, with
the delivery of notice, the passage of time or both, would constitute such a
breach or default, or permit the termination, modification or acceleration of
rent under such Lease;

(E) no security deposit or portion thereof deposited with respect to such Lease
has been applied in respect of a breach of or default under such Lease that has
not been redeposited in full;

(F) Target does not owe, or will owe in the future, any brokerage commissions or
finder’s fees with respect to such Lease;

(G) the other party to such Lease is not an Affiliate of, and otherwise does not
have any economic interest in, Target;

(H) Target has not subleased, licensed or otherwise granted any Person the right
to use or occupy the Leased Real Property or any portion thereof;

(I) Target has not collaterally assigned or granted any other Lien in such Lease
or any interest therein; and

(J) there are no Liens on the estate or interest created by such Lease.

(iii) The Owned Real Property identified in §4(l)(i) of the Disclosure Schedule
and the Leased Real Property identified in §4(l)(ii) of the Disclosure Schedule
(collectively, the “Real Property”), comprise all of the real property used or
intended to be used in, or otherwise related to, Target’s business; and Target
is not a party to any agreement or option to purchase any real property or
interest therein.

(iv) All buildings, structures, fixtures, building systems and equipment, and
all components thereof, including the roof, foundation, load-bearing walls and
other structural elements thereof,

 

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heating, ventilation, air conditioning, mechanical, electrical, plumbing and
other building systems, environmental control, remediation and abatement
systems, sewer, storm and waste water systems, irrigation and other water
distribution systems, parking facilities, fire protection, security and
surveillance systems, and telecommunications, computer, wiring and cable
installations, included in the Real Property (the “Improvements”) are in good
condition and repair and sufficient for the operation of Target’s business.
There are no structural deficiencies or latent defects affecting any of the
Improvements and there are no facts or conditions affecting any of the
Improvements that would, individually or in the aggregate, interfere in any
respect with the use or occupancy of the Improvements or any portion thereof in
the operation of Target’s business as currently conducted thereon.

(v) There is no condemnation, expropriation or other proceeding in eminent
domain, pending or threatened, affecting any parcel of Real Property or any
portion thereof or interest therein. There is no injunction, decree, order, writ
or judgment outstanding, or any claim, litigation, administrative action or
similar proceeding, pending or threatened, relating to the ownership, lease, use
or occupancy of the Real Property or any portion thereof, or the operation of
Target’s business as currently conducted thereon.

(vi) The Real Property is in compliance with all applicable building, zoning,
subdivision, health and safety and other land use laws, including The Americans
with Disabilities Act of 1990, as amended, and all insurance requirements
affecting the Real Property (collectively, the “Real Property Laws”), and the
current use and occupancy of the Real Property and operation of Target’s
business thereon do not violate any Real Property Laws. Target has not received
any notice of violation of any Real Property Law and there is no Basis for the
issuance of any such notice or the taking of any action for such violation.
There is no pending or anticipated change in any Real Property Law that will
materially impair the ownership, lease, use or occupancy of any Real Property or
any portion thereof in the continued operation of Target’s business as currently
conducted thereon.

(vii) Each parcel of Real Property has direct vehicular and pedestrian access to
a public street adjoining the Real Property, or has vehicular and pedestrian
access to a public street via an insurable, permanent, irrevocable and
appurtenant easement benefitting such parcel of Real Property, and such access
is not dependent on any land or other real property interest that is not
included in the Real Property. None of the Improvements or any portion thereof
is dependent for its access, use or operation on any land, building, improvement
or other real property interest that is not included in the Real Property.

(viii) All water, oil, gas, electrical, steam, compressed air,
telecommunications, sewer, storm and waste water systems and other utility
services or systems for the Real Property have been installed and are
operational and sufficient for the operation of Target’s business as currently
conducted thereon. Each such utility service enters the Real Property from an
adjoining public street or valid private easement in favor of the supplier of
such utility service or appurtenant to such Real Property, and is not dependent
for its access, use or operation on any land, building, improvement or other
real property interest that is not included in the Real Property.

(ix) All certificates of occupancy, permits, licenses, franchises, consents,
approvals and authorizations (collectively, the “Real Property Permits”) of all
governmental authorities, boards of fire underwriters, associations, any
quasi-governmental agency, or any other entity having jurisdiction over the Real
Property that are required or appropriate to use or occupy the Real Property or
operate Target’s business as currently conducted thereon, have been issued and
are in full force and effect. §4(l)(ix) of the Disclosure Schedule lists all
material Real Property Permits held by Target with respect to each parcel of
Real Property. Target has delivered to Buyer a true and complete copy of all
Real Property Permits. Target has not received any notice from any governmental
authority or other entity having jurisdiction over the Real Property threatening
a suspension, revocation, modification or

 

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cancellation of any Real Property Permit and there is no Basis for the issuance
of any such notice or the taking of any such action. The Real Property Permits
are transferable to Buyer without the consent or approval of the issuing
governmental authority or entity; no disclosure, filing or other action by
Target is required in connection with such transfer; and Buyer shall not be
required to assume any additional liabilities or obligations under the Real
Property Permits as a result of such transfer.

(x) The classification of each parcel of Real Property under applicable zoning
laws, ordinances and regulations permits the use and occupancy of such parcel
and the operation of Target’s business as currently conducted thereon, and
permits the Improvements located thereon as currently constructed, used and
occupied. There are sufficient parking spaces, loading docks and other
facilities at such parcel to comply with such zoning laws, ordinances and
regulations. Target’s use or occupancy of the Real Property or any portion
thereof or the operation of Target’s business as currently conducted thereon is
not dependent on a “permitted non-conforming use” or “permitted non-conforming
structure” or similar variance, exemption or approval from any governmental
authority.

(xi) The current use and occupancy of the Real Property and the operation of
Target’s business as currently conducted thereon does not violate any easement,
covenant, condition, restriction or similar provision in any instrument of
record or other unrecorded agreement affecting such Real Property (the
“Encumbrance Documents”). Neither of Sellers or Target has received any notice
of violation of any Encumbrance Documents, and there is no Basis for the
issuance of any such notice or the taking of any action for such violation.

(xii) None of the Improvements encroaches on any land that is not included in
the Real Property or on any easement affecting such Real Property, or violates
any building lines or set-back lines, and there are no encroachments onto the
Real Property, or any portion thereof, that would interfere with the use or
occupancy of such Real Property or the continued operation of Target’s business
as currently conducted thereon.

(xiii) Each parcel of Real Property is a separate lot for real estate tax and
assessment purposes, and no other real property is included in such tax parcel.
There are no Taxes, assessments, fees, charges or similar costs or expenses
imposed by any governmental authority, association or other entity having
jurisdiction over the Real Property (collectively, the “Real Estate
Impositions”) with respect to any Real Property or portion thereof that are
delinquent. The Title Commitments set forth all Real Estate Impositions that are
due and payable with respect to such parcel. There is no pending or threatened
increase or special assessment or reassessment of any Real Estate Impositions
for such parcel.

(xiv) None of the Real Property or any portion thereof is located in a flood
hazard area (as defined by the Federal Emergency Management Agency).

(xv) There is no amount due and payable to any architect, contractor,
subcontractor, materialman, or other person or entity for work or labor
performed for, or materials or supplies provided to, or in connection with, any
Real Property or portion thereof which is delinquent. There is no work or labor
being performed for, or materials or supplies being provided to, or in
connection with, any Real Property or portion thereof, or to be performed or
supplied prior to Closing, other than routine maintenance and repair work which
costs and expenses through completion will not exceed $1,000.00 and which shall
be paid in full prior to Closing.

(xvi) Each Real Property has access to water resources necessary in the
operation of Target’s business as currently conducted thereon, and such access
to and use of such water resources is not dependent on the ownership or lease of
any other real property, easements, or real property interests, contractual
rights, shares, certificates, permits, or other rights, interests, or privileges
of any kind which are not held by Target.

 

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(xvii) There are no pending property insurance claims with respect to any Real
Property or any portion thereof. Target has not received any notice from any
insurance company or any board of fire underwriters (or any entity exercising
similar functions) with respect to any Real Property or any portion thereof:
(i) requesting Target to perform any repairs, alterations, improvements, or
other work for such Real Property which Target has not completed in full or
(ii) notifying Target of any defects or inadequacies in such Real Property which
would materially adversely affect the insurability of the Real Property or the
premiums for the insurance thereof.

(m) Intellectual Property.

(i) Target owns and possesses or has the right to access and use pursuant to a
valid and enforceable written license, sublicense, agreement, covenant not to
sue, or permission all Intellectual Property necessary or desirable for the
operation of the business of Target as presently conducted. Each item of
Intellectual Property owned, accessed, or used by Target immediately prior to
the Closing will be owned or available for access and use by Target on identical
terms and conditions immediately subsequent to the Closing. Target has taken all
necessary and desirable action to maintain and protect each item of Intellectual
Property that they own or use.

(ii) Neither Target nor its business as presently conducted has or will
interfere with, infringe upon, dilute, misappropriate, or otherwise come into
conflict with, any Intellectual Property rights of third parties; there are no
facts indicating a likelihood of the foregoing; and none of Sellers has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, dilution, or conflict (including
any claim that Target must license or refrain from accessing or using any
Intellectual Property rights of any third party). To the Knowledge of any of
Sellers, no third party has interfered with, infringed upon, diluted,
misappropriated, or otherwise come into conflict with, any Intellectual Property
rights of Target.

(iii) §4(m)(iii) of the Disclosure Schedule identifies each patent or
registration that has been issued to Target with respect to any of its
Intellectual Property, identifies each pending patent application or application
for registration that Target has made with respect to any of its Intellectual
Property, and identifies each license, sublicense, agreement, covenant not to
sue, or other permission that Target has granted to any third party with respect
to any of its Intellectual Property (together with any exceptions). Sellers have
delivered to Buyer correct and complete copies of all such patents,
registrations, applications, licenses, sublicenses, agreements, covenants not to
sue, and permissions (as amended to date) and have made available to Buyer
correct and complete copies of all other written documentation evidencing
ownership and prosecution (if applicable) of each such item. §4(m)(iii) of the
Disclosure Schedule also identifies each unregistered trademark, service mark,
logo, slogan, trade name, corporate name, Internet domain name, or other source
identifier, computer software item (other than commercially available
off-the-shelf software purchased or licensed for less than a total cost of
$1,000 in the aggregate) and each material unregistered copyright used by Target
in connection with its business. With respect to each item of Intellectual
Property required to be identified in §4(m)(iii) of the Disclosure Schedule:

(A) Target owns and possesses all right, title, and interest in and to the item,
free and clear of any Lien, license, or other restriction or limitation
regarding access, use, or disclosure;

(B) the item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;

(C) no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or, to the Knowledge of any of Sellers and the
directors and officers (and employees with responsibility for Intellectual
Property matters) of Target, is threatened that challenges the legality,
validity, enforceability, access, use, or ownership of the item, and there are
no grounds for the same;

 

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(D) Target has not agreed to indemnify any Person for or against any
interference, infringement, dilution, misappropriation, or other conflict with
respect to the item; and

(E) no loss or expiration of the item is threatened, pending, or reasonably
foreseeable, except for patents expiring at the end of their statutory terms
(and not as a result of any act or omission by Sellers or Target, including
without limitation, a failure by Sellers or Target to pay any required
maintenance fees).

(iv) §4(m)(iv) of the Disclosure Schedule identifies each item of Intellectual
Property that any third party owns and that Target accesses or uses pursuant to
license, sublicense, agreement, covenant not to sue, or permission. Sellers have
delivered to Buyer correct and complete copies of all such licenses,
sublicenses, agreements, covenants not to sue, and permissions (each as amended
to date). With respect to each item of Intellectual Property required to be
identified in §4(m)(iv) of the Disclosure Schedule:

(A) the license, sublicense, agreement, covenant not to sue, or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect;

(B) the license, sublicense, agreement, covenant not to sue, or permission will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following consummation of the transactions contemplated
hereby;

(C) no party to the license, sublicense, agreement, covenant not to sue, or
permission is in breach or default, and no event has occurred that with notice
or lapse of time would constitute a breach or default or permit termination,
modification, or acceleration thereunder;

(D) no party to the license, sublicense, agreement, covenant not to sue, or
permission has repudiated any provision thereof;

(E) with respect to each sublicense, the representations and warranties set
forth in subsections (A) through (D) above are true and correct with respect to
the underlying license;

(F) the underlying item of Intellectual Property is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;

(G) no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand is pending or, to the Knowledge of any of Sellers and the
directors and officers (and employees with responsibility for Intellectual
Property matters) of Target is threatened that challenges the legality,
validity, or enforceability of the underlying item of Intellectual Property, and
there are no grounds for the same;

(H) Target has not granted any sublicense or similar right with respect to the
license, sublicense, agreement, covenant not to sue, or permission; and

(v) None of Sellers and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Target has any Knowledge of
any new products, inventions, procedures, or methods of manufacturing or
processing that any competitors or other third parties have developed that
reasonably could be expected to supersede or make obsolete any product or
process of Target or to limit the business of Target as presently conducted.

(vi) Sellers have taken all necessary and desirable actions to maintain and
protect all of the Intellectual Property of Target and will continue to maintain
and protect all of the Intellectual Property of Target prior to Closing so as
not to adversely affect the validity or enforceability thereof. To the Knowledge
of any of Sellers, the owners of any of the Intellectual Property licensed to,
or used by, Target has taken all necessary and desirable actions to maintain and
protect the Intellectual Property.

 

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(vii) Sellers have complied with, and are presently in compliance with, all
federal, state, local, and non-U.S. governmental (including, but not limited to,
the Federal Trade Commission and State Attorneys General), administrative, or
regulatory laws, regulations, guidelines, and rules applicable to any
Intellectual Property or to personal information and Sellers shall take all
steps necessary to ensure such compliance until Closing.

(n) Tangible Assets. Target owns or leases all buildings, machinery, equipment,
and other tangible assets necessary for the conduct of their business as
presently conducted. Each such tangible asset is free from defects (patent and
latent), has been maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used.

(o) Inventory. The inventory of Target 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 writedown set forth on the face of the
Most Recent Balance Sheet (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 Target.

(p) Contracts. §4(p) of the Disclosure Schedule lists the following contracts
and other agreements to which Target is a party:

(i) any agreement (or group of related agreements) for the lease of personal
property to or from any Person providing for lease payments in excess of
$1,000.00 per annum;

(ii) any agreement (or group of related agreements) for the purchase or sale of
raw materials, commodities, supplies, products, or other personal property, or
for the furnishing or receipt of services, the performance of which will extend
over a period of more than 1 year, result in a loss to Target, or involve
consideration in excess of $1,000.00;

(iii) any agreement concerning a partnership or joint venture;

(iv) any agreement (or group of related agreements) under which it has created,
incurred, assumed, or guaranteed any indebtedness for borrowed money, or any
capitalized lease obligation, in excess of $1,000.00 or under which it has
imposed a Lien on any of its assets, tangible or intangible;

(v) any agreement concerning confidentiality or non-competition;

(vi) any agreement with any of Sellers and their Affiliates (other than Target);

(vii) any profit sharing, Membership Interest Purchase option, deferred
compensation, severance, or other plan or arrangement for the benefit of its
current or former directors, officers, and employees;

(viii) any collective bargaining agreement;

(ix) any agreement for the employment of any individual on a full-time,
part-time, consulting, or other basis providing annual compensation in excess of
$1,000.00 or providing severance benefits;

(x) any agreement under which it has advanced or loaned any amount to any of its
directors, officers, and employees outside the Ordinary Course of Business;

(xi) any agreement under which the consequences of a default or termination
could have a Material Adverse Effect;

(xii) any agreement under which it has granted any Person any registration
rights (including, without limitation, demand and piggyback registration
rights);

(xiii) any settlement, conciliation or similar agreement with any Governmental
Entity or which will require satisfaction of any obligations after the execution
date of this Agreement;

 

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(xiv) any agreement under which Target has advanced or loaned any other Person
amounts in the aggregate exceeding $1,000.00; or

(xv) any other agreement (or group of related agreements) the performance of
which involves consideration in excess of $1,000.00.

Sellers have delivered to Buyer a correct and complete copy of each written
agreement (as amended to date) listed in §4(p) of the Disclosure Schedule and a
written summary setting forth the terms and conditions of each oral agreement
referred to in §4(p) of the Disclosure Schedule. With respect to each such
agreement: (A) the agreement is legal, valid, binding, enforceable, and in full
force and effect; (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (C) no party is in breach
or default, and no event has occurred that with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement.

(q) Notes and Accounts Receivable. All notes and accounts receivable of Target
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 Most Recent Balance
Sheet (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
Target.

(r) Powers of Attorney. There are no outstanding powers of attorney executed on
behalf of Target.

(s) Insurance. §4(s) of the Disclosure Schedule sets forth the following
information with respect to each insurance policy (including policies providing
property, casualty, liability, and workers’ compensation coverage and bond and
surety arrangements) to which Target has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past 10 years:

(i) the name, address, and telephone number of the agent;

(ii) the name of the insurer, the name of the policyholder, and the name of each
covered insured;

(iii) the policy number and the period of coverage;

(iv) the scope (including an indication of whether the coverage was on a claims
made, occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and

(v) a description of any retroactive premium adjustments or other loss-sharing
arrangements.

With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) the policy will continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (C) neither Target, nor any other party to the policy is in breach or
default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred that, with notice or the lapse of time,
would constitute such a breach or default, or permit termination, modification,
or acceleration, under the policy; and (D) no party to the policy has repudiated
any provision thereof. Target has been covered during the past 10 years by
insurance in scope and amount customary and reasonable for the businesses in
which it has engaged during the aforementioned period. §4(s) of the Disclosure
Schedule describes any self-insurance arrangements affecting Target.

(t) Litigation. §4(t) of the Disclosure Schedule sets forth each instance in
which Target (i) is subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (ii) is a party or, to the Knowledge of any of
Sellers and the directors and officers (and employees with responsibility for
litigation matters) of Target is threatened to be made a party to any action,
suit, proceeding, hearing, or

 

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investigation of, in, or before (or that could come before) any court or
quasi-judicial or administrative agency of any federal, state, local, or
non-U.S. jurisdiction or before (or that could come before) any arbitrator. None
of the actions, suits, proceedings, hearings, and investigations set forth in
§4(t) of the Disclosure Schedule could result in any Material Adverse Change.
None of Sellers and the directors and officers (and employees with
responsibility for litigation matters) of Target has any reason to believe that
any such action, suit, proceeding, hearing, or investigation may be brought or
threatened against Target or that there is any Basis for the foregoing.

(u) Product Warranty. Each product manufactured, sold, leased, or delivered by
Target has been in conformity with all applicable contractual commitments and
all express and implied warranties, and Target does not have any 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 Most Recent Balance Sheet (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 Target. §4(u) of the Disclosure
Schedule includes copies of the standard terms and conditions of sale or lease
for Target (containing applicable guaranty, warranty, and indemnity provisions).
No product manufactured, sold, leased, or delivered by Target is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease set forth in §4(u) of the Disclosure Schedule.

(v) Product Liability. Target does not have any Liability (and there is no Basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it 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 Target.

(w) Employees.

(i) With respect to the business of Target:

(A) there is no collective bargaining agreement or relationship with any labor
organization;

(B) to the Knowledge of any of Sellers or Target, no executive or manager of
Target (1) has any present intention to terminate his or her employment, or
(2) is a party to any confidentiality, non-competition, proprietary rights or
other such agreement between such employee and any Person besides such entity
that would be material to the performance of such employee’s employment duties,
or the ability of such entity or Buyer to conduct the business of such entity;

(C) no labor organization or group of employees has filed any representation
petition or made any written or oral demand for recognition;

(D) to the Knowledge of any of Sellers or Target, no union organizing or
decertification efforts are underway or threatened and no other question
concerning representation exists;

(E) no labor strike, work stoppage, slowdown, or other material labor dispute
has occurred, and none is underway or, to the Knowledge of Target, threatened;

(F) there is no workman’s compensation liability, experience or matter outside
the ordinary course of business;

(G) there is no employment-related charge, complaint, grievance, investigation,
inquiry or obligation of any kind, pending or threatened in any forum, relating
to an alleged violation or breach by Target (or its officers or directors) of
any law, regulation or contract; and,

(H) no employee or agent of Target has committed any act or omission giving rise
to material liability for any violation or breach identified in subsection
(G) above.

 

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(ii) Except as set forth in §4(w) of the Disclosure Schedule, (A) there are no
employment contracts or severance agreements with any employees of Target, and
(B) there are no written personnel policies, rules, or procedures applicable to
employees of Target. True and complete copies of all such documents have been
provided to Buyer prior to the date of this Agreement.

(iii) With respect to this transaction, any notice required under any law or
collective bargaining agreement has been or prior to the Closing Date will be
given, and all bargaining obligations with any employee representative have been
or prior to the Closing Date will be satisfied. Within the past 3 years, Target
has not implemented any plant closing or layoff of employees that could
implicate the WARN Act, and no such action will be implemented without advance
notification to Buyer.

(x) Employee Benefits.

(i) §4(x) of the Disclosure Schedule lists each Employee Benefit Plan that
Target maintains, to which Target contributes or has any obligation to
contribute, or with respect to which Target has any Liability.

(A) Each such Employee Benefit Plan (and each related trust, insurance contract,
or fund) has been maintained, funded and administered in accordance with the
terms of such Employee Benefit Plan and the terms of any applicable collective
bargaining agreement and complies in form and in operation in all respects with
the applicable requirements of ERISA, the Code, and other applicable laws.

(B) All required reports and descriptions (including Form 5500 annual reports,
summary annual reports, and summary plan descriptions) have been timely filed
and/or distributed in accordance with the applicable requirements of ERISA and
the Code with respect to each such Employee Benefit Plan. The requirements of
COBRA have been met with respect to each such Employee Benefit Plan and each
Employee Benefit Plan maintained by an ERISA Affiliate that is an Employee
Welfare Benefit Plan subject to COBRA.

(C) All contributions (including all employer contributions and employee salary
reduction contributions) that are due have been made within the time periods
prescribed by ERISA and the Code to each such Employee Benefit Plan that is an
Employee Pension Benefit Plan and all contributions for any period ending on or
before the Closing Date that are not yet due have been made to each such
Employee Pension Benefit Plan or accrued in accordance with the past custom and
practice of Target. All premiums or other payments for all periods ending on or
before the Closing Date have been paid with respect to each such Employee
Benefit Plan that is an Employee Welfare Benefit Plan.

(D) Each such Employee Benefit Plan that is intended to meet the requirements of
a “qualified plan” under Code §401(a) has received a determination from the
Internal Revenue Service that such Employee Benefit Plan is so qualified, and
nothing has occurred since the date of such determination that could adversely
affect the qualified status of any such Employee Benefit Plan. All such Employee
Benefit Plans have been timely amended for all such requirements and have been
submitted to the Internal Revenue Service for a favorable determination letter
within the latest applicable remedial amendment period.

(E) There have been no Prohibited Transactions with respect to any such Employee
Benefit Plan or any Employee Benefit Plan maintained by an ERISA Affiliate. No
Fiduciary has any Liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or investment of the assets
of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to the administration or the investment of the assets
of any such Employee Benefit Plan (other than routine claims for benefits) is
pending or, to the Knowledge of any of Sellers and the directors and officers
(and employees with responsibility for employee benefits matters) of Target,
threatened. None of Sellers and the directors and officers (and employees with
responsibility for employee benefits matters) of Target has any Knowledge of any
Basis for any such action, suit, proceeding, hearing, or investigation.

 

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(F) Sellers have delivered to Buyer correct and complete copies of the plan
documents and summary plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most recent annual report (Form
5500, with all applicable attachments), and all related trust agreements,
insurance contracts, and other funding arrangements that implement each such
Employee Benefit Plan.

(ii) Neither Target, nor any ERISA Affiliate contributes to, has any obligation
to contribute to, or has any Liability under or with respect to any Employee
Pension Benefit Plan that is a “defined benefit plan” (as defined in ERISA
§3(35)). No asset of Target is subject to any Lien under ERISA or the Code.

(iii) Neither Target, nor any ERISA Affiliate contributes to, has any obligation
to contribute to, or has any Liability (including withdrawal liability as
defined in ERISA §4201) under or with respect to any Multiemployer Plan.

(y) Guaranties. Target is not a guarantor or otherwise liable for any Liability
(including indebtedness) of any other Person.

(z) Environmental, Health, and Safety Matters.

(i) Target and its respective predecessors and Affiliates have at all times
complied and are in compliance with all Environmental, Health, and Safety
Requirements.

(ii) Without limiting the generality of the foregoing, Target and its respective
Affiliates have obtained and at all times complied with, and are in compliance
with, all Governmental Authorizations that are required pursuant to
Environmental, Health, and Safety Requirements for the ownership, occupation or
use of their property or facilities and the operation of their business; and a
list of all such permits Governmental Authorizations is set forth on §4(z) of
the Disclosure Schedule.

(iii) Target, nor its respective predecessors or Affiliates has received any
written or oral notice, report, order, directive, or other information regarding
any actual or alleged violation of Environmental, Health, and Safety
Requirements, or any Liabilities, including any investigatory, remedial, or
corrective obligations, relating to any of them, their business, or their past
or current facilities arising under Environmental, Health, and Safety
Requirements.

(iv) None of the following exists at any property or facility owned, leased or
operated by Target and none of the following existed at any property or facility
previously owned, leased or operated by the Target at or before the time the
Target ceased to own, lease or operate such property or facility:
(1) underground storage tanks, (2) asbestos-containing material in any form or
condition, (3) materials or equipment containing polychlorinated biphenyls,
(4) groundwater monitoring wells, drinking water wells, or production water
wells, or (5) landfills, surface impoundments, or disposal areas. All storage
tanks, injection wells, septic tanks, or other underground structures and
associated piping now or previously at any facility owned, leased or operated by
the Target which were previously removed from service have been properly removed
or otherwise closed, plugged and abandoned, and any related releases of
Contaminants have been remediated, in compliance with all applicable
Environmental, Health and Safety Requirements.

(v) Neither Target nor its respective predecessors or Affiliates has treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, manufactured, distributed, exposed any person to, or released any
substance, including without limitation any hazardous substance, or owned or
operated any property or facility which is or has been contaminated by any such
substance so as to give rise to any current or future Liabilities, including any
Liability for fines, penalties, response costs, corrective action costs,
personal injury, property damage, natural resources damages, or attorneys’ fees,
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (“CERCLA”), the Solid Waste Disposal Act, as amended
(“SWDA”), or any other Environmental, Health, and Safety Requirements.

 

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(vi) Neither this Agreement nor the consummation of the transactions that are
the subject of this Agreement will result in any obligations for site
investigation or cleanup, or notification to or consent of government agencies
or third parties, pursuant to any of the so-called “transaction-triggered” or
“responsible property transfer” Environmental, Health, and Safety Requirements.

(vii) Neither Target nor its respective predecessors or Affiliates has designed,
manufactured, sold, marketed, installed, or distributed products or other items
containing asbestos and none of such entities is or will become subject to any
Liabilities with respect to the presence of asbestos in any product or item or
in or upon any property, premises, or facility. No liens have arising under or
pursuant to any Environmental, Health and Safety Requirements applicable to any
facility, property or Assets, and no action has been taken or threatened by any
governmental body or any other person or entity that could subject any facility,
property or Assets to a lien under any Environmental Health and Safety
Requirements.

(viii) Target has not assumed, undertaken, provided an indemnity with respect
to, or otherwise become subject to, any Liability, including without limitation
any obligation for corrective or remedial action, of any other Person relating
to Environmental, Health, and Safety Requirements.

(ix) No facts, events, or conditions relating to the past or present facilities,
properties, or operations of Target, or its respective predecessors or
Affiliates will prevent, hinder, or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any investigatory,
remedial, or corrective obligations pursuant to Environmental, Health, and
Safety Requirements, or give rise to any other Liabilities pursuant to
Environmental, Health, and Safety Requirements, including without limitation any
relating to on-site or off-site releases or threatened releases of, or exposure
to, hazardous materials, substances or wastes, personal injury, property damage
or natural resources damage.

(x) Sellers and Target have furnished to Buyer all environmental audits,
reports, and other material environmental documents relating to Target’s or its
respective predecessors’ or Affiliates’ past or current properties, facilities,
or operations that are in their possession, custody, or under their reasonable
control.

(aa) Business Continuity.

(i) None of the computer software, computer hardware (whether general or special
purpose), telecommunications capabilities (including all voice, data and video
networks) and other similar or related items of automated, computerized, and/or
software systems and any other networks or systems and related services that are
used by or relied on by Target in the conduct of its business (collectively, the
“Systems”) have experienced bugs, failures, breakdowns, or continued substandard
performance in the past 12 months that has caused any substantial disruption or
interruption in or to the use of any such Systems by Target.

(ii) Target is covered by business interruption insurance in scope and amount
customary and reasonable to ensure its ongoing business operations.

(bb) Computer and Technology Security. Target has taken all reasonable steps to
safeguard the information technology systems utilized in the operation of the
business of Target, including the implementation of procedures to ensure that
such information technology systems are free from any disabling codes or
instructions, timer, copy protection device, clock, counter or other limiting
design or routing and any “back door,” “time bomb,” “Trojan horse,” “worm,”
“drop dead device,” “virus,” or other software routines or hardware components
that in each case permit unauthorized access or the unauthorized disablement or
unauthorized erasure of data or other software by a third party, and to date
there have been no successful unauthorized intrusions or breaches of the
security of the information technology systems.

 

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(cc) Certain Business Relationships with Target. None of Sellers, their
Affiliates, Sellers’ directors, officers, employees and shareholders and
Target’s directors, officers, employees, and shareholders has been involved in
any business arrangement or relationship with Target within the past 12 months,
and none of Sellers, their Affiliates, Seller’s directors, officers, employees
and shareholders and Target’s directors, officers, employees, and shareholders
owns any asset, tangible or intangible, that is used in the business of Target.

(dd) Customers and Suppliers.

(i) §4(dd) of the Disclosure Schedule lists the 5 largest customers of Target
(on a consolidated basis) for each of the 2 most recent fiscal years and sets
forth opposite the name of each such customer the percentage of consolidated net
sales attributable to such customer. §4(dd) of the Disclosure Schedule also
lists any additional current customers that Target anticipates shall be among
the 5 largest customers for the current fiscal year.

(ii) Since the date of the Most Recent Balance Sheet, no supplier of Target has
indicated that it shall stop, or decrease the rate of, supplying materials,
products or services to Target, and no customer listed on §4(dd) of the
Disclosure Schedule has indicated that it shall stop, or decrease the rate of,
buying materials, products or services from Target.

(ee) Data Privacy. Target’s business has complied with and, as presently
conducted is in compliance with, all Data Laws.

(ff) Disclosure. The representations and warranties contained in this §4 do not
contain any untrue statement of a fact or omit to state any fact necessary in
order to make the statements and information contained in this §4 not
misleading.

§5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing:

(a) General. Each of the Parties will use his, her, or its reasonable best
efforts to take all actions and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the Closing conditions set
forth in §7 below).

(b) Notices and Consents. Sellers will cause Target to give any notices to third
parties, and will cause Target to use its reasonable best efforts to obtain any
third-party consents referred to in §4(c) above, the Lease Consents, and the
items set forth on §5(b) of the Disclosure Schedule. Each of the Parties will
(and Sellers will cause Target to) give any notices to, make any filings with,
and use its reasonable best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in §3(a)(ii), §3(b)(ii), and §4(c) above.

(c) Operation of Business. Sellers will not cause or permit Target to engage in
any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business. Without limiting the generality of the foregoing,
Sellers will not cause or permit Target to (i) declare, set aside, or pay any
dividend or make any distribution with respect to its membership interest or
redeem, purchase, or otherwise acquire any of its membership interest, or
(ii) otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in §4(h) above.

(d) Preservation of Business. Sellers will cause Target to keep its business and
properties substantially intact, including its present operations, physical
facilities, working conditions, insurance policies, and relationships with
lessors, licensors, suppliers, customers, and employees.

 

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(e) Full Access. Each of Sellers will permit, and Sellers will cause Target to
permit, representatives of Buyer (including legal counsel and accountants) to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of Target, to all premises, properties,
personnel, books, records (including Tax records), contracts, and documents of
or pertaining to Target.

(f) Notice of Developments. Sellers will give prompt written notice to Buyer of
any material adverse development causing a breach of any of the representations
and warranties in §4 above. Each Party will give prompt written notice to the
others of any material adverse development causing a breach of any of his, her,
or its own representations and warranties in §3 above. No disclosure by any
Party pursuant to this §5(f), however, shall be deemed to amend or supplement
Annex I, Annex II, or the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.

(g) Exclusivity. None of Sellers will (and Sellers will not cause or permit
Target to) (i) solicit, initiate, or encourage the submission of any proposal or
offer from any Person relating to the acquisition of any membership interest or
other voting securities, or any substantial portion of the assets, of Target
(including any acquisition structured as a merger, consolidation, or share
exchange) or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. None of Sellers will vote their Target Membership Interests in favor
of any such acquisition. Sellers will notify Buyer immediately if any Person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.

(h) Maintenance of Real Property. Sellers will cause Target to maintain the Real
Property, including all of the Improvements, in substantially the same condition
as existed on the date of this Agreement, ordinary wear and tear excepted, and
shall not demolish or remove any of the existing Improvements, or erect new
improvements on the Real Property or any portion thereof, without the prior
written consent of Buyer.

(i) Leases. Sellers will not cause or permit any of Target’s Leases to be
amended, modified, extended, renewed or terminated, nor shall Target enter into
any new lease, sublease, license or other agreement for the use or occupancy of
any Real Property, without the prior written consent of Buyer.

(j) Title Insurance and Surveys. Sellers will cause Target to use its best
efforts to assist Buyer in obtaining the Title Commitments, Title Policies and
Surveys in form and substance as set forth in §7 of this Agreement, within the
time periods set forth therein, including removing from title any Liens or
encumbrances that are not Permitted Encumbrances. Sellers shall provide the
Title Company with any affidavits, indemnities, memoranda or other assurances
requested by the Title Company to issue the Title Policies.

(k) Tax Matters. Without the prior written consent of Buyer, Target shall not
make or change any election, change an annual accounting period, adopt or change
any accounting method, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment relating to Target, surrender any
right to claim a refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to Target,
or take any other similar action relating to the filing of any Tax Return or the
payment of any Tax, if such election, adoption, change, amendment, agreement,
settlement, surrender, consent or other action would have the effect of
increasing the Tax liability of Target for any period ending after the Closing
Date or decreasing any Tax attribute of Target existing on the Closing Date.

§6. Post-Closing Covenants. The Parties agree as follows with respect to the
period following the Closing:

(a) General. In case at any time after the Closing any further actions are
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further actions (including the execution and delivery of such further
instruments and documents) as any other Party may reasonably request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification

 

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therefore under §8 below). Sellers acknowledge and agree that from and after the
Closing Buyer will be entitled to possession of all documents, books, records
(including Tax records), agreements, and financial data of any sort relating to
Target.

(b) Litigation Support. In the event and for so long as any Party actively is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving Target, each of the other Parties will cooperate with him, her, or it
and his, her, or its counsel in the contest or defense, make available his, her,
or its personnel, and provide such testimony and access to his, her, or its
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefore under §8 below).

(c) Transition. None of Sellers will take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of Target from maintaining the same
business relationships with Target after the Closing as it maintained with
Target prior to the Closing. Each of Sellers will refer all customer inquiries
relating to the business of Target to Buyer from and after the Closing.

(d) Confidentiality. Each Seller will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to Buyer or
destroy, at the request and option of Buyer, all tangible embodiments (and all
copies) of the Confidential Information that are in his, her, or its possession.
In the event that any Seller is requested or required pursuant to written or
oral question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process to
disclose any Confidential Information, such Seller will notify Buyer promptly of
the request or requirement so that Buyer may seek an appropriate protective
order or waive compliance with the provisions of this §6(d). If, in the absence
of a protective order or the receipt of a waiver hereunder, any of Sellers is,
on the advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, such Seller may disclose the
Confidential Information to the tribunal; provided, however, that the disclosing
Seller shall use his, her, or its reasonable best efforts to obtain, at the
reasonable request of Buyer, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as Buyer shall designate. The foregoing provisions
shall not apply to any Confidential Information that is generally available to
the public immediately prior to the time of disclosure unless such Confidential
Information is so available due to the actions of a Seller.

(e) Covenant Not to Compete. Except as noted below, for a period of 5 years from
and after the Closing Date, none of Sellers will engage directly or indirectly
in the Business of Target in any Geographic Area. For the purposes of this §6(e)
only: (i) the “Business of Target” is the acquisition, processing and supply of
starch derivatives from potato, tapioca, corn and other sources; and (ii) the
“Geographic Area” is any area where Target, the Asset Selling Entities or 1
Freas Avenue conducts Business as of the Closing Date. If the final judgment of
a court of competent jurisdiction declares that any term or provision of this
§6(e) 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. The 5 year period identified in
the first sentence of this paragraph shall be reduced to one year for any Seller
whose employment with the Buyer or any related company is terminated by the
Buyer or any related company for any reason other than Cause (as defined in the
Stock Option).

 

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§7. Conditions to Obligation to Close.

(a) Conditions to Buyer’s Obligation. Buyer’s obligation to consummate the
Transaction, including the transactions to be performed by it in connection with
the Closing of this Agreement and the closing of the Asset Purchase Agreements
is subject to satisfaction of the following conditions:

(i) (a) the representations and warranties set forth in §3(a) and §4 above and
(b) Seller’s (as defined in the applicable Asset Purchase Agreement)
representation and warranties set forth in the Asset Purchase Agreements shall
be true and correct in all material respects at and as of the Closing Date,
except to the extent that such representations and warranties are qualified by
the term “material,” or contain terms such as “Material Adverse Effect” or
“Material Adverse Change,” in which case such representations and warranties (as
so written, including the term “material” or “Material”) shall be true and
correct in all respects at and as of the Closing Date;

(ii) (a) Sellers shall have performed and complied with all of their covenants
hereunder in all material respects through the Closing, except to the extent
that such covenants are qualified by the term “material,” or contain terms such
as “Material Adverse Effect” or “Material Adverse Change,” in which case Sellers
shall have performed and complied with all of such covenants (as so written,
including the term “material” or “Material”) in all respects through the Closing
and (b) Seller (as defined in each Asset Purchase Agreement) shall have
performed and complied with all of its covenants in the applicable Asset
Purchase Agreement in all material respects through the Closing, except to the
extent that such covenants are qualified by the term “material,” or contain
terms such as “Material Adverse Effect” or “Material Adverse Change,” in which
case Seller shall have performed and complied with all of such covenants (as so
written, including the term “material” or “Material”) in all respects through
the Closing;

(iii) (a) Target shall have procured all of the third-party consents specified
in §5(b) above and (b) Seller (as defined in each Asset Purchase Agreement)
shall have procured all of the third-party consents specified in each Asset
Purchase Agreement;

(iv) no action, suit, or proceeding shall be pending or threatened before (or
that could come before) any court or quasi-judicial or administrative agency of
any federal, state, local, or non-U.S. jurisdiction or before (or that could
come before) any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of the Transaction or
any of the transactions contemplated by this Agreement or the Asset Purchase
Agreements, (B) cause the Transaction or any of the transactions contemplated by
this Agreement or the Asset Purchase Agreements to be rescinded following
consummation, (C) adversely affect the right of Buyer to own the Target
Membership, to control Target, and/or to own the assets purchased pursuant to
the Asset Purchase Agreements or (D) adversely affect the right of Target to own
its assets and to operate its business (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);

(v) Each Seller (as such term is defined herein and in the Asset Purchase
Agreements) shall have delivered to Buyer a certificate to the effect that each
of the conditions specified above in §7(a)(i)-(iv) is satisfied in all respects;

(vi) the Parties and Target shall have received all authorizations, consents,
and approvals of governments and governmental agencies referred to in
(i) §3(a)(ii), §3(b)(ii), and §4(c) above and (ii) the Asset Purchase
Agreements, if any;

(vii) the relevant parties shall have entered into side agreements in form and
substance as set forth in Exhibits B-1 through B-5 attached hereto and the same
shall be in full force and effect;

(viii) Buyer shall have received from counsel to Sellers an opinion in form and
substance as set forth in Exhibit D attached hereto, addressed to Buyer and on
which Buyer’s lenders shall be entitled to rely, and dated as of the Closing
Date;

 

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(ix) Buyer shall have received the resignations, effective as of the Closing, of
each director and officer of Target other than those whom Buyer shall have
specified in writing at least 5 business days prior to the Closing;

(x) Buyer shall have obtained on terms and conditions reasonably satisfactory to
it all of the financing it needs in order to consummate the Transaction,
including the transactions contemplated hereby and the transactions contemplated
in the Asset Purchase Agreements and to fund the working capital requirements of
Target after the Closing;

(xi) all actions to be taken by Sellers in connection with consummation of the
Transaction, including the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
Transaction and the transactions contemplated hereby shall be satisfactory in
form and substance to Buyer;

(xii) Buyer shall have obtained, no later than 10 days prior to the Closing
Date, a commitment for an ALTA Owner’s Title Insurance Policy 2006 Form or other
form of policy acceptable to Buyer for each Owned Real Property and each Leased
Real Property identified by Buyer (the “Material Leased Real Property”), issued
by a title insurance company satisfactory to Buyer (the “Title Company”),
together with a copy of all documents referenced therein (the “Title
Commitments”);

(xiii) at Closing, Buyer shall have obtained title insurance policies from the
Title Company (which may be in the form of a mark-up of a pro forma of the Title
Commitments) in accordance with the Title Commitments, insuring Target’s fee
simple title to each Owned Real Property or Target’s legal, valid, binding and
enforceable leasehold interest in each Material Leased Real Property (as the
case may be), as of the Closing Date (including all recorded appurtenant
easements, insured as separate legal parcels), with gap coverage from Sellers
through the date of recording, subject only to Permitted Encumbrances, in such
amount as Buyer determines to be the value of the Real Property insured
thereunder and which shall include the endorsements identified herein (the
“Title Policies”); the Title Policies shall have the creditor’s rights exception
deleted, and shall include the following endorsements (to the extent available
in the applicable jurisdiction, but regardless of whether any additional amount
is charged for such endorsement), in form and substance reasonably acceptable to
Buyer: (i) extended coverage endorsement (insuring over the general or standard
exceptions); (ii) ALTA Form 3.1 zoning endorsement (with parking and loading
docks), or if unavailable in the applicable jurisdiction, a satisfactory zoning
letter from the local zoning authorities; (iii) a survey accuracy endorsement
(insuring that the Real Property described therein is the real property shown on
the Survey (as defined below) delivered with respect thereto and that such
Survey is an accurate survey thereof); (iv) access endorsement (insuring that
the Real Property described therein is adjacent to a public street and has
direct and unencumbered pedestrian and vehicular access to such public street);
(v) ALTA Form 9 owner’s comprehensive endorsement; (vi) tax parcel number
endorsement (insuring that the tax parcel number in the endorsement includes all
of the Real Property insured thereunder and no other real property); (vii) if
the Real Property insured therein consists of one or more adjacent parcels, a
contiguity endorsement (insuring that all of such parcels are contiguous to one
another without any gaps or gores); (viii) utilities endorsement (insuring the
availability of utilities to the Real Property); (ix) non-imputation endorsement
(to the effect that title defects known to the employees, officers, directors,
and members of Target prior to the Closing shall not be deemed to be “facts
known to the insured”); and (x) such other endorsements as reasonably requested
by Buyer; and Sellers shall pay all fees, costs and expenses with respect to the
Title Commitments and Title Policies;

(xiv) Real Property and Real Property Located Outside of the U.S. [INTENTIONALLY
DELETED];

 

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(xv) Buyer shall have obtained, no later than 10 days prior to the Closing Date,
a survey for each Owned Real Property and Material Leased Real Property, dated
no earlier than the date of this Agreement, prepared by a licensed surveyor in
the jurisdiction where the real property is located, satisfactory to Buyer, and
conforming to 2005 ALTA/ACSM Minimum Detail Requirements for Land Title Surveys,
including Table A Items Nos. 1, 2, 3, 4, 6, 7(a), 7(b)(1), 7(c), 8, 9, 10,
11(b), 13, 14, 15, and 16, and such other standards as the Title Company and
Buyer require as a condition to the removal of any survey exceptions from the
Title Policies, and certified to Buyer, Buyer’s lender, and the Title Company,
in a form and with a certification satisfactory to each of such parties (the
“Surveys”); the Surveys shall not disclose any encroachment from or onto any of
the Real Property or any portion thereof or any other survey defect that has not
been cured or insured over to Buyer’s reasonable satisfaction prior to the
Closing; and Sellers shall have paid or committed to pay all fees, costs and
expenses with respect to the Surveys;

(xvi) Target shall have obtained and delivered to Buyer a written consent for
the assignment of each of the Leases, and, if requested by Buyer’s lender, a
waiver of landlord liens, collateral assignment of lease or leasehold mortgage
from the landlord or other party whose consent thereto is required under such
Lease (the “Lease Consents”), in form and substance satisfactory to Buyer and
Buyer’s lender;

(xvii) Target shall have obtained and delivered to Buyer an estoppel certificate
with respect to each of the Leases, dated no more than 30 days prior to the
Closing Date, from the other party to such Lease, in form and substance
satisfactory to Buyer (the “Estoppel Certificates”);

(xviii) Target shall have obtained and delivered to Buyer a non-disturbance
agreement with respect to each of the Leases for the Material Leased Real
Property, in form and substance satisfactory to Buyer, from each lender
encumbering any real property underlying the Leased Real Property for such Lease
(the “Non-Disturbance Agreements”);

(xix) each Seller shall deliver to Buyer a non-foreign affidavit dated as of the
Closing Date, sworn under penalty of perjury and in form and substance required
under the Treasury Regulations issued pursuant to Code §1445 stating that such
Seller is not a “foreign person” as defined in Code §1445 (the “FIRPTA
Affidavit”);

(xx) no damage or destruction or other change has occurred with respect to any
of the Real Property or any portion thereof that, individually or in the
aggregate, would materially impair the use or occupancy of the Real Property or
the operation of Target’s business as currently conducted thereon;

(xxi) [INTENTIONALLY DELETED]

(xxii) Sellers shall have delivered to Buyer copies of the certificates of
formation of Target certified on or soon before the Closing Date by the
Secretary of State (or comparable officer) South Carolina;

(xxiii) Sellers shall have delivered to Buyer copies of the certificates of good
standing of Target issued on or soon before the Closing Date by the Secretary of
State (or comparable officer) of South Carolina and of each jurisdiction in
which Target is qualified to do business;

(xxiv) [INTENTIONALLY DELETED]

(xxv) Sellers shall have delivered to Buyer a certificate of the secretary or an
authorized member of Target, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer, as to: (i) no amendments to the certificate of
formation of Target since the date specified in clause (xxii) above; (ii) the
operating agreement of Target; and (iii) any resolutions of the board of
directors or members of Target relating to this Agreement and the transactions
contemplated hereby;

(xxvi) BIDA Lease amended by Berwick Industrial Development Association to
satisfaction of Buyer in its sole discretion;

 

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(xxvii) The entity providing Buyer’s financing shall have conducted a quality of
earnings review of Target and approved Buyer’s consummation of the Transaction
and the transactions contemplated hereby;

(xxiix) Buyer shall have conducted an environmental review of the Owned Real
Property and the Material Leased Property and the findings of such review shall
be satisfactory to Buyer in its sole discretion;

(xxix) The conditions to Buyer’s obligation to close contained in the Asset
Purchase Agreements have been satisfied;

(xxx) The Sellers shall have accepted the terms and conditions of new employment
with Carolina Starches, the Buyer or any company related Buyer; and

(xxxi) Buyer has received a binder for environmental liability insurance
coverage on the property located at 1 Freas Avenue in a form and amount, and
subject to a premium, that is acceptable to Buyer in its sole discretion.

Buyer may waive any condition specified in this §7(a) if it executes a writing
so stating at or prior to the Closing.

(b) Conditions to Sellers’ Obligation. The obligation of Sellers to consummate
the transactions to be performed by them in connection with the Closing is
subject to satisfaction of the following conditions:

(i) the representations and warranties set forth in §3(b) above shall be true
and correct in all material respects at and as of the Closing Date, the except
to the extent that such representations and warranties are qualified by the term
“material,” or contain terms such as “Material Adverse Effect” or “Material
Adverse Change,” in which case such representations and warranties (as so
written, including the term “material” or “Material”) shall be true and correct
in all respects at and as of the Closing Date;

(ii) Buyer shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing, except to the extent that such
covenants are qualified by the term “material,” or contain terms such as
“Material Adverse Effect” or “Material Adverse Change,” in which case Buyer
shall have performed and complied with all of such covenants (as so written,
including the term “material” or “Material”) in all respects through the
Closing;

(iii) no action, suit, or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state, local,
or non-U.S. jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement or
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);

(iv) Buyer shall have delivered to Sellers a certificate to the effect that each
of the conditions specified above in §7(b)(i)-(iii) is satisfied in all
respects;

(v) the Parties and Target shall have received all authorizations, consents, and
approvals of governments and governmental agencies referred to in §3(a)(ii),
§3(b)(ii), and §4(c) above;

(vi) the relevant parties shall have entered into side agreements in form and
substance as set forth in Exhibits B-1 through B-5 attached hereto and the same
shall be in full force and effect;

(vii) Sellers shall have received from counsel to Buyer an opinion in form and
substance as set forth in Exhibit E attached hereto, addressed to Sellers, and
dated as of the Closing Date; and

(viii) all actions to be taken by 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 reasonably satisfactory in form and substance to Sellers.

 

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(xxx) The Sellers shall have received from Buyer (or any company related to
Buyer) offers of employment constant with previously accepted terms.

Sellers may waive any condition specified in this §7(b) on behalf of all Sellers
if they execute a writing so stating at or prior to the Closing.

§8. Remedies for Breaches of This Agreement and/or Breaches of the Asset
Purchase Agreements.

(a) Survival of Representations and Warranties.

All of the representations and warranties of Sellers contained (i) in §4(g)-(j),
§4(l)-(y), and §4(aa)-(ff) above or shall survive the Closing hereunder (even if
Buyer knew or had reason to know of any misrepresentation or breach of warranty
at the time of Closing) and continue in full force and effect for a period of 4
years thereafter. All of the other representations and warranties of the Parties
contained in this Agreement (including the representations and warranties of
Sellers contained in §4(k) and §4(z) above) shall survive the Closing (even if
the damaged Party knew or had reason to know of any misrepresentation or breach
of warranty at the time of Closing) and continue in full force and effect until
the expiration of any applicable statutes of limitations (after giving effect to
any extensions or waivers) plus 60 days.

(b) Indemnification Provisions for Buyer’s Benefit.

(i) In the event any Seller breaches (or in the event any third party alleges
facts that, if true, would mean any Seller has breached) any of his, her, or its
representations, warranties, and covenants contained (i) herein (other than the
covenants in §2(a) above and the representations and warranties in §3(a) above)
or (ii) in the Asset Purchase Agreements (other than the covenants in §2(a) and
the representations and warranties in §3(a) of each Asset Purchase Agreement),
provided that Buyer makes a written claim for indemnification against any Seller
within the survival period (if there is an applicable survival period pursuant
to the applicable Transaction Agreement), then each Seller shall be obligated
jointly and severally to indemnify Buyer from and against the entirety of any
Adverse Consequences Buyer may suffer (including any Adverse Consequences Buyer
may suffer after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach (or the
alleged breach).

(ii) In the event any Seller breaches (or in the event any third party alleges
facts that, if true, would mean any Seller breached) (i) any of his, her, or its
covenants in §2(a) above or in §2(a) of any Asset Purchase Agreement or (ii) any
of his, her, or its representations and warranties in §3(a) above or in §3(a) of
any Asset Purchase Agreement, and provided that Buyer makes a written claim for
indemnification against such a Seller within the survival period (if there is an
applicable survival period pursuant to the applicable Transaction Agreement),
then such Seller shall indemnify Buyer from and against the entirety of any
Adverse Consequences Buyer may suffer (including any Adverse Consequences Buyer
may suffer after the end of any applicable survival period) resulting from
arising out of, relating to, in the nature of, or caused by the breach (or the
alleged breach).

(c) Indemnification Provisions for Sellers’ Benefit. In the event Buyer breaches
(or in the event any third party alleges facts that, if true, would mean Buyer
has breached) any of its representations, warranties, and covenants contained
herein or in an Asset Purchase Agreement and, provided that any Seller makes a
written claim for indemnification against Buyer within such survival period (if
there is an applicable survival period pursuant to the applicable Transaction
Agreement), then Buyer shall indemnify each Seller from and against the entirety
of any Adverse Consequences suffered (including any Adverse Consequences
suffered after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach (or the
alleged breach).

 

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(d) Matters Involving Third Parties.

(i) If any third party notifies any Party (the “Indemnified Party”) with respect
to any matter (a “Third-Party Claim”) that may give rise to a claim for
indemnification against any other Party (the “Indemnifying Party”) under this
§8, then the Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party is thereby prejudiced.

(ii) Any Indemnifying Party will have the right to defend the Indemnified Party
against the Third-Party Claim with counsel of his, her, or its choice reasonably
satisfactory to the Indemnified Party so long as (A) the Indemnifying Party
notifies the Indemnified Party in writing within 15 days after the Indemnified
Party has given notice of the Third-Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third-Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third-Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third-Party Claim involves only
money damages and does not seek an injunction or other equitable relief,
(D) settlement of, or an adverse judgment with respect to, the Third Party Claim
is not, in the good faith judgment of the Indemnified Party, likely to establish
a precedential custom or practice materially adverse to the continuing business
interests or the reputation of the Indemnified Party, and (E) the Indemnifying
Party conducts the defense of the Third-Party Claim actively and diligently.

(iii) So long as the Indemnifying Party is conducting the defense of the
Third-Party Claim in accordance with §8(d)(ii) above, (A) the Indemnified Party
may retain separate co-counsel at his, her, or its sole cost and expense and
participate in the defense of the Third-Party Claim, (B) the Indemnified Party
will not consent to the entry of any judgment on or enter into any settlement
with respect to the Third-Party Claim without the prior written consent of the
Indemnifying Party (not to be unreasonably withheld), and (C) the Indemnifying
Party will not consent to the entry of any judgment on or enter into any
settlement with respect to the Third-Party Claim without the prior written
consent of the Indemnified Party (not to be unreasonably withheld).

(iv) In the event any of the conditions in §8(d)(ii) above is or becomes
unsatisfied, however, (A) the Indemnified Party may defend against, and consent
to the entry of any judgment on or enter into any settlement with respect to,
the Third-Party Claim in any manner his, her, or it may reasonably deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third-Party Claim (including
reasonable attorneys’ fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third-Party Claim to the fullest extent provided in this §8.

(e) Determination of Adverse Consequences. The Parties shall take into account
the time cost of money (using the Applicable Rate as the discount rate) in
determining Adverse Consequences for purposes of this §8. All indemnification
payments under this §8 and §9(a) shall be deemed adjustments to the Purchase
Price.

(f) INTENTIONALLY DELETED.

 

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(g) Other Indemnification Provisions. The foregoing indemnification provisions
are in addition to, and not in derogation of, any statutory, equitable, or
common law remedy (including without limitation any such remedy arising under
Environmental, Health, and Safety Requirements) any Party may have with respect
to Target, or the transactions contemplated by this Agreement. Each Seller
hereby agrees that he will not make any claim for indemnification against Target
by reason of the fact that he was a director, officer, employee, or agent of any
such entity or was serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by Buyer
against such Seller (whether such action, suit, proceeding, complaint, claim, or
demand is pursuant to this Agreement, applicable law, or otherwise).

§9. Tax Matters. The following provisions shall govern the allocation of
responsibility as between Buyer and Sellers for certain tax matters following
the Closing Date:

(a) Tax Indemnification. Each Seller shall jointly and severally indemnify
Target, Buyer, and each Buyer Affiliate and hold them harmless from and against
any loss, claim, liability, expense, or other damage attributable to (i) all
Taxes (or the non-payment thereof) of Target for all taxable periods ending on
or before the Closing Date and the portion through the end of the Closing Date
for any taxable period that includes (but does not end on) the Closing Date
(“Pre-Closing Tax Period”), (ii) all Taxes of any member of an affiliated,
consolidated, combined or unitary group of which Target (or any predecessor of
any of the foregoing) is or was a member on or prior to the Closing Date,
including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar
state, local, or non-U.S. law or regulation, and (iii) any and all Taxes of any
person (other than Target) imposed on Target as a transferee or successor, by
contract or pursuant to any law, rule, or regulation, which Taxes relate to an
event or transaction occurring before the Closing;

(b) Straddle Period. In the case of any taxable period that includes (but does
not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes
based on or measured by income, receipts, or payroll of Target for the
Pre-Closing Tax Period shall be determined based on an interim closing of the
books as of the close of business on the Closing Date (and for such purpose, the
taxable period of any partnership or other pass-through entity in which Target
holds a beneficial interest shall be deemed to terminate at such time) and the
amount of other Taxes of Target for a Straddle Period that relates to the
Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period.

(c) Responsibility for Filing Tax Returns. Buyer shall prepare or cause to be
prepared and file or cause to be filed all Tax Returns for Target that are filed
after the Closing Date.

(d) Cooperation on Tax Matters.

(i) Buyer, Target, and Sellers shall cooperate fully, as and to the extent
reasonably requested by the other Party, in connection with the filing of Tax
Returns pursuant to this §9(c) and any audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the retention and (upon
the other Party’s request) the provision of records and information that are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Target and
Sellers agree (A) to retain all books and records with respect to Tax matters
pertinent to Target relating to any taxable period beginning before the Closing
Date until the expiration of the statute of limitations (and, to the extent
notified by Buyer or Sellers, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (B) to give the other Party reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other Party so requests, Target or Sellers, as the case may be, shall
allow the other Party to take possession of such books and records.

 

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(ii) Buyer and Sellers further agree, upon request, to use their best efforts to
obtain any certificate or other document from any governmental authority or any
other Person as may be necessary to mitigate, reduce or eliminate any Tax that
could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).

(iii) Buyer and Sellers further agree, upon request, to provide the other Party
with all information that either Party may be required to report pursuant to
Code §6043, or Code §6043A, or Treasury Regulations promulgated thereunder.

(e) Tax-Sharing Agreements. All tax-sharing agreements or similar agreements
with respect to or involving Target shall be terminated as of the Closing Date
and, after the Closing Date, Target shall not be bound thereby or have any
liability thereunder.

(f) Certain Taxes and Fees. All transfer, documentary, sales, use, stamp,
registration and other such Taxes, and all conveyance fees, recording charges
and other fees and charges (including any penalties and interest) incurred in
connection with consummation of the transactions contemplated by this Agreement
shall be paid by Sellers when due, and Sellers will, at their own expense, file
all necessary Tax Returns and other documentation with respect to all such
Taxes, fees and charges, and, if required by applicable law, Buyer will, and
will cause its Affiliates to, join in the execution of any such Tax Returns and
other documentation.

§10. Termination.

(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

(i) Buyer and Sellers may terminate this Agreement by mutual written consent at
any time prior to the Closing;

(ii) Buyer may terminate this Agreement by giving written notice to Sellers on
or before the 30th day following the date of this Agreement if Buyer is not
reasonably satisfied with the results of its continuing business, legal,
environmental, and accounting due diligence regarding Target;

(iii) Buyer may terminate this Agreement by giving written notice to Sellers at
any time prior to the Closing (A) in the event any of Sellers has breached any
material representation, warranty, or covenant contained in any of the
Transaction Agreements, including this Agreement and the Asset Purchase
Agreements, in any material respect, Buyer has notified Sellers of the breach,
and the breach has continued without cure for a period of 30 days after the
notice of breach or (B) if the Closing shall not have occurred on or before
December 23, 2011, by reason of the failure of any condition precedent under
§7(a) hereof (unless the failure results primarily from Buyer itself breaching
any representation, warranty, or covenant contained in this Agreement); and

(iv) Sellers may terminate this Agreement by giving written notice to Buyer at
any time prior to the Closing (A) in the event Buyer has breached any material
representation, warranty, or covenant contained in any of the Transaction
Agreements, including this Agreement and the Asset Purchase Agreements, in any
material respect, any Seller has notified Buyer of the breach, and the breach
has continued without cure for a period of 30 days after the notice of breach or
(B) if the Closing shall not have occurred on or before December 23, 2011, by
reason of the failure of any condition precedent under §7(b) hereof (unless the
failure results primarily from any Seller breaching any representation,
warranty, or covenant contained in this Agreement).

(b) Effect of Termination. If any Party terminates this Agreement pursuant to
§10(a) above, all rights and obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party (except for any
Liability of any Party then in breach).

 

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§11. Miscellaneous.

(a) Nature of Sellers’ Obligations.

(i) The covenants of each Seller in §2(a) above concerning the sale of his
Target Membership Interests to Buyer and the representations and warranties of
each Seller in §3(a) above concerning the transaction are individual, and not
joint and several, obligations. This means that the particular Seller making the
representation, warranty, or covenant shall be solely responsible to the extent
provided in §8(b)(ii) above for any Adverse Consequences Buyer may suffer as a
result of any breach thereof.

(ii) The remainder of the representations, warranties, and covenants in this
Agreement are joint and several obligations. This means that each Seller shall
be responsible to the extent provided in §8(b)(i) and (iii) above for the
entirety of any Adverse Consequences Buyer may suffer as a result of any breach
thereof.

(b) Press Releases and Public Announcements. No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement prior to the Closing without the prior written approval of Buyer and
Sellers; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other
Parties prior to making the disclosure).

(c) No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.

(d) Entire Agreement. The Transaction Agreements, including this Agreement
(including the documents referred to herein) and the Asset Purchase Agreements,
constitute the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they relate in any way to the subject matter hereof.

(e) Succession and Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of his, her,
or its rights, interests, or obligations hereunder without the prior written
approval of Buyer and Sellers; provided, however, that Buyer may (i) assign any
or all of its rights and interests hereunder to one or more of its Affiliates
and (ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases Buyer nonetheless shall remain
responsible for the performance of all of its obligations hereunder).

(f) Counterparts. This Agreement may be executed in one or more counterparts
(including by means of facsimile), each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.

(g) Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

(h) Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) when delivered personally
to the recipient, (ii) 1 business day after being sent to the recipient by
reputable overnight courier service (charges prepaid), (iii) 1 business day
after being sent to the recipient by facsimile transmission or electronic mail,
or (iv) 4 business days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, and addressed to
the intended recipient as set forth below:

 

If to Sellers:    Copy to:

Carolina Starches, LLC

7675 South Rail Road

North Charleston, 29420

Attn: Steve Brower

  

Nelson Mullins Riley & Scarborough

Suite 600

151 Meeting Street

Charleston, SC 29401

Attn: John B. Hagerty

 

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If to Buyer:    Copy to:

Penford Corporation

7094 South Revere Parkway

Centennial, CO 80112

Attn: General Counsel

  

Hunter, Maclean, Exley & Dunn

200 E. Saint Julian Street

Savannah, GA 31412

Attn: Daniel R. Crook

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

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

(j) Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by Buyer and
Sellers. No waiver by any Party of any provision of this Agreement or any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be valid unless the same shall be in writing and
signed by the Party making such waiver nor shall such waiver be deemed to extend
to any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such default, misrepresentation, or breach of warranty or
covenant.

(k) Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

(l) Expenses. Each Buyer, Seller and Target shall bear his, her, or its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby; provided, however,
that Sellers shall also bear the costs and expenses of Target (including all of
its legal fees and expenses) in connection with this Agreement and the
transactions contemplated hereby in the event that the transactions contemplated
by this Agreement are consummated.

(m) Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or non-U.S. statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation. The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) that the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.

(n) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits, Annexes,
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.

 

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(o) Specific Performance. Each Party acknowledges and agrees that the other
Parties would be damaged irreparably in the event any provision of this
Agreement is not performed in accordance with its specific terms or otherwise is
breached, so that a Party shall be entitled to injunctive relief to prevent
breaches of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in addition to any other remedy to which such Party
may be entitled, at law or in equity. In particular, the Parties acknowledge
that the business of Target is unique and recognize and affirm that in the event
Sellers breach this Agreement, money damages would be inadequate and Buyer would
have no adequate remedy at law, so that Buyer shall have the right, in addition
to any other rights and remedies existing in its favor, to enforce its rights
and the other Parties’ obligations hereunder not only by action for damages but
also by action for specific performance, injunctive, and/or other equitable
relief.

(p) Submission to Jurisdiction. Each of the Parties submits to the jurisdiction
of any state or federal court sitting in Wilmington, Delaware, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each Party also agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Each of the Parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of any other Party with respect thereto. Any Party may make service
on any other Party by sending or delivering a copy of the process to the Party
to be served at the address and in the manner provided for the giving of notices
in §11(h). Nothing in this §11(p), however, shall affect the right of any Party
to serve legal process in any other manner permitted by law or at equity. Each
Party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

(q) Governing Language. This Agreement has been negotiated and executed by the
Parties in English. In the event any translation of this Agreement is prepared
for convenience or any other purpose, the provisions of the English version
shall prevail.

* * * * *

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Business Sale and
Membership Interest Purchase Agreement as of the date first above written.

 

BUYER:     SELLERS: Penford Carolina, LLC,       a Delaware limited liability
company     R. Bentley Cheatham By:    Penford Corporation         its sole
member     Dwight L. Carlson By:           Name:    Thomas D. Malkoski    
Steven P. Brower Its:   President and Chief Executive Officer       ASSET
SELLING ENTITIES:     1 FREAS AVENUE:

Keystone Starches, LLC,

a South Carolina limited liability company

   

1 Freas Avenue, LLC,

a South Carolina limited liability company

By:         By:     Name:          Name:      Its:         Its:    

7675 South Rail Road, LLC,

a South Carolina limited liability company

      By:           Name:            Its:          

 

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