Exhibit 10.1

EXECUTION VERSION

 

 

ASSET PURCHASE AGREEMENT

BY AND BETWEEN

DELTAK, L.L.C.

AND

HAMON ACQUISITIONS, INC.

DATED AS OF AUGUST 5, 2011

 

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS

     1   

1.1

   Definitions      1   

1.2

   Interpretation      10   

ARTICLE II SALE AND PURCHASE

     10   

2.1

   Sale and Purchase of Assets      10   

2.2

   Excluded Assets      11   

2.3

   Assumed Liabilities      12   

2.4

   Excluded Liabilities      13   

2.5

   Purchase Price      14   

2.6

   Working Capital Adjustment      15   

ARTICLE III CLOSING AND DELIVERIES

     17   

3.1

   Closing      17   

3.2

   Deliveries by the Seller      17   

3.3

   Deliveries by the Buyer      18   

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER

     19   

4.1

   Organization; Good Standing      19   

4.2

   Authority      19   

4.3

   No Conflict      20   

4.4

   Financial Statements      20   

4.5

   Taxes      20   

4.6

   Absence of Certain Changes      21   

4.7

   Consents and Approvals      22   

4.8

   Litigation      23   

4.9

   Employee Benefit Plans      23   

4.10

   Real Property      24   

4.11

   Labor and Employment Matters      25   

4.12

   Contracts, Commitments and Bids      26   

4.13

   Intellectual Property      27   

4.14

   Environmental, Health, and Safety Matters      28   

4.15

   Insurance      29   

4.16

   Permits; Compliance with Laws      29   

4.17

   Personal Property      29   

4.18

   Accounts Payable      29   

4.19

   Accounts Receivable      29   

4.20

   Inventory      29   

4.21

   Title to Assets      30   

4.22

   Sufficiency of Assets      30   

4.23

   Brokers      30   

4.24

   Transactions with Affiliates      30   

4.25

   Customers and Suppliers      30   

4.26

   Product Warranty      30   

4.27

   Product Liability      30   

4.28

   Subsidiaries      31   

 

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4.29

   Foreign Corrupt Practices Act      31   

4.30

   Money Laundering Laws      31   

4.31

   OFAC      31   

4.32

   Intercompany Charges      31   

4.33

   Disclaimer      31   

4.34

   Disclosure      31   

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER

     32   

5.1

   Organization; Authority      32   

5.2

   No Conflict; Consents and Approvals      32   

5.3

   Litigation      32   

5.4

   Availability of Funds      33   

5.5

   No Other Representations      33   

5.6

   Brokers      33   

ARTICLE VI COVENANTS AND AGREEMENTS

     33   

6.1

   Interim Operations of the Seller      33   

6.2

   Reasonable Access; Confidentiality      35   

6.3

   Publicity      35   

6.4

   Records      35   

6.5

   Filing Tax Returns; Tax Allocations      35   

6.6

   No Solicitation of Acquisition Proposal      37   

6.7

   Release of Encumbrances      38   

6.8

   Regulatory and Other Authorizations; Consents      38   

6.9

   Updating Schedules      39   

6.10

   Employees      39   

6.11

   Letters of Credit      41   

6.12

   Non-Use of Excluded Assets; Agreement Not to Compete by the Buyer      41   

6.13

   Agreement Not to Compete by the Seller      42   

6.14

   Insurance Coverage for Pre-Closing Periods      43   

6.15

   Environmental Insurance      43   

6.16

   Bulk Sales Laws      43   

6.17

   Receivables      43   

6.18

   Use of Name      43   

6.19

   Transferred Employees      43   

6.20

   Closing Conditions      43   

6.21

   Title and Survey      43   

6.22

   Termination of Intercompany Accounts      44   

6.23

   Assigned Customer Contracts      44   

6.24

   Excluded Partially Performed Customer Contracts      44   

6.25

   Excluded Completed Customer Contracts      45   

6.26

   Warranty Service      45   

6.27

   Procedure For Resolving Disputes Concerning Customer Contracts or Warranty
Service      46   

6.28

   Apportionment      47   

ARTICLE VII CONDITIONS TO CLOSING

     47   

7.1

   Conditions to Obligations of the Parties      47   

7.2

   Conditions to Obligations of the Seller      47   

7.3

   Conditions to Obligations of the Buyer      48   

 

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ARTICLE VIII TERMINATION OF AGREEMENT

     48   

8.1

   Termination      48   

8.2

   Effect of Termination      49   

ARTICLE IX REMEDIES

     49   

9.1

   Survival      49   

9.2

   Indemnification by the Buyer      49   

9.3

   Indemnification by the Seller      50   

9.4

   Exclusive Remedy      50   

9.5

   Limitations on Indemnification      50   

9.6

   Procedures      51   

9.7

   Equitable Remedies      53   

9.8

   Treatment of Payments      53   

ARTICLE X MISCELLANEOUS

     53   

10.1

   Interpretation of Representations      53   

10.2

   Expenses      53   

10.3

   Successors and Assigns      53   

10.4

   Third-Party Beneficiaries      53   

10.5

   Further Assurances      54   

10.6

   Notices      54   

10.7

   Complete Agreement      55   

10.8

   Headings      55   

10.9

   Amendment      55   

10.10

   Waiver      55   

10.11

   Governing Law      55   

10.12

   Negotiated Agreement      56   

10.13

   Counterparts      56   

10.14

   Incorporation of Exhibits and Schedules      56   

10.15

   Severability      56   

 

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EXHIBITS   Exhibit A   Form of Escrow Agreement Exhibit B   Form of Bill of Sale
and Assignment and Assumption Agreement Exhibit C   Form of Intellectual
Property Assignments Exhibit D   Form of Non-Competition and Non-Solicitation
Agreement Exhibit E   Certain Title Exceptions Exhibit E-1   Form of Owner’s
Affidavit Exhibit E-2   Pro Form Owner’s Policy No. 462391 Exhibit F   Certain
Survey Exceptions SCHEDULES   Schedule 1.1   Global Power Employee Plans
Schedule 1.2   Knowledge of the Seller Schedule 1.3   Letters of Credit Schedule
1.4   Pending Litigation and Pending Claims Schedule 2.1(c)   Assigned Contracts
Schedule 2.2(d)   Excluded Contracts Schedule 2.2(k)   Braden Assets Schedule
2.2(m)   Other Excluded Assets Schedule 2.3(g)   Other Assumed Liabilities
Schedule 2.6(b)   Closing Working Capital Statement Example Schedule 4.1  
Qualification Schedule 4.3   Conflicts Schedule 4.4   Financial Statements
Schedule 4.5   Taxes Schedule 4.6   Absence of Certain Changes Schedule 4.7(a)  
Consents of Governmental Authorities Schedule 4.7(b)   Third-Party Consents
Schedule 4.8   Litigation Schedule 4.9   Employee Benefit Plans Schedule 4.10(a)
  Owned Real Property Schedule 4.10(b)   Leased Real Property Schedule 4.10(c)  
Certain Real Property Permitted Encumbrances Schedule 4.11(a)   Employment
Matters Schedule 4.11(b)   Labor Matters Schedule 4.11(c)   Certain Employees
Schedule 4.11(d)   Restrictions on Employees Schedule 4.11(e)   Change in
Control and Severance Agreements Schedule 4.11(f)   WARN Events Schedule 4.11(g)
  Payroll Audits Schedule 4.11(h)   Workers Compensation Coverage Schedule
4.11(i)   Independent Contractors and Consultants Schedule 4.11(j)   Family
Medical Leave Act Schedule 4.11(k)   Immigration Schedule 4.11(l)   Unemployment
or Workers’ Compensation Claims Schedule 4.12   Material Contracts Schedule
4.12(i)   Material Disputes Schedule 4.12(j)   Estimated Costs to Complete
Assigned Customer Contracts Schedule 4.12(k)   Bids and Proposals

 

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Schedule 4.13(a)   Intellectual Property Schedule 4.13(b)   Intellectual
Property Matters Schedule 4.13(c)   Intellectual Property Claims Schedule 4.14  
Environmental, Health, and Safety Matters Schedule 4.14(b)   Environmental and
Safety Permits Schedule 4.15   Insurance Schedule 4.16   Permits Schedule 4.17  
Interests in Personal Property Schedule 4.18   Accounts Payable Schedule 4.19  
Accounts Receivable Schedule 4.21   Title to Assets Schedule 4.22   Sufficiency
of Assets Schedule 4.24   Transactions with Affiliates Schedule 4.25(a)  
Customers Schedule 4.25(b)   Suppliers Schedule 4.26   Product Warranty Schedule
4.28   Subsidiaries Schedule 5.2(a)   Conflicts (Buyer) Schedule 5.2(b)  
Consents of Governmental Authorities and Third Parties (Buyer) Schedule 6.1  
Interim Operations of the Seller Schedule 6.10(a)   Transferred Employees
Schedule 6.10(f)   401(k) Participant Loans Schedule 6.11   Minnesota Workers’
Compensation Letter of Credit Schedule 6.21(a)   Title Commitment Schedule
6.21(b)   Owned Real Property Survey Schedule 6.24   Excluded Partially
Performed Customer Contracts Schedule 7.3   Seller Required Consents

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of August 5,
2011 by and between Deltak, L.L.C., a Delaware limited liability company (the
“Seller”), and Hamon Acquisitions, Inc., a Delaware corporation (the “Buyer”).

RECITALS

A. Deltak Construction Services Inc., a Wisconsin corporation (“DCSI”), has been
merged with and into the Seller pursuant to an Agreement and Plan of Merger, by
and between the Seller and DCSI, dated October 29, 2010. References to the
Seller in this Agreement shall be deemed to refer to DCSI as applicable;

B. The Seller is engaged in the business of designing and constructing specialty
boiler systems and small to mid-sized heat recovery steam generator systems,
including designing and constructing any related combined cycle selective
catalytic reduction exhaust systems, and providing field support and quality
assurance services with respect thereto (as currently conducted by the Seller,
the “Business”); provided, however, that notwithstanding any other provision of
this Agreement to the contrary, the Business shall not include any assets or
liabilities related to the Simple Cycle SCR Business;

C. The Seller desires to sell and assign to the Buyer, and the Buyer desires to
purchase and assume from the Seller, substantially all of the assets, and
certain specified liabilities, of the Business upon the terms and subject to the
conditions set forth in this Agreement;

D. The Seller is a wholly-owned subsidiary of Global Power Equipment Group Inc.,
a Delaware corporation (“Global Power”);

E. The Buyer is a direct wholly-owned subsidiary of Hamon Corporation, a
Delaware corporation (“Hamon”), and an indirect wholly-owned subsidiary of
Hamon & Compagnie International SA; and

F. As a condition and inducement to the willingness of the Seller to enter into
this Agreement, Hamon has, concurrently with the execution and delivery of this
Agreement by the Buyer, executed and delivered a Guarantee pursuant to which
Hamon has guaranteed the payment of the Initial Purchase Price to the Seller.

In consideration of the mutual representations, warranties, covenants and
agreements and upon the terms and subject to the conditions hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. The following capitalized terms used in this Agreement have the
following meanings for all purposes of this Agreement:

“Accounting Expert” has the meaning set forth in Section 2.6(c).

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

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“Acquisition Proposal” has the meaning set forth in Section 6.6.

“Actions” means any suit, action, arbitration, legal proceeding, administrative,
quasi- administrative or enforcement proceeding or arbitration proceeding before
any Governmental Authority, or, to the Knowledge of the Seller, any other formal
proceeding, criminal prosecution, investigation, inquiry or review of the Seller
by any Governmental Authority.

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with such
Person. For purposes of this Agreement, “control,” when used with respect to any
specified Person, (a) means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and (b) shall be presumed if a Person has
the direct or indirect power to appoint or have elected more than fifty percent
(50%) of the governing body (e.g., board of directors) of such Person or has
direct or indirect ownership of more than fifty percent (50%) of the voting
securities of such Person.

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

“Allocation Schedule” has the meaning set forth in Section 6.5(g).

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

“Asset Sale Purchase Price” has the meaning set forth in Section 6.5(g).

“Assigned Contracts” has the meaning set forth in Section 2.1(c).

“Assigned Customer Contracts” has the meaning set forth in Section 6.23.

“Assignment and Assumption of Lease” has the meaning set forth in
Section 3.2(e).

“Assumed Liabilities” has the meaning set forth in Section 2.3.

“Balance Sheet” has the meaning set forth in Section 4.4.

“Base Purchase Price” has the meaning set forth in Section 2.5(a).

“Basket” has the meaning set forth in Section 9.5(a).

“Bill of Sale and Assignment and Assumption Agreement” has the meaning set forth
in Section 3.2(b).

“Binding Bids” has the meaning set forth in Section 4.12.

“Braden” means Braden Manufacturing, L.L.C., a Delaware limited liability
company and wholly-owned subsidiary of Global Power.

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

“Business Day” means any day other than a Saturday, Sunday or a day on which the
Federal Reserve Bank located in New York, New York is closed.

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

 

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“Buyer 401(k) Plan” has the meaning set forth in Section 6.10(f).

“Buyer Fundamental Representations” shall mean those representations in Sections
5.1 (Organization; Authority) and 5.6 (Brokers).

“Buyer Indemnitees” has the meaning set forth in Section 9.3.

“Buyer’s Survey Objections” has the meaning set forth in Section 6.21(b).

“Cap” has the meaning set forth in Section 9.5(a).

“Claim” has the meaning set forth in Section 9.6(a).

“Claim Response” has the meaning set forth in Section 9.6(a).

“Claims Notice” has the meaning set forth in Section 9.6(a).

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Net Working Capital” means the Working Capital Assets as of the Closing
Date less the Working Capital Liabilities as of the Closing Date, as adjusted in
a manner consistent with the Closing Working Capital Statement – Example, set
forth in Schedule 2.6(b).

“Closing Working Capital Statement” means a statement setting forth the Closing
Net Working Capital.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

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

“Confidentiality Agreement” has the meaning set forth in Section 6.2(b).

“Consent” means any consent, approval, authorization, qualification, waiver,
registration or notification.

“Contracts” means all written contracts, leases, licenses, agreements (including
any amendments and other modifications thereto) or commitments, arrangements or
undertakings that are binding upon the Seller.

“Customer Contract Dispute” has the meaning set forth in Section 6.27(a).

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

“Dispute Notice” has the meaning set forth in Section 6.27(a).

“Dollars” or “$” means the lawful currency of the United States.

“Employee Plans” has the meaning set forth in Section 4.9(a).

 

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“Encumbrances” means any mortgage, lien, option, security interest, pledge,
restriction on use or transferability or other claim, charge or encumbrance of a
similar nature on any property or property interest.

“Environment” means soil, surface waters, groundwater, land, stream, sediments,
surface or subsurface strata and air.

“Environmental Insurance Policy” has the meaning set forth in Section 6.15.

“Environmental Law” means the Clean Air Act, the Clean Water Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Emergency Planning and Community Right-to-Know Act of 1986, the Occupational
Safety and Health Act of 1970 and the Resource Conservation and Recovery Act of
1976, each as amended, together with all other applicable Laws, Permits and
Orders of any Government Authority regarding the Environment or concerning
public health and safety, worker health and safety, and 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, or cleanup of any Hazardous Materials.

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

“Escrow Agent” has the meaning set forth in Section 2.5(b).

“Escrow Agreement” has the meaning set forth in Section 2.5(b).

“Estimated Month-End Net Working Capital” has the meaning set forth in
Section 2.6(a).

“Estimated Net Working Capital Adjustment” has the meaning set forth in
Section 2.6(a).

“Excluded Assets” has the meaning set forth in Section 2.2.

“Excluded Completed Customer Contracts” has the meaning set forth in
Section 6.25.

“Excluded Liabilities” has the meaning set forth in Section 2.4.

“Excluded Partially Performed Customer Contracts” has the meaning set forth in
Section 6.24.

“FCPA” has the meaning set forth in Section 4.29.

“Federal Employment Tax” means any Tax reported on a Federal Employment Tax
Return with respect to the Transferred Employees.

“Federal Employment Tax Returns” means the Forms W-2 (Wage and Tax Statement);
Forms 941 (Employer’s Quarterly Federal Tax Return); Forms W-4 (Employee’s
Withholding Allowance Certificate) and Forms W-5 (Earned Income Credit Advance
Payment Certificate) on which wages and other compensation paid to the
Transferred Employees during calendar year 2011 are reported.

“Financial Statements” has the meaning set forth in Section 4.4.

“GAAP” means United States generally accepted accounting principles.

 

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“General Escrow” has the meaning set forth in Section 2.5(b).

“General Escrow Amount” has the meaning set forth in Section 2.5(b).

“General Escrow Fund” has the meaning set forth in Section 2.5(b).

“Global Power” has the meaning set forth in the recitals.

“Global Power Employee Plans” means the items set forth on Schedule 1.1.

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

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

“Hazardous Material” means any pollutant, toxic substance, including asbestos
and asbestos-containing materials, hazardous waste, hazardous material,
hazardous substance, contaminant, petroleum or petroleum-containing materials,
radiation and radioactive materials and polychlorinated biphyenyls as defined in
any Environmental Law.

“Indemnitee” has the meaning set forth in Section 9.6(a).

“Indemnitor” has the meaning set forth in Section 9.6(a).

“Initial Purchase Price” has the meaning set forth in Section 2.5(a).

“Initial Release Date” has the meaning set forth in Section 2.5(b).

“Initial Release Date Pending Claims” has the meaning set forth in
Section 2.5(b).

“Initially Released General Escrow Funds” has the meaning set forth in
Section 2.5(b).

“Initiating Party” has the meaning set forth in Section 6.27(b).

“Intellectual Property” means any and all (i) inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
existing on the Closing Date, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, divisionals and reexaminations thereof; (ii) trademarks,
service marks, trade dress, logos, trade names, assumed names and corporate
names, together with all translations, adaptations, derivations and combinations
thereof, including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith; (iii) copyrightable works,
all copyrights and all applications, registrations and renewals in connection
therewith; (iv) mask works and all applications, registrations and renewals in
connection therewith; (v) trade secrets and confidential business information
(including ideas, research and development, know-how, technology, 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);
(vi) computer software (including data and related software program
documentation in computer-readable and hard-copy forms); (vii) other
intellectual property and proprietary rights of any

 

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kind, nature or description, including web sites, web site domain names and
other e-commerce assets and resources of any kind or nature; and (viii) copies
of tangible embodiments thereof (in whatever form or medium).

“Intellectual Property Assets” has the meaning set forth in Section 2.1(d).

“Intellectual Property Assignments” has the meaning set forth in Section 3.2(c).

“Intergroup Payables” means all amounts owed by the Seller, on the one hand, to
Global Power or any of its Affiliates (other than the Seller), on the other
hand.

“Intergroup Receivables” means all amounts owed to the Seller, on the one hand,
by Global Power or any of its Affiliates (other than the Seller), on the other
hand.

“Interim Financial Statements” has the meaning set forth in Section 4.4.

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

“IRCA” has the meaning set forth in Section 4.11(k).

“IRS” means the United States Internal Revenue Service.

“Knowledge of the Seller” means the actual knowledge, after reasonable inquiry
into the relevant matter, of the Persons whose names are set forth on Schedule
1.2.

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

“Leased Real Property” means the property leased pursuant to the Occupancy
Lease.

“Letter of Credit” means the letter of credit set forth on Schedule 1.3.

“Liability” means any direct or indirect liability, indebtedness, obligation,
expense, debt, claim, loss, damage, deficiency or guaranty by any Person,
whether secured or unsecured, recourse or non- recourse, filed or unfiled,
accrued or unaccrued, due or to become due, or liquidated or unliquidated.

“Losses” has the meaning set forth in Section 9.2.

“Material Adverse Effect” means any event, fact, condition, change, occurrence
or development that has had or is reasonably likely to have a material adverse
effect on (a) the Business, assets, liabilities, properties, operations or
results of operations, or condition (financial or otherwise) of the Seller,
taken as a whole, or (b) the Seller’s ability to consummate the transactions
contemplated by this Agreement, excluding any effect resulting from (i) general
economic conditions that do not disproportionately affect the Business or the
Seller, (ii) any economic conditions affecting the industry in which it conducts
its business generally that do not disproportionately affect the relevant party,
(iii) the execution, announcement or performance of this Agreement or the
consummation of the transactions contemplated hereby (including the loss of any
material customer as a result thereof), or (iv) any actions required or
permitted under this Agreement.

“Material Contract” has the meaning set forth in Section 4.12.

“Mediation Notice” has the meaning set forth in Section 6.27(b).

 

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“Money Laundering Laws” has the meaning set forth in Section 4.30.

“Month-End Net Working Capital” means the Working Capital Assets as of the end
of the month immediately preceding the Closing Date less the Working Capital
Liabilities as of that date, as adjusted in a manner consistent with the Closing
Working Capital Statement – Example, set forth in Schedule 2.6(b).

“Non-Competition and Non-Solicitation Agreement” has the meaning set forth in
Section 3.2(f).

“Occupancy Lease” means the lease described in Schedule 4.10(b).

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

“Owned Real Property” means the property described in Schedule 4.10(a).

“Pending Litigation and Pending Claims” means the matters set forth on Schedule
1.4.

“Permits” means any license, permit, registration, clearance, exemption,
approval, authorization, certificate of authority, qualification or similar
document or authority that has been issued or granted by any Governmental
Authority.

“Permitted Encumbrances” means (a) Encumbrances for Taxes, assessments and other
charges of Governmental Authorities not yet due and payable or being contested
in good faith by appropriate proceedings for which collection or enforcement
against the property is stayed, (b) mechanics’, workmens’, repairmen’s,
warehousemen’s or carriers’ Encumbrances arising or incurred in the ordinary
course of business consistent with past practice or by operation of Law if the
underlying obligations are not delinquent, and (c) with respect to the Owned
Real Property (i) the items set forth on Schedule 4.10(c), (ii) any condition
that would be shown by a current, accurate survey, (iii) any other
encroachments, covenants, conditions, restrictions, easements and other similar
matters of record that do not materially interfere with the conduct of the
Business and that individually or in the aggregate do not render title
unmarketable or uninsurable, or materially impair the value or use of the Owned
Real Property affected thereby, and (iv) zoning, building and other similar
restrictions; provided, however, that none of the foregoing described in
clauses (b) or (c) will individually or in the aggregate materially impair the
continued use and operation of the property to which they relate in the
Business. Notwithstanding the foregoing, as used in this Agreement, the
Permitted Encumbrances shall not include: any mortgage lien, mechanics’ lien or
judgment lien against the Seller’s interest in the Real Property not caused by
the Buyer. In the event any mortgage lien, mechanics’ lien or judgment lien
appears on the Title Commitment (as hereinafter defined) or otherwise arises
with respect to the Seller’s interest in the Real Property on or prior to the
Closing, except to the extent caused by the Buyer, the Seller shall either
(x) satisfy such lien out of the proceeds payable to the Seller at the Closing
or (y) permit the Buyer to withhold an amount of the Initial Purchase Price
sufficient to satisfy such lien in the event that the relevant lien was
established in error (provided that to the extent such lien is released without
payment, the Buyer shall promptly pay such withheld amount to the Seller in
immediately available funds). In the event any funds are withheld at Closing
pursuant to this paragraph, the Buyer shall permit the Seller a reasonable time
(not to exceed one hundred twenty (120) days) to cause such lien be released
without payment.

“Person” means any individual, sole proprietorship, partnership, corporation,
limited liability company, joint venture, unincorporated society or association,
trust or other legal entity or Governmental Authority.

 

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“Personal Property” has the meaning set forth in Section 2.1(e).

“Post-Closing Period Taxes” means any Tax attributable to the Business or the
Purchased Assets for a Post-Closing Tax Period.

“Post-Closing Straddle Period” means that portion of a Straddle Period that
begins the day after the Closing Date.

“Post-Closing Straddle Period Taxes” means for Taxes attributable to the
Business or the Purchased Assets for a Straddle Period, all such Taxes other
than Pre-Closing Straddle Period Taxes. For avoidance of doubt, Post-Closing
Straddle Period Taxes shall not include Transfer Taxes (as described in
Section 6.5(f)) and Federal Employment Taxes in respect of the Transferred
Employees.

“Post-Closing Tax Period” means any Tax period (or portion thereof) beginning
after the Closing Date.

“Pre-Closing Period Taxes” means any Taxes attributable to the Business or the
Purchased Assets for a Pre-Closing Tax Period.

“Pre-Closing Straddle Period” means that portion of a Straddle Period that ends
on and includes the Closing Date.

“Pre-Closing Straddle Period Taxes” means for those Taxes attributable to the
Business or the Purchased Assets for a Straddle Period: (a) with respect to
Taxes imposed on or measured by sales, use, value-added, income, receipts,
profits or payment of wages, the portion of all such Taxes that would have been
due had the Straddle Period ended on and included the Closing Date; and (b) with
respect to all other Taxes, an amount equal to the total of all other such Taxes
multiplied by a fraction, the numerator of which is the number of days in the
Pre-Closing Straddle Period, and the denominator of which is the number of days
in the entire Straddle Period. For avoidance of doubt, Pre-Closing Straddle
Period Taxes shall not include Transfer Taxes (as described in Section 6.5(f))
or Federal Employment Taxes in respect of the Transferred Employees.

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

“Pressure Part System Components” means the internal components of a heat
recovery steam generator system containing pressurized water and steam which
capture gas turbine exhaust energy for the purpose of creating steam for power
generation or industrial use.

“Purchase Price” has the meaning set forth in Section 2.5(a).

“Purchased Assets” has the meaning set forth in Section 2.1.

“Real Property” means all of the Seller’s real property and interest in real
property, leaseholds and subleaseholds, purchase options, easements, licenses,
rights to access, rights of way, all buildings and other improvements thereon
and other real property interests currently used in the Business or operations
of the Seller.

“Recipient Party” has the meaning set forth in Section 6.27(b).

“Response Period” has the meaning set forth in Section 9.6(a).

 

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“Responsible Party” has the meaning set forth in Section 9.6(c).

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

“Seller Fundamental Representations” shall mean those representations in
Sections 4.1 (Organization; Good Standing), 4.2 (Authority), 4.17 (Personal
Property) (but only the first sentence thereof), 4.21 (Title to Assets), 4.23
(Brokers), 4.29 (Foreign Corrupt Practices Act), 4.30 (Money Laundering Laws),
and 4.31 (OFAC).

“Seller Indemnitees” has the meaning set forth in Section 9.2.

“Simple Cycle SCR Business” means the business of designing, constructing,
manufacturing, marketing, and/or selling simple cycle selective catalytic
reduction exhaust systems, including NOx catalyst systems and/or CO catalyst
systems behind a gas turbine.

“Straddle Period” means any taxable period beginning on or before and ending
after the Closing Date.

“Successor” means, with respect to any Person, any other Person that following
the Closing directly acquires all or substantially all of the assets of such
Person.

“Survey” has the meaning set forth in Section 6.21(b).

“Target Net Working Capital” means Zero Dollars ($0).

“Tax” means any federal, state, local or foreign net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, commercial
activity, ad valorem, value added, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, penalties, additions to tax or additional amounts
imposed by any Taxing Authority.

“Tax Contest” has the meaning set forth in Section 6.5(d).

“Tax Returns” means all returns (including information returns), statements,
reports, forms, declarations and other similar documents required to be filed or
delivered with respect to any Tax.

“Taxing Authority” means any Governmental Authority responsible for the
administration or imposition of any Tax.

“Termination Notice” has the meaning set forth in Section 6.27(b).

“Third-Party Software” has the meaning set forth in Section 4.13(a).

“Title Commitment” has the meaning set forth in Section 6.21(a).

“Title Company” means First American Title Insurance Company.

“Title Policy” has the meaning set forth in Section 6.21(a).

“Top 10 Customers” has the meaning set forth in Section 4.25(a).

 

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“Top-Up Amount” means an amount equal to the sum of (a) the amount of any
warranty claims pending with respect to the Excluded Partially Performed
Customer Contracts and the Excluded Completed Customer Contracts, but not yet
distributed from the Warranty Escrow and (b) the amount distributed from the
Warranty Escrow prior to the first (1st) anniversary of the Closing Date;
provided, however, that the “Top-Up Amount” shall not exceed Five Hundred Fifty
Thousand Dollars ($550,000).

“Transfer Taxes” has the meaning set forth in Section 6.5(f).

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

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

“WARN Act” has the meaning set forth in Section 4.11(f).

“Warranty Escrow” has the meaning set forth in Section 2.5(c).

“Warranty Escrow Amount” has the meaning set forth in Section 2.5(c).

“Warranty Escrow Fund” has the meaning set forth in Section 2.5(c).

“Warranty Obligations” has the meaning set forth in Section 6.26.

“Working Capital Assets” means trade receivables (net of reserves), other
ordinary course receivables, inventory, costs in excess of billings and other
current assets determined in a manner consistent with the Closing Working
Capital Statement – Example, set forth in Schedule 2.6(b), including asset
account balances related to the Assigned Customer Contracts, but excluding any
asset account balances related to the Excluded Partially Performed Customer
Contracts.

“Working Capital Liabilities” means accounts payable, accrued compensation and
benefits, billings in excess of costs and other accrued liabilities, including
liability account balances related to the Assigned Customer Contracts, in each
case, incurred in the ordinary course of business determined in a manner
consistent with the Closing Working Capital Statement – Example, set forth in
Schedule 2.6(b), but excluding (i) warranty reserves for the Assigned Customer
Contracts and the Excluded Completed Customer Contracts, and (ii) warranty
reserves and other liability account balances for the Excluded Partially
Performed Customer Contracts.

1.2 Interpretation. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, and the part the whole, (b) references to any gender include all
genders, (c) “include” or “including” has the inclusive meaning frequently
identified with the phrases “but not limited to” and “without limitation,” and
(d) references to “hereof,” “hereunder” or “herein” relate to this Agreement.
Each accounting term used herein that is not specifically defined herein shall
have the meaning given to it under GAAP.

ARTICLE II

SALE AND PURCHASE

2.1 Sale and Purchase of Assets. Subject to the terms and conditions set forth
herein, at the Closing, the Buyer shall purchase and acquire from the Seller,
and the Seller shall sell, convey, assign, transfer and deliver to the Buyer,
free and clear of any Encumbrances other than Permitted Encumbrances, all of the
Seller’s right, title and interest in, to and under all of the assets,
properties and rights (other than the Excluded Assets), which relate to, or are
used, owned but not used, or held for use in connection with, the Business
(collectively, the “Purchased Assets”), including the following:

(a) all accounts or notes receivable of the Seller related to the Assigned
Contracts, and any security, claim, remedy or other right related to any of the
foregoing (“Accounts Receivable”);

 

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(b) all inventory, finished goods, raw materials, work in progress, packaging,
supplies, parts and other inventories (“Inventory”);

(c) all Contracts set forth on Schedule 2.1(c) and all other Contracts that
relate to or arise out of the Purchased Assets (the “Assigned Contracts”);

(d) all Intellectual Property that is owned or licensed by the Seller, including
all Intellectual Property used in or necessary for the conduct of the Business
(“Intellectual Property Assets”);

(e) all machinery, equipment, furniture, fixtures, tools, parts, supplies,
office equipment and other tangible personal property (the “Personal Property”);

(f) all Real Property;

(g) to the extent transferable, all Permits that are held by the Seller and
required for the conduct of the Business or for the ownership and use of the
Purchased Assets, including the Permits listed on Schedule 4.14(b) and Schedule
4.16;

(h) to the extent transferable, all certifications, ratings, listings, and
similar rights and benefits of the Seller that are held by the Seller and used
in the conduct of the Business or used in connection with the ownership or use
of the Purchased Assets;

(i) all prepaid expenses, credits, advance payments and security deposits;

(j) all of the Seller’s rights under warranties and all similar rights against
third parties to the extent related to the Purchased Assets;

(k) originals or, where not available, copies of all books and records,
including books of account, ledgers and general, financial and accounting
records, machinery and equipment maintenance files, customer lists, customer
purchasing histories, price lists, distribution lists, supplier lists,
production data, quality control records and procedures, customer complaints and
inquiry files, research and development files, and sales material and records in
the possession of the Seller; and

(l) all goodwill and the going concern value of the Business.

2.2 Excluded Assets. All assets of the Seller or any of its Affiliates that are
not included in the Purchased Assets as described in Section 2.1 shall be
retained by the Seller or such Affiliate, as the case may be, and are referred
to herein as the “Excluded Assets.” Notwithstanding Section 2.1, “Excluded
Assets” shall include:

(a) all cash, cash equivalents, and other marketable or non-marketable
securities in hand or in bank accounts held by the Seller;

 

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(b) all accounts or notes receivable of the Seller related to the Excluded
Assets, and any security, claim, remedy or other right related to any of the
foregoing;

(c) all Intergroup Receivables;

(d) Contracts that are not Assigned Contracts, including those set forth on
Schedule 2.2(d);

(e) the organizational documents, minute books, unit books, Tax Returns, books
of account or other records having to do with the organization of the Seller and
all books, records, files and papers prepared in connection with this Agreement
and the transactions contemplated by this Agreement;

(f) all rights under the Employee Plans and the Global Power Employee Plans and
all assets, records, and vendor arrangements associated with such Employee Plans
and Global Power Employee Plans, as the case may be, whether held by the Seller
or its Affiliates in trust or otherwise;

(g) all refunds, rebates or credits of Taxes attributable to the Business or the
Purchased Assets for Pre-Closing Tax Periods, provided that such refund, rebate
or credit is not included as a Purchased Asset in the determination of Closing
Net Working Capital;

(h) all claims available to or being pursued by the Seller to the extent related
to Excluded Assets or the Excluded Liabilities;

(i) all Purchased Assets sold or otherwise disposed of in the ordinary course of
business consistent with past practice and in compliance with Section 6.1 from
the date hereof to the Closing Date;

(j) all insurance benefits, including rights and proceeds, arising from or
relating to the Business, the Purchased Assets or the Assumed Liabilities,
except to the extent that the Buyer has incurred costs as a result of an insured
or insurable event and has not otherwise been reimbursed;

(k) the assets associated with the Simple Cycle SCR Business, including the
assets set forth on Schedule 2.2(k) and the technology related to the Simple
Cycle SCR Business set forth on Schedule 2.2(k);

(l) the rights that accrue or will accrue to the Seller under this Agreement and
the other documents delivered by the parties in connection herewith; and

(m) the assets, properties and rights set forth on Schedule 2.2(m).

2.3 Assumed Liabilities. Subject to the terms and conditions set forth herein,
at the Closing, the Buyer will assume and thereafter pay, discharge or perform
when due the following Seller’s Liabilities, to the extent arising out of or
pertaining to the Business or the Purchased Assets, other than the Excluded
Liabilities (the “Assumed Liabilities”):

(a) all Liabilities that accrue with respect to the operation of the Business
and the ownership, operation and use of the Purchased Assets following the
Closing;

 

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(b) all Liabilities of the Seller in respect of the Assigned Contracts but only
to the extent that such Liabilities thereunder are required to be performed
following the Closing Date, were incurred in the ordinary course of business and
do not relate to any failure to perform, improper performance, warranty or other
breach, default or violation by the Seller on or prior to the Closing Date;

(c) all Liabilities that relate to any Tax of the Business or the Purchased
Assets, whether disputed or not, for Post-Closing Tax Periods or for the
Post-Closing Straddle Period;

(d) all Liabilities arising after the Closing that relate to the Buyer’s
employment or termination of Transferred Employees or compensation or employee
benefits provided by the Buyer to Transferred Employees, but excluding any
Liabilities arising from the Seller’s employment or termination of Transferred
Employees and except as provided in Section 6.10;

(e) all Liabilities of the Business to the extent included or reflected in the
Closing Net Working Capital set forth in the Closing Working Capital Statement
that is final and binding upon the parties pursuant to Section 2.6;

(f) all Liabilities of the Seller that are required to be performed or observed
on or after the Closing under the Permits assigned and transferred to the Buyer
pursuant to Section 2.1(g) to the extent, in the case of each particular Permit,
that the rights and benefits under such Permit have been assigned to or received
by the Buyer; and

(g) the Liabilities of the Seller set forth on Schedule 2.3(g).

2.4 Excluded Liabilities. All Liabilities of the Seller that are not included in
the Assumed Liabilities are referred to herein as the “Excluded Liabilities.”
The Seller shall, and shall cause each of its Affiliates to, pay and satisfy in
due course all Excluded Liabilities that they are obligated to pay and satisfy.
The Excluded Liabilities shall not be assumed by the Buyer hereunder and shall
include the following:

(a) all Liabilities that accrue with respect to the Excluded Assets;

(b) all Liabilities that accrue with respect to the operation of the Business
and the ownership, operation and use of the Purchased Assets by the Seller prior
to the Closing, including warranty claims relating to the operation of the
Business by the Seller prior to the Closing;

(c) all Liabilities that relate to any Tax of the Business or the Purchased
Assets, whether disputed or not, for Pre-Closing Tax Periods or for the
Pre-Closing Straddle Period;

(d) all Liabilities in respect of the Pending Litigation and Pending Claims;

(e) all Liabilities in respect of any Employee Plans or any Global Power
Employee Plans;

(f) all Liabilities related to the items set forth on Schedule 2.2(k);

(g) all Liabilities of the Seller in respect of trade accounts payable of the
Business that remain unpaid as of the Closing Date; and

(h) all Intergroup Payables.

 

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2.5 Purchase Price.

(a) Purchase Price. In consideration for the Purchased Assets, the Buyer shall
pay to the Seller an amount equal to Thirty-One Million Dollars ($31,000,000)
(the “Base Purchase Price”) subject to adjustment pursuant to Section 2.6 (such
amount, as adjusted, the “Purchase Price”) and assume the Assumed Liabilities.
At the Closing: (i) the Base Purchase Price plus or minus the Estimated Net
Working Capital Adjustment (the “Initial Purchase Price”) less the General
Escrow Amount and the Warranty Escrow Amount shall be paid by the Buyer to the
Seller and (ii) the General Escrow Amount and the Warranty Escrow Amount shall
be deposited by the Buyer with the Escrow Agent, in each case, by wire transfer
of immediately available funds to an account or accounts designated in writing
by the Seller and the Escrow Agent, as applicable, and delivered to the Buyer at
least two (2) Business Days prior to the Closing Date.

(b) General Escrow. At the Closing, an amount equal to Six Million Two Hundred
Thousand Dollars ($6,200,000) (the “General Escrow Amount”) of immediately
available funds from the Initial Purchase Price shall be deposited by the Buyer
to an escrow account (the “General Escrow”) with Wells Fargo Bank, National
Association (or such other institution mutually agreed upon by the parties) as
escrow agent (the “Escrow Agent”), such deposit to constitute the general escrow
fund (the “General Escrow Fund”), and the disposition of the General Escrow Fund
will be governed by the terms of the escrow agreement substantially in the form
attached hereto as Exhibit A (the “Escrow Agreement”). Subject to
Section 2.5(c), on the first (1st) anniversary of the Closing Date (the “Initial
Release Date”), all of the then remaining General Escrow Fund in excess of the
sum of Three Million One Hundred Thousand Dollars ($3,100,000) plus any amounts
(i) that the Buyer is entitled to, but has not at the relevant time received,
from the General Escrow pursuant to the Escrow Agreement and (ii) with respect
to any unresolved Claims set forth in Claims Notices properly given by the Buyer
prior to the Initial Release Date, including the disputed portion of any such
Claims (all of such Claims in clauses (i) and (ii) being hereinafter referred to
as “Initial Release Date Pending Claims”) shall be released to the Seller in
accordance with the Escrow Agreement (such amount, the “Initially Released
General Escrow Funds”). As soon as reasonably practicable upon resolution
pursuant to the Escrow Agreement of any Initial Release Date Pending Claims, all
of the General Escrow Fund related to such Initial Release Date Pending Claims
that is not payable to the Buyer in accordance with such resolution shall be
released to the Seller in accordance with the Escrow Agreement. The General
Escrow will be maintained and administered by the Escrow Agent pursuant to the
terms of the Escrow Agreement until the fifth (5th) anniversary of the Closing
Date. The procedure for claims in connection with Losses against the General
Escrow Fund will be governed by the terms of the Escrow Agreement.

(c) Warranty Escrow. At the Closing, Seven Hundred Fifty Thousand Dollars
($750,000) (the “Warranty Escrow Amount”) of immediately available funds from
the Initial Purchase Price shall be deposited by the Buyer to an escrow account
(the “Warranty Escrow”) with the Escrow Agent, such deposit to constitute the
warranty escrow fund (the “Warranty Escrow Fund”), and the disposition of the
Warranty Escrow Fund will be governed by the terms of the Escrow Agreement. On
the Initial Release Date, the Top-Up Amount shall be deposited in the Warranty
Escrow out of the Initially Released General Escrow Funds, to the extent
available for distribution, or otherwise by the Seller. The Warranty Escrow will
be maintained and administered by the Escrow Agent pursuant to the terms of the
Escrow Agreement. The procedure for claims in connection with Losses against the
Warranty Escrow Fund will be governed by the terms of the Escrow Agreement. The
Buyer shall be able to make claims against both the General Escrow and the
Warranty Escrow with respect to warranty claims related to the Excluded
Partially Performed Customer Contracts and the Excluded Completed Customer

 

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Contracts as contemplated by Section 6.24 through Section 6.26; provided,
however, that, with respect to any such claim, the Buyer shall not be entitled
to recover from the General Escrow or the Warranty Escrow to the extent that the
Buyer has been compensated for such claim from the funds of the other.

2.6 Working Capital Adjustment.

(a) Estimated Month-End Net Working Capital. At least five (5) days prior to the
Closing Date, the Seller shall prepare, or cause to be prepared, a good faith
estimate of the Month-End Net Working Capital (the “Estimated Month-End Net
Working Capital”) and shall deliver such good faith estimate to the Buyer. If
the Estimated Month-End Net Working Capital is less than the Target Net Working
Capital, the Base Purchase Price shall be reduced by the amount of such
shortfall, subject to further adjustment as provided in this Section 2.6, and
(ii) if the Estimated Month-End Net Working Capital is greater than the Target
Net Working Capital, the Base Purchase Price shall be increased by the amount of
such excess, subject to further adjustment as provided in this Section 2.6. The
amount of any such adjustment is referred to herein as the “Estimated Net
Working Capital Adjustment”.

(b) Preparation of Closing Working Capital Statement.

(i) Within thirty (30) Business Days following the Closing, the Buyer shall
prepare, or cause to be prepared, the Closing Working Capital Statement and
shall deliver such Closing Working Capital Statement to the Seller.

(ii) The Seller shall, in connection with the preparation of the Closing Working
Capital Statement, provide, and cause its Affiliates, agents and representatives
to provide, to the Buyer and its Affiliates, agents and representatives, all
information and assistance that may be reasonably requested.

(iii) The Seller shall, within thirty (30) Business Days following receipt of
the Closing Working Capital Statement notify the Buyer in writing that the
Seller disputes any item set forth in the Closing Working Capital Statement,
providing reasonable details with respect to each such disputed item. If the
Seller does not timely notify the Buyer, the Closing Working Capital Statement
shall be deemed agreed to by the Seller and shall be final and binding upon the
parties.

(iv) The Buyer, during the thirty (30) Business Day period referred to in
Section 2.6(b)(iii), shall (A) provide the Seller with any information and
copies of any working papers reasonably requested by the Seller as to the
preparation of the Closing Working Capital Statement and (B) permit the Seller
and its Affiliates, agents and representatives to have and receive access to,
extracts from and copies of any books and records of the Business.

(c) Disputed Closing Working Capital Statement.

(i) In the event that the Seller disputes the Closing Working Capital Statement
pursuant to Section 2.6(b)(iii), then the parties shall jointly, within ten
(10) Business Days of the receipt by the Buyer of the notice referred to in
Section 2.6(b)(iii), appoint RMS McGladrey, Inc. (or, in the case that RMS
McGladrey, Inc. does not accept such appointment, such other independent
accounting firm as the parties, acting in good faith, shall mutually agree upon)
(the “Accounting Expert”) to resolve such disputed

 

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matters. Following a determination by the Accounting Expert, the Closing Working
Capital Statement shall be deemed to be amended to the extent necessary to
accord with such determination and, as so amended, shall constitute the Closing
Working Capital Statement, which shall be final and binding upon the parties.

(ii) The Accounting Expert shall be instructed by the parties to determine only
the matters in dispute and provide its determination simultaneously to the
parties as soon as practicable (but in any event within twenty (20) Business
Days of the acceptance by the Accounting Expert of its appointment hereunder).

(iii) Each party, at its own cost, shall immediately upon the acceptance of the
Accounting Expert of its appointment hereunder:

(A) provide the Accounting Expert full access to its books and records and any
information requested by the Accounting Expert to complete any determination
under this Section 2.6; and

(B) have the right to make submissions to the Accounting Expert in respect of
any determination to be made under this Section 2.6.

(iv) The Accounting Expert’s determination of any matter referred to it under
this Section 2.6 shall be in writing and shall be final and binding upon the
parties. In making a determination under this Section 2.6, the Accounting Expert
shall act as an expert and not as an arbitrator. The fees and expenses of the
Accounting Expert shall be borne by the party whose position (amount claimed or
disputed) is furthest from the amount determined by the Accounting Expert.

(d) Adjustment for Working Capital.

(i) If the Closing Net Working Capital set forth in the Closing Working Capital
Statement agreed to, or deemed agreed to, by the Seller pursuant to
Section 2.6(b)(iii) or as amended pursuant to the determinations made by the
Accounting Expert pursuant to Section 2.6(c) is:

(A) greater than the Estimated Month-End Net Working Capital, then the Buyer
shall pay to the Seller (by wire transfer of immediately available funds to an
account or accounts designated in writing by the Seller and delivered to the
Buyer at least two (2) Business Days prior to the date when such payment is
required to be made) on or before the day that is five (5) Business Days after
the date upon which the Closing Working Capital Statement is final and binding
upon the parties pursuant to Section 2.6, an amount that is equal to the
difference between the Closing Net Working Capital and the Estimated Month-End
Net Working Capital as an adjustment to the Initial Purchase Price; or

(B) less than the Estimated Month-End Net Working Capital, then the Seller shall
pay to the Buyer (by wire transfer of immediately available funds to an account
or accounts designated in writing by the Buyer and delivered to the Seller at
least two (2) Business Days prior to the date when such payment is required to
be made) on or before the day that is five (5) Business Days after the date upon
which the Closing Working Capital Statement is final and binding upon the
parties pursuant to Section 2.6, an amount that is equal to the difference
between the Estimated Month-End Net Working Capital and the Closing Net Working
Capital as an adjustment to the Initial Purchase Price.

 

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(ii) If any payment is made pursuant to Section 2.6(d)(i), then the Initial
Purchase Price shall be deemed (for all purposes, including Tax) to have been
further adjusted to reflect such payment.

ARTICLE III

CLOSING AND DELIVERIES

3.1 Closing. The closing of the transactions contemplated hereby (the “Closing”)
shall take place at 10:00 a.m., New York time, at the offices of Thompson Hine
LLP, 335 Madison Avenue, 12th Floor, New York, New York, 10017-4611, on the
later of (a) August 31, 2011 and (b) the fifth (5th) Business Day following the
satisfaction or waiver of each of the conditions set forth in Article VII (other
than those conditions that, by their nature, are to be satisfied at the
Closing), or at such other time and place or on such other date as the parties
may agree (the “Closing Date”). All actions to be taken and all documents to be
executed and delivered by the parties at the Closing shall be deemed to have
been taken and executed simultaneously, and no actions shall be deemed to have
been taken nor documents executed or delivered until all have been taken,
executed and delivered.

3.2 Deliveries by the Seller. At the Closing, the Seller shall deliver or cause
to be delivered to the Buyer the following items (unless the delivery of any of
the following items is waived by the Buyer):

(a) acknowledgement of receipt of the Initial Purchase Price less the General
Escrow Amount and the Warranty Escrow Amount by the Seller in a form reasonably
satisfactory to the Buyer;

(b) a bill of sale and assignment and assumption agreement substantially in the
form attached hereto as Exhibit B (the “Bill of Sale and Assignment and
Assumption Agreement”), duly executed by the Seller;

(c) assignments of the Intellectual Property Assets substantially in the forms
attached hereto as Exhibit C (the “Intellectual Property Assignments”), duly
executed by the Seller and/or Global Power, as applicable;

(d) with respect to the Owned Real Property, a limited warranty deed, duly
executed and notarized by the Seller, transferring the Owned Real Property to
the Buyer subject to Permitted Encumbrances;

(e) with respect to the Leased Real Property, an assignment and assumption of
the Occupancy Lease (the “Assignment and Assumption of Lease”), duly executed by
the Seller, assigning to the Buyer all of the Seller’s right, title and interest
as tenant thereunder;

(f) a non-competition and non-solicitation agreement substantially in the form
attached hereto as Exhibit D (the “Non-Competition and Non-Solicitation
Agreement”), duly executed by Global Power;

(g) a copy of the certificate of formation of the Seller and all amendments
thereto, certified as of the most recent practicable date by the Delaware
Secretary of State;

 

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(h) a certificate of the Delaware Secretary of State as to the good standing of
the Seller in the State of Delaware as of the most recent practicable date;

(i) a certificate of an officer of the Seller, certifying the limited liability
company agreement, including all amendments thereto, of the Seller;

(j) a certificate of an officer of the Seller, certifying the resolutions of the
member and the Board of Directors of the Seller authorizing the execution,
delivery and performance of this Agreement by the Seller and the transactions
contemplated hereby and that such resolutions have not been modified, rescinded
or otherwise changed since the date of the original resolutions;

(k) a certificate of an officer of the Seller to the effect that the conditions
set forth in Sections 7.3(a) and 7.3(b) have been satisfied;

(l) a duly completed and executed certification of non-foreign status pursuant
to Section 1.1445-2(b)(2) of the Treasury Regulations;

(m) the UCC-3 termination statements and other documentation contemplated by
Section 6.7;

(n) the Escrow Agreement, duly executed by the Seller;

(o) an amendment to the Seller’s certificate of formation, and such other
necessary documents to change the Seller’s name to one other than “Deltak,
L.L.C.” or any derivation thereof, such amendment to be filed by the Seller
within two (2) Business Days following the Closing; and

(p) any additional certificates, receipts, documents and instruments as the
Buyer or the Title Company may reasonably request.

3.3 Deliveries by the Buyer. At the Closing, the Buyer shall deliver or cause to
be delivered to the Seller or Escrow Agent, as applicable, the following items
(unless the delivery of any of the following items is waived by the Seller):

(a) the Initial Purchase Price less the General Escrow Amount and the Warranty
Escrow Amount;

(b) the General Escrow Amount and the Warranty Escrow Amount (each of which the
Buyer shall deliver or cause to be delivered to the Escrow Agent to be held in
the General Escrow and the Warranty Escrow, as the case may be, pursuant to the
terms of the Escrow Agreement);

(c) the Bill of Sale and Assignment and Assumption Agreement, duly executed by
the Buyer;

(d) the Intellectual Property Assignments, duly executed by the Buyer;

(e) the Assignment and Assumption of Lease, duly executed by the Buyer;

(f) the Non-Competition and Non-Solicitation Agreement, duly executed by the
Buyer;

 

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(g) a copy of the certificate of incorporation of the Buyer and all amendments
thereto, certified as of the most recent practicable date by the Delaware
Secretary of State;

(h) a certificate of the Delaware Secretary of State as to the good standing of
the Buyer in the State of Delaware as of the most recent practicable date;

(i) a certificate of an officer of the Buyer, certifying the by-laws or
equivalent document, including all amendments thereto, of the Buyer;

(j) a certificate of an officer of the Buyer certifying the resolutions of the
Board of Directors of the Buyer authorizing the execution, delivery and
performance of this Agreement by the Buyer and the transactions contemplated
hereby and that such resolutions have not been modified, rescinded or otherwise
changed since the date of the original resolutions;

(k) a certificate of an officer of the Buyer to the effect that the conditions
set forth in Sections 7.2(a) and 7.2(b) have been satisfied;

(l) the Escrow Agreement, duly executed by the Buyer and the Escrow Agent; and

(m) any additional certificates, receipts, documents and instruments as the
Seller may reasonably request.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as disclosed in one or more of the Schedules delivered by the Seller to
the Buyer prior to or concurrently with the execution of this Agreement (it
being understood that (i) any matter or item disclosed in any such Schedule
shall be deemed to be disclosed and incorporated into any other Schedule where
such disclosure is expressly cross-referenced and (ii) the disclosure of any
matter or item in any such Schedule shall not be deemed to constitute an
acknowledgement that such matter or item is required to be disclosed therein or
is material to a representation or warranty set forth in this Agreement and
shall not be used as a basis for interpreting the terms “material,”
“materially,” “materiality” or any word or phrase of similar import), the Seller
hereby represents and warrants to the Buyer as of the date hereof, unless a
different date is set forth in any such representation or warranty, as follows:

4.1 Organization; Good Standing. The Seller is a limited liability company duly
organized, validly existing and in good standing under the Laws of the State of
Delaware. Schedule 4.1 sets forth each jurisdiction where the Seller is
qualified to do business. The Seller is duly licensed or qualified to do
business, and in good standing, as a foreign limited liability company under the
laws of each other jurisdiction in which the character of its properties or in
which the transaction of the Business makes such qualification necessary, except
where the failure to be so licensed or qualified would not reasonably be
expected to have a Material Adverse Effect. The Seller has all necessary limited
liability company power and authority to conduct the Business as it is presently
being conducted and to own, use and lease the Purchased Assets. The copies of
the Seller’s certificate of formation and limited liability company agreement,
each as amended to date and made available to the Buyer’s counsel, are complete
and correct, and no amendments thereto are pending. The Seller owns no equity
interests in any other business entity.

4.2 Authority. The Seller has all necessary limited liability company power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement,
the performance by the Seller of its obligations hereunder and the consummation
of the transactions contemplated hereby have been duly authorized by all
requisite limited

 

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liability company action on the part of the Seller. Assuming the due
authorization, execution and delivery by the Buyer, this Agreement shall when
executed constitute a legal, valid and binding obligation of the Seller,
enforceable in accordance its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general equitable principles
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

4.3 No Conflict. The consummation of the transactions in accordance with the
terms hereof do not and will not violate, or conflict with, or result in a
breach of any provisions of the organizational documents of the Seller. Except
as set forth on Schedule 4.3, the execution and delivery by the Seller of this
Agreement and the consummation by the Seller of the transactions in accordance
with the terms hereof will not violate, or conflict with, or result in a breach
of any provision of, or constitute a default (or an event that, with notice or
lapse of time or both, would constitute a default) under any of the terms,
conditions or provisions of any Material Contract, in each case, in any material
respect.

4.4 Financial Statements. The Seller has delivered to the Buyer copies of
(a) the unaudited balance sheets for the Business at December 31, 2008, 2009 and
2010 and the related statements of income and cash flows for each of the years
then ended (collectively, the “Financial Statements”) and (b) the unaudited
balance sheet for the Business at June 30, 2011 and the related statements of
income and cash flows for the six (6) month period then ended (the “Interim
Financial Statements”). The Financial Statements present fairly, in all material
respects, the financial position, results of operations, member’s equity and
cash flows of the Business at the dates and for the time periods indicated and
have been prepared in accordance with GAAP consistently applied, subject to the
absence of notes. The Interim Financial Statements present fairly, in all
material respects, the financial position, results of operations, member’s
equity and cash flows of the Business at the date and for the time period
indicated and have been prepared in accordance with GAAP, consistent with the
Financial Statements, except that the Interim Financial Statements are subject
to normal and recurring quarter-end and year-end adjustments and the absence of
notes. The normal and recurring quarter-end and year-end adjustments made to the
Seller’s 2010 Financial Statements, the March 31, 2011 interim financial
statements, and the June 30, 2011 Interim Financial Statements are set forth on
Schedule 4.4. The Financial Statements and Interim Financial Statements (a) are
derived from the books and records of the Business, (b) such books and records
are reflective of the accounts of the Business as reflected on the trial
balances that comprise the Financial Statements and the Interim Financial
Statements and (c) are accurately reflected and consolidated into the financial
statements of Global Power. Taking into account the adjusting entries set forth
on Schedule 4.4, the unaudited balance sheet of the Business as of December 31,
2010 that is included in the Financial Statements is referred to herein as the
“Balance Sheet.”

4.5 Taxes. Except as set forth on Schedule 4.5:

(a) for all Pre-Closing Tax Periods since the date of its formation, the Seller
has been and will be disregarded as an entity separate from (that is, treated as
a division of) Global Power for purposes of federal Tax Law (other than for
purposes of federal excise Taxes imposed on or after January 1, 2008 and of
Federal Employment Taxes imposed on wages paid after January 1, 2009) and for
purposes of any state or local Tax Law with business entity classification
provisions similar to those of federal Tax Law.

(b) the Seller (or Global Power with respect to the Seller) has filed in a
timely manner all Tax Returns that it (or Global Power) was required to file
with respect to the Business or the Purchased Assets and has paid all Taxes due
as shown on such Tax Returns, and all such Tax Returns are true, complete and
accurate in all material respects;

 

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(c) the Seller (or Global Power with respect to the Seller) has not agreed to
any extension or waiver of the statute of limitations period applicable to any
Tax Return with respect to the Business or the Purchased Assets or agreed to any
extension of time with respect to a Tax assessment or deficiency, which period
(after giving effect to such extension or waiver) has not yet expired;

(d) the Seller (or Global Power with respect to the Seller) has timely withheld
and paid all Taxes relating to the Business or the Purchased Assets required to
have been withheld and paid;

(e) there are no Encumbrances for unpaid Taxes on any of the Purchased Assets,
except Encumbrances for current Taxes not yet due and payable;

(f) there are no audits, administrative proceedings or court proceedings
currently pending or, to the Knowledge of the Seller or to the actual knowledge
of Global Power, threatened with respect to the Business or the Purchased Assets
in respect of any Tax; there are no Tax deficiencies or assessments currently
pending or, to the Knowledge of the Seller or to the actual knowledge of Global
Power, threatened with respect to the Business or the Purchased Assets in
respect of any Tax; and

(g) the Seller has given the Buyer an opportunity to review correct and complete
copies of all Tax Returns relating to the Business or the Purchased Assets filed
by or with respect to the Seller for all taxable periods ending after
December 31, 2004 other than income Tax Returns filed on a consolidated basis
with Global Power.

(h) To the Knowledge of the Seller, the Seller’s performance of any Assigned
Customer Contract did not require the creation of permanent establishments in
foreign countries for Tax purposes.

The representations and warranties set forth in this Section 4.5 are the
Seller’s sole and exclusive representations and warranties regarding Tax
matters.

4.6 Absence of Certain Changes. Except as set forth on Schedule 4.6 and Schedule
4.11(e), since December 31, 2010, the Seller has operated the Business in the
ordinary course of business consistent with past practice and there has not been
any:

(a) payment of any bonuses, or increase in salaries or other compensation, by
the Seller to any of its directors, officers or employees, except for bonus
awards and increases in salaries made in the ordinary course of business
consistent with past practice, and the Seller has not entered into any severance
or similar agreement with any employee;

(b) damage to or destruction or loss of any property of the Business in excess
of One Hundred Thousand Dollars ($100,000), whether or not covered by insurance;

(c) incurrence of indebtedness or guarantee of debt or other liability of any
third party in connection with the Business or the Purchased Assets, except in
the ordinary course of business consistent with past practice and which if
outstanding at the end of any month has been properly reflected in the Interim
Financial Statements;

 

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(d) waiver of any right in excess of One Hundred Thousand Dollars ($100,000),
including any write-off or compromise of any accounts receivable, except in the
ordinary course of business consistent with past practice;

(e) change in the accounting methods, principles or practices of the Business,
including principles or practices relating to estimates, reserves, depreciation,
amortization, cost accounting policies or rates and percentage of completion
accounting;

(f) purchase or other acquisition of any assets for sums in excess of One
Hundred Thousand Dollars ($100,000) per transaction other than in the ordinary
course of business consistent with past practice;

(g) purchase or other acquisition of any stock or other equity interests of any
third party or sale or other disposition of any units or other equity interest
in the Seller;

(h) sale, assignment, transfer, conveyance, lease, pledge, encumbrance, mortgage
or other transfer of any material portion of the Purchased Assets, other than
inventory sold in the ordinary course of business consistent with past practice,
or any abandonment or affirmative disposal of any Intellectual Property Assets,
other than through the expiration of such rights at the conclusion of the full
statutory, regulatory or contractual term;

(i) payment, discharge or satisfaction of any material claim, Liability,
Encumbrance or obligation in excess of One Hundred Thousand Dollars ($100,000),
other than the repayment of debt obligations (including accounts payable) of the
Business and actions taken with respect to the Pending Litigation and Pending
Claims;

(j) material amendment or termination of any Material Contract other than
pursuant to the terms of such Material Contract or as reflected on
Schedule 4.12;

(k) transfers of Personal Property to Global Power or any of its Affiliates;

(l) declaration or payment of any dividends or other distributions (whether in
cash, equity or property or any combination thereof) in respect of any of its
capital; or

(m) agreement to do any of the actions described in clauses (a) through (l).

4.7 Consents and Approvals.

(a) Except as set forth on Schedule 4.7(a), the consummation of the transactions
contemplated by this Agreement will not require the Seller to obtain any Consent
from or make any filing with, or notification to, any Governmental Authority,
except (i) in connection, or in compliance, with the notification and waiting
period requirements of any antitrust or competition Law, (ii) where failure to
obtain such Consent, or make such filing or notification, would not reasonably
be expected to have a Material Adverse Effect, and (iii) as may be necessary as
a result of any facts or circumstances relating solely to the Buyer.

(b) Except as set forth on Schedule 4.7(b), the consummation of the transactions
contemplated by this Agreement will not require the Seller, as of the Closing
Date, to obtain any material third-party Consent.

 

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4.8 Litigation. Except as set forth on Schedule 4.8, as of the date of this
Agreement, there is no pending or, to the Knowledge of the Seller, threatened
Action: (a) that has been commenced by or against the Seller affecting the
Business, the Purchased Assets or the Assumed Liabilities; or (b) that has been
commenced by or against the Seller that, if adversely determined, would have the
effect of preventing, delaying, making illegal or otherwise interfering with any
of the transactions contemplated by this Agreement.

4.9 Employee Benefit Plans.

(a) Schedule 4.9 sets forth a complete list of (i) all “employee benefit plans,”
as defined in Section 3(3) of ERISA, (ii) all other severance pay, salary
continuation, bonus, incentive, option, retirement, pension, profit sharing or
deferred compensation plans, contracts, programs, funds or arrangements of any
kind, and (iii) all other employee benefit plans, contracts, programs, funds or
arrangements, in each case, that are sponsored or maintained by the Seller and
that provide benefits to any employees or former employees of the Seller or with
respect to which the Seller has any liability, including the Global Power
Employee Plans (all of the above being hereinafter individually or collectively
referred to as an “Employee Plan” or “Employee Plans,” respectively). Except as
set forth on Schedule 4.9, (1) no Employee Plan is funded, in whole or in part,
through a voluntary employee’s beneficiary association exempt from taxation
under Section 501(c)(9) of the Code and (2) each Employee Plan that is a
“nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of
the Code) was operated in good faith compliance with Section 409A of the Code
and all applicable IRS guidance between January 1, 2005 and December 31, 2008,
and has complied in form and operation with the requirements of Section 409A of
the Code since January 1, 2009.

(b) Copies of the following materials have been made available to the Buyer:
(i) all current plan documents for each Employee Plan (including amendments and
all documents under which such Employee Plan is operated); (ii) all rulings and
determination letters or National Office Opinion Letters from the IRS with
respect to any of the Employee Plans; (iii) all current summary plan
descriptions and other written employee communications with respect to the
Employee Plans; (iv) all current trust agreements and insurance contracts
relating to the funding or payment of benefits under any Employee Plan; and
(v) the three (3) most recent annual returns on Form 5500 for each Employee Plan
for which such returns are required to be filed.

(c) Each Employee Plan has been maintained, operated and administered in
compliance with its terms and any related documents or agreements and in
compliance with all applicable Laws, in each case, in all material respects.

(d) As of the date of this Agreement, there are no pending Actions (other than
routine benefit claims) that have been asserted or instituted by, against, or
relating to, any Employee Plan, the assets of any trust or other funding
arrangement under any such plan, or the Seller or any fiduciary with respect to
any such plan.

(e) The Seller has paid or accrued all amounts it is required to pay (including
employer contributions and employee elective deferred contributions) as
contributions to each Employee Plan by the date such contributions were required
to be made by applicable Law, agreement or the terms of the Employee Plan; and
all monies withheld from employee paychecks with respect to Employee Plans have
been transferred to the appropriate plan within the time applicable regulations
specify.

 

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(f) No Employee Plan is or, to the Knowledge of the Seller, has ever been
(i) subject to Title IV of ERISA, or (ii) a “multiemployer plan” as defined in
Section 3(37) of ERISA.

(g) Except as set forth on Schedule 4.9, and except for health continuation
coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA
and continuation of life benefits as required by the State of Minnesota, the
Seller does not have any liability for life, health, medical or other welfare
benefits to former employees or beneficiaries or dependents thereof.

(h) Except as set forth on Schedule 4.9, no payment made as a result of, or in
connection with, the transaction contemplated by this Agreement will fail to
qualify for a deduction under Section 280G of the Code, or be subject to Tax
under Section 4999 of the Code and no benefit under any Employee Plan, including
any severance or parachute payment plan or agreement, will be established or
become accelerated, vested or payable by reason of any transaction contemplated
under this Agreement, except as provided in Schedule 4.11(e).

The representations and warranties set forth in this Section 4.9 are the
Seller’s sole and exclusive representations and warranties regarding employee
benefits matters.

4.10 Real Property.

(a) Schedules 4.10(a) and (b) set forth a complete list of all Real Property and
any Contracts under which any such Real Property is owned by, occupied or used
by the Seller or in the operation of the Business.

(b) The Real Property includes all of the real property necessary to conduct the
Business in all material respects as conducted on the date of this Agreement and
will include, as of the Closing Date, all of the real property necessary to
conduct the Business in all material respects as conducted on the Closing Date.

(c) The Seller has good and marketable fee simple title to the Owned Real
Property, free and clear of all Encumbrances other than Permitted Encumbrances.

(d) The Seller has made available to the Buyer a true, correct and complete copy
of the Occupancy Lease. Except as set forth on Schedule 4.10(b): (i) the
Occupancy Lease is in full force and effect in accordance with its terms and has
not been modified or amended; (ii) the Seller has a valid and binding leasehold
interest in the Leased Real Property; and (iii) neither the Seller nor, to the
Knowledge of the Seller, the landlord is in default under the Occupancy Lease,
and the Seller has not received any written notice of any default under the
Occupancy Lease.

(e) To the Knowledge of the Seller, all utility services required by applicable
Law or for the normal operations of the Business, including electric, gas, water
supply, storm and sanitary sewer facilities, telephone lines and fire protection
facilities, currently serve the Real Property.

(f) As of the date of this Agreement, and except as set forth on Schedule
4.10(c), the Seller has received no outstanding written notice from any
Governmental Authority having jurisdiction over any portion of the Real Property
that the Real Property or the present use of the Real Property currently fails
to comply with any applicable Laws, Orders, Permits or restrictions of any
Governmental Authority having jurisdiction over any portion of the Real
Property.

 

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(g) As of the date of this Agreement, there are no pending or, to the Knowledge
of the Seller, threatened condemnation, fire, health, safety, environmental,
building, zoning or other land use Actions relating to any portion of the Real
Property that would adversely affect the current use or occupancy thereof, nor
has the Seller received written notice of any pending or threatened special
assessment proceedings affecting any portion of the Real Property.

(h) No third party is in possession of any of the Real Property or any portion
thereof and there are no Contracts granting any third party the right of use or
occupancy of any portion of the Real Property, except as otherwise provided on
Schedule 4.10(c).

(i) As of the date of this Agreement, the Seller has performed routine
maintenance of the Real Property consistent with past practices.

The representations and warranties set forth in this Section 4.10 are the
Seller’s sole and exclusive representations and warranties regarding real
property matters.

4.11 Labor and Employment Matters.

(a) Except as set forth on Schedule 4.11(a), there are no Actions pending or, to
the Knowledge of the Seller, threatened against the Seller affecting the
Business, the Purchased Assets or the Assumed Liabilities by or on behalf of any
present or former employee of the Seller alleging breach of any Law governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with any employment relationship. The Seller has
not received any written notice of the intent of any Governmental Authority
responsible for the enforcement of labor or employment laws to conduct an
investigation of the Business and, to the Knowledge of the Seller, no such
investigation is in progress.

(b) The Seller is not a party to or otherwise bound by any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization. Except as set forth on Schedule 4.11(b), the Seller is not
subject to any charge, demand, petition or representation proceeding seeking to
compel, require or demand it to bargain with any labor union or labor
organization, nor, as of the date of this Agreement, is there pending or, to the
Knowledge of the Seller, threatened any material labor strike, dispute, walkout,
work stoppage, slow-down or lockout involving the Seller.

(c) Schedule 4.11(c) sets forth the names and positions of all of the employees
of the Seller with an aggregate compensation in excess of One Hundred Thousand
Dollars ($100,000). The Seller has provided to the Buyer true, correct and
complete copies of any employment agreements, severance agreements, bonus
agreements or other agreements or arrangements with such employees that set
forth the terms and conditions of their employment in connection with the
Business.

(d) To the Knowledge of the Seller, except as set forth on Schedule 4.11(d), no
employee of the Seller is a party to any confidentiality agreement,
non-competition agreement or proprietary rights agreement with any other third
party that could reasonably be expected to affect the Business or the employee’s
duties with respect to the Business following the Closing.

(e) Except as set forth on Schedule 4.11(e), the consummation of the
transactions contemplated by this Agreement will not entitle any employee of the
Seller to any change in control payments, severance payments, retirement
allowance or benefit or any other type of payment due to any agreement between
the Seller and any such employee.

 

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(f) Except as set forth on Schedule 4.11(f), the Seller has not experienced a
plant closing, mass layoff or similar circumstance at any time during the three
(3) years immediately preceding the date of this Agreement that has given rise
to notice obligations under the federal Worker Adjustment and Restraining
Notification Act (“WARN Act”) or any similar applicable state or local Law.

(g) Except as set forth on Schedule 4.11(g), the Seller has not been the subject
of a payroll audit by the U.S. Department of Labor or any similar state or local
government agency at any time during the three (3) years immediately preceding
the date of this Agreement.

(h) Except as set forth on Schedule 4.11(h), the Seller has maintained workers’
compensation coverage as required by applicable state law through the purchase
of insurance or by self-insurance.

(i) Except as set forth on Schedule 4.11(i), the Seller engages no independent
contractors or consultants that are paid more than Fifty Thousand Dollars
($50,000) on an annual basis with respect to the Business.

(j) Except as set forth on Schedule 4.11(j), no employees of the Seller are, as
of one week prior to the date of this Agreement, on leave pursuant to the Family
Medical Leave Act of 1993, short- or long-term disability, military leave, sick
leave, inactive as a result of an injury covered by workers’ compensation or
otherwise on inactive status.

(k) Except as set forth on Schedule 4.11(k), no employees of the Seller are
ineligible to work in the United States under applicable federal Law. The Seller
has complied with its obligations under the Immigration Reform and Control Act
of 1986 (the “IRCA”). For each employee of the Seller for whom compliance is
required, the Seller has obtained and retained a complete and true copy of each
such employee’s Form I-9 (Employment Eligibility Verification Form), which shall
constitute Purchased Assets to the extent they relate to such employee. The
Seller has not been cited, fined, served with a Notice of Intent to Fine or with
a Cease and Desist Order, nor has any action or administrative proceeding been
initiated or, to the Knowledge of the Seller, threatened against the Seller by
reason of any actual or alleged failure to comply with the IRCA.

(l) Except as set forth on Schedule 4.11(l), no employees of the Seller are, as
of the date of this Agreement, receiving unemployment compensation or workers’
compensation benefits.

4.12 Contracts, Commitments and Bids. Except as set forth on Schedule 4.12 (each
contract set forth on Schedule 4.12 being referred to as a “Material Contract”
and collectively, the “Material Contracts”), the Seller is not a party to:

(a) any partnership agreement, joint venture agreement or other agreement that
involves sharing of revenues, profits, losses, costs or liabilities by the
Seller with any other Person;

(b) any Contract with a vendor that entails expenditures or receipts of more
than One Hundred Thousand Dollars ($100,000) on an annual basis or One Hundred
Thousand Dollars ($100,000) in the aggregate;

 

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(c) any Contract with a customer that entails delivery of products or services
valued at more than One Hundred Thousand Dollars ($100,000) on an annual basis
or One Hundred Thousand Dollars ($100,000) in the aggregate;

(d) any license, whether as licensor or licensee, of any Intellectual Property
(excluding Third-Party Software) that entails the expenditure of, or delivery of
products or services valued at, more than Fifty Thousand Dollars ($50,000) on an
annual basis;

(e) any Contract with another Person materially limiting or restricting the
ability of the Seller to enter into or engage in any market or line of business;

(f) any Contract with Global Power or any current or former officer, director,
manager, employee, consultant, agent or other representative of the Seller
(other than any Employee Plan or Global Power Employee Plan) that entails
expenditures of more than Fifty Thousand Dollars ($50,000) on an annual basis;

(g) any distribution, sales agent, sales representative or other similar
Contract for the sale or distribution of any product, part or service by the
Seller with another Person; and

(h) any other Contract involving the expenditure or receipt by the Seller of
more than One Hundred Thousand Dollars ($100,000) on an annual basis, other than
in the ordinary course of business consistent with past practice, and not
previously disclosed pursuant to this Section 4.12.

Each Material Contract is in full force and effect, is enforceable in accordance
with its terms and constitutes a legal, valid and binding obligation of the
Seller. Neither the Seller nor, to the Knowledge of the Seller, any other party
is in material breach of, or material default under, any of the Material
Contracts. The Seller has not received any written notice of a threat to
terminate, other than in the ordinary course of business consistent with past
practice, any of the Material Contracts. Except as set forth on
Schedule 4.12(i), there are no material disputes, material oral agreements or
arrangements or forbearance programs in effect as to any of the Material
Contracts or Top Ten Customers. To the Knowledge of the Seller, the estimated
costs to complete the Assigned Customer Contracts set forth on Schedule 4.12(j)
are true and correct in all material respects as of the date noted thereon.

Schedule 4.12(k) sets forth a list of any bids or proposals submitted or
received by the Seller that are binding upon the Seller and in excess of One
Hundred Thousand Dollard ($100,000) (the “Binding Bids”).

4.13 Intellectual Property.

(a) Schedule 4.13(a) sets forth a true, correct and complete list or description
of all registered Intellectual Property owned by the Seller or used in the
operation of the Business, including each of the following: (i) patents and
pending patent applications; (ii) copyrights; (iii) trademarks and service
marks, and pending trademark and service mark applications; (iv) trade names
used by the Seller since January 1, 2008; and (v) internet domain name
registrations, but excluding all “off-the-shelf” software owned by third parties
and licensed from such third parties through shrink-wrap, click-through, or
enterprise licenses available to the general public (“Third-Party Software”).

(b) Except as set forth on Schedule 4.13(b), the Seller owns all right, title
and interest in and to, or has the right to use, and assign its right to use,
the Intellectual Property

 

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Assets free and clear of all Encumbrances other than Permitted Encumbrances.
Except as set forth on Schedule 4.13(b), to the Knowledge of the Seller, the use
and registration of the Intellectual Property Assets do not infringe upon or
otherwise impair any rights of any other Person and none of the Intellectual
Property Assets are being infringed upon or otherwise impaired by any other
Person. Except as set forth on Schedule 4.13(b), there is no Action pending or,
to the Knowledge of the Seller, threatened by or against the Seller regarding
ownership of, or rights to sell or use, any of the Intellectual Property Assets.
To the Knowledge of the Seller, none of the consultants or independent
contractors who have performed services that are material to the Business has
any right, title or interest in or to the Intellectual Property Assets that are
material to the operation of the Business.

(c) Except as set forth on Schedule 4.13(c), the Seller has not received any
written claim, cease-and-desist letter or other written notice of any allegation
that any of the Intellectual Property Assets or the conduct of the Business
infringes upon or misappropriates the Intellectual Property of any Person.

4.14 Environmental, Health, and Safety Matters. Except as set forth on Schedule
4.14:

(a) The Seller is in material compliance with all Environmental Laws with
respect to the Business and the Purchased Assets.

(b) The Seller has obtained and is in material compliance with all Permits that
are required pursuant to Environmental Laws either for the occupation of the
Owned Real Property or for the operation of the Business; and a list of all such
Permits is set forth on Schedule 4.14(b).

(c) In the past three (3) years or if unresolved any prior years, the Seller has
not received any written notice, report or other request for information
regarding any actual or alleged violation of Environmental Law or any
liabilities or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, relating to the Business or its facilities arising under
Environmental Law.

(d) Except in material compliance with applicable Environmental Law, none of the
following exists at the Real Property: (i) underground storage tanks,
(ii) asbestos-containing material in any form or condition, (iii) materials or
equipment containing polychlorinated biphenyls, or (iv) landfills, surface
impoundments, or disposal areas.

(e) The Seller has not, and has no knowledge of any other party who at any of
the Real Property has, treated, stored, disposed of, arranged for or permitted
the disposal of, transported, handled, or released any substance, including any
Hazardous Material, in a manner that has given or would give rise to liabilities
to the Buyer, including any liability for response costs, corrective action
costs, personal injury, property damage, natural resources damages or attorney
fees, pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Solid Waste Disposal Act, as amended, or
any other Environmental Laws.

The representations and warranties set forth in this Section 4.14 are the
Seller’s sole and exclusive representations and warranties regarding
environmental matters, except for the representations and warranties provided in
Section 4.7 (Consents and Approvals), 4.8 (Litigation), 4.10(g) (Real Property)
and 4.34 (Disclosure).

 

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4.15 Insurance. Schedule 4.15 sets forth a list and description of the current
insurance policies (i.e., those in respect of which current premiums are being
paid) held by, or for the benefit of, the Seller and relating to the Business or
the Purchased Assets, and the owner of each such policy. All premiums with
respect to such policies are currently paid and such policies are in full force
and effect. The Seller or Global Power, as disclosed in Schedule 4.15, has
maintained the insurance described in Schedule 4.15, which insurance covers the
Real Property and the Personal Property, whether owned or leased, against loss
or damage by fire or other casualty, subject to the terms of such policies. The
Seller has notified the applicable insurance carriers of any and all claims
known to the Seller or Global Power with respect to the operations, products or
services of the Business for which the Seller is insured. Neither the Seller nor
Global Power has been refused any insurance coverage relating to the Business or
the Purchased Assets by any insurance carrier to which it has applied for
insurance during the past three (3) years.

4.16 Permits; Compliance with Laws. Schedule 4.16 sets forth a complete list of
all material Permits held by the Seller that are related to the conduct of the
Business or the ownership and use of the Purchased Assets. The Seller holds all
material Permits necessary to conduct the Business and to own and use the
Purchased Assets. The Seller is not in material default or violation of any
material Law applicable to the conduct of the Business or the ownership and use
of the Purchased Assets. Notwithstanding the foregoing, the representations and
warranties in this Section 4.16 shall not be deemed to apply to any Tax matters
(which are governed by Section 4.5), any employee benefits matters (which are
governed by Section 4.9), any real property matters (which are governed by
Section 4.10), or any environmental matters (which are governed by
Section 4.14).

4.17 Personal Property. Except as set forth on Schedule 4.17, no Person other
than the Seller has any interest in any of the Personal Property. All equipment
included in the Personal Property that is used in the conduct of the Business is
in good condition and repair (ordinary wear and tear excepted). All leases of
the Personal Property are in full force and effect and afford the Seller
peaceful and undisturbed possession and use of the subject matter of the lease.

4.18 Accounts Payable. Except as disclosed on Schedule 4.18, since the date of
the Balance Sheet, with respect to the Business: (a) all accounts payable of the
Seller were incurred in the ordinary course of business consistent with past
practice; (b) the Seller has paid vendors, Taxes, employees, employee
reimbursable expenses and other Liabilities on a timely basis and consistent
with past practice; (c) the Seller has not altered or amended in any material
respect its payment practices; and (d) no currently outstanding accounts payable
of the Seller have aged beyond their original due date.

4.19 Accounts Receivable. The accounts receivable on the Financial Statements
represent sales actually made in the ordinary course of business consistent with
past practice or are valid claims as to which performance has been rendered. The
reserves on the Financial Statements against the accounts receivable for
returns, allowances and bad debt have been calculated in accordance with GAAP
and in a manner consistent with the past practice of the Business. Except as set
forth on Schedule 4.19, no counterclaims, defenses or offsetting claims with
respect to the accounts receivable on the Financial Statements are pending or,
to the Knowledge of the Seller, threatened. Except as set forth on Schedule
4.19, all of the accounts receivable on the Financial Statements relate solely
to sales of goods or services to customers with respect to the Business, none of
whom are Affiliates of the Seller.

4.20 Inventory. Since December 31, 2010, the Seller has maintained the Inventory
in the ordinary course of business consistent with past practice. The Inventory:
(a) is of a quality and quantity usable and saleable in the ordinary course of
business consistent with past practice, except for obsolete, damaged, defective
or slow moving items that have been written off or written down to fair market
value for which adequate reserves have been established; (b) that is a finished
good is saleable as current inventory in the ordinary course of business
consistent with past practice; and (c) is recorded on the financial records in
accordance with GAAP, and otherwise consistent with the pricing and cost
accounting policies of the Seller.

 

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4.21 Title to Assets. Except as set forth on Schedule 4.21, the Seller has good
and valid title to, or a valid leasehold interest in, the Purchased Assets, free
and clear of all Encumbrances other than Permitted Encumbrances.

4.22 Sufficiency of Assets. Except as set forth on Schedule 4.22, the Purchased
Assets are sufficient for the continued conduct of the Business after the
Closing in substantially the same manner as conducted prior to the Closing and
constitute all of the rights, property and assets sufficient to conduct the
Business as currently conducted.

4.23 Brokers. Except for the fees payable to TM Capital Corp., which fees will
be paid by Global Power at the Closing, neither the Seller nor Global Power has
incurred or become liable for any broker’s commission, finder’s fee or other
similar fees relating to or in connection with the transactions contemplated by
this Agreement.

4.24 Transactions with Affiliates. Except as set forth on Schedule 4.24, no
Affiliate of the Seller: (a) has borrowed money from the Seller; (b) has any
contractual or other claim, express or implied, of any kind whatsoever against
the Seller; (c) has any interest in any property or assets used by the Seller or
necessary for the conduct of the Business; or (d) has engaged in any other
transaction with the Seller since December 31, 2010.

4.25 Customers and Suppliers.

(a) Schedule 4.25(a) sets forth the names of the top ten (10) customers of the
Business (the “Top 10 Customers”) as measured by the revenue of the Seller (in
the aggregate) from such customer for each of the last three (3) fiscal years of
the Business. None of the Top 10 Customers has notified the Seller in writing
that it intends to terminate, cancel or otherwise materially adversely modify
its business relationship with the Seller in any material respect. No other
material customer, except in the ordinary course of business, has notified the
Seller that it intends to terminate, cancel or otherwise materially adversely
modify its business relationship with the Seller in any material respect.

(b) Schedule 4.25(b) sets forth the names of the top ten (10) suppliers of the
Business as measured by the amount the Seller spent on purchasing goods and
services from such suppliers for each of the last three (3) fiscal years of the
Business. No supplier of the Business that is material to the Business has,
except in the ordinary course of business, notified the Seller that it intends
to terminate, cancel or otherwise materially adversely modify its business
relationship with the Seller in any material respect.

4.26 Product Warranty. Except as set forth on Schedule 4.26, to the Knowledge of
the Seller, each product manufactured, sold or delivered by the Seller with
respect to the Business has been in material conformity with all applicable
contractual commitments, and, to the Knowledge of the Seller, the Seller does
not have any material Liabilities for replacement or repair of any such products
or other material damages or costs in connection therewith, subject to the
reserve for product warranty claims set forth in the Interim Financial
Statements and as adjusted for operations and transactions through the Closing
Date in accordance with past practice.

4.27 Product Liability. As of the date of this Agreement, except as set forth on
Schedule 4.8, there is no pending or, to the Knowledge of the Seller, threatened
Action arising out of any injury to individuals or property as a result of the
ownership, possession, sale or use of any product manufactured, sold, leased, or
delivered by the Seller.

 

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4.28 Subsidiaries. Except as set forth on Schedule 4.28, the Seller has no
subsidiaries and does not own any shares of stock or other securities or equity
interests, directly or indirectly, in any other Person.

4.29 Foreign Corrupt Practices Act. None of the Seller or, to the Knowledge of
the Seller, any director, officer, agent, employee or other person acting on
behalf of the Seller has taken any action that is in violation of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay, or authorization of the payment of any money, or offer,
gift, promise to give, or authorization of the giving of anything of value to
any “foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office in contravention of the FCPA, and, during the past three (3) years, the
Seller has conducted the Business in compliance with the FCPA and has instituted
and maintained policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.

4.30 Money Laundering Laws. The operations of the Seller are currently conducted
in material compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions applicable to the
Business, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any Governmental
Authority (collectively, the “Money Laundering Laws”); and no action, suit or
proceeding by or before any Governmental Authority involving the Seller with
respect to the Money Laundering Laws is pending or, to the Knowledge of the
Seller, threatened.

4.31 OFAC. None of the Seller or, to the Knowledge of the Seller, any director,
officer, agent, employee or other person acting on behalf of the Seller is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department.

4.32 Intercompany Charges. All Contracts, commitments or transactions, including
all amounts payable or receivable resulting therefrom, between Global Power and
any of its Affiliates, on the one hand, and the Seller or any of its Affiliates,
on the other hand, are current and have been incurred in the ordinary course of
business.

4.33 Disclaimer. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY
PROVIDED IN THIS ARTICLE IV, NO REPRESENTATION OR WARRANTY OF ANY NATURE,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, IS MADE TO THE BUYER AND THE SELLER
HEREBY DISCLAIMS ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES CONCERNING THE
SELLER, GLOBAL POWER, THE BUSINESS, THE PURCHASED ASSETS OR THE ASSUMED
LIABILITIES, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

Except as disclosed in one or more of the Schedules delivered by the Buyer to
the Seller prior to or concurrently with the execution of this Agreement (it
being understood that (i) any matter or item disclosed in any such Schedule
shall be deemed to be disclosed and incorporated into any other Schedule where
such disclosure is expressly cross-referenced, and (ii) the disclosure of any
matter or item in any such Schedule shall not be deemed to constitute an
acknowledgement that such matter or item is required to be disclosed therein or
is material to a representation or warranty set forth in this Agreement and
shall not be used as a basis for interpreting the terms “material,”
“materially,” “materiality” or any word or phrase of similar import), the Buyer
hereby represents and warrants to the Seller as of the date hereof, unless a
different date is set forth in any such representation or warranty, as follows:

5.1 Organization; Authority. The Buyer is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. The Buyer
has all necessary power and authority to execute and deliver this Agreement and
to carry out the transactions contemplated hereby. The execution and delivery of
this Agreement, the performance by the Buyer of its obligations hereunder and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of the Buyer. This Agreement
shall when executed be duly executed and delivered by the Buyer. Assuming the
due authorization, execution and delivery of this Agreement by the Seller, this
Agreement shall when executed constitute a legal, valid and binding obligation
of the Buyer, enforceable against the Buyer in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding at Law or in equity).

5.2 No Conflict; Consents and Approvals.

(a) The execution and delivery by the Buyer of this Agreement and the
consummation by the Buyer of the transactions in accordance with the terms
hereof do not and will not conflict with or result in a breach of any provisions
of the organizational documents of the Buyer. Except as set forth on
Schedule 5.2(a), the execution and delivery by the Buyer of this Agreement and
the consummation by the Buyer of the transactions in accordance with the terms
hereof will not in any material way violate, or conflict with, or result in a
breach of any provision of, or constitute a default (or an event that, with
notice or lapse of time or both, would constitute a default) under any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
deed of trust, lease, contract or other agreement to which the Buyer or any of
its properties is bound.

(b) Except as set forth on Schedule 5.2(b), (i) the execution, delivery and
performance of this Agreement by the Buyer will not require any Consent or
filing with or notification to any Governmental Authority (except in connection,
or in compliance, with the notification and waiting period requirements of any
antitrust or competition Law) and (ii) the execution, delivery and performance
of this Agreement will not, as of the Closing Date, require any third-party
Consent, in each case, except as may be necessary as a result of any facts or
circumstances relating solely to the Seller.

5.3 Litigation. As of the date hereof, there is no action, suit or proceeding
pending or, to the knowledge of the Buyer, threatened against the Buyer or its
Affiliates that, if adversely determined, would prevent, enjoin or otherwise
delay the execution, delivery and performance of this Agreement.

 

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5.4 Availability of Funds. As of the Closing Date, the Buyer will have
sufficient funds to purchase the Purchased Assets and assume the Assumed
Liabilities and to pay the Purchase Price on the terms and conditions
contemplated by this Agreement. The Buyer acknowledges and agrees that the
Buyer’s performance of its obligations under this Agreement is not in any way
contingent upon the availability of third-party financing to the Buyer.

5.5 No Other Representations. The Buyer acknowledges that, except for the
representations and warranties specifically provided in Article IV, no
representation or warranty of any nature, whether express or implied, oral or
written, is made to the Buyer. The Buyer acknowledges that the Seller has not
made any representation or warranty with respect to any projections, estimates
(except for the estimates contained in Schedule 4.12(j)), or budgets delivered
to or made available to the Buyer of future revenues, future results of
operations (or any component thereof), future cash flows or future financial
condition (or any component thereof) of the Business or the future business and
operations of the Business.

5.6 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Buyer or any of its Affiliates.

ARTICLE VI

COVENANTS AND AGREEMENTS

6.1 Interim Operations of the Seller. Prior to the Closing Date or the earlier
termination of this Agreement, except as set forth on Schedule 6.1 or as
contemplated by this Agreement, unless the Buyer has previously consented in
writing thereto (which consent will not be unreasonably withheld, conditioned or
delayed), the Seller shall not:

(a) incur any indebtedness for borrowed money or issue any long-term debt
securities or assume, guarantee or endorse such obligations of any other Person,
in each case, in connection with the Business, except for indebtedness incurred
in the ordinary course of business consistent with past practice under lines of
credit existing on the date hereof, provided, however, that the Seller shall not
incur indebtedness for borrowed money or issue any long-term debt in excess of
One Hundred Thousand Dollars ($100,000) that will not be discharged at Closing
(other than letters of credit entered into in the ordinary course of business
consistent with past practice);

(b) except in the ordinary course of business consistent with past practice,
(i) acquire, or dispose of, any property or assets, except as permitted by
Section 6.1(e) or for any transaction involving less than One Hundred Thousand
Dollars ($100,000), (ii) mortgage, encumber or suffer any Encumbrance (other
than Permitted Encumbrances) to arise with respect to the Purchased Assets, or
(iii) cancel, terminate or amend or grant any waiver of any rights or settle any
debts owed to or claims held by the Seller in connection with the Business;
provided, however, that the Seller may repay any debt obligations outstanding as
of the date of this Agreement in accordance with the terms of such obligations
and may prepay any such obligations in the sole discretion of the Seller;

(c) enter into, terminate or amend any Material Contract, Binding Bid or
agreement or binding bid or proposal that would be required to be set forth on
Schedule 4.12 or Schedule 4.12(k), as the case may be, except in the ordinary
course of business consistent with past practice, provided, however, that Seller
shall not enter into, terminate or amend any Material Contract or Binding Bid
whereby such Material Contract or Binding Bid includes obligations in excess of
One Hundred Thousand Dollars ($100,000) or the termination or amendment of such
Material Contract or Binding Bid would materially adversely affect the Buyer
(other than change orders entered into in the ordinary course of business
consistent with past practice or Contracts entered into pursuant to Binding
Bids);

 

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(d) except to the extent required by applicable Law or any existing agreement,
(i) enter into, adopt, amend in any material respect or terminate any agreement
relating to the compensation, benefits or severance of any employee of the
Seller, or (ii) hire or terminate any employees, except in the ordinary course
of business consistent with past practice;

(e) purchase or otherwise acquire any assets of any third party in excess of One
Hundred Thousand Dollars ($100,000) or purchase or otherwise acquire any stock
or other equity interests of any third party;

(f) make any change to the accounting (including Tax accounting) methods,
principles or practices of the Business, except as may be required by GAAP or by
applicable Law;

(g) make or enter into any Tax election or closing agreement or settle any Tax
claim or assessment, or consent to any extension of the limitations period for
the assessment of any Tax;

(h) revalue any of the assets, including writing off receivables or reserves,
other than in ordinary course of business consistent with past practice;

(i) establish or increase the benefits payable under any Employee Plans or
establish any new bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing or other employee benefit plan for any employee of
the Seller, or otherwise increase the compensation payable or to become payable
to any employee of the Seller, except in the ordinary course of business
consistent with past practice or as may be required by law;

(j) enter into any employment or consulting agreement with any employee of the
Seller that would provide for payments to such employee of the Seller in excess
of Fifty Thousand Dollars ($50,000) in any calendar year;

(k) change or amend the certificate of formation, the limited liability company
agreement or any other governance document of the Seller so as to adversely
affect the Buyer;

(l) make any loans or advances to any Person (other than any employee of the
Seller), or, except for expenses incurred in the ordinary course of business, to
any employee of the Seller;

(m) pay accounts payable other than in the ordinary course of business;

(n) fail to perform routine maintenance of the Real Property consistent with
past practices; or

(o) enter into any agreement or otherwise become obligated (other than as
required by applicable Law) to do or take any of the actions described in
clauses (a) through (n) above.

 

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6.2 Reasonable Access; Confidentiality.

(a) From the date hereof until the Closing Date or the earlier termination of
this Agreement, and subject to applicable Law, the Seller shall give the Buyer
and its representatives, upon reasonable advance notice to the Seller,
reasonable access, during the Seller’s normal business hours and under the
supervision of the Seller’s personnel and in such a manner as not to interfere
with the normal operations of the Seller, to the assets, properties, books,
records and employees of the Seller and shall permit the Buyer and its
representatives to make such inspections as it or they may reasonably require
and to furnish the Buyer and its representatives during such period with
information relating to the Business as the Buyer and its representatives may
from time to time reasonably request.

(b) Any information provided to or obtained by the Buyer in connection with the
transactions contemplated by this Agreement shall be subject to the
Confidentiality Agreement between the Buyer (or the principal equity holder of
the Buyer) and TM Capital Corp., on behalf of the Seller and Global Power (the
“Confidentiality Agreement”), and shall be held by the Buyer in accordance with,
and be subject to the terms of, the Confidentiality Agreement.

(c) The Buyer agrees to be bound by and comply with the provisions set forth in
the Confidentiality Agreement as if such provisions were set forth in this
Agreement, and such provisions are hereby incorporated into this Agreement by
reference.

6.3 Publicity. Except as may be required to comply with the requirements of any
applicable Law or the rules and regulations of any stock exchange or national
market system upon which the securities of the Buyer or the Seller are listed,
no party will issue any press release or other public announcement relating to
the subject matter of this Agreement or the transactions contemplated hereby
without the prior approval (which approval will not be unreasonably withheld,
conditioned or delayed) of the other parties, and the parties shall cooperate as
to the timing and contents of any such press release or other public
announcement.

6.4 Records. With respect to the books and records of the Seller relating to
matters on or prior to the Closing Date (a) for a period of seven (7) years
after the Closing Date, the Buyer shall not cause or permit their destruction or
disposal without first offering to surrender such books and records to the
Seller, and (b) where there is legitimate purpose, including (i) an audit of the
Seller by the IRS or any other Taxing Authority or (ii) any requirement to
access such books and records so that the Seller and its Affiliates can timely
meet public reporting requirements and/or remain in compliance with all Tax
obligations associated with the Excluded Assets, the Buyer shall allow the
Seller and its representatives reasonable access to, and the right to make
copies of, such books and records during regular business hours.

6.5 Filing Tax Returns; Tax Allocations.

(a) With respect to the Business and the Purchased Assets, the Seller shall
prepare and file (or cause to be prepared and filed) all Tax Returns for any
Pre-Closing Tax Period for which Tax Returns are not yet due as of the Closing
Date and all Straddle Period Tax Returns that are required by Law to be filed by
the Seller after the Closing Date. All Straddle Period Tax Returns with respect
to the Business and the Purchased Assets that are not described in the
immediately preceding sentence shall be prepared and filed by the Buyer. The
party responsible for the preparation of any Straddle Period Tax Return shall
provide to the other party for its review, comment and consent (which consent
shall not be unreasonably withheld, conditioned or delayed) a draft of each such
Tax Return at least fifteen (15) days before the due date of any such

 

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Tax Return. The Seller or the Buyer, as the case may be, shall reimburse the
other party for the Straddle Period Taxes that the first party is responsible
for pursuant to Section 6.5(c) within two (2) Business Days before the
respective Straddle Period Tax Returns are filed.

(b) The Buyer and the Seller shall, and shall each cause their respective
Affiliates to, provide to the other such cooperation and information, as and to
the extent reasonably requested, in connection with the filing of any Tax
Return, amended Tax Return or claim for refund, determining Liability for Taxes
or a right to refund of Taxes, or in participating in any administrative
proceeding or court proceeding with respect to any Tax. Such cooperation and
information shall include providing powers of attorney, copies of all relevant
portions of relevant Tax Returns, together with relevant accompanying schedules
and relevant work papers, relevant documents relating to rulings and other
determinations by Taxing Authorities, and relevant records concerning the
ownership and Tax basis of property, which any such party may possess. Each
party will retain all Tax Returns, schedules, work papers, and all material
records and other documents relating to Tax matters of the Business or the
Purchased Assets for the first Post-Closing Tax Period ending after the Closing
Date, for a Straddle Period and for all Pre-Closing Tax Periods until the
expiration of the applicable statute of limitations (and, to the extent notice
is provided with respect thereto, any extensions thereof) for the Tax periods to
which the Tax Returns and other documents relate. Thereafter, the party holding
such Tax Returns or other documents may dispose of them provided that (i) such
party shall give to the other party written notice prior to doing so, and
(ii) such party shall deliver such documents to the other party in lieu of
disposal if the other party so requests. Each party shall make its employees
reasonably available on a mutually convenient basis at its cost to provide
explanation of any documents or information so provided.

(c) Except as provided in Section 6.5(f) below, the Seller shall be responsible
for all Pre-Closing Period Taxes and Pre-Closing Straddle Period Taxes, if any,
in excess of the amount of such Taxes reflected in the calculation of Closing
Net Working Capital. The Buyer shall be responsible for all Post-Closing Period
Taxes and Post-Closing Straddle Period Taxes.

(d) After the Closing, the Buyer shall promptly notify the Seller in writing
upon the commencement of any Tax Action (each a “Tax Contest”) concerning the
Business or the Purchased Assets with respect to a Pre-Closing Tax Period or a
Straddle Period. The Seller shall have control over Tax Contests with respect to
Pre-Closing Period Taxes and to Taxes relating to Straddle Period Tax Returns
that have been filed by the Seller, and the Buyer shall have control over Tax
Contests with respect to Post-Closing Period Taxes and to Taxes relating to
Straddle Period Tax Returns that have been filed by the Buyer, which control
shall (in each case) include the right to settle, compromise and/or concede any
such Tax Contest and the right to employ counsel of its choice at its expense;
provided, however, that in the case of a Tax Contest that relates to a Straddle
Period, the party not controlling the Tax Contest shall have the right to
participate in such Tax Contest at its own expense and the party controlling the
Tax Contest shall not settle, compromise and/or concede such Tax Contest without
the other party’s consent, which consent shall not be unreasonably withheld,
conditioned or delayed.

(e) Any refunds or credits of Taxes (and any interest thereon) attributable to
the Business or the Purchased Assets that relate to a Pre-Closing Tax Period or
a Pre-Closing Straddle Period and that are received by the Buyer, shall be paid
over to the Seller within five (5) Business Days of receipt; provided, however,
that any such refund or credit is not included as a Purchased Asset in the
calculation of Closing Net Working Capital.

 

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(f) All transfer, documentary, deed, sales, use, stamp, registration, excise,
recording, conveyance, value added and other similar Taxes and fees resulting
from the sale of the Purchased Assets as contemplated by this Agreement
(collectively, the “Transfer Taxes”) shall be borne equally by the Seller and
the Buyer. The party responsible under applicable Law for the filing of any Tax
Return or other documents with respect to any Transfer Tax shall prepare and
file such Tax Return at its sole expense (and the other party shall promptly
remit payment for fifty percent (50%) of such Transfer Taxes).

(g) The Buyer and the Seller agree that the sum of the Purchase Price, the
Liabilities of the Business as of the Closing Date that are assumed by the Buyer
and the value of the covenants provided by the Buyer under Section 6.12 of this
Agreement (collectively, the “Asset Sale Purchase Price”) shall be allocated
between and among the Purchased Assets and the covenants provided by Global
Power and the Seller under Section 6.13 of this Agreement. Within forty-five
(45) days after the Closing Date, the Buyer shall provide the Seller with a
schedule (the “Allocation Schedule”) setting forth the Buyer’s allocation of the
Asset Sale Purchase Price for the purpose of, and in accordance with,
Section 1060 of the Code and the applicable Treasury Regulations and any
applicable provision of state, local or foreign law, among the various class of
assets listed on IRS Form 8594. Such allocation shall be deemed final unless the
Seller notifies the Buyer in writing of any disagreement with the Allocation
Schedule within thirty (30) days of receipt of such schedule. If the allocation
is deemed final or the Buyer and the Seller reach such agreement, the Buyer and
the Seller shall execute and file all Tax Returns in a manner consistent with
the allocation determined pursuant to this Section 6.5(g). In the event that the
parties do not agree to a purchase price allocation in accordance with this
Section 6.5(g), then the Buyer and the Seller shall refer the disagreement to
the Accounting Expert. The parties shall instruct the Accounting Expert to
resolve any disagreement within thirty (30) days of the submission of the
matter, and the Buyer and the Seller agree that the decision of the Accounting
Expert shall be conclusive and binding on both the Buyer and the Seller. The
fees of the Accounting Expert shall be borne equally by the Buyer and the
Seller. The Buyer and the Seller shall execute and file all Tax Returns and
other related documents in a manner consistent with the Accounting Expert’s
determination.

(h) With respect to the preparation and filing of Federal Employment Tax
Returns, the Seller and the Buyer shall follow the Standard Procedure specified
in Rev. Proc. 2004-53, 2004-2 C.B. 320, Sec. 4, whereby, among other things, the
Seller shall be responsible for and perform all Federal Employment Tax
withholding, payment and reporting duties with respect to any wages and other
compensation paid by the Seller to the Transferred Employees in connection with
the operation of the Business on or prior to the Closing Date; and the Buyer
shall be responsible for and perform all Federal Employment Tax withholding,
payment and reporting duties with respect to any wages and other compensation
paid by the Buyer to the Transferred Employees in connection with the operation
of the Business after the Closing Date.

(i) With respect to the Pre-Closing Straddle Period, the Seller shall make no
election to be classified as an association taxable as a corporation for
purposes of federal Tax Law or for purposes of any state or local Tax Law with
business entity classification provisions similar to those of federal Tax Law.

6.6 No Solicitation of Acquisition Proposal. From and after the date of this
Agreement and up to and including the termination of this Agreement in
accordance with Section 8.1, without the prior written consent of the Buyer, the
Seller will not, and will not authorize or permit any of its representatives,
agents or Affiliates to, directly or indirectly, solicit, initiate or encourage
(including by way of furnishing information) or take any other action to
facilitate knowingly any inquiries or the

 

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making of any proposal that constitutes or could reasonably be expected to lead
to an Acquisition Proposal from any Person, or engage in any discussion or
negotiations relating thereto or accept any Acquisition Proposal. As used
herein, “Acquisition Proposal” means a proposal or offer (other than pursuant to
this Agreement) to acquire, in any manner, an equity interest in, or all or
substantially all of the assets of, the Seller. Unless restricted by a
confidentiality or similar agreement, the Seller shall notify the Buyer in
writing within two (2) Business Days of receiving an Acquisition Proposal.

6.7 Release of Encumbrances. The Seller shall coordinate with Global Power’s
senior lenders and any other secured party of the Seller (other than the parties
listed on Schedules 4.10(c) and Schedule 4.12 and the parties to Contracts
similar to such Contracts) so that at the Closing, Global Power’s senior lenders
and each such secured party, if any, will release all of their respective
Encumbrances on the Purchased Assets and will execute and deliver to the Seller
UCC-3 termination statements and any other documentation reasonably requested by
the Buyer or the Buyer’s lenders, evidencing the consent of Global Power’s
senior lenders or each such secured party, if any, to the sale of the Purchased
Assets by the Seller and the release of all such Encumbrances on the Purchased
Assets in their favor.

6.8 Regulatory and Other Authorizations; Consents.

(a) The Seller, on the one hand, and the Buyer, on the other hand, shall
(i) promptly, but in no event later than fifteen (15) Business Days following
the date hereof, make all filings and notifications with, and use their
respective commercially reasonable efforts to promptly obtain all
authorizations, consents, orders and approvals of, all Governmental Authorities
that may be or become necessary for the performance of their respective
obligations pursuant to, and the consummation of the transactions contemplated
by, this Agreement and (ii) cooperate with the reasonable requests of the other
in promptly seeking to obtain all such authorizations, consents, orders and
approvals. None of the Seller, the Buyer or any of their respective Affiliates
shall take any action that it should be reasonably aware would have the effect
of delaying, impairing or impeding the receipt of any required authorizations,
consents, orders or approvals.

(b) The Seller, on the one hand, and the Buyer, on the other hand, each agree to
promptly make any filing that may be required under any antitrust or competition
Law or by any antitrust or competition authority. The Buyer shall be responsible
for the filing fees associated with any such filings required in any
jurisdiction.

(c) Each of the Seller and the Buyer shall promptly notify one another of any
communication it or its Affiliates receives from any Governmental Authority
relating to the matters that are the subject of this Agreement and permit the
other party to review in advance any proposed communication by such party to any
Governmental Authority and shall provide the other party with copies of all
correspondence, filings or other communications between such party or any of its
representatives, on the one hand, and any Governmental Authority or any members
of its staff, on the other hand. Neither the Seller nor the Buyer shall agree to
participate in any meeting with any Governmental Authority in respect of any
such filings or any investigation or other inquiry unless it consults with the
other party in advance and, to the extent permitted by such Governmental
Authority, gives the other party the opportunity to attend and participate at
such meeting. Subject to the Confidentiality Agreement and Section 6.2, the
Seller and its Affiliates, on the one hand, and the Buyer and its Affiliates, on
the other hand, will coordinate and cooperate fully with the other in exchanging
such information and providing such assistance as the other may reasonably
request in connection with the foregoing and in seeking early termination of any
applicable waiting periods under any antitrust or competition Law; provided,
however, that neither the Seller nor the Buyer shall be required to disclose to
the other

 

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any of its or its Affiliates’ confidential competitive information. No party
shall be required to comply with any provision of this Section 6.8(c) to the
extent that such compliance would be prohibited by applicable Law.

(d) Each of the Seller and the Buyer shall use its reasonable best efforts to
avoid the entry of, or to effect the dissolution of, any decree, order,
judgment, injunction, temporary restraining order or other order in any action,
suit or proceeding that would otherwise have the effect of preventing or
materially delaying the consummation of the transactions contemplated by this
Agreement.

(e) Notwithstanding any other provision of this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign or subcontract any
Purchased Asset or any claim or right or any benefit arising thereunder or
resulting therefrom if such assignment or subcontract, without the Consent of a
third party thereto, would constitute a breach or other contravention of such
Purchased Asset or in any way adversely affect the rights of the Seller or the
Buyer (or the applicable Affiliate of the Seller or the Buyer) thereunder. The
Seller and the Buyer shall use their reasonable best efforts (but without any
payment of money by the Seller or the Buyer) to obtain the Consent of the other
parties to any such Purchased Asset or any claim or right or any benefit arising
thereunder for the assignment or subcontracting thereof to the Buyer as the
Buyer may request. If such Consent is not obtained, or if an attempted
assignment or subcontract thereof would be ineffective or would materially
adversely affect the rights of the Seller (or the applicable Affiliate of the
Seller) thereunder so that the Buyer would not in fact receive all such rights,
the Seller and the Buyer shall cooperate in a mutually agreeable arrangement
under which the Buyer would obtain the benefits and assume the obligations
thereunder in accordance with this Agreement, including subcontracting,
sublicensing, or subleasing to the Buyer, or under which the Seller (or the
applicable Affiliate of the Seller) would enforce for the benefit of the Buyer,
with the Buyer assuming the Seller’s (or the applicable Affiliate of the
Seller’s) obligations, any and all rights of the Seller (or the applicable
Affiliate of the Seller) against a third party thereto.

6.9 Updating Schedules. From time to time prior to the Closing, the Seller shall
be entitled to supplement or amend the Schedules delivered in connection
herewith with respect to any matter that exists or occurs after the date hereof,
which, if existing or occurring prior to or at the date hereof, would have been
required to be set forth or described in such Schedules or is necessary to
correct any information in such Schedules that has been rendered inaccurate
thereby, and each such supplement or amendment shall be deemed to be
incorporated into and to supplement or amend the Schedules as of the Closing
Date (including for purposes of the termination rights contained in this
Agreement and for purposes of determining whether or not the conditions set
forth in Section 7.3 have been satisfied); provided, however, that any
disclosure in any such supplement or amendment shall not be deemed to have cured
any inaccuracy in or breach of any representation or warranty contained in this
Agreement for purposes of indemnification under Article IX.

6.10 Employees.

(a) Prior to the Closing Date, the Buyer shall make offers of employment to the
employees of the Seller set forth on Schedule 6.10(a) (such employees who accept
the terms and conditions of such offer and who are employed by the Buyer are
hereinafter referred to as “Transferred Employees”). The Buyer shall notify the
Seller at least seven (7) days in advance of the Closing of the names of the
employees of the Seller who do not accept such offers and the Seller agrees to
terminate or transfer or cause to be terminated or transferred the employment of
such employees effective at the time of the Closing and to so notify them prior
to the Closing.

 

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(b) Except as set forth in subparagraphs (d), (e), (f) and (g), the Buyer shall
establish initial terms and conditions of employment (including a benefits
package) for all Transferred Employees that shall be, in the aggregate,
substantially equivalent to those provided by Global Power and/or the Seller as
of the Closing Date. The active participation by all Transferred Employees in
the Employee Plans and the Global Power Employee Plans will cease as of the
Closing Date.

(c) Immediately after or simultaneously with the Closing, the Seller shall pay
or shall cause to be paid all employees for all amounts due to employees of the
Seller (including Transferred Employees) through the Closing Date, including
amounts due as wages or salary, on account of severance, accrued vacation,
accrued sick days, health claims, bonus and other benefits for such employees
through the Closing Date.

(d) All prior service of a Transferred Employee with the Seller and its
Affiliates shall count toward the service requirements for eligibility for any
benefits and sick pay and vacation accruals with the Buyer. The Buyer shall
cause any eligible expenses incurred by such Transferred Employee under an
Employee Plan or a Global Power Employee Plan during the portion of the current
plan year ending on the date such Transferred Employee begins participation in
the corresponding medical or health plan made available by the Buyer to be taken
into account under such medical or health plan for purposes of satisfying all
deductible, coinsurance, and maximum out-of-pocket requirements that apply to
such Transferred Employee for the applicable plan year as if such amounts had
been paid in accordance with the medical or health plan made available by the
Buyer to such Transferred Employee, provided the Seller furnishes the Buyer with
records in a commercially reasonable format.

(e) With respect to any Transferred Employee who has or who, on or before the
Closing Date, develops any medical condition other than any medical condition
caused by, arising out of, or otherwise associated with an accidental injury
(including, by way of illustration but not by way of limitation, a work place,
sporting, motor vehicle, or other accidental injury) (an “Applicable
Condition”), the Buyer shall, or shall make commercially reasonable efforts to
cause insurance carriers for the Buyer to cause, each medical or health plan
made available by the Buyer to any such Transferred Employee to provide that any
pre-existing condition exclusion relating to such Applicable Condition (to the
extent that coverage for such condition is generally provided under such medical
or health plan) shall be waived (to the extent coverage for such condition was
provided under a comparable Employee Plan or Global Power Employee Plan in which
such Transferred Employee participated immediately prior to the Closing Date and
such pre-existing condition exclusion was waived under such Employee Plan or
Global Power Employee Plan, as the case may be) as to such Transferred Employee.

(f) The Buyer agrees to establish or make available to the Transferred Employees
a defined contribution plan that is qualified under Sections 401(a) and 401(k)
of the Code (the “Buyer 401(k) Plan”) that will accept rollovers from the 401(k)
plan maintained by Global Power in which employees of the Seller participate,
including, to the extent permitted by the 401(k) plan maintained by Global
Power, rollovers of promissory notes that represent participant loans of the
Transferred Employees. Such loans are set forth on Schedule 6.10(f).

(g) The provisions of this Section 6.10 are for the benefit of Global Power, the
Seller and the Buyer only, and no employee of the Seller or any other person
shall have any rights hereunder. Nothing herein expressed or implied shall
confer upon any employee of the Seller, or any legal representatives or
beneficiaries thereof, any rights or remedies, including any right to employment
or continued employment for any specified period or to be covered under or by
any

 

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employee benefit plan or arrangement, or shall cause the employment status of
any employee to be other than terminable at will. It is expressly agreed and
understood that the Buyer may terminate the employment of any Transferred
Employee at any time after the Closing Date.

(h) Employee Records. Except to the extent prohibited by law, the Seller shall
deliver to the Buyer originals or copies of personnel files and records relating
to Transferred Employees within ten (10) days after the Closing Date.

(i) The Buyer shall not be responsible for any liability under COBRA with
respect to any employees or former employees of the Seller who are not
Transferred Employees.

6.11 Letters of Credit. Prior to and after the Closing Date, the Seller and the
Buyer shall, and shall cause their respective Affiliates to, execute all
documents and instruments and take all actions reasonably requested by the other
and otherwise fully cooperate with the other in order to enable the replacement
of the Letter of Credit and otherwise to facilitate a smooth transition with
regard to the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Seller hereby agrees to keep the Letter of Credit in place until
it is replaced in accordance with the preceding sentence; provided, however,
that in no event shall such period exceed thirty (30) days. Promptly following
the receipt of a written notice from the Seller that an amount has been drawn on
the letter of credit set forth on Schedule 6.11 in respect of any of the
Transferred Employees and related to the post-Closing operation of the Business
by the Buyer, the Buyer shall pay to the Seller an amount equal to the amount
drawn on such letter of credit in immediately available funds to an account
designated in such written notice by the Seller. The Buyer hereby agrees that it
shall (a) reimburse the Seller and its Affiliates for any and all reasonable
costs or expenses incurred by any of them in complying with this Section 6.11
and (b) indemnify and hold harmless the Seller and its Affiliates from and
against any and all Losses actually incurred by the Seller and its Affiliates
relating to or arising from this Section 6.11 or compliance herewith.

6.12 Non-Use of Excluded Assets; Agreement Not to Compete by the Buyer.

(a) Following the Closing, the Buyer shall not, and shall cause its Successors,
its Affiliates, and its Affiliates’ Successors not to, directly or indirectly,
use any of the Excluded Assets. Following the Closing, the Buyer shall execute
or cause to be executed such further documents and instruments and take or cause
to be taken such further actions as may reasonably be necessary to vest all
right, title and interest in and to the Excluded Assets in Global Power, the
Seller, Braden or their Affiliates, as applicable, and as may be reasonably
necessary to convey, assign, transfer and deliver any and all Excluded Assets to
Global Power, the Seller, Braden or their Affiliates, as applicable. The Buyer
shall cooperate affirmatively with Global Power, the Seller and Braden, as
applicable, to the extent reasonably requested in writing by Global Power, the
Seller or Braden, as applicable, to enforce the rights and obligations herein
provided.

(b) The Buyer agrees and acknowledges that Global Power, the Seller and Braden
and their Affiliates shall be entitled to protect and preserve the going concern
value of the Simple Cycle SCR Business of Braden to the extent permitted by
applicable Law and that the Seller would not have entered into this Agreement
absent the provisions of this Section 6.12(b) and, therefore, for a period of
five (5) years from the Closing Date, the Buyer shall not, and shall cause its
Successors, its Affiliates, and its Affiliates’ Successors not to, directly or
indirectly, engage in activities or businesses, or establish new businesses,
that are in direct competition with the Simple Cycle SCR Business of Braden as
currently conducted. The restrictive covenant contained in this Section 6.12(b)
is a covenant independent of any other provision of this Agreement and the
existence of any claim that the Buyer may allege against Global Power, the
Seller or Braden, whether based on this Agreement or otherwise, shall not
prevent the enforcement of this

 

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covenant. The Buyer agrees that Global Power’s, the Seller’s and Braden’s
remedies at Law for any breach or threat of breach by the Buyer or any of its
Successors, its Affiliates, and its Affiliates’ Successors of the provisions of
this Section 6.12(b) will be inadequate, and that Global Power, the Seller and
Braden shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Section 6.12(b) and to enforce specifically the terms and
provisions hereof, in addition to any other remedy to which Global Power, the
Seller and/or Braden may be entitled at Law or in equity. In the event of
litigation regarding this covenant, the prevailing party in such litigation
shall, in addition to any other remedies the prevailing party may obtain in such
litigation, be entitled to recover from the other parties its reasonable legal
fees and out of pocket costs incurred by such party in enforcing or defending
its rights hereunder. The length of time for which this covenant shall be in
force shall not include (and shall be extended for) any period of violation or
any other period required for litigation during which Global Power, the Seller
or Braden seeks to enforce this covenant. The Buyer agrees that the provisions
of this Section 6.12(b) are no greater than necessary to protect Global Power’s,
the Seller’s and Braden’s legitimate interests in the Simple Cycle SCR Business
of Braden. If a court of competent jurisdiction should conclude that any
provision contained herein is too broad or restrictive to be enforceable,
then the parties agree that the court shall have the authority to modify such
provision to the minimum extent necessary to make the provision reasonable and
enforceable and, as so modified, the parties agree that the court shall fully
enforce the provision.

6.13 Agreement Not to Compete by the Seller. The Seller agrees and acknowledges
that the Buyer and its Affiliates shall be entitled to protect and preserve the
going concern value of the Business and the Purchased Assets to the extent
permitted by applicable Law and that the Buyer would not have entered into this
Agreement absent the provisions of this Section 6.13 and, therefore:

(a) for a period of five (5) years from the Closing Date, the Seller shall not,
and shall cause its Successors, its subsidiaries, and its subsidiaries’
Successors not to, directly or indirectly, engage in the business of the design,
construction, manufacture, marketing, distribution and/or sale of Pressure Part
System Components or specialty boilers, in each case, in competition with the
product lines of the Seller existing at Closing; and

(b) for a period of two (2) years from the Closing Date, the Seller shall not,
and shall cause its Successors, its subsidiaries, and its subsidiaries’
Successors not to, directly or indirectly, solicit, recruit or hire any
Transferred Employee, or solicit or encourage any Transferred Employee to leave
the employment of the Buyer.

The restrictive covenants contained in this Section 6.13 are covenants
independent of any other provision of this Agreement and the existence of any
claim that the Seller may allege against the Buyer, whether based on this
Agreement or otherwise, shall not prevent the enforcement of these covenants.
The Seller agrees that the Buyer’s remedies at Law for any breach or threat of
breach by the Seller or any of its subsidiaries of the provisions of this
Section 6.13 will be inadequate, and that the Buyer shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Section 6.13 and to enforce specifically the terms and provisions hereof, in
addition to any other remedy to which the Buyer may be entitled at Law or in
equity. In the event of litigation regarding these covenants, the prevailing
party in such litigation shall, in addition to any other remedies the prevailing
party may obtain in such litigation, be entitled to recover from the other
parties its reasonable legal fees and out of pocket costs incurred by such party
in enforcing or defending its rights hereunder. The length of time for which
these covenants shall be in force shall not include (and shall be extended for)
any period of violation or any other period required for litigation during which
the Buyer seeks to enforce these covenants. The Seller agrees that the
provisions of this Section 6.13 are no greater than necessary to protect the
Buyer’s legitimate interests in the Business. If a court of competent
jurisdiction should conclude that any provision contained herein

 

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is too broad or restrictive to be enforceable, then the parties agree that the
court shall have the authority to modify such provision to the minimum extent
necessary to make the provision reasonable and enforceable and, as so modified,
the parties agree that the court shall fully enforce the provision.

6.14 Insurance Coverage for Pre-Closing Periods. Until the Closing Date, the
Seller or its Affiliates, as applicable, will pay the premiums under insurance
policies that relate to the operations of the Seller prior to the Closing Date
and comply with the terms of such policies in all material respects.

6.15 Environmental Insurance. On or prior to the Closing Date, the Seller will
purchase or cause one of its Affiliates to purchase for the benefit of the Buyer
an insurance policy in respect of the Real Property described in Schedules
4.10(a) and (b), having a ten (10) year term and providing for pre-existing
environmental conditions coverage of $5,000,000 per occurrence and $10,000,000
aggregate limits with a $100,000 deductible and substantially in the form agreed
upon by the parties prior to the Closing (the “Environmental Insurance Policy”).
The cost of the Environmental Insurance Policy shall be borne by the Seller,
except that the Buyer shall reimburse the Seller for the incremental expense
associated with the increase of the aggregate limit of the Environmental
Insurance Policy from $5,000,000 to $10,000,000. Global Power and the Seller
will be named as additional insureds under the Environmental Insurance Policy.

6.16 Bulk Sales Laws. The parties hereby waive compliance with the provisions of
any bulk sales, bulk transfer or similar Laws of any jurisdiction that may
otherwise be applicable with respect to the sale of any or all of the Purchased
Assets to the Buyer.

6.17 Receivables. From and after the Closing, if the Seller or any of its
Affiliates receives or collects any funds relating to any Accounts Receivable or
any other Purchased Asset, the Seller or such Affiliate, as the case may be,
shall remit such funds to the Buyer within five (5) Business Days after receipt
thereof. From and after the Closing, if the Buyer or any of its Affiliates
receives or collects any funds relating to any Excluded Asset, the Buyer or such
Affiliate, as the case may be, shall remit such funds to the Seller within five
(5) Business Days after receipt thereof.

6.18 Use of Name. On the Closing Date, the Seller shall discontinue any business
operations under, and any use of, the name “Deltak” or any similar name. The
Seller shall cease the use of any common law trademarks that embody the name or
mark “Deltak” or any similar name.

6.19 Transferred Employees. The Buyer will offer employment to a sufficient
number of employees of the Seller, as set forth on Schedule 6.10(a), so as not
to trigger obligations under the WARN Act or similar state or local law.

6.20 Closing Conditions. Each of the parties will use its commercially
reasonable efforts to take all action and to do all things necessary 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
Article VII).

6.21 Title and Survey.

(a) The Buyer has received a title commitment (Commitment No. NCS-462391-CLE),
with a commitment date of March 25, 2011, revised July 26, 2011 (the “Title
Commitment”) issued by the Title Company for the issuance of an ALTA owner’s
policy of title insurance for the Owned Real Property (the “Title Policy”). The
Title Commitment is described on Schedule 6.21(a) and has been reviewed by the
Buyer. The Buyer has identified for the Seller those exceptions to which the
Buyer objects in the Title Commitment. The Seller has agreed to

 

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reasonably cooperate with the Buyer in an effort to cure or otherwise remedy by
Closing those title exceptions that are listed on Exhibit E, in the manner set
forth on Exhibit E, including by furnishing an Owner’s Affidavit to the Title
Company, at Closing, in the form attached hereto as Exhibit E-1; provided,
however, that the Seller affirmatively agrees to cure or otherwise remedy items
1 – 6, 9, 16, 17 and 19 set forth on Schedule B, Section 2 of the Title
Commitment (For purposes of this Section 6.21, “cure or otherwise remedy” shall
mean to release, satisfy, remove or take other action to enable the Buyer to
obtain title insurance with coverage over, or without exception for, such
item.). In addition, the Seller has requested that the Registrar of Titles of
Hennepin County, Minnesota issue an “exchange certificate” removing the easement
referenced in Item 11 of the Title Commitment from the Certificate of Title. The
Seller will use its best efforts to work with the Registrar of Titles to have
such Item removed from the Certificate of Title, including, if necessary,
continuing such efforts following Closing, at the Seller’s expense. All title
exceptions not listed on Exhibit E are hereby approved by the Buyer and are
deemed to be Permitted Encumbrances. The Buyer shall accept title to the Owned
Real Property subject to all such matters reflected on the Pro Forma ALTA
Owner’s Policy No. 462391, a copy of which is attached hereto as Exhibit E-2
(other than Schedule B, Item 9 relating to bankruptcy matters). The premium (and
any extra cost for any deletions, modifications or endorsements) for the Title
Policy shall be paid for by the Buyer at the Closing. Notwithstanding the
foregoing, the cost of recording releases of any mortgage or other liens, or of
any other instruments, that are not Permitted Encumbrances, as well as the cost
of any title curative endorsements shall be borne by the Seller.

(b) The Buyer has received a survey of the Owned Real Property (the “Survey”)
prepared by a registered land surveyor or engineer. The Survey is described on
Schedule 6.21(b) and has been reviewed by the Buyer. The Buyer has identified
for the Seller those matters affecting title to the Owned Real Property and
disclosed in the Survey that are disapproved by the Buyer (“Buyer’s Survey
Objections”). The Seller has agreed to cure or otherwise remedy by Closing the
Buyer’s Survey Objections that are listed on Exhibit F. The cost of the Survey
shall be paid for by the Buyer at the Closing, or reimbursed to the Seller, as
applicable.

6.22 Termination of Intercompany Accounts. Prior to or at the Closing, the
Seller shall take all necessary action to cause all Contracts, commitments or
transactions, including all amounts payable or receivable resulting therefrom,
between Global Power or any of its Affiliates (other than the Seller), on the
one hand, and the Seller, on the other hand, to be satisfied as of the Closing;
provided, however, that Global Power and its Affiliates (other than the Seller),
on the one hand, and the Seller, on the other hand, shall be permitted to enter
into Contracts, commitments or transactions with one another following the
Closing.

6.23 Assigned Customer Contracts. Certain of the Assigned Contracts are
partially completed customer contracts of the Seller that will, subject to
Section 6.8(e), be assigned to the Buyer by the Seller pursuant to this
Agreement for which the Seller has already performed a certain portion of such
contracts prior to the Closing, and/or the Seller has already billed the
customer prior to the Closing for a portion of such contracts, which assigned
partially completed customer contracts are set forth on Schedule 2.1(c) under
the caption “Assigned Customer Contracts” (such Contracts, the “Assigned
Customer Contracts”). The liabilities of the parties in respect of the Assigned
Customer Contracts shall be as provided in Section 2.3(b) (Assumed Liabilities)
and Section 2.4(b) (Excluded Liabilities).

6.24 Excluded Partially Performed Customer Contracts. Certain of the Excluded
Liabilities are uncompleted customer contracts of the Seller that will be
retained by the Seller after the Closing because such contracts were already
substantially fulfilled and billed by the Seller prior to the Closing. These
excluded partially performed customer contracts (the “Excluded Partially
Performed Customer

 

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Contracts”) are set forth on Schedule 2.2(d), Part I. The Seller shall retain
the Excluded Partially Performed Customer Contracts following the Closing, and
will retain the obligations and duties under the Excluded Partially Performed
Customer Contracts following the Closing, but shall utilize the Buyer
exclusively as the Seller’s agent to perform the services to the customer
required to complete the Excluded Partially Performed Customer Contracts
following Closing. In order to fulfill any obligation or duty under each
Excluded Partially Performed Customer Contract to deliver products to the
customer following the Closing, the Seller shall acquire such products
exclusively from the Buyer. Further, the Seller shall engage the Buyer, as the
Seller’s exclusive agent, to perform any and all services that are required to
complete the Excluded Partially Performed Customer Contracts, including the
administrative support services set forth on Schedule 6.24(a). The parties
anticipate that prior to the Closing, the Seller will issue a purchase order to
the Buyer, in respect of each Excluded Partially Performed Customer Contract, to
procure such products and services. Such purchase order shall, where applicable,
be generally consistent with the form of purchase order placed by the relevant
customer on the Seller prior to the Closing and shall be intended to represent
an arrangement whereby the Buyer would, subject to the next following sentence
concerning payment terms, obtain the post-Closing benefits and assume the
post-Closing obligations under the relevant Excluded Partially Performed
Customer Contract. The Seller shall compensate the Buyer for all such products
and services to complete each Excluded Partially Performed Customer Contract on
a time and materials basis. The Buyer shall charge the Seller for time based
services at the Seller’s current standard internal cost per hour as set forth on
Schedule 6.24(b) plus five percent (5%). The Buyer may increase the standard
internal cost per hour chargeable to the Seller by four percent (4%) per annum,
effective January 1 of each year. Parts, inventory, subcontracted services,
travel, accomodation, and other out-of-pocket costs (grossed up for related
foreign Taxes, if any, which are due and from which the Buyer may not be
exempted) incurred in the performance of such warranty service shall be invoiced
at cost plus five percent (5%). The Seller shall pay such invoices within thirty
(30) days of invoice date. The Seller and the Buyer shall cooperate with each
other in good faith to ensure that customers party to an Excluded Partially
Performed Customer Contract, properly direct to the Seller all payments owed to
the Seller thereunder. In the event that through error or mistake, any customer
party to an Excluded Partially Performed Customer Contract, directly pays the
Buyer for any amount owed by such customer to the Seller under a party to an
Excluded Partially Performed Customer Contract, the Buyer shall promptly forward
such misdirected amounts to the Seller.

6.25 Excluded Completed Customer Contracts. Certain of the Excluded Liabilities
are completed customer contracts for which the product and/or service warranty
remains in effect. These excluded completed customer contracts (the “Excluded
Completed Customer Contracts”) are set forth on Schedule 2.2(d), Part II.

6.26 Warranty Service. With regard to warranty obligations arising after the
Closing in respect of work performed by the Seller prior to the Closing under
the Assigned Customer Contracts, the Excluded Partially Performed Customer
Contracts and the Excluded Completed Customer Contracts (the “Warranty
Obligations”), the Buyer and the Seller agree as follows:

(a) After the Closing, the Buyer shall, subject to the remaining provisions of
this Section 6.26, perform the Warranty Obligations on behalf of the Seller,
using commercially reasonable efforts to perform the Warranty Obligations in a
satisfactory and efficient manner, substantially consistent with the past
practice of the Seller in providing warranty service to customers and consistent
with the original purchase order under which the applicable Warranty Obligation
has arisen.

(b) Each of the Buyer and the Seller shall give reasonably prompt notice to the
other of claims made by customers that might reasonably be regarded as relating
to Warranty Obligations.

 

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(c) The Buyer shall not incur any costs or expenses in connection with or
perform any Warranty Obligations exceeding $10,000 per incident or customer
claim (calculated in accordance with Section 6.26(d)) without the prior written
consent of the Seller, which shall be granted or withheld based on the Seller’s
assessment of the merits of the relevant warranty claim. The Seller shall
provide such assessment of the merits of the relevant warranty claim, including
whether such consent will be granted or withheld, within thirty (30) days of
notice of the relevant warranty claim and related information. In no event shall
the Buyer admit liability on behalf of the Seller in respect of any Warranty
Obligations.

(d) The Seller shall compensate the Buyer for the proper discharge of the
Warranty Obligations on a time and materials basis on the financial terms set
forth in Section 6.24 (including the five percent (5%) mark-up referred to
therein). Invoices for the discharge of Warranty Obligations by the Seller may
be claimed by the Buyer against the General Escrow and/or the Warranty Escrow;
provided, however, that, with respect to any such claim, the Buyer shall not be
entitled to recover from the General Escrow or the Warranty Escrow to the extent
that the Buyer has been compensated directly from the funds of the other.

6.27 Procedure For Resolving Disputes Concerning Customer Contracts or Warranty
Service.

(a) Negotiation. The parties shall attempt in good faith to resolve any
controversy, claim or dispute arising out of or relating to the parties’
obligations contained in Section 6.23 through Section 6.26 (and any related
Section) of this Agreement (a “Customer Contract Dispute”) promptly by
negotiation. Either party may give the other party written notice (a “Dispute
Notice”) of any Customer Contract Dispute which has not been resolved in the
normal course of business. If the Customer Contract Dispute has not been
resolved within 30 days after delivery of the Dispute Notice, either party may
initiate mediation of the Customer Contract Dispute under Section 6.27(b). All
negotiations under this Section 6.27(a) shall be confidential and shall be
treated as compromise and settlement negotiations. Nothing said or disclosed,
nor any document produced, in the course of such negotiations which is not
otherwise independently discoverable shall be offered or received as evidence or
used for impeachment or for any other purpose in any current or future
litigation.

(b) Mediation. If the Customer Contract Dispute has not been resolved by
negotiation as provided in Section 6.27(a), the parties shall make a good faith
attempt to settle the Customer Contract Dispute by mediation pursuant to the
provisions of this Section 6.27(b) before resorting to litigation or any other
dispute resolution procedure. Unless the parties agree otherwise, the mediation
shall be conducted in New York, New York, and shall be conducted in accordance
with the Commercial Mediation Rules of the American Arbitration Association then
in effect. Unless the parties agree otherwise, the mediator shall be a neutral
and impartial lawyer with excellent academic and professional credentials who is
or has been practicing law for at least 10 years, specializing in either general
commercial litigation or general corporate and commercial matters. The costs of
the mediation shall be split equally between the Buyer on the one hand and the
Seller on the other hand, unless an alternative arrangement is agreed to as part
of the mediation. The Buyer on the one hand or the Seller on the other (in
either case, the “Initiating Party”) may initiate mediation of the Customer
Contract Dispute by giving the other party (the “Recipient Party”) written
notice (a “Mediation Notice”) setting forth a list of the names and resumes of
qualifications and experience of three impartial persons who the Initiating
Party believes would be qualified as a mediator pursuant to the provisions of
this Section 6.27(b). If the Initiating Party and the Recipient Party cannot
agree on a mediator from the three impartial nominees submitted by the
Initiating Party or otherwise cannot agree on another impartial mediator within
10 days after the Recipient Party’s receipt of the Mediation Notice, then the

 

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Recipient Party shall designate a person who the Recipient Party believes would
be qualified as a mediator under the provisions of this Section 6.27(b), and the
Initiating Party shall designate one of the three impartial persons initially
selected by the Initiating Party, and the two persons so designated shall select
a third person qualified as a mediator under the provisions of this
Section 6.27(b), which third person shall serve as the mediator. Within 30 days
after the mediator has been selected as provided above, the parties and their
respective attorneys, if any, shall meet with the mediator for one mediation
session of at least four hours. If the Customer Contract Dispute cannot be
settled at such mediation session or at any mutually agreed continuation
thereof, any party may give the other party and the mediator a written notice
declaring the mediation process at an end (a “Termination Notice”). Following
delivery of a Termination Notice, the parties shall be free to pursue all of
their rights and remedies related to the subject matter of the Customer Contract
Dispute in a court of competent jurisdiction. All conferences and discussions
which occur in connection with the mediation conducted pursuant to this
Agreement shall be deemed settlement discussions, and nothing said or disclosed,
nor any document produced, which is not otherwise independently discoverable
shall be offered or received as evidence or used for impeachment or for any
other purpose in any current or future litigation.

6.28 Apportionment. The Buyer and the Seller agree to apportion any liabilities
for commissions due to sales representatives engaged by the Seller in connection
with the Assigned Customer Contracts so that they each shall bear a proportion
of such liabilities corresponding to the percentage of revenues received and to
be received under the Contract in respect of which the applicable sales
representative has been engaged.

ARTICLE VII

CONDITIONS TO CLOSING

7.1 Conditions to Obligations of the Parties. The respective obligations of the
Seller and the Buyer to consummate the transactions contemplated by this
Agreement are subject to the satisfaction (or waiver if permitted by applicable
Law) at or prior to the Closing of each of the following conditions:

(a) none of the parties hereto will be subject to any Order that prohibits the
consummation of the transactions contemplated by this Agreement; and

(b) any waiting period (and any extension of such period) under any antitrust or
competition Law and by any antitrust or competition authority applicable to the
transactions contemplated by this Agreement shall have expired or shall have
been terminated.

7.2 Conditions to Obligations of the Seller. The obligations of the Seller to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver (if permitted by applicable Law) at or prior to the
Closing of each of the following additional conditions:

(a) the representations and warranties of the Buyer set forth in this Agreement
will be true and correct in all material respects (provided that any
representation or warranty of the Buyer contained herein that is subject to a
materiality or similar qualification shall be true and correct in all respects)
as of the Closing Date as though made on and as of the Closing Date (except to
the extent such representations and warranties speak as of an earlier date);

(b) each of the agreements and covenants of the Buyer to be performed and
complied with by the Buyer pursuant to this Agreement prior to or as of the
Closing Date will have been duly performed and complied with in all material
respects; and

 

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(c) the Buyer will have delivered to the Seller the items required by
Section 3.3.

7.3 Conditions to Obligations of the Buyer. The obligations of the Buyer to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver (if permitted by applicable Law) at or prior to the
Closing of each of the following conditions:

(a) the representations and warranties of the Seller set forth in this Agreement
will be true and correct in all material respects (provided that any
representation or warranty of the Seller contained herein that is subject to a
materiality, Material Adverse Effect or similar qualification shall be true and
correct in all respects) as of the Closing Date as though made on and as of the
Closing Date (except to the extent such representations and warranties speak as
of an earlier date);

(b) each of the agreements and covenants of the Seller to be performed and
complied with by the Seller pursuant to this Agreement prior to or as of the
Closing Date will have been duly performed and complied with in all material
respects;

(c) the Seller will have obtained and delivered to the Buyer the Consents listed
on Schedule 7.3, and the same shall be in full force and effect; and

(d) the Seller will have delivered or will have caused to be delivered to the
Buyer the items required by Section 3.2.

ARTICLE VIII

TERMINATION OF AGREEMENT

8.1 Termination. Notwithstanding any other provision of this Agreement to the
contrary, this Agreement may be terminated at any time prior to the Closing
Date:

(a) by the mutual written consent of the parties;

(b) by the Buyer, on the one hand, or the Seller, on the other hand, upon
written notice to the other party, if the transactions contemplated by this
Agreement have not been consummated on or prior to October 31, 2011, unless such
failure of consummation shall be due to the failure of the party seeking such
termination to perform or observe in all material respects the covenants and
agreements hereof to be performed or observed by such party;

(c) by the Buyer, on the one hand, or the Seller, on the other hand, by written
notice to the other party if there has been a material breach (for which written
notice and a reasonable opportunity to cure has been provided) by the other
party of any of its representations, warranties, covenants or agreements
contained herein;

(d) by the Buyer, on the one hand, or the Seller, on the other hand, if there is
a breach by the other party that causes a Material Adverse Effect that cannot
reasonably be expected to be cured prior to the date referred to in
Section 8.1(b); and

(e) by the Buyer, on the one hand, or the Seller, on the other hand, upon
written notice to the other party, if a Governmental Authority of competent
jurisdiction has issued an Order or any other action permanently enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and such Order has become final and non-appealable; provided,
however, that the party seeking to terminate this Agreement pursuant to this
clause has used its reasonable best efforts to remove such Order.

 

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8.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 8.1, this Agreement shall become void and have no effect,
and no party will have any liability or any further obligation to any other
party, except as provided in this Section 8.2 and except that nothing herein
releases, or may be construed as releasing, any party hereto from any liability
or damage to any other party hereto arising out of the breaching party’s breach
in the performance of any of its covenants, agreements, duties or obligations
arising under this Agreement. The obligations of the parties to this Agreement
under Section 6.2 (Reasonable Access; Confidentiality) (as such Section relates
to confidentiality), Section 6.3 (Publicity), the last sentence of Section 6.11
(Letters of Credit), this Section 8.2 (Effect of Termination), Section 10.2
(Expenses) and Section 10.11 (Governing Law) and Article IX (Remedies) will
survive any termination of this Agreement.

ARTICLE IX

REMEDIES

9.1 Survival. The representations, warranties, covenants and agreements of the
Seller, on the one hand, and the Buyer, on the other hand, contained in this
Agreement (including the Schedules and Exhibits attached hereto and the
certificates delivered pursuant hereto) will survive the Closing Date but only
to the extent specified below:

(a) all covenants and agreements contained in this Agreement (including the
Schedules and Exhibits attached hereto and the certificates delivered pursuant
hereto) that contemplate performance thereof following the Closing Date shall
survive the Closing Date in accordance with their terms; and

(b) the representations and warranties contained in this Agreement (including
the Schedules and Exhibits attached hereto and the certificates delivered
pursuant hereto) shall survive the Closing Date until the date that is eighteen
(18) months following the Closing Date, at which point such representations and
warranties and any claim for indemnification on account thereof shall terminate,
except for Claims pending as of the date that is eighteen (18) months following
the Closing Date; provided, however, that the representations and warranties of
the Seller in Sections 4.1 (Organization; Good Standing), 4.2 (Authority), 4.17
(Personal Property) (but only the first sentence thereof), 4.21 (Title to
Assets) and 4.23 (Brokers) and the representations and warranties of the Buyer
in Sections 5.1 (Organization; Authority) and 5.6 (Brokers) shall survive the
Closing indefinitely, the representations and warranties of the Seller in
Section 4.9 (Employee Benefit Plans) shall survive the Closing until the fifth
(5th) anniversary of the Closing Date, and the representations and warranties of
the Seller in Section 4.5 (Taxes) and Section 4.14 (Environmental, Health, and
Safety Matters) shall survive the Closing until forty-five (45) days following
the expiration of the statute of limitations applicable to the subject matter
addressed thereunder.

No claim for indemnification may be asserted against either party for breach of
any representation, warranty, covenant or agreement contained herein unless
written notice of such claim in accordance with Section 9.6(a) is received by
such party on or prior to the date on which the representation, warranty,
covenant or agreement on which such claim is based ceases to survive as set
forth in this Section 9.1.

9.2 Indemnification by the Buyer. Subject to Section 9.5, from and after the
Closing Date, the Buyer shall indemnify and hold harmless the Seller and its
Affiliates and their respective successors and assigns, directors, managers,
officers, employees, equity holders and agents (collectively, the “Seller

 

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Indemnitees”) from and against, and will pay to the Seller Indemnitees the
amount of, any and all liabilities, damages, penalties, fines, judgments,
awards, settlements, fees (including reasonable investigation fees), expenses
(including reasonable attorneys’ fees) and disbursements, including any
punitive, consequential, incidental, indirect, exemplary or special damages
(collectively, “Losses”) actually incurred by any of the Seller Indemnitees
following the Closing Date arising out of, based upon or in connection with:
(a) any breach of or inaccuracy in the representations and warranties of the
Buyer contained in this Agreement; (b) any breach of the covenants or agreements
of the Buyer contained in this Agreement; or (c) the Assumed Liabilities.

9.3 Indemnification by the Seller. Subject to Section 9.5, from and after the
Closing Date, the Seller shall indemnify and hold harmless the Buyer and its
Affiliates and their respective successors and assigns, directors, managers,
officers, employees, equity holders and agents (collectively, the “Buyer
Indemnitees”) from Losses actually incurred by any Buyer Indemnitee following
the Closing Date arising out of, based upon or in connection with: (a) any
breach of or inaccuracy in the representations and warranties of the Seller
contained in this Agreement; (b) any breach of the covenants or agreements of
the Seller contained in this Agreement; or (c) the Excluded Liabilities.

9.4 Exclusive Remedy. From and after the Closing Date, the exclusive remedies of
any Seller Indemnitee or Buyer Indemnitee for any Losses based upon, arising out
of or otherwise in respect of the matters set forth in this Agreement are the
indemnification obligations of the parties set forth in this Article IX and
Section 6.11; provided, however, that the foregoing shall not apply to
intentional misrepresentations or fraud. The provisions of this Section 9.4
shall not, however, prevent or limit (i) a cause of action under Section 9.7 to
obtain an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof or (ii) claims under
Section 6.27.

9.5 Limitations on Indemnification. Notwithstanding anything in this Agreement
to the contrary, the right to indemnification pursuant to this Article IX is
limited as follows:

(a) The Buyer Indemnitees shall be entitled to indemnification pursuant to
clause (a) of Section 9.3 to the extent (but only to the extent) that the
aggregate amount of all Losses suffered by the Buyer Indemnitees exceeds one
percent (1%) of the Initial Purchase Price (the “Basket”), and then only to the
extent of the excess up to a maximum of twenty percent (20%) of the Initial
Purchase Price until the first (1st) anniversary of the Closing Date and ten
percent (10%) of the Initial Purchase Price thereafter (the “Cap”); provided,
however, that neither the Basket nor the Cap shall apply to any Losses related
to breaches of any of the Seller Fundamental Representations. For the avoidance
of doubt, neither the Basket nor the Cap shall apply to any Losses related to
(i) breaches of any covenants or agreements of the Seller contained in this
Agreement, (ii) the Excluded Liabilities or (iii) the Excluded Assets.

(b) The Buyer Indemnitees’ right to indemnification pursuant to Section 9.3 on
account of any Losses will be reduced by (i) all insurance proceeds or other
third-party indemnification proceeds received by the Buyer Indemnitees, (ii) all
insurance proceeds received by the Buyer Indemnitees under the Environmental
Insurance Policy, and (iii) the net amount of any Tax Savings realized by the
Buyer Indemnitees by reason of such Losses. The Buyer Indemnitees shall use
commercially reasonable best efforts to (x) claim and recover any Losses
suffered by the Buyer Indemnitees under the Environmental Insurance Policy prior
to seeking indemnification under this Article IX and (y) claim and realize all
such Tax savings. Promptly after the realization of any insurance proceeds,
indemnity, Tax savings, contribution or other similar payment, the Buyer
Indemnitees shall reimburse the Seller for the reduction in Losses for which the
Buyer Indemnitees were indemnified prior to the realization of reduction of such
Losses.

 

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(c) The Seller Indemnitees shall be entitled to indemnification pursuant to
clause (a) of Section 9.2 to the extent (but only to the extent) that the
aggregate amount of all Losses suffered by the Seller Indemnitees exceeds the
Basket, and then only to the extent of the excess up to a maximum of the Cap;
provided, however, that neither the Basket nor the Cap shall apply to any Losses
related to breaches of any of the Buyer Fundamental Representations. For the
avoidance of doubt, neither the Basket nor the Cap shall apply to any Losses
related to (i) breaches of any covenants or agreements of the Buyer contained in
this Agreement, (ii) the Assumed Liabilities or (iii) the Purchased Assets.

(d) The Seller Indemnitees’ right to indemnification pursuant to Section 9.2 on
account of any Losses will be reduced by (i) all insurance proceeds or other
third-party indemnification proceeds received by the Seller Indemnitees,
(ii) all insurance proceeds received by the Seller Indemnitees under the
Environmental Insurance Policy, and (iii) the net amount of any Tax Savings
realized by the Seller Indemnitees by reason of such Losses. The Seller
Indemnitees shall use commercially reasonable best efforts to (x) claim and
recover any Losses suffered by the Seller Indemnitees under the Environmental
Insurance Policy prior to seeking indemnification under this Article IX and
(y) claim and realize all such Tax savings. Promptly after the realization of
any insurance proceeds, indemnity, Tax savings, contribution or other similar
payment, the Seller Indemnitees shall reimburse the Buyer for the reduction in
Losses for which the Seller Indemnitees were indemnified prior to the
realization of reduction of such Losses.

(e) The Buyer Indemnitees shall not be entitled to indemnification pursuant to
Section 9.3 for Losses to the extent that any Buyer Indemnitee has been
compensated therefor pursuant to Section 2.6.

(f) The Buyer Indemnitees shall take, and cause their Affiliates to take,
commercially reasonable steps to mitigate any Loss upon becoming aware of any
event or circumstance that would be reasonably expected to, or does, give rise
thereto.

(g) The General Escrow Fund established by the General Escrow will be the sole
and exclusive remedy of the Buyer Indemnitees for any Claims under
Section 9.3(a), except for Claims due to a breach of the Seller Fundamental
Representations, and the Buyer Indemnitees will not seek recourse against the
Seller with respect to any Claims under Section 9.3(a), except for Claims due to
a breach of the Seller Fundamental Representations.

9.6 Procedures. Except as set forth in Section 6.27, the following procedures
shall apply to claims under this Agreement:

(a) Notice of Losses. As soon as reasonably practicable after an indemnitee (an
“Indemnitee”) has actual knowledge of any claim that it has under this
Article IX that could reasonably be expected to result in an indemnifiable Loss
(a “Claim”), the Indemnitee shall give written notice thereof (a “Claims
Notice”) to the party responsible for indemnification (the “Indemnitor”). A
Claims Notice must describe the Claim in reasonable detail, and indicate the
amount (estimated in good faith, as necessary and to the extent feasible) of the
Loss that has been or may be suffered by the applicable Indemnitee. No delay or
failure to give a Claims Notice by the Indemnitee pursuant to this
Section 9.6(a) will adversely affect any of the other rights or remedies that
the Indemnitee has under this Agreement, or alter or relieve an Indemnitor of
its obligation to indemnify the applicable Indemnitee except to the extent that
they are materially prejudiced thereby. The Indemnitor shall respond to the
Indemnitee (a “Claim Response”) within sixty (60) days (the “Response Period”)
after the date that the Claims Notice is sent by the

 

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Indemnitee. Any Claim Response must specify whether or not the Indemnitor
disputes the Claim described in the Claims Notice. If the Indemnitor fails to
give a Claim Response within the Response Period, the Indemnitor shall be deemed
not to dispute the Claim described in the related Claims Notice. If the
Indemnitor elects not to dispute a Claim described in the related Claims Notice,
whether by failing to give a timely Claim Response or otherwise, then the amount
of Losses alleged in such Claims Notice will be conclusively deemed to be an
obligation of the relevant Indemnitor, and the relevant Indemnitor shall satisfy
such obligation within thirty (30) days after the last day of the applicable
Response Period the amount specified in the Claims Notice. If the Indemnitor
delivers a Claim Response within the Response Period indicating that it disputes
one or more of the matters identified in the Claims Notice, a representative of
the Buyer and a representative of the Seller shall promptly meet and use their
commercially reasonable efforts to settle the dispute. The Buyer and the Seller
shall cooperate with and make available to the other party and its respective
representatives all information, records and data, and shall permit reasonable
access to its facilities and personnel, as may be reasonably required in
connection with the resolution of such disputes. If the Buyer’s representative
and the Seller’s representative are unable to reach agreement within thirty (30)
days after the conclusion of the Response Period, then either the Buyer or the
Seller may resort to other legal remedies subject to the limitations set forth
in this Article IX and the provisions of Section 10.11.

(b) Claims without Determinable Losses. Subject to the limitations set forth in
this Article IX, if any Indemnitee believes in good faith that it has a Claim
the amount of which cannot reasonably be determined, such Indemnitee, as soon as
reasonably practicable after it becomes aware of such Claim, shall notify the
Indemnitor by means of a Claims Notice that contains the information required by
Section 9.6(a) and a good faith estimate, if possible, of the Indemnitee’s
calculation of the Losses incurred by the applicable Indemnitees with respect
thereto. The failure by the Indemnitee to promptly deliver a Claims Notice under
this Section 9.6(b) will not adversely affect the applicable Indemnitees’ rights
hereunder except to the extent the Indemnitor is prejudiced thereby.

(c) Opportunity to Defend Third-Party Claims. In the event of any claim by a
third party against an Indemnitee for which indemnification is available
hereunder, the Indemnitor has the right, exercisable by written notice to the
Indemnitee, within sixty (60) days of receipt of a Claims Notice from the
Indemnitee to assume and conduct the defense of such claim with counsel selected
by the Indemnitor and reasonably acceptable to the Indemnitee, with such fees
and expenses to be satisfied by the Indemnitor. If the Indemnitor has assumed
such defense as provided in this Section 9.6(c), the Indemnitor will not be
liable for any legal expenses subsequently incurred by any Indemnitee in
connection with the defense of such claim. If the Indemnitor does not assume the
defense of any third-party claim in accordance with this Section 9.6(c), the
Indemnitee may continue to defend such claim at the sole cost and expense of the
Indemnitor (subject to the limitations set forth in this Article IX) and the
Indemnitor may still participate in, but not control, the defense of such
third-party claim at the Indemnitor’s sole cost and expense. The Indemnitee
shall not consent to a settlement of, or the entry of any judgment arising from,
any such claim, without the prior written consent of the Indemnitor (such
consent not to be unreasonably withheld, conditioned or delayed). Except with
the prior written consent of the Indemnitee (such consent not to be unreasonably
withheld, conditioned or delayed), no Indemnitor, in the defense of any such
claim, will consent to the entry of any judgment or enter into any settlement
that (i) provides for injunctive or other nonmonetary relief affecting the
Indemnitee or (ii) does not include as an unconditional term thereof the giving
by each claimant or plaintiff to such Indemnitee and its Affiliates of a release
from all liability with respect to such claim or litigation. In any such
third-party claim, the party responsible for the defense of such claim (the
“Responsible Party”) shall keep, to the extent reasonably requested by the other
party,

 

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such other party informed as to the status of such claim, including all
settlement negotiations and offers. Each Indemnitee shall use all commercially
reasonable efforts to make available to the Indemnitor and its representatives,
all books and records of the Indemnitee relating to such third-party claim and
shall reasonably cooperate with the Indemnitor in the defense of such
third-party claim.

(d) Settlement of Third-Party Claims. The Responsible Party shall promptly
notify the other party of each settlement offer with respect to a third-party
claim. Such other party shall promptly notify the Responsible Party whether or
not such party is willing to accept the proposed settlement offer. If the
Indemnitor is willing to accept the proposed settlement offer but the Indemnitee
refuses to accept such settlement offer, then if (i) such settlement offer
requires only the payment of money damages and provides a complete release of
all Indemnitees that are a party to such third-party claim and their Affiliates
with respect to the subject matter thereof and (ii) the Indemnitor agrees in
writing that the entire amount of such proposed settlement constitutes Losses
for which the relevant Indemnitor is responsible and shall satisfy in full,
subject to the limitations contained in this Article IX, then the amount payable
to the Indemnitees with respect to such third-party claim will be limited to the
amount of such settlement offer subject to the limitations contained in this
Article IX. If any such settlement offer is made to any claimant and rejected by
such claimant, the amount payable to an Indemnitee with respect to such claim
will not be limited to the amount of such settlement offer but will remain
subject to all other limitations set forth in this Agreement.

9.7 Equitable Remedies. Each party’s obligation under this Agreement is unique.
Notwithstanding any other provision of the Agreement, if either party should
breach its covenants or agreements under this Agreement, the parties each
acknowledge and agree the non-breaching party, in addition to any other
available rights or remedies it may have under the terms of this Agreement, may
sue in equity for remedies other than at Law, including injunction and specific
performance, without the necessity of posting bond or other security.

9.8 Treatment of Payments. Payments made under this Article IX will be treated
as Purchase Price adjustments for Tax purposes unless otherwise required by
applicable Law.

ARTICLE X

MISCELLANEOUS

10.1 Interpretation of Representations. Each representation and warranty made in
this Agreement or pursuant hereto is independent of all other representations
and warranties made by the same parties, whether or not covering related or
similar matters, and must be independently and separately satisfied.

10.2 Expenses. Whether or not the transactions contemplated by this Agreement
are consummated, all costs and expenses (including all legal, accounting,
broker, finder or investment banker fees) incurred in connection with this
Agreement and the transactions contemplated hereby are to be paid by the party
incurring such expenses except as expressly provided herein.

10.3 Successors and Assigns. This Agreement is binding upon and inures to the
benefit of the parties hereto and their respective successors and assigns, but
is not assignable by either party without the prior written consent of the other
party.

10.4 Third-Party Beneficiaries. Other than as set forth in Sections 6.10
(Employees), 6.11 (Letters of Credit), 6.12 (Non-Use of Excluded Assets;
Agreement Not to Compete by the Buyer), 9.2

 

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(Indemnification by the Buyer) and 9.3 (Indemnification by the Seller), each
party intends that this Agreement does not benefit or create any right or cause
of action in or on behalf of any Person other than the parties hereto. The Buyer
acknowledges that Global Power and Braden are third party beneficiaries of the
Buyer’s covenants in Sections 6.11 (Letters of Credit), 6.12 (Non-Use of
Excluded Assets; Agreement Not to Compete by the Buyer) and 9.2 (Indemnification
by the Buyer) and that Global Power is a third party beneficiary of the Buyer’s
covenant in Section 6.10 (Employees). The Seller acknowledges that Hamon is a
third party beneficiary of the Seller’s covenants in Section 6.13 (Agreement Not
to Compete by the Seller).

10.5 Further Assurances. The parties shall execute or cause their respective
Affiliates to execute such further documents and instruments and take or cause
their respective Affiliates to take such further actions as may reasonably be
necessary to carry out the intent of this Agreement. Each party shall cooperate
affirmatively with the other party, to the extent reasonably requested by such
other party, to enforce rights and obligations herein provided.

10.6 Notices. Any notice, request, consent, claim, demand, waiver or
communication required or permitted to be given by any provision of this
Agreement will be deemed to have been sufficiently given or served for all
purposes (a) when personally delivered (with written confirmation of receipt),
(b) when received if sent by a nationally recognized overnight courier service
to the recipient at the address below indicated, (c) on the third (3rd) day
after the date sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) on the date sent by facsimile or electronic mail with
confirmation of transmission if sent during normal business hours of the
recipient, and on the next Business Day if sent after normal business hours of
the recipient:

 

if to the Seller:   

Deltak, L.L.C.

c/o Global Power Equipment Group Inc.

400 E. Las Colinas Boulevard

Irving, Texas 75039

Attention: Corporate Secretary

Fax: (918) 274-2355

Email: CorporateSecretary@globalpower.com

with a copy, which shall not constitute

notice, to:

  

Thompson Hine LLP

335 Madison Avenue, 12th Floor

New York, New York 10017-4611

Attention: Stuart Welburn

Fax: (212) 344-6101

Email: Stuart.Welburn@ThompsonHine.com

if to the Buyer:   

Hamon Acquisitions, Inc.

c/o Hamon Corporation

Hamon Corporate Plaza

58 East Main Street

Somerville, New Jersey 08876

Attention: William P. Dillon

Fax: (908) 333-2152

Email: william.dillon@hamonusa.com

 

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with a copy, which

shall not constitute

notice, to:

  

Place Maurice Hamon

Rue Emile Francqui 2

B-1435 Mont-St-Guibert

Belgium

3210390473

Attention: Michele Vrebos

Fax: 00 32 10 39 04 01

Email: michele.vrebos@hamon.com

with a copy, which

shall not constitute

notice, to:

  

Ballard Spahr LLP

1735 Market Street, 51st Floor

Philadelphia, Pennsylvania 19103

Attention: Gerald J. Guarcini

Fax: (215) 864-8999

Email: guarcini@ballardspahr.com

or to such other address, email address or facsimile number as either party may,
from time to time, designate in a written notice given in like manner.

10.7 Complete Agreement. This Agreement and the Schedules and Exhibits hereto
and the other documents delivered by the parties in connection herewith,
together with the Confidentiality Agreement, contain the complete agreement
between the parties with respect to the transactions contemplated hereby and
thereby and supersede all prior agreements and understandings between the
parties hereto with respect thereto.

10.8 Headings. The section and other headings contained in this Agreement are
for reference purposes only and shall not control or affect the construction of
this Agreement or the interpretation thereof in any respect. Section,
subsection, clause, Schedule and Exhibit references are to this Agreement unless
otherwise specified.

10.9 Amendment. This Agreement may be amended or modified only by an instrument
in writing duly executed by the Seller and the Buyer.

10.10 Waiver. Any of the terms or conditions of this Agreement that may be
lawfully waived may be waived in writing at any time by each party, at its sole
discretion, that is entitled to the benefits thereof. Any waiver of any of the
provisions of this Agreement by any party will be binding only if set forth in
an instrument in writing signed on behalf of such party. No failure to enforce
any provision of or right under this Agreement will be deemed to or will
constitute a waiver of such provision or right and no waiver of any of the
provisions of this Agreement will be deemed to or will constitute a waiver of
any other provision hereof (whether or not similar) nor will such waiver
constitute a continuing waiver.

10.11 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of Delaware
without regard to any choice or conflict of law or choice of forum provision,
rule or principle (whether of the State of Delaware or any other jurisdiction)
that might otherwise refer construction or interpretation of this Agreement to
the substantive law of another jurisdiction. The parties hereby irrevocably
(a) submit themselves to the non-exclusive jurisdiction of the state and federal
courts sitting in the State of Delaware, and (b) waive the right and hereby
agree not to assert by way of motion, as a defense or otherwise in any action,
suit or proceeding brought in any such court, any claim that it is not subject
to the jurisdiction of such court, that such action, suit or proceeding is
brought in an inconvenient forum or that the venue of such action, suit or
proceeding is improper. Each party also irrevocably and unconditionally consents
to the service of any process, pleadings, notices or other papers in a manner
permitted by the notice provisions of Section 10.6.

 

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10.12 Negotiated Agreement. The parties hereby acknowledge that the terms and
language of this Agreement were the result of negotiations among the parties
and, as a result, there shall be no presumption that any ambiguities in this
Agreement shall be resolved against any particular party. Any controversy over
construction of this Agreement shall be decided without regard to events of
authorship or negotiation.

10.13 Counterparts. This Agreement may be executed in counterparts (delivery of
which may occur via facsimile or .pdf), each of which shall be binding as of the
date first above written, and, when delivered, all of which will be deemed an
original but all of which will constitute but one instrument.

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

10.15 Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any term or other
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid, illegal or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid, illegal or
unenforceable provision, and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be
affected by such invalidity, illegality or unenforceability, nor shall such
invalidity, illegality or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.

[signature page follows]

 

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

 

DELTAK, L.L.C. By:  

/s/    Dean Glover

Name: Dean Glover Title: President HAMON ACQUISITIONS, INC. By:  

/s/    William Dillon

Name: William Dillon Title: President and Chief Executive Officer