Exhibit 10.1

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PURCHASE AGREEMENT

by and among

SUNLIGHT SUPPLY, INC.,

SUNLIGHT GARDEN SUPPLY, INC.,

SUNLIGHT GARDEN SUPPLY, ULC,

IP HOLDINGS, LLC,

CRAIG R. HARGREAVES,

KIM E. HARGREAVES,

HAWTHORNE HYDROPONICS LLC
and
solely with respect to Section 2.5, THE SCOTTS MIRACLE-GRO COMPANY
Dated as of April 12, 2018

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TABLE OF CONTENTS
 
Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1
   Section 1.1.
Definitions
1
   Section 1.2.
Definitions defined in Agreement
11
   Section 1.3.
Grammatical Constructions
13
ARTICLE II
PURCHASE AND SALE OF ASSETS AND CLOSING
14
   Section 2.1.
Purchase and Sale
14
   Section 2.2.
Excluded Assets
16
   Section 2.3.
Assumed Liabilities
17
   Section 2.4.
Excluded Liabilities
17
   Section 2.5.
Purchase Price
18
   Section 2.6.
Closing
19
   Section 2.7.
Closing Deliveries by Sellers
19
   Section 2.8.
Closing Deliveries by Buyer
21
   Section 2.9.
Pre-Closing Delivery by Sellers; Adjustment
21
   Section 2.10.
Closing Date Balance Sheet
22
   Section 2.11.
Withholding
24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
24
   Section 3.1.
Organization and Qualification; Capitalization
24
   Section 3.2.
Authority; Non-Contravention; Approvals
25
   Section 3.3.
Financial Statements; Inventory
26
   Section 3.4.
Absence of Undisclosed Liabilities
27
   Section 3.5.
Absence of Certain Changes or Events
27
   Section 3.6.
Tax Matters
27
   Section 3.7.
ERISA and Employee Benefits
29
   Section 3.8.
Employment Matters
32
   Section 3.9.
Litigation
33
   Section 3.10.
No Violation of Law; Permits
33
   Section 3.11.
Title to Purchased Assets; Encumbrances
34
   Section 3.12.
Entire Business; Sufficiency
34
   Section 3.13.
Solvency
34

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TABLE OF CONTENTS
(continued)
Page
   Section 3.14.
Insurance
35
   Section 3.15.
Material Contracts
35
   Section 3.16.
Tangible Personal Property
37
   Section 3.17.
Receivables; Disputed Accounts Payable
37
   Section 3.18.
Intellectual Property
38
   Section 3.19.
Real Property
40
   Section 3.20.
Environmental Matters
41
   Section 3.21.
Casualties
42
   Section 3.22.
Product Warranties; Product Liability
42
   Section 3.23.
Product Registrations; Universal Product Codes
42
   Section 3.24.
Promotions and Allowances
43
   Section 3.25.
Bank and Brokerage Accounts; Investment Purchased Assets
43
   Section 3.26.
Absence of Certain Business Practices
43
   Section 3.27.
Propriety of Past Payments
43
   Section 3.28.
Customers and Suppliers
44
   Section 3.29.
Removal of Excluded Assets
44
   Section 3.30.
Brokers
44
   Section 3.31.
Affiliate Transactions
45
   Section 3.32.
Restrictions on Business Activities
45
   Section 3.33.
Activities of Columbia River
45
   Section 3.34.
Ownership by the Hargreaves
45
   Section 3.35.
Full Disclosure
45
   Section 3.36.
No Other Representation and Warranties
45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
45
   Section 4.1.
Organization and Qualification
45
   Section 4.2.
Authority; Non-Contravention; Approvals
46
   Section 4.3.
Brokers
46
   Section 4.4.
Sufficient Funds
47
   Section 4.5.
Legal Proceedings
47
   Section 4.6.
No Other Representations and Warranties
47

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TABLE OF CONTENTS
(continued)
 
Page
ARTICLE V
COVENANTS
47
   Section 5.1.
Conduct of the Business
47
   Section 5.2.
Use of Name
49
   Section 5.3.
Tax Matters
49
   Section 5.4.
Non-Competition; Non-Solicitation
51
   Section 5.5.
Non-Assignable Assets
53
   Section 5.6.
Employee Matters
54
   Section 5.7.
Parties’ Obligations
56
   Section 5.8.
Bulk Sale Filings
58
   Section 5.9.
Escrow
58
   Section 5.10.
Further Assurances; Post-Closing Cooperation
59
   Section 5.11.
Access to Information
60
   Section 5.12.
Publicity
61
   Section 5.13.
Exclusivity
61
   Section 5.14.
Notification of Certain Matters
61
   Section 5.15.
Maintenance of Product Registrations
62
   Section 5.16.
Reimbursement
62
   Section 5.17.
Craig R. Hargreaves Post-Closing Support Obligations
62
ARTICLE VI
CONDITIONS TO CLOSING
63
   Section 6.1.
Conditions to Each Party’s Obligations
63
   Section 6.2.
Conditions to Buyer’s Obligations
63
   Section 6.3.
Conditions to Sellers’ Obligations
65
ARTICLE VII
TERMINATION
66
   Section 7.1.
Termination
66
   Section 7.2.
Effect of Termination
67
ARTICLE VIII
SURVIVAL; INDEMNIFICATON
67
   Section 8.1.
Survival of Representations, Warranties, Covenants and Agreements
67
   Section 8.2.
Indemnification by Buyer
68
   Section 8.3.
Indemnification by Sellers
68
   Section 8.4.
Assertion of Claims
68

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TABLE OF CONTENTS
(continued)
 
Page
   Section 8.5.
Notice of and Right to Defend Third Party Claims
68
   Section 8.6.
Indemnification Procedures
70
   Section 8.7.
Limitations
71
   Section 8.8.
Payment of Claims
71
   Section 8.9.
Character of Indemnity Payments
71
   Section 8.10.
Exclusive Remedy
71
ARTICLE IX
MISCELLANEOUS
71
   Section 9.1.
Notices
71
   Section 9.2.
Entire Agreement
72
   Section 9.3.
Expenses
72
   Section 9.4.
Waiver
72
   Section 9.5.
Amendment
73
   Section 9.6.
No Third Party Beneficiary
73
   Section 9.7.
Assignment; Binding Effect
73
   Section 9.8.
Governing Law
73
   Section 9.9.
Consent to Jurisdiction; Service of Process; Waiver of Jury Trial
73
   Section 9.10.
Invalid Provisions
74
   Section 9.11.
Counterparts
74
   Section 9.12.
Attorney-Client Privilege
74
   Section 9.13.
Interpretation
75

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EXHIBITS
 
Form of Assignment and Assumption Agreement and Bill of Sale
A
Form of Escrow Agreement
B
Form of Trademark Assignment Agreement
C
Form of Copyright Assignment Agreement
D
Form of Domain Name Assignment Agreement
E
Form of Patent Assignment Agreement
F
Calculation of Net Working Capital
G
Key Employee Offer Letters
H
Non-Affiliated Real Property Lease Assignments
I
Employee Handbook
J
Contingent Payment Scale
K
Form of Lease Agreement
L
Persons with Access to Information
M

SCHEDULES
 
Sellers’ Disclosure Schedule
I
   1.
Section 1.1(KE) – Key Employees
 
   2.
Section 1.1(PE) – Prepaid Expense Categories
 
   3.
Section 1.1(RP) – Registered Products
 
   4.
Section 2.1(b) – Tangible Property
 
   5.
Section 2.1(f) – Asset Sellers’ UPC Codes
 
   6.
Section 2.1(h) – Purchased Contracts
 
   7.
Section 2.1(p) – Included Assets
 
   8.
Section 2.2(m) – Excluded Assets
 
   9.
Section 2.5(a) – Payment Instructions
 
   10.
Section 2.7(e) – Non-Affiliated Real Property Leases
 
   11.
Section 2.7(f) – Affiliated Real Property Leases
 
   12.
Section 2.7(k) – Pay-Off Letter Recipients
 
   13.
Section 2.7(m) – Intellectual Property Defects
 
   14.
Section 2.10 – Closing Date Balance Sheet Example
 
   15.
Section 3.1 – Membership Interest: Columbia River Industrial Holding, LLC
   16.
Section 3.2(a) – Authorization; Non-Contravention
 
   17.
Section 3.2(b) – Non-Contravention
 
   18.
Section 3.2(c) – Governmental Authority Authorization
 
   19.
Section 3.3 – Financial Statements
 
   20.
Section 3.4 – Undisclosed Liabilities
 
   21.
Section 3.5 – Absence of Certain Changes or Events
 
   22.
Section 3.6 – Tax Matters
 
   23.
Section 3.7 – ERISA and Employee Benefits
 
   24.
Section 3.8 – Employment Matters
 
   25.
Section 3.9 – Litigation
 

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   26.
Section 3.10 – No Violation of Law; Permits
 
   27.
Section 3.14 – Insurance Policies
 
   28.
Section 3.15 – Material Contracts
 
   29.
Section 3.18 – Intellectual Property
 
   30.
Section 3.19 – Real Property
 
   31.
Section 3.21 – Casualties
 
   32.
Section 3.22(b)(i) – Product Warranties; Product Liability
 
   33.
Section 3.24 – Promotions and Allowances
 
   34.
Section 3.25 – Bank and Brokerage Accounts; Investment Purchased Assets
   35.
Section 3.28 – Customers and Suppliers
 
   36.
Section 3.30 – Brokers
 
   37.
Section 3.31 – Affiliate Transactions
 
   38.
Section 3.33 – Activities of Columbia River
 
   39.
Section 5.1 – Conduct of the Business
 
   40.
Section 5.3(b) – Allocation Principles
 
   41.
Section 5.3(c) – Tax Jurisdictions
 
   42.
Section 5.13 – Exclusivity
 
   43.
Section 6.2(c) – Closing Conditions; Required Consents and Approvals
 
 
 
Schedule CA
CA

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PURCHASE AGREEMENT
This Purchase Agreement, dated as of April 12, 2018 (this “Agreement”), is by
and among Sunlight Supply, Inc., a Washington corporation (“Sunlight Supply”),
Sunlight Garden Supply, Inc., a Washington corporation (“Sunlight Garden”),
Sunlight Garden Supply, ULC, a British Columbia unlimited liability company
(“Sunlight ULC”), IP Holdings, LLC, a Washington limited liability company (“IP
Holdings”), Craig R. Hargreaves and Kim E. Hargreaves, husband and wife (the
“Hargreaves”, and together with Sunlight Supply, Sunlight Garden, Sunlight ULC
and IP Holdings, “Sellers” and each, a “Seller”), Hawthorne Hydroponics LLC, a
Delaware limited liability company (“Buyer”) and, solely with respect to Section
2.5, The Scotts Miracle-Gro Company, a Ohio corporation, (“Parent”). Each Seller
and Buyer are referred to herein individually as a “Party” and collectively as
the “Parties”.
RECITALS
WHEREAS, Sellers are engaged in the business of developing, manufacturing,
marketing and distributing horticultural, organics, lighting, and hydroponics
products, including, without limitation, lighting fixtures, nutrients, seeds and
growing media, systems, trays, fans, filters, humidifiers and dehumidifiers,
timers, instruments, water pumps, irrigation supplies and hand tools (the
“Business”);
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase or cause
one or more of its Affiliates to purchase, as applicable, from Sellers,
substantially all of the assets and liabilities of the Business, subject to the
terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
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 AND RULES OF CONSTRUCTION
Section 1.1.    Definitions.
(a)    Whenever used in this Agreement, the following words and phrases will,
when capitalized, have the respective meanings ascribed to them as follows:
“Action” means any demand, dispute, charge, claim, action, suit, countersuit,
arbitration, mediation, hearing, inquiry, proceeding, audit, review, complaint,
litigation or investigation, sanction, summons, subpoena, examination, citation,
audit, review or proceeding of any Governmental Authority.
“Affiliate” means, with respect to any Person, any other Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, the Person specified. The term “control”
(including the terms “controlling,” “controlled by”

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and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of the management, policies and
affairs of a Person, whether through the ownership of voting securities, by
Contract or otherwise.
“Affiliated Real Property Leases” means any Real Property Lease between a
Company, on the one hand, and any other Company, the Hargreaves or any Affiliate
thereof on the other hand.
“Asset Sellers” means Sunlight Supply, Sunlight Garden, Sunlight ULC and IP
Holdings.
“Assumed Current Assets” means all Purchased Assets that are Current Assets.
“Assumed Current Liabilities” means all Assumed Liabilities that are Current
Liabilities.
“Business Day” means any day, other than Saturday and Sunday, on which
federally-insured commercial banks in New York, New York are open for business
(and not required or authorized to be closed) and capable of sending and
receiving wire transfers.
“Business Intellectual Property” means all of Sellers’ right, title and
interests in Intellectual Property that is now, and/or at the time of the
Closing will be, used or held for use in or otherwise necessary for the conduct
of the Business, including all the Intellectual Property listed in Section 3.18
of Sellers’ Disclosure Schedule.
“Business Material Adverse Effect” means any event, change, development, effect,
condition, circumstance, matter, occurrence or state of facts that, individually
or in the aggregate, has a material adverse effect on the business, operations
or financial condition of the Business taken as a whole; provided, that none of
the following events, changes, developments, effects, conditions, circumstances,
matters, occurrences or states of facts shall be taken into account in
determining whether there has been or may be a Business Material Adverse Effect:
(a) any change or development in United States financial or securities markets,
general economic or business conditions or political or regulatory conditions in
the United States, (b) any act of war, armed hostilities or terrorism, (c) any
change or development in the industry in which the Business operates, (d) any
change in Law or the enforcement thereof or in GAAP or the interpretation
thereof, (e) the public announcement or pendency of the transactions
contemplated by this Agreement or the Transaction Documents, (f) any change
resulting from any action taken or omitted to be taken by or at the written
request or consent of Buyer, or (g) any failure of the Business to meet, with
respect to any period or periods, any internal or external projections,
forecasts, estimates of earnings or revenues or business plans, except (i) in
the case of clauses (a), (b), (c) or (d) to the extent such events, changes,
developments, effects, conditions, circumstances, matters, occurrences or states
of facts have a disproportionate effect on the Business relative to other
Persons engaged in the industry in which the Business operates and (ii) in the
case of clause (g), that the underlying reasons for such failure may be
considered if such underlying reasons do not arise out of any of the events set
forth in clauses (a)-(e).

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“Business Product Registrations” means all Product Registrations used or held
for use or contemplated to be used or held for use by any Company or any third
party in connection with the marketing and sale of the Business Products to the
end-user.
“Business Products” means all of the products of the Business that have been or
are currently sold, licensed, distributed or otherwise made available to
customers, as applicable, including the Registered Products and any products
currently under development or scheduled for commercial release within 180 days
of the date of this Agreement or otherwise scheduled to be provided to
customers.
“Buyer Material Adverse Effect” means a material adverse effect on the ability
of Buyer to consummate the transactions contemplated hereby and fulfill its
obligations under this Agreement.
“Closing Date Net Working Capital” means the Net Working Capital calculated as
of the end of the Business Day immediately preceding the Closing Date,
calculated in accordance with Exhibit G.
“Code” means the Internal Revenue Code of 1986.
“Columbia River” means Columbia River Industrial Holdings, LLC, a Washington
limited liability company.
“Companies” means Sunlight Supply, Sunlight Garden, Sunlight ULC, Columbia River
and IP Holdings.
“Company-Owned Business Product Registrations” means any Business Product
Registration owned by any Company.
“Confidential Information” has the meaning set forth in the Confidentiality
Agreement.
“Confidentiality Agreement” means the confidentiality agreement, dated January
16, 2018, between Sunlight Supply and Parent.
“Contract” means any agreement, contract, plan, undertaking, instrument, note,
bond, mortgage, indenture, deed of trust, loan, credit agreement, franchise
concession, Permit, license, lease, purchase order, sales order or other similar
commitment, obligation, arrangement or understanding, whether written or oral.
“Copyright Assignment Agreement” means the agreement, substantially in the form
attached as Exhibit D hereto.
“Current Assets” means, as of a particular date and without duplication, amounts
which would, in conformity with GAAP, be included under and classified as
current assets on a consolidated balance sheet of Sellers, provided, however,
that (a) the amount of Receivables from Sellers’ consolidated balance sheet will
be reduced to an amount equal to Eligible Receivables, (b)

3

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Current Assets will exclude assets associated with Taxes, and (c) Current Assets
will not include Inventory other than Inventory of the supplier listed on
Schedule CA. Current Assets will be calculated in accordance with Exhibit G.
“Current Liabilities” means, as of a particular date and without duplication,
amounts which would, in conformity with GAAP, be included under and classified
as current liabilities on a consolidated balance sheet of Sellers, including (a)
all of Sellers’ obligations with respect to accounts payable associated with the
corresponding Business obligations of any Seller and (b) all accrued, but
unpaid, expenses; provided, however, that Current Liabilities will exclude
liabilities associated with Taxes. Current Liabilities will be calculated in
accordance with Exhibit G.
“Customer Orders” means all bona fide purchase orders that have been received by
Asset Sellers for the shipment of goods or services prior to and as of the
Closing Date.
“Domain Name Assignment Agreement” means the agreement, substantially in the
form attached as Exhibit E hereto.
“Eligible Receivables” means Receivables less reserves established by Sellers in
accordance with GAAP for returns, allowances, chargebacks and discounts to, or
taken by, customers for such Receivables.
“Employees” means each person who, immediately prior to the Closing, is an
employee of any of the Asset Sellers, other than Craig R. Hargreaves and Kim E.
Hargreaves.
“Encumbrances” means any and all liens, charges, security interests, mortgages,
pledges, options, preemptive rights, rights of first refusal or first offer,
proxies, levies, voting trusts or agreements, or other adverse claims or
restrictions on, or imperfections of, title or transfer of any nature whatsoever
(including any Encumbrances arising from any Liability for Taxes).
“Environment” means soil, surface waters, groundwater, drinking water, natural
resources, land, stream sediments, surface or subsurface strata, ambient air,
indoor air, any material or substance used in the physical structure of any
building or improvement and any environmental medium.
“Environmental Condition” means any condition of the Environment that violates
any Environmental Law or that results in any Release, threat of Release, Loss or
Liability with respect to (a) the Real Property arising, existing or occurring
on or prior to the Closing, (b) any Real Property previously owned, leased or
operated by the Companies, the Hargreaves or any of their respective Affiliates
in connection with the Business to the extent such condition of the Environment
existed or occurred at the time of such ownership, lease or operation, or (c)
any other real property at which any Hazardous Substance generated by the
operation of the Business prior to the Closing has been treated, stored,
recycled, disposed of, or has otherwise come to be located.
“Environmental Law” means any Law relating to (a) human health or safety
(including public or workplace health and safety), (b) protection of the
Environment, (c) Releases

4

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of Hazardous Substances, (d) injury, harm or adverse health effects to Persons
relating to exposure to Hazardous Substances, or (e) the treatment, storage,
recycling, handling, use, generation, manufacture, sale, distribution,
importation, exportation, labeling or reporting relating to Hazardous
Substances.
“Environmental Loss” means any Loss arising out of or relating to Environmental
Laws, an Environmental Condition or Release of Hazardous Substance.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
as construed to include all applicable regulations, orders, rules, judgments,
rulings and other pronouncements issued thereunder.
“ERISA Affiliate” means a Person required at any particular time to be
aggregated with any of Sellers under Sections 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA.
“Excluded Taxes” means any (a) Taxes imposed on or payable by Sellers, including
any and all Taxes of any Person (other than Sellers) imposed on or payable by
Sellers or any of Sellers’ predecessors in interest pursuant to any Law, as a
transferee or successor, under any Contract or otherwise, (b) Taxes imposed on
or with respect to the Purchased Assets or the Business for all periods ending
prior to, and portions thereof through the end of, the Closing Date, and (c) all
amounts for which Seller is responsible under Section 2.11.
“FCPA” means the Foreign Corrupt Practices Act of 1977.
“GAAP” means United States generally accepted accounting principles,
consistently applied.
“Governmental Authority” means any international, supranational, national,
provincial, regional, federal, state, municipal or local government, any
instrumentality, subdivision, court, tribunal, judicial or arbitral body,
administrative or regulatory agency or commission or other authority thereof, or
any quasi-governmental or private body exercising any regulatory, taxing,
importing or other governmental or quasi-governmental authority.
“Hazardous Substance” means any pollutant, toxic substance, asbestos and
asbestos-containing materials, hazardous waste, hazardous material, hazardous
substance, contaminant, petroleum and petroleum-containing materials, radiation
and radioactive materials, leaded paints, toxic mold, polychlorinated biphenyls
and other substances or materials as defined in, the subject of, or which could
give rise to Liability under, any Environmental Law.
“Indebtedness” means, with respect to any Person, (a) all obligations of such
Person for borrowed money (including reimbursement and all other obligations
with respect to surety bonds, letters of credit and bankers’ acceptances,
whether or not matured), (b) all obligations of such Person evidenced by notes,
bonds, debentures or similar instruments, (c) all obligations of such Person to
pay the deferred purchase price of property or services, except trade accounts
payable and accrued commercial or trade Liabilities arising in the ordinary
course of business, (d) all interest rate and currency swaps, caps, collars and
similar agreements or hedging devices under which payments are

5

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obligated to be made by such Person, whether periodically or upon the happening
of a contingency, (e) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person, (f) all obligations of such Person under leases which have been or
should be, in accordance with GAAP, recorded as capital leases, (g) all
indebtedness secured by any lien on any property or asset owned or held by such
Person regardless of whether the indebtedness secured thereby will have been
assumed by such Person or is non-recourse to the credit of such Person, (h) all
guarantees by such Person of the indebtedness of any other Person, and (i) all
other obligations that would be required to be reflected as debt in accordance
with GAAP.
“Information Systems” means computer systems, networks, hardware, Software,
databases, internet web sites and equipment used to process, store, maintain and
operate data, information and functions used in connection with the Business.
“Intellectual Property” means all intellectual property, in any jurisdiction
worldwide, whether registered or unregistered, including (a) all trademarks,
service marks, trade names, logos, artwork, designs, slogans and symbols,
corporate names, certification marks, collective marks, d/b/a’s, Internet domain
names and websites, user names on social media websites, business symbols, brand
names and other indicia of origin, all applications and registration for the
foregoing and all goodwill associated therewith and symbolized thereby,
including all renewals of same, (b) all patents, patent applications and
inventions, if any, including any provisional, utility, continuation,
continuation-in-part or divisional applications filed in the United States or
any other jurisdiction and all reissues thereof and all reexamination
certificates issuing therefrom, (c) all published and unpublished works of
authorship, if any, whether copyrightable or not (including data bases and other
compilations of information), copyrights therein and thereto, and registrations
and applications therefor, and all renewals, extensions, restorations and
reversions thereof, (d) all confidential or proprietary information, trade
secrets and know-how, if any, including processes, schematics, business methods,
formulae, drawings, prototypes, models, designs, customer and supplier lists,
advertising materials and other industry information, (e) the rights of privacy
and publicity and to sue for and recover damages, assert, settle and/or release
any claims or demands and obtain all other remedies and relief at Law or equity
for any past, present or future infringement or misappropriation of any of the
Intellectual Property, (f) all licenses, options to license and other
contractual rights to use the Intellectual Property, (g) all UPC Codes, and
(h) all computer and electronic data processing programs and Software and
related documentation, existing research projects, Software presently under
development, and all Software concepts owned and all proprietary information,
processes, formulae and algorithms, used in the ownership, marketing,
development, maintenance, support and delivery of such Software, subject to all
applicable licenses and rights to use such Software.
“Intellectual Property Assignments” means the Trademark Assignment Agreement,
Copyright Assignment Agreement, Domain Name Assignment Agreement and Patent
Assignment Agreement.
“Inventory” means all inventory, including finished goods, work-in-process,
packaging, parts, supplies and raw materials.

6

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“IRS” means the United States Internal Revenue Service, or any successor
Governmental Authority.
“Key Employee” means those persons identified on Section 1.1(KE) of Sellers’
Disclosure Schedule.
“Key Employee Offer Letters” means the agreements, substantially in the form
attached as Exhibit H hereto.
“Law” means any federal, provincial, state, local, municipal, foreign, national,
supranational, international, multinational or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute,
treaty, rule, code or other requirement imposed by a Governmental Authority.
“Liability” means any direct or indirect, primary or secondary, liability,
Indebtedness, obligation, penalty, cost or expense (including costs of
investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person of any type, secured or unsecured, whether
accrued, fixed, absolute or contingent, direct or indirect, asserted or
unasserted, due or to become due, whenever or however arising (including
contract, tort, negligence or strict liability), liquidated or unliquidated,
matured or unmatured, known or unknown or otherwise.
“Losses” means any and all damages, fines, fees, penalties, deficiencies,
Liabilities, claims, losses (excluding any diminution in value of the
Inventory), demands, judgments, settlements, actions, obligations and costs and
expenses (including interest, court costs and fees and reasonable costs of
attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).
“Net Working Capital” means, as of a specified date, and calculated in
accordance with Exhibit G, (a) the sum of Assumed Current Assets less
(b) Assumed Current Liabilities; provided, that such calculation will exclude
(i) any intercompany accounts and any balances owed between or among any of
Sellers, (ii) any Tax Liabilities or Tax assets, (iii) any property or item of
value received in connection with any transfer of any Excluded Assets (other
than any Assumed Current Assets or cash so received, which will be included in
the calculations), (iv) any gain or loss relating to or resulting from any
hedging agreement; and (v) any Inventory. Whenever the term “GAAP” is used in
this Agreement in connection with a definition used in the calculation of Net
Working Capital, “GAAP” shall mean GAAP as applied in a manner consistent with
the accounting practices used to prepare the Exhibit G.
“Non-Affiliated Real Property Leases” means any Real Property Lease that is not
an Affiliated Real Property Lease.
“Non-Solicitation Agreement” means the mutual non-solicitation agreement, dated
January 31, 2018, between Sunlight Supply and Parent.
“Open Source Materials” refers to any Software or other material that is
distributed as “free software,” “open source software” or under similar
licensing or distribution terms (including

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the GNU General Public License (GPL), GNU Lesser General Public License (LGPL),
Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape
Public License, the Sun Community Source License (SCSL), the Sun Industry
Standards License (SISL), the Apache License, and any license identified as an
open source license by the Open Source Initiative (www.opensource.org)).
“Patent Assignment Agreement” means the agreement, substantially in the form
attached as Exhibit F hereto.
“Permit” means any permit, license, franchise, approval, consent, registration,
clearance, variance, exemption, order, certificate or authorization by, of or to
any Governmental Authority.
“Permitted Encumbrances” means (a) liens for Taxes not yet due and payable, (b)
such non-monetary imperfections of title, if any, which do not materially
detract from the value or materially interfere with the present use of the
property subject thereto or affected thereby, (c) statutory liens to secure
obligations to landlords, lessors or renters under leases or rental agreements,
(d) statutory liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens arising or incurred in the ordinary course of business for amounts which
are not delinquent and which are not, individually or in the aggregate, material
and for which adequate reserves have been established, and (e) zoning,
entitlement, building and other land use regulations imposed by a Governmental
Authority having jurisdiction over the Real Property which are not violated by
the current use and operation thereof.
“Person” means any natural person, corporation, general partnership, limited
partnership, limited or unlimited liability company, proprietorship, joint
venture, other business organization, trust, union, association or Governmental
Authority.
“Prepaid Expenses” means all prepaid expenses, deferred charges, advance
payments, Security Deposits paid by or on behalf of the Asset Sellers reserves
in connection with any Permitted Encumbrances and similar items, excluding (i)
any prepaid Taxes, and (ii) any such items arising from, related to, or in
connection with, any Excluded Assets. The Prepaid Expense categories and amounts
as of March 31, 2018 are set forth in Section 1.1(PE) of Sellers’ Disclosure
Schedule.
“Product Registrations” means any and all pending applications or filings and
all current registrations or certifications issued under any federal or state
statute or other Law or any other regulation, letters of authorization, and any
and all labels, data, including but not limited to toxicology, chemistry and
efficacy data, studies, protocols, final reports and raw data, and other
documentation and information used and/or reasonably necessary to support such
registrations and/or to support label or advertising claims.
“Real Property” means any and all real property and interests in real property
of the Companies (together with all buildings, structures, fixtures and
improvements thereon), including the Owned Real Property, the Leased Real
Property, any real property leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access and rights of way and any

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other real property otherwise owned, occupied or used by the Companies in
connection with the Business.
“Receivables” means all of the Companies’ accounts (including all health-care
insurance receivables), Contract rights, instruments (including promissory notes
and other instruments evidencing Indebtedness owed to the Companies by any
Person other than any of their respective Affiliates), chattel paper (whether
tangible or electronic), general intangible assets relating to accounts, drafts
and acceptances, and all other forms of obligation owing to any of the Companies
arising out of, or in connection with, the sale, lease or other disposition of
Inventory or the rendition of services, and all guarantees and other security
therefor, whether secured or unsecured.
“Registered Products” means each of the end-user products sold by the Asset
Sellers set forth on Section 1.1(RP) of Sellers’ Disclosure Schedule, which
products are sold, as of the Closing, pursuant to Product Registrations.
“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing, or
dumping of a Hazardous Substance into the Environment (including the abandonment
or discarding of barrels, containers and other closed receptacles containing any
Hazardous Substance).
“Representatives” with respect to any Person, means, collectively, such Person’s
directors, officers, managers, trustees, shareholders, members, partners,
employees, agents, counsel, accountants, financial advisors, consultants and
other representatives.
“Security Deposit” means any security deposits, whether deposited with or paid
by any of the Companies (including any tenant security or other similar deposit
held by or on behalf of a landlord in connection with any Leased Real Property
and any tenant security or other similar deposit held by or on behalf of any
Seller in connection with any sub-lease thereof).
“Seller Material Adverse Effect” means a material adverse effect on the ability
of Sellers to consummate the transactions contemplated hereby and fulfill their
obligations under this Agreement.
“Sellers’ Disclosure Schedule” means that schedule of disclosures made by
Sellers and annexed hereto as Schedule I.
“Sellers’ Knowledge” means, with respect to the Companies, the facts and
circumstances that are known, after reasonably inquiry, or reasonably should
have been known, had such reasonably inquiry been undertaken, by Craig R.
Hargreaves, Kim E. Hargreaves, Doug Hargreaves and Ann Rivers, pursuant to the
discharge of their duties in the ordinary course.
“Software” means all computer software and code, including assemblers, applets,
compilers, source code, object code, development tools, design tools, user
interfaces, databases and data, in any form or format, however fixed, including
any related documentation.

9

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“Subsidiary” means, with respect to any Person, any other Person (a) of which
the first Person owns directly or indirectly 50% or more of the equity interest
in the other Person, (b) of which the first Person or any other Subsidiary of
the first Person is a general partner or managing member, (c) of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
with respect to the other Person are at the time owned by the first Person
and/or one or more of the first Person’s Subsidiaries, or (d) whose financial
results are required by GAAP to be consolidated with the financial results of
the first Person.
“Tangible Property” means all machinery, tools, equipment, computers, computer
equipment, servers, computer disks and peripheral devices, appliances, fixtures,
motor vehicles, trucks, forklifts and other rolling stock, spare parts and other
tangible personal property (other than Inventory, except for purposes of Section
3.16) including any assignable warranties related thereto, in each case whether
owned or leased by any of the Companies or the Hargreaves or any of their
respective Affiliates, that in the past 12 months has been, is now, or at the
time of the Closing will be, used or held for use in or otherwise necessary for
the conduct of, the Business.
“Target Net Working Capital” means $6,568,545.
“Tax” and “Taxes” means all federal, state or local and all foreign taxes,
including income, gross receipts, windfall profits, value added, severance,
property, production, sales, use, duty, license, excise, franchise, employment,
withholding or similar taxes, together with any interest, additions or penalties
with respect thereto and any interest with respect to such additions or
penalties, and including any liability under state or local abandonment or
unclaimed property, escheat or similar Law.
“Tax Return” means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“Taxing Authority” means any Governmental Authority or any subdivision, agency,
commission or authority thereof having jurisdiction over the assessment,
determination, collection or imposition of any Tax.
“Trademark Assignment Agreement” means the agreement, substantially in the form
attached as Exhibit C hereto.
“Transaction Documents” means this Agreement and each other agreement, document,
instrument or certificate contemplated hereby or thereby or to be executed by
Sellers or Buyer in connection with the consummation of the transactions
contemplated by this Agreement.
“UPC Code” means any Universal Product Code, including any International Article
Numbers.

10

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Section 1.2.    Definitions defined in Agreement.
“Agreement”
Preamble
“Allocation Principles”
5.3(b)
“Asset Allocation Statement”
5.3(b)
“Assumed Liabilities”
2.3(a)
“Benefit Plans”
3.7(a)(i)
“Bill of Sale”
2.7(a)
“Business”
Recitals
“Business Permits”
3.10(d)
“Buyer”
Preamble
“Buyer Fundamental Representations”
8.1
“Buyer Parties”
8.3
“Buyer’s Closing Date Net Working Capital”
2.10(c)
“Cash Amount”
2.5(a)
“Claim”
8.4
“Closing”
2.6
“Closing Date”
2.6
“Closing Date Balance Sheet”
2.10(a)
“Consent”
3.2(b)
“Contingent Payment”
2.5(c)
“Deductible Amount”
8.7(a)
“Dispute Notice”
2.10(b)
“Employee Handbook”
3.18(c)
“Employment Commencement Date”
5.6(b)
“Escrow Accounts”
5.9
“Escrow Agent”
5.9
“Escrow Agreement”
5.9
“Escrow Amount”
2.8(b)
“Excluded Assets”
2.2(m)
“Excluded Liabilities”
2.4
“FF&E”
2.1(b)
“Final Closing Date Net Working Capital”
2.10(d)
“Final Release Date”
5.9
“Financial Statements”
3.3(a)
“First Release Date”
5.9
“Fundamental Representations”
8.1
“Governmental Antitrust Entity”
5.7(c)

11

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“Hargreaves”
Preamble
“Highest 30-Day Share Price”
2.5(c)
“HSR Act”
3.2(c)
“Indemnitees”
8.3
“Indemnitor”
8.4
“Interests”
2.1(q)
“Interim Balance Sheet”
3.3(a)
“IP Holdings”
Preamble
“Leased Real Property”
3.19(b)
“Leave Employee”
5.6(a)
“Maintenance Fees”
5.15(c)
“Material Contract”
3.15(a)(xxiv)
“Maximum Indemnity Amount”
8.7(a)
“Non-Affiliated Real Property Lease Assignments”
2.7(e)
“Officer’s Certificate”
8.6(a)
“Orders”
3.9
“Owned Real Property”
3.19(a)
“Parent”
Preamble
“Parent Shares”
2.5(a)
“Parties”
Preamble
“Pay-Off Letters”
2.7(k)
“Projected Closing Date Balance Sheet”
2.9
“Projected Closing Date Net Working Capital”
2.9
“Purchase Price”
2.5(a)
“Purchased Assets”
2.1
“Purchased Contracts”
2.1(h)
“Real Property Leases”
3.15(a)(xx)
“Reviewing Accountant”
2.10(c)
“Second Release Date”
5.9
“Seller Fundamental Representations”
8.1
“Seller Parties”
8.2
“Sellers”
Preamble
“Sellers’ Closing Date Net Working Capital”
2.10(c)
“Stock Consideration”
2.5(a)
“Sunlight Garden”
Preamble
“Sunlight Supply”
Preamble
“Sunlight ULC”
Preamble
“Tax Clearance Certificate”
5.3(c)
“Terminating Breach”
7.1(b)
“Termination Date”
7.1(d)(iii)

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“Third-Party Claim”
8.5(a)
“Transfer Taxes”
5.3(a)
“Transferring Employee”
5.6(b)
“Valuation Expert”
5.3(b)
“WARN Act”
3.8(c)

Section 1.3.    Grammatical Constructions. As used in this Agreement, except to
the extent that the context otherwise requires:
(a)    when a reference is made in this Agreement to an Article, Section,
Exhibit or Schedule, such reference is to an Article or Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated, and any
Schedule or Exhibit referred to herein will be construed with, and as an
integral part of, this Agreement to the same extent as if they were set forth
verbatim;
(b)    the table of contents and headings for this Agreement are for reference
purposes only and do not affect in any way the meaning or interpretation of this
Agreement;
(c)    whenever the words “include,” “includes” or “including” (or similar
terms) are used in this Agreement, irrespective of whether used in connection
with the words “without limitation,” they are deemed in all cases to be followed
by the words “without limitation”;
(d)    the words “hereof,” “herein” and “hereunder” and words of similar import,
when used in this Agreement, refer to this Agreement as a whole and not to any
particular provision of this Agreement;
(e)    all terms defined in this Agreement have their defined meanings when used
in any certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein;
(f)    the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms;
(g)    if any action is to be taken by any Party hereto pursuant to this
Agreement on a day that is not a Business Day, such action will be taken on the
next Business Day following such day, and any deadline shall be deemed to expire
at 5:00 p.m. Pacific Time;
(h)    references to a Person are also to its permitted successors and assigns;
(i)    the use of “or” is not intended to be exclusive unless expressly
indicated otherwise;
(j)    “ordinary course of business” (or similar terms) will be deemed followed
by “consistent with past practice”;
(k)    “assets” will include “rights,” including rights under Contracts, unless
expressly indicated otherwise;

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(l)    “reasonable efforts” or similar terms will not require the waiver of any
rights under this Agreement;
(m)    any reference to any Law will be deemed also to refer to all rules and
regulations promulgated thereunder and to include all statutory and regulatory
provisions consolidating, amending or replacing the Law, unless the context
requires otherwise;
(n)    any reference to a Contract or other document means such Contract or
other document as amended, supplemented and modified from time to time to the
extent permitted by the provisions thereof; and
(o)    all accounting terms used herein and not expressly defined herein will
have the meanings given to them under GAAP, and any references to “dollars,” “$”
or other dollar amounts in this Agreement will mean the lawful currency of the
United States.
ARTICLE II

PURCHASE AND SALE OF ASSETS AND CLOSING
Section 2.1.    Purchase and Sale. At the Closing, upon the terms and subject to
the conditions of this Agreement, each Seller will sell, transfer, assign,
convey and deliver to Buyer, and Buyer will purchase from each Seller and
acquire good, valid and marketable title to, free and clear of all Encumbrances,
other than Permitted Encumbrances, all of the assets, properties and rights of
each Seller that are now, in the past twelve (12) months have been, or at the
time of the Closing are, used or held for use in or otherwise necessary for the
conduct of, the Business, including all assets reflected on the most recent
balance sheet included in the Financial Statements and not subsequently disposed
of in the ordinary course of business without breach of any provision of this
Agreement, in each case other than the Excluded Assets described in Section 2.2
(collectively, the “Purchased Assets”). The Purchased Assets will include:
(a)    all Leased Real Property (including all rights of the Asset Sellers in
any leases of Leased Real Property);
(b)    all Tangible Property (including all rights of Asset Sellers in any
leases of Tangible Property), including all of the furniture, fixtures and
equipment (“FF&E”) and including the items listed on Section 2.1(b) of Sellers’
Disclosure Schedule;
(c)    all Inventory;
(d)    Customer Orders;
(e)    all Receivables and rights of any Asset Seller to receive payments
arising out of, sales occurring in the conduct of the Business and the security
agreements related thereto, including all rights of any Asset Seller with
respect to any third-party collection proceedings or any other actions or
proceedings that have been commenced in connection therewith;

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(f)    Asset Sellers’ UPC Codes used or held for use in or otherwise necessary
for the conduct of the Business, including the items set forth in Section 2.1(f)
of Sellers’ Disclosure Schedule;
(g)    all Business Intellectual Property and all rights to sue and recover
damages for past, present and future infringement, dilution, misappropriation,
violation, unlawful imitation or breach thereof;
(h)    all interests, rights, claims and benefits of Asset Sellers under all
Contracts that are now, or at the time of the Closing are, used or useful in, or
necessary for the conduct of the Business or relating to or arising out of the
conduct of the Business, including all Contracts under which any of Sellers have
the right to protect the confidentiality of information relating to the Business
or to prevent third parties from competing with the Business or soliciting
Employees, all customer and distributor agreements, all of which Contracts, if
material, are required to be listed either in Section 2.1(h), 3.15 or 3.19(b) of
Sellers’ Disclosure Schedule (collectively, the “Purchased Contracts”);
(i)    all Permits that are now, or at the time of the Closing will be, used or
held for use in or otherwise necessary for the conduct of, the Business,
including the Business Permits listed in Section 3.10(d) of Sellers’ Disclosure
Schedule;
(j)    all files, documents, instruments, papers, books and records (whether in
paper, digital or other tangible or intangible form) that are now, or at the
time of the Closing will be, used or held for use in or otherwise necessary for
the conduct of, the Business, the Purchased Assets or the Assumed Liabilities,
(other than those set forth in Section 2.2), including copies of financial
records, copies of Tax records (other than income Tax records), all technical
information, operating and production records, quality control records,
blueprints, research and development notebooks and files, customer credit data,
manuals, engineering and scientific data, sales and promotional literature,
drawings, technical plans, business plans, budgets, price lists, lists of
customers and suppliers and human resources data (including copies of all files
and records associated with Transferring Employees);
(k)    all rights, claims (other than those set forth in Section 2.2(k)) and
causes of Action that are now, or at the time of the Closing will be, used or
held for use in or otherwise necessary for the conduct of, the Business or any
of the Assumed Liabilities or the Purchased Assets;
(l)    all Prepaid Expenses that are now, or at the time of the Closing will be,
used or held for use in or otherwise necessary for the conduct of the Business;
(m)    all rights of any Seller under or pursuant to all warranties,
representations, indemnities and guarantees made by suppliers, manufacturers,
intermediaries, distributors or contractors in connection with products sold or
services provided to any Seller for, or in connection with, the Business, or in
respect of any Purchased Asset, but excluding any such rights with respect to
Excluded Assets;

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(n)    all telephone numbers, websites and domain names and user names on social
media websites that are now, or at the time of the Closing will be, used or held
for use in or otherwise necessary for the conduct of, the Business;
(o)    all goodwill associated with the Business and the Purchased Assets,
together with the right to represent to third parties that Buyer is the
successor to the Business;
(p)    all other assets described in Section 2.1(p) of Sellers’ Disclosure
Schedule, whether or not now, or at the time of the Closing, used or held for
use in or otherwise necessary for the conduct of, the Business; and
(q)    all of the issued and outstanding membership interests or other equity
interests of Columbia River (the “Interests”).
Section 2.2.    Excluded Assets. Notwithstanding any provision of this Agreement
express or implied to the contrary, Buyer will not acquire and the Purchased
Assets will not include the following assets, properties and rights:
(a)    the capital stock of, or any membership interest, partnership interest or
any similar equity interest in, any Person, other than the Interests;
(b)    any Benefit Plan and all Contracts and refunds related thereto (including
refunds of workers’ compensation expenses, Contract premiums or payments);
(c)    insurance policies and all prepaid expenses or premiums, proceeds, rights
and claims thereunder and all insurance benefits;
(d)    all rights to any refunds of Taxes imposed on or with respect to the
Business and paid by any Seller prior to the Closing;
(e)     the minute books, charter documents, and transfer records of Asset
Sellers and such other books and records as pertain to the organization,
existence or capitalization of Asset Sellers, any other books or records not
related to the Business or the Purchased Assets and financial records pertinent
to Sellers’ operation of the Business (copies of which will be provided to
Buyer);
(f)    Sellers’ rights under this Agreement and the Transaction Documents to
which it is a party;
(g)    all assets owned or held in trust or otherwise associated with or used in
connection with any Benefit Plan;
(h)    all of Sellers’ rights, claims, causes of Action, rights of recovery and
rights of set-off of any kind against third parties which (i) may arise in
connection with the discharge by Sellers of the Excluded Liabilities or (ii) are
not related to the Purchased Assets;
(i)    any prepaid expenses made by or on behalf of Sellers other than Prepaid
Expenses;

16

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(j)    all cash held by the Asset Sellers;
(k)    the claims of any Seller including any award, settlement, judgment, or
other proceeds arising out of or in connection with the matters listed in
Section 3.9 of Sellers’ Disclosure Schedule;
(l)    all confidential communications, files, documents, papers, books and
records (whether in paper, digital or other tangible or intangible form) created
by or on behalf of Sellers pertaining to the performance of this Agreement or
the negotiations, preparation, and investigation preceding this Agreement, and
any other books and records which Sellers are prohibited from disclosing or
transferring under applicable Law and are required by applicable Law to retain;
and
(m)    each of the assets set forth in Section 2.2(m) of Sellers’ Disclosure
Schedule (the assets, properties and rights in this Section 2.2 collectively,
the “Excluded Assets”).
Section 2.3.    Assumed Liabilities.
(a)    Buyer agrees that, on the Closing Date, Buyer will assume and thereafter
pay, perform or discharge, as the case may be only (i) the Liabilities of
Sellers arising after the Closing Date that are either in respect of ownership
of the Purchased Assets as of and following the Closing Date or the conduct of
the Business as of and following the Closing Date and (ii) the Liabilities
reflected in the calculation of the Final Closing Date Net Working Capital
(collectively, the “Assumed Liabilities”).
(b)    In the event of any claim against Buyer with respect to any of the
Assumed Liabilities, Buyer will have, and each Seller hereby assigns to Buyer,
all defenses, counterclaims and rights of setoff that would have been available
to any Seller or the Business if such claim had been asserted against any Seller
or the Business, except and to the only extent such defense, counterclaim or
right of setoff would give rise to a Loss for a Seller, in which event Seller
will promptly notify Buyer in writing that such claim is being retained by
Seller and such claim shall be handled pursuant to Article VIII of this
Agreement. The assumption by Buyer of the Assumed Liabilities and the transfer
of the Assumed Liabilities by any Seller will in no way expand the rights or
remedies of any Person against Buyer, Sellers, their respective Affiliates or
any of their respective Representatives as compared to the rights and remedies
that such Person would have had against Buyer, any Seller, their respective
Affiliates or any of their respective Representatives had Buyer not assumed the
Assumed Liabilities.
Section 2.4.    Excluded Liabilities. Notwithstanding any provision of this
Agreement express or implied to the contrary (and without any implication that
Buyer is assuming any Liability of Sellers or the Business or any Liability
related to any of the Purchased Assets not expressly excluded), Buyer is not
assuming or becoming obligated in any way in respect of, and will not be
required to pay, perform, undertake or discharge, any Liabilities that are not
specifically included in the Assumed Liabilities, including (a) any debt for
borrowed money and all fees, accrued and unpaid interest, premiums or penalties
relating to the foregoing, (b) any Liabilities to the extent relating to,
resulting from or arising out of any Environmental Law (including any violation
of Environmental Law), Environmental Condition, or any Release of Hazardous
Substance on, under,

17

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at or migrating to or from any of the Companies’ or any of their predecessors
current or former facilities, (c) any Liability arising from facts or
circumstances or underlying conditions or events or activities first occurring
on or prior to the Closing, or relating to the conduct or operation of the
Business or any other conduct of Sellers and their Affiliates and their
respective officers, directors, employees, consultants, agents or advisors on or
prior to the Closing, (d) any Liability for Excluded Taxes, or (e) all
Liabilities relating to any former employee or any Employees other than the
Transferring Employees and with respect to the Transferring Employees up to the
Closing Date, including without limitation (i) under or relating to any Benefit
Plan or any other employee benefit arrangement of any of the Companies, (ii) all
salaries, wages, commissions, contractual incentive payments, contractual
bonuses, employer insurance contributions, statutory holiday pay, overtime pay
and similar obligations (including all related Taxes and social insurance
costs), relating to any Employee prior to the Closing Date, (iii) Liabilities
under all applicable Laws or statutory plans and related to any required notice
of termination, termination, severance or similar obligation with respect to or
arising from the termination of employment with Sellers and its Affiliates of an
Employee (including all related Taxes and social insurance costs), (iv) all
Liabilities relating to compliance with the requirements of Section 4980B of the
Code, Part 6 of Subtitle B of Title I or ERISA, or any similar state or local
Law or applicable employment standards legislation, including the provision of
continuation coverage, with respect to all Employees who do not become
Transferring Employees, and their spouses and dependents, and with respect to
Transferring Employees, and their spouses and dependents, for whom a qualifying
event occurs prior to or on the Closing Date, (v) long-term disability (whether
long-term or short-term) coverage of Employees who do not become Transferring
Employees and of Transferring Employees for whom the incident or circumstance
giving rise to such coverage occurred prior to or on the Closing Date, (vi) any
workers’ compensation, occupational disease or illness, state or other
disability or similar workers’ protection claims with respect to any Employee
(including any Transferring Employee), to the extent the injury or illness
giving rise to such claim originated prior to the Closing Date, or (vii) any
Liability relating to any misclassification of individual independent
contractors or consultants who perform all or substantially all of his or her
services for Sellers or any of its Subsidiaries on behalf of the Business (the
“Excluded Liabilities”).
Section 2.5.    Purchase Price.
(a)    In full consideration for the transfer of the Purchased Assets, Buyer
will deliver and pay to Sellers pursuant to the instructions set forth on
Section 2.5(a) of Sellers’ Disclosure Schedule or, at any Seller’s written
direction certain other Persons, a purchase price of $450,000,000, plus, to the
extent payable pursuant to Section 2.5(c), the Contingent Payment (the “Purchase
Price”) subject to any adjustments required pursuant to Sections 2.9 and 2.10.
The Purchase Price is payable as follows: (i) at the Closing, (x) Buyer will pay
to Sellers pursuant to the instructions set forth on Section 2.5(a) of Sellers’
Disclosure Schedule or, at any Seller’s written direction, certain other
Persons, a total of $425,000,000 (the “Cash Amount”) in immediately available
funds by bank wire transfer to such accounts designated in writing for this
purpose by each Seller to Buyer at least two Business Days prior to the Closing
and (y) Parent will deliver to Sellers, pursuant to the instructions set forth
on Section 2.5(a) of Sellers’ Disclosure Schedule or, at any Seller’s written
direction, Craig R. Hargreaves, on behalf of Sellers, duly authorized, validly
issued, fully paid and nonassessable shares of common stock, no par value, of
Parent (the “Parent Shares”) having an

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aggregate value (determined in accordance with Section 2.5(b)) of $25,000,000
(the “Stock Consideration”) and (ii) after the Closing, Buyer will, if earned,
deliver and pay the Contingent Payment in accordance with Section 2.5(c). Each
Seller acknowledges that (A) any payment made to a Person other than the
applicable Seller pursuant to this Section 2.5(a) is at such Seller’s direction
and is in complete satisfaction of Buyer’s obligations under this Section 2.5(a)
and (B) no Parent Share it receives pursuant to this Section 2.5(a) may be
transferred to another Person until the date that is one Business Day following
the one year anniversary of the Closing Date; provided, that any Seller may
transfer Parent Shares to any of the Hargreaves, subject to the same restriction
or to any trust or other estate planning vehicle, so long as one or both of the
Hargreaves are the trustee or beneficiary. Dividends, distributions, splits, and
other benefits of the Parent Shares during the restricted period shall inure to
the benefit of Sellers; provided, however, that to the extent any portion of the
Stock Consideration is held in escrow pursuant to Section 5.9 of this Agreement,
any such dividends, distributions, splits or other benefits attributable to such
Parent Shares will be deposited into escrow.
(b)    For the purposes of Section 2.5(a), the value of one Parent Share will
equal the average closing price of Parent Shares for a period of 30 Trading Days
ending three Trading Days prior to the date hereof. A “Trading Day” means a day
on which the New York Stock Exchange is open for the buying and selling of
securities.
(c)    If the highest rolling average closing price of the Parent Shares for any
continuous 30 Trading Days, for a period starting on the six-month anniversary
of the Closing Date and ending on the one year anniversary of the Closing Date,
(the “Highest 30-Day Share Price”) is equal to or greater than $101 per share,
Sellers will be entitled to a contingent cash payment (“Contingent Payment”).
The value of the Contingent Payment will be based on the Highest 30-Day Share
Price in accordance with the Contingent Payment Scale attached hereto as Exhibit
K. Within five Business Days following the one year anniversary of the Closing
Date, Buyer will deliver and pay to Sellers pursuant to the instruction set
forth in Section 2.5(a) of Sellers’ Disclosure Schedule, or at any Seller’s
written direction, any other Persons, the Contingent Payment, if earned.
Section 2.6.    Closing. Unless the Agreement is earlier terminated, the closing
of the transactions contemplated hereby (the “Closing”) will take place on the
third Business Day following the satisfaction or waiver of all conditions set
forth in Article VI (other than conditions that, by their nature, are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions) or at such other time and at such place as Buyer and Sellers
mutually agree. The date on which the Closing actually occurs is referred to
herein as the “Closing Date.”
Section 2.7.    Closing Deliveries by Sellers. At the Closing, Sellers will
deliver or cause to be delivered to Buyer:
(a)    a duly executed original copy of the Assignment and Assumption Agreement
and Bill of Sale (the “Bill of Sale”) in substantially the form of Exhibit A,
duly executed by Sellers;
(b)    the Intellectual Property Assignments substantially in the forms attached
hereto as Exhibit C, Exhibit D, Exhibit E and Exhibit F, duly executed by
Sellers;

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(c)    the Escrow Agreement, duly executed by Sunlight Supply;
(d)    the Key Employee Offer Letters, duly executed by each Key Employee,
respectively;
(e)    assignment in the form of Exhibit I hereto (the “Non-Affiliated Real
Property Lease Assignments”), duly executed by the applicable Seller,
transferring all of such Seller’s right, title and interest in and to the
Non-Affiliated Real Property Leases set forth on Section 2.7(e) of Sellers’
Disclosure Schedule;
(f)    evidence of termination of all Affiliated Real Property Leases set forth
on Section 2.7(f) of Sellers’ Disclosure Schedule, in form and substance
reasonably acceptable to Buyer and signed leases as required by Section 6.2(n);
(g)    all Tax Clearance Certificates as provided under Section 5.3;
(h)    a certificate described in Treasury Regulations Section 1.1445-2(b)(2)
from each Seller, in a form reasonably acceptable to Buyer and duly executed by
each Seller, and an IRS Form W-9 form each Seller, properly completed and duly
executed by each Seller;
(i)    a list of all Customers, together with their respective business
addresses, as well as the telephone numbers and electronic mail addresses for
those individuals employed by those Customers responsible for U.S. state and
local sales and use Tax matters, to the extent known to Sellers;
(j)    evidence of termination of all agreements pursuant to which any Seller is
granted any right to use, or other interest in, any Intellectual Property owned
or purported to be owned by another Seller, including that certain Intellectual
Property License Agreement dated April 19, 2002 between IP Holdings and Sunlight
Supply, in form and substance reasonably acceptable to Buyer;
(k)    the pay-off letters (the “Pay-Off Letters”) in a form reasonably
satisfactory to Buyer, with respect to the pay-off amounts of the Indebtedness
of each Company from each of the Person listed on Section 2.7(k) of Sellers’
Disclosure Schedule, which Pay-Off Letters shall specify that all liens and
guarantees related to such Indebtedness shall be terminated and released after
satisfaction of the conditions specified therein;
(l)    such further instruments and documents as may be required to be delivered
by Sellers pursuant to the terms of this Agreement or as may be reasonably
requested by Buyer in connection with the Closing of the transactions
contemplated by this Agreement and the Transaction Documents to complete the
transfer of the Purchased Assets and the Business to Buyer, including good and
sufficient instruments of assignment with respect to the Intellectual Property,
endorsements, consents, assignments and other good and sufficient instruments of
conveyance and assignment necessary or appropriate to vest in Buyer all right,
title and interest in, to and under the Purchased Assets; and

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(m)    copies of documents filed by or on behalf of Sellers with the applicable
Government Authority correcting the defects in the chain of title relating to
certain Business Intellectual Property set forth on Section 2.7(m) of Sellers’
Disclosure Schedule, along with receipts or other documents evidencing that such
documents have been filed with the applicable Governmental Authority, in each
case, in form and substance reasonably acceptable to Buyer.
Section 2.8.    Closing Deliveries by Buyer. At the Closing, Buyer will deliver
or cause to be delivered:
(a)    to Sellers, the Parent Shares in accordance with Section 2.5(a);
(b)    to Sellers, in accordance with Section 2.5(a) an amount in cash equal to
the Cash Amount less (i) the Escrow Amount and (ii) the amounts payable pursuant
to Section 2.8(d);
(c)    to the Escrow Agent, an amount equal to [INTENTIONALLY OMITTED] (the
“Escrow Amount”); [INTENTIONALLY OMITTED] of which will be delivered by wire
transfer of immediately-available funds, and [INTENTIONALLY OMITTED] of which
will be delivered by transfer of the beneficial ownership of Stock Consideration
to the Escrow Agent in accordance with the Escrow Agreement;
(d)    to each Person listed on Section 2.7(k) of Sellers’ Disclosure Schedule,
the amount set forth opposite such Person’s name as the amount necessary, as set
forth and in accordance with the applicable Pay-Off Letters, to fully discharge
the Indebtedness undertaken by each Company to such Person and outstanding as of
immediately prior to the Closing, which amount will be paid by wire transfer of
immediately available funds in accordance with the instructions set forth in
such schedule opposite such Person’s name;
(e)    to Sellers, the Bill of Sale, duly executed by Buyer;
(f)    to Sellers, the Escrow Agreement, duly executed by Buyer;
(g)    to Sellers, the Intellectual Property Assignments, duly executed by HGCI,
Inc.;
(h)    to Sellers, the Key Employee Offer Letters, duly executed by Buyer;
(i)    and signed leases as required by Section 6.2(n); and
(j)    such further instruments and documents as may be required to be delivered
by Buyer pursuant to the terms of this Agreement or as may be reasonably
requested by Buyer in connection with the Closing of the transactions
contemplated by this Agreement and the Transaction Documents.
Section 2.9.    Pre-Closing Delivery by Sellers; Adjustment. At least six
Business Days prior to the Closing Date, Sellers will deliver to Buyer the
projected, unaudited consolidated balance sheet of Sellers as of the end of the
Business Day immediately preceding the Closing Date (the “Projected Closing Date
Balance Sheet”), together with a statement based on the Projected Closing

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Date Balance Sheet setting forth Sellers’ calculation of projected Net Working
Capital as of the end of the Business Day immediately preceding the Closing Date
(the “Projected Closing Date Net Working Capital”). The Projected Closing Date
Balance Sheet and the Projected Closing Date Net Working Capital will be
prepared in accordance with GAAP, applied in a manner consistent with the
accounting practices used to prepare the Financial Statements as of and for the
12-month period ended December 31, 2017. Buyer will as promptly as practicable
review the Projected Closing Date Balance Sheet and such statement of Projected
Closing Date Net Working Capital, and the Parties will promptly discuss in good
faith all comments and questions Buyer may have with respect to the Projected
Closing Date Balance Sheet and such statement of Projected Closing Date Net
Working Capital. If, following such discussions, (a) the Projected Closing Date
Net Working Capital is an amount greater than the Target Net Working Capital,
the Purchase Price and the Closing Payment will be increased by the amount of
such excess, or (b) the Target Net Working Capital is an amount greater than the
Projected Closing Date Net Working Capital, the Purchase Price and the Closing
Payment will be decreased by the amount of such excess.
Section 2.10.    Closing Date Balance Sheet.
(a)    Promptly following the Closing Date, but in no event more than 90 days
following the Closing Date, Buyer will prepare and deliver to Sellers (i) a pro
forma balance sheet as of the end of the Business Day immediately preceding the
Closing Date, which will be prepared in accordance with GAAP and consistently
with the example provided in Section 2.10 of Sellers’ Disclosure Schedule (the
“Closing Date Balance Sheet”), and (ii) a statement based on the Closing Date
Balance Sheet setting forth Buyer’s calculation of the Closing Date Net Working
Capital. Buyer will permit an agent for Sellers to review and to have reasonable
access solely to the financial records of the Business necessary for such
agent’s calculation of the Closing Date Balance Sheet and, during normal
business hours, to Ann Rivers and any other employees responsible for the
Closing Date Balance Sheet, and the Purchased Assets for purposes of reviewing
the Closing Date Balance Sheet and the Closing Date Net Working Capital
determination during the 60-calendar day period set forth in Section 2.10(b);
provided, however, that such investigation shall not unreasonably disrupt the
Companies’ or the Business’ operations.
(b)    Unless within 60 calendar days after delivery of the Closing Date Balance
Sheet an agent for Sellers delivers to Buyer a notice setting forth, in
reasonable detail, any good faith dispute as to the Closing Date Net Working
Capital and the basis for such dispute (a “Dispute Notice”), Buyer’s calculation
of the Closing Date Net Working Capital will be deemed accepted by Sellers and
will be final and binding.
(c)    For 30 days after Buyer’s receipt of any Dispute Notice, an agent for
Sellers and Buyer will endeavor in good faith to resolve by mutual agreement all
matters in the Dispute Notice to reach definitive agreement on the disputed
items or amounts in order to determine, as may be required, the amount of
Closing Date Net Working Capital, which amount will not be more than the amount
thereof shown in Sellers’ calculations delivered pursuant to Section 2.10(b)
(“Sellers’ Closing Date Net Working Capital”) nor less than the amount thereof
shown in Buyer’s calculation delivered pursuant to Section 2.10(a) (“Buyer’s
Closing Date Net Working Capital”). If the Parties are unable to resolve any
matter in the Dispute Notice within such 30-calendar day

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period, Buyer and Sellers will engage KPMG LLP or another nationally recognized,
independent accounting firm to be mutually agreed upon (the “Reviewing
Accountant”). For the avoidance of doubt, no Party to this Agreement has a
material relationship with KPMG, LLP. The fees and expenses of the Reviewing
Accountant will be allocated and borne by Buyer, on the one hand, and Sellers,
on the other hand, based on the inverse of the percentage that the Reviewing
Accountant’s determination (before such allocation) bears to the total amount of
the total items in dispute as originally submitted to the Reviewing Accountant.
(d)    Buyer and Sellers will instruct the Reviewing Accountant to resolve the
disputed matters as promptly as practicable. The Reviewing Accountant will act
as an expert, and not an arbitrator, and will resolve the amounts disputed in
the Dispute Notice only, based solely on written submissions by Buyer and
Sellers and not by independent review or audit, and applying only the principles
set forth in this Agreement. The Parties will cooperate with each other and the
Reviewing Accountant in connection with the matters set forth in this Section
2.10, including by furnishing such information as may be reasonably requested.
Each Party will afford the other Party the reasonable and unrestricted
opportunity to participate in all communications with the Reviewing Accountant.
The Reviewing Accountant will give to Buyer and Sellers its written
determination of its calculation of the Closing Date Net Working Capital (the
“Final Closing Date Net Working Capital”), which determination will be made, to
the extent practicable, within 30 days of the Reviewing Accountant’s engagement;
provided, that, in no event will the Final Closing Date Net Working Capital be
greater than the amount of Sellers’ calculation of the Closing Date Net Working
Capital or less than the amount of Buyer’s calculation of the Closing Date Net
Working Capital. The Reviewing Accountant’s determination will be final and
binding and no Party will seek recourse to any Governmental Authority, arbitral
body or otherwise, other than to collect any amounts due under this Section
2.10. Judgment may be entered to enforce the Reviewing Accountant’s
determination in any court having jurisdiction over the Party against which such
determination is to be enforced.
(e)    (i)    If the Final Closing Date Net Working Capital is an amount greater
than the Projected Closing Date Net Working Capital, Buyer will pay in cash to
Sellers, as an adjustment to the Purchase Price, an amount by which the Final
Closing Date Net Working Capital exceeds the Projected Closing Date Net Working
Capital, within five Business Days after the Final Closing Date Net Working
Capital has been determined in accordance with this Section 2.10, by wire
transfer of immediately-available funds;
(ii)    If the Final Closing Date Net Working Capital is an amount less than the
Projected Closing Date Net Working Capital, Sellers will pay in cash to Buyer,
as an adjustment to the Purchase Price, an amount by which the Projected Closing
Date Net Working Capital exceeds the Final Closing Date Net Working Capital
within five Business Days after the Final Closing Date Net Working Capital has
been determined in accordance with this Section 2.10, by wire transfer of
immediately-available funds; and
(iii)    If the Final Closing Date Net Working Capital equals the Projected
Closing Date Net Working Capital, then no adjustment will be made to the
Purchase Price.

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Section 2.11.    Withholding. Sellers shall be responsible for all amounts
required to be deducted and withheld from any amount payable by Buyer or any of
its Affiliates pursuant to this Agreement (including payment of the Purchase
Price, including the Contingent Payment, if any, and releases of amounts held in
escrow and the Escrow Amount) under any applicable Tax Laws.
ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF SELLERS
Each Seller, jointly and severally, represents and warrants to Buyer as to
itself and as to the Purchased Assets only as to which such Seller has right,
title and interest, as of the date hereof and as of the Closing Date as set
forth in this Article III.
Section 3.1.    Organization and Qualification; Capitalization.
(a)    Each of Sunlight Supply and Sunlight Garden is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Washington, Sunlight ULC is an unlimited liability company duly organized,
validly existing and in good standing under the Laws of the province of British
Columbia and each of Columbia River and IP Holdings is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Washington. Each Company has all requisite power and authority to
own, license, use, lease and operate its assets and properties (including any
Purchased Assets owned by Sellers) and to carry on its business as it is now
being conducted. Each Company is duly licensed or qualified to do business and
is in good standing in each jurisdiction in which the assets and properties
owned or leased by it or the operation of its business as currently conducted
(including any Purchased Assets and the Business) makes such licensing or
qualification necessary, except where the failure to be so licensed, qualified
or in good standing would not, individually or in the aggregate, be material to
the Business. Craig R. Hargreaves is the sole equity holder of Sunlight Supply
and IP Holdings. The Hargreaves are the sole equity holders of Columbia River.
Sunlight Supply is the sole equity holder of Sunlight Garden and Sunlight Garden
is the sole equity holder of Sunlight ULC.
(b)    Each of the Hargreaves owns the Interests set forth opposite the name of
such Seller on Section 3.1(a) of Sellers’ Disclosure Schedule. The Interests
constitute all the issued and outstanding equity interests of Columbia River,
all of which are duly authorized, validly issued and outstanding, fully paid up
and nonassessable, free of any Encumbrances and any agreement, obligation or
commitment to create, grant, give or permit to subsist any Encumbrances
whatsoever and are held of record by the Hargreaves. There is no security,
option, warrant, right, call, subscription, agreement, commitment or
understanding of any nature whatsoever, fixed or contingent, that directly or
indirectly (i) calls for the issuance, sale, pledge or other disposition by
Columbia River of any of its equity interests or any securities convertible
into, or other rights to acquire, any such equity interests, (ii) relates to the
voting or control of such equity interests or rights, or (iii) obligates
Columbia River to grant, offer or enter into any of the foregoing. Except as set
forth in Section 3.1(b) of Sellers’ Disclosure Schedule, Columbia River has not
created any “phantom equity,” equity appreciation rights, profit participation
rights or other similar rights with respect to Columbia River. Columbia River
has not granted to any Person the right to demand or

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request that Columbia River effect a registration under the Securities Act of
1933, of any securities held by such Person or to include any securities of such
Person in any such registration by Columbia River. The Hargreaves have good,
legal, valid, and marketable title to the Interests, free and clear of all
Encumbrances other than Permitted Encumbrances. Buyer will acquire, at Closing,
good, legal, valid, and marketable title to the Interests, free and clear of all
Encumbrances other than Permitted Encumbrances. Other than the Interests, no
other Person owns any equity interest in Columbia River and no right of any kind
to have any such equity interest issued. Columbia River does not own and has not
owned, of record or beneficially, or control and has not controlled any direct
or indirect equity or other interest, or any right (contingent or otherwise) to
acquire the same, in any corporation, partnership, limited liability company,
joint venture, association or other entity. Columbia River is not a party to or
bound by any Contract to acquire any direct or indirect equity or ownership
interest in any other Person or business. Columbia River is not obligated to
provide funds or make any investment (whether in the form of a loan, capital
contribution, or otherwise) in any other Person.
Section 3.2.    Authority; Non-Contravention; Approvals.
(a)    Each Seller has all requisite power and authority to execute and deliver
this Agreement and the Transaction Documents to which it is a party and to
perform the transactions contemplated by this Agreement and the Transaction
Documents. The execution and delivery by each Seller of this Agreement and the
Transaction Documents and the performance by each Seller of the transactions
contemplated by this Agreement and the Transaction Documents have been duly
authorized and approved by their respective Boards of Directors or other
governing body and their requisite shareholders or members, as applicable.
Except as set forth on Section 3.2(a) of Sellers’ Disclosure Schedule, no
corporate or other action or proceeding on the part of any Seller or any other
Person is necessary to authorize the execution and delivery of this Agreement
and the Transaction Documents by each Seller that is a party thereto or the
performance and consummation by each Seller of the transactions contemplated by
this Agreement and the Transaction Documents. This Agreement has been, and upon
their execution the Transaction Documents will be, duly executed and delivered
by each Seller that is party thereto and, assuming the due authorization,
execution and delivery of this Agreement and the Transaction Documents by Buyer
and, with respect to the Escrow Agreement, the Escrow Agent, constitutes, and
upon their execution the Transaction Documents will constitute, valid and
binding obligations of each Seller that is party thereto, enforceable against
such Sellers in accordance with their respective terms.
(b)    The execution and delivery by each of Sellers of this Agreement and the
Transaction Documents that such Sellers are party to and the performance of the
transactions contemplated by this Agreement and the Transaction Documents do not
and will not (i) conflict with or result in a breach of any provision of the
organizational documents of any Company, (ii) except as set forth in
Section 3.2(b) of Sellers’ Disclosure Schedule, constitute a default or an event
of default under (with or without due notice, lapse of time or both) or give
rise to any obligation or any third party right to cancel, terminate or
accelerate any obligation under, any material Contract to which any of the
Hargreaves or the Companies is a party, by which any of the Hargreaves or the
Companies may be bound or to which the Purchased Assets are subject, (iii)
result in the creation of any Encumbrance on the Purchased Assets or any other
right or asset of any of the Hargreaves

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or the Companies, (iv) violate any Law applicable to Sellers, the Business, the
Purchased Assets or the Assumed Liabilities, or (v) require any authorization,
consent, approval, waiver, exemption or other action by, or notice to, any party
(other than Sellers) to any Purchased Contract (each, a “Consent”), except as
disclosed in Section 3.2(b) of Sellers’ Disclosure Schedule.
(c)    Except for the filings by Sellers required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the “HSR Act”) and as disclosed in Section
3.2(c) of Sellers’ Disclosure Schedule, and subject to the provisions of
Section 5.8, no declaration, filing or registration with, or notice to, or
authorization, consent, order or approval of, any Governmental Authority is
required to be obtained or made in connection with or as a result of the
execution and delivery of this Agreement and the Transaction Documents by
Sellers or the performance by Sellers of the transactions contemplated by this
Agreement and the Transaction Documents, except as could not reasonably be
expected to have a Seller Material Adverse Effect or otherwise be material to
the Business.
Section 3.3.    Financial Statements; Inventory.
(a)    Section 3.3 of Sellers’ Disclosure Schedule sets forth the audited
balance sheet of the Business and for each Company for each of the two fiscal
years ended December 31, 2016 and December 31, 2017 and the related unaudited
consolidated statements of income and cash flows for such periods, and the
related balance sheet (the “Interim Balance Sheet”) consolidated statements of
income, and cash flows for the three-month period ended March 31, 2018
(collectively, the “Financial Statements”). The Financial Statements were
derived from the books and records of the Companies and prepared in accordance
with GAAP and fairly present the financial position and results of operations of
the Business as of their respective dates and for the respective periods
presented (subject to the absence of notes, recordation of Taxes and certain
footnote disclosures otherwise required by GAAP, which are not material in
nature or amount, individually or in the aggregate, to the Business). The books
of account and other financial records of the Business are complete and correct
in all material respects and have been maintained in the ordinary course of
business consistent with past practice. The Companies maintain a system of
internal controls over financial reporting sufficient to provide reasonable
assurances regarding the reliability of financial reporting, including that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of the financial statements in accordance with GAAP and to maintain
accountability for its assets, and (iii) access to assets is permitted only in
accordance with management’s general or specific authorization.
(b)    All Inventory, net of reserves, (i) currently consists of a quality and
quantity that is marketable, good, useable (as to raw materials or work in
process) and saleable (as to finished goods) in the ordinary course of business,
(ii) has been created or acquired in the ordinary course of business, and (iii)
is fit for the purpose for which it was procured or manufactured. None of the
Inventory is held on consignment, or similar arrangement, by third parties. The
amount and mix of items in the Inventories of supplies, in process and finished
products are consistent with past business practice of Sellers with respect to
the Business, and, to Sellers’ Knowledge, the year-to-

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date Inventory shrink related to the Business is consistent with historical
shrink incurred in the ordinary course of business.
Section 3.4.    Absence of Undisclosed Liabilities. Except as set forth in
Section 3.4 of Sellers’ Disclosure Schedule, there are no material Liabilities
relating to the Business of any nature, whether accrued, contingent or
otherwise, and there is no existing condition, situation or set of facts or
circumstances that reasonably could be expected to result in such a Liability,
except for Liabilities (a) reflected on the Interim Balance Sheet, but only to
the extent reflected therein, (b) that were incurred in the ordinary course of
business since the date of the Interim Balance Sheet and that could not
reasonably be expected to be material to the Business, or (c) transaction
expenses relating to the transactions contemplated by this Agreement or the
Transaction Documents, all of which are the responsibility of Sellers.
Section 3.5.    Absence of Certain Changes or Events. Since the date of the
Interim Balance Sheet (a) there has not been any event, circumstance, change or
effect that has had or could reasonably be expected to have a Business Material
Adverse Effect, (b) except as disclosed in Section 3.5 of Sellers’ Disclosure
Schedule, the Business has been conducted only in the ordinary course of
business, and (c) none of the Hargreaves or the Companies has taken any action
which, if taken after the date of this Agreement without Buyer’s consent, would
be prohibited under Section 5.1(a)-(r).
Section 3.6.    Tax Matters.
(a)    All Tax Returns required to have been filed with respect to the Business
or the Purchased Assets have been timely filed and are true, correct and
complete in all material respects. Except as set forth in Section 3.6 of
Sellers’ Disclosure Schedule, none of the Tax Returns with respect to the
Purchased Assets or the Business is currently subject to a grant of any
extension of time within which to file such Tax Return.
(b)    All Taxes that are due and payable with respect to the Business or the
Purchased Assets (whether or not shown on any Tax Return) have been timely and
fully paid.
(c)    All Taxes required to be withheld by any Seller with respect to the
Purchased Assets or the Business in connection with any amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third party
have been timely withheld and all such withheld Taxes have been timely paid over
and reported to the proper Governmental Authority in accordance with applicable
Law.
(d)    No deficiencies for Taxes have been claimed, threatened, proposed or
assessed or, to Sellers’ Knowledge, are expected to be claimed, threatened,
proposed or assessed, in each case, with respect to the Purchased Assets or the
Business. Section 3.6(d) of Sellers’ Disclosure Schedule contains a complete
list of all Tax audits, examinations and investigations with respect to the
Business or the Purchased Assets that have been completed or are currently
pending and a description in reasonable detail of any deficiencies that have
been paid or are currently being contested. Except as described in Section
3.6(d) of Sellers’ Disclosure Schedule, no Seller has given or been requested to
give any waiver or extension (or is or would be subject to a waiver or

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extension given by any other Person) of any statute of limitations relating to
the assessment or payment of Taxes with respect to the Business or the Purchased
Assets.
(e)    There are no Encumbrances for Taxes on any of the Purchased Assets (other
than for Taxes not yet due and payable or not yet delinquent), and to Sellers’
Knowledge there is no basis for the assertion of any claims for Taxes which
could result in any such Encumbrance.
(f)    No claim has been made to Sellers by a Governmental Authority that any
Seller has nexus or is required to file Tax Returns or pay Taxes (in each case,
with respect to the Purchased Assets or the Business) in a jurisdiction where it
does not file such Tax Returns or pay such Taxes. Each Seller has filed income
Tax Returns in all jurisdictions where such Seller holds Tangible Property or
makes payments through payroll.
(g)    No Seller has any deferred income pursuant to IRS Revenue Procedure
2004-34, Treasury Regulation Section 1.451-5, Section 455 of the Code, or
Section 456 of the Code (or any corresponding or similar provision of Law), in
each case related to the Business or the Purchased Assets.
(h)    None of the Purchased Assets is (i) property required to be treated as
being owned by another Person pursuant to the safe harbor lease provision of
former Section 168(f)(8) of the Code, (ii) “tax-exempt use property” within the
meaning of Section 168(h)(1) of the Code, (iii) “tax-exempt bond financed
property” within the meaning of Section 168(g) of the Code, or (iv) subject to
any similar provision of Law.
(i)    None of the Purchased Assets is an interest (other than indebtedness
within the meaning of Section 163 of the Code) in an entity treated for U.S.
federal (and applicable U.S. state and local) income Tax purposes as a
corporation, partnership, trust or real estate mortgage investment conduit,
except for the Interests.
(j)    There is no Liability under any Contract that is a Purchased Asset to
pay, share or indemnify for the Taxes of any other Person (other than
Liabilities under such Contracts entered into in the ordinary course of business
that do not relate primarily to Taxes).
(k)    No Seller has engaged in a “reportable transaction” involving the
Purchased Assets or the Business, as defined in Section 6707A(c)(1) of the Code
or Treasury Regulations Section 1.6011-4(b), or any transaction requiring
disclosure under a comparable or similar provision of applicable Law.
(l)    No Seller of United States real property (within the meaning of Section
897 of the Code) is a “foreign person” within the meaning of Section 1445 of the
Code.
(m)    Each Seller has complied with all applicable Laws relating to escheat,
property, sales, use, goods and services or other commodity Taxes with respect
to the Purchased Assets and the Business.

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(n)    Sunlight Supply has duly elected to be treated as, and at all times since
making its “S” election on June 28, 2002, has been an “S corporation” pursuant
to Section 1362 of the Code and the Laws of each state and other jurisdiction in
which the Company conducts business or could otherwise be subject to income
Taxes. Sunlight Garden has duly elected to be treated as, and has, at all times
since its incorporation, been, a “qualified Subchapter S subsidiary” pursuant to
Section 1361(b)(3)(B) of the Code and the laws of each state and other
jurisdiction in which Sunlight Supply conducts business or could otherwise be
subject to income Taxes.
(o)    Columbia River is and has, at all times since its formation, been, a
partnership for U.S. federal (and applicable state and local) income tax
purposes.
Section 3.7.    ERISA and Employee Benefits.
(a)    Section 3.7 of Sellers’ Disclosure Schedule sets forth a complete and
accurate list of (i) all employee benefit plans, programs and arrangements,
including all profit-sharing, bonus, commission, stock option, stock
appreciation, pension, retirement, deferred compensation, post-retirement
medical or life insurance, severance, welfare (e.g., medical, dental, vision,
life insurance, death benefits), cafeteria, fringe benefit, incentive, sick
leave or other leave of absence, vacation, short- or long-term disability,
retention and salary continuation, plans, programs and arrangements (whether
written or oral, qualified or nonqualified, funded or unfunded, foreign or
domestic, currently effective of terminated), in any case, established,
maintained, sponsored or contributed to in connection with the Business for the
benefit of any present or former Employees, directors, officers, shareholders,
consultants, or independent contractors of the Business or with respect to which
any Company or ERISA Affiliate has made or is required to make payments,
transfers, or contributions, or under which the Company or any ERISA Affiliate
has any potential liability (the “Benefit Plans”), and (ii) each employment or
severance agreement addressed to or covering any Employees, directors, officers,
consultants, or independent contractors of the Business pursuant to which any
Company or any ERISA Affiliate has any actual or contingent Liability or
obligation, or where those agreements are oral, accurate and complete summaries
of their terms. No Company or ERISA Affiliate has Liability with respect to any
plan, agreement, program or arrangement of the type described in the preceding
sentence other than the Benefit Plans.
(b)    With respect to each Benefit Plan, Sellers have made available to Buyer
true and complete copies of each Benefit Plan document and any amendments
thereto (or, if not written, a written summary of its material terms), along
with, to the extent applicable, copies of all trust agreements, and any
amendments thereto, insurance contracts, or other funding vehicles; summary plan
descriptions and summaries of material modifications; for the three most recent
years (i) annual reports (Form 5500 series and attached schedules), (ii) audited
financial statements, and (iii) actuarial or other valuation reports prepared
with respect thereto; the most recent determination, advisory, or opinion letter
issued by the IRS; nondiscrimination tests for the previous three years; all
material, non-routine correspondence relating to the imposition of liability on
a Company or an ERISA Affiliate in relation to any Benefit Plan between such
Company or ERISA Affiliate or any of their representatives and any Governmental
Authority; and any documents, forms or other instruments relating to any Benefit
Plan reasonably requested by Buyer.

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(c)    Each Benefit Plan has been maintained and operated, from the time of such
Benefit Plan’s inception up to and including the Closing Date, in accordance
with its terms and in accordance with applicable Law, including ERISA and the
Code. As of the date hereof, there are no Actions pending, or threatened, with
respect to any Benefit Plan (other than routine claims for benefits in the
ordinary course of business), nor is there any basis for one. With respect to
the Benefit Plans, no breaches of fiduciary duty and no non-exempt prohibited
transactions (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) have occurred that could reasonably be expected to give rise to any
Liability on the part of any Company or any ERISA Affiliates. No condition
exists and no event has occurred that could constitute grounds for termination
of any Benefit Plan, and no Company or any ERISA Affiliate has incurred, or
reasonably expects to incur, any material liability under Title IV of ERISA
arising in connection with the termination of, or complete or partial withdrawal
from, any plan covered or previously covered by Title IV of ERISA. No
“accumulated funding deficiency,” as defined in Section 412 of the Code, has
been incurred with respect to any Benefit Plan, whether or not waived.
(d)    Each Company and each ERISA Affiliate, as applicable, has complied with
the terms of each employment agreement and each severance agreement pursuant to
which the Company or the ERISA Affiliate is a party. Columbia River does not,
and has never, employed any employees.
(e)    Each Company and each ERISA Affiliate, as applicable, has complied with
all reporting and disclosure obligations to all governmental entities and all
participants and beneficiaries with respect to each Benefit Plan required by the
terms of such Benefit Plan and any Law, including but not limited to ERISA, the
Code and the Sarbanes-Oxley Act of 2002.
(f)    No Company nor any ERISA Affiliate sponsors, maintains or contributes to,
or has an obligation to contribute to (i) any “employee pension benefit plan”
(as defined in Section 3(2) of ERISA) that is subject to Title IV of ERISA, (ii)
any pension plan subject to the funding standards of Section 302 of ERISA or
Section 412 of the Code, (iii) any “multiemployer plan” (within the meaning of
Section 3(37) of ERISA), or (iv) any “multiple employer plan” within the meaning
of Section 210(a) of ERISA.
(g)    Each Benefit Plan that is intended to be qualified under Section 401(a)
of the Code is currently so qualified and has received a favorable determination
letter from the IRS, or with respect to a prototype plan or volume submitter
plan, each Company, as applicable, can rely on an opinion or advisory letter
from the IRS to the prototype or volume submitter plan sponsor, to the effect
that such Benefit Plan is so qualified and that the trust related thereto is
exempt from federal income Taxes under Sections 401(a) and 501(a), respectively,
of the Code, and, to Sellers’ Knowledge, there are no facts or circumstances
that would reasonably be expected to result in the loss of the qualification of
such Benefit Plan.
(h)    Each Benefit Plan which is a “cafeteria” or other similar plan that is
intended to satisfy the requirements of Section 125 of the Code does satisfy
such requirements from the time of such Benefit Plan’s inception up to and
including the Closing Date.

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(i)    With respect to each Benefit Plan that is a “welfare benefit plan” (as
defined in Section 3(1) of ERISA), no such plan provides medical or death
benefits with respect to any Person beyond their termination of employment
(other than to the extent required by Law, including group health plan
continuation coverage required under Part 6 of Subtitle B of Title I of ERISA,
Section 4980B of the Code or similar state Law).
(j)    With respect to each Benefit Plan that is a “group health plan” under
Section 4980B of the Code or Section 607(1) of ERISA, there has been timely
compliance in all material respects with all requirements imposed under Section
4980B of the Code and Part 6 of Title I of ERISA, so that no Company nor any
ERISA Affiliate has any (and will not incur any) loss, assessment, tax penalty,
or other sanction with respect to any such Benefit Plan.
(k)    With respect to each Benefit Plan that is a “group health plan” under
Section 9832 of the Code or Section 733 of ERISA, such Benefit Plan has been
maintained in compliance in all material respects with all requirements imposed
under Subtitle K of the Code and Part 7 of Title I of ERISA, so that no Company
nor any of its ERISA Affiliates has any (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to any such Benefit
Plan. If any Company or any Benefit Plan is treated as a “covered entity” under
the Privacy and Security Standards at 45 CFR Parts 160 through 164, such covered
entities have complied in all material respects with such standards beginning
with the effective date of such standards to such covered entities.
(l)    No Benefit Plan is or at any time was funded through a “welfare benefit
fund” as defined in Section 419(e) of the Code, and no benefits under any
Benefit Plan are or at any time have been provided through a voluntary
employees’ beneficiary association (within the meaning of subsection 501(c)(9)
of the Code) or a supplemental unemployment benefit plan (within the meaning of
Section 501(c)(17) of the Code).
(m)    All contributions, reserves or premium payments (including all employer
contributions and employee salary reduction contributions) that are due as of
the date hereof have been made to each Benefit Plan and have been or are fully
deductible under the Code.
(n)    With respect to any insurance policy providing funding for benefits under
any Benefit Plan, there is no Liability of any Company in the nature of a
retroactive rate adjustment, loss sharing agreement or other actual or
contingency Liability.
(o)    Neither the execution and delivery of this Agreement (alone or together
with any other event which, standing alone, would not by itself trigger such
result) nor the consummation of the transactions contemplated hereby shall
result in, cause the accelerated vesting, funding or delivery of, or increase
the amount or value of, any payment or benefit due under any Benefit Plan.
(p)    No Company is party to any agreement that creates an obligation to make
any payments that reimburse or otherwise gross up any Person for any Taxes
imposed under Sections 409A or 4999 of the Code.

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(q)    No amount that could be received (whether in cash or property or the
vesting of property) as a result of any of the transactions contemplated by this
Agreement by any employee, officer or director of any Company who is a
“disqualified individual” (as such term is defined in the Treasury Regulation
Section 1.280G-1) under any employment, severance or termination agreement,
other compensation arrangement or Benefit Plan currently in effect would be
characterized as an “excess parachute payment” (as such term is defined in
Section 280G(b)(1) of the Code).
(r)    No Benefit Plan provides benefits to any individual who is not a current
or former employee of a Company, or the dependents or other beneficiaries of any
such current or former employee.
(s)    No Company is a party or subject to any union contract or any employment
contract or arrangement providing for annual future compensation to any
employee, owner, shareholder or independent contractor of any Company or any
ERISA Affiliate, including (without limitation) any severance or other similar
contract, arrangement or policy, whether written or oral, providing for
compensation or benefits upon termination.
(t)    For the avoidance of doubt, representations contained in this Section 3.7
that contain references to specific sections of the Code or ERISA are not
intended to apply to the Benefit Plans maintained by Sunlight ULC to the extent
such sections are inapplicable to such Benefit Plans.
Section 3.8.    Employment Matters.
(a)    Section 3.8 of Sellers’ Disclosure Schedule contains a list of all
Employees, contractors, and other service providers as of the date hereof and
sets forth for each such individual the following as of the date hereof: (i)
title or position (including whether full or part time), (ii) hire date, (iii)
age (for employees working in Canada only), (iv) annual base compensation or
hourly rate, (v) commission, bonus or other incentive-based compensation, (vi)
work location, (vii) leave status, (viii) exempt/non-exempt classification, (ix)
accrued vacation, and (x) a description of any material fringe benefits provided
to each such individual. Such information shall be updated upon reasonable
request by Buyer and five days prior to the Closing Date.
(b)    No Company is a party to or bound by any collective bargaining, works
council or other agreement with a labor organization or representative covering
the Employees, and there are no ongoing or threatened, and have not been in the
past three years, any union organizing activities, strikes, lockouts, slowdowns
or work stoppages involving the Employees.
(c)    Except as set forth in Section 3.8(c) of Sellers’ Disclosure Schedule,
(i) each Company is, and has been for the past three years, in compliance in all
material respects with all applicable Laws, Contracts, agreements, and policies
relating to employment and terms and conditions of employment, including Laws
regarding wages and hours (including those regulating the timing of payments,
wage notices, classification of employees as exempt or non-exempt, payment of
overtime and minimum wages, hours of work, and provision of mandated meal and
rest breaks), termination of employment (including any obligations pursuant to
the Worker Adjustment and Retraining Notification Act of 1988 (or similar laws)
(the “WARN Act”), occupational safety

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and health, human rights, pay equity, classification of service providers as
independent contractors, consultants or employees, immigration, background
checks, employment record retention, and paid and unpaid leave, (ii) there are
no, and for the past three years have not been any, unfair labor practice
charges or complaints against any Company and to Sellers’ Knowledge, no such
charges or complaints are threatened, and (iii) there is no Action pending, and
have been no Actions in the past three years, against any Company alleging
violations of any employment Laws, or brought by or on behalf of any current or
former Employee or other service provider, or applicant.
Section 3.9.    Litigation. Except as set forth in Section 3.9 of Sellers’
Disclosure Schedule, there is no Action pending or, to Sellers’ Knowledge,
threatened against or affecting any of the Hargreaves or the Companies relating
to or affecting the Purchased Assets, the Business or the Assumed Liabilities.
There are no outstanding orders, writs, judgments, decrees, injunctions or
settlements (collectively, “Orders”) rendered against the Hargreaves or the
Companies that restrict the Business, the Purchased Assets or the Assumed
Liabilities or to which any of the foregoing is subject.
Section 3.10.    No Violation of Law; Permits.
(a)    Except as set forth in Section 3.10 of Sellers’ Disclosure Schedule, each
Company is and, since January 1, 2012, has been, in compliance in all material
respects with, and is not in violation, in any material respect, of, all Laws
applicable to the Business, the Purchased Assets or the Assumed Liabilities and
no Company has received written notice of any noncompliance with, or violation
of, any such Laws. To Sellers’ Knowledge, no event has occurred that shall (with
or without notice or lapse of time) constitute or result in a violation, in any
material respect, by any Company of, or a failure on the part of any Company to
comply with, any Law that is applicable to the Business, any of the Purchased
Assets or the Assumed Liabilities. No Company has received any written notice
(or, to Sellers’ Knowledge, other communication) from any Person regarding any
actual or possible violation of, or failure to comply with, any Law that is
applicable to the Business, any of the Purchased Assets or the Assumed
Liabilities.
(b)    All material reports, statements, documents, registrations, filings or
submissions required to be filed with any Governmental Authority to the extent
they relate to the Business have been filed. All such reports and filings were
in compliance with applicable Laws when filed or as amended or supplemented, and
no deficiencies have been asserted by any such Governmental Authority with
respect to such reports and filings.
(c)    The Company has not applied for or received, is and will be entitled to,
or is and will be the beneficiary of any grant, subsidy or financial assistance
from any Governmental Authority in connection with the Business.
(d)    The Purchased Assets include all Permits that are now, or at the time of
the Closing will be, used or held for use in or otherwise related to or
necessary for the conduct of the Business as currently conducted and the
Purchased Assets, and all such Permits are listed in Section 3.10(d) of Sellers’
Disclosure Schedule (collectively, the “Business Permits”). All Business Permits
have been legally obtained and maintained and are in full force and effect. None
of the Companies, the Business or any of the Purchased Assets is in violation
of, in any material respect,

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or is being operated in violation of, in any material respect, the terms of any
Business Permit. No Business Permit will lapse, terminate, expire or otherwise
be impaired as a result of the consummation of the transactions contemplated
hereby and the Transaction Documents.
(e)    Except as set forth in Section 3.10(e) of Sellers’ Disclosure Schedule,
neither the execution and delivery of this Agreement nor the performance of any
of the transactions contemplated hereby will (i) require any assignment,
consent, waiver or other action in respect of any Business Permit, (ii) result
in the termination or modification of any Business Permit, or (iii) result in a
need for additional Permits.
(f)    Without limiting the generality of the foregoing, each Company is and,
since, January 1, 2013, has been, in compliance with the U.S. economic
sanctions, the U.S. export control laws (including anti-boycott laws), and the
U.S. import laws. None of the Companies has engaged or currently engages in
transactions or other dealings with or involving any countries or territories
subject to a comprehensive U.S. embargo or any parties subject to U.S. economic
sanctions or export control restrictions. None of the merchandise imported into
the United States by any of the Companies: (i) is subject to any antidumping or
countervailing duties; (ii) include steel or aluminum products subject to duties
under Section 232 of the Trade Expansion Act of 1962; or (iii) include products
from China potentially subject to additional duties pursuant to actions taken by
the U.S. government pursuant to Section 301 of the Trade Act of 1974.
Section 3.11.    Title to Purchased Assets; Encumbrances. Sellers have good,
valid and marketable title to, or good, valid and subsisting leasehold interests
in, all of the Purchased Assets, free and clear of all Encumbrances, other than
Permitted Encumbrances, and, at the Closing, will convey to Buyer good, valid
and marketable title to, or good, valid and subsisting leasehold interests in,
all of the Purchased Assets, free and clear of all Encumbrances, other than
Permitted Encumbrances.
Section 3.12.    Entire Business; Sufficiency. The Purchased Assets constitute
all of the assets, properties and rights used in or necessary for the conduct of
the Business as heretofore conducted by the Hargreaves and the Companies (except
for the Excluded Assets) and, together with the Transferring Employees, are
adequate to conduct the Business as presently conducted. Immediately following
the Closing, neither Sellers nor any of their respective Affiliates will own or
lease any assets, properties or rights that are necessary for the conduct of the
Business. There are no facilities, services, assets or properties that are used
by Sellers in the conduct or operation of the Business and that are not required
to be transferred to Buyer pursuant to the provisions of this Agreement or the
Transaction Documents other than the Excluded Assets. Upon consummation of the
transactions contemplated by this Agreement, Buyer will have acquired good and
marketable title in and to, or a valid leasehold interest in, each of the
Purchased Assets free and clear of all Encumbrances other than Permitted
Encumbrances.
Section 3.13.    Solvency. Sellers are not, and immediately prior to and
following the transfer of the Purchased Assets to Buyer will not be, insolvent,
as determined under any applicable bankruptcy, insolvency, fraudulent conveyance
of similar Laws or any applicable jurisdiction.

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Section 3.14.    Insurance. Section 3.14 of Sellers’ Disclosure Schedule sets
forth a complete and correct list of all insurance policies (other than
insurance policies that provide benefits under any Benefit Plan) held by or on
behalf of the Hargreaves or the Companies relating to the Business and a brief
description of such policies, including the names and addresses of the insurers,
the principal insured and each named insured, the policy number and period of
coverage, the expiration dates, the annual premiums and payment terms, a brief
description of the interests insured by such policies and the amount of any
deductible. Sellers have delivered to Buyer a complete and correct copy of all
such policies together with all riders and amendments thereto. Except as
disclosed on Section 3.14 of Sellers’ Disclosure Schedule, neither the
Hargreaves nor the Companies maintain any self-insurance arrangement with
respect to the Business. The insurance policies listed on Section 3.14 of
Sellers’ Disclosure Schedule include all policies of insurance that are required
by the Purchased Contracts in the amounts required under such Purchased
Contracts. All the insurance policies listed on Section 3.14 of Sellers’
Disclosure Schedule are in full force and effect, all premiums due and payable
thereon covering all periods up to and including the Closing Date have been paid
and no notice of cancellation or termination has been received or, to Sellers’
Knowledge, threatened with respect to any such policy. To Seller’s Knowledge, no
insurer is in breach of its obligations under any such policy nor has any such
insurer made a general assignment for the benefit of its creditors, filed a
petition in bankruptcy or liquidation or commenced any proceeding for a
reorganization or arrangement of debts. The Purchased Assets and the properties
and risks of the Business are covered by valid and currently effective insurance
policies issued specifically for the benefit of the Business, in each case with
reputable insurance companies, in such types and amounts covering such risks as
are consistent with customary practices and standards of companies engaged in
business and operations similar to the Business.
Section 3.15.    Material Contracts.
(a)    Section 3.15 of Sellers’ Disclosure Schedule sets forth, by reference to
the applicable subsection of this Section 3.15, each Contract (and in the case
of an oral Contract, the material terms of such Contract) relating to the
Business to which any of the Companies or the Hargreaves is a party or to which
any of the assets of the Business are bound, including any Contract:
(i)    relating to the Indebtedness of the Business, the guarantee of the
repayment of Indebtedness of the Business or the grant of any Encumbrance on any
property or asset of the Business, including the Purchased Assets;
(ii)    providing for the employment of any Person;
(iii)    containing covenants limiting the freedom of Sellers to compete in any
line of business or with any Person or in any geographic area or market or
containing any such covenants that would bind Buyer or any part of the Business
following the Closing;
(iv)    concerning any Business Intellectual Property, including the
development, acquisition or licensing thereof;
(v)    with any current or former managers, directors, officers, employees,
members or shareholders of the Companies or Affiliates of the Companies or the
Hargreaves;

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(vi)    providing for the future or ongoing purchase, maintenance or
acquisition, or the sale or furnishing, of materials, supplies, services,
merchandise or equipment in excess of $200,000;
(vii)    granting to any Person a right of first refusal, first offer or similar
preferential right to purchase or acquire any right, asset, property or service
of the Companies or the Hargreaves;
(viii)    pertaining to the lease of equipment or other personal property
involving payments in excess of $200,000;
(ix)    providing for any offset, countertrade or barter arrangement;
(x)    containing a “most favored nation,” “most favored customer,” “most
favored licensee,” exclusivity or similar provision;
(xi)    involving a distributor, sales representative, broker or advertising
arrangement that (A) involves payments of more than $200,000 during any 12-month
period, or (B) regardless of the amounts payable thereunder, by its express
terms is not terminable by any of the Companies or the Hargreaves at will or by
giving notice of 30 days or less, without Liability;
(xii)    with any customer that involves payments of more than $200,000 during
any 12-month period;
(xiii)    involving Tax sharing, a joint venture or partnership or the sharing
of profits, Losses, costs or Liability by the Companies or the Hargreaves with
any other Person;
(xiv)    involving management services, consulting services, support services or
any other similar services;
(xv)    involving the acquisition or disposition of any business enterprise
whether via stock or asset purchase or otherwise;
(xvi)    granting a power of attorney to any Person;
(xvii)    providing for a business alliance or commission payments to any third
party;
(xviii)    involving any Governmental Authority;
(xix)    involving the export of any goods outside of the United States and
Canada;
(xx)    providing for a lease, sublease, license or occupancy agreement,
together with all amendments or supplements thereto, with respect to Leased Real
Property (collectively, “Real Property Leases”) or involving the lease of
personal property and involving

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annual payments in excess of $200,000 relating to personal property used in
operation of the Business;
(xxi)    involving a material settlement or compromise of any suit, claim,
proceeding or dispute relating to the Business;
(xxii)    that provides for future payments or a purchase from the Business that
is conditioned, in whole or in part, on a change of control of the Business;
(xxiii)    that was not made in the ordinary course of business, consistent with
past practice; and
(xxiv)    that is otherwise material to the Business or the Purchased Assets
(the contracts described in clauses (i)-(xxiv) are each, a “Material Contract”
and collectively, the “Material Contracts”).
(b)    Sellers have provided to Buyer true and complete copies of each Material
Contract, as amended through the Closing Date. Each Material Contract is a
valid, binding and enforceable obligation of the Hargreaves or the Companies (as
applicable) and, to Sellers’ Knowledge, the other parties thereto, enforceable
in accordance with its terms. With respect to the Material Contracts listed on
Section 3.15 of Sellers’ Disclosure Schedule (or required to be listed on
Section 3.15 of Sellers’ Disclosure Schedule), (i) none of the Hargreaves or the
Companies (as applicable) is in default under or in violation of any Material
Contract, (ii) no event has occurred that, with notice or lapse of time or both,
would constitute such a default or violation, (iii) none of the Hargreaves or
the Companies (as applicable) has released any of its rights under any Material
Contract, and (iv) no party to a Material Contract has repudiated any of the
terms thereof or threatened to terminate, cancel or not renew any Material
Contract.
Section 3.16.    Tangible Personal Property. The Tangible Property is in good
operating condition and is adequate and suitable to conduct the Business as
currently conducted, subject to continued repair and replacement in accordance
with past practice, and neither the Companies nor the Hargreaves have received
notice that any of the Tangible Property is in violation, in any material
respect, of any existing Law or Order of any Governmental Authority. During the
past three years there has not been any interruption of the operations of the
Business due to inadequate maintenance or repair of the Tangible Property. No
approval or consent of any Person is needed so that the interest of Sellers in
the Tangible Property will continue to be in full force and effect and
enforceable by Buyer following the Closing.
Section 3.17.    Receivables; Disputed Accounts Payable. All Receivables
reflected on the Financial Statements are, and all Receivables arising from or
otherwise relating to the Business will, at the Closing Date, be valid and
genuine arising in the ordinary course of business from bona fide sales of
products and services in the aggregate amount thereof subject to normal and
customary trade discounts, customer allowances for discounts, returns,
markdowns, co-op advertising and operational chargebacks, less any bona fide
reserves for doubtful accounts in amounts consistent with those recorded on the
most recent balance sheet included in the Financial Statements.

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Section 3.18.    Intellectual Property.
(a)    Section 3.18 of Sellers’ Disclosure Schedule sets forth, with owner,
countries, registration and application numbers and dates indicated, as
applicable, and in the case of unregistered trademarks, country of use and date
of first use, a complete and correct list of all of the following Business
Intellectual Property: (i) patents and applications therefor; (ii) registered
copyrights and applications therefor; (iii) registered trademarks, material
unregistered trademarks, and applications for the registration of trademarks;
(iv) Software; (v) domain name registrations and applications therefor; and (vi)
all licenses or similar agreements related to Intellectual Property to which
Seller or any of its Subsidiaries is a party (including agreements or consents
that restrict the territory or field of use with respect to any of the
Intellectual Property included in the Purchased Assets, but excluding licenses
for commercially available off-the-shelf Software). All fees associated with any
Business Intellectual Property have been paid in full in a timely manner to the
proper Governmental Authority and, except as set forth on Section 3.18 of
Sellers’ Disclosure Schedule, no such fees are due within the three-month period
after the Closing Date. Except as set forth on Section 3.18 of Sellers’
Disclosure Schedule, all of the Business Intellectual Property required to be
listed thereon has been duly registered with, filed in or issued by, as the case
may be, the United States Patent and Trademark Office, the United States
Copyright Office or other applicable filing office(s), domestic or foreign, to
the extent necessary or desirable to ensure full protection under any applicable
Intellectual Property law, and such registrations, filings, issuances and other
actions remain in full force and effect.
(b)    Except pursuant to a Material Contract set forth on Section 3.15 of
Sellers’ Disclosure Schedule or as otherwise set forth on Section 3.18 of
Sellers’ Disclosure Schedule, all of the Intellectual Property used in the
conduct of the Business is owned solely by Sellers and Sellers have the
exclusive right to use and possess such Intellectual Property for the life
thereof for any purpose, free from (i) any Encumbrances (except for Permitted
Encumbrances) and (ii) any requirement of any past, present or future royalty
payments, license fees, charges or other payments or conditions or restrictions
whatsoever. Except pursuant to a Material Contract set forth on Section 3.15 of
Sellers’ Disclosure Schedule, neither of Sellers has licensed or otherwise
granted any right to any Person under any Business Intellectual Property and has
not otherwise agreed not to assert any Business Intellectual Property against
any Person.
(c)    Except as set forth on Section 3.18 of Sellers’ Disclosure Schedule, all
Employees have received a copy, and acknowledged their agreement in writing
regarding the substance, of Sellers’ Employee Handbook, a true and correct copy
of which is annexed hereto as Exhibit J (the “Employee Handbook”), which
Employee Handbook provides, among other things, that all Employees are deemed to
be performing “work for hire” for Sellers. No manager, director, officer,
member, shareholder, employee, consultant, contractor, agent or other
Representative of Sellers owns or claims any rights in (nor has any of them made
application for) any Business Intellectual Property and all such individuals
have executed written agreements pursuant to which Business Intellectual
Property has been assigned to the applicable Seller.
(d)    The Business as currently conducted, including the possession, use,
disclosure, copying or distribution of any information, data, products or other
Tangible Property or

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intangible property in the possession of Sellers has not infringed,
misappropriated, diluted, violated or otherwise conflicted with, does not and
will not infringe, misappropriate, dilute, violate or otherwise conflict with
any Intellectual Property right of any other Person nor does or will the
operation of the Business, as currently conducted, constitute unfair competition
or deceptive or unfair trade practice. Except as set forth in Section 3.18(d) of
Sellers’ Disclosure Schedule, the Business Intellectual Property is not being
infringed or otherwise used or available for use by any Person other than
Sellers and customers or end users in the ordinary course of business, except
pursuant to a Material Contract listed on Section 3.15 of Sellers’ Disclosure
Schedule.
(e)    Sellers have taken all steps reasonable under the circumstances to
enforce, protect and maintain the Business Intellectual Property, including
protecting the confidentiality of trade secrets and other proprietary
information. All of the Business Intellectual Property is valid and enforceable.
No loss or expiration of any of the Business Intellectual Property is
threatened, pending or, to Sellers’ Knowledge, reasonably foreseeable (other
than patents expiring at the end of their respective statutory terms).
(f)    Except as set forth on Section 3.18 of Sellers’ Disclosure Schedule, no
Action is pending or threatened that (i) challenges the rights of Sellers in
respect of any Intellectual Property utilized in the Business, (ii) asserts that
the operation or conduct of the Business is, was or will be infringing or
otherwise in violation of any Intellectual Property, or is (except as set forth
in a Material Contract listed on Section 3.15 of Sellers’ Disclosure Schedule)
required to pay any royalty, license fee, charge or other amount with regard to
any Intellectual Property, or (iii) claims that any default exists under any
Material Contract set forth or required to be set forth on Section 3.15 of
Sellers’ Disclosure Schedule. Except as set forth on Section 3.18 of Sellers’
Disclosure Schedule, none of the Business Intellectual Property is or has been
subject to any Law or order, and no Seller has been subject to any Law or order
relating to the Business in respect of any other Person’s Intellectual Property.
(g)    Sellers have complied at all times with all relevant requirements of any
applicable data protection and privacy related Laws, order or industry standard
setting organizations, including compliance with Sellers’ own data protection
principles, requests from data subjects for access to data held by Sellers and
any Law, order or industry standard requirements relating to the registration of
data users insofar as the same pertain to any aspect of the Business. Sellers
have not received any order or other notification from a Governmental Authority
regarding non-compliance or violation of any data protection principles or Law.
No Person has claimed any compensation from Sellers for the loss of or
unauthorized disclosure or transfer of personal data, and no facts or
circumstances exist that might give rise to such a claim insofar as the same
relate to the Business.
(h)    The products and services of the Business have not used and do not use
Open Source Materials in such a way that grants, or purports to grant, to any
third party any rights or immunities under any Business Intellectual Property
(including using any Open Source Materials that require, as a condition of use,
modification and/or distribution of such Open Source Materials that other
Software incorporated into, derived from or distributed with such Open Source
Materials be (i) disclosed or distributed in source code or other human readable
form, (ii) licensed for the purpose of making derivative works, or (iii)
redistributable at no charge).

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(i)    There are, to Sellers’ Knowledge, no material defects in any of the
Software or Information Systems used in connection with the Business that (i)
prevent such Software or Information System from operating or being provided
substantially as described in its related documentation or specifications and
otherwise in fulfillment of its intended purpose or (ii) that may, or may be
used to, improperly access, modify, delete, damage or disable any Software or
Information Systems used in connection with the Business or that would
reasonably be expected to result in material damage thereto. All Information
Systems are sufficient for the conduct of the Business as currently conducted
and have for the last three years been maintained in a commercially reasonable
manner. Sellers have used commercially reasonable means to protect the security
and integrity of all Information Systems and all data held in connection with
the Business.
Section 3.19.    Real Property.
(a)    The Asset Sellers do not own any real property. Section 3.19(a) of
Sellers’ Disclosure Schedule identifies the parcels of real property that are
owned by Columbia River, including the address thereof (the “Owned Real
Property”). Columbia River is in possession of all Owned Real Property and has
good and marketable indefeasible fee simple title to such Owned Real Property,
free and clear of all Encumbrances, except for Permitted Encumbrances and for
those Encumbrances set forth on Section 3.19(a) of Sellers’ Disclosure Schedule.
(b)    Section 3.19(b) of Sellers’ Disclosure Schedule sets forth a correct and
complete list of all Real Property that is currently leased, licensed, subleased
or otherwise used by the Asset Sellers (the “Leased Real Property”). All of the
Leased Real Property is used or occupied by the applicable Asset Seller pursuant
to a Real Property Lease.
(c)    Other than as set forth on Section 3.19(c) of Sellers’ Disclosure
Schedule, the Hargreaves do not own any real property or lease, license,
sublease or otherwise use any real property in connection with the Business.
(d)    The occupancy, use and operation of the Real Property complies in all
material respects with all applicable Law and Permits. The condition and use of
the Real Property in all material respects conforms to each applicable
certificate of occupancy and all other permits required to be issued in
connection with the Real Property. The Real Property and the appurtenant
easements include all of the land, buildings, offices, structures, appurtenant
easements and other improvements used or held for use in connection with or
otherwise required to carry on the Business.
(e)    There are no pending or, to Sellers’ Knowledge, threatened,
appropriation, condemnation, eminent domain or like proceedings relating to the
Real Property.
(f)    The Companies enjoy peaceful and undisturbed possession of the Real
Property. To Sellers’ Knowledge, all of the buildings, fixtures, structures and
systems located on the Real Property and used or occupied by the Companies are
in good condition and repair (subject to ordinary wear and tear) and operating
condition for the conduct of the Business as currently conducted.

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(g)    Except as set forth on Section 3.19(g) of Sellers’ Disclosure Schedule,
the Real Property is not subject to any subleases, licenses, or sub-tenancies of
any kind, and no Person (other than the Companies) is in possession of any of
the Real Property.
(h)    The operation of the Business at each location that is subject to an
Affiliated Real Property Lease on the date of this Agreement does not violate,
and as of the Closing Date will not violate, the authorized use provision set
forth in Section 1.2 of Exhibit L.
Section 3.20.    Environmental Matters.
(a)    (i) The Companies possess all Permits required by applicable Laws
relating to Environmental Laws, (ii) the Companies and operations of the
Business are and have been since January 1, 2013 in full compliance with all
terms and conditions of such Permits and all Environmental Laws, and (iii) there
are no current circumstances which could reasonably be expected to give rise to
any material Liability, obligation or duty in relation to any non-compliance
with Environmental Laws.
(b)    None of the Companies or the Hargreaves have received any written request
for information, notice, demand letter, notice of investigation, administrative
inquiry or complaint or claim relating to any Environmental Condition or
Liability under any Environmental Law.
(c)    Except as has been fully resolved with no further Liability, there are no
threatened orders, writs, judgments, awards, injunctions or decrees of any
Governmental Authority or Actions with respect to any non-compliance with, or
any Liability under Environmental Laws or under Contracts concerning
Environmental matters relating to current or past circumstances against the
Companies or the Business.
(d)    To the extent that any of the Real Property or any building, plant,
machinery, equipment or other assets employed in the conduct of the Business
contains any asbestos or asbestos containing material which is regulated by
Environmental Law, such asbestos or asbestos containing material is currently
being managed in compliance with Environmental Law.
(e)    There has been no Release of any Hazardous Substance at, on, under, or
migrating from any properties currently or formerly owned, leased or operated by
the Companies or the Business that requires or shall require reporting,
investigation, assessment, clean-up, remediation or any other response action
pursuant to any Environmental Law or any Contract.
(f)    None of the Companies or the Business has assumed, undertaken, agreed to
indemnify, or otherwise become subject to any Liability of any other Person
relating to or arising from any Environmental Law or Environmental Matter.
(g)    To Sellers’ Knowledge, no Real Property will require a material capital
expenditure or material annual operating expense increase during the two years
following the Closing to comply with any Environmental Law.

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(h)    Sellers have made available to Buyer true and complete copies of any and
all material documents, correspondence, pleadings, reports, assessments,
analytical results, Permits relating to Environmental Laws, or other documents
concerning Environmental Laws or the presence of Hazardous Substances as
contamination in the air, soil and, surface water, groundwater and subsurface or
subsurface strata of any Real Property, which could reasonably be expected to
give rise to Environmental Loss.
Section 3.21.    Casualties. Except as set forth on Section 3.21 of Sellers’
Disclosure Schedule, since December 31, 2017, neither the Business nor any
Purchased Asset has been materially affected in any way by or as a result of any
flood, fire, mudslide, landslide, explosion or other casualty (whether or not
covered by insurance).
Section 3.22.    Product Warranties; Product Liability.
(a)    Sellers have provided to Buyer true and accurate copies of the standard
terms and conditions of the sale of products by the Companies (containing
applicable guaranty, warranty and indemnity provisions).
(b)     (i) No Company has, since January 1, 2012, manufactured, sold or
distributed any products that were, at the time they were manufactured, sold or
distributed, faulty or defective or did not comply with any and all warranties
or representations expressly made or implied by or on behalf of the applicable
Company and (ii) except as set forth on Section 3.22(b)(i) of Sellers’
Disclosure Schedule, all products manufactured, sold, distributed, provided,
shipped or licensed by any Company and each service rendered by any Company has
conformed with all applicable contractual commitments, warranties and Laws, and
there are no material design, manufacturing or other defects, latent or
otherwise, in such products.
(c)    All products manufactured, sold, distributed, provided, shipped or
licensed by any Company have complied in all material respects with all
requirements of Laws and regulation related to warning labels, packaging,
containers, and all other labeling requirements.
(d)    In the five-year period prior to the Closing Date, no written service or
product warranty, recall indemnity or similar claims have been made by any
Person against any Company in connection with the Business. In the five-year
period prior to the Closing Date, no Company has received any written notice of
any Actions for any other product Liability, backcharge, additional work, field
repair or other claim by any third party (whether based on Contract or tort and
whether relating to personal injury, including death, property damage or
economic Loss) arising from (i) the sale or distribution of products by any
Company in connection with the Business, or (ii) the operation of the Business.
Section 3.23.    Product Registrations; Universal Product Codes.
(a)    All information pertaining to, used in, or comprising the information and
documentation necessary for the Business Product Registrations is true and
correct in all respects, and complies with all applicable Laws and regulations.

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(b)     All applications, filings and records submitted to any Governmental
Authority to obtain the grant of the Business Product Registrations at all times
have been truthful in all respects, not misleading or fraudulent and in
compliance with all applicable Laws and regulations.
(c)    Each Company and, to Sellers’ Knowledge, each applicable third party has
paid and is in good standing regarding all fees, mill assessments, penalties,
Taxes or other monetary obligations of any kind owed to any Governmental
Authority for the Business Product Registrations.
(d)     There is no pending or, to Sellers’ Knowledge, threatened Action by any
Governmental Authority or third party to cancel, suspend, revoke, terminate or
challenge any of the Business Product Registrations.
(e)    No Person has been granted a right of first refusal or option to purchase
from any Company or, to Sellers’ Knowledge, any applicable third party, any of
the Business Product Registrations.
(f)    The UPC Codes are all of the all universal product codes of the Company
related to the Business. The Company is not using the UPC Codes other than
related to the Business.
Section 3.24.    Promotions and Allowances. Section 3.24 of Sellers’ Disclosure
Schedule sets forth the material terms in effect as of the date hereof of all
return, markdown, promotion, co-op advertising and other similar programs or
allowances offered generally by the Companies to any customer with respect to
the Business.
Section 3.25.    Bank and Brokerage Accounts; Investment Purchased Assets.
Section 3.25 of Sellers’ Disclosure Schedule sets forth a true and complete list
of (a) the names and locations of all banks, trust companies, securities brokers
and other financial institutions at which the Companies have an account or safe
deposit box or maintains a banking, custodial, trading or other similar
relationship with respect to the Business or any of the Purchased Assets (as
well as a list of such accounts and safety deposit boxes), (b) the names of all
persons authorized to draw on or have access to such accounts and safe deposit
boxes, and (c) all outstanding powers of attorney or similar authorizations
granted by the Companies.
Section 3.26.    Absence of Certain Business Practices. Neither the Companies
nor any of their Representatives has, directly or indirectly, given or agreed to
give any gift or similar benefit to any customer, supplier, employee of any
Governmental Authority or any other Person that could reasonably be expected to
subject the Business, Purchased Assets or Assumed Liabilities to any material
penalty in any civil, criminal or governmental litigation or proceeding.
Section 3.27.    Propriety of Past Payments. In connection with the Business,
(a) no unrecorded fund or asset of the Companies or the Hargreaves has been
established for any purpose, (b) no material accumulation or material use of
corporate funds of the Companies has been made without being properly accounted
for in the books and records of the Business, (c) no payment has been made by or
on behalf of the Companies with the understanding that any part of such payment
is to be used for any purpose other than that described in the documents
supporting such payment,

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and (d) none of the Companies, any of their Representatives or any other Person
associated with or acting for or on behalf of the Companies has, directly or
indirectly, made any illegal contribution, gift, bribe, rebate, payoff,
influence payment, kickback or other payment to any Person, private or public,
regardless of form, whether in money, property or services, (i) to obtain
favorable treatment for any Company in securing business, (ii) to pay for
favorable treatment for business secured for any Company, (iii) to obtain
special concessions, or for special concessions already obtained, for or in
respect of any Company, or (iv) otherwise for the benefit of any of the
Companies in violation of any Law, including the FCPA. Neither the Companies nor
any current director, officer, agent, employee or other Person acting on behalf
of the Companies, has accepted or received any unlawful contribution, payment,
gift, kickback, expenditure or other item of value in violation of any Law.
Section 3.28.    Customers and Suppliers. Section 3.28 of Sellers’ Disclosure
Schedule lists the 20 largest customers of the Business (measured in terms of
revenues during such period) and the 20 largest suppliers of the Business
(measured in terms of total spend during such period). No Company has received
within the 12 months prior to the date hereof any written or, to Sellers’
Knowledge, oral notice that (a) any of the 20 largest customers of the Business
or any of the 20 largest suppliers of the Business will cease dealing with the
Business or (b) that any of such 20 largest customers may otherwise reduce or
become unable for any reason to maintain the volume of business transacted by
such customer with the Business. No Company has received within the 12 months
prior to the date hereof any written notice of a dispute, claim or other Action
between the Business or any Company, on the one hand, and any supplier or
customer thereof, on the other hand, other than those occurring in the ordinary
course of business that are not material to the Business. For the avoidance of
doubt, nothing in this Section 3.28 requires Seller to make any inquiry of its
largest customers or suppliers.
Section 3.29.    Removal of Excluded Assets. Except as may be otherwise provided
in the Transaction Documents or otherwise agreed to by the Parties in writing,
all Tangible Properties that are Excluded Assets (if any) that are located at
any of the Real Property shall be removed from such facilities prior to the
Closing (or as promptly as reasonably practicable thereafter), at Sellers’
expense and in a manner so as not to unreasonably interfere with the operations
of Buyer or any of its Affiliates (to the extent any such removal is following
the Closing) and to not cause damage to such Real Property or any Purchased
Asset (other than wear and tear that is reasonably expected in connection with
the applicable removal, but in any event, not material to any Purchased Asset or
the Real Property from which it is being removed), and Buyer or any of its
Affiliates, as applicable, (to the extent any such removal is following the
Closing) shall provide reasonable access to Sellers as applicable to such Real
Property to effectuate such movement. Sellers shall be solely responsible for
all costs and expenses of removing such Excluded Assets and any subsequent
moving and installation thereof.
Section 3.30.    Brokers. Neither Sellers nor any of their Affiliates, officers,
directors, managers or Employees has employed, retained or engaged any broker or
finder or incurred any Liability for any brokerage, finder’s or similar fees or
commissions in connection with the transactions contemplated by this Agreement
and the Transaction Documents.

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Section 3.31.    Affiliate Transactions. Except as set forth on Section 3.31 of
Sellers’ Disclosure Schedule, there are no agreements or contracts with any
current or former managers, directors, officers, employees, members or
shareholders of Seller or Affiliates of Sellers or any arrangements or Contracts
pursuant to which the Hargreaves or any of their Affiliates (other than the
Companies) provide any goods or services to the Business.
Section 3.32.    Restrictions on Business Activities. There is no Contract
(including covenants not to compete) or Order relating to the Business that has
or would reasonably be expected to have, whether before or after consummation of
the transactions contemplated by this Agreement and the Transaction Documents,
the effect of prohibiting or impairing the conduct of the Business as currently
conducted.
Section 3.33.    Activities of Columbia River. Columbia River’s sole purpose is,
and since its date of formation has been, to own the Owned Real Property. Except
as disclosed in Section 3.33 of Sellers’ Disclosure Schedule, Columbia River
owns the marketable title to the Owned Real Property free and clear of all
liens. Other than owning the Owned Real Property, Columbia River does not
conduct any business activities in connection with the Business or otherwise.
Section 3.34.    Ownership by the Hargreaves. Other than interests in the
Companies and in the landlords party to the Affiliate Real Property Leases, none
of the Hargreaves, directly or indirectly, have any right, title or interest in
any assets used or held for use in, or otherwise necessary for, the conduct of
the Business.
Section 3.35.    Full Disclosure. No representation or warranty about the
Business made in this Agreement by Sellers and no statement contained in
Sellers’ Disclosure Schedule or any certificate or other document furnished or
to be furnished to Buyer pursuant to this Agreement contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements contained therein, in light of the circumstances in which
they are made, not misleading.
Section 3.36.    No Other Representations and Warranties. Except for the
representations and warranties contained in this Article III (including the
related portions of Sellers’ Disclosure Schedule), neither Sellers nor any other
Person has made or makes any other express or implied representations or
warranties, either written or oral, on behalf of Sellers.
ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to each Seller as of the date hereof and as
of the Closing Date, as set forth in this Article IV:
Section 4.1.    Organization and Qualification. Buyer is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware and has all requisite power and authority to own, license,
use or lease and operate its assets and properties and to carry on its business
as it is now conducted.

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Section 4.2.    Authority; Non-Contravention; Approvals.
(a)    Buyer has all requisite power and authority to execute and deliver this
Agreement and the Transaction Documents and to perform the transactions
contemplated by this Agreement and the Transaction Documents. The execution and
delivery by Buyer of this Agreement and the Transaction Documents and the
performance by Buyer of the transactions contemplated by this Agreement and the
Transaction Documents have been duly authorized and approved by the Board of
Directors and the requisite shareholders, of Buyer and no other corporate or
other actions or proceedings on the part of Buyer or any other Person are
necessary to authorize the execution and delivery of this Agreement or the
Transaction Documents or the performance and consummation by Buyer of the
transactions contemplated by this Agreement and the Transaction Documents. This
Agreement has been, and upon their execution the Transaction Documents will be,
duly executed and delivered by Buyer and, assuming the due authorization,
execution and delivery of this Agreement and the Transaction Documents by
Sellers and, with respect to the Escrow Agreement, the Escrow Agent, constitutes
and upon their execution the Transaction Documents will constitute, valid and
binding obligations of Buyer enforceable against Buyer in accordance with their
respective terms.
(b)    The execution and delivery by Buyer of this Agreement and the Transaction
Documents and the performance of the transactions contemplated by this Agreement
and the Transaction Documents do not and will not (i) conflict with or result in
a breach of any provisions of the certificate of incorporation or bylaws of
Buyer, (ii) result in a violation or breach of or constitute a default (or an
event which, with or without notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or the loss of a benefit under
or accelerate the performance required by, or give rise to any obligation or
result in a right to cancel, terminate or accelerate any obligation under, the
terms, conditions or provisions of any Contract of any kind to which Buyer or
any of its Subsidiaries is now a party or by which Buyer or any of its
Subsidiaries or any of their respective properties or assets may be bound or
affected, or (iii) violate any order, writ, injunction, decree, statute, treaty,
rule or regulation applicable to Buyer or any of its Subsidiaries, other than in
the case of clauses (ii) and (iii) above as would not reasonably be expected to
result in a Buyer Material Adverse Effect.
(c)    Except for the filings by Buyer required by the HSR Act, no declaration,
filing or registration with, or notice to, or authorization, consent, order or
approval of, any Governmental Authority is required to be obtained or made in
connection with or as a result of the execution and delivery of this Agreement
and the Transaction Documents by Buyer or the performance by Buyer of the
transactions contemplated by this Agreement and the Transaction Documents, other
than such declarations, filings, registrations, notices, authorizations,
consents or approvals which, if not made or obtained, as the case may be, could
not reasonably be expected to result in a Buyer Material Adverse Effect.
Section 4.3.    Brokers. Neither Buyer nor any of their Affiliates, officers,
directors, managers or Employees has employed, retained or engaged any broker or
finder or incurred any Liability for any brokerage, finder’s or similar fees or
commissions in connection with the transactions contemplated by this Agreement
and the Transaction Documents.

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Section 4.4.    Sufficient Funds. Buyer possesses sufficient funds (through
existing credit facilities and cash on hand) to pay, and, with respect to the
Purchase Price, will in the future possess sufficient funds to pay, the Purchase
Price and affirms that it is not a condition to Closing or any of its other
obligations under this Agreement that Buyer obtain financing for or related to
payment thereof.
Section 4.5.    Legal Proceedings. There are no Actions pending or, to Buyer’s
knowledge, threatened against or by Buyer or any Affiliate of Buyer that
challenge or seek to prevent, enjoin or otherwise delay the transactions
contemplated by this Agreement.
Section 4.6.    No Other Representations and Warranties. Neither Seller nor any
other Person has made any representation or warranty as to Sellers, the
Business, the Purchased Assets, the Interests, or this Agreement, except as
expressly set forth in Article III of this Agreement (including the related
portions of the Disclosure Schedules).
ARTICLE V

COVENANTS
Section 5.1.    Conduct of the Business. Since December 31, 2017, except as
otherwise expressly provided in this Agreement or set forth in Section 5.1 of
Sellers’ Disclosure Schedule, Sellers have operated the Business only in the
ordinary course of business consistent with past practice. During the period
from the date of this Agreement to the Closing, except as otherwise expressly
provided in this Agreement, Sellers will operate the Business only in the
ordinary course of business. Sellers will use commercially reasonable efforts to
(a) preserve intact the present organization of the Business, (b) keep available
the services of the present officers of the Business and Employees, and (c)
preserve relationships with customers, suppliers, licensors, licensees,
contractors, distributors and others having business dealings with the Business.
Without limiting the generality of the foregoing, from the date of this
Agreement to the Closing, except as set forth in Section 5.1 of Sellers’
Disclosure Schedule, Sellers will not, to the extent related to the Business or
any of the Purchased Assets:
(a)    sell, pledge, lease, encumber, assign, transfer or dispose of, or
authorize the sale, pledge, lease, encumbrance, assignment, transfer or
disposition of, any assets or rights or acquire (including by merger,
consolidation or acquisition of stock or assets) any assets or rights that, in
either case, are or would otherwise be Purchased Assets, other than sales of
Inventory in the ordinary course of business;
(b)    abandon or allow to lapse any of the Business Intellectual Property or
fail to prosecute any pending applications for registration of any of the
Business Intellectual Property;
(c)    disclose any Confidential Information of any of the Companies or the
Hargreaves relating to the Business or the Purchased Assets to any Person,
except in the ordinary course of business;

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(d)    (i) make any material change to any pricing, marketing, sales, billing,
Receivables collection or payment practice of the Business, (ii) waive any
rights in respect of or write off any Receivables, or (iii) fail to timely pay
any account payable of the Business, in each case, except in the ordinary course
of business;
(e)    engage in any material promotional sale, discount, pricing reduction or
other activity that would reasonably be expected to have the effect of
accelerating sales of the Business for the period of time prior to the Closing
that otherwise would have occurred post-Closing, except in the ordinary course
of business;
(f)    enter into any material commitment or transaction, including any
commitment to make any loan, advance or capital contribution to, or investment
in, any other Person with respect to the Business, in each case that would not
be fulfilled in full prior to the Closing;
(g)    incur, create or assume any Indebtedness for borrowed money in excess of
$200,000 (other than letters of credit entered into or issued in the ordinary
course of business) or take or omit to take any action that results in an
Encumbrance, other than a Permitted Encumbrance, in excess of $200,000 (other
than letters of credit entered into or issued in the ordinary course of
business), being imposed on any asset that may be a Purchased Asset;
(h)    (i) make, change or rescind any election relating to Taxes, (ii) settle
or compromise or agree to compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy relating to Taxes,
or consent to any extension or waiver of the statute of limitations thereof,
(iii) except as may be required by Law, make any change to any of its methods of
reporting income or deductions for Tax purposes from those employed in the
preparation of its most recently filed Tax Returns, (iv) change any annual Tax
accounting period, (v) adopt or change any method of Tax accounting, or (vi)
obtain any Tax ruling or enter into any closing agreement, in each of clauses
(i) – (vi), to the extent related to the Purchased Assets or the Business and
that would reasonably be expected to affect Taxes of the Business for any
taxable period ending after the Closing Date;
(i)    (i) except to the extent required by this Agreement or applicable Law,
enter into, adopt, amend or terminate employment, severance, termination or
similar type of Contract, collective bargaining agreement or Benefit Plan,
except as may be required by any Benefit Plan in effect as of the date hereof or
(ii) increase in any manner the compensation or benefits of any officer,
employee or consultant of Seller or pay or otherwise grant any benefit not
required by any Benefit Plan;
(j)    effectuate a plant closing or layoff regardless of whether such action
triggers obligations under the WARN Act;
(k)    hire any new employees of the Business or reassign or transfer any
current employee to or from the Business, except in the ordinary course of
business;
(l)    (i) make or commit to any capital expenditures, other than (A) those
provided in the forecast for the Business provided to Buyer prior to the date
hereof and (B) such expenditures

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with an aggregate cost not exceeding $200,000 or (ii) fail to make or commit to
any capital expenditures provided in the forecast for the Business provided to
Buyer prior to the date hereof;
(m)    (i) enter into, amend or terminate any Contract of a type that, if in
effect at the date of this Agreement, would be required to be disclosed pursuant
to Section 3.15(a) or (ii) amend or modify or otherwise waive, release or assign
any material rights, claims or benefits of any Material Contract;
(n)    pay, discharge or satisfy any Liabilities relating to the Business in
excess of $200,000, except in the ordinary course of business;
(o)    settle or compromise any Action pending or threatened against Sellers,
the Business or the Purchased Assets in excess of $25,000, except in the
ordinary course of business or to the extent covered by any insurance policy
maintained by any Company;
(p)    enter into any transaction or any Contract with any Affiliate, current or
former managers, directors, officers, employees, members or shareholders of
Sellers relating to the Business, except in the ordinary course of business;
(q)    license or grant any right to, or transfer, any of the Business
Intellectual Property, other than grants of non-exclusive licenses in the
ordinary course of business; or
(r)    take, or agree or otherwise commit to take, any of the foregoing actions
or any other action that if taken would cause any representation or warranty of
Sellers contained in this Agreement to be untrue or incorrect as of the date
when made or as of any subsequent date (as if made as of such date) or that
could prevent the satisfaction of any condition set forth in Article VI.
Section 5.2.    Use of Name. Sellers agree that from and after the Closing none
of them will use the name “Sunlight,” “Sunlight Supply,” “Sunlight Garden,”
“Columbia River” or “National Garden Wholesale” in any form whatsoever,
including in respect of advertising and promotional materials.
Section 5.3.    Tax Matters.
(a)    Sellers shall bear all transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and interest
thereon) incurred in connection with the transactions contemplated by this
Agreement (collectively, “Transfer Taxes”). The Parties shall cooperate as
reasonably requested to minimize such Transfer Taxes, including with respect to
any available exemption from such Transfer Taxes. Sellers will prepare and file
or cause to be prepared and filed as Tax Returns with respect to such Transfer
Taxes, except as otherwise required by applicable Law.
(b)    The Parties agree to allocate the Purchase Price (and other relevant
amounts for Tax purposes) in accordance with Section 1060 of the code and the
Treasury Regulations thereunder and the principles described in Section 5.3(b)
of Sellers’ Disclosure Schedule (the

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“Allocation Principles”). Within 30 days after the Closing Date, Buyer will
engage Ernst & Young (the “Valuation Expert”) to conduct a valuation analysis of
the Purchased Assets (and such other relevant amounts) consistent with the
Allocation Principles. Following the Valuation Expert’s delivery of the final
valuation report (and in any event within 120 days after the determination of
the Final Closing Date Net Working Capital pursuant to Section 2.10(d)) Buyer
shall deliver to Sellers a statement (the “Asset Allocation Statement”) of the
allocation of the Purchase Price (and such other relevant amounts) among the
Purchased Assets in accordance with the Valuation Expert’s final valuation
report and the Allocation Principles. Buyer and Sellers and each of their
respective Affiliates shall: (i) be bound by the Asset Allocation Statement for
purposes of determining any Taxes; (ii) prepare and file, and cause their
respective Affiliates to prepare and file, their Tax Returns (including IRS Form
8594) on a basis consistent with the Asset Allocation Statement; (iii) cooperate
in the filing of any forms (including IRS Form 8594) required to be filed with
regard to the Asset Allocation Statement, including any amendments to such forms
required pursuant to any applicable Law or this Agreement; and (iv) take no
position, and cause their Affiliates to take no position, inconsistent with the
Asset Allocation Statement on any applicable Tax Return or in any proceeding
before any Governmental Authority or otherwise. If the Asset Allocation
Statement is disputed by any Taxing Authority, the Party receiving notice of the
dispute shall promptly notify the other Party, and the Parties agree (and shall
cause their respective Affiliates) to use their reasonable best efforts to
defend such Asset Allocation Statement in any audit or other Action and not to
settle or otherwise dispose of such audit or other Action without the prior
written consent of the other party (such consent not to be unreasonably
withheld, conditioned or delayed).
(c)    On or prior to the Closing Date, Sellers will notify all of the
Government Authorities responsible for the administration of Taxes for the
jurisdictions set forth on Section 5.3(c) of Sellers’ Disclosure Schedule of the
transactions contemplated by this Agreement in the form and manner required by
such Governmental Authorities, if the failure to make any such notification or
receive any available Tax clearance certificate (each a “Tax Clearance
Certificate”) could subject Buyer to any Taxes of Sellers. If, with respect to
any application for a Tax Clearance Certificate made pursuant to this Section
5.3(c), any Governmental Authority asserts that Sellers are liable for any Tax,
Sellers will promptly pay any and all such Taxes and will provide evidence to
Buyer that such Taxes have been paid in full or the Liability for such Taxes has
otherwise been resolved or satisfied.
(d)    The Parties shall cooperate (and cause their respective Affiliates to
cooperate) fully, as and to the extent reasonably requested by the other
parties, in connection with the preparation and filing of Tax Returns (or
amendments thereto) pursuant to this Section 5.3 and any Tax audit, litigation
or other proceeding with respect to Taxes and payments in respect thereof. Such
cooperation shall include the retention and (upon the other Parties’ request)
the provision of records and information which are reasonably relevant to any
such Tax audit, litigation or other proceeding and making employees available on
a mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Each of the Parties shall furnish the other
Parties with copies of all relevant correspondence received from any
Governmental Authority in connection with any Tax audit or information request
with respect to any Taxes for which any other party may have an indemnification
obligation under this Agreement or that otherwise could reasonably be expected
to affect the Taxes of the other Party.

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(e)    All amounts paid in respect of indemnification under Article VIII shall
be treated for all Tax purposes as adjustments to the Purchase Price, except as
other required by applicable Law.
(f)    The Parties agree to treat the purchase and sale of the Interests, for
all U.S. federal (and applicable state and local) income tax purposes,
consistent with Revenue Ruling 99-6, 1999-1 CB 432, Situation 2, such that (i)
from the perspective of Buyer, Columbia River is treated as making a liquidating
distributing all of its assets to the Hargreaves, and Buyer is then treated as
purchasing from the Hargreaves all of those assets for consideration equal to
the fair market value of those assets, in which Buyer will take a cost basis
under Section 1012 of the Code, and (ii) each of the Hargreaves are treated as
selling their partnership interests in a taxable transaction governed by Section
741 of the Code. None of the Parties shall take any position inconstant with
this Section 5.3(f) in any Tax Return or in any proceeding with a Taxing
Authority.
Section 5.4.    Non-Competition; Non-Solicitation.
(a)    As a material inducement to Buyer to enter into this Agreement, from the
Closing and for five years thereafter, Sellers will not, directly or indirectly
through any Person anywhere in the world, (i) engage in, own any interest in,
invest in, lend funds to, operate, control or provide any management,
consulting, financial, administrative, supply, distribution or other services to
any business that competes with the Business as conducted, and as contemplated
by Sellers to be conducted, at the time of Closing, directly or indirectly in
any manner, or (ii) solicit, sell or attempt to sell goods and services offered
by the Business to any facility that is a customer of the Business (or any
successor) or induce or seek to induce any such Person to cease to do business
with the Business or otherwise vary the terms of its relationship with the
Business; provided, however, that notwithstanding the foregoing, Sellers may own
the Parent Shares or otherwise exercise or perform rights and obligations under
this Agreement and related agreements, and Sellers may collectively own,
directly or indirectly, solely as an investment, securities of any Person that
are traded on any national securities exchange or the NASDAQ Stock Market if
Sellers (alone or collectively) (A) are not a controlling Person of, or a member
of a group that controls such Person and (B) do not, directly or indirectly, own
2% or more of any class of securities of such Person.
(b)    From the Closing and for five years thereafter, Sellers will not,
directly or indirectly through any Person, (i) cause, solicit, induce or
encourage any Employees to leave such employment or (ii) cause, induce or
encourage any material actual or prospective customer, supplier or licensor of
Sellers as of the Closing Date, or any other Person who has a material business
relationship with Sellers as of the Closing Date, to terminate or modify any
such actual or prospective relationship. The foregoing restrictions will not
preclude (x) general solicitations in newspapers or similar mass media not
targeted toward Employees or (y) the solicitation of any employee who for at
least one year prior to the date on which such solicitation would take place has
terminated such employee’s employment with Sellers (it being conclusively
presumed so as to avoid any disputes under this Section 5.4(b) that any such
solicitation within such one year period is in violation of clause (i) above).
In the event that the employment of [INTENTIONALLY OMITTED] is terminated or
such individual resigns without a violation of this provision, then Section
5.4(b)(i) will not apply to such terminated individual.

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(c)    Sellers will not make any disparaging or defamatory public comments about
Buyer or its Affiliates or their respective directors, managers and officers, or
to encourage or participate with anyone to make such statements or any such
comments with respect to the Business, Buyer or its Affiliates or their
products. Buyer agrees and acknowledges that the terms of this Section 5.4(c) do
not prohibit Sellers from making truthful statements, if required to do so by
Law or Action (including in connection with any Action relating to this
Agreement and the transactions contemplated hereby); provided, however, that if
any such Person is requested by Order to provide testimony which would otherwise
violate the provisions of this Section 5.4(c), such Person will promptly notify
Buyer of such request. Buyer and its Affiliates will not make any disparaging or
defamatory public comments about Seller or their Affiliates or their respective
directors, managers and officers, or to encourage or participate with anyone to
make such statements or any such comments with respect to the Business, Sellers
or their Affiliates or their products. Seller agrees and acknowledges that the
terms of this Section 5.4(c) do not prohibit Buyer from making truthful
statements, if required to do so by Law or Action (including in connection with
any Action relating to this Agreement and the transactions contemplated hereby);
provided, however, that if any such Person is requested by Order to provide
testimony which would otherwise violate the provisions of this Section 5.4(c),
such Person will promptly notify Seller of such request.
(d)    From and after the Closing, Sellers will not and will cause their
Affiliates and their respective Representatives not to, directly or indirectly,
disclose, reveal, divulge or communicate to any Person, other than authorized
officers, directors and employees of Buyer, or use or otherwise exploit for its
own benefit or for the benefit of anyone other than Buyer, any Confidential
Information. Sellers and their respective Affiliates and Representatives will
not have any obligation to keep confidential the Confidential Information if and
to the extent disclosure thereof is specifically required by Law, except that in
the event disclosure is required by applicable Law, Sellers will, to the extent
reasonably permitted provide Buyer with prompt written notice of such
requirement prior to making any disclosure so that buyer may seek an appropriate
protective order.
(e)    The Parties recognize that the Laws and public policies of the various
states of the United States and provinces of Canada may differ as to the
validity and enforceability of covenants similar to those set forth in this
Section 5.4. It is the intention of the Parties that the provisions of this
Section 5.4 be enforced to the fullest extent permissible under the Laws and
policies of each jurisdiction in which enforcement may be sought, and that the
unenforceability (or the modification to conform to such Laws or policies) of
any provisions of this Section 5.4 will not render unenforceable, or impair, the
remainder of the provisions of this Section 5.4. Accordingly, if any provision
of this Section 5.4 is determined to be invalid or unenforceable, such
invalidity or unenforceability will be deemed to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
determination is made and not with respect to any other provision or
jurisdiction. The Parties (i) have carefully read and understand all of the
provisions of this Agreement and have had the opportunity for this Agreement to
be reviewed by counsel and (ii) acknowledge that the duration, geographical
scope and subject matter of this Section 5.4 are reasonable and necessary to
protect the goodwill, customer relationships, legitimate business interests,
trade secrets and confidential information of the Parties.

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(f)    The Parties to this Agreement acknowledge and agree that any remedy at
Law for any breach of the provisions of this Section 5.4 may be inadequate, and
each Party hereby agree that a Party will have the right to seek equitable
relief, including the issuance of a temporary or permanent injunction by a court
of competent jurisdiction.
Section 5.5.    Non-Assignable Assets.
(a)    Notwithstanding anything to the contrary in this Agreement, and subject
to the provisions of this Section 5.5, to the extent that the sale, assignment,
transfer, conveyance or delivery, or attempted sale, assignment, transfer,
conveyance or delivery, to Buyer of any Purchased Asset would result in a
violation of applicable Law, or would require the consent, authorization,
approval or waiver of a Person who is not a Party to this Agreement or an
Affiliate of a Party to this Agreement (including any Governmental Authority),
and such consent, authorization, approval or waiver shall not have been obtained
prior to the Closing, this Agreement will not constitute a sale, assignment,
transfer, conveyance or delivery, or an attempted sale, assignment, transfer,
conveyance or delivery, thereof; provided, however, that, subject to the
satisfaction or waiver of the conditions contained in Article VI, the Closing
will occur notwithstanding the foregoing without any adjustment to the Purchase
Price on account thereof. Following the Closing, Sellers and Buyer will use
commercially reasonable efforts, and will cooperate with each other, to obtain
any such required consent, authorization, approval or waiver of all parties, so
that, in any case, Buyer will be solely responsible for any liabilities and
obligations related to such arrangements from and after the Closing Date;
provided, however, that neither Party will be required to make any payments,
incur any Liability or offer or grant any accommodation (financial or otherwise)
to any third party to obtain any such consent, authorization, approval or
waiver, other than the incurrence of incidental expenses relating to obtaining
any such consent, authorization, approval or waiver, except and only to the
extent that Buyer agrees to reimburse and make whole Sellers for any payment or
other accommodation made by Sellers at Buyer’s request. Once such consent,
authorization, approval or waiver is obtained, Sellers will sell, assign,
transfer, convey and deliver to Buyer the relevant Purchased Asset to which such
consent, authorization, approval or waiver relates for no additional
consideration. Applicable sales, transfer and other similar Taxes in connection
with such sale, assignment, transfer, conveyance or license will be borne by
Sellers in accordance with Section 5.3(a).
(b)    To the extent that any Purchased Asset cannot be transferred to Buyer
following the Closing pursuant to this Section 5.5, Buyer and Sellers will use
commercially reasonable efforts to enter into such arrangements (such as
subleasing, sublicensing or subcontracting) to provide to the Parties the
economic and, to the extent permitted under applicable Law, operational
equivalent of the transfer of such Purchased Asset to Buyer as of the Closing
and the performance by Buyer of its obligations with respect thereto. Buyer
will, as agent or subcontractor for Sellers pay, perform and discharge fully the
liabilities and obligations of Sellers thereunder from and after the Closing
Date. To the extent permitted under applicable Law, Sellers will, at Buyer’s
expense, hold in trust for and pay to Buyer promptly upon receipt thereof, such
Purchased Asset and all income, proceeds and other monies received by Sellers to
the extent related to such Purchased Asset in connection with the arrangements
under this Section 5.5.

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Section 5.6.    Employee Matters.
(a)    Offer of Employment. Prior to Closing, Buyer or one of its Affiliates
shall make offers of employment to all Employees other than those Employees
listed on Section 5.6(a) of Sellers’ Disclosure Schedule. Offers to each such
Employee who, as of immediately prior to the Closing Date, is on an approved
leave of absence (each, a “Leave Employee”), will be contingent on each such
Employee returning to active employment within three (3) months following the
Closing Date and will become effective as of the date that such Leave Employee
returns to active employment. With respect to Leave Employees, all references to
the “Closing,” or “Closing Date” in this Agreement, except in this Section
5.6(a) shall refer to the date on which a Leave Employee returns to active
employment and becomes a Transferring Employee.
(b)    Each Employee who accepts Buyer’s or its Affiliate’s offer of employment
and completes Buyer’s standard onboarding process shall become an Employee of
Buyer or one of its Affiliates within one week following the Closing Date, or as
of their return to active employment, as applicable (and shall be referred to
herein as a “Transferring Employee”). For the avoidance of doubt, no Employee
shall become employed by Buyer prior to completing Buyer’s standard onboarding
process. The date on which each such Transferring Employee commences employment
with Buyer or one of its Affiliates shall be referred to herein as the
“Employment Commencement Date.” For the avoidance of doubt, Sellers shall be
responsible for any severance and/or notice pay obligations under employment
standards legislation and common law owed to any Employee who does not accept an
offer of employment from Buyer or one of its Affiliates. Sellers shall provide
Buyer with an opportunity to review, revise and approve any formal written
communications by the Company to the Employees regarding the transactions
contemplated by this Agreement and such Employees’ employment with Buyer or one
of its Affiliates as described herein, and Sellers shall accept Buyer’s
revisions to such communications. Buyer and its Affiliates shall not contact any
Employees unless and until Craig R. Hargreaves has provided prior consent, which
consent will not be unreasonably withheld, conditioned or delayed.
(c)    Non-Assumption of Benefit Plans. Neither Buyer nor any of its Affiliates
shall assume sponsorship of the Benefit Plans and shall not succeed to Sellers’
rights under any trust or other funding agreements or related service or similar
agreements in respect of any Benefit Plan.
(d)    Terms and Conditions of Employment.
(i)    Following the Closing, Buyer shall, or shall cause its Affiliates to,
provide Transferring Employees with compensation and employee benefits at a
level and in a manner consistent with Buyer’s general compensation and employee
benefits practices, as determined in Buyer’s reasonable discretion.
(ii)    To the extent consistent with the terms of Buyer’s employee benefit
plans and general employee benefits practices, Buyer shall, or shall cause its
Affiliates, as applicable, to give Transferring Employees full credit for such
Transferring Employees’ service with the applicable Company, their Affiliates
and any predecessor employer prior to the Closing for purposes of eligibility,
vesting, and determination of the level of benefits (except for purposes of
severance,

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unless otherwise required by applicable Law) to the same extent and for the same
purpose as recognized by the applicable Company, Affiliate, or predecessor
employer immediately prior to the Closing, under any employee benefit plans made
available to Transferring Employees and in which a Transferring Employee is
eligible to participate and actually participates; provided, however, that such
service shall not be recognized to the extent that such recognition would result
in a duplication of benefits with respect to the same period of service.
(iii)    Sellers shall, or shall cause its Affiliates, as applicable, to
continue to offer medical, dental, vision, and life insurance benefits to each
Transferring Employee through the end of the month that includes the Closing
Date.
(iv)    After the Closing Date, Sellers shall be responsible for providing
continuation coverage required under Section 4980B of the Code and Title I, Part
6 of ERISA or other applicable Laws to all former employees of any Company or
ERISA Affiliate who terminated employment on or before such date and to all
persons who are considered “M&A qualified beneficiaries” as defined under Treas.
Reg. Section 54.4980B-9 in connection with this transaction.
(e)    General Employee Provisions.
(i)    The applicable Company and Buyer shall cooperate in giving any notices
required by applicable Laws or contracts and take whatever other actions with
respect to the plans, programs and policies described in this Section 5.6 as may
be necessary to carry out the arrangements described in this Section 5.6.
(ii)    The applicable Company and Buyer shall provide each other with such plan
documents and summary plan descriptions, employee data or other information as
may be reasonably required to carry out the arrangements described in this ‎5.6.
(iii)    Buyer and the applicable Company intend to use the “standard procedure”
under IRS Revenue Procedure 2004 53, whereby each of Buyer and the applicable
Company report on Forms W-2 only those wages paid to the Transferring Employees
for the portion of the calendar year that such Transferring Employees were
employed by Buyer and the applicable Company, respectively.
(f)    No Third-Party Beneficiary Rights. Nothing contained in this Agreement
shall (i) impose an obligation on Buyer to continue the employment or service of
any Transferring Employee or any contractor or consultant of any Company, (ii)
limit the right of Buyer to terminate the employment or services of, or to
reassign or otherwise alter the status of, any Transferring Employee or any
contractor or consultant of any Company after the Closing Date, or to change in
any manner the terms and conditions of his or her employment or other service to
or engagement by any Company, (iii) require Buyer to continue any Benefit Plan,
or (iv) be construed as amending any Benefit Plan or any benefit plan maintained
by Buyer.
(g)    WARN Act. Asset Sellers shall be responsible for all WARN Act Liabilities
relating to the periods prior to and on the Closing Date, including any such
Liabilities that result from Employees’ separation of employment from Asset
Sellers and/or Employees not becoming

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Transferred Employees. Buyer shall be responsible for all WARN Act Liabilities
exclusively with respect to the Transferred Employees that relate to the period
following the Closing Date.
Section 5.7.    Parties’ Obligations.
(a)    Each of Sellers and Buyer will cause their respective Representatives to
timely perform any of their respective obligations under this Agreement and the
Transaction Documents. Without limiting the foregoing, each of the Parties will
use its reasonable best efforts to take all actions and to do all things
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement as promptly as practicable. Sellers will use their reasonable
best efforts to obtain all such waivers, consents or approvals from third
parties, and to give all such notices to third parties, that are required.
(b)    Subject to the terms and conditions of this Agreement, each Party will
use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate the transactions contemplated by
this Agreement. The Parties hereto will furnish to each other and to each
other’s legal counsel all such information as may be reasonably requested in
order to accomplish the foregoing actions.
(c)    Subject to the terms and conditions of this Agreement, each Party will
use its commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties hereto in doing, all things necessary, proper or advisable to
consummate and make effective, the transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Authorities and the making of all
necessary registrations and filings (including filings with Governmental
Authorities, if any) and the taking of all reasonable steps as may be necessary
to obtain an approval or waiver from, or to avoid an Action or proceeding by,
any Governmental Authority, (ii) the obtaining of all necessary consents or
waivers from third parties, including Governmental Authorities, and (iii) the
execution and delivery of any additional instruments necessary to consummate the
transactions contemplated by this Agreement and to fully carry out the purposes
of this Agreement. The Parties agree that they will consult and cooperate with
each other in good faith with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental Authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the others apprised of the status of matters
relating to consummation of the transactions contemplated by this Agreement.
Subject to applicable Laws and this Agreement, Sellers, on the one hand, and
Buyer, on the other hand, and their respective legal counsel will (x) have the
right to review in advance, and, to the extent practicable, each will consult
the other on, any filing made with, or written materials to be submitted to, any
Governmental Authority in connection with the transactions contemplated by this
Agreement, (y) promptly inform each other of any communication (or other
correspondence or memoranda) received from, or given to, the U.S. Department of
Justice, the U.S. Federal Trade Commission, or any other Governmental Authority
with regulatory jurisdiction over enforcement of any applicable anti-trust,
competition, or trade regulation Law (each such Governmental Authority, a
“Governmental Antitrust Entity”), and (z) furnish each other with copies of all

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correspondence, filings and written communications between them or their
Subsidiaries or Affiliates, on the one hand, and any Governmental Authority or
its respective staff, on the other hand, with respect to this Agreement or the
transactions contemplated by this Agreement. Sellers, on the one hand, and
Buyer, on the other hand, will provide each other and their respective legal
counsel with advance notice of, and the opportunity to participate in, any
discussion, telephone call or meeting with any Governmental Authority in respect
of any filing, investigation or other inquiry in connection with the
transactions contemplated by this Agreement and to participate in the
preparation for such discussion, telephone call or meeting. Buyer shall be
entitled to direct the antitrust defense of this Agreement, or negotiations
with, any Governmental Authority or other third party relating to this Agreement
or regulatory filings under applicable competition Law, subject to the
provisions of this Section 5.7. Sellers shall use their commercially reasonable
efforts to provide full and effective support of Buyer in all material respects
in all such negotiations and other discussions or actions to the extent
requested by Buyer.
(d)    Without limiting the generality of the undertakings pursuant to this
Section 5.7, but subject to Section 5.7(e), (i) the Parties shall provide or
cause to be provided (including by their “ultimate parent entities” as that term
is defined in the HSR Act) as promptly as practicable to Governmental Antitrust
Entities information and documents requested by any Governmental Antitrust
Entity or necessary, proper or advisable to permit consummation of the
transactions contemplated by this Agreement, including preparing and filing any
notification and report form and related materials required under the HSR Act
within ten Business Days following the date of this Agreement, with respect to
the required filing under the HSR Act, and thereafter to respond promptly to any
request for additional information, data or documentary material that may be
made under the HSR Act, (ii) the Parties shall use their commercially reasonable
efforts to take such actions as are necessary or advisable to obtain from any
Governmental Authority any consents, licenses, permits, waivers, approvals,
authorizations, or orders to effect prompt consummation of the transactions
contemplated by this Agreement, and (iii) the Parties will use their
commercially reasonable efforts to resolve any objections and challenges,
including by contest through litigation on the merits, negotiation or other
Action, that may be asserted by any Governmental Antitrust Entity with respect
to the Transactions under the HSR Act. Fees associated with the filing under the
HSR Act will be borne by Buyer.
(e)    In furtherance and not in limitation of this Section 5.7, Sellers and
Buyer will make any other filings required in connection with any approval or
consent of or waiver by a Governmental Authority required to permit consummation
of the transactions contemplated by this Agreement as promptly as practicable.
(f)    Notwithstanding anything in this Agreement to the contrary, it is
expressly understood and agreed that: (i) neither Buyer nor any of its
Affiliates shall have any obligation to litigate or contest any administrative
or judicial action or proceeding or any decree, judgment, injunction or other
order, whether temporary, preliminary or permanent; and (ii) neither Buyer nor
any of its Affiliates shall be under any obligation to make proposals, execute
or carry out agreements, enter into consent decrees or submit to orders
providing for (A) the sale, divestiture, license or other disposition or holding
separate (through the establishment of a trust or otherwise) of any assets or
categories of assets of Buyer or any of its Affiliates or Sellers or any of
their Subsidiaries, (B) the

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imposition of any limitation or regulation on the ability of Buyer or any of its
Affiliates to freely conduct their business or own such assets, or (C) the
holding separate of the Purchased Assets or any of Business’s product lines,
assets or operations or the Business or any limitation or regulation on the
ability of Buyer or any of its Affiliates to exercise full rights of ownership
of the Business or the Purchased Assets.
(g)    Sellers, on the one hand, and Buyer, on the other hand, will promptly
advise each other upon receiving any communication from any Governmental
Authority whose consent or approval is required for consummation of the
transactions contemplated by this Agreement that causes such party to believe
that there is a reasonable likelihood that any such consent or approval will not
be obtained or that the receipt of any such approval will be materially delayed.
Section 5.8.    Bulk Sale Filings. To the extent necessary, Buyer hereby waives
compliance for Sellers and their respective Affiliates with the provisions of
any bulk sales transfer Laws applicable to the transfers described in this
Agreement. Sellers will indemnify and hold harmless Buyer from and against any
and all Liabilities that may be asserted by third parties against Buyer as a
result of such Seller noncompliance.
Section 5.9.    Escrow. On the Closing Date, Sunlight Supply, Buyer and Wells
Fargo Bank, National Association, a national banking association, as escrow
agent (including its successors and permitted assigns in such capacity, the
“Escrow Agent”) will enter into an escrow agreement, substantially in the form
of Exhibit B (the “Escrow Agreement”). Sellers on the one hand, and Buyer, on
the other hand, will each pay 50% of all fees and expenses of the Escrow Agent
in connection with the Escrow Agreement. Sellers and Buyer agree that, for Tax
reporting purposes, all interest or other income from investment of such
escrowed assets will, as of the end of each calendar year and to the extent
required by the IRS, be reported as having been earned by Sunlight Supply, and,
in accordance with the terms of the Escrow Agreement, the Escrow Agent will
release to Sunlight Supply from the accounts established by the Escrow Agent
pursuant to the Escrow Agreement (the “Escrow Accounts”) funds sufficient to pay
such Tax Liability. In accordance with the terms of the Escrow Agreement, (a) on
the first Business Day immediately following the nine-month anniversary of the
Closing Date (the “First Release Date”), the Escrow Agent shall release and pay
to Sunlight Supply out of the Escrow Account an amount equal to (i) 25% of the
funds deposited in escrow less (ii) the sum of (A) all payments out of the
Escrow Account made by the First Release Date and (B) an amount equal to the
maximum aggregate amount of any unresolved claims for indemnification pursuant
to Article VIII hereof on the First Release Date; (b) on the first Business Day
immediately following the 15-month anniversary of the Closing Date (the “Second
Release Date”), the Escrow Agent shall release and pay to Sunlight Supply out of
the Escrow Account an amount equal to (i) 25% of the funds deposited in escrow
less (ii) the sum of (A) all payments out of the Escrow Account made by the
Second Release Date and (B) an amount equal to the maximum aggregate amount of
any unresolved claims for indemnification pursuant to Article VIII hereof on the
Second Release Date; and (c) on the first Business Day immediately following the
18-month anniversary of the Closing Date (the “Final Release Date”), the Escrow
Agent shall release and pay to Sunlight Supply the then-remaining amount in the
Escrow Account, less an amount equal to the maximum aggregate amount of any
unresolved claims for indemnification pursuant to Article VIII hereof on the
Final Release Date. The Parties agree that, to the extent any

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portion of the assets held in escrow are released to Sunlight Supply on the
Second Release Date or any subsequent release date, the release will first be
comprised of that portion of the Escrow Amount that is represented by the
beneficial ownership of the Stock Consideration and, only after all such Stock
Consideration has been released, will any cash portion of the escrowed assets be
released and further agree that any release from Escrow in favor of Buyer will
be first in cash. The maximum aggregate amount of any unresolved claim shall be
equal to, in the case of a claim by a Party, the most recent amount claimed by
such Party or, for a Third-Party Claim, the amount claimed by such third party.
Section 5.10.    Further Assurances; Post-Closing Cooperation.
(a)    From time to time after the Closing, without additional consideration,
each of the Parties will (or, if appropriate, will cause their Affiliates to)
execute and deliver such further instruments and take such other action as may
be necessary to make effective the transactions contemplated by this Agreement
and the Transaction Documents. If any Party will following the Closing have in
its possession any asset, right or Liability that under this Agreement that
should have been delivered to another Party, then such Party will promptly
deliver such asset, right or Liability to the other Party.
(b)    Sellers hereby constitute and appoint, effective as of the Closing Date,
Buyer and its successors and assigns as the true and lawful attorney of Sellers
with full power of substitution in the name of Buyer, or in the name of Sellers,
but for the benefit of Buyer, at Buyer’s cost (i) to collect for the account of
Buyer any items of Purchased Assets and (ii) to institute and prosecute all
proceedings that Buyer may in its reasonable discretion deem proper to assert or
enforce any right, title or interest in, to or under the Purchased Assets, and
to defend or compromise any and all Actions in respect of the Purchased Assets,
except and to the only extent such defense, counterclaim or right of setoff
would give rise to a Loss for a Seller, in which event Seller will promptly
notify Buyer in writing that such claim is being retained by Seller and such
claim shall be handled pursuant to Article VIII of this Agreement. Buyer will be
entitled to retain for its own account any amounts collected pursuant to the
foregoing powers, including any amounts payable as interest in respect thereof.
(c)    Following the Closing, Sellers will afford Buyer and its Representatives
(i) such access during normal business hours as Buyer may reasonably request to
all books, records and other data and information, including any information
from Employees, relating to the Business, the Purchased Assets, the Excluded
Assets, the Assumed Liabilities and the Excluded Liabilities and (ii) the right
to make copies and extracts therefrom. Further, each Party agrees for a period
extending seven years after the Closing Date not to destroy or otherwise dispose
of any such books, records and other data unless such Party will first offer in
writing to surrender such books, records and other data to the other Party and
such other Party will not agree in writing to take possession thereof during the
ten calendar day period after such offer is made and to inform the senders that
Buyer is the new rightful recipient.
(d)    Following the Closing, Buyer may receive and open all mail addressed to
Sellers and deal with the contents thereof in its discretion to the extent that
such mail and the contents thereof relate to the Business. Buyer agrees to
deliver or cause to be delivered to Sellers all mail

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received by Buyer after the Closing addressed to Sellers or any of their
respective Affiliates that does not relate to the Business, including any mail
related or addressed to the Affiliated entities that are landlords of the
Affiliated Real Property Leases.
(e)    Sellers will take, or cause to be taken, all actions and do, or cause to
be done, at no cost to Sellers, all things necessary, proper, or advisable to
register, maintain, and prevent the diminution in value of the Business
Intellectual Property, including filing any affidavits of use in commerce with
the U.S. Patent and Trademark Office, responding to all office actions or other
correspondence from the U.S. Patent and Trademark Office, U.S. Copyright Office,
and all other corresponding governmental offices throughout the world, obtaining
and recording all documents necessary to establish, maintain, transfer, or
identify Buyer’s rights in such Intellectual Property, including all necessary
assignments of such Intellectual Property and fulfilling all of its duties and
obligations and avoid any defaults under all Contracts regarding Intellectual
Property, and assist Buyer after the Closing with respect to any legal or
administrative action relating to the Intellectual Property, including before
the U.S. Patent and Trademark Office, U.S. Copyright Office, and all other
corresponding foreign and domestic Governmental Authorities.
(f)    To the extent that any moral rights or rights of droit moral are deemed
to exist or apply in any jurisdiction to any of the Intellectual Property rights
transferred hereunder, each of Sellers agrees to, and hereby waives, or hereby
agrees to seek a waiver in favor of Sellers and Buyer of any and all such moral
rights or rights of droit moral.
(g)    Sellers will effect all renewals of all Intellectual Property that are
scheduled to or may expire between the date hereof and the date that is 30 days
after the Closing Date. Subject to the immediately following sentence, Buyer
will be responsible for all out-of-pocket third-party fees and expenses incurred
by Sellers in connection with all such renewals, and Buyer will reasonably
assist Sellers in connection therewith, including executing and delivering, or
causing to be executed and delivered, all such documents and instruments as
Sellers may reasonably deem necessary to affect such renewals. Sellers will be
fully responsible for, including paying all costs associated with, filing
releases of all security Encumbrances existing on the Closing Date on Business
Intellectual Property with the United States Patent and Trademark Office and any
applicable foreign Intellectual Property offices where Encumbrances have been
recorded on or prior to the Closing Date.
Section 5.11.    Access to Information. From the date hereof to the Closing
Date, Sellers will (a) afford Buyer and its Representatives reasonable access to
the Employees and reasonable access to and the right to inspect all of the Real
Property, properties, assets, premises, books and records, contracts, agreements
and other data related to the Business and (b) furnish Buyer and its
Representatives with such financial, operating and other data and information
related to the Business as Buyer may reasonably request, except that any such
investigation will be conducted during normal business hours, upon reasonable
advance notice to Sellers, under the supervision of Sellers’ personnel and in
such manner as not to unreasonably interfere with the normal operations of the
Business. Buyer will, and will cause its Representatives to, abide by the terms
of the Confidentiality Agreement with respect to any access or information
provided pursuant to this Section 5.11. Notwithstanding the foregoing, Sellers
will not be required to disclose the identities or any

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identifying information of vendors that Sellers consider to be proprietary to
the Asset Sellers other than to the individuals set forth in Exhibit M and such
individuals will not be permitted to disclose such information to any other
person (other than outside legal counsel) without the prior written consent of
Craig R. Hargreaves, on behalf of Sellers.
Section 5.12.    Publicity. The initial press release announcing this Agreement
will be in substantially the form previously agreed by Representatives of the
Parties. Thereafter and prior to the Closing, no Party will issue any press
release or make any public comment or announcement concerning this Agreement or
the transactions contemplated hereby without obtaining the prior written
approval of the other, which approval will not be unreasonably withheld, delayed
or conditioned, unless and to the extent that the disclosing Party otherwise
determines in good faith that such disclosure is required by Law (in which case
it will, if practicable under the circumstances, endeavor in good faith to
consult with the other Parties with respect to the filing and content thereof).
Other than in connection with the filings required pursuant to the HSR Act, the
terms of this Agreement will not be disclosed or otherwise made available to any
third party, except where such disclosure, availability or filing is required by
Law and only to the extent required by Law.
Section 5.13.    Exclusivity. During the term of this Agreement, Sellers will
not, and will not permit their respective Affiliates or Representatives to, nor
will they encourage or authorize any Person (including any Representative) to,
initiate any contact with, solicit, encourage or enter into or continue any
negotiations, understandings or agreements with any third party with respect to
or in connection with, or furnish or disclose any non-public information
regarding the Business to any third party in connection with, any share
purchase, merger, consolidation, share exchange, recapitalization or other
business combination transaction involving the Business, in each case other than
the transactions contemplated by this Agreement. During the term of this
Agreement, Buyer will not, and will not permit their respective Affiliates or
Representatives to, nor will they encourage or authorize any Person (including
any Representative) to, initiate any contact with, solicit, encourage or enter
into or continue any negotiations, understandings or agreements with the
entities identified on Section 5.13 of Sellers’ Disclosure Schedule or their
Representatives with respect to or in connection with, or furnish or disclose
any non-public information to any such third party in connection with, any share
purchase, merger, consolidation, share exchange, recapitalization or other
business combination transaction, in each case other than the transactions
contemplated by this Agreement. For the avoidance of doubt, nothing herein will
restrict ordinary course communications between Buyer or an Affiliate of Buyer,
on the one hand, and an entity identified on Section 5.13 of Sellers’ Disclosure
Schedule or its Representatives, on the other hand, except for discussions
related to a transformative transaction between them.
Section 5.14.    Notification of Certain Matters. Sellers will give prompt
written notice to Buyer, and Buyer will give prompt written notice to Sellers,
(a) of any notice or other communication received by such Party or any of its
Affiliates from any Governmental Authority in connection with the transactions
contemplated by this Agreement or from any Person alleging that the consent of
such Person is or may be required in connection with the transactions
contemplated by this Agreement, (b) of any Action commenced or, to such Party’s
knowledge, threatened against, relating to or involving or otherwise affecting
such Party or any of its Affiliates which relate to the transactions
contemplated by this Agreement, and (c) in the event such Party becomes aware of
the occurrence

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or non-occurrence of any event which will result, or has a reasonable prospect
of resulting, in the failure of any condition, covenant or agreement contained
in this Agreement to be complied with or satisfied prior to or at the Closing.
Section 5.15.    Maintenance of Product Registrations.
(a)    Each Asset Seller agrees to maintain, as valid and lawful, and permit
Buyer to use, all of the Company-Owned Business Product Registrations, and shall
authorize Buyer to (i) manufacture such Business Products and (ii) sell and
distribute such Business Products under the Company-Owned Business Product
Registrations until with respect to each Company-Owned Business Product
Registration, the later of (A) such time as Buyer is able to obtain, with
Sellers’ assistance, its own registrations of the applicable products; provided,
that Buyer shall use commercially reasonable efforts to obtain its own
registrations of such products as promptly as reasonably practicable following
the Closing Date or (B) such time as no Business Products sold by Buyer under
the Company-Owned Business Product Registrations remain “In the Channels of
Trade” for that particular state. For the purposes of this Section 5.15, “In the
Channels of Trade” means a Business Product that is being offered for sale,
offered for distribution, or is in the process of being sold and distributed by
any Person.
(b)    Each Asset Seller agrees to provide, in good faith, regulatory support
services to Buyer, including, if necessary, filing a letter of authorization, or
making other supportive communications with any Governmental Authority, to
facilitate Buyer’s procurement of the Company-Owned Business Product
Registrations.
(c)    Buyer agrees to pay all reasonable post-Closing costs, including filing
fees, mill assessments, Taxes or other monetary obligations of any kind, owed to
any Governmental Authority in order to maintain the Company-Owned Business
Product Registrations as required pursuant to this Section 5.15 (the
“Maintenance Fees”), except as such Maintenance Fees relate to pre-Closing
periods or to the Business Products sold prior to the Closing Date; provided,
however, that if a Seller fails to provide Buyer with sufficient advance written
notice of the due date of such a fee, or a Seller fails to fulfill their
non-monetary obligations required to maintain the Company-Owned Business Product
Registrations pursuant to this Section 5.15, the applicable Seller will pay the
cost of all penalties or other charges imposed as a result of such Seller’s acts
or omissions.
(d)    Each Seller will cooperate in good faith with Buyer to determine the most
reasonable and efficient method for maintaining the Company-Owned Business
Product Registrations hereunder.
Section 5.16.    Reimbursement. No more than seven Business Days following
receipt of a written request with supporting documentation, Buyer will reimburse
Sellers up to an aggregate amount of $250,000 for termination fees actually
incurred by Sellers in connection with the termination of health insurance or
other commitments of Sellers as a result of the consummation of the transactions
contemplated by this Agreement.
Section 5.17.    Craig R. Hargreaves Post-Closing Support Obligations. For a
period of one-year following the Closing, from time to time, upon the request of
Buyer or one or more of its

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Affiliates, Craig R. Hargreaves will provide transition and other assistance and
post-Closing support to Buyer and its Affiliates in connection with the
transition of the ownership and operation of the Business.
ARTICLE VI

CONDITIONS TO CLOSING
Section 6.1.    Conditions to Each Party’s Obligations. The respective
obligations of each Party to effect the Closing are subject to the satisfaction
or waiver at or prior to the Closing of the following conditions:
(a)    All necessary consents and approvals of any Governmental Authority
required for the consummation of the transactions contemplated by this Agreement
shall have been obtained, and any waiting period applicable to the consummation
of the transactions contemplated hereby under the HSR Act shall have expired or
been terminated.
(b)    No Law shall have been enacted, entered, promulgated or enforced by a
Governmental Authority that prohibits the consummation of the transactions
contemplated by this Agreement or the Transaction Documents, and no Action shall
be pending by a Governmental Authority having jurisdiction over the Business
that seeks to prohibit or enjoin the consummation of the transactions
contemplated by this Agreement or the Transaction Documents.
Section 6.2.    Conditions to Buyer’s Obligations. The obligations of Buyer to
effect the Closing are further subject to the satisfaction or waiver at or prior
to the Closing of the following conditions:
(a)    Each of the representations and warranties made by Sellers in this
Agreement that is qualified by reference to materiality, Business Material
Adverse Effect or Seller Material Adverse Effect shall be true and correct in
all respects, and each of the representations and warranties made by Sellers in
this Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and at and as
of the Closing Date as if made on that date (except in any case that
representations and warranties that expressly speak as of a specified date or
time need only be true and correct as of such specified date or time).
(b)    Sellers shall have performed and complied in all material respects with
each covenant required by this Agreement to be so performed or complied with by
Sellers at or before the Closing (including delivering to Buyer the items set
forth in Section 2.7).
(c)    All consents or approvals listed in Section 6.2(c) of Sellers’ Disclosure
Schedule shall have been obtained and Buyer shall have received copies of such
consents in form and substance reasonably satisfactory to Buyer.
(d)    No event, circumstance or change shall have occurred, that individually
or in the aggregate with one or more other events, circumstances or changes, has
had or reasonably could be expected to have, a Seller Material Adverse Effect or
a Business Material Adverse Effect.

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(e)    Each Asset Seller shall have amended its charter, articles of
organization, bylaws and any other governing documents, as applicable, and taken
all other actions necessary to change its name to one sufficiently dissimilar to
its present name, in Buyer’s reasonable judgment, to avoid confusion with the
conduct of the Business post-Closing. In addition, Sunlight shall have withdrawn
all of its fictitious name filings and “doing business as” filings for “National
Garden Wholesale.”
(f)    With respect to the Owned Real Property, an owner’s title insurance
policy, to be paid by the Hargreaves, issued by Buyer’s title company, insuring
that Columbia River has good and marketable title to the Owned Real Property as
of the Closing Date, free and clear of all Encumbrances other than Permitted
Encumbrances, and with the endorsements reasonably requested by Buyer in the
amount of the fair market value of the Owner Real Property.
(g)    Sellers shall have delivered to Buyer a certificate, dated the Closing
Date and duly executed by each of the Hargreaves with respect to the Hargreaves
and by the Chief Executive Officer of each Asset Seller with respect to the
Asset Sellers, in form and substance reasonably satisfactory to Buyer, to the
effect that the conditions set forth in clauses (a), (b) and (d) of this Section
6.2 have been satisfied.
(h)    Each Asset Seller shall have delivered to Buyer a certificate of the
corporate secretary of each Asset Seller attaching thereto a true, correct and
complete copy of resolutions of the board of directors or the member, as
applicable, each Asset Seller authorizing the execution, delivery and
performance of this Agreement, the Transaction Documents and the consummation of
the transactions contemplated hereby and thereby.
(i)    Sellers shall have delivered to Buyer a certificate of good standing or
similar document with respect to each Company issued by the applicable
Governmental Authority as of a date within three Business Days of the Closing
Date.
(j)    Sunlight Supply, on behalf of Sellers, and the Escrow Agent (or, if the
Escrow Agent is unable or unwilling to serve in such capacity, an alternative
escrow agent reasonably satisfactory to Buyer) shall have entered into and
delivered the Escrow Agreement.
(k)    (i) At least 80% of the Employees in each of the (1) sales, (2)
warehouse, (3) production, work department categories and at least 80% of the
Employees in all other work department categories, in each case, identified in
Section 3.8 of Sellers’ Disclosure Schedule, shall have completed, to the
reasonable satisfaction of Buyer, Buyer’s background screening procedures, which
may include, but are not limited to, drug screening, reference checks and
obtaining proof of each such Employee’s identity and legal authorization to work
in any applicable jurisdiction, and (ii) each Employee shall (A) have accepted
Buyer’s offer of employment, which shall not include any material change in
benefits and compensation, and (B) have successfully completed and signed all
required on-boarding documents for employment with Buyer.
(l)    Each Key Employee shall have executed and delivered a Key Employee Offer
Letter.

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(m)    (i) each Key Employee shall have completed, to the satisfaction of Buyer
in its sole discretion, Buyer’s background screening procedures, which may
include, but are not limited to, drug screening, reference checks and obtaining
proof of each such Key Employee’s identity and legal authorization to work in
any applicable jurisdiction, and (ii) each Key Employee shall (A) have accepted
Buyer’s offer of employment, and (B) have successfully completed and signed all
required on-boarding documents for employment with Buyer.
(n)    The landlords of each of the Affiliated Real Property Leases set forth on
Section 2.7(f) of Sellers’ Disclosure Schedule shall have entered into a lease
agreement in substantially the form attached hereto as Exhibit L, with respect
to each of the Leased Real Property that is subject to an Affiliated Real
Property Lease.
(o)    Buyer shall have received verification that none of Sellers’ vendors
employees, customers, suppliers, or other parties with whom Sellers interact are
parties with whom U.S. persons are prohibited from engaging in transactions or
other dealings.
(p)    Buyer shall have completed its due diligence review of the Business and
the results thereof shall be reasonably satisfactory to Buyer; provided,
however, that the condition set forth in this Section 6.2(p) shall be deemed
waived if a written notice of failure to satisfy this condition has not been
delivered to Seller by the day that is 30 calendar days following the filing
with respect to the transactions contemplated by this Agreement under the HSR
Act. For the avoidance of doubt, nothing in this Section 6.2(p) shall be deemed
to waive or otherwise impact the separate condition to closing set forth in
Section 6.2(o) above.
Section 6.3.    Conditions to Sellers’ Obligations. The obligations of Sellers
to effect the Closing are further subject to the satisfaction or waiver at or
prior to the Closing of the following conditions:
(a)    Each of the representations and warranties made by Buyer in this
Agreement that is qualified by reference to materiality or Buyer Material
Adverse Effect shall be true and correct in all respects, and each of the other
representations and warranties made by Buyer in this Agreement that are not so
qualified shall be true and correct in all material respects, in each case as of
the date of this Agreement and at and as of the Closing Date as if made on that
date (except in any case that representations and warranties that expressly
speak as of a specified date or time need only be true and correct as of such
specified date or time).
(b)    Buyer shall have performed and complied with, in all material respects,
each covenant required by this Agreement to be so performed or complied with by
Buyer at or before the Closing (including delivering to Sellers or the Escrow
Agent, as applicable, the items set forth in Section 2.8).
(c)    Buyer shall have delivered to Sellers a certificate, dated the Closing
Date and duly executed by an officer of Buyer, in form and substance reasonably
satisfactory to Sellers, to the effect that the conditions set forth in clauses
(a) and (b) above have been satisfied.

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(d)    Buyer shall have delivered to Sellers a certificate of the corporate
secretary of Buyer attaching thereto a true, correct and complete copy of
resolutions of the board of directors of Buyer authorizing the execution,
delivery and performance of this Agreement, the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby.
(e)    Buyer and the Escrow Agent (or, if the Escrow Agent is unable or
unwilling to serve in such capacity, an alternative escrow agent reasonably
satisfactory to Sellers) shall have entered into and delivered the Escrow
Agreement.
ARTICLE VII

TERMINATION
Section 7.1.    Termination. This Agreement may be terminated at any time prior
to the Closing by:
(a)    the mutual written consent of Buyer and Craig R. Hargreaves, on behalf of
Sellers;
(b)    Buyer, upon a material breach of any representation, warranty, covenant
or agreement set forth in this Agreement (a “Terminating Breach”) by Sellers
such that the conditions specified in Section 6.2(a) or 6.2(b) would not be
satisfied at the Closing and, in either such case, such breach cannot be cured
by the Termination Date or, if capable of being cured, is not cured within 15
days following receipt by Sellers from Buyer of written notice thereof, except
that the right to terminate this Agreement pursuant to this Section 7.1(b) will
not be available to Buyer if it is then in material breach of any of its
representations, warranties or covenants under this Agreement; or
(c)    Craig R. Hargreaves, on behalf of Sellers, upon a Terminating Breach by
Buyer such that the conditions specified in Section 6.3(a) or 6.3(b) would not
be satisfied at the Closing and, in either such case, such breach cannot be
cured by the Termination Date or, if capable of being cured, is not cured within
15 days following receipt by Buyer from Sellers of written notice thereof,
except that the right to terminate this Agreement pursuant to this Section
7.1(c) will not be available to Craig R. Hargreaves if Sellers are then in
material breach of any of their representations, warranties or covenants under
this Agreement; or
(d)    Buyer or Craig R. Hargreaves, on behalf of Sellers, as the case may be,
if:
(i)    there shall be any Law that makes consummation of the transactions
contemplated by this Agreement illegal or otherwise prohibited; or
(ii)    any Governmental Authority shall have issued an Order restraining or
enjoining the transactions contemplated by this Agreement, and such Order shall
have become final and non-appealable; or

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(iii)    the Closing shall not have occurred by October 12, 2018 (the
“Termination Date”) (unless the failure to consummate the Closing by such date
shall be due to or have resulted from any breach of the representations or
warranties made by, or the failure to perform or comply with any of the
agreements or covenants hereof to be performed or complied with prior to the
Closing by, the Party seeking to terminate the Agreement pursuant to this
Section 7.1(d)(iii)); provided, however, that if on such date at least one of
the conditions set forth in Section 6.1(a) (as a result of an antitrust Law or
an Order under an antitrust Law) shall not have been satisfied, then, the
Termination Date will automatically be extended to December 31, 2018 and, if on
that date, one of the conditions set forth in Section 6.1(a) (as a result of an
antitrust Law or an Order under an antitrust Law) shall still not have been
satisfied, Buyer, at its sole discretion, may elect to extend the Termination
Date for one three-month period.
(e)    by Sellers if (i) all the conditions set forth in Sections 6.1 and 6.2
(provided such conditions are capable of being satisfied as of the date of
Sellers’ notice terminating the Agreement pursuant to this Section 7.1(e)) have
been satisfied, (ii) Sellers have irrevocably confirmed by written notice to
Buyer that they are ready and willing to consummate the transactions
contemplated by this Agreement (subject to the satisfaction of all of the
conditions set forth in Section 6.3 that by their nature to be satisfied by
actions taken at the Closing) on a proposed Closing Date that is consistent with
Section 2.6 and such notice is given not less than five Business Days prior to
such proposed Closing Date, and (iii) the Closing shall not have been
consummated on such proposed Closing Date.
Section 7.2.    Effect of Termination. In the event this Agreement is terminated
by either Party as provided in Section 7.1, the provisions of this Agreement
will immediately become void and of no further force and effect, and no Party or
any of its Subsidiaries or Affiliates (or any of their respective directors or
officers) will have any Liability whatsoever under this Agreement or in
connection with the transactions contemplated hereby (other than this Section
7.2, Section 5.12 and Article IX which will survive the termination of this
Agreement), except that (a) such termination will not relieve any Party hereto
of any Liability for damages actually incurred or suffered by the other Party as
a result of any willful breach of this Agreement and (b) the provisions of the
Confidentiality Agreement and Non-Solicitation Agreement continue in full force
and effect. For purposes hereof, “willful breach” means a material breach by a
Party of the applicable provision of this Agreement as a result of an action or
failure to act by such Party that it knew would result in a breach of this
Agreement.
ARTICLE VIII

SURVIVAL; INDEMNIFICATION
Section 8.1.    Survival of Representations, Warranties, Covenants and
Agreements. [INTENTIONALLY OMITTED]. Each covenant contained in this Agreement
will survive until fully performed or fulfilled, unless non-compliance with such
covenants is waived in writing by the Party or Parties entitled to such
performance. No Claim for indemnification may be asserted after the expiration
of the applicable survival period; provided, that a specific Claim for
indemnification which was timely and properly made before expiration of the
applicable survival period but not

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resolved prior to its expiration will extend the survival period with respect to
the specific representation, warranty, covenant or agreement underlying such
Claim through the date such Claim is conclusively resolved. The Parties’
respective representations, warranties, covenants and agreements contained in
this Agreement will survive strictly in accordance with this Section 8.1.
Section 8.2.    Indemnification by Buyer. Subject to the provisions of this
Article VIII, Buyer agrees to indemnify, defend and hold harmless Sellers and
Sellers’ officers, directors, managers, members, employees, agents, Affiliates
and Subsidiaries, including officers and directors of any Affiliate or
Subsidiary of Sellers (collectively, the “Seller Parties”), after the Closing,
from and against any and all Losses incurred by Seller Parties to the extent
such Losses are based upon, arise out of or are related to (a) a breach of any
representation or warranty of Buyer set forth in this Agreement or any of the
Transaction Documents, (b) any failure to perform or comply with any of the
covenants of Buyer set forth in this Agreement or any of the Transaction
Documents, (c) the Assumed Liabilities, or (d) any and all Taxes for which Buyer
is responsible pursuant to this Agreement.
Section 8.3.    Indemnification by Sellers. Subject to the provisions of this
Article VIII, each of Asset Sellers and Craig R. Hargreaves will jointly and
severally indemnify, defend and hold harmless Buyer and Buyer’s officers,
directors, managers, members, employees, agents, Affiliates and Subsidiaries,
including officers and directors of any Affiliate or Subsidiary of Buyer
(collectively, the “Buyer Parties” and together with the Seller Parties, the
“Indemnitees”), after the Closing, from and against any and all Losses incurred
by Buyer Parties to the extent such Losses are based upon, arise out of or
relate to (a) a breach of any representation or warranty of any Seller set forth
in this Agreement or in any of the Transaction Documents, (b) any failure to
perform or comply with any of the covenants of Sellers set forth in this
Agreement or in any of the Transaction Documents, (c) Excluded Liabilities, or
(d) any and all Taxes for which Seller is responsible pursuant to this Agreement
or for which Seller is otherwise responsible under any applicable Law.
Notwithstanding anything else in this Agreement, with respect to the covenant in
Section 5.6(d)(iv) regarding Sellers’ obligation to provide COBRA continuation
coverage, to the extent that Buyer or its Affiliates become responsible for
providing such COBRA continuation coverage, each of the Asset Sellers and Craig
R. Hargreaves will jointly and severally indemnify, defend and hold harmless
Buyer or its Affiliates for the actual cost of group health plan benefit claims
without regard to any timing limitation or the limitations imposed by Section
8.7.
Section 8.4.    Assertion of Claims. The Indemnitee will give prompt notice to
the Party from whom the indemnification is sought (the “Indemnitor”) of any
claim (a “Claim”) describing, to the extent practicable, such Claim with
reasonable particularity and containing a reference to the provisions of this
Agreement under which such Claim has arisen, except that the failure to give
such prompt notice will not prevent any Indemnitee from being indemnified
hereunder for any Losses, except to the extent that the Indemnitor is actually
prejudiced as a result of such failure to so promptly notify the Indemnitee.
Section 8.5.    Notice of and Right to Defend Third Party Claims.
(a)    If any lawsuit or enforcement Action is filed against any Party entitled
to the benefit of indemnity hereunder which may give rise to a Claim (a
“Third-Party Claim”), written

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notice thereof will be given by the Indemnitee to the Indemnitor as promptly as
practicable. Promptly after delivery of written notice of a Third-Party Claim
and for a period of 30 days thereafter, the Indemnitee will provide, during
normal business hours, reasonable access to information readily available to the
Indemnitee with respect to such Third-Party Claim and to personnel of Indemnitee
with information related to such Third-Party Claim for the purpose of providing
assistance to the Indemnitor in determining whether or not to assume the defense
of such Third-Party Claim. If the Indemnitor sends a notice in writing to the
Indemnitee within 30 days after receipt of a Third-Party Claim confirming the
Indemnitor assumes responsibility to indemnify and hold harmless the Indemnitee
therefor, the Indemnitor may (subject to the limitations set forth in this
Article VIII) elect assume control over the compromise or defense of such
Third-Party Claim at the expense of the Indemnitor and by counsel selected by
the Indemnitor, which counsel will be reasonably satisfactory to the Indemnitee;
provided, however, that (i) the Indemnitee may, if such Indemnitee so desires,
employ counsel at such Indemnitee’s own expense to assist in the handling (but
not control the defense) of any Third-Party Claim, (ii) the Indemnitor will keep
the Indemnitee advised of all material events with respect to any Third-Party
Claim, (iii) the Indemnitor will obtain the prior written approval of the
Indemnitor before ceasing to defend against any Third-Party Claim or entering
into any settlement, adjustment or compromise of such Third-Party Claim
involving injunctive or similar equitable relief being asserted against any
Indemnitee or any of its Affiliates, and (iv) no Indemnitor will, without the
prior written consent of the Indemnitee, settle, compromise or consent to the
entry of any judgment in any pending or threatened Claim in respect of which
indemnification may be sought hereunder (whether or not any such Indemnitee is a
party to such action) if, with respect to the settlement, compromise, or consent
to the entry of judgment (A) such settlement, compromise, or consent involves
the payment of damages other than the payment of monetary damages by the
Indemnitor, (B) the claimant does not provide an unqualified release of the
Indemnitee from all Liability in respect of such Third-Party Claim, (C) such
settlement, compromise, or consent encumbers any of the material assets of the
Indemnitee or imposes any restriction or condition that would apply to or
materially affect the Indemnitee or the conduct of the Indemnitee's business, or
(D) such settlement, compromise or consent involves any admission of liability
or wrongdoing by the Indemnitee or any of its Affiliates. If the Indemnitee does
not consent to a settlement of a Third-Party Claim offered by the third party
and to which the Indemnitor agrees, then the Indemnitor’s obligation to
indemnify Losses for the Claim is limited to the amount of the settlement offer.
The other Party will cooperate with the Party assuming the defense, compromise
or settlement of any such Claim in accordance with this Agreement in any manner
that such Party that assumes the defense reasonably may request. After notice
from the Indemnitor to the Indemnitee of its election so to assume the defense,
conduct or settlement thereof, the Indemnitor will not be liable to the
Indemnitee for any costs or legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense, conduct or settlement thereof
following such notice (including the cost of any settlement entered into by
Indemnitee without Indemnitor’s express written consent). If an Indemnitor does
not elect to assume the defense, conduct or settlement of a Third-Party Claim as
set forth in this Section 8.5(a) and the Indemnitee is entitled to
indemnification pursuant to this Article VIII, then the Indemnitor will be
liable for any costs of legal or other expenses incurred by the Indemnitee. In
connection with any defense of any Third-Party Claim (whether by the Indemnitors
or the Indemnitees), all of the Parties will, and will cause their respective
Affiliates and Representatives to, reasonably cooperate with each other in
connection with such Third-Party

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Claim to make available to each other all Persons and all pertinent information
under their respective control.
(b)    Notwithstanding anything contained herein to the contrary, the Indemnitor
will not be entitled to have sole control over (and if it so desires, the
Indemnitee will have sole control over) the defense, settlement, adjustment or
compromise of (but the Indemnitor will nevertheless be required to pay all
Losses incurred by the Indemnitee in connection with such defense, settlement or
compromise to the extent the Indemnitor has assumed the defense or the
Indemnitee is otherwise entitled to indemnification hereunder) (i) any Third
Party Claim that seeks an order, injunction or other equitable relief against
any Indemnitee or any of its Affiliates, (ii) any Third-Party Claim in which
both the Indemnitor and the Indemnitee are named as parties and either the
Indemnitor or the Indemnitee determines upon the advice of counsel that there
may be one or more legal defenses available to it that are different from or
additional to those available to the other party, and (iii) any Third-Party
Claim relating to Taxes relating to the Business for periods, or portions
thereof, after the Closing Date.
(c)    If the Indemnitor elects not to assume the defense, settlement,
adjustment or compromise of an asserted Liability, fails to timely and properly
notify the Indemnitee of its election as herein provided, or, at any time after
assuming such defense, fails to diligently defend against such Third-Party Claim
in good faith, fails to have sufficient financial resources to pay the full
amount of such potential Liability in connection with such Third-Party Claim or
if the Indemnitee is otherwise entitled pursuant to this Agreement to have
control over the defense, settlement or compromise of any Claim, the Indemnitee
may, at the Indemnitor’s expense (but only to the extent the Indemnitee is
entitled to indemnification hereunder), pay, defend, settle, adjust or
compromise such asserted Liability (but the Indemnitor will nevertheless be
required to pay all Losses incurred by the Indemnitee in connection with such
payment, defense, settlement, adjustment or compromise to the extent set forth
in this Article VIII).
Section 8.6.    Indemnification Procedures.
(a)    If an Indemnitee seeks indemnification under this Article VIII, such
Indemnitee will deliver an Officer’s Certificate to the Indemnitor (and, in the
case of a claim by Buyer, the Escrow Agent, if the Escrow Period has not
expired). The Indemnitor may object to such claim by delivering written notice
to the Indemnitees (and, in the case of a claim by Buyer, the Escrow Agent, if
the Escrow Agreement has not expired in accordance with its terms) specifying
the basis for such objection within 30 calendar days following receipt by the
Indemnitor of notice from the Indemnitee regarding such claim. If no such
objection is made within such 30 calendar day period, the Indemnitee may recover
Losses without further consent or approval required of any of the Indemnifying
Parties. For the purposes hereof, “Officer’s Certificate” will mean a
certificate signed by any officer of the Indemnitee (i) stating that the
Indemnitee has paid, sustained, incurred or properly accrued, or in good faith
reasonably anticipates that it will pay, sustain, incur or accrue Losses, and
(ii) specifying in reasonable detail the individual items of Losses included in
the amount so stated, the date each such item was paid, sustained, incurred or
properly accrued, or the basis for such anticipated Liability.

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(b)    All Losses incurred by an Indemnitee will be satisfied in accordance with
the procedures set forth herein.
Section 8.7.    Limitations.
[INTENTIONALLY OMITTED]

Section 8.8.    Payment of Claims. If Sellers are required to indemnify any
Buyer Party pursuant to this Article VIII (subject to the limitations set forth
in Section 8.7), then (a) Buyer and Sellers will instruct the Escrow Agent to
pay to such Buyer Party the Maximum Indemnity Amount pursuant to the terms of,
and subject to, the Escrow Agreement or (b) Seller will pay the applicable
indemnity amount, to the extent in excess of the Maximum Indemnity Amount and
payable pursuant to the terms of this Agreement.
Section 8.9.    Character of Indemnity Payments. The Parties agree that any
indemnification payments made with respect to this Agreement will be treated for
all Tax purposes as an adjustment to the Purchase Price, unless otherwise
required by Law (including by a determination of a Taxing Authority that, under
applicable Law, is not subject to further review or appeal).
Section 8.10.    Exclusive Remedy. From and after the Closing, except with
respect to fraud by Sellers, the remedies provided for in this Article VIII are
exclusive and will be in lieu of all other remedies for any breach of any
representation or warranty or the failure to perform or comply with any
covenant, agreement or other provision of this Agreement.
ARTICLE IX

MISCELLANEOUS
Section 9.1.    Notices. All notices, requests, waivers and other communications
under this Agreement must be in writing and will be deemed to have been duly
given upon receipt to the Parties at the following addresses or facsimiles (or
at such other address or facsimile for a Party as will be specified by the
notice):
If to Sellers:
Craig R. Hargreaves
3204 NW 28th Cir.
Vancouver, WA 98660
Email: craigh@sunlightsupply.com
Facsimile: (360) 450-5473

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With a copy (which will not constitute notice) to:
Buckley Law P.C.
5300 Meadows Road, Suite 200
Lake Oswego, OR 97035
Attention: Randall Duncan 
                   John T. Witherspoon
Email: rld@buckley_law.com 
                   jtw@buckley_law.com 
Facsimile: (503) 620-4878

If to Buyer:
The Hawthorne Gardening Company
800 Port Washington Blvd.
Port Washington, NY 11050
Attention: Corporate Department 
Email: dave.aronowitz@scotts.com

With a copy (which will not constitute notice) to:
Jones Day 
250 Vesey Street
New York, New York 10281
Attention: Randi Lesnick
Email: rclesnick@jonesday.com
Facsimile: (212) 755-7306

Section 9.2.    Entire Agreement. This Agreement, the exhibits and schedules
hereto and the Transaction Documents supersede all prior and contemporaneous
discussions and agreements, both written and oral, among the Parties with
respect to the subject matter of this Agreement and the Transaction Documents,
including the Letter of Intent, and constitute the sole and entire agreement
among the Parties to this Agreement with respect to the subject matter of this
Agreement.

Section 9.3.    Expenses. Except as otherwise expressly provided in this
Agreement or any Transaction Document, each Party will pay its own costs and
expenses incurred in connection with the negotiation, execution and closing of
this Agreement and the Transaction Documents and the transactions contemplated
by this Agreement and the Transaction Documents. Buyer will pay any requisite
filing fee in respect of any notification submitted pursuant to antitrust Laws,
including the HSR Act.
Section 9.4.    Waiver. Any term or condition of this Agreement may be waived at
any time by the Party that is entitled to the benefit thereof, but no such
waiver will be effective unless set forth in a written instrument duly executed
by or on behalf of the Party waiving such term or condition. No failure or delay
by any party in exercising any right, power or privilege hereunder will operate
as a waiver thereof nor will any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. No waiver by any Party of any term or condition of this Agreement, in
any one or more instances, will be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any

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future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not alternative.
Section 9.5.    Amendment. This Agreement may only be amended, supplemented or
modified by a written instrument duly executed by or on behalf of each Party to
this Agreement.
Section 9.6.    No Third‑Party Beneficiary. Except as such forth in this Section
9.6, the terms and provisions of this Agreement are intended solely for the
benefit of each Party hereto and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third party
beneficiary rights upon any other Person other than any Person entitled to
indemnity under Article VIII.
Section 9.7.    Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation under this Agreement may be assigned or delegated
by any Party by operation of Law or otherwise without the prior written consent
of the other Parties and any attempt to do so will be void, except that Buyer
may assign or delegate any or all of its rights, interests and obligations under
this Agreement (a) before or after the Closing, to any Affiliate, and (b) after
the Closing, to any Person that acquires all or substantially all of the assets
of Buyer; provided, that any such Affiliate or Person referred to in clause (a)
or (c), as applicable, agrees in writing to be bound by the terms, conditions
and provisions contained in this Agreement, but no such assignment will relieve
Buyer of its obligations under this Agreement if such assignee does not perform
such obligations. Without limiting the generality of the foregoing, if requested
by Buyer, Sellers agree to cause the Business and the Purchased Assets or any
portion thereof at the Closing to be transferred to any Person that Buyer may
direct. Subject to the foregoing, this Agreement is binding upon, inures to the
benefit of and is enforceable by the Parties and their respective successors and
assigns.
Section 9.8.    Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware, without regard for the
conflict of laws principles thereof.
Section 9.9.    Consent to Jurisdiction; Service of Process; Waiver of Jury
Trial.
(a)    Each party hereby irrevocably submits and consents to the exclusive
jurisdiction of the Delaware Court of Chancery (and if jurisdiction in the
Delaware Court of Chancery shall be unavailable, the federal courts of the
United States of America sitting in the state of Delaware) in respect of any
action, suit or proceeding arising in connection with this Agreement and the
Transaction Documents and the transactions contemplated hereby and thereby, and
each party agrees that any such action, suit or proceeding will be brought only
in such court (and waives any objection based on forum non conveniens or any
other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 9.9 and will
not be deemed to be a general submission to the jurisdiction of said courts or
in the state of Delaware other than for such purpose. Any and all process may be
served in any action, suit or proceeding arising in connection with this
Agreement or the Transaction Documents by complying with the provisions of
Section 9.1. Such service of process will have the same effect as if the Party
being served were a resident in the State of Delaware and had been lawfully
served with such process in such jurisdiction. The Parties hereby waive all
claims of error by reason of such service. Nothing herein

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will affect the right of any Party to service process in any other manner
permitted by Law or to commence legal proceedings or otherwise proceed against
the other in any other jurisdiction to enforce judgments or rulings of the
aforementioned courts. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY OF THEM WITH RESPECT
TO THIS AGREEMENT OR ANY TRANSACTION DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE
DECIDED BY COURT TRIAL WITHOUT JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 9.9 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
(b)    In the event of any breach of the provisions of this Agreement or the
Transaction Documents, the non-breaching party will be entitled to seek
equitable relief, including in the form of injunctions and orders for specific
performance, where the applicable legal standards for such relief in such courts
are met, in addition to all other remedies available to the non-breaching party
with respect thereto at law or in equity.
Section 9.10.    Invalid Provisions. If any provision of this Agreement is held
by a court of competent jurisdiction or other Governmental Authority to be
illegal, invalid or unenforceable under any present or future Law, (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom, and (d) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible.
Section 9.11.    Counterparts. This Agreement may be executed in any number of
counterparts, all of which will be deemed originals and constitute one and the
same instrument. This Agreement, and any amendment hereto, to the extent signed
and delivered by means of a facsimile machine or other electronic transmission,
will be treated in all manner and respects as an original agreement and will be
considered to have the same binding legal effects as if it were the original
signed version thereof delivered in person.
Section 9.12.    Attorney-Client Privilege. All communications involving
attorney-client confidences between any Seller or any of their Affiliates and
its attorneys in the course of negotiation, documentation, and consummation of
the transactions contemplated by this Agreement are deemed to be attorney-client
confidences that belong solely to Sellers and their Affiliates. Accordingly,

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Buyer and its Affiliates shall not have access to any such communications or
files, none of which are included in the Purchased Assets, notwithstanding
anything to the contrary.
Section 9.13.    Interpretation. The Parties have participated jointly in the
negotiating and drafting of this Agreement. If an ambiguity or a question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the Parties, and no presumption or burden of proof will arise
favoring or disfavoring any Party by virtue of the authorship of any provisions
of this Agreement.
[The remainder of this page has been intentionally left blank.]

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
SUNLIGHT SUPPLY, INC. 
By: _/s/ CRAIG R. HARGREAVES___ 
         Craig R. Hargreaves, its President

SUNLIGHT GARDEN SUPPLY, INC.
By: _/s/ CRAIG R. HARGREAVES___ 
         Craig R. Hargreaves, its President

SUNLIGHT GARDEN SUPPLY, ULC
By: _/s/ CRAIG R. HARGREAVES___ 
         Craig R. Hargreaves, its President

IP HOLDINGS, LLC
By: _/s/ CRAIG R. HARGREAVES___ 
         Craig R. Hargreaves, its Manager

   _/s/ CRAIG R. HARGREAVES    
CRAIG R. HARGREAVES

   _/s/ KIM E. HARGREAVES       
KIM E. HARGREAVES

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HAWTHORNE HYDROPONICS LLC
By: _/s/ CHRISTOPHER HAGEDORN_ 
   Name: Christopher Hagedorn 
   Title: President

THE SCOTTS MIRACLE-GRO COMPANY
By: _/s/ MICHAEL LUKEMIRE______ 
   Name: Michael Lukemire 
   Title: President and COO

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