Exhibit 10.1

 

 

ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of July 25, 2018, is
entered into by and among (i) AGEAGLE AERIAL SYSTEMS INC., a Nevada corporation
(“Parent”), (ii) EAGLE AERIAL SYSTEMS, INC., a Nevada corporation and
wholly-owned subsidiary of Parent (“Purchaser”), (iii) AGRIBOTIX, LLC, a
Colorado limited liability company (the “Seller”), (iv) the individuals listed
on the signature page hereof (each a “Unitholder” and collectively, the
“Unitholders”), and (v) Paul Hoff, in his capacity as the representative of the
Seller Investor Parties (as defined below) (the “Representative”). Parent,
Purchaser, Seller, each of the Unitholders and the Representative are each
referred to herein as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Seller is engaged in the business of providing integrated agricultural
drone solutions and drone-enabled software technologies and services for
precision agriculture, including the cloud-based FarmLensTM data processing and
analytics platform and the Agrion drone system (the “Business”);

 

WHEREAS, Seller owns a minority membership interest in AGRIBOTIX LATIN AMERICA
LLC, a Minnesota limited liability company (“Agribotix LAM”) and has the option
to acquire the remaining membership interests in Agribotix LAM; and

 

WHEREAS, Seller wishes to sell and assign to Purchaser, and Purchaser wishes to
purchase and assume from Seller, substantially all the assets, and certain
specified liabilities, of the Business, subject to the terms and conditions set
forth herein;

 

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 hereto agree as
follows:

 

ARTICLE I

 

DEFINITIONS

 

The following terms have the meanings specified or referred to in this Article
I:

 

“Accounts Payable” means accounts payable to trade creditors of the Business
arising from the purchase of products or services sold or rendered to the
Business prior to the Closing.

 

“Accounts Receivable” means trade accounts receivable and other rights to
payment from customers of the Business arising from the purchase of products or
services from the Business prior to the Closing and any other account or note
receivable Related to the Business arising prior to the Closing. 

 

1

 

 

 

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

 

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

 

“Authorization” means any authorization, approval, consent, certificate,
license, permit or franchise of or from any Governmental Authority or pursuant
to any Law.

 

“Business Day” means any day except Saturday, Sunday or any other day on which
commercial banks located in New York, New York, are authorized or required by
Law to be closed for business.

 

“Capital Investment Multiplier”, as used in Section 3.4, means 1.5 (one point
five) times the amount of capital invested by the Parent or its affiliates in
the Seller to support and advance the Business, inclusive of loans or other
investments provided to Seller prior to the Closing, less $250,000. For example,
if $500,000 is invested in total, the Capital Investment Multiplier amount will
be $375,000 and calculated as follows: $500,000 - $250,000 = $250,000 X 1.5 =
$375,000.

 

“Cause” means, with respect to each Key Employee, any of the following: (a)
failure to make a good faith effort to perform his duties of employment (other
than any such failure resulting from incapacity due to physical or mental
illness); (b) engagement in fraud, embezzlement, or other dishonesty, which is,
in each case, materially injurious to Purchaser or its affiliates; (c)
conviction of, or plea of guilty or nolo contendere to, a crime that constitutes
a felony (or state law equivalent) or a crime that constitutes a misdemeanor
involving moral turpitude; (d) material breach of any material obligation under
any written agreement, including a non-disclosure agreement, with Purchaser or
any of its Affiliates; or (e) failure to comply with Purchaser’s written
policies or rules, as they may be in effect from time to time during his term of
employment, after receiving an express warning from Purchaser or one of its
Affiliates, which failure is not cured within twenty (20) days after such
warning (and provided that Key Employee is exercising diligent efforts to cure
such failure within such 20 day period).

 

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

 

“Contracts” means any agreement, contract, license, lease, commitment,
arrangement or understanding, written or oral, including any sales or purchase
order.

 

2

 

 

“Employee Benefit Plan” means any pension, benefit, retirement, compensation,
employment, consulting, profit-sharing, deferred compensation, incentive, bonus,
performance award, phantom equity, stock or stock-based, change in control,
retention, severance, vacation, paid time off, welfare, Code Section 125
cafeteria, fringe-benefit and other similar agreement, plan, policy, program or
arrangement (and any amendments thereto), in each case whether or not reduced to
writing and whether funded or unfunded, including each “employee benefit plan”
within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and
whether or not subject to ERISA, which is or has been maintained, sponsored,
contributed to, or required to be contributed to by Seller for the benefit of
any current or former employee, officer, director, retiree, independent
contractor or consultant of the Business or any spouse or dependent of such
individual, or under which Seller or any of its ERISA Affiliates has or may have
any Liability, or with respect to which Purchaser or any of its Affiliates would
reasonably be expected to have any Liability, contingent or otherwise.

 

“Environmental Law” means any applicable Law, and any Governmental Order or
binding agreement with any Governmental Authority: (a) relating to pollution (or
the cleanup thereof) or the protection of natural resources, endangered or
threatened species, human health or safety, or the environment (including
ambient air, soil, surface water or groundwater, or subsurface strata); or (b)
concerning the presence of, exposure to, or the management, manufacture, use,
containment, storage, recycling, reclamation, reuse, treatment, generation,
discharge, transportation, processing, production, disposal or remediation of
any Hazardous Materials.

 

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

 

“ERISA Affiliate” means all employers (whether or not incorporated) that would
be treated together with Seller or any of its Affiliates as a “single employer”
within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

“Escrow Agent” means the entity designated to serve as escrow agent under the
Escrow Agreement.

 

“Escrow Agreement” means the Escrow Agreement among Purchaser, Seller and the
Escrow Agent, to be executed and delivered at the Closing.

 

“Escrow Amount” means the sum to be deposited with the Escrow Agent and held in
escrow pursuant to the Escrow Agreement and which is comprised of the following:

 

(a)      SEVENTY FIVE THOUSAND DOLLARS ($75,000.00) in cash (the “Escrow Cash”);

 

(b)      the Closing Escrow Shares; and

 

(c)      the Post-Closing Escrow Shares.

 

“Escrow Shares” means collectively the Closing Escrow Shares and the
Post-Closing Escrow Shares.

 

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“GAAP” means United States generally accepted accounting principles.

 

“Governmental Authority” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local, or municipal government, foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority thereof, and any
non-governmental regulatory body to the extent that the rules and regulations or
orders of such body have the force of Law.

 

“Indebtedness” means any of the following: (a) any indebtedness for borrowed
money,

(b) any obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) any obligations to pay the deferred purchase price of property
or services, except trade accounts payable and other current Liabilities arising
in the ordinary course of the Business, (d) any obligations as lessee under
capitalized leases, (e) any indebtedness created or arising under any
conditional sale or other title retention agreement with respect to acquired
property, (f) any obligations, contingent or otherwise, under acceptance credit,
letters of credit or similar facilities, and (g) any guaranty of any of the
foregoing. Notwithstanding the foregoing, Indebtedness shall not include
promissory notes that are convertible into units or other equity interests of
Seller.

 

“Intellectual Property” means inventions (whether or not patentable), trade
secrets, technical data, databases, customer lists, designs, tools, methods,
processes, technology, ideas, know-how, source code, product road maps and other
proprietary information and materials; (ii) trademarks and service marks
(whether or not registered), trade names, logos, trade dress and other
proprietary indicia and all goodwill associated therewith; (iii) documentation,
advertising copy, marketing materials, web-sites, specifications, mask works,
drawings, graphics, databases, recordings and other works of authorship, whether
or not protected by Copyright; (iv) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, design documents, flow-charts, user manuals and
training materials relating thereto and any translations thereof (collectively,
"Software"); and (v) all forms of legal rights and protections that may be
obtained for, or may pertain to, the Intellectual Property set forth in clauses
(i) through (iv) in any country of the world ("Intellectual Property Rights"),
including all letters patent, patent applications, provisional patents, design
patents, PCT filings, invention disclosures and other rights to inventions or
designs, all registered and unregistered copyrights in both published and
unpublished works, all trademarks, service marks and other proprietary indicia
(whether or not registered), trade secret rights, mask works, moral rights or
other literary property or authors rights, and all applications, registrations,
issuances, divisions, continuations, renewals, reissuances and extensions of the
foregoing..

 

“Intellectual Property Agreements” means all licenses, sublicenses, consent to
use agreements, settlements, coexistence agreements, covenants not to sue,
permissions and other Contracts (including any right to receive or obligation to
pay royalties or any other consideration), whether written or oral, relating to
any Intellectual Property that is used in or necessary for the conduct of the
Business as currently conducted to which Seller is a party, beneficiary or
otherwise bound.

 

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“Intellectual Property Assets” means all Intellectual Property that is owned by
Seller or licensed to Seller.

 

“Intellectual Property Registrations” means all Intellectual Property Assets
that are subject to any issuance, registration, application or other filing by,
to or with any Governmental Authority or authorized private registrar in any
jurisdiction, including registered trademarks, domain names and copyrights,
issued and reissued patents and pending applications for any of the foregoing.

 

“Key Employee” means each of Jason Barton and Paul Susmarski.

 

“Knowledge of Seller” and phrases of similar import mean the knowledge of the
Unitholders, after reasonable inquiry.

 

“Law” means any statute, law (including common law), constitution, treaty,
ordinance, code, order, decree, judgment, rule, regulation and any other binding
requirement or determination of any Governmental Authority.

 

“Liabilities” means liabilities, obligations or commitments of any nature
whatsoever, asserted or unasserted, known or unknown, absolute or contingent,
accrued or unaccrued, matured or unmatured or otherwise.

 

“Lien” means, with respect to any property or asset, any charge, claim,
community property interest, pledge, condition, equitable interest, lien
(statutory or other), option, security interest, mortgage, easement,
encroachment, right of way, right of first refusal, or restriction of any kind,
including any restriction on use, voting, transfer, receipt of income or
exercise of any other attribute of ownership.

 

“Open Source Material” means all software, documentation or other material that
is distributed as “free software”, “open source software” or under a similar
licensing or distribution model, including, but not limited to, the GNU General
Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public
License (MPL), or any other license described by the Open Source Initiative as
set forth at www.opensource.org.

 

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

 

“Permitted Liens” means (a) Liens for current real or personal property Taxes
not yet due and payable, (b) workers’, carriers’ and mechanics’ or other like
Liens incurred in the ordinary course of the Business with respect to which
payment is not due and that do not impair the conduct of the Business or the
present or proposed use of the affected property and (c) Liens that are
immaterial in character, amount, and extent and which do not detract from the
value or interfere with the present or proposed use of the properties they
affect.

 

5

 

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust or
unincorporated organization.

 

“PPACA” means the Patient Protection and Affordable Care Act and the regulations
promulgated thereunder, as amended.

 

“Purchaser General Representations” means the representations and warranties of
Purchaser set forth in Article V other than Purchaser Fundamental
Representations.

 

“Purchaser Fundamental Representations” means the representations and warranties
of the Purchaser set forth in Section 5.2 (Authorization and Enforceability).

 

“Purchaser Representations” means collectively the Purchaser General
Representations and Purchaser Fundamental Representations.

 

“Related to the Business” means used or held for use in or otherwise relating to
the Business.

 

“Seller Fundamental Representations” means the representations and warranties of
Seller set forth in Section 4.2 (Authorization and Enforceability), Section 4.6
(Taxes), and Section 4.10 (Sufficiency of Assets).

 

“Seller General Representations” means the representations and warranties of
Seller set forth in Article IV other than Seller Fundamental Representations and
Seller Special Representations.

 

“Seller Representations” means collectively the Seller General Representations,
Seller Fundamental Representations and Seller Special Representation.

 

“Seller Special Representations” means the representations and warranties of
Seller set forth in Section 4.9 (Intellectual Property).

 

“Seller Transaction Expenses” means all costs and expenses incurred by Seller or
for which Seller is liable or any of its assets are subject in connection with
the preparation and execution of this Agreement and the other Transaction
Documents and the transactions contemplated hereby and thereby.

 

“Taxes” means all taxes however denominated, including any interest, penalties
or additions to tax that may become payable in respect thereof, imposed by any
Governmental Authority, which taxes shall include, without limiting the
generality of the foregoing, all income taxes, payroll and employee withholding
taxes, unemployment insurance, social security, sales and use taxes, excise
taxes, franchise taxes, gross receipts taxes, occupation taxes, real and
personal property taxes, stamp taxes, transfer taxes, workmen’s compensation
taxes, value added taxes and other obligations of the same or a similar nature,
whether arising before, on or after the Closing; and “Tax” shall mean any one of
them.

 

 

6

 

“Tax Returns” shall mean any return, report, information return or other
document (including any related or supporting information) filed or required to
be filed with any governmental body in connection with the determination,
assessment, collection or administration of any Taxes.

 

“Transaction Documents” refer collectively to the Bill of Sale, the Assignment
and Assumption Agreement, the Assignment and Assumption of Lease, the
Intellectual Property Assignments, the Escrow Agreement and the other documents,
certificates and instruments delivered pursuant to the terms hereof.

 

1.2       Other Defined Terms. The following terms have the meanings assigned to
such terms in the Sections of the Agreement set forth below:

 

 

Agreement

 

Introductory Paragraph

 

Agribotix LAM

  Recitals  

Allocation Statement

 

3.5

 

Annual Financial Statements

 

4.4(a)(i)

 

Assignment and Assumption Agreement

 

2.3(c)(ii)

 

Assignment and Assumption of Lease

 

2.3(c)(iv)

 

Assumed Contracts

 

2.1(a)(ii)

 

Assumed Liabilities

 

2.2(a)

 

Average Price

 

3.1(d)(i)

 

Balance Sheet

 

4.4(a)(ii)

  Balance Sheet Date  

4.4(a)(ii)

 

Bill of Sale

 

2.3(c)(i)

 

Books and Records

 

2.1(a)(xi)

 

Business

 

Recitals

 

Business Authorization

  4.11(b)  

Cash Consideration

 

3.1(a)

 

Closing

 

2.3(a)

 

Closing Cash Consideration

 

3.1(d)(ii)

 

Closing Consideration Amount

 

3.1(d)

 

Closing Date

 

2.3(a)

 

Closing Escrow Shares

 

2.3(e)(i)

 

Closing Parent Shares

 

3.1(d)(i)

 

COBRA

 

6.7(d)

 

Consent

 

4.3(a)

 

Deductible

 

9.2

 

Definitive Agreement Installment

 

2.6

  Disclosure Schedules  

Article IV

 

Earn-out Revenue

 

3.4(a)

 

Earn-out Shares

 

3.4(a)

 

Equipment

 

2.1(a)(i)

 

Escrow Cash

 

Definition of Escrow Amount

 

Escrow Fund

  9.6(a)  

Escrow Period

 

9.6(c)

 

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  Exchange Agreement   3.1(c)   Exchange Parent Shares   3.1(c)   Excluded
Assets   2.1(b)   Excluded Liabilities   2.2(b)   Export Control and Import Laws
  4.19(a)   Financial Statements   4.4(a)(ii)   First Cut-Off Date   9.1(a)  
General Cap   9.2   Indemnified Party   9.4(a)   Indemnifying Party   9.4(a)  
Insurance Policies   4.18   Interim Financial Statements   4.4(a)(ii)  
Intellectual Property Assignment   2.3(c)(iii)   Inventory   2.1(a)(iv)   IP
Rights Assignment Agreement   4.9(b)   Joint Venture Operating Agreement  
2.1(a)(xvi)   Leased Equipment   2.1(a)(i)   Leased Real Property   4.4(b)  
Leases   4.4(b)   LOI Advance   3.1(a)   Losses   9.2(a)   Material Customers  
4.17(a)   Material Suppliers   4.17(b)   Maximum Cap   9.2(d)   Notice of Claim
  9.4(a)   Owned Equipment   2.1(a)(i)   Parent Common Stock   3.1(d)(i)   Party
  Introductory Paragraph   Payoff Letter   2.3(b)   Post-Closing Cash
Consideration   3.1(e)(ii)   Post-Closing Consideration Amount   3.1(e)  
Post-Closing Escrow Shares   3.3(a)(i)   Post-Closing Parent Shares   3.1(e)(i)
  Post-Closing Tax Period   6.8(a)   Pre-Closing Tax Period   6.8(a)   Pro Rata
Share   6.14   Purchase Price   3.1(a)   Purchased Assets   2.1(a)   Purchaser  
Introductory Paragraph   Purchaser Closing Certificate   7.3(f)   Purchaser
Indemnitees   9.2(a)   Purchaser Representations   9.1(a)   Purchaser Warranty
Losses   9.2   Representative   Introductory Paragraph   Restricted Contract  
2.5(a)   Restricted Services

 

6.5(a)

 

 

8

 

 

Second Cut-Off Date

 

9.1(a)

 

Seller

 

Introductory Paragraph

 

Seller Accounts Payable and Indebtedness Amount

 

2.3(b)

 

Seller Closing Certificate

 

7.2(i)

 

Seller Indemnitees

 

9.3

 

Seller Investor Party

 

4.20(a)

 

Seller Source Code

 

4.9(g)

 

Seller Warranty Losses

 

9.3

 

Seller Wire Account

  3.2(b)(iv)  

Signing Advance

 

3.1(b)

 

Special Cap

 

9.2(c)

 

Tax Clearance Certificate

 

6.8(c)

 

Third Party Claim

  9.4(a)  

Third Party Defense

 

9.4(b)

 

Transaction Expense Statement

 

2.3(b)

 

Transferred Employees

 

6.7(a)

 

Unitholder

 

Introductory Paragraph

 

 

ARTICLE II

 

PURCHASE AND SALE OF THE PURCHASED ASSETS

 

2.1. Transfer of Purchased Assets.

 

(a) Subject to the terms and upon the conditions herein set forth, at the
Closing Seller shall sell, convey, transfer, assign and deliver to Purchaser,
and Purchaser shall purchase and accept from Seller, all right, title and
interest of Seller in and to the assets, properties and rights Related to the
Business other than the Excluded Assets (the “Purchased Assets”), free and clear
of Liens. The Purchased Assets include the following assets, properties and
rights:

 

(i)      all of the computer equipment, drones, drone parts, equipment,
machinery, tools, molds, parts, fixtures, furniture, vehicles and other items of
tangible personal property Related to the Business, including those that are set
forth on Schedule 2.1(a)(i)(A) (“Owned Equipment”) or Schedule 2.1(a)(i)(B)
(“Leased Equipment” and together with the Owned Equipment, “Equipment”);

 

(ii)      all Contracts Related to the Business that are set forth on Schedule
2.1(a)(ii) (the “Assumed Contracts”);

 

(iii)      all Intellectual Property Assets, including any Seller Source Code,
and IP Rights Assignments;

 

(iv)      all of the finished goods, raw materials, and work in progress of
Seller (collectively, the “Inventory”);

 

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(v)      all Leased Real Property;

 

(vi)      all Business Authorizations;

 

(vii)      all rights to any Actions of any nature available to or being pursued
by Seller to the extent related to the Business, the Purchased Assets or the
Assumed Liabilities, whether arising by way of counterclaim or otherwise;

 

(viii)      all prepaid expenses, credits, advance payments, claims, security,
refunds, rights of recovery, rights of set-off, rights of recoupment, deposits,
charges, sums and fees (including any such item relating to the payment of
Taxes);

 

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

 

(x)      all insurance benefits, including rights and proceeds, arising from or
relating to the Business, the Purchased Assets or the Assumed Liabilities;

 

(xi)      originals, or where not available, copies, of all books and records,
including, but not limited to, books of account, ledgers and general, financial
and accounting records, machinery and equipment maintenance files, customer and
prospective customer lists, customer purchasing histories, price lists,
distribution lists, supplier lists, production data, quality control records and
procedures, customer complaints and inquiry files, research and development
files, records and data (including all correspondence with any Governmental
Authority), sales material and records (including pricing history, total sales,
terms and conditions of sale, sales and pricing policies and practices),
strategic plans, internal financial statements, marketing and promotional
surveys, material and research, internal documents describing how to operate
Seller software and identify common issues and files relating to the
Intellectual Property Assets and the Intellectual Property Agreements (“Books
and Records”);

 

(xii)      all right, title and interest in and to the name “Agribotix,”
“FarmLens,” “Enduro,” “Hornet,” “HornetLR,” “Agrion,” “QVu,” “Gateway to
Precision Agriculture” and any derivation thereof, including the goodwill
associated therewith and any URL containing such name or any derivation thereof;

 

(xiii)      the websites located at https://agribotix.com/ and www.farmlens.net
(and in each case, all content therein), and telephone numbers, e-mail
addresses, archived e-mail and other communications Related to the Business; and

 

(xiv)      all goodwill of Seller Related to the Business.

 

(b)      The Parties hereby acknowledge and agree that Seller is not selling and
Purchaser is not purchasing any assets, properties or rights of Seller other
than the Purchased Assets. Without limiting the generality of the foregoing,
Seller is not selling and Purchaser is not purchasing any of Seller’s right,
title or interest in or to any of the following assets, properties or rights
(collectively, the “Excluded Assets”):

 

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(i)      cash on hand and on deposit in banks, cash equivalents and investments
of Seller;

 

(ii)      the Employee Benefit Plans and any trusts and assets related to the
Employee Benefit Plans;

 

(iii)      Seller’s rights under this Agreement;

 

(iv)      the capital stock of Seller;

 

(v)      Accounts Receivable;

 

(vi)      all claims for refunds of Taxes and other governmental charges or
assessments arising from or pertaining to periods, activities, operations or
events occurring on or prior to the Closing;

 

(vii)      any of Seller’s membership interest in Agribotix LAM or Seller’s
option to purchase the remaining membership interest in Agribotix LAM; and

 

(viii)      the Exchange Parent Shares.

 

2.2.      Assumption of Assumed Liabilities; Exclusion of Excluded Liabilities.

 

(a) Assumption of Assumed Liabilities As part of its consideration for the
Purchased Assets, at the Closing Purchaser shall assume and agree to pay,
perform and discharge when due all obligations to perform under the Assumed
Contracts after the Closing to the extent that they do not arise from any
failure to perform or improper performance by Seller under, or any breach,
default or violation by Seller of, the Assumed Contracts prior to the Closing
(the “Assumed Liabilities”).

 

(b) Exclusion of Excluded Liabilities. Except for the Liabilities described in
Section 2.2(a), above, Purchaser shall not assume or pay, perform or discharge
any other Liabilities of Seller (all such Liabilities being herein referred to
as the “Excluded Liabilities”), including, without limitation, the following
Liabilities of Seller:

 

(i)      all Liabilities arising out of or relating to products or services sold
or rendered by Seller in respect of the Business to the extent sold or rendered
prior to the Closing, including product Liability, warranty and similar claims
for damages to person or property;

 

(ii)      Liabilities under any Assumed Contract to the extent arising from any
failure to perform by Seller under, or breach by Seller of, the Assumed
Contracts prior to the Closing;

 

(iv)      Liabilities for Taxes, including (A) any Taxes arising as a result of
Seller's operation of the Business or ownership of the Purchased Assets, (B) any
Taxes that will arise as a result of the sale of the Purchased Assets pursuant
to this Agreement; (C) any deferred Taxes of any nature; and (D) or other Taxes
of Seller (or any unitholder or Affiliate of Seller) of any kind or description
(including any Liability for Taxes of Seller (or any unitholder or Affiliate of
Seller) that becomes a Liability of Purchaser under any common law doctrine of
de facto merger or transferee or successor liability or otherwise by operation
of contract or Law);

 

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(v)      Liabilities under any Contract that is not an Assumed Contract;

 

(vi)      Liabilities arising out of or relating to Seller’s operation of the
Business or ownership of the Purchased Assets prior to the Closing;

 

 

(vii)      Liabilities arising under or in connection with any Employee Benefit
Plan;

 

(viii)      Liabilities in respect of any pending or threatened Action arising
out of, relating to or otherwise in respect of the operation of the Business or
the Purchased Assets to the extent such Action relates to such operation on or
prior to the Closing Date;

 

(ix)      Liabilities of Seller for any present or former employees, officers,
directors, retirees, independent contractors or consultants of Seller,
including, without limitation, any Liabilities associated with any claims for
wages or other benefits, bonuses, accrued vacation, workers’ compensation,
severance, retention, termination or other payments;

 

(x)      warranty obligations under Assumed Contracts;

 

(xi)      Liabilities arising out of or relating to any convertible promissory
notes issued by Seller in favor of third parties;

 

(xii)      Liabilities arising out of or relating to Seller’s Equity Incentive
Plan adopted by the Board of Managers of Seller on May 1, 2015;

 

(xiii)      Accounts Payable and Indebtedness;

 

(xiv)      Liabilities of Agribotix LAM; and

 

(xv)      Liabilities arising out of or relating to Seller’s membership interest
in Agribotix LAM or Seller’s option to purchase the remaining membership
interest in Agribotix LAM.

 

2.3.      Closing.

 

(a)      The consummation of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the offices of Cohen & Grigsby, P.C., 625
Liberty Avenue, Pittsburgh, Pennsylvania 15222 on the third (3rd) Business Day
following the satisfaction or, to the extent permitted by Law, waiver of each of
the conditions set forth in Sections 7.1, 7.2 and 7.3 (other than those
conditions that are by their nature to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions at Closing), or at such other
place or on such other time or date as the parties may mutually agree in
writing. The date on which the Closing actually takes place is referred to in
this Agreement as the “Closing Date” and the transactions contemplated by this
Agreement shall be deemed effective at 12:01 a.m. EST on the Closing Date.

 

12

 

 

(b)      At least two Business Days prior to the Closing Date, Seller shall
deliver to Purchaser (i) a written statement that sets forth Seller’s Accounts
Payable and Indebtedness as of immediately prior to Closing (the “Seller
Accounts Payable and Indebtedness Amount”), a payoff letter prepared in good
faith in a form to be reasonably approved by Purchaser from each holder of the
Seller Accounts Payable and Indebtedness Amount that is being repaid at the
Closing showing the payoff amount and wire transfer instructions for payment
thereof from the respective holders of such Accounts Payable and Indebtedness
(each, a “Payoff Letter”), and a written schedule of all unpaid Seller
Transaction Expenses and wire transfer instructions for payment thereof from the
respective service providers (the “Transaction Expense Statement”).

 

(c)      At the Closing, Seller shall deliver to Purchaser the following:

 

(i)      a bill of sale in the form of Exhibit A hereto (the “Bill of Sale”) and
duly executed by Seller, transferring the tangible personal property included in
the Purchased Assets to Purchaser;

 

(ii)      an assignment and assumption agreement in the form of Exhibit B hereto
(the “Assignment and Assumption Agreement”) and duly executed by Seller,
effecting the assignment to and assumption by Purchaser of the Assumed Contracts
and the Assumed Liabilities;

 

(iii)      an assignment in the form of Exhibit C hereto (the “Intellectual
Property Assignment”) and duly executed by Seller, transferring all of Seller’s
right, title and interest in and to the Intellectual Property Assets to
Purchaser;

 

(iv)      with respect to the Lease, an Assignment and Assumption of Lease in
form and substance satisfactory to Purchaser (each, an “Assignment and
Assumption of Lease”) and duly executed by Seller and the landlord;

 

(v)      evidence in form and substance reasonably satisfactory to Purchaser,
that the corporate name of Seller has been changed from “Agribotix, LLC” to a
name that is not similar to such name;

 

(vi)      a duly executed counterpart to the Escrow Agreement;

 

(vii)      evidence in form and substance reasonably satisfactory to Purchaser
that all Consents that are listed on Section 4.3(a) of the Disclosure Schedules
have been obtained and are in full force and effect;

 

 

 

13

 

(viii)      such other customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Purchaser, as may be
required to give effect to this Agreement; and

 

(ix)      an Acknowledgment and Joinder Agreement in the form attached hereto as
Exhibit E from each Seller Investor Party other than the Unitholders.

 

(d)      At the Closing, Purchaser shall:

  

(i)      pay and deliver the Closing Cash Consideration in accordance with
Section 3.1(a)(i)(B);

 

(ii)      deliver to Seller the Assignment and Assumption Agreement duly
executed by Purchaser;

 

(iii)     with respect to the Lease, deliver to Seller an Assignment and
Assumption of Lease duly executed by Purchaser; and 

 

(iv)     deliver to Seller a duly executed counterpart to the Escrow Agreement.

 

(e)      At the Closing or as soon thereafter as practicable, Parent shall
submit the letter of instruction attached hereto as Exhibit D to Standard
Registrar, the registrar and transfer agent for shares of Parent Common Stock
(“Standard Registrar”), that directs the transfer agent to issue and deliver:

 

(i)      to the Escrow Agent a stock certificate registered in the name of
Seller that represents the number of shares of Parent Common Stock that is equal
to FIFTY PERCENT (50%) of the number of Closing Parent Shares (the “Closing
Escrow Shares”); and

 

(ii)      to Seller a stock certificate registered in the name of Seller that
represents the number of shares of Parent Common Stock equal to (A) the Closing
Parent Shares pursuant to Section 3.1(c)(i) minus (B) the Closing Escrow Shares.

 

(f)      At the Closing, Purchaser shall pay the Escrow Cash, the Closing Escrow
Shares, the Seller Accounts Payable and Indebtedness Amount and the unpaid
Seller Transaction Expenses in accordance with Sections 3.2(a)(i) and 3.2(b)(i),
(ii) and (iii), respectively, and shall pay the remaining Closing Cash
Consideration under Section 3.2(b)(iv).

 

2.4.      Subsequent Documentation; Further Assurances. Purchaser and Seller
shall, at any time and from time to time, upon the reasonable request of a
counterparty, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, all such further documents and instruments as may be
reasonably necessary for the further completion or confirmation of any of the
transactions contemplated herein.

 

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2.5      Third Party Consents.

 

(a)      Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to sell, assign, transfer, convey or
deliver any Purchased Asset or any benefit arising under or resulting from such
Purchased Asset if the sale, assignment, transfer, conveyance or delivery
thereof, without the Consent of a third party, (i) would constitute a breach or
other contravention of the rights of such third party, (ii) would be ineffective
with respect to any party to a Contract concerning such Purchased Asset, or
(iii) would, upon transfer, in any way adversely affect the rights of Purchaser
under such Purchased Asset. If the sale, assignment, transfer, conveyance or
delivery by Seller to, or any assumption by Purchaser of, any interest in, or
Liability under, any Purchased Asset requires the Consent of a third party, then
such sale, assignment, transfer, conveyance, delivery or assumption shall be
subject to such Consent being obtained. Without limiting Section 2.5(b), to the
extent any Assumed Contract may not be assigned to Purchaser by reason of the
absence of any such Consent (“Restricted Contract”), Purchaser shall not be
required to assume any Assumed Liabilities arising under such Restricted
Contract.

 

(b)      To the extent that any Consent in respect of a Restricted Contract or
any other Purchased Asset shall not have been obtained on or before the Closing,
Seller shall continue to use reasonable best efforts to obtain any such Consent
after the Closing until such time as it shall have been obtained. Seller shall
cooperate with Purchaser in any economically feasible arrangement proposed by
Purchaser to provide that Purchaser shall receive the interest of Seller in the
benefits under such Restricted Contract or other Purchased Asset. Seller shall
pay and discharge, and shall indemnify and hold harmless, Purchaser and its
Affiliates from and against any and all out-of-pocket costs of seeking to obtain
or obtaining any such Consent. As soon as a Consent for the sale, assignment,
transfer, conveyance, delivery or assumption of a Restricted Contract or other
Purchased Asset is obtained, Seller shall promptly assign, transfer, convey and
deliver such Restricted Contract or Purchased Asset to Purchaser, and Purchaser
shall assume the Assumed Liabilities under any such Restricted Contract from and
after the date of assignment to Purchaser pursuant to a special-purpose
assignment and assumption agreement substantially similar in terms to those of
the Assignment and Assumption Agreement.

 

(c)      Nothing contained in this Section 2.5 or any other provision of this
Agreement shall be deemed to constitute an agreement to exclude from the
Purchased Assets any Assumed Contracts or other Purchased Asset as to which a
Consent may be necessary.

 

2.6.      Definitive Agreement Installment. Upon the execution of this
Agreement, Purchaser shall advance to Seller the sum FORTY THOUSAND DOLLARS
($40,000.00) (such amount, the “Definitive Agreement Installment”). Purchaser
shall pay the Definitive Agreement Installment by wire transfer of immediately
available funds to an account designated in writing by Seller.

 

2.7      Cancellation of Units Owned by Parent. Effective immediately prior to
the Closing, Seller shall cancel for no consideration any and all units of
membership interest in Seller that were issued to Parent pursuant to the
Exchange Agreement such that, at and following the Closing, neither Parent nor
any of its Affiliates shall be a member or an equity or other interest holder of
Seller. The Parties acknowledge and agree that neither Parent nor or any of its
Affiliates is entitled to receive any distributions from Seller after the
Closing in respect of such cancelled units, and neither Parent nor any or of its
Affiliates shall be deemed a Seller Investor Party for any purpose whatsoever,
including for purposes of the indemnities provided by Seller, the Unitholders
and the other Seller Investor Parties in Article IX hereof. For the avoidance of
doubt, this Section 2.7 shall not require Parent to cancel any Exchange Parent
Shares issued pursuant to the Exchange Agreement.

 

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ARTICLE III

 

PURCHASE PRICE

 

3.1      Purchase Price. The consideration for the Purchased Assets (the
“Purchase Price”) shall be the sum of the following:

 

(a)      FIFTY THOUSAND DOLLARS ($50,000) in cash, which amount was paid to
Seller by Parent upon execution of that certain letter of intent between Seller
and Purchaser, dated September 22, 2017 (the “LOI Advance”);

 

(b)      ONE HUNDRED THOUSAND DOLLARS ($100,000) in cash, which amounts
represents the sum of: (i) the amount of TWENTY FIVE THOUSAND DOLLARS which
Purchaser advanced to Seller on December 27, 2017; (ii) THIRTY FIVE THOUSAND
DOLLARS which Purchaser advanced to Seller on March 30, 2018; and (iii) the
Definitive Agreement Installment (the “Signing Advance”);

 

(c)      TWO HUNDRED THOUSAND (200,000) shares of Parent Common Stock at a value
of FIVE DOLLARS ($5.00) per share (the “Exchange Parent Shares”) which shares
were issued to Seller by Parent pursuant to the Exchange Agreement between
Parent and Seller, dated as of November 20, 2017 (the “Exchange Agreement”);

 

(d)      an amount payable at Closing (the “Closing Consideration Amount”) equal
to the sum of:

 

(i)      the number of shares of common stock, par value $0.001 per share, of
Parent (“Parent Common Stock”), that is calculated by dividing ONE MILLION
DOLLARS ($1,000,000) by the average closing daily price per share of Parent
Common Stock on the New York Stock Exchange, as reported at
www.nyse.com/quote/XASE:UAVS, for each of the twenty (20) trading days ending on
the date immediately preceding the Closing Date (the “Average Price”), provided
that in the event that the Average Price so calculated is less than TWO DOLLARS
($2.00), the Average Price shall be TWO DOLLARS ($2.00) (the “Closing Parent
Shares”); and

 

(ii)      an amount equal to FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000) in
cash (the “Closing Cash Consideration”);

 

(e)      an amount payable on the ninetieth (90th) day following the Closing
(the “Post-Closing Consideration Amount”) equal to the sum of:

 

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(i)      the number of shares of Parent Common Stock that is calculated by
dividing TWO MILLION U.S. DOLLARS ($2,000,000) by the Average Price (calculated
as if the 20–trading day period to which reference is made in Section 3.1(d)(i)
ends on the 89th day following the Closing), with any fractional share rounded
up to the nearest whole share of Parent Common Stock (such number of shares, the
“Post-Closing Parent Shares”); provided that in the event that the Average Price
so calculated is less than TWO DOLLARS ($2.00), the Average Price shall be TWO
DOLLARS ($2.00); and provided further that in the event that the Average Price
so calculated is more than the Average Price calculated under Section 3.1(d)(i),
the Average Price shall be the Average Price calculated under Section 3.1(d)(i);
and

 

(ii)      an amount equal to FOUR HUNDRED THOUSAND DOLLARS ($400,000) in cash
(the “Post Closing Cash Consideration”);

 

(f)      the Earn-out Shares, if any, in accordance with Section 3.4; and

 

(g)      the assumption of the Assumed Liabilities.

 

3.2      Payment of Closing Consideration. The Closing Consideration Amount
shall be paid as follows:

 

(a)      Parent shall issue and deliver the Closing Parent Shares as soon as
practicable following the Closing (but in no case more than 14 days after
Closing) as follows:

 

(i)      deliver the Closing Escrow Shares to the Escrow Agent and such shares
shall be held and distributed in accordance with the terms of this Agreement and
the Escrow Agreement; and

 

(ii)      the remaining Closing Parent Shares in accordance with Section
2.3(e)(ii); and

 

(b) Purchaser shall pay the Closing Cash Consideration at Closing as follows:

 

(i) Purchaser shall deposit 50% of the Escrow Cash by wire transfer of
immediately available funds into an account designated by the Escrow Agent and
such amount shall be held and distributed in accordance with the terms of this
Agreement and the Escrow Agreement;

 

(ii) Purchaser shall pay the Seller Accounts Payable and Indebtedness Amount in
full by wire transfer of immediately available funds to each Person entitled
thereto pursuant to the Payoff Letters;

 

(iii)      Purchaser shall pay all unpaid Seller Transaction Expenses in full by
wire transfer of immediately available funds to the accounts designated by the
applicable service providers as set forth in the Transaction Expense Statement;
and

 

(iv)      Purchaser shall pay the remainder of the Closing Cash Consideration
(after deduction of the amounts set forth in (i), (ii), and (iii) above) by wire
transfer of immediately available funds to an account (the “Seller Wire
Account”) designated in writing by Seller to Purchaser no later than three
Business Days prior to the Closing Date

 

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3.3      Payment of Post-Closing Consideration. The Post-Closing Consideration
Amount shall be paid as follows:

 

(a)      Parent shall issue and deliver the Post-Closing Parent Shares as soon
as practicable after the ninetieth (90th) day following the Closing (but in no
case more than 104 days following Closing) by submitting a letter of instruction
in the form attached hereto as Exhibit D to Standard Registrar that directs
Standard Registrar to issue and deliver:

 

(i)      to the Escrow Agent a stock certificate registered in the name of
Seller that represents the number of shares of Parent Common Stock that is equal
to TWENTY FIVE PERCENT (25%) of the number of Post-Closing Parent Shares (the
“Post-Closing Escrow Shares”) and such shares shall be held and distributed in
accordance with the terms of this Agreement and the Escrow Agreement; and

 

(ii)      to Seller a stock certificate registered in the name of Seller that
represents the number of shares of Parent Common Stock equal to (A) the
Post-Closing Parent Shares minus (B) the Post-Closing Escrow Shares; and

 

(b)      Purchaser shall pay the Post-Closing Cash Consideration on the
ninetieth (90th) day following the Closing as follows:

 

(i)      Purchaser shall deposit 50% of the Escrow Cash by wire transfer of
immediately available funds into an account designated by the Escrow Agent and
such amount shall be held and distributed in accordance with the terms of this
Agreement and the Escrow Agreement; and

 

(ii)      Purchaser shall pay the remainder of the Post-Closing Cash
Consideration (after deduction of the amount set forth in (i) above) by wire
transfer of immediately available funds to the Seller Wire Account.

 

3.4      Earn-out.

 

(a)      If revenue of the Business for the one year period ending on the first
anniversary of the Closing Date (the “First Anniversary”) is at least ONE
MILLION DOLLARS ($1,000,000) (the “Earn-out Revenue”), PLUS the Capital
Investment Multiplier amount, then Seller shall earn the number of shares of
Parent Common Stock that is calculated by dividing TWO HUNDRED FIFTY THOUSAND
DOLLARS ($250,000) by the Average Price (calculated as if the 20–trading day
period to which reference is made in Section 3.1(c)(i)(A) ends on the First
Anniversary), with any fractional share rounded up to the nearest whole share of
Parent Common Stock (such number of shares, the “Earn-out Shares”); provided
that in the event that the Average Price so calculated is less than TWO DOLLARS
($2.00), the Average Price under this Section 3.4(a) shall be TWO DOLLARS
($2.00).

 

 

18

 

(b)      Within 90 days after the First Anniversary, Purchaser shall notify
Seller as to its determination of the Earn-out Revenue and whether the Earn-out
Shares have been earned by Seller. If Purchaser determines that Seller has
earned the Earn-out Shares, Purchaser and/or Parent shall, not later than the
third Business Day following such determination, submit a letter of instruction
in the form attached hereto as Exhibit D to Standard Registrar that directs
Standard Registrar to issue and deliver to Seller a stock certificate registered
in the name of Seller that represents the Earn-out Shares. For the avoidance of
doubt, if the Earn-out Revenue is less than ONE MILLION U.S. DOLLARS
($1,000,000), Purchaser shall have no obligation to issue any portion of the
Earn-out Shares.

 

3.5      Seller Investor Parties. Shares of Parent Common Stock issued to or
registered in the name of Seller under this Agreement shall be deemed issued for
the benefit of the Seller Investor Parties, subject to satisfaction of Seller’s
Liabilities to its creditors, including the Purchaser indemnitees.

 

3.6      Allocation of Purchase Price. Seller and Purchaser agree that the
Purchase Price and the Assumed Liabilities (plus other relevant items) shall be
allocated among the Purchased Assets for all purposes (including Tax and
financial accounting) as shown on the allocation schedule (the “Allocation
Statement”). A draft of the Allocation Statement shall be prepared by Purchaser
and delivered to Seller within thirty (30) days following the Closing Date. If
Seller notifies Purchaser in writing that Seller objects to one or more items
reflected in the Allocation Statement, Seller and Purchaser shall negotiate in
good faith to resolve such dispute; provided, however, that if Seller and
Purchaser are unable to resolve any dispute with respect to the Allocation
Schedule within twenty (20) days following Seller’s receipt of the Allocation
Statement, such dispute shall be resolved by an impartial nationally recognized
firm of independent certified public accountants other than Seller’s accountants
or Purchaser’s accountants who, acting as experts and not arbitrators, shall
resolve such disputed amounts only and make any adjustments to the Allocation
Statement. The fees and expenses of such accounting firm shall be borne equally
by Seller and Purchaser. Purchaser and Seller shall file all Tax Returns
(including amended returns and claims for refund) and information reports in a
manner consistent with the Allocation Schedule.

 

3.7      Withholding Tax. Parent and Purchaser shall be entitled to deduct and
withhold from the Purchase Price all Taxes that Purchaser may be required to
deduct and withhold under any provision of Tax Law. All such withheld amounts
shall be treated as delivered to Seller hereunder.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF SELLER AND THE UNITHOLDERS.

 

Seller and the Unitholders represent and warrant to Parent and Purchaser as of
the date hereof that the statements contained in this Article IV are true and
correct, except as set forth in the disclosure schedules dated and delivered as
of the date hereof by Seller to Parent and Purchaser (the “Disclosure
Schedules”), which are attached to this Agreement and are designated therein as
being the Seller Disclosure Schedules. The Seller Disclosure Schedules shall be
arranged in sections corresponding to each Section of this Article IV. Each
exception to a representation and warranty set forth in the Seller Disclosure
Schedules shall qualify the specific representation and warranty which is
referenced in the applicable section of the Seller Disclosure Schedules and any
other section in respect of which such disclosure is reasonably apparent on its
face.

 

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4.1      Corporate Organization. Agribotix LLC is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Colorado. Agribotix Latin America LLC is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Minnesota. Seller has all requisite company power and authority to own
its properties and assets and to conduct its business as currently conducted.
Seller is duly qualified to do business as a foreign entity in those
jurisdictions where such qualification is required in connection with the
Business. Seller is in compliance with its Articles of Organization and its
Operating Agreement.

 

4.2      Authorization and Enforceability. Seller has all requisite company
power and authority to enter into this Agreement and the other Transaction
Documents to which it is a party and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the other
Transaction Documents to which it is a party and the performance of its
obligations hereunder and thereunder have been duly authorized by all necessary
company action of Seller. Seller’s execution and delivery of this Agreement, and
Seller’s performance of its obligations hereunder, has been approved by all
members of Seller and no other Person is entitled to vote thereon. This
Agreement has been, and the other Transaction Documents to which it is a party
when executed will be, duly executed by Seller and constitute or, when executed,
will constitute valid and binding obligations of Seller, enforceable against it
in accordance with their respective terms subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors’ rights generally and to the effect of general principles of
equity, whether considered in a proceeding at law or in equity. Each of the
Unitholders has all necessary legal capacity to execute and deliver this
Agreement and perform such Unitholder’s obligations under this Agreement and the
other Transaction Documents.

 

4.3      No Conflicts; Consents.

 

(a)      Seller’s execution, delivery and performance of this Agreement and the
other Transaction Documents to which it is a party (i) do not and will not
violate or conflict with any provision of the Articles of Organization or
Operating Agreement of Seller, (ii) do not and will not violate any Law,
Authorization or Order applicable to Seller, (iii) do not and will not violate
or result in a breach of or constitute (with due notice or lapse of time or
both) a default under, require the consent, waiver, notice to or other action by
any Person under, result in the acceleration of or create in any party the right
to accelerate, terminate, modify or cancel, any Contract or Authorization to
which Seller is a party or by which Seller or the Business is bound or to which
any of the Purchased Assets are subject, and (iv) will not result in the
creation or imposition of any Lien (other than Permitted Liens) upon any of the
Purchased Assets. Section 4.3(a) of the Disclosure Schedules sets forth all
consents, waivers, assignments and other approvals and actions that are required
in connection with the transactions contemplated by this Agreement under any
Contract to which Seller is a party (collectively, “Consents”) in order to
preserve all rights of, and benefits to, Purchaser thereunder.

 

20

 

 

(b)      No Authorization or Order of, declaration to or filing or registration
with any Governmental Authority or any other Person, is required by or with
respect to Seller in connection with the execution and delivery of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby.

 

4.4      Financial Information.

 

(a)      Section 4.4(a) of the Disclosure Schedules contains true and complete
copies of the following financial statements of Seller consisting of:

 

(i)      the audited balance sheet of Seller as at December 31 in each of the
years 2015, 2016, and 2017 and the related audited statements of income and
retained earnings, stockholders' equity and cash flow, for the years then ended
(the “Annual Financial Statements”); and

 

(ii)      the balance sheet of the Business as at April 30, 2018 (the “Balance
Sheet” and the date thereof, the “Balance Sheet Date”) and the related statement
of income and retained earnings, stockholders' equity and cash flow, for the
four-month period then ended (the “Interim Financial Statements” and together
with the Annual Financial Statements, the “Financial Statements”).

 

(b)      The Financial Statements: (i) are true, complete and correct and have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved; (ii) are based on the books and records of Seller in
respect of the Business and present fairly the financial condition of the
Business as of the respective dates they were prepared and the results of
operations of the Business for the periods indicated.

 

(c)      Seller has good valid and marketable title in and to all items of
Inventory included in the Purchased Assets, free and clear of all Liens. All
such items of Inventory are of a quality, quantity and condition useable or
saleable in the ordinary course of business. None of such Inventory is obsolete
and no write-down of such inventory has been made or should have been made. All
of such Inventory is located at the facilities of Seller and no inventory is
held on a consignment basis. Inventories are valued in accordance with the
principles set forth on Section 4.4(c) of the Disclosure Schedules.

 

4.5      Undisclosed Liabilities. Seller has no Liabilities with respect to the
Business, except (a) those which are adequately reflected or reserved against in
the Balance Sheet as of the Balance Sheet Date, and (b) those which have been
incurred in the ordinary course of business consistent with past practice since
the Balance Sheet Date and which are not, individually or in the aggregate,
material in amount.

 

21

 

4.6      Taxes.

 

(a)      All Tax Returns with respect to the Business required to be filed by
Seller for any Pre-Closing Tax Period have been, or will be, timely filed. Such
Tax Returns are, or will be when filed, true, complete and correct in all
respects. All Taxes due and owing by Seller (whether or not shown on any Tax
Return) have been, or will be, timely paid. Seller has delivered to Purchaser
correct and complete copies of all Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by Seller since January
1, 2013.

 

(b)      Seller has withheld and paid each Tax required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, customer, unitholder or other party, and complied with all
information reporting and backup withholding provisions of applicable Law. All
individuals formerly or currently characterized and treated by Seller as
consultants or independent contractors of the Business have been and are
properly treated as independent contractors under all applicable Laws.

 

(c)      No extensions or waivers of statutes of limitations have been given or
requested with respect to any Taxes of Seller.

 

(d)      All deficiencies asserted, or assessments made, against Seller as a
result of any examinations by any taxing authority have been fully paid.

 

(e)      Seller is not a party to any Action by any taxing authority. There are
no pending or, to the Knowledge of Seller, threatened Actions by any taxing
authority.

 

(f)      There are no Liens for Taxes upon any of the Purchased Assets nor, to
Seller’s Knowledge, is any taxing authority in the process of imposing any Liens
for Taxes on any of the Purchased Assets (other than for current Taxes not yet
due and payable).

 

(g)      Seller is not a “foreign person” as that term is used in Treasury
Regulations Section 1.1445-2.

 

(h)      Seller is not, and has not been, a party to, or a promoter of, a
“reportable transaction” within the meaning of Section 6707A(c)(1) of the Code
and Treasury Regulations Section 1.6011-4(b).

 

(i)      None of the Purchased Assets are tax-exempt use property within the
meaning of Section 168(h) of the Code.

 

4.7      Equipment.

 

(a)      Seller has good valid and marketable title in and to the Owned
Equipment included in the Purchased Assets, free and clear of all Liens. None of
such Owned Equipment is in the possession or control of any Person other than
Seller.

 

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(b)      Section 2.1(a)(i)(B) of the Disclosure Schedules sets forth each item
of Leased Equipment and, with respect to each such item of Leased Equipment, (i)
the lessor of such item, (ii) the term of the lease of such item and (iii) the
monthly lease payment for such item. All leases under which Leased Equipment is
leased are in full force and effect and valid and enforceable in accordance with
their terms. Seller has performed the obligations required to be performed by it
to date under any such lease and there is no default or event that, with notice
or lapse of time or both, would constitute a default by Seller under any such
lease.

 

(c)      To the Knowledge of Seller, all items of Equipment are structurally
sound, are in good operating condition and repair (subject to normal wear and
tear given the use and age of such assets), are usable in the ordinary course of
business, and conform to all Laws and Authorizations relating to their
construction, use, and operation.

 

4.8      Real Property.

 

(a)      Seller does not own any real property.

 

(b)      Section 4.8(b) of the Disclosure Schedules sets forth each parcel of
real property leased by Seller and used in or necessary for the conduct of the
Business as currently conducted (together with all rights, title and interest of
Seller in and to leasehold improvements relating thereto, including, but not
limited to, security deposits, reserves or prepaid rents paid in connection
therewith, collectively, the “Leased Real Property”), and a true and complete
list of all leases, subleases, licenses, concessions and other agreements
(whether written or oral), including all amendments, extensions renewals,
guaranties and other agreements with respect thereto, pursuant to which Seller
holds any Leased Real Property (collectively, the “Leases”). Seller has
delivered to Purchaser a true and complete copy of each Lease. With respect to
each Lease:

 

(i)      such Lease is valid, binding, enforceable and in full force and effect,
and Seller enjoys peaceful and undisturbed possession of the Leased Real
Property;

 

(ii)      Seller is not in breach or default under such Lease, and no event has
occurred or circumstance exists which, with the delivery of notice, passage of
time or both, would constitute such a breach or default, and Seller has paid all
rent due and payable under such Lease;

 

(iii)      Seller has not received nor given any notice of any default or event
that with notice or lapse of time, or both, would constitute a default by Seller
under any of the Leases and, to the Knowledge of Seller, no other party is in
default thereof, and no party to any Lease has exercised any termination rights
with respect thereto;

 

(iv)      Seller has not subleased, assigned or otherwise granted to any Person
the right to use or occupy such Leased Real Property or any portion thereof; and

 

(v)      Seller has not pledged, mortgaged or otherwise granted any Lien on its
leasehold interest in any Leased Real Property.

 

23

 

(c)      Neither Seller nor, to the Knowledge of Seller, any Affiliate has
received written notice of (i) material violations of building codes and/or
zoning ordinances or other governmental or regulatory Laws affecting the Leased
Real Property, (ii) existing, pending or threatened condemnation proceedings
affecting the Leased Real Property, or (iii) existing, pending or threatened
zoning, building code or other moratorium proceedings, or similar matters which
could reasonably be expected to materially and adversely affect the ability to
operate the Leased Real Property as currently operated. Neither the whole nor
any material portion of any Leased Real Property has been damaged or destroyed
by fire or other casualty.

 

(d)      The Leased Real Property is sufficient for the continued conduct of the
Business after the Closing in substantially the same manner as conducted prior
to the Closing and constitutes all of the real property necessary to conduct the
Business as currently conducted.

 

4.9      Intellectual Property.

 

(a)      Section 4.9(a) of the Disclosure Schedules lists (i) all Intellectual
Property Assets, including Software, that are not registered but that are
material to the operation of the Business, (ii) other than with respect to
generally commercially available software products not incorporated into
Seller’s products or services under standard non-negotiated end-user object code
license agreements, all Intellectual Property Agreements pursuant to which a
third party authorizes Seller to use, practice any rights under, or grant
sublicenses with respect to, any Intellectual Property owned by such third
party, and (iii) all Intellectual Property Agreements pursuant to which Seller
authorizes a third party to use, practice any rights under, or grant sublicenses
with respect to, any Intellectual Property owned by Seller. Seller does not have
any Intellectual Property Registrations.

 

(b)      (i) Seller has entered into binding, written agreements (each, an “IP
Rights Assignment Agreement”) with every current and former employee of Seller,
and with every current and former independent contractor, whereby such employees
and independent contractors (A) assign to Seller any ownership interest and
right they may have in the Intellectual Property Assets; and (B) acknowledge
Seller’s exclusive ownership of all Intellectual Property Assets.

 

(ii)      All Intellectual Property Assets that are owned or purported to be
owned by Seller were developed, conceived, reduced to practice, written and/or
created solely by either (A) employees of Seller acting within the scope of
their employment and subject to an IP Rights Assignment Agreement or (B) third
parties who are subject to an IP Rights Assignment Agreement, and no third
Person owns or has any ownership rights to any of the Intellectual Property
Assets that are owned or purported to be owned by Seller.

 

(iii)      To the Knowledge of Seller, no employee or third party (A) is in
breach of any IP Rights Assignment Agreement, or (B) has developed any
Intellectual Property Assets for Seller that are subject to any agreement under
which such Person has assigned or otherwise granted to any third Person any
rights in respect thereof. With respect to Seller’s Intellectual Property
Assets, the documentation relating thereto is current, accurate and sufficient
in detail and content to identify and explain it and to allow its full and
proper use without reliance on the special knowledge or memory of others.

24

 

(c)      The Intellectual Property Assets and Intellectual Property licensed
under Assumed Contracts that are Intellectual Property Agreements are all of the
Intellectual Property necessary to operate the Business as presently conducted.
The consummation of the transactions contemplated hereunder will not result in
the loss or impairment of or payment of any additional amounts with respect to,
nor require the consent of any other Person in respect of, the Purchaser’s right
to own, use or hold for use any Intellectual Property as owned, used or held for
use in the conduct of the Business as currently conducted.

 

(d)      Seller’s rights in the Intellectual Property Assets are valid,
subsisting, and enforceable. Seller has taken all reasonable steps to maintain
the Intellectual Property Assets and to protect and preserve the confidentiality
of all trade secrets included in the Intellectual Property Assets, including
requiring all Persons having access thereto to execute written non-disclosure
agreements.

 

(e)      None of the products or services currently or formerly developed
manufactured, sold, distributed, provided, shipped or licensed by Seller, or
which are currently under development, has infringed or infringes upon, or
otherwise unlawfully used or uses, the Intellectual Property Rights of any third
party. Seller, by conducting its business as currently conducted or as proposed
to be conducted, has not infringed and does not infringe upon, and has not
otherwise unlawfully used and does not unlawfully use, any Intellectual Property
Rights of a third party. To the Knowledge of Seller, no Person has infringed,
misappropriated, diluted or otherwise violated, or is currently infringing,
misappropriating, diluting or otherwise violating, any Intellectual Property
Assets.

 

(f)      There are no Actions (including any oppositions, interferences or
re-examinations) settled, pending or, to the Knowledge of Seller, threatened
(including in the form of offers to obtain a license): (i) alleging any
infringement, misappropriation, dilution or violation of the Intellectual
Property of any Person by Seller in connection with the Business; (ii)
challenging the validity, enforceability, registrability, or ownership of any
Intellectual Property Assets or Seller’s rights with respect to any Intellectual
Property Assets; or (iii) by Seller or any other Person alleging any
infringement, misappropriation, dilution or violation by any Person of any
Intellectual Property Assets.

 

(g)      None of the Software owned by Seller contains any programming code,
documentation or other materials or development environments that embody
Intellectual Property Rights of any person other than Seller, except for such
materials obtained by Seller from other Persons who make such materials
generally available to all interested purchasers or end-users on standard
commercial terms. Each of Seller’s currently supported and marketed Software
products performs, in all material respects, the functions described in any
agreed specifications or end user documentation or other information provided to
customers of the Business on which such customers relied when licensing or
otherwise acquiring such products, subject only to routine bugs and errors that
can be corrected promptly by Seller in the course of providing customer support
without further liability to Seller, and all of the code of such products has
been developed in a manner that meets common industry practice, including the
use of regression test and release procedures. Each of Seller’s existing and
currently supported and marketed Software products is free of all viruses,
worms, trojan horses and material known contaminants and does not contain any
bugs, errors, or problems that would substantially disrupt its operation or have
a substantial adverse impact on the operation of the Software.

 

25

 

 

(h)      Seller has not licensed, distributed or disclosed, and knows of no
distribution or disclosure by others (including any current or former employee
or contractor of Seller) of, the source code for any product or service of
Seller or any software owned by Seller (collectively, “Seller Source Code”) to
any Person other than to employees and contractors of Seller solely for their
use on behalf of Seller and who were at all relevant times bound by an IP Rights
Assignment Agreement and a non-disclosure agreement. No event has occurred, and
no circumstance or condition exists, that (with or without notice or lapse of
time, or both) will, or would reasonably be expected to, nor will the
consummation of the transactions contemplated hereby, result in the disclosure
or release of any Seller Source Code by Seller, an escrow agent(s) or any other
Person to any third party.

 

(i)      Seller is in compliance with all requirements of all license agreements
applicable to all Open Source Materials used by it. Seller has not used Open
Source Materials in any manner that would (i) require the disclosure or
distribution in source code form of any product or service of Seller, (ii)
require the licensing of any product or service of Seller for the purpose of
making derivative works, (iii) impose any restriction on the consideration to be
charged for distribution of any product or service of Seller, (iv) create, or
purport to create, obligations for Seller with respect to Intellectual Property
Assets owned by Seller or grant, or purport to grant, to any third party any
rights or immunities with respect to any Intellectual Property owned by Seller,
or (v) impose any other material limitation, restriction or condition on the
right of Seller to use or distribute any product or service of Seller.

 

(j)      Seller is the sole and exclusive owner of all Intellectual Property
Assets owned or purported to be owned by Seller, free and clear of all Liens
other than Permitted Liens. Seller has the sole and exclusive right to bring a
claim or suit against a third party for infringement or misappropriation of such
Intellectual Property Assets. Seller has not

transferred ownership of, or granted any exclusive license with respect to, any
Intellectual Property Assets that are, or as of the time of such transfer or
exclusive license were, material to Seller to any other Person or (ii) permitted
the rights of Seller in any of the Intellectual Property Assets that are, or at
the time were, material to Seller to enter into the public domain.

 

4.10      Sufficiency of Assets. The Purchased Assets are sufficient for the
continued conduct of the Business after the Closing in substantially the same
manner as conducted prior to the Closing and constitute all of the rights,
property and assets necessary to conduct the Business as currently conducted.
None of the Excluded Assets are material to the Business.

 

4.11      Compliance with Law; Business Authorizations.

 

(a)      Seller has conducted the Business in accordance with all applicable
Laws. Seller has received no written notice of any violation of, or failure to
conduct the Business in compliance with, any applicable Law.

 

26

 

 

(b)      Seller owns and lawfully uses in the operation of the Business all
Authorizations which are necessary for it to conduct the Business as currently
conducted and for the ownership and use of the Purchased Assets free and clear
of all Liens (“Business Authorizations”), a complete list of which (other than
Environmental Authorizations) is set forth in Section 4.11(b) of the Disclosure
Schedules. Such Business Authorizations are valid and in full force and effect.
All material Authorizations are set forth on the Disclosure Schedules. Seller is
not in default of any Business Authorization. Seller has received no written
notice regarding any violation, or failure to conduct the Business in compliance
with, any such Business Authorization or any revocation of any such Business
Authorization. Seller is not required under the terms of any material Business
Authorization to consummate the transactions contemplated hereby or by the other
Transaction Documents to which it is a party.

 

4.12      Environmental Matters.

 

(a)      The operations of Seller with respect to the Business and the Purchased
Assets are currently and have been in compliance with all Environmental Laws.
Seller has not received from any Person, any: (i) notice or claim under
Environmental Law; or (ii) written request for information pursuant to
Environmental Law, which, in each case, either remains pending or unresolved, or
is the source of ongoing obligations or requirements as of the Closing Date.

 

(b)      Seller has not been, and is not currently, required to obtain or
maintain any Environmental Authorizations to conduct the Business as formerly
and currently conducted or to own, lease, operate or use the Purchased Assets,
and there is no condition, event or circumstance pertaining to the environment
that would reasonably be expected to prevent or impede, after the Closing, the
conduct of the Business as currently conducted or the ownership, lease,
operation or use of the Purchased Assets.

 

4.13      Litigation. Except as set forth in Section 4.13 of the Disclosure
Schedules, there are no Actions pending or, to the Knowledge of Seller,
threatened against Seller involving or affecting the Business or the Purchased
Assets. There is no outstanding Order that names Seller or any of its Affiliates
and involves or affects the Business or the Purchased Assets.

 

4.14      Contracts. Seller has delivered or made available to Purchaser a
correct and complete copy of each Contract to which Seller is a party or by
which any of the Purchased Assets are bound. Such Contracts are in full force
and effect and valid and enforceable in accordance with their terms. Except as
set forth on Schedule 4.3(a), Seller is not required under the terms of any
Contract to give notice to or obtain consent from any party thereto to
consummate the transactions contemplated hereby or by the other Transaction
Documents to which it is a party, which notice has not been given or consent has
not been obtained. Seller has performed the obligations required to be performed
by it to date under any Contract and there is no default or event that, with
notice or lapse of time or both, would constitute a default by Seller under any
Contract or result in a termination thereof or would cause or permit the
acceleration or other changes of any right or obligation or the loss of any
benefit thereunder. Seller has not received notice that any party to any
Contract intends to cancel or terminate any Contract or to exercise or not
exercise any options under any Contract. To the Knowledge of Seller, no other
party to any Contract is in default in respect thereof. No other party to any
Contract has provided notice of any intention to terminate any Contract. There
are no material disputes pending or threatened under any Contract.

 

27

 

 

4.15      Employee Matters.

 

(a)      Seller is not party to any collective bargaining agreement.

 

(b)      Section 4.15(b) of the Disclosure Schedules contains a complete and
accurate list of (i) each employee and each contract worker of Seller, and (ii)
the respective positions, base wage rates and the amount of any other
compensation, of each employee and contract worker. To Seller’s Knowledge, no
management level employee and no group of employees has any plans to terminate
his, her, or their employment.

 

(c)      There are no pending nor, to the Knowledge of Seller, threatened
material labor disputes currently subject to any grievance procedure,
arbitration or litigation, including any unfair labor practice charge or
complaint (as defined in the National Labor Relations Act) against Seller.

 

(d)      Seller has been, and is currently, in compliance in all material
respects with all applicable Laws pertaining to employment and employment
practices to the extent they relate to employees of the Business and all
employees of the Business classified as exempt under the Fair Labor Standards
Act and state and local wage and hour laws are properly classified in all
material respects.

 

4.16      Employee Benefits.

 

(a)      (i) Section 4.16(a) of the Disclosure Schedules contains a true and
complete list of each Employee Benefit Plan. With respect to each Employee
Benefit Plan, Seller has delivered or made available to Purchaser accurate,
current and complete copies of each of the following: (A) where the Employee
Benefit Plan has been reduced to writing, the plan document together with all
amendments and the summary plan description; (B) where the Employee Benefit Plan
has not been reduced to writing, a written summary of all material plan terms;
(C) the most recent annual report (Form 5500, with all applicable attachments);
(D) copies of material notices, letters or other correspondence from the
Internal Revenue Service, Department of Labor, or other Governmental Authority
relating to the Employee Benefit Plan; and (E) all related trust agreements,
insurance contracts, and other funding arrangements which implement each
Employee Benefit Plan.

 

(ii)      Neither Seller nor any of its ERISA Affiliates contribute, and has
never, sponsored, maintained, or contributed to an “employee pension benefit
plan” as defined in ERISA Section 3(2) including, without limitation, (A) a
“multiemployer plan” (as defined in Section 3(37) of ERISA, (B) a plan covered
by Title IV of ERISA or subject to the minimum funding requirements of Section
302 of ERISA or Section 412 of the Code, or (C) a multiple employer plan subject
to Section 4063 or 4064 of ERISA or Section 413(c) of the Code. Neither Seller
nor any of its ERISA Affiliates has ever participated in a multiple employer
welfare arrangement (as defined in Section 3(40)(A) of ERISA).

 

28

 

(b)      Each Employee Benefit Plan has been maintained and administered, in
each case, in all material respects in compliance with its terms and with
applicable Laws.

 

(c)      Other than as required under Section 4980B of the Code or other
applicable Law, no Employee Benefit Plan provides medical, health, or life
insurance or other welfare-type benefits to retirees or former employees of any
Company.

 

(d)      None of Seller’s ERISA Affiliates sponsor, maintain or contribute to
any Employee Benefit Plan.

 

(e)      All benefits, contributions, premiums, or other payments that are due
have been timely paid with respect to each Employee Benefit Plan, and all
benefits, contributions, premiums or applicable payments relating to each
Employee Benefit Plan for any period ending on or before the Closing that are
not yet due have been paid or accrued in accordance with reasonable accounting
methods.

 

(f)      No transaction or omission has occurred with respect to any Employee
Benefit Plan that would subject Seller to any material Tax or penalty (civil or
otherwise).

 

(g)      Neither Seller nor any Employee Benefit Plan fiduciary (as defined in
ERISA Section 3(21)), has engaged in any transaction in violation of ERISA
Section 406(a) and (for which no exemption exists under ERISA Section 408) or
any “prohibited transaction” (as defined in Section 4975(c)(2) or Section
4975(d) of the Code).

 

(h)      No action, suit, proceeding, hearing, or investigation with respect to
the administration or the investment of the assets of any Employee Benefit Plan
(other than routine claims for benefits) is pending or, to Seller’s Knowledge,
threatened, and no Employee Benefit Plan has within the three years prior to the
date hereof been the subject of an examination or audit by a Governmental
Authority or the subject of an application or filing under, or is a participant
in, an amnesty, voluntary compliance, self-correction, or similar program
sponsored by any Governmental Authority.

 

(i)      The consummation of the transactions contemplated by this Agreement
will not, either alone or in combination with another event, (i) entitle any
employee or consultant of Seller to any payment or benefit under any Employee
Benefit Plan, (ii) accelerate the time of payment or vesting of benefits, or
increase the amount of compensation, due to any Person under any Employee
Benefit Plan, (iii) trigger any funding obligation under any Employee Benefit
Plan or impose any restrictions or limitations on Seller’s rights to administer,
amend or terminate any Employee Benefit Plan or (iv) result in any payment that
would reasonably be construed, individually or in combination with any other
such payment, to constitute an “excess parachute payment” (as defined in Section
280G(b)(1) of the Code).

 

(j)      Seller has no obligations to pay any deferred compensation to any
Person. 

 

29

 

 

4.17      Customers and Suppliers.

 

(a)      Section 4.17(a) of the Disclosure Schedules sets forth a true and
complete list, for the years ended December 31, 2016 and 2017 and for the four
months ended April 30, 2018, of Seller’s ten largest customers of goods and
services related to the Business (“Material Customers”). Seller has not received
any notice, and, to the Knowledge of Seller, has no reason to believe, that any
of the Material Customers has ceased, or intends to cease after the Closing, to
use the goods or services of the Business or to otherwise terminate or
materially reduce its relationship with the Business.

 

(b)      Section 4.17(b) of the Disclosure Schedules sets forth a true and
complete list, for the years ended December 31, 2016 and 2017 and for the four
months ended April 30, 2018, of Seller’s ten largest suppliers of goods and
services related to the Business (“Material Suppliers”). Seller has not received
any notice, and, to the Knowledge of Seller, has no reason to believe, that any
of the Material Suppliers has ceased, or intends to cease, to supply goods or
services to the Business or to otherwise terminate or materially reduce its
relationship with the Business.

 

4.18      Insurance. Section 4.18 of the Disclosure Schedules sets forth (a) a
true and complete list of all current policies or binders of fire, liability,
product liability, umbrella liability, real and personal property, workers’
compensation, vehicular, fiduciary liability and other casualty and property
insurance maintained by Seller or its Affiliates and relating to the Business,
the Purchased Assets or the Assumed Liabilities (collectively, the “Insurance
Policies”); and (b) with respect to the Business, the Purchased Assets or the
Assumed Liabilities, a list of all pending claims and the claims history for
Seller since January 1, 2015. There are no claims related to the Business, the
Purchased Assets or the Assumed Liabilities pending under any such Insurance
Policies as to which coverage has been questioned, denied or disputed or in
respect of which there is an outstanding reservation of rights.

 

4.19      Export Control. Except as set forth on Section 4.19 of the Disclosure
Schedules:

 

(a)      Seller has been and is in compliance in all material respects with all
export control and import Laws applicable to the Business or the Purchased
Assets, including all regulations pertaining to the release of technical
information to foreign persons wherever located, and with Laws governing
embargoes, sanctions and boycotts applicable to the Business or the Purchased
Assets, including the Arms Export Control Act of 1976 (22 U.S.C. Ch. 39), the
International Emergency Economic Powers Act (50 U.S.C. §§ 1701, et seq.), the
Trading with the Enemy Act (50 U.S.C. app. §§ 1, et seq.), the International
Boycott Provisions of Section 999 of the Code, the International Traffic in Arms
Regulations (22 C.F.R. §§ 120, et seq.), the Export Administration Regulations
(15 C.F.R. §§ 730, et seq.), and all rules, regulations and executive orders
relating to any of the foregoing, and the Laws administered by the Office of
Foreign Assets Control of the United States Department of the Treasury, and the
Laws administered by United States Customs and Border Protection (collectively,
“Export Control and Import Laws”). 

 

30

 

 

(b)      Seller has obtained and complied with all licenses, agreements,
authorizations and license exceptions and exemptions required for Seller’s
exports of articles or technology or provision of services.

 

(c)      Seller has not provided, sold to, or otherwise transferred, without any
required approval from the U.S. Government, any products, services, software or
technologies of the Business, directly or indirectly, to: (i) Iran, North Korea,
Sudan, Syria, or any other country against which the United States maintains
embargoes; (ii) any instrumentality, agent, entity, or individual that is acting
on behalf of, or directly or indirectly owned or controlled by, any Governmental
Authority of such countries; (iii) nationals of such countries; or (iv) any
organization, entity, or individual appearing on a U.S. government list of
parties with whom companies are prohibited from transacting business, including
the Specially Designated Nationals and Blocked Persons List and Foreign
Sanctions Evaders List, both maintained by the U.S. Treasury Department’s Office
of Foreign Assets Control; the Debarred List, maintained by the U.S. Department
of State; and the Denied Persons List, Entity List, and Unverified List, each of
which are maintained by the Bureau of Industry and Security of the U.S.
Department of Commerce.

 

(d)      Seller has not received any notice alleging that Seller is not in
compliance with, or has liability under, any Export Control and Import Laws, or
has engaged in any brokering activity as defined in 22 C.F.R. § 129.2(b). Seller
has not conducted or initiated any internal investigation, made any mandatory or
voluntary disclosure, declined to make a voluntary disclosure with respect to
any known violation of any Export Control and Import Laws, or failed to make any
mandatory report or disclosure to any Governmental Authority pursuant to any
Export Control and Import Laws.

 

4.20      Investment Representations.

 

(a)      Seller, the Unitholders and each other holder of any equity, debt or
profits or other interest in Seller (the Unitholders and such other holders not
including Parent (but not the Seller), collectively, “Seller Investor Parties”)
understand that the sale of the Parent Common Stock to Seller has not been
registered under the Securities Act, or any state securities law by reason of
specific exemptions under the provisions thereof which depend in part upon the
other representations and warranties made by Seller in this Agreement. Seller
understands that Parent is relying upon the representations and warranties
contained in this Section 4.20 for the purpose of determining whether this
transaction meets the requirements for such exemptions.

 

(b)      Seller and the Seller Investor Parties have such knowledge, skill and
experience in business, financial and investment matters so that Seller and each
of the Seller Investor Parties is capable of evaluating the merits and risks of
an investment in the Parent Common Stock and, to the extent that Seller or any
Seller Investor Party has deemed it appropriate to do so, Seller or such Seller
Investor Party has relied upon appropriate professional advice regarding the
tax, legal and financial merits and consequences of an investment in the Parent
Common Stock. Each Seller Investor Party is an accredited investor as defined in
Regulation D pursuant to the Securities Act of 1933, as amended. 

 

31

 

(c)      Seller and the Seller Investor Parties have made, either alone or
together with their respective advisors, such independent investigation of
Parent, its management, business, prospects and related matters as Seller and
the Seller Investor Parties deem to be, or such advisors have advised to be,
necessary or advisable in connection with an investment in the Parent Common
Stock through the transactions contemplated by this Agreement; and Seller, the
Seller Investor Parties, and such advisors have received all information and
data that Seller, the Seller Investor Parties, and such advisors believe to be
necessary in order to reach an informed decision as to the advisability of an
investment in the Parent Common Stock through the transactions contemplated by
this Agreement.

 

(d)      Neither Seller nor any of the Seller Investor Parties has any present
or contemplated future need to dispose of all or any portion of the Parent
Common Stock to satisfy any existing or contemplated undertaking, need or
indebtedness, and Seller and each of the Seller Investor Parties is capable of
bearing the economic risk of an investment in the Parent Common Stock for the
indefinite future.

 

(e)      Seller and the Seller Investor Parties understands that the Parent
Common Stock will be “restricted securities” under applicable federal securities
laws and that the Securities Act and the rules of the Commission promulgated
thereunder provide in substance that Seller and the Seller Investor Parties may
dispose of such shares only pursuant to an effective registration statement
under the Securities Act or an exemption from registration if available. Seller
and each Seller Investor Party further understands that Parent has no obligation
or intention to register the sale of any of the Parent Common Stock to be
received by Seller or the Seller Investor Parties in the transaction
contemplated hereby, or take any other action so as to permit sales pursuant to,
the Securities Act. Accordingly, Seller and the Seller Investor Parties
understand that Seller and the Seller Investor Parties may dispose of such
shares only in transactions which are of a type exempt from registration under
the Securities Act, including (without limitation) a “private placement,” in
which event the transferee will acquire such shares as “restricted securities”
and subject to the same limitations as in the hands of Seller and the Seller
Investor Parties. Seller and the Seller Investor Parties further understands
that applicable state securities laws may impose additional constraints upon the
sale of securities. As a consequence, Seller and the Seller Investor Parties
understand that Seller and the Seller Investor Parties may have to bear the
economic risks of an investment in the Parent Common Stock for an indefinite
period of time.

 

(f)      Seller and the Seller Investor Parties are acquiring the Parent Common
Stock for investment only and not with a view to or intention of or in
connection with any resale or distribution of such shares or any interest
therein.

 

(g)      The certificate evidencing the Parent Common Stock shall bear the
following legend:

 

32

 

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL,
ACCEPTABLE TO THE COMPANY. THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN ASSET PURCHASE AGREEMENT,
DATED AS OF [ ], 2018, BY AND AMONG AGEAGLE AERIAL SYSTEMS INC., EAGLE AERIAL
SYSTEMS, INC., AGRIBOTIX, LLC, THE INDIVIDUALS LISTED ON THE SIGNATURE PAGE
THEREOF, AND PAUL HOFF, IN HIS CAPACITY AS THE REPRESENTATIVE OF THE SELLER
INVESTOR PARTIES.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER

 

Parent and Purchaser hereby represent and warrant to Seller as follows:

 

5.1      Corporate Organization. Each of Parent and Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, and each of Parent and Purchaser has all requisite corporate
power and authority to own its properties and assets and to conduct its business
as now conducted.

 

5.2      Authorization and Enforceability. Each of Parent and Purchaser has all
requisite corporate power and authority to enter into this Agreement and each of
the other Transaction Documents to which it is a party and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and each of the other Transaction Documents to which Parent or
Purchaser is a party and the performance of its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action, and no
other corporate proceeding on the part of Parent or Purchaser is necessary to
authorize such execution, delivery and performance. This Agreement and each
other Transaction Document to which it is a party have been duly executed by
Parent and Purchaser and constitute Parent’s or Purchaser’s valid and binding
obligations, enforceable against Parent or Purchaser, as applicable, in
accordance with their respective terms, subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditor’s rights generally and to the effect of general principles of equity,
whether considered in a proceeding at law or in equity.

 

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5.3      No Conflict or Violation. The execution, delivery and performance by
each of Parent and Purchaser of this Agreement and the other Transaction
Documents to which either of them is a party (a) do not and will not violate or
conflict with any provision of Parent’s or Purchaser’s Articles of Incorporation
or Bylaws, (b) do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
and (c) do not and will not violate or result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or
instrument to which Parent or Purchaser is a party or by which it is bound or to
which any of its properties or assets is subject except, in the case of
foregoing clause (c), for such violations, breaches and defaults that,
individually or in the aggregate, would not reasonably be expected to prohibit
or materially impede Parent’s or Purchaser’s ability to perform its obligations
under this Agreement or any other Transaction Document to which it is a party.

 

5.4      Consents and Approvals. No Authorization or Order of, declaration to or
filing or registration with any Governmental Authority or any other Person, is
required by or with respect to Parent or Purchaser in connection with the
execution and delivery of this Agreement and the other Transaction Documents and
the consummation of the transactions contemplated hereby and thereby.

 

5.5      Capitalization. The authorized capital stock of Parent consists of
250,000,000 shares of Common Stock, and 25,000,000 shares of Preferred Stock,
par value $0.001 per share 10,000 shares are designated Series C Convertible
Preferred Stock, par value $0.001 per share. As of July 17, 2018, (a) 10,164,001
shares of Parent Common Stock were issued and outstanding, and (b) 6,507 shares
of Series C Convertible Preferred Stock were issued and outstanding. All of such
outstanding shares of capital stock are duly authorized, validly issued, fully
paid and non-assessable. As of July 17, 2018, 2,000,000 shares of Parent Common
Stock were reserved for future issuance pursuant to Parent stock option plans.
The shares of Parent Common Stock issuable to Seller pursuant to this Agreement
have been duly authorized and reserved for issuance and, when issued in
accordance with the terms of this Agreement, will be validly issued, fully paid,
non-assessable and free of preemptive rights. Except as set forth above in this
Section 5.5, there are no outstanding (v) shares of capital stock or other
voting securities or equity interests of Parent, (w) securities of Parent
convertible into or exchangeable or exercisable for shares of capital stock of
Parent or other voting securities or equity interests of Parent, (x) stock
appreciation rights, “phantom” stock rights, performance units, interests in or
rights to the ownership or earnings of Purchaser or other equity equivalent or
equity-based award or right, (y) subscriptions, options, warrants, calls,
commitments, Contracts or other rights to acquire from Parent, or obligations of
Parent to issue, any shares of capital stock of Parent, voting securities,
equity interests or securities convertible into or exchangeable or exercisable
for capital stock or other voting securities or equity interests of Parent or
rights or interests described in clause (x), or (z) obligations of Parent to
repurchase, redeem or otherwise acquire any such securities or to issue, grant,
deliver or sell, or cause to be issued, granted, delivered or sold, any such
securities.

 

5.6      Valid Issuance of Shares. The shares of Parent Common Stock, (a) when
issued and delivered in accordance with the terms and for the consideration set
forth herein, will be validly issued, fully paid, nonassessable, and free from
restrictions on transfer other than restrictions on transfer under the
Transaction Agreements, and applicable state and federal securities laws and (b)
will be issued in compliance with all applicable federal and state securities
laws; and (c) will be eligible for resale by Seller and the other Seller
Investor Parties, subject to Seller and Seller Investor Parties compliance with
Rule 144 (17 C.F.R. § 230.144) after satisfaction of any holding period required
herein. The stock certificates representing the shares of Parent Common Stock
shall bear the following legend:

 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL,
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN ASSET PURCHASE AGREEMENT,
DATED AS OF [ ], 2018, BY AND AMONG AGEAGLE AERIAL SYSTEMS INC., EAGLE AERIAL
SYSTEMS, INC., AGRIBOTIX, LLC, THE INDIVIDUALS LISTED ON THE SIGNATURE PAGE
THEREOF, AND PAUL HOFF, IN HIS CAPACITY AS THE REPRESENTATIVE OF THE SELLER
INVESTOR PARTIES.

 

 

5.7      No Reliance on Unstated Representations. Neither Parent nor Purchaser
is relying on any representation concerning the Business, the subject matter of
this Agreement, or the transactions contemplated hereby except those expressly
made herein.

 

ARTICLE VI

 

COVENANTS

6.1      Conduct of Business Prior to Closing.

 

(a)      From the date hereof until the earlier of the Closing Date or the
termination of this Agreement as provided herein, except as otherwise expressly
provided for by this Agreement or consented to in writing by Purchaser (which
consent will not be unreasonably withheld or delayed), Seller shall (i) conduct
its Business in the ordinary course of business and preserve in all material
respects its Business relationships with its material customers, material
suppliers, material distributors and other Persons with which Seller transacts
material business. Each of Seller and the Unitholders, on the one hand, and
Parent and Purchaser, on the other hand, shall use their reasonable best efforts
to cause all of the conditions to the obligations of the other under this
Agreement to be satisfied as soon as practicable following the date hereof.

 

(b)      From the date hereof until the Closing Date, except as consented to in
writing by Purchaser (which consent will not be unreasonably withheld or
delayed), Seller will not:

 

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(i)      subject any portion of its properties, rights or assets to any material
Lien, except for Liens existing on the date hereof and Permitted Liens;

 

(ii)      sell, assign, license or transfer any Purchased Assets, except sales
of products or services in the ordinary course of business;

 

(iii)      sell, assign, license, allow to expire or lapse or transfer any
Intellectual Property, except for non-exclusive licenses in connection with the
provision of services in the ordinary course of business;

 

(iv)      (A) increase the compensation or fringe benefits of any employee, (B)
grant or increase any severance or termination pay, except as required by Law,
(C) except as required by Law, establish, adopt, enter into, amend or terminate
any Employee Benefit Plan, (D) hire any employee (other than to fill vacancies)
or terminate any employee (other than for “cause”), (E) grant any awards under
any bonus, incentive, equity, performance or other compensation plan or
arrangement or benefit plan, or (F) take any action to fund or in any other way
secure the payment of compensation or benefits under any Employee Benefit Plan;

 

(v)      incur, or modify in any material respect the terms of, any
Indebtedness, except for Indebtedness incurred under credit facilities in effect
on the date hereof in the ordinary course of business for working capital
purposes;

 

(vi)      other than in the ordinary course of business, enter into any Contract
or modify in any material respect or terminate any Assumed Contract;

 

(vii)      allow any insurance policy to lapse or terminate, except as replaced
by a substantially similar insurance policy;

 

(viii)      adopt or enter into any collective bargaining agreement;

 

(ix)      agree, authorize or commit to do any of the foregoing or any action
which would reasonably be expected to make any of the representations and
warranties of Seller untrue in any material respect or result in any of the
conditions set forth in Article VII not being satisfied; or

 

(x)      other than month-to-month subscriptions entered into in the ordinary
course of business, sell any pre-paid subscriptions of FarmLens Professional
(including pre-paid coupons for such subscriptions).

 

6.2      Access to Information. From the date hereof until the Closing, Seller
shall (a) afford Purchaser and its representatives full and free access to and
the right to inspect all of the Leased Real Property, properties, assets,
premises, Books and Records, Contracts and other documents and data related to
the Business; (b) furnish Purchaser and its representatives with such financial,
operating and other data and information related to the Business as Purchaser or
any of its representatives may reasonably request; and (c) instruct the
representatives of Seller to cooperate with Purchaser in its investigation of
the Business. Without limiting the foregoing, Seller shall permit Purchaser and
its representatives to conduct environmental due diligence of the Leased Real
Property. Any investigation pursuant to this Section 6.2 shall be conducted in
such manner as not to interfere unreasonably with the conduct of the Business or
any other businesses of Seller. No investigation by Purchaser or other
information received by Purchaser shall operate as a waiver or otherwise affect
any representation, warranty or agreement given or made by Seller in this
Agreement.

 

36

 

 

6.3      No Solicitation of Other Bids.

 

(a)      Seller and the Unitholders shall not, and shall not authorize or permit
any of their representatives to, directly or indirectly, (i) encourage, solicit,
initiate, facilitate or continue inquiries regarding an Acquisition Proposal;
(ii) enter into discussions or negotiations with, or provide any information to,
any Person concerning a possible Acquisition Proposal; or enter into any
agreements or other instruments (whether or not binding) regarding an
Acquisition Proposal. Seller shall immediately cease and cause to be terminated,
and shall cause its Affiliates and all of its and their representatives to
immediately cease and cause to be terminated, all existing discussions or
negotiations with any Persons conducted heretofore with respect to, or that
could lead to, an Acquisition Proposal. For purposes hereof, “Acquisition
Proposal” means any inquiry, proposal or offer from any Person (other than
Purchaser or any of its Affiliates) relating to the direct or indirect
disposition, whether by sale, merger or otherwise, of all or any portion of the
Business or the Purchased Assets.

 

(b)      In addition to the other obligations under this Section 6.3, Seller
shall promptly (and in any event within two Business Days after receipt thereof
by Seller or its representatives) advise Purchaser orally and in writing of any
Acquisition Proposal, any request for information with respect to any
Acquisition Proposal, or any inquiry with respect to or which could reasonably
be expected to result in an Acquisition Proposal, the material terms and
conditions of such request, Acquisition Proposal or inquiry, and the identity of
the Person making the same.

 

(c)      Seller and the Unitholders agree that the rights and remedies for
noncompliance with this Section 6.3 shall include having such provision
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach shall cause
irreparable injury to Purchaser and that money damages would not provide an
adequate remedy to Purchaser.

 

6.4      Notice of Certain Events.

 

(a)      From the date hereof until the Closing, Seller shall promptly notify
Purchaser in writing of:

 

(i)      any fact, circumstance, event or action the existence, occurrence or
taking of which (A) has had, or could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the Business or
the Purchased Assets, (B) has resulted in, or could reasonably be expected to
result in, any representation or warranty made by Seller hereunder not being
true and correct or (C) has resulted in, or could reasonably be expected to
result in, the failure of any of the conditions set forth in Section 7.02 to be
satisfied;

 

37

 

 

(ii)      any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;

 

(iii)      any notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Agreement; and

 

(iv)      any Actions commenced or, to Seller's Knowledge, threatened against,
relating to or involving or otherwise affecting the Business, the Purchased
Assets or the Assumed Liabilities or that relates to the consummation of the
transactions contemplated by this Agreement.

 

(b)      Purchaser's receipt of information pursuant to this Section 6.4 shall
not operate as a waiver or otherwise affect any representation, warranty or
agreement given or made by Seller in this Agreement and shall not be deemed to
amend or supplement the Disclosure Schedules.

 

6.5      Restrictive Covenants.

 

(a)      For a period of four (4) years after the Closing, Seller agrees that it
will not, and each Unitholder agrees that such Unitholder will not, either
directly or indirectly:

 

(i)      engage, in any capacity, in any business located in a Restricted Area
which is engaged, directly or indirectly, in providing Restricted Services;
provided, however, that any Unitholder may provide uncompensated services to any
not-for-profit or governmental entity that provides Restricted Services,
regardless of the geographical area, and may receive reimbursement of reasonable
expenses incurred in providing those services (i.e., travel, lodging, meals,
etc.); or

 

(ii)      have any direct or indirect ownership interest in any business located
in a Restricted Area which is engaged, either directly or indirectly, in
providing Restricted Services (other than by ownership of, in the aggregate,
less than five percent (5%) of the stock of a publicly held entity).

 

“Restricted Area” means, immediately before Closing, the geographical areas
where the Business was historically conducted, is currently conducted, and is
proposed to be conducted. “Restricted Services” means, immediately before
Closing, the Business as historically conducted, as currently conducted, and as
proposed to be conducted.

 

(b)      For a period of four (4) years after the Closing, Seller agrees that it
will not, and each Unitholder agrees that such Unitholder will not, either
directly or indirectly:

 

 

38

 

(i)      cause, induce or attempt to cause or induce any customer, supplier,
licensee, licensor, franchisee, employee, consultant or other business relation
of Seller in respect of the Business at the Closing or since January 1, 2015, to
cease doing business with Purchaser in respect of the Business, to deal with any
competitor of Purchaser in respect of the Business or in any way interfere with
its relationship with Purchaser in respect of the Business; or

 

(ii)      hire, retain, or attempt to hire or retain any employee or independent
contractor of Purchaser in respect of the Business, including any Transferred
Employee, or in any way interfere with the relationship between Purchaser and
any of its employees or independent contractors, including any Transferred
Employee, in respect of the Business; provided, however, that Seller or any
Unitholder may hire any person who responds to an advertisement targeted at the
general public for employment or services without violating this provision.

 

(c)      If a final judgment of a court or tribunal of competent jurisdiction
determines that any term or provision contained in this Section 6.5 is invalid
or unenforceable, then the Parties agree that the court or tribunal will have
the power to reduce the scope, duration or geographic area of the term or
provision, to delete specific words or phrases or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision. This Section 6.5 will be enforceable as so
modified after the expiration of the time within which the judgment may be
appealed. This Section 6.5 is reasonable and necessary to protect and preserve
Purchaser’s legitimate business interests and the value of the Purchased Assets
and to prevent any unfair advantage conferred on Seller.

 

(d)      Seller and each of the Unitholders acknowledge that if Seller or such
Unitholder should violate any term or provision of this Section 6.5, Purchaser
will suffer irreparable harm for which monetary damages alone would not
constitute an adequate remedy. Seller and each of the Unitholders agree that the
terms and conditions hereof shall be specifically enforceable in equity and that
injunctive or other equitable relief shall not constitute any hardship upon
Seller or such Unitholder.

 

6.6      Post-Closing Transition; Access to Records.

 

(a)      Seller shall cooperate with Purchaser to ensure a smooth transition of
the Business. After the Closing, Seller shall cooperate with Purchaser in its
efforts to continue and maintain for the benefit of Purchaser those business
relationships of Seller in respect of the Business existing prior to the
Closing.

 

(b)      For a period of two (2) years after the Closing, Seller shall have
reasonable access to all of the books and records of the Business with respect
to periods prior to the Closing that are held or controlled by Purchaser to the
extent that such access may be reasonably requested by Seller. Purchaser shall
afford such access upon receipt of reasonable advance notice and during normal
business hours. Purchaser shall permit Seller to make copies of such books and
records at Seller’s expense. Seller shall be solely responsible for any costs or
expenses incurred by it pursuant to this Section 6.6(b). If Purchaser shall
desire to dispose of any of such books and records prior to the expiration of
such five-year period, Purchaser shall, prior to such disposition, give Seller a
reasonable opportunity, at Seller’s expense, to segregate and remove such books
and records as Seller may elect.

 

39

 

 

(c)      Seller agrees to promptly endorse and pay over or cause to be endorsed
and paid over to Purchaser, without deduction or offset, the full amount of any
payment received by Seller after the Closing in respect of goods sold or
services rendered as part of the Business, except for that portion, if any, of
such payments attributable to goods sold and shipped, or services rendered,
prior to the Closing.

 

6.7      Employees.

 

(a)      Effective as of the date of this Agreement, Seller shall provide
Purchaser and its Affiliates access to the employees of the Business for the
purpose of pre-employment interviews and commercially reasonable screening.
Purchaser or one of its Affiliates may offer employment, on an “at will” basis,
to any or all of such employees of the Business in its sole discretion effective
at and subject to the Closing. The employees of the Business who accept such
employment and commence employment with Purchaser or its Affiliate on the
Closing Date are referred to herein as the “Transferred Employees.” On the
Closing Date, Seller shall terminate the employment of all Transferred Employees
and such Transferred Employees shall become employees of Purchaser or one of its
Affiliates.

 

(b)      Seller shall be solely responsible, and Purchaser shall have no
obligations whatsoever for, any compensation or other amounts payable to any
current or former employee (including any Transferred Employee), independent
contractor or consultant of the Business, including, without limitation, hourly
pay, commission, bonus, salary, accrued vacation, fringe, pension or profit
sharing benefits or severance pay for any period relating to the service with
Seller at any time on or prior to the Closing Date and Seller shall pay all such
amounts to all entitled persons on or prior to the Closing Date.

 

(c)      Seller shall be liable for the administration and payment of all health
and welfare Liabilities and benefits under the Employee Benefit Plans with
respect to (i) Transferred Employees to the extent resulting from claims,
events, circumstances, exposures, conditions or occurrences occurring on or
prior to the Closing Date, and (ii) employees of the Business who are not
Transferred Employees. Purchaser shall be liable for the administration and
payment of all health and welfare Liabilities and benefits under Purchaser’s
benefit plans with respect to Transferred Employees who accept Purchaser’s offer
of employment and who participate therein to the extent resulting from claims,
events, circumstances, exposures, conditions or occurrences occurring after the
Closing Date.

 

(d)      If the obligation to provide coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”) to any “M&A qualified beneficiaries”
(as defined in in Treasury Regulation Section 54.4980B-9, Q&A-4 and with respect
to the transactions contemplated by this Agreement) shifts to Purchaser pursuant
to Treasury Regulation Section 54.4980B-9 or other applicable Internal Revenue
Service guidance, then notwithstanding any other provision of this Agreement to
the contrary, Seller shall reimburse Purchaser for any and all documented costs
and expenses that Purchaser reasonably incurs in providing COBRA coverage to
such individuals (including, but not limited to, claims, administrative costs,
fees and insurance premiums).

 

40

 

 

(e)      Neither Seller nor any Affiliate will make any transfer of pension or
other employee benefit plan assets to Purchaser. Purchaser shall not have any
responsibility, liability or obligation, whether to Transferred Employees,
former employees, their beneficiaries or to any other Person, with respect to
any Employee Benefit Plan.

 

(f)      Seller shall be liable for the administration and payment of all
workers' compensation Liabilities and benefits with respect to (i) Transferred
Employees to the extent resulting from claims, events, circumstances, exposures,
conditions or occurrences occurring on or prior to the Closing Date, and (ii)
employees of the Business who are not Transferred Employees. Purchaser shall be
liable for the administration and payment of all workers' compensation
Liabilities and benefits with respect to any Transferred Employees who accept
Purchaser’s offer of employment to the extent resulting from claims, events,
circumstances, exposures, conditions or occurrences occurring after the Closing
Date.

 

6.8      Payment of Taxes.

 

(a)      Seller shall pay in a timely manner all Taxes resulting from or payable
in connection with the sale of the Purchased Assets pursuant to this Agreement.
All Taxes levied with respect to the Purchased Assets for a taxable period that
includes (but does not end at) the Closing shall be apportioned based on the
number of days of such taxable period included in the period ending with and
including the Closing (the “Pre-Closing Tax Period”), and the number of days of
such taxable period beginning after the Closing (the “Post-Closing Tax Period”).
Seller shall be liable for the proportionate amount of such Taxes that is
attributable to the Pre-Closing Tax Period, and Purchaser shall be liable for
the proportionate amount of such Taxes that is attributable to the Post-Closing
Tax Period.

 

(b)      Seller shall pay all transfer, documentary, sales, use, stamp,
registration, value added and other such Taxes and fees (including any penalties
and interest) incurred in connection with this Agreement and the other
Transaction Documents (including any real property transfer Tax and any other
similar Tax) when due.

 

(c)      If requested by Purchaser, Seller shall notify all of the taxing
authorities in the jurisdictions that impose Taxes on Seller or where Seller has
a duty to file Tax Returns of the transactions contemplated by this Agreement in
the form and manner required by such taxing authorities, if the failure to make
such notifications or receive any available tax clearance certificate (a “Tax
Clearance Certificate”) could subject Purchaser to any Taxes of Seller. If any
taxing authority asserts that Seller is liable for any Tax, Seller shall
promptly pay any and all such amounts and shall provide evidence to Purchaser
that such liabilities have been paid in full or otherwise satisfied. 

 

41

 

6.9      Discharge of Business Obligations after the Closing.

 

(a)      From and after the Closing, Seller shall pay and discharge on a timely
basis all Excluded Liabilities.

 

(b)      As of the Closing Date, Seller hereby (i) authorizes Purchaser or its
designee to open any and all mail addressed to Seller with respect to the
Purchased Assets or the Assumed Liabilities and delivered to the offices of the
Business if received on or after the Closing Date, and (ii) appoints Purchaser
or its designee as Seller’s attorney-in-fact to endorse, cash and deposit any
monies, checks or negotiable instruments received by Purchaser or its designee
after the Closing Date with respect to the Purchased Assets or accounts
receivable relating to work performed by Purchaser after the Closing, as the
case may be, made payable or endorsed to Seller or Seller’s order, for
Purchaser’s or its designee’s own account.

 

6.10      Bulk Sales Laws. Purchaser and Seller hereby waive compliance by
Purchaser and Seller with the bulk sales laws and any other similar Laws in
respect of the transactions contemplated hereby and the other Transaction
Documents. Any Liabilities arising out of the failure of Seller to comply with
the requirements and provisions of any bulk sales, bulk transfer or similar Laws
of any jurisdiction which would not otherwise constitute Assumed Liabilities
shall be treated as Excluded Liabilities.

 

6.11      Confidentiality. From and after the Closing, Seller and each of the
Unitholders shall hold in confidence any and all information, whether written or
oral, concerning the Business, except to the extent that Seller or such
Unitholder can show that such information (a) is generally available to and
known by the public through no fault of Seller or any of the Unitholders, any of
its Affiliates or its respective representatives; or (b) is lawfully acquired by
Seller or such Unitholder, any of its Affiliates or its respective
representatives from and after the Closing from sources which are not prohibited
from disclosing such information by a legal, contractual or fiduciary
obligation. If Seller or any of the Unitholders or their respective
representatives are compelled to disclose any information by judicial or
administrative process or by other requirements of Law, Seller and such
Unitholder shall promptly notify Purchaser in writing and shall disclose only
that portion of such information which Seller or such Unitholder is advised by
its counsel in writing is legally required to be disclosed, provided that Seller
or such Unitholder shall use reasonable best efforts to obtain an appropriate
protective order or other reasonable assurance that confidential treatment will
be accorded such information.

 

6.12      Public Announcements. Neither Seller nor any of the Unitholders shall
make any public announcements in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media without the
prior written consent of Parent, provided that Seller may communicate with other
non-Unitholder members, noteholders, and similar related parties. Parent may
make public statements with respect to this Agreement and the transactions
contemplated hereby as it believes are required to comply with any listing
agreement with any national securities exchange or stock market or with its
obligations under applicable securities laws. 

 

42

 

6.13      Transfers of Parent Shares.

 

(a)      Seller agrees that it will not Transfer any Exchange Parent Shares,
Closing Parent Shares, Post-Closing Parent Shares or Earn-out Shares
(collectively, “Parent Shares”) to any third party, including to the Seller
Investor Parties, prior to the six-month anniversary of the Closing Date. During
each calendar month following the six-month anniversary of the Closing Date,
Seller may transfer to the Seller Investor Parties up to ten percent (10%), in
the aggregate (prorated for any period of less than a full calendar month), of
the total number of Parent Shares (calculated as of the first day of such
calendar month); provided, however, that if the number of Parent Shares held by
Seller on the first day of a calendar month (prior to any transfer of Parent
Shares in such calendar month) is less than ten percent (10%) of the aggregate
number of Parent Shares, then, during such calendar month, Seller may distribute
to the Seller Investor Parties all remaining Parent Shares held by Seller.

 

(b)      Any transfers permitted pursuant to Section 6.13(a) shall be made by
Seller and allocated among the Seller Investor Parties in accordance with
Seller’s Articles of Organization and Operating Agreement and in compliance with
the terms of all agreements and instruments pursuant to which Seller has issued
any equity, debt or profits or other interest in Seller. Any transfer of the
Shares by Seller to the Seller Investor Parties shall not relieve Seller or any
Seller Investor Party of its indemnity obligations under Article IX.

 

6.14      Pro Rata Shares. Seller shall deliver to Parent and Purchaser not more
than thirty 30) Business Days following the Closing a spreadsheet that includes
the name of each Seller Investor Party and the portion of the Purchase Price,
after giving effect to the adjustments set forth in Section 3.2(b)(ii) and
Section 3.2(b)(iii), that will be allocated to each such Seller Investor Party
in accordance with the documents described in Section 6.13(b) (such portion,
such Investor Seller Party’s “Pro Rata Share”).

 

6.15      Rule 144. Nothing in this Agreement or any other Transaction Document
is intended to prevent or restrict the transfer of Parent Shares made in
accordance with applicable laws, including but not limited to the U.S.
Securities Laws. Parent and Purchaser shall cooperate reasonably with holders of
Parent Shares to facilitate the sales of such shares in accordance with Rule 144
(17 C.F.R. § 230.144) under the Securities Act and such cooperation will
include, but will not be limited to, removing restrictive legends from share
certificates that have been held by non-affiliates for the applicable Rule 144
holding periods. The seller of any Parent Shares will be solely responsible for
compliance with all stated and federal laws and regulations pertaining to the
sales of Parent Shares.

 

ARTICLE VII

 

CONDITIONS TO CLOSING 

 

7.1      Conditions to Obligations of All Parties. The obligations of each party
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment, at or prior to the Closing, of the following condition:

 

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(a)      No Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Order which is in effect and has the effect of making
the transactions contemplated by this Agreement illegal, otherwise restraining
or prohibiting consummation of such transactions or causing any of the
transactions contemplated hereunder to be rescinded following completion
thereof.

 

7.2      Conditions to Obligations of Parent and Purchaser. The obligations of
Parent and Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or Parent and Purchaser’s waiver,
at or prior to the Closing, of each of the following conditions:

 

(a)      Other than the Seller Fundamental Representations, the representations
and warranties of Seller contained in this Agreement, the other Transaction
Documents and any certificate or other writing delivered pursuant hereto shall
be true and correct in all respects (in the case of any representation or
warranty qualified by materiality or material adverse effect) or in all material
respects (in the case of any representation or warranty not qualified by
materiality or material adverse effect) on and as of the date hereof and on and
as of the Closing Date with the same effect as though made at and as of such
date (except those representations and warranties that address matters only as
of a specified date, the accuracy of which shall be determined as of that
specified date in all respects). The Seller Fundamental Representations shall be
true and correct in all respects on and as of the date hereof and on and as of
the Closing Date with the same effect as though made at and as of such date
(except those representations and warranties that address matters only as of a
specified date, the accuracy of which shall be determined as of that specified
date in all respects).

 

(b)      Seller and each of the Unitholders shall have duly performed and
complied with all agreements, covenants and conditions required by this
Agreement.

 

(c)      No Action shall have been commenced against Parent, Purchaser, Seller
or any of the Unitholders which would prevent the Closing.

 

(d)      All Consents that are listed on Section 4.3(a) of the Disclosure
Schedules shall have been received in form and substance reasonably satisfactory
to Parent and Purchaser, and executed counterparts thereof shall have been
delivered to Parent and Purchaser at or prior to the Closing.

 

(e)      From the date of this Agreement, there shall not have occurred any
material adverse effect on the Business or the Purchased Assets, nor shall any
event or events have occurred that, individually or in the aggregate, with or
without the lapse of time, could reasonably be expected to result in a material
adverse effect on the Business or the Purchased Assets.

 

(f)      Seller shall have delivered to Parent and Purchaser duly executed
counterparts to the Transaction Documents (other than this Agreement) and such
other documents and deliveries set forth in Section 2.3(c). 

 

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(g)      Purchaser shall have received all Authorizations that are necessary for
it to conduct the Business as conducted by Seller as of the Closing Date.

 

(h)      All Liens relating to the Purchased Assets shall have been released in
full, other than Permitted Liens, and Seller shall have delivered to Purchaser
written evidence, in form satisfactory to Parent and Purchaser in its sole
discretion, of the release of such Liens.

 

(i)      Parent and Purchaser shall have received a certificate, dated the
Closing Date and signed by a duly authorized officer of Seller, that each of the
conditions set forth in Section 7.2(a) and Section 7.2(b) have been satisfied
(the "Seller Closing Certificate").

 

(j)      Parent and Purchaser shall have received a certificate of the Secretary
or an Assistant Secretary (or equivalent officer) of Seller certifying that
attached thereto are true and complete copies of all resolutions adopted by the
board of directors of Seller authorizing the execution, delivery and performance
of this Agreement and the other Transaction Documents and the consummation of
the transactions contemplated hereby and thereby, and that all such resolutions
are in full force and effect and are all the resolutions adopted in connection
with the transactions contemplated hereby and thereby.

 

(k)      Each Seller Investor Party other than the Unitholders shall have
delivered to Parent and Purchaser an Acknowledgment and Joinder Agreement in the
form attached hereto as Exhibit E.

 

(l)      Seller shall have delivered to Purchaser such other documents or
instruments as Purchaser reasonably requests and are reasonably necessary to
consummate the transactions contemplated by this Agreement.

 

(m)      Each of the employees of the Business whose names are included on
Schedule 7.2(m) shall have accepted Purchaser’s offer of employment and shall be
Transferred Employees.

 

(n)      Seller shall have obtained a new agreement with Pix4D for the license
of Pix4D software on terms satisfactory to Purchaser, including a provision that
such agreement is freely assignable to Purchaser. Seller shall pay any usage
fees under such new agreement through the Closing Date and Purchaser shall pay
such fees after the Closing Date.

 

7.3      Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or Seller's waiver, at or prior to the Closing, of each of the
following conditions:

 

(a)      Other than the Purchaser Fundamental Representations, the
representations and warranties of Parent and Purchaser contained in this
Agreement, the other Transaction Documents and any certificate or other writing
delivered pursuant hereto shall be true and correct in all respects (in the case
of any representation or warranty qualified by materiality or material adverse
effect) or in all material respects (in the case of any representation or
warranty not qualified by materiality or material adverse effect) on and as of
the date hereof and on and as of the Closing Date with the same effect as though
made at and as of such date (except those representations and warranties that
address matters only as of a specified date, the accuracy of which shall be
determined as of that specified date in all respects). The Purchaser Fundamental
Representations shall be true and correct in all respects on and as of the date
hereof and on and as of the Closing Date with the same effect as though made at
and as of such date.

 

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(b)      Purchaser shall have duly performed and complied with all agreements,
covenants and conditions required by this Agreement.

 

(c)      Purchaser shall have delivered to Seller and the Unitholders duly
executed counterparts to the Transaction Documents (other than this Agreement)
and such other documents and deliveries set forth in Section 2.3(d).

 

(e)      Purchaser shall have delivered the Escrow Amount to the Escrow Agent
pursuant to Section 2.3(f).

 

(f)      Seller shall have received a certificate, dated the Closing Date and
signed by a duly authorized officer of Purchaser, that each of the conditions
set forth in Section 7.3(a) and Section 7.3(b) have been satisfied (the
“Purchaser Closing Certificate”).

 

(g)      Purchaser shall have delivered to Seller such other documents or
instruments as Seller reasonably requests and are reasonably necessary to
consummate the transactions contemplated by this Agreement.

 

 

ARTICLE VII

 

TERMINATION

 

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

 

(a)      by the mutual written consent of Parent, Purchaser and Seller;

 

(b)      by Parent and Purchaser by written notice to Seller and the Unitholders
if:

 

(i)      neither Parent nor Purchaser is then in material breach of any
provision of this Agreement and there has been a breach, inaccuracy in or
failure to perform any representation, warranty, covenant or agreement made by
Seller or the Unitholders pursuant to this Agreement that would give rise to the
failure of any of the conditions specified in Article VII and such breach,
inaccuracy or failure has not been cured by Seller or the Unitholders, as the
case may be, within ten (10) days of Seller's and the Unitholders’ receipt of
written notice of such breach from Parent and Purchaser; or

 

(ii)      any of the conditions set forth in Section 7.1 or Section 7.2 shall
not have been, or if it becomes apparent that any of such conditions will not
be, fulfilled by ninety (90) days following the date hereof, unless such failure
shall be due to the failure of Parent or Purchaser to perform or comply with any
of the covenants, agreements or conditions hereof to be performed or complied
with by it prior to the Closing;

 

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(c)      by Seller by written notice to Parent and Purchaser if:

 

(i)      neither Seller nor any Unitholder is then in material breach of any
provision of this Agreement and there has been a breach, inaccuracy in or
failure to perform any representation, warranty, covenant or agreement made by
Parent or Purchaser pursuant to this Agreement that would give rise to the
failure of any of the conditions specified in Article VII and such breach,
inaccuracy or failure has not been cured by Purchaser within ten (10) days of
Purchaser's receipt of written notice of such breach from Seller; or

 

(ii)      any of the conditions set forth in Section 7.1 or Section 7.3 shall
not have been, or if it becomes apparent that any of such conditions will not
be, fulfilled by ninety (90) days following the date hereof, unless such failure
shall be due to the failure of Seller or any Unitholder to perform or comply
with any of the covenants, agreements or conditions hereof to be performed or
complied with by it prior to the Closing; or

 

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

 

8.2      Effect of Termination. In the event of the termination of this
Agreement in accordance with this Article VIII, this Agreement shall forthwith
become void and there shall be no obligation on the part of any Party hereto
except:

 

(a)      if this Agreement is terminated pursuant to Section 8.1(a), Section
8.1(c)(i), Section 8.1(c)(ii), or Section 8.1(d), Seller shall repay to Parent
and Purchaser, as applicable, the LOI Advance and the Signing Advance pursuant
to the terms applicable to the same;

 

(b)      if this Agreement is terminated pursuant to either Section 8.1(b)(i) or
Section 8.1(b)(ii), within three (3) business days of such termination, Seller
shall repay to Parent and Purchaser, as applicable, the principal and all
outstanding interest of the LOI Advance and the Signing Advance in immediately
available funds to accounts designated by Parent and Purchaser;

 

(c)      as set forth in this Article VIII, Section 6.12 and Article X hereof;
and

 

(d)      that nothing herein shall relieve any Party hereto from liability for
any willful breach of any provision hereof prior to such termination.

 

 

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ARTICLE IX

 

INDEMNIFICATION

 

9.1      Survival.

 

(a)      The Seller General Representations and the Purchaser General
Representations shall survive until the twelve-month anniversary of the Closing
Date (the “First Cut-Off Date”). The Seller Special Representations shall
survive until the second anniversary of the Closing Date (the “Second Cut-Off
Date”). The Seller Fundamental Representations and the Purchaser Fundamental
Representations shall survive until the fourth (4th) anniversary date (the
“Third Cut-Off Date”. The covenants and agreements of the parties contained
herein requiring performance after the Closing shall survive in accordance with
their terms.

 

(b)      If any Notice of Claim is given in good faith in accordance with the
terms of Section 9.4 on or prior to (i) the First Cut-Off Date in respect of (A)
a breach of the Seller Representations (other than Seller Fundamental
Representations and Seller Special Representations), or (B) a breach of the
Purchaser Representations (other than the Purchaser Fundamental
Representations), (ii) the Second Cut-Off Date in respect of a breach of the
Seller Special Representations, or (iii) the Third Cut-Off Date in respect of a
breach of the Seller Fundamental Representations or the Purchaser Fundamental
Representations) then the claims specifically set forth in the Notice of Claim
shall survive until such time as such claim is finally resolved.

 

9.2      Indemnification by Seller and the Unitholders.

 

(a)      Seller, each Unitholder and each other Seller Investor Party shall,
severally but not jointly in accordance with each such Unitholder’s and other
Seller Investor Party’s Pro Rata Share and in accordance with this Article IX,
indemnify and defend, save and hold Parent, Purchaser, their Affiliates, and
their respective directors, officers, employees and representatives (the
“Purchaser Indemnitees”) harmless from and against any claim, damage, liability,
loss, judgment, cost, expense (including all reasonable attorneys’ fees and
costs, court costs and expert witness fees and costs), deficiency, interest,
penalty, impositions, assessments or fines (collectively, “Losses”) arising out
of or resulting from:

 

(i)      the breach of any representation or warranty made by Seller or a
Unitholder in this Agreement (and the related certifications in the Seller
Closing Certificate) or in any of the other Transaction Documents to which
Seller and/or the Unitholders are a Party;

 

(ii)      any failure of Seller or any of the Unitholders to perform or observe
any covenant or agreement on the part of Seller or the Unitholders to be
performed or observed hereunder or under any of the other Transaction Documents
to which Seller and/or the Unitholders are a party;

 

(iii)      the Excluded Liabilities;

 

 

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(iv)      fraudulent transfer Laws or the failure to comply with any bulk sales
Laws or similar Laws; or

 

(v)      the ownership of the Purchased Assets or the conduct of the Business by
Seller prior to the Closing.

 

(b)      Seller, the Unitholders, and the other Seller Investor Parties shall
not be liable for any Loss or Losses pursuant to Section 9.2(a)(i) (“Purchaser
Warranty Losses”) (i) unless and until the aggregate amount of all Purchaser
Warranty Losses incurred by the Purchaser Indemnitees exceeds THIRTY FIVE
THOUSAND DOLLARS ($35,000.00) (the “Deductible”), in which event Seller, the
Unitholders and the other Seller Investor Parties shall be liable for all
Purchaser Warranty Losses in excess of the Deductible, and (ii) to the extent
that Purchaser Warranty Losses exceed ONE MILLION DOLLARS ($1,000,000.00) in the
aggregate (the “General Cap”); provided that the Deductible shall not apply to
any Purchaser Warranty Losses that result from any breach by Seller or any of
the Unitholders of the Seller Fundamental Representations; and provided further
that the General Cap shall not apply to any Purchaser Warranty Losses that
result from any breach by Seller or Unitholder of the Special Representations or
the Seller Fundamental Representations.

 

(c)      The cumulative indemnification obligation of Seller, the Unitholders,
and the other Seller Investor Parties with respect to any and all Purchaser
Warranty Losses for breach of the Seller General Representations and Seller
Special Representations shall not exceed ONE MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS ($1,250,000.00) (the “Special Cap”); provided that the Special Cap shall
not apply to any Purchaser Warranty Losses that result from any breach by Seller
or any of the Unitholders of the Seller Fundamental Representations.

 

(d)      The cumulative indemnification obligation of Seller, the Unitholders,
and the other Seller Investor Parties with respect to any and all Purchaser
Warranty Losses for breach of the Seller General Representations, Seller Special
Representations and Seller Fundamental Representations and Section
9.2(a)(iv)-(v) shall not exceed ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000.00) (the “Maximum Cap”).

 

(e)      For the avoidance of doubt, the Deductible, the General Cap, the
Special Cap and the Maximum Cap shall not apply to any Losses incurred by the
Purchaser Indemnitees that are subject to indemnification under Section
9.2(a)(ii)-(iii); provided that, with respect to any breach by a Unitholder
contained in Section 6.5, only such Unitholder and not any other Unitholder or
other Seller Investor Party shall be liable with respect to Losses arising as a
result of such breach.

 

(f)      In the event of any Loss or Losses for which a Purchaser Indemnitee is
entitled to be indemnified pursuant to this Section 9.2, such Purchaser
Indemnitee shall first seek recovery as follows:

 

(i)      First, out of the Escrow Fund as follows: (A) first, the Escrow Cash
equal to the Loss; and (B) second, if the Escrow Cash is not sufficient, then
the number of Escrow Shares with a value, based on the Indemnity Share Price,
equal to the remaining Loss shall be transferred to the Purchaser Indemnitee;

 

49

 

 

(ii)      Second, to the extent that the Escrow Fund has terminated or is not
sufficient therefor, the Purchaser Indemnitee shall seek recovery from Seller of
the portion of the Loss that has not been satisfied from the Escrow Fund;
provided, that Seller may satisfy its indemnity obligation, in whole or in part,
by the transfer to such Purchaser Indemnitee of a number of shares of Parent
Common Stock with a value, based on the Indemnity Share Price, equal to the
amount of the Loss; and

 

(iii)      Third, to the extent that a Purchaser Indemnitee is not indemnified
out of the Escrow Fund or by Seller, such Purchaser Indemnitee may recover the
Loss from the Unitholders and the other Seller Investor Parties, severally but
not jointly, in accordance with their respective Pro Rata Shares, but not to
exceed in the aggregate such Unitholder’s and other Seller Investor Party’s Pro
Rata Share of the Maximum Cap.

 

(g)      “Indemnity Share Price” means (i) in the event that Seller has not
earned the Earn-out Shares, the average price obtained by dividing FOUR MILLION
DOLLARS ($4,000,000) by the sum of the Exchange Parent Shares, the Closing
Parent Shares and the Post-Closing Parent Shares, or (ii) in the event that
Seller has earned the Earn-Out shares, the average price obtained by dividing
FOUR MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($4,250,000) by the sum of the
Exchange Parent Shares, the Closing Parent Shares, the Post-Closing Parent
Shares, and the Earn-out Shares. The Indemnity Share Price shall be subject to
appropriate adjustment in the event of any stock dividend, stock split, stock
combination or other similar recapitalization change with respect to or
otherwise affecting the Parent Shares.

 

9.3      Indemnification by Purchaser. Purchaser and Parent shall indemnify and
defend, save and hold Seller, its Affiliates, and their respective directors,
officers, employees and representatives (the “Seller Indemnitees”) harmless from
and against any Losses arising out of or resulting from:

 

(a)      the breach of any representation or warranty made by Purchaser or
Parent in this Agreement (and the related certifications in the Purchaser
Closing Certificate) or in any of the other Transaction Documents to which it is
a party;

 

(b)      any failure of Purchaser or Parent to perform or observe any covenant
or agreement on the part of Purchaser or Parent to be performed or observed
hereunder or under any of the other Transaction Documents to which it is a
party;

 

(c)      the Assumed Liabilities; or

 

(d)      the ownership of the Purchased Assets or the conduct of the business of
Purchaser or Parent after the Closing Date, except, in each case, for Excluded
Liabilities.

 

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Purchaser shall not be liable for any Loss or Losses pursuant to Section 9.3(a)
(“Seller Warranty Losses”) (i) unless and until the aggregate amount of all
Seller Warranty Losses incurred by the Seller Indemnitees exceeds the
Deductible, in which event Purchaser shall be liable for all Seller Warranty
Losses in excess of the Deductible, and (ii) to the extent that Seller Warranty
Losses exceed the General Cap; provided that the Deductible and the General Cap
shall not apply to any Seller Warranty Losses that result from any breach by
Purchaser of the Purchaser Fundamental Representations; and provided further
that the cumulative indemnification obligation of Purchaser with respect to any
and all Seller Warranty Losses shall not exceed the Maximum Cap. For the
avoidance of doubt, the Deductible, the General Cap and the Maximum Cap shall
not apply to any Losses incurred by Seller that are subject to indemnification
under Section 9.3(b)-(d).

 

9.4      Conduct of Proceedings.

 

(a)      In the event that any Person not a Party to this Agreement (including a
Governmental Authority) shall levy an assessment or commence or file or threaten
to commence or file any lawsuit or proceeding, which pending or threatened
lawsuit or proceeding or assessment may result in any Losses subject to
indemnification under this Agreement (each, a “Third Party Claim”), then the
Purchaser Indemnitee or the Seller Indemnitee, as the case may be (the
“Indemnified Party”) shall provide written notice (“Notice of Claim”) of such
Third Party Claim to the indemnifying party (the “Indemnifying Party”) as soon
as is reasonably practicable but in any event within thirty (30) days after
discovery or receipt of notice of such Proceeding (provided, however, that
failure to notify within such time period shall not rescind or revoke the
Indemnifying Party’s obligation to indemnify but shall only reduce the amount of
the indemnification to the extent that the Indemnifying Party is damaged by such
delay).

 

(b)      The Indemnifying Party shall have the option, at its own cost and
expense, to assume the defense of such Third Party Claim by retaining counsel
for and reasonably acceptable to the Indemnified Party to defend the same
(“Third Party Defense”). If the Indemnifying Party elects to assume control of
the defense of any Third Party Claim, the Indemnifying Party shall give prompt
written notice to the Indemnified Party of such election and the Indemnified
Party shall have the right to participate in the defense of such assessment or
such pending or threatened Proceeding at its own expense. The Indemnifying Party
will not be entitled to assume the Third Party Defense to the extent that: (i)
the Third Party Claim seeks, in addition to or in lieu of monetary damages, any
injunctive or other equitable relief; or (ii) the Third Party Claim relates to
or arises in connection with any criminal proceeding, action, indictment,
allegation or investigation.

 

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(c)      In the event that the defense of any Third Party Claim is tendered to
the Indemnifying Party and the Indemnifying Party assumes control of the Third
Party Defense, the Indemnified Party shall cooperate and assist the Indemnifying
Party in conducting such Third Party Defense. If the Indemnifying Party assumes
the defense of any Third Party Claim, it will take all steps necessary in the
defense, prosecution, or settlement of such claim and will hold all Indemnified
Parties harmless from and against all Losses caused by or arising out of such
Third Party Claim. The Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement except with the written consent of the
Indemnified Party; provided that the consent of the Indemnified Party shall not
be required if all of the following conditions are met: (i) the terms of the
judgment or proposed settlement include as an unconditional term thereof the
giving to the Indemnified Parties by the third party of a release of the
Indemnified Parties from all liability in respect of such Third Party Claim,
(ii) there is no finding or admission of (A) any violation of Law by the
Indemnified Parties (or any Affiliate thereof), (B) any violation of the rights
of any Person and (C) no effect on any other action or claims of a similar
nature that may be made against the Indemnified Parties (or any Affiliate
thereof), and (iii) the sole form of relief is monetary damages which are paid
in full by the Indemnifying Party. The Indemnifying Party shall conduct the
defense of the Third Party Claim actively and diligently, and the Indemnified
Party will provide reasonable cooperation in the defense of the Third Party
Claim. So long as the Indemnifying Party is reasonably conducting the Third
Party Defense in good faith, the Indemnified Party will not consent to the entry
of any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not to be
unreasonably withheld or delayed). Notwithstanding the foregoing, the
Indemnified Party shall have the right to pay or settle any such Third Party
Claim, provided that in such event it shall waive any right to indemnity
therefor by the Indemnifying Party for such claim unless the Indemnifying Party
shall have consented to such payment or settlement (such consent not to be
unreasonably withheld or delayed). If the Indemnifying Party is not reasonably
conducting the Third Party Defense in good faith, the Indemnified Party shall
have the right to consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party and the Indemnifying Party shall reimburse the
Indemnitee promptly for all Losses incurred in connection with such judgment or
settlement.

 

(d)      In the event that (i) an Indemnified Party gives Notice of Claim to the
Indemnifying Party and the Indemnifying Party fails or elects not to assume a
Third Party Defense which the Indemnifying Party had the right to assume under
this Section 9.4 or (ii) the Indemnifying Party is not entitled to assume the
Third Party Defense pursuant to this Section 9.4, the Indemnified Party shall
have the right, with counsel of its choice, to defend, conduct and control the
Third Party Defense, at the sole cost and expense of the Indemnifying Party. In
each case, the Indemnified Party shall conduct the Third Party Defense actively
and diligently, and the Indemnifying Party will provide reasonable cooperation
in the Third Party Defense. The Indemnified Party shall have the right to
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim on such terms as it may deem appropriate; provided,
however, that the amount of any settlement made or entry of any judgment
consented to by the Indemnified Party without the consent of the Indemnifying
Party shall not be determinative of the validity of the claim, except with the
consent of the Indemnifying Party (not to be unreasonably withheld or delayed).
If the Indemnifying Party does not elect to assume a Third Party Defense which
it has the right to assume hereunder, the Indemnified Party shall have no
obligation to do so.

 

(e)      Each party to this Agreement shall use its commercially reasonable
efforts to cooperate and to cause its employees to cooperate with and assist the
Indemnified Party or the Indemnifying Party, as the case may be, in connection
with any Third Party Defense, including attending conferences, discovery
proceedings, hearings, trials and appeals and furnishing records, information
and testimony, as may reasonably be requested; provided that each party shall
use its best efforts, in respect of any Third Party Claim of which it has
assumed the defense, to preserve the confidentiality of all confidential
information and the attorney-client and work-product privileges

 

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9.5      Indemnification Procedures for Non-Third Party Claims. The Indemnified
Party will deliver a Notice of Claim to the Indemnifying Party promptly upon its
discovery of any matter for which the Indemnifying Party may be liable to the
Indemnified Party hereunder that does not involve a Third Party Claim. The
Indemnified Party shall reasonably cooperate and assist the Indemnifying Party
in determining the validity of any claim for indemnity by the Indemnified Party
and in otherwise resolving such matters. Such assistance and cooperation shall
include providing reasonable access to and copies of information, records and
documents relating to such matters, furnishing employees to assist in the
investigation, defense and resolution of such matters and providing legal and
business assistance with respect to such matters.

 

9.6      Escrow Fund.

 

(a)      As partial security for the indemnity provided in Section 9.2 and the
obligations of the Key Employees provided in Section 9.8, Purchaser shall cause
to be delivered to the Escrow Agent, on each of the Closing Date and the
ninetieth day after the Closing Date, a portion of the Escrow Amount as set
forth in Sections 3.2 and 3.3. The Escrow Amount, together with any and all
income and proceeds thereon, shall be referred to hereinafter as the “Escrow
Fund.” The Escrow Fund shall be available to compensate Purchaser Indemnitees
for the indemnification obligations of Seller and Unitholder under this Article
IX. The Parties agree and acknowledge that claims against the Escrow Fund are
not the exclusive remedy of any Purchaser Indemnitee for indemnifiable Losses
hereunder; provided that Purchaser shall first seek indemnification for any such
Losses from the Escrow Fund and, to the extent that the Escrow Fund is not
sufficient therefor or is otherwise exhausted, may recover such Losses directly
from Seller and the Unitholders (subject to the limitations set forth in Section
9.2).

 

(b)      The Escrow Fund shall be held and disbursed by the Escrow Agent in
accordance with the terms of this Agreement and the Escrow Agreement.

 

(c)      The Escrow Fund shall be in existence on the Closing Date and shall
terminate at 5:00 p.m., Eastern Time, on the fifteenth-month anniversary of the
Closing Date (the period of time from the Closing Date through and including
such termination date is referred to herein as the “Escrow Period”); provided,
however, that the Escrow Period shall not terminate with respect to any amount
that is subject to any claim that is pending against the Escrow Fund as of such
date and time and, solely with respect to all such claims, the Escrow Period
shall be extended until such date and time as all such claims are resolved or
finally determined in accordance with this Agreement and the Escrow Agreement.
Upon termination, and subject to the provisions in the preceding sentence, the
entire remaining Escrow Fund shall be paid to Seller and the Purchaser shall so
instruct the Escrow Agent.

 

9.7      Exclusive Remedy. Except in the case of fraud, intentional
misrepresentation of willful misconduct, the provisions of this Article IX
constitute the sole and exclusive remedies for the breach of any representations
and warranties set forth in this Agreement.

 

 

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9.8      Key Employees.

 

(a)      The continued employment of the Key Employees with the Business is a
material inducement to Purchaser and Parent to enter into this Agreement and to
consummate the transactions contemplated hereby. Accordingly, if, on or prior to
the one-year anniversary of the Closing Date, either of the Key Employees (1)
voluntarily terminates his employment with Purchaser, or (2) is terminated by
Purchaser for Cause (the last date of such Key Employee’s employment being
referred to his “Separation Date”), then Purchaser shall be entitled to receive,
solely from the shares remaining in the Escrow Fund on the Separation Date, the
lesser of the following:

 

(i)      The number of Escrow Shares having a value, at the Indemnity Share
Price as of such Key Employee’s Separation Date, equal to “A” minus “B”, where:

 

“A” equals ONE MILLION DOLLARS ($1,000,000); and

 

“B” equals the product of FIFTY THOUSAND DOLLARS ($50,000) multiplied by the
number of months between the Closing Date and such Key Employee’s Separation
Date, rounded to the nearest whole month.

 

Solely for purposes of illustration, if a Key Employee voluntarily terminates
his employment with Purchaser exactly four months after the Closing Date, the
Escrow Shares described in this Section 9.8(a)(i), with respect to such Key
Employee, will be that number of Escrow Shares having a value, at the Indemnity
Share Price as of such Key Employee’s Separation Date, equal to $800,000.00
(i.e., $1,000,000.00 – (4 x $50,000.00)) = $1,000,000.00 –

$200,000.00 = $800,000.00).

 

(ii)      all the Escrow Shares remaining in the Escrow Fund.

 

(b)      For clarity, the maximum value of Escrow Shares, at the Indemnity Share
Price, subject to release to Purchaser under this Section 9.8 is ONE MILLION
DOLLARS ($1,000,000) for both Key Employees.

 

(c)      In any event or circumstance requiring the release of Escrow Shares
under Section 9.8(a), Purchaser and the Representative shall instruct the Escrow
Agent to release the appropriate number of Escrow Shares to Purchaser in
accordance with the terms of this Section 9.8.

 

(d)      Other than in the case of a termination for Cause and subject to any
restrictive covenants and other obligations that survive termination of such Key
Employee’s employment, the delivery of Escrow Shares to Purchaser under this
Section 9.8 in connection with the termination of employment of a Key Employee
will be deemed in full accord and satisfaction of all claims, damages,
liabilities, indemnities, and obligations arising out of or in connection with
the termination of the employment of the Key Employee with respect to whom the
delivery was made. 

 

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ARTICLE X

 

MISCELLANEOUS

 

10.1      Successors and Assigns. Except as otherwise provided in this
Agreement, no Party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other Parties
hereto, and any purported assignment without such prior written consent shall be
void and of no force or effect; provided, however, that Purchaser may, without
such consent, assign this Agreement to any of its Affiliates. This Agreement
shall inure to the benefit of and shall be binding upon the successors and
permitted assigns of the Parties hereto.

 

10.2      Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of New York applicable to contracts
entered into and to be entirely performed within such State.

 

10.3      Broker’s and Finder’s Fees. Seller represents and warrants that it has
dealt with no broker or finder in connection with any of the transactions
contemplated by this Agreement, and, insofar as it knows, no broker or other
Person is entitled to any commission or finder’s fee in connection with any of
these transactions. Purchaser represents and warrants that it has dealt with no
broker or finder in connection with any of the transactions contemplated by this
Agreement, and, insofar as it knows, no broker or other Person is entitled to
any commission or finder’s fee in connection with any of these transactions. If
any other Person claims to be owed any such fees or commission as a result of
its dealings with either Party, then such identified Party shall indemnify and
hold the other harmless from and against all Losses resulting from such claims.

 

10.4      Severability. If any term, provision, agreement, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, agreements, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to either
Party hereto. Upon such a determination, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in a reasonably acceptable manner in order that
the transactions contemplated hereby may be consummated as originally
contemplated to the fullest extent possible. 

 

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documents and instruments delivered pursuant to any provision hereof are
expressly made a part of this Agreement as fully as though completely set forth
herein.

 

10.10      Parties in Interest. Nothing in this Agreement is intended to confer
any rights or remedies under or by reason of this Agreement on any Persons other
than Seller, Purchaser, the Unitholders, their respective successors and
permitted assigns, the Purchaser Indemnitees and the Seller Indemnitees. Nothing
in this Agreement is intended to relieve or discharge the obligations or
liability of any third Persons to Seller, Purchaser or the Unitholders.

 

10.11      Section and Paragraph Headings. The section and paragraph headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

 

10.12      Facsimile or Electronic Mail Execution. Delivery of an executed
counterpart of this Agreement, any other Transaction Document or any other
instrument or document contemplated hereby by facsimile or electronic mail shall
be equally effective as delivery of a manually executed counterpart. Any party
that delivers any such counterpart by facsimile or electronic mail shall also
deliver a manually executed counterpart, but the failure to do so shall not
affect the validity, enforceability or binding effect of the applicable
agreement, instrument or document.

 

10.13      Representative.

 

(a) Seller, each Unitholder and, upon execution and delivery to Purchaser and
Parent of the Acknowledgment and Joinder Agreement, each other Seller Investor
Party hereby appoints Paul Hoff as its representative and its true and lawful
attorney-in-fact and agent, with full powers of substitution and resubstitution,
in its name, place and stead, in any and all capacities, in connection with the
transactions contemplated by this Agreement and the Escrow Agreement, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
with the transactions contemplated hereby and thereby as fully to all intents
and purposes as it might or could do in person. Without limiting the foregoing,
Seller, each Unitholder and each other Seller Investor Party hereby irrevocably
appoint Representative as their sole representative to act as the
attorney-in-fact and agent and on behalf of each of them for the purposes of:
(i) supervising the Closing; (ii) taking any and all actions that may be
necessary or desirable, as determined by Representative, in his sole discretion,
in connection with the amendment of this Agreement, or waiver of any provision
in this Agreement; (iii) accepting notices (including, without limitation,
Notices of Claim) on their behalf; (iv) to act for each of them with regard to
matters pertaining to indemnification referred to in this Agreement and the
Escrow Agreement, including the power to compromise any indemnity claim on their
behalf; (v) executing and delivering, on behalf of Seller, such Unitholder and
such other Seller Investor Party, any and all notices, documents or certificates
to be executed by any of them in connection with this Agreement and the Escrow
Agreement and the transactions contemplated hereby and thereby; (vi) to act for
each of them with regard to matters pertaining to litigation (with the
Unitholders and the other Seller Investor Parties hereby agreeing severally, but
not jointly, to contribute, in respect of any amounts paid (or required to be
paid) in settlement or compromise of such matters, their pro rata portion of
such amounts based on their Pro Rata Share); and (vii) granting any consent,
waiver or approval on behalf of each of them under this Agreement and the Escrow
Agreement. As the representative under this Agreement and the Escrow Agreement,
Representative shall act as the agent for Seller, all Unitholders and all other
Seller Investor Parties, shall have authority to bind each such Person in
accordance with this Agreement, and Purchaser may rely on such appointment and
authority until the receipt of notice of the appointment of a successor upon two
(2) Business Days’ prior written notice to Purchaser. Purchaser may conclusively
rely upon, without independent verification or investigation, all decisions made
by Representative in connection with this Agreement in writing and signed by
Representative.

 

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(b)      Neither Representative nor any agent employed by Representative shall
be liable to Seller, any Unitholder or any other Seller Investor Party relating
to the performance of Representative’s duties under this Agreement for any
errors in judgment, negligence, oversight, breach of duty or otherwise except to
the extent it is finally determined in a court of competent jurisdiction by
clear and convincing evidence that the acts or omissions of Representative
constituted willful misconduct or fraud. Representative shall be severally (but
not jointly) indemnified and held harmless by the Unitholders and the other
Seller Investor Parties, on a Pro Rata Share basis, against all costs and
expenses incurred by Representative in the course of performance of
Representative’s duties hereunder and losses, including costs of defense, paid
or incurred in connection with any action, suit, proceeding or claim to which
Representative is made a party by reason of the fact that Representative was
acting as Representative pursuant to this Agreement; provided, however, that
Representative shall not be entitled to indemnification hereunder to the extent
it is finally determined by a court of competent jurisdiction by clear and
convincing evidence that the acts or omissions of Representative constituted
willful misconduct or fraud. Representative shall be protected in acting upon
any notice, statement or certificate believed by Representative to be genuine
and to have been furnished by the appropriate Person and in acting or refusing
to act in good faith on any matter.

 

(c)      In the event that Representative resigns from its position as
Representative, a successor Representative shall be appointed by a
Majority-in-Interest as promptly as practicable. Each successor Representative
shall have all of the power, authority and rights conferred by this Agreement
upon the initial Representatives and the term “Representatives” herein shall be
deemed to include any successor Representative. “Majority-in-Interest” means
Unitholders and other Seller Investor Parties that, collectively, receive not
less than 50.1% of Purchase Price paid pursuant to this Agreement.

 

(d)      Representative shall be entitled to rely, and shall be fully protected
in relying, upon any statements furnished to it by Seller, any Unitholder, any
other Seller Investor Party, Parent or Purchaser, or any other evidence deemed
by Representative to be reliable, Representatives shall be entitled to act on
the advice of counsel selected by it. Representatives shall be fully justified
in failing or refusing to take any action under this Agreement unless it shall
have received such advice or concurrence of any such Person as it deems
appropriate or it shall have been expressly indemnified to its satisfaction
(severally as to each Unitholder and other Seller Investor Party and not jointly
as to or with any other Unitholder and other Seller Investor Party) against any
and all liability and expense that Representatives may incur by reason of taking
or continuing to take any such action. Representatives shall in all cases be
fully protected in acting, or refraining from acting, under this Agreement, the
Escrow Agreement and other agreement entered into in connection herewith and
therewith in accordance with a request or instructions from a
Majority-in-Interest, and such request or instructions, and any action taken or
failure to act pursuant thereto, shall be binding upon Seller, the Unitholders
and the other Investor Seller Parties.

 

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10.14      Interpretation. Except where expressly stated otherwise in this
Agreement, the following rules of interpretation apply to this Agreement: (a)
“either” and “or” are not exclusive and “include,” “includes” and “including”
are not limiting; (b) “hereof,” “hereto,” “hereby,” “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; (c) “date of this
Agreement” refers to the date set forth in the initial caption of this
Agreement; (d) “extent” in the phrase “to the extent” means the degree to which
a subject or other thing extends, and such phrase does not mean simply “if”; (e)
the descriptive headings and table of contents included herein are included for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement or any provision hereof; (f) definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms; (g) references to a contract or agreement mean such contract or agreement
as amended or otherwise supplemented or modified from time to time; (h)
references to a Person are also to its permitted successors and assigns; (i)
references to an “Article,” “Section,” “Exhibit” or “Schedule” refer to an
Article or Section of, or an Exhibit or Schedule to, this Agreement, including
all its parts and subparts; (j) references to “$” or otherwise to dollar amounts
refer to the lawful currency of the United States; (k) references to a federal,
state, local or foreign Law mean such Law as amended, modified, codified,
reenacted, supplemented or superseded in whole or in part, and in effect from
time to time and include any rules, regulations and delegated legislation issued
thereunder; references to accounting terms used and not otherwise defined herein
have the meaning assigned to them under GAAP; and (m) references to lists or
attachments on Schedules or the Disclosure Schedule or lists provided to the
Purchaser and/or Parent shall be to true, correct and complete lists and
attachments, and references to copies shall be to true, correct and complete
copies all of which have been provided or made available to the Purchaser.

 

 

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UNITHOLDERS:

 

 

 

/s/ Thomas McKinnon______________________________

 

Thomas McKinnon

     

Address:

  ________________________________________________  
________________________________________________  
________________________________________________      

/s/ Paul Hoff______________________________________

  Paul Hoff       Address:   ________________________________________________  
________________________________________________  
________________________________________________      

_/s/ Wayne Greenberg______________________________

 

Wayne Greenberg

     

Address:

  ______________________________________________  
________________________________________________  
________________________________________________      

_/s/ Lou Faust____________________________________

 

Lou Faust

     

Address:

  ________________________________________________  
________________________________________________  
________________________________________________      

REPRESENTATIVE

     

_/s/ Paul Hoff_____________________________________

 

Name: Paul Hoff

     

Address:

  ________________________________________________  
________________________________________________  
________________________________________________    

 

 

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