Exhibit 10.1

MERGER AGREEMENT
by and among
FORBES ENERGY SERVICES LLC
as Buyer,
COBRA TRANSITORY SUB LLC,
as Merger Sub,
CRETIC ENERGY SERVICES, LLC
as the Company
and
CATAPULT ENERGY SERVICES GROUP, LLC,
as the Holders Representative and Paying Agent
Dated as of November 16, 2018

iii

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TABLE OF CONTENTS
Page
Article I TERMS OF THE MERGER
2

Section 1.1.
The Merger    2

Section 1.2.
Effects of the Merger    2

Section 1.3.
Effective Time of the Merger    3

Section 1.4.
Effect of the Merger    3

Section 1.5.
Procedures.    4

Section 1.6.
Allocations    5

Section 1.7.
Merger Consideration    6

Section 1.8.
Closing Date    6

Section 1.9.
Closing Deliveries.    6

Section 1.10.
Merger Consideration Adjustment.    9

Section 1.11.
Merger Consideration Allocation.    13

Section 1.12.
Determination of Earn-Out Payments.    14

Section 1.13.
Escrow    17

Section 1.14.
Holders Representative Reserve    19

Section 1.15.
Paying Agent    19

Section 1.16.
Withholding    19

Article II REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
19

Section 2.1.
Organizational Status of the Company; Authorization.    19

Section 2.2.
No Conflicts; Consents and Approvals.    20

Section 2.3.
Capitalization of the Company and its Subsidiary.    21

Section 2.4.
Financial Statements    21

Section 2.5.
Absence of Undisclosed Liabilities    21

Section 2.6.
Real Property; Personal Property Leases.    22

Section 2.7.
Contracts.    23

Section 2.8.
Employee Benefit Matters.    24

Section 2.9.
Intellectual Property.    26

Section 2.10.
Governmental Authorizations; Compliance with Law    28

Section 2.11.
Litigation    28

Section 2.12.
Taxes    28

Section 2.13.
Absence of Changes    29

Section 2.14.
Environmental Matters    30

Section 2.15.
Employment Matters    31

Section 2.16.
No Brokers or Finders    32

Section 2.17.
Insurance    32

Section 2.18.
Title, Condition and Sufficiency of Assets    32

Section 2.19.
Related Party Transactions    33

Section 2.20.
No Powers of Attorney    33

Article III REPRESENTATIONS AND WARRANTIES OF BUYER
33

Section 3.1.
Organizational Status; Authority    33

Section 3.2.
No Conflicts; Consents and Approvals    34

Section 3.3.
Litigation    35

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Section 3.4.
Purchase for Investment    35

Section 3.5.
No Brokers or Finders    35

Section 3.6.
HSR Act    35

Article IV COVENANTS OF PARTIES
35

Section 4.1.
Consents    35

Section 4.2.
Publicity    36

Section 4.3.
Employee Benefits.    36

Section 4.4.
Director and Officer Indemnification    37

Section 4.5.
Post-Closing Procedures for Capital Interests Holders    38

Section 4.6.
Post-Closing Procedures for Incentive Interests Holders    38

Article V INDEMNIFICATION
39

Section 5.1.
Survival    39

Section 5.2.
Indemnification of Buyer.    39

Section 5.3.
Indemnification of Holders    41

Section 5.4.
Procedure for Indemnification.    41

Section 5.5.
Exclusive Remedies; Waiver of Certain Damages    42

Section 5.6.
Independent Investigation; Waiver of Other Representations.    43

Section 5.7.
Tax Treatment of Indemnity Payments    46

Section 5.8.
Other Matters.    46

Article VI POST-CLOSING MATTERS
47

Section 6.1.
Taxes    47

Section 6.2.
Preservation of Books and Records    51

Section 6.3.
Refunds    52

Article VII GENERAL PROVISIONS; MISCELLANEOUS
52

Section 7.1.
Modification; Waiver    53

Section 7.2.
Entire Agreement    53

Section 7.3.
Expenses    53

Section 7.4.
Further Actions    53

Section 7.5.
Notices    53

Section 7.6.
Assignment    55

Section 7.7.
No Third Party Beneficiaries    55

Section 7.8.
Counterparts    55

Section 7.9.
Rules of Construction.    55

Section 7.10.
Governing Law; Jury Waiver    56

Section 7.11.
Consent to Jurisdiction and Forum Selection    56

Section 7.12.
Disclosure Schedules    56

Section 7.13.
Specific Performance    57

Section 7.14.
Holders Representative.    57

Section 7.15.
Conflict Waiver; Attorney-Client Privilege.    60

SCHEDULES
Schedule 1.7(a)    CapEx Amount
Schedule 1.9(a)(iii)    Resignations
Schedule 1.9(b)(v)(A)    Closing Transaction Expense Payments

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Schedule 1.10(a)    Working Capital Adjustments
Schedule 1.12(e)    Monthly Reports
Schedule 2.2        Company: No Conflicts; Consents and Approvals
Schedule 2.3(a)    Capitalization
Schedule 2.3(c)    Agreements with Respect to the Membership Interests
Schedule 2.4        Financial Statements
Schedule 2.5        Absence of Undisclosed Liabilities
Schedule 2.6(b)    Facilities; Real Property Leases
Schedule 2.6(f)    Personal Property Leases
Schedule 2.7(a)    Material Contracts
Schedule 2.7(b)    Material Contract Exceptions
Schedule 2.7(c)    Material Contracts Not Provided
Schedule 2.8(a)    Employee Benefit Plans
Schedule 2.8(b)    Employee Benefit Plan Exceptions
Schedule 2.8(d)    Title IV Employee Benefit Plans
Schedule 2.9(a)    Intellectual Property
Schedule 2.9(c)    Intellectual Property Assignments
Schedule 2.9(e)    Source Code
Schedule 2.10        Governmental Authorizations; Compliance with Law
Schedule 2.11        Company Litigation
Schedule 2.12        Tax Matters
Schedule 2.13        Absence of Certain Changes
Schedule 2.14        Environmental Matters
Schedule 2.15        Employee Benefits
Schedule 2.17        Insurance
Schedule 2.18        Title, Condition and Sufficiency of Assets
Schedule 2.19        Related Party Transactions
Schedule 4.1        Consents
Schedule 4.3(a)    Continuing Employees

EXHIBITS
Exhibit A    Definitions
Exhibit B    Certificate of Merger
Exhibit C    [Reserved]
Exhibit D     Escrow Agreement
Exhibit E    [Reserved]
Exhibit F    Earn-Out EBITDA Definition and Assumptions
Exhibit G    Net Merger Consideration Payment Schedule
Exhibit H    Form of Letter of Transmittal
Exhibit I    CC8

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MERGER AGREEMENT
THIS MERGER AGREEMENT (this “Agreement”), dated as of November 16, 2018 (the
“Closing Date”), is entered into by and among Forbes Energy Services LLC, a
Delaware limited liability company (“Buyer”), Cobra Transitory Sub LLC, a
Delaware limited liability company (“Merger Sub”), Cretic Energy Services, LLC,
a Delaware limited liability company (the “Company”), and Catapult Energy
Services Group, LLC, a Delaware limited liability company (“Catapult”), solely
in its capacity as a representative for the Holders pursuant to Section 7.14
hereof (the “Holders Representative”) and in its capacity as Paying Agent. Each
of Buyer, the Company and the Holders Representative is referred to herein as a
“Party” and collectively are referred to as the “Parties.”
RECITALS
WHEREAS, Buyer has formed Merger Sub solely for the purpose of merging it with
and into the Company, as set forth below, with the Company continuing as the
surviving limited liability company and becoming a wholly-owned subsidiary of
Buyer;
WHEREAS, the managers and the requisite members of the Company have (i) approved
this Agreement and declared that it is advisable to enter into this Agreement
providing for the merger of the Merger Sub with and into the Company, with the
Company as the surviving entity, in accordance with the DLLCA, upon the terms
and subject to the conditions set forth herein and (ii) approved the execution,
delivery and performance of this Agreement and the consummation of the
Contemplated Transactions, in accordance with the DLLCA, upon the terms and
conditions contained herein;
WHEREAS, the board of directors of Buyer and the sole member of Merger Sub have
(i) approved this Agreement and declared it is advisable and in the best
interests of Buyer to enter into this Agreement providing for the merger of the
Merger Sub and with and into the Company, with the Company as the surviving
entity, in accordance with the DLLCA, upon the terms and subject to the
conditions set forth herein and (ii) approved the execution, delivery and
performance of this Agreement and the consummation of the Contemplated
Transactions, in accordance with the DLLCA, upon the terms and conditions
contained herein;
WHEREAS, the Parties desire to make certain representations, warranties,
covenants and agreements in connection with the Contemplated Transactions; and
WHEREAS, capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in Exhibit A attached hereto.
AGREEMENT
NOW, THEREFORE, in consideration of these recitals and the respective
representations, warranties and covenants contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound, hereby agree as
follows:
Article I

Article IITERMS OF THE MERGER
Section 1.The Merger
. Upon the terms and subject to the conditions of this Agreement, at the
Effective Time, Merger Sub shall merge with and into the Company in accordance
with the applicable provisions of the DLLCA (the “Merger”). Following the
Effective Time, the separate existence of Merger Sub shall cease

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and the Company shall be the surviving Entity in the Merger (the “Surviving
Company”) and shall continue its existence under the Laws of the State of
Delaware.
Section 2.Effects of the Merger
.
(a)As of the Effective Time, by virtue of the Merger and without any action on
the part of the Buyer, Merger Sub or the Company, (i) the certificate of
formation of the Surviving Company, as in effect immediately prior to the
Effective Time, shall be the certificate of formation of the Surviving Company
unless and until thereafter amended, (ii) the limited liability company
agreement of the Merger Sub, as in effect as the Effective Time as may be
amended at the Effective Time, shall be the limited liability company agreement
of the Surviving Company, except that the name of the Surviving Company shall be
Cretic Energy Services, LLC and the Surviving Company’s limited liability
company agreement shall be amended and restated accordingly unless and until
thereafter amended, (iii) the existing managers of the Company shall be removed
and the Surviving Company shall have no managers unless and until determined
otherwise by the Surviving Company’s sole member and (iv) the managers and
officers of Merger Sub immediately prior to the Effective Time shall become,
from and after the Effective Time, the sole officers of the Surviving Company,
until their respective successors are duly elected or appointed or their earlier
resignation or removal or the sole member appoints additional officers. Subject
to the foregoing, any additional effects of the Merger shall be as provided for
by applicable Laws.
(b)Upon the terms and subject to the conditions set forth in this Agreement, and
in accordance with the DLLCA, on the Effective Time, Merger Sub shall be merged
with and into the Company and the separate existence of Merger Sub shall
thereupon cease, and the Company, as the Surviving Company, shall by virtue of
the Merger continue its existence under the laws of the State of Delaware.
(c)Without limiting the generality of the foregoing, and subject thereto, from
and after the Effective Time, all of the properties, rights, privileges,
immunities, powers, franchises, licenses and authorities of the Company and
Merger Sub shall vest in the Surviving Company, and all debts, liabilities,
obligations, restrictions and duties of the Company and Merger Sub shall become
the debts, liabilities, obligations, restrictions and duties of the Surviving
Company.
Section 3.Effective Time of the Merger
. Subject to the provisions of this Agreement, on the Closing Date, the
certificate of merger in substantially the form attached hereto as Exhibit B
(the “Certificate of Merger”), shall be executed and filed with the Secretary of
State of the State of Delaware. The Parties shall make all such other filings or
recordings in connection with the Merger when and as required under the DLLCA or
other applicable Laws. The Merger shall become effective at 9:00 a.m. Eastern
Time on the Closing Date or at such later time or date as Buyer and the Company
shall agree and as shall be set forth in the Certificate of Merger (the
“Effective Time”). At the Effective Time, the effect of the Merger shall be as
provided in the Certificate of Merger and the applicable provisions of the
DLLCA.
Section 4.Effect of the Merger
. At the Effective Time, by virtue of the Merger and without any further action
on the part of the Buyer, Merger Sub or any Holder:
(a)Merger Sub Membership Interest. The Membership Interest in Merger Sub that is
issued and outstanding as of the Effective Time shall be automatically cancelled
and converted into and become the newly issued Membership Interest in the
Surviving Company, and such Membership Interest shall constitute the only
outstanding Membership Interest in, and represent ownership of 100% of the
Surviving Company as of the Effective Time.

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(b)Capital Interests. Each Capital Interests Holder’s Capital Interest that is
issued and outstanding immediately prior to the Effective Time shall
automatically be cancelled and converted into the right to receive, subject to
the terms of this Agreement, the portion of the Merger Consideration (comprised
of (i) the Capital Interests Holders Closing Consideration, (ii) the
Indemnification Escrow Property, (iii) the Merger Consideration Adjustment
Escrow Property, (iv) the Holders Representative Reserve Property, (v) the
Earn-Out Payment, and (vi) the Additional Consideration, to be paid to Capital
Interests Holders under this Agreement) allocated to the Capital Interests
Holder’s Capital Interest in accordance with Section 1.6 below, which amounts
shall be payable as provided herein and subject to any adjustments pursuant to
this Agreement, including those set forth in this Article I.
(c)Incentive Interests. Each Company Incentive Interest that is issued and
outstanding immediately prior to the Effective Time shall automatically be
cancelled and converted into the right to receive, subject to the terms of this
Agreement, the portion of the Merger Consideration (comprised of (i) the
Incentive Interests Holders Closing Consideration, (ii) the Indemnification
Escrow Property, (iii) the Merger Consideration Adjustment Escrow Property, (iv)
the Holders Representative Reserve Property, (v) the Earn-Out Payment, and (vi)
the Additional Consideration, to be paid to Incentive Interests Holders under
this Agreement) allocated to the Incentive Interest Holder’s Incentive Interest
in accordance with Section 1.6 below, which amounts shall be payable as provided
herein and subject to any adjustments pursuant to this Agreement, including
those set forth in this Article I.
(d)There shall be no transfers of (i) any Company Membership Interests
outstanding prior to the Effective Time or (ii) the entitlement of any former
member or assignee of a Company Interest to any portion of the Merger
Consideration (other than as expressly provided for in this Agreement).
Section 5.Procedures.
(a)Procedures for Capital Interests Holders. The portion of the Holders Closing
Consideration to be paid to the Capital Interests Holders for their Capital
Interests in accordance with the amounts set forth opposite their respective
names on the Net Merger Consideration Payment Schedule (the “Capital Interests
Holders Closing Consideration”) shall be paid by the Buyer to the Paying Agent
at Closing and thereafter the Paying Agent shall, following receipt of the
Capital Interests Holders Materials (as defined below) from a Capital Interests
Holder, pay to such Capital Interests Holder the portion of the Capital
Interests Holders Closing Consideration such Capital Interests Holder is
entitled to receive as set forth on the Net Merger Consideration Payment
Schedule, in cash or other immediately available funds to such Capital Interest
Holder’s account as set forth in such Capital Interests Holder’s Letter of
Transmittal. The Capital Interest Holder will only receive its portion of the
Holders Closing Consideration following such Capital Interest Holder’s delivery
to the Paying Agent (and receipt by the Paying Agent thereof) of a duly
completed and executed letter of transmittal, including the representations and
warranties, covenants and releases set forth therein (the making thereof which
is a material inducement to Buyer entering into this Agreement), in
substantially the form attached hereto as Exhibit H (each, a “Letter of
Transmittal”), including all documents required pursuant thereto (collectively
with the Letter of Transmittal, the “Holder Materials”). The amounts paid
pursuant to this Section 1.5(a) and Section 4.5, if any, shall be deemed to be
full payment and satisfaction of all rights pertaining to the Capital Interests
represented by such Holder Materials, except for any rights of the Capital
Interests Holders to the remaining components of the Merger Consideration. Until
the Holder Materials (including the making by such Capital Interests Holder of
the representations and warranties, covenants and releases set forth therein)
are delivered to the Paying Agent by a Capital Interests Holder, as contemplated
by this Section 1.5(a), such Capital Interests Holder’s Capital Interests shall
be deemed at any time after the Effective Time to represent only the right to
receive the amounts determined pursuant to Section 1.5(a) and Section 4.5, if
any, subject to the delivery of the Holder Materials. Any portion of the amount
paid to the Paying Agent pursuant to this Agreement that remains unclaimed by
any Capital Interests Holder one (1) year after the Effective Time shall, to the
extent permitted by applicable Law, be returned to Buyer,

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and any Capital Interests Holder who has not submitted a Letter of Transmittal
and Holder Materials to receive its applicable consideration prior to such time
shall thereafter look only to Buyer for payment thereof without any interest
thereon (subject to abandoned property, escheat or similar Laws).
Notwithstanding any provision of this Agreement to the contrary, neither the
Paying Agent nor the Company shall be liable to any Holder in respect of any
Capital Interest or monetary obligation derived therefrom that has been
delivered to a public official pursuant to applicable abandoned property,
escheat or similar Laws.
(b)Procedures for Incentive Interests Holders. The portion of the Holders
Closing Consideration to be paid to the Incentive Interests Holders for their
Incentive Interests in accordance with the amounts set forth opposite their
respective names on the Net Merger Consideration Payment Schedule (the
“Incentive Interests Holders Closing Consideration”) shall be paid by the Buyer
to the Paying Agent at Closing and thereafter the Paying Agent shall, following
receipt of the Holder Materials (as defined below) from an Incentive Interests
Holder, pay to such Incentive Interests Holder the portion of the Incentive
Interests Holders Closing Consideration such Incentive Interests Holder is
entitled to receive as set forth on the Net Merger Consideration Payment
Schedule, in cash or other immediately available funds to such Incentive
Interests Holder’s account as set forth in such Incentive Interest Holder’s
Letter of Transmittal. The Incentive Interests Holder will only receive its
portion of the Holders Closing Consideration following such Incentive Interests
Holder’s delivery to the Paying Agent (and receipt by the Paying Agent thereof)
of a duly completed and executed Letter of Transmittal, including the
representations and warranties, covenants and releases set forth therein (the
making thereof which is a material inducement to Buyer entering into this
Agreement), and the other Holder Materials. The amounts paid pursuant to this
Section 1.5(b) and Section 4.6, if any, shall be deemed to be full payment and
satisfaction of all rights pertaining to the Incentive Interests represented by
such Holder Materials, except for any rights of the Incentive Interests Holders
to the remaining components of the Merger Consideration. Until the Holder
Materials (including the making by such Incentive Interests Holder of the
representations and warranties, covenants and releases set forth therein) are
delivered to the Paying Agent by an Incentive Interests Holder, as contemplated
by this Section 1.5(b), such Incentive Interests Holder’s Incentive Interests
shall be deemed at any time after the Effective Time to represent only the right
to receive the amounts determined pursuant to Section 1.5(b) and Section 4.6, if
any, subject to the delivery of the Holder Materials. Any portion of the amount
paid to the Paying Agent pursuant to this Agreement that remains unclaimed by
any Incentive Interests Holder one (1) year after the Effective Time shall, to
the extent permitted by applicable law, be returned to Buyer, and any Incentive
Interests Holder who has not submitted an Incentive Interests Holder Letter of
Transmittal and Holder Materials to receive its applicable consideration prior
to such time shall thereafter look only to Buyer for payment thereof without any
interest thereon (subject to abandoned property, escheat or similar Laws).
Notwithstanding any provision of this Agreement to the contrary, neither the
Paying Agent nor the Company shall be liable to any Person in respect of
Incentive Interests or monetary obligation derived therefrom that has been
delivered to a public official pursuant to applicable abandoned property,
escheat or similar Laws.
Section 6.Allocations
. The Merger Consideration shall be allocated among the Holders in a manner that
is consistent with the Charter Documents of the Company, and an example pro
forma allocation is set forth on Exhibit G attached hereto (the “Net Merger
Consideration Payment Schedule”). The Company shall prepare and deliver the Net
Merger Consideration Payment Schedule at Closing, which shall contain an
allocation of the Holders Closing Consideration among the Holders and a pro
forma statement showing potential allocations (consistent with the Charter
Documents of the Company as in effect immediately prior to Closing as determined
in good faith by the Paying Agent) of any post-Closing payments of Merger
Consideration (including any portion of the Merger Consideration Adjustment
Escrow Property released from the Merger Consideration Adjustment Escrow
Account, any portion of the Indemnification Escrow Property released from the
Indemnification

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Escrow Account, the Earn-Out Payment, and a release by the Holders
Representative of a portion of the Holders Representative Reserve Property or
such other consideration required to be paid to the Holders under this
Agreement) among the Holders. Any portion of the Merger Consideration that is
payable after Closing (other than the Closing Date Consideration), including any
portion of the Merger Consideration Adjustment Escrow Property released from the
Merger Consideration Adjustment Escrow Account, any portion of the
Indemnification Escrow Property released from the Indemnification Escrow
Account, the Earn-Out Payment, and a release by the Holders Representative of a
portion of the Holders Representative Reserve Property or any other
consideration required to be paid to the Holders under this Agreement, if any,
shall be paid to the Holders, as applicable, allocated in accordance with the
Charter Documents of the Company as in effect immediately prior to Closing.
Section 7.Merger Consideration
. The consideration for the Merger shall be the aggregate sum of (a) Sixty-Seven
Million Five Hundred Thousand USD ($67,500,000.00) plus (b) the capital
expenditure amount set forth on Schedule 1.7(a) (the “CapEx Amount”) plus (c)
the Earn-Out Payment, if any, subject to adjustment pursuant to Section 1.10
(the “Merger Consideration”).
Section 8.Closing Date
. The closing of the transaction described in Article I (the “Closing”) provided
for in this Agreement will take place at the offices of Locke Lord LLP, 600
Travis Street, Suite 2800, Houston, Texas 77002, contemporaneously with the
execution hereof. The Parties may consummate the Contemplated Transactions by
facsimile or electronic transmission to the extent to which such transactions
may be consummated by facsimile or electronic transmission.
Section 9.Closing Deliveries.
(a)At the Closing, the Company shall deliver, or shall cause to be delivered, to
Buyer the following (each of which deliveries of the Company acknowledges as a
material inducement to Buyer entering to this Agreement and consummating the
Contemplated Transactions):
(i)the Certificate of Merger, duly executed by the Company;
(ii)the Escrow Agreement, duly executed by the Holders Representative;
(iii)a duly executed resignation of each of the individuals set forth on
Schedule 1.9(a)(iii) from each officer, manager, and other position held by such
individuals within the Company and its Subsidiaries, effective as of the
Effective Time;
(iv)a certificate from a duly authorized officer of the Company certifying to
and providing copies of the resolutions authorizing and approving the execution
and delivery of this Agreement and the Transaction Documents to which the
Company is a party, and the consummation of the transactions contemplated hereby
and thereby, by the managers and members of the Company;
(v)[Reserved];
(vi)copies of documentation effecting or otherwise evidencing issued purchase
orders and deposits and progress payments, if any, for the fabrication and
delivery of CC8;
(vii)copies of documentation effecting or otherwise evidencing the termination
and release of all claims against and obligations of the Company and all Buyer
Indemnified Parties arising out of or otherwise related to the Advisory
Services, Reimburses and Indemnification Agreement, dated June 23, 2013, between
the Company and Catapult;
(viii)copies of documentation effecting or otherwise evidencing (A) the payment
and satisfaction of all Company Transaction Expenses (other than Unpaid Company
Transaction Expenses), (B) the payment and satisfaction of all outstanding
Indebtedness of the Company and its Subsidiaries (other than Unpaid Company
Indebtedness), (C) the payment

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and satisfaction of all tax Liens filed against the Company, including the tax
Lien filed by the Texas Workforce Commission on January 17, 2017 in Montgomery
County, TX in the amount of $3,853.85, (D) removal and release by novation or
termination of the Company from the leasing and subleasing arrangements for the
premises located at 99 Pullin Road, Pleasanton, TX (the “Pleasanton Premises”)
and (E) the replacement of the Company’s letter of credit with respect to the
Pleasanton Premises; and
(ix)the Net Merger Consideration Payment Schedule.
(b)At the Closing, Buyer shall deliver, or shall cause to be delivered (each of
which deliverables, Buyer acknowledges as a material inducement to the Company
entering to this Agreement and consummating the Contemplated Transactions):
(i)to the Company:
(A)the Escrow Agreement, duly executed by Buyer;
(B)a certificate from a duly authorized officer of Buyer certifying and
providing copies of the resolutions authorizing and approving the execution and
delivery of this Agreement and the Transaction Documents, and the consummation
of the transactions contemplated hereby and thereby, by Buyer;
(C)[Reserved]; and
(D)the D&O Tail Policies.
(ii)to the Escrow Agent:
(A)the Merger Consideration Adjustment Holdback (as defined in Section 1.13(b))
by wire transfer of immediately available funds to the Merger Consideration
Adjustment Escrow Account and in accordance with the terms of the Escrow
Agreement, to be held for the purpose of securing the Holder’s obligations in
Section 1.10(d);
(B)the Indemnification Holdback (as defined in Section 1.13(a)) by wire transfer
of immediately available funds to the Indemnification Escrow Account and in
accordance with the terms of the Escrow Agreement, to be held for the purpose of
securing the Holder’s obligations in Article V; and
(C)the Escrow Agreement duly executed by Buyer and Holder Representative;
(iii)to the Holders Representative:
(A)an amount equal to $1,000,000 (the “Holders Representative Reserve Deposit”),
which shall be deposited in an account designated by the Holders Representative
to serve as the Holders Representative Reserve Deposit, as set forth in Section
1.14.
(iv)to the Paying Agent:
(A) cash in the amount equal to (1) the Closing Date Consideration (as defined
in Section 1.10(a)) minus (2) the sum of (a) the Merger Consideration Adjustment
Holdback, (b) the Indemnification Holdback, (c) the Closing Transaction Expense
Payments, (d) the Holders Representative Reserve Deposit and (e) the D&O Tail
Amount (the “Holders Closing Consideration”) by wire transfer of immediately
available funds for payment by the Paying Agent of the Capital Interests Holders
Closing Consideration to the Capital Interests Holders and the Incentive
Interests Holders Closing Consideration to the Incentive Interests Holders.
(v)the following:
(A)payments of the Company Transaction Expenses (on behalf of the Company) set
forth in Schedule 1.9(b)(v)(A) (the “Closing Transaction Expense Payments”) to
the service providers of such unpaid Company Transaction Expenses,

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in the amounts and to the accounts designated on Schedule 1.9(b)(v)(A) with
respect thereto; and
(B)$9,770 (the “D&O Tail Amount”), to the insurers of the D&O Tail Policies.
Section 10.Merger Consideration Adjustment.
(a)Closing Adjustment.
(i)Prior to the Closing, the Company prepared and delivered, or caused to be
prepared and delivered, to Buyer showing in reasonable detail the reasonable
good faith estimate of (A) the balance sheet of the Company as of the Closing
Date, which shall specifically identify the amount of each item of Unpaid
Company Indebtedness and item of Unpaid Company Transaction Expenses (the
“Estimated Closing Date Balance Sheet”), (B) the estimated Working Capital (the
“Estimated Working Capital”), (C) the estimated Closing Cash (the “Estimated
Closing Cash”) and (D) a statement setting forth the amount by which the Merger
Consideration is to be adjusted pursuant to this Section 1.10(a) (in all cases,
subject to true-up in accordance with Sections 1.10(b), (c) and (d)), which
shall be used for purposes of determining the Closing Date Consideration. The
Estimated Closing Date Balance Sheet, the Estimated Closing Cash and the
Estimated Working Capital (x) shall each be prepared, calculated and determined
in accordance with GAAP as in effect on the date the Estimated Working Capital,
Estimated Closing Cash and Estimated Closing Date Balance Sheet were prepared
and the assumptions and methods set forth on Schedule 1.10(a) (the “Agreed
Principles”), except where there is an inconsistency between GAAP and this
Agreement, in which case this Agreement shall be controlling, and (y) shall be
provided with appropriate supporting calculations and documentation.
(ii)At the Closing, the Merger Consideration shall be adjusted in the following
manner:
(A)either (1) an increase by the amount, if any, by which the Estimated Working
Capital is greater than the Target Working Capital, or (2) a decrease by the
amount, if any, by which the Estimated Working Capital is less than the Target
Working Capital (all as determined in accordance with Section 1.10(a)(i));
(B)an increase by the amount, if any, of the Estimated Closing Cash;
(C)a decrease by the outstanding Indebtedness of the Company as of the Closing
that is not paid and satisfied on the Closing Date or otherwise using Merger
Consideration (the “Unpaid Company Indebtedness”); and
(D)a decrease by the amount of unpaid Company Transaction Expenses (after giving
effect to Closing Transaction Expense Payments paid pursuant to Section
1.9(b)(v)(A)) as of the Closing that is not paid and satisfied on the Closing
Date or otherwise using Merger Consideration (the “Unpaid Company Transaction
Expenses”).
The net amount after giving effect to the adjustments listed above shall be the
“Closing Date Consideration.”
(b)Post-Closing Adjustment. No later than sixty (60) days after the Closing
Date, Buyer will prepare and deliver to Holders Representative a written
statement (the “Buyer Closing Statement”) showing in reasonable detail (i) the
balance sheet of the Company as of the Closing Date, which shall specifically
identify the amount of each item of Unpaid Company Indebtedness and item of
Unpaid Company Transaction Expenses (the “Initial Closing Date Balance Sheet”),
(ii) the Buyer’s reasonable good faith estimate of the Closing Cash (the
“Initial Closing Cash”) and (iii) Buyer’s reasonable good faith written
calculation of the Working Capital (the “Initial Closing Date Working Capital”).
The Initial Closing Date Balance Sheet, the Initial Closing Cash and the Initial
Closing

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Date Working Capital (collectively, the “Initial Closing Date Items”) (A) shall
each be prepared, calculated and determined in accordance with GAAP as in effect
on the date the Initial Closing Date Working Capital, Initial Closing Cash and
Initial Closing Date Balance Sheet were prepared and the Agreed Principles,
except where there is an inconsistency between GAAP and this Agreement, in which
case this Agreement shall be controlling and (B) shall be provided together with
appropriate supporting calculations and documentation.
(c)Examination and Review.
(i)Examination and Objection. If the Holders Representative disputes any item in
the Buyer Closing Statement, within thirty (30) days of receipt thereof (the
“Dispute Deadline”), the Holders Representative shall provide written notice to
Buyer of such dispute, setting forth in reasonable detail those Initial Closing
Date Items that Holders Representative disputes, the amounts of any adjustments
that are necessary in Holders Representative’s judgment for the computations of
the disputed Initial Closing Date Items to conform to the requirements of this
Agreement, and the basis for Holders Representative’s suggested adjustments (a
“Dispute Notice”). During such thirty (30) day period, the Holders
Representative and its Representatives shall, upon reasonable written notice to
Buyer of a request for access (which shall be delivered to the chief financial
officer or a senior financial executive of Buyer), be provided with reasonable
access during normal business hours to (A) personnel of the Company to ask such
personnel questions regarding the calculation of the Initial Closing Date Items,
and (B) the Books and Records of the Company and supporting schedules, analyses,
workpapers and other underlying records or documentation, in each case of clause
(A) and clause (B), as are reasonably necessary and appropriate for the Holders
Representative to evaluate and confirm or object to the calculation of the
Initial Closing Date Items, (provided, that, in the case of (B) such
documentation provided shall not be provided with significant amounts of
information unrelated to the calculation of the Initial Closing Date Items for
the purpose of delaying or frustrating the review of Holders Representative and
its Representatives). The Holders Representative and its Representatives will
conduct such review in a manner that does not unreasonably interfere with the
conduct of the businesses of Buyer, the Company or their respective Affiliates.
If the Holders Representative provides such a Dispute Notice, then the Holders
Representative and Buyer shall, during the thirty (30) day period following
delivery of a Dispute Notice (the “Dispute Resolution Period), negotiate in good
faith with a view to resolving such disputes (the “Agreed Closing Date Item
Adjustments”). If the Holders Representative and Buyer so resolve such disputed
items in writing, then the Initial Closing Date Items, as adjusted by Agreed
Closing Date Item Adjustments, shall be deemed to be the “Final Working
Capital”, the “Final Closing Cash” and the “Final Closing Date Balance Sheet.”
If the Holders Representative fails to provide a Dispute Notice prior to the
Dispute Deadline, then the Initial Closing Date Items shall be deemed to be the
“Final Working Capital”, the “Final Closing Cash” and the “Final Closing Date
Balance Sheet.”
(ii)Resolution of Disputes. If the Holders Representative and Buyer are unable
to resolve all items in the Dispute Notice within the Dispute Resolution Period,
then Buyer and the Holders Representative shall promptly thereafter jointly
request that the Independent Accounting Firm make a binding determination as to
the items remaining in dispute (the “Remaining Dispute Items”) in accordance
with this Agreement. The Independent Accounting Firm will, under the terms of
its engagement, have no more than sixty (60) days from the date of the final
submission of information and testimony by Buyer and Holders Representative
within which to render its written decision with respect to the Remaining
Dispute Items. The Independent Accounting Firm shall review such submissions and
base its determination solely on such submissions. In resolving any such
dispute, the Independent Accounting Firm may

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not assign a value to any item greater than the maximum value for such item
claimed by Holders Representative or Buyer, as applicable, or less than the
minimum value for such item claimed by Holders Representative or Buyer, as
applicable. The Independent Accounting Firm may not award damages or penalties.
The decision of the Independent Accounting Firm shall be deemed final and
binding upon the Parties and enforceable by any court of competent jurisdiction,
and following such decision, the Independent Accounting Firm shall issue the
final Initial Closing Date Balance Sheet (which shall be the Final Closing Date
Balance Sheet and shall be binding on the Parties to this Agreement).
Notwithstanding anything to the contrary herein, Buyer and Holders
Representative may, at their option, and at any time prior to the Independent
Accounting Firm issuing its written decision, agree in writing to consensually
resolve any Remaining Dispute Items. The fees and expenses of the Independent
Accounting Firm shall be allocated to and paid by Buyer, on the one hand, and
the Holders on the other hand (in accordance with the Payment Percentages, and
which the Holders Representative must first pay out of the Holders
Representative Reserve Property, to the extent available), based upon the
percentage that the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party, as determined by the
Independent Accounting Firm.
(d)Determination and Payment of Post-Closing Adjustment. Following the final
determination of the Final Working Capital, Final Closing Cash and the Final
Closing Date Balance Sheet:
(i)if the Final Working Capital is greater than the Estimated Working Capital,
then Buyer shall pay (in accordance with Section 1.10(e)) to the Holders
Representative (for payment to the Holders, based on Payment Percentages and in
accordance with Sections 4.5 and 4.6) an amount equal to (x) the Final Working
Capital minus (y) the Estimated Working Capital (the “Additional Working Capital
Consideration”);
(ii)if the Final Working Capital is less than the Estimated Working Capital,
Buyer and the Holders Representative shall, within two (2) Business Days
following such determination, deliver joint written instructions to the Escrow
Agent authorizing the Escrow Agent to release an amount equal to (A) the
Estimated Working Capital minus (B) the Final Working Capital, such amount to be
paid to Buyer (in accordance with Section 1.10(e)) from the Merger Consideration
Adjustment Escrow Account. If the amount owed to Buyer under this Section
1.10(d)(ii) exceeds the amount available in the Merger Consideration Adjustment
Escrow Account, then Buyer and Holders Representative shall deliver joint
written instructions to the Escrow Agent authorizing the Escrow Agent to release
(x) the amount owed to Buyer minus (y) the amount paid to Buyer from the Merger
Consideration Adjustment Escrow Account, such amount to be paid to Buyer (in
accordance with Section 1.10(e)) from the Indemnification Escrow Property;
(iii)if the Final Closing Cash is greater than the Estimated Closing Cash, then
Buyer shall pay (in accordance with Section 1.10(e)) to the Holders
Representative (for payment to the Holders, based on Payment Percentages and in
accordance with Sections 4.5 and 4.6) an amount equal to (A) the Final Closing
Cash minus (B) the Estimated Closing Cash (together with the Additional Working
Capital Consideration, the “Additional Consideration”); and
(iv)if the Final Closing Cash is less than the Estimated Closing Cash, Buyer and
the Holders Representative shall, within two (2) Business Days following such
determination, deliver joint written instructions to the Escrow Agent
authorizing the Escrow Agent to release an amount equal to (A) the Estimated
Closing Cash minus (B) the Final Closing Cash, such amount to be paid to Buyer
in accordance with Section 1.10(e) from the Merger Consideration Adjustment
Escrow Account. If the amount owed to Buyer under this Section 1.10(d)(iv)

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exceeds the amount available in the Merger Consideration Adjustment Escrow
Account, then Buyer and Holders Representative shall deliver joint written
instructions to the Escrow Agent authorizing the Escrow Agent to release (x) the
amount owed to Buyer minus (y) the amount paid to Buyer from the Merger
Consideration Adjustment Escrow Account, such amount to be paid to Buyer (in
accordance with Section 1.10(e)) from the Indemnification Escrow Property.
The payments described in this Section 1.10(d) shall be netted and referred to
herein as the “Post-Closing Adjustment”.
(e)Timing and Manner of Payment of Post-Closing Adjustment. The Post-Closing
Adjustment shall:
(i)be due within five (5) Business Days of the final determination of the Final
Working Capital and Final Closing Date Balance Sheet; and
(ii)be paid by wire transfer of immediately available funds to an account or
accounts designated in advance by the Paying Agent or Buyer, as applicable.
(f)Buyer and the Company agree to treat any adjustment made pursuant to this
Section 1.10 as an adjustment to the Merger Consideration for all purposes,
including Tax purposes, except as otherwise required by applicable Law.
Section 11.Merger Consideration Allocation.
(a)For U.S. federal (and applicable state, local and non-U.S.) income Tax
purposes, the parties intend the Merger under this Agreement shall be properly
characterized in accordance with Revenue Ruling 99-6, Situation 2, as follows:
(i) as to the Holders, as a sale of partnership interests in the Company, and
(ii) as to Buyer, as a liquidation of the Company followed by an acquisition by
Buyer of all of the Company's assets.
(b)Within ninety (90) days after the Closing Date, Buyer shall prepare and
deliver to the Holders Representative an allocation of the Merger Consideration
(and all other amounts treated as consideration for the purchase of the assets
of the Company for U.S. federal income Tax purposes, including liabilities
assumed) among the assets of the Company in accordance with Section 1.6 and with
Sections 741, 751 and 1060 of the Code and the rules and Treasury Regulations
promulgated thereunder, and any comparable provisions of state, local or other
tax Law (the “Merger Consideration Allocation”). Upon receipt of the Merger
Consideration Allocation from Buyer, the Holders Representative shall have
twenty (20) days to provide written comments to Buyer, which Buyer shall
consider in good faith. If the Holders Representative fails to deliver written
comments to Buyer within such twenty (20) days, the Merger Consideration
Allocation delivered by Buyer to the Holders Representative shall be final and
binding on the parties in all respects. Buyer and the Holders Representative
will in good faith negotiate to resolve any dispute on the Merger Consideration
Allocation and shall amend the Merger Consideration Allocation to reflect any
resolution agreed to in writing. Buyer and the Holders Representative shall use
the same procedures provided in Section 1.10(c) to agree upon and finalize the
Merger Consideration Allocation and to resolve any disputes relating thereto.
Buyer and the Holders Representative also shall allocate any adjustments to the
Merger Consideration in accordance with Treasury Regulations Section
1.1060-1(e), and any allocations made as a result of such adjustments shall
become part of the Merger Consideration Allocation. The Merger Consideration
Allocation shall be revised after all adjustments, if any, have been made in
accordance with this Section 1.11. The parties hereby agree to report the U.S.
federal, state, local and non-U.S. Tax consequences of the Contemplated
Transactions in a manner consistent with the Merger Consideration Allocation and
agree to act in accordance with the Merger Consideration Allocation in the
preparation and filing of all Tax Returns (including filing Form 8594, if
applicable, with their respective federal and applicable state and local income
Tax Returns for the taxable year that includes the Closing Date).

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(c)Buyer shall revise the Merger Consideration Allocation to reflect adjustments
to the Merger Consideration pursuant to this Agreement (including, pursuant to
Section 1.10 or Section 1.12).
Section 12.Determination of Earn-Out Payments.
(a)If Earn-Out EBITDA exceeds Thirteen Million Five Hundred Thousand USD
($13,500,000.00) (“Earn-Out EBITDA Threshold”), the Holders shall be entitled to
receive an Earn-Out Payment to be determined and paid in accordance with this
Section 1.12. Subject to the definition and assumptions for calculating Earn-Out
EBITDA set forth on Exhibit F, Earn-Out EBITDA for the period beginning on
January 1, 2018 and ending on December 31, 2018 (the “Earn-Out Measurement
Period”) shall be calculated and determined in accordance with GAAP as in effect
on the date the Preliminary Earn-Out Report is delivered to the Holders
Representative and in a manner consistent with the principles and policies set
forth on Exhibit F (the “Agreed Earn-Out Principles”), except where there is an
inconsistency between GAAP and this Agreement, in which case this Agreement
shall be controlling; provided, however, that the Parties hereby agree that
“Earn-Out EBITDA” for Q1 2018 is $3,420,000, for Q2 2018 is $3,741,991 and for
Q3 is $5,247,206.26. If the Earn-Out EBITDA Threshold is exceeded, the payment
(the “Earn-Out Payment”) shall be equal to (i) (x) Earn-Out EBITDA minus (y)
Thirteen Million Five Hundred Thousand USD ($13,500,000.00) multiplied by (ii)
five (5).
(b)No later than sixty days (60) days following the end of the Earn-Out
Measurement Period, Buyer shall prepare and deliver to the Holders
Representative a written statement (the “Preliminary Earn-Out Report”) setting
forth in reasonable detail Buyer’s calculations of Earn-Out EBITDA and the
Earn-Out Payment (the “Preliminary Earn-Out Payment”), which shall be subject to
the definition and assumptions for calculating Earn-Out EBITDA set forth on
Exhibit F and calculated and determined in accordance with GAAP as in effect on
the date the Preliminary Earn-Out Report is delivered to the Holders
Representative and in a manner consistent with the Agreed Earn-Out Principles,
except where there is an inconsistency between GAAP and this Agreement, in which
case this Agreement shall be controlling. Following the delivery of the
Preliminary Earn-Out Report to the Holders Representatives, upon reasonable
written notice to Buyer of a request for access (which shall be delivered to the
chief financial officer or a senior financial executive of Buyer), Buyer shall
afford the Holders Representative and its Representatives reasonable access to
(i) personnel of the Company to ask such personnel questions regarding the
calculation of the items in the Preliminary Earn-Out Report and (ii) the Books
and Records of the Company and supporting schedules, analyses, work papers and
other underlying records or documentation as are reasonably necessary and
appropriate for the Holders Representative to confirm or object to the
calculation of the items in the Preliminary Earn-Out Report, (provided, that in
the case of (ii) such documentation shall not be provided with significant
amounts of information unrelated to the calculation of the items in the
Preliminary Earn-Out Report for the purpose of delaying or frustrating the
review of Holders Representative and its Representatives). The Buyer shall
reasonably cooperate with the Holders Representative and its Representatives in
connection with such examination, including providing answers to questions asked
by the Holders Representative and its Representatives.
(c)Examination and Objection. If the Holders Representative disputes any item in
the Preliminary Earn-Out Report, within thirty (30) days after the receipt
thereof (the “Earn-Out Objection Deadline”), the Holders Representative may
deliver to Buyer written notice setting forth any objections to the Preliminary
Earn-Out Report and the Preliminary Earn-Out Payment as set forth in the
Preliminary Earn-Out Report, together with a summary of the reasons therefore
and calculations which, in its view, are necessary to eliminate such objections
(an “Earn-Out Objection Notice”). If the Holders Representative timely delivers
to Buyer an Earn-Out Objection Notice, during the thirty (30) day period
following delivery of an Earn-Out Objection Notice (the “Earn-Out Dispute
Resolution Period”), Buyer and the Holders Representative shall negotiate in
good faith with a view

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to resolving such objection(s) (the “Agreed Earn-Out Adjustments”). If the
Holders Representative and Buyer so resolve any such differences in writing, the
Preliminary Earn-Out Payment set forth in the Preliminary Earn-Out Report, as
adjusted by the Agreed Earn-Out Adjustments, shall be final and binding as the
“Earn-Out Payment” for the Earn-Out Measurement Period for purposes of this
Agreement. If the Holders Representative fails to provide an Earn-Out Objection
Notice prior to the Earn-Out Objection Deadline, the Preliminary Earn-Out
Payment set forth in the Preliminary Earn-Out Report shall be final and binding
as the “Earn-Out Payment” for the Earn-Out Measurement Period for purposes of
this Agreement.
(d)Resolution of Earn-Out Disputes. If the Holders Representative and Buyer are
unable to resolve all items in the Earn-Out Objection Notice within the Earn-Out
Dispute Resolution Period, then Buyer and the Holders Representative shall
promptly thereafter jointly request that the Independent Accounting Firm make a
binding determination as to the items remaining in dispute (the “Remaining
Earn-Out Dispute Items”). Each of the Holders Representative and Buyer shall
provide the Independent Accounting Firm and the other party with a statement of
its position as to the amount for each Remaining Earn-Out Dispute Items on the
date of the referral of the dispute to the Independent Accounting Firm. The
Independent Accounting Firm will, under the terms of its engagement, have no
more than thirty (30) days from the date after the date on which the dispute is
referred to the Independent Accounting Firm within which to render its written
decision with respect to the Remaining Earn-Out Dispute Items. The Parties shall
make readily available to the Independent Accounting Firm all relevant
schedules, analyses, workpapers and other underlying records or documentation
relating to the Preliminary Earn-Out Report and all other items reasonably
requested by the Independent Accounting Firm in connection with resolving the
Remaining Earn-Out Dispute Items. In resolving any such dispute, the Independent
Accounting Firm may not assign a value to any item greater than the maximum
value for such item claimed by Holders Representative or Buyer, as applicable,
or less than the minimum value for such item claimed by Holders Representative
or Buyer, as applicable. The Independent Accounting Firm may not award damages
or penalties. The decision of the Independent Accounting Firm shall be deemed
final and binding upon the Parties and enforceable by any court of competent
jurisdiction, and following such decision, the Independent Accounting Firm shall
issue the final Earn-Out Statement and the Earn-Out Payment, respectively, for
such Earn-Out Measurement Period for purposes of this Agreement. Notwithstanding
anything to the contrary herein, Buyer and the Holders Representative may, at
their option, and at any time prior to the Independent Accounting Firm issuing
its written decision, agree in writing to consensually resolve any objections or
issues raised in the Earn-Out Objection Notice. The fees and expenses of the
Independent Accounting Firm hereunder shall be borne equally by Buyer, on the
one hand, and the Holders, on the other hand (in accordance with the Payment
Percentages, and which the Holders Representative must first pay out of the
Holders Representative Reserve Property, to the extent available).
(e)Earn-Out Payment. Buyer agrees that, until the end of the Earn-Out
Measurement Period, Buyer shall cause the Company to, subject to applicable Law,
operate the Business in the ordinary course of business consistent with past
practices of the Company, subject to the requirements on Exhibit F, and agrees
not to engage in, or cause the Company to engage in, any acts that are solely
intended to thwart or inhibit the achievement of any Earn-Out Payment.
Notwithstanding anything in this Section 1.12(e) to the contrary, unless waived
by the Holders Representative in writing, until the end of the Earn-Out
Measurement Period, (i) Buyer shall deliver to the Holders Representative a
monthly report, with the information set forth on Schedule 1.12(e), and all
reasonable supporting documentation with respect to the progress of Earn-Out
EBITDA and the Earn-Out Payment (the “Monthly Report”) and (ii) Buyer shall
provide reasonable access to personnel of the Company or Buyer that prepare the
Monthly Report to ask such personnel questions regarding about the Monthly
Report. Notwithstanding anything in this Section 1.12(e) to the contrary, unless
waived by the Holders

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Representative in writing, until the end of the Earn-Out Measurement Period, (i)
neither Buyer nor any of its respective Affiliates (including, after Closing,
the Company) will take any actions, or omit to take any actions, for the primary
purpose of or that would, without a good faith business reason unrelated to the
results described in the following clauses, reasonably be expected to result in
(A) thwarting or inhibiting the achievement of the Earn-Out Payment, (B)
reducing the amount of the Earn-Out Payment or (C) otherwise frustrating or
avoiding the Buyer’s obligations under this Agreement with respect to the
Earn-Out Payment, and (ii) Buyer will not take any action that would integrate,
combine or otherwise consolidate the Company into Buyer or any other Person or
business.
(f)When the Preliminary Earn-Out Payment Report becomes final and binding in
accordance with Section 1.12(c) or Section 1.12(d), if there is an Earn-Out
Payment owing to the Holders, then the Buyer, subject to any rights of Buyer to
set off against an Earn-Out Payment arising under Article V, shall pay, or cause
to be paid, the Earn-Out Payment to the Paying Agent (for payment to the
Holders, based on Payment Percentages and in accordance with Sections 4.5 and
4.6) within five (5) Business Days of such statement becoming final and binding,
by wire transfer of immediately available funds to an account or accounts
designated by the Paying Agent.
(g)The Parties agree to treat any payment made pursuant to this Section 1.12 as
an adjustment to the Merger Consideration for all purposes, including Tax
purposes, except as otherwise required by applicable Law.
Section 13.Escrow
.
(a)Indemnification Escrow Holdback. At the Closing, Buyer shall deposit with the
Escrow Agent Six Million Three Hundred Ninety Thousand USD ($6,390,000.00) (the
“Indemnification Holdback”) to be retained in escrow following the Closing Date
to secure the payment and performance of the Holder’s indemnification
obligations set forth in Article V of this Agreement and Holder’s obligations
under Section 1.10(d) (only to the extent such obligations have not been
satisfied by payments made out of the Merger Consideration Adjustment Escrow
Account), pursuant to and in accordance with an escrow agreement between Buyer,
the Holders Representative and the Escrow Agent in the form attached hereto as
Exhibit D (the “Escrow Agreement”). The amount of the Indemnification Holdback
retained by the Escrow Agent shall be reduced as follows:
(i)on the twelve (12) month anniversary of the Closing Date, the amount required
to be maintained in the Indemnification Escrow Account in respect of the
Indemnification Holdback shall be reduced to the sum of (A) Three Million One
Hundred Ninety-Five Thousand, plus (B) the aggregate amount of claims for
indemnification under Section 5.2(a) or Section 5.2(b) that are pending and
unresolved at such time and for which notice has been provided in accordance
with Article V, subject to the limitations set forth in Article V (which sum
shall remain in the Indemnification Escrow Account pending the resolution of
such outstanding claims), and any amount of cash in excess of that sum shall be
released and distributed by the Escrow Agent to the Holders Representative (for
payment to the Holders, based on Payment Percentages and in accordance with
Sections 4.5 and 4.6) in accordance with the terms of the Escrow Agreement; and
(ii)on the first (1st) Business Day on or after the eighteen (18) month
anniversary of the Closing Date, after accounting for cash distributed to the
Holders Representative pursuant to Section 1.13(a)(i) and exclusive of the
aggregate amount of claims for indemnification under Section 5.2(a) or
Section 5.2(b) that are pending and unresolved at such time and for which notice
has been provided in accordance with Article V, subject to the limitations set
forth in Article V (which amount shall remain in the Indemnification Escrow
Account pending the resolution of such outstanding claims), the remaining cash
balance of the Indemnification Holdback shall be released and distributed by the
Escrow Agent to the

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Holders Representative (for payment to the Holders, based on Payment Percentages
and in accordance with Sections 4.5 and 4.6) in accordance with the terms of the
Escrow Agreement.
(b)Merger Consideration Adjustment Escrow Holdback. At the Closing, Buyer shall
deposit with the Escrow Agent $1,500,000 (the “Merger Consideration Adjustment
Holdback”) to be retained in escrow following the Closing Date to secure the
payment of and the performance of the Holder’s obligations set forth in Section
1.10(d) of this Agreement, pursuant to and in accordance with the Escrow
Agreement between Buyer, the Holders Representative and Escrow Agent. Within two
(2) Business Days following payment of the Post-Closing Adjustment, any amount
remaining in the Merger Consideration Adjustment Escrow Account in respect of
the Merger Consideration Adjustment Holdback, if any, shall be released by the
Escrow Agent to the Holders Representative (for payment to the Holders, based on
Payment Percentages and in accordance with Sections 4.5 and 4.6) in accordance
with the terms of the Escrow Agreement.
(c)Buyer, on one hand, and the Holders, on the other hand (in accordance with
the Payment Percentages, and which the Holders Representative must first pay out
of the Holders Representative Reserve Property, to the extent available), will
share equally the payment of any fees and expenses payable to the Escrow Agent
pursuant to the Escrow Agreement.
Section 14.Holders Representative Reserve
. Buyer shall cause the Holders Representative Reserve Deposit to be delivered
to a non-interest-bearing account established by the Holders Representative (the
portion of the Holders Representative Reserve remaining in such account at a
given time, the “Holders Representative Reserve Property”).  The Holders
Representative Reserve Property shall be held and applied by the Holders
Representative for the purpose of funding any potential expenses of the Holders
Representative in carrying out its authorized duties under this Agreement
(“Charges”). At such time as the Holders Representative determines (in its
reasonable discretion) that all or a portion of the Holders Representative
Reserve Property is not necessary to pay such Charges, the Holders
Representative shall cause such portion of the Holder Representative Reserve
Property to be released to each Holder in accordance with Section 4.5 and
Section 4.6, as applicable, and such Holder’s Payment Percentages.
Section 15.Paying Agent
. The Holders Representative shall act as the paying agent (the “Paying Agent”)
for the purpose of distributing any Merger Consideration to the Holders.
Provided that Buyer has made the payments to the Paying Agent as contemplated in
Section 1.9(b)(iv)(a), Section 1.12(f) or otherwise in this Agreement, neither
Buyer nor the Company shall have any liability to the Holders in regard to the
payments to be made from the Paying Agent to the Holders pursuant to Section
1.5, Section 1.12(f), Section 4.5 or Section 4.6 nor shall Buyer or the Paying
Agent have any liability in respect of any allocations and adjustment pursuant
to Section 1.6 or with respect to the determination of the Payment Percentages.
Section 16.Withholding
. Notwithstanding any other provision of this Agreement, Buyer, Merger Sub, the
Company, the Holders Representative and the Paying Agent shall be entitled to
deduct and withhold from any consideration payable pursuant to this Agreement
such amounts as may be required to be deducted or withheld therefrom under any
provision of U.S. federal, state, local or non-U.S. Tax law or under any
applicable legal requirement, provided, that the applicable withholding agent
shall notify the Person in respect of which such deduction or withholding would
be made in writing of the amount and basis of such deduction and withholding and
shall reasonably cooperate in good faith with such Person to mitigate any such
requirement to deduct or withhold to the extent permitted by applicable Law. To
the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the Person
to whom such amounts would otherwise have been paid.

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Article III

Article IVREPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
The Company represents and warrants to Buyer and Merger Sub, that the statements
contained in this Article II are true and correct as of the date hereof (unless
a specific date is set forth in such representation or warranty, in which case
such representation or warranty must be true and correct as of such specific
date).
Section 1.Organizational Status of the Company; Authorization.
(a)The Company is duly formed, validly existing and in good standing under the
Laws of the State of Delaware. The Company has all requisite company power and
authority to execute and deliver the Transaction Documents to which it is a
party and to perform all its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Company of the Transaction Documents to which the Company is a
party, and the performance by the Company of its obligations hereunder and
thereunder have been duly and validly authorized by all necessary action
required on the part of the Company and no further action, approval or consent
on the part of Company is necessary to authorize the execution, delivery or
performance of this Agreement, the Transaction Documents or the consummation of
the Contemplated Transactions. The Transaction Documents have been (or, when
executed, will be) duly and validly executed and delivered by the Company and,
assuming that such Transaction Documents have been duly executed and delivered
by the party seeking to enforce such Transactions Documents, constitute (or,
when executed, will constitute) the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with its terms.
(b)The Company has all requisite company power and authority to conduct its
Business and to own or lease all of its Assets and Properties as is now
conducted, owned or leased. The Company is duly qualified to do business in each
jurisdiction where required, except to the extent the failure to do so would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. True and complete copies of the Charter Documents of the Company
have been made available to Buyer or its Representatives.
Section 2.No Conflicts; Consents and Approvals.
(a)Except as set forth on Schedule 2.2, the execution and delivery of this
Agreement and the consummation of the Contemplated Transactions will not result
in (i) any breach or violation of or default under the Charter Documents of the
Company, (ii) any breach or violation of or default under any Law, judgment or
Governmental Authorization applicable to the Company or its Assets and
Properties, (iii) any breach or violation of, default under, termination or
right to terminate or required payment under, in each case in any material
respect, any mortgage, lease, agreement, deed of trust, indenture or any other
instrument to which the Company is a party or by which the Company or any of its
respective Assets and Properties are bound, or (iv) the creation or imposition
of any Liens (other than Permitted Liens) on any Assets or Properties of the
Company, except (in the case of clause (ii), (iii) and (iv) above) for any
breach, violation, default, termination, payment or Lien that would not
reasonably be expected to have a Material Adverse Effect.
(b)Except (i) for filings required under the HSR Act (if applicable), or (ii) as
set forth on Schedule 2.2, no consent, approval, waiver, authorization or other
order of or filing with any Governmental Authority is required on the part of
the Company in connection with the Company’s execution and delivery of this
Agreement or the consummation of the Contemplated Transaction.
Section 3.Capitalization of the Company and its Subsidiary.
(a)The issued and outstanding Membership Interests of the Company and the equity
interests of its Subsidiaries consist solely of the equity interests set forth
on Schedule 2.3(a). At the Closing, upon receipt of the Membership Interests and
admission as a member of the Company, Buyer shall have no obligation solely by
reason of ownership of the Membership Interests or its status as a member of the
Company to make any capital contribution or other payments to the Company under

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the DLLCA, the Company’s Charter Documents and any subscription or similar
agreement entered into by a Holder (or its predecessor as owner of a Membership
Interest).
(b)The Membership Interests in the Company and the equity interests held by the
Company in any of its Subsidiaries were issued in compliance with applicable
Law. Neither the Membership Interests nor the equity interests held by the
Company in any of its Subsidiaries were issued in violation of the Charter
Documents of the Company or such Subsidiary, as applicable.
(c)Except as set forth on Schedule 2.3(c), neither the Company nor any of its
Subsidiaries are a party to any written or oral Contract to grant or issue, or
have otherwise granted, issued or agreed to grant or issue, any other equity
interests in the Company or in any of its Subsidiaries, and there are no
outstanding options, warrants, subscription rights, securities that are
convertible into or exchangeable for, or any other commitments of any character
relating to, any equity interests (including the Membership Interests) in the
Company or any of its Subsidiaries.
(d)Neither the Company nor its Subsidiaries own any equity securities of or
equity interests in any Person other than the Company’s ownership of Ventiva
Systems, LLC.
(e)The Company has received no written notice that any of the Membership
Interests have been transferred, pledged or otherwise encumbered.
Section 4.Financial Statements
. The Company has made available to Buyer true and complete copies of the (a)
audited balance sheets and statements of income of the Company as of and for the
fiscal year ended as of December 31, 2017 and December 31, 2016 and the related
statements of income, operations, changes in member’s equity and cash flow for
the years then ended (the “Audited Financial Statements”) and (b) unaudited
balance sheets and the related statements of income, operations, changes in
member’s equity and cash flow as of and for the six (6) months ended June 30,
2018 (the “Interim Financial Statements” together with the Audited Financial
Statements, the “Financial Statements”). The Financial Statements (including the
related notes and schedules) present fairly, in all material respects, the
financial condition and results of operations of Company as of the dates and for
the periods indicated, and have been prepared in accordance with GAAP, except as
described on Schedule 2.4; provided, however, that the Interim Financial
Statements are subject to normal year-end adjustments and lack footnotes and
other presentation items.
Section 5.Absence of Undisclosed Liabilities
. Except for (a) liabilities reflected or reserved against in the Financial
Statements, (b) liabilities disclosed in the Disclosure Schedules, (c) Contracts
entered into in the ordinary course of business or (d) as set forth on Schedule
2.5, the Company has no liabilities of a type that are required to be reflected
in a balance sheet prepared in accordance with GAAP, other than liabilities
incurred in the ordinary course of business since the Latest Balance Sheet Date.
Section 6.Real Property; Personal Property Leases.
(a)Neither the Company nor any of its Subsidiaries own, nor has any of the
Company or any current or former Subsidiary ever owned any real property.
(b)Schedule 2.6(b) sets forth a list of the real property that the Company
leases (the “Facilities”). The lease for each Facility is listed in Schedule
2.6(b) (each a “Real Property Lease”). Each Real Property Lease is in full force
and effect and, to the Knowledge of the Company, is enforceable against the
landlord that is party thereto in accordance with its terms. There exists no
material default or material event of default (or any event that with notice or
lapse of time or both would become a material default) on the part of the
Company or any Subsidiary, or, to the Knowledge of the Company, any other party,
under any Real Property Lease. Except as set forth on Schedule 2.6(b), since
January 1, 2018, neither the Company nor any Subsidiary has received any written
notice of any material default under any Real Property Lease that has not been
cured nor any other termination notice with respect thereto. Except as would not
reasonably be expected to have, individually or in

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the aggregate, a Material Adverse Effect, the Company has a valid leasehold
interest in all of the real property necessary to conduct the business
operations of the Company, free and clear of any and all Liens, other than
Permitted Liens.
(c)As of the Closing Date, there will not be any subleases, license agreements
or other arrangements permitting any third party to use or occupy any portion
any portion of the Real Property Leases that material interferes with the
business operations of the Company.
(d)The Company’s current uses of each Real Property Lease has complied and
continues to comply with applicable Law in all material respects.
(e)Each lease pursuant to which the Company leases any fixtures, furniture,
equipment and any other personal property and under which the Company is
required to make payments in excess of $50,000 per annum (the “Personal Property
Leases”) is listed in Schedule 2.6(f). Each Personal Property Lease is in full
force and effect and, to the Knowledge of the Company, is enforceable against
the lessor that is party thereto in accordance with its terms. There exists no
material default or material event of default (or any event which with notice or
lapse of time or both would become a material default) on the part of the
Company or any Subsidiary, or, to the Knowledge of the Company, any other party,
under any Personal Property Lease. Since January 1, 2018, neither the Company
nor any Subsidiary has received any written notice of any default under any
Personal Property Lease that has not been cured nor any other termination notice
with respect thereto.
Section 7.Contracts.
(a)Schedule 2.7 contains a complete and correct list, as of the Closing Date, of
all Material Contracts. The term “Material Contracts” means all of the following
types of contracts and agreements to which the Company is a party (but excluding
Real Property Leases, Personal Property Leases, Governmental Authorizations, any
Company Benefit Plan, and the Insurance Policies):
(i)all written employment and consulting agreements with current officers, other
employees or consultants of the Company other than Contracts that by their terms
may be terminated or canceled by the Company with notice of not more than the
greater of 90 days or the period of notice required under applicable Law, and in
either case without penalty;
(ii)all Contracts relating to Indebtedness of the Company or any Subsidiary,
including loan agreements, notes, mortgages, indentures, security agreements or
guarantees of the obligations of a third party;
(iii)joint venture, partnership and limited partnership agreements;
(iv)Contracts between the Company and any Person to whom the Company is
obligated to pay $50,000 or more in any calendar year or $100,000 or more under
the terms of the Contract, that is not terminable on notice of ninety (90) days
or less without penalty;
(v)Contracts between the Company and any Person who is obligated to pay $50,000
or more to the Company in a calendar year or $100,000 or more under the terms of
the Contract (other than purchase orders or service orders entered into in the
ordinary course of business of the Company);
(vi)Contracts prohibiting or restricting in any material respect the ability of
the Company to compete with any Person, engage in any business or operate in any
geographical area;
(vii)Contracts that require the Company to purchase its total requirements of
any product or service from a third party or that contains “take or pay”
provisions;
(viii)Contracts that relate to the acquisition or disposition of a business of
any other Person (whether by merger, sale of stock or other equity interests or
sale of substantially all of the assets of such Person) or any real property,
where the Company is obligated to pay more than $100,000;

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(ix)Contracts primarily relating to the use of Intellectual Property (other than
“shrink wrap” software with payment obligations of less than $10,000 in a
calendar year); and
(x)any collective bargaining agreement or other labor agreement to or with any
labor unions or other employee representatives or groups of employees.
(b)Each Material Contract is in full force and effect as to the Company, and to
the Knowledge of the Company, as to each other party thereto. Except as set
forth on Schedule 2.7(b), neither the Company, nor, to the Knowledge of the
Company, any other party thereto, is in material default or breach that has not
been cured (or is alleged to be in material breach of or default under), or has
been provided or received any written notice of any intention to terminate any
Material Contract.
(c)Except as set forth on Schedule 2.7(c), a true and complete copy of each
Material Contract (or, a summary of the terms thereof if such Material Contract
is not written) has been made available to Buyer, in each case as amended or
otherwise modified and in effect as of the date hereof.
(d)No counterparty to any Material Contract has given written notice or
threatened that is it terminating, canceling or materially changing its business
relationship with the Company in a materially adverse manner.
Section 8.Employee Benefit Matters.
(a)Schedule 2.8(a) lists each Employee Benefit Plan maintained, sponsored,
contributed to, or required to be contributed to by the Company for its
employees (each, a “Company Benefit Plan”), including whether such Employee
Benefit Plan is sponsored by Catapult or the Company, or pursuant to which the
Company or Catapult could have any liability. Except as provided in Schedule
2.8(a), the Company does not sponsor any Employee Benefit Plans.
(b)Except as set forth on Schedule 2.8(b), with respect to each Company Benefit
Plan, the Company has made available to Buyer or its Representatives correct and
complete copies of (i) each Company Benefit Plan document (or, in the case of
any such Company Benefit Plan that is unwritten, descriptions thereof) and any
proposed amendments, (ii) the most recent summary plan description for each
Company Benefit Plan for which such summary plan description is required, (iii)
the two most recent annual reports (Form 5500 series or equivalent if required
under applicable Law), including all exhibits and attachments thereto, (iv) the
most recent determination or opinion letter, if any, issued by the Internal
Revenue Service and any pending request for such a letter, (v) all material
correspondence, and all non-routine filings made, with any Governmental
Authority, (vi) all material correspondence with employees of the Company
regarding any Company Benefit Plans and (vii) the most recent audited financial
statements and actuarial or other valuation reports prepared with respect
thereto.
(c)Each Company Benefit Plan has been maintained and administered in all
material respects in accordance with its terms. The Company and all of the
Company Benefit Plans have complied in all material respects with the applicable
provisions of ERISA, the Code and all other applicable Laws with respect to
employee benefit matters.
(d)Except as set forth on Schedule 2.8(d), neither the Company nor any ERISA
Affiliate maintains, contributes to or has an obligation to contribute any
pension benefit plan, as defined in Section 3(2) of ERISA, that is subject to
Title IV of ERISA, a multi-employer plan, as defined in Section 3(37) of ERISA,
or a plan described in Section 4063(a) of ERISA, nor has either Company or any
ERISA Affiliate ever maintained, contributed to or had an obligation to
contribute to any pension benefit plan, as defined in Section 3(2) of ERISA,
that is subject to Title IV of ERISA, any multi-employer plan, as defined in
Section 3(37) of ERISA, or any plan described in Section 4063(a) of ERISA.
(e)Each Company Benefit Plan that is intended to be qualified under Section
401(a) of the Code is and at all times has been so qualified, and has a
currently-effective favorable determination

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letter or, if applicable, opinion letter, from the Internal Revenue Service as
to its qualification, and nothing has occurred that could reasonably be expected
to adversely affect such qualification.
(f)All contributions, premiums or benefits which are due and payable from the
Company or any of its Subsidiaries under any Company Benefit Plan have been paid
to or in respect of each such Company Benefit Plan.
(g)No Company Benefit Plan provides or has ever provided for medical, life
insurance, or other welfare benefits to any former or current employee, or any
spouse or dependent of any such employee, beyond retirement or other termination
of employment (other than as required under Code Section 4980B, or similar state
Law).
(h)No Company Benefit Plan is under audit or investigation by the Internal
Revenue Service, the Department of Labor or any other Governmental Authority
and, to the Knowledge of the Company, no such audit or investigation is
threatened.
(i)There are no pending or, to the Knowledge of the Company, threatened,
actions, suits or claims with respect to any Company Benefit Plan or the assets
or any fiduciary thereof (in that Person’s capacity as a fiduciary of such
Company Benefit Plan), other than ordinary course claims for benefits brought by
participants or beneficiaries.
(j)Each Company Benefit Plan that constitutes in any part a nonqualified
deferred compensation plan within the meaning of Section 409A of the Code and
that is subject to Section 409A of the Code has been operated and maintained in
all material respects in operational and documentary compliance with Section
409A of the Code and applicable guidance thereunder during the respective time
periods in which such operational or documentary compliance has been required.
There is no Contract to which the Company or any of its Subsidiaries is a party
or by which it is bound to compensate any employee for excise Taxes paid
pursuant to Section 409A of the Code.
(k)Neither the execution and delivery of this Agreement nor the consummation of
the Contemplated Transactions (either alone or upon the occurrence of any
additional or subsequent events or the passage of time) will (i) result in any
payment becoming due to any employee, (ii) increase any benefits under any
Company Benefit Plan, (iii) result in the acceleration of the time of payment,
vesting or funding of, or other rights in respect of, any benefits under any
Company Benefit Plan or (iv) result in the triggering or imposition of any
restrictions or limitations on the right of the Company or any of its
Subsidiaries to amend or terminate any Company Benefit Plan or (or result in any
adverse consequences for so doing).
(l)The execution of this Agreement and the consummation of the Contemplated
Transactions will not (either alone or upon the occurrence of any additional or
subsequent events or the passage of time), will not result in the payment of any
amount that may be deemed an “excess parachute payment” under Section 280G of
the Code. There is no Contract to which the Company or any of its Subsidiaries
is a party or by which it is bound to compensate any employee for excise Taxes
paid pursuant to Section 4999 of the Code.
(m)Neither the Company nor any of its Subsidiaries has any leased employees
within the meaning of Section 414(n) of the Code.
Section 9.Intellectual Property.
(a)Schedule 2.9(a) sets forth a true and complete list as of the date hereof of
all (i) Intellectual Property that is issued or renewed by, registered, recorded
or filed with, or the subject of a pending application before any Governmental
Authority or internet domain name registrar; (ii) material unregistered
trademarks; and (iii) Proprietary Software, in each case of (i)-(iii) that are
owned by or purported to be owned by the Company. The Company owns, or otherwise
has the right to use pursuant to license, sublicense, agreement or otherwise,
all items of Intellectual Property required in connection with the operation of
the Business as presently conducted, and all such rights will survive unchanged
the consummation of the Contemplated Transactions, except where the failure to
own or have the right to use such Intellectual Property would not have a
Material Adverse Effect. The

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Company exclusively owns the material Intellectual Property owned or purported
to be owned by the Company (the “Company Intellectual Property”) free and clear
of all Liens (other than Permitted Liens and non-exclusive licenses granted in
the ordinary course of business to customers in connection with the sale or
provisions of goods or services consistent with past practice). None of the
Company Intellectual Property is subject to any outstanding order, judgment,
injunction, decree, ruling or agreement that restricts or would restrict the
Company’s right to use or license such Company Intellectual Property.
(b)To the Knowledge of the Company, no Person is infringing, misappropriating or
otherwise violating any Company Intellectual Property, and no Person has done so
in the last six (6) years. The Company and the operation of the Business do not
materially infringe, misappropriate or otherwise violate the Intellectual
Property rights of any other Person, and have not done so in the last six (6)
years. The Intellectual Property listed in Schedule 2.9(a) is valid, subsisting
and enforceable. There is no action or claim currently pending, asserted or, to
the Knowledge of the Company, threatened by or against the Company concerning
any of the foregoing in this Section 2.9(b).
(c)The Company has taken all reasonable measures consistent with reasonable
industry practices to maintain the confidentiality and value of source code for
any Proprietary Software owned by or purported to be owned by the Company and
all other confidential Company Intellectual Property. Except as set forth on
Schedule 2.9(c), to the Knowledge of the Company, no such source code or Company
Intellectual property has been disclosed to, or discovered by any Person, other
than Persons subject to appropriate non-disclosure agreements. To the Knowledge
of the Company, no employee, contractor or agent of the Company is in default or
breach of any term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement relating to the
protection, ownership, development, use or transfer of Intellectual Property.
Except as set forth on Schedule 2.9(c), the Company is a party to valid and
enforceable written agreements with all Persons that have conceived, developed,
acquired or created Company Intellectual Property for the Company, pursuant to
which agreements the entire and unencumbered right, title and interest in and to
such Intellectual Property is assigned to the Company and/or vest in the Company
by operation of Law.
(d)The Company IT Assets are adequate for, and operate and perform in all
material respects in accordance with their documentation and functional
specifications and otherwise as required in connection with, the operation of
the Business. The Company IT Assets are free from material bugs and other
defects, have not materially malfunctioned or failed within the past three (3)
years, and do not contain any viruses, malware, or similar devices. The Company
has implemented backup, security and disaster recovery measures and technology
consistent with reasonable industry practices, and no Person has gained
unauthorized access to any Company IT Assets.
(e)All source code and other documentation concerning Proprietary Software is
correct, accurate, complete and sufficiently documented to enable a software
developer of reasonable skill to understand, modify, debug, enhance, compile,
support and otherwise utilize all aspects of software to which it pertains,
without reference to other sources of information, except as would not have a
Material Adverse Effect. Except as set forth on Schedule 2.9(e), no such source
code has been delivered or licensed to any other Person, or is subject to any
source code escrow or assignment obligation. The Company has complied in all
material respects with the terms of all Contracts governing the use or
distribution of Open Source Software, and no use of or activities with respect
to Open Source Software by or on behalf of the Company, or its customers, (i)
requires the licensing, disclosure or distribution of any source code (other
than source code that is a part of such Open Source Software) or Company
Intellectual Property to any other Person, (ii) prohibits or limits the (A)
receipt of consideration in connection with licensing or otherwise distributing
any software, or (B) imposition of contractual restrictions on the rights of
licensees or other recipients to decompile, disassemble or otherwise
reverse-engineer any software, or (iii) requires the licensing or other
distribution of any

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Proprietary Software to any Person for the purpose of making derivative works,
except as would not have a Material Adverse Effect.
Section 10.Governmental Authorizations; Compliance with Law
. The Company has all material Governmental Authorizations required for the
conduct of the Business. Except as set forth on Schedule 2.10, to the Knowledge
of the Company, the operations of the Business are in compliance in all material
respects with applicable Laws and Governmental Authorizations. Notwithstanding
the preceding two sentences, no representation or warranty is made pursuant to
this Section 2.10 regarding the compliance by the Company with any Environmental
Law, Tax Law, ERISA or any other Law governing or regulating Benefit Plans, wage
and hour matters or other employment matters, including the Company’s possession
of and compliance with any Governmental Authorization required thereunder.
Section 11.Litigation
. Except as set forth on Schedule 2.11, there is no Proceeding pending or, to
the Knowledge of the Company, threatened (a) against the Company or any
Subsidiary or the material Assets or Properties of the Company or any Subsidiary
or (b) that, questions the validity of, or seeks to prevent or delay the
consummation of this Agreement or the transactions contemplated hereby,
including the Company’s performance of its obligations under any Transaction
Document to which it is, or is contemplated to be, a party. There is no pending
investigation of the Company or any Subsidiary by any Governmental Authority as
to which the Company or any Subsidiary has been duly served or given notice or,
to the Knowledge of the Company, threatened investigation of the Company or any
Subsidiary by any Governmental Authority.
Section 12.Taxes
. Except as set forth on Schedule 2.12:
(a)All Tax Returns required to have been filed by the Company or with respect to
the Company’s assets or activities have been timely filed. All such Tax Returns
are true and correct in all material respects. All Taxes required to be paid by
the Company (whether or not reflected on such Tax Returns) have been paid in
full.
(b)None of the Assets or Properties of the Company is or at the Closing Date
will be encumbered by any Liens (other than Permitted Liens) and there are no
grounds for the assertion or assessment of any Liens against any of the
properties or assets of the Company in respect of any Taxes (other than
Permitted Liens).
(c)No Governmental Authority in a jurisdiction where the Company does not file
Tax Returns has made a claim, assertion or threat that the Company is or may be
subject to taxation in such jurisdiction.
(d)The Company has not participated in any “listed transaction” or similar
transaction within the meaning of Treasury Regulations § 1.6011-4(b)(2).
(e)All Taxes that the Company is required to collect or withhold have been duly
withheld or collected and, to the extent required, have been paid to the proper
Governmental Authority, including any such Taxes required to be collected or
withheld with respect to any employee, contractor, creditor, equity holder or
other party.
(f)No written agreement or other document extending, or having the effect of
extending, the period of assessment or collection of any Taxes relating to the
Company or any of the Company’s assets or activities, and no power of attorney
with respect to any such Taxes, has been executed or filed with the Internal
Revenue Service or any other Taxing Authority that is currently in effect.
(g)The Company is not the beneficiary of any extension of time (other than an
automatic extension of time not requiring the consent of the Internal Revenue
Service or any other taxing authority) within which to file any Tax Return not
previously filed. The Company has not received any reports or other written
assertions by agents of any Taxing Authority of any deficiencies or other

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liabilities for Taxes with respect to taxable periods for which the limitations
period has not run. The Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(h)There is no Proceeding, assessment, audit or similar event pending or
threatened in respect of any Taxes or Tax Return relating to the Company or any
of the Company’s assets or activities.
(i)The Company (a) is not a party to, bound by, or has any obligation under, any
agreement regarding the sharing of, indemnification for, or allocation of any
Tax, (b) is not and has not been a member of an affiliated group filing
consolidated or combined Tax Returns and (c) otherwise does not have any
liability for the Taxes of any Person under applicable Law or by Contract (other
than the Company).
(j)The Company is, and has been at all times since the date of formation been,
properly classified as a partnership for U.S. federal and applicable state and
local income Tax purposes.
Section 13.Absence of Changes
. Except for the execution and delivery of the Transaction Documents and the
transactions to take place pursuant to any of the Transaction Documents on or
prior to the Closing Date, since the Latest Balance Sheet Date, and except as
set forth in Schedule 2.13, there has not been any change, event or development
which, individually or together with other such events, would reasonably be
expected to have a Material Adverse Effect. Without limiting the foregoing,
except as set forth in Schedule 2.13, there has not occurred between the Latest
Balance Sheet Date and the Closing Date:
(a)any transfer, issuance, repurchase, redemption, split, combination,
reclassification or cancellation of any Membership Interests of the Company;
(b)any physical damage, destruction or other casualty loss (whether or not
covered by insurance) affecting any of the material Assets or Properties of the
Company or its Subsidiaries in an amount exceeding $50,000 individually or
$100,000 in the aggregate other than physical, damage, destruction or other
casualty loss that is in the ordinary course of business and customary, among
companies operating in the Business;
(c)any amendment to the Charter Documents of, or any recapitalization,
reorganization, liquidation, dissolution, merger or business combination
involving, the Company or any of its Subsidiaries;
(d)any incurrence of a Lien (other than a Permitted Lien) on any Assets or
Properties of the Company;
(e)any entering into, or material amendment, modification, termination (partial
or complete) or granting of a waiver under or giving any consent with respect to
any Material Contract outside of the ordinary course of business;
(f)any declaration, setting aside or payment of any dividend or other
distribution or other payment in respect of any equity interest in the Company
or any of its Subsidiaries;
(g)any capital expenditures or commitments for additions to property, plant or
equipment comprising part of the Assets or Properties of the Company in an
amount exceeding $50,000 individually or $100,000 in the aggregate;
(h)a material change in any method of accounting or accounting practice of the
Company;
(i)any incurrence, assumption or guarantee of any material Indebtedness;
(j)any capital investment in, or any loan to, any other Person;
(k)any action to accelerate the vesting or payment of any compensation or
benefit for any current or former employee, officer, manager, independent
contractor or consultant; or
(l)any entering into a Contract (or otherwise committing) to do or engage in any
of the foregoing after the date hereof.
Section 14.Environmental Matters

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. Except for those matters disclosed on Schedule 2.14 attached hereto:
(a)the Company is and, during the preceding three (3) years, has been in
material compliance with all applicable Environmental Laws, and has obtained,
maintained and is in compliance with the terms of all permits, licenses,
registrations, consents and approvals required under all applicable
Environmental Laws to entitle the Company to operate its assets and to carry on
and conduct the Business as currently conducted;
(b)to the Knowledge of the Company, there have been no Releases or exposures to
Hazardous Substances (i) at, on, or migrating from any Business Facilities
(including any buildings or improvements located thereon) or any real property
formerly owned, leased or operated by the Company or (ii) arising from or
relating to the operations of or any products manufactured, marketed, sold or
distributed, by the Company or its predecessors; in each case, that would
reasonably be likely to give rise to material liabilities or obligations of the
Company;
(c)there are no pending or, to the Knowledge of the Company, threatened orders,
writs, judgments, awards, injunctions, decrees, or adversarial Proceedings
arising under any Environmental Laws with respect to the Company or affecting
the Business Facilities or any of the Assets and Properties (whether real,
personal or mixed) currently or formerly owned or operated by the Company and
for which the Company has been alleged or would be expected to have liability;
(d)the Company has not received any written notices from a Governmental
Authority or other claimant regarding any actual or alleged unresolved violation
of, or liability under, any Environmental Law by the Company, or of any
unresolved obligation to undertake or bear the cost of any Environmental
Liabilities with respect to the operations of the Company or otherwise with
respect to the Business Facilities, any other properties in which the Company
has or had an interest or at which it has operated (other than the Other
Facilities), or any property at which Hazardous Substances were generated by the
Company or to which Hazardous Substances generated by the Company were
transferred; in each case, other than any such notices that are fully resolved
with no ongoing obligations or liabilities;
(e)except with respect to Contracts entered into by the Company in the ordinary
course of business, to the Knowledge of the Company, the Company has not assumed
or retained by Contract or by operation of Law any obligation of a third party
under any Environmental Law or concerning any Hazardous Substance that would
reasonably be likely to give rise to material liabilities or obligations of the
Company under Environmental Law; and
(f)the Company has made available to Buyer true and complete copies and results
of any third party Phase I or Phase II environmental site assessment reports or
studies in the possession of or reasonably accessible to the Company pertaining
to Environmental Law or Hazardous Substances and regarding the Business
Facilities or the operation of the Business.
The representations and warranties in this Section 2.14 shall not apply to, and
for purposes of this Section 2.14 only, the term “Business Facilities” shall not
include, any real property or residential premises that (i) the Company leases
for the sole purpose of providing housing or living arrangements to its
employees and (ii) are managed and owned by third parties not affiliated with
the Company.
Section 15.Employment Matters
. Except as otherwise disclosed on Schedule 2.15:
(a)The Company has previously provided Buyer with a list of each individual who,
as of the Closing Date, was employed by the Company (“Company Employees”), along
with each such Company Employee’s (i) approximate date of hire, (ii) then
current title or grade, normal work location, exempt or non-exempt status, and
active or leave status, and (iii) salary or rate of

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compensation, bonuses and other compensation paid or payable by, as applicable,
the Company and its Subsidiaries during 2018 and 2017.
(b)The Company is in compliance in all material respects with all applicable
Laws relating to employment and labor, including but not limited to, provisions
thereof relating to wages, hours, overtime, classification of employees as
exempt or nonexempt, employment discrimination, safety and health, workers’
compensation, equal employment opportunity, collective bargaining and the
collection and payment of withholding and employment taxes.
(c)The Company has not experienced any strike, labor dispute or work stoppage
during the last two (2) years, and no such labor dispute is pending, or to the
Knowledge of the Company, threatened between any Company Employee and the
Company.
(d)There are no claims (other than ordinary claims under Company Benefit Plans),
disputes, grievances or disciplinary actions pending or, to the Knowledge of the
Company, threatened against the Company by any Company Employee or any former
employee of the Company.
(e)There are no workers’ compensation claims pending against the Company as of
the Closing Date and there are no pending claims asserted against the Company by
any Company Employee or any former employee of the Company relating to wage and
hour statutes, including but not limited to the Fair Labor Standards Act, 29
U.S.C. 201, et seq.
(f)To the Knowledge of the Company, no employee of the Company is subject to any
secrecy or noncompetition agreement or any other agreement or restriction of any
kind that would impede in any way the ability of such employee to carry out
fully the duties of his or her position with the Company.
(g)All employees of the Company are legally employed, and the Company is in
material compliance with all requirements of the Immigration and Reform Control
Act of 1986.
(h)The Company is not, nor has been within the last six (6) years, a party to or
bound by any collective bargaining agreement or similar labor agreement with a
labor union or other employee representative, and there are no current union
organization activities or representation questions involving the Company
Employees or employees of any of the Company’s Subsidiaries.
(i)Neither the Company nor any of its Subsidiaries has or has had within the
last two (2) years, any liability arising from the misclassification of any
Person as an independent contractor, temporary employee, leased employee or any
other service provider compensated other than through reportable wages (as an
employee) paid by the Company or a Subsidiary (any such Person, a “Contingent
Worker”), and no Contingent Worker has been improperly excluded from any Company
Benefit Plan.
Section 16.No Brokers or Finders
. Except for Simmons & Company International, the Company has not retained,
employed or used any broker, finder, financial advisor or other similar agent
that is entitled to any fee or commission from the Company or Buyer in
connection with this Agreement or the Transaction Documents.
Section 17.Insurance
. Schedule 2.17 lists all property, liability, commercial general liability,
workers compensation other forms of insurance (other than any Company Benefit
Plans) currently in effect covering the operations of the Company (the
“Insurance Policies”). Each Insurance Policy is valid and in effect. Except as
set forth on Schedule 2.17, no Insurance Policy provides for any retrospective
premium adjustment or other experience-based liability on the part of the
Company. The Company has not received written notice that any insurer under any
policy referred to in Schedule 2.17 is denying liability with respect to an
unresolved claim thereunder or defending such claim under a reservation of
rights clause.
Section 18.Title, Condition and Sufficiency of Assets

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. Except as set forth on Schedule 2.18, the Company is the sole and exclusive
owner of, and has good and valid title to all of its Assets and Properties,
which are reflected as owned by the Company on the Latest Balance Sheet, or a
valid leasehold or other contractual interest in all of their leased assets, in
each case, free and clear of all Liens, except for Permitted Liens. Except as
set forth on Schedule 2.18, (i) the Company currently owns or leases all of the
tangible personal property necessary to conduct its business in all material
respects as conducted immediately prior to the Closing and (ii) the material
Assets and Properties of the Company are in good operating condition and repair,
and are adequate for the uses to which they are being put. The Assets and
Properties are sufficient for the continued conduct of the Business after the
Closing Date in substantially the same manner as conducted immediately prior to
the Closing and constitute all of the material rights, property and assets
necessary to conduct the business of the Company as currently conducted.
Section 19.Related Party Transactions
. Except as set forth in Schedule 2.19, the Company is not a party to any
Contract, loan or other arrangement with any Related Party.
Section 20.No Powers of Attorney
. The Company does not have any powers of attorney or comparable delegations of
authority outstanding.
Article V

Article VIREPRESENTATIONS AND WARRANTIES OF BUYER
Each of Buyer and Merger Sub, jointly and severally, represents and warrants to
the Company and the Holders, that the statements contained in this Article III
are true and correct as of the date hereof (unless a specific date is set forth
in such representation or warranty, in which case such representation or
warranty must be true and correct as of such specific date).
Section 1.Organizational Status; Authority
.
(a)Buyer is duly organized, validly existing and in good standing under the Laws
of the State of Delaware. Buyer has all requisite legal capacity, power and
authority to execute and deliver the Transaction Documents to which it is a
party and to perform all its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by Buyer of the Transaction Documents to which Buyer is a party, and
the performance by Buyer of its obligations hereunder and thereunder have been
duly and validly authorized by all necessary action required on the part of
Buyer and no further action, approval or consent on the part of Buyer is
necessary to authorize the execution, delivery or performance of this Agreement,
the Transaction Documents or the consummation of the Contemplated Transactions.
The Transaction Documents have been (or, when executed, will be) duly and
validly executed and delivered by Buyer and, assuming that such Transaction
Documents have been duly executed and delivered by the party seeking to enforce
such Transactions Documents, constitute (or, when executed, will constitute) the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with their terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or
other similar Laws relating to or affecting the enforcement of creditors’ rights
generally, or by general equitable principles (regardless of whether enforcement
is considered in a proceeding at Law or in equity). Buyer has full power and
authority to conduct the business of Buyer as and to the extent now conducted
and to own, use and lease its Assets and Properties.
(b)    The Merger Sub is duly organized, validly existing and in good standing
under the Laws of the State of Delaware. The Merger Sub has all requisite legal
capacity, power and authority

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to execute and deliver the Transaction Documents to which it is a party and to
perform all its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by the
Merger Sub of the Transaction Documents to which the Merger Sub is a party, and
the performance by the Merger Sub of its obligations hereunder and thereunder
have been duly and validly authorized by all necessary action required on the
part of the Merger Sub and no further action, approval or consent on the part of
the Merger Sub is necessary to authorize the execution, delivery or performance
of this Agreement, the Transaction Documents or the consummation of the
Contemplated Transactions. The Transaction Documents have been (or, when
executed, will be) duly and validly executed and delivered by the Merger Sub
and, assuming that such Transaction Documents have been duly executed and
delivered by the party seeking to enforce such Transactions Documents,
constitute (or, when executed, will constitute) the legal, valid and binding
obligation of the Merger Sub, enforceable against the Merger in accordance with
their terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium or other similar
Laws relating to or affecting the enforcement of creditors’ rights generally, or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding at Law or in equity). The Merger Sub has full power and
authority to conduct the business of the Merger Sub as and to the extent now
conducted and to own, use and lease its Assets and Properties.
Section 2.No Conflicts; Consents and Approvals
.
(a)The execution, delivery and performance of this Agreement by Buyer or Merger
Sub will not result in (i) any conflict with the Charter Documents of Buyer or
Merger or (ii) any breach or violation of or default under any Law, judgment,
order, decree, license, permit or Governmental Authorization or any mortgage,
lease, agreement, deed of trust, indenture or any other instrument to which
Buyer or the Merger Sub is a party or by which Buyer or Merger Sub or any of
their respective Assets and Properties are bound.
(b)No consent, approval or authorization of or filing with any Governmental
Authority is required on the part of Buyer, the Merger Sub or any respective
Affiliate thereof in connection with the execution and delivery of this
Agreement or the consummation of the Contemplated Transactions.
Section 3.Litigation
. There is no Proceeding involving Buyer or Merger Sub pending or, to the
knowledge of the Buyer, threatened against Buyer or Merger Sub that questions
the validity of, or seeks to prevent or delay the consummation of this Agreement
or the Contemplated Transactions, including Buyer’s or Merger Sub’s performance
of its obligations under any Transaction Document to which it is, or is
contemplated to be, a party.
Section 4.Purchase for Investment
. Buyer (a) is an informed, sophisticated entity with sufficient knowledge and
experience in investment and financial matters so as to be capable of evaluating
the risks and the Contemplated Transactions, (b) has determined that the Merger
is consistent with its general investment objectives, (c) understands that the
purchase of the Membership Interests of the Company through the Merger involves
certain business and other risks, (d) is financially able to bear the risks of
Merger, (e) has had an opportunity to discuss the business, management and
financial affairs of the Company with the Holders and the Company and, in
entering into this Agreement, is relying on its informed conclusions of its own
investigations of such businesses, (f) is acquiring the Membership Interests of
the Company through the Merger for its own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof,
(g) was not organized for the specific purpose of the Merger, (h) understands
that the Membership Interests of the

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Company have not been registered under the Securities Act or the applicable
securities or blue sky laws of any state and, accordingly, must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration, (i) is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and (j) understands
that the exemptions from registration under the Securities Act relied upon by
the Company or a Holder are based in part on the fact that Buyer is an
“accredited investor” as defined in Rule 501(a) under the Securities Act.
Section 5.No Brokers or Finders
. Neither Buyer nor the Merger Sub has retained, employed or used any broker,
finder, financial advisor or other similar agent that is entitled to any fee,
commission or compensation from any Holder or the Company in connection with
this Agreement or the Transaction Documents.
Section 6.HSR Act
. The board of directors of Buyer has determined in good faith that the fair
market value, calculated in accordance with the HSR Act, of all of the Company
Interests to be acquired by Buyer pursuant to this Agreement and that will be
held by Buyer after the consummation of the transactions contemplated by this
Agreement does not exceed the applicable HSR Act reporting threshold.
Article VII

Article VIIICOVENANTS OF PARTIES
Section 1.Consents
. Buyer acknowledges the third-party consents and waivers (including those set
forth on Schedule 2.2) may be required from parties to the Material Contracts
and other Contracts to which the Company is a party. Without limiting any rights
or remedies Buyer may have in respect of Losses suffered due to the failure to
obtain any consent or waiver that (a) may be required in connection with the
Contemplated Transactions or in order to avoid giving a counterparty a right of
termination and (b) is not set forth in Schedule 2.2 or otherwise disclosed in
writing to Buyer, no Holder shall have any liability whatsoever to Buyer or
(after Closing) the Company arising out of or relating to the failure to obtain
any consents or waivers that may be required in connection with the Contemplated
Transactions or because of the termination of any Material Contract or other
Contract as a result thereof if (A) the consent or waiver is set forth on
Schedule 4.1 on the Closing Date or its requirement is otherwise disclosed to
Buyer, (B) Buyer has received written notice that the consent or waiver has not
been obtained and (C) Buyer, nonetheless, elects to consummate the transaction
contemplated hereby.
Section 2.Publicity
. No press release or public announcement related to this Agreement, or the
Contemplated Transactions, may be issued or made by any Party without the
approval of the other Parties (which such approval shall not be unreasonably
withheld, conditioned or delayed), unless required by Law or any securities
exchange (including Buyer’s obligations under the U.S. Securities Exchange Act
of 1934), in which case the other Parties shall have the right to review such
press release or announcement prior to publication. The Company acknowledges
that the Buyer’s parent company is subject to the periodic and current reporting
requirements of the U.S. Securities Exchange Act of 1934 and that Buyer will be
obligated to file a current report on Form 8-K no later than four business days
after the Closing Date.
Section 3.Employee Benefits.
(a)As of the Closing Date, the only individuals employed by the Company and its
Subsidiaries at the Effective Time are the individuals set forth on Schedule
4.3(a) (such individuals, the “Continuing Employees”).
(b)As of and following the Closing Date, Buyer will permit the Continuing
Employees and, as applicable, their eligible dependents, to participate in the
welfare benefit plans, programs or

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policies (including any plan intended to qualify within the meaning of Section
401(a) of the Code and any vacation, sick, per personal time off plans or
programs) of Buyer (each, a “Buyer Plan”), on terms no less favorable than those
provided to similarly situated employees of Buyer on the Closing Date; provided
that (i) the Continuing Employees shall continue to participate in the Company’s
medical and dental benefits plans until the end of the calendar month in which
the Closing Date occurs after which they will become eligible to participate in
Buyer’s medical and dental benefits plans and (ii) Buyer shall cause the
Continuing Employees to become eligible to participate in its 401k retirement
plan as promptly as practicable following the Closing Date. Buyer shall, and
shall cause its Affiliates to, give each Continuing Employee full credit (for
all purposes, including eligibility to participate, vesting, vacation
entitlement and severance benefits) for all service with the Company (or
predecessor employers) prior to the Closing Date under each of the comparable
Buyer Plans in which such Continuing Employee becomes a participant; provided,
however, that such service will not be credited (i) to the extent it would
result in a duplication of benefits, or (ii) for purposes of any plan, program
or arrangement (A) under which similarly situated employees of Buyer and its
Affiliates (not including the Company) do not receive credit for prior service
or (B) that is grandfathered or that is that is frozen with respect to level of
benefits or participation, or (iii) with respect to benefit accruals under any
defined benefit pension plan. In addition, with respect to each Buyer Plan,
Buyer and each of its Affiliates, as applicable, shall (A) cause to be waived
any eligibility waiting periods, any evidence of insurability requirements and
the application of any pre-existing condition limitations under such plan, and
(B) cause each Continuing Employee to be given credit under such plan for all
amounts paid by such Continuing Employee under any similar Company Benefit Plan
for the plan year that includes the Closing Date for purposes of applying
deductibles, co-payments and out-of-pocket maximums as though such amounts had
been paid in accordance with the terms and conditions of the applicable plan
maintained by Buyer or its Affiliate, as applicable, for the plan year in which
the Closing Date occurs.If requested by Buyer in writing delivered to the
Company not less than ten (10) Business Days prior to the Closing Date, the
Company shall take all such action as is necessary to terminate the Employee
Retirement Plan (i.e. the Company’s 401(k) retirement plan), effective as of the
day prior to the Closing Date.
(c)The Company shall take all such action as is necessary to terminate the
participation of all of its employees in the 401(k) retirement plan of Catapult
Energy Services Group, LLC, effective as of the day prior to the Closing Date.
(d)Subject to the Company providing Buyer with all information relating to the
termination of employment of Continuing Employees that may have an impact on the
analysis relating to the Worker Adjustment and Retraining Notification Act, 29
U.S.C. Section 2101 et. seq., the regulations and rules thereunder, or under any
similar provision of any federal, state, foreign or local law, rule or
regulation (collectively, a “WARN Obligation”), to the extent that any WARN
Obligations arise with respect to any loss of employment by any employee of the
Company in connection with or as a result of the Contemplated Transactions,
whether on or after the Closing, Buyer shall be solely responsible for such WARN
Obligation and any associated obligations.
(e)Nothing in this Section 4.3, whether express or implied, shall confer upon
any Person whether or not a Party to this Agreement (including any Continuing
Employee) any right to continued employment with the Company and nothing herein
shall be construed so as to prohibit Buyer or any of its Affiliates from having
the right to terminate the employment of any Continuing Employee, provided that
any such termination is effected in accordance with applicable Law.
(f)The provisions of this Section 4.3 are for the sole benefit of the parties
hereto and nothing herein, express or implied, is intended or shall be construed
to confer upon or give to any person (including any Continuing Employee), other
than the parties to this Agreement and their respective successors and permitted
assigns, any legal or equitable or other rights or remedies under or by reason
of any provision of this Section 4.3. Nothing contained herein, express or
implied: (i)

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shall be construed to establish, amend or modify any benefit plan, program,
agreement or arrangement; (ii) shall alter or limit the Buyer’s ability to
amend, modify or terminate any benefit plan, program, agreement or arrangement;
or (iii) is intended to confer upon any Continuing Employee any right to
employment or continued employment for any period of time by reason of this
Agreement, or any right to a particular term or condition of employment.
Section 4.Director and Officer Indemnification
.
(a)Buyer agrees that all rights to exculpation, indemnification and advancement
of expenses now existing in favor of the current or former directors, managers,
members or officers of the Company (including those provided in the Charter
Documents of the Company), and each of the foregoing who served as a director,
manager or officer, member, trustee or fiduciary of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise at the request of the Company, in their capacities as such and not as
members and/or equity holders of a Company or otherwise (each, together with
such person’s heirs, executors or administrators, a “Company Indemnified
Party”), as the case may be, shall survive the Closing and shall continue in
full force and effect.
(b)At Closing, Buyer shall cause the Company to obtain, by payment of the D&O
Tail Amount, for the benefit of the Company Indemnified Parties who are
currently covered by the Company’s existing directors’ and officers’ liability
insurance “tail” insurance policies with a claims period of at least six (6)
years from the Closing Date with respect to directors’ and officers’ liability
insurance in an amount and scope at least as favorable as the Company’s existing
policies for claims arising from facts or events that occurred on or prior to
the Closing Date (the “D&O Tail Policies”). The D&O Tail Policies shall not be
amended, repealed, or otherwise modified by Buyer or any of its Affiliates
(including the Company) for a period of six (6) years from the Closing Date in
any manner that would materially and adversely affect the rights thereunder of
individuals who, at the Closing, were directors, officers, employees,
fiduciaries, or agents of the Company and covered by the tail policy.
(c)The provisions of this Section 4.4 shall survive the consummation of the
Contemplated Transactions and expressly are intended to benefit, and are
enforceable by, each Company Indemnified Party.
Section 5.Post-Closing Procedures for Capital Interests Holders
. If any portion of the Merger Consideration is payable after Closing to the
Capital Interests Holders (other than the Holders Closing Consideration),
including the Capital Interests Holders’ applicable portion of (a) Merger
Consideration Adjustment Escrow Property released from the Merger Consideration
Adjustment Escrow Account, (b) Indemnification Escrow Property released from the
Indemnification Escrow Account, (c) the Earn-Out Payment, (d) the Additional
Consideration, (e) a release by the Holders Representative of a portion of the
Holders Representative Reserve Property or (f) such other consideration required
to be paid to the Capital Interests Holders under this Agreement, then, such
amounts shall first be paid to the Paying Agent, who shall promptly pay the
applicable amounts (based on the Payment Percentages) to the Capital Interests
Holders who previously delivered the Holder Materials pursuant to Section
1.5(a), in cash or other immediately available funds, less that portion of the
applicable payment, if any, that is withheld pursuant to Section 1.16.
Section 6.Post-Closing Procedures for Incentive Interests Holders
. If any portion of the Merger Consideration is payable after Closing to the
Incentive Interests Holders (other than the Holders Closing Consideration),
including the Incentive Interests Holders’ applicable portion of (a) Merger
Consideration Adjustment Escrow Property released from the Merger Consideration
Adjustment Escrow Account, (b) Indemnification Escrow Property released from the
Indemnification Escrow

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Account, (c) the Earn-Out Payment, (d) the Additional Consideration, (e) a
release by the Holders Representative of a portion of the Holders Representative
Reserve Property or (f) such other consideration required to be paid to the
Incentive Interests Holders under this Agreement, then, such amounts shall first
be paid to the Paying Agent, who shall promptly pay the applicable amounts
(based on the Payment Percentages) to the Incentive Interests Holders who
previously delivered the Holder Materials pursuant to Section 1.5(b), in cash or
other immediately available funds, less that portion of the applicable payment,
if any, that is withheld pursuant to Section 1.16.
Article IX

Article XINDEMNIFICATION
Section 1.Survival
. All of the representations and warranties of the parties contained in Articles
II and III shall survive the Closing hereunder for an 18 month period following
the Closing Date, except the representations and warranties in Section 3.6 which
shall survive indefinitely, and claims for Fraud which shall survive until
December 31, 2021. All covenants and agreements of the Parties made in this
Agreement to be performed after Closing shall survive the Closing and shall
remain in full force and effect until the performance thereof. No claim for
indemnification pursuant to Section 5.2(a) or Section 5.3 based on the breach,
or alleged breach, of a representation, warranty, agreement or covenant may be
asserted after the date on which such representation, warranty, agreement or
covenant expires hereunder; provided that any claims asserted in good faith (and
in accordance with Section 5.4) with reasonable specificity and in writing by
notice from the non-breaching Party to the breaching Party (which in the case of
a claim on behalf of all of the Holders, must be made by Holders Representative)
prior to the expiration date of the applicable survival period shall not
thereafter be barred by the expiration of the relevant representation or
warranty and such claims shall survive until finally resolved (subject to
Section 5.4(b)).
Section 2.Indemnification of Buyer.
(a)After the Closing and subject to the limitations set forth in this Agreement,
Buyer, Merger Sub and the Surviving Company and their respective Affiliates, and
each of their respective officers, directors, shareholders, members, managers,
agents and attorneys (collectively, the “Buyer Indemnified Parties”) shall be
indemnified and held harmless against, without duplication, any loss, Taxes,
liability (including, without limitation, STRICT LIABILITY), deficiency, damage,
expense or cost (including costs of investigation and defense and reasonable
attorneys’ fees), whether or not involving a third-party claim (collectively,
“Losses”), actually incurred or suffered by any Buyer Indemnified Party arising
out of
(i)any breach of any representation or warranty contained in Article II of this
Agreement;
(ii)any breach of any representation or warranty made by a Holder in such
Holder’s Letter of Transmittal (the “Letters of Transmittal Representations”);
(iii)any breach of, or failure to perform, any covenant or obligation of a
Holder contained in this Agreement or in any of the Transaction Documents;
(iv)any breach of, or failure to perform any covenant or obligation of the
Company that is to be performed prior to the Closing in this Agreement or in any
of the Transaction Documents,
such indemnity to be funded to be solely and exclusively by funds from the
Indemnity Escrow Account or by set off against the Earn-Out Payment, if any, and
only in accordance with the terms of the Escrow Agreement and this Agreement.
(b)Other than with respect to Losses arising out of any breach of Company
Fundamental Representations, the Letters of Transmittal Representations or of a
representation or warranty in Section 2.12, none of the Buyer Indemnified
Parties shall be entitled to assert any right to

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indemnification under Section 5.2(a)(i) or Section 5.2(a)(ii) with respect to a
claim or series of related claims if such claim or series of related claims
arising out of the same or similar set of facts or circumstances where the
Losses related thereto are less than $10,000 (each, a “De Minimis Loss”). Other
than with respect to Losses arising out of any breach of Company Fundamental
Representations, Letter of Transmittal Representations or of a representation or
warranty in Section 2.12, none of the Buyer Indemnified Parties shall be
entitled to assert any right to indemnification under Section 5.2(a)(i) or
Section 5.2(a)(ii) until the aggregate amount of all Losses, not including any
De Minimis Losses, actually incurred by the Buyer Indemnified Parties with
respect to such matters exceeds $500,000 (the “Basket”), in which case the Buyer
Indemnified Parties shall have the right to seek indemnification for all Losses
in excess of, but not including, the Basket.
(c)Notwithstanding anything to the contrary in this Agreement, and subject to
the other limitations on indemnification set forth in this Article V:
(i)the Buyer Indemnified Parties’ recovery of all indemnification obligations
owed to the Buyer Indemnified Parties under this Agreement, other than with
respect to Section 5.2(a)(ii) and Section 5.2(a)(iii), will be limited solely to
recovery against the remaining amount of the Indemnification Escrow Property or
the Earn-Out Payment.
(ii)the Buyer Indemnified Parties’ recovery of all indemnification obligations
owed to the Buyer Indemnified Parties under Section 5.2(a)(ii) and Section
5.2(a)(iii) will be limited solely to recovery against the remaining amount of
such breaching Holder’s Payment Percentage of (A) the Indemnification Escrow
Property or (B) the Earn-Out Payment.
(iii)in no event shall a Holder be liable for indemnity obligations attributable
to the acts or omissions, Fraud or breaches of Letters of Transmittal
Representations of another Holder.
(iv)other than the Indemnification Holdback deposited by Buyer with the Escrow
Agent at Closing, the Holders and the Company shall have no obligation to pay
any amounts into, or increase, the Indemnification Holdback.
(v)the Buyer Indemnified Parties may not recover against the Earn-Out Payment
once it is paid to the Paying Agent or the Indemnification Holdback once all of
the Indemnification Escrow Property has been released from the Indemnification
Escrow Account.
(d)No Materiality. Except with respect to representations and warranties in
Section 2.4 and Section 2.13 or determining whether Fraud has occurred, for
purposes of determining whether a breach of any representation, warranty or
covenant has occurred under this Agreement and the damages suffered as a result
of such breach, no qualification as to materiality or Material Adverse Effect
(or any correlative terms) shall be taken into consideration.
Section 3.Indemnification of Holders
. After the Closing and except as otherwise limited hereby, the Buyer and the
Company, jointly and severally, shall indemnify the Holders and their respective
Affiliates, and each of their respective officers, directors, shareholders,
members, managers, agents and attorneys (collectively, the “Holder Indemnified
Parties”) and hold them harmless against any Losses, arising from or based upon:
(a)any breach of any representation or warranty made by Buyer contained in
Article III of this Agreement;
(b)any breach of, or failure to perform, any covenant or obligation of Buyer
contained in this Agreement; and
(c)any breach of, or failure to perform any covenant or obligation of the
Company that is to be performed after the Closing in this Agreement or in any of
the Transaction Documents.

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Section 4.Procedure for Indemnification.
(a)Making of Claims. No Buyer Indemnified Party or Holder Indemnified Party
(each, an ”Indemnified Party”) shall be entitled to indemnification for Losses
under this Agreement unless the Indemnified Party shall have given to the other
party from which indemnification is sought (the “Indemnifying Party”) a written
claim notice relating to such Loss for which such Indemnified Party is entitled
to indemnification under this Article V (“Indemnification Claim”) prior to the
expiration of the representation, warranty or covenant upon which the claim is
based. The Indemnification Claim shall be given reasonably promptly (but in no
event more than twenty (20) Business Days) after the Indemnified Party becomes
aware that a claim for indemnification may be warranted, and shall state in
reasonable detail, including the factual circumstances giving rise to and the
basis of the Indemnified Party’s request for indemnification under this
Agreement, and will indicate the amount (estimated, if necessary) of the Loss
that has been or may be suffered. If the Indemnified Party delivering the
Indemnification Claim is a Buyer Indemnified Party, then the Indemnified Party
shall also deliver a copy of the Indemnification Claim to the Escrow Agent on
the same day that the Indemnified Party delivers the Indemnification Claim to
the Holders Representative. The failure of any Indemnified Party to give notice
of an Indemnification Claim shall not relieve the Indemnifying Party of its
obligations under this Section 5.4, except to the extent that the Indemnifying
Party is materially prejudiced by the failure to give such Indemnification
Claim.
(b)If the Indemnifying Party does not agree with an Indemnification Claim, then
within thirty (30) Business Days after the Indemnifying Party’s receipt of the
Indemnification Claim, the Indemnifying Party shall deliver to the Indemnified
Party a written notice setting forth the Indemnifying Party’s objection to such
claim and stating in reasonable detail the Indemnifying Party’s reasons for such
objection and the amount of Indemnification Claim in dispute. If the
Indemnification Claim to which the Indemnifying Party is objecting is made by a
Buyer Indemnified Party, then the Indemnifying Party shall also deliver a copy
of the objection to the Indemnification Claim to the Escrow Agent on the same
day that the Indemnifying Party delivers the objection to the Indemnified Party.
Following delivery of the objection, the Parties shall negotiate in good faith
for a period of at least twenty (20) Business Days from the date the Indemnified
Party receives such objection in an effort to resolve the Indemnification Claim.
After the twenty (20) Business Day period, if the Parties still cannot agree on
the claim, the Indemnified Party may, within one (1) year thereafter with
respect to its claim for indemnification, commence a Proceeding against the
Indemnifying Party to enforce its rights to indemnification from and against any
Losses described in the Indemnification Claim described above. If the
Indemnifying Party does not submit a written notice objecting to such
Indemnification Claim with such thirty (30) Business Day period, then the
Indemnifying Party shall be deemed to have accepted such claim and, unless
otherwise stated herein, shall be barred from objecting to such Indemnification
Claim.
(c)Defense of Third Party Claims. With respect to indemnity claims based on a
third party claim made against an Indemnified Party, the Indemnifying Party
shall be entitled, through counsel of its own choosing and reasonably
satisfactory to the Indemnified Party, to assume the defense thereof or other
indemnification obligation with respect thereto; provided, however, that any
Indemnified Party shall be (i) entitled to participate in any such claim with
counsel of its own choice by and at its own expenses, it being understood,
however, that the Indemnifying Party will continue to control such defense and
(ii) shall be entitled to control such defense with counsel of its own choice at
the expense of the Indemnifying Party (but only if the Indemnified Party is
actually entitled to indemnification hereunder) by all appropriate proceedings,
which proceedings shall be prosecuted diligently by the Indemnified Party, if
(A) the Indemnifying Party fails to notify the Indemnified Party in writing,
within fifteen (15) Business Days after delivery of the Indemnification Claim,
of its election to assume such defense, (B) the Indemnifying Party fails to
defend diligently the action or Proceeding within fifteen (15) Business Days
after receiving notice of such failure from such Indemnified Party,

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(C) such Indemnified Party reasonably shall have concluded (upon advice of its
counsel) that there may be one or more legal defenses available to such
Indemnified Party or other Indemnified Parties which are not available to the
Indemnifying Party or (D) if such Indemnified Party reasonably shall have
concluded (upon advice of its counsel) that, with respect to such claims, the
Indemnified Party and the Indemnifying Party may have different, conflicting, or
adverse legal positions or interest. In such circumstances, the Indemnified
Party shall defend any such third-party claim in good faith and have full
control of such defense and proceedings and the Indemnifying Party may
participate in, but not control, any defense or settlement controlled by the
Indemnified Party pursuant to this Section 5.4(c), and the Indemnifying Party
shall bear its own costs and expenses with respect to such participation.
Notwithstanding the foregoing, the Indemnifying Party will obtain the prior
written consent, which shall not be unreasonably withheld, conditioned or
delayed, of the Indemnified Party before entering into any settlement,
compromise, admission or acknowledgement of the validity of such third party
claim if the settlement requires an admission of guilt or wrongdoing on the
party of the Indemnified Party, subjects the Indemnified Party to criminal
liability or does not unconditionally release the Indemnified Party from all
liabilities and obligations with respect to such third-party claim or the
settlement imposes injunctive or other equitable relief against, or any
continuing obligation or payment requirement on, the Indemnified Party.
Notwithstanding the foregoing, the Indemnified Party may not enter into any
compromise or settlement of a third party claim if indemnification is to be
sought hereunder, without the Indemnifying Party’s consent (which consent shall
not be unreasonably withheld, conditioned or delayed).
(d)The Indemnified Party and Indemnifying Party will cooperate in the defense or
prosecution of any third-party and will furnish or cause to be furnished such
records, information and testimony (subject to any applicable confidentiality
agreement), and attend such conferences, discovery proceedings, hearings, trials
or appeals as may be reasonably requested in connection therewith.
Section 5.Exclusive Remedies; Waiver of Certain Damages
. EXCEPT (a) AS MAY BE SET FORTH IN A SEPARATE AGREEMENT BETWEEN BUYER AND A
HOLDER DELIVERED AT CLOSING OR (b) IN THE CASE OF FRAUD BY ANY HOLDER (IN WHICH
CASE THE BUYER INDEMNIFIED PARTIES MAY SEEK CLAIMS SOLELY AGAINST SUCH HOLDER)
(I) FROM AND AFTER THE CLOSING, THE REMEDIES OF THE PARTIES SPECIFICALLY
PROVIDED FOR BY THIS ARTICLE V SHALL BE THE SOLE AND EXCLUSIVE REMEDIES OF THE
PARTIES FOR ALL MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, THE
BUSINESS, THE COMPANY, THE FACILITIES, THE COMPANY’S ASSETS AND PROPERTIES OR
THE MEMBERSHIP INTERESTS OF THE COMPANY (INCLUDING ANY MATTERS COVERED BY ANY
TRANSACTION DOCUMENT) AND (II) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
BUYER HEREBY EXPRESSLY AGREES THAT FROM AND AFTER CLOSING, BUYER SHALL NOT SEEK
AND HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY RIGHTS, CLAIMS, CAUSES OF ACTION
TO OR FOR INDEMNIFICATION, CONTRIBUTION, COST RECOVERY REPAYMENT OR OTHER REMEDY
(WHETHER ARISING UNDER STATUTORY OR COMMON LAW) OR RECOURSE DIRECTLY OR
INDIRECTLY (THROUGH ANY DIRECTOR, MANAGER, OFFICER, EMPLOYEE, CONSULTANT, AGENT
OR REPRESENTATIVE OF ANY HOLDER, THE COMPANY OR OTHERWISE) FROM THE HOLDERS WITH
RESPECT TO ANY MATTER RELATING TO THE COMPANY OR ITS ASSETS AND PROPERTIES, THE
BUSINESS OR THE MEMBERSHIP INTERESTS OF THE COMPANY (INCLUDING, BUT NOT LIMITED
TO, ANY LIABILITIES PURSUANT TO ENVIRONMENTAL LAWS OR ANY MATTERS RELATING TO
THE MERCHANTABILITY, VALUE OR USE OF ANY SUCH PROPERTIES OR ASSETS) OR THE
SUBJECT MATTER OF THIS AGREEMENT (WHETHER ON THE BASIS OF A CLAIM SOUNDING IN
TORT, CONTRACT, STATUTE OR OTHERWISE)

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OUTSIDE OF THE PROVISIONS OF THIS ARTICLE V. IN NO EVENT SHALL ANY PARTY BE
LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL (UNLESS
PROBABLE AND REASONABLY FORESEEABLE AS OF THE DATE OF THIS AGREEMENT), OR
INDIRECT DAMAGES, LOST PROFITS, DIMINUTION IN VALUE, DAMAGE TO REPUTATION OR
LOSS TO GOODWILL, WHETHER BASED IN CONTRACT, TORT, STRICT LIABILITY OR
OTHERWISE, EXCEPT THAT THIS SECTION 5.5 SHALL NOT LIMIT A PARTY’S RIGHT TO
RECOVERY UNDER ARTICLE V OF THIS AGREEMENT FOR ANY SUCH DAMAGES TO THE EXTENT
SUCH PARTY IS REQUIRED TO PAY SUCH DAMAGES TO AN UNAFFILIATED THIRD PARTY IN
CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO
INDEMNIFICATION UNDER ARTICLE V OF THIS AGREEMENT.
Section 6.Independent Investigation; Waiver of Other Representations.
(a)EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN OR THE LETTERS OF TRANSMITTAL,
EACH HOLDER AND THE COMPANY EXPRESSLY DISCLAIMS, ON BEHALF OF ITSELF AND ITS
AFFILIATES, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO (i) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE
MEMORANDUM RELATING TO THE COMPANY, THE BUSINESS, THE MEMBERSHIP INTERESTS OF
THE COMPANY OR THE COMPANY ASSETS AND PROPERTIES, (ii) ANY ESTIMATES OF THE
VALUE OF THE COMPANY, THE BUSINESS, THE MEMBERSHIP INTERESTS OF THE COMPANY OR
THE COMPANY ASSETS AND PROPERTIES, OR FUTURE REVENUES GENERATED THEREBY, (iii)
THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN, MARKETABILITY,
PROSPECTS (FINANCIAL OR OTHERWISE) OR RISKS AND OTHER INCIDENTS OF THE COMPANY,
THE BUSINESS, THE MEMBERSHIP INTERESTS OF THE COMPANY OR THE COMPANY ASSETS AND
PROPERTIES OR (iv) ANY OTHER DUE DILIGENCE INFORMATION. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT OR THE LETTERS OF TRANSMITTAL, EACH HOLDER
AND THE COMPANY (A) DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO
MODELS OR SAMPLES, AND (B) THE PARTIES AGREE THAT THE BUYER SHALL BE DEEMED TO
BE OBTAINING ALL OF THE HOLDERS’ INTERESTS IN THE COMPANY AND THEIR
CORRESPONDING INDIRECT INTERESTS IN THE COMPANY ASSETS AND PROPERTIES, IN THEIR
PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS,” “WHERE IS” AND “WITH ALL
FAULTS.”
(b)BUYER HEREBY ACKNOWLEDGES THAT (i) IT HAS MADE ITS OWN INDEPENDENT
EXAMINATION, INVESTIGATION, ANALYSIS AND EVALUATION OF THE BUSINESS, OPERATIONS,
ASSETS AND PROPERTIES, LIABILITIES, RESULTS OF OPERATIONS, FINANCIAL CONDITION,
TECHNOLOGY AND PROSPECTS OF EACH OF THE COMPANY, (ii) IT HAS BEEN PROVIDED
ACCESS TO PERSONNEL, PROPERTIES, PREMISES AND RECORDS OF THE COMPANY (INCLUDING
THE BOOKS AND RECORDS OF THE COMPANY) FOR SUCH PURPOSE AND HAS RECEIVED AND
REVIEWED SUCH INFORMATION AND HAS HAD A REASONABLE OPPORTUNITY TO ASK QUESTIONS
OF AND RECEIVE ANSWERS RELATING TO SUCH MATTERS AS IT DEEMED NECESSARY OR
APPROPRIATE TO CONSUMMATE THE CONTEMPLATED TRANSACTIONS, (iii) IT HAS SUCH
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT IT IS CAPABLE OF
EVALUATING THE MERITS AND RISKS OF EACH OF THE COMPANY AND AN INVESTMENT IN THE
COMPANY AND (iv) THE HOLDERS AND THE COMPANY HAVE DELIVERED OR MADE AVAILABLE TO
BUYER OR ITS ADVISORS ALL INFORMATION WHICH BUYER OR SUCH ADVISORS HAVE
REQUESTED FOR THE

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PURPOSE OF DECIDING WHETHER OR NOT TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTION DOCUMENTS.
(c)EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, IN ENTERING INTO THIS
AGREEMENT, BUYER HAS RELIED UPON, AMONG OTHER THINGS, ITS DUE DILIGENCE
INVESTIGATION AND ANALYSIS OF THE COMPANY AND THE ASSETS AND PROPERTIES OF THE
COMPANY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER:
(i)ACKNOWLEDGES AND AGREES THAT IT HAS NOT BEEN INDUCED BY AND HAS NOT RELIED
UPON ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, MADE BY THE
COMPANY OR ANY OF THE HOLDERS OR THEIR RESPECTIVE AFFILIATES OR ANY OF THEIR
RESPECTIVE DIRECTORS, MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES, CONTROLLING
PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “COMPANY PERSONS”)
THAT ARE NOT EXPRESSLY SET FORTH IN ARTICLE II OR THE LETTERS OF TRANSMITTAL,
WHETHER OR NOT SUCH REPRESENTATIONS, WARRANTIES OR STATEMENTS WERE MADE IN
WRITING OR ORALLY;
(ii)ACKNOWLEDGES AND AGREES THAT NO COMPANY PERSON MAKES OR HAS MADE ANY
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE ACCURACY OR
COMPLETENESS OF ANY OF THE INFORMATION PROVIDED OR MADE AVAILABLE TO THE BUYER
OR ITS AFFILIATES OR THEIR RESPECTIVE DIRECTORS, MANAGERS, OFFICERS, EQUITY
HOLDERS, EMPLOYEES, CONTROLLING PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “BUYER PERSONS”), INCLUDING ANY INFORMATION, DOCUMENT, OR
MATERIAL PROVIDED OR MADE AVAILABLE, OR STATEMENTS MADE, TO THE BUYER PERSONS
DURING SITE OR OFFICE VISITS, IN ANY “DATA ROOMS” (INCLUDING INTERNET-BASED DATA
ROOMS), MANAGEMENT PRESENTATIONS, OR SUPPLEMENTAL DUE DILIGENCE INFORMATION
PROVIDED TO ANY BUYER PERSONS IN CONNECTION WITH DISCUSSIONS OR ACCESS TO
MANAGEMENT OF THE COMPANY OR IN ANY OTHER FORM IN EXPECTATION OF THE
CONTEMPLATED TRANSACTIONS (COLLECTIVELY, THE “DUE DILIGENCE INFORMATION”),
EXCEPT IN EACH CASE TO THE EXTENT EXPRESSLY SET FORTH IN THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN ARTICLE II OR THE LETTERS OF TRANSMITTAL;
(iii)ACKNOWLEDGES AND AGREES THAT (A) THE DUE DILIGENCE INFORMATION INCLUDES
CERTAIN PROJECTIONS, ESTIMATES AND OTHER FORECASTS, AND CERTAIN BUDGETS AND
BUSINESS PLAN INFORMATION, INCLUDING THOSE ATTACHED AS EXHIBITS OR SCHEDULES TO
THE TRANSACTION DOCUMENTS, (B) THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO
MAKE SUCH PROJECTIONS, ESTIMATES AND OTHER FORECASTS AND PLANS AND IT IS
FAMILIAR WITH SUCH UNCERTAINTIES, AND (C) IT IS TAKING FULL RESPONSIBILITY FOR
MAKING ITS OWN EVALUATIONS OF THE ADEQUACY AND ACCURACY OF ALL PROJECTIONS,
ESTIMATES AND OTHER FORECASTS, BUDGETS AND PLANS SO FURNISHED TO IT, AND ANY USE
OF OR RELIANCE BY IT ON SUCH PROJECTIONS, ESTIMATES AND OTHER FORECASTS, BUDGETS
AND PLANS SHALL BE AT ITS SOLE RISK; AND
(iv)AGREES, TO THE FULLEST EXTENT PERMITTED BY LAW, THAT NEITHER THE COMPANY NOR
ANY OF THE HOLDERS NOR ANY OF THEIR RESPECTIVE AFFILIATES NOR ANY OF THEIR
RESPECTIVE DIRECTORS,

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MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES, CONTROLLING PERSONS, AGENTS,
ADVISORS OR REPRESENTATIVES SHALL HAVE ANY LIABILITY OR RESPONSIBILITY
WHATSOEVER TO BUYER, ITS AFFILIATES OR THEIR RESPECTIVE DIRECTORS, MANAGERS,
OFFICERS, EQUITY HOLDERS, EMPLOYEES, CONTROLLING PERSONS, AGENTS, ADVISORS OR
REPRESENTATIVES ON ANY BASIS (INCLUDING IN CONTRACT OR TORT, UNDER FEDERAL OR
STATE SECURITIES LAWS OR OTHERWISE) RESULTING FROM THE FURNISHING TO BUYER
AND/OR ITS AFFILIATES, OR ANY BUYER’S AND/OR ITS AFFILIATES’ USE OF, ANY DUE
DILIGENCE INFORMATION.
(d)THE STATEMENTS AND DISCLAIMERS MADE UNDER THIS SECTION 5.6 EXPRESSLY SURVIVE
THE CLOSING DATE.
Section 7.Tax Treatment of Indemnity Payments
. The Parties agree to treat any indemnity payments made pursuant to this
Article V or Section 6.1 as an adjustment to the Merger Consideration for all
purposes, including income tax purposes, except as otherwise required by
applicable Law.
Section 8.Other Matters.
(a)Each Indemnified Party shall make commercially reasonable efforts to mitigate
any Losses that an Indemnified Party asserts under this Article V. In the event
that an Indemnified Party shall fail to make such commercially reasonable
efforts to mitigate any such Losses, then notwithstanding anything else to the
contrary contained herein, the Indemnifying Party shall not be required to
indemnify any Indemnified Party for any Loss that could reasonably be expected
to have been avoided if the Indemnified Party had made such efforts.
(b)Any indemnification payable under this Article V shall be, to the extent
permitted by Law, an adjustment to the Merger Consideration.
(c)In the case of any claim for which there is a reasonable possibility that a
party may have a direct or indirect right of recovery against one or more third
parties (including, but not limited to, rights of recovery under insurance
policies or indemnification arrangements with third parties), such party shall
seek recovery of such claim from such third parties for so long as pursuit of
such recovery is commercially reasonable up to a period of one (1) year after
the claim is asserted (and if not commercially reasonable or the one (1) year
period has expired, the Indemnified Party shall to the extent it has such right,
assign such of its rights to proceed against such third parties as are necessary
to permit the Indemnifying Party to recover from such third parties the amount
of such claim). To the extent that a party obtains any recovery in respect of
any such claim from any third parties, (i) such party shall use the funds
provided by such recovery, after deduction of all reasonable costs incurred with
the pursuit of such recovery (the “net recovery”) (in lieu of funds provided by
any other party pursuant to the indemnification provisions of this Article V) to
pay or otherwise satisfy such claims, (ii) the net recovery shall reduce the
amount of Losses for purposes of determining the amount of any Holder’s
indemnity obligations under this Article V in respect of such claim and (iii) if
received after any indemnity payment by a Holder under this Article V, the
amount actually recovered (but not in excess of the amount of the indemnity
payment previously paid by such Holder) shall be paid to such Holder.
(d)Notwithstanding anything to the contrary contained in this Agreement, the
Buyer Indemnified Parties shall have no right to indemnification under
Section 5.2(a) or Section 5.2(b) with respect to any Losses if the matter
forming the basis for such Losses shall or should have been taken into account
in the determination of the Final Working Capital.
Article XI

Article XIIPOST-CLOSING MATTERS
Section 1.Taxes

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. The following provisions shall govern the allocation of responsibility as
between the Parties for certain Tax matters following the Closing Date:
(a)Following the Closing Date, except to the extent taken into account as a
liability in determining Final Working Capital and subject to the other terms of
this Article VI and the limitations on indemnification in Section 5.2(c), the
Indemnity Escrow Property shall be used to pay to or reimburse the Buyer for any
(i) Taxes incurred by or imposed on, or with respect to any asset owned by, the
Company for any Pre-Closing Tax Period (including any such Taxes that are
allocable to a Pre-Closing Tax Period pursuant to Section 6.1(b)), (ii) Taxes
incurred by or imposed on any Holder or any Affiliate thereof (excluding, for
the avoidance of doubt, the Company) for any taxable period, with the exception
of any Transfer Taxes, (iii) Taxes relating to the failure of any of the
representations and warranties made by the Company in Section 2.12 to be true
and correct as of the date hereof and as of the Closing (as though such
representation or warranty had been made at and as of the Closing), with such
determination made without regard to any references to “material” or "Material
Adverse Effect" or any other similar words or phrases, (iv) Taxes relating to
the breach or nonperformance of any covenant or agreement contained in Section
1.11 or this Article VI by the Company prior to the Closing or by the Holders
Representative at any time, and (v) costs, expenses (including reasonable
attorneys’, consultant and tax preparation fees or expenses), interest or
penalties incurred in connection with any Tax described in any of clauses
(i)-(iv) above (collectively, “Holder Taxes”). For the avoidance of doubt, the
obligations under this Section 6.1(a) will not be subject to the limitations in
Section 5.2(b).
(b)Straddle Period. In the case of any taxable period of the Company beginning
on or before, and ending after, the Closing Date (a “Straddle Period”): (i) the
amount of any real, personal and intangible property taxes, ad valorem taxes and
similar obligations (“Property Taxes”) allocable to the applicable Pre-Closing
Tax Period shall be the product of the amount of such Tax for the Straddle
Period and a fraction, the numerator of which is the number of calendar days in
the Straddle Period on or before the Closing Date and the denominator of which
is the number of calendar days in the entire Straddle Period, and (ii) subject
to Section 1.11(a), the amount of any Tax not described in clause (i) above
allocable to the applicable Pre-Closing Tax Period shall be the amount of Tax
that would have been payable with respect to such Straddle Period if such
Straddle Period had ended as of the close of the Closing Date (determined based
on an interim closing of the Books and Records as of the close of business on
the Closing Date); provided, however, that all exemptions, allowances, or
deductions for the entire Straddle Period which are calculated on an annual
basis (including, but not limited to, depreciation and amortization deductions)
shall be allocated between the period ending on the Closing Date and the period
beginning after the Closing Date in proportion to the number of days in each
period.
(c)Responsibility for Filing Tax Returns.
(i)The Holders Representative shall prepare, in a manner consistent with past
practice and applicable Law, all U.S. federal income Tax Returns of the Company
for taxable periods ending on or before the Closing Date, and shall provide
Buyer with a draft of any such Tax Return at least twenty (20) Business Days
prior to the due date for filing such Tax Return (after taking into account any
applicable extensions or waivers) (the “Due Date”). The Holders Representative
shall consider in good faith any comments it receives from Buyer with respect to
any such Tax Return at least ten (10) Business Days prior to the Due Date for
such Tax Return, and shall incorporate any such comments that are reasonable.
For U.S. federal income tax purposes, the Company shall designate the Holders
Representative as the “partnership representative” (within the meaning of
Section 6223 of the Code) for any taxable period beginning on or after January
1, 2018 and ending on or before the Closing Date. The

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Holders Representative shall timely file (or cause to be filed) each such Tax
Return in accordance with applicable Law.
(ii)Buyer shall prepare (or cause to be prepared) all Tax Returns for the
Company not described in Section 6.1(c)(i), and shall provide the Holders
Representative with a draft of any Straddle Period Tax Return for the Company at
least twenty (20) Business Days prior to the Due Date for such Tax Return;
provided, however, that the Company shall continue its Tax Return preparation
activities through the Closing consistent with past practice, and in no event
shall Buyer be obligated to provide such a draft before the date that is twenty
(20) Business Days after the Closing Date. Buyer shall consider in good faith
any comments it receives from the Holders Representative with respect to any
such Tax Return at least ten (10) Business Days prior to the Due Date for such
Tax Return, and shall incorporate any such comments that are reasonable. The
Indemnity Escrow Property shall be used to pay (or cause to be paid) to the
Company no later than two (2) days before the Due Date any Taxes due and owing
in connection with any such Tax Return that are allocable to the Pre-Closing Tax
Period under Section 6.1(b), except to the extent taken into account as a
liability in determining Final Working Capital, and Buyer shall timely file (or
cause to be filed) such Tax Return and shall timely pay (or cause to be paid)
all Taxes due and owing in connection therewith.
(d)Cooperation on Tax Matters.
(i)Buyer and Holders Representative shall provide each other and shall cause
their respective Affiliates, officers, employees, agents, auditors and
Representatives to provide each other with such cooperation and information
relating to the Company as any of them reasonably may request in connection with
any Tax matter governed by this Agreement, including (i) the preparation and
filing of any Tax Return or form; (ii) examinations of Tax Returns; (iii)
participation in or conduct of any Tax Proceeding; and (iv) furnishing each
other with copies of all correspondence received from any Taxing Authority in
connection with any audit or information request. Each such party shall make
employees available on a mutually convenient basis to provide explanations of
any documents or information provided hereunder. Such cooperation shall include
the retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such Tax Proceeding. Any
information or documents provided under this Section 6.1(d) shall be kept
confidential by the party receiving the information or documents, except as may
otherwise be necessary in connection with the filing of Tax Returns or any
administrative or judicial Proceedings relating to Taxes, or as required by
applicable Law.
(ii)The Company shall ensure that as of the Closing Date the Company is in
possession of all Books and Records (including Tax Returns and Tax opinions or
memoranda received prior to the Closing Date) relating to Tax matters pertinent
to the Company for any Pre-Closing Tax Period. Buyer shall (i) retain all such
Books and Records until the expiration of the statute of limitations (including
any extensions thereof, subject, in the event that the Company is the party that
extends the statute of limitations, to the Company notifying Buyer of such
extension) applicable to such Tax periods, and to abide by all record retention
agreements entered into with any Taxing Authority and (ii) give the Holders
Representative reasonable written notice prior to transferring, destroying or
discarding any such Books and Records and, if the Holders Representative so
requests, allow the Holders Representative to take possession of such Books and
Records.
(iii)Neither Buyer, Merger Sub nor any of their respective Affiliates (including
the Company) will make any election (including any election under Treasury
Regulation Section 301.7701-3) that would have effect with respect to the
Company on or prior to the Closing Date. Neither Buyer, Merger Sub nor any of
their respective Affiliates (including the Company) shall amend any Tax Return
of the Company for any Pre-Closing Tax Period (i)

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without the consent of the Holders Representative, which consent shall not be
unreasonably withheld, conditioned or delayed, or (ii) unless required by
applicable Law. Notwithstanding any other provision to the contrary provided
herein, the Indemnity Escrow Property shall not be used for any Tax imposed on
the Company with respect to any sale (or other disposition) of assets of the
Company outside the ordinary course of business after Closing on the Closing
Date.
(e)Certain Taxes and Fees. All sales, use, transfer, filing, recordation,
registration and similar Taxes and fees arising from or associated with the
Contemplated Transactions and payable under applicable Law (collectively
“Transfer Taxes”), whether levied on any Holder or Buyer or their respective
Affiliates, shall be borne and paid by Buyer when due. Buyer shall prepare, and
the Person required to do so by applicable Law shall file, any necessary Tax
Returns and other documentation with respect to any Transfer Taxes; provided,
however, that the other parties hereto shall reasonably cooperate in the timely
preparation and filing of (and, to the extent required by applicable Law, join
in the execution of) any such Tax Returns.
(f)Tax Claims.
(i)If a third-party shall notify Buyer of any audit, contest, claim, Proceeding
or inquiry relating to Taxes (“Tax Proceeding”) by any Taxing Authority which,
if successful, might result in an indemnity payment to Buyer pursuant to this
Article VI, Buyer shall notify the Holders Representative in writing of such Tax
Proceeding within fifteen (15) days of receipt of any written notice from the
Taxing Authority, and shall give the Holders Representative such other
information with respect thereto as the Holders Representative may reasonably
request; provided, however, that any failure to notify the Holders
Representative promptly shall limit Buyer’s indemnification obligations under
this Article VI only to the extent that the Holders shall have been actually
prejudiced as a result of such failure.
(ii)With respect to any Tax Proceeding that relates primarily to Taxes for which
Holders would bear or would be obligated to indemnify Buyer and that relates
solely to any taxable period ending on or before the Closing Date (a
“Pre-Closing Tax Proceeding”), the Holders Representative shall have the right,
at its expense, to control the conduct of such Pre-Closing Tax Proceeding. The
Holders Representative shall keep Buyer reasonably informed regarding the
progress and substantive aspects of such Pre-Closing Tax Proceeding. If the
resolution of a Pre-Closing Tax Proceeding could reasonably be expected to
adversely affect Buyer or the Company, the Holders Representative shall: (i)
consult in good faith with Buyer before taking any action in connection with the
Pre-Closing Tax Proceeding that might adversely affect Buyer or the Company,
(ii) consult in good faith with Buyer and offer Buyer a reasonable opportunity
to comment and approve before submitting to any Taxing Authority any written
materials prepared or furnished in connection with such Pre-Closing Tax
Proceeding to the extent such materials concern matters in the Pre-Closing Tax
Proceeding that might adversely affect Buyer or the Company, (iii) permit Buyer
(or any Affiliate thereof) to participate in good faith, using its reasonable
efforts, in the conduct of such Pre-Closing Tax Proceeding and (iv) not agree to
settle, compromise, abandon or otherwise dispose of such Pre-Closing Tax
Proceeding without Buyer's prior written consent (which may not be unreasonably
withheld, conditioned or delayed). The Indemnity Escrow Property shall be used
to pay or reimburse Buyer for the amount of any Holder Taxes within five (5)
Business Days following the disposition of such Pre-Closing Tax Proceeding,
except to the extent taken into account as a liability in determining Final
Working Capital.
(iii)Notwithstanding the foregoing, at Buyer's request, the Holders
Representative shall make a valid election under Section 6226 of the Code with
respect to any imputed underpayment arising out of a Tax Proceeding involving a
taxable period of the Company (or any Affiliate thereof) ending on or before the
Closing Date that is conducted pursuant to

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Sections 6221-6241 of the Code as amended by the Bipartisan Budget Act of 2015
(including any subsequent amendments thereto).
Section 2.Preservation of Books and Records
. For a period of six (6) years from the Closing Date:
(a)Buyer shall not, and shall cause its Affiliates not to, dispose of or destroy
any of the books and records of the Company in existence on the Closing Date
(the “Books and Records”), without first offering to turn over possession
thereof to the Holders Representative by written notice to the Holders
Representative at least thirty (30) days prior to the proposed date of such
disposition or destruction.
(b)Buyer shall, and shall cause its Affiliates to, allow the Holders and their
respective agents access to all Books and Records on reasonable notice and at
reasonable times at Buyer’s principal place of business or at any location where
any Books and Records are stored, and the Holders shall have the right, at their
own expense, to make copies of any Books and Records; provided that any such
access or copying shall be had or done in such a manner so as not to
unreasonably interfere with the normal conduct of Buyer’s business.
(c)Buyer shall, and shall cause its Affiliates to, upon reasonable notice from a
Holder and written request to the Buyer, make available to the Holders and their
respective Affiliates and Representatives, during normal business hours, Buyer’s
or its Affiliates’ personnel to assist any Holder in locating and obtaining any
Books and Records to the extent doing so will not unreasonably interfere with
the normal conduct of Buyer’s business.
Section 3.Refunds
. Any refund or credits (including any interest received from a Governmental
Authority with respect thereto) of Taxes of the Company for any Pre-Closing Tax
Period, except to the extent taken into account as an asset in determining Final
Working Capital, shall be for the account of the Holders (based on their Payment
Percentages) to the extent (i) such refund is received within eighteen (18)
months after the Closing Date, or (ii) such credit is recognized and results in
a reduction in the cash Tax liability of the Company or the Buyer or its
Affiliates within eighteen (18) months after the Closing Date. Any such refund
or credit of Taxes of the Company for any Straddle Period shall be equitably
apportioned between the Holders and Buyer in the same manner as Section 6.1(b).
Buyer shall forward, and shall cause its Affiliates (including the Company) to
forward, to Holders Representative the amount of such refund or credit (net of
any reasonable expenses associated with obtaining such refund or credit,
including any Taxes imposed on the party receiving or recognizing such refund or
credit in respect of the receipt or recognition of such refund or credit) within
twenty (20) days after such refund or credit is received or recognized. Buyer
shall, if the Holders Representative so requests and at the Holders
Representative’s expense, cause the Company to file for and obtain any refund or
credit to which a Holder is entitled under this Section 6.3 if done within the
period of time that would reasonably allow receipt or recognition of the refund
or credit within the 18 month period after the Closing Date, and provided that
filing for or obtaining such refund or credit would not result in any material
Tax detriment to the Company, the Buyer or any Affiliate thereof. Holders
Representative (or the Holders based on their Payment Percentages) shall repay
to the Company the amount paid to Holders Representative pursuant to this
Section 6.3 (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that the Company is required to
repay the applicable refund or an amount attributable to an applicable credit to
such Governmental Authority, including, for the avoidance of doubt, in the event
that such repayment is required more than eighteen (18) months after the Closing
Date. For purposes of this Section 6.3 only, the term “Affiliate” shall mean
only those entities that are under Buyer’s control and majority-owned.
Article XIII

Article XIVGENERAL PROVISIONS; MISCELLANEOUS

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Section 1.Modification; Waiver
. This Agreement may be modified only by a written instrument executed by each
Party. Any of the terms and conditions of this Agreement may be waived in
writing at any time on or prior to the Closing Date by the Party or Parties
entitled to the benefits thereof.
Section 2.Entire Agreement
. This Agreement, including the Disclosure Schedules and exhibits hereto, the
Escrow Agreement, the documents, instruments and schedules referred to herein
and all other documents dated as of the Closing Date, together with the
Confidentiality Agreement, constitutes the entire agreement among the Parties
with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the Parties or any
of them with respect to the subject matter hereof; provided, however, that
effective upon Closing, the Confidentiality Agreement shall terminate and be of
no further force and effect.
Section 3.Expenses
. Except as expressly provided herein, whether or not the Contemplated
Transactions shall be consummated, each Party shall pay its own expenses
incident to the preparation of this Agreement and the negotiation and
consummation of the Contemplated Transactions, including fees and disbursements
of counsel, financial advisors and accountants.
Section 4.Further Actions
. Each Party will execute and deliver such certificates and other documents and
take such other actions as may reasonably be requested by another Party in order
to consummate or implement the Contemplated Transactions.
Section 5.Notices
. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given or made as follows: (a) if
sent by registered or certified mail in the United States return receipt
requested, upon receipt; (b) if sent by reputable overnight air courier (such as
DHL or Federal Express), one (1) Business Day after mailing; (c) if sent by
facsimile transmission, when transmitted and receipt is confirmed by the
recipient by telephone; or (d) if otherwise actually personally delivered, when
delivered, and, except as otherwise provided by Section 1.10(a) and Section
1.12(b), shall be delivered as follows:
If to the Holders Representative:

Catapult Energy Services Group, LLC
3040 Post Oak Blvd. #1450
Houston, Texas 77056
Attention: Gregory D. Laake

With a copy (which shall not constitute notice) to:

Locke Lord LLP
600 Travis, Suite 2800
Houston, Texas 77002
Fax: (713) 229-2666
Attention: Kevin Peter

and

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NGP X US Holdings, L.P.
5221 N. O’Connor Blvd., 11th Floor
Irving, Texas 75039
Fax: (972) 432-1441
Attention: General Counsel

If to Buyer or Merger Sub:
Forbes Energy Services LLC
3000 Business Highway
281 South
Alice, Texas 78332
Fax: (361) 664-0599
Attention: John E. Crisp

With a copy (which shall not constitute notice) to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004-1980
Fax: 212-859-4000
Attention: John M. Bibona

or to such other address or to such other Person as any Party hereto has last
designated by notice to the other parties.

Section 6.Assignment
. This Agreement will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any Party hereto without (a) the prior written consent of the
Holders Representative in the case of an assignment by Buyer or Merger Sub and
(b) the prior written consent of the Holders Representative and Buyer in the
case of an assignment by a Company; provided, that notwithstanding the
foregoing, Buyer may, without the prior written consent of the Company or the
Holders Representative, assign its rights to receive the Membership Interests of
the Company to a wholly owned subsidiary of the Buyer. No assignment shall
release the assigning Party of its obligations and liabilities under this
Agreement.
Section 7.No Third Party Beneficiaries
. Except for the provisions of Article I, Article IV, Article V, Article VI and
Article VII, which are intended to be enforceable by the Persons respectively
referred to therein and the Holders, nothing in this Agreement, whether express
or implied, is intended to or shall confer any legal or equitable right, benefit
or remedy of any nature whatsoever upon any Person that is not a Party or a
successor or permitted assignee of a Party to this Agreement.
Section 8.Counterparts
. This Agreement may be executed in counterparts, all of which shall together
constitute one and the same instrument.
Section 9.Rules of Construction.
(a)Unless the context otherwise requires, references herein: (i) to Articles,
Sections, Schedules and Exhibits mean the Articles and Sections of, and
Disclosure Schedules and Exhibits

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attached to, this Agreement; (ii) to an agreement, instrument or other document
means such agreement, instrument or other document as amended, supplemented and
modified from time to time to the extent permitted by the provisions thereof and
(iii) to a statute means such statute as amended from time to time and includes
any successor legislation thereto and any regulations promulgated thereunder.
(b)When calculating the period of time before which, within which, or following
which any act is to be done or step taken pursuant to this Agreement, the date
that is the reference date in calculating such period will be excluded. If the
last day of such period is a non-Business Day, the period in question will end
on the next succeeding Business Day.
(c)The words “hereby,” “herein,” “hereof,” “hereunder”, “hereinafter” and words
of similar import refer to this Agreement as a whole (including any exhibits and
schedules hereto) and not merely to the specific section, paragraph or clause in
which such word appears. The words “include”, “includes” and “including” are
deemed to be followed by the phrase “without limitation.” For purposes of the
Transaction Documents, and subject to the limitations on indemnification set
forth in Article V, if there is a substantive inaccuracy in a Person’s
representation (which for purposes of clarification shall not include
scrivener’s errors or other inaccuracies that would not reasonably be expected
to result in actual economic loss), the Person will be deemed to have “breached”
its representation. The definitions given in this Agreement apply equally to
both the singular and plural forms of the terms defined. Whenever the context
requires, any pronoun includes the corresponding masculine, feminine and neuter
forms. If a term is defined as one part of speech (such as a noun), it shall
have a corresponding meaning when used as another part of speech (such as a
verb).
(d)The word “or” is not exclusive and means one or more items or clauses may be
implicated, affected or applicable.
(e)The Disclosure Schedules to this Agreement are hereby incorporated and made a
part hereof as if set forth in full herein and are an integral part of this
Agreement.
(f)The Parties hereto acknowledge that each Party and its attorney(s) have
reviewed this Agreement and that any rule of construction to the effect that any
ambiguities are to be resolved against the drafting Party, or any similar rule
operating against the drafter of an agreement, shall not be applicable to the
construction or interpretation of this Agreement.
(g)The provision of a Table of Contents, the division of this Agreement into
Articles, Sections, and other subdivisions, and the insertion of headings are
for convenience of reference only and do not affect, and will not be utilized in
construing or interpreting, this Agreement.
(h)All references to currency herein, including, but not limited to, “$”, “USD”
and “dollars”, shall be to, and all payments required hereunder shall be paid
in, U.S. dollars.
(i)All accounting terms used herein and not expressly defined herein shall have
the meanings given to them under GAAP.
Section 10.Governing Law; Jury Waiver
.
(a)THIS AGREEMENT WILL BE CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES OF SUCH STATE THAT WOULD REQUIRE THE SUBSTANTIVE LAWS OF ANOTHER
STATE TO APPLY.
(b)THE PARTIES HERETO HEREBY AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT
TO TRIAL BY JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS
AGREEMENT.
Section 11.Consent to Jurisdiction and Forum Selection
. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF TEXAS IN AND FOR HARRIS COUNTY AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS IN

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CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE CONTEMPLATED TRANSACTIONS.
Section 12.Disclosure Schedules
. The Disclosure Schedules to this Agreement are arranged in sections
corresponding to those contained in this Agreement merely for convenience, and
the disclosure of an item in one section or subsection of the Disclosure
Schedules as an exception to any particular covenant, representation or warranty
shall be deemed adequately disclosed as an exception with respect to all other
covenants, representations or warranties, notwithstanding the presence or
absence of an appropriate section or subsection of such schedules with respect
to such other covenants, representations or warranties or an appropriate
cross-reference thereto, in each case to the extent relevancy of such disclosure
to such other covenants, representations or warranties is reasonably apparent.
Additionally, for each of the schedules, the mere inclusion of an item in such
schedules as an exception to a representation or warranty shall not be deemed an
admission or acknowledgment, in and of itself and solely by virtue of the
inclusion of such information in such schedules, that such information is
required to be listed in such schedules or that such item (or any non-disclosed
item or information of comparable or greater significance) represents a material
exception or fact, event or circumstance, that such item has had, or is expected
to result in, a Material Adverse Effect that such item actually constitutes
noncompliance with, or a violation of, any Law, Governmental Authorization or
Contract or other topic to which such disclosure is applicable or that such item
is outside the ordinary course of business. The specification of any dollar
amount in the representations and warranties contained in this Agreement or the
inclusion of any specific item in the Disclosure Schedules is not intended to
imply that such amounts (or higher or lower amounts) are or are not material,
and no party shall use the fact of the setting of such amounts or the fact of
the inclusion of any such item in the Disclosure Schedules in any dispute or
controversy between the parties as to whether any obligation, item, or matter
not described herein or included in a Disclosure Schedule is or is not material
for purposes of this Agreement. Capitalized terms used in the Disclosure
Schedules, unless otherwise defined therein, shall have the meanings assigned to
them in this Agreement.
Section 13.Specific Performance
. The Parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the Parties agree that,
in addition to any other remedies, each Party shall be entitled to (a) enforce
the terms of this Agreement by a decree of specific performance without the
necessity of proving the inadequacy of money damages as a remedy, (b) equitable
relief, including a temporary restraining order, (c) an injunction, and (d) any
other relief that may be available from a court of competent jurisdiction. Each
Party hereby waives any requirement for securing or posting of any bond in
connection with such remedy.
Section 14.Holders Representative.
(a)The Holders Representative, and its successors, is hereby appointed by the
Company as the representative of the Holders and as the attorney-in-fact, proxy
and agent for and on behalf of each of the Holders, with full power of
substitution and re-substitution to act in its, his or her name, place and stead
in connection with the authority granted to such Holders Representative pursuant
to this Section 7.14, and such appointment is coupled with an interest and shall
survive the death, incompetency, bankruptcy or liquidation of each such Holder.
By executing this Agreement under the heading “Holders Representative,” Catapult
Energy Services Group, LLC hereby (i) accepts its appointment and authorization
to act as Holders Representative and agent, proxy and attorney-in-fact on behalf
of the Holders in accordance with the terms of this Agreement, and (ii) agrees
to perform its obligations under, and otherwise comply with, this Section 7.14.

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(b)Except as otherwise set forth in this Section 7.14, all the statements,
directions or other communications made by the Holders Representative are
binding on each of the Holders as if such Holder had made the statement,
direction or other communication itself.
(c)The Holders Representative shall have the authority to take all actions it
believes necessary or appropriate under this Agreement, including interpreting
all of the terms and provisions of this Agreement, authorizing payments to be
made with respect hereto and thereto, determining and settling all payment
obligations pursuant to this Agreement, determining the allocation of proceeds
pursuant to this Agreement, consenting to, compromising or settling all claims,
conducting negotiations with Buyer and its agents regarding such claims, and
engaging counsel, accountants or other Representatives in connection with the
foregoing. Without limiting the foregoing, (i) the Holders Representative shall
be authorized to act as the sole point of contact between the Buyer and the
Holders, to take any and all actions required or permitted to be taken by the
Holders Representative under or in connection with this Agreement and to do all
things and execute any and all documents which may be necessary, convenient or
appropriate to facilitate the consummation of the Contemplated Transactions, and
for the following additional purposes: (A) to give and receive notices and
communications to or from the Buyer relating to this Agreement and the
Transaction Documents and the other Contemplated Transactions and the
Transaction Documents; (B) to act on such Holder’s behalf with respect to the
matters set forth in Section 1.10, Section 1.11 and Section 1.12, in accordance
with the terms and provisions of Section 1.10, Section 1.11 and Section 1.12,
including giving and receiving all notices and communications to be given or
received with respect to the matters set forth in Section 1.10, Section 1.11 and
Section 1.12 and disputing the matters in Section 1.10, Section 1.11 and Section
1.12; (C) to authorize deliveries to Buyer of cash from the Indemnification
Escrow Account in satisfaction of claims for indemnification pursuant to Article
V or otherwise pursuant to this Agreement or for the payment of any Merger
Consideration adjustment amounts pursuant to Section 1.10 and Section 1.12; (D)
to authorize deliveries to the Holders Representative (on behalf of the Holders)
or to Holders of cash from the Escrow Accounts once such funds are eligible for
distribution therefrom; (E) on behalf of the Holders, to initiate or to refrain
from initiating or to dispute or to refrain from disputing any indemnity or
other claim under this Agreement and the Transaction Documents, as the Holders
Representative, in its reasonable discretion, determines to be necessary or
desirable; (F) on behalf of the Holders, to negotiate, compromise and resolve
any dispute which may arise under this Agreement or the Transaction Documents,
as the Holders Representative, in its reasonable discretion, determines to be
necessary or desirable; (G) on behalf of the Holders, to exercise or refrain
from exercising rights or remedies (including any rights or remedies of a Holder
as a third party beneficiary of this Agreement) available under this Agreement
and the Transaction Documents and to sign any release or other document with
respect to such dispute or remedy, as the Holders Representative, in its
reasonable discretion, determines to be necessary or desirable; (H) to execute
and deliver waivers and consents in connection with this Agreement and the
Transaction Documents as the Holders Representative, in its reasonable
discretion, determines to be necessary or desirable; (I) to act on such Holder’s
behalf with respect to the matters set forth in Section 4.5 and Section 4.6; and
(J) to take all actions necessary or appropriate in the reasonable discretion of
the Holders Representative for the accomplishment of the foregoing, in each case
without having to seek or obtain the consent of any Holder and (ii) agrees to be
bound by all agreements and determinations made by and documents executed and
delivered by the Holders Representative pursuant to the authority granted to it
hereunder.
(d)The Holders Representative (i) shall not be liable for any actions taken or
omitted to be taken under or in connection with this Agreement or the
Contemplated Transactions and (ii) shall not owe or have any fiduciary duty or
fiduciary responsibility to any Holder as a result of any action taken by the
Holders Representative pursuant to this Agreement, except for any such action
taken or omitted to be taken resulting from the Holders Representative’s willful
misconduct. The Holders

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Representative is authorized to act on its behalf, notwithstanding any dispute
or disagreement between any Holder and the Holders Representative, and each
Indemnified Party and any other Person shall be entitled to rely on any and all
actions taken by the Holders Representative under this Agreement without any
liability to, or obligation to inquire of, any of the Holders. Any notice or
communication given or received by, and any decision, action, failure to act
within a designated period of time, agreement, consent, settlement, resolution
or instruction of, the Holders Representative that is within the scope of the
Holders Representative’s authority under this Section 7.14 shall constitute a
notice or communication to or by, or a decision, action, failure to act within a
designated period of time, agreement, consent, settlement, resolution or
instruction of all the Holders and shall be final, binding and conclusive upon
each such Holder. Each Indemnified Party and any other Person shall be entitled
to rely upon any such notice, communication, decision, action, failure to act
within a designated period of time, agreement, consent, settlement, resolution
or instruction as being a notice or communication to or by, or a decision,
action, failure to act within a designated period of time, agreement, consent,
settlement, resolution or instruction of, each and every such Holder.
(e)Absent willful misconduct, any actions taken by the Holders Representative
pursuant to the authority granted in this Section 7.14 or otherwise under this
Agreement shall be immediately and unconditionally effective and absolutely
binding on the Holders as if such actions had been directly taken by the
Holders.
(f)The Buyer shall be entitled to rely upon the actions, determinations and
authority of the Holders Representative to act as the agent of the Holders.
(g)The Holders shall, jointly and severally, indemnify the Holders
Representative for, and hold the Holders Representative harmless against, any
Loss, liability or expense incurred on the part of the Holders Representative,
arising out of or in connection with the Holders Representative’s carrying out
its duties under this Agreement or any Transaction Document, including costs and
expenses of successfully defending the Holders Representative against any claim
or liability in respect thereof. The Holders Representative may consult with
counsel of its own choice and as to any claims brought by the Holders against
the Holders Representative. The Holders Representative will have full and
complete authorization and protection for any action taken and suffered by it in
good faith or in accordance with the opinion of such counsel.
Section 15.Conflict Waiver; Attorney-Client Privilege.
(a)Buyer and Merger Sub waive and shall not assert, and each agrees to cause the
Company and its Affiliates and Representatives to waive and to not assert, any
conflict of interest arising out of or relating to the representation, after the
Closing (the “Post-Closing Representation”), of the Holders Representative, any
Holder, or any of their Affiliates (excluding, after Closing, the Company), or
any officer, employee, manager or director of the Company (any such Person, a
“Designated Person”) in any matter involving Buyer, Merger Sub or their
Affiliates (after Closing, including the Company), or this Agreement or any
other Transaction Document or the Contemplated Transactions (including any
litigation, arbitration, mediation or other proceeding), by Locke Lord LLP (the
“Current Counsel”), which firm is representing the Company and certain of the
Designated Persons in connection with this Agreement, the Transaction Documents
and the Contemplated Transactions (the “Current Representation”).
(b)Buyer and Merger Sub waive and shall not assert, and after Closing each
agrees to cause the Company to waive and to not assert, any attorney-client
privilege or confidentiality obligation with respect to any communication
between the Current Counsel and any Designated Person occurring with respect to
the Current Representation (the “Privileged Communication”) in connection with
any Post-Closing Representation, including in connection with a dispute with
Buyer, Merger Sub or their Affiliates (after Closing, including the Company), it
being the intention of the Parties hereto that all such rights to such
attorney-client privilege and confidential information and to control such
attorney-client privilege and such confidential information shall be retained by
such

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Designated Person (and not the Buyer or the Company) and shall not pass to or be
claimed by the Buyer or the Company. Accordingly, after Closing, Buyer and its
Affiliates (including the Company) shall not have access to any such
communications or to the files of the Current Counsel relating to the Current
Representation from and after Closing. Without limiting the generality of the
foregoing, from and after Closing, (a) the Designated Persons shall be the sole
holders of the attorney-client privilege with respect to the Current
Representation, and the Company shall not be a holder thereof, (b) to the extent
that files of the Current Counsel in respect of the Current Representation
constitute property of the client, only the Designated Persons shall hold such
property rights and (c) the Current Counsel shall, subject to Section 7.15(c),
have no duty whatsoever to reveal or disclose any such attorney-client
communications or files to the Companies by reason of any attorney-client
relationship between the Current Counsel and the Company or otherwise.
(c)Notwithstanding the foregoing, in the event a dispute arises between the
Buyer and the Company, on the one hand, and a third party (other than a
Designated Person or any of their respective Affiliates), on the other hand,
after the Closing to which a Designated Person or any of their respective
Affiliates are not a party, Buyer or the Company, as the case may be, may assert
the attorney-client or work product privilege to prevent disclosure of
confidential communications by the Current Counsel to such third party and (ii)
waive such attorney-client or work product privilege; provided that no such
waiver shall be given without the Holders Representative’s consent. In the event
that the Buyer or any of its Affiliates (including the Company after Closing) is
legally required by order or otherwise legally required to access or obtain a
copy of all or a portion of the Privileged Communications, to the extent (x)
permitted by applicable Law, and (y) advisable in the opinion of Buyer’s
counsel, then Buyer shall immediately notify the Holders Representative in
writing so that the Holders Representative can seek a protective order.
(d)This Section is intended for the benefit of, and shall be enforceable by, the
Current Counsel. This Section 7.15 shall be irrevocable, and no term of this
Section 7.15 may be amended, waived or modified, without the prior written
consent of the Current Counsel.
Section 7.16     Non-Recourse. This Agreement may only be enforced against, and
any Proceeding based upon, arising out of, or related to this Agreement, or the
negotiation, execution or performance of this Agreement, may only be brought
against the entities that are expressly named as parties hereto and then only
with respect to the specific obligations set forth herein with respect to such
party. No past, present or future director, officer, manager, employee,
incorporator, member, partner, stockholder, agent, attorney, Representative or
affiliate of any Party or any of their respective Affiliates (unless such
Affiliate is expressly a party to this Agreement) shall have any liability
(whether in contract or in tort) for any obligations or liabilities of such
party arising under, in connection with or related to this Agreement or for any
claim based on, in respect of, or by reason of, the Contemplated Transactions;
provided, however, that nothing in this Section 7.16 shall limit any liability
of the Parties to this Agreement for breaches of the terms and conditions of
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the date first above written.

BUYER:

FORBES ENERGY SERVICES LLC

By:    /s/ John E. Crisp            
Name: John E. Crisp

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Title: President and Chief Executive Officer

MERGER SUB:

COBRA TRANSITORY SUB LLC

By:    /s/ John E. Crisp            
Name: John E. Crisp
Title: President and Chief Executive Officer

COMPANY:

CRETIC ENERGY SERVICES, LLC

By:    /s/ Joe Michetti            
Name: Joe Michetti
Title: President and Chief Executive Officer

HOLDERS REPRESENTATIVE AND PAYING AGENT:

CATAPULT ENERGY SERVICES GROUP, LLC

By:    /s/ Gregory D. Laake            
Name: Gregory D. Laake
Title: Managing Partner

I-9

I-1

EXHIBIT A
DEFINITIONS
“Affiliate” means, with respect to any specified Person, a Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Person specified. For purposes of this
definition, “control” (including the correlative terms “controlling,”
“controlled by” and “under common control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting equity interest,
by contract or otherwise.
“Assets and Properties” of any Person means all assets and/or properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including, without limitation, cash,
cash equivalents, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory, goods and
Intellectual Property.

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“Business” means the business of coiled tubing completion services, and, as
related to the coiled tubing completion services business, the completion
chemicals and coiled tubing related rental tool business.
“Business Day” means any day other than Saturday, Sunday or any day on which
banks located in Houston, Texas are authorized to be closed for the conduct of
regular banking business.
“Business Facilities” means the real property the Company leases to operate the
Business.
“Capital Interests” means the Company Interests, other than the Incentive
Interests.
“Capital Interests Holder” means the holders of the Capital Interests
immediately prior to the Effective Time.
“CC8” means the coiled tubing unit and all other equipment listed on Exhibit I
under the title ‘Commander 8’.
“Charter Documents” means, with respect to any Entity at any time, in each case
as amended, modified and supplemented at that time, (a) the articles or
certificate of formation, incorporation or organization (or the equivalent
organizational documents) of that Entity, (b) the bylaws, regulations or limited
liability company agreement or regulations (or the equivalent governing
documents) of that Entity and (c) each document setting forth the designation,
amount and relative rights, limitations and preferences of any class or series
of that Entity’s capital stock or of any rights in respect of that Entity’s
capital stock.
“Closing Cash” means the aggregate cash and cash equivalents of the Company as
of the Closing Date, as determined in accordance with GAAP.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Fundamental Representations” means the representations and warranties
set out in Section 2.1(a) (Organizational Status of the Company; Authorization);
Section 2.3 (Capitalization of the Company and its Subsidiary); and Section 2.16
(No Brokers or Finders).
“Company Interest” has the meaning set forth in the LLC Agreement.
“Company IT Assets” means software, systems, servers, computers, hardware,
firmware, middleware, networks, data communications lines, routers, hubs,
switches and all other information technology equipment, and all associated
documentation used or held for use in the operation of the Business, including
the Proprietary Software.
“Company Transaction Expenses” all fees and expenses incurred by the Company in
connection with the Contemplated Transactions; provided, however, “Company
Transaction Expenses” shall not include any fees or expenses incurred in
connection with the Services Agreement entered into by and between Catapult
Energy Services Group, LLC and Buyer.
“Confidential Information” means, with respect to any Person, all trade secrets,
know‑how and other confidential, nonpublic or proprietary information of that
Person, including any such information derived from reports, investigations,
research, studies, work in progress, codes, marketing, sales or service
programs, customer lists, records relating to past service provided to
customers, capital expenditure projects, cost summaries, equipment or production
system designs or drawings, pricing formulae, contract analyses, financial
information, projections, present and future business plans, agreements with
vendors, joint venture agreements, confidential filings with any Governmental
Authority and all other confidential, nonpublic

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concepts, methods, techniques or processes of doing business, ideas, materials
or information prepared or performed for, by or on behalf of that Person.
“Confidentiality Agreement” means that certain Confidentiality Agreement, dated
February 22, 2018, by and between an Affiliate of Buyer and the Company.
“Contemplated Transactions” means the transactions contemplated by this
Agreement, including the Escrow Agreement and Letters of Transmittal.
“Contract” means, any agreement, lease, or contract, whether written or oral,
other than a Company Benefit Plan or Governmental Authorization.
“Disclosure Schedules” means the disclosure schedules delivered in the form by
the Company to Buyer and attached and made a part of this Agreement.
“DLLCA” means the Delaware Limited Liability Company Act.
“Employee Benefit Plan” shall mean (a) any employee welfare benefit plan,
employee pension benefit plan or employee benefit plan as defined in Sections
3(1), 3(2) and 3(3) of ERISA, including, but not limited to, a plan that
provides retirement income or results in deferrals of income by employees for
periods extending to their terminations of employment or beyond, and a plan that
provides medical, surgical or hospital care benefits or benefits in the event of
sickness, accident, disability, death or unemployment, and (b) any other
employee benefit agreement or arrangement that is not an ERISA plan, including
any retirement plan, deferred compensation plan, incentive plan, bonus plan or
arrangement, stock option plan, stock purchase plan, stock award or other equity
compensation plan, golden parachute agreement, severance pay plan, retention
plan, dependent care plan, cafeteria plan, employee assistance program,
scholarship program, fringe benefit, insurance, paid time off, supplemental
unemployment, supplemental or excess benefit, employment contract, vacation
policy, or other similar employee benefit plan, program, agreement or
arrangement.
“Entity” means any sole proprietorship, corporation, partnership of any kind
having a separate legal status, limited liability company, business trust,
unincorporated organization or association, mutual company, joint stock company
or joint venture.
“Environmental Laws” means any applicable foreign, federal, state, or local law,
rules, regulations, codes, ordinances, and orders relating to pollution,
contamination, protection of the environment, worker health and safety (with
regard to Hazardous Substances), or exposure to Hazardous Substances, including
any of the foregoing relating to the use, generation, transport, treatment,
storage or disposal of any Hazardous Substance or Laws relating to emissions,
discharges or releases of any Hazardous Substance into air, surface water,
groundwater, land surface or subsurface, or any buildings or improvements
located thereon.
“Environmental Liabilities” means any loss, liability (including STRICT
LIABILITY), claim, damage, expense, or cost relating to any remediation or other
environmental response obligation arising from or under any applicable
Environmental Laws.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any Person that is treated as a single employer together
with the Company under Section 414 of the Code.
“Escrow Agent” means Regions Bank in its capacity as escrow agent under the
Escrow Agreement.

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“Escrow Accounts” means the Merger Consideration Adjustment Escrow Account and
Indemnification Escrow Account.
“Fraud” means an intentional misrepresentation of a material existing fact made
with actual knowledge of its falsity and for the purpose of inducing the other
Person to act, and upon which the other Person relies with resulting injury or
damage.
“GAAP” means generally accepted accounting principles as set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as may be approved by a significant segment of the accounting
profession in the United States.
“Governmental Authority” means any federal, state, local or foreign judicial,
legislative, executive or regulatory authority or agency.
“Governmental Authorizations” means approvals, licenses, permits, consents,
authorizations, qualifications, orders and certificates from Governmental
Authorities necessary to conduct the Business and own and operate the assets of
the Business.
“Hazardous Substance” means any pollutant, contaminant, chemical, waste,
material or substance that is defined as toxic or hazardous by, or otherwise
gives rise to liability under, any Environmental Law, and specifically includes,
but is not limited to: (i) petroleum and petroleum products or by-products,
including crude oil and any fractions thereof; (ii) natural gas, synthetic gas
and any mixtures thereof; (iii) polychlorinated biphenyls; and (iv) asbestos or
asbestos-containing materials.
“Holders” means the Capital Interests Holders and the Incentive Interests
Holders.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
“Incentive Interests Holder” means the holders of the Incentive Interests
immediately prior to the Effective Time.
“Incentive Interests” has the meaning set forth in the LLC Agreement.
“Indebtedness” means, with respect to any Person, without duplication, all of
the following, contingent or otherwise, and whether or not included as
indebtedness or liabilities in accordance with GAAP: (a) all obligations of such
Person for the principal and premium amounts of borrowed money, (b) all
obligations of such Person evidenced by notes, bonds, letters of credits
(including standby and commercial), indentures, loan agreements, performance
bonds and similar instruments issued or created by or for the account of such
Person, (c) the deferred Merger Consideration of property or services (other
than trade payables incurred in the ordinary course of business), (d) all
indebtedness secured by a Lien on property owned or being owned by such Person,
(e) capital leases and (f) all guarantees of the obligations described in
clauses (a) through (e) above of any such Person; provided, however, that
Indebtedness will expressly exclude trade payables, purchase money security
interests and other similar indebtedness incurred in the ordinary course of
business.
“Indemnification Escrow Account” means the indemnification escrow account
established pursuant to the Escrow Agreement.
“Indemnification Escrow Property” means, at any given time, the funds contained
in the Indemnification Escrow Account at such time.

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“Independent Accounting Firm” means the Houston office of PKF International
Limited.
“Intellectual Property” means intellectual property rights under statutory or
common Law, worldwide, including (a) trademarks, service marks, trade dress,
slogans, logos, domain names and other identifiers of source, and all goodwill
associated therewith, and any applications or registrations for any of the
foregoing; (b) copyrights and any applications or registrations for any of the
foregoing; and (c) patents and patent applications, and (d) all confidential
know-how, trade secrets and similar proprietary rights in inventions,
discoveries, improvements, data, processes, techniques, devices, methods,
patterns, formulae, specifications, and lists of suppliers, vendors, customers,
and distributors.
“Knowledge of the Company,” or any phrase of similar import means the actual
knowledge of each of Joe Michetti and Timmy Caldwell, after reasonable
investigation and due inquiry of his immediate reports.
“Latest Balance Sheet” means the unaudited balance sheet of the Company as of
the Latest Balance Sheet Date.
“Latest Balance Sheet Date” means June 30, 2018.
“Laws” means all laws, statutes, rules, regulations, ordinances and other
pronouncements in effect on the date of this Agreement having the effect of law
of the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision or of any Governmental Authority.
“Letters of Transmittal” means the Capital Interests Holder Letters of
Transmittal and the Incentive Interests Holder Letters of Transmittal.
“Liens” means any liens, security interests, adverse claims, charges,
restrictions, licenses, adverse interests or other encumbrances affecting title.
“LLC Agreement” means that certain Limited Liability Company Agreement of the
Company, dated June 24, 2013, as amended, restated, supplemented or otherwise.
“Material Adverse Effect” means any event or effect that has or would have, (a)
a material and adverse effect on the business, operations, assets, financial
condition or operating results of the Company taken as a whole or (b) prevent or
materially delay the Company from performing its obligations under this
Agreement or consummating the Contemplated Transactions; provided, however, that
none of the following shall be deemed, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be, a Material Adverse Effect: (i) any adverse
change, event, development or effect arising from or relating to (A) the
negotiation, execution, delivery, performance or public announcement of this
Agreement or the Contemplated Transactions, (B) general business or economic
conditions, including such conditions related to the Business and the oil and
gas industry, (C) national or international political or social conditions,
including the engagement by the United States in hostilities, whether or not
pursuant to the declaration of a national emergency or war or the occurrence of
any military or terrorist attack upon the United States or any of its
territories, possessions or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, (D) financial,
banking or securities markets (including any disruption thereof and any decline
in the price of any security or any market index), (E) changes in GAAP or any
Law or industry standard, (F) the failure of the Company to meet, with respect
to any period or periods, any internal or industry analyst projections,
forecasts, estimates of earnings or revenues, or business plans, (G) pandemics,
earthquakes, hurricanes, tornados or other natural disasters, (H) matters that
arise from any actions or omissions of Buyer and its Affiliates in violation of
this Agreement, (ii) any action or omission of the Company or any Holder or any
of their respective Affiliates taken with the

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written consent or written waiver of Buyer; (iii) any matter that will be
reflected in the Final Working Capital; (iv) any resignation of employment by
any employee of the Company as a result of the pendency of the transaction
contemplated by this Agreement, including, without limitation, any resignation
arising as a result of any employment package (including, without limitation,
title, level of responsibility, location of employment or compensation) offered
to such employee by or at the direction of Buyer, Merger Sub or their respective
Affiliates; (v) any existing event, occurrence or circumstance with respect to
which Buyer or Merger Sub has knowledge as of the date of this Agreement
“Membership Interests” means with respect to a limited liability company, a
member’s aggregate rights, entitlements and interests in the limited liability
company (including, in the case of the Company, the Company Interests),
including the member’s right (i) to a share of, and the member’s interest in,
the profits, losses and assets of the limited liability company, (ii) to receive
distributions from the limited liability company as well as all other payments
due or to become due to the member in respect of its interest, whether under any
limited liability company agreement or otherwise, (iii) to vote and participate
in the management of the limited liability company, (iv) to execute any
instruments and to take any action on behalf of and in the name of the limited
liability company, or to give or receive any notice, consent, amendment, waiver
or approval, together with full power and authority to demand, receive, enforce,
collect or give receipt for any of the foregoing and (v) to make determinations,
exercise any elections or take any other action on behalf of the member in
respect of the interest.
“Merger Consideration Adjustment Escrow Account” means the merger consideration
escrow account established pursuant to the Escrow Agreement.
“Merger Consideration Adjustment Escrow Property” means, at any given time, the
funds contained in the Merger Consideration Adjustment Escrow Account at such
time.
“Open Source Software” means any software that contains, or is derived in any
manner from, in whole or in part, any software that is distributed as freeware,
shareware, open source software or similar licensing or distribution models that
(i) require the licensing or distribution of source code to any other Person,
(ii) prohibit or limit the receipt of consideration in connection with licensing
or otherwise distributing any software, (iii) except as specifically permitted
by applicable Law, allow any Person to decompile, disassemble or otherwise
reverse-engineer any software, or (iv) require the licensing or other
distribution of any software to any other Person for the purpose of making
derivative works. For the avoidance of doubt, “Open Source Software” includes
software licensed or otherwise distributed under any license or distribution
model described by the Open Source Initiative as set forth on
www.opensource.org.
“Payment Percentage” shall be, for each Holder, such Holder’s pro rata
percentage of the Merger Consideration, determined in good faith by the Paying
Agent in accordance with the Charter Documents of the Company as in effect
immediately prior to Closing.
“Permitted Encumbrances” means (a) restrictions on any sale, assignment or
transfer of securities under applicable securities Laws, (b) restrictions on any
sale, assignment or transfer of the Membership Interests or other equity
interests of the Company set forth in the Charter Documents of the Company, and
(c) any Liens created by or through Buyer or any of its respective Affiliates.
“Permitted Liens” means any or all of the following:
(e)Liens granted under the terms of lease obligations or bonding arrangements of
the Company;

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(f)Liens in favor of operators, vendors, carriers, landlords, warehousemen,
repairmen, mechanics, workmen and materialmen and construction or similar Liens
arising by operation of law or in the ordinary course of business in respect of
obligations that are not yet due or that are being contested in good faith by
appropriate Proceedings;
(g)workers’ or unemployment compensation Liens arising in the ordinary course of
business;
(h)Liens or other encumbrances securing payment of Taxes or other similar
assessments that are, in either case, not yet delinquent or, if delinquent, are
being contested in good faith by appropriate proceedings and adequate reserves
with respect thereto are being maintained on the books of the Company in
accordance with GAAP;
(i)rights of third parties pursuant to restrictive covenants, easements, rights
of way, servitudes, licenses, permits, surface leases, surface use restrictions,
sub-surface leases, mineral reservations or severances, grazing rights or
logging rights or rights related to ponds, lakes, waterways, canals, ditches,
reservoirs, railways, streets, roads and structures or other rights related to
surface uses and impediments on, over or in respect of any of the properties or
assets of the Company that are not such as to interfere materially with the use
or enjoyment of the properties or assets to which they apply;
(j)rights reserved to or vested in any Governmental Authority to control or
regulate any of the properties or assets of the Company in any manner, and all
applicable Laws, decrees, requirements, orders, judgments or rules of any
Governmental Authority;
(k)conditions in any permit or other authorization granted or issued by any
Governmental Authority for the ownership and operation of all or part of the
properties or assets of the Company;
(l)Liens of public record;
(m)good faith deposit, prepayment or pledge to secure bids, tenders, contracts
(other than for the payment of Indebtedness), leases, licenses, public or
statutory obligations or surety or appeal bonds, in each case in the ordinary
course of business;
(n)purchase money Liens and Liens securing rental payments under capital lease
arrangements;
(o)zoning, building, entitlement and other land use regulations or restrictions;
(p)the interests of the lessors and sublessors with respect to the property
covered by the Real Property Leases, or Liens described or referenced in the
Real Property Leases;
(q)Liens securing liabilities which are reflected or reserved against in the
Books and Records to the extent so reflected or reserved;
(r)Permitted Encumbrances; and
(s)other Liens, encumbrances and defects in title that are not substantial or
material in character, amount or extent.
“Person” means any natural person, firm, partnership, association, corporation,
company, trust, business trust, Governmental Authority or other such Entity.
“Pre-Closing Tax Period” shall mean any taxable period ending on or before the
Closing Date and the portion of any Straddle Period through the end of the
Closing Date.
“Proceeding” means an action, arbitration, audit, hearing, litigation or suit
(whether civil, criminal or administrative) commenced, brought, conducted or
heard by or before any Governmental Authority or arbitrator.
“Proprietary Software” means all material computer software owned, or purported
to be owned, by the Company.

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“Related Party” means (a) any equity holder or any officer or director of any of
the Holders, (b) any spouse of the Persons listed in clause (a) above, (c) any
Affiliate of any of the Persons listed in clause (a) or (b) above, (d) any
corporation or organization of which such Persons listed in clause (a) or (b)
above is an officer or partner or is directly or indirectly the beneficial owner
of fifty (50%) percent or more of any class of equity interests, and (e) any
trust or other estate in which any of the Persons listed in clause (a) or (b)
above has a substantial beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity, excluding, in each of clauses (c)
and (d) above, the Company.
“Release” means any release, spill, emission, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposal, dumping,
abandonment, dispersing, leaching or migrating in, into, onto or through the
indoor or outdoor environment.
“Representatives” means officers, directors, managers, employees, counsel,
accountants, financial advisers, consultants or agents of the Holders
Representative, a Holder or of Buyer, as applicable.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Subsidiary” means, with respect to any Person (for the purposes of this
definition, the “parent”), any other Person (other than a natural person),
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by the parent or by one
or more of its respective Subsidiaries or by the parent and any one or more of
its respective Subsidiaries.
“Target Working Capital” means Seven Million Six Hundred Thirty-Seven Thousand
Five Hundred Dollars ($7,637,500.00).
“Tax Return” means all returns and reports (including declarations, disclosures,
statements, forms, claim for refund, schedules and information returns) filed or
required to be supplied to a Taxing Authority relating to Taxes.
“Taxes” means (a) all federal, state, local, foreign and other income taxes,
gross receipts taxes, franchise taxes, profits taxes, wealth taxes, abandoned
property and escheat taxes, withholding taxes, employment taxes, unemployment
insurance taxes, social security taxes, sales and use taxes, ad valorem taxes,
excise taxes, real and personal Property Taxes, stamp taxes, transfer taxes and
workers’ compensation taxes or other tax, duty, levy, tariff, impost, toll,
custom or other similar assessment of any kind whatsoever, including all
governmental charges, together with all interest, penalties and additions
payable with respect thereto, whether disputed or not, and (b) any liability for
any item described in clause (i) above of another Person as a transferee or
successor, pursuant to contract, by operation of applicable Law, or otherwise.
“Taxing Authority” shall mean any Governmental Authority having jurisdiction
over the assessment, determination, collection or other imposition of any Tax.
“Transaction Documents” means this Agreement, the Capital Interests Holders
Letters of Transmittal and any other agreement, certificate or similar document
to be executed and/or delivered pursuant to this Agreement and the Contemplated
Transactions.
“Working Capital” means, as of the Closing Date, an amount (which may be
positive or negative) equal to the total book value of the current assets of the
Company minus the current liabilities of the Company, excluding any amounts
identified on the Closing Date as Unpaid Company Indebtedness or Unpaid Company
Transaction Expenses solely to the extent that such amounts result in a decrease
of the Merger Consideration,

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determined in accordance with the policies, practices and methods set forth on
Schedule 1.10(a); provided, however, that current assets shall not include any
(a) Closing Cash or (b) deferred income Tax assets and current liabilities shall
not include any deferred income Tax liabilities.
In addition to the terms set forth above, the following terms shall have the
meanings assigned to them in the provisions of this Agreement shown in the table
below:
Defined Term
Location in Agreement
Additional Consideration
Section 1.10(d)(iii)
Additional Working Capital Consideration
Section 1.10(d)(i)
Agreed Closing Date Item Adjustments
Agreed Earn-Out Adjustments
Agreed Earn-Out Principles
Agreed Principles
Agreement
Audited Financial Statements
Section 1.10(c)(i)
Section 1.12(c)
Section 1.12(a)
Section 1.10(a)(i)
Introductory paragraph
Section 2.4
Basket
Section 5.2(b)
Books and Records
Section 6.2(a)
Business
Recitals
Buyer
Introductory paragraph
Buyer Closing Statement
Section 1.10(b)
Buyer Indemnified Parties
Section 5.2(a)
Buyer Persons
Buyer Plan
Section 5.6(c)(ii)
Section 4.3(c)
CapEx Amount
Section 1.7
Capital Interests Holders Closing Consideration
Section 1.5(a)
Certificate of Merger
Section 1.3
Charges
Section 1.14
Closing
Section 1.8
Closing Date
Closing Date Consideration
Introductory paragraph
Section 1.10(a)(ii)
Closing Transaction Expense Payments
Section 1.9(b)(v)(a)
Company
Introductory paragraph
Company Benefit Plan
Section 2.8(a)
Company Employees
Section 2.15(a)
Company Indemnified Party
Section 4.4(a)
Company Intellectual Property
Section 2.9(a)
Company Persons
Continuing Employees
Section 5.6(c)(i)
Section 4.3(a)
Contingent Worker
Section 2.15(i)
Current Counsel
Section 7.15(a)
Current Representation
Section 7.15(a)
D&O Tail Amount
Section 1.9(b)(v)(B)
D&O Tail Policies
Section 4.4(b)
De Minimis Loss
Section 5.2(b)
Designated Person
Section 7.15(a)
Dispute Deadline
Section 1.10(c)(i)
Dispute Notice
Section 1.10(c)(i)
Dispute Resolution Period
Section 1.10(c)(i)
Due Date
Section 6.1(c)(i)

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Due Diligence Information
Section 5.6(c)(ii)
Earn-Out Dispute Resolution Period
Section 1.12(c)
Earn-Out EBITDA
Earn-Out EBITDA Threshold
Exhibit F
Section 1.12(a)
Earn-Out Measurement Period
Earn-Out Payment
Earn-Out Objection Deadline
Earn-Out Objection Notice
Effective Time
Escrow Agreement
Estimated Closing Cash
Estimated Closing Date Balance Sheet
Section 1.12(a)
Section 1.12(a)
Section 1.12(c)
Section 1.12(c)
Section 1.3
Schedule 1.13(a)
Section 1.10(a)(ii)
Section 1.10(a)(ii)
Estimated Working Capital
Section 1.10(a)(ii)
Final Closing Cash
Final Closing Date Balance Sheet
Section 1.10(c)(i)
Section 1.10(c)(i)
Final Working Capital
Section 1.10(c)(i)
Financial Statements
Section 2.4
Holder Indemnified Parties
Section 5.3
Holder Materials
Section 1.5(a)
Holder Taxes
Section 6.1(a)
Holders Closing Consideration
Section 1.9(b)(iv)(A)
Holders Representative
Introductory paragraph
Holders Representative Reserve Deposit
Section 1.9(b)(iii)(A)
Holders Representative Reserve Property
Section 1.14
Incentive Interests Holders Closing Consideration
Section 1.5(b)
Indemnification Claim
Section 5.4(a)
Indemnification Holdback
Indemnified Party
Section 1.13(a)
Section 5.4(a)
Indemnifying Party
Section 5.4(a)
Interim Financial Statements
Section 2.4
Initial Closing Cash
Initial Closing Date Balance Sheet
Section 1.10(b)
Section 1.10(b)
Initial Closing Date Items
Section 1.10(b)
Initial Closing Date Working Capital
Section 1.10(b)
Insurance Policies
Section 2.17
Letter of Transmittal
Section 1.5(a)
Letters of Transmittal Representations
Section 5.2(a)(ii)
Losses
Section 5.2(a)
Material Contracts
Section 2.7(a)
Merger
Section 1.1
Merger Consideration
Section 1.7
Merger Consideration Adjustment Holdback
Merger Consideration Allocation
Section 1.13(b)
Section 1.11(b)
Merger Sub
Introductory paragraph
Monthly Report
Section 1.12(e)
Net Merger Consideration Payment Schedule
Section 1.6
Parties
Introductory paragraph
Party
Introductory paragraph
Paying Agent
Section 1.15

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Personal Property Leases
Pleasanton Premises
Post-Closing Adjustment
Post-Closing Representation
Pre-Closing Tax Proceeding
Preliminary Earn-Out Payment
Preliminary Earn-Out Report
Section 2.6(e)
Section 1.9(a)(viii)
Section 1.10(d)
Section 7.15(a)
Section 6.1(f)(ii)
Section 1.12(b)
Section 1.12(b)
Privileged Communication
Section 7.15(b)
Property Taxes
Section 6.1(b)
Real Property Lease
Section 2.6(b)
Remaining Earn-Out Dispute Items
Remaining Dispute Items
Section 1.12(d)
Section 1.10(c)(ii)
Straddle Period
Section 6.1(b)
Surviving Company
Section 1.1
Tax Proceeding
Section 6.1(f)(i)
Transfer Taxes
Section 6.1(e)
Unpaid Company Indebtedness
Section 1.10(a)(ii)(C)
Unpaid Company Transaction Expenses
Section 1.10(a)(ii)(D)
WARN Obligation
Section 4.3(e)