form8k20160304exh10-2







EXHIBIT 10.2   Execution Version   ASSET PURCHASE AGREEMENT   dated as of February 29, 2016   by and among   JOE JOHNSON EQUIPMENT (USA) INC.   VACTOR MANUFACTURING INC.   FEDERAL SIGNAL CORPORATION   AND   THE SHAREHOLDERS OF   JOE JOHNSON EQUIPMENT (USA) INC.    





 







i   Table of Contents   Page   EXHIBIT A — PRELIMINARY ALLOCATION SCHEDULE .............................................V   EXHIBIT B — BILL OF SALE AND ASSIGNMENT AGREEMENT .................................V   EXHIBIT C — JOINT ISSUES AND REVERSE EARN OUT PAYMENT AGREEMENTV   ARTICLE I PURCHASE AND SALE OF ASSETS, PURCHASE PRICE, ALLOCATION   AND OTHER RELATED MATTERS ........................................................................................1   1.1 Purchase and Sale ................................................................................................................1   1.2 Purchase Price......................................................................................................................2   1.3 Payment of the Purchase Price.............................................................................................2   1.4 Assumed Liabilities .............................................................................................................2   1.5 Taxes ....................................................................................................................................2   1.6 Allocation.............................................................................................................................3   1.7 Customer Repurchase Obligations.......................................................................................4   ARTICLE II INTENTIONALLY DELETED............................................................................5   ARTICLE III CLOSING AND CLOSING DATE DELIVERIES ...........................................5   3.1 Closing. ................................................................................................................................5   3.2 Closing Deliveries by Seller. ...............................................................................................5   3.3 Closing Deliveries by Purchaser ..........................................................................................7   3.4 Cooperation..........................................................................................................................7   ARTICLE IV PRE-CLOSING COVENANTS...........................................................................7   4.1 Due Diligence Review .........................................................................................................7   4.2 Maintenance of Business; and Notice of Changes...............................................................8   4.3 Pending Closing ...................................................................................................................8   4.4 Consents.............................................................................................................................10   4.5 Permits. ..............................................................................................................................10   4.6 Bulk Sales Laws.................................................................................................................10   4.7 Tax Clearance Certificates .................................................................................................10   4.8 Employee Benefit Plans. ....................................................................................................11   4.9 Commercially Reasonable Efforts to Close.......................................................................11   ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER AND THE   PRINCIPALS ...............................................................................................................................11   5.1 Organization.......................................................................................................................12    





 







ii   5.2 Authority; Capacity............................................................................................................12   5.3 No Violations and Consents...............................................................................................12   5.4 Brokers...............................................................................................................................13   5.5 Required Assets .................................................................................................................13   5.6 Related Party Transactions ................................................................................................13   5.7 Title to Purchased Assets ...................................................................................................13   5.8 Inventory ............................................................................................................................14   5.9 Product Warranties.............................................................................................................14   5.10 Condition of Assets............................................................................................................15   5.11 Litigation and Compliance with Laws ...............................................................................15   5.12 Intellectual Property...........................................................................................................15   5.13 Contracts ............................................................................................................................17   5.14 Financial Statements and Related Matters .........................................................................18   5.15 Subsequent Events .............................................................................................................19   5.16 Insurance ............................................................................................................................20   5.17 Licenses and Permits..........................................................................................................20   5.18 Environmental Matters.......................................................................................................20   5.19 Taxes ..................................................................................................................................22   5.20 Suppliers; Customers .........................................................................................................23   5.21 Employees and Employee Benefits ...................................................................................24   5.22 Real Property .....................................................................................................................28   5.23 Certain Payments ...............................................................................................................30   5.24 Accounts Payable...............................................................................................................30   5.25 Trade Programs..................................................................................................................30   5.26 Material Information; Full Disclosure ...............................................................................30   ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS OF   SELLER........................................................................................................................................31   6.1 Authority ............................................................................................................................31   6.2 No Violations and Consents...............................................................................................31   6.3 Litigation............................................................................................................................31   6.4 Brokers...............................................................................................................................31   ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER ...............31   7.1 Due Incorporation ..............................................................................................................32   7.2 Authority ............................................................................................................................32   7.3 No Violations and Consents...............................................................................................32   7.4 Litigation............................................................................................................................32   7.5 Brokers...............................................................................................................................32   7.6 Bankruptcy.........................................................................................................................32   ARTICLE VIII CONDITIONS TO CLOSING APPLICABLE TO PURCHASER ............33   8.1 No Termination..................................................................................................................33   8.2 Accuracy of Representations and Warranties ....................................................................33    





 







iii   8.3 Compliance with Obligations ............................................................................................33   8.4 No Material Adverse Change.............................................................................................33   8.5 Pending Actions; Statutes ..................................................................................................33   8.6 Required Consents .............................................................................................................34   8.7 Required Permits................................................................................................................34   8.8 Diligence ............................................................................................................................34   8.9 Environmental Reports ......................................................................................................34   8.10 Inventory and Rental Fleet.................................................................................................34   8.11 Termination of Related Party Transactions .......................................................................34   8.12 Employee Benefit Plans. ....................................................................................................34   8.13 Joint Issues and Reverse Earn Out Payment Agreement. ..................................................34   8.14 Canadian Purchase Agreement. .........................................................................................34   8.15 All Necessary Documents..................................................................................................35   ARTICLE IX CONDITIONS TO CLOSING APPLICABLE TO SELLER ........................35   9.1 No Termination..................................................................................................................35   9.2 Accuracy of Representations and Warranties ....................................................................35   9.3 Compliance with Obligations ............................................................................................35   9.4 Pending Actions; Statutes ..................................................................................................35   9.5 Joint Issues and Reverse Earn Out Payment Agreement. ..................................................35   9.6 Canadian Purchase Agreement. .........................................................................................36   9.7 All Necessary Documents..................................................................................................36   ARTICLE X TERMINATION...................................................................................................36   10.1 Termination........................................................................................................................36   10.2 Effect of Termination.........................................................................................................36   ARTICLE XI INDEMNIFICATION.........................................................................................37   11.1 Indemnification by Seller and the Principals .....................................................................37   11.2 Indemnification by the Shareholders of Seller...................................................................37   11.3 Indemnification by Purchaser ............................................................................................38   11.4 Claim Procedure/Notice of Claim......................................................................................38   11.5 Survival of Representations, Warranties and Covenants; Determination of Losses .........40   11.6 Exclusive Remedy .............................................................................................................41   11.7 Right of Set-Off and Withholding .....................................................................................41   ARTICLE XII EMPLOYEE MATTERS..................................................................................42   12.1 Seller’s Obligations............................................................................................................42   12.2 Purchaser’s Obligations. ....................................................................................................42   12.3 Seller’s Responsibilities.....................................................................................................42   12.4 Purchaser’s Responsibilities. .............................................................................................42   ARTICLE XIII GUARANTEE ..................................................................................................42    





 







iv   13.1 Guarantee of Purchaser’s Obligations ...............................................................................42   13.2 Liability of Guarantor ........................................................................................................43   13.3 Expenses ............................................................................................................................43   ARTICLE XIV CERTAIN OTHER AGREEMENTS.............................................................43   14.1 Confidentiality ...................................................................................................................43   14.2 Post Closing Access to Records/Cooperation....................................................................44   14.3 Consents Not Obtained at Closing.....................................................................................44   14.4 Further Assurances.............................................................................................................45   14.5 Non-Competition ...............................................................................................................45   14.6 Tax Matters ........................................................................................................................46   14.7 Risk of Loss .......................................................................................................................47   14.8 Pre-Closing Loss................................................................................................................47   ARTICLE XV MISCELLANEOUS ..........................................................................................47   15.1 Cost and Expenses .............................................................................................................47   15.2 Entire Agreement ...............................................................................................................47   15.3 Counterparts .......................................................................................................................47   15.4 Assignment, Successors and Assigns ................................................................................47   15.5 Interpretation......................................................................................................................48   15.6 Reserved.............................................................................................................................48   15.7 Savings Clause ...................................................................................................................48   15.8 Headings ............................................................................................................................48   15.9 Governing Law ..................................................................................................................49   15.10 Disclosure Generally..........................................................................................................49   15.11 Press Releases and Public Announcements .......................................................................49   15.12 Currency.............................................................................................................................49   15.13 Survival ..............................................................................................................................49   15.14 Notices ...............................................................................................................................49   15.15 Submission to Jurisdiction; Venue.....................................................................................50   15.16 No Third-Party Beneficiary ...............................................................................................51    





 







v   Exhibit Index   Exhibit A — Preliminary Allocation Schedule   Exhibit B — Bill of Sale and Assignment Agreement   Exhibit C — Joint Issues and Reverse Earn Out Payment Agreement    





 







ASSET PURCHASE AGREEMENT   This Asset Purchase Agreement is made and entered into as of February 29, 2016 (this   “Agreement”), by and among Vactor Manufacturing Inc., an Illinois corporation (“Purchaser”),   Federal Signal Corporation, a Delaware corporation (“Guarantor”), Joe Johnson Equipment   (USA) Inc., a New York corporation (“Seller”), Joe Johnson, an individual resident of Ontario   (“Joe”), Jeff Johnson, an individual resident of Ontario (“Jeff”), and Jamie Johnson, an   individual resident of Ontario (“Jamie” and, collectively with Joe and Jeff, the “Principals”), and   2019185 Ontario Inc., an Ontario corporation (collectively with the Principals, the “Shareholders   of Seller”).   RECITALS:   WHEREAS, Seller is engaged in the business of selling, renting, leasing and servicing   new and used specialty vehicles, construction and maintenance equipment and parts such as   sewer and street maintenance equipment, hydro excavation, Department of Transportation and   Transport Canada compliant and other industrial vacuum equipment, snow and ice control   equipment, refuse and recycling equipment, and indoor recreational ice products (collectively the   “Business”);   WHEREAS, Seller desires to sell the Business and substantially all of the assets and   properties of Seller, and Purchaser desires to acquire the Business and substantially all of the   assets and properties of Seller, on the terms and subject to the conditions hereinafter set forth;   WHEREAS, Joe Johnson Equipment Inc., an Ontario corporation (“JJE”), FST Canada   Inc., an Ontario corporation (“FST”), the Principals and certain other parties thereto have entered   into an Asset and Share Purchase Agreement, dated as of the date hereof (the “Canadian   Purchase Agreement”), pursuant to which JJE will sell, and FST will purchase, substantially all   of the assets and properties of JJE; and   WHEREAS, each term defined in the first paragraph and recitals shall have the meaning   set forth above whenever used herein, unless otherwise expressly provided or defined in Annex I,   and each other defined term shall have the meaning given thereto in Annex I.   NOW, THEREFORE, in consideration of the foregoing recitals, the representations,   warranties and covenants set forth herein, and other good and valuable consideration, the receipt   and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:   ARTICLE I   PURCHASE AND SALE OF ASSETS, PURCHASE PRICE, ALLOCATION AND   OTHER RELATED MATTERS   1.1 Purchase and Sale.  On and subject to the terms and conditions of this   Agreement, Purchaser agrees to purchase from Seller, and Seller agrees to sell, assign, convey,   transfer and deliver at the Closing for the consideration specified in Section 1.2 to Purchaser, all   of the Purchased Assets, free and clear of any Liens, other than Permitted Liens.    





 







- 2 -   1.2 Purchase Price. The purchase price (the “Purchase Price”), payable by   Purchaser to Seller for the Purchased Assets and the rights and benefits conferred herein shall be:   $31,500,000, payable in accordance with Section 1.3 and as adjusted in accordance with this   Agreement and the Joint Issues and Reverse Earn Out Payment Agreement.   1.3 Payment of the Purchase Price.  The Purchase Price shall be payable as   follows:   (a) On the Closing Date, Purchaser shall pay to Seller an amount equal to (i)   the Purchase Price, minus (ii) the Payoff Amounts (the “Closing Purchase Price”). The Closing   Purchase Price shall be paid by Purchaser by wire transfer of immediately available funds to   such accounts as designated in writing to Purchaser by Seller prior to the Closing.   (b) The Payoff Amounts shall be paid by wire transfer of immediately   available funds by Purchaser, on behalf of Seller, to such lenders and other creditors in   accordance with the payoff letters provided by such lenders and creditors.   1.4 Assumed Liabilities.   (a) As additional consideration for the purchase of the Purchased Assets,   Purchaser shall, at the Closing, by its execution and delivery of the Bill of Sale and Assignment   Agreement, assume, agree to perform, and in due course pay and discharge, only the following   Liabilities of Seller relating to the Business (collectively, the “Assumed Liabilities”):   (i) the Liabilities of Seller reflected on the Final Closing Balance   Sheet settled pursuant to Section 5.3 of the Joint Issues and Reverse Earn Out Payment   Agreement, but only to the extent of the monetary amount of such Liabilities so reflected and   included in the determination of the Net Working Capital, but for greater certainty excluding the   Intercompany Accounts;   (ii) the Liabilities of Seller arising after and in respect of the period   after the Closing Date under the Transferred Contracts; provided, however, Purchaser is not   assuming any Liabilities of Seller in respect of a breach of or default under, or any   noncompliance with Laws with respect to, any Transferred Contract that occurs prior to the   Closing; and   (iii) the Assumed Employee Liabilities.   (b) Purchaser shall not assume, be deemed to assume, or otherwise have any   responsibility or obligation for any Liabilities other than the Assumed Liabilities, and Seller shall   continue to be responsible for all other Liabilities related to Seller or the Business, including   Retained Liabilities.   1.5 Taxes. Purchaser shall be responsible for and pay all Taxes payable upon   or in connection with the conveyance or transfer of the Purchased Assets by Seller to Purchaser;   provided, that Seller shall, on reasonable request, cooperate with Purchaser to obtain resale status    





 







- 3 -   or other favorable treatment with respect to Taxes payable upon or in connection with such   conveyance or transfer.   1.6 Allocation.   (a) Exhibit A sets forth an allocation of the Purchase Price (and all relevant   Assumed Liabilities and other relevant items) among the Purchased Assets (the “Preliminary   Allocation Schedule”).  The Preliminary Allocation Schedule shall be dated or updated, in either   instance in a manner mutually acceptable to Seller and Purchaser, as of a date not more than five   (5) Business Days prior to the Closing Date.  Within thirty (30) days after the final determination   of the Final Closing Balance Sheet, Purchaser shall provide Seller a schedule allocating the   Purchase Price (and all relevant Assumed Liabilities and other relevant items) among the   Purchased Assets (the “Purchase Price Allocation Schedule”) in a manner consistent with the   previously approved Preliminary Allocation Schedule.  The Preliminary Allocation Schedule and   the Purchase Price Allocation Schedule shall be prepared in accordance with the methodologies   set forth on Exhibit A.  If Seller disagrees with Purchaser’s Purchase Price Allocation Schedule,   Seller shall provide notice (the “Allocation Dispute Notice”) to Purchaser within ten (10)   Business Days of the receipt of the Purchase Price Allocation Schedule and Purchaser and Seller   shall use commercially reasonable efforts to resolve their differences.   (b) If Purchaser and Seller fail to agree on an allocation of the Purchase  Price   within 30 days after Purchaser receives the Allocation Dispute Notice, then Seller and Purchaser   shall jointly submit the disputed matter(s) to KPMG LLP or another mutually acceptable   nationally recognized independent accounting firm (the “Independent Auditor”).  Seller and   Purchaser will furnish, or cause to be furnished, to the Independent Auditor such work papers,   documentation and other reports and information relating to the disputed matter(s) as the   Independent Auditor may request or as either of them  believes relevant and each of Seller and   Purchaser shall be afforded the opportunity to discuss the disputed matter(s) with the   Independent Auditor. The Independent Auditor shall make the final determination (the   “Auditor’s Allocation Determination”) (A) in reliance upon supporting documentation provided   to the Independent Auditor by the parties hereto within 20 Business Days of submission of the   disputed matter(s) to the Independent Auditor, (B) in writing, (C) available to the Parties as soon   as practicable after the disputed items(s) have been referred to the Independent Auditor, and (D)   absent manifest error and subject to the following sentence, nonappealable and incontestable by   the parties hereto and each of their respective Affiliates and successors and not subject to   collateral attack for any reason.  Any fees and expenses of the Independent Auditor incurred in   resolving the disputed matter(s) pursuant to this Section 1.6(b) shall be borne equally by   Purchaser, on the one hand, and Seller, on the other hand.   (c) Purchaser and Seller shall report the transactions for Tax purposes   consistent with the Purchase Price Allocation Schedule, as finally determined, or the Auditor’s   Allocation Determination, as applicable.  To the extent there are any adjustments to the Purchase   Price or Assumed Liabilities, including but not limited to, pursuant to the Joint Issues and   Reverse Earn Out Payment Agreement, the parties shall make appropriate adjustments to the   Purchase Price Allocation Schedule, as finally determined, or the Auditor’s Allocation   Determination, as applicable, to reflect such changes.    





 







- 4 -   1.7 Customer Repurchase Obligations.   (a) If, after the Closing Date, Purchaser is obligated to satisfy a Customer   Repurchase Obligation that existed as of the Closing Date with respect to a customer of the   Business, Purchaser shall promptly provide Seller written notice of the applicable customer’s   exercise of the Customer Repurchase Obligation (each such notice, a “Customer Repurchase   Notice”). Each Customer Repurchase Notice shall: (i) identify the applicable Transferred   Contract, if any, the equipment subject to such Customer Repurchase Obligation (the   “Repurchased Unit”) and the amount Purchaser reasonably expects to incur with respect to the   Customer Repurchase Obligation; and (ii) state whether Purchaser intends to (A) retain such   Repurchased Unit or (B) hold it for resale in accordance with Section 1.7(b) below. If Purchaser   elects to retain such Repurchased Unit, then none of Purchaser, Seller or the Principals shall have   any further obligation under this Section 1.7 with respect to such Customer Repurchase   Obligation or such Repurchased Unit.   (b) If Purchaser elects to hold a Repurchased Unit for resale, then Purchaser   shall use commercially reasonable efforts to sell each such Repurchased Unit; provided, that   Purchaser may, but is not obligated to, incur reasonable costs in connection with readying the   Repurchased Unit for resale, including, but not limited to, costs of repair, refurbishment,   maintenance and updating (collectively, “Refurbishing Costs”).   (c) Beginning with the third anniversary of the Closing Date and for each   anniversary of the Closing Date thereafter until there are no further Customer Repurchase   Obligations outstanding, and no further amounts owing to Purchaser which may become   Customer Repurchase Recovery Amounts, Purchaser shall prepare a calculation of the Net   Customer Repurchase Obligation (each, a “Repurchase Calculation”) for the applicable   measurement period specified in this Section 1.7(c). The initial Repurchase Calculation shall set   forth the Net Customer Repurchase Obligation for the period beginning on the Closing Date and   ending on the third anniversary thereof, and each subsequent Repurchase Calculation shall set   forth the Net Customer Repurchase Obligation for the 12-month period beginning on the prior   anniversary of the Closing Date. Purchaser shall deliver to Seller each Repurchase Calculation as   soon as practicable following the applicable anniversary date, but, in any event, not later than 60   days after such anniversary date.   (d) Seller shall have 30 days to review each Repurchase Calculation.  For the   purposes of this review, Purchaser shall permit Seller and its authorized representatives to   examine all working papers, schedules, accounting books and records and other documents and   information used or prepared by Purchaser in connection with the preparation of the Repurchase   Calculation.  Seller may dispute any of the items in the Repurchase Calculation by written notice   (a “CRO Objection Notice”) to Purchaser within the 30-day period.  If Seller has not delivered a   CRO Objection Notice to Purchaser within the 30-day period, Seller shall be deemed to have   accepted the Repurchase Calculation. If Seller delivers a CRO Objection Notice, Seller and   Purchaser shall work expeditiously and in good faith in an attempt to resolve all of the items in   dispute within 15 days of receipt of the CRO Objection Notice.  If all items in dispute are not   resolved within this 15-day period, the matter will be referred to the Independent Auditor in   accordance with the terms of Section 1.6, mutatis mutandis, to resolve the remaining items in   dispute.    





 







- 5 -   (e) The Purchase Price is to be adjusted in accordance with this Section 1.7(e)   by the amount of the Net Customer Repurchase Obligation for each applicable measurement   period, as finally determined pursuant to Section 1.7(d). If the Net Customer Repurchase   Obligation for a measurement period is expressed as a positive number, Seller shall pay the   amount of such Net Customer Repurchase Obligation to Purchaser within ten Business Days of   the final determination of such Net Customer Repurchase Obligation; provided, that Purchaser   may elect, in its sole discretion, to setoff the amount of the Net Customer Repurchase Obligation   against the then Applicable CRO Holdback Amount in accordance with the Joint Issues and   Reverse Earn Out Payment Agreement. If the Net Customer Repurchase Obligation for a   measurement period is expressed as a negative number, Purchaser shall pay the amount of such   Net Customer Repurchase Obligation to Seller within ten Business Days of the final   determination of such Net Customer Repurchase Obligation.   ARTICLE II   INTENTIONALLY DELETED   ARTICLE III   CLOSING AND CLOSING DATE DELIVERIES   3.1 Closing. The term “Closing” as used herein shall refer to the actual   conveyance, transfer, assignment and delivery of the Purchased Assets to Purchaser in exchange   for the Closing Purchase Price delivered to Seller pursuant to Section 1.3(a).  The Closing shall   take place at the offices of DLA Piper (Canada) LLP in Toronto, Ontario on the Closing Date or   as soon as reasonably practicable following the satisfaction or waiver of all conditions to the   obligations of Seller and Purchaser to consummate the transactions contemplated hereby (other   than conditions with respect to actions Seller or Purchaser will take at the Closing itself) or at   such other place and time as is mutually agreed to in writing by Seller and Purchaser or by   electronic exchange of documents.  The Closing shall be deemed to occur at the Effective Time.   3.2 Closing Deliveries by Seller. At the Closing, Seller and, as applicable, the   Shareholders of Seller, shall deliver to Purchaser:   (a) The Bill of Sale, Assignment and Assumption Agreement, substantially in   the form of Exhibit B (the “Bill of Sale and Assignment Agreement”), executed by Seller,   together with all such other bills of sale (including specific title documents and bills of sale for   each of the vehicles), lease assignments and estoppel certificates from landlords, assignments of   all Purchased Intellectual Property, contract assignments and other documents and instruments of   sale, assignment, conveyance, transfer and assumption, as Purchaser may reasonably deem   necessary or desirable;   (b) A certificate of the Secretary or President of Seller certifying as to:  (i) the   certificate of incorporation and bylaws of Seller, and (ii) resolutions of the board of directors and   shareholders of Seller authorizing and approving the execution, delivery and performance by   Seller of this Agreement and any agreements, instruments, certificates or other documents   executed by Seller pursuant to this Agreement;    





 







- 6 -   (c) A certificate of good standing of each jurisdiction set forth in Section 5.1   of the Disclosure Schedule, in each case as of a date not earlier than five (5) days prior to the   Closing Date, as to Seller’s good standing, existence, or similar status under the Laws of such   jurisdiction, and foreign qualification of Seller in each such jurisdiction;   (d) Evidence reasonably satisfactory to Purchaser that all Liens identified in   Section 5.7(a) of the Disclosure Schedule have been or will be at the Closing terminated and   released in their entirety and that any Indebtedness related thereto has been satisfied in full at or   prior to the Closing;   (e) Evidence reasonably satisfactory to Purchaser that the Purchased Assets   are conveyed free of any Liens in connection therewith, and that Purchaser is released from any   claim associated therewith;   (f) One or more payoff letters, drafts of which shall have been delivered to   Purchaser at least three (3) days prior to the Closing Date, executed by the lenders or other   creditors of Seller setting forth all amounts (including principal, accrued but unpaid interest and   penalties) necessary to be paid to such lenders and other creditors to obtain title to the Purchased   Assets free and clear of all Liens (the “Payoff Amounts”); provided that, Payoff Amounts shall   not include obligations or liabilities of Seller under the Transferred Contracts or which are   otherwise included in the Assumed Liabilities and that Section 3.2(f) of the Disclosure Schedule   contains a list of the lenders or other creditors of Seller setting forth all amounts (including   principal, accrued but unpaid interest and penalties) owed as of January 31, 2016;   (g) The consents, authorizations and approvals of the Governmental   Authorities and other Persons required to be set forth in Section 5.3(b) of the Disclosure   Schedule;   (h) Canadian Purchase Agreement and closing documents contemplated   therein executed by all parties thereto;   (i) The Joint Issues and Reverse Earn Out Payment Agreement, substantially   in the form of Exhibit C (provided, that Exhibit C to the Joint Issues and Reverse Earn Out   Payment Agreement shall be finalized by the parties prior to execution), executed by all parties   thereto;   (j) A certificate pursuant to Treasury Regulations Section 1.1445-2(b),   executed by Seller and dated the Closing Date, certifying that Seller is not a foreign person   within meaning of Section 1445 of the Code;   (k) A certificate, executed by Seller and dated the Closing Date, certifying as   to Seller’s satisfaction of the conditions set forth in Sections 8.2 and 8.3;   (l) Evidence of the transfer of all domain names set forth in Section 5.12(a) of   the Disclosure Schedule to Purchaser; and   (m) Such other documents as Purchaser may reasonably request to carry out   the purposes of this Agreement.    





 







- 7 -   Simultaneously with such deliveries, Seller shall take such steps as are required to   put Purchaser in actual possession and operating control of the Purchased Assets.   3.3 Closing Deliveries by Purchaser.  At the Closing, Purchaser shall deliver   to Seller:   (a) The payments to be delivered by Purchaser pursuant to Section 1.3(a);   (b) Evidence of the wire transfer of the payments contemplated by Section   1.3(b);   (c) A certificate of the Secretary or an Assistant Secretary of Purchaser   certifying as to resolutions of the board of directors of Purchaser authorizing and approving the   execution, delivery and performance by Purchaser of this Agreement and any agreements,   instruments, certificates or other documents executed by Purchaser pursuant to this Agreement;   (d) The Bill of Sale and Assignment Agreement, executed by Purchaser,   reflecting the assumption of the Liabilities set forth in Section 1.4(a), together with all such other   bills of sale, lease assignments, assignments of all Purchased Intellectual Property, contract   assignments and other documents and instruments of sale, assignment, conveyance, transfer and   assumption, as Seller may reasonably deem necessary or desirable;   (e) Canadian Purchase Agreement and closing documents contemplated   therein executed by all parties thereto;   (f) The Joint Issues and Reverse Earn Out Payment Agreement, substantially   in the form of Exhibit C (provided, that Exhibit C to the Joint Issues and Reverse Earn Out   Payment Agreement shall be finalized by the parties prior to execution), executed by all parties   thereto;   (g) A certificate, executed by Purchaser and dated the Closing Date, certifying   as to Purchasers’ satisfaction of the conditions set forth in Sections 9.2 and 9.3; and   (h) Such other documents as Seller may reasonably request to carry out the   purposes of this Agreement.   3.4 Cooperation.  Seller and Purchaser shall, on reasonable request, on and   after the Closing Date, cooperate with one another by furnishing any additional information,   executing and delivering any additional documents and/or instruments and doing any and all   such other things as may be reasonably required by the parties to consummate or otherwise   implement the transactions contemplated by this Agreement.   ARTICLE IV   PRE-CLOSING COVENANTS   4.1 Due Diligence Review.  Seller shall, upon reasonable notice and at   reasonable times prior to the Closing, make the personnel, properties, assets, books and records,   including supplier and customer lists, receivables records, equipment lists, accountants’ work    





 







- 8 -   papers and reports, real estate and environmental records and reports, personnel records and all   agreements, pertaining to the Business available for examination, inspection and review by   Purchaser and its representatives.  As part of such examination, Purchaser may make such   inquiries of such Persons having a relationship with the Business, including Employees,   customers and vendors of the Business, as Purchaser shall reasonably determine, upon   reasonable notice to Seller.  No such examination, inspection or review by Purchaser or its   representatives shall in any way affect, diminish or terminate any of the representations,   warranties or covenants of Seller expressed in this Agreement.   4.2 Maintenance of Business; and Notice of Changes.   (a) Pending the Closing, Seller shall use commercially reasonable efforts to   preserve and protect the goodwill, rights, properties and assets of the Business, and to preserve   and protect each relationship with its Employees, creditors, suppliers, customers and others   having business relationships with Seller that relate to the Business.   (b) Seller shall give Purchaser prompt notice of any Material Adverse Change   which has occurred or reasonably could be expected to occur between the date hereof and the   Closing Date.   4.3 Pending Closing.  Without limiting the generality of Section 4.2(a),   pending the Closing, Seller shall, except as set forth in Section 4.3 of the Disclosure Schedule:   (a) conduct and carry on the Business only in the Ordinary Course;   (b) not purchase, sell, assign, lease, hypothec, pledge or otherwise acquire or   dispose of any properties or assets of, or related or used, or otherwise material to, the Business,   except for Inventory and supplies purchased, sold or otherwise disposed of in the Ordinary   Course;   (c) not suffer or permit the creation of any Lien upon any of the Purchased   Assets except for any Lien created with respect to Indebtedness pursuant to Seller’s existing   credit facilities on the date hereof and disclosed in Section 5.14(c) of the Disclosure Schedule;   (d) not waive, release or cancel any material claims against third parties or   debts owing to them, or any rights which have any value in connection with the Business;   (e) keep all tangible personal property used in the operation of the Business   and constituting part of the Purchased Assets in good working order and repair, and replace any   Purchased Asset which shall be worn out, lost, stolen or destroyed, in each case having regard to   the Ordinary Course practices of Seller;   (f) other than (i) as required pursuant to the Contracts set out in Section 4.3(f)   of the Disclosure Schedule; and (ii) Contracts required to fulfill binding sales obligations to its   customers or contractual commitments listed in the Disclosure Schedules, not enter into, or   become obligated under, any Contract with respect to, or in any way affecting, the Business other   than Contracts in the Ordinary Course, provided that where individually the stated obligations    





 







- 9 -   under or value of any such Contract exceeds, or have maximum obligations or value that exceed,   $25,000, such Contract shall only be entered into with Purchaser Consent, not to be unreasonably   withheld or delayed;   (g) not change, amend, terminate or otherwise modify any agreement or   contract with Affiliates and, except in the Ordinary Course, any Transferred Contract or Permit;   (h) maintain in full force and effect with respect to the Business, policies of   insurance of the same type, character and coverage as the policies currently carried and described   in Section 5.16 of the Disclosure Schedule;   (i) refrain from doing any act or omitting to do any act, or permitting any act   or omission to act, which will cause a material breach of any Transferred Contract;   (j) not hire any Employees or independent contractors or terminate the   employment of any current Employees or independent contractors, other than with Purchaser   Consent, not to be unreasonably withheld or delayed;   (k) not alter any term or condition of employment of the Employees or term   or condition of engagement of any independent contractor;   (l) not make any changes in Seller’s accounting systems, policies, principles   or practices;   (m) not make any loans, advances or capital contributions to, or investments   in, any other Person, except in the Ordinary Course;   (n) other than: (i) as required pursuant to the Contracts set out in Section   4.3(n) of the Disclosure Schedule; or (ii) with Purchaser Consent not to be unreasonably   withheld or delayed, not authorize or make any capital expenditures in connection with, or in any   way affecting, the Business which individually or in the aggregate would result in more than   $25,000 of unfunded commitments with respect thereto as of the Closing;   (o) not authorize or make additions to the Rental Fleet without Purchaser   Consent, not to be unreasonably withheld or delayed;   (p) not change its historical practice with respect to the payment of current   Liabilities, the collection of Accounts Receivable, or the granting of terms and conditions of sale   in connection with the Business;   (q) duly comply in all material respects with all Laws, including   Environmental Laws and Employment Laws, applicable to the Business or the Purchased Assets   or as may be required for the valid and effective transfer and assignment of the Purchased   Assets;   (r) (i) not (and it will use its best efforts to ensure that its officers, directors,   Employees, agents, managers, agents, advisors and Affiliates (collectively, the   “Representatives”) do not on its behalf), solicit, initiate, pursue or encourage (by way of    





 







- 10 -   furnishing information or otherwise) any inquiries or proposals, or enter into any discussions,   negotiations or agreements (whether preliminary or definitive) with any Person (other than   discussions with Purchaser or its Representatives), contemplating or providing for any merger,   acquisition, purchase or sale of equity or all or any material part of the assets or any business   combination or change in control of the Business (any thereof, an “Alternative Proposal”); (ii)   deal exclusively with Purchaser with respect to the sale of the Business and the Purchased   Assets; and (iii) notify Purchaser promptly upon receipt by Seller (or any of its Representatives)   of any Alternative Proposal or any request for nonpublic information in connection with any   potential Alternative Proposal or for access to the properties, books or records of the Business by   any person or entity that informs Seller that it is considering, or has made, an Alternative   Proposal;   (s) (i) duly maintain all the Purchased Intellectual Property, and with respect   to each item of pending, issued, or registered Purchased Intellectual Property, use commercially   reasonable efforts to prosecute and not allow abandonment of such item of Purchased Intellectual   Property having regard to the value and utility of the relevant Purchased Intellectual Property,   and (ii) not license any Purchased Intellectual Property without Purchaser Consent;   (t) not enter into any Contract that restricts the operation of the Business   anywhere in the world; and   (u) not agree to do any of the items prohibited by the foregoing.   4.4 Consents.  Pending the Closing Date, Seller shall proceed with all   reasonable diligence and use all commercially reasonable efforts to obtain the written consent,   authorization or approval to the consummation of this Agreement from all necessary Persons.   4.5 Permits. Pending the Closing Date, Purchaser shall use commercially   reasonable efforts to obtain those Permits (other than the Permits set forth on Section 4.5 of the   Disclosure Schedule) necessary for Purchaser to operate the Business in substantially the same   manner as operated by Seller prior to the Closing.   4.6 Bulk Sales Laws.  The parties hereby waive compliance with the   provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwise   be applicable with respect to the sale of any or all of the Purchased Assets to Purchaser; it being   understood that any Liabilities arising out of the failure of Seller to comply with the   requirements and provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction   which would not otherwise constitute Assumed Liabilities shall be treated as Retained   Liabilities. Purchaser acknowledges receipt of New York Department of Taxation and Finance   form TP-153.   4.7 Tax Clearance Certificates.  If requested by Purchaser, Seller shall notify   all of the taxing authorities in the jurisdictions that impose Taxes on Seller or where Seller has a   duty to file Tax Returns of the transactions contemplated by this Agreement in the form and   manner required by such taxing authorities, if the failure to make such notifications or receive   any available tax clearance certificate could subject Purchaser to any Taxes of Seller. If any   taxing authority asserts that Seller is liable for any Tax, Seller shall promptly pay any and all    





 







- 11 -   such amounts and shall provide evidence to Purchaser that such liabilities have been paid in full   or otherwise satisfied.   4.8 Employee Benefit Plans. Pending the Closing Date, Purchaser shall use   commercially reasonable efforts to obtain employee benefit plan coverage for the Employees and   the New Employees that accept offers of employment from Purchaser.   4.9 Commercially Reasonable Efforts to Close.   (a) Subject to the terms and conditions hereof, each party hereto covenants   and agrees to use all commercially reasonable efforts to consummate the transactions   contemplated hereby and will fully cooperate with the other parties hereto for such purpose.   (b) Each party agrees to immediately notify the other parties of any event, fact   or circumstance of which such first party becomes aware that could reasonably be expected to   result in the failure of a condition set forth in Article VIII or Article IX to be satisfied prior to the   Closing Date and, if such condition is curable, to allow the applicable party a reasonable   opportunity to satisfy such condition.   ARTICLE V   REPRESENTATIONS AND WARRANTIES OF SELLER AND THE PRINCIPALS   Seller and each of the Principals, jointly and severally, represent and warrant to Purchaser   (which representations and warranties shall survive the Closing as provided in Section 11.5),   subject to the matters set forth in the Disclosure Schedule, that the statements contained in this   Article V are true and correct as of the date of this Agreement and will be true and correct as of   the Closing Date (as though then made and as though the Closing Date were substituted for the   date of this Agreement, except to the extent any representation or warranty speaks as of an   earlier date).  From time to time on or before the Closing Date, Seller shall, deliver written notice   to Purchaser (an “Update Notice”) to reflect any change, fact, circumstance, occurrence or event   (collectively, “Change”): (a) that may constitute a breach of any covenant or agreement of Seller   or any Shareholders of Seller or may constitute a breach of any representation or warranty of   Seller and the Principals if such representation or warranty were made on the date of the   occurrence or discovery of such Change or the Closing Date; or (b) in the case of any   representations or warranties made to the Knowledge of Seller, which occurred prior to the date   of this Agreement but of which Seller first acquires Knowledge after the date of this Agreement,   in each case, together with any additions, supplements, or modifications necessary to make the   information set forth in the Schedules true, accurate, and complete in all respects as soon as   practicable after such information is available to Seller.  Neither the Update Notice nor any   disclosure after the date hereof of the untruth of any representation or warranty made in this   Agreement or delivery of an updated Schedule shall operate as a cure of the failure to disclose   the information, or as a cure of any representation or warranty made herein; and determination of   any liability for breach of representations or warranties either at signing or at Closing shall be   made without reference to any supplements and with reference only to the Schedules as they   stand on the date of this Agreement.  For the avoidance of doubt, the applicable limitations set    





 







- 12 -   forth in Article XI shall apply to any claim for indemnification after the Closing with respect to a   Change for which an Update Notice has been delivered pursuant to this paragraph.   5.1 Organization.  Seller is a corporation duly formed and validly existing   under the Laws of New York.  Seller is not required to be qualified as a foreign corporation in   any jurisdiction, other than in the jurisdictions set forth in Section 5.1 of the Disclosure   Schedule, and Seller is so qualified and in good standing therein.  Seller has all requisite power   and authority to carry on the Business and to own, lease and use the assets and properties owned,   leased and used by it, including the Purchased Assets.  Seller has furnished to Purchaser correct   and complete copies of its certificate of incorporation and bylaws, each as currently in effect.   Seller is not in violation of any provision of such incorporation or governing documents.  Other   than as set forth in Section 5.1 of the Disclosure Schedule, Seller does not hold or beneficially   own any direct or indirect interest in any Person, or any subscriptions, options, warrants, rights,   calls, convertible securities or other agreements or commitments for any interest in any Person.   No Person, other than the Shareholders of Seller, Chen Hui and Jason Hannah, holds or   beneficially owns any direct or indirect interest in Seller, or any subscriptions, options, warrants,   rights, calls, convertible securities or other agreements or commitments for any interest in Seller.   5.2 Authority; Capacity. Seller (a) has the right and power to enter into, and   perform its obligations under this Agreement and each other agreement delivered in connection   herewith to which it is a party and (b) has taken all requisite action to authorize (i) the execution,   delivery and performance of this Agreement and each such other agreement delivered in   connection herewith to which it is a party and (ii) the consummation of the sale of the Purchased   Assets and other transactions contemplated by this Agreement and each such other agreement   delivered in connection herewith to which it is a party.  This Agreement has been duly executed   and delivered by Seller and is binding upon, and legally enforceable against, Seller in accordance   with its terms.   5.3 No Violations and Consents.   (a) Except as set forth in Section 5.3(a) of the Disclosure Schedule, neither   the execution, delivery and performance of this Agreement or any other agreement delivered in   connection herewith by Seller, nor the consummation of the sale of the Purchased Assets or any   other transaction contemplated by this Agreement or any other agreement delivered in   connection herewith by Seller, does or will, after the giving of notice, or the lapse of time, or   otherwise, (i) conflict with, result in a breach of, or constitute a default under, the incorporation   or governing documents of Seller, any Law or Order, or any Permit or Contract, including any   Transferred Contract, to which Seller is a party or by which Seller or any of the Purchased Assets   are subject or bound; (ii) result in the creation of any Lien or other adverse interest upon any of   the Purchased Assets; (iii) terminate, amend or modify, or give any party the right to terminate,   amend, modify, abandon, or refuse to perform, any Transferred Contract or plan related to the   Business to which Seller is a party; or (iv) accelerate or modify, or give any party the right to   accelerate or modify, the time within which, or the terms under which, any duties or obligations   are to be performed, or any rights or benefits are to be received, under any Transferred Contract   or plan related to the Business to which Seller is a party.    





 







- 13 -   (b) Except as set forth in Section 5.3(b) of the Disclosure Schedule, no   consent, authorization or approval of, filing or registration with or giving of notice to, any   Governmental Authority or any other Person is necessary in connection with the execution,   delivery and performance by Seller of this Agreement or of any other agreement delivered in   connection herewith by Seller or in connection with the consummation of the transactions   contemplated hereby or by any other agreement delivered in connection herewith by Seller.   5.4 Brokers.  Except as set forth in Section 5.4 of the Disclosure Schedule,   Seller has no Liability to pay any fees or commissions to any broker, finder or agent with respect   to the transactions contemplated by this Agreement.   5.5 Required Assets.  All of the rights, properties and assets utilized or   required in connection with owning and operating the Business as presently conducted by Seller   are (a) either owned by Seller or licensed or leased to Seller under one of the Transferred   Contracts, and (b) included in the Purchased Assets.   5.6 Related Party Transactions.  Except as set forth in Section 5.6 of the   Disclosure Schedule, (a) neither Seller nor any of its Affiliates, directors or officers own five   percent (5%) or more of any class of securities of, or have an equity interest of five percent (5%)   or more in, any Person which has any business relationship (as lessor, supplier, customer,   consultant or otherwise) with the Business; (b) no Affiliate of Seller, and no director or officer,   or management Employee of Seller (i) other than with respect to ownership of capital stock of   Seller, owns, or has any interest in, the Purchased Assets or any right, property or asset which is   utilized or required by Seller in connection with owning or operating the Business; (ii) has any   other business relationship (as lessor, supplier, customer, consultant or otherwise) with the   Business; (iii) has any claim or cause of action against the Business or Seller; (iv) is a competitor   of the Business, or (v) to the Knowledge of Seller (A) serves as an officer or director, or in   another similar capacity, of any Person whose business competes with the Business or any   Person that is a party to any Transferred Contract, or (B) owns directly or indirectly on an   individual or joint basis (other than through beneficial ownership of less than five percent (5%)   of the outstanding securities of a publicly traded company) any interests in any Person whose   business competes with the Business or any other Person that is a party to any Transferred   Contract.   5.7 Title to Purchased Assets.   (a) Except as set forth in Section 5.7(a) of the Disclosure Schedule, Seller has   good and transferable title to, or a valid leasehold interest in, all of the Purchased Assets, free   and clear of any Liens, other than Permitted Liens.   (b) At the Closing, Seller shall, subject to the receipt of the Purchase Price   pursuant to Section 1.3 and the other terms and conditions set forth herein, sell, assign, convey,   transfer and deliver to Purchaser good and valid title to, or a valid leasehold interest in, all of the   Purchased Assets, free and clear of any Liens, other than Permitted Liens.   (c) Section 5.7(c) of the Disclosure Schedule sets forth an accurate and   complete list of the Accounts Receivable as of December 31, 2015, and such Accounts    





 







- 14 -   Receivable have arisen from bona fide transactions and represent arm’s length sales made in the   Ordinary Course to Persons that are not Affiliates of Seller and, to the extent not previously   collected, are fully collectible, net of the allowance for doubtful accounts (on an aggregate   basis), in the Ordinary Course and assuming that the methods of collection practices and   procedures used in collection of the Accounts Receivable are consistent with those historically   used by Seller.  Except as set forth in Section 5.7(c) of the Disclosure Schedule, none of such   Accounts Receivable is or will be at the Closing Date subject to any valid counterclaim or set off   other than credits, returns and allowances arising in the Ordinary Course.  The reserves,   allowances and discounts with respect to such Accounts Receivable reflected on the Disclosure   Schedule were and are adequate and consistent in extent with reserves, allowances and discounts   previously maintained by Seller in the Ordinary Course.  Except as set forth in Section 5.7(c) of   the Disclosure Schedule, no Person has any Lien on any such Accounts Receivable or any part   thereof, and no material agreement for deduction, free goods, discount or other deferred price or   quantity adjustment has been made with respect to any such Accounts Receivable.   (d) Section 5.7(d) of the Disclosure Schedule sets forth an accurate and   complete list of the Prepaids as of December 31, 2015.   (e) Section 5.7(e) of the Disclosure Schedule sets forth an accurate and   complete list of: (i) Seller’s Rental Fleet and other tangible personal property of Seller as of   December 31, 2015; and (ii) certain Retained Assets under the heading “Retained Assets”.   5.8 Inventory. Section 5.8 of the Disclosure Schedule sets forth an accurate   and complete list of the Inventory of the Business as of February 7, 2016.  The Inventory of the   Business is of good and merchantable material, of a quality and quantity usable or saleable in the   Ordinary Course, is fit for its intended purpose and is not, in any material respect, adulterated,   misbranded, or mislabeled within the meaning of, or in violation of, any applicable Laws, and is   carried on the books and records of Seller in accordance with ASPE applied consistently with the   Financial Statements.  The Inventory of the Business consisting of finished goods meets all   contractual requirements and all requirements of any Governmental Authorities having   jurisdiction thereof.  Items of such inventory which are not of a quality usable and saleable in the   Ordinary Course have been written down to net realizable value.   5.9 Product Warranties.   (a) Other than normal claims and returns of products of the Business in the   Ordinary Course and consistent with historical levels, no claims of a customer, Governmental   Authority or other Person based upon any alleged defects or unsuitability for its intended use of   any of such products are presently pending or, to Seller’s Knowledge, anticipated.  Seller has not   given or made any warranties to third parties with respect to any products sold by the Business,   except for warranties arising by operation of law or as described in Section 5.9(a) of the   Disclosure Schedule.  There has not been any product recall, voluntary withdrawal, post-sale   warning or similar action conducted with respect to any product leased, shipped, delivered or   sold by the Business, or any investigation or consideration of, or decision made by Seller   concerning whether or not to undertake any of the foregoing nor, to Seller’s Knowledge, is there   a basis for any such recall.    





 







- 15 -   (b) Section 5.9(b) of the Disclosure Schedule sets forth a complete and   accurate summary of the Business’s customers’ product return activity relating to guaranteed   returns, and the dollar value thereof, during the past three (3) years with respect to any product   sold, distributed or manufactured by the Business.   5.10 Condition of Assets.  Except as set forth in Section 5.10 of the Disclosure   Schedule, each item of the Rental Fleet and other material tangible personal property included in   the Purchased Assets is in good operating condition and repair (ordinary wear and tear excepted),   and is suitable for immediate use in the Ordinary Course.   5.11 Litigation and Compliance with Laws.   (a) Except as set forth in Section 5.11 of the Disclosure Schedule, in the past   five (5) years there has been no Action pending or, to Seller’s Knowledge, threatened against or   affecting Seller in connection with the Business, or any of the Purchased Assets or Seller’s right   to own the Purchased Assets or operate the Business, nor has Seller at any time entered into any   material settlement agreement in connection with any of the Purchased Assets or Seller’s right to   own the Purchased Assets or operate the Business; and, to Seller’s Knowledge, there are no facts   or contemplated events which may reasonably be expected to give rise to any such Action.   Seller is not subject to any Order affecting the Business or any part of the Purchased Assets.   (b) Seller has complied:   (i) in all material respects with all applicable Laws; and   (ii) with the Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1 et seq.   and all applicable Laws relating to privacy, data protection and the collection, retention,   protection and use of personal information collected, used or held for use by Seller;   and no Action or notice has been filed or commenced against Seller alleging any failure so to   comply   (c) There are no Actions pending or, to Seller’s Knowledge, threatened   against Seller with respect to this Agreement, or in connection with the transactions   contemplated hereby.   5.12 Intellectual Property.   (a) Section 5.12(a) of the Disclosure Schedule sets forth an accurate and   complete schedule of the Owned Intellectual Property and the Licensed Intellectual Property (the   “Purchased Intellectual Property”).   (b) As of the Closing Date, Seller owns, or validly licenses or otherwise   possesses valid rights to use, each item of Purchased Intellectual Property in the jurisdictions in   which the Business operates.  The Purchased Intellectual Property is sufficient to operate the   Business as presently operated as of the Closing.    





 







- 16 -   (c) Except as set forth in Section 5.12(c) of the Disclosure Schedule, with   respect to each item of Owned Intellectual Property: (i) Seller possesses, in respect of the   jurisdictions in which the Business operates, exclusive right, title and interest in and to the item,   free and clear of any Lien, other than Permitted Liens; (ii) the item is not subject to any   outstanding Order, past due payment, decision or agreement in any restricting manner, including   restricting the transfer, commercialization, enforcement or licensing thereof; (iii) no legal or   administrative proceeding is pending or, to Seller’s Knowledge, threatened, that challenges the   legality, validity, enforceability of, or Seller’s ownership of or right to use or otherwise exploit,   the item; (iv) to Seller’s Knowledge, there is no reason that any item would be considered invalid   or unenforceable in the jurisdictions in which the Business operates; and (v) each such item is   presently pending or in force in accordance with its terms.  Except as set forth in Section 5.12(c)   of the Disclosure Schedule, no license, sublicense, covenant, agreement or permission has been   granted or entered into by Seller in respect of any item of Owned Intellectual Property.   (d) With respect to each item of Licensed Intellectual Property, except as set   forth in Section 5.12(d) of the Disclosure Schedule: (i) Seller’s rights covering the item are valid,   binding and enforceable in accordance with their respective terms; (ii) to Seller’s Knowledge, no   other party thereto is in breach or default and no event has occurred which with notice or lapse of   time would constitute a breach or default or permit termination, modification or acceleration   thereunder; (iii) Seller has not received written notice that any party to the license, sublicense,   agreement or permission intends to cancel, not renew, or terminate the license, sublicense,   agreement or permission or to exercise or not exercise an option thereunder; and (iv) the license,   sublicense, agreement or permission will not be terminated or cancelled, or Seller’s rights   thereunder diminished or impaired, or Seller’s obligations thereunder increased, as a result of the   consummation of the transactions contemplated by this Agreement.   (e) Except as set forth in Section 5.12(e) of the Disclosure Schedule, there is   not now, and there has not been, as a result of or in connection with Seller’s operation of the   Business any infringement by Seller (including inducing, contributory or vicarious   infringement), misuse or misappropriation by  Seller of any Intellectual Property that is owned or   licensed by any third party.  There is not now existing any claim or, to Seller’s Knowledge, there   is not any threatened claim against Seller for such a violation.   (f) Except as set forth in Section 5.12(f) of the Disclosure Schedule, there is   no actual unauthorized use, interference, disclosure, infringement, misappropriation or violation   by any party of any of the Purchased Intellectual Property.  Except as set forth in Section 5.12(f)   of the Disclosure Schedule, Seller has not been subject to any legal proceeding (or received any   written notice, charge, complaint, claim or demand or, to Seller’s Knowledge, threat), a claim of   infringement, misappropriation or violation of any Intellectual Property right or other proprietary   right of any party that concerns or relates to any of the Purchased Assets, Purchased Intellectual   Property, or Seller’s operation of the Business.  Except as set forth in Section 5.12(f) of the   Disclosure Schedule, Seller has not brought against any Person any legal proceeding for   infringement of any Purchased Intellectual Property or breach of any license, sublicense or   agreement involving Purchased Intellectual Property owned or used by Seller.   (g) To Seller’s Knowledge, Seller has the exclusive right to file, prosecute and   maintain each item of Owned Intellectual Property and to register each such item of Owned    





 







- 17 -   Intellectual Property (in each case to the extent applicable to the relevant category of Owned   Intellectual Property), including any inventions or ideas that have not yet been the subject of   such an application, and has the exclusive right to maintain exclusive ownership of each such   item of Owned Intellectual Property in the jurisdictions in which the Business operates, and there   is no claim by any third party regarding title to the same or derivative works of the same.   (h) Except as set forth in Section 5.12(h) of the Disclosure Schedule, Seller   has taken all commercially reasonable actions to maintain and protect each item of Purchased   Intellectual Property, including payment of all fees, annuities and all other payments that have   heretofore become due to any Governmental Authority or licensor with respect to the Intellectual   Property, and have taken all commercially reasonable steps necessary to prosecute, maintain,   protect and enforce the same.   (i) Seller has not authorized any third party to use any Purchased Intellectual   Property except pursuant to a binding, written license and excluding any implied licenses granted   as the result of commercial sales of products or services incorporating such Purchased   Intellectual Property.   (j) No current or former Employee, independent contractor or consultant of   Seller has any interest in any Purchased Intellectual Property.   (k) Except as set forth in Section 5.12(k) of the Disclosure Schedule, none of   the rights in or to any Purchased Intellectual Property shall be materially adversely affected by   the execution or delivery of this Agreement by Seller, nor by the full performance by Seller of   any of its obligations hereunder.   (l) No breach, security incident or violation of any data security rule, policy   or procedure in relation to Seller’s data has occurred or is threatened, and there has been no   unauthorized or illegal processing of any of Seller’s data. No circumstance has arisen in which   applicable Law would require Seller to notify a Governmental Authority of a data security   breach.   5.13 Contracts.   (a) Section 5.13(a) of the Disclosure Schedule sets forth an accurate and   complete list of the Material Contracts to which Seller is a party that relate, or are material, to the   Purchased Assets or the operation of the Business.   (b) All Transferred Contracts are valid, binding and enforceable against Seller   and, to Seller’s Knowledge, against the other parties thereto in accordance with their respective   terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization,   moratorium or other similar Laws affecting enforcement of creditors’ rights generally.   (c) Neither Seller nor, to Seller’s Knowledge, any other Person is in material   breach of, or material default under, any Transferred Contract, and no event or action has   occurred, is pending, or, to Seller’s Knowledge, is threatened, which, after the giving of notice,   or the lapse of time, or otherwise, could constitute or result in a material breach by Seller, or, to   Seller’s Knowledge, any other Person, or a material default by Seller, or, to Seller’s Knowledge,    





 







- 18 -   any other Person, under any Transferred Contract. There are no renegotiations, attempts to   renegotiate or outstanding rights to negotiate any amount to be paid or payable to or by Seller   under any Transferred Contract other than with respect to non-material amounts in the Ordinary   Course, and no Person has made a written demand for such renegotiation.  Seller has not released   or waived any of their respective rights under any Transferred Contract.   5.14 Financial Statements and Related Matters.   (a) Section 5.14(a) of the Disclosure Schedule contains accurate and   complete copies of the consolidated and non-consolidated reviewed balance sheet and statement   of income and cash flow of Seller as of and for the years ended August 31, 2015 (the “Most   Recent Fiscal Year End”) and August 31, 2014 (collectively, the “Year End Financial   Statements”) and for the 4 months ended December 31, 2015 (the “Interim Financial   Statements,” and together with the Year End Financial Statements, the “Financial Statements”).   The Financial Statements have been prepared in accordance with ASPE (except as disclosed in   the footnotes), except for, in the case of the Interim Financial Statements, (1) normal recurring   year-end adjustments that are not material and (2) the omission of footnote disclosure required   by ASPE.  The books and records of Seller have been maintained in accordance with sound   business practice and reflect in all material respects the transactions entered into by Seller.  The   Financial Statements accurately and fairly present the consolidated and non-consolidated   financial position and results of operations of Seller at the dates and for the periods indicated   therein and are consistent with the books and records of Seller.   (b) Except as described in Section 5.14(b) of the Disclosure Schedule, Seller   does not have any Liabilities other than those Liabilities: (i) which are set forth or reserved for in   the Financial Statements; (ii) which have arisen after the date of the Financial Statements in the   Ordinary Course and are characterized as Current Liabilities as of the Closing Date that will be,   in accordance with the Joint Issues and Reverse Earn Out Payment Agreement, fully reflected or   reserved for in the Final Closing Balance Sheet and the calculation of Net Working Capital of the   Business as of the Closing Date; (iii) which constitute Assumed Employee Liabilities that have   arisen after the date of the Financial Statements in the Ordinary Course; or (iv) arising under or   pursuant to the Transferred Contracts (but not Liabilities that result from, arise out of or are   attributable to, any breach of any such Transferred Contract prior to Closing).   (c) As of the date hereof, Seller does not have any Indebtedness in connection   with or affecting the Business except as described in Section 5.14(c) of the Disclosure Schedule,   provided that for purposes of this Section 5.14(c), the defined term “Indebtedness” shall be   construed and applied as excluding subsections  (e), (g), (i) and (j) of such definition, and further   provided that in respect of Accounts Payable comprising part of Indebtedness, this representation   is made as of January 31, 2016 and not as of the date hereof. Section 5.14(c) of the Disclosure   Schedule sets forth: (i) each Contract containing a Customer Repurchase Obligation; and (ii) for   each such Contract, the amount of such Customer Repurchase Obligation as of April 1, 2016 and   for each subsequent anniversary of April 1, 2016 through the last anniversary on which the   Customer Repurchase Obligation for such Contract remains outstanding.    





 







- 19 -   5.15 Subsequent Events.  Since the Most Recent Fiscal Year End to, and   including, the date hereof, except as otherwise set forth in Section 5.15 of the Disclosure   Schedule:   (a) The Business has been conducted and carried on only in the Ordinary   Course;   (b) Except for Inventory and supplies purchased, sold or otherwise disposed   of in the Ordinary Course, Seller has not purchased, sold, leased, hypothecated, pledged or   otherwise acquired or disposed of any properties or assets of or for the Business;   (c) Seller has not sustained or incurred any loss or damage to any of the   Purchased Assets (whether or not insured against) on account of fire, flood, accident or other   calamity which has interfered with or affected, or may interfere with or affect, the operation of   the Business;   (d) There has been no Material Adverse Change and to Seller’s Knowledge no   state of facts or basis exists which may reasonably be expected to give rise to any Material   Adverse Change;   (e) Seller has not waived, released or cancelled any claims against third   parties or Indebtedness owing to Seller, or any rights which have a value in the aggregate in   excess of  $25,000 in connection with, or related to the Business, other than repayment of   Indebtedness in the Ordinary Course;   (f) Seller has not entered into, authorized or permitted any transaction with   any Affiliate, shareholder, partner, director, officer or Employee of Seller in connection with or   related to the Business;   (g) Seller has not made any loans, advances or capital contributions to, or   investments in, any other Person in connection with, or related to, the Business, except in the   Ordinary Course;   (h) Seller has not issued any note, bond or other debt security or created,   incurred, assumed or guaranteed any Liability for borrowed money outside the Ordinary Course   in connection with, or related to, the Business;   (i) Seller has not delayed or postponed the payment of accounts payable or   other Liabilities beyond their due date or accelerated the collection of any Accounts Receivable;   (j) Seller has not authorized or made any capital expenditures in connection   with the operation of the Business which individually or in the aggregate are in excess of   $25,000;   (k) Seller has not hired any new Employees, except in the Ordinary Course;   (l) Seller has not committed to pay any increase in bonus or granted any   increase in the base compensation payable by Seller to any director, officer, or Employees    





 







- 20 -   thereof, except in the Ordinary Course; and where in the Ordinary Course, such increase in   bonus or increase in the base compensation is set out in Section 5.21(a)(i) of the Disclosure   Schedule;   (m) No Lien has been imposed on any of the Purchased Assets;   (n) Seller has not changed any accounting systems, policies, principles or   practices (including any change in depreciation or amortization policies or rates) that in any   material way affects the Business or the presentation of the results of the Business;   (o) Seller has not entered into, terminated or relinquished any rights under any   Transferred Contract (or series of related Transferred Contracts) related to its assets or the   Business either involving consideration in the aggregate in excess of $25,000, or otherwise   outside the Ordinary Course;   (p) Seller has not entered into any Contract with any customer or supplier   (excluding Purchaser and its Affiliates in respect of the within transaction) other than in the   Ordinary Course; and   (q) Seller has not agreed to do any of foregoing.   5.16 Insurance. Section 5.16 of the Disclosure Schedule sets forth and   describes all policies of insurance which are currently maintained by Seller or which relate to the   Business.  Each such policy of insurance is in full force and effect in accordance with its terms   (free from any presently exercisable right of termination on the part of the insurance company   issuing such policy prior to the expiration of the term of such policy). Each such policy of   insurance provides for coverage of the insured liability on an “occurrence basis.” Seller has not   been refused any insurance with respect to the Purchased Assets or the Business, and its   coverage has not been limited by any insurance carrier to which Seller has applied for any such   insurance. Section 5.16 of the Disclosure Schedule sets forth any pending insurance claims   under insurance policies maintained by Seller that have been denied insurance coverage.  Seller   has not failed to give any notice or present any claim under any insurance policy in due and   timely fashion or as required by any insurance policy.   5.17 Licenses and Permits. Section 5.17 of the Disclosure Schedule sets forth a   complete and correct list of all licenses, franchises, permits, operating authorities, state operating   licenses or registrations and other national or international regulatory licenses and other   Governmental Authority authorizations held by Seller relating, or otherwise material, to the   Business (collectively, “Permits”).  The Permits are valid and in effect, and Seller has not   received any written notice that any Governmental Authority intends to cancel, terminate or not   renew any of the same. Seller holds all licenses, franchises, permits, operating authorities,   provincial operating licenses or registrations and other national or international regulatory   licenses and other Governmental Authority authorizations necessary for the conduct of the   Business as currently conducted.   5.18 Environmental Matters.    





 







- 21 -   (a) Seller and the Purchased Assets (including the Leased Real Property and   any property or facility that was at any time owned, occupied, leased, operated, managed, used   controlled or under the custody of Seller) comply and have complied with all Environmental   Laws in all material respects, and Seller conducts and has conducted the Business in material   compliance with all Environmental Laws.   (b) Seller possesses all Permits required under applicable Environmental   Laws for the operation of the Business as currently conducted as well as to own and use the   Purchased Assets (“Environmental Permits”), all of which are described in Section 5.18 of the   Disclosure Schedule and are valid, subsisting and in good standing, and the operations and   facilities of Seller are in compliance with the requirements of such Environmental Permits in all   material respects.   (c) There is no Environmental Liabilities Action pending or, to Seller’s   Knowledge, threatened against Seller, and no event has occurred and no circumstance exists that   might give rise to any Environmental Liabilities (i) concerning non-compliance by or liability of   Seller under any Environmental Laws; or (ii) which seeks to or threatened to suspend, revoke,   cancel or terminate, modify or limit any Environmental Permits.   (d) Seller has not been (i)  inspected or investigated for any actual, alleged or   potential breach or violation of, non-compliance with or liability under any Environmental Laws   which have not been resolved or remain unsatisfied, (ii)  charged with, settled any prosecution   for, convicted of or sentenced for any offence under Environmental Laws, (iii) subject to or   responsible for any Remediation at any property or facility (including its soil, subsoil, surface   water, groundwater and indoor environment) whether owned by Seller or a third party or in   respect of any natural resource or feature, or any other corrective action under any   Environmental Laws, or voluntarily conducted any of the foregoing, or (iv) subject to any Order   or request by a Governmental Authority under any Environmental Laws which remains   unresolved; and no event has occurred and no circumstance exists that might give rise to any of   the foregoing.   (e) Seller has not received, within the previous five years, any written or other   notice or request for information (i) concerning non-compliance by or liability of Seller under   any Environmental Laws; or (ii) indicating that there are or are potentially responsible for or that   they must carry out, for any reason whatsoever, any Remediation at any property or facility   (including its soil, subsoil, surface water, groundwater and indoor environment) whether owned   by Seller or a third party or in respect of any natural resource or feature.   (f) There are no Substances in, on, under  or migrating from any Leased Real   Property, including in soil, subsoil, surface water, ground water and the indoor environment.   (g) Seller has not caused or allowed the Release, in any manner whatsoever,   of any Substance in, on, under, to or from any of the Purchased Assets or any property or facility   owned, occupied, in the custody of, used, operated, controlled, leased or managed by Seller in   the past or any property or facility of a third party but with respect to which Seller is or may   reasonably be alleged to have liability.    





 







- 22 -   (h) Seller has not disposed or arranged for disposal of Substances on any third   party real property in violation of applicable Environmental Laws or for which Seller has   received written notice of alleged liability under any Environmental Laws. None of the facilities   or locations at which Seller has disposed or arranged for disposal of Substances has been placed   or proposed for placement on the National Priorities List (or CERCLIS) under CERCLA or any   similar state list.   (i) There are not any underground storage tanks or associated piping or   appurtenances, landfills, surface impoundments, or disposal areas, whether active or abandoned.   located in, on or under the Leased Real Property.   (j) True, accurate and complete copies of the documents in the possession of   Seller relating to environmental or health and safety matters with respect to the Business and the   Purchased Assets, whether or not they were filed or registered on title or with any Governmental   Authority, have been provided to Purchaser.   (k) Seller is not required to maintain any environmental or operating   documents or records under any Environmental Laws.   (l) Seller has disclosed to the relevant Governmental Authority, any event,   incident and information that it is required to disclose under Environmental Laws.   (m) No amount is due by Seller to any Governmental Authority or any other   Person under any Environmental Laws.   (n) Seller owns all right, title and interest in all Environmental Attributes that   are associated with or arose out of the Business conducted by it, free and clear of all Liens. For   purposes hereof, “Environmental Attribute” means any emission unit, credit, reduction, offset   and other emission allowance.   (o) Seller is not considered to be an emitter, under Environmental Laws, for   the purpose of any cap and trade system or other similar emission allowance regime.   (p) None of the Business, the Purchased Assets, or any property or facility   owned, occupied, in the custody of, used, operated, controlled, leased or managed by Seller in   the past or any property or facility of a third party but with respect to which Seller is or may   reasonably be alleged to have liability is listed on, or has been proposed for listing on, the   National Priorities List (or CERCLIS) under CERCLA or any similar state list.   5.19 Taxes.   (a) Seller has filed on a timely basis all Tax Returns relating to the Purchased   Assets or the Business required to be filed by applicable Law.  All such Tax Returns were correct   and complete in all material respects and were timely prepared and filed in accordance with   applicable Law.  All Taxes due and payable with respect to any Tax Returns (whether or not   shown as payable), or otherwise due and payable by Seller or for which Seller could be liable as   a result of transferee liability, joint and several liability, contractual liability or otherwise, have   been timely paid to the appropriate taxing authority.  There are no existing Liens for Taxes on    





 







- 23 -   any of the Purchased Assets.  All applicable sales Taxes that were required to be paid when the   Purchased Assets were acquired were paid in accordance with applicable Laws.  Seller has   provided to Purchaser correct and complete copies of (i) all federal, state, local, and foreign Tax   Returns filed by it with respect to the Business or the Purchased Assets in the past five (5) years   and (ii) all notices, correspondence, and similar material received by Seller from any taxing   authority relating to the Business or the Purchased Assets or Taxes associated therewith.   (b) Seller has (i) withheld all required amounts from payments to Employees   and timely remitted such amounts to the proper agencies in accordance with applicable Laws,   (ii) withheld all required amounts from payments to agents, contractors and nonresidents and   timely remitted such amounts to the proper agencies; (iii) timely paid all employer contributions   and premiums to the proper agencies; and (iv) filed all federal, state, local and foreign Tax   Returns and reports with respect to Employee Income Tax withholding, social security Taxes and   premiums, and unemployment Taxes and premiums, all in compliance with applicable Laws.   (c) Neither Seller nor any of its directors, officers, or Employees, is aware of   any contingent tax liabilities or any grounds which could prompt an assessment or reassessment   including, without limitation, aggressive treatment of income, expenses, credits or other amounts   in filing Tax Returns and has not received any indication from any Governmental Authority that   an assessment or reassessment is proposed, regardless of its merits.   (d) Seller has no obligation for Taxes pursuant to any Transferred Contract   that Purchaser is assuming as a result of the transactions contemplated by this Agreement.  Seller   has not extended any statute of limitations relating to Taxes for which Purchaser could be liable   whether under this Agreement or pursuant to applicable Law.  No taxing authority has made a   claim that as a result of or in connection with conducting the Business or owning any Purchased   Assets that any Seller is obligated to pay Taxes in a jurisdiction in which Seller is not filing Tax   Returns.  No audits or other proceedings are ongoing or, to Seller’s Knowledge, threatened with   respect to any Taxes relating to the Business or the Purchased Assets for which Purchaser could   have liability whether under this Agreement or under applicable Laws.  There are no unpaid or   proposed assessments for Taxes with respect to any of the Purchased Assets.   (e) Seller is not a “foreign person” as that term is used in Treasury   Regulations Section 1.1445-2. Seller has not been a United States real property holding   corporation within the meaning of Section 897(c)(2) of the Code during the applicable periods   specified in Section 897(c)(1)(A)(ii) of the Code. None of the Purchased Assets (i) is property   required to be treated as being owned by another Person for federal income tax purposes, (ii)   constitutes “tax-exempt use property” within the meaning of Section 168(h)(1) of the Code or   (iii) is tax-exempt bond financed property within the meaning of Section 168(f) of the Code.   5.20 Suppliers; Customers.   (a) Suppliers. Section 5.20(a) of the Disclosure Schedule sets forth the ten   (10) largest suppliers of the Business (based on dollar amounts of products and services supplied   to Seller but excluding related entities of Purchaser) (the “Material Suppliers”), in each case, for   the twelve months ended December 31, 2015, and the amounts for which such Material Suppliers   invoiced Seller in connection with the Business during such periods.  Except as set forth in    





 







- 24 -   Section 5.20(a) of the Disclosure Schedule, (i) all Material Suppliers continue to be suppliers of   Seller in connection with the Business; (ii) Seller has not received any notice, whether written or   oral, nor does Seller have any Knowledge, that any Material Supplier will reduce materially its   business with Seller in connection with the Business from the levels achieved during the twelve   months ended December 31, 2015, (iii) no Material Supplier has terminated its relationship with   Seller in connection with the Business or, to Seller’s Knowledge, threatened to do so; (iv) no   Material Supplier has modified or indicated that it intends to modify its relationship with Seller   in connection with the Business in a manner which is less favorable in any material respect to   Seller or has agreed not to or indicated it will not agree to do business on such terms and   conditions at least as favorable as the terms and conditions provided to Seller on December 31,   2015; and (v) Seller is not involved in any material claim, dispute or controversy with any   Material Supplier. No Material Supplier has threatened, whether in writing or orally, to take any   of the actions described in this Section 5.20(a) as a result of the transactions contemplated by this   Agreement, including any threatened action as a result of the identity of Purchaser and its   Affiliates.  Since December 31, 2015, there has been no other adverse change in the relationship   between Seller and any Material Supplier, other than those arising as a result of (A) the   announcement of the transactions with Purchaser contemplated herein and (B) the identity of   Purchaser and its Affiliates.   (b) Customers. Section 5.20(b) of the Disclosure Schedule sets forth the ten   (10) largest customers of the Business (based on dollar amounts of products and services   purchased from Seller) (the “Material Customers”), in each case, for the twelve months ended   December 31, 2015, and the amounts for which Seller invoiced such Material Customers during   such periods.  Except as set forth in Section 5.20(b) of the Disclosure Schedule, (i) all Material   Customers continue to be customers of Seller in connection with the Business, (ii) Seller has not   received any notice, whether written or oral, nor does Seller has Knowledge, that any Material   Customer will reduce its business with Seller in connection with the Business by more than 3%   of the gross sales made to such Material Customer from the levels achieved during the twelve   months ended December 31, 2015; (iii) no Material Customer has terminated its relationship   with Seller in connection with the Business or, to Seller’s Knowledge, threatened to do so;   (iv) no Material Customer has modified or, to Seller’s Knowledge, indicated that it intends to   modify its relationship with Seller in connection with the Business in a manner which is less   favorable in any material respect to Seller or has agreed not to or indicated it will not agree to do   business on such terms and conditions substantially similar to the terms and conditions provided   to Seller on December 31, 2015; and (v) Seller is not involved in any material claim, dispute or   controversy with any Material Customer.  No Material Customer has threatened, whether in   writing or orally, to take any of the actions described in this Section 5.20(b) as a result of the   transactions contemplated by this Agreement, including any threatened action as a result of the   identity of Purchaser and its Affiliates.  Since December 31, 2015, there has been no other   adverse change in the relationship between Seller and any Material Customer, other than those   arising as a result of (A) the announcement of the transactions with Purchaser contemplated   herein and (B) the identity of Purchaser and its Affiliates.   5.21 Employees and Employee Benefits.   (a) Section 5.21(a)(i) of the Disclosure Schedule contains a complete and   accurate list of the following information for each Employee and independent contractor of    





 







- 25 -   Seller, including each employee on leave of absence or layoff status as of the date hereof:  (i)   name; (ii) job title; (iii) date of hire; (iv) current compensation or remuneration, including but not   limited to whether the Employee is eligible for bonus and commission, under what plan,   structure or terms the Employee is eligible, and the amount of bonus or commission paid to the   Employee in the last calendar year; (v) the Employee’s annual vacation entitlement and current   vacation accrual; (vi) benefit entitlement and participation; (vii) exempt versus non-exempt   status for purposes of overtime compensation; (viii) full or part-time status; (ix) independent   contractor or employee status; (x) whether the Employee is eligible for benefits and (xi) if on   leave, the reason for and period of the leave.  Except as set forth in Section 5.21(a)(ii) of the   Disclosure Schedule, Seller has not made any promises for the payment of any bonuses,   backpay, golden parachute payment, change of control payment, retention bonus, or other   remuneration to any Employees, independent contractors or other Persons.  Except as set forth in   Section 5.21(a)(iii) of the Disclosure Schedule, with respect to the Business: (i) there is no   collective bargaining agreement or contract with any trade union, association of employees or   labor organization; (ii) there is no voluntary relationship with any trade union, association or   employees or labor organization; and (iii) no trade union, association of employees or labor   organization has been issued a certificate of bargaining rights for any of the employees; (iv) to   Seller’s Knowledge, no management or other key employee of Seller (A) has any present   intention to terminate his or her employment, or (B) is a party to any confidentiality,   non-competition, proprietary rights or other such agreement between such employee and any   Person; (v) there has been no application for certification or representation petition filed by a   trade union, association of Employees or labor organization; (vi) no union organizing campaign   is under way and there has been no threat of a union organizing campaign in the past two (2)   years; (vii) there is no application for certification pending and no trade union, association of   Employees or labor organization has made any written or oral demand for recognition; (viii) no   union organizing or certification efforts are underway or threatened and no other question   concerning representation exists; (ix) no labor strike, work stoppage, slowdown, lockout or other   material labor dispute has occurred (legal or otherwise), and none is underway or, to Seller’s   Knowledge, threatened; (x) there is no worker’s compensation Liability, experience or matter   outside the Ordinary Course; (xi) there is no employment-related action, application, charge,   complaint, grievance, investigation, inquiry or obligation of any kind, pending or, to Seller’s   Knowledge, threatened in any forum, relating to an alleged violation or breach by Seller (or its   officers, managers or directors) of any Law; and (xii) to Seller’s Knowledge, no employee or   agent of Seller has committed any act or omission giving rise to material Liability for any   violation or breach identified in subsection (xi) above.   (b) Except as set forth in Section 5.21(b) of the Disclosure Schedule, there are   no: (i) employment contracts, agreements or arrangements, including severance agreements, with   the Employees; and (ii) written policies, practices, rules, or procedures applicable to the   Employees.   Seller confirms that true and complete copies of all documents set forth in Section   5.21(b) of the Disclosure Schedule have been provided to Purchaser prior to the date of this   Agreement.   (c) With respect to the transactions contemplated by this Agreement, any   notice required under any Law or collective bargaining agreement has been given, and all   bargaining obligations with any trade union or association of Employees representative(s) have   been satisfied.  Seller has not implemented any plant closing or the layoff of Employees within    





 







- 26 -   the past three (3) years, and no such action will be implemented without advance notification to   Purchaser. Seller has complied with the WARN Act, and it has no plans to undertake any action   that would trigger the WARN Act.   (d) Seller has complied with all Employment Laws.  Seller has paid, in full,   all amounts owed and payable to its Employees or on behalf of the Employees under applicable   Employment Laws, and there are no circumstances that would permit a penalty or reassessment   under Employment Laws.  No notice has been received by Seller of any investigation or inquiry   by any Governmental Authority of any complaint filed by any Employees instituting a   proceeding or claiming that Seller has violated any applicable employment and labor standards’   legislation, human rights legislation, or relating to unfair labor practices, employment   discrimination, harassment, retaliation, equal pay, wages and hours or any other employment   related matter arising under applicable Employment Law or applicable pay equity legislation or   of any complaints or proceedings of any kind involving Seller or any Employees.  Seller has   provided Purchaser with all inspection reports issued to Seller under applicable occupational   health and safety legislation.  There are no outstanding inspection orders nor any pending or   threatened charges made under any applicable workers’ compensation legislation or occupational   health and safety legislation or any equivalent legislation or government policy relating to Seller.   There have been no fatal or critical injuries or critical accidents within the last three (3) years   which have or may lead to charges against Seller under any applicable occupational health and   safety legislation or any equivalent legislation or government policy.  There are no threatened or   outstanding orders or charges against Seller under any applicable workers’ compensation   legislation or occupational health and safety legislation or any equivalent legislation or   government policy. All levies, assessments and penalties made against Seller pursuant to any   applicable occupational health and safety legislation and workers’ compensation legislation have   been paid by Seller, and Seller has not been reassessed under any such legislation in the past five   (5) years.  Seller has fulfilled its obligations pursuant to all applicable pay equity legislation or   any other equivalent or similar legislation. All individuals characterized and treated by Seller as   consultants or independent contractors of the Business are properly treated as independent   contractors under all applicable Laws. All employees of the Business classified as exempt under   the Fair Labor Standards Act and state and local wage and hour laws are properly classified.   (e) There are no complaints, appeals, claims or charges pending or   outstanding or, to Seller’s Knowledge, anticipated, nor are there any order, decisions, penalties,   reassessments directions or convictions currently registered or outstanding by any tribunal or   agency against, or in respect of, Seller as the employer of the Employees under or in respect of   any Employment Laws.   (f) All accruals for wages, vacation pay, vacation time, statutory deductions   and withholdings, health premiums, and pension plan premiums, have been reflected in the   books and records of Seller and reflected in the Financial Statements.   (g) Section 5.21(g) of the Disclosure Schedule contains a complete and   accurate list of Seller’s former employees whose employment was terminated with Seller during   the twelve (12) month period prior to the date of this Agreement, together with a summary of the   terms of notice and severance with respect to each of them.    





 







- 27 -   (h) Section 5.21(h) of the Disclosure Schedule sets forth an accurate and   complete list as of the Closing Date of each Employee Benefit Plan.   (i) With respect to each Employee Benefit Plan, Seller has made available to   Purchaser accurate, current and complete copies of each of the following: (i) where the   Employee Benefit Plan has been reduced to writing, the plan document together with all   amendments; (ii) where the Employee Benefit Plan has not been reduced to writing, a written   summary of all material plan terms; (iii) where applicable, copies of any trust agreements or   other funding arrangements, custodial agreements, insurance policies and contracts,   administration agreements and similar agreements, and investment management or investment   advisory agreements, now in effect or required in the future as a result of the transactions   contemplated by this Agreement or otherwise; (iv) copies of any summary plan descriptions,   summaries of material modifications, employee handbooks and any other written   communications (or a description of any oral communications) relating to any Employee Benefit   Plan; (v) in the case of any Employee Benefit Plan that is intended to be qualified under Section   401(a) of the Code, a copy of the most recent determination, opinion or advisory letter from the   Internal Revenue Service; (vi) in the case of any Employee Benefit Plan for which a Form 5500   is required to be filed, a copy of the two most recently filed Form 5500, with schedules and   financial statements attached; (vii) actuarial valuations and reports related to any Employee   Benefit Plans with respect to the most recently completed plan years; (viii) the most recent   nondiscrimination tests performed under the Code; and (ix) copies of material notices, letters or   other correspondence from the Internal Revenue Service, Department of Labor, Pension Benefit   Guaranty Corporation or other Governmental Authority relating to the Employee Benefit Plan.   (j) Each Employee Benefit Plan has been maintained in compliance with all   applicable Law (including ERISA, the Code and any applicable local Laws).   (k) All contributions or premiums required to be paid, deducted or remitted   and all obligations required to be performed by Seller under the terms of any Employee Benefit   Plan or by Law have been paid, deducted, remitted or performed in a timely fashion and there is   no outstanding default or violation thereunder. All contributions to Employee Benefit Plans   required to be made by way of authorized payroll deduction have been properly withheld by   Seller and fully paid thereunder.   (l) No proceeding is pending or, to Seller’s Knowledge, threatened with   respect to Employee Benefit Plans, other than routine claims for benefits and no circumstance or   event has occurred that could result in such proceeding.   (m) No promise or commitment has been made by Seller to amend any   Employee Benefit Plan, to provide increased benefits thereunder or to establish any new plan.   (n) There are no post-termination or retiree welfare benefits for Seller’s   current or former employees.   (o) No Employee Benefit Plan requires or permits retroactive increases or   assessments in premiums or payments.    





 







- 28 -   (p) Seller’s liabilities under any unfunded Employee Benefit Plan have been   properly accrued and reflected in the Financial Statements.   (q) Seller did not contribute and was not required to contribute to any multi-   employer pension or benefit plan or to a “multiple employer plan” within the meaning of Section   413(c) of the Code or a “multiple employer welfare arrangement” (as defined in Section 3(40) of   ERISA). No Employee Benefit Plan is a multi-employer pension or benefit plan or is a “multiple   employer plan” within the meaning of Section 413(c) of the Code or a “multiple employer   welfare arrangement” (as defined in Section 3(40) of ERISA).   (r) Each Employee Benefit Plan that is intended to be qualified under Section   401(a) of the Code (a “Qualified Benefit Plan”) is so qualified and has received a favorable and   current determination letter from the Internal Revenue Service, or with respect to a prototype   plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan   sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the   trust related thereto are exempt from federal income taxes under Sections 401(a) and 501(a),   respectively, of the Code, and nothing has occurred that could reasonably be expected to   adversely affect the qualified status of any Qualified Benefit Plan. Nothing has occurred with   respect to any Employee Benefit Plan that has subjected or could reasonably be expected to   subject Seller or any of its ERISA Affiliates or, with respect to any period on or after the Closing   Date, Purchaser or any of its Affiliates, to a penalty under Section 502 of ERISA or to tax or   penalty under Section 4975 of the Code.   (s) Neither Seller nor any of its ERISA Affiliates has (i) incurred or   reasonably expects to incur, either directly or indirectly, any material Liability under Title I or   Title IV of ERISA or related provisions of the Code or applicable local Law relating to employee   benefit plans; (ii) failed to timely pay premiums to the Pension Benefit Guaranty Corporation;   (iii) withdrawn from any Employee Benefit Plan; or (iv) engaged in any transaction which would   give rise to liability under Section 4069 or Section 4212(c) of ERISA.   (t) Each Employee Benefit Plan that is subject to Section 409A of the Code   has been administered in compliance with its terms and the operational and documentary   requirements of Section 409A of the Code and all applicable regulatory guidance (including,   notices, rulings and proposed and final regulations) thereunder. Seller does not have any   obligation to gross up, indemnify or otherwise reimburse any individual for any excise taxes,   interest or penalties incurred pursuant to Section 409A of the Code.   (u) Neither the execution of this Agreement nor any of the transactions   contemplated by this Agreement will (either alone or upon the occurrence of any additional or   subsequent events): (i) entitle any current or former director, officer, employee, independent   contractor or consultant of the Business to severance pay or any other payment; (ii) accelerate   the time of payment, funding or vesting, or increase the amount of compensation due to any such   individual; (iii) increase the amount payable under or result in any other material obligation   pursuant to any Employee Benefit Plan; (iv) result in “excess parachute payments” within the   meaning of Section 280G(b) of the Code; or (v) require a “gross-up” or other payment to any   “disqualified individual” within the meaning of Section 280G(c) of the Code.   5.22 Real Property.    





 







- 29 -   (a) Seller does not own any Owned Real Property.   (b) Section 5.22(b) of the Disclosure Schedule sets forth the municipal   addresses and owner of all Leased Real Property and an accurate and complete list of all Leases   relating thereto.  With respect to such Leased Real Property, Seller has not sub-leased or   otherwise granted to any Person the right to use or occupy such Leased Real Property and there   are no outstanding options, rights of first offer or rights of first refusal to purchase or lease such   Leased Real Property or any portion thereof or interest therein.  All buildings, structures, fixtures   and appurtenances comprising part of such Leased Real Property are in sufficient condition to   operate the Business as conducted as of the date hereof.   With respect to each Lease:   (i) such Lease is the valid and binding obligation of Seller,   enforceable in accordance with its terms;   (ii) neither Seller nor, to Seller’s Knowledge, any other party to such   Lease is in material default under such Lease and no event has occurred which, with the passage   of time or the giving of notice or both would result in a material default, breach or event of   noncompliance by Seller under any such Lease;   (iii) Seller has delivered or made available to Purchaser a correct and   complete copy of each such Lease, and in the case of any oral Lease, a written summary of the   terms of such Lease;   (iv) Seller’s possession and quiet enjoyment of the Leased Real   Property under such Lease is not currently being disturbed, and there are no disputes with respect   to such Lease;   (v) no security deposit or portion thereof deposited with respect to   such Lease has been applied in respect of a breach or default under such Lease which has not   been redeposited in full;   (vi) the other party to such Lease is not an Affiliate of, and otherwise   does not have any economic interest in, Seller;   (vii) Seller has not subleased, licensed or otherwise granted any Person   the right to use or occupy such Leased Real Property or any portion thereof; and   (viii) Seller has not collaterally assigned or granted any other security   interest in such Lease or any interest therein.   (c) The Leased Real Property is in compliance in all material respects with all   applicable building, zoning, subdivision, health and safety and other land use Laws, and all   insurance requirements affecting the Leased Real Property, and the current use or occupancy of   the Leased Real Property or operation of the Business thereon does not violate any applicable   Law.    





 







- 30 -   5.23 Certain Payments. Except as set forth in Section 5.23 of the Disclosure   Schedule, neither Seller, nor any director, officer, manager, partner, agent, or Employee of Seller   or any other Person associated with or acting for or on behalf of Seller has, directly or indirectly,   with respect to the Business (a) made any payment not in the Ordinary Course (including any   bribes, payoffs, kickbacks, unlawful contributions, gifts, entertainment or other unlawful   expenses related to political activity), whether in money, property, or services (i) to any “foreign   official” (as such term is defined in the Foreign Corrupt Practice Act, 15 U.S.C. 78dd-1 et seq.),   (ii) to obtain favorable treatment in securing business, (iii) to pay for favorable treatment for   business secured, or (iv) to obtain special concessions or for special concessions already   obtained, or (b) established or maintained any material fund or asset that has not been recorded   in the books and records of Seller. None of Seller or any representative of Seller has directly or   indirectly been interrogated, questioned, held or formally accused in connection with a criminal   inquiry or public inquiry in connection with the Business.   5.24 Accounts Payable.   (a) All of Seller’s accounts payable and accrued Liabilities, in each case   reflected in Financial Statements or incurred since the date of the Interim Financial Statements,   have arisen from bona fide transactions in the Ordinary Course and have been reduced by   sufficient reserves, in accordance with ASPE, for bad debts, returns, allowances and customer   promotional allowances reflected on the Financial Statements.   (b) Seller has paid its accounts payable in the Ordinary Course, has not   delayed payments on any such accounts payable and has not altered the payment terms   thereunder.   5.25 Trade Programs. Section 5.25 of the Disclosure Schedule contains a   description of all existing programs, practices or arrangements that relate to trade discounts,   trade promotions, marketing, promotional sales, demo and sampling commitments, slotting   arrangements, or coupons related to any product currently sold or leased by Seller or that   otherwise affect the collectability or value of any existing or future accounts receivable of the   Business, and specifies any such programs, practices or arrangements of Seller for either the   2014 or the 2015 fiscal year.   5.26 Material Information; Full Disclosure.  Seller has furnished to Purchaser   complete and accurate copies or originals of all documents and/or information requested by   Purchaser.  No disclosure (including the Schedules hereto) or statement of fact by Seller   contained in this Agreement and no disclosure or statement of fact furnished or to be furnished   by Seller to Purchaser pursuant to this Agreement or pursuant to Purchaser’s due diligence   contains or will contain any untrue statement of a material fact or omits or will omit to state any   material fact necessary in order to make the statements herein or therein contained not   misleading.  The Schedules to this Agreement are complete and accurate with respect to the   information the Schedules purport to provide.    





 







- 31 -   ARTICLE VI   REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS OF SELLER   Each Shareholder of Seller, severally, represents and warrants to Purchaser (which   representations and warranties shall survive the Closing as provided in Section 11.5) that the   statements contained in this Article VI are true and correct as of the date of this Agreement and   will be true and correct as of the Closing Date (as though then made and as though the Closing   Date were substituted for the date of this Agreement, except to the extent any representation or   warranty speaks as of an earlier date).   6.1 Authority. Such Shareholder of Seller (a) has the respective right and   capacity to enter into, and perform its respective obligations under, this Agreement and each   other agreement delivered in connection herewith to which it is a party and (b) has taken all   respective requisite action to authorize (i) the execution, delivery and performance of this   Agreement and each such other agreement delivered in connection herewith to which it is a party   and (ii) the consummation of the purchase of the Purchased Assets and other transactions   contemplated by this Agreement and each such other agreement delivered in connection herewith   to which it is a party.  This Agreement has been duly executed and delivered by such   Shareholder of Seller and is binding upon, and legally enforceable against, such Shareholder of   Seller in accordance with its terms, except as such enforcement may be limited by bankruptcy,   insolvency, reorganization, moratorium or other similar Laws affecting enforcement of creditors’   rights generally.   6.2 No Violations and Consents.  Neither the execution, delivery or   performance of this Agreement by such Shareholder of Seller or any other agreement delivered   in connection herewith by such Shareholder of Seller does or will, after the giving of notice, or   the lapse of time, or otherwise, conflict with, result in a breach of, or constitute a default under   any Law or Order, or any Contract to which a Shareholder of Seller is a party or by which it is   subject or bound.  No consent, authorization or approval of, filing or registration with or giving   of notice to, any Governmental Authority or any other Person is necessary in connection with the   execution, delivery and performance by such Shareholder of Seller of this Agreement.   6.3 Litigation.  There are no Actions pending or, to the knowledge of such   Shareholder of Seller, threatened against it with respect to this Agreement.   6.4 Brokers.  Such Shareholder of Seller has no Liability to pay any fees or   commissions to any broker, finder or agent with respect to the transactions contemplated by this   Agreement.   ARTICLE VII   REPRESENTATIONS AND WARRANTIES OF PURCHASER   Purchaser represents and warrants to Seller (which representations and warranties shall   survive the Closing as provided in Section 11.5) that the statements contained in this Article VII   are true and correct as of the date of this Agreement and will be true and correct as of the Closing    





 







- 32 -   Date (as though then made and as though the Closing Date were substituted for the date of this   Agreement, except to the extent any representation or warranty speaks as of an earlier date).   7.1 Due Incorporation.  Purchaser is a corporation duly formed, validly   existing and in good standing under the Laws of Illinois.   7.2 Authority.  Purchaser (a) has the respective right and power to enter into,   and perform its obligations under, this Agreement and each other agreement delivered in   connection herewith to which it is a party and (b) has taken all requisite action to authorize (i) the   execution, delivery and performance of this Agreement and each such other agreement delivered   in connection herewith to which it is a party and (ii) the consummation of the purchase of the   Purchased Assets and other transactions contemplated by this Agreement and each such other   agreement delivered in connection herewith to which it is a party.  This Agreement has been duly   executed and delivered by Purchaser and is binding upon, and legally enforceable against   Purchaser in accordance with its terms, except as such enforcement may be limited by   bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting enforcement   of creditors’ rights generally.   7.3 No Violations and Consents.  Neither the execution, delivery or   performance of this Agreement by Purchaser or any other agreement delivered in connection   herewith by Purchaser, nor the consummation of the purchase of the Purchased Assets or any   other transaction contemplated by this Agreement or any other agreement delivered in   connection herewith by Purchaser, does or will, after the giving of notice, or the lapse of time, or   otherwise, conflict with, result in a breach of, or constitute a default under, Purchaser’s articles   of incorporation or bylaws, or any Law or Order, or any Contract to which Purchaser is a party or   by which Purchaser is subject or bound.  No consent, authorization or approval of, filing or   registration with or giving of notice to, any Governmental Authority or any other Person is   necessary in connection with the execution, delivery and performance by Purchaser of this   Agreement or of any other agreement delivered in connection herewith by Purchaser or in   connection with the consummation of the transactions contemplated hereby or by any other   agreement delivered in connection herewith by Purchaser.   7.4 Litigation.  There are no Actions pending or, to the knowledge of   Purchaser, threatened against Purchaser with respect to this Agreement, or in connection with the   transactions contemplated hereby.   7.5 Brokers.  Purchaser has no Liability to pay any fees or commissions to any   broker, finder or agent with respect to the transactions contemplated by this Agreement.   7.6 Bankruptcy.  Immediately after giving effect to the transactions   contemplated hereby, Purchaser will be solvent and will: (a) be able to pay its debts as they   become due; (b) own property that has a fair saleable value greater than the amounts required to   pay its debts (including a reasonable estimate of the amount of all contingent liabilities); and (c)   have adequate capital to carry on its business.  No transfer of property is being made and no   obligation is being incurred in connection with the transactions contemplated hereby with the   intent to hinder, delay, or defraud either present or future creditors of Purchaser.  In connection    





 







- 33 -   with the transactions contemplated hereby, Purchaser has not incurred, nor plans to incur, debts   beyond its ability to pay as they become absolute and matured.  Purchaser has not made an   assignment in favor of its creditors or a proposal in bankruptcy to its creditors or any class   thereof, and no petition for a receiving order has been presented in respect of it.  Purchaser has   not initiated proceedings with respect to a compromise or arrangement with its creditors or for its   winding up, liquidation or dissolution.  No receiver or interim receiver has been appointed in   respect of it or any of its undertakings, property or assets and no execution or distress has been   levied on any of its undertakings, property or assets, nor have any proceedings been commenced   in connection with any of the foregoing.   ARTICLE VIII   CONDITIONS TO CLOSING APPLICABLE TO PURCHASER   The obligations of Purchaser hereunder (including the obligation of Purchaser to close the   transactions herein contemplated) are subject to the following conditions precedent:   8.1 No Termination.  Neither Purchaser nor Seller shall have terminated this   Agreement pursuant to Section 10.1.   8.2 Accuracy of Representations and Warranties.  The representations and   warranties of Seller and the Principals set forth in Article V and of the Shareholders of Seller set   forth in Article VI shall have been accurate and complete in all material respects (except with   respect to any representation or warranty qualified by the word “material” or words of similar   import, in which case such representations and warranties must have been accurate and   complete) as of the date of this Agreement, and must be accurate and complete in all material   respects (except with respect to any representation or warranty qualified by the word “material”   or words of similar import, in which case such representations and warranties must have been   accurate and complete) as of the Closing Date, as if made on and as of the Closing Date (except   to the extent such representations and warranties speak as of an earlier date, in which case such   representations and warranties shall be true and correct in all material respects as of such earlier   date).   8.3 Compliance with Obligations.  Seller and each of the Shareholders of   Seller must have performed and complied with all of its covenants and obligations required by   this Agreement to be performed or complied with at or prior to the Closing in all material   respects.   8.4 No Material Adverse Change.  Since the date of this Agreement, there   shall have been no event or series of events, individually or in the aggregate, that has resulted in   or could reasonably be expected to result in a Material Adverse Change.   8.5 Pending Actions; Statutes.  No Action shall be pending on the Closing   Date which challenges, or might result in a challenge to, this Agreement or any transactions   contemplated hereby, or which claims, or might give rise to a claim for, damages against   Purchaser in a material amount as a result of the consummation of this Agreement.  No Law shall   have been enacted, promulgated or otherwise issued by any Government Authority with   authority to enforce such Law, which would make consummation of the Closing illegal.    





 







- 34 -   8.6 Required Consents.  Purchaser shall have received evidence reasonably   satisfactory to it of the receipt of all consents required to be listed in Section 5.3(b) of the   Disclosure Schedule, other than those consents set forth in Section 5.3(b) of the Disclosure   Schedule under the heading “Immaterial Consents.”   8.7 Required Permits. Purchaser shall have obtained those Permits (other than   the Permits set forth on Section 4.5 of the Disclosure Schedule) necessary for Purchaser to   operate the Business in substantially the same manner as operated by Seller prior to the Closing.   8.8 Diligence.  Purchaser shall have completed its accounting, legal and   business diligence relating to the Business, and the results of such diligence shall be satisfactory   to Purchaser, acting reasonably.   8.9 Environmental Reports.  Purchaser shall have completed its environmental   diligence relating to the Business, and the results of such diligence shall be satisfactory to   Purchaser, acting reasonably.   8.10 Inventory and Rental Fleet.  Purchaser shall have conducted a count of   units comprising Rental Fleet, Stock Units and Used Units (in the case of Rental Fleet, the count   shall include units which are out on rental as evidenced by signed agreements provided by   Seller), and the results of such count shall confirm the physical presence of not less than 90% of   the Rental Fleet, Stock Units and Used Units carried on the books of Seller.   8.11 Termination of Related Party Transactions.  Each Contract (a) set forth in   Section 5.6 of the Disclosure Schedule in response to Section 5.6, and (b) any and all Contracts   that were not, but by their terms should have been, set forth in Section 5.6 of the Disclosure   Schedule shall have been terminated as of the Closing Date, and the parties thereto shall have   acknowledged full payment of all amounts owed pursuant thereto and the termination of all   obligations of the Business thereunder; provided, that the provisions of this Section 8.11 shall not   apply to those Contracts set forth in Section 8.11 of the Disclosure Schedule.   8.12 Employee Benefit Plans. Purchaser shall have arranged for employee   benefit plan coverage for the Employees and the New Employees that have accepted offers of   employment from Purchaser, and Purchaser shall have offered enrollment therein to the   Employees and New Employees.   8.13 Joint Issues and Reverse Earn Out Payment Agreement. Exhibit C to the   Joint Issues and Reverse Earn Out Payment Agreement shall have been agreed upon by the   parties thereto, and the Joint Issues and Reverse Earn Out Payment Agreement shall have been   executed and delivered by all such parties.   8.14 Canadian Purchase Agreement. The closing of the transactions   contemplated by the Canadian Purchase Agreement shall occur simultaneously with the Closing   hereunder.    





 







- 35 -   8.15 All Necessary Documents.  All proceedings to be taken in connection with   the consummation of the transactions contemplated by this Agreement and the Purchase   Agreements and all documents incident thereto, shall be reasonably satisfactory in form and   substance to Purchaser and Purchaser shall have received copies of such documents as Purchaser   may reasonably request in connection therewith, including those documents to be delivered   pursuant to Section 3.2.   Purchaser shall have the right to waive any of the foregoing conditions precedent.   ARTICLE IX   CONDITIONS TO CLOSING APPLICABLE TO SELLER   The obligations of Seller hereunder (including the obligation to close the transactions   herein contemplated) are subject to the following conditions precedent:   9.1 No Termination.  Neither Purchaser nor Seller shall have terminated this   Agreement pursuant to Section 10.1.   9.2 Accuracy of Representations and Warranties.  The representations and   warranties of Purchaser set forth in Article VII shall have been accurate and complete in all   material respects (except with respect to any representation or warranty qualified by the word   “material” or words of similar import, in which case such representations and warranties must   have been accurate and complete) as of the date of this Agreement, and must be accurate and   complete in all material respects (except with respect to any representation or warranty qualified   by the word “material” or words of similar import, in which case such representations and   warranties must have been accurate and complete) as of the Closing Date, as if made on and as   of the Closing Date (except to the extent such representations and warranties speak as of an   earlier date, in which case such representations and warranties shall be true and correct in all   material respects as of such earlier date).   9.3 Compliance with Obligations.  Purchaser must have performed and   complied with all of its covenants and obligations required by this Agreement to be performed or   complied with at or prior to the Closing in all material respects, other than its obligations under   Section 1.3. Purchaser must have performed and complied with all of its covenants and   obligations under Section 1.3 on Closing.   9.4 Pending Actions; Statutes.  No Action shall be pending on the Closing   Date which challenges, or might result in a challenge to, this Agreement or any transaction   contemplated hereby, or which claims, or might give rise to a claim for, damages against Seller   in a material amount as a result of the consummation of the transactions contemplated hereby.   No Law shall have been enacted, promulgated or otherwise issued by any Government Authority   with authority to enforce such Law, which would make consummation of the Closing illegal.   9.5 Joint Issues and Reverse Earn Out Payment Agreement. Exhibit C to the   Joint Issues and Reverse Earn Out Payment Agreement shall have been agreed upon by the   parties thereto, and the Joint Issues and Reverse Earn Out Payment Agreement shall have been   executed and delivered by all such parties.    





 







- 36 -   9.6 Canadian Purchase Agreement. The closing of the transactions   contemplated by the Canadian Purchase Agreement shall occur simultaneously with the Closing   hereunder.   9.7 All Necessary Documents.  All proceedings to be taken in connection with   the consummation of the transactions contemplated by this Agreement, and all documents   incident thereto, shall be reasonably satisfactory in form and substance to Seller, and Seller shall   have received copies of such documents as they may reasonably request in connection therewith,   including those documents to be delivered pursuant to Section 3.3.   Seller shall have the right to waive any of the foregoing conditions precedent.   ARTICLE X   TERMINATION   10.1 Termination.  This Agreement may be terminated at any time prior to the   Closing only as follows:   (a) Purchaser and Seller may terminate this Agreement by mutual written   consent;   (b) Either Seller or Purchaser may terminate this Agreement upon delivery of   written notice if the Closing has not occurred by the Expiration Date; provided, that the party   electing to terminate shall not have caused such failure to close.   (c) Purchaser may terminate this Agreement by giving written notice to Seller   in the event that any Seller or Shareholder of Seller has breached any representation, warranty, or   covenant contained in this Agreement such that the condition set forth in Section 8.2 or 8.3 shall   not have been satisfied; provided, that, with respect to Seller’s or a Shareholder of Seller’s   failure to satisfy the condition set forth in Section 8.3, Purchaser may only terminate this   Agreement prior to the Expiration Date if the performance or satisfaction by Seller of any   covenant or obligation contemplated therein prior to the Expiration Date would be impossible.   (d) Seller may terminate this Agreement by giving written notice to Purchaser   in the event that Purchaser has breached any representation, warranty, or covenant contained in   this Agreement such that the condition set forth in Section 9.2 or 9.3 shall not have been   satisfied; provided, that, with respect to Purchaser’s failure to satisfy the condition set forth in   Section 9.3, Seller may only terminate this Agreement prior to the Expiration Date if the   performance or satisfaction by Purchaser of any covenant or obligation contemplated therein   prior to the Expiration Date would be impossible.   10.2 Effect of Termination.  If this Agreement is terminated by Purchaser or   Seller pursuant to this Article X, all further rights and obligations of Purchaser on the one hand,   and Seller and the Shareholders of Seller, on the other hand, under this Agreement will terminate   without any Liability of either party to the other party (except for any Liability of a party then in    





 







- 37 -   breach, in which case the rights of any non-breaching party to pursue all legal remedies for   Losses such party suffers in connection with such breach will survive such termination   unimpaired); provided, however, that the rights and obligations of the parties under Section 14.1   (Confidentiality), Section 15.11 (Press Releases and Public Announcements), this Section 10.2   (Effect of Termination), Article XV (Miscellaneous) and any other provisions regarding the   interpretation or enforcement of this Agreement will survive any such termination.   ARTICLE XI   INDEMNIFICATION   11.1 Indemnification by Seller and the Principals.  Subject to the provisions of   this Article XI and Section 4.2 of the Joint Issues and Reverse Earn Out Payment Agreement,   Seller and each Principal, jointly and severally, covenant and agree after the Closing to   indemnify, defend and hold harmless Purchaser and its Affiliates, and each of their respective   managers, members, officers, directors, partners, employees and agents (collectively, the   “Purchaser Indemnitees”), from and against any and all Losses incurred or suffered by Purchaser   Indemnitees arising or resulting from, directly or indirectly, any of the following:   (a) any inaccuracy in or breach of, or, with respect to a third-party claim, any   alleged breach or inaccuracy of, any representation or warranty of Seller set forth in this   Agreement (or the Disclosure Schedule) or in any document or certificate delivered by Seller   pursuant to Section 3.2 hereof;   (b) any breach of any covenant or agreement of Seller or any Principal set   forth herein;   (c) any claim against Purchaser or its Affiliates instituted prior to or after the   Closing Date which is based on an act or omission of Seller or any Principal prior to the Closing   Date, except for claims or matters in respect of the Assumed Liabilities;   (d) any Indebtedness of Seller existing on or before the Closing Date to the   extent such Indebtedness: (i) is not paid off in accordance with Section 1.3(a) of this Agreement;   (ii) does not constitute part of the Assumed Liabilities; or (iii) is not factored into the net   working capital adjustment provided for in Article 5 of the Joint Issues and Reverse Earn Out   Agreement;   (e) any Retained Liabilities;   (f) any Retained Assets;   (g) any bulk sales laws; or   (h) any claim against Purchaser in connection with, relating to or deriving   from the Payoff Amounts, other than claims related to Purchaser’s failure to make payments with   respect to the Payoff Amounts as required hereunder.   11.2 Indemnification by the Shareholders of Seller. Subject to the provisions of   this Article XI and Section 4.2 of the Joint Issues and Reverse Earn Out Payment Agreement,    





 







- 38 -   each Shareholder of Seller, on a several basis, covenants and agrees after the Closing to   indemnify, defend and hold harmless the Purchaser Indemnitees from and against any and all   Losses incurred or suffered by Purchaser Indemnitees arising or resulting from, directly or   indirectly, any of the following:   (a) any inaccuracy in or breach of, or, with respect to a third-party claim, any   alleged breach or inaccuracy of, any representation or warranty of such Shareholder of Seller set   forth in this Agreement (or the Disclosure Schedule) or in any document or certificate delivered   by the Shareholders of Seller pursuant to Section 3.2 hereof; or   (b) any breach of any covenant or agreement of such Shareholder of Seller   set forth herein.   11.3 Indemnification by Purchaser.  Subject to the provisions of this Article XI   and Section 4.2 of the Joint Issues and Reverse Earn Out Payment Agreement, Purchaser   covenants and agrees after the Closing to indemnify, defend and hold harmless Seller, the   Shareholders of Seller and each of their respective managers, shareholders, officers, directors,   stockholders, partners, employees and agents (collectively, the “Seller Indemnitees”) from and   against any and all Losses incurred or suffered by Seller Indemnitees arising or resulting from,   directly or indirectly, any of the following:   (a) any inaccuracy in or breach of, or, with respect to a third-party claim, any   alleged breach or inaccuracy of, any representation or warranty of Purchaser set forth in this   Agreement or in any document or certificate delivered by Purchaser pursuant to Section 3.3 of   this Agreement;   (b) any breach of any covenant or agreement of Purchaser set forth herein; or   (c) any Assumed Liability.   11.4 Claim Procedure/Notice of Claim.   (a) A party entitled or seeking to assert rights to indemnification under this   Article XI (an “Indemnified Party”) shall give prompt written notification (a “Claim Notice”) to   the party from whom indemnification is sought (an “Indemnifying Party”) which contains (i) a   description and the amount (the “Claimed Amount”), if then known, of any Losses incurred or   reasonably expected to be incurred by the Indemnified Party and (ii) a statement that the   Indemnified Party is entitled to indemnification under this Article XI for such Losses and a   reasonable explanation of the basis therefor. For purposes of the foregoing, the Claimed Amount   shall be a good faith estimate by the Indemnified Party of the Losses which the Indemnified   Party has incurred or reasonably expects will be incurred in connection with the relevant claim.   (b) Within thirty (30) days after delivery of a Claim Notice, the Indemnifying   Party shall deliver to the Indemnified Party a written response (the “Response”) in which the   Indemnifying Party shall either: (i) agree that the Indemnified Party is entitled to receive all of   the Claimed Amount or (ii) dispute that the Indemnified Party is entitled to receive any or all of   the Claimed Amount and the basis for such dispute (in such an event, the Response shall be    





 







- 39 -   referred to as an “Objection Notice”).  If no Response is delivered by the Indemnifying Party to   the Indemnified Party within such 30-day period, the Indemnifying Party shall be deemed to   have agreed that an amount equal to the entire Claimed Amount shall be payable to the   Indemnified Party and such Claimed Amount shall be promptly paid to Purchaser Indemnitees or   Seller Indemnitees, as applicable.   (c) In the event that the parties are unable to agree on whether Losses exist or   on the amount of such Losses within the 30-day period after delivery of an Objection Notice,   Purchaser or Seller may (but are not required to) petition or file an action in a court of competent   jurisdiction for resolution of such dispute.   (d) In the event that the Indemnified Party is entitled or is seeking to assert   rights to indemnification under this Article XI relating to a third-party claim, the Indemnified   Party shall give written notification to the Indemnifying Party of the commencement of any   Action relating to such third-party claim.  Such notification shall be given promptly after receipt   by the Indemnified Party of notice of such Action, shall be accompanied by reasonable   supporting documentation submitted by such third-party (to the extent then in the possession of   the Indemnified Party) and shall describe in reasonable detail (to the extent known by the   Indemnified Party) the facts constituting the basis for such Action and the amount of the claimed   Losses, if then known; provided, however, that no delay, deficiency or failure on the part of the   Indemnified Party in so notifying the Indemnifying Party shall relieve the Indemnifying Party of   any liability or obligation hereunder except to the extent the Indemnifying Party can demonstrate   in writing that the defense of such Action has been materially prejudiced by such delay,   deficiency or failure.  Within thirty (30) days after delivery of such notification, the   Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of   the defense of such Action with counsel reasonably satisfactory to the Indemnified Party;   provided, however, that (i) the Indemnifying Party may only assume control of such defense if it   acknowledges in writing to the Indemnified Party that any Losses that may be assessed against   the Indemnified Party in connection with such Action constitute Losses for which the   Indemnified Party shall be indemnified pursuant to this Article XI, and (ii) the Indemnifying   Party may not assume control of the defense of a suit or proceeding (A) involving criminal   liability, (B) in which any relief other than monetary damages is sought against the Indemnified   Party and the Indemnified Party reasonably determines that such non-monetary relief would   materially and adversely affect the Indemnified Party, or (C) in which increased statutory,   enhanced or treble damages are sought based on willful misconduct.  In addition,   notwithstanding anything to the contrary in the foregoing, in the event that an Indemnified Party   reasonably determines that the conduct of the defense of any Action or any proposed settlement   of any such Action by the Indemnifying Party might be expected to materially and adversely   affect the Indemnified Party’s Tax Liability or the ability of the Indemnified Party to conduct its   business (including relationships with customers, suppliers or other Persons with whom the   Indemnified Party conducts business), the Indemnified Party shall have the right at all times to   take over and assume control over the defense, settlement or negotiations relating to any such   Action at the sole cost of the Indemnified Party, subject to reimbursement as part of a Claimed   Amount.  If the Indemnifying Party does not so assume control of such defense, the Indemnified   Party shall control such defense at the Indemnified Party’s expense subject to reimbursement as a   part of a Claimed Amount.  The party not controlling such defense (the “Non-controlling Party”)   may participate therein at its own expense; provided, however, that if the Indemnifying Party    





 







- 40 -   assumes control of such defense and the Indemnified Party reasonably concludes that the   Indemnifying Party and the Indemnified Party have conflicting interests or different defenses   available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to   the Indemnified Party shall be considered “Losses” for purposes of this Agreement.  The party   controlling such defense (the “Controlling Party”) shall keep the Non-controlling Party   reasonably advised of the status of such Action and the defense thereof and shall consider in   good faith recommendations made by the Non-controlling Party with respect thereto.  The Non-   controlling Party shall furnish the Controlling Party with such information as it may have with   respect to such Action (including copies of any summons, complaint or other pleading which   may have been served on such party and any written claim, demand, invoice, billing or other   document evidencing or asserting the same) and shall otherwise cooperate with and assist the   Controlling Party in the defense of such Action.  The Indemnifying Party shall not agree to any   settlement of, or the entry of any judgment arising from, any such Action without the prior   written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned   or delayed.  The Indemnified Party shall not agree to any settlement of, or the entry of any   judgment arising from, any such Action without the prior written consent of the Indemnifying   Party, which shall not be unreasonably withheld, conditioned or delayed.   11.5 Survival of Representations, Warranties and Covenants; Determination of   Losses.   (a) Except as set forth in Sections 11.5(b), 11.5(c) and 11.5(d), the   representations and warranties of Seller, the Principals, the Shareholders of Seller and Purchaser   contained in this Agreement shall survive for a period ending on the Release Date, at which time   such representations and warranties shall terminate.   (b) The representations and warranties of Seller and the Principals contained   in Section 5.19 (Taxes) (the “Tax Representations”) shall survive until the expiration of the   applicable statute of limitations (including any applicable extensions) plus a period of thirty (30)   days, at which time such representations and warranties shall terminate.   (c) The representations and warranties of Seller and the Principals contained   in Section 5.18 (Environmental Matters), Section 5.21 (Employees and Employee Benefits) and   Section 5.6 (Related Party Transactions) shall survive until the fifth anniversary of the Closing   Date (collectively, the “Five-Year Representations”).   (d) The representations and warranties of (i) the Shareholders of Seller   contained in Section 6.1 (Authority) and Section 6.4 (Brokers), (ii) Purchaser contained in   Section 7.1 (Due Incorporation), Section 7.2 (Authority) and Section 7.5 (Brokers) and (iii)   Seller and the Principals contained in Section 5.1 (Organization), Section 5.2 (Authority;   Capacity), Section 5.4 (Brokers), Sections 5.7(a) and 5.7(b) (Title to Purchased Assets) and   Section 5.23 (Certain Payments), (collectively, the “Fundamental Representations”) shall survive   indefinitely.   (e) Notwithstanding anything to the contrary in this Agreement, if an   Indemnified Party delivers to an Indemnifying Party, before termination or expiration of a   representation or warranty, either a Claim Notice based upon a breach of such representation or    





 







- 41 -   warranty, or a notice that, as a result of any Action brought by a third party, the Indemnified   Party reasonably expects to incur Losses, then the applicable representation or warranty shall   survive until, but only for purposes of, the resolution of the matter covered by such notice.   (f) The representations and warranties of Seller and the Principals shall not be   deemed waived by reason of any investigation made by or on behalf of Purchaser.   (g) Each covenant of Purchaser, the Shareholders of Seller and Seller set forth   herein shall survive until such time as each such covenant has been fully performed and satisfied.   (h) The amount of any Losses incurred by Purchaser Indemnitees or Seller   Indemnitees, as applicable, will be reduced by the net amount Purchaser Indemnitees or Seller   Indemnitees, as applicable, actually recover from any insurer or other party liable for such   Losses.  Purchaser Indemnitees and Seller Indemnitees will take commercially reasonable steps   to notify, file a claim with and collect any amount from, any insurer or other party.   (i) Seller shall cooperate with Purchaser to recover under Seller’s insurance   policies for Losses suffered by Purchaser from events or damages occurring prior to the Closing   in connection with the Business and shall only provide access to such coverage for any such   Losses to the extent such coverage is available and permitted by the relevant policy; and Seller   shall take all actions reasonably requested by Purchaser to obtain such recovery.   (j) Any indemnity payments made pursuant to this Article XI shall be treated   for all Tax purposes by the parties hereto as an adjustment to the Purchase Price.   (k) If a Purchaser Indemnitee is entitled to indemnification for Losses arising   out of both a breach of a representation and warranty of Seller and a Liability of Seller that is not   an Assumed Liability and is a Retained Liability, such limitations shall not apply or restrict such   Purchaser Indemnitee’s right to indemnification with respect to any such Retained Liability.   Notwithstanding the foregoing, under no circumstances shall Purchaser be entitled to   indemnification for an amount in excess of the Losses actually incurred by Purchaser.   11.6 Exclusive Remedy.  Except with respect to (i) Losses based on fraud or   willful misconduct, and (ii) injunctive relief or other equitable relief to restrain a breach or   threatened breach of this Agreement or to specifically enforce this Agreement without proving   that any monetary damages have been sustained, the indemnification provisions in this Article XI   will be the exclusive remedy of Purchaser and Seller with respect to any and all monetary   damages.   11.7 Right of Set-Off and Withholding.  With respect to Losses arising under   Section 11.1 that have been determined by mutual agreement of the parties hereto, or by final   and binding decision of an arbitrator or court of competent jurisdiction, without any further right   of appeal, the Purchaser Indemnitees shall be entitled to set off the amount of any such Losses   against any amount payable to a Purchaser Indemnitee pursuant to the Joint Issues and Reverse   Earn Out Payment Agreement. Further, if at the time Purchaser is required to pay any amount in   accordance with Article 6 of the Joint Issues and Reverse Earn Out Payment Agreement, a   Purchaser Indemnitee has provided a Claim Notice, Purchaser Indemnitees shall be entitled to    





 







- 42 -   withhold a portion of such payment in an amount equal to the Claimed Amounts, until such time   as the validity and the amount of such claim(s) is determined in accordance with the terms of this   Agreement.   ARTICLE XII   EMPLOYEE MATTERS   12.1 Seller’s Obligations. With the exception of terminations and departures in   the Ordinary Course, Seller will use commercially reasonable efforts to employ all of its   Employees until the Closing, and all employees so continuing shall be employed on the same   terms and conditions as are in effect on the date of this Agreement.   12.2 Purchaser’s Obligations. Purchaser will make offers of employment,   effective at the Closing, to employ (a) all of the Employees and (b) all employees who join Seller   in compliance with this Agreement during the period beginning on the date hereof and ending on   the Closing Date (the “New Employees”), other than the employees listed in Section 12.2 of the   Disclosure Schedule.  Such offers shall provide:   (i) substantially comparable terms in the aggregate with respect to job   function, title and location as each such Employee or New Employee was performing,   held or had immediately prior to the Closing Date without material diminution of job   responsibility or authority; and   (ii) remuneration and benefits that are substantially comparable in the   aggregate to the remuneration and benefits each Employee or New Employee received   immediately prior to the Closing.   Seller covenants and agrees to fully cooperate with Purchaser in making such offers of   employment, securing acceptance of such offers of employment and taking other applicable   onboarding actions with respect to Purchaser’s employment of the Employees and the New   Employees as contemplated hereby, including, but not limited to, any actions necessary to   transition the Employees and the New Employees to the employment benefit plans to be offered   by Purchaser.   12.3 Seller’s Responsibilities. Seller will pay, be responsible for and will   discharge all Retained Employee Liabilities.   12.4 Purchaser’s Responsibilities. Purchaser will pay, be responsible for and   will discharge all Assumed Employee Liabilities which become payable at any time subsequent   to the close of business on the Closing Date.   ARTICLE XIII   GUARANTEE   13.1 Guarantee of Purchaser’s Obligations.  Guarantor hereby irrevocably and   unconditionally guarantees to Seller and the Shareholders of Seller the timely and complete   performance and payment of all obligations of Purchaser under this Agreement and any    





 







- 43 -   agreements, instruments, certificates or other documents executed by Purchaser pursuant to or in   connection with this Agreement.   13.2 Liability of Guarantor.The liability of Guarantor under the guarantee (the   “Guarantee”) contemplated by Section 13.1 is absolute and unconditional and the Guarantee   shall be binding upon Guarantor and its successors and permitted assigns, shall not be subject to   any counterclaim, setoff, deduction or defense-based upon any claim Guarantor may have   against Seller or the Shareholders of Seller, hereunder or otherwise, and shall remain in full force   and effect without regard to, and shall not be released, discharged or in any way affected by, any   circumstance or condition whatsoever (whether or not Guarantor shall have any knowledge or   notice thereof) which might otherwise constitute a legal or equitable discharge or defense of a   guarantor; provided that any claim hereunder against Guarantor shall be subject to, and   Guarantor shall have available to it in defense of any such claim, any and all of Purchaser’s   rights and defenses in respect of any such claim.   13.3 Expenses.  Guarantor shall pay all costs and expenses (including legal fees   and expenses) reasonably incurred by or on behalf of Seller and/or the Shareholders of Seller in   enforcing the obligations of Guarantor under the Guarantee.   ARTICLE XIV   CERTAIN OTHER AGREEMENTS   14.1 Confidentiality.  During the Restricted Period, Seller shall, and shall cause   its Affiliates and agents to, keep confidential and not, directly or indirectly, divulge to any   Person or use for their own benefit, any Company Confidential Information.  “Company   Confidential Information” shall mean confidential or proprietary information or confidential   documents relating to the Business or the Purchased Assets, including proprietary information   relating to products, confidential records, computer software programs, terms of Transferred   Contracts, Intellectual Property, pricing information, marketing information, sales techniques,   business organization, personnel, business activities, customers, and financial information or   prospects of the Business, in any form, including printed, written, oral, visual, electronic or   software.  In the event that any Seller is requested or required (by oral question or request for   information or documents in any legal proceeding, interrogatory, subpoena, civil investigative   demand, or similar process) to disclose any Company Confidential Information, Seller shall   notify Purchaser of the request or requirement so that Purchaser may seek an appropriate   protective order or waive compliance with the provisions of this Section 14.1.  If, in the absence   of a protective order or the receipt of a waiver hereunder at the time such disclosure is requested   or required to be made, Seller believes in good faith, after consulting with counsel, that it is   legally compelled to disclose any such Company Confidential Information or else stand liable for   contempt or suffer censure or other penalty, Seller may disclose such Company Confidential   Information; provided, however, that Seller shall use its commercially reasonable efforts to   obtain an Order or other assurance that confidential treatment will be accorded to such portion of   such Company Confidential Information required to be disclosed.  The prohibitions against   disclosure of Company Confidential Information recited herein are in addition to, and not in lieu   of, any rights or remedies that Purchaser may have available pursuant to the Laws of any   jurisdiction or at common Law to prevent the disclosure of trade secrets or proprietary   information, and the enforcement by Purchaser of its rights and remedies pursuant to this    





 







- 44 -   Agreement shall not be construed as a waiver of any other rights or available remedies that it   may possess in law or equity absent this Agreement.  The following information does not   constitute “Company Confidential Information”, information that (a) is generally available to the   public other than as a result of a disclosure by Seller; or (b) was received after the date of this   Agreement from another Person without any limitations on use or disclosure, but only the   recipient had no reason to believe that the other Person was prohibited from using or disclosing   the information by a contractual or fiduciary obligation.   14.2 Post Closing Access to Records/Cooperation.  Purchaser and Seller shall   provide each other with such assistance as may reasonably be requested by the other in   connection with the preparation of any return or report of Taxes, any audit or other examination   by any taxing authority, any judicial or administrative proceedings relating to Liabilities for   Taxes, or any other matter for which cooperation and assistance is reasonable requested.  Such   assistance shall include making employees available on a mutually convenient basis to provide   additional information or explanation of material provided hereunder and shall include providing   copies of relevant Tax Returns and supporting material.  The party requesting assistance   hereunder shall reimburse the assisting party for reasonable out-of-pocket expenses incurred in   providing assistance.  Purchaser and Seller shall retain for seven (7) years following the Closing   Date and provide the others with any records or information which may be relevant to such   preparation, audit, examination, proceeding or determination.  In addition, upon reasonable   advance notice from Seller, Purchaser will, during Purchaser’s regular business hours and in a   manner that does not unreasonably interfere with the operation of Purchaser’s business, afford   Seller and its representatives reasonable access to the data and records included in the Purchased   Assets.   14.3 Consents Not Obtained at Closing.   (a) Seller shall use all commercially reasonable efforts to obtain and deliver to   Purchaser at or prior to the Closing such consents as are required to allow the assignment by   Seller to Purchaser of Seller’s rights, title and interest in, to and under any Transferred Contract   and Permit included in the Purchased Assets.  To the extent any Transferred Contract or Permit   is not capable of being assigned without the consent or waiver of the other party thereto or any   third party (including any Governmental Authority), or if such assignment or attempted   assignment would constitute a breach thereof or a violation of any Law or Order, neither this   Agreement nor the Bill of Sale and Assignment Agreement shall constitute an assignment or an   attempted assignment of such Transferred Contract or Permit.   (b) If any such consents and waivers are not obtained with respect to any   Transferred Contract, the Bill of Sale and Assignment Agreement shall constitute an equitable   assignment by Seller to Purchaser of all of Seller’s rights, benefits, title and interest in and to   such Transferred Contract, to the extent permitted by Law, and Purchaser shall be deemed to be   Seller’s agent for the purpose of completing, fulfilling and discharging all of Seller’s rights and   Liabilities arising on and after the Closing Date under such Transferred Contract, and Seller shall   take all necessary steps and actions to provide Purchaser with the benefits of such Transferred   Contract.    





 







- 45 -   14.4 Further Assurances.  The parties shall execute such further documents, and   perform such further acts, as may be reasonably necessary to transfer and convey the Purchased   Assets and Assumed Liabilities to Purchaser, on the terms herein contained, and to otherwise   comply with the terms of this Agreement and consummate the transactions contemplated hereby.   14.5 Non-Competition.   (a) In consideration of the benefits received by Seller and each Shareholder of   Seller herein and in order to induce Purchaser to enter into this Agreement, Seller and each   Shareholder of Seller shall not, during the applicable periods set out in Sections 14.5(b) and   14.5(c), anywhere in Canada and the United States (the “Restricted Territory”), directly or   indirectly (whether as an owner, partner, member, manager, shareholder, agent, officer, director,   employee, independent contractor, consultant, or otherwise):   (i) except in connection with Purchaser or its Affiliates, own, operate,   manage, control, invest in, perform services as an employee, consultant or independent   contractor of, or engage or participate in any manner in, (alone or in association with any   Person) any Person that engages in or owns, invests in, operates, manages or controls any   venture or enterprise that engages or proposes to engage in any business that is   competitive with the Business or the business carried on by LogCAN Consulting Inc. or   Ontario’s Municipal Equipment Resources Guide Inc. in the Restricted Territory as of the   date hereof (“Restricted Business”); or   (ii) except on behalf of Purchaser or an Affiliate of Purchaser, solicit,   or participate as employee, agent, consultant, shareholder, member, manager, director,   partner or in any other individual or representative capacity, in any business which   solicits any Person who is, or within the twelve (12) month period immediately preceding   the Closing was, an employee, customer, supplier or partner of Seller or the Business, for   the purpose of securing employment, business or contracts related to the Restricted   Business.   (b) Seller and each Shareholder of Seller shall be bound by the restrictions set   out in Section 14.5(a) for a period beginning on the Closing Date and ending two (2) years   following the termination of such Principal’s employment with Purchaser (the “Restrictive   Period”).  Notwithstanding the foregoing, if a Shareholder of Seller’s, employment is terminated   by Purchaser without cause, the Restrictive Period for such person shall be automatically reduced   to the period beginning on the Closing Date and ending one (1) year following the termination of   such person’s employment with Purchaser.   (c) Notwithstanding Section 14.5(b), the Restrictive Period shall not: (i) end   prior to the third anniversary of the Closing Date; or (ii) continue beyond the fifth anniversary of   the Closing Date.   (d) Nothing contained in this Section 14.5 shall be construed to prevent Seller   or any Shareholder of Seller from engaging in any business activity approved in advance and in   writing by Purchaser, or from investing in the securities of any competing company that are   listed on a national or regional securities exchange or have been registered under Section 12(g)    





 







- 46 -   of the Exchange Act, but only if Seller or any Shareholder of Seller is not involved in the   management of the business of said company in any material respect and only if Seller and its   associates (as such term is defined in Regulation 14(A) promulgated under the Exchange Act, as   in effect on the date hereof) collectively, does not own more than an aggregate of two percent   (2%) of the equity securities of such company.   (e) In the event of a breach or a threatened breach by Seller or any   Shareholder of Seller of any of the provisions of this Section 14.5, Purchaser, in addition and   supplementary to other rights and remedies existing in its favor, shall be entitled to specific   performance and/or injunctive or other equitable relief from a court of competent jurisdiction in   order to enforce or prevent any violations of the provisions hereof (without posting a bond or   other security).  In the event of a breach or violation by Seller or any Shareholder of Seller of any   covenant set forth in this Section 14.5, the terms of such covenant will be extended by the period   of the duration of such breach or violation.   14.6 Tax Matters.   (a) Seller shall be liable for and shall pay all Taxes, whether assessed or   unassessed, applicable to the Business or the Purchased Assets, in each case attributable to all   periods prior to the Closing Date.  Purchaser shall be liable for and shall pay all Taxes, whether   assessed or unassessed, applicable to the operation of the Business or the Purchased Assets, in   each case attributable to periods beginning on or after the Closing Date.   (b) Seller or Purchaser, as the case may be, shall provide reimbursement for   any Tax paid by the other that is the responsibility of Seller or Purchaser, respectively, in   accordance with the terms of this Agreement.  Within a reasonable time prior to the payment of   any Tax by one party on behalf of any other party, the party paying the Tax shall give notice to   such other party of the Tax for which it is responsible, although failure to do so shall not relieve   the other party from its Liability under this Agreement.   (c) After the Closing, Seller and Purchaser shall (and shall cause their   respective Affiliates to):   (i) make available to the other parties hereto and to any taxing   authority, as reasonably requested, all information, records, and documents with respect to Taxes   relating to the Business or the Purchased Assets and preserve that information and those records   and documents until the expiration of seven (7) years following the Closing Date;   (ii) provide timely written notices to the other parties hereto of any   pending or threatened Tax proceedings relating to the Business or the Purchased Assets for   taxable periods for which any other party hereto may have a responsibility under this   Section 14.6 or otherwise; and   (iii) furnish the other parties hereto with copies of all correspondence   received from any taxing authority in connection with any Tax proceeding or information request   with respect to any taxable period for which any other party hereto may have a responsibility   under this Section 14.6 or otherwise.    





 







- 47 -   (d) Seller and Purchaser agree to use the alternate procedure set forth in   Internal Revenue Service Revenue Procedure 2004-53 with respect to wage reporting.   14.7 Risk of Loss.  Until the Closing, the Purchased Assets and Business will   be and remain at the sole risk of Seller.   14.8 Pre-Closing Loss.  If prior to the Closing Date any of the Purchased Assets   are destroyed or damaged by fire or any other casualty or shall be expropriated or seized by any   Governmental Authority, the Purchase Price of the Purchased Assets shall not be affected by   such destruction or damage and the compensation for such expropriation or seizure paid or   payable to Seller shall be deemed an asset of Seller without any adjustment to the Purchase   Price, and Purchaser shall accept such compensation, or the right to recover the same in   replacement for such assets so expropriated or seized.   ARTICLE XV   MISCELLANEOUS   15.1 Cost and Expenses.  Purchaser will pay its own costs and expenses   (including attorneys’ fees, accountants’ fees and other professional fees and expenses) in   connection with the negotiation, preparation, execution and delivery of this Agreement and the   consummation of the purchase of the Purchased Assets and the other transactions contemplated   by this Agreement (except as otherwise specifically provided for herein); and Seller will pay   their own respective costs and expenses (including attorneys’ fees, accountants’ fees and other   professional fees and expenses) in connection with the negotiation, preparation, execution and   delivery of this Agreement and the consummation of the sale of the Purchased Assets and the   other transactions contemplated by this Agreement (except as otherwise specifically provided for   herein).   15.2 Entire Agreement.  The Disclosure Schedule and the Exhibits referenced   in this Agreement are incorporated into this Agreement and together with the Joint Issues and   Reverse Earn Out Payment Agreement contain the entire agreement between the parties hereto   with respect to the transactions contemplated hereunder, and supersede all negotiations,   representations, warranties, commitments, offers, contracts and writings prior to the date hereof,   including the Letter of Intent other than section (h) of the Letter of Intent which shall survive.   No waiver and no modification or amendment of any provision of this Agreement shall be   effective unless specifically made in writing and duly signed by the party to be bound thereby.   15.3 Counterparts.  This Agreement may be executed in counterparts, each of   which shall be deemed an original, but all of which, together, shall constitute one and the same   instrument. A copy transmitted via facsimile or e-mail of this Agreement, bearing the signature   of any party shall be deemed to be of the same legal force and effect as an original of this   Agreement bearing such signature(s) as originally written of such one or more parties.   15.4 Assignment, Successors and Assigns.  The respective rights and   obligations of the parties hereto shall not be assignable without the prior written consent of the   other parties; provided, however, that Purchaser may assign all or part of its respective rights   under this Agreement and delegate all or part of its respective obligations under this Agreement    





 







- 48 -   without such written consent to (i) one or more of its Affiliates, in which event all the rights and   powers of Purchaser, as the case may be, and remedies available to it under this Agreement shall   extend to and be enforceable by each such Affiliate, or (ii) its lenders as security for any   obligations arising in connection with the financing of the transactions contemplated hereby or   for the Business and Purchased Assets acquired hereunder; provided that: (a) Purchaser provides   Seller and the Shareholders of Seller at least 10 days’ prior written notice of such an assignment;   and (b) Purchaser and Guarantor shall remain jointly and severally liable with the assignee for all   of the liabilities and obligations of Purchaser hereunder notwithstanding the assignment.  For the   sake of clarity, Guarantor shall not be permitted to assign its obligations under this Agreement.   This Agreement shall be binding upon and inure to the benefit of the parties hereto and their   successors and permitted assigns.   15.5 Interpretation.  The parties have participated jointly in the negotiation and   drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation   arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption   or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any   of the provisions of this Agreement.  Unless the context of this Agreement otherwise requires,   (a) words of any gender shall be deemed to include each other gender, (b) words using the   singular or plural number shall also include the plural or singular number, respectively, (c)   references to “hereof,” “herein,” “hereby” and similar terms shall refer to this entire Agreement,   (d) all references in this Agreement to Articles, Sections and Exhibits shall mean and refer to   Articles, Sections and Exhibits of this Agreement, (e) all references to statutes and related   regulations shall include all amendments of the same and any successor or replacement statutes   and regulations in effect as of the Closing Date, (f) references to any Person shall be deemed to   mean and include the successors and permitted assigns of such Person (or, in the case of a   Governmental Authority, Persons succeeding to the relevant functions of such Person), (g) the   word “including” means “including without limitation” and (h) references to a specific statute or   Act applicable in a state or territory in the United States includes a reference to any statute or Act   of any other state or territory relating to the same or similar subject matter to which Seller or the   Purchased Assets are subject. In this Agreement, any reference to a document being provided to   Purchaser shall include the uploading of such document to the Project Hunter Intralinks data   room prior to the date hereof.   15.6 Reserved.   15.7 Savings Clause.  If any provision hereof shall be held invalid or   unenforceable by any court of competent jurisdiction or as a result of future legislative action,   such holding or action shall be strictly construed and shall not affect the validity or effect of any   other provision hereof.   15.8 Headings.  The captions of the various Articles and Sections of this   Agreement have been inserted only for convenience of reference and shall not be deemed to   modify, explain, enlarge or restrict any of the provisions of this Agreement.    





 







- 49 -   15.9 Governing Law.  The validity, interpretation and effect of this Agreement   shall be governed exclusively by the Laws of the Province of Ontario and the federal laws of   Canada applicable therein, excluding the “conflict of laws” rules thereof.   15.10 Disclosure Generally.  All references to this Agreement herein or to the   Disclosure Schedule shall be deemed to refer to this entire Agreement, including the Disclosure   Schedule; provided, however, that information furnished in one Section of the Disclosure   Schedule shall be deemed to be included in another Section of the Disclosure Schedule to the   extent such disclosure is reasonably apparent on the face thereof to be relevant to such other   section, whether or not a specific cross-reference appears.  (By way of example, the failure to   disclose non-compliance with Environmental Laws in Section 5.11 of the Disclosure Schedule   (Litigation and Compliance with Laws), when such non-compliance is disclosed in Section 5.18   of the Disclosure Schedule (Environmental Matters), shall be deemed to be disclosed for   purposes of Section 5.11 and shall not give rise to any claim for breach.)   15.11 Press Releases and Public Announcements.    Seller and Purchaser will   consult and cooperate with each other concerning the timing and manner of the announcements   of the transactions contemplated by this Agreement to Seller’s employees, customers, suppliers,   and other business relations.  Upon Purchaser’s request, Seller will permit Purchaser to be   present at any such announcement.  Any public announcements with respect to this Agreement   or the transactions contemplated by this Agreement will be made, if at all, at such time and in   such manner as agreed to by Seller and Purchaser, provided, however that Purchaser may make   any announcement as it determines required by applicable securities Law or the applicable   exchange on which Guarantor’s securities are traded.   15.12 Currency.  All amounts expressed in this Agreement and all payments   required by this Agreement are in Canadian dollars.   15.13 Survival.  All representations and warranties made by any party in this   Agreement shall be deemed made for the purpose of inducing the other party to enter into this   Agreement and shall survive the Closing as provided in Section 11.5.   15.14 Notices.   (a) All notices, requests, demands and other communications under this   Agreement shall be in writing and delivered in person, or sent by facsimile or sent by reputable   overnight delivery service and properly addressed as follows:   To Guarantor or Purchaser:   Federal Signal Corporation   1415 W. 22nd Street, Suite 1100   Oak Brook, IL  60523   Fax:   (630) 954-2030   Attention:  President   With a copy not constituting notice to:    





 







- 50 -   Federal Signal Corporation   1415 W. 22nd Street, Suite 1100   Oak Brook, IL  60523   Fax:   (866) 229-3522   Attention:  General Counsel   Thompson Coburn LLP   One US Bank Plaza   St. Louis, MO 63116   Fax: (314) 552-7000   Attention: Michele C. Kloeppel   To Seller, the Principals and the Shareholders of Seller:   c/o Joe Johnson Equipment (USA) Inc.   2521 Bowman Street   Innisfil, Ontario   L9S 3V6   Telephone: (705) 733-7700   Fax: (705) 733-8800   Attention: Joe Johnson   With a copy not constituting notice to:   Jim Elder   Borden Ladner Gervais LLP   40 King Street West   Toronto, Ontario   M5H 3Y4   Telephone: (416) 367.6188   Fax: (416) 367-6749   Attention: Jim Elder   (b) Any party may from time to time change its address for the purpose of   notices to that party by a similar notice specifying a new address, but no such change shall be   deemed to have been given until it is actually received by the party sought to be charged with its   contents.   (c) All notices and other communications required or permitted under this   Agreement which are addressed as provided in this Section 15.14 if delivered personally or   courier, shall be effective upon delivery; if sent by facsimile, shall be delivered upon receipt of   proof of transmission.   15.15 Submission to Jurisdiction; Venue.  The parties hereto hereby irrevocably   submit to the nonexclusive jurisdiction of any court of the Province of Ontario or the State of    





 







- 51 -   New York over any dispute arising out of or relating to this agreement or any of the transactions   contemplated hereby and each party hereby irrevocably agrees that all claims in respect of such   dispute or any suit, action or proceeding related thereto may be heard and determined in such   courts.  The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law,   any objection which they may now or hereafter have to the laying of venue of any such dispute   brought in such court or any defense of inconvenient forum for the maintenance of such dispute.   Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other   jurisdictions by suit on the judgment or in any other manner provided by Law.  Each party agrees   to accept service of any summons, complaint or other initial pleading made in the manner   provided for the giving of notices in Section 15.14.  Nothing in this Section 15.15, however,   shall affect the right of any party to serve such summons, complaint or initial pleading in any   other manner permitted by Law.   15.16 No Third-Party Beneficiary.  This Agreement is being entered into solely   for the benefit of the parties hereto, Purchaser Indemnitees and Seller Indemnitees, and the   parties do not intend that any employee or any other Person shall be a third-party beneficiary of   the covenants by Seller, the Principals, the Shareholders of Seller or Purchaser contained in this   Agreement, except as contemplated by this Section 15.16.   [signature page follows]    





 







SIGNATURE PAGE TO THE ASSET PURCHASE AGREEMENT   IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase   Agreement as of the date first written above.   PURCHASER:   VACTOR MANUFACTURING INC.   By: /s/ Jennifer L. Sherman   Name: Jennifer L. Sherman   Title: Vice President   GUARANTOR:   FEDERAL SIGNAL CORPORATION   By: /s/ Jennifer L. Sherman   Name: Jennifer L. Sherman   Title: President and Chief Executive Officer   SELLER:   JOE JOHNSON EQUIPMENT (USA) INC.   By: /s/ Joe Johnson   Name: Joe Johnson   Title: President   SHAREHOLDERS OF SELLER:   /s/ Joe Johnson   JOE JOHNSON   /s/ Jeff Johnson   JEFF JOHNSON   /s/ Jamie Johnson   JAMIE JOHNSON   2019185 ONTARIO INC.   By: /s/ Joe Johnson   Name: Joe Johnson   Title: President    





 







- i -   ANNEX I   Whenever used in the Agreement, the following terms shall have the meanings set forth in this   Annex I, unless otherwise expressly provided:   “Accounts Receivable” – As defined in clause (i) of the definition of Purchased Assets.   “Action” means any action, administrative enforcement, appeal, petition, plea, charge,   complaint, claim, suit, demand, litigation, arbitration, mediation, hearing, or other proceeding   commenced, brought, or heard by or before any Governmental Authority.   “Affiliate” means as to any Person, any other Person which, directly or indirectly, is   controlled by, controls, or is under common control with, such Person.  As used in the preceding   sentence, “control” shall mean and include, but not necessarily be limited to, (i) the ownership of   ten percent (10%) or more of the voting securities or other voting interest of such Person, or   (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the   management and policies of such Person, whether through the ownership of voting securities, by   contract or otherwise.   “Allocation Dispute Notice” As defined in Section 1.6(a).   “Alternative Proposal” – As defined in Section 4.3(r).   “Applicable CRO Holdback Amount” — As defined in the Joint Issues and Reverse Earn   Out Payment Agreement.   “ASPE” means Accounting Standards for Private Enterprises.   “Assumed Employee Liabilities” means any and all of the following: (i) Liabilities   assumed by the Purchaser pursuant to accepted offers of employment made pursuant to Article   XII; and (ii) Liabilities of Seller with respect to the Employees and New Employees reflected on   the Final Closing Balance Sheet settled pursuant to Section 5.3 of the Joint Issues and Reverse   Earn Out Payment Agreement, but only to the extent of the monetary amount of such Liabilities   so reflected and included in the determination of the Net Working Capital.   “Assumed Liabilities” - As defined in Section 1.4(a).   “Auditor’s Allocation Determination” – As defined in Section 1.6(b).   “Bill of Sale and Assignment Agreement” - As defined in Section 3.2(a).   “Business” has the meaning set forth in the recitals.   “Business Day” means any day other than a Saturday or Sunday or other day on which   banks in Toronto, Ontario or Chicago, Illinois are authorized or required to be closed.    





 







- ii -   “Canadian Purchase Agreement” has the meaning set forth in the recitals.   “CERCLA” means the Comprehensive Environmental Response, Compensation, and   Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of   1986, 42 U.S.C. §§ 9601 et seq.   “Change” - As defined in the preamble to Article V.   “Claim” means any act, omission or state of facts and any demand, action, investigation,   inquiry, suit, proceeding, claim, assessment, judgment or settlement or compromise relating   thereto which may give rise to a right of indemnification under this Agreement.   “Claim Notice” - As defined in Section 11.4(a).   “Claimed Amount” - As defined in Section 11.4(a).   “Closing” - As defined in Section 3.1.   “Closing Date” means April 1, 2016 or as contemplated by Section 3.1.   “Closing Purchase Price” - As defined in Section 1.3(a).   “Code” means the Internal Revenue Code of 1986, as amended.   “Company Confidential Information” - As defined in Section 14.1.   “Contingent Customer Obligations” means any and all Liabilities arising from, in   connection with, or related to, any rebate, giveback, promotional, customer or volume discount   program or arrangement with respect to any product of the Business.   “Contract” means, with respect to any Person, any contract, agreement, deed, mortgage,   lease, license, purchase order, commitment, arrangement or undertaking, written or oral, or other   document or instrument to which or by which such Person is a party or otherwise subject or   bound or to which or by which any asset, property or right of such Person is subject or bound.   “Controlling Party” - As defined in Section 11.4(d).   “CRO Objection Notice” - As defined in Section 1.7(d).   “Current Assets” - As defined in the Joint Issues and Reverse Earn Out Payment   Agreement.   “Current Liabilities” - As defined in the Joint Issues and Reverse Earn Out Payment   Agreement.    





 







- iii -   “Customer Repurchase Notice” - As defined in Section 1.7(a).   “Customer Repurchase Obligation” means any and all Liabilities of Seller arising from,   in connection with, or related to, any customer repurchase, buy-back or similar obligation with   respect to any product of the Business, including, without limitation, those set forth on Section   5.14(c) of the Disclosure Schedule.   “Customer Repurchase Recovery Amount” means with respect to any Repurchased Unit:   (a) the aggregate proceeds actually received by Purchaser with respect to the resale of such   Repurchased Unit; less (b) all Refurbishing Costs for such Repurchased Unit.   “Disclosure Schedule” means the schedules delivered by Seller to Purchaser concurrently   herewith and identified by the parties as the Disclosure Schedule.   “Effective Time” means 12:01 am (EST) on the Closing Date.   “Employee Benefit Plan” means all employee compensation or benefit plans, agreements,   programs, arrangements or policies which are maintained or otherwise contributed to or required   to be contributed to by Seller for the benefit of any Employees including, without limitation, in   relation to retirement, pension, bonus, change of control, retention, performance, stock purchase,   phantom stock, stock appreciation, incentive compensation, profit sharing, stock option, deferred   compensation, incentive compensation, severance or termination pay, insurance, health benefits,   medical, hospital, dental, vision care, drug, sick leave, disability, life insurance, salary   continuation, legal benefits, unemployment benefits, vacation time, vacation pay, or holiday pay   and each “employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or not   tax-qualified and whether or not subject to ERISA, that is maintained, sponsored, contributed to,   by Seller or to which Seller are required to contribute or for which Seller or any of its ERISA   Affiliates has any or are likely to have any Liability.   “Employees” means all employees of Seller who are employed in the Business as of the   date hereof, whether full-time, part-time, salaried or hourly.   “Employment Law” means any Law relating to employment and/or employment   practices, terms and conditions of employment, payment or non-payment of wages and other   compensation, affirmative action, working conditions, labor unions, and payment, non-payment,   and/or provision of employee benefits, including, without limitation, the Worker Adjustment and   Retraining Notifications Act, Immigration and Nationality Act, Fair Labor Standards Act, Title   VII of the Civil Rights Act of 1964, Americans with Disabilities Act, Age Discrimination in   Employment Act, Racketeer Influenced and Corrupt Organizations Act, Foreign Corrupt   Practices Act, 18 U.S.C. §1341 et seq. (provisions relating to honest services mail and wire   fraud), Rehabilitations Act of 1973, ERISA, National Labor Relations Act, and the Occupational   Safety and Health Act.   “Environment” means all components of the Earth, including: (a) water (whether surface   water or ground water, and including any drinking water supply and sewer system); (b) air   (whether ambient air or the Earth’s atmosphere); (c) soil, land surface and subsurface strata    





 







- iv -   (whether submerged or covered by a structure); (d) organic and inorganic matter; living species   and organisms; or (e) a combination of any of the foregoing; and, generally, the ambient milieu   in which living species and organisms have dynamic relations.   “Environmental Attribute” – As defined in Section 5.18(n).   “Environmental Laws” means any and all Laws relating to, in whole or in part: (i) the   protection of the Environment or any natural resource; (ii) the presence, Release or Remediation   of Substances; (iii) the ownership, occupation, custody, use, operation, control, lease,   management, transfer or sale of contaminated sites; (iv) public health, occupational health and   safety, the exposure of workers to Substances in the workplace, and worker right-to-know   legislation pertaining thereto; and (v) the manufacturing, extraction, processing, production,   treatment, use, recycling, receipt, transportation, handling, storage, shipping, distribution,   labelling, import, export or sale of Substances or of products or product ingredients by virtue of   their composition or any other physical properties and any other act, business, operation or   activity that endangers, increases the danger to or poses a risk of harm to the Environment or   public health; and (vi) the use, withdrawal or extraction of natural resources, including water.   Without limiting the generality of the foregoing, “Environmental Laws” includes (1) the Solid   Waste Disposal Act, 42 U.S.C. 6901 et seq., as amended, (2) CERCLA, (3) the Clean Water Act,   33 U.S.C. § 1251 et seq., as amended, (4) the Clean Air Act, 42 U.S.C. § 7401 et seq., as   amended, (5) the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., as amended, (6) the   Emergency Planning and Community Right To Know Act, 15 U.S.C. § 2601 et seq., as amended,   and (7) the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., as amended.   “Environmental Liabilities” means all Liabilities, responsibilities, Actions, losses, costs   (including remedial, removal, response, abatement, clean-up, investigation, or monitoring costs   and any other related costs and expenses), damages, settlements, expenses, charges, assessments,   liens, penalties, fines, pre-judgment and post-judgment interest, attorneys’ fees and other legal   fees pursuant to any agreement, order, notice, or responsibility, directive (including directives   embodied in Environmental Laws), injunction, judgment, or similar documents (including   settlements), arising out of or in connection with any Environmental Laws.   “ERISA” means the Employee Retirement Income Security Act of 1974, as amended,   and the regulations promulgated thereunder.   “ERISA Affiliate” means all employers (whether or not incorporated) that would be   treated together with Seller or any of its Affiliates as a “single employer” within the meaning of   Section 414 of the Code.   “Estimated Closing Balance Sheet” - As defined in the Joint Issues and Reverse Earn Out   Payment Agreement.   “Estimated Net Working Capital” - As defined in the Joint Issues and Reverse Earn Out   Payment Agreement.   “Exchange Act” means the Securities Exchange Act of 1934, as amended.   “Expiration Date” means April 30, 2016.    





 







- v -   “Financial Statements” - As defined in Section 5.14(a).   “Five-Year Representations” - As defined in Section 11.5(c).   “FST” has the meaning set forth in the recitals.   “Fundamental Representations” - As defined in Section 11.5(d).   “Governmental Authority” means the government of the United States or any foreign   country or any provincial, state or political subdivision thereof and any entity, body or authority   exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining   to government, including quasi-governmental entities established to perform such functions.   “Guarantee” - As defined in Section 13.2.   “Guarantor” has the meaning set forth in the caption.   “Income Taxes” means any Taxes measured by, or imposed on, net income or any   franchise Taxes imposed in lieu thereof, including, in each case, any interest or penalties related   thereto.   “Indebtedness” means (a) all indebtedness for borrowed money, or issued in substitution   for or exchange of indebtedness for borrowed money, or for the deferred purchase price of   property or services with respect to which a Person is liable, contingently or otherwise, as   obligor or otherwise (including reimbursement and all other obligations with respect to surety   bonds, letters of credit and bankers’ acceptances, whether or not matured, and any “earn-out”   and similar obligations), including the current portion of such indebtedness, (b) all obligations   evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, (d)   all obligations under conditional sale or other title retention agreements, (e) all “cut” but un-   cashed checks or any overdrafts outstanding as of the Closing Date, (f) any indebtedness secured   by a lien on a Person’s assets, (g) any accrued expenses, (h) any Contingent Customer   Obligations (to the extent not booked or recorded as an accrued expense), (i) any accrued interest   on any of the foregoing, (j) any prepayment or other similar fees, expenses or penalties on or   relating to the repayment or assumption of any of the foregoing and (k) all guarantees of any of   the items set forth in clauses (a) - (j) above.   “Indemnified Party” - As defined in Section 11.4(a).   “Indemnifying Party” - As defined in Section 11.4(a).   “Independent Auditor” - As defined in Section 1.6(b).   “Intellectual Property” means, on a worldwide basis: (a) all inventions, developments,   discoveries, concepts and ideas (whether or not patentable and whether or not reduced to   practice) and all patents, patent applications, patent disclosures and all related continuations,    





 







- vi -   divisionals, continuations-in-part, reissues, reexaminations, utility models, certificates of   invention, industrial designs, and design patents, as well as the rights to file for, and to claim   priority to, any such patent rights, (b) all registered and unregistered trademarks, service marks,   domain names, trade dress and product configurations, logos, trade names, corporate names, and   all other indicia of source, together with all goodwill associated with any of the foregoing, and   all registrations and applications therefor including all extensions, modifications, and renewals of   same, (c) all registered and unregistered copyrights in both published and unpublished works and   all moral rights, and applications for registration thereof, (d) all computer software, data and   documentation, (e) all internet domain names and registration rights, uniform resource locators,   internet or worldwide web sites or protocol addresses, and all related content and programming,   and related security passwords or codes, (f) all trade secrets and confidential business   information, whether patentable or unpatentable and whether or not reduced to practice,   including know-how, formulas, drawings and technical plans, schematics, prototypes, designs,   models, unpublished works of authorship, data and databases, manufacturing and production   processes and techniques, research and development information, other copyrightable works,   financial, marketing and business data, pricing and cost information, business and marketing   plans, vinyl patterns and customer and supplier lists and information, (g) all other proprietary   rights relating to any of the foregoing and (h) all copies and tangible embodiments thereof (in   whatever form or medium).   “Intercompany Accounts” means all accounts payable of the Business representing   amounts owed by the Business to Seller or divisions or Affiliates of Seller, and all accounts   receivable owed to the Business by Seller or divisions or Affiliates of Seller, provided that   payables owing by Seller to Shareholders of Seller are excluded from Intercompany Accounts.   “Interim Financial Statements” - As defined in Section 5.14(a).   “Inventory” means all inventories of the Business, including all raw materials, work in   process, parts, supplies and finished goods merchandise.   “Jamie” has the meaning set forth in the caption.   “Jeff” has the meaning set forth in the caption.   “JJE” has the meaning set forth in the recitals.   “Joe” has the meaning set forth in the caption.   “Joint Issues and Reverse Earn Out Payment Agreement” means that certain Joint Issues   and Reverse Earn Out Payment Agreement dated as of the date hereof entered into among   Purchaser, Guarantor, Seller, the Shareholders of Seller and the other parties thereto.   “Law” means any law, statute, code, regulation, ordinance, rule, Order or governmental   requirement enacted, promulgated, entered into, agreed, imposed or enforced by any   Governmental Authority.    





 







- vii -   “Lease”  means all leases, subleases, licenses, concessions and other agreements (written   or oral), including all amendments, extensions, renewals and guaranties with respect thereto,   pursuant to which Seller holds any Leased Real Property.   “Leased Real Property” means the real property leased or subleased to Seller and used in,   or otherwise material to, the Business and other rights to use or occupy any land, buildings,   structures, improvements, fixtures or other interest in real property related to the Business.   “Letter of Intent” means that certain letter of intent dated November 17, 2015 among JJE   and Guarantor, as amended.   “Liabilities” means any obligation or liability (whether known or unknown, whether   asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether   liquidated or unliquidated and whether due or to become due), including any liability for Taxes.   “Licensed Intellectual Property” means any and all Intellectual Property, whether or not   included in Section 5.12(a) of the Disclosure Schedule, that is licensed or co-licensed by Seller   and is related, or otherwise material, to the Business.   “Lien” means any encumbrance of any kind whatever (registered or unregistered) and   includes a security interest, mortgage, conditional sale, lien, hypothec, pledge, hypothecation,   assignment, charge, security, trust or deemed trust (whether contractual, statutory or otherwise   arising), voting trust or pooling agreement with respect to securities, any adverse claim,   easement, restrictive covenant, limitation, agreement, reservation, right-of-way, restriction,   preferential arrangement, encroachment or burden, or joint ownership interest, grant of any   exclusive license or sole license, or any other right, option or claim of others of any kind   whatever affecting the Purchased Assets or the use of any thereof, and any rights or privileges   capable of becoming any of the foregoing.   “Losses” means any and all loss, liability, damage, cost, expense, charge, fine, penalty or   assessment, suffered or incurred by the Person seeking indemnification, resulting from or arising   out of any Claim, including the costs and expenses of any action, suit, proceeding, investigation,   inquiry, arbitration award, grievance, demand, assessment, judgment, settlement or compromise   relating thereto, but: (i) excluding any contingent liability until it becomes actual; (ii) reduced by   any net Tax benefit actually received by the Person seeking indemnification solely to the extent   such benefit is received within two (2) years from the date of Loss; and (iii) reduced by any   recovery, settlement or other benefits pursuant to insurance coverage actually received by the   Person seeking indemnification to which such indemnification payments apply.   “Material Adverse Change” means any effect or change that would be (or could   reasonably be expected to be) materially adverse to the business, assets, condition (financial or   otherwise), operating results, operations, or prospects of the Business, taken as a whole, or to the   ability of Seller to consummate timely the transactions contemplated hereby, except that a   Material Adverse Change does not include a change or effect caused by (i) the execution or   announcement of the execution of this Agreement; (ii) compliance with the terms of, or taking   any action required or permitted by, this Agreement,  (iii) changes in general economic,    





 







- viii -   financial, regulatory or market conditions affecting the Business or the industry in which the   Business operates; (iv) changes to the Canadian or U.S. credit markets in general, including   changes in interest rates or the availability of financing; (v) any change in Laws or accounting   rules, including ASPE, and any changes in the interpretation thereof; and (vi) and acts war, act of   terrorism, civil unrest or similar events; provided, however that any effect or change referred to   in clauses (iii) through (vi) above shall take into account in determining if a Material Adverse   Change has occurred or could reasonably be expected to occur, if such event or change has a   disproportionate effect on the Business compared to other participants in the industry in which   the Business operates.   “Material Contract” means any Contract entered into by Seller which imposes annual   obligations upon Seller of more than $10,000, or which imposes aggregate obligations upon   Seller of more than of $25,000.   “Material Customers” - As defined in Section 5.20(b).   “Material Suppliers” - As defined in Section 5.20(a).   “Most Recent Fiscal Year End” - As defined in Section 5.14(a).   “Net Customer Repurchase Obligation” – means, for each applicable measurement   period: (a) the aggregate amount of Customer Repurchase Obligations paid by Purchaser in such   period; less (b) the aggregate Customer Repurchase Recovery Amounts received by Purchaser in   such period.   “Net Working Capital” - As defined in the Joint Issues and Reverse Earn Out Payment   Agreement.   “New Employees” - As defined in Section 12.2.   “Non-controlling Party” - As defined in Section 11.4(d).   “Objection Notice” - As defined in Section 11.4(b).   “Order” means any decree, order, judgment, writ, award, injunction, stipulation or   consent of or by, or settlement agreement with, a Governmental Authority.   “Ordinary Course” means the ordinary course of business of the Business, and of Seller   in connection with the Business, consistent with past practice and custom.   “Owned Intellectual Property” means any and all Intellectual Property, whether or not   included in Section 5.12(a) of the Disclosure Schedule, that is owned or co-owned (provided that   any co-owned Intellectual Property shall be specifically noted as such on the Disclosure   Schedule) by Seller and is related, or otherwise material, to the Business.    





 







- ix -   “Owned Real Property” means all land, together with all buildings, structures,   improvements and fixtures located thereon, and all easements and other rights appurtenant   thereto.   “Payoff Amounts” - As defined in Section 3.2(f).   “Permits” - As defined in Section 5.17.   “Permitted Liens” means (i) security given by Seller to a public utility or any   Governmental Authority when required in the Ordinary Course but only to the extent that the   obligation secured at the Closing Date is adjusted in favor of Purchaser on the Closing Balance   Sheet; (ii) easements, including rights of way for, or reservations or rights of others relating to,   sewers, water lines, gas lines, pipelines, electric lines, telegraph and telephone lines and other   similar products or services and any registered restrictions or covenants that run with the land,   provided that there has been compliance with the provisions thereof and that they do not affect   the ability of Purchaser to carry on the Business as it has been carried on in the past; (iii) zoning   bylaws, ordinances or other restrictions as to the use of real property, and agreements with other   Persons registered against title to the lands, provided that they do not in the aggregate and will   not materially and adversely affect the ability of Purchaser to carry on the Business as it has been   carried on in the past, (iv) Liens for Taxes, assessments or other claims by a Governmental   Authority not yet delinquent or the amount or validity of which is being contested in good faith   by appropriate proceedings or for which an appropriate reserve or security deposit is established   by Seller therefor, and (v) rights of landlords under leases.   “Person” means any natural person, corporation, limited liability company, partnership,   firm, joint venture, joint-stock company, trust, association, unincorporated entity or organization   of any kind, Governmental Authority or other entity of any kind.   “Preliminary Allocation Schedule” – As defined in Section 1.6(a) and attached hereto as   Exhibit A.   “Prepaids” - As defined in clause (ii) of the definition of Purchased Assets.   “Principals” has the meaning set forth in the caption.   “Purchase Price” - As defined in Section 1.2.   “Purchase Price Allocation Schedule” - As defined in Section 1.6(a).   “Purchased Assets” means the Business and all of Seller’s right, title and interest in all of   the assets, rights and properties of Seller related to the Business, whether or not carried and   reflected on the books of Seller, other than the Retained Assets, including the following:   (i) all accounts, notes or other receivables arising from the Business   (collectively, “Accounts Receivable”), including any Accounts Receivable of the Business which    





 







- x -   are listed in Section 5.7(c) of the Disclosure Schedule that remain outstanding as of the Closing   Date;   (ii) all deposits and advances, prepaid expenses, rebates and refunds   and other prepaid items arising from the Business to the extent the foregoing are transferable to   Purchaser (collectively, “Prepaids”), including any Prepaids that are listed in Section 5.7(d) of   the Disclosure Schedule;   (iii) all of the Current Assets of the Business, other than cash and cash   equivalents;   (iv) the tangible assets, including motor vehicles, machinery,   equipment, tools, spare parts, operating supplies, furniture and office equipment, fixtures,   telephone systems, telecopiers, photocopiers and computer hardware related to the Business   including the tangible assets that are listed in Section 5.7(e) of the Disclosure Schedule;   (v) the Rental Fleet;   (vi) except for any Contract set out in Section 5.7(e) of the Disclosure   Schedule under the heading “Retained Assets,” all (A) Material Contracts described in   Section 5.13(a) of the Disclosure Schedule; (B) Contracts which are not Material Contracts and   which have been entered into by Seller prior to the date hereof in the Ordinary Course; and (C)   Contracts entered into by Seller relating to the Business after the date hereof in compliance with   the terms and provisions of this Agreement (collectively, the “Transferred Contracts”);   (vii) all Inventory;   (viii) Seller’s rights in and to the Leased Real Property other than the   real property that is subject to the New Lease Agreements;   (ix) the Purchased Intellectual Property;   (x) all Permits, including the Permits that are listed in Section 5.17 of   the Disclosure Schedule, to the extent such Permits are transferrable to Purchaser;   (xi) all causes of action, causes in action, claims, rights of recovery or   rights of set-off of every kind and character and rights of recoupment, including those arising   under or pursuant to any warranties, guarantees or indemnities, in each case to the extent   transferrable to Purchaser;   (xii) all files, papers, documents and records, including credit, sales and   accounting records, price sheets, catalogues and sales literature, books, processes, office   supplies, forms, manuals, correspondence, employment records (except those required by Law to   be maintained by Seller, which will be made available to Purchaser for copying to the extent   allowed by Law) and any other information that is used or useable in or relates to the Purchased   Assets or Assumed Liabilities including any such information or records that are maintained   electronically; and    





 







- xi -   (xiii) all other miscellaneous assets of Seller related, or otherwise   material, to the Business wherever located.   “Purchased Intellectual Property” - As defined in Section 5.12(a).   “Purchaser” has the meaning set forth in the caption.   “Purchaser Consent” means the express consent of any of the following Persons on   behalf of Purchaser and Guarantor, in each such Person’s capacity as an officer of Purchaser   and/or Guarantor: (a) Jennifer Sherman, (b) Brian Cooper, (c) Sam Miceli or (d) Svetlana   Vinokur.   “Purchaser Indemnitees” - As defined in Section 11.1.   “Refurbishing Costs” - As defined in Section 1.7(b).   “Release” when used as a verb includes release, discharge, escape, deposit, dispose,   spray, abandonment, dispose, bury, disperse, exhaust, spill, emit, leak, generate, pump, pour,   empty, dump, issue, place, flow, inject, seep, leach and migrate on or into the Environment or,   on,  into or out of any property, in any manner whatsoever, and “Release” when used as a noun   and “Released” each has a correlative meaning.   “Release Date” means the date that is twenty-four (24) months subsequent to the Closing   Date.   “Remediate” or “Remediation” means all work, repair, measures and capital   expenditures, whether voluntary, compelled by a Governmental Authority, or required pursuant   to Environmental Laws, that are reasonably necessary to: (i) characterize, clean up, remove,   treat, rehabilitate, restore, monitor, correct or in any other way deal with Substances (including   necessary follow-up measures); and (ii) prevent any Release of Substances.   “Rental Fleet” means all vehicles and equipment of Seller which are held primarily for   purposes of short or long term lease to customers.   “Representative” - As defined in Section 4.3(r).   “Repurchase Calculation” - As defined in Section 1.7(c).   “Repurchased Unit” - As defined in Section 1.7(a).   “Response” - As defined in Section 11.4(b).   “Restricted Business” - As defined in Section 14.5(a)(i).   “Restricted Period” means the period beginning on the Closing Date and ending on the   fifth anniversary of the Closing Date.    





 







- xii -   “Restricted Territory” - As defined in Section 14.5(a).   “Restrictive Period” - As defined in Section 14.5(b).   “Retained Assets” means the following:   (i) all cash and cash equivalents and marketable securities of Seller;   (ii) employment records required by Law to be maintained by Seller,   Seller’s corporate seal, if any, minute books and stock or membership record books, the general   ledgers and books of original entry, all Income Tax returns and other Income Tax records (to the   extent they relate to the Business), reports, data, files and documents, to the extent not required   to conduct the Business;   (iii) all claims relating to Tax refunds, credits, abatements, rebates,   duty drawbacks and other governmental charges of whatever nature relating to pre-Closing   periods;   (iv) all insurance policies and rights, including premium refunds;   (v) all foreign currency hedging contracts;   (vi) Seller’s rights under this Agreement, the Bill of Sale and   Assignment Agreement, the Joint Issues  and Reverse Earn Out Payment Agreement, and any   other agreements delivered by Seller in connection with this Agreement;   (vii) all assets set out in Section 5.7(e) of the Disclosure Schedule under   the heading “Retained Assets” and any lease related thereto;   (viii) any loan made by Seller to an Employee;   (ix) all Employee Benefit Plans and all assets or funds held in trust, or   otherwise, associated with or used in connection with the Employee Benefit Plans; and   (x) all Intercompany Accounts.   “Retained Employee Liabilities” means any and all obligations and Liabilities of Seller   with respect to the Employees or the New Employees, other than any Assumed Employee   Liabilities. For the avoidance of doubt, any and all obligations and Liabilities of Seller with   respect to any Employee or New Employee: (i) who does not accept Purchaser’s offer of   employment in accordance with Article XII; or (ii) who is listed in Section 12.2 of the Disclosure   Schedule, are Retained Employee Liabilities.   “Retained Liabilities” means any and all Liabilities of Seller other than the Assumed   Liabilities, including (i) any Indebtedness of Seller, (ii) any Liability relating to any Retained   Asset, (iii) any long term deferred commission payment obligations, (iv) off balance sheet   pension obligations of Seller, (v) any Liability relating to a guarantee of a third party obligations,    





 







- xiii -   (vi) any Retained Employee Liability, and (vii) any other Liability for which Seller is liable or   otherwise obligated pursuant to this Agreement, only to the extent that such Liabilities are not   Assumed Liabilities.   “Seller” has the meaning set forth in the caption.   “Seller Indemnitees” - As defined in Section 11.3.   “Seller’s Knowledge” or “Knowledge” - with respect to Seller, Seller will be deemed to   have “Knowledge” of a particular fact or matter if any of Joe, Jeff, Jamie, Chen Hui or Jason   Hannah (i) is actually aware of such fact or matter or (ii) would have obtained knowledge of   such fact or matter after making such due inquiry (including a review of their files and after   consulting with their direct reports and other pertinent Persons) that a prudent business person   would have made in order to gain a full understanding and determination of the accuracy of such   fact or matter.   “Shareholders of Seller” has the meaning set forth in the caption.   “Stock Units” means new vehicles held by Seller for purposes of sale to customers.   “Substances” means (a) any substance or material that is prohibited, regulated or   designated as a pollutant, contaminant, toxic substance, deleterious substance, dangerous good,   waste or residual material, hazardous waste or hazardous residual material, hazardous substance,   hazardous material or any other similar designation, under any provision of Environmental Laws,   (b) asbestos and any asbestos-containing material, including asbestos-containing vermiculite, and   urea formaldehyde foam insulation, (c) mold, radon and pyrite, (d) any microorganism, sound,   vibration, rays, heat, odor or radiation that is likely to alter the quality of the Environment in any   way, and (e) any substance or material that is otherwise regulated by Environmental Laws   “Tax Representations” - As defined in Section 11.5(b).   “Tax Return” means any report, declaration, return, claim for refund, or information   return or statement required to be supplied to a Governmental Authority in connection with any   Taxes.   “Taxes” means all taxes, surtaxes, duties, levies, imposts, fees, assessments,   withholdings, dues and other charges of any nature, including interest and penalties associated   therewith, imposed or collected by any Governmental Authority, whether disputed or not,   including U.S. federal, Canadian federal, state, provincial, territorial, municipal and local,   foreign and other income, franchise, capital, real property, personal property, withholding,   payroll, health, transfer, goods and services, harmonized sales, value added sales, use,   consumption, excise, customs, anti-dumping, countervail, net worth, stamp, registration,   franchise, payroll, employment, education, business, school, local improvement, development   and occupation taxes, duties, levies, imposts, fees, assessments and withholdings, dues and other   charges of any nature and all other taxes and similar governmental charges of any kind for which    





 







- xiv -   a Person may have any liability imposed by any Governmental Authority and “Tax” has a   corresponding meaning.   “Transferred Contracts” – As defined in clause (vi) of the definition of Purchased Assets.   “Update Notice” - As defined in the preamble to Article V.   “Used Units” means vehicles held by Seller for purposes of resale to customers which   does not form part of Stock Units.   “WARN Act” means the federal Worker Adjustment and Retraining Notification Act of   1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs   and employment losses.