Document:

Exhibit 10.1

 

 

ASSET PURCHASE AGREEMENT

 

between

 

ECHO DCL, LLC

 

and

 

SG ECHO, LLC

 

dated as of

 

September 17, 2020

 

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

		 	Page 
	ARTICLE I	DEFINITIONS	1
	ARTICLE II	PURCHASE AND SALE	12
	Section 2.01.	Purchase and Sale of Assets	12
	Section 2.02.	Excluded Assets	13
	Section 2.03.	Assumed Liabilities	13
	Section 2.04.	Excluded Liabilities	15
	Section 2.05.	Purchase Price	17
	Section 2.06.	Purchase Price Adjustment	17
	Section 2.07.	Allocation of Purchase Price	20
	Section 2.08.	Withholding Tax	22
	Section 2.09.	Third Party Consents	23
	ARTICLE III	CLOSING	23
	Section 3.01.	Closing	23
	Section 3.02.	Closing Deliverables	23
	ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF SELLER	25
	Section 4.01.	Organization and Qualification of Seller	25
	Section 4.02.	Authority of Seller	26
	Section 4.03.	No Conflicts; Consents	26
	Section 4.04.	Financial Statements	27
	Section 4.05.	Undisclosed Liabilities	27
	Section 4.06.	Absence of Certain Changes, Events and Conditions	28
	Section 4.07.	Material Contracts	28
	Section 4.08.	Title to Purchased Assets	30
	Section 4.09.	Condition and Sufficiency of Assets	31
	Section 4.10.	Real Property	32
	Section 4.11.	Intellectual Property	33
	Section 4.12.	[Inventory	34
	Section 4.13.	[Accounts Receivable	36
	Section 4.14.	[Customers and Suppliers	36
	Section 4.15.	Insurance	37
	Section 4.16.	Legal Proceedings; Governmental Orders	37
	Section 4.17.	Compliance With Laws; Permits	37
	Section 4.18.	Environmental Matters	38
	Section 4.19.	Employee Benefit Matters	38
	Section 4.20.	Employment Matters	40
	Section 4.21.	Taxes	43
	Section 4.22.	Brokers	45
	Section 4.23.	[Full Disclosure	46
	ARTICLE V	REPRESENTATIONS AND WARRANTIES OF BUYER	49
	Section 5.01.	Organization of Buyer	49
	Section 5.02.	Authority of Buyer	49
	Section 5.03.	No Conflicts; Consents	49

 

    i

     

    

 

	Section 5.04.	Brokers	50
	Section 5.05.	Sufficiency of Funds	50
	Section 5.06.	Legal Proceedings	50
	ARTICLE VI	COVENANTS	51
	Section 6.01.	Conduct of Business Prior to the Closing	51
	Section 6.02.	Access to Information	52
	Section 6.03.	No Solicitation of Other Bids	52
	Section 6.04.	Notice of Certain Events	53
	Section 6.05.	Employees and Employee Benefits	53
	Section 6.06.	Confidentiality	54
	Section 6.07.	Non-Competition; Non-Solicitation	55
	Section 6.08.	Governmental Approvals and Consents	56
	Section 6.09.	Books and Records	57
	Section 6.10.	Closing Conditions	58
	Section 6.11.	Public Announcements	58
	Section 6.12.	Bulk Sales Laws	58
	Section 6.13.	Receivables	58
	Section 6.14.	Transfer Taxes	58
	Section 6.15.	[Tax Clearance Certificates	58
	Section 6.16.	Further Assurances	58
	ARTICLE VII	CONDITIONS TO CLOSING	59
	Section 7.01.	Conditions to Obligations of All Parties	59
	Section 7.02.	Conditions to Obligations of Buyer	59
	Section 7.03.	Conditions to Obligations of Seller	61
	ARTICLE VIII	INDEMNIFICATION	62
	Section 8.01.	Survival	62
	Section 8.02.	Indemnification By Seller	62
	Section 8.03.	Indemnification By Buyer	63
	Section 8.04.	Certain Limitations	63
	Section 8.05.	Indemnification Procedures	64
	Section 8.06.	Payments; Indemnification Escrow Fund	66
	Section 8.07.	Tax Treatment of Indemnification Payments	66
	Section 8.08.	Effect of Investigation	66
	Section 8.09.	Exclusive Remedies	67
	ARTICLE IX	TERMINATION	67
	Section 9.01.	Termination	67
	Section 9.02.	Effect of Termination	68
	ARTICLE X	MISCELLANEOUS	68
	Section 10.01.	Expenses	68
	Section 10.02.	Notices	68
	Section 10.03.	Interpretation	69
	Section 10.04.	Headings	69
	Section 10.05.	Severability	69
	Section 10.06.	Entire Agreement	70
	Section 10.07.	Successors and Assigns	70
	Section 10.08.	No Third-party Beneficiaries	70
	Section 10.09.	Amendment and Modification; Waiver	70
	Section 10.10.	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	70
	Section 10.11.	Specific Performance	71
	Section 10.12.	Counterparts	71

 

    ii

     

    

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase
Agreement (this “Agreement”), dated as of September 17, 2020, is entered into between ECHO DCL, LLC a Texas
limited liability company (“Seller”) and SG ECHO, LLC, a Delaware limited liability company (“Buyer”).

 

RECITALS

 

WHEREAS, Seller
is engaged in the business of the design, manufacture and sale of permanent and relocatable modular and intermodal buildings (the
“Business”);

 

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

 

NOW, THEREFORE,
in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE
I

DEFINITIONS

 

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

 

“Accounts
Receivable” has the meaning set forth in Section 2.01(b).

 

“Acquisition
Proposal” has the meaning set forth in Section 6.03(a).

 

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

 

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

 

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

 

“Allocation
Schedule” has the meaning set forth in Section 2.08.

 

“Ancillary
Documents” means the documents, agreements and instruments described in Section 3.02 and such other documents, agreements
and instruments required to be delivered at the Closing.

 

“Assigned
Contracts” has the meaning set forth in Section 2.01(d).

 

    1

     

    

 

“Assignment
and Assumption Agreement” has the meaning set forth in Section 3.02(a)(iii).

 

“Assumed Liabilities”
has the meaning set forth in Section 2.03.

 

“Balance Sheet”
has the meaning set forth in Section 4.04.

 

“Balance Sheet
Date” has the meaning set forth in Section 4.04.

 

“Basket”
has the meaning set forth in Section 8.04(a).

 

“Benefit Plan”
has the meaning set forth in Section 4.20(a).

 

“Bill of Sale”
has the meaning set forth in Section 3.02(a)(ii).

 

“Books and
Records” has the meaning set forth in Section 2.01(m).

 

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

 

“BTH Credit
Line” means a revolving loan facility entered into between Seller and BTH Bank, N.A. on May 1, 2020 with an outstanding
principal balance in the approximate amount of $500,000.

 

“BTH Credit
Line Payoff” has the meaning set forth in Section 2.03(c).

 

“BTH Lender”
has the meaning set forth in Section 2.03(c).

 

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

 

“Business
IT Systems” means all Software, computer hardware, servers, networks, platforms, peripherals, and similar or related
items of automated, computerized, or other information technology (IT) networks and systems (including telecommunications networks
and systems for voice, data, and video) owned, leased, licensed, or used (including through cloud-based or other third-party service
providers) in the conduct of the Business.

 

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

 

“Buyer Closing
Certificate” has the meaning set forth in Section 7.03(f).

 

“Buyer Indemnitees”
has the meaning set forth in Section 8.02.

 

“Buyer’s
Accountants” means the accounting firm that may be engaged by Buyer to render accounting and other financial services,
from time to time.

 

“Buyer’s
Indebtedness Advances” has the meaning set forth in Section 2.03(d).

  

    2

     

    

 

“Buyer’s
Mortgage” has the meaning set forth in Section 2.03(d).

 

“Cash Consideration”
has the meaning set forth in Section 2.05.

 

“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.

 

“Closing”
has the meaning set forth in Section 3.01.

 

“Closing Cash
Amount” has the meaning set forth in Section 2.03(a).

 

“Closing Cash
Deficiency” has the meaning set forth in Section 2.03(a).

 

“Closing Cash
Target” means $316,432.

 

“Closing Date”
has the meaning set forth in Section 3.01.

 

“Closing Working
Capital” means: (a) Current Assets, less (b) Current Liabilities, determined as of the open of business on the Closing
Date.

 

“Closing Working
Capital Statement” has the meaning set forth in Section 2.07(a)(i).

 

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

 

“Consents”
has the meaning set forth in Section 4.03(b).

 

“Contracts”
means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures
and all other agreements, commitments and legally binding arrangements, whether written or oral.

 

“Current Assets”
means the current assets of the Business included in the line items set forth on Section 2.07(a)(i) of the Disclosure Schedules
and only to the extent acquired pursuant to the terms of this Agreement.

 

“Current Liabilities”
means the current liabilities of the Business included in the line items set forth on Section 2.07(a)(i) of the Disclosure Schedules
and only to the extent assumed pursuant to the terms of this Agreement.

 

“Direct Claim”
has the meaning set forth in Section 8.05(c).

 

“Disclosure
Schedules” means the Disclosure Schedules delivered by Seller and Buyer concurrently with the execution and delivery
of this Agreement.

 

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

 

“Due Diligence”
shall have the meaning set forth in Section 6.02.

 

“Due Diligence
Period” shall have the meaning set forth in Section 6.02.

 

    3

     

    

 

“Earn Out
Determination Date” has the meaning set forth in Section 2.06(h).

 

“Earn Out
Notice of Objection” has the meaning set forth in Section 2.06(g).

 

“Earn Out
Payment” has the meaning set forth in Section 2.06.

 

“Earn Out
Shares” has the meaning set forth in Section 2.06(a).

 

“Earn Out
Statement” has the meaning set forth in Section 2.06(f).

 

“Earn Out
Statement Resolution Period” has the meaning set forth in Section 2.06(h).

 

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

 

“Environmental
Attributes” means any emissions and renewable energy credits, energy conservation credits, benefits, offsets and allowances,
emission reduction credits or words of similar import or regulatory effect (including emissions reduction credits or allowances
under all applicable emission trading, compliance or budget programs, or any other federal, state or regional emission, renewable
energy or energy conservation trading or budget program) that have been held, allocated to or acquired for the development, construction,
ownership, lease, operation, use or maintenance of the Business or the Purchased Assets or as of: (a) the date of this Agreement;
and (b) future years for which allocations have been established and are in effect as of the date of this Agreement.

 

“Environmental
Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising
therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs
of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages,
property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising
out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or
alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

 

“Environmental
Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating
to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or
safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning
the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental
Law” includes, without limitation, the following (including their implementing regulations and any state analogs): 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.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water
Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances
Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C.
§§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

 

    4

     

    

 

“Environmental
Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim
relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

 

“Environmental
Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under
or issued, granted, given, authorized by or made pursuant to Environmental Law.

 

“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 the Seller or any of its Affiliates as a
“single employer” within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

“Escrow Agent”
means Buyer’s attorneys, Ruta Soulios & Stratis, LLP.

 

“Escrow Agreement”
means the Escrow Agreement to be entered into by Buyer, Seller and the Escrow Agent at the Closing, substantially in the form of
Exhibit A.

 

“Exchange
Cap” has the meaning set forth in Section 2.06(e).

 

“Excluded
Assets” has the meaning set forth in Section 2.02.

 

“Excluded
Contracts” has the meaning set forth in Section 2.02(a).

 

“Excluded
Liabilities” has the meaning set forth in Section 2.04.

 

“Financial
Statements” has the meaning set forth in Section 4.04.

 

“FIRPTA Certificate”
has the meaning set forth in Section 7.02(m).

 

“First Earn
Out Payment” has the meaning set forth in Section 2.06(a).

 

“First Earn
Out Period” has the meaning set forth in Section 2.06.

 

“GAAP”
means United States generally accepted accounting principles in effect from time to time.

 

    5

     

    

 

“GLOC Loans”
means the loans or other indebtedness of the Seller (including an Affiliate) under one or more Guidance Lines of Credit.

 

“GLOC Loan
Balance” means the aggregate outstanding principal and interest due under the GLOC Loans as of the Closing Date, or $616,228.

 

“GLOC Loan
Payoff” has the meaning set forth in Section 2.03(a).

 

“Government
Contracts” has the meaning set forth in Section 4.08(a)(viii)

 

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

 

“Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.

 

“Hazardous
Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid,
mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of
similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive
materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated
biphenyls.

 

“ICON Acquisition”
means Seller’s acquisition of the ICON Business on February 28, 2020 under an asset purchase agreement and other documents
and instruments that were executed and delivered by the respective parties in connection therewith.

 

“ICON Business”
means the business and assets, including but not limited to the Owned Real Property, of ICON Construction, Inc.

 

“ICON Debt
Service” means, collectively, the monthly principal and interest payments due from Seller under (i) an obligation to
Sasha Bell under a non-compete pay-out in the approximate amount of $10,000 per month; (ii) an obligation to ICON Creditors Committee
in the approximate amount of $2,500 per month; and (iii) an obligation to RE/MAX in the approximate amount of $14,250 per month.

 

“ICON Lenders”
has the meaning set forth in Section 2.03(b).

 

“Indebtedness
Escrow Amount” means $150,000.

 

“Indebtedness
Escrow Fund” has the meaning set forth in Section 3.02(c)(iii).

 

“Indemnification
Escrow Amount” means $150,000.

 

    6

     

    

 

“Indemnification
Escrow Fund” has the meaning set forth in Section 3.02(c)(ii).

 

“Indemnified
Party” has the meaning set forth in Section 8.05.

 

“Indemnifying
Party” has the meaning set forth in Section 8.05.

 

“Independent
Accountant” has the meaning set forth in Section 2.06(h).

 

“Insurance
Policies” has the meaning set forth in Section 4.16.

 

“Intellectual
Property” means any and all rights in, arising out of, or associated with any of the following in any jurisdiction throughout
the world: (a) issued patents and patent applications (whether provisional or non-provisional), including divisionals, continuations,
continuations-in-part, substitutions, reissues, reexaminations, extensions, or restorations of any of the foregoing, and other
Governmental Authority-issued indicia of invention ownership (including certificates of invention, petty patents, and patent utility
models) (“Patents”); (b) trademarks, service marks, brands, certification marks, logos, trade dress, trade names,
and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all
registrations, applications for registration, and renewals of, any of the foregoing (“Trademarks”); (c) copyrights
and works of authorship, whether or not copyrightable, and all registrations, applications for registration, and renewals of any
of the foregoing (“Copyrights”); (d) internet domain names and social media account or user names (including
“handles”), whether or not Trademarks, all associated web addresses, URLs, websites and web pages and all content
and data thereon or relating thereto, whether or not Copyrights; (e) industrial designs, and all Patents, registrations, applications
for registration, and renewals thereof; (f) trade secrets, know-how, inventions (whether or not patentable), discoveries, improvements,
technology, business and technical information, databases, data compilations and collections, tools, methods, processes, techniques,
and other confidential and proprietary information and all rights therein (“Trade Secrets”); (g) computer programs,
operating systems, applications, firmware and other code, including all source code, object code, application programming interfaces,
data files, databases, protocols, specifications, and other documentation thereof (“Software”); and (h) all
other intellectual or industrial property and proprietary rights.

 

“Intellectual
Property Agreements” means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements,
covenants not to sue, waivers, releases, permissions and other Contracts, whether written or oral, relating to any Intellectual
Property that is used or held for use in the conduct of the Business as currently conducted to which Seller is a party, beneficiary
or otherwise bound.

 

“Intellectual
Property Assets” means all Intellectual Property that is owned by Seller and used or held for use in the conduct of the
Business as currently conducted, together with all (i) royalties, fees, income, payments, and other proceeds now or hereafter due
or payable to Seller with respect to such Intellectual Property; and (ii) claims and causes of action with respect to such Intellectual
Property, whether accruing before, on, or after the date hereof, including all rights to and claims for damages, restitution, and
injunctive and other legal or equitable relief for past, present, or future infringement, misappropriation, or other violation
thereof.

 

“Intellectual
Property Assignments” has the meaning set forth in Section 3.02(a)(iv).

 

    7

     

    

 

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

 

“Interim Balance
Sheet” has the meaning set forth in Section 4.04.

 

“Interim Balance
Sheet Date” has the meaning set forth in Section 4.04.

 

“Interim Financial
Statements” has the meaning set forth in Section 4.04.

 

“Inventory”
has the meaning set forth in Section 2.01(c).

 

“ITEC RoFR”
means a right of first refusal on behalf of Buyer (or its Affiliate) to purchase the business and assets of Industrial Truck &
Equipment Coating, LLC.

 

“ITEC RoFR
Agreement” means an agreement between Buyer and Seller in the form of Annex III to this Agreement evidencing the
ITEC RoFR.

 

“Knowledge
of Seller or Seller’s Knowledge” or any other similar knowledge qualification, means the actual or constructive
knowledge of any director or officer of Seller.

 

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

 

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

 

“Long-Term
Lease” means a lease for the Buyer’s long-term occupancy of the Owned Real Property in the form annexed as Annex
I to this Agreement, executed by Seller, as landlord, and Buyer (or its Affiliate), as tenant

 

“Losses”
means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of
whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and
the cost of pursuing any insurance providers; provided, however, that “Losses” shall not include punitive damages,
except to the extent actually awarded to a Governmental Authority or other third party.

 

“Material
Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become,
individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise)
or assets of the Business, (b) the value of the Purchased Assets, or (c) the ability of Seller to consummate the transactions contemplated
hereby on a timely basis; provided, however, that “Material Adverse Effect” shall not include any event, occurrence,
fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions;
(ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial or securities
markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening
thereof; (v) any action required or permitted by this Agreement, except pursuant to Section 4.03 and Section 6.08; (vi) any changes
in applicable Laws or accounting rules, including GAAP; or (vii) the public announcement, pendency or completion of the transactions
contemplated by this Agreement; provided further, however, that any event, occurrence, fact, condition or change referred to in
clauses (i) through (iv) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred
or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate
effect on the Business compared to other participants in the industries in which the Business operates.

 

    8

     

    

 

“Material
Contracts” has the meaning set forth in Section 4.08(a).

 

“Material
Customers” has the meaning set forth in Section 4.15(a).

 

“Material
Suppliers” has the meaning set forth in Section 4.15(b).

 

“Multiemployer
Plan” has the meaning set forth in Section 4.20(c).

 

“Nasdaq”
has the meaning set forth in Section 2.06(d).

 

“Nasdaq Listing
Application” has the meaning set forth in Section 2.06(d).

 

“Net Income”
shall mean gross revenues less cost of goods sold, selling, general and administrative expenses,
operating expenses, depreciation, interest, taxes, and other expenses, but shall not include revenues earned or expenses incurred
by Seller under that certain contract between SG Blocks and Seller dated August 2020 for construction of a mixed-used project in
Flamingo, Florida.

 

“Owned Real
Property” means the real property and all improvements thereon at Seller’s current facilities located at 2719 Big
Lots Parkway, Durant, OK 74701.

 

“Permits”
means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained,
or required to be obtained, from Governmental Authorities.

 

“Permitted
Encumbrances” has the meaning set forth in Section 4.09(a).

 

“Person”
means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated
organization, trust, association or other entity.

 

“Platform
Agreements” has the meaning set forth in Section 4.12(h).

 

“Post-Closing
Adjustment” has the meaning set forth in Section 2.06(a)(ii).

 

“Post-Closing
Tax Period” means any taxable period beginning after the Closing Date and, with respect to any taxable period beginning
before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.

 

    9

     

    

 

“Pre-Closing
Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning
before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

 

“Products”
has the meaning set forth in Section 4.26.

 

“Purchase
Price” has the meaning set forth in Section 2.05.

 

“Purchase
Price Adjustment Escrow Amount” means $106,438.

 

“Purchase
Price Adjustment Escrow Fund” has the meaning set forth in Section 3.02(c)(i).

 

“Purchased
Assets” has the meaning set forth in Section 2.01.

 

“Qualified
Benefit Plan” has the meaning set forth in Section 4.20(c).

 

“Real Estate
RoFR” means a right of first refusal on behalf of Buyer (or its Affiliate) to purchase the Owned Real Estate,

 

“Real Estate
RoFR Agreement” means an agreement between Buyer and Seller in the form of Annex II to this Agreement evidencing
the Real Estate RoFR.

 

“Real Property”
means, collectively, the Owned Real Property and the Leased Real Property.

 

“Release”
means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without
limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building,
structure, facility or fixture).

 

“Representative”
means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants
and other agents of such Person.

 

“Restricted
Business” means the design, manufacture and sale of permanent and relocatable modular and intermodal buildings.

 

“Restricted
Period” has the meaning set forth in Section 6.07(a).

 

“Second Earn
Out Payment” has the meaning set forth in Section 2.06(b).

 

“Second Earn
Out Period” has the meaning set forth in Section 2.06.

  

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

 

“Seller Closing
Certificate” has the meaning set forth in Section 7.02(j).

 

“Seller Indemnitees”
has the meaning set forth in Section 8.03.

 

    10

     

    

 

“Seller’s
Accountants” means the accounting firm that may be engaged by Seller to render accounting and other financial services,
from time to time.

 

“SG Blocks”
has the meaning set forth in Section 2.06(a).

 

“Single Employer
Plan” has the meaning set forth in Section 4.20(c).

 

“Tangible
Personal Property” has the meaning set forth in Section 2.01(f).

 

“Target Working
Capital” means $532,187.64.

 

“Tax Clearance
Certificate has the meaning in Section 6.15.

 

“Taxes”
means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, documentary,
franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated,
excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits,
customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties.

 

“Tax Return”
means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

 

“Territory”
means North America.

 

“Third Earn
Out Payment” has the meaning set forth in Section 2.06(c).

 

“Third Earn
Out Period” has the meaning set forth in Section 2.06.

 

“Third Party
Claim” has the meaning set forth in Section 8.05(a).

 

“Union”
has the meaning set forth in Section 4.21(b).

 

“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.

 

“Working Capital
Disputed Amounts” has the meaning set forth in Section 2.07(b)(iii).

 

“Working Capital
Notice of Objections” has the meaning set forth in Section 2.07(b)(ii).

 

“Working Capital
Resolution Period” has the meaning set forth in Section 2.07(b)(ii).

 

“Working Capital
Review Period” has the meaning set forth in Section 2.07(b)(i).

 

“Working Capital
Undisputed Amounts” has the meaning set forth in Section 2.07(b)(iii).

 

    11

     

    

 

ARTICLE
II

PURCHASE AND SALE

 

Section
2.01. Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, at the Closing, Seller
shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of any Encumbrances
other than Permitted Encumbrances, all of Seller’s right, title and interest in, to and under all of the assets, properties
and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including goodwill), wherever located
and whether now existing or hereafter acquired (other than the Excluded Assets), which relate to, or are used or held for use in
connection with, the Business (collectively, the “Purchased Assets”), including, without limitation, the following:

 

(a) cash
and cash equivalents, which will be in an amount of not less than the Closing Cash Target;

 

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

 

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

 

(d) all
Contracts, including Intellectual Property Agreements, set forth on Section 2.01(d) of the Disclosure Schedules (the “Assigned
Contracts”);

 

(e) all
Intellectual Property Assets;

 

(f) all
furniture, fixtures, equipment, machinery, tools, vehicles, office equipment, supplies, computers, telephones and other tangible
personal property (the “Tangible Personal Property”);

 

(g) the
ICON Business recently acquired by Seller;

 

(h) all
Permits, including Environmental Permits, which are held by Seller and required for the conduct of the Business as currently conducted
or for the ownership and use of the Purchased Assets, including, without limitation, those listed on Section 4.18(b) and Section
4.19(b) of the Disclosure Schedules, to the extent permitted to be assigned or transferred under applicable Law;

 

(i) all
rights to any Actions of any nature available to or being pursued by Seller to the extent related to the Business, the Purchased
Assets or the Assumed Liabilities, whether arising by way of counterclaim or otherwise, to the extent permitted to be assigned
or transferred under applicable Law, but specifically excluding Actions relating to any Excluded Assets;

 

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

 

    12

     

    

 

(k) all
of Seller’s rights under warranties, indemnities and all similar rights against third parties to the extent related to any
Purchased Assets, to the extent permitted to be assigned or transferred under applicable Law;

 

(l) all
insurance benefits, including rights and proceeds, arising from or relating to the Business, the Purchased Assets or the Assumed
Liabilities, to the extent permitted to be assigned or transferred under applicable Law, but specifically excluding benefits, rights
and proceeds relating to any Excluded Assets;

 

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

 

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

 

Section
2.02. Excluded Assets. Notwithstanding the foregoing, the Purchased Assets shall not include the following assets
(collectively, the “Excluded Assets”):

 

(a) Contracts,
including Intellectual Property Agreements, that are not Assigned Contracts (the “Excluded Contracts”);

 

(b) the
corporate seals, organizational documents, minute books, stock books, Tax Returns, books of account or other records having to
do with the corporate organization of Seller;

 

(c) all
Benefit Plans and assets attributable thereto;

 

(d) the
assets, properties and rights specifically set forth on Section 2.02(d) of the Disclosure Schedules;

 

(e) the
rights which accrue or will accrue to Seller under this Agreement and the Ancillary Documents; and

 

(f) any
assets that are not permitted to be assigned or transferred pursuant to applicable Law

 

Section
2.03. Assumed Liabilities. Subject to the terms and conditions set forth herein, Buyer shall only assume and agree
to pay, perform and discharge the Liabilities of Seller set forth on Schedule 2.03 (collectively, the “Assumed Liabilities”),
and no other Liabilities.

 

    13

     

    

 

(a) Seller
and Buyer agree that effective as of the Closing Date, Buyer shall, pay the GLOC Loan Balance directly to the lender under the
GLOC Loan (the “GLOC Loan Payoff”); provided, however, that the difference between the amount paid by Buyer
to effectuate the GLOC Loan Payoff and the actual amount of cash conveyed and delivered to Buyer through the acquisition of the
Purchased Assets (the “Closing Cash Amount”) shall be deemed, and included in the calculation of, Buyer’s
Indebtedness Advances for purposes of Section 2.03(d). Notwithstanding the foregoing, if the Closing Cash Amount is less
than the Closing Cash Target (a “Closing Cash Deficiency”), Buyer shall have no obligation to effectuate a GLOC
Loan Payoff, and Seller and Buyer shall negotiate in good faith with respect to Buyer’s recoupment of a Closing Cash Deficiency
before Buyer is responsible for the GLOC Loan Payoff.

 

(b) Seller
and Buyer agree that effective as of the Closing Date, and for the 12-month period thereafter, Buyer shall advance to Seller an
amount equal to pay the monthly principal and interest payments due under the ICON Debt Service, which Seller will promptly pay
over to the respective lenders of the ICON Debt Service (the “ICON Lenders”) and provide proof of payment thereof
to Buyer.

 

(c) 
Seller and Buyer agree that effective as of the Closing Date, and for the 12-month period thereafter, Buyer shall, at Buyer’s
option, either (i) advance to Seller an amount equal to pay the monthly principal and interest payments due under the BTH Credit
Line, which Seller will promptly pay over to the lender under the BTH Credit Line (the “BTH Lender”); or (ii)
pay the monthly principal and interest payments due under the BTH Credit Line directly to the BTH Lender on account of the Seller.
If, after the expiration of such 12-month period, Seller has not fully satisfied the outstanding principal and interest due under
the BTH Credit Line and caused the BTH Lender to release and terminate any Encumbrances on the Purchased Assets arising out of
the BTH Credit Line (a “BTH Credit Line Payoff”), Buyer may pay the outstanding principal and interest due under
the BTH Credit Line and any such amounts paid by Buyer will be deemed, and included in the calculation of, Buyer’s Indebtedness
Advances for purposes of Section 2.03(d).

 

(d) The
aggregate monthly advances by Buyer with respect to the ICON Debt Service and the BTH Credit Line during the 12-month period set
forth in Sections 2.03(b) and (c) above, shall not exceed $345,000. The aggregate sums advanced or otherwise expended
by Buyer in accordance with Sections 2.03(a), (b) and (c) above, including, but not limited to, a GLOC Loan Payoff, the
ICON Debt Service, monthly payments of the BTH Credit Line and a BTH Credit Line Payoff (the “Buyer’s Indebtedness
Advances”) shall be withheld and deposited into the Indebtedness Escrow Fund and deducted from the consideration due
to Seller, if any, under the First Earn Out Payment and Second Earn Out Payment (if necessary) and Third Earn Out Payment (if necessary)
as set forth in Sections 2.06(a), (b) and (c) below. To the extent Buyer’s rights to withhold and deduct
from the Earn Out Payments are insufficient to enable Buyer to recoup the Buyer’s Indebtedness Advances, any such deficiency
will be satisfied: (i) from the Indebtedness Escrow Fund; and (ii) if the deficiency amount exceeds the amount in the Indebtedness
Escrow Fund, from the Purchase Price Adjustment Escrow Fund and, if necessary, the Indemnification Escrow Fund. To the extent Buyer’s
rights to withhold and deduct from the Earn Out Payments, Buyer’s rights to the Indebtedness Escrow Fund and Buyer’s
rights to the Purchase Price Escrow Fund and Indemnification Escrow Fund under this Section 2.03(d) are insufficient to
enable Buyer to recoup the Buyer’s Indebtedness Advances, then Buyer (or SG Blocks) may prepare and file and record a mortgage
(the “Buyer’s Mortgage”) against the Owned Real Property securing the amount of such deficiency as of
the effective date of the filing of the Buyer’s Mortgage. Seller covenants that as long as the Buyer’s Mortgage is
in effect, Seller (or an Affiliate), shall not, directly or indirectly, sell, assign, convey, lease, license or grant or permit
any Encumbrance that relates to the Owned Real Property without the prior written consent of Buyer, which may be granted or withheld
in Buyer’s sole and absolute discretion

  

    14

     

    

 

(e) Notwithstanding
anything to the contrary in this Section 2.03 of the Disclosure Schedules, Buyer’s willingness to make or incur the
Buyer’s Indebtedness Advances shall not be construed as an assumption of any liability or indebtedness of Seller, including
but not limited to the GLOC Loan, the ICON Debt Service or the BTH Credit Line, which shall not be deemed Assumed Liabilities hereunder,
and no lender or creditor of Seller shall be deemed an intended beneficiary hereunder.

 

Section
2.04. Excluded Liabilities. Notwithstanding the provisions of Section 2.03 or any other provision in this Agreement
to the contrary, Buyer shall not assume and shall not be responsible to pay, perform or discharge any Liabilities of Seller or
any of its Affiliates of any kind or nature whatsoever other than the Assumed Liabilities (collectively, the “Excluded
Liabilities”). Seller shall, and shall cause each of its Affiliates to, pay and satisfy in due course all Excluded Liabilities
which they are obligated to pay and satisfy and indemnify and hold Buyer and its Affiliates (and their respective officers and
directors) harmless from and against, any liability (actual or contingent) relating to the Excluded Liabilities. Without limiting
the generality of the foregoing, the Excluded Liabilities shall include, but not be limited to, the following:

 

(a) all
Liabilities in respect of any trade accounts payable of Seller to third parties in connection with the Business that remain unpaid
or delinquent as of the Closing Date but only to the extent that such Liabilities thereunder arose or are required to be performed
before the Closing Date, whether or not they were incurred in the ordinary course of business, relate to any failure to perform,
improper performance, warranty or other breach, default or violation by Seller on or prior to the Closing;

 

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

 

(c) any
Liabilities of Seller arising or incurred in connection with the ICON Acquisition, other than those that are specifically identified
as Assumed Liabilities (“Assumed ICON Business Liabilities”);

 

(d) any
Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this
Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby, including, without limitation, fees and
expenses of counsel, accountants, consultants, advisers and others;

 

    15

     

    

 

(e) any
Liability for (i) Taxes of Seller (or any stockholder or Affiliate of Seller) or relating to the Business, the Purchased Assets
or the Assumed Liabilities for any Pre-Closing Tax Period; (ii) Taxes that arise out of the consummation of the transactions contemplated
hereby or that are the responsibility of Seller pursuant to Section 6.14; or (iii) other Taxes of Seller (or any stockholder or
Affiliate of Seller) of any kind or description (including any Liability for Taxes of Seller (or any stockholder or Affiliate of
Seller) that becomes a Liability of Buyer under any common law doctrine of de facto merger or transferee or successor liability
or otherwise by operation of contract or Law);

 

(f) any
Liabilities relating to or arising out of the Excluded Assets;

 

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

 

(h) any
product Liability or similar claim for injury to a Person or property which arises out of or is based upon any express or implied
representation, warranty, agreement or guaranty made by Seller prior to the Closing, or by reason of the improper performance or
malfunctioning of a product, improper design or manufacture, failure to adequately package, label or warn of hazards or other related
product defects of any products at any time manufactured or sold or any service performed by Seller prior to the Closing;

 

(i) any
Liabilities of Seller arising under or in connection with any Benefit Plan providing benefits to any present or former employee
of Seller;

 

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

 

(k) any
Environmental Claims, or Liabilities under Environmental Laws, to the extent arising out of or relating to facts, circumstances
or conditions existing on or prior to the Closing or otherwise to the extent arising out of any actions or omissions of Seller;

 

(l) any
trade accounts payable of Seller (i) to the extent not accounted for on the Interim Balance Sheet; (ii) which constitute intercompany
payables owing to Affiliates of Seller; (iii) which constitute debt, loans or credit facilities to financial institutions; or (iv)
which did not arise in the ordinary course of business;

 

(m) any
Liabilities of the Business relating to or arising from unfulfilled commitments, quotations, purchase orders, customer orders or
work orders that (i) do not constitute part of the Purchased Assets issued by the Business’ customers to Seller on or before
the Closing; (ii) did not arise in the ordinary course of business; or (iii) are not validly and effectively assigned to Buyer
pursuant to this Agreement;

 

    16

     

    

 

(n) any
Liabilities to indemnify, reimburse or advance amounts to any present or former officer, director, employee or agent of Seller
(including with respect to any breach of fiduciary obligations by same), except for indemnification of same pursuant to Section
8.03 as Seller Indemnitees;

 

(o) any
Liabilities under the Excluded Contracts or any other Contracts, including Intellectual Property Agreements, (i) which are not
validly and effectively assigned to Buyer pursuant to this Agreement; (ii) which do not conform to the representations and warranties
with respect thereto contained in this Agreement; or (iii) to the extent such Liabilities arise out of or relate to a breach by
Seller of such Contracts prior to Closing;

 

(p) any
indebtedness of Seller or Liabilities associated with debt, loans or credit facilities of Seller and/or the Business owing to financial
institutions;

 

(q) any
Liabilities arising out of, in respect of or in connection with the failure by Seller or any of its Affiliates to comply with any
Law or Governmental Order;

 

(r) any
Liabilities owed by Seller to its Affiliates;

 

(s) any
Liabilities incident to, or arising out of, the conduct of the Business of Seller up to and including the Closing Date; and

 

(t) any
Liabilities incident to, or arising out of, non-ordinary course liabilities of Seller not reflected in the Balance Sheet or Seller’s
Disclosure Schedules.

 

Section
2.05. Purchase Price. The aggregate purchase price for the Purchased Assets and Assumed Liabilities shall be $1,059,600,
subject to adjustment pursuant to Section 2.06 hereof (the “Purchase Price”). The Purchase Price shall be paid
in cash at Closing (the “Cash Consideration”).

 

Section
2.06.  Earn-Out Payments. In addition to the Purchase Price, Seller shall be entitled to the following “Earn
Out Payments” based upon the actual Net Income of the Business during the 3-month period beginning on the first day of
the first full month that is 3 months after the Closing Date (the “First Earn Out Period”), the 3-month period
following the First Earn Out Period (the “Second Earn Out Period”) and the 3-month period following the Second
Earn Out Period (the “Third Earn Out Period”).

 

    17

     

    

 

(a) First
Earn Out Period. Buyer will pay Seller an amount equal to one hundred percent (100%) of the Net Income actually received
by Buyer from the Business during the First Earn Out Period (the “First Earn Out Payment”), fifty (50%) percent
in cash and, subject to the receipt of all necessary approvals, including the approval by the stockholders of Buyer of the proposed
issuance as may be required in accordance with the rules of The Nasdaq Stock Market, fifty (50%) percent in shares of restricted
common stock of SG Blocks, Inc. (“SG Blocks”), an Affiliate of Buyer, based on a price per share of $2.50, free
and clear of all Encumbrances, with all necessary transfer tax and other revenue stamps, if any, required (the “Earn Out
Shares”), on or before the date thirty (30) days from the end of the First Earn Out Period; provided, however, that 100%
of the First Earn Out Payment will be paid into and held in the Indebtedness Escrow until the amount of the First Earn Out Payment
so deposited into the Indebtedness Escrow Fund is not less than the anticipated aggregate amount of the Buyer’s Indebtedness
Advances. To the extent any portion of the First Earn Out Payment cannot be paid in Earn Out Shares, such portion of the First
Earn Out Payment shall be paid in cash.

 

(b) Second
Earn Out Period. Buyer will pay Seller an amount equal one hundred percent (100%) of the Net Income actually received
by Buyer from the Business during the Second Earn Out Period (the “Second Earn Out Payment”), fifty (50%) percent
in cash and, subject to the receipt of all necessary approvals, including the approval by the stockholders of Buyer of the proposed
issuance as may be required in accordance with the rules of The Nasdaq Stock Market, fifty (50%) percent in Earn Out Shares, on
or before the date thirty (30) days from the end of the Second Earn Out Period; provided, however, that 100% of the Second Earn
Out Payment will be paid into and held in the Indebtedness Escrow until the total amount of the First Earn Out Payment and Second
Earn Out Payment so deposited into the Indebtedness Escrow Fund is not less than the anticipated aggregate amount of the Buyer’s
Indebtedness Advances. To the extent any portion of the Second Earn Out Payment cannot be paid in Earn Out Shares, such portion
of the Second Earn Out Payment shall be paid in cash.

 

(c) Third
Earn Out Period. Buyer will pay Seller an amount equal one hundred percent (100%) of the Net Income actually received
by Buyer from the Business during the Third Earn Out Period (the “Third Earn Out Payment”), fifty (50%) percent
in cash and, subject to the receipt of all necessary approvals, including the approval by the stockholders of Buyer of the proposed
issuance as may be required in accordance with the rules of The Nasdaq Stock Market, fifty (50%) percent in Earn Out Shares, on
or before the date thirty (30) days from the end of the Third Earn Out Period; provided, however, that 100% of the Third Earn Out
Payment will be paid into and held in the Indebtedness Escrow until the total amount of the First Earn Out Payment, Second Earn
Out Payment and Third Earn Out Payment so deposited into the Indebtedness Escrow Fund is not less than the anticipated aggregate
amount of the Buyer’s Indebtedness Advances. To the extent any portion of the Third Earn Out Payment cannot be paid in Earn
Out Shares, such portion of the Third Earn Out Payment shall be paid in cash.

 

(d) Nasdaq
Approval. Buyer shall use its commercially reasonable efforts, (i) to the extent required by the rules and regulations of Nasdaq
Stock Market (“Nasdaq”), to cause SG Blocks to prepare and submit to Nasdaq a notification form for the listing
of the Earn Out Shares and to cause the Earn Out Shares to be approved for listing (subject to official notice of issuance); and
(ii) to the extent required by Nasdaq Marketplace Rule 5110, to cause SG Blocks to file an initial listing application for the
Company’s Common Stock on Nasdaq (the “Nasdaq Listing Application”) and to cause such Nasdaq Listing Application
to be conditionally approved prior to the issuance of any Option Shares. The Parties and SG Blocks will use commercially reasonable
efforts to coordinate with respect to compliance with Nasdaq rules and regulations. Seller will cooperate with Buyer as reasonably
requested by Buyer with respect to the Nasdaq Listing Application and promptly furnish to the Buyer all information concerning
the Seller and its members that may be required or reasonably requested in connection with any action contemplated by this Section 2.06.

 

    18

     

    

 

(e)
Nasdaq Cap. Notwithstanding anything to the contrary set forth in this Agreement,
in no event shall SG Blocks be obligated to issue Earn Out Shares under this Agreement more than an aggregate of number of shares
of its common stock constituting 19.99% of its outstanding shares on the date hereof (the “Exchange Cap”).

 

(f) Each
Earn Out Payment will be accompanied by a certified statement (an “Earn Out Statement”) prepared by or on behalf
of Buyer showing in reasonable detail the amount of Net Income received by Buyer from the Business during the applicable Earn Out
Period and the calculation of the corresponding Earn Out Payment, if any.

 

(g) After
receipt of an Earn Out Statement, Seller shall have thirty (30) days to review such Earn Out Statement and notify Buyer in writing
of the number of Earn Out Shares, if any, to be issued in lieu of cash. At Seller’s request, Buyer shall deliver to Seller
supporting materials as are reasonably required to understand and verify the accuracy of the amounts set forth, and all calculations
made in, the Earn Out Statement. Unless Seller delivers written notice to Buyer on or prior to the thirtieth (30th) day after receipt
of such Earn Out Statement specifying in reasonable detail all disputed items and the basis therefor (an “Earn Out Notice
of Objection”), Seller shall be deemed to have accepted and agreed to such Earn Out Statement. Any Earn Out Statement
Notice of Objection shall include only objections based on (i) mathematical errors in the computation of net income and/or an Earn
Out Payment; (ii) whether an item should be included in, or excluded from, the Earn Out Statement based on the definition of Net
Income; or (iii) any written agreement entered into between Seller and Buyer regarding a modification of the calculation of an
Earn Out Payment.

 

(h) If
Seller provides an Earn Out Statement Notice of Objection within such thirty (30) day period, Seller and Buyer shall, within thirty
(30) days following Buyer’s receipt of such Earn Out Statement Notice of Objection (the “Earn Out Statement Resolution
Period”), negotiate in good faith to resolve their differences and any resolution by them (evidenced in writing) as to
any disputed amounts shall be final, binding and conclusive on all parties hereto. If a dispute remains at the conclusion of the
Earn Out Statement Resolution Period, then all amounts remaining in dispute shall be submitted for resolution to an impartial nationally
recognized firm of independent certified public accountants (other than Seller’s Accountants or Buyer’s Accountants)
(the “Independent Accountant”) appointed by Buyer and Seller by mutual agreement within five (5) days after
the expiration of such Earn Out Statement Resolution Period. All fees and expenses relating to the work, if any, to be performed
by the Independent Accountant shall be borne by Seller and Buyer in proportion to the percentage of the total amount in dispute
that is resolved in their favor. The Independent Accountant shall determine and resolve only those issues in dispute. The Independent
Accountant’s determination shall be made within sixty (60) days after the submission of the dispute to the Independent Accountant,
shall be set forth in a written statement delivered to Seller and Buyer and shall be final, binding and conclusive on all parties
hereto. The date on which the disputed Earn Out Payment is finally determined pursuant to this Section 2.06(h) shall be
referred to as an “Earn Out Determination Date”.

 

    19

     

    

 

(i) Within
five (5) Business Days after an Earn Out Determination Date, if an Earn Out Payment is due and payable to Seller, then Buyer shall
pay such Earn Out Payment to Seller by wire transfer of immediately available funds to the account or accounts designated in writing
by Seller and issuance of the Earn Out Shares. In the event Buyer fails to timely pay any undisputed Earn Out Payment pursuant
to this Agreement, interest shall accrue on such unpaid Earn Out Payment at the rate of five percent (5%) per annum and be added
to and paid with the cash portion of the Earn Out Payment.

  

Section
2.06. Purchase Price Adjustment.

 

(a) Post-Closing
Adjustment.

 

(i) Within
thirty (30) days after the Closing Date, Buyer shall prepare and deliver to Seller (A) a statement setting forth its calculation
of Closing Working Capital, which statement shall be in the form of Section 2.07(a)(i) of the Disclosure Schedules (the “Closing
Working Capital Statement”), and (B) a certificate of an officer the of Buyer that the Closing Working Capital Statement
was prepared in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures,
with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the
Audited Financial Statements for the most recent fiscal year end, subject to the modifications and limitations set forth on Section
2.07(a)(i) of the Disclosure Schedules.

 

(ii) The
“Post-Closing Adjustment” shall be an amount equal to the Closing Working Capital minus the Target Working Capital.
If the Post-Closing Adjustment is a positive number, Buyer shall pay to Seller an amount equal to the Post-Closing Adjustment;
provided, however, that no such payment will be due and owing to Seller to the extent such payment is less than any unrecouped
amounts of the Buyer’s Indebtedness Advances. If the Post-Closing Adjustment is a negative number, Seller shall pay to Buyer
an amount equal to the Post-Closing Adjustment.

 

(b) Examination
and Review.

 

(i) Examination.
After receipt of the Closing Working Capital Statement, Seller shall have thirty (30) days (the “Working Capital Review
Period”) to review the Closing Working Capital Statement. During the Working Capital Review Period, Seller and Seller’s
Accountants shall have full access to the relevant books and records of Buyer, the personnel of, and work papers prepared by, Buyer
and/or Buyer’s Accountants to the extent that they relate to the Closing Working Capital Statement and to such historical
financial information (to the extent in Buyer’s possession) relating to the Closing Working Capital Statement as Seller may
reasonably request for the purpose of reviewing the Closing Working Capital Statement and to prepare a Working Capital Notice of
Objections (defined below), provided, that such access shall be in a manner that does not interfere with the normal business operations
of Buyer.

 

    20

     

    

 

(ii) Objection.
On or prior to the last day of the Working Capital Review Period, Seller may object to the Closing Working Capital Statement by
delivering to Buyer written notice setting forth Seller’s objections in reasonable detail, indicating each disputed item
or amount and the basis for Seller’s disagreement therewith (the “Working Capital Notice of Objections”).
If Seller fails to deliver the Working Capital Notice of Objections before the expiration of the Working Capital Review Period,
the Closing Working Capital Statement and the Post-Closing Adjustment, as the case may be, reflected in the Closing Working Capital
Statement shall be deemed to have been accepted by Seller. If Seller delivers the Working Capital Notice of Objections before the
expiration of the Working Capital Review Period, Buyer and Seller shall negotiate in good faith to resolve such objections within
thirty (30) days after the delivery of the Working Capital Notice of Objections (the “Working Capital Resolution Period”),
and, if the same are so resolved within the Working Capital Resolution Period, the Post-Closing Adjustment and the Closing Working
Capital Statement with such changes as may have been previously agreed in writing by Buyer and Seller, shall be final and binding.

 

(iii) Resolution
of Disputes. If Seller and Buyer fail to reach an agreement with respect to all of the matters set forth in the Working Capital
Notice of Objections before expiration of the Working Capital Resolution Period, then any amounts remaining in dispute (“Working
Capital Disputed Amounts” and any amounts not so disputed, the “Working Capital Undisputed Amounts”)
shall be submitted to the Independent Accountant who, acting as an expert and not arbitrator, shall resolve the Working Capital
Disputed Amounts only and make any adjustments to the Post-Closing Adjustment, as the case may be, and the Closing Working Capital
Statement. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant
shall only decide the specific items under dispute by the parties and their decision for each Working Capital Disputed Amount must
be within the range of values assigned to each such item in the Closing Working Capital Statement and the Working Capital Notice
of Objections, respectively.

 

(iv) Fees
of the Independent Accountant. The fees and expenses of the Independent Accountant shall be paid by Seller, on the one hand, and
Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to Seller or Buyer, respectively,
bears to the aggregate amount actually contested by Seller and Buyer.

 

(v) Determination
by Independent Accountant. The Independent Accountant shall make a determination as soon as practicable within thirty (30) days
(or such other time as the parties hereto shall agree in writing) after their engagement, and their resolution of the Working Capital
Disputed Amounts and their adjustments to the Closing Working Capital Statement and/or the Post-Closing Adjustment shall be conclusive
and binding upon the parties hereto.

 

    21

     

    

 

(vi) Payments
of Post-Closing Adjustment. Except as otherwise provided herein, any payment of the Post-Closing Adjustment, together with interest
calculated as set forth below, shall (A) be due (x) within five (5) Business Days of acceptance of the applicable Closing Working
Capital Statement or (y) if there are Working Capital Disputed Amounts, then within five (5) Business Days of the resolution described
in clause (v) above; and (B) be paid by wire transfer of immediately available funds to such account as is directed by Buyer or
Seller, as the case may be. Any payment of the Post-Closing Adjustment owed by Seller to Buyer shall be paid by the Escrow Agent
pursuant to the terms of the Escrow Agreement: (X) from the Purchase Price Adjustment Escrow Fund, and (Y) to the extent the amount
of the Post-Closing Adjustment exceeds the amount available in the Purchase Price Adjustment Escrow Fund, from the Indemnification
Escrow Fund. The amount of any Post-Closing Adjustment shall bear interest from and including the Closing Date to and including
the date of payment at a rate per annum equal to six percent (6%) per annum. Such interest shall be calculated daily on the basis
of a 365-day year and the actual number of days elapsed.

 

(c) Adjustments
for Tax Purposes. Any payments made pursuant to Section 2.07 shall be treated as an adjustment to the Purchase Price
by the parties for Tax purposes, unless otherwise required by Law.

 

(d) Offset. In
addition to Buyer’s rights with respect to the Purchase Price Adjustment Escrow Fund, the Indemnification Escrow Fund, the
Indebtedness Escrow Fund and Buyer’s rights to withhold and retain Earn Out Payments in accordance with Sections, 2.06(a),
(b) and (c) Buyer shall have the right to withhold and set-off against any Earn Out Payments or other amounts that
may be due to Seller under this Agreement; provided, however, that, except for Buyer’s rights with respect to Earn Out Payments
as set forth in Sections, 2.06(a), (b) and (c), in which case Buyer may withhold, set off against and deposit
into the Indebtedness Escrow all Earn Out Payments without giving notice to Seller regardless of the amount of set-off, Buyer may
not offset in an amount in excess of $50,000 (in the aggregate) without first giving written notice to Seller, in which case Seller
and Buyer will seek to resolve the events giving rise to the offset in good faith. In the event such good faith efforts are unsuccessful,
or the parties are unable to achieve a mutually acceptable resolution within 30 days (unless that time period is extended by the
written agreement of Seller and Buyer), then the dispute will be submitted to binding mediation. During the pendency of such mediation,
the funds subject to Buyer’s proposed offset will be held in escrow by Buyer’s attorney in accordance with an escrow
agreement in substantially the form of the Escrow Agreement.

 

Section
2.07. Allocation of Purchase Price. Seller and Buyer agree that the Purchase Price and the Assumed Liabilities
(plus other relevant items) shall be allocated among the Purchased Assets for all purposes (including Tax and financial accounting)
as shown on the allocation schedule (the “Allocation Schedule”). A draft of the Allocation Schedule shall be
prepared by Buyer and delivered to Seller within ten (10) days after to the Closing Date. If Seller notifies Buyer in writing that
Seller objects to one or more items reflected in the Allocation Schedule, Seller and Buyer shall negotiate in good faith to resolve
such dispute; provided, however, that if Seller and Buyer are unable to resolve any dispute with respect to the Allocation
Schedule within twenty (20) days following the Closing Date, such dispute shall be resolved by the Independent Accountant. The
fees and expenses of such accounting firm shall be borne equally by Seller and Buyer. Buyer and Seller shall file all Tax Returns
(including amended returns and claims for refund) and information reports in a manner consistent with the Allocation Schedule.
Any adjustments to Section 2.08 herein shall be allocated in a manner consistent with the Allocation Schedule. Notwithstanding
the foregoing, the Buyer’s good-faith estimate of the Purchase Price Allocation is attached hereto as Exhibit 2.08.

 

    22

     

    

 

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

 

Section
2.09. Third Party Consents. To the extent that Seller’s rights under any Contract or Permit constituting
a Purchased Asset, or any other Purchased Asset, may not be assigned to Buyer without the consent of another Person which has not
been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute
a breach thereof or be unlawful, and Seller, at its expense, shall use its reasonable best efforts to obtain any such required
consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective
or would impair Buyer’s rights under the Purchased Asset in question so that Buyer would not in effect acquire the benefit
of all such rights, Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as Buyer’s
agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased
Asset, with Buyer in any other reasonable arrangement designed to provide such benefits to Buyer. Notwithstanding any provision
in this Section 2.10 to the contrary, Buyer shall not be deemed to have waived its rights under Section 7.02(e) hereof
unless and until Buyer either provides written waivers thereof or elects to proceed to consummate the transactions contemplated
by this Agreement at Closing.

 

ARTICLE
III

CLOSING

 

Section
3.01. Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of Ruta Soulios & Stratis, LLP, 211 East
43rd Street, 24th Floor, New York, NY or remotely by exchange of documents and signatures (or their electronic
counterparts), at such time after all of the conditions to Closing set forth in ARTICLE VII are either satisfied or waived (other
than conditions which, by their nature, are to be satisfied on the Closing Date) which the Parties expect to occur on or about
September 21, 2020, or at such other time, date or place as Seller and Buyer may mutually agree upon in writing. The date on which
the Closing is to occur is herein referred to as the “Closing Date.”

 

Section
3.02. Closing Deliverables.

 

(a) At
the Closing, Seller shall deliver to Buyer the following:

 

(i) the
Escrow Agreement duly executed by Seller;

 

    23

     

    

 

(ii) a
bill of sale in form and substance satisfactory to Buyer (the “Bill of Sale”) and duly executed by Seller, transferring
the tangible personal property included in the Purchased Assets to Buyer;

 

(iii) an
assignment and assumption agreement in form and substance satisfactory to Buyer (the “Assignment and Assumption Agreement”)
and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;

 

(iv) 
assignments in form and substance satisfactory to Buyer (the “Intellectual Property Assignments”) and duly executed
by Seller, transferring all of Seller’s right, title and interest in and to the Intellectual Property Assets to Buyer;

 

(v) the
Long Term Lease, duly executed by Seller;

 

(vi) the
Real Estate RoFR Letter Agreement, duly executed by Seller;

 

(vii) the
ITEC RoFR Letter Agreement, duly executed by Seller;

 

(viii) a
limited power of attorney with respect to the ownership and operation of the Purchased Assets, payment of the GLOC Loan, Seller’s
Debt Service and BTH Credit Line and the filing of the BTH Credit Line Mortgage, in form and substance satisfactory to Buyer and
duly executed by Seller;

 

(ix) the
Seller Closing Certificate;

 

(x) the
FIRPTA Certificate;

 

(xi) the
certificates of the Secretary or Assistant Secretary of Seller required by Section 7.02(k) and Section 7.02(l);

 

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

 

(b) At
the Closing, Buyer shall deliver to Seller the following:

 

(i) the
Cash Consideration, less the Purchase Price Adjustment Escrow Amount and the Indemnification Escrow Amount, by wire transfer
of immediately available funds to an account designated in writing by Seller to Buyer;

 

(ii) 
the Escrow Agreement duly executed by Buyer;

 

(iii) the
Assignment and Assumption Agreement duly executed by Buyer;

 

(iv) the
Long Term Lease, duly executed by Buyer (or its Affiliate);

 

    24

     

    

 

(v) the
Real Estate RoFR Agreement, duly executed by Seller (or its Affiliate);

 

(vi) the
ITEC RoFR Agreement, duly executed by Seller (or its Affiliate);

 

(vii) the
Buyer Closing Certificate;

 

(viii) the
certificates of the Secretary or Assistant Secretary of Buyer required by Section 7.03(g) and Section 7.03(h).

 

(c) At
the Closing, Buyer shall deliver to the Escrow Agent:

 

(i) the
Purchase Price Adjustment Escrow Amount (such amount, including any interest or other amounts earned thereon and less any disbursements
therefrom in accordance with the Escrow Agreement, the “Purchase Price Adjustment Escrow Fund”) by wire transfer
of immediately available funds to accounts designated by the Escrow Agent, to be held for the purpose of securing the obligations
of Seller in Section 2.07(b)(vi) and Section 2.03(d);

 

(ii) the
Indemnification Escrow Amount (such amount, including any interest or other amounts earned thereon and less any disbursements therefrom
in accordance with the Escrow Agreement, the “Indemnification Escrow Fund”) by wire transfer of immediately
available funds to accounts designated by the Escrow Agent, to be held for the purpose of securing the indemnification obligations
of Seller set forth in Article VIII and the obligations of Seller in Section 2.07(b)(vi) and Section 2.03(d);

 

(iii) the
Indebtedness Escrow Amount (such amount, including any interest or other amounts earned thereon and less any disbursements therefrom
in accordance with the Escrow Agreement, the “Indebtedness Escrow Fund”) by wire transfer of immediately available
funds to accounts designated by the Escrow Agent, to be held for the purpose of securing the obligations of Seller in Section
2.03(d);and

 

(iv) the
Escrow Agreement.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth
in the correspondingly numbered Section of the Disclosure Schedules attached to this Agreement, Seller represents and warrants
to Buyer that the statements contained in this Article IV are true and correct as of the date hereof. The Disclosure Schedule shall
be arranged in sections corresponding to each section and subsection of this Article IV.

 

Section
4.01. Organization and Qualification of Seller. Seller is a limited liability company duly organized, validly
existing and in good standing under the Laws of the state of Texas and has full corporate power and authority to own, operate or
lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted. Except
as set forth in Section 4.01 of the Disclosure Schedules, Seller is duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the ownership of the Purchased Assets or the operation of the Business as currently conducted makes
such licensing or qualification necessary. Seller previously has delivered to Buyer true and complete copies of its certificate
of formation and operating agreement as presently in effect.

 

    25

     

    

 

Section
4.02. Authority of Seller. Seller has full power and authority to enter into this Agreement and the Ancillary
Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any Ancillary Document to which Seller
is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement
has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement
constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms. When each
Ancillary Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization,
execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of
Seller enforceable against it in accordance with its terms.

 

Section
4.03. No Conflicts; Consents. Seller is not in violation or default (i) of any provision of its the certificate
of formation, operating agreement or other organizational documents, (ii) of any instrument, judgment, order, writ or decree, (iii)
under any note, indenture or mortgage, or (iv) under any lease, agreement, mortgage contract or purchase order to which it is a
party or by which it is bound. The execution, delivery and performance by Seller of this Agreement and the Ancillary Documents
to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict
with or result in a violation or breach of, or default under, any provision of the certificate of formation, operating agreement
or other organizational documents of Seller; (b) to the best of Seller’s Knowledge, conflict with or result in a violation
or breach of any provision of any Law or Governmental Order applicable to Seller, the Business or the Purchased Assets; (c) require
the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default
or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration
of or create in any party the right to accelerate, terminate, modify or cancel any Contract or Permit to which Seller is a party
or by which Seller or the Business is bound or to which any of the Purchased Assets are subject (including any Assigned Contract);
or (d) result in the creation or imposition of any Encumbrance other than Permitted Encumbrances on the Purchased Assets. No consent,
approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with
respect to Seller in connection with the execution and delivery of this Agreement or any of the Ancillary Documents and the consummation
of the transactions contemplated hereby and thereby. Except as set forth on Schedule 4.03 of the Disclosure Schedules, there
are no notices, authorizations, consents, licenses, permits, waivers, assignments and other approvals and actions that are necessary
in connection with the execution and delivery by Seller of this Agreement and the Ancillary Documents and consummation by Seller
of the transactions contemplated hereby and thereby, under any Law or Contract to which Seller is a party or to which the Purchased
Assets are subject (collectively, “Consents”). No authorization, consent, registration, declaration or filing
with, or notice to, any Governmental Authority or other Person is required by or with respect to the Seller in connection with
the execution and delivery by Seller of this Agreement and the Ancillary Documents or the consummation by Seller of the transactions
contemplated hereby and thereby, except for such filings, authorizations, registrations, consents, declarations, filings or notice
which, in the aggregate, would not have a Material Adverse Effect.

 

    26

     

    

 

Section
4.04. Financial Statements. True, correct and complete copies of the financial statements consisting of the balance
sheet of the Seller for each year in which Seller has been in operation since 2017 and the related statements of income and retained
earnings, partners’ equity and cash flow for the years then ended (the “Financial Statements”), and unaudited
financial statements consisting of the balance sheet of the Seller as of June 30, 2020, and the related statements of income and
retained earnings, stockholders’ equity and cash flow for the 6-month period then ended (the “Interim Financial
Statements” and together with the Financial Statements, the “Financial Statements”) have been delivered
to Buyer. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period
involved, subject, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments (the effect of
which will not be materially adverse) and the absence of notes (that, if presented, would not differ materially from those presented
in the Financial Statements). The Financial Statements are based on the books and records of the Business, and fairly present the
financial condition of the Business as of the respective dates they were prepared and the results of the operations of the Business
for the periods indicated. Except as set forth on Schedule 4.04, the Financial Statements have not been rendered untrue,
incomplete or unfair as representations of the financial condition or results of operations of the Seller by the subsequent discovery
of events or occurrences, which should have been reflected in such Financial Statements. The balance sheet of the Business as of
December 31, 2019 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance
Sheet Date” and the balance sheet of the Business as of June 30, 2020 is referred to herein as the “Interim
Balance Sheet” and the date thereof as the “Interim Balance Sheet Date”. Seller maintains a standard
system of accounting for the Business established and administered in accordance with GAAP.

 

Seller maintains a system
of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations and (ii) transactions are recorded as necessary and to maintain asset accountability.
Seller has established disclosure controls and procedures for Seller and designed such disclosure controls and procedures to ensure
that material information relating to Seller is made known to their officers by others. The managers of Seller have evaluated the
effectiveness of Seller’s controls and procedures. Since the date of the Balance Sheet, there have been no changes in any
of Seller’s internal controls or other factors that could significantly affect Seller’s internal controls.

 

Section
4.05. Liabilities. Except as set forth in Schedule 4.05, the Financial Statements reflect all debts,
liabilities, obligations or commitments of Seller related to the Business of a type or nature that would be required to be reflected
on a balance sheet, except those which have been incurred in the ordinary course of business since the Balance Sheet Date and which
are not material in amount. Except as set forth in the Financial Statements, neither the Business nor the Purchased Assets are
subject to any liability upon or with respect to, subject to or obligated in any other way to provide funds in respect of or to
guarantee or assume in any manner, any debt, liability or obligation of any other Person and there is no basis for the assertion
of any such claim or liability.

 

    27

     

    

 

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

 

Section
4.06. Absence of Certain Changes, Events and Conditions. Since the Balance Sheet Date, except as set forth on
Schedule 4.07, there has not been any:

 

(a) event,
occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect;

 

(b) declaration
or payment of any distributions on or in respect of any of Seller’s membership interests or redemption, purchase or acquisition
of Seller’s membership interests;

 

(c) material
change in any method of accounting or accounting practice for the Business, except as required by GAAP or as disclosed in the notes
to the Financial Statements;

 

(d) material
change in cash management practices and policies, practices and procedures with respect to collection of Accounts Receivable, establishment
of reserves for uncollectible Accounts Receivable, accrual of Accounts Receivable, inventory control, prepayment of expenses, payment
of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

 

(e) entry
into any Contract that would constitute a Material Contract other than in the ordinary course of business;

 

(f) incurrence,
assumption or guarantee of any indebtedness for borrowed money in connection with the Business except unsecured current obligations
and Liabilities incurred in the ordinary course of business consistent with past practice;

 

(g) transfer,
assignment, sale or other disposition of any of the Purchased Assets shown or reflected in the Balance Sheet, except for the sale
of Inventory in the ordinary course of business;

 

(h) cancellation
of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets;

 

(i) transfer
or assignment of or grant of any license or sublicense under or with respect to any Intellectual Property Assets or Intellectual
Property Agreements (except non-exclusive licenses or sublicenses granted in the ordinary course of business consistent with past
practice;

 

(j) abandonment
or lapse of or failure to maintain in full force and effect any Intellectual Property Registration, or failure to take or maintain
reasonable measures to protect the confidentiality or value of any Trade Secrets included in the Intellectual Property Assets;

 

    28

     

    

 

(k) material
damage, destruction or loss, or any material interruption in use, of any Purchased Assets, whether or not covered by insurance;

 

(l) acceleration,
termination, material modification to or cancellation of any Assigned Contract or Permit;

 

(m) material
capital expenditures which would constitute an Assumed Liability;

 

(n) imposition
of any Encumbrance upon any of the Purchased Assets;

 

(o) (i)
grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation
or benefits in respect of any current or former employees, officers, directors, independent contractors or consultants of the Business,
other than as provided for in any written agreements or required by applicable Law, (ii) change in the terms of employment for
any employee of the Business or any termination of any employees for which the aggregate costs and expenses exceed $5,000, or (iii)
action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director,
consultant or independent contractor of the Business;

 

(p) hiring
or promoting any person as or to (as the case may be) a senior executive position or hiring or promoting any employee below such
position except to fill a vacancy in the ordinary course of business;

 

(q) adoption,
modification or termination of any: (i) employment, severance, retention or other agreement with any current or former employee,
officer, director, independent contractor or consultant of the Business, (ii) Benefit Plan, or (iii) collective bargaining or other
agreement with a Union, in each case whether written or oral;

 

(r) any
loan to (or forgiveness of any loan to), or entry into any other transaction with, any current or former directors, officers or
employees of the Business;

 

(s) adoption
of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any
provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar
Law;

 

(t) purchase,
lease or other acquisition of the right to own, use or lease any property or assets in connection with the Business, except for
purchases of Inventory or supplies in the ordinary course of business consistent with past practice;

 

(u) amendment
or change to Seller’s Operating Agreement or other organizational documents;

 

    29

     

    

 

(v) any
Tax election made, or change to Seller’s method of Tax accounting or settled any claim for Taxes;

 

(w) settlement
of any Action by Seller; or

 

(x) any
Contract or agreement, whether in writing or otherwise, to do any of the foregoing, or any action or omission that would result
in any of the foregoing.

 

Section
4.07. Material Contracts.

 

(a) Section
4.08(a) of the Disclosure Schedules lists each of the following Contracts (x) by which any of the Purchased Assets are bound or
affected or (y) to which Seller is a party or by which it is bound in connection with the Business or the Purchased Assets (such
Contracts, together with all Contracts concerning the occupancy, management or operation of any Real Property (including without
limitation, brokerage contracts) listed or otherwise disclosed in Section 4.11(a) of the Disclosure Schedules and all Intellectual
Property Agreements, being “Material Contracts”):

 

(i) all
Contracts involving aggregate consideration in excess of $5,000 and which, in each case, cannot be cancelled without penalty or
without more than thirty (30) days’ notice;

 

(ii) all
Contracts that require Seller to purchase or sell a stated portion of the requirements or outputs of the Business or that contain
“take or pay” provisions;

 

(iii) all
Contracts that provide for the indemnification of any Person or the assumption of any Tax, environmental or other Liability of
any Person;

 

(iv) all
Contracts that relate to the acquisition or disposition of any business, a material amount of stock or assets of any other Person
or any real property (whether by merger, sale of stock, sale of assets or otherwise);

 

(v) all
broker, distributor, dealer, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing
consulting and advertising Contracts;

 

(vi) all
employment agreements and Contracts with independent contractors or consultants (or similar arrangements) which are not cancellable
at-will;

 

(vii) except
for Contracts relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees);

 

(viii) all
Contracts with any Governmental Authority (“Government Contracts”);

 

(ix) all
Contracts that limit or purport to limit the ability of Seller to compete in any line of business or with any Person or in any
geographic area or during any period of time;

 

    30

     

    

 

(x) all
joint venture, partnership or similar Contracts;

 

(xi) all
Contracts for the sale of any of the Purchased Assets or for the grant to any Person of any option, right of first refusal or preferential
or similar right to purchase any of the Purchased Assets;

 

(xii) all
powers of attorney with respect to the Business or any Purchased Asset;

 

(xiii) all
collective bargaining agreements or Contracts with any Union; and

 

(xiv) all
other Contracts that are material to the Purchased Assets or the operation of the Business and not previously disclosed pursuant
to this Section 4.08.

 

(b) Each
Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or,
to Seller’s Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default
under) or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has
occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result
in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any
benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements
thereto and waivers thereunder) have been made available to Buyer. There are no material disputes pending or threatened under any
Contract included in the Purchased Assets.

 

Section
4.08. Title to Purchased Assets. Seller has good and marketable title to or a valid leasehold interest in all
of the Purchased Assets, free and clear of Encumbrances except for the following (collectively referred to as “Permitted
Encumbrances”):

 

(a) those
items set forth in Section 4.09 of the Disclosure Schedules;

 

(b) liens
for Taxes not yet due and payable;

 

(c) mechanics’,
carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business
consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material
to the Business or the Purchased Assets;

 

(d) easements,
rights of way, zoning ordinances and other similar encumbrances affecting Real Property which are not, individually or in the aggregate,
material to the Business or the Purchased Assets, which do not prohibit or interfere with the current operation of any Real Property
and which do not render title to any Real Property unmarketable; or

 

    31

     

    

 

(e) other
than with respect to Owned Real Property, liens arising under original purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course of business consistent with past practice which are not, individually
or in the aggregate, material to the Business or the Purchased Assets.

 

Except as set
forth on Schedule 4.08, as of Closing none of the Purchased Assets or the use thereof: (i) is subject to any easements or
restrictions or to any Liens , or to any rights of others of any kind of nature whatsoever; (ii) encroaches or infringes on the
property or rights of another; or (iii) contravenes any applicable law or ordinance or any other administrative regulation or violates
any restrictive covenant or any provision of law. There are no agreements or arrangements between Seller and any third person,
which have any adverse effect upon Seller’s title to or other rights respecting the Purchased Assets. Further, and not in
limitation of any of the foregoing provisions of this Section 4.08, except as described in Schedule 4.08:

 

(i) Seller
has the full right and power to transfer the Assets;

 

(ii)  Seller
has the right to bring actions for the infringement of its interest and proprietary rights in, all of the Purchased Assets;

 

(iii)  Seller
has no present or future obligation or requirement to compensate any person with respect to any of the Purchased Assets, whether
by the payment of royalties or not, or whether by reason of the ownership, use, license, lease, sale or any commercial use or any
disposition whatsoever of any of such assets and the sale of the Purchased Assets does not trigger any such rights or similar rights;

 

(iv) the
ownership, production, marketing, license, lease, use or other disposition of any product or service presently being licensed or
leased by Seller to any person does not and will not violate any license or agreement of the Seller with any person or infringe
any right of any other person;

 

(v) there
are no express or implied warranties outstanding with respect to any products or services provided by Seller, except as set forth
on Schedule 4.08 or may be provided by law; and

 

(vi) none
of the present or former employees of Seller own directly or indirectly, or has any other right or interest in, in whole or in
part, any of the Purchased Assets and each has signed an assignment of any inventions to the Seller; and

 

(viii) the
Purchased Assets constitute all rights necessary for the Seller to conduct the Business as now conducted.

 

Section
4.9. Condition and Sufficiency of Assets. The buildings, plants, structures, furniture, fixtures, machinery,
equipment, inventory, vehicles and other items of tangible personal property included in the Purchased Assets are structurally
sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such
buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property
is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.
The Purchased Assets are sufficient for the continued conduct of the Business after the Closing in substantially the same manner
as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as currently
conducted. None of the Excluded Assets are material to the Business.

 

    32

     

    

 

Section
4.10. Real Property.

 

(a) Except
for the Owned Real Property, there is no real property, buildings, fixtures, structures or improvements situated thereon, easements,
rights-of-way or other rights and privileges appurtenant thereto that are owned by Seller or used in or necessary for the conduct
of the Business as currently conducted. Seller has delivered to Buyer copies of the deeds and other instruments (as recorded) by
which Seller acquired the Owned Real Property, and copies of all title insurance policies, opinions, abstracts and surveys in the
possession of Seller with respect thereto. With respect to the Owned Real Property:

 

(i) Seller
has good and marketable fee simple title, free and clear of all Encumbrances;

 

(ii) Except
for the Long Term Lease, Seller has not leased or otherwise granted to any Person the right to use or occupy the Owned Real Property
or any portion thereof; and

 

(iii) Except
for the Real Estate RoFR, there are no unrecorded outstanding options, rights of first offer or rights of first refusal to purchase
the Owned Real Property or any portion thereof or interest therein.

 

(b) Seller
does not lease, sublease, license or sublicense any real property that is used in or necessary for the conduct of the Business
as currently conducted.

 

(c) Seller
has not received any written notice of (i) violations of building codes and/or zoning ordinances or other governmental or regulatory
Laws affecting the Owned Real Property, (ii) existing, pending or threatened condemnation proceedings affecting the Owned Real
Property, or (iii) existing, pending or threatened zoning, building code or other moratorium proceedings, or similar matters which
could reasonably be expected to adversely affect the ability to operate the Owned Real Property as currently operated. The uses
for which the buildings, facilities and other improvements located on the Owned Real Property are zoned do not restrict or impair
the use of the Owned Real Property for purposes of the Business of Seller. Neither the whole nor any material portion of any Owned
Real Property has been damaged or destroyed by fire or other casualty.

 

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

 

(e) Seller
has delivered to Buyer true and complete copies of the following: (i) all deeds pursuant to which Seller acquired title and (ii)
all owner’s policies of title insurance, together with copies of listed exceptions to title, covering the Owned Real Property.
Seller has peaceful, undisturbed and exclusive possession of the Owned Real Property. Seller has not received notice of any outstanding
claims under any expired leases or subleases to which the Seller is or was a party.

 

    33

     

    

 

(f) The
Owned Real Property and all present uses and operations of the Owned Real Property comply with all Laws, covenants, conditions,
restrictions, easements, disposition agreements and similar matters affecting the Real Property; and the Owned Real Property and
the continued use, occupancy and operation as used, occupied and operated in the conduct of the Business, do not constitute nonconforming
uses and are not the subject of any special use permit under any Law.

 

(g) The
Owned Real Property is in suitable condition for Seller’s Business as currently conducted and as currently contemplated to
be conducted.

 

Section
4.11. Intellectual Property.

 

(a) Section
4.12(a) of the Disclosure Schedules contains a correct, current and complete list of: (i) all Intellectual Property Registrations,
specifying as to each, as applicable: the title, mark, or design; the jurisdiction by or in which it has been issued, registered
or filed; the patent, registration or application serial number; the issue, registration or filing date; and the current status;
(ii) all unregistered Trademarks included in the Intellectual Property Assets; (iii) all proprietary Software included in the Intellectual
Property Assets; and (iv) all other Intellectual Property Assets that are used in the conduct of the Business as currently conducted.

 

(b) 
Seller is the sole and exclusive legal and beneficial, and with respect to the Intellectual Property Registrations, record, owner
of all right, title and interest in and to the Intellectual Property Assets, and has the valid and enforceable right to use all
other Intellectual Property used in or necessary for the conduct of the Business as currently conducted, in each case, free and
clear of Encumbrances other than Permitted Encumbrances. The Intellectual Property Assets are all of the Intellectual Property
necessary to operate the Business as presently conducted. The documentation relating to the Intellectual Property Assets is current,
accurate and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance
on the special knowledge or memory of others. Seller has taken commercially reasonable steps to protect and preserve the confidentiality
of all Trade Secrets owned by the Seller. Seller has entered into binding, valid and enforceable written Contracts with each current
and former employee and independent contractor who is or was involved in or has contributed to the invention, creation, or development
of any Intellectual Property during the course of employment or engagement with Seller whereby such employee or independent contractor
(i) acknowledges Seller’s exclusive ownership of all Intellectual Property Assets invented, created or developed by such
employee or independent contractor within the scope of his or her employment or engagement with Seller; (ii) grants to Seller a
present, irrevocable assignment of any ownership interest such employee or independent contractor may have in or to such Intellectual
Property; and (iii) irrevocably waives any right or interest, including any moral rights, regarding such Intellectual Property,
to the extent permitted by applicable Law. Seller has provided Buyer with true and complete copies of all such Contracts. All assignments
and other instruments necessary to establish, record, and perfect Seller’s ownership interest in the Intellectual Property
Registrations have been validly executed, delivered, and filed with the relevant Governmental Authorities and authorized registrars.

 

    34

     

    

 

(c) Neither
the execution, delivery, or performance of this Agreement, nor the consummation of the transactions contemplated hereunder, will
result in the loss or impairment of or payment of any additional amounts with respect to, or require the consent of any other Person
in respect of, the Buyer’s right to own or use any Intellectual Property Assets in the conduct of the Business as currently
conducted. Immediately following the Closing, all Intellectual Property Assets will be owned or available for use by Buyer on the
same terms as they were owned or available for use by Seller immediately prior to the Closing.

 

(d) All
of the Intellectual Property Assets are valid and enforceable, and all Intellectual Property Registrations are subsisting and in
full force and effect. Seller has taken all necessary steps to maintain and enforce the Intellectual Property Assets and to preserve
the confidentiality of all Trade Secrets included in the Intellectual Property Assets, including by requiring all Persons having
access thereto to execute binding, written non-disclosure agreements. All required filings and fees related to the Intellectual
Property Registrations have been timely submitted with and paid to the relevant Governmental Authorities and authorized registrars.
Seller has provided Buyer with true and complete copies of all file histories, documents, certificates, office actions, correspondence,
assignments, and other instruments relating to the Intellectual Property Registrations.

 

(e) The
conduct of the Business as currently and formerly conducted, including the use of the Intellectual Property Assets in connection
therewith, and the products, processes, and services of the Business have not infringed, misappropriated, or otherwise violated
and will not infringe, misappropriate, or otherwise violate or unlawfully use the Intellectual Property or other rights of any
Person. Seller has not received any communication alleging that Seller or any of its products, services, activities or operations
infringe upon or otherwise unlawfully uses any Intellectual Property of a third party is there any basis for any claim of infringement
or unlawful use. No Person has infringed, misappropriated, or otherwise violated any Intellectual Property Assets.

 

(f) There
are no Actions (including any opposition, cancellation, revocation, review, or other proceeding), whether settled, pending or threatened
(including in the form of offers to obtain a license): (i) alleging any infringement, misappropriation, or other violation of the
Intellectual Property of any Person by Seller in the conduct of the Business; (ii) challenging the validity, enforceability, registrability,
patentability, or ownership of any Intellectual Property Assets; or (iii) by Seller or any other Person alleging any infringement,
misappropriation, or other violation by any Person of any Intellectual Property Assets. Seller is not aware of any facts or circumstances
that could reasonably be expected to give rise to any such Action. Seller is not subject to any outstanding or prospective Governmental
Order (including any motion or petition therefor) that does or could reasonably be expected to restrict or impair the use of any
Intellectual Property Assets.

 

    35

     

    

 

(g) 
All Business IT Systems are in good working condition and are sufficient for the operation of the Business as currently conducted.
In the past twelve (12) months, there has been no malfunction, failure, continued substandard performance, denial-of-service, or
other cyber incident, including any cyberattack, or other impairment of the Business IT Systems that has resulted or is reasonably
likely to result in a disruption or damage to the Business and that has not been fully remedied. Seller has taken all commercially
reasonable steps to safeguard the confidentiality, availability, security, and integrity of the Business IT Systems, including
implementing and maintaining appropriate backup, disaster recovery, and Software and hardware support arrangements.

 

(h) Seller
has complied with all applicable Laws and all internal or publicly posted policies, notices, and statements concerning the collection,
use, processing, storage, transfer, and security of personal information in the conduct of the Business. In the past twelve (12)
months, Seller has not (i) experienced any actual, alleged, or suspected data breach or other security incident involving personal
information in its possession or control or (ii) been subject to or received any notice of any audit, investigation, complaint,
or other Action by any Governmental Authority or other Person concerning the Company’s collection, use, processing, storage,
transfer, or protection of personal information or actual, alleged, or suspected violation of any applicable Law concerning privacy,
data security, or data breach notification, in each case in connection with the conduct of the Business, and there are no facts
or circumstances that could reasonably be expected to give rise to any such Action.

 

Section
4.12.  Inventory. All Inventory, whether or not reflected in the Balance Sheet, consists of a quality and quantity
usable and salable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or
slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established.
All Inventory is owned by Seller free and clear of all Encumbrances, and no Inventory is held on a consignment basis. The quantities
of each item of Inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the
present circumstances of Seller.

 

Section
4.13.  Accounts Receivable. The Accounts Receivable reflected on the Interim Balance Sheet and the Accounts Receivable
arising after the date thereof (a) have arisen from bona fide transactions entered into by Seller involving the sale of goods or
the rendering of services in the ordinary course of business consistent with past practice; (b) constitute only valid, undisputed
claims of Seller not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in
the ordinary course of business consistent with past practice; and (c) subject to a reserve for bad debts shown on the Interim
Balance Sheet or, with respect to Accounts Receivable arising after the Interim Balance Sheet Date, on the accounting records of
the Business, are collectible in full within ninety (90) days after billing. The reserve for bad debts shown on the Interim Balance
Sheet or, with respect to Accounts Receivable arising after the Interim Balance Sheet Date, on the accounting records of the Business
have been determined in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of disclosures
normally made in footnotes. The Seller has no knowledge that any accounts receivable will not be collected.

 

    36

     

    

 

Section
4.14.  Customers and Suppliers.

 

(a) Section
4.15(a) of the Disclosure Schedules sets forth with respect to the Business (i) each customer who has paid aggregate consideration
to Seller for goods or services rendered in an amount greater than or equal to $5,000 for each of the two (2) most recent fiscal
years (collectively, the “Material Customers”); and (ii) the amount of consideration paid by each Material Customer
during such periods. Seller has not received any notice, and has no reason to believe, that any of the Material Customers has ceased,
or intends to cease after the Closing, to use the goods or services of the Business or to otherwise terminate or materially reduce
its relationship with the Business.

 

(b) Section
4.15(b) of the Disclosure Schedules sets forth with respect to the Business (i) each supplier to whom Seller has paid consideration
for goods or services rendered in an amount greater than or equal to $5,000 for each of the two (2) most recent fiscal years (collectively,
the “Material Suppliers”); and (ii) the amount of purchases from each Material Supplier during such periods.
Seller has not received any notice, and has no reason to believe, that any of the Material Suppliers has ceased, or intends to
cease, to supply goods or services to the Business or to otherwise terminate or materially reduce its relationship with the Business.

 

Section
4.15. Insurance. Section 4.16 of the Disclosure Schedules sets forth (a) a true and complete list of all current
policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers’ compensation,
vehicular, fiduciary liability and other casualty and property insurance maintained by Seller or its Affiliates and relating to
the Business, the Purchased Assets or the Assumed Liabilities (collectively, the “Insurance Policies”); and
(b) with respect to the Business, the Purchased Assets or the Assumed Liabilities, a list of all pending claims and the claims
history for Seller. There are no claims related to the Business, the Purchased Assets or the Assumed Liabilities pending under
any such Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding
reservation of rights. Neither Seller nor any of its Affiliates has received any written notice of cancellation of, premium increase
with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have
either been paid or, if not yet due, accrued. All such Insurance Policies (a) are in full force and effect and enforceable in accordance
with their terms; (b) are provided by carriers who are financially solvent; and (c) have not been subject to any lapse in coverage.
None of Seller or any of its Affiliates is in default under, or has otherwise failed to comply with, in any material respect, any
provision contained in any such Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried
by Persons conducting a business similar to the Business and are sufficient for compliance with all applicable Laws and Contracts
to which Seller is a party or by which it is bound. True and complete copies of the Insurance Policies have been made available
to Buyer.

 

Section
4.16. Legal Proceedings; Governmental Orders.

 

(a) There
are no Actions pending or, to Seller’s Knowledge, threatened against or by Seller (a) relating to or affecting the Business,
the Purchased Assets or the Assumed Liabilities; or (b) that challenge or seek to prevent, enjoin or otherwise delay the transactions
contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any
such Action.

 

    37

     

    

 

(b) There
are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against, relating to or affecting the
Business. Seller is in compliance with the terms of each Governmental Order. No event has occurred or circumstances exist that
may constitute or result in (with or without notice or lapse of time) a violation of any such Governmental Order.

 

Section
4.17. Compliance With Laws; Permits.

 

(a) 
To Seller’s Knowledge, Seller has complied, and is now complying, with all Laws applicable to the conduct of the Business
as currently conducted or the ownership and use of the Purchased Assets. To Seller’s Knowledge, no event has occurred and
no circumstances exist that (with or without the passage of time or the giving of notice, or both) may result in a violation of,
conflict with or cause the failure on the part of Seller to comply with, any applicable Law. Seller has not received notice regarding
any violation of, conflict with or failure to comply with any applicable Law. No investigation or review by any Governmental Authority
with respect to Seller is pending or, to the knowledge of Seller threatened.

 

(b) All
Permits required for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets
have been obtained by Seller and are valid and in full force and effect and none will be terminated or impaired or become terminable
or impaired as a result of the transaction contemplated hereby. All fees and charges with respect to such Permits as of the date
hereof have been paid in full. Section 4.18(b) of the Disclosure Schedules lists all current Permits issued to Seller which are
related to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets, including the names
of the Permits and their respective dates of issuance and expiration. No event has occurred that, with or without notice or lapse
of time or both, would reasonably be expected to result in the revocation, suspension, lapse. modification or limitation of any
Permit set forth in Section 4.18(b) of the Disclosure Schedules. No Person owns or has any proprietary, financial or other interest
(direct or indirect) in the Permits.

 

Section
4.18. Environmental Matters.

 

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

 

    38

     

    

 

(b) Seller
has obtained and is in material compliance with all Environmental Permits (each of which is disclosed in Section 4.19(b) of the
Disclosure Schedules) necessary for the conduct of the Business as currently conducted or the ownership, lease, operation or use
of the Purchased Assets and all such Environmental Permits are in full force and effect and shall be maintained in full force and
effect by Seller through the Closing Date in accordance with Environmental Law, and Seller is not aware of any condition, event
or circumstance that might prevent or impede, after the Closing Date, the conduct of the Business as currently conducted or the
ownership, lease, operation or use of the Purchased Assets. With respect to any such Environmental Permits, Seller has undertaken,
or will undertake prior to the Closing Date, all measures necessary to facilitate transferability of the same, and Seller is not
aware of any condition, event or circumstance that might prevent or impede the transferability of the same, and has not received
any Environmental Notice or written communication regarding any material adverse change in the status or terms and conditions of
the same.

 

(c) None
of the Business or the Purchased Assets or any real property currently or formerly owned, leased or operated by Seller in connection
with the Business is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or
any similar state list.

 

(d) There
has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the Business or the Purchased
Assets or any real property currently or formerly owned, leased or operated by Seller in connection with the Business, and Seller
has not received an Environmental Notice that any of the Business or the Purchased Assets or real property currently or formerly
owned, leased or operated by Seller in connection with the Business (including soils, groundwater, surface water, buildings and
other structure located thereon) has been contaminated with any Hazardous Material which could reasonably be expected to result
in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by, Seller.

 

(e) Section
4.19(e) of the Disclosure Schedules contains a complete and accurate list of all active or abandoned aboveground or underground
storage tanks owned or operated by Seller in connection with the Business or the Purchased Assets.

 

(f) Section
4.19(f) of the Disclosure Schedules contains a complete and accurate list of all off-site Hazardous Materials treatment, storage,
or disposal facilities or locations used by Seller and any predecessors in connection with the Business or the Purchased Assets
as to which Seller may retain liability, and none of these facilities or locations has been placed or proposed for placement on
the National Priorities List (or CERCLIS) under CERCLA, or any similar state list, and Seller has not received any Environmental
Notice regarding potential liabilities with respect to such off-site Hazardous Materials treatment, storage, or disposal facilities
or locations used by Seller.

 

(g) Seller
has not retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental
Law.

 

    39

     

    

 

(h) Seller
has provided or otherwise made available to Buyer and listed in Section 4.19(h) of the Disclosure Schedules: (i) any and all environmental
reports, studies, audits, records, sampling data, site assessments, risk assessments, economic models and other similar documents
with respect to the Business or the Purchased Assets [or any real property currently or formerly owned, leased or operated by Seller
in connection with the Business] which are in the possession or control of Seller related to compliance with Environmental Laws,
Environmental Claims or an Environmental Notice or the Release of Hazardous Materials; and (ii) any and all material documents
concerning planned or anticipated capital expenditures required to reduce, offset, limit or otherwise control pollution and/or
emissions, manage waste or otherwise ensure compliance with current or future Environmental Laws (including, without limitation,
costs of remediation, pollution control equipment and operational changes).

 

(i) Seller
is not aware of or reasonably anticipates, as of the Closing Date, any condition, event or circumstance concerning the Release
or regulation of Hazardous Materials that might, after the Closing Date, prevent, impede or materially increase the costs associated
with the ownership, lease, operation, performance or use of the Business or the Purchased Assets as currently carried out.

 

(j) Seller
owns and controls all Environmental Attributes (a complete and accurate list of which is set forth in Section 4.19(j) of the Disclosure
Schedules) and has not entered into any contract or pledge to transfer, lease, license, guarantee, sell, mortgage, pledge or otherwise
dispose of or encumber any Environmental Attributes as of the date hereof. Seller is not aware of any condition, event or circumstance
that might prevent, impede or materially increase the costs associated with the transfer (if required) to Buyer of any Environmental
Attributes after the Closing Date.

 

Section
4.19. Employee Benefit Matters.

 

(a) Section
4.20(a) of the Disclosure Schedules contains a true and complete list of each pension, benefit, retirement, compensation, employment,
consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock or stock-based, change
in control, retention, severance, vacation, paid time off (PTO), medical, vision, dental, disability, welfare, Code Section 125
cafeteria, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each
case whether or not reduced to writing and whether funded or unfunded, including each “employee benefit plan” within
the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA, which is or has been maintained,
sponsored, contributed to, or required to be contributed to by Seller for the benefit of any current or former employee, officer,
director, retiree, independent contractor or consultant of the Business or any spouse or dependent of such individual, or under
which Seller or any of its ERISA Affiliates has or may have any Liability, or with respect to which Buyer or any of its Affiliates
would reasonably be expected to have any Liability, contingent or otherwise (as listed on Section 4.20(a) of the Disclosure Schedules,
each, a “Benefit Plan”).

 

    40

     

    

 

(b) With
respect to each Benefit Plan, Seller has made available to Buyer accurate, current and complete copies of each of the following:
(i) where the Benefit Plan has been reduced to writing, the plan document together with all amendments; (ii) where the 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, summaries of benefits and coverage, COBRA communications, employee handbooks and any other written communications
(or a description of any oral communications) relating to any Benefit Plan; (v) in the case of any 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 and any legal opinions issued thereafter with respect to such Benefit Plan’s continued qualification;
(vi) in the case of any Benefit Plan for which a Form 5500 must be filed, a copy of the two most recently filed Forms 5500, with
all corresponding schedules and financial statements attached; (vii) actuarial valuations and reports related to any 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, Department
of Health and Human Services, Pension Benefit Guaranty Corporation or other Governmental Authority relating to the Benefit Plan.

 

(c) Each
Benefit Plan and any related trust (other than any multiemployer plan within the meaning of Section 3(37) of ERISA (each a “Multiemployer
Plan”)) has been established, administered and maintained in accordance with its terms and in compliance with all applicable
Laws (including ERISA, the Code and any applicable local Laws). Each Benefit Plan that is intended to be qualified within the meaning
of Section 401(a) of the Code (a “Qualified Benefit Plan”) is so qualified and received a favorable and current
determination letter from the Internal Revenue Service with respect to the most recent five year filing cycle, or with respect
to a prototype or volume submitter plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan
or volume submitter 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 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, Buyer or any of its Affiliates, to a penalty under Section
502 of ERISA or to tax or penalty under Sections 4975 or 4980H of the Code.

 

No pension
plan (other than a Multiemployer Plan) which is subject to minimum funding requirements, including any multiple employer plan,
(each a “Single Employer Plan”) in which employees of the Business or any ERISA Affiliate participate or have
participated has an “accumulated funding deficiency,” whether or not waived, or is subject to a lien for unpaid contributions
under Section 303(k) of ERISA or Section 430(k) of the Code. No Single Employer Plan covering employees of the Business which is
a defined benefit plan has an “adjusted funding target attainment percentage,” as defined in Section 436 of the Code,
less than 80%. All benefits, contributions and premiums relating to each Benefit Plan have been timely paid in accordance with
the terms of such Benefit Plan and all applicable Laws and accounting principles, and all benefits accrued under any unfunded Benefit
Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with GAAP.

 

    41

     

    

 

(d) 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 Benefit Plan; (iv)
engaged in any transaction which would give rise to liability under Section 4069 or Section 4212(c) of ERISA; (v) incurred taxes
under Section 4971 of the Code with respect to any Single Employer Plan; or (vi) participated in a multiple employer welfare arrangements
(MEWA).

 

(e) With
respect to each Benefit Plan (i) no such plan is a Multiemployer Plan, and (A) all contributions required to be paid by Seller
or its ERISA Affiliates have been timely paid to the applicable Multiemployer Plan, (B) neither Seller nor any ERISA Affiliate
has incurred any withdrawal liability under Title IV of ERISA which remains unsatisfied, and (C) a complete withdrawal from all
such Multiemployer Plans at the Effective Time would not result in any material liability to Seller and no Multiemployer Plan is
in critical, endangered or seriously endangered status or has suffered a mass withdrawal; (ii) no such plan 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); (iii) no Action has been initiated by the Pension Benefit Guaranty Corporation to terminate
any such plan or to appoint a trustee for any such plan; (iv) no such plan or the plan of any ERISA Affiliate maintained or contributed
to within the last six (6) years is a Single Employer Plan subject to Title IV of ERISA; and (v) no “reportable event,”
as defined in Section 4043 of ERISA, with respect to which the reporting requirement has not been waived, has occurred with respect
to any such plan.

 

(f) Other
than as required under Sections 601 to 608 of ERISA or other applicable Law, no Benefit Plan or other arrangement provides post-termination
or retiree health benefits to any individual for any reason.

 

(g) There
is no pending or, to Seller’s Knowledge, threatened Action relating to a Benefit Plan (other than routine claims for benefits),
and no Benefit Plan has within the three (3) years prior to the date hereof been the subject of an examination or audit by a Governmental
Authority or the subject of an application or filing under, or is a participant in, an amnesty, voluntary compliance, self-correction
or similar program sponsored by any Governmental Authority.

 

(h) There
has been no amendment to, announcement by Seller or any of its Affiliates relating to, or change in employee participation or coverage
under, any Benefit Plan or collective bargaining agreement that would increase the annual expense of maintaining such plan above
the level of the expense incurred for the most recently completed fiscal year (other than on a de minimis basis) with respect to
any director, officer, employee, consultant or independent contractor of the Business, as applicable. Neither Seller nor any of
its Affiliates has any commitment or obligation or has made any representations to any director, officer, employee, consultant
or independent contractor of the Business, whether or not legally binding, to adopt, amend, modify or terminate any Benefit Plan
or any collective bargaining agreement.

 

    42

     

    

 

(i) Each
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.

 

(j) 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 (including stock-based compensation) due to any such individual; (iii) increase the amount
payable under or result in any other material obligation pursuant to any 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.

 

Section
4.20. Employment Matters.

 

(a) Section
4.21(a) of the Disclosure Schedules contains a list of all persons who are employees, independent contractors or consultants of
the Business as of the date hereof, including any employee who is on a leave of absence of any nature, paid or unpaid, authorized
or unauthorized, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full-time
or part-time); (iii) hire or retention date; (iv) current annual base compensation rate or contract fee; (v) commission, bonus
or other incentive-based compensation; and (vi) a description of the fringe benefits provided to each such individual as of the
date hereof. As of the date hereof, all compensation, including wages, commissions, bonuses, fees and other compensation, payable
to all employees, independent contractors or consultants of the Business for services performed on or prior to the date hereof
have been paid in full and there are no outstanding agreements, understandings or commitments of Seller with respect to any compensation,
commissions, bonuses or fees.

 

(b) Seller
is not, and has not been for the past three (3) years, a party to, bound by, or negotiating any collective bargaining agreement
or other Contract with a union, works council or labor organization (collectively, “Union”), and there is not,
and has not been for the past three (3) years, any Union representing or purporting to represent any employee of Seller, and no
Union or group of employees is seeking or has sought to organize employees for the purpose of collective bargaining. There has
never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime
or other similar labor disruption or dispute affecting Seller or any employees of the Business. Seller has no duty to bargain with
any Union.

 

    43

     

    

 

(c) Seller
is and has been in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate
to employees, volunteers, interns, consultants and independent contractors of the Business, including all Laws relating to labor
relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable
accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion
and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’ compensation,
leaves of absence, paid sick leave and unemployment insurance. 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.
Seller is in compliance with and has complied with all immigration laws, including Form I-9 requirements and any applicable mandatory
E-Verify obligations. There are no Actions against Seller pending, or to the Seller’s Knowledge, threatened to be brought
or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any current or former applicant,
employee, consultant, volunteer, intern or independent contractor of the Business, including, without limitation, any charge, investigation
or claim relating to unfair labor practices, equal employment opportunities, fair employment practices, employment discrimination,
harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation,
employee classification, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods,
privacy, health and safety, workers’ compensation, leaves of absence, paid sick leave, unemployment insurance or any other
employment related matter arising under applicable Laws.

 

(d) Seller
has complied with the WARN Act, and it has no plans to undertake any action in the future that would trigger the WARN Act.

 

(e) 
Seller is not and has not been for the past three (3) years a party to any Government Contract OR With respect to each Government
Contract, Seller is and has been in compliance with Executive Order No. 11246 of 1965 (“E.O. 11246”), Section 503 of
the Rehabilitation Act of 1973 (“Section 503”) and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974
(“VEVRAA”), including all implementing regulations. Seller maintains and complies with affirmative action plans in
compliance with E.O. 11246, Section 503 and VEVRAA, including all implementing regulations. Seller is not and has not been for
the past three (3) years, the subject of any audit, investigation or enforcement action by any Governmental Authority in connection
with any Government Contract or related compliance with E.O. 11246, Section 503 or VEVRAA. Seller has not been debarred, suspended
or otherwise made ineligible from doing business with the United States government or any government contractor. Seller is in compliance
with and has complied with all immigration laws, including any applicable mandatory E-Verify obligations.

 

    44

     

    

 

Section
4.21. Taxes. 

 

(a) All
Tax Returns with respect to the Business required to be filed by Seller for any Pre-Closing Tax Period have been, or will be, timely
filed with the appropriate tax authority. Such Tax Returns are, or will be, true, complete and correct in all respects, fairly
present the information purported to be shown therein, and reflect in all material respects all liabilities for the applicable
Taxes for the periods covered by such Tax Returns. All Taxes due and owing by Seller (whether or not shown on any Tax Return) have
been, or will be, timely paid.

 

(b) Seller
has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any Employee,
independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup
withholding provisions of applicable Law.

 

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

 

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

 

(e) Except
as disclosed on Schedule 4.22: (i) there is no Action currently proposed, threatened or pending against, or with respect
to, Seller or the Purchased Assets in respect of any Taxes or Tax Return; (ii) no material issue has been raised in writing in
any Tax examination with respect to Seller which could result in liability for Taxes for Seller for any period; (iii) Seller is
not the beneficiary of any extension of time within which to file any Tax Return, nor has Seller made (or caused to be made on
its behalf) any requests for such extensions; (iv) no claim is pending or, to the knowledge of Seller, threatened by a Governmental
Authority in a jurisdiction where Seller does not file Tax Returns that Seller is or may be subject to taxation by such jurisdiction
or that Seller must file Tax Returns; and (v) there are no Liens encumbering any of the assets of Seller with respect to Taxes
(except where such Lien arises as a matter of Law prior to the due date for paying the related Taxes).

 

(f) There
are no Encumbrances for Taxes upon any of the Purchased Assets nor is any taxing authority in the process of imposing any Encumbrances
for Taxes on any of the Purchased Assets (other than for current Taxes not yet due and payable).

 

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

 

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

 

(i) None
of the Purchased Assets is (i) required to be treated as being owned by another person pursuant to the so-called “safe harbor
lease” provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, (ii) subject to Section 168(g)(1)(A)
of the Code, or (iii) subject to a disqualified leaseback or long-term agreement as defined in Section 467 of the Code.

 

    45

     

    

 

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

 

(k) Seller
has delivered to Buyer correct and complete copies of all Tax Returns, examination reports and statements of deficiencies assessed
against or agreed to by Seller during the past two years. Seller has not waived (nor is subject to a waiver of) any statute of
limitations in respect of Taxes nor has agreed to (nor is subject to) any extension of time with respect to a Tax assessment or
deficiency.

 

(l) Seller
has not received (and is not subject to) any ruling from any Tax Authority nor has it they entered into (or are subject to) any
agreement with a Tax Authority.

 

(m) Seller
is not a party to any Tax allocation or sharing agreement, or other agreement relating to the allocation or sharing of, or liability
or indemnification for, taxes between Seller and any other Person. Seller has no liability for the Taxes of any other Person. Seller
is not a party to any joint venture, partnership or other arrangement that is, or could be, treated as a partnership for federal
income tax purposes.

 

Section
4.22. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee
or commission in connection with the transactions contemplated by this Agreement or any Ancillary Document based upon arrangements
made by or on behalf of Seller.

 

Section
4.24. ICON Business. Seller is the sole and exclusive owner of the ICON Business, all of which was duly and
validly purchased and acquired by, and sold, transferred and conveyed to Seller through the closing of the ICON Acquisition, free
and clear of any Encumbrances. Except as set forth on Schedule 4.24, Seller (i) has fully performed all of its obligations
to be performed under the ICON Acquisition; (ii) has not been notified that it is in breach of any obligation under the ICON Acquisition;
and (iii) has not alleged, and has no basis for alleging, that the seller in the ICON Acquisition has failed to perform any of
its obligations under the ICON Acquisition or is otherwise in breach thereof. Except as may be identified on Schedule 4.24,
neither Seller or any of Seller’s Affiliates have any Liabilities arising from or relating to the ICON Acquisition.

 

Section
4.25. Solvency. Seller is on the date hereof solvent and able to pay its current liabilities as they become due.
Immediately after the Closing (i) Seller expects to be able to pay all creditors in a timely manner; and (ii) no solvency proceeding
of any character, including bankruptcy, receivership, reorganization, composition or arrangement with creditors (including any
assignment for the benefit of creditors), voluntary or involuntary, affecting the Business is pending or is currently being contemplated
by Seller or, to the knowledge of Seller is being threatened against Seller by any other Person. Seller has not made any assignment
for the benefit of creditors or taken any action in contemplation of, or which would constitute the basis for, the institution
of any such insolvency proceedings.

 

    46

     

    

 

Section
4.26. Product Warranty.

 

(a) Except
as disclosed on Schedule 4.26, there are no warranties (express or implied) outstanding with respect to any products currently
or formerly manufactured, sold, distributed, provided, shipped or licensed by Seller (“Products”).

 

(b) To
Seller’s knowledge, all Products that have been or are being tested, developed, labeled, stored, promoted, distributed, manufactured,
sold and/or marketed by Seller have been and are being tested, developed, labeled, stored, promoted, distributed, manufactured,
sold and/or marketed in compliance with all Product specifications, all express and implied warranties and all requirements under
applicable Law.

 

(c) To
the Knowledge of Seller, there are no material design, manufacturing or other defects, latent or otherwise, with respect to any
Product. To the Knowledge of Seller, there is no material liability arising out of any injury to individuals or property as a result
of the ownership, possession or use of any Product. Seller has not committed any act or failed to commit any act, which would result
in, and there has been no occurrence which would give rise to or form the basis of, any product liability, product defect or liability
for breach of warranty in excess of $5,000 (whether covered by insurance or not) on the part of Seller with respect to any Product.

 

(d) Seller
has not in the past had any Product design and warranty claims or other damages in connection with any Product manufactured, sold,
distributed, shipped or licensed, or service rendered, by it on or prior to date of the Closing.

 

Section
4.27. Bank Accounts. All payments made by Seller have been made in the ordinary course through banking channels.

 

Section
4.28. Powers of Attorney. Except as disclosed on Schedule 4.28, there are no outstanding powers of attorney
executed by or on behalf of Seller in favor of any Person.

 

Section
4.29. Loans to or from Directors, Officers, Employees, or Consultants. Except as set forth on Schedule 4.29,
Seller has not loaned any monies to or borrowed any monies from, any director, manager or employee of, or consultant to Seller.

 

Section
4.30. Accredited Investor Representations. 

 

(a) The
Seller, and each of their equity owners, is: (i) an “accredited investor” as that term is defined in Rule 501 of the
General Rules and Regulations under Securities Act of 1933, as amended (the “Securities Act”), by reason of Rule 501(a)(3),
and (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason
of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with
or compensated in any way by Buyer or any of its Affiliates), to protect its own interests in connection with the transactions
described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the Equity
Consideration Shares. Events. No “bad actor” disqualification event is applicable to the Seller for purposes of Rule
506 promulgated under the Securities Act.

 

(b) Seller
is acquiring the Equity Consideration Shares for its own account for investment purposes only and not with a view towards the public
sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof;

 

    47

     

    

 

(c) All
subsequent offers and sales of the Equity Consideration Shares by the Seller shall be made pursuant to registration under the Securities
Act, or pursuant to an exemption from registration;

 

(d) Seller
understands that the Equity Consideration Shares are being offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that Buyer is relying upon the truth and accuracy of, and the
Seller’s compliance with, the representations, warranties, agreements, acknowledgements and understandings set forth herein
in order to determine the availability of such exemptions and the eligibility of the Seller to acquire the Equity Consideration
Shares;

 

(e) Seller
has been furnished with all materials relating to the business, finances and operations of Buyer and materials relating to the
offer and sale of the Equity Consideration Shares which have been requested by the Seller. The Seller and its advisors, if any,
have been afforded the opportunity to ask questions of Buyer and have received complete and satisfactory answers to any such inquiries.
Without limiting the generality of the foregoing, the Seller has also had the opportunity to obtain and to review SG Blocks’
Current Reports on Form 8-K filed from January 1, 2020 up to the Closing Date, Quarterly Reports on Form 10-Q for the fiscal quarter
ended March 31, 2020 and Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

 

(f) Seller
understands that its investment in the Equity Consideration Shares involves a high degree of risk;

 

(g) Seller
understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Equity Consideration Shares;

 

(h) Seller
acknowledges that (1) the Equity Consideration Shares has not been registered under the provisions of the Securities Act and may
not be transferred unless (A) subsequently registered thereunder, as provided for herein, or (B) the Seller shall have delivered
to Buyer an opinion of counsel, reasonably satisfactory in form, scope and substance to Buyer, to the effect that the Equity Consideration
Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; and (2) any sale of
any security made in reliance on Rule 144 promulgated under the Securities Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of that security under circumstances in which the seller, or
the person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the Securities Act, may require
compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder.

 

(i) Seller
acknowledges and agrees that the stock certificates evidencing the Equity Consideration Shares shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer thereof):

 

THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Section
4.23. Full Disclosure. No representation or warranty by Seller in this Agreement and no statement contained in
the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant
to this Agreement, including, but not limited to, Due Diligence, contains any untrue statement of a material fact, or omits to
state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made,
not misleading.

 

    48

     

    

 

ARTICLE
V

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and
warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof.

 

Section
5.01. Organization of Buyer. Buyer is a limited liability company, duly organized, validly existing and in good
standing under the Laws of the State of Delaware.

 

Section
5.02. Authority of Buyer. Buyer has full power and authority to enter into this Agreement and the Ancillary Documents
to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Buyer of this Agreement and any Ancillary Document to which Buyer is a party,
the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated
hereby and thereby have been duly authorized by all requisite company action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes
a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms. When each Ancillary Document
to which Buyer is or will be a party has been duly executed and delivered by Buyer (assuming due authorization, execution and delivery
by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of Buyer enforceable against
it in accordance with its terms.

 

Section
5.03. No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the Ancillary
Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not:
(a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of formation, operating
agreement or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of any provision of
any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any Person under any Contract
to which Buyer is a party. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental
Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the Ancillary
Documents and the consummation of the transactions contemplated hereby and thereby.

 

    49

     

    

 

Section
5.04. Earn Out Shares. The Earn Out Shares are, and any shares of common stock of SG Blocks that may be issued
in respect of the Earn-Out Payments will be, duly authorized, validly issued, fully paid and non-assessable. The Earn-Out Shares
will not be issued in violation of: (i) any preemptive rights, rights of first refusal or other rights, and is not subject to any
such rights; or (ii) any agreement or instrument to which SG Blocks is a party or otherwise bound. The Earn-Out Shares will be
offered, issued, sold and delivered by SG Blocks in compliance with all applicable Laws assuming the accuracy of Seller’s
representations to Buyer, which Seller acknowledge and agrees are being relied upon by SG Blocks in connection with the Earn-Out
Shares.

 

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

 

Section
5.05. Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds
to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.

 

Section
5.06. Legal Proceedings. There are no Actions pending or, to Buyer’s knowledge, threatened against or by
Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this
Agreement. No event has occurred, or circumstances exist that may give rise or serve as a basis for any such Action.

 

Section
5.08. Disclosure. No representation or warranty by Buyer, or any statement or certificate furnished by Buyer to
Seller pursuant to this Agreement or in connection with the Transaction, contains any untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein not misleading.

 

Section
5.09. Reliance. Each of Buyer’s representations and warranties in this Article V, as well as those made
elsewhere in this Agreement and in the Ancillary Documents, will be deemed to be material and relied upon by the Seller.

 

Section
5.10. Due Diligence. Buyer has received all financial and other information related to the Business that it has
requested from the Seller. Buyer has conducted its own independent review of the Business, the Acquired Assets, and the Assumed
Liabilities and is relying solely on the representations and warranties in this Agreement together with Buyer’s own independent
analysis of the information related to the Business that it received from the Seller.

 

Section
5.11. No Guarantee of Success. Subject to the adjustment to the Purchase Price based upon Target Working Capital,
Buyer represents and warrants that it is fully aware that Seller will not make any guarantee that Buyer will be successful or will
achieve any specific level of gross or net income in operating the Business after the Closing Date. Buyer acknowledges that the
past success of the Business has resulted in large part from certain intangible factors that cannot be transferred to Buyer, including,
but not limited to, the level of technical skills, management abilities, ability to communicate with clients and vendors, promotional
and programs, and various situational and environmental factors that cannot be quantified, transferred, or assigned. These intangible
factors also include the desire to hire and train staff, the level of competition within the industry, and the general economic
climate. Buyer acknowledges that it is fully aware that the purchase of the Business constitutes a significant change to that Business.
Accordingly, the foregoing intangible factors will impact future profitability in a manner that cannot be predicted.

 

    50

     

    

 

ARTICLE
VI

COVENANTS

 

Section
6.01. Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided
in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), Seller shall
(x) conduct the Business in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts
to maintain and preserve intact its current Business organization, operations and franchise and to preserve the rights, franchises,
goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having relationships with the
Business. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall:

 

(a) preserve
and maintain all Permits required for the conduct of the Business as currently conducted or the ownership and use of the Purchased
Assets;

 

(b) pay
the debts, Taxes and other obligations of the Business when due;

 

(c) continue
to collect Accounts Receivable in a manner consistent with past practice, without discounting such Accounts Receivable;

 

(d) maintain
the properties and assets included in the Purchased Assets in the same condition as they were on the date of this Agreement, subject
to reasonable wear and tear;

 

(e) continue
in full force and effect without modification all Insurance Policies, except as required by applicable Law;

 

(f) defend
and protect the properties and assets included in the Purchased Assets from infringement or usurpation;

 

(g) perform
all of its obligations under all Assigned Contracts;

 

(h) maintain
the Books and Records in accordance with past practice;

 

(i) comply
in all material respects with all Laws applicable to the conduct of the Business or the ownership and use of the Purchased Assets;
and

 

(j) not
take or permit any action that would cause any of the changes, events or conditions described in Section 4.06 to occur.

 

    51

     

    

 

Section
6.02. Access to Information. From the date hereof until September [ ], 2020, unless extended by mutual consent
of the parties or as automatically extended to the extent Seller has not complied with this Section 6.02 (the “Due
Diligence Period”) Buyer, directly or through its Representatives, may conduct a due diligence investigation (“Due
Diligence”) into all matters relating to the Business and the Seller that Buyer deems advisable. Without limiting the
foregoing, Seller shall (a) afford Buyer and its Representatives full and free access to and the right to inspect all of the Owned
Real Property, properties, assets, premises, Books and Records, Contracts and other documents and data related to the Business;
(b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the Business
as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of Seller to cooperate with
Buyer in its investigation of the Business. Without limiting the foregoing, Seller shall permit Buyer and its Representatives to
conduct environmental due diligence of the Owned Real Property, including the collecting and analysis of samples of indoor or outdoor
air, surface water, groundwater or surface or subsurface land on, at, in, under or from the Owned Real Property. Any Due Diligence
pursuant to this Section 6.02 shall be conducted in such manner as not to interfere unreasonably with the conduct of the
Business or any other businesses of Seller. No investigation by Buyer or other information received by Buyer shall operate as a
waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.

 

Section
6.03. No Solicitation of Other Bids.

 

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

 

(b) In
addition to the other obligations under this Section 6.03, Seller shall promptly advise Buyer orally and in writing of any Acquisition
Proposal, any request for information with respect to any Acquisition Proposal, or any inquiry with respect to or which could reasonably
be expected to result in an Acquisition Proposal, the material terms and conditions of such request, Acquisition Proposal or inquiry,
and the identity of the Person making the same.

 

(c) Seller
agrees that the rights and remedies for noncompliance with this Section 6.03 shall include having such provision specifically enforced
by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause
irreparable injury to Buyer and that money damages would not provide an adequate remedy to Buyer.

 

    52

     

    

 

Section
6.04. Notice of Certain Events.

 

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

 

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

 

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

 

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

 

(iv) any
Actions commenced or, to Seller’s Knowledge, threatened against, relating to or involving or otherwise affecting the Business,
the Purchased Assets or the Assumed Liabilities that, if pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 4.17 or that relates to the consummation of the transactions contemplated by this Agreement.

 

(b) Buyer’s
receipt of information pursuant to this Section 6.04 shall not operate as a waiver or otherwise affect any representation,
warranty or agreement given or made by Seller in this Agreement (including Section 8.02 and Section 9.01(b)) and
shall not be deemed to amend or supplement the Disclosure Schedules.

 

Section
6.05. Employees and Employee Benefits.

 

(a) Commencing
on the Closing Date, Seller shall terminate all employees of the Business who are actively at work on the Closing Date, and, at
Buyer’s sole discretion, Buyer may offer employment, on an “at will” basis, to any or all of such employees.
Seller shall bear any and all obligations and liability under the WARN Act resulting from employment losses pursuant to this Section
6.05.

 

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

 

    53

     

    

 

(c) Seller
shall remain solely responsible for the satisfaction of all claims for medical, dental, life insurance, health accident or disability
benefits brought by or in respect of current or former employees, officers, directors, independent contractors or consultants of
the Business or the spouses, dependents or beneficiaries thereof, which claims relate to events occurring on or prior to the Closing
Date. Seller also shall remain solely responsible for all worker’s compensation claims of any current or former employees,
officers, directors, independent contractors or consultants of the Business which relate to events occurring on or prior to the
Closing Date. Seller shall pay, or cause to be paid, all such amounts to the appropriate persons as and when due.

 

(d) Effective
as soon as practicable following the Closing Date, Seller, or any applicable Affiliate, shall effect a transfer of assets and liabilities
from the defined contribution retirement plan that it maintains, to the defined contribution retirement plan maintained by Buyer,
with respect to those employees of the Business who become employed by Buyer, or an Affiliate of Buyer, in connection with the
transactions contemplated by this Agreement. Any such transfer shall be in an amount sufficient to satisfy Section 414(l) of the
Code.

 

(e) Each
employee of the Business who becomes employed by Buyer in connection with the transactions contemplated by this Agreement shall
be eligible to a two (2) year employment agreement with an annual salary and other terms and conditions to be determined by Buyer;
provided, however that such agreements will include a valid with a no-compete clause.

 

(f) Each
employee of the Business who becomes employed by Buyer in connection with the transaction shall be given service credit for the
purpose of eligibility under the group health plan and eligibility and vesting only under the defined contribution retirement plan
for his or her period of service with the Seller prior to the Closing Date; provided, however, that (i) such credit
shall be given pursuant to payroll or plan records, at the election of Buyer, in its sole and absolute discretion; and (ii) such
service crediting shall be permitted and consistent with Buyer’s defined contribution retirement plan.

 

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

 

    54

     

    

 

Section
6.07. Non-Competition; Non-Solicitation.

 

(a) For
a period of twelve (12) months commencing on the Closing Date (the “Restricted Period”), none of Seller, Mike
Ames or Chris Jarrard shall, or permit any of their respective Affiliates to, directly or indirectly, (i) engage in or assist others
in engaging in the Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly
in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal,
agent, trustee or consultant; or (iii) cause, induce or encourage any material actual or prospective client, customer, supplier
or licensor of the Business (including any existing or former client or customer of Seller and any Person that becomes a client
or customer of the Business after the Closing), or any other Person who has a material business relationship with the Business,
to terminate or modify any such actual or prospective relationship. Notwithstanding the foregoing, Seller may own, directly or
indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Seller is not a controlling
Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own 5%/ or more of any class
of securities of such Person.

 

(b) During
the Restricted Period, none of Seller, Mike Ames or Chris Jarrard shall, or permit any of their respective Affiliates to, directly
or indirectly, hire or solicit any person who is offered employment by Buyer pursuant to Section 6.05(a) or is or was employed
in the Business during the Restricted Period, or encourage any such employee to leave such employment or hire any such employee
who has left such employment, except pursuant to a general solicitation which is not directed specifically to any such employees;
provided, that nothing in this Section 6.07(b) shall prevent Seller or any of its Affiliates from hiring (i) any
employee whose employment has been terminated by Buyer or (ii) after 180 days from the date of termination of employment, any employee
whose employment has been terminated by the employee.

 

(c) Each
of Seller, Mike Ames and Chris Jarrard acknowledges that a breach or threatened breach of this Section 6.07 would give rise
to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of
a breach or a threatened breach of any such obligations, Buyer shall, in addition to any and all other rights and remedies that
may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an
injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any
requirement to post bond).

 

(d) Each
of Seller, Mike Ames and Chris Jarrard acknowledges that the restrictions contained in this Section 6.07 are reasonable
and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement
and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 6.07
should ever be adjudicated to exceed the time, geographic, product or service or other limitations permitted by applicable Law
in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed,
in such jurisdiction to the maximum time, geographic, product or service or other limitations permitted by applicable Law. The
covenants contained in this Section 6.07 and each provision hereof are severable and distinct covenants and provisions.
The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the
remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such covenant or provision in any other jurisdiction.

 

    55

     

    

 

(e) This
Section 6.07 shall be subject to the terms and conditions of any employment or consulting agreement executed between Buyer
and any equity owner or Affiliate of Seller.

 

Section
6.08. Governmental Approvals and Consents.

 

(a) Each
party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law
applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all
consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution
and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the Ancillary Documents. Each
party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations,
orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or
impeding the receipt of any required consents, authorizations, orders and approvals.

 

(b) Seller
and Buyer shall use reasonable best efforts to give all notices to, and obtain all consents from, all third parties that are described
in Section 4.03 of the Disclosure Schedules.

 

(c) Without
limiting the generality of the parties’ undertakings pursuant to subsections (a) and (b) above, each of the parties hereto
shall use all reasonable best efforts to:

 

(i) respond
to any inquiries by any Governmental Authority regarding antitrust or other matters with respect to the transactions contemplated
by this Agreement or any Ancillary Document;

 

(ii) avoid
the imposition of any order or the taking of any action that would restrain, alter or enjoin the transactions contemplated by this
Agreement or any Ancillary Document; and

 

(iii) in
the event any Governmental Order adversely affecting the ability of the parties to consummate the transactions contemplated by
this Agreement or any Ancillary Document has been issued, to have such Governmental Order vacated or lifted.

 

(d) All
analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on
behalf of either party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection
with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between Seller with
Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing
confidential information) shall be disclosed to the other party hereunder in advance of any filing, submission or attendance, it
being the intent that the parties will consult and cooperate with one another, and consider in good faith the views of one another,
in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments,
and proposals. Each party shall give notice to the other party with respect to any meeting, discussion, appearance or contact with
any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide
the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

 

    56

     

    

 

(e) Notwithstanding
the foregoing, nothing in this Section 6.08 shall require, or be construed to require, Buyer or any of its Affiliates to
agree to (i) sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or interests of
Buyer or any of its Affiliates; (ii) any conditions relating to, or changes or restrictions in, the operations of any such assets,
businesses or interests which, in either case, could reasonably be expected to result in a Material Adverse Effect or materially
and adversely impact the economic or business benefits to Buyer of the transactions contemplated by this Agreement and the Ancillary
Documents; or (iii) any material modification or waiver of the terms and conditions of this Agreement.

 

Section
6.09. Books and Records.

 

(a) In
order to facilitate the resolution of any claims made against or incurred by Seller prior to the Closing, or for any other reasonable
purpose, for a period of three (3) years after the Closing, Buyer shall:

 

(i) retain
the Books and Records (including personnel files) relating to periods prior to the Closing in a manner reasonably consistent with
the prior practices of Seller; and

 

(ii) upon
reasonable notice, afford the Seller’s Representatives reasonable access (including the right to make, at Seller’s
expense, photocopies), during normal business hours, to such Books and Records.

 

(b) In
order to facilitate the resolution of any claims made by or against or incurred by Buyer after the Closing, or for any other reasonable
purpose, for a period of three (3) years following the Closing, Seller shall:

 

(i) retain
the books and records (including personnel files) of Seller which relate to the Business and its operations for periods prior to
the Closing; and

 

(ii) upon
reasonable notice, afford the Buyer’s Representatives reasonable access (including the right to make, at Buyer’s expense,
photocopies), during normal business hours, to such books and records.

 

(c) Neither
Buyer nor Seller shall be obligated to provide the other party with access to any books or records (including personnel files)
pursuant to this Section 6.09 where such access would violate any Law.

 

    57

     

    

 

Section
6.10. Closing Conditions. From the date hereof until the Closing, each party hereto shall use reasonable best
efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII hereof.

 

Section
6.11. Public Announcements. Unless otherwise required by applicable Law or stock exchange requirements (based
upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement
or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other
party (which consent shall not be unreasonably withheld or delayed), and the parties shall cooperate as to the timing and contents
of any such announcement.

 

Section
6.12. 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 Buyer; 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 Excluded Liabilities.

 

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

 

Section
6.14. Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes
and fees (including any penalties and interest) incurred in connection with this Agreement and the Ancillary Documents (including
any real property transfer Tax and any other similar Tax) shall be borne and paid by Seller when due. Seller shall, at its own
expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect
thereto as necessary).

 

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

 

Section
6.16. Lock-up. Seller covenants and agrees that it will not sell or otherwise transfer, make any short sale of,
grant any option, right or warrant for the purchase of, or dispose of, or enter into any similar transaction relating to any Equity
Consideration Shares or Earn-Out Shares received by it under this Agreement for one hundred eighty (180) days following its receipt
of the securities from SG Blocks.

 

Section
6.16. Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause their respective
Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions
as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement
and the Ancillary Documents.

 

    58

     

    

 

ARTICLE
VII

CONDITIONS TO CLOSING

 

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

 

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

 

(b) Seller
shall have received all Consents referred to in Section 4.03 in form and substance reasonably satisfactory to Buyer, and
no such consent, authorization, order and approval shall have been revoked.

 

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

 

(a) Buyer
is satisfied with the results of such Due Diligence, in Buyer’s sole and absolute discretion.

 

(b) Other
than the representations and warranties of Seller contained in Section 4.01, Section 4.02, Section 4.04 and
Section 4.22, the representations and warranties of Seller contained in this Agreement, the Ancillary Documents and any
certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation
or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation
or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing
Date with the same effect as though made at and as of such date (except those representations and warranties that address matters
only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations
and warranties of Seller contained in Section 4.01, Section 4.02, Section 4.04 and Section 4.22 shall
be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though
made at and as of such date (except those representations and warranties that address matters only as of a specified date, the
accuracy of which shall be determined as of that specified date in all respects).

 

    59

     

    

 

(c) Seller
shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this
Agreement and each of the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date; provided,
that, with respect to agreements, covenants and conditions that are qualified by materiality, Seller shall have performed such
agreements, covenants and conditions, as so qualified, in all respects.

 

(d) No
Action shall have been commenced against Buyer or Seller, which would prevent the Closing. No injunction or restraining order shall
have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

 

(e) All
Consents listed on Section 4.03 of the Disclosure Schedules shall have been received and executed counterparts thereof shall have
been delivered to Buyer at or prior to the Closing.

 

(f) From
the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred
that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material
Adverse Effect.

 

(g) Seller
shall have delivered to Buyer duly executed counterparts to the Ancillary Documents and such other documents and deliveries set
forth in Section 3.02(a).

 

(h) Buyer
shall have received all Permits that are necessary for it to conduct the Business as conducted by Seller as of the Closing Date.

 

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

 

(j) Buyer
shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions
set forth in Section 7.02(a) and Section 7.02(b) have been satisfied (the “Seller Closing Certificate”).

 

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

 

(l) Buyer
shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying the names
and signatures of the officers of Seller authorized to sign this Agreement, the Ancillary Documents and the other documents to
be delivered hereunder and thereunder.

 

    60

     

    

 

(m) Buyer
shall have received a certificate pursuant to Treasury Regulations Section 1.1445-2(b) (the “FIRPTA Certificate”)
that Seller is not a foreign person within the meaning of Section 1445 of the Code duly executed by Seller.

 

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

 

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

 

(a) Other
than the representations and warranties of Buyer contained in Section 5.01, Section 5.02 and Section 5.04,
the representations and warranties of Buyer contained in this Agreement, the Ancillary Documents and any certificate or other writing
delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by
materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified
by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect
as though made at and as of such date (except those representations and warranties that address matters only as of a specified
date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties
of Buyer contained in Section 5.01, Section 5.02 and Section 5.04 shall be true and correct in all respects
on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

 

(b) Buyer
shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this
Agreement and each of the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date; provided,
that, with respect to agreements, covenants and conditions that are qualified by materiality, Buyer shall have performed such
agreements, covenants and conditions, as so qualified, in all respects.

 

(c) No
injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits
any material transaction contemplated hereby.

 

(d) Buyer
shall have delivered to Seller duly executed counterparts to the Ancillary Documents and such other documents and deliveries set
forth in Section 3.02(b).

 

(e) Buyer
shall have delivered the Purchase Price Adjustment Escrow Amount, the Indemnification Escrow Amount and the Indebtedness Escrow
Amount to the Escrow Agent pursuant to Section 3.02(c).

 

(f) Seller
shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions
set forth in Section 7.03(a) and Section 7.03(b) have been satisfied (the “Buyer Closing Certificate”).

 

    61

     

    

 

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

 

(h) Seller
shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying the names
and signatures of the officers of Buyer authorized to sign this Agreement, the Ancillary Documents and the other documents to be
delivered hereunder and thereunder.

 

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

  

ARTICLE
VIII

INDEMNIFICATION

 

Section
8.01. Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties
contained herein shall survive the Closing and shall remain in full force and effect until the date that is two (2) years from
the Closing Date; provided, that the representations and warranties in (i) Section 4.01, Section 4.02, Section
4.08, Section 4.09, Section 4.23, Section 4.24, Section 5.01, Section 5.02 and Section
5.04 shall survive indefinitely, and (ii) Section 4.19, Section 4.20 and Section 4.22 shall survive for
the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus 60
days. All covenants and agreements of the parties contained herein shall survive the Closing indefinitely or for the period explicitly
specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent
known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of
the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and
such claims shall survive until finally resolved.

 

Section
8.02. Indemnification By Seller. Subject to the other terms and conditions of this Article VIII, Seller shall
indemnify and defend each of Buyer and its Affiliates and their respective Representatives (collectively, the “Buyer Indemnitees”)
against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses
incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

 

(a) any
inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement, the Ancillary Documents
or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, as of the date such representation
or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for representations
and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference
to such specified date);

 

    62

     

    

 

(b) any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement, the Ancillary
Documents or any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement;

 

(c) any
Excluded Asset or any Excluded Liability; or

 

(d) any
Third-Party Claim based upon, resulting from or arising out of the business, operations, properties, assets or obligations of Seller
or any of its Affiliates (other than the Purchased Assets or Assumed Liabilities) conducted , existing or arising on or prior to
the Closing Date.

 

Section
8.03. Indemnification By Buyer. Subject to the other terms and conditions of this Article VIII, Buyer shall indemnify
and defend each of Seller and its Affiliates and their respective Representatives (collectively, the “Seller Indemnitees”)
against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses
incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

 

(a) any
inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate
or instrument delivered by or on behalf of Buyer pursuant to this Agreement, as of the date such representation or warranty was
made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties
that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified
date);

 

(b) any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement; or

 

(c) any
Assumed Liability.

  

Section
8.04. Certain Limitations. The indemnification provided for in Section 8.02 and Section 8.03 shall
be subject to the following limitations:

 

(a) Seller
shall not be liable to the Buyer Indemnitees for indemnification under Section 8.02(a) until the aggregate amount of all
Losses in respect of indemnification under Section 8.02(a) exceeds $50,000 (the “Basket”), in which event
Seller shall be required to pay or be liable for all such Losses from the first dollar.

 

(b) Buyer
shall not be liable to the Seller Indemnitees for indemnification under Section 8.03(a) until the aggregate amount of all
Losses in respect of indemnification under Section 8.03(a) exceeds the Basket, in which event Buyer shall be required to
pay or be liable for all such Losses from the first dollar.

 

    63

     

    

 

(c) Notwithstanding
the foregoing, the limitations set forth in Section 8.04(a) and Section 8.04(b) shall not apply to Losses based upon,
arising out of, with respect to or by reason of any inaccuracy in or breach of any representation or warranty in Section 4.01,
Section 4.02, Section 4.08, Section 4.09, Section 4.18, Section 4.19, Section 4.21, Section
4.22, Section 4.23, Section 5.01, Section 5.02 and Section 5.04.

 

(d) For
purposes of this Article VIII, any inaccuracy in or breach of any representation or warranty shall be determined without regard
to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such representation
or warranty.

 

Section
8.05. Indemnification Procedures. The party making a claim under this Article VIII is referred to as the “Indemnified
Party”, and the party against whom such claims are asserted under this Article VIII is referred to as the “Indemnifying
Party”.

 

(a) Third
Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought by any
Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a
“Third Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated
to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written
notice thereof, but in any event not later than thirty (30) calendar days after receipt of such notice of such Third Party Claim.
The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations,
except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by
the Indemnified Party shall describe the Third-Party Claim in reasonable detail, shall include copies of all material written evidence
thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the
Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified
Party, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s
own counsel, and the Indemnified Party shall cooperate in good faith in such defense; provided, that if the Indemnifying
Party is Seller, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim
that (x) is asserted directly by or on behalf of a Person that is a supplier or customer of the Business, or (y) seeks an injunction
or other equitable relief against the Indemnified Party. In the event that the Indemnifying Party assumes the defense of any Third
Party Claim, subject to Section 8.05(b), it shall have the right to take such action as it deems necessary to avoid, dispute,
defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party.
The Indemnified Party shall have the right to participate in the defense of any Third-Party Claim with counsel selected by it subject
to the Indemnifying Party’s right to control the defense thereof. The fees and disbursements of such counsel shall be at
the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to the Indemnified Party, (A)
there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying
Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party that cannot be waived,
the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnified Party in each jurisdiction
for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not to compromise or defend such
Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement,
or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may, subject to Section 8.05(b),
pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating
to such Third Party Claim. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense
of any Third Party Claim, including making available (subject to the provisions of Section 6.06) records relating to such
Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending
party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such
Third Party Claim.

 

    64

     

    

 

(b) Settlement
of Third-Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement
of any Third-Party Claim without the prior written consent of the Indemnified Party, except as provided in this Section 8.05(b).
If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation
on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from
all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree
to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party
fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may continue to
contest or defend such Third-Party Claim and, in such event,, the maximum liability of the Indemnifying Party as to such Third
Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer
and also fails to assume defense of such Third-Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms
set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section
8.05(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not
be unreasonably withheld or delayed).

 

(c) Direct
Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “Direct
Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof,
but in any event not later than thirty (30) days after the Indemnified Party becomes aware of such Direct Claim. The failure to
give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and
only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified
Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall
indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party.
The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim.
The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance
alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and
the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including
access to the Indemnified Party’s premises and personnel and the right to examine and copy any accounts, documents or records)
as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond
within such 30-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party
shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of
this Agreement.

 

    65

     

    

 

Section
8.06. Payments; Indemnification Escrow Fund.

 

(a) Once
a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article VIII, the Indemnifying
Party shall satisfy its obligations within fifteen (15) Business Days of such final, non-appealable adjudication by wire transfer
of immediately available funds. The parties hereto agree that should an Indemnifying Party not make full payment of any such obligations
within such 15-Business Day period, any amount payable shall accrue interest from and including the date of agreement of the Indemnifying
Party or final, non-appealable adjudication to and including the date such payment has been made at a rate per annum equal to five
percent (5%) per annum. Such interest shall be calculated daily on the basis of a 365-day year and the actual number of days elapsed.

 

(b) Any
Losses payable to a Buyer Indemnitee pursuant to this Article VIII shall be satisfied: (i) from the Indemnification Escrow Fund;
and (ii) to the extent the amount of Losses exceeds the amounts available to the Buyer Indemnitee in the Indemnification Escrow
Fund, from Seller.

 

Section
8.07. Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall
be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

 

Section
8.08. Effect of Investigation. The representations, warranties and covenants of the Indemnifying Party, and the
Indemnified Party’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any
investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of the fact
that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is,
was or might be inaccurate or by reason of the Indemnified Party’s waiver of any condition set forth in Section 7.02
or Section 7.03, as the case may be, unless the Indemnified Party had actual knowledge that such warranty or representation
was inaccurate under the documents or materials delivered by the Indemnifying Party during Due Diligence.

 

    66

     

    

 

Section
8.09. Exclusive Remedies. Subject to Section 2.07(d), Section 6.07 and Section 10.11, the
parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising
from fraud, criminal activity or willful misconduct on the part of a party hereto in connection with the transactions contemplated
by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise
relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article
VIII. In furtherance of the foregoing, each party hereby waives, to the fullest extent permitted under Law, any and all rights,
claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein
or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their Affiliates
and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions
set forth in this Article VIII. Nothing in this Section 8.09 shall limit any Person’s right to seek and obtain any
equitable relief to which any Person shall be entitled or to seek any remedy on account of any party’s fraudulent, criminal
or intentional misconduct.

 

ARTICLE
IX

TERMINATION

 

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

 

(a) by
the mutual written consent of Seller and Buyer;

 

(b) by
Buyer by written notice to Seller if:

 

(i) Buyer
is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform
any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure
of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Seller within ten
(10) days of Seller’s receipt of written notice of such breach from Buyer; or

 

(ii) any
of the conditions set forth in Section 7.01 or Section 7.02 shall not have been, or if it becomes apparent that any
of such conditions will not be, fulfilled by the Closing Date on September ___, 2020, unless such failure shall be due to the failure
of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it
prior to the Closing; provided, however, that Buyer may terminate this Agreement if the condition set forth in Section
7.02(a) has not been satisfied in Buyer’s sole and absolute discretion;

 

(c) by
Seller by written notice to Buyer if:

 

(i) Seller
is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform
any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure
of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Buyer within ten
(10) days of Buyer’s receipt of written notice of such breach from Seller; or

 

    67

     

    

 

(ii) any
of the conditions set forth in Section 7.01 or Section 7.03 shall not have been, or if it becomes apparent that any
of such conditions will not be, fulfilled by the Closing Date on September ___, 2020, unless such failure shall be due to the failure
of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it
prior to the Closing; or

 

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

 

Section
9.02. Effect of Termination. In the event of the termination of this Agreement in accordance with this Article,
this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:

 

(a) as
set forth in this Article IX and Section 6.06 and Article X hereof; and

 

(b) that
nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.

 

ARTICLE
X

MISCELLANEOUS

 

Section
10.01.  Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall
have occurred.

 

Section
10.02.  Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b)
when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by
facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient,
and on the next Business Day if sent after normal business hours of the recipient or (d) on the fifth (5th) day after
the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to
the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given
in accordance with this Section 10.02):

 

		If to Seller:	Echo DCL, LLC

12720 Hillcrest Road

Suite 1045

Dallas, TX 75230

Facsimile: 

E-mail: 

Attention: 

 

    68

     

    

 

		with a copy to:	Braden M. Wayne

Steckler Gresham Cochran, PLLC

12720 Hillcrest Road, Suite 1045

Dallas, Texas 75230

Facsimile: 

Email: 

 

		If to Buyer:	SG ECHO, LLC

195 Montague Street

14th Floor

Brooklyn, NY 11210

Facsimile: 

E-mail: 

Attention: Paul Galvin, Manager

 

		with a copy to:	Ruta Soulios & Stratis, LLP

211 East 43rd Street

24th Floor

New York, NY 10017

Facsimile: 

E-mail: 

Attention: Steve Soulios, Esq.

 

Section
10.03.  Interpretation. For purposes of this Agreement, (a) the words “include,” “includes”
and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or”
is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and
“hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles,
Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to,
this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended,
supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute
as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement
shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting
an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed
with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

Section
10.04.  Headings. The headings in this Agreement are for reference only and shall not affect the interpretation
of this Agreement.

 

Section
10.05.  Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or
invalidate or render unenforceable such term or provision in any other jurisdiction. Except as provided in Section 6.07(d),
upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest
extent possible.

 

    69

     

    

 

Section
10.06.  Entire Agreement. This Agreement and the Ancillary Documents constitute the sole and entire agreement
of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between
the statements in the body of this Agreement and those in the Ancillary Documents, the Annexes and Disclosure Schedules (other
than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section
10.07.  Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder
without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed; provided, however,
that prior to the Closing Date, Buyer may, without the prior written consent of Seller, assign all or any portion of its rights
under this Agreement to one or more of its direct or indirect wholly-owned subsidiaries. No assignment shall relieve the assigning
party of any of its obligations hereunder.

 

Section
10.08.  No Third-party Beneficiaries. Except as provided in Article VIII, this Agreement is for the sole benefit
of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended
to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.

 

Section
10.09.  Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by
an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective
unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed
as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar
or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any
right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.

 

Section
10.10.  Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a) This
Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule.

 

    70

     

    

 

(b) ANY
LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK
IN EACH CASE LOCATED IN THE CITY OF NEW YORK AND COUNTY OF KINGS, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S
ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT.
THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN
SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY DOCUMENTS IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER
IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 10.10(c).

 

Section
10.11.  Specific Performance. The parties agree that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

Section
10.12.  Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original,
but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile,
e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed
copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

    71

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto
duly authorized.

  

	 	ECHO DCL, LLC (Seller)
	 	 
	 	By	/s/ Mike Ames
	 	Name:	Mike Ames

	 	Title:	CEO
	 	 
	 	SG ECHO, LLC (Buyer)
	 	 
	 	By	/s/ Paul Galvin
	 	Name:  	Paul Galvin
	 	Title: 	Manager

  

Agreed to solely with respect to ITEC RoFR described in Section
3.02(a) and (b):

 

INDUSTRIAL TRUCK & EQUIPMENT COATING, LLC

  

	By:	/s/ Mike Ames	 
	Name:	Mike Ames	 
	Title:	CEO	 

 

Agreed to solely with respect to Sections 2.06 (a) through
(e), Section 4.29 and Section 5.04:

 

SG BLOCKS, INC.

  

	By:	/s/ Paul Galvin	 
	Name: 	Paul Galvin	 
	Title:	Chairman and CEO	 

  

Agreed to solely with respect to Section 6.07

 

	/s/ Mike Ames	 
	MIKE AMES	 
	 	 
	/s/ Chris Jarrard	 
	CHRIS JARRARD	 

 

 

72ex_204569.htm

Exhibit 10t

 

FIRST AMENDMENT

TO

AMENDED AND RESTATED 

LOAN AND SECURITY AGREEMENT (ALL ASSETS)

 

This First Amendment to Amended and Restated Loan and Security Agreement (this "Amendment") is made as of September 17, 2020 by and among The L. S. Starrett Company, a Massachusetts corporation having a principal place of business located at 121 Crescent Street, Athol, Massachusetts 01331 ("Starrett"), Tru-Stone Technologies, Inc., a Delaware corporation having a principal place of business located at 1101 Prosper Drive, P.O. Box 430, Waite Park, MN 56387 ("Tru-Stone"), Starrett Kinemetric Engineering, Inc., a Delaware corporation having a principal place of business located at 26052 Merit Circle, Suite 103, Laguna Hills, CA 92653 ("Kinemetric") and Starrett Bytewise Development, Inc., a Delaware corporation with offices located at 1150 Brookstone Center Parkway, Columbus, Georgia 31904 ("Starrett Bytewise", collectively with Kinemetric, Starrett and Tru-Stone, each a "Borrower" and together the "Borrower") and T.D. Bank, N.A., a national banking association organized and existing under the laws of the United States of America, the secured party hereunder having a place of business located at 370 Main Street, Worcester, Massachusetts 01608 (the "Lender").

 

RECITALS

 

WHEREAS, the Borrower and the Lender have entered into an Amended and Restated Loan and Security Agreement (All Assets) dated as of June 25, 2020 (as amended, amended and restated or otherwise modified from time to time, the "Agreement").

 

WHEREAS, pursuant to the terms of the Agreement, the Borrower may request certain advances from the Lender from time to time and the Lender has agreed to make loans to the Borrower subject to the terms and conditions of the Agreement.

 

WHEREAS, the loan advances under the Agreement are evidenced by (i) a certain Deferred Draw Term Note dated as of December 31, 2019, in the maximum principal amount of Ten Million ($10,000,000.00) Dollars, issued by the Borrower and payable to the order of the Lender (the "Term Note"), and (ii) a certain Revolving Note dated as of December 31, 2019, in the maximum principal amount of Twenty-Five Million ($25,000,000.00) Dollars, issued by the Borrower and payable to the order of the Lender (the "Revolving Note" and together with the Term Note, each a "Note" and together, the "Notes").

 

WHEREAS, the Borrower has requested that certain amendments be made to the Agreement, which the Lender is willing to make pursuant to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:

 

1.     Terms used in this Amendment which are defined in the Agreement shall have the same meanings as defined therein, unless otherwise defined herein.

 

 

 

 

2.     The Agreement is hereby amended as follows:

 

(a)     Modification of Borrowing Base. In order to reflect the agreement of the parties to modify the formulation of the Borrowing Base for the Revolving Loan, the definition of "Borrowing Base" in Section 1.01 is hereby stricken in its entirety and the following new definition is substituted therefor:

 

"'Borrowing Base' as used herein shall mean the sum of the following:

 

	 	
			(a)

				
			eighty (80%) percent of the unpaid face amount of Qualified Accounts (as defined below), PLUS

			

 

	 	
			(b)

				
			85% of the Net Orderly Liquidation Value of Eligible Inventory, PLUS

			

 

	 	
			(c)

				
			the lesser of (i) 62.5% of the appraised fair market value of the Real Property Collateral, and (ii) $7,500,000."

			

 

(b)      Modification of Credit Limit Definition. In order to reflect the potential reduction of the Credit Limit as a result of the mandatory prepayments required by Section 2.11, the definition of "Credit Limit" in Section 1.01 is hereby stricken in its entirety and the following new definition is substituted therefor:

 

"'Credit Limit' means an amount equal to Twenty-Five Million ($25,000,000.00) Dollars or such lesser amount as reduced pursuant to clause (b) of the first sentence of Section 2.11."

 

(c)      Modification of Interest Rate Margin. In order to reflect the agreement of the parties to modify the applicable margin used to determine the Borrower's interest rate, in Section 1.01, the definition of "Margin" is hereby stricken in its entirety and the following new definition is substituted therefor:

 

"'Margin' shall mean, during the applicable period, the percentages set forth below, as determined by the Borrower's Leverage Ratio (as defined herein):

 

	
			Level

				
			Leverage Ratio

			 

				
			Margin

			
	
			1

				
			Less than 1.00

				
			1.50%

			
	
			2

				
			1.00 to 2.00

				
			1.75%

			
	
			3

				
			Greater than 2.00 and up

			to and including 2.50

				
			2.00%

			
	
			4

				
			Greater than 2.50 and up

			to and including 3.00

				
			2.25%

			
	
			5

				
			Greater than 3.00 and up

			to and including 3.50

				
			2.50%

			
	
			6

				
			Greater than 3.50 and up

			to and including 4.00

				
			3.00%

			
	
			7

				
			Greater than 4.00

				
			3.50%

			

 

 

2

 

 

Upon the Bank's receipt of a Margin Certificate in the form of Exhibit 1 attached hereto and the financial statements of Starrett and its consolidated subsidiaries in accordance with Section 11 of this Agreement (the 'Required Documents') the Margin shall be determined and be effective as of the first day of the following month, which Margin shall remain in effect until the first day of the calendar month following the Bank's receipt of the subsequent Margin Certificate and shall be adjusted, if at all, as at the end of each quarterly period thereafter based on the applicable accurate Margin Certificate. In the event that the Borrower fails to timely furnish the Bank with the Required Documents in accordance with Section 11 of this Agreement then the Margin shall be determined as if Level 7 was applicable, from the first day after the date that such Required Documents were due until the first day of the calendar month following the Bank's receipt of the Required Documents."

 

(d)      Additional Modified Definitions. The definitions of “Eligible Inventory” and “LIBOR” in Section 1.01 are hereby deleted in their entirety and the following new definitions are substituted therefor:

 

"'Eligible Inventory' means Borrower’s raw materials and finished goods which are initially and at all times until sold: new and unused or refurbished (except, with Bank’s written approval, used equipment held for sale or lease), in first−class condition, merchantable and saleable through normal trade channels; at a location which is in the United States; subject to a perfected security interest in favor of Bank; owned by Borrower free and clear of any lien except in favor of Bank and/or Permitted Liens; not obsolete; not scrap, waste, defective goods and the like; have been produced by Borrower in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders promulgated thereunder; not stored with a bailee, warehouseman or similar party unless Bank has given its prior written consent thereto; and have not been designated by Bank, in accordance with its normal credit policies, as unacceptable for any reason by notice to Borrower. The most recent field exam and inventory recommendations of the Bank will be reflected in determining Eligible Inventory.

 

'LIBOR' means the rate of interest in U.S. Dollars (rounded upwards, at the Bank's option, to the next 100th of one percent) equal to the Intercontinental Exchange Benchmark Administration Ltd. ("ICE" or the successor thereto determined in accordance with Section 2.03.C if ICE is no longer publishing such rate) London Interbank Offered Rate for a 30-day period as published by Bloomberg (or such other commercially available source providing quotations of LIBOR as designated by Lender from time to time) at approximately 11:00 AM. (London time) two (2) London Business Days prior to the Reset Date and prior to the commencement of each subsequent interest period; provided however, if more than one LIBOR for such 30-day period is specified, the applicable rate shall be the arithmetic mean of all such rates. "London Business Days" means any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London, England.

 

3

 

 

(e)      New Definitions. The following new definitions are hereby included in Section 1.01, which definitions shall appear alphabetically therein:

 

"'EBITDA' shall mean, for the applicable period, income from continuing operations before the payment of interest and taxes plus depreciation, depletion, amortization and non-cash pension and retirement benefit expense, determined in accordance with GAAP for Starrett and its subsidiaries on a consolidated basis, plus or minus non-cash foreign exchange with Borrower’s subsidiaries and plus restructuring charges, in an amount not to exceed, in any fiscal quarter, the amount indicated opposite such quarter in the table below:

 

	
			Fiscal Quarter Ending

				
			Restructuring Charges

			
	
			September 30, 2020

				
			$400,000

			
	
			December 31, 2020

				
			$1,800,000

			
	
			March 31, 2021

				
			$2,300,000

			
	
			June 30, 2021

				
			$2,500,000

			

 

'NC Property' means that certain parcel of real property owned by the Borrower and located at 1372 Boggs Drive, Mount Airy, North Carolina.

 

'Net Cash Proceeds' means an amount equal to (a) any cash payments or proceeds received by the Borrower from any sale of U.S. Real Estate Assets MINUS (b) (i) any selling costs and out-of-pocket expenses (including reasonable broker’s fees or commissions, legal fees, accountant’s fees, survey costs, title insurance premiums and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith, and the Borrower’s good faith estimate of taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve in accordance with GAAP against any liabilities incurred under any indemnification obligation or purchase price adjustment associated with such sale (provided that to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) cash escrows (until released from escrow to the Borrower) from the sale price for such sale.

 

'Net Orderly Liquidation Value' means a professional opinion of the estimated most probable cash proceeds which could typically be realized at a properly advertised and professionally managed liquidation sale, conducted under orderly sale conditions for an extended period of time (usually six to nine months), under the economic trends existing at the time of the appraisal.

 

4

 

 

'Real Property Collateral' means any U.S. Real Estate Asset of the Borrower in which the Bank holds a valid and perfected first lien pursuant to a mortgage, deed of trust or other similar grant, as evidenced by a title policy in form reasonably acceptable to the Bank. The Borrower shall execute and deliver such documents as reasonably requested by the Bank from time to time, inclusive of title affidavits, in order to perfect such liens and insure the Bank’s security interest in the U.S. Real Estate Assets.

 

'U.S. Real Estate Asset' means each of Borrower’s real property assets owned in fee simple and located in the United States."

 

(f)     Additional LIBOR Provisions. In order to reflect the Lender's current policy regarding the replacement of interest rates based on LIBOR, a new Section 2.03C is hereby added immediately following Section 2.03.B., as follows:

 

"Section 2.03.C. Upon the occurrence of any of the following as determined by Bank (which determination shall be conclusive and binding absent manifest error):

 

(a)     by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining LIBOR,

 

(b)     a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely,

 

(c)     a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely,

 

(d)     a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that the LIBOR is no longer representative, or

 

(e)     business loans in the market are being executed or amended to incorporate or adopt a LIBOR replacement.

 

5

 

 

the Bank, giving due consideration any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR for U.S. dollar-denominated credit facilities, shall have the sole discretion to select an alternative to LIBOR as a reference, base, or other rate then designated by the Bank inclusive of a spread adjustment, giving due consideration to any governmental authority's selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR or to any evolving or then-prevailing market convention for determining a spread adjustment, it being understood that such benchmark replacement rate is a reference rate, not necessarily the lowest, established from time to time to serve as the basis upon which effective interest rates are calculated for loans making reference thereto (the "Benchmark Replacement Rate"). The Benchmark Replacement Rate will become effective at 5:00 p.m. on the fifth (5th) Business Day after Bank has provided notice to Borrower without any further action or consent of Borrower and Bank may implement any amendments to this Agreement as may be appropriate to reflect the adoption and implementation of the Benchmark Replacement Rate.

 

Bank does not warrant or accept responsibility for, and Bank shall have no liability with respect to the administration, submission or any other matter related to the rates in the definition of "LIBOR" or with respect to any rate that is an alternative or replacement for, or successor to LIBOR (including, without limitation (i) any Benchmark Replacement Rate or related adjustment, or (ii) whether the composition or characteristics of any such alternative, successor or replacement reference rate, as it may be adjusted hereunder, will be similar to, or produce the same value or economic equivalence of, LIBOR or have the same volume or liquidity as did LIBOR)."

 

(g)     Mandatory Principal Repayments. In order to reflect the agreement of the parties that proceeds from the sale of the Borrower's assets be paid to the Lender and applied first to the Term Note and then to the Revolving Note, a new Section 2.11 is hereby added immediately following Section 2.10, as follows:

 

"Section 2.11.     One hundred percent (100%) of the Net Cash Proceeds from any sale or other disposition of any U.S. Real Estate Asset of the Borrower (other than as provided below with respect to any sale or disposition of the NC Property on or prior to June 30, 2021) shall, within one business day of receipt thereof, be paid to, or retained by (if applicable), Bank and, absent the continuance of an Event of Default, shall be applied: (a) first, to the remaining installments of principal under the Term Loan, in the inverse order of maturity, until the Term Loan has been paid in full; and (b) second, in repayment of the advances and the other Obligations then due and payable under the Revolving Loan until paid in full. The Credit Limit shall be reduced, dollar for dollar, by the amount of any funds applied to the Revolving Note pursuant to clause (b) of the immediately preceding sentence. The Borrower agrees to execute and deliver an amended and restated Revolving Note to reflect any such reduction if requested by the Bank. Nothing in this Section 2.11 shall be construed to constitute consent to any transaction that is not expressly permitted by other provisions of this Agreement or the other Loan Documents. No partial prepayment of the Term Loan will change the due dates or the amount of the principal payments otherwise required hereunder and under the Term Note. Notwithstanding the foregoing, if the Borrower consummates the sale of the NC Property on or before June 30, 2021, Borrower shall be required to pay to the Bank the lesser of (x) fifty percent (50%) of Net Cash Proceeds from the sale thereof and (y) $2,000,000. For avoidance of doubt, no Yield Maintenance Amount shall be due or payable with respect to any amounts required to be prepaid under this Section 2.11."

 

6

 

 

(h)     Additional Collateral. In order to reflect the agreement of the parties that real property owned by the Borrower in which it has granted a lien to the Lender is to be included as Collateral, Section 5(d) is hereby stricken in its entirety and the following new Section 5(d) is substituted therefor:

 

"(d)     All proceeds and products of all of the foregoing in any form, including, without limitation, all proceeds of credit, fire or other insurance, and also including, without limitation, rents and profits resulting from the temporary use of any of the foregoing (which, with Inventory, Receivables, Equipment and Real Property Collateral are all hereinafter called "Collateral")."

 

(i)     Additional Reporting Requirements. In order to reflect the agreement of the parties that the Borrower will satisfy additional reporting requirements in connection with this Amendment, a new Section 11.03(e) is hereby added immediately following 11.03(d), as follows:

 

 

	
			"(e)

				
			Backlog reports and 13 week cash flow forecasts, including variance to prior forecast.

				
			Monthly, on or before the last business day of each following month."

			 

			

 

7

 

 

(j)     Appraisal Rights. In order to reflect that the Lender will have the right, from time to time, to obtain appraisals of the Real Property Collateral, Section 12.02 is hereby stricken in its entirety and the following new Section 12.02 is substituted therefor:

 

"Section 12.02. Bank or its agents have the right to inspect the Collateral and all records pertaining thereto at reasonable intervals to be determined by Bank and without hindrance or delay. Additionally, Bank shall have the right, at the Borrower’s sole cost and expense, to obtain appraisals of the Borrower’s Inventory and Real Property Collateral at such times as Bank deems necessary or as may be required by applicable law, or its prevailing credit or underwriting policies; provided, however, that absent an Event of Default, the Borrower shall not be charged for more than one (1) appraisal of such Inventory or any single location comprising the Real Property Collateral in any twelve (12) month period."

 

(k)     Modification of Fixed Charge Coverage Ratio Requirement. In order to reflect the agreement of the parties to suspend the Borrower's obligation to comply with the Fixed Charge Coverage Ratio requirement through June 30, 2021, Section 13.01 is hereby stricken in its entirety and the following new Section 13.01 is substituted therefor:

 

"Section 13.01. Permit, for the twelve-month period ending on the last day of any fiscal quarter of the Borrower commencing with the twelve month period ending September 30, 2021, its Fixed Charge Coverage Ratio to be less than 1.15 to 1, such covenant to be measured on a consolidated basis and tested as of each March 31st, June 30th, September 30th and December 31st thereafter that this Agreement is in effect;"

 

(l)     Decrease of Permitted Capital Expenditures. In order to reflect the agreement of the parties to decrease the Borrower's permitted Capital Expenditures during its 2021 fiscal year, Section 13.02 is hereby stricken in its entirety and the following new Section 13.02 is substituted therefor:

 

"Section 13.02. Permit, for the twelve-month period ending on the last day of any fiscal quarter of Starrett commencing with the twelve month period ending September 30, 2020, the aggregate amount of funded and unfunded Capital Expenditures for Starrett and its consolidated subsidiaries to exceed $8,000,000;"

 

(m)     Addition of Minimum Cumulative EBITDA Covenant. In order to reflect the agreement of the parties to establish a new minimum cumulative EBITDA covenant effective as of the Borrower's fiscal quarter ending September 30, 2020, Section 13.03 is hereby stricken in its entirety and the following new Section 13.03 is substituted therefor:

 

"Section 13.03. achieve, during each period described below, EBITDA of less than the amount set forth below for each such period:

 

	
			Period

				
			Minimum Cumulative EBITDA

			
	
			Trailing 3 months ending September 30, 2020

				
			$500,000

			
	
			Trailing 6 months ending December 31, 2020

				
			$2,200,000

			
	
			Trailing 9 months ending March 31, 2021

				
			$5,000,000

			
	
			Trailing 12 months ending June 30, 2021

				
			$7,900,000

			

"

8

 

 

(n)     Modification of Restriction on Dispositions. In order to reflect the agreement of the parties that the Borrower is permitted to sell up to $100,000 of Collateral (excluding Real Property Collateral) each fiscal year, Section 13.07 is hereby stricken in its entirety and the following new Section 13.07 is substituted therefor:

 

"Section 13.07. Sell, assign, exchange or otherwise dispose of any of the Collateral, other than Inventory consisting of (a) scrap, waste, defective goods and the like; (b) obsolete goods; (c) finished goods sold in the ordinary course of business or any interest therein to any individual, partnership, trust or other corporation; and (d) Equipment which is no longer required or deemed necessary for the conduct of Borrower's business, so long as Borrower receives therefor a sum substantially equal to such Equipment's fair value. Notwithstanding the foregoing, the Borrower may sell or otherwise dispose of Collateral (other than Real Property Collateral) with an aggregate value of no more than $100,000 for the twelve month period ending at the end of each fiscal quarter."

 

(o)     Additional Restriction Against Distributions. In order to reflect the agreement of the parties that the Borrower is prohibited from making distributions if it has not achieved a Fixed Charge Coverage Ratio of 1.15 to 1 for at least two (2) consecutive fiscal quarters, Section 13.09 is hereby stricken in its entirety and the following new Section 13.09 is substituted therefor:

 

"Section 13.09. Pay or make any distributions on account of any class of ownership interest in Borrower in cash or in property (other than additional ownership interests) (i) if at the time of any proposed distribution there exists an Event of Default under Borrower's Fixed Charge Coverage Ratio (as defined and calculated in accordance with Section 13.01 hereof) or if the making of such distribution would cause an Event of Default under the Borrower's Fixed Charge Coverage Ratio, or (ii) unless at the time of any proposed distribution, the Borrower's Fixed Charge Coverage Ratio has not been less than 1.15 to 1 for at least the two (2) most recent consecutive fiscal quarters of the Borrower, as evidenced by the timely filing by Borrower of applicable compliance certificates, or redeem, purchase or otherwise acquire, directly or indirectly, any of the ownership interests in Borrower;"

 

9

 

 

(p)     Additional Restriction on Loans by Borrower. In order to reflect the agreement of the parties that the Borrower is prohibited from making loans to any Person in excess of $5,000 without the prior written consent of the Bank, Section 13.10 is hereby stricken in its entirety and the following new Section 13.10 is substituted therefor:

 

"Section 13.10. Make any loans or advances to any Person, including, without limitation, Borrower's directors, officers and employees, in an individual amount exceeding $5,000 or an aggregate amount exceeding $500,000.00 at any time, except advances to officers or employees with respect to expenses incurred by them in the ordinary course of their duties which are properly reimbursable by Borrower and intercompany loans between each of the entities constituting the Borrower;"

 

(q)     Restriction on Acquisitions by Borrower. In order to reflect the agreement of the parties that the Borrower is prohibited from acquiring the assets of any Person without the prior written consent of the Bank, Section 13.15 is hereby stricken in its entirety and the following new Section 13.15 is substituted therefor:

 

"Section 13.15. (a) Merge or consolidate with or into any Person, or acquire all or substantially all of the capital stock or property of another Person; (b) enter into any joint venture or partnership with any Person; (c) convey, lease or sell all or any material portion of its property or assets or business to any other Person, except for the sale of Inventory in the ordinary course of its business; or (d) convey, lease or sell any of its assets to any Person for less than the fair market value thereof."

 

(r)      Updated Compliance Certificate. Exhibit 3 of the Agreement is hereby deleted in its entirety, and the following new Exhibit 3 attached hereto is inserted in lieu thereof in order to include in the Compliance Certificate language providing that the Borrower has complied with the minimum cumulative EBITDA covenant.

 

3.     Except as explicitly amended by this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect and shall apply to any advance thereunder.

 

4.     The Borrower agrees to pay the Lender as of the date hereof a fully earned, non-refundable amendment fee in the amount of $45,000.00 in consideration of (i) the execution by the Lender of this Amendment and (ii) the full release by the Lender of any claim arising from undercharged, under-billed or underpaid interest on the Revolving Loan and/or the Term Loan arising on or before the First Amendment Effective Date.

 

5.     This Amendment shall be effective upon (i) receipt by the Lender of an executed original hereof, (ii) payment of the amendment fee provided for in Section 4, and (iii) the execution and delivery by the Borrower and such other parties of customary secretaries certificates, including authorizing resolutions with respect to this Amendment (the date on which such conditions are met, the “First Amendment Effective Date”.

 

10

 

 

6.     The Borrower hereby represents and warrants to the Lender as follows:

 

	 	
			(a)

				
			Each Borrower has all requisite power and authority to execute this Amendment and to perform all of its obligations hereunder, and this Amendment has been duly executed and delivered by such Borrower and constitutes the legal, valid and binding obligation of such Borrower, enforceable in accordance with its terms.

			

 

	 	
			(b)

				
			The execution, delivery and performance by each Borrower of this Amendment has been duly authorized by all necessary corporate action and does not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to such Borrower, or the Articles of Organization or By-Laws of such Borrower, or (iii) result in a material breach of or constitute a material default under any indenture or loan or Agreement or any other agreement, lease or instrument to which such Borrower is a party or by which it or its properties may be bound or affected.

			

 

	 	
			(c)

				
			All of the representations and warranties contained in Sections 7 and 8 of the Agreement are correct and complete on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties were correct and complete as of such earlier date.

			

 

7.     Within sixty (60) days after the First Amendment Effective Date, the Bank shall have received a valid and perfected first lien pursuant to a mortgage, deed of trust or other similar grant with respect to each U.S. Real Estate Asset, and shall deliver such other customary documents in connection with the same, including, without limitation, surveys, reports and insurance certificates, reasonably requested by the Lender. For the avoidance of doubt, the Borrower’s failure to comply with this Section 7 shall constitute an immediate Event of Default.

 

8.     All references in the Agreement to "this Agreement" shall be deemed to refer to the Agreement as amended hereby.

 

9.     The execution of this Amendment and acceptance of any documents related hereto shall not be deemed to be a waiver of any Event of Default under the Agreement or breach, default or event of default under any other document held by the Lender, whether or not known to the Lender and whether or not existing on the date of this Amendment.

 

10.     Excepting only the contractual obligations to be performed by the Lender for the Borrower as expressly stated in the Agreement, each Borrower hereby absolutely and unconditionally releases and forever discharges the Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which such Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown.

 

11

 

 

11.     The Borrower hereby reaffirms its agreement under the Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred by the Lender in connection with the Agreement and all other documents contemplated thereby, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the foregoing, the Borrower specifically agrees to pay all fees and disbursements of counsel to the Lender for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. The Borrower hereby agrees that the Lender may, at any time or from time to time in its sole discretion and without further authorization by the Borrower, make a loan to the Borrower under the Agreement, or apply the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and expenses.

 

12.     This Amendment may be executed in multiple counterparts, each of which shall be effective upon delivery and, thereafter, shall be deemed to be an original, and all of which shall be taken as one and the same instrument with the same effect as if each party hereto had signed on the same signature page. Any signature page of this Amendment may be detached from any counterpart of this Amendment without impairing the legal effect of any signature thereto and may be attached to another part of this Amendment identical in form hereto and having attached to it one or more additional signature pages. This Amendment may be transmitted by facsimile machine or by electronic mail in portable document format ("pdf") and signatures appearing on faxed instruments and/or electronic mail instruments shall be treated as original signatures. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability or binding effect hereof.

 

 

[Remainder of Page Left Intentionally Blank

 

12

 

 

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

 

	
			Witnessed by: 

				
			BANK:

			 

			TD BANK, N.A.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				 	
			By:

				 
	
			Print Name: 

				 	
			 

				
			Dana P. Wedge, Senior Vice President

			
	 	 	 	 
	
			WITNESS

				 	
			BORROWER:

			 

			THE L. S. STARRETT COMPANY

			
	 	 	 	 
	 	 	 	 
	 	 	
			By:

				 
	
			Print Name:

				 	 	
			Douglas A. Starrett, President and CEO

			
	 	 	 	 
	 	 	 	 
	 	 	
			TRU-STONE TECHNOLOGIES, INC.

			
	 	 	 	 
	 	 	 	 
	 	 	
			By:

				 
	
			Print Name:

				 	 	
			Douglas A. Starrett, President and CEO

			
	 	 	 	 
	 	 	 	 
	 	 	
			STARRETT KINEMETRIC ENGINEERING, INC.

			
	 	 	 	 
	 	 	 	 
	 	 	
			By:

				 
	
			Print Name:

				 	 	
			Douglas A. Starrett, President and CEO

			
	 	 	 	 
	 	 	 	 
	 	 	
			STARRETT BYTEWISE DEVELOPMENT, INC.

			
	 	 	 	 
	 	 	 	 
	 	 	
			By:

				 
	
			Print Name:

				 	 	
			Douglas A. Starrett, President and CEO

			

  

 

 

 

[Signature Page to First Amendment of 

Amended and Restated Loan and Security Agreement (All Assets)]

 

13

 

 

 

EXHIBIT 3

 

COMPLIANCE CERTIFICATE

 

The L. S. Starrett Company, a Massachusetts corporation, Tru-Stone Technologies, Inc., a Delaware corporation, Starrett Kinemetric Engineering, Inc., a Delaware corporation, and Starrett Bytewise Development, Inc., a Delaware corporation ("Borrower"), hereby certifies to TD Bank, N.A. ("Bank") pursuant to the Amended and Restated Loan and Security Agreement (All Assets) between Borrower and Bank dated June 25, 2020, as may be amended from time to time ("Loan Agreement"), that:

 

A.     General

 

1.     Capitalized terms not defined herein shall have the meanings set forth in the Loan Agreement.

 

2.     The Borrower has complied with all the terms, covenants and conditions to be performed or observed by the Borrower contained in the Loan Agreement and other documents required to be executed by the Borrower in connection with the Loan Agreement.

 

3.     Neither on the date hereof nor, if applicable, after giving effect to the loan made on the date hereof, does there exist an Event of Default or an event which would with notice or the lapse of time, or both, constitute an Event of Default.

 

4.     The representations and warranties contained in the Loan Agreement and in any certificate, document or financial or other statement furnished at any time thereunder are true, correct and complete in all material respects with the same effect as though such representations and warranties had been made on the date hereof, except to the extent that any such representation and warranty relates solely to an earlier date (in which case such representation and warranty shall be true, correct and complete on and as of such earlier date).

 

B.     Asset Divestitures. For the 12 month period ending [insert applicable fiscal quarter end], the Borrower has sold, assigned, exchanged or otherwise disposed of assets (other than Real Property Collateral) with an aggregate value of $_________.

 

C.     Financial Covenants

 

As of the date hereof or, for such period as may be designated below, the computations, ratios and calculations as set forth below in accordance with Section 13 of the Loan Agreement are true and correct:

 

1.     Fixed Charge Coverage Ratio - Section 13.01

 

The cash flow of Starrett and its consolidated subsidiaries for the preceding twelve-month period was equal to ______ times the amount of Fixed Charges for such period, computed as follows:

 

	A.     Net Income	  $___________

 

 

 

 

	
			B.     Income Tax Expense

			 

			C.     Interest Expense 

			 

			D.     Depreciation Expense    

			 

			E.     Amortization Expense     

			 

			F.     Non-Cash Pension/Post-Retirement Benefit Expense     

			 

			G.     Non-Cash Stock Compensation Expense     

			 

			H.     Gains/Losses from the Sale of Assets     

			 

			I.     Bank Approved One-Time Restructuring Expenses     

			 

			J.     Dividends/Distributions     

			 

			K.     Unfunded Capital Expenditures     

			 

			L.     Required Cash Pension Payments     

			 

			M.     Cash Taxes     

			 

			N.     Non-Cash Foreign Exchange    

			 

			O.     Restructuring Charges    

			 

			P.     Cash Flow (A+B+C+D+E+F+G+or-H+I-J-K-L-M±N+O)

			 

			Q.     Required Principal Payments on all Term Debt, excluding

			Short-Term Loans from the Brazilian Banks to

			Finance Export Accounts Receivable from Borrower's

			Brazilian Subsidiary     

			 

			R.     Interest Expense     

			 

			S.     Fixed Charges (Q+R)      

			 

			T.     Fixed Charge Coverage Ratio (P divided by S)=

				
			  $___________

			 

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			 

			 

			 

			  $___________

			 

			  $___________

			 

			  $___________

			 

			___: 1.0

			

   

	 	
			2.

				
			Minimum Cumulative EBITDA – Section 13.03

			

 

The EBITDA of Starrett and its consolidated subsidiaries for the trailing __ month period ending ________, 202__ was equal to $ ______.

 

2

 

 

	 	
			3.

				
			Minimum Liquidity – Section 13.16

			

 

The Liquid Assets of Starrett and its consolidated subsidiaries as at ___________, 20__ was ___________, computed as follows:

 

	A.      Cash	 $___________
	 	 
	B.      Liquid Investments	 $___________
	 	 
	C.      Availability under the Borrowing Base	 ____________
	 	 
	D.      Liquid Assets (A + B + C)	 $___________

 

IN WITNESS WHEREOF, the undersigned, a duly authorized officer of Borrower, has executed and delivered this Certificate in the name and on behalf of the Borrower on ___________, 20__.

 

	
			 

				
			THE L. S. STARRETT COMPANY, as Agent

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			Name:

			Title:

				
			 

			

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00314-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00314-of-00352.parquet"}]]