Document:

Exhibit 10.5

 

EQUITY PURCHASE
AGREEMENT

 

This Equity Purchase Agreement
(this “Agreement”) is entered into on August 15, 2017, between 4301 Operations, LLC, a Delaware limited liability
company (“Buyer”) and Appliance Recycling Centers of America, Inc., a Minnesota corporation (“Seller”).
Buyer and Seller are each sometimes referred to herein as a “Party” and collectively as the “Parties.”

 

RECITALS

 

A.                
Seller owns 50% of the issued and outstanding membership interests (the “Equity Interests”) of ARCA Advanced
Processing, LLC, a Minnesota limited liability company (the “Company”).

 

B.                
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Equity Interests, on the terms set forth
herein.

 

C.                
The Parties are entering into this Agreement in order to facilitate (i) the ultimate sale of substantially all of the assets
of the Company to Recleim PA, LLC, a Delaware limited liability company, and (ii) the repayment of certain debt obligations of
the Company.

 

D.                
Concurrently with the execution of this Agreement, Seller is entering into a Letter Agreement with Recleim LLC, a Delaware
corporation (“Recleim”), regarding other obligations and undertakings of Relceim and Seller.

 

Accordingly, the Parties, intending to be legally bound,
agree as follows:

 

ARTICLE 1 -- PURCHASE
AND SALE; CLOSING

 

1.1             
Purchase and Sale. At the Closing, Seller will sell, transfer and deliver to Buyer, and Buyer will purchase and accept
from Seller, the Equity Interests, free and clear of any Liens.

 

1.2             
Time and Place of Closing. The consummation of the transactions contemplated hereby (the “Closing”)
will occur concurrently with the execution of this Agreement on the date hereof (the “Closing Date”) at the
office of the Company located at 4301 North Delaware Avenue, Philadelphia, PA or remotely by the electronic exchange of documents
in .pdf format.

 

1.3             
Purchase Price and Payment. In consideration for the transfer of the Equity Interests and Seller’s other obligations
under this Agreement, at the Closing, Buyer will deliver or cause to be delivered to Seller the Cash Purchase Price of $800,000,
by wire transfer of immediately available funds to an account designated by Seller in writing.

 

1.4             
Seller’s Closing Deliverables. At the Closing, Seller will deliver, or cause to be delivered, to Buyer:

 

(a)               
evidence reasonably satisfactory to Buyer that any Lien attaching to or affecting the Equity Interests has been released;

 

 

 

 

    	 	1	 

     

    

 

(b)              
the certificate or certificates, if any, representing the Equity Interests, duly endorsed for transfer or accompanied by
transfer powers duly endorsed in blank;

 

(c)               
resolutions of the board of directors of Seller consenting to, and approving, the transactions contemplated by this Agreement;
and

 

(d)              
such other documents and agreements as Buyer may reasonably request which relate to sale and purchase of the Equity Interests.

 

1.5             
Buyer’s Closing Deliverables. At the Closing, Buyer will deliver, or cause to be delivered, to Seller a resolution
of the board of directors of Buyer consenting to, and approving, the transactions contemplated by this Agreement.

 

ARTICLE 2 -- REPRESENTATIONS
AND WARRANTIES

 

2.1              
Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer as of the Closing Date:

 

(a)               
Existence. Seller is duly formed, validly existing and in good standing under the Laws of its jurisdiction of incorporation
and is duly authorized, qualified or licensed to do business and is in good standing as a foreign entity in each jurisdiction in
which it is required to be so qualified, except to the extent that the failure to be so licensed or qualified and in good standing
would not adversely affect the ability of Seller to perform its obligations under, and consummate the transactions contemplated
by, this Agreement.

 

(b)              
Authority, Validity and Enforceability. Seller has all requisite authority and full legal capacity to enter into
and perform its obligations under this Agreement and consummate the transactions contemplated hereby. There is no oral or written
Contract, understanding or impediment of any kind which limits Seller’s ability to sell, transfer and deliver the Equity
Interests to Buyer in accordance with this Agreement. This Agreement has been duly executed and delivered by Seller pursuant to
all necessary authorizations and constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms.

 

(c)               
Title to Equity Interests. Seller is in lawful possession of, and has good and marketable title to, the Equity Interests,
free and clear of any Liens. There are no agreements, commitments or Contracts relating to the issuance, sale, transfer or voting
of the Equity Interests or any other equity securities of the Company, and no third party has any rights of any kind in the Equity
Interests.

 

(d)               No
Consent. The execution, delivery and performance by Seller of this Agreement, and the consummation of the
transactions contemplated hereby, do not and will not: (i) conflict with or result in a violation or breach of, or default
under, any provision of the organizational documents of Seller or the Company; (ii) conflict with or result in a violation or
breach of any provision of any Law applicable to Seller or the Company; (iii) 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 to which Seller or the Company is a party or by which Seller or
the Company is bound or to which any of their respective properties and assets are subject; or (iv) result in the creation or
imposition of any Lien on any properties or assets of the Company. No consent, approval, declaration or filing with, or
notice to, any Governmental Body is required by or with respect to Seller in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby.

 

 

 

 

    	 	2	 

     

    

 

2.2              
Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller as of the Closing Date as
follows:

 

(a)               
Existence. Buyer is duly formed, validly existing and in good standing under the Laws of its jurisdiction of formation
and is duly authorized, qualified or licensed to do business and is in good standing as a foreign entity in each jurisdiction in
which it is required to be so qualified, except to the extent that the failure to be so licensed or qualified and in good standing
would not adversely affect the ability of Buyer to carry out its obligations under and consummate the transactions contemplated
by this Agreement.

 

(b)              
Authority, Validity and Enforceability. Buyer has all requisite authority and full legal capacity to enter into and
perform its obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Buyer pursuant to all necessary authorizations and constitutes a legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms.

 

ARTICLE 3 -- COVENANTS

 

3.1              
Further Assurances. From and after the Closing Date, at the request of Buyer, Seller will execute and deliver to
Buyer, or cause to be executed and delivered on behalf of Seller or any of its Affiliates to Buyer, such instruments and other
documents as Buyer may reasonably request to implement the transactions contemplated by this Agreement, including any documents
and instruments of conveyance, transfer or assignment to effect, record or verify the transfer to, and vesting in Buyer of, Seller’s
right, title and interest in and to the Equity Interests, in accordance with this Agreement.

 

3.2              
Expenses. Each of the Parties will bear its respective expenses incurred or to be incurred in connection with the
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

 

3.3               Tax
Matters. For the purposes of this Agreement, items of Company income, gain, loss, deduction or credit attributable to the
Equity Interests for any Tax period that begins on or before the Closing Date and ends after the Closing Date (a
“Straddle Period”) will be apportioned between the period of the Straddle Period that extends before the
Closing Date through and including the Closing Date (the “Pre-Closing Straddle Period”) and the period of
the Straddle Period that extends from the day after the Closing Date to the end of the Straddle Period (the
“Post-Closing Straddle Period”). The portion of such items of income, gain, loss, deduction or credit
attributable to the Pre-Closing Straddle Period will be the amount that would be reportable by the Company on its Tax Return
for the Straddle Period if the Straddle Period began on the date it would otherwise begin and ended on and included the
Closing Date, with such items of income, gain, loss, deduction or credit for the Pre-Closing Straddle Period being allocated
amongst Seller and the other Persons owning membership interests in the Company during the Pre-Closing Straddle Period in
accordance with the operating agreement of the Company. The portion of such items of income, gain, loss, deduction or credit
attributable to the Post-Closing Straddle Period will be the amount that would be reportable by the Company on its Tax Return
for the Straddle Period if the Straddle Period began on the day immediately following the Closing Date and ended on and
included the date it would otherwise end, with such items of income, gain, loss, deduction or credit for the Post-Closing
Straddle Period being allocated to Buyer.

 

 

 

 

 

    	 	3	 

     

    

 

ARTICLE 4 -- INDEMNIFICATION

 

 4.1               Indemnification.

 

(a)               
Seller will defend, indemnify and hold harmless Buyer and its Affiliates and their respective officers, directors, trustees,
agents, employees, partners, members and controlling persons (each, a “Buyer Indemnified Party”) against any
and all Losses suffered by a Buyer Indemnified Party arising out of, relating to or in connection with: (i) Seller’s ownership
of the Equity Interests; (ii) Seller’s breach of any representation, warranty, covenant or agreement contained in this Agreement;
or (iii) any claim of legal or equitable ownership in the Equity Interests made by any third party.

 

(b)                
Buyer will defend, indemnify and hold harmless Seller and its officers, directors, trustees, agents, employees, partners,
stockholders and controlling persons (each, a “Seller Indemnified Party”) against any and all Losses suffered
by a Seller Indemnified Party arising out of, relating to or in connection with Buyer’s breach of any representation, warranty,
covenant or agreement contained in this Agreement.

 

ARTICLE 5 -- MISCELLANEOUS

 

5.1             
Survival. The representations, warranties and covenants of Seller and Buyer contained in this Agreement will survive
the Closing indefinitely.

 

5.2             
Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the Parties with
regard to the subject matter hereof and supersedes all other prior agreements with regard to the subject matter hereof.

 

5.3             
Binding Provisions; Assignment. This Agreement will be binding upon and inure to the benefit of the Parties and,
except as provided herein, their respective successors and assigns. This Agreement may not be assigned by any Party without the
prior consent of the other Party. Any attempt to assign this Agreement in a manner prohibited by this Section 5.3 will be
void.

 

 

 

 

 

 

 

 

 

 

    	 	4	 

     

    

 

5.4             
Governing Law and Jurisdiction. This Agreement will 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 (whether of the State of
Delaware or any other jurisdiction). Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of Delaware
in each case located in the city of Wilmington and county of New Castle, and each Party irrevocably submits to the exclusive jurisdiction
of such courts in any such suit, action or proceeding.

 

5.5             
WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT
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 OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

5.6             
Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or
future Laws effective during the term of this Agreement, (a) such provision will be fully severable, (b) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement, (c)
the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance from this Agreement and (d) in lieu of each such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid
or unenforceable provisions as may be possible and be legal, valid and enforceable.

 

5.7             
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 will 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.

 

5.8               Notices.

 

(a)               
Except as otherwise provided in this Agreement, any notice or other communication required or permitted to be delivered
to any Party under this Agreement will be in writing and delivered by (i) email or (ii) overnight delivery via a national courier
service, in each case to the email address or physical address specified below:

 

If to Seller:

 

Appliance Recycling Centers of America, Inc.

Attention: Tony Isaac

Email: tisaac@arcainc.com

 

If to Buyer:

 

4301 Operations, LLC

4301 N. Delaware Ave., Bldg. C

Philadelphia, PA
19137

 

 

 

 

    	 	5	 

     

    

 

(b)              
Any notice received by email transmission on a non-Business Day or on any Business Day after 5:00 p.m. addressee’s
local time or overnight delivery on a non- Business Day will be deemed to have been received at 9:00 a.m. addressee’s local
time on the next Business Day. Any Party may specify a different address, by written notice to the other Parties. The change of
address will be effective upon the other Parties’ receipt of the notice of the change of address.

 

5.9             
Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of
which together will 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 will be deemed to have the same legal effect as delivery of an original signed copy of
this Agreement.

 

5.10           
No Third-Party Beneficiaries. Except as specifically set forth or referred to herein, nothing herein is intended
or will be construed to confer upon any person or entity other than the Parties and their successors or assigns, any rights or
remedies under or by reason of this Agreement.

 

5.11           
Amendment. No amendment or modification to this Agreement will be valid unless it is in writing and signed by each
Party. No course of dealing or course of conduct between or among any Persons having any interest in this Agreement will be deemed
to modify, amend or waive any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement.

 

5.12           
Waiver. No waiver by any Party of any of the provisions hereof will be effective unless explicitly set forth in writing
and signed by the party so waiving. No waiver by any Party will 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 will operate or be construed as a waiver thereof; nor will 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.

 

ARTICLE 6 -- DEFINITIONS;
CONSTRUCTION

 

6.1             
Definitions. The following words and phrases will have the meanings specified in this Section 6.1:

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly Controlled by, Controlling or under common Control with
such Person.

 

“Business Day”
means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of Delaware.

 

 

 

 

 

 

 

    	 	6	 

     

    

 

“Cash Purchase Price” means $800,000.

 

“Contracts”
means all contracts, agreements, leases (whether real or personal property), licenses, commitments, understandings, courses of
dealings or performance, instruments, guarantees, bids, orders and proposals, whether oral or written.

 

“Control”
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 securities, by Contract or otherwise. The terms “Controlled” and “Controlling”
have correlative meanings.

 

“Governmental
Body” means any government or political subdivision or regulatory authority, whether federal, state, local or foreign,
or any agency or instrumentality of any such government or political subdivision or regulatory authority, or any federal state,
local or foreign court or arbitrator or mediator.

 

“Law”
means any applicable statute, law, rule (including rules of common law), regulation, ordinance, order (including any injunction,
judgment, decree, ruling, writ, consent, agreement, assessment or arbitration award), code, ruling or other official act or legally
enforceable requirement of or by any Governmental Body.

 

“Lien”
means any hypothecation, mortgage, assignment, lease, deed of trust, encumbrance, real property title defect, preference, deposit
arrangement, infringement, interference, charge, claim, community property interest, easement, right of way, covenant, servitude,
condition, equitable interest, lien, option, pledge, security interest, purchase rights, right of first refusal, tag along right
or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute
of ownership, any conditional sale or other title retention agreement and any financing lease having substantially the same economic
effect as any of the foregoing.

 

“Losses” means all losses, liabilities, claims, damages, judgments, fines, penalties,
costs or expenses (including reasonable fees, disbursements and other charges of counsel) incurred by a Buyer Indemnified Party
or a Seller Indemnified Party, as the case may be.

 

“Person”
means any individual, sole proprietorship, partnership, corporation, limited liability company, unincorporated society or association,
trust, Governmental Body or other entity.

 

“Tax”
means (a) all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross
receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll,
employment, social security, unemployment, excise, estimated, severance, stamp, occupation, property, estimated or other
taxes, customs duties, fees, assessments or charges of any kind whatsoever, or other tax of any kind whatsoever, including
any liability under any state abandonment or unclaimed property, escheat or similar Law, including all interest, fines and
penalties thereon, and additions to tax or additional amounts, imposed by any Governmental Body, (b) any liability for the
payment of any amounts of any of the foregoing as a result of being a member of an affiliated, consolidated, combined or
unitary group or being a party to any agreement or arrangement whereby liability for payment of such amounts was determined
or taken into account with reference to the liability of any other Person and (c) any liability in respect of any of the
items described in clauses (a) or (b) payable by reason of Contract, assumption, transferee liability, operation of law, or
otherwise.

 

 

 

 

    	 	7	 

     

    

 

“Tax Return”
means any return, declaration, report, information return or other document (including schedules or any related or supporting information)
filed or required to be filed with any Governmental Body, including any return, attachment or schedule of an affiliated, consolidated,
combined or unitary group, in connection with the determination, assessment or collection of any Tax or the administration of any
Laws relating to any Tax.

 

6.2             
Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have meanings set
forth in the sections indicated:

 

	 	Term	Section
	 	Agreement	Preamble
	 	Buyer	Preamble
	 	Buyer Indemnified Party	4.1(a)
	 	Closing	1.2
	 	Closing Date	1.2
	 	Company	Recitals
	 	Equity Interests	Recitals
	 	Parties	Preamble
	 	Post-Closing Straddle Period	3.5
	 	Pre-Closing Straddle Period	3.5
	 	Straddle Period	3.5
	 	Seller	Preamble
	 	Seller Indemnified Party	4.1(b)

 

6.3              Construction. The
Parties intend that each representation, warranty, covenant and agreement contained in this Agreement will have independent
significance. The headings are for convenience only and will not be given effect in interpreting this Agreement. References
to sections and articles are to the sections and articles contained in, referred to by or attached to this Agreement, unless
otherwise specified. The words “hereof,” “herein” and “hereunder” and words of
similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this
Agreement. The words “include,” “includes” and “including” in this Agreement mean
“include/includes/including without limitation.” All references to $, currency, monetary values and
dollars set forth herein means United States dollars. The use of the masculine, feminine or neuter gender or the singular or
plural form of words will not limit any provisions of this Agreement. Any reference to a statute refers to the statute, any
amendments or successor legislation and all rules and regulations promulgated under or implementing the statute, as in effect
at the relevant time. Time is of the essence with respect to this Agreement. Whenever this Agreement refers to a number of
days, such number will refer to calendar days unless Business Days are specified. Whenever any action must be taken hereunder
on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business
Day. Any reference herein to any Law or Contract will be construed as referring to such Law or Contract as amended or
modified or, in the case of a Law, codified or reenacted, in each case, in whole or in part, and as in effect from time to
time. The Parties acknowledge and agree that (a) each Party and its counsel has reviewed, or has had the opportunity to
review, the terms and provisions of this Agreement, (b) any rule of construction to the effect that any ambiguities are
resolved against the drafting Party will not be used to interpret this Agreement and (c) the provisions of this Agreement
will be construed fairly as to all Parties and not in favor of or against any Party, regardless of which Party was generally
responsible for the preparation of this Agreement.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

    	 	8	 

     

    

 

IN
WITNESS WHEREOF, the Parties have caused their respective duly authorized representatives to execute this Agreement as of the
date first written above.

 

	 	BUYER
	 	 
	 	4301 OPERATIONS, LLC
	 	 
	 	By: /s/ Brian Conners                          
	 	Name: Brian Conners
	 	Title: President
	 	 
	 	 
	 	SELLER
	 	 
	 	APPLIANCE RECYCLING CENTERS OF
	 	AMERICA, INC.
	 	 
	 	By: /s/ Tony Isaac                              
	 	Name: Tony Isaac
	 	Title: CEO
	 	 
	 	 
	 	 
	 	 

 

 

[SIGNATURE PAGE
TO EQUITY PURCHASE AGREEMENT]

 

 

 

 

 

 

 

 

 

 

 

    	 	9Exhibit 10.6

 

 

 

 

 

ASSET PURCHASE
AGREEMENT

 

between

 

RECLEIM PA, LLC

 

and

 

ARCA ADVANCED PROCESSING,
LLC

 

dated
as of

 

August 15, 2017

 

 

 

 

 

 

 

 

 

 

 

 

    	 	 	 

     

    

 

	ARTICLE I           Defined Terms	1
	Section 1.01	Defined Terms	1
	Section 1.02	Construction	4
	 	 	 
	ARTICLE II           Purchase and Sale	5
	Section 2.01	Purchase and Sale of Assets	5
	Section 2.02	Excluded Assets	5
	Section 2.03	Assumption of Liabilities	5
	Section 2.04	Specifically Excluded Liabilities	6
	 	 	 
	ARTICLE III           Purchase Price; Closing	6
	Section 3.01	Purchase Price	6
	Section 3.02	Payment of Initial Purchase Price and Aggregate Payoff Amount	6
	Section 3.03	Closing	7
	Section 3.04	Closing Deliverables	7
	Section 3.05	Allocation of Purchase Price	8
	Section 3.06	Method of Payment	8
	Section 3.07	Withholding Tax	8
	 	 	 
	ARTICLE IV           Representations and Warranties of Seller	8
	Section 4.01	Organization and Authority of Seller; Enforceability	8
	Section 4.02	No Conflicts; Consents	9
	Section 4.03	Title to and Sufficiency of Purchased Assets	9
	Section 4.04	Financial Statements	9
	Section 4.05	Operations since Interim Balance Sheet Date	10
	Section 4.06	Condition of Assets	10
	Section 4.07	Inventory	10
	Section 4.08	Intellectual Property	10
	Section 4.09	Assigned Contracts	10
	Section 4.10	Permits	11
	Section 4.11	Environmental Matters.	11
	Section 4.12	Non-foreign Status	11
	Section 4.13	Compliance With Laws	11
	Section 4.14	Legal Proceedings	11
	Section 4.15	Real Property	11

 

 

 

 

    	 	i	 

     

    

 

TABLE OF CONTENTS

(continued)

 

	Section 4.16	Employees and Employment Matters	12
	Section 4.17	Brokers	13
	 	 	 
	ARTICLE V           Representations and Warranties of Buyer	13
	Section 5.01	Organization and Authority of Buyer; Enforceability	13
	Section 5.02	No Conflicts; Consents	13
	Section 5.03	Legal Proceedings	13
	Section 5.04	Brokers	13
	 	 	 
	ARTICLE VI           Covenants	13
	Section 6.01	Public Announcements	13
	Section 6.02	Employee Matters	14
	Section 6.03	Covenant Not to Compete and Confidentiality	14
	Section 6.04	Bulk Sales Laws	14
	Section 6.05	Transfer Taxes	15
	Section 6.06	Further Assurances.	15
	Section 6.07	Consents	15
	 	 	 
	ARTICLE VII           Indemnification	15
	Section 7.01	Survival	15
	Section 7.02	Indemnification By the Seller Parties	16
	Section 7.03	Indemnification By Buyer.	16
	Section 7.04	Indemnification Procedures	16
	Section 7.05	Tax Treatment of Indemnification Payments	17
	Section 7.06	Effect of Investigation.	17
	Section 7.07	Exclusive Remedy	17
	 	 	 
	ARTICLE VIII           Miscellaneous	17
	Section 8.01	Expenses	17
	Section 8.02	Notices	17
	Section 8.03	Headings	18
	Section 8.04	Severability	18
	Section 8.05	Entire Agreement	18
	Section 8.06	Successors and Assigns	18
	Section 8.07	No Third-party Beneficiaries	18
	Section 8.08	Amendment and Modification	19
	Section 8.09	Waiver	19

 

 

 

 

    	 	ii	 

     

    

 

TABLE OF CONTENTS

(continued)

 

	Section 8.10	Governing Law	19
	Section 8.11	Submission to Jurisdiction	19
	Section 8.12	Waiver of Jury Trial	19
	Section 8.13	Specific Performance	19
	Section 8.14	Counterparts	19

 

 

 

	Exhibits	 	 
	Exhibit 2.01	Tangible Assets	 
	Exhibit 2.02(e)	Excluded Assets	 
	Exhibit 2.03(b)(iii)	Assumed Liabilities	 
	Exhibit 3.01(b)	Indebtedness to be Paid Off at the Closing	 
	Exhibit 3.05	Purchase Price Allocation	 
	Exhibit 4.15	Assigned Leases	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	iii	 

     

    

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement
(this “Agreement”), dated as of August 15, 2017, is entered into among ARCA Advanced Processing, LLC, a Minnesota
limited liability company (“Seller”), 4301 Operations, LLC, a Delaware limited liability company (“4301”),
Brian Conners (“Conners”), James Ford (“Ford”) and Recleim PA, LLC, a Delaware limited liability
company (“Buyer”). Seller, Conners, Ford and 4301 are collectively referred to herein as the “Seller
Parties” and each as a “Seller Party.”

 

RECITALS

 

A.         Immediately prior to the execution of this Agreement, 4301 and Appliance Recycling Centers of America, Inc. a Minnesota
corporation, entered into an Equity Purchase Agreement, pursuant to which 4301 became the owner of 100% of the issued and outstanding
equity interests of Seller.

 

B.          Conners
and Ford own 100% of the issued and outstanding equity interests of 4301.

 

C.           Seller
is engaged in the business of appliance recycling and bulk appliance and appliance part sales (the “Business”).

 

D.          
Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, the rights and obligations
of Seller to the Purchased Assets and the Assumed Liabilities, subject to the terms and conditions set forth herein.

 

E.          
Concurrently with the execution of this Agreement, Buyer has entered into an employment agreement with each of Brian Conners,
Michael Safford and Mary Volpe (the “Key Employee Agreements”).

 

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

DEFINED TERMS

 

Section 1.01     Defined
Terms. As used herein, the following terms have the meanings set forth below:

 

“4301”
has the meaning set forth in the preamble.

 

“Action” has the meaning set forth in Section 4.14.

 

“Affiliate”
means, with respect to any Person, any other Person which, at the time of determination, directly or indirectly through one or
more intermediaries controls, is controlled by or is under common control with such Person. For purposes of this Agreement, “control”,
“controlled by”, “under common control with” and “controlling” means, as to any Person, the
power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

 

 

 

 

    	 	1	 

     

    

 

“Aggregate
Payoff Amount” has the meaning set forth in Section 3.01(b).

 

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

 

“Assigned Contracts” has the meaning set forth in Section 4.09.

 

“Assigned Leases” has the meaning set forth in Section 4.15.

 

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

 

“Bill of Sale and Assumption Agreement”
has the meaning set forth in Section 3.04(a)(i).

 

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

 

“Business Employee” means an employee of Seller.

 

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

 

“Buyer Business” means the Business, as conducted by Buyer following
the Closing.

 

“Closing”
has the meaning set forth in Section 3.03.

 

“Closing
Date” has the meaning set forth in Section 3.03.

 

“Code”
means the Internal Revenue Code of 1986, as amended, and the treasury regulations promulgated thereunder.

 

“Competing
Business” has the meaning set forth in Section 6.03(a).

 

“Confidential
Information” means any data or information concerning Seller (including trade secrets), without regard to form, regarding
(for example and including) (i) business process models, (ii) proprietary software, (iii) research, development, products, services,
marketing, selling, business plans, budgets, unpublished financial statements, licenses, prices, costs, contracts, suppliers,
customers, and customer lists, (iv) the identity, skills and compensation of employees, contractors, and consultants, (v) specialized
training or (vi) discoveries, developments, trade secrets, processes, formulas, data, lists, and all other works of authorship,
mask works, ideas, concepts, know-how, designs, and techniques, whether or not any of the foregoing is or are patentable, copyrightable,
or registrable under any Intellectual Property laws in the United States or elsewhere. Notwithstanding the foregoing, no data
or information constitutes “Confidential Information” if such data or information is publicly known and in the public
domain through means that do not involve a breach by Seller of any covenant or obligation set forth in this Agreement.

 

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

 

“Disclosure
Schedules” has the meaning set forth in Article IV.

 

“Encumbrance”
means any mortgage, pledge, lien, charge, security interest, claim or other encumbrance.

 

“Environmental
Law” means all laws concerning the environment, human health and safety or Hazardous Substances.

 

 

 

 

    	 	2	 

     

    

 

“Environmental
Permits” means any permits, licenses or authorizations required by or pursuant to any Environmental Laws.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

 

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

 

“Excluded Liabilities” has the meaning set
forth in Section 2.03(a).

 

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

 

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

 

“Governmental
Authority” means any (i) government or any governmental, regulatory or administrative body thereof, or political subdivision
thereof, whether federal, state, provincial, municipal, local or foreign, (ii) governmental agency, instrumentality, commission,
department, board, bureau or any authority thereof, (iii) multinational or supra national entity, body or authority, or (iv) court
or tribunal.

 

“Hazardous
Substances” means (i) any petroleum, petroleum by-product or break-down product, radiation or radioactive material,
asbestos or asbestos-containing material, mold and polychlorinated biphenyl, and (ii) any material, substance, mixture or solution
that is defined, identified or regulated as a pollutant, contaminant or waste, or as hazardous, toxic, radioactive or words of
similar effect, by or pursuant to any Environmental Law.

 

“Indemnified Party” has the meaning set forth in Section
7.04.

 

“Indemnifying Party” has the meaning set forth in Section 7.04.

 

“Independent Accountant”
has the meaning set forth in Section 3.05(b)(ii).

 

“Initial
Purchase Price” has the meaning set forth in Section 3.01(a).

 

“Intellectual
Property” means any and all of the following in any jurisdiction throughout the world: (i) trademarks and service marks,
including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing; (ii)
copyrights, including all applications and registrations related to the foregoing; (iii) trade secrets and confidential know-how;
(iv) patents and patent applications; (v) websites and internet domain name registrations; and (vi) other intellectual property
and related proprietary rights, interests and protections (including all rights to sue and recover and retain damages, costs and
attorneys’ fees for past, present and future infringement and any other rights relating to any of the foregoing).

 

“Interim
Balance Sheet” means the balance sheet of Seller as of the Interim Balance Sheet Date.

 

“Interim
Balance Sheet Date” means June 30, 2017.

 

“Key Employee
Agreements” has the meaning set forth in the recitals.

 

 

 

 

    	 	3	 

     

    

 

“Non-Assignable
Contract” means any contract included in the Purchased Assets that requires the consent of any third party, which consent
has not been obtained by Seller prior to or as of the Closing.

 

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

 

“Purchase Price” has the meaning set forth in Section
3.01.

 

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

 

“Purchased IP”
has the meaning set forth in Section 4.08(a).

 

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

 

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

 

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

 

“Seller
Plans” means (i) all employee benefit plans (within the meaning of Section 3(3) of ERISA) and all retirement, welfare
benefit, bonus, stock option, stock purchase, restricted stock, incentive, equity or equity-based compensation, deferred compensation,
retiree health or life insurance, supplemental retirement, severance, change in control, Code Section 125 flexible benefit, vacation
or other benefit plans, programs or arrangements, whether written or oral, that are maintained, contributed to or sponsored by
Seller or its respective Affiliates for the benefit of any current or former employee, director or individual consultant of the
Business, other than governmental plans or arrangements, and (ii) all individual employment, retention, termination, severance,
Tax gross up, collective bargaining, consulting, employee non-competition, employee non-solicitation or other similar contracts
pursuant to which Seller or its respective Affiliates currently has any obligation with respect to any current or former employee,
director or individual consultant of the Business.

 

“Transferred
Permits” has the meaning set forth in Section 4.10.

 

Section 1.02     Construction.

 

(a)          Unless
the context of this Agreement otherwise requires, (i) words of any gender include the other gender; (ii) words using the singular
or plural number also include the plural or singular number, respectively; (iii) the terms “hereunder,” “hereof,”
“herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement,
including the Schedules and Exhibits hereto; (iv) the terms “Article,” “Section,” “paragraph,”
“clause” and “Exhibit” refer to the specified Article, Section, paragraph, clause or Exhibit of this Agreement;
and (v) the words “include” and “including” and variations thereof mean without limitation.

 

(b)         
References to agreements and other documents (including this Agreement) include (i) all subsequent amendments and other
modifications thereto and (ii) all addenda, exhibits and schedules thereto.

 

(c)         
References to statutes include all regulations promulgated thereunder and references to statutes or regulations will be
construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.

 

 

 

 

    	 	4	 

     

    

 

(d)         
Whenever this Agreement refers to a number of days, such number refers to calendar days unless Business Days are specified.

 

(e)         
All accounting terms used herein and not expressly defined herein have the meanings given to them under GAAP.

 

(f)           References
to “$” or “dollars” means United States dollars.

 

(g)     
    A reference to any Person includes such Person’s successors and permitted assigns.

 

(h)          When
calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this
Agreement, the date that is the reference date in calculating such period will be excluded, and if the last day of such period
is not a Business Day, the period will end on the next succeeding Business Day.

 

(i)           This Agreement was negotiated by the parties with the benefit of legal representation and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any party will not apply to any construction or interpretation
hereof.

 

ARTICLE II

PURCHASE
AND SALE

 

Section 2.01Purchase
and Sale of Assets. Subject to the terms and conditions set forth herein, Seller will sell, assign, transfer, convey and deliver
to Buyer, and Buyer will purchase from Seller, all of Seller’s assets, properties, rights and interests, of any kind and
description (whether real or personal, tangible or intangible, fixed, contingent or otherwise), wherever located and by whomever
possessed, including the assets set forth on Exhibit 2.01, other than the Excluded Assets (collectively, the “Purchased
Assets”), free and clear of any Encumbrance.

 

Section 2.02Excluded Assets. Notwithstanding the provisions of
Section 2.01, the Purchased Assets will not include the following assets (collectively, the “Excluded Assets”):

 

(a)          all
cash, cash equivalents and bank accounts of Seller;

 

(b)          all
accounts and notes receivable due to Seller from any member or Affiliate of Seller or any of their respective Affiliates;

 

(c)          all
corporate minute books, stock transfer books, the corporate seal, if any, all accounting records, and all books and records of
Seller not related to the Purchased Assets;

 

(d)           all
Seller Plans;

 

(e)           all
assets set forth on Exhibit 2.02(e); and

 

(f)           any rights of Seller created under this Agreement. Section

 

2.03Assumption
of Liabilities.

 

 

 

 

    	 	5	 

     

    

 

(a)          Except
as provided in Section 2.03(b), Buyer will not assume, in connection with the transactions contemplated hereby, any liability
or obligation of Seller whatsoever, whether known or unknown, disclosed or undisclosed, accrued or hereafter arising, absolute
or contingent, and Seller will retain responsibility for, and will timely discharge and satisfy, all such liabilities and obligations
(collectively, and including the liabilities set forth in Section 2.04, the “Excluded Liabilities”).

 

(b)          Effective
as of the Closing, Buyer will assume and be responsible for the following liabilities and obligations of Seller (collectively,
the “Assumed Liabilities”):

 

(i)            the
obligations of Seller under each Assigned Contract and Assigned Lease, except to the extent such obligations are required to be
performed on or prior to the Closing Date, or accrue and relate to the operation of the Business prior to the Closing Date;

 

(ii)          the
accounts payable and other current liabilities of Seller of the type reflected or reserved against on the Interim Balance Sheet;
and

 

(iii)          the
liabilities listed on Exhibit 2.03(b)(iii).

 

Section 2.04     Specifically
Excluded Liabilities. Specifically, and without in any way limiting the generality of Section 2.03, the Assumed Liabilities
do not include, and in no event will Buyer assume, agree to pay, discharge or satisfy any liability or obligation of Seller:

 

(a)          for
any taxes of Seller for any period;

 

(b)          owed
to any member or Affiliate of Seller or any of their respective Affiliates (other than accrued salary, wages, commissions or bonuses
for the then-current payroll period);

 

(c)           that
is being paid off by Buyer at the Closing pursuant to Article III; or

 

(d)           in respect of any Excluded Asset.

 

ARTICLE III

PURCHASE
PRICE; CLOSING

 

Section 3.01     Purchase
Price. The aggregate consideration for the Purchased Assets (the “Purchase Price”) is:

 

(a)          
the payment by Buyer at the Closing of an amount equal to $1.00 (the “Initial Purchase Price”); plus

 

(b)          the
payment by Buyer at the Closing of the aggregate amount of the indebtedness listed on Exhibit 3.01(b) (the “Aggregate
Payoff Amount”); plus

 

(c)           the
assumption by Buyer of the Assumed Liabilities.

 

Section 3.02     Payment
of Initial Purchase Price and Aggregate Payoff Amount. At the Closing, Buyer will pay (i) to Seller, the Initial Purchase
Price and (ii) to each lender listed on Exhibit 3.01(b), the portion of the Aggregate Payoff Amount listed opposite such
lender’s name on Exhibit 3.01(b).

 

 

 

 

 

    	 	6	 

     

    

 

Section 3.03     Closing.
The closing of the transactions contemplated by this Agreement (the “Closing”) will take place simultaneously
with the execution of this Agreement on the date of this Agreement (the “Closing Date”) at the offices of Jones
Day, 1420 Peachtree St. N.E., Atlanta, GA 30309, or remotely via electronic exchange of documents. The consummation of the transactions
contemplated by this Agreement will be deemed to occur at 12:01 a.m. on the Closing Date.

 

Section 3.04     Closing Deliverables.

 

(a)          At
or prior to the Closing (or, in those cases where a specified period of time before the Closing is indicated in this Agreement,
by no later than such time), Seller will deliver to Buyer the following:

 

(i)           a
bill of sale and assumption agreement in form and substance satisfactory to Buyer and Seller (the “Bill of Sale and Assumption
Agreement”) and duly executed by Seller, transferring the Purchased Assets to Buyer and effecting the assignment to
and assumption by Buyer of the the Assumed Liabilities;

 

(ii)          copies
of all consents, approvals, waivers and authorizations set forth in Section 4.02 of the Disclosure Schedules;

 

(iii)         a
certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section
1445 of the Code, duly executed by Seller;

 

(iv)         a
certificate of the Secretary or Assistant Secretary (or equivalent officer) of Seller certifying as to the resolutions of the
board of directors of Seller, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby;

 

(v)         the
Key Employee Agreements, duly executed by Brian Conners, Michael Safford and Mary Volpe;

 

(vi)        a
payoff letter from each lender listed on Exhibit 3.01(b), evidencing the amount of Seller’s indebtedness to such
lender as of the Closing Date and providing that, if such aggregate amount so identified is paid to such lender on the Closing
Date, such indebtedness will be repaid in full and that all Encumbrances affecting any real or personal property of Seller will
be released;

 

(vii)        a
transition services agreement (the “Transition Services Agreement”), in form and substance satisfactory to
Buyer and Seller and duly executed by Seller; and

 

(viii)       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.

 

(b)          At
the Closing, Buyer will deliver the following:

 

(i)           to
Seller, the Initial Purchase Price;

 

(ii)
         to each lender listed on Exhibit 3.01(b), the portion of the Aggregate
Payoff Amount listed opposite such lender’s name thereon;

 

 

 

 

 

    	 	7	 

     

    

 

(iii)
        to Seller, the Bill of Sale and Assumption Agreement duly executed by Buyer;

 

(iv)
        to Seller, the Transition Services Agreement, duly executed by Buyer;

 

(v)
         to Brian Conners, Michael Safford and Mary Volpe, the Key Employment Agreements,
duly executed by Buyer;

 

(vi)        to
Seller, a certificate of the Secretary or Assistant Secretary (or equivalent officer) of Buyer certifying as to the resolutions
of the members, managers or board of directors, as applicable, of Buyer, duly adopted and in effect, which authorize the execution,
delivery and performance of this Agreement and the transactions contemplated hereby; and

 

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

 

Section 3.05     Allocation
of Purchase Price. Seller and Buyer agree to allocate the Purchase Price among the Purchased Assets for all purposes (including
tax and financial accounting) in accordance with Exhibit 3.05. Buyer and Seller will file all tax returns (including amended
returns and claims for refund) and information reports in a manner consistent with such allocation.

 

Section 3.06     Method
of Payment. All payments required under this Article III or any other provision of this Agreement will be made in cash
by wire transfer of immediately available federal funds to a bank account designated in writing by the party entitled to receive
such payment.

 

Section 3.07     Withholding Tax. Buyer will be entitled to deduct and withhold from the Purchase Price all
taxes that Buyer may be required to deduct and withhold under any applicable tax law, which have been identified and agreed to
by Seller prior to the Closing. All such withheld amounts will be treated as delivered to Seller hereunder; provided, however,
that such amount withheld pursuant to applicable tax laws are actually remitted to the appropriate Governmental Authority as and
when required by law.

 

ARTICLE IV

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

For purposes of this
Article IV, “Seller Parties’ knowledge,” “knowledge of the Seller Seller Parties” and any
similar phrases will mean the actual knowledge of Conners and Ford, after due and careful inquiry. Except as set forth in the
disclosure schedules delivered by Seller in connection with this Agreement (the “Disclosure Schedules”), the
Seller Parties, jointly and severally, represent and warrant to Buyer as follows:

 

Section 4.01     Organization
and Authority of Seller; Enforceability. Seller is a limited liability company duly organized, validly existing and in good
standing under the laws of the state of Minnesota. Seller has full limited liability company power and authority to enter into
this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder
and the consummation of the transactions contemplated hereby have been duly authorized by all requisite action on the part of
Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming
due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal,
valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

 

 

 

 

    	 	8	 

     

    

 

Section 4.02     No
Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered
hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the
organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time
or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation
or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets
are subject; or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. Except as set forth in Section
4.02 of the Disclosure Schedules, no consent, approval, waiver or authorization is required to be obtained by Seller from
any Person (including any Governmental Authority) in connection with the execution, delivery and performance by Seller of this
Agreement and the consummation of the transactions contemplated hereby.

 

Section 4.03     Title
to and Sufficiency of Purchased Assets. Seller owns and has good title to the Purchased Assets, free and clear of Encumbrances.
The Purchased Assets constitute all of the assets used in the Business and reasonably necessary to operate the Business as currently
conducted, and are sufficient for the continued conduct of the Business immediately after the Closing in substantially the manner
conducted prior to the Closing. Section 4.03 of the Disclosure Schedules sets forth a description of all material services
received by the Business provided by individuals who are not Business Employees or provided using assets that are not included
in the Purchased Assets, including any such services provided by a member of Seller or any Affiliate of such member (other than
Seller) who is not a Business Employee.

 

Section
4.04     Financial Statements. Section 4.04(a) of the Disclosure Schedules contains
(i) the Interim Balance Sheet and related statements of income and cash flows of Seller as of and for the six-month
period ended on the Interim Balance Sheet Date and (ii) the audited balance sheets and related statements of income and cash
flows of Seller as of and for the years 2015 and 2016, respectively. All such balance sheets and statements of income and
cash flows have been prepared in conformity with GAAP consistently applied and present fairly in all material respects the
financial position, results of operations and cash flows of Seller as of their respective dates and for the respective
periods covered thereby. Except as set forth in Section 4.04(b) of the Disclosure Schedules, Seller is not, with
respect to the Business, subject to any known or asserted liability which is not shown or which is in excess of amounts shown
or reserved for in the Interim Balance Sheet, other than liabilities of the same nature as those set forth in the Interim
Balance Sheet and incurred in the ordinary course of business after the Interim Balance Sheet Date.

 

 

 

 

 

 

    	 	9	 

     

    

 

Section 4.05     Operations
since Interim Balance Sheet Date. Except as set forth in Section 4.05 of the Disclosure Schedules, and except for the
transactions contemplated by this Agreement, since the Interim Balance Sheet Date (a) there has been no material adverse change
in the Purchased Assets, the Business or the operations, liabilities, profits or condition (financial or otherwise) of Seller,
and, to the knowledge of the Seller Parties, no fact or condition exists or is contemplated or threatened which would reasonably
be expected to cause such a change in the future, and (b) Seller has conducted the Business only in the ordinary course and in
conformity with past practice.

 

Section 4.06     Condition
of Assets. The tangible personal property included in the Purchased Assets is in good condition (normal wear and tear excepted)
and is adequate for the uses to which it is being put, and none of such 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.

 

Section 4.07     Inventory.
All inventory, finished goods, raw materials, work in progress, packaging, supplies, parts and other inventories included in the
Purchased Assets consist of a quality and quantity usable and salable in the ordinary course of business.

 

Section 4.08     Intellectual
Property.

 

(a)         Seller owns or has adequate, valid and enforceable rights to use all Intellectual Property included in the Purchased Assets
(“Purchased IP”), free and clear of all Encumbrances. Seller is not bound by any outstanding judgment, injunction,
order or decree restricting the use of the Purchased IP, or restricting the licensing thereof to any Person. With respect to the
registered Intellectual Property included in the Purchased IP, (i) all such Intellectual Property is valid, subsisting and in
full force and effect and (ii) Seller has paid all maintenance fees and made all filings required to maintain Seller’s ownership
thereof.

 

(b)         Seller’s
prior and current use of the Purchased IP has not and does not infringe, violate, dilute or misappropriate the Intellectual Property
of any Person and there are no claims pending or, to the knowledge of the Seller Parties, threatened by any Person with respect
to the ownership, validity, enforceability, effectiveness or use of the Purchased IP. No Person is infringing, misappropriating,
diluting or otherwise violating any of the Purchased IP, and neither Seller nor any Affiliate of Seller has made or asserted any
claim, demand or notice against any Person alleging any such infringement, misappropriation, dilution or other violation.

 

Section 4.09     Assigned
Contracts. Each contract included in the Purchased Assets and being assigned to and assumed by Buyer (the “Assigned
Contracts”) is valid and binding on Seller in accordance with its terms and is in full force and effect, or is a month-to
month contract under which goods or services are being provided after the expiration of its original term. None of Seller or,
to the knowledge of the Seller Parties, 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 Assigned Contract. No event or
circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default under any
Assigned 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 benefit thereunder. Complete and correct copies of each Assigned Contract have been made available to
Buyer. There are no disputes pending or threatened under any Assigned Contract.

 

 

 

 

 

    	 	10	 

     

    

 

Section 4.10     Permits.
All permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained
from Governmental Authorities included in the Purchased Assets (the “Transferred Permits”) are valid and in
full force and effect. All fees and charges with respect to such Transferred Permits as of the date hereof have been paid in full.
To Seller’s knowledge, 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 or limitation of any Transferred Permit.

 

Section 4.11     Environmental
Matters. Except as set forth in Section 4.11 of the Disclosure Schedules: (i) Seller complies, and for the last five
years has complied, in all material respects with all applicable Environmental Laws; (ii) Seller has obtained all Environmental
Permits necessary for the operation of the Business, all such Environmental Permits are in good standing, and Seller is, and has
for the past five years been, in compliance in all material respects with all of the terms and conditions thereof, and the transactions
contemplated by this Agreement will not result in or trigger the termination, revocation, or right of termination or cancellation,
of any such Environmental Permits; (iii) there are not now, nor in the last five years has there been, any lawsuits, claims, proceedings
or investigations concerning Environmental Laws pending or, to the knowledge of the Seller Parties, threatened against or affecting
Seller or the Purchased Assets nor, to the knowledge of the Seller Parties, is there currently any reasonable basis for any of
the same; and (iv) Seller has not received any notice that it is or may be subject to any liability with respect any actual or
alleged presence of, or exposure to, Hazardous Substances or violation of Environmental Law at any location.

 

Section 4.12     Non-foreign
Status. Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2.

 

Section 4.13     Compliance
With Laws. Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable
to ownership and use of the Purchased Assets.

 

Section 4.14     Legal
Proceedings. There is no claim, action, suit, proceeding or governmental investigation (“Action”) of any
nature pending or, to the knowledge of the Seller Parties, threatened against or by Seller (a) relating to or affecting the Purchased
Assets or the Assumed Liabilities; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated
by this Agreement. To Seller’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as
a basis for, any such Action.

 

Section 4.15     Real
Property. Seller does not now own any real property or hold any option to acquire any real property. Exhibit 4.15 sets
forth (i) a list of each lease or similar agreement under which Seller is lessee of, or holds or operates, any real property owned
by any third Person and that is being assigned to Buyer in connection with the transactions contemplated by this Agreement (“Assigned
Leases”). Each Assigned Lease is valid and binding on Seller in accordance with its terms and is in full force and effect.
None of Seller or, to the knowledge of the Seller Parties, 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 Assigned Lease.
No event or circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default
under any Assigned Lease 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 benefit thereunder. Complete and correct copies of each Assigned Lease have been made available
to Buyer. There are no disputes pending or, to Seller’s knowledge, threatened under any Assigned Lease.

 

 

 

 

 

    	 	11	 

     

    

 

Section 4.16     Employees
and Employment Matters.

 

(a)         Section
4.16(a)(i) of the Disclosure Schedules sets forth a list of each Business Employee and the name, title, date of birth, and
date of hire of each such person. Section 4.16(a)(ii) of the Disclosure Schedules sets forth a list of each material Seller
Plan. Seller is, and has been, in compliance in all material respects with all applicable laws in respect of the Business Employees
and the Seller Plans, including under ERISA and the Code. Seller is not party to any collective bargaining agreement and is not,
and has not previously been, the subject of any collective bargaining or union organizing activity. Except as set forth in Section
4.16(a)(iii) of the Disclosure Schedules, Seller is not a party to any employment agreement, or any other agreement, providing
for any payment or consideration payable to any Business Employee upon a change of control or a sale of all or any portion of
the Business.

 

(b)         Each
Seller Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from
the IRS that it is so qualified, and each related trust that is intended to be exempt from federal income tax pursuant to Section
501(a) of the Code has received a determination letter from the IRS that it is so exempt, and no fact or event has occurred or
is expected to occur since the date of such determination letter that could reasonably be expected to adversely affect such qualification
or exemption, as the case may be.

 

(c)          Seller
has not incurred any liability, contingent or otherwise, under or arising out of Title IV of ERISA that has not been satisfied
in full and no fact or event exists that has or could reasonably be expected to result in such a liability. None of the Purchased
Assets is the subject of any Encumbrance arising with respect to any Seller Plan under applicable law (including ERISA and the
Code).

 

(d)         Seller is in compliance in all material respects with all laws relating to the employment of the Business Employees, and
has paid in full all wages, salaries, commissions, and other compensation and benefits, as well as all contributions due to them
or to third parties on their behalf (including taxes, social security taxes, workers compensation contributions and employment
insurance payments). No material claim, charge or litigation with respect to such compliance or payment obligations has been asserted,
is now pending, or to the knowledge the Seller Parties, has been threatened with respect to current or former Business Employees.
There are no outstanding, unsatisfied obligations to comply with any recommendations or declarations of any Governmental Authority
in respect of claims by current or former Business Employees.

  

Section 4.17     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 based upon arrangements made by or on behalf of Seller.

 

 

 

    	 	12	 

     

    

 

ARTICLE V

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

For purposes of this Article
V, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases will mean the actual or
constructive knowledge of any member, manager, director or officer of Buyer, after due inquiry. Buyer represents and warrants to
Seller as follows:

 

Section 5.01     Organization
and Authority of Buyer; Enforceability. Buyer is a limited liability company duly organized, validly existing and in good
standing under the laws of the state of Delaware. Buyer has full limited liability company power and authority to enter into this
Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder
and the consummation of the transactions contemplated hereby have been duly authorized by all requisite action on the part of
Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer, and (assuming
due authorization, execution and delivery by the Seller Parties) this Agreement and the documents to be delivered hereunder constitute
legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

 

Section 5.02     No
Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered
hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the
organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any
Person (including any Governmental Authority) in connection with the execution, delivery and performance by Buyer of this Agreement
and the consummation of the transactions contemplated hereby.

 

Section 5.03     Legal
Proceedings. There is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that
challenges or seeks 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.

 

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 based upon arrangements made by or on behalf of Buyer.

 

ARTICLE VI

COVENANTS

 

Section 6.01     Public
Announcements. Unless otherwise required by applicable law, no party will make any public announcements regarding this Agreement
or the transactions contemplated hereby without the prior written consent of the other parties (which consent will not be unreasonably
withheld or delayed).

 

 

 

 

 

 

    	 	13	 

     

    

 

Section 6.02     Employee
Matters. Buyer may, in its sole and absolute discretion, make an offer of employment to any Business Employee. Seller hereby
waives any contractual or other obligation or provision that would restrict any Business Employee from accepting employment with
Buyer or would otherwise restrict the activities of any Business Employee hired by Buyer, including any non-competition or non-solicitation
covenant contained in an agreement between Seller and any Business Employee. Seller will use commercially reasonable efforts to
cause each Business Employee to whom Buyer makes an offer of employment to accept such offer in a timely manner.

 

Section 6.03     Covenant
Not to Compete and Confidentiality.

 

(a)          In
furtherance of the sale of the Business and the Purchased Assets and to more effectively protect the value and goodwill thereof,
Seller covenants and agrees for a period ending on the five-year anniversary of the Closing Date (the “Restricted Period”),
that it will not, directly or indirectly (whether as principal, agent, independent contractor, employee, partner or otherwise),
own, manage, operate, control, participate in, perform services for, or otherwise carry on, a business competitive with the Business
(a “Competing Business”) anywhere in the United States (it being understood by the parties hereto that the
Business is not limited to any particular region of the United States and that such Business may be engaged in effectively from
any location in the United States).

 

(b)          Seller
will hold in confidence at all times following the Closing all Confidential Information and will not disclose, publish or make
use of Confidential Information at any time following the date hereof without the prior written consent of Buyer.

 

(c)          It
is the intent and understanding of each party hereto that if, in any action before any Governmental Authority legally empowered
to enforce this Section 6.03, any term, restriction, covenant or promise in this Section 6.03 is found to be unreasonable
and for that reason unenforceable, then such term, restriction, covenant or promise will be deemed modified to the extent necessary
to make it enforceable by such Governmental Authority.

 

(d)          In
the event that Seller violates any obligation under this Section 6.03, Buyer may proceed against Seller in law or in equity.
Seller acknowledges that a violation of this Section 6.3 would cause Buyer irreparable harm which cannot be adequately
compensated for by money damages. Seller expressly acknowledges that the remedy at law for any breach of this Section 6.03
will be inadequate, and that upon any such breach or threatened breach Buyer will be entitled as a matter of right to injunctive
relief in any court or other tribunal of competent jurisdiction, in equity or otherwise, and to enforce the specific performance
of the obligations under these provisions without the necessity of proving actual damages or the inadequacy of a legal remedy
or posting a bond or other security. If Buyer prevails in any action commenced under this Section 6.03, it will also be
entitled to recover its expenses in connection therewith.

 

Section 6.04     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.

 

Section 6.05     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 documents to be delivered hereunder will be borne and
paid by Seller when due. Seller will timely pay such taxes and fees and timely file and any tax return or other document with
respect to such taxes or fees.

 

 

 

 

 

 

    	 	14	 

     

    

 

Section 6.06     Further
Assurances. Following the Closing, each of the parties hereto will 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 documents to be delivered hereunder.

 

Section 6.07     Consents.
Until such time as each Non-Assignable Contract can be assigned to Buyer, and then during the remaining term of each Non-Assignable
Contract, Seller will make the benefit of such Non-Assignable Contract available to Buyer so long as Buyer fully cooperates with
Seller and reimburses Seller for all payments made by Seller in connection therewith. In addition, during the remaining term of
each Non-Assignable Contract, Seller will use commercially reasonable efforts to (a) obtain the consent of the third parties required
thereunder, and (b) enforce, at the request of Buyer and for the account of Buyer, any right of Seller arising from such Non-Assignable
Contract against the other party or parties thereto (including the right to elect or terminate any such Non- Assignable Contract
in accordance with the terms thereof). Seller will not take any action or suffer any omission that would reasonably be expected
to limit, restrict or terminate in any material respect the benefits to Buyer of such Non-Assignable Contract unless, in good
faith and after consultation with and prior written notice to Buyer, Seller is (i) ordered to do so by a Governmental Authority
of competent jurisdiction or (ii) otherwise required to do so by law; provided, however, that if any such order
is appealable and Buyer so requests, Seller will take such reasonable actions as are requested by Buyer to file and pursue such
appeal and to obtain a stay of such order, and the Seller will reimburse Buyer for the costs incurred by Buyer related to the
appeal of such an order. Nothing in this Agreement or the Bill of Sale and Assumption Agreement constitutes a sale, assignment,
transfer or conveyance to, or assumption by, Buyer of the Non-Assignable Contracts. With respect to any such Non-Assignable Contract
as to which the necessary approval or consent for the assignment or transfer to Buyer is obtained following the Closing, Seller
will transfer such Non-Assignable Contract to Buyer by execution and delivery of an instrument of conveyance reasonably satisfactory
to Buyer within five business days following receipt of such approval or consent.

 

ARTICLE
VII

INDEMNIFICATION

 

Section 7.01     Survival.
All representations, warranties, covenants and agreements contained herein and all related rights to indemnification will survive
the Closing and continue in full force and effect for four years thereafter, except (i) the representations and warranties set
forth in Sections 4.11 and 4.16, which will survive the Closing and continue in full force and effect until the
applicable statute of limitations expires (or for 15 years if there is no applicable statute of limitations) and (ii) the representations
and warranties set forth in Section 4.01 and 5.01, which will survive the Closing and will continue in full force
and effect forever.

 

Section 7.02     Indemnification
By the Seller Parties. Subject to the other terms and conditions of this Article VII, the Seller Parties will, jointly
and severally, defend, indemnify and hold harmless Buyer, its Affiliates and their respective members, managers, directors, officers
and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including
reasonable attorneys’ fees and disbursements, but excluding punitive or incidental damages, arising from or relating to:

 

 

 

 

 

 

    	 	15	 

     

    

 

(a)          any
inaccuracy in or breach of any of the representations or warranties of the Seller Parties contained in this Agreement or any document
to be delivered hereunder;

 

(b)          any
breach or non-fulfillment of any covenant, agreement or obligation to be performed by any Seller Party pursuant to this Agreement
or any document to be delivered hereunder;

 

(c)          the
operation and ownership of, or conditions first occurring with respect to, the Purchased Assets prior to the Closing (other than
the Assumed Liabilities relating thereto); or

 

(d)          any
Excluded Asset or Excluded Liability.

 

Section 7.03     Indemnification
By Buyer. Subject to the other terms and conditions of this Article VII, Buyer will defend, indemnify and hold harmless
Seller, its Affiliates and their respective stockholders or other equity holders, directors, officers and employees from and against
all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including reasonable attorneys’ fees
and disbursements, but excluding punitive or incidental damages, arising from or relating to:

 

(a)          any
inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document to be
delivered hereunder;

 

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

 

(c)          the
operation and ownership of, or conditions first occurring with respect to, the Purchased Assets from and after the Closing (other
than the Excluded Liabilities relating thereto); or

 

(d)          any
Assumed Liability.

 

Section 7.04     Indemnification
Procedures. Whenever any claim will arise for indemnification hereunder, the party entitled to indemnification (the
“Indemnified Party”) will promptly provide written notice of such claim to the other party (the “Indemnifying
Party”). In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action
by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice
to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party.
The Indemnified Party will be entitled to participate in the defense of any such Action, with its counsel and at its own cost
and expense. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but will not
be obligated to, defend against such Action in such manner as it may deem appropriate, including, but not limited to, settling
such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate
and no action taken by the Indemnified Party in accordance with such defense and settlement will relieve the Indemnifying Party
of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party will
not settle any Action without the Indemnified Party’s prior written consent (which consent will not be unreasonably withheld
or delayed).

 

 

 

 

 

    	 	16	 

     

    

 

Section 7.05     Tax
Treatment of Indemnification Payments. All indemnification payments made by Seller under this Agreement will be treated by
the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

 

Section 7.06     Effect
of Investigation. Buyer’s right to indemnification or other remedy based on the representations, warranties, covenants
and agreements of the Seller Parties contained herein will not be affected by any investigation conducted by Buyer with respect
to, or any knowledge acquired by Buyer at any time, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or agreement.

 

Section 7.07     Exclusive Remedy. The rights and remedies provided in this
Article VII are the exclusive remedies of Buyer and Seller arising out of or in connection with this Agreement and shall
be in lieu of any rights under contract, tort or otherwise (other than claims based on actual fraud of this Agreement, intentional
misrepresentation or deliberate or willful breach). Notwithstanding the foregoing, nothing in this Section 7.07 will impair
the parties’ rights to specific performance pursuant to Section 8.13.

 

ARTICLE
VIII

MISCELLANEOUS

 

Section 8.01     Expenses.
All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the
party incurring such costs and expenses.

 

Section
8.02      Notices. All notices, requests, consents, claims, demands, waivers and other
communications hereunder will be in writing and will 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 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 third 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
specified in a notice given in accordance with this Section 8.02):

 

	If to Seller:	ARCA Advanced Processing, LLC
	 	4301 N. Delaware Ave. Bldg. C
	 	Philadelphia, PA 19137
	 	 
	If to 4301, Conners or Ford:	4301 Operations, LLC
	 	4301 N. Delaware Ave. Bldg. C
	 	Philadelphia, PA 19137

 

 

 

 

 

    	 	17	 

     

    

 

	 	 
	If to Buyer:	Recleim PA, LLC
	 	c/o Peachtree Investment Solutions, LLC
	 	34 Old Ivy road, Suite 200
	 	Atlanta, GA 30342
	 	Attention: Pete Davis
	 	E-mail: pete@peachtreeinv.com
	 	 
	with a copy to:	Jones Day
	 	1420 Peachtree St., N.E., Suite 800
	 	Atlanta, GA 30309
	 	Attention: Ken Boehner
	 	E-mail: kboehner@jonesday.com

 

Section 8.03     Headings.
The headings in this Agreement are for reference only and will not affect the interpretation of this Agreement.

 

Section 8.04     Severability.
If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality
or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term
or provision in any other jurisdiction.

 

Section 8.05     Entire
Agreement. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties
to this Agreement with respect to the subject matter contained herein, 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 the documents to be delivered hereunder, the Exhibits 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 8.06     Successors
and Assigns. This Agreement will be binding upon and will inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party may assign its rights or obligations hereunder without the prior written consent of
the other parties, which consent will not be unreasonably withheld or delayed. Notwithstanding the foregoing, Buyer may assign
this Agreement to an Affiliate of Buyer without the prior consent of Seller. No assignment will relieve the assigning party of
any of its obligations hereunder.

 

Section 8.07     No
Third-party Beneficiaries. Except as provided in Article VII, 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 will confer
upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 8.08     Amendment
and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party
hereto.

 

Section 8.09     Waiver.
No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by
the party so waiving. No waiver by any party will 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
will operate or be construed as a waiver thereof; nor will 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.

 

 

 

 

 

    	 	18	 

     

    

 

Section 8.10     Governing
Law. This Agreement will 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 (whether of the State of Delaware or any other jurisdiction).

 

Section 8.11     Submission
to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in the federal courts of the United States of America or the courts of the State of Delaware in each
case located in the city of Wilmington and county of New Castle, and each party irrevocably submits to the exclusive jurisdiction
of such courts in any such suit, action or proceeding.

 

Section 8.12     Waiver
of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement 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 or the transactions contemplated
hereby.

 

Section 8.13     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 will 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 8.14     Counterparts. This Agreement may be
executed in counterparts, each of which will be deemed an original, but all of which together will 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 will
be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

    	 	19	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed as of the date first written above.

 

 

	 	BUYER
	 	 
	 	RECLEIM PA, LLC
	 	 
	 	By: /s/ J. Steve Bush                       
	 	Name: J. Steve Bush
	 	Title: Manager
	 	 
	 	 
	 	SELLER PARTIES
	 	 
	 	ARCA ADVANCED PROCESSING, LLC
	 	 
	 	By: /s/ Brian Conners                      
	 	Name: Brian Conners
	 	Title: COO
	 	 
	 	 
	 	4301 OPERATIONS, LLC
	 	 
	 	By: /s/ Brian Conners                      
	 	Name: Brian Conners
	 	Title: President
	 	 
	 	 
	 	/s/ Brian Conners                             
	 	Brian Conners
	 	 
	 	/s/ James Ford                                  
	 	James Ford

 

 

[SIGNATURE
PAGE TO ASSET PURCHASE AGREEMENT]

 

 

    	 	20	 

     

    

 

 

Exhibit 2.01

 

Tangible Assets

 

See attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	21	 

     

    

 

 

 

 

 

    	 	22	 

     

    

 

 

 

    	 	23	 

     

    

 

 

 

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    	 	27	 

     

    

 

 

 

    	 	28	 

     

    

 

 

 

    	 	29	 

     

    

 

 

 

    	 	30	 

     

    

 

 

 

    	 	31	 

     

    

 

 

 

    	 	32	 

     

    

 

 

 

    	 	33	 

     

    

 

 

 

    	 	34	 

     

    

 

 

 

    	 	35	 

     

    

 

 

 

    	 	36	 

     

    

 

 

 

    	 	37	 

     

    

 

 

 

    	 	38	 

     

    

 

 

 

    	 	39	 

     

    

 

 

 

    	 	40	 

     

    

 

 

 

    	 	41	 

     

    

 

 

 

Exhibit 2.02(e)

 

Excluded Assets

 

None.

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	42	 

     

    

 

 

Exhibit 2.03(b)(iii)

 

Assumed Liabilities

 

See attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	43	 

     

    

 

	ABCA Recycling	 	$	1,950.00
	AERC.COM	 	$	6,237.40
	Aeroteck	 	$	209,573.70
	AirGas	 	 	 
	All Staffing Warehouse	 	 	 
	American Pulverizer	 	 	 
	American Metal Markets	 	 	 
	AMSCO	 	 	 
	Anthem Propane	 	$	1,049.46
	Appliance Warehouse	 	$	751.54
	Atomic Extinguishers	 	 	 
	 	 	 	 
	Belgrade	 	$	58.64
	Beverly Brown-Petty cash	 	$	524.54
	Bermuda International Shipping	 	 	 
	Beverage & Diamond	 	$	3,068.83
	Bowman	 	$	10,673.40
	Brian Finn Scale	 	$	1,801.00
	BSE Holdings	 	$	19,840.00
	Celayix	 	$	1,600.00
	CJB Packaging	 	4	875.83
	Cleaning MDs	 	 	1,180.98
	Commonwealth Computer Recycling	 	 	1,822.80
	Concentra	 	$	156.50
	Corestaff	 	$	12,268.03
	The Ministry of Public Works	 	$	29,532.96
	DB Schenker	 	$	369.90
	Delaware Ave LLC	 	$	21,222.88
	de lage landen	 	$	4,318.66
	Delware Valley Remediation	 	$	1,252.30
	ECOvanta	 	$	8,912.40
	Eforce	 	$	3,006.57
	Elemental	 	 	 
	Environmed	 	 	 
	Equipment Depot	 	$	12,212.60
	E-Waste Experts	 	 	 
	Fidelity Alarm	 	$	810.00
	First Star Logistics	 	$	2,781.00
	Frank Callahan	 	$	1,846.31
	Franc Environmental	 	$	2,095.00
	George Leck	 	 	 
	Grainger	 	$	29.59
	Guardian Life	 	 	 
	Harleysville Ins	 	 	 
	Hustler Conveyor	 	$	7,097.14
	Incorp	 	$	99.00
	IBX	 	$	10,046.85

 

 

 

 

    	 	44	 

     

    

 

	Industrial Tire	 	 	 
	JJ Keller	 	 	 
	Jag Expansion	 	$	11,630.00
	Jim Fesmire	 	$	4,175.00
	Joseph Fazzio	 	$	256.29
	JQ Staffing	 	$	36,260.88
	Komatsu	 	$	4,985.95
	Law Offices of Dimitri Karapelou	 	 	 
	Leshkowitz & Co	 	$	201.35
	Linde	 	 	23818.94
	Lorco	 	 	 
	Martin's Appliance	 	 	3981.05
	Masterman's	 	 	 
	Mazzucco & Co	 	$	2,630.00
	McMaster Carr	 	$	2,173.50
	Metal Stock	 	 	 
	Midatlantic Machinery	 	$	2,173.80
	MidAtlantic Fire	 	$	2,350.00
	Nationwide Insurance	 	 	 
	Mobile Mini Inc	 	$	1,194.91
	Nova	 	$	4,281.00
	Payroll,
    taxes, 401k and support payments
	Parade Wire	 	 	 
	PBP Fasteners	 	$	2,177.50
	Peco	 	 	 
	Penn Jersey	 	$	795.75
	Perry Johnson Registars	 	$	2,000.00
	Petro Choice	 	$	971.84
	PIDC	 	$	16,965.55
	Port packaging	 	 	 
	Praxair	 	$	4,251.39
	Premium Assignment	 	$	7,661.86
	Recycling Equipment	 	$	10,277.84
	Revolution Recovery	 	$	771.30
	Wells
    Fargo	 	$	15,798.45
	River Drive	 	 	 
	Royal	 	$	919.83
	Ryder	 	$	5,463.84
	Safe Disposal	 	 	8485.97
	 	 	 	 
	Safety Kleen	 	 	91.56
	SDS Service	 	$	1,142.68
	Separator Disc	 	 	 
	Shingle & Gibb	 	$	3,347.89
	Spichers	 	$	9,529.70
	Stauffer Glove	 	 	 

 

 

 

 

 

    	 	45	 

     

    

 

	Sullivan Scrap	 	 	765.9
	Susquehanna Credit card	 	$	22,991.33
	Trailer Tech Parts	 	$	718.99
	Unum insurance	 	 	 
	Van Hydraulics	 	 	 
	Vintage Tech	 	$	6,555.92
	Waste Management	 	$	9,822.60
	Water Revenue Bureau	 	 	524.42
	William C. Miller, Trustee	 	$	4,322.50
	Wright Express	 	 	 
	Yard Specialists	 	 	 
	Zwicky	 	$	1,849.47
	 	 	 	 
	River Drive	 	 	 
	Safety Kleen	 	 	 
	Service Caster Corp	 	$	309.20
	SLC Nationwide	 	 	 
	Stauffer Glove	 	 	 
	STS Trucking	 	 	 
	Volvo	 	 	 
	Vintage Tech	 	 	 
	Water Revenue Bureau	 	 	 
	Wells Fargo debit from BBT account	 	 	 
	Delaware Avenue, LLC (April-July)	 	$	150,208.40
	Total	 	$	767,900.16

 

 

    	 	46	 

     

    

 

 

Exhibit 3.01(b)

 

Indebtedness to
be Paid off at the Closing

 

BB&T - $3,454,068.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	47	 

     

    

Exhibit 3.05

 

Purchase Price Allocation

 

The Purchase Price
(as adjusted under federal income tax principles) will be allocated among the Purchased Assets for federal income
tax purposes based on the Purchase Price Allocation Methodology set forth below, which follows the principles of Section 1060
of the Code and the regulations under Section 338 of the Code. Capitalized terms have the meanings set forth in the Agreement.

 

	Cash	The net tax basis at Closing.
	 	 
	(Class I assets)	 
	Marketable securities and
    certificates of deposit	The net tax basis at Closing.
	 	 
	(Class II assets)	 
	Accounts receivable and other like
    rights to payments	The net tax basis at Closing.
	 	 
	(Class III assets)	 
	Inventory	The net tax basis at Closing.
	 	 
	(Class IV assets)	 
	All other assets (i.e., other than
    those included in Classes I, II, III, IV, VI, and VII)	The net tax basis at Closing.
	 	 
	(Class V assets)	 
	Intangibles other than goodwill
    and going concern value	The fair market value at Closing.
	 	 
	(Class VI assets)	 
	Goodwill and going concern value	Any ).residual amount of the
    
	 	Purchase Price (as adjusted under
	(Class VII assets)	federal
    income tax principles

 

 

 

 

 

 

    	 	48	 

     

    

 

Exhibit 4.15

 

Assigned Leases

 

 

	1.		4301 N. Delaware
                                         Avenue, Philadelphia, PA, Bldg. A, Parking Yard C: Industrial Lease, dated November
                                         26, 2008, between Delaware Avenue, LLC and Safe Disposal Systems, Inc., as amended by
                                         the Addendum to Industrial Lease, dated February 9, 2010, as assigned to ARCA Advanced
                                         Processing, LLC pursuant to the Assignment of Lease, dated June 15, 2010, as further
                                         amended by the Amendment to Lease Agreement, dated November 24, 2010, as further amended
                                         by the Addendum to Industrial Lease, dated November 30, 2013, as further amended by the
                                         Fourth Amendment to Lease, dated January 1, 2015

 

	2.		4301 N. Delaware
                                         Avenue, Philadelphia, PA, Bldg. B: Industrial Lease, dated October 1, 2013, between
                                         Delaware Avenue, LLC and ARCA Advanced Processing, LLC

 

 

 

 

 

 

 

 

 

 

 

 

    	 	49

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