ASSET PURCHASE AGREEMENT by and among AQUABOUNTY FARMS OHIO LLC, AQUABOUNTY FARMS INDIANA LLC, and SUPERIOR FRESH LLC Dated as of June 28, 2024





Page



ARTICLE 1: DEFINITIONS

ARTICLE 2: PURCHASE AND SALE of assets; assumption of liabilities



Purchase and Sale of the Assets



Excluded Assets



Assumption of Liabilities



Excluded Liabilities



Purchase Price.

ARTICLE 3: DELIVERIES AND OTHER ACTIONS



Closing



Deliveries by the Seller



Deliveries by and Actions of the Buyer

ARTICLE 4: post-closing matters



Bulk-Sales Laws



Proration of Certain Expenses



Further Conveyances and Assumptions; Consent of Third Parties.

ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF THE SELLER



Existence and Good Standing



Validity and Enforceability



No Conflict



Required Filings and Consents



Intentionally Omitted



Title to Purchased Assets and Personal Property



Taxes.



Owned Real Property.



Purchased Contracts



Litigation and Orders.



Compliance with Laws



Permits



Labor Matters.



Environmental.





Page





Brokers



No Other Representations and Warranties

ARTICLE 6: REPRESENTATIONS, WARRANTIES, and pre-closing covenants OF THE BUYER



Existence and Good Standing



Power



Validity and Enforceability



No Conflict



Litigation



Brokers



Due Diligence Investigation; No Reliance.



Available Funds

ARTICLE 7: TAX MATTERS



Transfer Taxes



Cooperation; Audits



Prorations

ARTICLE 8: COVENANTS AND AGREEMENTS



Preservation of Records; Access



Publicity



Employees



No Disparagement



Efforts to Consummate



Updates to Schedules

ARTICLE 9: REMEDIES



General Indemnification Obligation.



Survivability; Limitations.



Claim Procedures.

ARTICLE 10: MISCELLANEOUS



Expenses



No Assignment





Page





Notices



Governing Law



Counterparts



Non-Recourse



Consent to Jurisdiction and Service of Process



Waiver of Jury Trial



Disclosure Schedules



Third Party Beneficiaries



Termination.



Enforcement of Agreement

ARTICLE 1:    DEFINITIONS

ARTICLE 2:    PURCHASE AND SALE of assets; assumption of liabilities

(a) all tangible personal property of the Seller set forth on Schedule 2.1(a), and all owned Furniture and Equipment whether listed on Schedule 2.1(a) or not;

(b) that certain tangible personal property of the Seller located at, or intended for use, at the Ohio Seller’s Pioneer, Ohio facility, as more specifically listed on Schedule 2.1(b) (the “Ohio Equipment”);

(c) all rights of the Seller under the Contracts set forth on Schedule 2.1(c) (the “Purchased Contracts”), including all claims or causes of action with respect to the Purchased Contracts;

(d) all rights of the Seller and the Real Estate Seller with respect to all Owned Real Property;

(e) all supplies owned by the Indiana Seller and used in connection with the Business as currently conducted;

(f) all rights of the Seller under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors to the extent transferrable, without requiring the consent of any other Person, and relating to products sold or services provided to the Seller (except to the extent related to the Excluded Assets or the Excluded Liabilities) or to the extent affecting any Purchased Assets;

(g) originals or copies of all books of account, ledgers and general, financial and accounting records of the Seller related exclusively to the Purchased Assets and Assumed Liabilities and all Tax Returns, other than Income Tax Returns, and other documents related to or supporting such Tax Returns (including written advice and other written communications from third parties, transfer pricing documentation and work files); provided, however, that, to the extent that any portions of such books or records arise out of or relate to both the Purchased Assets and Assumed Liabilities and any other business of the Seller, such portions relating to any other business of such Seller may be extracted or redacted at the sole discretion of the Seller; and

(h) all Tax credits, deposits, advance payments, prepayments, refunds or similar Tax item or attributes that either belong to the Buyer or relate to Taxes for which Buyer is liable under Article 7.

(i) all cash, cash equivalents, accounts receivable and other current assets of the Seller;

(j) all bank and other depository accounts;

(k) the Excluded Contracts;

(l) all Seller Intellectual Property;

(m) all Excluded Documents;

(n) all rights of the Seller related to Proceedings that are pending as of the date hereof or as of the Closing Date;

(o) under or pursuant to all warranties, any representations and guarantees made by suppliers, manufacturers and contractors to the extent relating to products sold or services provided to the Seller or to the extent affecting any Excluded Assets or Excluded Liabilities;

(p) all goodwill and other intangible assets of the Seller associated with the Excluded Assets;

(q) all Tax credits, deposits, advance payments, prepayments, refunds or similar Tax item or attributes that either belong to the Seller or relate to Taxes for which Seller is liable under Article 7;

(r) all insurance policies of the Seller, and all coverages and proceeds thereunder and rights in connection therewith, and refunds due from any insurer with respect to insurance premium payments heretofore paid by the Seller;

(s) the rights which accrue or will accrue to the Seller under the Transaction Documents;

(t) all minutes books, written consents, organizational documents of the Seller;

(u) all claims, counterclaims, causes of action and rights of recourse of the Seller against third parties relating to any Excluded Liability or Excluded Asset, whether ▇▇▇▇▇▇ or inchoate, known or unknown, contingent or non-contingent; and

(v) the assets set forth on Schedule 2.2(o). 

(a) all Liabilities of the Seller under the Purchased Contracts or any other Contracts or Permits that constitute Purchased Assets, in each case, that arise out of or relate to the period from and after the Closing Date;

(w) all Liabilities relating to the Purchased Assets or the Buyer’s operation of the Business, in each case, only to the extent arising out of underlying events, actions or failures to act occurring during the period from and after the Closing Date;  and

(x) all Liabilities for (i) Transfer Taxes and (ii) Taxes that relate to the Purchased Assets or the Assumed Liabilities allocable to Buyer pursuant to Section 7.2.

2.2 Purchase Price.

(a) The aggregate purchase price to be paid by the Buyer for the Purchased Assets, is an amount in cash equal to $9,500,000.00 (the “Purchase Price”), which shall be paid as $9,000,000.00 (the “Initial Purchase Price”), on the Closing Date, and $500,000.00 (the “Deferred Purchase Price”, and together with the Initial Purchase Price, the Purchase Price), on or before the date that is ninety (90) calendar days following the Closing Date (the “Equipment Review Period), but subject to Section 2.5(a)(i).  On the Closing Date, subject to the satisfaction or waiver of the conditions to Closing set forth in Section 3.2, the Buyer shall pay, or cause to be paid, (1) to the Seller by bank wire transfer of immediately available funds to an account designated in writing by the Seller, an amount in cash equal to the Initial Purchase Price less (i) the Escrow Amount (which shall be paid by the Escrow Agent to the Title Company, and then released to the Seller), (ii) the Release Amount and (iii) the Tax Payoff Amount; and (2) to the holders of any Indebtedness of the Seller who have Asset Liens, the applicable amount set forth on the Seller’s Certificate required to release such Asset Liens (such aggregate amount, the “Release Amount”); and (3) to the Title Company, the amount needed to pay off any outstanding real estate Taxes related to the Owned Real Property (the “Tax Payoff Amount”).

(i) If during the Equipment Review Period any of the property or equipment set forth in Schedule 2.1(a) or Schedule 2.1(b) is discovered by Buyer to be missing from the Owned Real Property and/or Seller’s Pioneer, Ohio facility,  and not readily made available for transfer by Seller, then Buyer and Seller shall negotiate in good faith to agree upon an appropriate deduction from the Deferred Purchase Price for the missing piece of property (each deduction a “Asset Cost”), provided if Buyer and Seller cannot in good faith reasonably agree on the Asset Cost, the Asset Cost shall be calculated as AquaBounty’s net book value for the item as of June 30, 2024 times 35%. Buyer shall notify Seller and in writing at any time prior to the end of the Equipment Review Period of such missing property or equipment, and Seller shall promptly attempt to locate the same and make it available for transfer to Buyer within five (5) business days. Further, for each piece of missing property or equipment which is not located by Seller within the five (5) business day period, Buyer shall have the right to notify Escrow Agent, and the corresponding Asset Cost shall be deducted from the Deferred Purchase Price and returned to Buyer within five (5) business days after the end of the Equipment Review Period, and Seller shall receive the balance of the Deferred Purchase Price (if any) within two (2) business days of Buyer’s receipt of the Asset Cost(s).

(ii) Notwithstanding anything to the contrary, beginning on the Effective Date and continuing through the end of Closing Date (or date termination of this Agreement), Seller shall not remove any tangible personal property, owned Furniture and Equipment, or related infrastructure from the Owned Real Property.

(b) Within two (2) business days after the later of the Effective Date or receiving wiring instructions from the Escrow Agent, the Buyer shall deliver the Escrow Amount to the Escrow Agent.  The Escrow Amount shall be fully refundable to the Buyer in the event the Buyer terminates this Agreement prior to the expiration of the Due Diligence Period in accordance with the terms hereof; provided, however, in the event the Buyer fails to so terminate prior to the expiration of the Due Diligence Period, the entire Escrow Amount shall become non-refundable, unless Seller refuses to close, as required herein (other than as a result of the Buyer’s failure to satisfy a condition precedent to Closing).  Promptly following the Effective Date, the Seller shall place an order with the Title Company for a title commitment with respect to the Owned Real Property. 

(c) Notwithstanding anything herein to the contrary, to the extent required under Law, at the Closing,  the Buyer shall be entitled to withhold any and all amounts from the Purchase Price equal to any withholding Tax owed to any Taxing Authority as a result of the transactions contemplated by this Agreement (other than with respect to Taxes for which the Buyer is liable); provided however that the Buyer shall notify the Seller prior to withholding any such amount.  For the avoidance of doubt, any amounts withheld hereunder shall be treated as having been paid to the Seller.

ARTICLE 3:    DELIVERIES AND OTHER ACTIONS

(a) The representations and warranties of the Seller set forth in Article V shall be true and correct as of the date of this Agreement and as of the Closing Date, as if made on the Closing Date, other than any such representations or warranties made as of a specified date, which shall be true and correct as of such specified date (in each case, without regard to materiality qualifiers), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Seller Material Adverse Effect.

(b) The Seller shall have performed all covenants required to be performed by the Seller prior to Closing, except where the failure to perform such covenants would not be reasonably expected to have a Seller Material Adverse Effect.

(c) At or prior to Closing, the Seller shall deliver, or cause to be delivered, to the Buyer, or the Title Company, as directed by the Buyer, the following items:

(i) a copy of the Bill of Sale, duly executed by the Seller;

(ii) a copy of the Assignment and Assumption Agreement, duly executed by the Seller;

(iii) a certificate of an officer of the Seller (the “Seller’s Certificate”), dated as of the Closing Date, (x) setting forth in sufficient detail acceptable to the Buyer the aggregate amount of Indebtedness of the Seller as of immediately prior to the Closing secured by ▇▇▇▇▇ ▇▇▇▇▇ (and accompanied by payoff letters where applicable), and (y) certifying that the conditions set forth in Sections 3.2(a), (b) and (d) have been satisfied;

(iv) appropriate termination statements under the Uniform Commercial Code and other instruments as may be reasonably requested by the Buyer evidencing extinguishment of all Asset Liens to the extent directed by the Buyer;

(v) all of the consents listed on Schedule 3.2(e)(v);

(vi) a non-foreign person affidavit that complies with the requirements of Section 1445 of the Code, executed by the Seller and in form and substance reasonably satisfactory to Buyer certifying that, as of the Closing Date, the Seller is not a “foreign person” within the meaning of Section 1445 of the Code;

(vii) an original of the Deed;

(viii) any affidavits or undertakings acceptable to Title Company as it may reasonably require to issue the Title Insurance;

(ix) evidence, reasonably satisfactory to the Buyer and the Title Company, that any required approval of the sole member of the Seller to this Agreement and the transactions contemplated hereby has been obtained and that the person executing the documents delivered by the Seller pursuant to this Section 3.2 on behalf of the Seller has full right, power and authority to do so;

(x) a copy of the settlement statement, duly executed by the Seller;

(xi) good standing certificates, dated within five (5) days of the Closing Date, for the Seller and the Real Estate Seller;

(xii) original mortgage releases, in form and substance reasonably satisfactory to the Buyer and sufficient to cause the mortgages set forth on Schedule 3.2(e)(xii) to be removed as exceptions to title under the title insurance policy required to be obtained by the Buyer pursuant to Section 3.3(c)(vi);  and

(xiii) evidence reasonably satisfactory to the Buyer and the Title Company that all delinquent Taxes related to the Owned Real Property (other than Tax obligations paid or withheld from the Purchase Price pursuant to Section 2.5) have been paid or are not secured by Liens against any of the Purchased Assets.

(d) The representations and warranties of the Buyer set forth in Article VI shall be true and correct as of the date of this Agreement and as of the Closing Date, as if made on the Closing Date, other than any such representations or warranties made as of a specified date, which shall be true and correct as of such specified date, (in each case, without regard to materiality qualifiers), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Buyer Material Adverse Effect.

(e) The Buyer shall have performed in all material respects all covenants required to be performed by the Buyer prior to the Closing.

(f) At or prior to the Closing, the Buyer shall:

(i) deliver to the Seller a certificate of an officer of the Buyer (the “Buyer’s Certificate”), dated as of the Closing Date, certifying that the condition set forth in Section 3.3(a) and (b) have been satisfied;

(ii) deliver to the Seller a copy of the Assignment and Assumption Agreement, duly executed by the Buyer;

(iii) deliver to the Seller such other documents and instruments as the Seller reasonably requests to consummate the transactions contemplated by this Agreement;

(iv) a copy of the settlement statement, duly executed by the Buyer; and

(v) obtain an ALTA Extended Owner’s Policy of Title Insurance for the Owned Real Property, or a binding commitment to issue such a policy, issued by the Title Company in such amount as may be reasonably agreeable to the Buyer, insuring that title to the Owned Real Property is vested in the Buyer or its designees as of the Closing; the Seller (or the Real Estate Seller) shall provide to the Title Company such affidavits as are reasonably necessary to permit the Title Company to delete its standard exceptions (other than the survey exception, if no survey is obtained by the Buyer).

(g) At the Closing, the Buyer shall make, or cause to be made, the payments contemplated by Section 2.5(a).

ARTICLE 4:    post-closing matters

4.1 Further Conveyances and Assumptions; Consent of Third Parties.

(a) From time to time following the Closing, the Seller and the Buyer shall, and shall cause their respective controlled Affiliates to, execute, acknowledge and deliver all such further conveyances, notices, assumptions, releases and acquittances and such other instruments, and shall take such further actions, as may be necessary or appropriate to assure fully to the Buyer and its respective successors or assigns, all of the properties, rights, titles, interests, estates, remedies, powers and privileges intended to be conveyed to the Buyer under this Agreement and the Ancillary Agreements and to assure fully to the Seller and its Affiliates and their successors and assigns, the assumption of the liabilities and obligations intended to be assumed by the Buyer under this Agreement and the Ancillary Agreements, and to otherwise make effective the transactions contemplated hereby and thereby.

(b) Nothing in this Agreement nor the Ancillary Agreements shall be construed as an attempt or agreement to assign any Purchased Assets, including any Contract, Permit, certificate, approval, authorization or other right constituting a Purchased Asset, which by its terms or by Law is nonassignable without the consent of a third party or a Governmental Authority or is cancelable by a third party in the event of an assignment (“Nonassignable Assets”) unless and until such consent shall have been obtained.  The Seller shall, and shall cause its controlled Affiliates to, reasonably cooperate with the Buyer at its request in endeavoring to obtain such consents promptly.  To the extent permitted by applicable Law, in the event consents to the assignment thereof cannot be obtained, such Nonassignable Assets shall be held, as of and from the Closing Date, by the Seller or the applicable controlled Affiliate of the Seller in trust for the Buyer and the covenants and obligations thereunder shall be performed by the Buyer in the Seller’s or such Affiliate’s name and all benefits and obligations existing thereunder shall be for the Buyer’s account.  The Seller shall take or cause to be taken at the Buyer’s expense such actions in its name or otherwise as the Buyer may reasonably request so as to provide the Buyer with the benefits of the Nonassignable Assets and to effect collection of money or other consideration that becomes due and payable under the Nonassignable Assets, and the Seller or the applicable controlled Affiliate of the Seller shall promptly pay over to the Buyer all money or other consideration received by it in respect of all Nonassignable Assets.  As of and from the Closing Date, the Seller on behalf of itself and its controlled Affiliates authorizes the Buyer, to the extent permitted by applicable Law and the terms of the Nonassignable Assets, at the Buyer’s expense, to perform all the obligations and receive all the benefits of the Seller or its Affiliates under the Nonassignable Assets and appoints the Buyer or its attorney-in-fact to act in its name on its behalf or in the name of the applicable controlled Affiliate of the Seller and on such Affiliate’s behalf with respect thereto.

ARTICLE 5:    REPRESENTATIONS AND WARRANTIES OF THE SELLER

5.1 Taxes.

(a) All Tax Returns required to be filed with any Taxing Authority with respect to any Pre-Closing Tax Period by or on behalf of the Seller, to the extent required to be filed on or before the Closing Date, have been timely filed in accordance with all applicable Laws.  All such Tax Returns with respect to Pre-Closing Tax Periods correctly and completely reflect the facts regarding the income, business, assets, operations, activities and status of the Seller.  The Seller has withheld and remitted to the appropriate Taxing Authority all Taxes required to have been withheld and remitted in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other Person.  Except as set forth on Schedule 5.6(i), there are no Liens for Taxes upon the Purchased Assets (other than Permitted Liens).

(b) Except as set forth on Schedule 5.6(i), all deficiencies asserted or assessments made as a result of any examinations by any Taxing Authority of the Tax Returns relating to the direct or indirect ownership or operation of the Purchased Assets or relating to the Assumed Liabilities have been fully paid.  There are no current (and the Seller has not received written notice of any proposed) examinations, audits, actions, proceedings, investigations, disputes, assessments or claims by any Taxing Authority with respect to any Tax that relates to the Seller’s direct or indirect ownership or operation of the Purchased Assets or relating to the Assumed Liabilities.

(c) Other than set forth on Schedule 5.7(c), the transactions contemplated by this Agreement will not terminate any Tax incentive, holiday or abatement.

(d) No agreement, waiver or other document or arrangement extending or having the effect of extending the period for assessment or collection of Taxes (including, but not limited to, any applicable statute of limitation) or the period for filing any Tax Return, in each case with respect to the Purchased Assets or the Assumed Liabilities, has been executed or filed with any Taxing Authority by or on behalf of the Seller.  The Seller has not  requested any extension of time within which to file any Tax Return with respect to the Purchased Assets or the Assumed Liabilities which Tax Return has since not been filed.

(e) The Seller is not a “foreign person” within the meaning of Section 1445 of the Code.

(f) None of the Purchased Assets is an interest (other than indebtedness within the meaning of Section 163 of the Code) in an entity taxable as a corporation, partnership, trust, real estate investment trust or real estate mortgage investment conduit for federal income Tax purposes.

(g) The Seller has not executed or entered into any agreement with, or obtained any consents or clearances from, any Taxing Authority, or has been subject to any ruling guidance specific to the Seller or Affiliate of the Seller, that would be binding on Buyer for any taxable period (or portion thereof) ending after the Closing Date.

5.2 Owned Real Property.

(a) Owned Real Property.  Schedule 5.8(a) identifies the parcels of Owned Real Property.  The Real Estate Seller is the fee simple owner of the Owned Real Property, and has good and marketable fee simple title to the Owned Real Property, free and clear of all Liens (excluding Permitted Liens and Liens set forth on Schedule 5.6(i)).  To the Seller’s Knowledge, there are no leases, options to purchase, purchase agreements, rights of first offer, rights of first refusal or similar agreements in effect with respect to the Owned Real Property, other than this Agreement (or as may be disclosed by any instruments identified as exceptions to the Title Insurance policy obtained by the Buyer).  The Owned Real Property is in good condition and repair (subject to normal wear and tear) and the condition of the Owned Real Property is reasonably sufficient for the operation of the business of the Seller as it is currently conducted.

(b) Absence of Violations.  Except as set forth on Schedules 5.10 or 5.11,  the Seller has not received any written notice of, and to the Seller’s Knowledge, there currently is not any existing, violation of any applicable Law in connection with the Owned Real Property which has not been heretofore corrected.

(c) Assessments.  To the Seller’s Knowledge, there are no public improvements, the construction of which is in progress or proposed, that will result in special assessments against or otherwise adversely affect any of the Owned Real Property.

(d) No Condemnation.  There is no pending condemnation, expropriation, eminent domain or similar proceeding affecting all or any portion of the Owned Real Property.  The Seller has not received any written notice (or, to the Seller’s Knowledge, oral notice) of any such proceeding, and to the Knowledge of the Seller, no such proceeding is threatened or contemplated.

(e) Condition of Property.  The Owned Real Property has access to adequate service of any utilities required in the operation of the business of the Seller currently conducted at the Owned Real Property.

5.3 Litigation and Orders.

(a) Except as set forth on Schedule 5.10, there are no Proceedings pending against Seller or, to the Knowledge of the Seller, threatened against or affecting the Seller, the Purchased Assets or the Assumed Liabilities.  Except as set forth on Schedule 5.11, to the Seller’s Knowledge, no event has occurred or circumstances exist that would give rise to or serve as a basis for the commencement of any Proceeding against, the Seller, the Purchased Assets or the Assumed Liabilities.  There are no Proceedings pending or, to the Knowledge of the Seller, threatened that question the legality, validity or enforceability of this Agreement, the Ancillary Agreements or any of the transactions contemplated hereby or thereby or that are, individually or in the aggregate, reasonably be expected to materially impair the ability of the Seller to perform on a timely basis its obligations under this Agreement or the Ancillary Agreements.  Schedule 5.10 lists all Proceedings involving claims against the Seller since August 10, 2016 (that have not been settled).

(b) Except as set forth on Schedule 5.10, there is no Order to which the Seller, or any of the Purchased Assets, is subject.  The Seller has been in full compliance with all of the terms and requirements of each Order to which it, or any of the Purchased Assets is subject.  The Seller has not received any written notice (or, to the Seller’s Knowledge, oral notice) from any Governmental Authority or any other Person regarding any actual or alleged violation of, or failure to comply with, any term or requirement of any Order to which the Seller, or any of the Purchased Assets, is subject.

5.4 Labor Matters.

(a) (i) The Seller is not a party to, bound by or subject to any collective bargaining agreement or other similar type of contract with any labor union, (ii) the Seller has not agreed to recognize any union or other collective bargaining representative, (iii) in the past two years no union or group of employees of the Seller has made a pending demand for recognition, and there are no representation proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board and, (iv) (A) in the past two (2) years no union or collective bargaining representative has been certified as representing any employees of the Seller and (B) to the Seller’s Knowledge, no organizational attempt has been made or threatened by or on behalf of any labor union or collective bargaining representative with respect to any employees of the Seller.  The Seller has not experienced any labor strike, slowdown or stoppage or any other material labor difficulty and, to the Seller’s Knowledge, there are no facts or circumstances that might lead to any such material labor difficulty.

(b) The Seller is not liable for any payment to any trust or other fund or to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the ordinary course of business).  There are no pending claims against the Seller under any workers compensation plan or policy or for long-term disability.

5.5 Environmental.

(a) Except as set forth on Schedule 5.14(a), to the Seller’s Knowledge, there are no underground tanks and related pipes, pumps or other facilities, whether active or abandoned at the Owned Real Property,  requiring a Permit or other registration under Environmental Laws.  Notwithstanding the foregoing, to the Seller’s Knowledge, there are underground well water tanks, process water tanks, and three septic storage tanks.  To the Seller’s Knowledge, the foregoing tanks do not require any Permit or other registration under Environmental Laws. 

(b) To the Seller’s Knowledge, there is no asbestos nor any asbestos-containing materials used in, applied to or in any way incorporated in any building, structure or other form of improvement on the Owned Real Property.

(c) Except as set forth on Schedule 5.14(c), the Seller is presently in compliance with all Environmental Laws applicable to the Owned Real Property or to the Seller’s  Business, and to Seller’s knowledge there exist no Environmental Conditions that require reporting, investigation, assessment, cleanup, remediation or any other type of response action pursuant to any Environmental Law or that could be the basis for any liability of any kind pursuant to any Environmental Law.

(d) The Seller has not generated, manufactured, refined, transported, treated, stored, handled, disposed, transferred, produced or processed any Hazardous Materials at or upon the Owned Real Property, except in compliance with all applicable Environmental Laws; to the Seller’s Knowledge, there has been no Release or Threat of Release of any Hazardous Material at or in the vicinity of the Owned Real Property in the past two years that requires or may require reporting, investigation, assessment, cleanup, remediation or any other type of response action pursuant to any Environmental Law.

(e) Except as set forth on Schedule 5.14(c), the Seller has not (i) entered into or been subject to any consent decree, compliance order or administrative order with respect to the Owned Real Property; (ii) received notice under the citizen suit provisions of any Environmental Law; (iii) received any request for information, notice, demand letter, administrative inquiry or formal or informal complaint or claim with respect to any Environmental Condition; or (iv) been subject to or threatened with any governmental or citizen enforcement action with respect to any Environmental Law.

(f) The Seller has not assumed, undertaken, agreed to indemnify or otherwise become subject to any liability of any other Person relating to or arising from any Environmental Law.

(g) The Seller has delivered, or caused to be delivered, to the Buyer copies of all documents, records and information in its possession or control concerning Environmental Conditions, including, previously conducted environmental audits and documents regarding any Release or disposal of Hazardous Materials at, upon or from the Owned Real Property, spill control plans and environmental agency reports and correspondence.

ARTICLE 6:    REPRESENTATIONS,  WARRANTIES, and pre-closing covenants OF THE BUYER

6.1 Due Diligence Investigation; No Reliance.

(a) The Buyer is experienced and sophisticated with respect to transactions of the type contemplated by this Agreement.  During the Due Diligence Period, it shall have, in consultation with experienced counsel and advisors of its choice, the right to conduct its own independent review and analysis of the Seller, the Purchased Assets, the Assumed Liabilities and the Business and the rights and obligations it is acquiring and assuming under this Agreement and the Ancillary Agreements. 

(b) During the Due Diligence Period, the Buyer may review and inspect or cause to be inspected all aspects of the physical and economic condition of the Purchased Assets and Owned Real Property, access to which shall be freely granted to the Buyer and the Buyer's agents and representatives, at all reasonable times during normal business hours following at least twenty-four (24) hours’ advance written notice to the Seller; provided, however, the Buyer acknowledges that it shall have no right to unpack or test any of the Ohio Equipment, but may review the same in its current condition.  Subject to the foregoing, such inspections may include whatever investigations, tests, reports and inspections of the Owned Real Property, which the Buyer deems reasonably appropriate, including, without limitation, a property condition report and a Phase I Environmental Site Assessment (provided such assessment is non-invasive).  Notwithstanding the foregoing, in no event shall Buyer conduct a Phase II Environmental Site Assessment or any other invasive testing without the Seller’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.

(c) Prior to any entry by the Buyer or any of the Buyer’s designees onto the Owned Real Property, the Buyer shall: (i) if the Buyer does not then have such a policy in force, procure a policy of commercial general liability insurance, issued by an insurer reasonably satisfactory to the Seller, covering all of the Buyer’s activities, with a single limit of liability (per occurrence and aggregate) of not less than $1,000,000.00; and (ii) deliver to the Seller a Certificate of Insurance, evidencing that such insurance is in force and effect, and evidencing that Seller has been named as an additional insured thereunder with respect to any activities in, about or with respect to the Owned Real Property by the Buyer or any party acting directly or indirectly for or on behalf of the Buyer (such Certificate of Insurance shall be delivered to the Seller).  Such insurance shall be written on an “occurrence” basis and shall be maintained in force until the earlier of (x) the termination of this Agreement and the conclusion of all Buyer’s activities in or about the Owned Real Property, or (y) the Closing.

(d) The Buyer, at all times, will conduct such due diligence in compliance with all applicable Law, and in a manner so as to not cause damage, loss, cost or expense to the Seller, the Owned Real Property or any occupant or employee of the Owned Real Property.  Other than as required by applicable Law, subpoena or other court order, the Buyer shall not reveal to any Governmental Authority or any other third party (other than Buyer’s employees, agents, attorneys, lenders, partners, investors, engineers, representatives, consultants and advisors on a need-to-know basis) not approved by the Seller the results of or any other information acquired pursuant to its inspections.   The foregoing obligations of the Buyer shall not survive the Closing. The Buyer shall restore any material damage to the Owned Real Property to substantially the same condition existing prior to the Buyer’s inspection (provided such damage was caused by the Buyer’s inspection) and will keep the Owned Real Property free and clear of any mechanics’ liens or materialmen’s liens in connection with such inspections and examinations.

(e) The cost of all inspections and tests undertaken by the Buyer shall be borne solely by the Buyer.  The Buyer shall indemnify, protect, defend, and hold the Seller, the Seller’s Affiliates, and each of their respective financing providers,  members, managers, directors, owners, agents,  employees and other representatives harmless from and against any obligation, liability, claim (including any claim for damage to property or injury to or death of any persons), Lien or other encumbrance, loss, damage, cost or expense, including, without limitation reasonable attorneys’ fees and expenses (in each case whether or not legal proceedings are instituted), arising from the acts or omissions of the Buyer or its agents, employees or contractors occurring in connection with, or as a result of, such inspections, tests or examinations of any Real Estate; provided that such indemnity shall not include (i) any expense, loss or damage to the extent arising from or out of (x) any act or omission of the Seller or any unrelated thirty-party (i.e., any third party not performing inspections on behalf of the Buyer) during any such inspection, or (y) the discovery or release of any hazardous substances or materials at the Owned Real Property, or (z) any pre-existing condition (including the discovery by the Buyer of any pre-existing condition on the Owned Real Property during such entry conducted pursuant to the terms of this Agreement); and (ii) any indirect, consequential, punitive, or special damages. 

ARTICLE 7:    TAX MATTERS

ARTICLE 8:    COVENANTS AND AGREEMENTS

ARTICLE 9:    REMEDIES

9.1 General Indemnification Obligation.

(a) Subject to the terms of this Article IX,  from and after the Closing, until the Expiration Date,  the Seller shall indemnify and hold harmless the Buyer and its Affiliates and each of their respective officers, managers, directors, employees, agents, members and other representatives (each, a “Buyer Indemnitee”) from and against any and all actual, third party, out-of-pocket losses, liabilities, claims, damages, penalties, fines, judgments, awards, settlements, costs, fees, expenses and disbursements  (collectively “Losses”) incurred by a Buyer Indemnitee based upon or arising out of (i) any breach of any representation or warranty of the Seller contained in Article V of this Agreement or in any Ancillary Agreement, (ii) any breach of the covenants or agreements of the Seller contained in this Agreement (including the Schedules and Exhibits attached hereto) or any Ancillary Agreement or (iii) the Excluded Liabilities.

(b) From and after the Closing, the Buyer shall indemnify and hold harmless the Seller and its Affiliates and each of their respective officers, managers, directors, employees, agents, members and other representatives (each, a “Seller Indemnitee”) from and against any and all Losses actually incurred by a Seller Indemnitee based upon or arising out of (i) any breach of any representation or warranty of the Buyer contained in Article VI of this Agreement or any Ancillary Agreement, (ii) any breach of the covenants or agreements of the Buyer contained in this Agreement or any Ancillary Agreement or (iii) any Assumed Liability.

(c) Each Person providing indemnification pursuant to this Section 9.1 is also referred to herein as an “Indemnifying Party,” and each Person being indemnified pursuant to this Section 9.1 is also referred to here as an “Indemnified Party.”

9.2 Survivability; Limitations.

(a) The representations and warranties of the Seller and the Buyer contained in this Agreement or in any Ancillary Agreement, and any liability claim related thereto, will only survive for a period ending on the first anniversary of the Closing Date (the “Expiration Date”). All of the covenants and agreements of the Seller and the Buyer contained in this Agreement that are to be performed prior to or at the Closing will only survive for a period ending on the first anniversary of the Closing Date. All of the covenants and agreements of the Seller and the Buyer contained in this Agreement or in any Ancillary Agreement that are to be performed after the Closing will only survive in accordance with their terms.  For the avoidance of doubt, no Indemnifying Party shall be liable for a claim asserted against it after the applicable Expiration Date.

(b) All indemnity payments shall be treated as adjustments to the Purchase Price for all income Tax purposes except to the extent required by Law.

(c) Seller’s aggregate liability pursuant to Section 9.1(a) of this Agreement shall not exceed $250,000 (the “Cap”).     

(d) The Seller shall not have any liability under Section 9.1(a)(i) hereof unless the aggregate amount of Losses incurred by the Seller Indemnitees and indemnifiable hereunder exceeds $25,000 (the “Deductible”) and, in such event, the Seller shall only be required to pay the amount of Losses in excess of such Deductible (subject to the other limitations in this Article 9).

(e) If any Losses sustained by a Buyer Indemnitee are covered by an insurance policy or an indemnification, contribution or similar obligation of another Person (other than an Affiliate of such Buyer Indemnitee), the Buyer Indemnitee shall use commercially reasonable efforts to collect such insurance proceeds or indemnity, contribution or similar payments.  The amount of any Losses subject to indemnification under Section 9.1(a) shall be reduced by the amounts actually recovered (net of any costs of recovery) by any Buyer Indemnitee under applicable insurance policies or an indemnification, contribution or similar obligation of another Person (other than an Affiliate of such Buyer Indemnitee) with respect to claims related to such Losses and if any Buyer Indemnitee receives such insurance proceeds or indemnity, contribution or similar payments after the settlement of any indemnification claim under Section 9.1(a), such Buyer Indemnitee shall refund to the Seller the amount of such insurance proceeds or indemnity, contribution or similar payments, up to the amount received in connection with such indemnification claim (net of any costs of recovery).  It is the intention of the parties that no insurer or third party shall be entitled to any benefit or right it would not be entitled to receive in the absence of this paragraph. An Indemnified Party hereunder shall be subrogated to the Indemnified Party’s rights of recovery to the extent of any Losses satisfied by such Indemnified Party.  Such Indemnified Party shall execute and deliver such instruments and papers as are necessary to assign such rights and assist in the exercise thereof.

(f) The amount of any Losses subject to indemnification under Section 9.1 shall be calculated net of any Tax benefit actually received by the Buyer Indemnitee or Seller Indemnitee (as applicable) on account of such Losses within the four-year period after the Closing Date. No Buyer Indemnitees shall be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity more than once in respect of any one Loss or related group of Losses.

(g) Notwithstanding anything to the contrary contained in this Agreement or provided for under any applicable Law, no party hereto shall be liable to any other Person, either in contract or in tort, for, and Losses shall exclude, any loss of profits or any consequential, incidental, exemplary, indirect, special or punitive damages of such other Person, including loss of future revenue, income or profits, or any diminution of value or multiples of earnings damages relating to the breach or alleged breach hereof, whether or not the possibility of such damages has been disclosed to the other party in advance or could have been reasonably foreseen by such other party, except to the extent such damages are paid to an unaffiliated third party pursuant to a non-appealable court order in connection with a Third Party Claim that is subject to indemnification hereunder.

(h) The Seller shall have no liability under any provision of this Agreement for any Losses caused by actions of any Buyer Indemnitee taken after the Closing.  The Buyer Indemnitees shall use commercially reasonable efforts to mitigate or otherwise reduce the amount of any Losses that it incurs in connection with any matter with respect to which it is entitled to be held harmless, indemnified, compensated or reimbursed pursuant to this Article 9.  Each party hereby waives, to the extent permitted under its applicable insurance policies, any subrogation rights that its insurer may have with respect to any indemnifiable Losses.

(i) Each party acknowledges and agrees that, excluding knowing and willful fraud, its sole and exclusive remedy with respect to any and all claims relating to the subject matter of this Agreement and transactions contemplated hereby (other than those arising from a claim under Section 8.1,  Section 8.2, or Section 8.4 or under the Escrow Agreement, with respect to which each party shall be entitled to specific performance and other equitable remedies) shall be pursuant to the indemnification set forth in this Article 9 and the remedies contemplated by Section 10.16.  In furtherance of the foregoing, but without limiting the rights of indemnification expressly provided for under Section 9.1 (and subject to the other provisions of this Article 9), excluding knowing and willful fraud and except for actions seeking specific performance or similar injunctive relief pursuant to Section 10.16, each Buyer Indemnitee and Seller Indemnitee hereby waives, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action (including any right, whether arising at Law or in equity, to seek indemnification, contribution, cost recovery, damages or any other recourse or remedy, including the remedy of rescission and remedies that may arise under common law) it may have against any Indemnifying Party whether arising under or based upon any federal, state, local or foreign Law (including any Environmental Law) or otherwise.

(j) Notwithstanding anything set forth herein to the contrary, ▇▇▇▇▇ and Seller agree that Seller’s liability for any claims arising out of a breach of the representations set forth in Section 5.1 (Existence and Good Standing),  Section 5.2 (Validity and Enforceability), and any claims arising from knowing and willful fraud, shall not be subject to the Expiration Date, Cap and Deductible. 

9.3 Claim Procedures.

(a) Procedures for Third-Party Claims.  In the event that an Indemnified Party determines that it has a claim for Losses against an Indemnifying Party arising from a claim of a third party (a “Third-Party Claim”), the Indemnified Party shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim as promptly as reasonably practicable after receipt by such Indemnified Party of notice of the Third-Party Claim; provided that failure to give such notification on a timely basis shall not affect the indemnification provided hereunder except (i) to the extent the Indemnifying Party shall have been prejudiced as a result of such failure and (ii) no indemnification shall be available under this Article 9 with respect to a claim made after the applicable Expiration Date.  Thereafter, the Indemnified Party shall deliver to the Indemnifying Party from time to time, promptly, upon becoming aware of any facts or circumstances that would reasonably be expected to give rise to, or be in furtherance of, a claim for indemnification hereunder, written notice thereof to the Indemnifying Party, specifying the amount of such claim and the nature and basis of such claim, and provide copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third-Party Claim.  The Indemnifying Party shall be entitled to participate in the defense of the Third-Party Claim and, if it elects and acknowledges in writing to satisfy its indemnification obligations hereunder with respect to such claim, subject to the limitations in this Article 9, to assume the defense thereof with counsel selected by the Indemnifying Party.  Should an Indemnifying Party elect to assume the defense of a Third-Party Claim, the Indemnifying Party shall not be liable for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof.  If the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood, however, that the Indemnifying Party shall control such defense.  If the Indemnifying Party elects to defend a Third-Party Claim, each party shall cooperate in the defense or prosecution of such Third-Party Claim.  Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision by the Indemnified Party to the Indemnifying Party of records and information which are reasonably relevant to such Third-Party Claim, and making personnel available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  No compromise or settlement of any Third-Party Claim may be effected by the Indemnifying Party without the Indemnified Party’s consent, which shall not be unreasonably withheld, conditioned or delayed; provided that no such consent shall be required if (i) there is no finding or admission of any violation of Law by the Indemnified Party and no effect on any other claims that may be made against such Indemnified Party or its Affiliates and (ii) each Indemnified Party that is party to such Third-Party Claim is fully and unconditionally released from liability with respect to such claim.  No Indemnified Party shall settle or compromise any Third Party Claim without the express prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld.

(b) Procedures for Inter-Party Claims.  In the event that an Indemnified Party determines that it has a claim for Losses against an Indemnifying Party hereunder (other than as a result of a Third-Party Claim), the Indemnified Party shall give written notice thereof to the Indemnifying Party, specifying the amount of such claim, the nature and basis of the alleged breach giving rise to such claim (no indemnification shall be available under this Article 9 with respect to a claim made after the applicable Expiration Date).  The Indemnified Party shall provide the Indemnifying Party with reasonable access to its books and records related to such claim during normal business hours and upon reasonable prior written notice for the purpose of allowing the Indemnifying Party a reasonable opportunity to verify any such claim for Losses.

ARTICLE 10:    MISCELLANEOUS

10.1 Termination.

(a) This Agreement may be terminated at any time prior to the Closing:

(i) by the Buyer, prior to the expiration of the Due Diligence Period;

(ii) by the Seller or the Buyer, if any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement; and

(iii) by the mutual written consent of the Seller and the Buyer.

(b) If this Agreement is terminated by the Buyer or the Seller as provided in Section 10.15, the provisions of this Agreement shall immediately become void and of no further force and effect (other than (i) this Article X and (ii) liability on the part of the Buyer or the Seller to one another for material breaches of this Agreement prior to the time of such termination, which shall all survive the termination of this Agreement). Nothing in this Section 10.15 shall be deemed to alter the provisions of Section 10.16 or otherwise impair the right of any party to compel specific performance by another party of its obligations under this Agreement in accordance with Section 10.16. If the transactions contemplated by this Agreement are terminated as provided herein, (x) the Buyer shall return all documents and copies and other materials received from or on behalf of the Seller relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the Seller, and (y) all such information shall be treated in accordance with refer the confidentiality provisions set forth herein, and any non-disclosure agreement(s) by and between the Buyer and the Seller, which shall remain in full force and effect notwithstanding the termination of this Agreement in accordance with this Section 10.15.