ARTICLE I DEFINITIONS 1 ARTICLE II PURCHASE AND SALE 13 Section 2.01 Purchase and Sale. 13 Section 2.02 Purchase Price. 13 Section 2.03 Transactions to be Effected at the Closing. 13 Section 2.04 Purchase Price Adjustment. 15 Section 2.05 Closing. 16...

 

 

 

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This Membership Interest Purchase Agreement (this "Agreement"), dated as of May 11, 2018 (the "Effective Date"), is entered into between True North Consulting, LLC, a Colorado limited liability company (the "Company"), ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇ (collectively, "Sellers"), GSE Performance Solutions, Inc., a Delaware corporation ("Buyer"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇, as a representative of all of the Sellers (the "Seller Representative"). Sellers may also be individually referred to as a "Seller Party" and, collectively, as the "Seller Parties." Sellers, the Company and Buyer may be individually referred to as a "Party" and, collectively, as the "Parties."

RECITALS

WHEREAS, Sellers own all of the issued and outstanding membership interests (the "Interests") of the Company;

WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, the Interests, upon the terms and conditions set forth herein; and

WHEREAS, a portion of the purchase price payable by Buyer to Sellers shall be placed in escrow by Buyer, the release of which shall be contingent upon certain events and conditions, all as set forth in this Agreement and the Escrow Agreement (as defined herein).

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:

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

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

"Agreement" has the meaning set forth in the preamble.

"Allocation Schedule" has the meaning set forth in Section 8.01(d)(iii).

"Ancillary Documents" means the Escrow Agreement and all other documents listed in Section 9.02 and Section 9.03.

"Audited Financial Statements" has the meaning set forth in Section 3.05.

 

"Balance Sheet" has the meaning set forth in Section 3.05.

"Balance Sheet Date" has the meaning set forth in Section 3.05.

"Basket" means an amount equal to $48,750.

"Benefit Plan" has the meaning set forth in Section 3.18(a).

"Bonds" has the meaning set forth in Section 3.14.

"Business Day" means any day except Saturday, Sunday or any other day on which commercial banks located in Washington, D.C. are authorized or required by Law to be closed for business.

"Buyer" has the meaning set forth in the preamble.

"Buyer Indemnitees" has the meaning set forth in Section 10.02.

"Cap" means an amount equal to $1,462,500.00.

"Cash Balance Plan" has the meaning set forth in Section 7.07.

"Cause" means, with respect to a Key Personnel's employment under a Key Employment Agreement: (i) Key Personnel's gross negligence or willful misconduct in the performance of the duties and services required of Key Personnel pursuant to the Key Employment Agreement or at the reasonable direction of the Employer; (ii) Key Personnel's conviction of (1) a felony or (2) a misdemeanor involving a crime of moral turpitude; (iii) Key Personnel's willful failure to perform the duties and responsibilities reasonably required of Key Personnel under the Key Employment Agreement, which remains uncorrected for ten (10) days following written notice to Key Personnel; (iv) Key Personnel's involvement in a conflict of interest, which remains uncorrected for thirty (30) days following written notice to Key Personnel; (v) Key Personnel's engagement in conduct that Key Personnel knows or should know is materially injurious to the Employer, the Company, the Buyer or any of their respective affiliate entities, which remains uncorrected for ten (10) days following written notice to Key Personnel; (vi) Key Personnel's material breach of any written policy of the Employer, which remains uncorrected for ten (10) days following written notice to Key Personnel; or (vii) any other serious conduct that creates a significant legal, safety or other risk to the Employer, the Company, the Buyer, or any of their respective affiliated entities.  For purposes of this definition of Cause, the term "affiliated entities" means (i) any corporation, company or other entity more than twenty percent (20%) of whose outstanding shares or securities are, now or hereafter, owned or controlled in the aggregate, directly or indirectly, by the Employer, the Company or the Buyer, individually or collectively, and (ii) any partnership, joint venture, unincorporated association or limited liability company in which at least fifty percent (50%) of its ownership interest is now or hereafter owned or controlled in the aggregate, directly or indirectly, by the Employer, the Company or the Buyer, individually or collectively.

 

"CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.

"Claim" means, whether civil, criminal, administrative, regulatory or otherwise, any claim, action, cause of action, litigation, inquiry, investigation, audit, notice of violation, citation, summons, subpoena, proceeding (arbitral, administrative, legal or otherwise), suit, settlement, stipulation, hearing, charge, complaint, demand or similar matter, all whether at law or in equity.

"Claims Notice" has the meaning set forth in Section 10.05(a).

"Closing" has the meaning set forth in Section 2.05.

"Closing Date" has the meaning set forth in Section 2.05. All references to the Closing Date shall mean as of the Effective Time on such date.

"Closing Date Payment" has the meaning set forth in Section 2.04(a)(i).

"Closing Indebtedness Certificate" means a certificate executed by the Seller Representative and the Chief Financial Officer (or equivalent officer) of the Company certifying (a) an itemized list of all outstanding Indebtedness of the Company as of the Closing Date; (b) the Person to whom such outstanding Indebtedness is owed; and (c) the aggregate total of such outstanding Indebtedness.

"Closing Transaction Expenses Certificate" means a certificate executed by the Seller Representative and the Chief Financial Officer (or equivalent officer) of the Company certifying (a) an itemized list of all unpaid Transaction Expenses as of the Closing Date (including a description of the nature of such expense); (b) the Person to whom such Transaction Expense is owed; and (c) the aggregate total of such Transactions Expenses.

"Closing Working Capital" means: (a) the Current Assets of the Company minus (b) the Current Liabilities of the Company, each determined as of the Closing Date.

"Closing Working Capital Statement" has the meaning set forth in Section 2.04(b)(i).

"Code" means the Internal Revenue Code of 1986, as amended.

"Company" has the meaning set forth in the recitals.

 

"Company Intellectual Property" means all Intellectual Property that is owned by the Company.

"Company IP Agreements" means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to ▇▇▇, waivers, releases, permissions and other Contracts, whether written or oral, relating to Intellectual Property to which the Company is a party, beneficiary or otherwise bound; provided, however that Company IP Agreements shall not include commercial-off-the-shelf software licenses with an aggregate acquisition price or annual licensing fee of less than $15,000 and a term not exceeding twelve (12) months.

"Company IP Registrations" means all Company Intellectual Property that is subject to any issuance, registration or application by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing.

"Company Systems" has the meaning set forth in Section 3.11(g).

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

"Current Assets" means unrestricted cash and cash equivalents, accounts receivable, current inventory (provided, however, that such inventory shall not include any damaged, obsolete or slow-moving inventory), and prepaid expenses, but excluding (a) the portion of any prepaid expense of which Buyer will not receive the benefit following the Closing, (b) deferred Tax assets and (c) receivables from any of the Company's Affiliates, directors, officers, managers, employees, or members, and any of their respective Affiliates, determined in determined in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financial Statements for the most recent fiscal year end as if such accounts were being prepared and audited as of a fiscal year end.

"Current Liabilities" means (a) accounts payable, (b) accrued Taxes, (c) accrued expenses and (d) accrued paid-time-off liabilities, but excluding (v) any accrued payments owing under any Company Plan that is not being assumed by Buyer at Closing, (w) payables to any of the Company's Affiliates, directors, officers, managers, employees, or members, and any of their respective Affiliates, (x) deferred Tax Liabilities, (y) Transaction Expenses, and (z) the current portion of any Indebtedness of the Company, determined in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financial Statements for the most recent fiscal year end as if such accounts were being prepared and audited as of a fiscal year end.

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

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

"Disputed Amounts" has the meaning set forth in Section 2.04(c)(iii).

"Dollars" or "$" means the lawful currency of the United States.

"Effective Date" has the meaning set forth in the preamble.

"Effective Time" means 12:01 am Eastern Time.

 

"Employer" means, with respect to each Key Employment Agreement, the employer under such Key Employment Agreement.

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

"Environmental Law" means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air (indoor or outdoor), soil, sediment, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, control, containment, storage, handling, recycling, reclamation, reuse, treatment, generation, discharge, release, transportation, processing, production, disposal, removal or remediation of any Hazardous Materials. The term "Environmental Law" includes, without limitation, the following (including their implementing regulations adopted thereunder and any state and local analogs); CERCLA; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq.; and the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136 et seq.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

"ERISA Affiliate" means all employers (whether or not incorporated) that would be treated together with the Company or any of its Affiliates as a "single employer" within the meaning of Section 414 of the Code.

"Escrow Agent" means Delaware Trust.

"Escrow Agreement" means the Escrow Agreement to be entered into by Buyer, Seller Representative and Escrow Agent at the Closing, substantially in the form attached hereto as Exhibit A, which shall establish an escrow account to be maintained by the Escrow Agent as security for any Claims pursuant to ARTICLE VIII or ARTICLE X of this Agreement.

"Escrow Amount" means an amount equal to $1,462,500.00, which consists of the Retention Escrow Amount and the Indemnity Escrow Amount.

"Escrow Fund" has the meaning set forth in Section 2.03(a)(iii).

 

"Escrow Release Date" has the meaning set forth in Section 10.06(d).

"Estimated Closing Working Capital" has the meaning set forth in Section 2.04(a)(ii).

"Estimated Closing Working Capital Statement" has the meaning set forth in Section 2.04(a)(ii).

"FAR" means the Federal Acquisition Regulation codified at Title 48 of the Code of Federal Regulations.

"Financial Statements" has the meaning set forth in Section 3.05.

"FLSA" means the Fair Labor Standard Act, as amended as of the date hereof.

"Fundamental Representations" means the representations and warranties made in Section 3.01 (Organization and Authority of the Company), Section 3.02 (Capitalization), Section 3.16 (Compliance with Laws; Permits), Section 3.18 (Employee Benefits), Section 3.23 (Related Party Transactions), Section 3.25 (Brokers), Section 4.01 (Authority of Sellers), Section 4.02 (Title), Section 5.01 (Organization and Authority of Buyer), and Section 5.03 (Brokers).

"GAAP" means United States generally accepted accounting principles with those exceptions and deviations described in Section 1.0 of the Disclosure Schedules.

"General Survival Period" means eighteen (18) months from the Closing Date.

"Good Reason" means (i) following the full execution of a Key Employment Agreement, the assignment to Key Personnel of a title, position, or responsibilities, other than as permitted under the Key Employment Agreement, which assignment results in a material decrease in the level of responsibility of the Key Personnel when compared to the Key Personnel's level of responsibility for the Company's operations immediately following Closing; (ii) following the full execution of a Key Employment Agreement, a reduction in the Key Personnel's base salary set forth in the Key Personnel Agreement, unless such reduction is part of a larger reduction in base pay for other employees of the Employer; or (iii) the Key Personnel is required to be based more than 50 miles from the Premises, except for required travel on Employer's business to an extent reasonably consistent with the business travel obligations which the Key Personnel undertook on behalf of the Company prior to Closing; provided, however, that in all events, Good Reason shall not exist until such time as Key Personnel has provided Employer with written notice of the circumstances giving rise to a claim of Good Reason and Employer has failed to cure such circumstances within ten (10) days after Employer's receipt of such written notice.

"Governing Documents" means, with respect to a Person, such Person's articles of incorporation, certificate of incorporation, articles of organization, articles of formation, declaration of trust or their equivalent, together with such Person's bylaws, partnership agreement, limited liability company operating agreement, or any organizational or other constituent document, as applicable, each as it may be amended from time to time.

 

"Government Bid" means any bid, proposal, offer or quote for supplies, services or construction, whether solicited or unsolicited, made by the Company or a contractor team or joint venture in which the Company is participating that is intended by the Company to result in a Government Contract.

"Government Contract" means any prime contract, subcontract, facility contract, teaming agreement or arrangement, joint venture, basic ordering agreement, blanket purchase agreement, pricing agreement, letter contract, contract awarded under the Federal Supply Schedule program, individual purchase order, task order or delivery order or other Contract, between the Company and (a) any Governmental Authority, (b) any prime contractor of a Governmental Authority in its capacity as a prime contractor, or (c) any subcontractor (or lower tier subcontractor) with respect to any contract of a type described in clauses (a) or (b) immediately above.

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

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

"Hazardous Materials" means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or man-made, that is defined or regulated as a "hazardous material," "hazardous substance," "hazardous chemical," "hazardous waste," "toxic substance," "regulated substance," "contaminant," or "pollutant" or words of similar import or regulatory effect under, or a basis for Liability under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, mold, carcinogenic materials, urea formaldehyde foam insulation and polychlorinated biphenyls, and compounds containing them.

"Horn Employment Agreement" has the meaning set forth in Section 10.02(c).

"Indebtedness" means, without duplication and with respect to the Company, all (a) indebtedness for borrowed money; (b) obligations for the deferred purchase price of property or services (other than Current Liabilities taken into account in the calculation of Closing Working Capital); (c) long- or short-term obligations evidenced by notes, bonds, debentures or other similar instruments; (d) obligations under any interest rate, currency swap or other hedging agreement or arrangement; (e) capital lease obligations; (f) reimbursement obligations under any letter of credit, banker's acceptance or similar credit transactions; (g) guarantees made by the Company on behalf of any third party in respect of obligations of the kind referred to in the foregoing clauses (a) through (f) immediately above; (h) payables to any of the Company's Affiliates, directors, officers, managers, employees, or members, and any of their respective Affiliates; (i) any accrued payments or unfunded obligations due and owing, or that will become due and owing as a result of the transactions contemplated by this Agreement, under the Cash Balance Plan or any other Company Plan that is being frozen, amended or terminated by Buyer attendant to the transactions contemplated by this Agreement; (j) deferred Tax Liabilities; and (k) any unpaid interest, prepayment penalties, premiums, costs and fees that would arise or become due as a result of the prepayment of any of the obligations referred to in the foregoing clauses (a) through (i). For the avoidance of doubt, Indebtedness shall not include Current Liabilities to the extent included in Closing Working Capital.

 

"Indemnified Party" has the meaning set forth in Section 10.05.

"Indemnifying Party" has the meaning set forth in Section 10.05.

"Indemnity Escrow Amount" means $975,000.00.

"Independent Accountant" has the meaning set forth in Section 2.04(c)(iii).

"Insurance Policies" has the meaning set forth in Section 3.14.

"Intellectual Property" means any and all intellectual property and industrial property, and all related rights, interests, and protections, however arising, pursuant to the Laws of any jurisdiction throughout the world, all registrations, applications for registration, and renewals of such rights, and the goodwill connected with the use of and symbolized by any of the foregoing, including any and all: trademarks, service marks, trade names, and similar indicia of source or origin; websites and domain names, social media account names and pages, and all related content and data; designs and design registrations; copyrights and works of authorship, whether or not copyrightable; trade secrets, inventions, technology, and other confidential and proprietary information, whether or not patentable; and patents (including all reissues, divisionals, continuations, continuations-in-part, and extensions thereof).

"Interests" has the meaning set forth in the recitals.

"Interim Balance Sheet" has the meaning set forth in Section 3.05.

"Interim Balance Sheet Date" has the meaning set forth in Section 3.05.

"Interim Financial Statements" has the meaning set forth in Section 3.05.

"Key Employment Agreements" means employment agreements, in form and substance reasonably acceptable to Buyer, between the Company or Buyer (or their Affiliates after the Closing) and the Key Personnel.

"Key Personnel" means ▇▇▇▇▇▇ ▇. ▇▇▇▇.

"Knowledge of Sellers or Sellers' Knowledge" or any other similar knowledge qualification, means the actual knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇ after due inquiry.

 

"Landlord" means DRH Properties, LLC, a Colorado limited liability company, as the owner of the Premises, together with its successors and assigns.

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

"Lease Amendment" means an amendment to the Commercial Lease Agreement dated as of November 1, 2012, made by and between Landlord and the Company, substantially in the form attached hereto as Exhibit B.

"Liabilities" has the meaning set forth in Section 3.06.

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

"Material Adverse Effect" means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of the Company, or (b) the ability of the Company or Sellers to consummate the transactions contemplated hereby on a timely basis; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) any changes in financial or securities markets in general; (ii) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (iii) any action required or permitted by this Agreement, except pursuant to Section 3.04; (iv) any changes in applicable Laws or accounting rules, including GAAP; or (v) the public announcement of the transactions contemplated by this Agreement; provided further, however, that any event, occurrence, fact, condition or change referred to in clauses (i) through (ii) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Company compared to other participants in the industries in which the Company conducts its businesses.

"Material Contracts" has the meaning set forth in Section 3.08(a).

"Material Customers" has the meaning set forth in Section 3.13(a).

"Material Suppliers" has the meaning set forth in Section 3.13(b).

"Multiemployer Plan" has the meaning set forth in Section 3.18(c).

"Ordinary Course of Business" means an action taken by a Person that is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person and does not require any special authorization or consent of any form.

 

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

"Permitted Encumbrances" has the meaning set forth in Section 3.09(a).

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

"Post-Closing Adjustment" has the meaning set forth in Section 2.04(b)(ii).

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

"Post-Closing Taxes" means Taxes of the Company for any Post-Closing Tax Period.

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

"Pre-Closing Taxes" means Taxes of the Company for any Pre-Closing Tax Period.

"Premises" means the Real Property commonly referred to as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, which, as of the date hereof, is leased to the Company pursuant to that certain Commercial Lease Agreement dated as of November 1, 2012, made by and between Landlord and the Company.

"Pro Rata" has the meaning set forth in Section 12.01(b).

"Purchase Price" has the meaning set forth in Section 2.02.

"Qualified Benefit Plan" has the meaning set forth in Section 3.18(c).

"Real Property" means the real property owned, leased or subleased by the Company, together with all buildings, structures and facilities located thereon.

"Related Person" means (a) any Affiliate, director, manager, officer or employee of the Company, or (b) any individual related by blood, marriage or adoption to Sellers.

"Release" has the meaning set forth in Section 7.03.

"Released Parties" has the meaning set forth in Section 7.03.

"Releasor" has the meaning set forth in Section 7.03.

 

"Representative(s)" means, with respect to any Person, any and all directors, officers, employees, managers, consultants, financial advisors, counsel, accountants and other agents of such Person.

"Resolution Period" has the meaning set forth in Section 2.04(c)(ii).

"Restricted Business" means the provision of simulation, staffing, technical engineering, or related or similar services to the power industry.

"Restricted Period" means the time period beginning immediately after the Closing Date until 11:59 pm Eastern Time on the date that is five (5) years following the Closing Date.

"Retention Escrow Amount" means $487,500.00.

"Review Period" has the meaning set forth in Section 2.04(c)(i).

"Section 338(h)(10) Election" has the meaning set forth in Section 8.01(d)(i).

"Section 338(h)(10) Forms" has the meaning set forth in Section 8.01(d)(ii).

"Seller Escrow Fees" means an amount equal to fifty percent (50%) of all initial setup fees, annual fees and other similar fees and amounts due to the Escrow Agent pursuant to the Escrow Agreement in connection with the setup, maintenance and administration of the Escrow Fund.

"Sellers" has the meaning set forth in the preamble.

"Seller Indemnitees" has the meaning set forth in Section 10.03.

"Statement of Objections" has the meaning set forth in Section 2.04(c)(ii).

"Straddle Period" has the meaning set forth in Section 8.04.

"Subsidiary" means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of equity entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes of this Agreement, a Person(s) will be deemed to have a majority ownership interest in a corporation, limited liability company, partnership, association or other business entity if such Person(s) is allocated a majority of such entity's gains or losses, or such Person(s) is in control of such entity. Unless the context requires otherwise, each reference to a Subsidiary will be deemed to be a reference to a Subsidiary of the Company.

 

"Target Working Capital" means $931,000.

"Tax Claim" has the meaning set forth in Section 8.05.

"Tax Contest" has the meaning set forth in Section 3.20(b).

"Tax Return" means any return, declaration, report, claim for refund, information return or other documents (including any related or supporting schedules, statements or information, and any amendment thereof) filed or required to be filed in connection with the determination, assessment or collection of any Taxes of the Company or any Affiliates of the Company, other than the Sellers, or the administration of any Laws or administrative requirements relating to any Taxes.

"Taxes" means any federal, state, local or foreign income, gross receipts, franchise, profits, employment, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, real property, personal property, equity securities, social security, unemployment, disability, payroll, license, employee or other withholding, or any other tax, of any kind whatsoever, including any interest, penalties or additions to Tax or additional amounts in respect of the foregoing.

"Taxing Authority" means any Governmental Authority exercising any authority to impose, regulate or administer the imposition of Taxes.

"Territory" means the United States of America, Argentina, Belgium, Brazil, Canada, China, Romania, South Korea, Taiwan, the United Arab Emirates, and the United Kingdom.

"Third Party Claim" has the meaning set forth in Section 10.05(b).

"Transaction Expenses" means all fees and expenses incurred by the Company or Sellers at or prior to the Closing in connection with the preparation, negotiation and execution of this Agreement and the Ancillary Documents, and the performance and consummation of the transactions contemplated hereby and thereby.

"Treasury Regulations" means the United States treasury regulations promulgated under the Code.

"Undisputed Amounts" has the meaning set forth in Section 2.04(c)(iii).

"Union" has the meaning set forth in Section 3.19(b).

"WARN Act" means the federal Worker Adjustment and Retraining Notification Act of 1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and employment losses.

 

 

 

 

The Sellers, jointly and severally, represent and warrant to Buyer that the statements contained in this ARTICLE III, as modified by the Disclosure Schedules, are true and correct as of the date hereof, except to the extent that a representation and warranty contained in the text of this ARTICLE III, as modified by the Disclosure Schedules, expressly states that such representation and warranty is current as of an earlier date and then such statements contained in this ARTICLE III are true and correct as of such earlier date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES

 

 

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

 

ARTICLE VI

INTENTIONALLY OMITTED

 

(a) Each Seller Party agrees that for the Restricted Period, such Seller Party shall not, and shall not permit any of its Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in any Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, stockholder, member, employee, principal, agent, trustee or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between (A) the Company and its Affiliates (including the Buyer), on the one hand, and customers or suppliers of such Persons, on the other hand; or (B) the Company and its Affiliates (including the Buyer), on the one hand, and employees of such Persons, on the other hand. Notwithstanding the foregoing, Sellers may own or acquire, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Sellers are not a controlling Person of, or a member of a group which controls, such Person and do not, directly or indirectly, own five percent (5%) or more of any class of securities of such Person. (b) Each Seller Party agrees that during the Restricted Period, such Seller Party shall not, and shall not permit any of its Affiliates to, directly or indirectly, hire or solicit any employee of the Company or its Affiliates (including Buyer) or encourage any such employee to leave such employment or hire any such employee who has left such employment, except pursuant to a general solicitation which is not directed specifically to any such employees; provided, that nothing in this Section 7.02(b) shall prevent any Seller Party or any of their Affiliates from hiring any employee whose employment has been terminated without cause by the Company or its Affiliates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE XII
SELLER REPRESENTATIVE

 

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Buyer has caused this Agreement to be executed as of the date first written above.

IN WITNESS WHEREOF, the Company, the Seller Parties, and the Seller Representative have caused this Agreement to be executed as of the date first written above.

4813-3144-7647, v. 12