EX-10.5 7 exhibit105.htm EX-10.5 exhibit105
i
SECURITIES PURCHASE AGREEMENT
By and Among
ECHO LAKE FOODS, INC.,
ELT, LLC,
ECHO LAKE HUNTINGTON, INC.,
XENITEL, INC.,
ECHO LAKE HUNTINGTON 435, LLC,
BLUE GRASS REAL ESTATE CO, LLC,
ECHO YORKVILLE, LLC,
ECHO LAKE PROPERTIES, LLC,
ELKIN PROPERTIES, LLC,
THE VOTING SECURITYHOLDERS SIGNATORY HERETO,
SCOTT MEINERZ, in his capacity as Sellers’
 
Representative,
and
CAL-MAINE FOODS, INC.
Dated as of April 8, 2025
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ii
iii
iv
v
vii
viii
ix
LIST OF SCHEDULES
Schedule A
 
Employment Agreement Counterparties
Schedule B-1
 
Reference Balance Sheet
Schedule B-2
 
Allocation Methodology
Schedule C
 
R&W Insurance Policy
Schedule
1
 
Company Group Employees Employed by Company Group Affiliates
Schedule
2
 
Excluded Assets
Schedule
3(a)
 
Knowledge of the Company Group
Schedule
3(b)
 
Knowledge of Buyer
Schedule
4
 
Permitted Liens
Schedule
 
Foreign Qualification
Schedule
 
Non-Contravention; Consents
Schedule
 
Governmental Authorizations
Schedule
 
Capitalization Matters
Schedule
 
Financial Statements
Schedule
 
Deviations from GAAP
Schedule
 
Liabilities
Schedule
 
Internal Controls
Schedule
 
No Adverse Changes
Schedule
 
Sufficiency of Assets
Schedule
 
Owned Real Property
Schedule
 
Leased Real Property
Schedule
 
Improvements
Schedule
 
Litigation
Schedule
 
Orders
Schedule
 
Compliance with Laws
Schedule
1
 
Registered Intellectual Property
Schedule
2
 
Unregistered Trademarks
Schedule
 
Domain Names
Schedule
 
Intellectual Property Exceptions
Schedule
 
Intellectual Property Licenses
Schedule
 
Personal Data
Schedule
 
Material Contracts
Schedule
 
Material Contract Breaches and Defaults
Schedule
 
Environmental Laws
Schedule
 
Environmental Proceedings
Schedule
 
Environmental Permits
Schedule
 
Environmental Notices
Schedule
 
Releases
Schedule
 
Taxes
Schedule
 
Employee Plans
Schedule
 
Employee Plans
Schedule
 
Employee Plans
Schedule
 
Labor Matters
Schedule
 
Company Group Employees
Schedule
 
Consultants and Individual Independent Contractors
Schedule
 
Brokerage Agreements
Schedule
 
Suppliers
Schedule
 
Customers
Schedule
 
Product Liability
x
Schedule
 
Inventory
Schedule
 
Affiliate Transactions
Schedule
 
Insurance
Schedule
 
Pre-Closing Conduct of the Business
Schedule
 
Termination of Affiliate Contracts
Schedule
 
Restricted Parties
Schedule
 
Specified Liabilities
LIST OF EXHIBITS
Exhibit A
 
Accounting Principles
Exhibit B
 
Form of Closing Certificate
Exhibit C
 
Form of Consideration Allocation Schedule
Exhibit D
 
Form of Excluded Asset
 
Assignment Agreement
Exhibit E
 
Form of Echo Lake LLC Agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
SECURITIES PURCHASE AGREEMENT
This Securities
 
Purchase Agreement (this
 
“Agreement”), dated
 
as of
 
the 8th day
 
of April, 2025, is
by and among:
(a)
Cal-Maine Foods, Inc., a Delaware corporation (“Buyer”);
(b)
the
 
following companies
 
to
 
be
 
acquired,
 
directly
 
or
 
indirectly,
 
by
 
Buyer
 
on
 
the
 
terms
 
and
subject to
 
the conditions
 
set forth
 
in this Agreement
 
(each, a
 
“Company” and,
 
collectively,
the “Companies” or the “Company Group”):
(i)
Echo Lake Foods, Inc., a Wisconsin corporation (“Echo Lake Foods”);
(ii)
ELT, LLC, a Wisconsin limited liability company (“ELT”);
(iii)
Echo Lake Huntington, Inc., a Wisconsin corporation (“Huntington”);
(iv)
Xenitel, Inc., a Wisconsin corporation (“Xenitel”);
(v)
Echo
 
Lake
 
Huntington
 
435,
 
LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company
(“Huntington 435”);
(vi)
Blue
 
Grass Real
 
Estate Co,
 
LLC, a
 
Wisconsin
 
limited liability
 
company (“Blue
Grass”); and
(vii)
Echo Yorkville, LLC, a Wisconsin limited liability company (“Yorkville”);
(c)
the following transferring entities and securityholders (each, a “Seller” and, collectively, the
“Sellers”):
(i)
Echo Lake
 
Properties, LLC,
 
a Wisconsin
 
limited liability
 
company (“Echo
 
Lake
Properties”);
(ii)
Elkin
 
Properties,
 
LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company
 
(“Elkin
Properties”);
(iii)
the holders, collectively, of 100% of the issued and outstanding shares of Class A
voting
 
common
 
stock
 
of
 
Echo
 
Lake
 
Foods,
 
as
 
set
 
forth
 
on
 
the
 
signature
 
pages
hereto
 
(each,
 
a
 
“Voting
 
Securityholder”
 
and,
 
collectively,
 
the
 
“Voting
Securityholders”); and
(d)
Scott Meinerz, in his capacity as Sellers’ Representative.
The
 
Persons
 
listed
 
above
 
in
 
subparagraphs
 
–
 
are
 
sometimes
 
referred
 
to
 
individually
 
as
 
a
“Party” and
 
collectively as
 
the “Parties.”
 
Capitalized terms
 
used but
 
not defined
 
elsewhere in
 
the text
 
of
this Agreement have the respective meanings set forth in
 
below.
WITNESSETH
WHEREAS, the Securityholders collectively own all of the issued and outstanding Equity Interests
of Echo
 
Lake Foods
 
(the “Echo
 
Lake Foods
 
Equity Interests”),
 
ELT (the
 
“ELT Equity
 
Interests”), Echo
 
Lake
Properties
 
and
 
Elkin
 
Properties
 
in
 
the
 
respective
 
amounts
 
set
 
forth
 
on
 
Schedule
,
 
in
 
each
 
case
 
which
interests are the only issued and outstanding Equity Interests of those Companies;
WHEREAS, Echo Lake
 
Foods owns all
 
of the issued
 
and outstanding Equity
 
Interests of Huntington
and Xenitel;
WHEREAS,
 
Echo
 
Lake
 
Properties
 
owns
 
all
 
of
 
the
 
issued
 
and
 
outstanding
 
Equity
 
Interests
 
of
Huntington 435 (the “Huntington 435 Equity Interests”);
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2
WHEREAS, Elkin Properties owns all of the issued and outstanding
 
Equity Interests of Blue Grass
(the “Blue Grass Equity Interests”) and of Yorkville (the “Yorkville Equity Interests”);
WHEREAS, on the
 
terms and subject
 
to the conditions
 
of this Agreement, the
 
Sellers wish to
 
sell,
and Buyer wishes to purchase,
 
(a) all of the Echo
 
Lake Foods Equity Interests, (b) the
 
ELT Equity Interests,
(c) the
 
Huntington
 
435
 
Equity
 
Interests,
 
(d) the
 
Blue
 
Grass
 
Equity
 
Interests
 
and
 
(e) the Yorkville
 
Equity
Interests (collectively, the “Purchased Equity Interests”); and
WHEREAS, prior to or concurrently with
 
the execution of this
 
Agreement, and as a condition to
 
the
willingness
 
of,
 
and
 
material
 
inducement
 
to,
 
Buyer
 
to
 
enter
 
into
 
this
 
Agreement,
 
each
 
person
 
listed
 
on
Schedule A has entered
 
into an
 
employment agreement
 
with Buyer
 
or one
 
of its Affiliates,
 
each of
 
which
restrictive
 
covenant
 
agreements
 
and
 
employment
 
agreements
 
shall
 
become
 
effective
 
at
 
and
 
conditioned
upon the Closing;
NOW, THEREFORE,
 
in consideration
 
of the
 
foregoing and
 
of the
 
mutual representations,
 
warranties
and covenants
 
contained herein,
 
as well
 
as other
 
good and
 
valuable consideration,
 
the receipt
 
and sufficiency
of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN INTERPRETIVE MATTERS
1.1
Definitions
.
 
In addition to the terms defined elsewhere herein, the following terms have the
following respective meanings when used herein with initial capital letters:
“2023 Financial Statements” has the meaning set forth in Section
“2024 Financial Statements” has the meaning set forth in Section
“Accounting
 
Principles”
 
the
 
accounting
 
methods,
 
policies,
 
practices,
 
principles,
 
bases
 
and
procedures, including classification and estimation methodology as set forth on Exhibit A.
“Adjusted Equity
 
Price” means
 
the Estimated Adjusted
 
Equity Price
 
or the
 
Final Adjusted Equity
Price, as applicable.
“Adjustment Escrow
 
Account” means a
 
bank account designated
 
in writing by
 
the Escrow
 
Agent for
the purpose of holding and administering the Adjustment Escrow
 
Amount.
“Adjustment Escrow Amount” means an amount equal to
 
$4,000,000, as established in accordance
with
 
Section
,
 
together
 
with
 
any
 
interest
 
or
 
other
 
earnings
 
accrued
 
thereon
 
while
 
held
 
in
 
the
Adjustment Escrow Account.
“Affiliate” means, with respect to a specified entity, an entity
 
that directly, or indirectly through one
or more intermediaries,
 
controls, is controlled
 
by or is
 
under common control
 
with, the entity
 
specified.
 
The
term “control” (including, with correlative meaning, 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.
“Affiliate Contracts” has the meaning set forth in Section
“Agreement” has the meaning set forth in the Preamble.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
“Allocation Methodology” has the meaning set forth in Section
“Ancillary
 
Agreements”
 
means
 
each
 
of
 
the
 
Escrow
 
Agreement
 
and
 
the
 
Transition
 
Services
Agreement.
“Annual Financial Statements” has the meaning set forth in Section
“Anti-Corruption Laws” has the meaning set forth in Section
“Blue Grass” has the meaning set forth in the Preamble.
“Blue Grass Equity Interests” has the meaning set forth in the Recitals.
“Business” means the business of the Company Group, as conducted as of the date hereof.
“Business Day”
 
means any
 
day other
 
than (a) a
 
Saturday or
 
Sunday or
 
(b) a day
 
on which
 
the national
banking institutions in New York, New York or Milwaukee,
 
Wisconsin are required to be closed.
“Buyer” has the meaning set forth in the Preamble.
“Buyer
 
Closing
 
Date
 
Transaction”
 
means
 
any
 
transaction
 
engaged
 
in
 
by
 
any
 
member
 
of
 
the
Company Group
 
on the
 
Closing Date
 
that occurs
 
after the Closing
 
or at
 
the direction
 
of Buyer,
 
that is outside
the ordinary
 
course of
 
business, including
 
any transaction
 
engaged in
 
by any
 
member of
 
the Company
 
Group
in connection with the financing of any obligations of Buyer (or its Affiliate) to make a payment under this
Agreement.
“Buyer Indemnified Parties” has the meaning set forth in Section
“Buyer Plan” has the meaning set forth in Section
“Buyer Prepared Return” has the meaning set forth in Section
“Buyer Tax Claim” has the meaning set forth in Section
“Calculation
 
Time”
 
means
 
11:59 p.m. (Milwaukee,
 
Wisconsin
 
time)
 
on
 
the
 
day
 
immediately
preceding the Closing Date.
“Capital
 
Lease
 
Obligations”
 
means,
 
with
 
respect
 
to
 
any
 
Person,
 
for
 
any
 
applicable
 
period,
 
the
obligations of such
 
Person that are
 
required to be
 
classified and accounted
 
for as capital
 
obligations under
GAAP, and the amount of such obligations at any date will be the capitalized amount
 
of such obligations at
such
 
date
 
determined
 
by
 
the
 
Company
 
Group
 
(but
 
calculated
 
separately
 
based
 
on
 
the
 
subtotals
 
for
 
each
Transferor Group) in accordance with the Accounting Principles.
“Cash” means, with respect to
 
the Company Group (but calculated
 
separately based on the subtotals
for each
 
Transferor Group),
 
at any
 
particular time,
 
the sum
 
of the
 
fair market
 
value (expressed
 
in United
States dollars)
 
of the
 
aggregate cash
 
and cash
 
equivalents determined
 
in accordance
 
with the Accounting
Principles
 
(including
 
marketable
 
securities,
 
deposits,
 
short
 
term
 
investments,
 
treasury
 
bills
 
and
 
treasury
notes with,
 
in each
 
case, an
 
original maturity
 
date of
 
three months
 
or less,),
 
held by
 
the Company
 
Group.
 
Cash
 
shall
 
(a) not
 
include
 
any
 
cash
 
security
 
deposits
 
made
 
or
 
held
 
by
 
the
 
Company
 
Group,
 
cash
collateralizing
 
any
 
obligation,
 
cash
 
in
 
reserve,
 
custodial
 
cash
 
and
 
cash
 
subject
 
to
 
a
 
dominion,
 
control
 
or
similar agreement (other than those terminated at Closing)
 
or otherwise subject to any legal, contractual or
other restriction on the ability to freely transfer or use
 
such cash for any lawful purpose, including any cash
subject to
 
repatriation and
 
the imposition
 
of any
 
withholding Taxes
 
or other
 
Taxes on
 
any such
 
cash if
 
it
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
were to be distributed or otherwise repatriated to the Company Group, (b) not include any cash held in any
third-party account owned solely by
 
one or more Excluded Companies,
 
(c) be reduced by all overdrafts
 
and
issued and uncleared
 
checks in excess
 
of bank balances
 
that would be
 
reported as accounts
 
payable or short-
term borrowings
 
under GAAP
 
and (d) not
 
include any
 
amounts paid
 
to satisfy
 
or discharge
 
any Indebtedness,
Company
 
Group
 
Expenses
 
or
 
any
 
cash
 
distributions
 
by
 
the
 
Company
 
Group,
 
in
 
each
 
case
 
where
 
such
amounts
 
are paid
 
after
 
the Calculation
 
Time
 
but immediately
 
prior
 
to the
 
Closing.
 
For the
 
avoidance of
doubt, Closing
 
Cash will
 
be reduced
 
for checks,
 
drafts and
 
other wire
 
transfers issued
 
but not
 
yet cleared
and will include checks,
 
other wire transfers and
 
drafts deposited or available
 
for deposit but not
 
yet cleared
for the account of the Company Group.
“cGMP” has the meaning set forth in Section
“Closing” has the meaning set forth in Section
“Closing Cash”
 
means the
 
aggregate sum
 
of Cash
 
held by
 
Company Group
 
(but calculated
 
separately
based on the subtotals for each Transferor Group) as of immediately prior to the Closing.
“Closing Certificate” has the meaning set forth in Section
“Closing Date” has the meaning set forth in Section
“Closing Date Payment” has the meaning set forth in Section
“Closing Indebtedness”
 
means the
 
aggregate sum
 
of the
 
Indebtedness of
 
the Company
 
Group (but
calculated
 
separately
 
based
 
on
 
the
 
subtotals
 
for
 
each
 
Transferor
 
Group)
 
as
 
of
 
immediately
 
prior
 
to
 
the
Closing.
“Closing Statement” has the meaning set forth in Section
“Closing
 
Tax
 
Liability Amount”
 
means
 
the
 
Tax
 
Liability Amount
 
as
 
of
 
immediately
 
prior
 
to
 
the
Closing.
“Closing
 
Working
 
Capital”
 
means
 
the
 
Working
 
Capital
 
as
 
of
 
the
 
Calculation
 
Time,
 
which,
 
for
accounting purposes,
 
shall be
 
based on the
 
facts and
 
circumstances and
 
information available
 
to Buyer
 
as
of the date on which the Closing Statement is delivered by Buyer to Sellers’
 
Representative with regards to
conditions
 
as
 
they
 
exist
 
as
 
of
 
the
 
Calculation
 
Time
 
in
 
accordance
 
with
 
Financial Accounting
 
Standards
Board Accounting Standard
 
Codification Topic 855,
 
Subsequent Events
 
and shall
 
exclude (a) all
 
fees and
expenses
 
incurred
 
by
 
or
 
for
 
the
 
account
 
of
 
Buyer
 
or
 
any
 
of
 
its
 
Affiliates,
 
(b) the
 
effects
 
of
 
purchase
accounting arising from the Transactions, and
 
(c) the effects of any actions
 
taken by Buyer or its Affiliates
after the Closing and (d) any asset in respect of which any amounts have been included in Closing Cash.
“Code” means the Internal Revenue Code of 1986.
“Company” has the meaning set forth in the Preamble.
“Company Group” has the meaning set forth in the Preamble.
“Company Group Access Contact” has the meaning set forth in Section
“Company Group
 
Data” means
 
all data
 
contained in the
 
Company Group Information
 
Technology
Systems
 
or
 
the
 
Company
 
Group’s
 
databases
 
and
 
all
 
other
 
information
 
and
 
data
 
compilations
 
used
 
by,
 
or
necessary to the Business.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
“Company Group Domain Names” has the meaning set forth in Section
“Company Group Employee List” has the meaning set forth in Section
“Company
 
Group
 
Employees”
 
means
 
individuals
 
who
 
(a) are
 
employed
 
by
 
a
 
member
 
of
 
the
Company Group
 
or (b) (i) are
 
employed by
 
an Affiliate of
 
a member
 
of the
 
Company Group,
 
(ii) provide
services primarily in respect of the Business, and (iii) are listed on Schedule
1.
“Company
 
Group
 
Expenses”
 
means,
 
without
 
duplication,
 
all
 
fees,
 
charges,
 
expenses
 
and
 
other
payments incurred or payable
 
by the Company Group (but
 
calculated separately based on the
 
subtotals for
each
 
Transferor
 
Group)
 
prior
 
to
 
the
 
Closing
 
and
 
in
 
connection
 
with
 
the
 
negotiation,
 
preparation
 
and
execution
 
of
 
this
 
Agreement
 
and
 
the
 
consummation
 
of
 
the
 
Transactions
 
(including
 
the
 
Pre-Closing
Restructuring) that have not
 
been paid as of immediately
 
prior to the Closing (but
 
calculated assuming the
Closing has
 
been consummated),
 
including (a) fees
 
and disbursements
 
of attorneys,
 
accountants, investment
bankers and
 
other advisory
 
or transaction
 
service providers
 
that are
 
payable by
 
the Company
 
Group and
(b) all
 
severance
 
payments
 
or
 
similar
 
benefits,
 
and
 
all
 
change
 
of
 
control,
 
transaction,
 
sale
 
or
 
retention
bonuses or other
 
similar payments (other
 
than grants or
 
other issuances of
 
Equity Interests) that
 
any member
of the Company Group is obligated to pay
 
in connection with the Transactions and that have not
 
been paid
as
 
of
 
immediately
 
prior
 
to
 
the
 
Closing
 
(including,
 
in
 
each
 
case,
 
the
 
employer
 
portion
 
of
 
any
 
associated
payroll, employment, social security,
 
Medicare, national insurance, contributions,
 
unemployment or similar
Taxes
 
or
 
similar
 
obligations
 
related
 
to
 
any
 
such
 
payments,
 
determined
 
without
 
regard
 
to
 
whether
 
the
remittance of any
 
such amounts to
 
the applicable Governmental
 
Authority has been
 
deferred), but excluding
any arrangements implemented at the direction of
 
Buyer or its
 
Affiliates; provided, however, that Company
Group Expenses
 
shall in
 
no event
 
include, without
 
duplication, (i) the portion
 
of the
 
costs, fees and
 
expenses
of the
 
D&O Tail
 
Policy to
 
be paid
 
by Buyer
 
pursuant to
 
Section
, (ii) the
 
portion of
 
the costs
 
fees and
expenses of the R&W
 
Insurance Policy to be paid
 
by Buyer pursuant to Section
, (iii) any such items to
the extent
 
included in
 
the computation
 
of Closing
 
Indebtedness or
 
Working Capital
 
and (iv) any
 
fees and
expenses to the extent they have been paid by or on behalf of the Company Group prior to the Closing.
“Company
 
Group
 
Information
 
Technology
 
Systems”
 
has
 
the
 
meaning
 
set
 
forth
 
in
Section
“Company Group Intellectual Property” means
 
any and all Intellectual Property
 
used or held for
 
use
by, owned or
 
purported to be
 
owned by, or
 
licensed to, any
 
member of the
 
Company Group, in
 
each case,
that is material to the Business, excluding Open Source Licenses and Off the Shelf Software.
“Company Group
 
Lease” means
 
any Contract
 
pursuant to
 
which any
 
member of
 
the Company
 
Group
leases, subleases, licenses or
 
occupies Leased Real Property
 
from another Person, and any
 
amendments or
modifications thereto.
“Company
 
Group
 
Plan”
 
means
 
any
 
Employee
 
Plan
 
that
 
(a) is
 
sponsored
 
by
 
a
 
member
 
of
 
the
Company Group or (b) primarily covers current or former Company Group Employees.
“Company Group Privacy and Data Security
 
Policies” means the Company Group’s past
 
or present,
internal or public-facing
 
policies, notices and
 
statements concerning the
 
privacy, security or
 
Processing of
Personal Data.
“Competing Business” has the meaning set forth in Section
“Competitive Activity”
 
means
 
being
 
directly
 
or
 
indirectly
 
engaged
 
in
 
and/or
 
being
 
employed
 
by,
promoting, assisting (financially or otherwise), consulting for the benefit of, having any governance role
 
or
rights
 
with
 
respect
 
to
 
or
 
having
 
a
 
financial
 
or
 
ownership
 
interest
 
in,
 
any
 
Competing
 
Business;
 
provided,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
however, that
 
a passive
 
investment in
 
the capital
 
stock or
 
other interest
 
of an
 
issuer whose
 
securities are
listed on
 
a national securities
 
exchange or quotation
 
system or traded
 
in the over-the-counter
 
market shall
not
 
constitute
 
a
 
Competitive Activity
 
so
 
long
 
as
 
such
 
Person
 
does
 
not,
 
directly
 
or
 
indirectly
 
(including
through
 
such Person’s
 
Affiliates), hold
 
in the
 
aggregate
 
more than
 
2% of
 
the outstanding
 
shares or
 
other
interests so listed or traded.
“Confidential Information” has the meaning set forth in Section
“Confidentiality
 
Agreement”
 
means
 
that
 
certain
 
confidentiality
 
agreement,
 
dated
 
as
 
of
November 20, 2024, by and between Echo Lake Foods and Buyer.
“Conflicting Transaction”
 
means any (a) reorganization,
 
liquidation, dissolution or
 
recapitalization
involving
 
any
 
member
 
of
 
the
 
Company
 
Group
 
or
 
any
 
Transferor
 
thereof,
 
(b) merger
 
or
 
consolidation
involving any member
 
of the Company
 
Group or any
 
Transferor thereof, (c) sale
 
of all
 
or any material
 
assets
of
 
any
 
of
 
the
 
members
 
of
 
the
 
Company
 
Group
 
(other
 
than
 
sales
 
of
 
inventory
 
in
 
the
 
ordinary
 
course
 
of
business and sales
 
of assets that
 
are obsolete or
 
no longer useful
 
to the business
 
of the applicable
 
member
of the
 
Company Group) or,
 
except as not
 
prohibited by Section
 
all or any
 
equity securities (including
any rights to
 
acquire, or securities
 
convertible into or
 
exchangeable for, any
 
such equity securities)
 
of any
member of the
 
Company Group or
 
any Transferor
 
thereof or (d) similar
 
transaction or business
 
combination
involving
 
any
 
member
 
of
 
the
 
Company
 
Group,
 
any
 
Transferor
 
thereof
 
or
 
their
 
respective
 
businesses
 
or
assets.
“Consideration Allocation Schedule” has the meaning set forth in Section
“Continuing Employee” has the meaning set forth in Section
“Contract” means any contract, agreement, indenture, note, bond, loan, license, instrument, lease or
other
 
agreement,
 
whether
 
oral
 
or
 
written,
 
and
 
in
 
each
 
case,
 
that
 
is
 
legally
 
binding,
 
but
 
excluding
 
any
Employee Plans or purchase orders.
“Conversions” has the meaning set forth in Section
“Copyrights”
 
means
 
all
 
copyrights
 
and
 
works
 
of
 
authorship
 
(including
 
any
 
moral
 
and
 
economic
rights however
 
denominated), and
 
all copyright
 
registrations and
 
pending copyright
 
applications, and
 
any
renewals or extensions of any of the foregoing.
“D&O Expenses” has the meaning set forth in Section
“D&O Indemnifiable Claim” has the meaning set forth in Section
“D&O Indemnified Party” has the meaning set forth in Section
“D&O Indemnifying Party” has the meaning set forth in Section
“D&O Losses” has the meaning set forth in Section
“D&O Tail Policy” has the meaning set forth in Section
“Domain Names” means all Internet domain names and all Uniform Resource Locators (URLs).
“Echo Lake Foods” has the meaning set forth in the Preamble.
“Echo Lake Foods Contribution”
 
has the meaning set forth in Section
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
“Echo Lake Foods Equity Interests” has the meaning set forth in the Recitals.
“Echo Lake Foods Group” means, collectively, Echo Lake Foods, Huntington and Xenitel.
“Echo Lake Foods Transferor”
 
has the meaning set forth in Section
“Echo
 
Lake LLC
 
Agreement”
 
means
 
the
 
Limited Liability
 
Company Agreement
 
of the
 
Delaware
limited liability company
 
into which Echo
 
Lake Foods, Inc.
 
is converted pursuant
 
to Section
,
the form of which is attached hereto as Exhibit E.
“Echo Lake Properties” has the meaning set forth in the Preamble.
“Echo Lake Properties Group” means, collectively, Huntington 435 and ELT.
“Elkin Properties” has the meaning set forth in the Preamble.
“Elkin Properties Group” means, collectively, Blue Grass and Yorkville.
“ELT” has the meaning set forth in the Preamble.
“ELT Contribution” has the meaning set forth in Section
“ELT Equity Interests” has the meaning set forth in the Recitals.
“Employee
 
Plan”
 
means
 
each
 
“employee
 
benefit
 
plan”
 
(as
 
defined
 
in
 
Section 3(3)
 
of
 
ERISA,
whether or not subject
 
to ERISA), and each
 
other compensation or benefit
 
plan, contract, program, policy,
arrangement or agreement, including any
 
severance, termination, retention, change in
 
control, incentive or
bonus,
 
deferred
 
compensation,
 
pension,
 
profit
 
sharing,
 
retirement,
 
welfare,
 
unemployment
 
benefits,
 
sick
leave, vacation pay, paid time
 
off, disability, hospitalization, health, medical,
 
life insurance, fringe benefit,
tax gross-up, tuition reimbursement,
 
flexible spending account or
 
scholarship, stock purchase, stock option,
equity or equity-based incentive compensation, employment, consulting or similar plan, contract, program,
policy, arrangement
 
or agreement,
 
in each
 
case, whether
 
written or
 
unwritten, and
 
that is
 
(a) sponsored or
maintained by
 
any member
 
of the
 
Company Group
 
or to
 
which any
 
member of
 
the Company
 
Group is
 
a
party, (b) to which any
 
member of the Company
 
Group is required to contribute,
 
(c) in which any employee
or service provider of any member of the Company Group
 
participates related to their services provided to
such member of the Company Group
 
or (d) with respect to which any
 
member of the Company Group has
any liability or obligation (including contingent liability).
“Environmental Laws”
 
means all
 
Laws pertaining
 
to the
 
prevention of
 
pollution and
 
protection of
health and
 
safety (to
 
the extent
 
relating to
 
Hazardous Materials),
 
the environment
 
or natural
 
resources or
relating
 
to
 
the
 
use,
 
generation,
 
management,
 
manufacture,
 
processing,
 
treatment,
 
storage,
 
transportation,
remediation,
 
cleanup,
 
handling,
 
disposal
 
or
 
Release
 
or
 
threatened
 
Release
 
of,
 
or
 
exposure
 
to,
 
Hazardous
Materials currently in effect
 
in any and all
 
jurisdictions in which the
 
Company Group’s facilities are
 
located
or in
 
which its
 
operations are
 
conducted, including
 
the Clean Air Act,
 
the Comprehensive
 
Environmental
Response, Compensation, and Liability Act of
 
1980, the Federal Water Pollution Control
 
Act, the Resource
Conservation and
 
Recovery Act of
 
1976, the
 
Safe Drinking Water Act,
 
the Toxic Substances
 
Control Act,
the Hazardous Materials Transportation
 
Act, the Emergency Planning and Community Right-to-Know Act,
the Oil
 
Pollution Act, the
 
Occupational Safety
 
and Health Act
 
and any
 
state or
 
local Laws
 
similar thereto
and any regulations promulgated under any of the foregoing Laws.
“EPIA” has the meaning set forth in Section
“Equity Interests” has the meaning set forth in Section
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
“Equity Purchase” has the meaning set forth in Section
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA
 
Affiliate” means any trade or business (whether or not incorporated) that together with any
member of
 
the Company
 
Group would
 
be treated
 
as a
 
single employer
 
under Section 414
 
of the
 
Code or
Section 4001 of ERISA.
“Escrow Agent” means Citibank, N.A.,
 
as the Escrow Agent under the Escrow
 
Agreement.
“Escrow Agreement” means the Escrow
 
Agreement, to be entered into at the Closing by and
 
among
the Sellers’
 
Representative, Buyer and
 
the Escrow
 
Agent, in a
 
form mutually agreeable
 
to the parties
 
thereto.
“Estimated
 
Adjusted
 
Equity
 
Price”
 
means
 
an
 
amount
 
with
 
respect
 
to
 
the
 
Company
 
Group
 
(but
calculated separately based
 
on the subtotals
 
and Purchase Price
 
allocations for each
 
Transferor Group) equal
to (a) the Purchase Price,
minus
 
(b) if the Estimated Adjustment
 
Amount is a negative number, the absolute
value
 
of
 
the
 
Estimated Adjustment
 
Amount,
plus
(c) if
 
the
 
Estimated Adjustment
 
Amount
 
is
 
a
 
positive
number,
 
the
 
Estimated
 
Adjustment
 
Amount,
minus
 
(d) the
 
Adjustment
 
Escrow
 
Amount,
minus
 
(e) the
Indemnification Escrow Amount.
“Estimated
 
Adjustment
 
Amount”
 
means
 
an
 
amount
 
with
 
respect
 
to
 
the
 
Company
 
Group
 
(but
calculated separately based
 
on the subtotals
 
for each
 
Transferor Group) equal
 
to, without duplication,
 
(a) the
Estimated Cash,
minus
 
(b) the Estimated Company Group Expenses,
minus
(c) the Estimated Indebtedness,
plus
 
(d) the excess, if any, of the Estimated Working Capital
 
over the Target Working Capital,
minus
 
(e) the
excess, if any,
 
of the Target Working
 
Capital over the
 
Estimated Working Capital,
minus
(f) the Estimated
Tax Liability Amount.
“Estimated Cash”
 
means the
 
estimated Closing
 
Cash, as
 
set forth
 
on the
 
Closing Certificate
 
delivered
to Buyer pursuant to Section
“Estimated Company Group Expenses”
 
means the estimated
 
Company Group Expenses, as
 
set forth
in the Closing Certificate delivered to Buyer pursuant to Section
“Estimated
 
Indebtedness”
 
means
 
the
 
estimated
 
Closing
 
Indebtedness,
 
as
 
set
 
forth
 
on
 
the
 
Closing
Certificate delivered to Buyer pursuant to Section
“Estimated Tax
 
Liability Amount”
 
means
 
the
 
estimated Tax
 
Liability Amount,
 
as
 
set
 
forth
 
in
 
the
Closing Certificate delivered to Buyer pursuant to Section
“Estimated
 
Working
 
Capital”
 
means
 
the
 
estimated
 
Working
 
Capital
 
of
 
the
 
Company
 
Group
 
(but
calculated
 
separately
 
based
 
on
 
the
 
subtotals
 
for
 
each
 
Transferor
 
Group),
 
as
 
set
 
forth
 
on
 
the
 
Closing
Certificate delivered to Buyer pursuant to Section
“Excluded Asset Assignment Agreement” means the
 
Excluded Asset Assignment Agreement to be
entered into between
 
Echo Lake Foods
 
and Echo Lake
 
Foods Transferor to distribute
 
the Excluded Assets
from Echo Lake Foods to Echo Lake Foods Transferor, which instrument shall be substantially in the
 
form
set forth on Exhibit D.
“Excluded
 
Assets”
 
means
 
those
 
assets,
 
properties,
 
claims,
 
rights
 
and
 
interests
 
set
 
forth
 
on
Schedule
2.
“Excluded Assets Distribution” has the meaning set forth in Section
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
“Excluded Companies” means, collectively,
 
The Elkin Company, LLC,
 
a Wisconsin limited
 
liability
company,
 
Elkin
 
Operations,
 
Inc.,
 
a
 
Wisconsin
 
corporation,
 
Ailco
 
Equipment
 
Finance
 
Group,
 
Inc.,
 
a
Wisconsin
 
corporation, Aluma Tec
 
Industries, Inc.,
 
a Wisconsin
 
corporation, Seller
 
Tank Truck
 
Services,
Inc., a Wisconsin corporation.
“Existing Credit
 
Facility” means
 
that certain
 
Credit Agreement, dated
 
as of
 
July 31, 2018, by
 
and
among Associated Bank,
 
National Association, as
 
administrative agent,
 
Echo Lake
 
Foods and
 
the lenders
party thereto, as the same has been amended from time to time.
“F Reorganization” has the meaning set forth in Section
“FCPA” has the meaning set forth in Section
“FDA” means the U.S. Food and Drug Administration.
“FDCA” has the meaning set forth in Section
“Final Adjusted Equity
 
Price” means an amount with respect
 
to the Company Group (but calculated
separately based on the subtotals and Purchase Price allocations for
 
each Transferor Group) equal to (a) the
Purchase Price,
minus
 
(b) if the
 
Final Adjustment Amount is a
 
negative number,
 
the absolute
 
value of
 
the
Final
 
Adjustment
 
Amount,
plus
(c) if
 
the
 
Final
 
Adjustment
 
Amount
 
is
 
a
 
positive
 
number,
 
the
 
Final
Adjustment
 
Amount,
minus
 
(d) the
 
Adjustment
 
Escrow
 
Amount,
minus
 
(e) the
 
Indemnification
 
Escrow
Amount.
“Final Adjustment Amount” means an amount
 
with respect to
 
the Company Group
 
(but calculated
separately based
 
on the
 
subtotals for
 
each Transferor
 
Group) equal
 
to, without
 
duplication, (a) Closing
 
Cash,
minus
 
(b) Company
 
Group
 
Expenses,
minus
 
(c) Closing
 
Indebtedness,
plus
 
(d) the
 
excess,
 
if
 
any,
 
of
 
the
Closing Working
 
Capital over
 
the Target
 
Working Capital,
minus
 
(e) the excess,
 
if any,
 
of the
 
Target Working
Capital over the Closing Working Capital,
minus
 
(f) the Closing Tax Liability Amount.
“Final Adjustment Amount Determination Date” has the meaning set forth in Section
“Final Closing Certificate” has the meaning set forth in Section
“Financial Statements” has the meaning set forth in Section
“Food and Beverage Laws” has the meaning set forth in Section
“Fraud” means, with
 
respect to any
 
Party, an actual
 
and intentional fraud
 
involving a knowing
 
and
intentional misrepresentation
 
or a
 
knowing and
 
intentional omission,
 
in each
 
case, of
 
a material
 
fact with
respect to
 
the applicable
 
representations and
 
warranties made
 
by such
 
Party in Article
 
or
 
in this
Agreement or any certificate delivered pursuant to this
 
Agreement, made with the specific intent to deceive
or mislead (as opposed to any
 
fraud claim based on constructive knowledge,
 
negligent misrepresentation or
omission or a similar theory).
“FSIS” has the meaning set forth in Section
“FTC” means the Federal Trade Commission.
“FTCA” has the meaning set forth in Section
“GAAP” means generally
 
accepted accounting principles
 
in effect from
 
time to time
 
in the United
States of America.
 
 
 
 
 
 
 
 
 
 
10
“Governmental Authority”
 
means any international
 
organization or agency,
 
any U.S. and
 
non-U.S.
national, federal, state, county, city,
 
local, municipal and any other
 
political subdivision or government, any
governmental, regulatory or
 
quasi-governmental authority of
 
any nature (including
 
any agency, department,
commission,
 
board,
 
branch,
 
self-regulatory
 
organization,
 
court,
 
official,
 
entity,
 
arbitrator,
 
bureau
 
or
instrumentality)
 
and
 
any
 
body
 
exercising,
 
or
 
entitled
 
to
 
exercise
 
any
 
administrative,
 
executive,
 
judicial,
legislative, police, regulatory or Tax authority or power of any nature.
“Hazardous Material”
 
means any substance,
 
material or waste
 
that is listed,
 
classified or regulated
as
 
hazardous
 
or
 
toxic
 
or
 
as
 
a
 
pollutant
 
or
 
contaminant
 
pursuant
 
to
 
any
 
Environmental
 
Law,
 
or
 
that
 
is
otherwise
 
regulated
 
by
 
or
 
for
 
which
 
liability
 
or
 
standards
 
of
 
care
 
may
 
be
 
imposed
 
under
 
Environmental
Laws,
 
including
 
petroleum
 
or
 
petroleum
 
products,
 
radioactive
 
materials,
 
asbestos
 
or
 
asbestos-containing
material, lead or
 
lead-containing materials, urea
 
formaldehyde foam insulation,
 
polychlorinated biphenyls
and per- and polyfluoroalkyl substances.
“HSR Act” means the Hart-Scott-Rodino
 
Antitrust Improvements Act of 1976.
“Huntington” has the meaning set forth in the Preamble.
“Huntington 435” has the meaning set forth in the Preamble.
“Huntington 435 Equity Interests” has the meaning set forth in the Recitals.
“Improvements” has the meaning set forth in Section
“Inactive Company Group Employee” has the meaning set forth in Section
“Income Tax”
 
means the
 
United States
 
federal income
 
Tax and
 
any United
 
States state
 
or local
 
or
non-U.S. net
 
income Tax or
 
any franchise
 
or business
 
profits Tax
 
incurred in
 
lieu of
 
a Tax
 
on net
 
income
(but
 
excluding,
 
for
 
the
 
avoidance
 
of
 
doubt,
 
any
 
sales,
 
use,
 
real
 
or
 
personal
 
property,
 
transfer
 
or
 
similar
Taxes).
“Indebtedness” means, with respect
 
to the Company Group
 
(but calculated separately based
 
on the
subtotals and Purchase Price allocations
 
for each Transferor
 
Group), at any date, without
 
duplication, (a) all
obligations
 
of
 
the
 
Company
 
Group
 
for
 
borrowed
 
money
 
(or
 
issued
 
in
 
substitution
 
for
 
or
 
exchange
 
of
indebtedness
 
for
 
borrowed money),
 
whether
 
short-term
 
or long-term,
 
and whether
 
secured
 
or unsecured,
(b) all obligations of the Company Group
 
evidenced by bonds, debentures, notes or
 
similar instruments and
all reimbursement obligations of the Company
 
Group under or pursuant to letters
 
of credit or other similar
instruments
 
or
 
arrangements
 
by
 
which
 
the
 
Company
 
Group
 
assures
 
a
 
creditor
 
against
 
loss,
 
in
 
each
 
case,
solely
 
to
 
the
 
extent
 
drawn,
 
(c) all
 
obligations
 
of
 
the
 
Company
 
Group
 
upon
 
which
 
interest
 
charges
 
are
customarily paid (other
 
than any Taxes or
 
any trade payables
 
incurred in the
 
ordinary course of
 
business),
(d) all obligations of the Company Group under conditional sale or other title retention agreements relating
to property or assets purchased
 
by the Company Group, (e) all
 
guarantees, whether direct or indirect,
 
by the
Company Group of Indebtedness of others
 
or Indebtedness of any other Person
 
secured by any assets of the
Company Group, (f) all Capital Lease
 
Obligations of the Company Group,
 
(g) any “applicable employment
taxes” (as defined
 
in Section 2302(d)(1) of
 
the CARES Act) that
 
the Company Group
 
has elected to
 
defer
in
 
respect
 
of a
 
Pre-Closing Tax
 
Period
 
pursuant
 
to
 
Section 2302
 
of
 
the
 
CARES Act,
 
in
 
each
 
case,
 
to
 
the
extent not subsequently paid prior to the Closing; (h) all obligations in respect of (i) non-qualified deferred
compensation, post-retirement welfare benefits and/or
 
pensions under any Employee Plan, in
 
each case, to
the
 
extent
 
unfunded
 
or
 
underfunded,
 
(ii) accrued
 
deferred
 
compensation
 
and
 
gain
 
and
 
profit
 
sharing
obligations,
 
(iii) accrued
 
severance
 
expense
 
or
 
similar
 
accrued
 
exit
 
payments
 
or
 
termination
 
indemnities
payable
 
to
 
any
 
current
 
or
 
former
 
employee,
 
director,
 
officer
 
or
 
independent
 
contractor
 
of
 
the
 
Company
Group (but excluding for clarity, any such expenses, payments and indemnities that can be triggered solely
 
 
 
 
 
 
 
 
11
due to an
 
involuntary termination
 
or constructive termination
 
(e.g., good reason
 
event) of
 
employment by
Buyer,
 
or
 
any
 
member
 
of
 
the
 
Company
 
Group
 
after
 
Closing),
 
(i) the
 
employer-side
 
employment
 
Taxes,
social or national insurance contributions or similar obligations payable with respect to the items described
in the foregoing clause (h), (j) any
 
dividends or distributions payable by
 
the Company Group on
 
or after the
Calculation Time
 
to
 
any
 
pre-Closing
 
holder
 
of
 
Equity
 
Interests,
 
(k) any
 
payables
 
between
 
the
 
Company
Group, on
 
the one
 
hand, and
 
any Seller
 
or any Affiliate of
 
any Seller,
 
on the
 
other hand
 
(to the
 
extent not
included in
 
Company Group
 
Expenses); (l) all
 
obligations of
 
the Company
 
Group for
 
accrued but
 
unpaid
interest, unpaid prepayment
 
or redemption penalties,
 
overdrafts, premiums or
 
payments and unpaid
 
fees and
expenses that are payable in
 
connection with retirement or prepayment
 
of any of the foregoing
 
obligations
as if
 
such obligations
 
were repaid
 
at the
 
Closing, (m) all
 
outstanding legal
 
expense obligations
 
related to
litigation settled on or prior to Closing, including
 
obligations related to unpaid legal settlements and
 
unpaid
legal fees, in each case, whether or not accrued, (n) all accounts receivable credit balances of the Company
Group, (o) all remaining obligations related to fiscal year 2024 audit fees, (p) all obligations under forward
currency
 
exchanges,
 
interest
 
rate
 
protection
 
agreements,
 
swap
 
agreements
 
and
 
hedging
 
arrangements,
 
in
each
 
case,
 
at
 
the
 
value
 
due
 
assuming
 
the
 
obligation
 
is
 
terminated
 
or
 
settled
 
at
 
the
 
Closing,
 
and
 
(q) all
obligations
 
of
 
any
 
deferred
 
or
 
unpaid
 
purchase
 
price
 
of
 
property,
 
business,
 
asset,
 
equipment,
 
service,
purchase price
 
settlement or
 
adjustment obligations,
 
and contingency
 
payments (other
 
than accounts
 
payable
included
 
in
 
the
 
calculation
 
of
 
Working
 
Capital),
 
in
 
each
 
case,
 
to
 
the
 
maximum
 
amount
 
payable.
 
Indebtedness shall not include (1) any amounts reflected in Working Capital or Company Group Expenses,
(2) any amounts available under
 
any debt instrument to
 
the extent undrawn or
 
uncalled, (3) trade payables
incurred in
 
the ordinary
 
course of
 
business, (4) any
 
amounts reflected
 
in the
 
Tax Liability
 
Amount, or
 
(5) any
payables or indebtedness between a member of the Company Group, on
 
the one hand, and another member
of the Company Group, on the other hand.
“Indemnification Escrow
 
Account” means
 
a bank
 
account designated
 
in writing
 
by the
 
Escrow
 
Agent
for the purpose of holding and administering the Indemnification Escrow Amount.
“Indemnification
 
Escrow
 
Amount”
 
means
 
an
 
amount
 
equal
 
to
 
$5,000,000,
 
as
 
established
 
in
accordance with Section
, together with any
 
interest or other earnings
 
accrued thereon while held
in the
 
Indemnification Escrow Account;
 
provided, however,
 
that a
 
portion of
 
the Indemnification
 
Escrow
Amount may be released
 
on the terms and
 
subject to the conditions
 
set forth in accordance
 
with Section
“Indemnified Taxes” means, without
 
duplication, any of
 
the following:
 
(a) all Taxes of any
 
Seller,
Securityholder or their respective
 
Affiliates imposed on any member of the Company Group,
 
including any
Taxes
 
of
 
any
 
Seller,
 
Securityholder
 
or
 
their
 
respective
 
Affiliates
 
resulting
 
from
 
the
 
Pre-Closing
Restructuring;
 
(b) all Taxes
 
imposed
 
on
 
any
 
member
 
of
 
the Company
 
Group
 
that
 
are
 
incurred
 
for
 
a
 
Pre-
Closing Tax Period; (c) all Taxes for which any member
 
of the Company Group is held liable
 
by reason of
being included
 
in any
 
“affiliated group”
 
(as defined
 
in Section 1504(a)
 
of the
 
Code without
 
regard to
 
the
limitations contained in Section 1504(b) of the Code) or any other group of corporations filing
 
Tax Returns
on a
 
combined, consolidated,
 
unitary or
 
similar basis
 
that, at
 
any time
 
on or
 
before the
 
Closing Date,
 
includes
or has included any member of the Company Group or any direct or
 
indirect predecessor of any member of
the Company Group;
 
(d) all Taxes
 
of any Person
 
(other than the
 
members of the
 
Company Group) for
 
which
any member of the
 
Company Group is liable
 
as a transferee or
 
successor, by contract, or
 
otherwise, which
Taxes are
 
attributable to
 
an event
 
or transaction
 
occurring
 
prior to
 
the Closing,
 
(e) all Transfer
 
Taxes for
which Sellers
 
are
 
liable pursuant
 
to Section
, and
 
(f) all Taxes
 
attributable to
 
Echo Lake
 
Foods not
qualifying as an
 
“S corporation” for purposes
 
of Subchapter S of
 
the Code and
 
Huntington and Xenitel each
not qualifying as a “qualified subchapter S subsidiary” as defined under Section 1361(b)(3)(B) of the Code
(and, in each case, as of the respective
 
Qualification Dates set forth in Section
; provided, however,
that “Indemnified Taxes”
 
shall not include any
 
Taxes included as a
 
liability for purposes of
 
determining Tax
Liability Amount,
 
Working
 
Capital,
 
Company
 
Group
 
Expenses,
 
or
 
Indebtedness,
 
in
 
each
 
case,
 
as
 
finally
determined under this Agreement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12
“Independent Accountant”
 
means
 
Grant
 
Thornton;
 
provided,
 
however,
 
that
 
if
 
Grant
 
Thornton
 
is
unable
 
or
 
unwilling
 
to
 
accept
 
such
 
engagement,
 
then
 
the
 
Independent Accountant
 
will
 
be
 
a
 
nationally
recognized
 
independent accounting,
 
financial
 
advisory
 
or boutique
 
specialty firm
 
with an
 
active practice
area
 
focused
 
on
 
post-mergers
 
and
 
acquisitions
 
purchase
 
price
 
dispute
 
resolution
 
that
 
is
 
reasonably
acceptable to both the Sellers and Buyer.
“Intellectual Property” means all
 
Patents, Copyrights, Marks and Trade Secrets,
 
including the right
to
 
sue
 
or
 
otherwise
 
recover
 
for
 
any
 
and
 
all
 
past,
 
present
 
and
 
future
 
infringements
 
and
 
misappropriations
thereof.
“Intellectual Property
 
Licenses” means
 
(a) licenses or
 
sublicenses of
 
Intellectual Property
 
granted
by any member
 
of the Company
 
Group to any
 
third party (excluding non-exclusive
 
licenses and sublicenses
of
 
Intellectual
 
Property
 
entered
 
into
 
in
 
the
 
ordinary
 
course
 
of
 
business);
 
(b) licenses
 
or
 
sublicenses
 
of
Intellectual Property or
 
Software granted by
 
any third party
 
to any member
 
of the Company
 
Group (other
than
 
licenses
 
for
 
Off-the-Shelf
 
Software
 
and
 
Open
 
Source
 
Licenses)
 
and
 
(c) trademark
 
co-existence
 
or
consent agreements.
“Intended Tax Treatment” has the meaning set forth in Section
“IRS” means the Internal Revenue Service.
“Key Customers” has the meaning set forth in Section
“Key Suppliers” has the meaning set forth in Section
“Knowledge” and any derivations thereof
 
means, the actual knowledge, after
 
reasonable inquiry of
those employees reporting directly
 
to such Persons who
 
would reasonably be expected
 
to have knowledge
of the fact, event or circumstance in
 
question that is in their area of
 
responsibility of (a) with respect to the
Company
 
Group
 
or
 
any
 
Transferor,
 
the
 
individuals
 
identified
 
on
 
Schedule
3(a);
 
(b) with
 
respect
 
to
Buyer, the
 
individuals identified
 
on Schedule
3(b); and
 
(c) with respect
 
to any
 
Voting Securityholder,
such Voting Securityholder.
“Law” means any
 
U.S. federal,
 
state, county, city
 
and any non-U.S.
 
or other government
 
statute, law,
regulation, rule, Order, ordinance, principle
 
of common law or
 
code and any permit or
 
license granted by or
under the authority of any of the foregoing.
“Leased Real
 
Property” means
 
the real
 
property that
 
is leased,
 
subleased, licensed
 
or occupied
 
by
any member of the Company Group from another Person.
“Lien”
 
means
 
with
 
respect
 
to
 
any
 
property
 
or
 
asset,
 
any
 
mortgage,
 
deed
 
of
 
trust,
 
lien,
 
pledge,
hypothecation, assignment,
 
license, charge,
 
easement, encumbrance
 
or security
 
interest in
 
respect of
 
such
property or asset.
“Losses” means,
 
without duplication,
 
losses, damages,
 
claims, reasonable
 
and documented
 
costs and
expenses, interest,
 
awards, judgments
 
and penalties
 
(including reasonable
 
and documented
 
attorneys’ and
consultants’ fees
 
and
 
expenses
 
and
 
other
 
reasonable
 
costs
 
of
 
defending,
 
investigating
 
or
 
settling
 
claims)
suffered or incurred by an indemnified party.
“Marks”
 
means all
 
trademarks, service
 
marks,
 
trade dress,
 
trade names,
 
logos,
 
slogans, corporate
names, fictitious
 
and other
 
business names
 
used in
 
connection with
 
the conduct
 
of an
 
entity’s business
 
to
identify any
 
product, service,
 
business or
 
company, and
 
registrations and
 
applications for
 
registration and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13
any renewals or extensions thereof, together in each
 
case with the goodwill of the business connected
 
with
the use of or symbolized by each of the foregoing.
“Material
 
Adverse
 
Effect”
 
means
 
any
 
change,
 
event,
 
circumstance,
 
occurrence,
 
state
 
of
 
facts,
development or
 
effect that,
 
individually or
 
in the
 
aggregate, (a) has,
 
or could
 
reasonably be
 
expected to
 
have,
a material adverse effect
 
on the business, assets,
 
results of operations or
 
financial condition of the
 
Company
Group, taken as
 
a whole or
 
(b) prevents or materially
 
impairs, or could
 
reasonably be expected
 
to prevent
or
 
materially
 
impair,
 
the
 
consummation
 
of
 
the
 
Transactions;
 
provided,
 
however,
 
that,
 
with
 
respect
 
to
clause (a),
 
changes,
 
events,
 
circumstances,
 
occurrences,
 
facts,
 
developments
 
or
 
effects
 
relating
 
to
 
the
following shall
 
not be
 
taken into
 
account in
 
determining whether
 
a Material Adverse Effect
 
has occurred:
 
(i) changes
 
in economic,
 
financial,
 
regulatory
 
or political
 
conditions
 
or events
 
or the
 
financing,
 
banking,
currency or
 
capital markets;
 
(ii) changes after
 
the date
 
hereof in
 
Laws or
 
Orders or
 
interpretations thereof
or
 
changes
 
after
 
the
 
date
 
hereof
 
in
 
accounting
 
rules
 
(including
 
GAAP)
 
or
 
any
 
interpretation
 
thereof;
(iii) changes affecting generally
 
any of the industries
 
(or segments thereof),
 
markets or geographical
 
areas
in
 
which
 
the
 
Company
 
Group
 
conducts
 
the
 
Business;
 
(iv) any
 
disaster,
 
calamity,
 
epidemic,
 
pandemic,
weather
 
condition,
 
military
 
action,
 
armed
 
hostilities
 
or
 
war
 
(regardless
 
of
 
whether
 
declared)
 
or
 
any
escalation or worsening thereof,
 
regardless of whether occurring
 
or commenced before or
 
after the date of
this Agreement; (v) any national or international political, labor or social conditions, (vi) any failure by the
Company Group to meet
 
any projections, forecasts, estimates
 
or financial analyses (provided,
 
however, that
the underlying cause
 
or causes of
 
such failure may
 
constitute a Material Adverse Effect);
 
(vii) any actions
taken or omitted
 
to be taken
 
by, with the
 
express written consent
 
of, or at
 
the express request
 
of, Buyer or
any of
 
its Affiliates (other than
 
compliance with Section
; or
 
(viii) the negotiation
 
or execution
 
of this
Agreement of
 
the announcement
 
or existence
 
thereof, the
 
identity of
 
Buyer or
 
its
 
Affiliates or
 
the compliance
by any Person with any term of any agreement,
 
certificate or document in connection with the
 
Transactions
(including,
 
in
 
each
 
case,
 
the
 
impact
 
thereof
 
on
 
relationships,
 
contractual
 
or
 
otherwise,
 
with,
 
or
 
actual
 
or
potential
 
loss
 
or
 
impairment
 
of,
 
customers,
 
suppliers,
 
vendors,
 
partners,
 
employees
 
or
 
Governmental
Authorities); provided, however,
 
that, in the
 
case of the
 
foregoing clauses (i), (ii),
 
(iii), (iv) and
 
(v), any such
change,
 
event,
 
circumstance,
 
occurrence,
 
state
 
of
 
facts,
 
development
 
or
 
effect
 
shall
 
not
 
be
 
deemed
 
to
 
be
excluded solely to the extent it
 
has a materially disproportionate adverse effect
 
on the results of operations
or
 
financial
 
condition
 
of
 
the
 
Company
 
Group,
 
taken
 
as
 
a
 
whole,
 
as
 
compared
 
to
 
other
 
Persons
 
similarly
situated in
 
the same
 
industry.
 
For the
 
avoidance of
 
doubt, a
 
“Material Adverse Effect”
 
will be
 
measured
against
 
only
 
past
 
performance
 
of
 
the
 
Company
 
Group
 
and
 
not
 
against
 
any
 
forward-looking
 
statements,
projections or forecasts of the Company Group or any other Person.
“Material Contracts” has the meaning set forth in Section
“Maximum Premium” has the meaning set forth in Section
“Nonparty Affiliates” has the meaning set forth in Section
“Objection Notice” has the meaning set forth in Section
“Off-the-Shelf
 
Software”
 
means
 
non-exclusive
 
licenses
 
for
 
software
 
that
 
is
 
(a) licensed
 
under
“shrink-wrap”
 
or
 
“click-through”
 
contracts
 
or
 
agreements;
 
(b) generally
 
commercially
 
available;
 
and
(c) licensed for a fee of no more than $100,000 per year.
“Open Source License”
 
means non-exclusive licenses
 
for software
 
that (a) licenses software
 
or other
material as “free software” or
 
“open source software” or (b) is,
 
or is substantially similar to,
 
a license now
or in
 
the future
 
approved by
 
the Open
 
Source Initiative
 
and listed
 
at http://www.opensource.org/licenses,
which
 
licenses
 
include
 
all
 
versions
 
of
 
the
 
GNU
 
GPL,
 
the
 
GNU
 
LGPL,
 
the
 
GNU Affero
 
GPL,
 
the
 
MIT
license, the
 
Eclipse Public
 
License, the
 
Common Public
 
License, the
 
CDDL, the
 
Mozilla Public
 
License,
the Academic Free License, the BSD license and the
 
Apache License.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14
“Order”
 
means
 
any
 
judgment,
 
injunction,
 
order,
 
ruling,
 
award,
 
writ
 
or
 
decree
 
that
 
is
 
issued
 
by
 
a
Governmental Authority.
“Organizational Documents”
 
means any
 
charter, certificate
 
of incorporation,
 
certificate of
 
formation,
articles
 
of
 
association,
 
bylaws,
 
limited
 
liability
 
company
 
agreement,
 
operating
 
agreement,
 
partnership
agreement
 
or
 
similar
 
formation
 
or
 
governing
 
documents
 
and
 
instruments
 
of
 
(a) each
 
member
 
of
 
the
Company Group and (b) the respective Transferors thereof.
“Other Indemnitors” has the meaning set forth in Section
“Outside Date” has the meaning set forth in Section
“Owned
 
Real
 
Property”
 
means
 
all
 
real
 
property
 
that
 
is
 
owned
 
by
 
any
 
member
 
of
 
the
 
Company
Group.
“Party” or “Parties” has the meaning set forth in the Preamble.
“Passthrough Return” has the meaning set forth in Section
“Patents” means all patents and patent
 
applications of any kind, including design
 
patents and design
registrations,
 
utility
 
models,
 
gebrauchsmuster,
 
patentable
 
inventions
 
and
 
invention
 
disclosures
 
and
 
all
reissues,
 
divisionals,
 
continuations,
 
continuations-in-part,
 
provisionals,
 
reexaminations,
 
substitutes
 
and
extensions of any of the foregoing.
“PCI DSS” has the meaning set forth in Section
“Permits” has the meaning set forth in Section
“Permitted Equity Interest Encumbrances” means Liens arising pursuant to applicable federal, state
and provincial
 
securities Laws,
 
Liens arising
 
as a
 
result of
 
actions taken
 
by Buyer
 
or any
 
of its Affiliates,
and Liens imposed by the Organizational Documents.
“Permitted Liens”
 
means
 
(a) Liens
 
for
 
utilities, Taxes,
 
assessments
 
or other
 
similar governmental
charges that
 
are not
 
delinquent, that
 
may hereafter
 
be paid
 
without penalty,
 
or that
 
are being
 
contested in
good
 
faith
 
by
 
appropriate
 
proceedings
 
and
 
for
 
which
 
appropriate
 
reserves
 
have
 
been
 
established
 
in
accordance
 
with
 
GAAP,
 
(b) any
 
construction,
 
mechanics’,
 
carriers’,
 
workmen’s,
 
repairmen’s,
materialmen’s,
 
warehousemen’s
 
and
 
other
 
similar
 
Liens
 
arising
 
or
 
incurred
 
in
 
the
 
ordinary
 
course
 
of
business, (c) non-exclusive licenses of Intellectual Property entered into in the ordinary course of business,
(d) Liens under the Existing Credit Facility, to the extent
 
paid off in full at the Closing, (e) Liens arising
 
in
the ordinary
 
course of
 
business that are
 
immaterial, individually
 
or in
 
the aggregate,
 
(f) Liens reflected
 
or
reserved against or otherwise disclosed on the balance sheets included
 
in the Financial Statements or notes
thereto
 
or securing
 
liabilities reflected
 
in such
 
balance sheets
 
or notes
 
thereto;
 
(g) Liens arising
 
under or
created by this Agreement or any of the Ancillary Agreements; (h) zoning, entitlement, building codes and
other land
 
use Laws
 
regulating the
 
use or
 
occupancy of
 
real property
 
or the
 
activities conducted
 
thereon;
(i) Liens arising under workmen’s
 
compensation, unemployment insurance, social
 
security, retirement and
similar Laws; (j) pledges and deposits to secure the performance
 
of bids, trade Contracts, leases, surety and
appeal
 
bonds,
 
performance
 
bonds
 
and
 
other
 
obligations
 
of
 
a
 
similar
 
nature,
 
in
 
each
 
case
 
in
 
the
 
ordinary
course of business; and (k) Liens listed on Schedule
4.
“Person”
 
means
 
an
 
individual,
 
a
 
corporation,
 
a
 
partnership,
 
a
 
limited
 
liability
 
company,
 
an
association, a trust, a joint
 
stock company, a joint venture, an
 
unincorporated organization, a business entity
or any Governmental Authority.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15
“Personal
 
Data”
 
means
 
any
 
information
 
defined
 
as
 
“personal
 
data,”
 
“personally
 
identifiable
information,”
 
“individually
 
identifiable
 
health
 
information,”
 
or
 
“personal
 
information”
 
or
 
similar
 
or
comparable term under any Privacy Law.
“Pre-Closing Covenant” has the meaning set forth in Section
“Pre-Closing Restructuring” has the meaning set forth in Section
“Pre-Closing Tax Period”
 
means (a) for
 
purposes of Income
 
Taxes, any Tax
 
period that
 
ends on or
before the Closing Date,
 
and with respect to
 
any Straddle Period, the
 
portion of such Straddle
 
Period ending
on and including the Closing Date,
 
and (b) for purposes of non-Income Taxes, any Tax period that
 
ends on
or before the Calculation Time, and
 
with respect to any Straddle Period, the
 
portion of such Straddle Period
ending on the Calculation Time.
“Privacy Laws”
 
means all
 
Laws relating
 
to the
 
protection or
 
Processing of
 
Personal Data
 
that are
applicable to the Company Group.
“Pro Rata
 
Share” means,
 
with respect
 
to each
 
Transferor, the
 
applicable percentage
 
as set
 
forth in
the Closing Statement of any additional payments or
 
liabilities to which such Transferor is
 
entitled or liable
pursuant to this Agreement following the Closing Date.
“Proceedings” has the meaning set forth in Section
“Processing” means
 
any operation
 
performed on
 
Personal Data,
 
including the
 
collection, creation,
receipt,
 
access,
 
use,
 
handling,
 
compilation,
 
analysis,
 
monitoring,
 
maintenance,
 
retention,
 
storage,
transmission, transfer, protection, disclosure, distribution or disposal of Personal Data.
“Property Taxes” has the meaning set forth in Section
“Proposed Allocation” has the meaning set forth in Section
“PTE Election” means any
 
election under applicable state
 
or local Income
 
Tax Law made by
 
or with
respect to any member of the Company Group pursuant to
 
which such member of the Company Group will
incur or
 
otherwise be
 
liable for any
 
state or
 
local Income Tax
 
liability under applicable
 
state or local
 
Law
that would have been borne (in whole or in part) by the direct or indirect equity owners
 
of such member of
the Company
 
Group had
 
no such
 
election been
 
made (including
 
any “Specified
 
Income Tax Payment”
 
as
defined in IRS Notice 2020-75).
“Purchase Price” means an amount equal to $258,080,663.
“Purchased Equity Interests” has the meaning set forth in the Recitals.
“QSub Election” has the meaning set forth in Section
“Qualification Dates” has the meaning set forth in Section
“Qualifying Order” has the meaning set forth in Section
“R&W Insurance Policy”
 
means any
 
Buyer-Side Representations
 
and Warranties Insurance
 
Policy
obtained by Buyer, a copy of which is attached hereto as Schedule C.
“Registered Intellectual Property” has the meaning set forth in Section
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16
“Reinhart” has the meaning set forth in Section
“Related Parties” has the meaning set forth in Section
“Release”
 
means
 
any
 
release,
 
spill,
 
emission,
 
leaking,
 
pumping,
 
pouring,
 
emptying,
 
escape,
injection,
 
deposit,
 
disposal, discharge,
 
dispersal, dumping,
 
leaching
 
or migration
 
of Hazardous
 
Materials
into or through
 
the indoor or
 
outdoor environment or
 
into or out
 
of any property,
 
including the movement
of Hazardous Materials through or in the air, soil, sediment, surface water or groundwater.
“Restricted Party” has the meaning set forth in Section
“Restricted Territory” has the meaning set forth in Section
“Sanctioned Country” means
 
a country that
 
is, at the
 
then-relevant time, the
 
target of comprehensive
territory-based applicable
 
Sanctions (which,
 
as of
 
the date
 
of this
 
Agreement, includes
 
the so-called
 
People’s
Republic of Luhansk, and
 
the so-called People’s Republic
 
of Donetsk, and the
 
Crimea regions of Ukraine,
Cuba, Iran, North Korea and Syria).
“Sanctions”
 
means
 
economic
 
or
 
financial
 
sanctions or
 
trade
 
embargoes
 
imposed,
 
administered
 
or
enforced from
 
time to
 
time by
 
(a) the U.S.
 
government, including
 
those administered
 
by OFAC,
 
the U.S.
Department of State,
 
the USDA
 
and the FDA,
 
(b) the United Nations
 
Security Council,
 
the European Union,
any
 
European
 
Union
 
member
 
state
 
or
 
Her
 
Majesty’s
 
Treasury
 
of
 
the
 
United
 
Kingdom,
 
or
 
(c) any
 
other
applicable economic or
 
financial sanctions or
 
trade embargoes imposed,
 
administered, or enforced
 
by any
other country, except to the extent inconsistent with U.S. Law.
“Schedule”
 
means
 
any
 
disclosure
 
schedule
 
delivered
 
in
 
connection
 
with
 
the
 
execution
 
of
 
this
Agreement.
“Securities Act” has the meaning set forth in Section
“Security Incident” has the meaning set forth in Section
“Securityholders”
 
means
 
the
 
holders,
 
collectively,
 
of
 
100%
 
of
 
the
 
issued
 
and
 
outstanding
 
Equity
Interests of Echo Lake Foods, Echo Lake Properties, ELT and Elkin Properties.
“Seller Returns” has the meaning set forth in Section
“Seller Tax Claim” has the meaning set forth in Section
“Sellers” has the meaning set forth in the Preamble.
“Sellers’ Representative” has the meaning set forth in Section
“Software”
 
means
 
computer
 
software
 
programs,
 
including
 
tool
 
sets,
 
compilers,
 
higher
 
level
“proprietary” languages and related documentation, whether
 
in source code, object code or
 
human readable
form; provided, however, that Software does not include Off-the-Shelf Software.
“Specified Liabilities” has the meaning set forth in Section
“Specified
 
Tax
 
Refund”
 
means
 
the
 
Kentucky
 
sales
 
and
 
use
 
Tax
 
refund
 
receivable
 
by
 
Echo
 
Lake
Foods with
 
respect
 
to the
 
2018 through
 
2021 Tax
 
period
 
in an
 
estimated amount
 
equal to
 
approximately
$900,000.
 
 
 
 
 
 
 
 
 
 
 
 
 
17
“Statement Date” has the meaning set forth in Section
“Straddle Period”
 
means (a) for
 
purposes of
 
Income Taxes, any
 
Tax period
 
that includes
 
(but does
not end on) the Closing
 
Date, and (b) for purposes of non-Income Taxes,
 
any Tax period that includes (but
does not end on) the Calculation Time.
“Submission” has the meaning set forth in Section
“Submission Deadline” has the meaning set forth in Section
“Subsidiary”
 
means,
 
with
 
respect
 
to
 
a
 
specified
 
entity,
 
(a) in
 
the
 
case
 
of
 
a
 
corporation
 
or
 
limited
liability company,
 
25% or
 
more of
 
the capital
 
stock or
 
membership interests,
 
as applicable, the
 
holders of
which are regularly entitled to vote for the election of directors or
 
managers, is owned directly or indirectly
by such entity, or (b) in the case of a trust, partnership or other entity, a trust, partnership or entity of which
such specified entity owns directly or indirectly 25% or more of the beneficial interest or equity.
“Target Working Capital” means an amount equal to $36,000,000.
“Tax Claim” has the meaning set forth in Section
“Tax Liability Amount”
 
means with
 
respect to
 
the Company
 
Group (but
 
calculated separately
 
for
each
 
Transferor
 
Group),
 
without
 
duplication
 
and
 
determined
 
as
 
of
 
the
 
Closing
 
Date,
 
the
 
amount
 
of
 
any
unpaid Income Taxes
 
of any member
 
of the
 
Company Group itself
 
(whether or not
 
then due) for
 
any Pre-
Closing Tax Period
 
and solely to
 
the extent such
 
unpaid Income
 
Taxes relate to
 
Tax Returns of
 
the Company
Group that have not
 
yet come due and
 
been filed as of
 
the Closing Date or
 
a Tax Return
 
with respect to such
Income Taxes has been filed but the amount shown as due thereon has not been
 
paid as of the Closing Date
(which amount shall not be an amount less than zero in any jurisdiction or in the aggregate), which amount
shall
 
be
 
calculated:
 
(i) by
 
calculating
 
any
 
Income
 
Taxes
 
for
 
Straddle
 
Periods
 
in
 
accordance
 
with
Section
 
herein;
 
(ii) by
 
including
 
any
 
Income Taxes
 
incurred
 
as
 
a
 
result
 
of
 
a
 
PTE
 
Election;
 
(iii) by
treating any agreed or required
 
adjustments initiated prior to Closing
 
in respect of a Tax period
 
(or portion
thereof) ending after
 
the Closing Date
 
pursuant to Section 481
 
of the Code
 
(or any similar
 
provision of state,
local
 
or
 
non-U.S. Law)
 
for
 
any
 
Pre-Closing Tax
 
Period
 
as
 
having
 
occurred in
 
a
 
Pre-Closing Tax
 
Period;
(iv) by using the Company Group’s past practices to the extent permitted by applicable Law under a “more
likely
 
than
 
not”
 
(or
 
higher)
 
level
 
of
 
authority;
 
(v) by
 
taking
 
into
 
account
 
any
 
applicable
 
prepayments
 
or
estimated payments of Income Taxes by the Company
 
Group on or before the Closing Date;
 
(vi) by taking
into
 
account
 
any
 
Transaction
 
Tax
 
Deductions
 
to
 
the
 
extent
 
deductible
 
by
 
the
 
applicable
 
member
 
of
 
the
Company Group under
 
applicable Law under
 
a “more likely
 
than not” (or
 
higher) level of
 
authority to the
extent they will actually reduce the relevant unpaid Income Tax liability as a matter of applicable Law; and
(vii) by
 
excluding
 
all
 
deferred
 
Tax
 
liabilities
 
and
 
deferred
 
Tax
 
assets;
 
provided,
 
however,
 
that
 
the
 
Tax
Liability Amount shall
 
not include
 
any Taxes
 
included as
 
a liability
 
for purposes
 
of determining Working
Capital,
 
Company
 
Group
 
Expenses,
 
or
 
Indebtedness,
 
in
 
each
 
case,
 
as
 
finally
 
determined
 
under
 
this
Agreement.
“Tax Refund” has the meaning set forth in Section
“Tax Return” means
 
any report, statement,
 
form, return, election,
 
schedule, claim for
 
refund or other
document
 
or
 
information
 
relating
 
to
 
Taxes
 
or
 
required
 
to
 
be
 
supplied
 
to
 
a
 
Governmental
 
Authority
 
in
connection with Taxes, including any amendment or supplement thereto.
“Taxes” means
 
any and
 
all U.S.
 
federal, state,
 
local or
 
non-U.S. income,
 
franchise, gross
 
receipts,
alternative or add-on
 
minimum, ad valorem,
 
property, sales, use,
 
value added, excise,
 
stamp, withholding,
payroll, employment, unemployment, occupation, license, excise or
 
windfall profit tax or any customs
 
duty
 
 
 
 
 
 
 
 
 
 
 
 
18
and any other tax, levy or other
 
similar assessment by a Governmental
 
Authority or other tax of any kind
 
or
any
 
charge
 
of
 
any
 
kind
 
in
 
the
 
nature
 
of
 
(or
 
similar
 
to)
 
taxes
 
whatsoever
 
imposed
 
by
 
a
 
Governmental
Authority, together with any interest,
 
fine, penalty or other
 
additional amount imposed by
 
a Governmental
Authority with respect thereto.
“Third Party Claim” has the meaning set forth in Section
“Trade Control Laws” means
 
all applicable trade, export
 
control, import and antiboycott
 
Laws and
regulations imposed, administered or enforced by the U.S. government, including the
 
Arms Export Control
Act
 
(22
 
U.S.C. § 1778),
 
the
 
International
 
Emergency
 
Economic
 
Powers Act
 
(50
 
U.S.C. §§ 1701–1706),
Section 999 of the
 
Internal Revenue Code,
 
the U.S. customs
 
laws at Title
 
19 of the
 
U.S. Code, the
 
Export
Control Reform Act
 
of 2018
 
(50 U.S.C. §§ 4801-4861),
 
the International Traffic
 
in Arms Regulations
 
(22
C.F.R. Parts 120–130), the Export Administration Regulations (15 C.F.R. Parts 730-774), the U.S. customs
regulations at 19 C.F.R. Chapter 1 and the Foreign Trade Regulations (15 C.F.R. Part 30).
“Trade
 
Secrets”
 
means
 
all
 
trade
 
secrets,
 
know-how
 
and
 
confidential
 
or
 
proprietary
 
information,
including ideas, research in progress, algorithms, data, designs, processes, formulae, drawings, schematics,
blueprints, flow charts,
 
models, strategies, prototypes,
 
customer lists, supplier
 
lists, mailing lists,
 
business
plans and techniques that derive independent economic value, actual or potential, from not
 
being generally
known or
 
readily ascertainable
 
by others,
 
including all
 
rights to
 
limit the
 
use or
 
disclosure thereof
 
by any
Person.
“Transaction Tax
 
Deduction”
 
means all
 
Tax deductions
 
or losses
 
of any
 
member of
 
the Company
Group resulting
 
from the
 
payment of
 
the following
 
amounts related
 
to the
 
Transactions, without
 
duplication:
 
(a) any Company Group Expenses, or (b) any fees, expenses, interest (including unamortized
 
original issue
discount and other amounts treated as
 
interest for federal Income Tax
 
purposes), prepayment premiums and
penalties
 
paid or
 
payable
 
with
 
respect
 
to
 
the
 
prepayment
 
of
 
debt and
 
the
 
write-off
 
or
 
acceleration
 
of
 
the
amortization of deferred financing
 
costs incurred by any
 
member of the Company
 
Group with respect to
 
the
repayment or termination of Indebtedness.
“Transactions” means
 
the Equity
 
Purchase, the
 
F Reorganization, the
 
ELT Contribution
 
and the
 
other
transactions contemplated hereby and by the Ancillary
 
Agreements.
“Transfer Taxes” has the meaning set forth in Section
“Transferor” means
 
(a) with respect
 
to the
 
Echo Lake
 
Foods Group,
 
Echo Lake
 
Foods Transferor,
(b) with respect to the Echo Lake Properties Group, Echo Lake Properties,
 
and (c) with respect to the Elkin
Properties Group, Elkin Properties.
“Transferor Group”
 
means each
 
of the
 
Echo Lake
 
Foods Group,
 
the Echo
 
Lake Properties
 
Group
and the Elkin Properties Group.
“Transition Services
 
Agreement” means a
 
Transition Services
 
Agreement to be
 
entered into between
the Excluded Companies and
 
the Company Group to
 
provide certain transition services
 
to and/or from the
Company Group in a form mutually acceptable to Buyer and the Sellers’ Representative.
“Unaudited Financial Statements” has the meaning set forth in Section
“USDA” means the United States Department of Agriculture.
“Voting Securityholders” has the meaning set forth in the Preamble.
 
 
 
 
 
 
 
 
 
 
 
 
19
“WARN Act” means
 
the federal
 
Worker Adjustment and
 
Retraining Notification Act
 
of 1988,
 
and
similar applicable Laws related to plant closings, relocations, mass layoffs and employment losses.
“Working Capital” means,
 
with respect to
 
the Company Group
 
(but calculated separately
 
based on
the subtotals for each
 
Transferor Group), (a) the
 
current assets of
 
the Company Group,
minus
 
(b) the current
liabilities of the Company
 
Group, in each case,
 
calculated as of the
 
Calculation Time in
 
accordance with the
Accounting Principles, as
 
set forth in
 
Exhibit A; provided, however,
 
that Working Capital will
 
not include
(i) Cash,
 
(ii) Indebtedness,
 
(iii) Company
 
Group
 
Expenses,
 
(iv) the
 
Tax
 
Liability
 
Amount,
 
but
 
for
 
the
avoidance of
 
doubt, will
 
include any
 
sales, use,
 
real or
 
personal property,
 
payroll Taxes or
 
any other
 
non-
Income
 
Taxes
 
of
 
the
 
Company
 
Group,
 
(v) any
 
deferred
 
Tax
 
assets
 
and
 
liabilities
 
or
 
(vi) any
 
assets
 
or
liabilities to the
 
extent specifically excluded
 
from such calculations
 
as set forth
 
in the
 
Accounting Principles
on Exhibit A;
 
provided further
 
that Working
 
Capital shall
 
include any
 
receivables between
 
the Company
Group, on the one
 
hand, and any Seller
 
or any Affiliate of
 
any Seller, on the other
 
hand, to the extent
 
arising
in the ordinary course
 
of business and settled
 
to an account owned
 
by the Company Group
 
within 30 days
of Closing.
 
Solely for illustrative purposes,
 
set forth on Schedule
 
B-1 is a
 
Reference Balance Sheet as
 
if the
Closing had occurred on the Statement Date.
“Xenitel” has the meaning set forth in the Preamble.
“Yorkville” has the meaning set forth in the Preamble.
“Yorkville Equity Interests” has the meaning set forth in the Recitals.
1.2
Certain Interpretive Matters
.
 
For purposes of this Agreement:
(a)
unless otherwise specified, all references to Sections,
 
Articles, Schedules or Exhibits
are to the Sections, Articles, Schedules or Exhibits of or to this
 
Agreement;
(b)
each term defined in this Agreement has the meaning assigned to it;
(c)
each
 
accounting
 
term
 
not
 
otherwise
 
defined
 
in
 
this
 
Agreement
 
has
 
the
 
meaning
commonly applied to it in accordance with GAAP;
(d)
words in the singular
 
include the plural and
vice versa,
 
unless the context otherwise
expressly requires;
(e)
pronouns
 
in
 
masculine,
 
feminine
 
or
 
neuter
 
genders
 
shall
 
be
 
construed
 
to
 
state
 
and
include any other gender;
(f)
the
 
words
 
“herein,”
 
“hereby,”
 
“hereof,”
 
“hereunder”
 
and
 
other
 
words
 
of
 
similar
import
 
refer
 
to
 
this
 
Agreement
 
as
 
a
 
whole
 
and
 
not
 
to
 
any
 
particular
 
Section,
 
Article
 
or
 
other
subdivision;
(g)
the term “including” means “including, without limitation,”;
(h)
with respect to
 
the Company
 
Group, the
 
term “ordinary
 
course of business”
 
will be
deemed to refer
 
to the conduct
 
of the business
 
of the Company
 
Group in a
 
manner consistent with
the ordinary course of business of the Company Group consistent with past practice;
(i)
all references
 
to “$”
 
or dollar
 
amounts will
 
be to
 
the lawful
 
currency of
 
the United
States;
20
(j)
to
 
the
 
extent
 
the
 
term
 
“day”
 
or
 
“days”
 
is
 
used,
 
it
 
will
 
mean
 
calendar
 
days
 
unless
otherwise specified;
(k)
all references to any federal, state, local or foreign Law shall be deemed
 
to also refer
to all rules and regulations promulgated thereunder, unless the context requires otherwise;
(l)
except
 
as
 
otherwise
 
specifically
 
provided
 
in
 
this
 
Agreement,
 
any
 
statute,
 
rule
 
or
regulation
 
defined
 
or
 
referred
 
to
 
herein
 
means
 
such
 
statute
 
as
 
from
 
time
 
to
 
time
 
amended,
supplemented
 
or
 
modified,
 
including
 
by
 
succession
 
of
 
comparable
 
successor
 
statutes,
 
rules
 
or
regulations, as applicable;
(m)
unless the context
 
otherwise requires, all
 
references to any
 
agreement or instrument
means
 
such
 
agreement
 
or
 
instrument
 
as
 
from
 
time
 
to
 
time
 
amended,
 
modified
 
or
 
supplemented,
including by waiver or consent;
(n)
no provision of this Agreement will be
 
interpreted in favor of,
 
or against, any of
 
the
Parties by
 
reason of
 
the extent
 
to which
 
any such
 
Party
 
or its
 
counsel participated
 
in the
 
drafting
thereof or
 
by reason
 
of the
 
extent to
 
which any
 
such provision
 
is inconsistent
 
with any
 
prior draft
hereof or thereof;
(o)
any document
 
or item
 
will be
 
deemed “delivered,”
 
“provided” or
 
“made available”
within the meaning of this Agreement if such document or item (i) is included
 
in the electronic data
room or
 
(ii) actually delivered
 
or provided
 
to Buyer
 
or any
 
of its
 
representatives, including
 
via email,
in each case, at least one day prior to the date of this Agreement;
(p)
in the computation
 
of periods of
 
time from a
 
specified date to a
 
later specified date,
the word
 
“from” means
 
“from and
 
including” and
 
the words
 
“to” and
 
“until” mean
 
“to but
 
excluding”
and the
 
word “through”
 
means “to
 
and including.”
 
Whenever the
 
last day
 
for the
 
exercise of
 
any
privilege or the discharge of any duty hereunder shall fall upon a day that is not
 
a Business Day, the
Party having such privilege
 
or duty may exercise such
 
privilege or discharge such
 
duty on the next
succeeding day that is a Business Day; and
(q)
The
 
Schedules
 
constitute
 
a
 
part
 
of
 
this Agreement
 
and
 
are
 
incorporated
 
into
 
this
Agreement for all purposes as if fully set forth herein.
 
Any disclosure made in any Schedule to this
Agreement shall
 
be deemed
 
to be
 
disclosures made
 
with respect
 
to all
 
representations, warranties,
covenants
 
and
 
Schedules
 
contained
 
in
 
this
 
Agreement
 
to
 
the
 
extent
 
the
 
applicability
 
thereto
 
is
reasonably
 
apparent
 
from
 
the
 
disclosure.
 
Neither
 
the
 
specification
 
of
 
any
 
dollar
 
amount
 
in
 
any
representation, warranty or
 
covenant contained in
 
this Agreement nor the
 
inclusion of any
 
specific
item in any Schedule is intended to imply that
 
such amount, or higher or lower amounts, or
 
the item
so included or other items, are or are
 
not material.
 
No Party shall use the fact of setting forth
 
of any
such amount or the inclusion
 
of any such item in any
 
dispute or controversy between the
 
Parties as
to whether any
 
obligation, item or
 
matter not described
 
herein or included
 
in any Schedule
 
is or is
not material
 
or could
 
have a
 
Material Adverse Effect
 
for purposes
 
of this Agreement.
 
Neither the
specification
 
of
 
any
 
item
 
or
 
matter
 
in
 
any
 
representation,
 
warranty
 
or
 
covenant
 
contained
 
in
 
this
Agreement nor
 
the inclusion
 
of such
 
specific item
 
in any
 
Schedule is
 
intended to
 
imply that
 
such
item or matter, or other items or matters, are or are not in the ordinary course of business.
 
No Party
shall use the fact of the setting forth or the inclusion of any specific item or matter in any dispute or
controversy between the Parties as to whether any
 
obligation, item or matter not described herein or
included
 
in
 
any
 
Schedule
 
is
 
or
 
is
 
not
 
in
 
the
 
ordinary
 
course
 
of
 
business
 
for
 
purposes
 
of
 
this
Agreement.
 
Matters included in
 
the Schedules are
 
not necessarily limited
 
to matters required
 
by this
Agreement
 
to
 
be
 
included
 
in
 
the
 
Schedules
 
and
 
such
 
matters
 
may
 
be
 
set
 
forth
 
for
 
informational
purposes and do not necessarily include other matters of a similar nature.
 
The information set forth
 
 
 
 
 
21
in this Agreement and
 
the Schedules is
 
disclosed solely for
 
the purposes of
 
this Agreement and no
information set forth herein or therein shall be deemed to be an admission by any Party to any third
party
 
of
 
any
 
matter
 
whatsoever,
 
including
 
any
 
violation
 
of
 
any
 
Law
 
or
 
breach
 
of
 
any
 
Contract.
 
Nothing
 
in
 
the
 
Schedules
 
is
 
intended
 
to
 
broaden
 
the
 
scope
 
of
 
any
 
representation
 
or
 
warranty
contained in this Agreement or to create any covenant.
ARTICLE II
SALE AND PURCHASE OF
 
SECURITIES; CLOSING
2.1
Pre-Closing Actions; Sale and Purchase of Equity
.
(a)
Prior to the
 
Closing, the Sellers will
 
take the following actions
 
or cause the following
actions
 
to
 
be
 
taken
 
and
 
deliver
 
to
 
Buyer
 
for
 
review
 
and
 
comment,
 
five
 
Business
 
Days
 
prior
 
to
execution, drafts of documents reflecting the following steps:
(i)
At
 
least
 
two
 
Business
 
Days
 
prior
 
to
 
the
 
Closing,
 
each
 
Securityholder
 
will
cause a new corporation, Meinerz Holdings, Inc., to be duly incorporated under the Laws of
the State of Wisconsin (such new corporation, the “Echo Lake Foods Transferor”);
(ii)
The
 
Securityholders
 
will
 
contribute
 
all
 
issued
 
and
 
outstanding
 
Echo
 
Lake
Foods Equity
 
Interests to
 
Echo Lake
 
Foods Transferor,
 
in exchange
 
for shares
 
of capital
 
stock
of the Echo Lake Foods Transferor,
 
which the Securityholders will
 
own in the same classes
and
 
the
 
same
 
proportions
 
in
 
which
 
they
 
hold
 
their
 
Echo
 
Lake
 
Foods
 
Equity
 
Interests
 
(the
“Echo Lake Foods Contribution”);
(iii)
On, and effective as of, the date of the Echo
 
Lake Foods Contribution and as
an integrated “reorganization” effected in accordance with Section 368(a)(1)(F) of the Code
and Rev.
 
Rul. 2008-18, Echo
 
Lake Foods
 
Transferor shall
 
file a
 
valid IRS
 
Form 8869 electing
to
 
treat
 
Echo
 
Lake
 
Foods
 
as
 
a
 
“qualified
 
subchapter
 
S
 
subsidiary”
 
(as
 
defined
 
in
Section 1361(b)(3)(B) of
 
the Code)
 
for federal
 
and applicable
 
state Income
 
Tax purposes
 
(the
“QSub Election”);
(iv)
Echo Lake
 
Foods Transferor
 
will join
 
in the
 
execution of
 
this Agreement as
an
 
additional
 
Party
 
hereto,
 
with
 
the
 
rights
 
and
 
obligations
 
set
 
forth
 
herein
 
for
 
Echo
 
Lake
Foods Transferor as both a Transferor and a Seller;
(v)
At least one
 
Business Day after
 
the effective time
 
for and mailing
 
of the QSub
Election:
(A)
Echo
 
Lake
 
Foods
 
will
 
convert
 
from
 
a
 
Wisconsin
 
corporation
 
to
 
a
Delaware limited liability company;
(B)
Echo
 
Lake
 
Foods
 
will
 
cause
 
Xenitel
 
to
 
convert
 
from
 
a
 
Wisconsin
corporation to a Delaware limited liability company;
(C)
Echo Lake Foods will cause Huntington to convert from
 
a Wisconsin
corporation to a Delaware limited liability company
 
(such conversion, together with
the
 
conversions
 
set
 
forth
 
in
 
subparagraphs
 
and
,
 
the
 
“Conversions”
 
and,
together
 
with
 
the
 
Echo
 
Lake
 
Foods
 
Contribution
 
and
 
the
 
QSub
 
Election,
 
the
“F Reorganization”).
 
 
 
 
 
 
 
 
22
(D)
Echo
 
Lake
 
Foods
 
will
 
distribute
 
the
 
Excluded Assets
 
to
 
Echo
 
Lake
Foods
 
Transferor
 
pursuant
 
to
 
the
 
Excluded
 
Asset
 
Assignment
 
Agreement
 
(the
“Excluded Assets Distribution”).
(E)
Except as expressly set forth herein or the context otherwise requires,
any reference to Echo Lake Foods, Xenitel
 
or Huntington herein includes Echo Lake
Foods, Inc.,
 
Xenitel, Inc.
 
and Echo
 
Lake Huntington,
 
Inc., respectively,
 
as well
 
as,
for
 
all
 
periods
 
after
 
the
 
Conversions,
 
the
 
Delaware
 
limited
 
liability
 
company
 
into
which such entity was converted.
(vi)
The Securityholders who own
 
ELT Equity Interests will
 
contribute all of the
ELT Equity Interests
 
to Echo Lake
 
Properties as a
 
capital contribution for
 
no consideration
(the “ELT
 
Contribution” and,
 
collectively with
 
the F Reorganization
 
and the
 
Excluded
 
Assets
Distribution, the “Pre-Closing Restructuring”).
(vii)
The Sellers
 
will
 
complete the
 
Pre-Closing
 
Restructuring no
 
later
 
than three
Business Days
 
after all
 
other conditions
 
to Closing
 
set forth
 
in Section
 
have been
 
satisfied
(other
 
than
 
those
 
that
 
by
 
their
 
terms
 
are
 
to
 
be
 
satisfied
 
at
 
the
 
Closing,
 
but
 
subject
 
to
 
the
satisfaction thereof);
 
provided, however,
 
that if
 
the Sellers
 
fail to
 
meet that
 
deadline solely
because of one or more
 
Governmental Authority’s failure
 
to process, or provide evidence
 
of,
the Pre-Closing Restructuring within
 
such time period, then
 
such failure shall not
 
be deemed
to
 
be
 
a
 
breach
 
of
 
this
 
covenant;
 
provided
 
further
 
that
 
the
 
closing
 
condition
 
set
 
forth
 
in
Section
 
shall nevertheless not be met until all such required actions are taken by each
such Governmental Authority.
 
Buyer and
 
its representatives
 
shall have
 
the right,
 
acting in
good
 
faith,
 
to
 
review
 
and
 
comment
 
upon
 
the
 
documentation
 
used
 
for
 
the
 
Pre-Closing
Restructuring.
 
The
 
Sellers’
 
Representative
 
will
 
review
 
Buyer’s
 
comments
 
to
 
the
documentation used
 
for the
 
Pre-Closing Restructuring
 
in good
 
faith and
 
shall incorporate
 
any
reasonable comments timely provided by Buyer with respect thereto.
(b)
At
 
the
 
Closing,
 
upon
 
the
 
terms
 
and
 
subject
 
to
 
the
 
conditions
 
contained
 
herein,
 
the
following transactions will occur (collectively, the “Equity Purchase”).
(i)
The Sellers will cause Echo Lake Foods Transferor to sell to
 
Buyer, free and clear of
any and
 
all Liens
 
(other than
 
Permitted Equity
 
Interest Encumbrances),
 
and Buyer
agrees to
 
purchase from
 
Echo Lake
 
Foods Transferor
 
all of
 
the issued
 
and outstanding
Echo Lake Foods Equity Interests;
(ii)
The Sellers
 
will cause
 
Echo Lake
 
Properties to
 
sell to
 
Buyer, free
 
and clear
 
of any
and all Liens (other
 
than Permitted Equity Interest
 
Encumbrances), and Buyer agrees
to purchase,
 
all
 
of the
 
issued and
 
outstanding Huntington
 
435 Equity
 
Interests
 
and
ELT Equity Interests; and
(iii)
The Sellers will cause Elkin Properties
 
to sell to Buyer, free and clear
 
of any and all
Liens
 
(other
 
than
 
Permitted
 
Equity
 
Interest
 
Encumbrances),
 
and
 
Buyer
 
agrees
 
to
purchase, all of the issued and outstanding Blue Grass Equity Interests and
 
Yorkville
Equity Interests.
(c)
Each of
 
the Sellers irrevocably
 
waives any rights
 
of first refusal,
 
preemptive rights,
consent rights, voting
 
rights, restrictions on
 
transfer or other
 
rights pertaining to
 
such transactions,
whether arising under
 
any Organizational Document
 
of any such
 
Person or otherwise.
 
In connection
with the acquisition by Buyer
 
of the Echo Lake Foods
 
Equity Interests pursuant to Section
,
 
23
effective as of
 
the Closing, Buyer
 
(i) shall be admitted
 
as a member
 
of Echo Lake
 
LLC and (ii) by
executing this Agreement agrees to be bound by the terms of the Echo Lake LLC
 
Agreement.
2.2
Closing
 
Date
 
Payment
.
 
At
 
the
 
Closing,
 
upon
 
the
 
terms
 
and
 
subject
 
to
 
the
 
conditions
contained herein, Buyer
 
will pay
 
or cause
 
to be
 
paid to
 
Transferors an aggregate
 
amount equal
 
to the
 
Closing
Date Payment, as follows:
(a)
to Echo Lake Foods Transferor,
 
cash in an amount equal to the applicable portion of
the Estimated
 
Adjusted Equity Price set
 
forth on the
 
Consideration Allocation
 
Schedule for the Echo
Lake
 
Foods
 
Group,
 
by
 
wire
 
transfer
 
of
 
immediately
 
available
 
funds
 
to
 
the
 
account
 
specified
 
in
writing by the Sellers’ Representative at least three Business Days prior to the Closing;
(b)
to
 
Echo
 
Lake
 
Properties,
 
cash
 
in
 
an
 
amount
 
equal
 
to
 
the
 
applicable
 
portion
 
of
 
the
Estimated Adjusted
 
Equity Price
 
set forth
 
on the
 
Consideration Allocation
 
Schedule
 
for
 
the
 
Echo
Lake Properties Group,
 
by wire transfer
 
of immediately available
 
funds to the
 
account specified in
writing by the Sellers’ Representative at least three Business Days prior to the Closing;
(c)
to Elkin
 
Properties, cash
 
in an
 
amount equal
 
to the
 
applicable portion
 
of the
 
Estimated
Adjusted Equity
 
Price set
 
forth on
 
the Consideration Allocation
 
Schedule for
 
the Elkin
 
Properties
Group, by
 
wire transfer
 
of immediately
 
available funds
 
to the
 
account specified
 
in writing
 
by the
Sellers’ Representative at
 
least three
 
Business Days
 
prior to
 
the Closing
 
(the amounts
 
set forth
 
in
subparagraphs
 
–
, collectively, the “Closing Date Payment”);
(d)
upon execution and
 
delivery of
 
the Escrow
 
Agreement by the
 
Sellers’
 
Representative,
Buyer and the Escrow
 
Agent, to the Escrow
 
Agent, by wire transfer of immediately available funds:
(i)
to
 
the
 
Adjustment
 
Escrow
 
Account,
 
cash
 
in
 
an
 
amount
 
equal
 
to
 
the
Adjustment Escrow Amount to be held in the
 
Adjustment Escrow Account; and
(ii)
to
 
the
 
Indemnification
 
Escrow
 
Account,
 
cash
 
in
 
an
 
amount
 
equal
 
to
 
the
Indemnification Escrow Amount to be held in the Indemnification Escrow
 
Account;
(e)
on behalf of the applicable Transferor and
 
Company, to each holder of Indebtedness
of the
 
Company Group
 
from which
 
Buyer shall
 
have received
 
a payoff
 
letter (including
 
under the
Existing Credit Facility), the amount
 
of Indebtedness to be repaid
 
as of the Closing Date
 
pursuant to
such payoff
 
letter (to
 
the extent
 
taken into
 
account in
 
determining the
 
amount of
 
the Closing
 
Date
Payment); and
(f)
on behalf of
 
the applicable
 
Transferor and Company,
 
to (i) each Person
 
to whom non-
compensatory Company Group
 
Expenses are owed,
 
as set forth
 
in the Closing
 
Certificate and (ii) the
Company Group, for further distribution via
 
the Company Group’s payroll to the
 
recipients thereof
as set
 
forth in
 
the Closing
 
Certificate, any
 
compensatory Company
 
Group Expenses,
 
in each
 
case,
the respective
 
amounts set forth
 
in the
 
Closing Certificate
 
and to the
 
respective accounts
 
specified
in writing by the Sellers’ Representative at least three Business Days prior to the Closing; and
(g)
The
 
Closing
 
Date
 
Payment
 
will
 
be calculated
 
in accordance
 
with
 
the
 
terms
 
of
 
this
Agreement, and the payment of the Closing Date
 
Payment pursuant to this Section
 
will be made
on
 
the
 
Closing
 
Date
 
by
 
Buyer
 
by
 
wire
 
transfer
 
of
 
immediately
 
available
 
funds
 
to
 
the
 
respective
accounts
 
of
 
the
 
Sellers
 
specified
 
in
 
writing
 
by
 
the
 
Sellers’ Representative
 
at
 
least
 
three
 
Business
Days prior to the Closing.
 
 
 
 
 
 
 
 
 
 
 
 
24
(h)
Notwithstanding
 
anything
 
to
 
the
 
contrary
 
in
 
this Agreement,
 
subject
 
to
 
the
 
actual
payment by
 
or on
 
behalf of
 
Buyer of
 
the amounts
 
required to
 
be paid
 
to Transferors
 
hereunder, Buyer
shall not have any liability to any Person for any payment made in accordance with the calculations
set forth in
 
the Consideration Allocation Schedule or
 
any other payment
 
made to or
 
for the benefit
of
 
the
 
Sellers
 
pursuant
 
to
 
this
 
Section
,
 
based
 
on
 
the
 
written
 
instructions
 
of
 
the
 
Sellers’
Representative (including
 
with respect
 
to any
 
claim that
 
the Consideration Allocation
 
Schedule or
such other written instruction is incomplete or inaccurate).
2.3
Closing Certificate
.
 
No later than three
 
Business Days prior to
 
the Closing Date, the
 
Sellers’
Representative will deliver
 
to Buyer (a) a
 
certificate in substantially
 
the form attached
 
hereto as Exhibit B
(for the avoidance of doubt, the
 
numbers in Exhibit B are for illustrative purposes
 
only and will be revised
for the
 
Closing in
 
accordance with
 
this Agreement) (the
 
“Closing Certificate”)
 
setting forth
 
in reasonable
detail the Sellers’ Representative’s good faith estimate of:
 
(i) the Estimated Adjustment
 
Amount (and each
component thereof
 
and including
 
the subtotal
 
for each
 
Transferor Group),
 
(ii) the Estimated
 
Adjusted Equity
Price (including the
 
subtotal for each Transferor
 
Group) and (iii) the
 
Closing Date Payment (including
 
the
subtotal for each
 
Transferor Group), in
 
each case, as
 
calculated in accordance
 
with the applicable
 
definitions
set forth in this Agreement and the
 
Accounting Principles, and (b) a schedule in the form of, and consistent
with the formulae and methodologies underlying, the Consideration
 
Allocation Schedule attached hereto as
Exhibit C (the
 
“Consideration Allocation Schedule”)
 
setting forth
 
the applicable
 
portion of
 
the Estimated
Adjusted Equity Price payable
 
to each Transferor.
 
While the numbers reflected
 
in Exhibit C are illustrative,
the formulae
 
and methodologies
 
underlying such
 
numbers shall
 
be the
 
same formulae
 
and methodologies
used in preparing the Consideration Allocation Schedule delivered pursuant to this Section
.
 
Buyer and
its
 
representatives
 
shall
 
have
 
the
 
right,
 
acting
 
in
 
good
 
faith,
 
to
 
review
 
and
 
comment
 
upon
 
the
 
Estimated
Working
 
Capital, the
 
Estimated Indebtedness
 
and the
 
Estimated Cash
 
and any
 
other item
 
set forth
 
in
 
the
Closing Certificate,
 
and shall
 
provide any
 
such comments
 
to the
 
Sellers’ Representative no later
 
than one
Business Day prior to the Closing
 
Date and the Sellers shall promptly
 
provide Buyer and its representatives
with
 
reasonable
 
access
 
to
 
the
 
books,
 
records,
 
work
 
papers,
 
employees
 
and
 
accountants
 
of
 
the
 
Company
Group and any information
 
reasonably requested by Buyer
 
and its representatives in
 
connection with their
review of the Closing Certificate and the Sellers will cause the Company Group to reasonably cooperate in
connection with such review, and such
 
review and access shall be
 
subject to the Confidentiality
 
Agreement.
 
The Sellers’
 
Representative will review Buyer’s comments to the Closing Certificate in good
 
faith and may
incorporate such comments into the Closing Certificate in its reasonable
 
judgment; provided, however, that
the Sellers’ Representative’s determination of the Closing Certificate, after giving good faith consideration
to any
 
such comments,
 
shall be
 
conclusive for
 
determining the
 
Estimated Adjustment Amount, Estimated
Adjusted Equity Price, the Closing Date Payment and the Consideration
 
Allocation Schedule.
 
The Closing
Certificate,
 
taking
 
into
 
account
 
any
 
adjustments
 
made
 
as
 
a
 
result
 
of
 
Buyer’s
 
comments
 
that
 
the
 
Sellers’
Representative
 
incorporates
 
therein,
 
as
 
well
 
as
 
any
 
other
 
adjustments
 
mutually
 
agreed
 
by
 
the
 
Sellers’
Representative and
 
Buyer
 
prior
 
to the
 
Closing, shall
 
be deemed
 
the
 
“Final Closing
 
Certificate.”
 
For the
avoidance of doubt, Buyer shall have no obligation to comment on the Closing Certificate.
 
Buyer’s failure
to identify any questions
 
or changes to the
 
Closing Certificate shall not indicate
 
any acceptance or waiver,
or otherwise affect Buyer’s right to prepare the Closing Statement in accordance with Section
2.4
Post-Closing Adjustment
.
(a)
As promptly as practicable, but in no event later than 90 days following the Closing,
Buyer will
 
prepare in good
 
faith and deliver
 
to the Sellers’ Representative
 
a written statement
 
(the
“Closing
 
Statement”)
 
setting
 
forth
 
Buyer’s
 
calculation
 
of
 
(i) Closing
 
Cash,
 
(ii) Closing
 
Working
Capital,
 
(iii) Closing
 
Indebtedness,
 
(iv) Company
 
Group
 
Expenses,
 
(v) the
 
Final
 
Adjustment
Amount, (vi) the Closing
 
Tax Liability
 
Amount, and (vii) the
 
Adjusted Equity Price
 
calculated based
on items (i)
 
through (vi)
 
of this
 
sentence.
 
Each such
 
calculation shall
 
also include
 
the subtotal
 
of
such calculation for
 
each Transferor Group.
 
Buyer’s computations in
 
the Closing Statement
 
shall be
 
 
 
25
determined in a
 
manner consistent with
 
the applicable definitions
 
set forth in
 
this Agreement
 
and the
Accounting Principles,
 
and shall
 
not reflect
 
any changes
 
in accounting
 
policy or
 
any other
 
matter.
 
The Parties
 
agree that
 
(i) the adjustment
 
contemplated by
 
this Section
 
is intended
 
to show
 
the
change between Estimated Cash and Closing Cash, the change between Estimated Working Capital
and Closing
 
Working Capital,
 
the change
 
between Estimated
 
Indebtedness and
 
Closing Indebtedness
and Estimated Company
 
Group Expenses and
 
Company Group Expenses,
 
and that such
 
changes can
be measured only if each calculation is done in a manner consistent with Exhibit B, the Accounting
Principles and the applicable definitions in this Agreement, and (ii) Closing Cash, Closing Working
Capital, Closing
 
Indebtedness and
 
Company Group
 
Expenses shall
 
not include
 
any item
 
that is
 
an
asset
 
or
 
liability
 
of
 
an
 
Excluded
 
Company,
 
except,
 
and
 
solely
 
to
 
the
 
extent,
 
that
 
such
 
item
 
was
included in such calculation in the Closing Certificate.
(b)
After
 
receipt
 
of
 
the
 
Closing
 
Statement,
 
the
 
Sellers’
 
Representative
 
and
 
its
representatives will have reasonable access to, and be allowed to make copies of, all relevant books
and records (including accountant work papers, but subject to
 
entering into customary access letters
as required by such accountant), and reasonable access to accountants
 
and employees of Buyer and
the Company Group, in each case to
 
the extent reasonably necessary to complete their
 
review of the
Closing Statement
 
and during
 
normal business
 
hours and
 
in a
 
manner that
 
does not
 
unreasonably
interfere with normal operations of the Company Group, and Buyer will cause the Company Group
to cooperate in good faith
 
with the Sellers’
 
Representative and its representatives in
 
connection with
such review.
(c)
If, within 45 days
 
following the timely
 
delivery of the
 
Closing Statement by
 
Buyer,
the Sellers’
 
Representative has
 
not given
 
Buyer notice
 
of its
 
objection
 
to any
 
item in
 
the Closing
Statement
 
or
 
its
 
calculation
 
of
 
the
 
Final
 
Adjustment Amount
 
(an
 
“Objection
 
Notice”),
 
then
 
the
Closing Statement will be deemed final and binding on Buyer and the Sellers.
(d)
If the Sellers’
 
Representative timely delivers
 
an Objection Notice,
 
then Buyer and
 
the
Sellers’
 
Representative
 
will
 
consult
 
in
 
good
 
faith
 
to
 
resolve
 
the
 
disputed
 
items
 
set
 
forth
 
in
 
the
Objection Notice and the Final Adjustment Amount.
 
If all disputed items set forth in the Objection
Notice are resolved in writing by
 
the Sellers’
 
Representative and Buyer, then the Closing
 
Statement,
as revised to reflect the written resolution
 
of the Sellers’
 
Representative and Buyer, will be final and
binding
 
on
 
the
 
Parties.
 
If
 
the
 
Sellers’
 
Representative
 
and
 
Buyer
 
are
 
unable
 
to
 
resolve
 
the
disagreement
 
with respect
 
to any
 
disputed item
 
and the
 
Final Adjustment Amount
 
within 30 days
following delivery
 
of the
 
Objection Notice,
 
the remaining
 
disputed items
 
may be
 
submitted to
 
the
Independent Accountant
 
by either Buyer
 
or the Sellers’
 
Representative to make
 
a final determination
of
 
the
 
remaining
 
disputed
 
items
 
and
 
the
 
Final
 
Adjustment
 
Amount
 
in
 
accordance
 
with
 
this
Section
.
 
If the remaining disputed items
 
are submitted to the Independent
 
Accountant, Buyer
and the Sellers’ Representative will each execute a customary engagement letter with respect to the
engagement
 
of
 
the
 
Independent
 
Accountant.
 
In
 
resolving
 
any
 
disputed
 
item,
 
the
 
Independent
Accountant shall (i) act
 
as an expert
 
and not as
 
an arbitrator and
 
(ii) limit its determination
 
to each
unresolved disputed item.
 
If resolution of
 
the final disputed
 
items and the
 
Final Adjustment
 
Amount
is submitted
 
to the
 
Independent Accountant, then (x) the
 
Sellers’ Representative will deliver
 
to the
Independent Accountant
 
the
 
relevant
 
Objection
 
Notice,
 
(y) Buyer
 
will
 
deliver
 
to
 
the
 
Independent
Accountant the Closing Statement and
 
(z) each of Buyer and the
 
Sellers’
 
Representative will submit
a supporting
 
brief to
 
the Independent Accountant,
 
each within
 
ten Business
 
Days of
 
retaining the
Independent
 
Accountant
 
(the
 
“Submission
 
Deadline”).
 
Each
 
of
 
Buyer
 
and
 
the
 
Sellers’
Representative may make an oral presentation to the
 
Independent Accountant, in which case Buyer
or the
 
Sellers’ Representative, as applicable,
 
will provide
 
prompt prior
 
notice of
 
such presentation
to
 
the
 
other
 
Party,
 
which
 
Party
 
will
 
be
 
entitled
 
to
 
attend
 
or
 
have
 
a
 
representative
 
attend
 
such
presentation
 
(the
 
supporting
 
brief, Closing
 
Statement
 
or Objection
 
Notice,
 
as
 
applicable, and
 
any
 
 
26
material submitted
 
at such
 
oral presentation
 
being referred
 
to as
 
a Party’s
 
“Submission”).
 
Neither
Party shall have
 
any
ex parte
communications or meetings
 
with the Independent
 
Accountant without
the prior written
 
consent of the
 
other Party.
 
Buyer and the
 
Sellers’ Representative will instruct the
Independent
 
Accountant
 
(A) to
 
determine
 
whether
 
Buyer’s
 
Submission
 
or
 
the
 
Sellers’
Representative’s Submission reflects the more accurate
 
calculation of the Final
 
Adjustment Amount
(
i.e.
, the Independent Accountant may select only the Final
 
Adjustment Amount proposed by Buyer
or
 
the
 
Sellers’
 
Representative,
 
as
 
applicable,
 
in
 
the
 
Closing
 
Statement
 
or
 
Objection
 
Notice,
 
as
applicable, as
 
further described
 
in their
 
respective Submissions,
 
as the
 
Final Adjustment Amount)
and (B) to
 
deliver its
 
written determination
 
of the
 
Final
 
Adjustment
 
Amount to
 
Buyer and
 
the Sellers’
Representative no
 
later than
 
the 20th day
 
after the
 
Submission Deadline.
 
For the
 
avoidance of
 
doubt,
the reference in
 
the immediately preceding
 
sentence to a
 
Party’s Submission of
 
the Final
 
Adjustment
Amount
 
refers
 
to
 
the
 
total
 
Final
 
Adjustment
 
Amount
 
for
 
the
 
Company
 
Group,
 
not
 
the
 
subtotal
calculation
 
for
 
an
 
individual
 
Transferor
 
Group.
 
The
 
Independent
 
Accountant
 
will
 
be
 
given
reasonable
 
access
 
to
 
all
 
the
 
records
 
of
 
Buyer
 
and
 
the
 
Company
 
Group
 
to
 
determine
 
the
 
Final
Adjustment
 
Amount,
 
and
 
the
 
Independent
 
Accountant
 
shall
 
have
 
the
 
authority
 
to
 
make
determinations only in respect
 
of those specific items
 
that remain in dispute
 
and all determinations
shall
 
be
 
based
 
solely
 
on
 
the
 
Submissions
 
and
 
not
 
by
 
independent
 
review.
 
The
 
Final Adjustment
Amount
 
determined
 
by
 
the
 
Independent Accountant
 
pursuant
 
to
 
this
 
Section
 
will
 
be
 
final,
binding and conclusive on all Parties, absent manifest error or fraud.
 
The date that the Independent
Accountant notifies the
 
Parties of the
 
determination of the
 
Final Adjustment Amount is referred to
in
 
this Agreement
 
as
 
the
 
“Final Adjustment
 
Amount
 
Determination
 
Date.”
 
The
 
costs,
 
fees
 
and
expenses of the
 
Independent
 
Accountant shall be
 
borne by the
 
Party whose Submission
 
is not chosen
by the Independent Accountant as the Final
 
Adjustment Amount.
(i)
If,
 
upon
 
determination
 
of
 
the
 
Final
 
Adjustment
 
Amount
 
pursuant
 
to
 
this
Section
, the Final Adjusted Equity
 
Price exceeds the Estimated Adjusted Equity Price as
determined
 
at
 
the
 
Closing,
 
then,
 
no
 
later
 
than
 
five
 
Business
 
Days
 
following
 
the
 
Final
Adjustment
 
Amount
 
Determination
 
Date,
 
(A) Buyer
 
and
 
the
 
Sellers’
 
Representative
 
will
provide
 
a
 
joint
 
written
 
instruction
 
to
 
the
 
Escrow
 
Agent
 
to
 
release
 
the
 
amounts
 
in
 
the
Adjustment
 
Escrow Account
 
to the
 
Sellers’ Representative,
 
including
 
any interest
 
accrued
thereon,
 
for
 
disbursement
 
to
 
Transferors
 
in
 
accordance
 
with
 
the
 
Consideration Allocation
Schedule
 
and
 
their
 
respective
 
Pro
 
Rata
 
Shares,
 
and
 
(B) Buyer
 
will
 
pay
 
to
 
the
 
Sellers’
Representative, for
 
the benefit
 
of Transferors,
 
by wire
 
transfer of
 
immediately available
 
funds
to an account designated by the Sellers’ Representative (for disbursement to the Transferors
in
 
accordance
 
with
 
their
 
Pro
 
Rata
 
Shares),
 
an
 
amount
 
equal
 
to
 
the
 
amount
 
that
 
the
 
Final
Adjusted Equity Price exceeds the Estimated Adjusted Equity Price.
(ii)
If,
 
upon
 
determination
 
of
 
the
 
Final
 
Adjustment
 
Amount
 
pursuant
 
to
 
this
Section
, the
 
Estimated Adjusted Equity
 
Price as
 
determined at
 
the Closing
 
exceeds the
Final
 
Adjusted
 
Equity
 
Price,
 
then,
 
no
 
later
 
than
 
five
 
Business
 
Days
 
following
 
the
 
Final
Adjustment Amount Determination Date,
 
Buyer and the Sellers’
 
Representative will provide
a joint written
 
instruction to the
 
Escrow Agent to pay to
 
Buyer, on behalf
 
of the Sellers,
 
by
wire
 
transfer
 
of
 
immediately
 
available
 
funds
 
from
 
the Adjustment
 
Escrow Account
 
to
 
the
account designated by
 
Buyer, an amount
 
equal to such
 
excess, including any
 
interest accrued
thereon.
 
To the extent there
 
remains a balance of
 
the Adjustment Escrow Account after the
payment of such excess to
 
Buyer, including any interest accrued
 
thereon, then Buyer and the
Sellers’
 
Representative will provide a
 
joint written instruction
 
to the Escrow
 
Agent to release
the remaining balance in the Adjustment Escrow Account to the Sellers’ Representative, for
disbursement
 
to
 
Transferors
 
in
 
accordance
 
with
 
their
 
respective
 
Pro
 
Rata
 
Shares.
 
To
 
the
extent the absolute value of the excess
 
of the Estimated
 
Adjusted Equity Price over the Final
Adjusted Equity Price exceeds
 
the then-remaining funds in
 
the Adjustment
 
Escrow Account,
 
 
 
27
then, within five Business Days after the Final Adjustment
 
Amount Determination Date, the
Sellers shall
 
cause to
 
be paid
 
through the
 
Sellers’
 
Representative to
 
Buyer the
 
amount of such
Adjustment Escrow
 
Account shortfall, by wire
 
transfer of immediately
 
available funds to the
account designated by Buyer.
(iii)
For all Tax
 
purposes, Buyer and the Sellers agree to treat
 
any payment made
pursuant to this Section
 
as an adjustment to the Adjusted
 
Equity Price, unless otherwise
required by Law.
2.5
Withholding Rights
.
 
Buyer and any
 
of its Affiliates will
 
be entitled to
 
deduct and withhold
from the consideration otherwise payable
 
to any of Transferors
 
pursuant to this
 
Agreement such amounts as
are required to
 
be deducted and
 
withheld with respect
 
to the making
 
of such payment
 
under applicable Laws
related
 
to
 
Taxes.
 
Other
 
than
 
any
 
deduction
 
or
 
withholding
 
in
 
respect
 
of
 
payments
 
that
 
are
 
treated
 
as
compensation for
 
Tax purposes,
 
before either
 
Buyer or
 
any of
 
its Affiliates makes
 
any such
 
deduction or
withholding, Buyer shall promptly provide the Sellers’ Representative notice of the intention to make such
deduction or
 
withholding and,
 
in reasonable
 
detail, the
 
authority, basis,
 
and method
 
of calculation
 
for the
proposed deduction
 
or withholding
 
(and Buyer
 
shall use
 
commercially reasonable
 
efforts to
 
provide such
notice at least five days prior to
 
such deduction or withholding being made).
 
Buyer shall cooperate in good
faith
 
to
 
avoid
 
or
 
minimize
 
the
 
need
 
to
 
make
 
such
 
deduction
 
or
 
withholding
 
to
 
the
 
extent
 
permitted
 
by
applicable Law.
 
To the extent
 
that any such
 
amounts are so
 
deducted or withheld
 
by any Person
 
pursuant
to
 
this
 
Section
,
 
such
 
Person
 
shall
 
timely
 
and
 
properly
 
remit
 
such
 
amounts
 
to
 
the
 
appropriate
Governmental Authority
 
in
 
accordance
 
with
 
applicable
 
Law,
 
and
 
any
 
such
 
amounts
 
that
 
are
 
deducted
 
or
withheld
 
and
 
remitted
 
to
 
the
 
appropriate
 
Governmental Authority
 
will
 
be
 
treated
 
for
 
all
 
purposes
 
of
 
this
Agreement as
 
having been
 
paid to
 
such Person
 
in respect of
 
which such
 
deduction or
 
withholding was
 
made.
2.6
Closing
.
 
The
 
closing
 
of the
 
Transactions
 
(the “Closing”)
 
will
 
take place
 
remotely via
 
the
electronic
 
exchange
 
of documents
 
and signature
 
pages,
 
as soon
 
as
 
practicable, but
 
no later
 
than the
 
fifth
Business Day after
 
the satisfaction or
 
waiver of all
 
of the conditions
 
to the obligations
 
of the Parties
 
set forth
in
 
(other than
 
(a) those that
 
by their
 
terms are
 
to be
 
satisfied at
 
the Closing,
 
but subject
 
to the
satisfaction thereof
 
at the
 
Closing and
 
(b) the completion
 
of the
 
Pre-Closing Restructuring,
 
but subject
 
to
the completion thereof in
 
accordance with Section
, or at such
 
other time and place
 
and on such other
date as the Sellers’ Representative and Buyer shall agree (the “Closing Date”).
2.7
Relationship Among the Sellers; Sellers’
 
Representative
.
(a)
Each Seller, by executing this
 
Agreement and agreeing to the
 
terms hereof, including
the consideration
 
payable to
 
such Seller
 
hereunder, hereby
 
appoints Scott
 
Meinerz to
 
serve as
 
the
representative (the
 
“Sellers’ Representative”) of such
 
Seller to
 
act, with
 
full power
 
of substitution,
as a representative
 
by and for
 
the benefit of
 
the Sellers, as
 
the exclusive agent
 
and attorney-in-fact
to
 
act
 
on
 
behalf
 
of
 
each
 
Seller
 
in
 
connection
 
with,
 
and
 
to
 
facilitate
 
the
 
consummation
 
of
 
the
Transactions, the Escrow Agreement and any other
 
Ancillary Agreement.
(b)
Without
 
limiting
 
the
 
generality
 
of
 
Section
,
 
the
 
scope
 
of
 
the
 
Sellers’
Representative’s appointment shall include:
 
(i) acceptance of any payments hereunder or under the
Escrow Agreement or
 
any other Ancillary Agreement
 
(in each
 
case, net
 
of applicable
 
withholding
Taxes) and delivery of wire
 
instructions to Buyer in connection therewith;
 
(ii) delivering any funds
hereunder
 
or
 
under
 
the
 
Escrow
 
Agreement
 
or
 
any
 
other
 
Ancillary
 
Agreement;
 
(iii) determining
whether
 
the
 
conditions
 
to
 
closing
 
in
 
have
 
been
 
satisfied
 
and
 
supervising
 
the
 
Closing,
including waiving any such condition if the Sellers’ Representative, in the Sellers’ Representative’s
sole and absolute
 
discretion, determines that
 
such waiver is
 
appropriate; (iv) taking any
 
action that
may
 
be
 
necessary
 
or
 
desirable,
 
as
 
determined
 
by
 
the
 
Sellers’
 
Representative
 
in
 
the
 
Sellers’
 
 
28
Representative’s sole and absolute discretion, in connection with
 
the termination of this Agreement
in accordance
 
with
; (v) taking
 
any and
 
all actions
 
that may
 
be necessary
 
or desirable,
 
as
determined
 
by
 
the
 
Sellers’
 
Representative
 
in
 
the
 
Sellers’
 
Representative’s
 
sole
 
and
 
absolute
discretion, in
 
connection with
 
the amendment
 
of this Agreement
 
in accordance
 
with Section
;
(vi) accepting notices on behalf of such Seller in accordance with Section
 
(vii) taking any and
all actions
 
that may
 
be necessary
 
or desirable,
 
as determined
 
by the
 
Sellers’ Representative in
 
the
Sellers’ Representative’s sole and
 
absolute discretion,
 
in connection
 
with the
 
payment of
 
the costs
and
 
expenses
 
incurred
 
with
 
respect
 
to
 
any
 
member
 
of
 
the
 
Company
 
Group
 
or
 
such
 
Seller
 
in
accordance
 
with
 
Section
;
 
(viii) executing
 
and
 
delivering,
 
in
 
the
 
Sellers’
 
Representative’s
capacity
 
as
 
the
 
representative
 
of
 
such
 
Seller,
 
any
 
and
 
all
 
notices,
 
documents
 
or
 
certificates
 
to
 
be
executed by the
 
Sellers’
 
Representative, on behalf
 
of such Seller,
 
in connection with
 
this Agreement,
the Escrow Agreement
 
and the
 
other Ancillary Agreements; (ix) granting
 
any consent
 
or approval
on behalf of such
 
Seller under this Agreement; (x) enforcing and
 
protecting the rights and
 
interests
of the Sellers and to enforce and protect the rights and interest of the Sellers’
 
Representative arising
out of
 
or under
 
or in
 
any manner
 
relating to
 
this Agreement, the
 
Escrow Agreement and
 
the other
Ancillary
 
Agreements;
 
(xi) refraining
 
from
 
enforcing
 
any
 
right
 
of
 
the
 
Sellers
 
or
 
the
 
Sellers’
Representative
 
arising
 
out
 
of,
 
under,
 
or
 
in
 
any
 
manner
 
relating
 
to
 
this
 
Agreement,
 
the
 
Escrow
Agreement and the
 
other
 
Ancillary Agreements;
 
provided, however, that
 
no such failure
 
to act on
 
the
part
 
of
 
the
 
Sellers’ Representative,
 
except
 
as
 
otherwise
 
provided
 
in
 
this Agreement,
 
the
 
Escrow
Agreement
 
and
 
the
 
other Ancillary
 
Agreements,
 
shall
 
be
 
deemed
 
a
 
waiver
 
of
 
any
 
such
 
right
 
or
interest by
 
the Sellers’ Representative
 
or by
 
the Sellers
 
unless such
 
waiver is
 
in writing
 
signed by
the waiving
 
party or
 
by the
 
Sellers’ Representative; and
 
(xii) taking any
 
and all
 
other actions
 
and
doing any
 
and all
 
other things
 
provided in
 
or contemplated
 
by this
 
Agreement, the
 
Escrow
 
Agreement
or any other Ancillary Agreement to
 
be performed by
 
such Seller or
 
by the Sellers’ Representative
on behalf of such Seller.
 
As the representative of the Sellers, the Sellers’ Representative will act as
the
 
agent
 
for
 
all
 
Sellers
 
and
 
shall
 
have
 
authority
 
to
 
bind
 
each
 
Seller
 
in
 
accordance
 
with
 
this
Agreement, and Buyer
 
may rely on
 
such appointment and
 
authority until
 
the receipt of
 
written notice
of the appointment of a
 
successor (in which case Buyer
 
may rely on such appointment
 
and authority
of
 
such
 
successor).
 
Such
 
agency
 
and
 
proxy
 
are
 
coupled
 
with
 
an
 
interest,
 
and
 
are
 
therefore
irrevocable without the consent of the Sellers’
 
Representative, and survive the death, incompetency,
bankruptcy or
 
liquidation of
 
any of
 
the Sellers
 
and the
 
consummation of
 
the Transactions,
 
the Escrow
Agreement or any other Ancillary
 
Agreement.
(c)
All
 
decisions,
 
actions,
 
consents
 
and
 
instructions
 
of
 
the
 
Sellers’
 
Representative
authorized to be made,
 
taken or given pursuant
 
to this Section
 
shall be final and
 
binding upon all
of the Sellers, and
 
no such Person shall
 
have any right to
 
object, dissent, protest or
 
otherwise contest
the
 
same,
 
except
 
for
 
the
 
fraud
 
or
 
willful
 
misconduct
 
of
 
the
 
Sellers’ Representative
 
in
 
connection
therewith.
 
Neither the
 
Sellers’
 
Representative nor
 
any agent
 
employed by
 
the Sellers’
 
Representative
shall incur any
 
liability to any
 
Seller relating to the
 
performance of in
 
the Sellers’ Representative’s
duties as authorized
 
hereunder or the
 
failure to act,
 
except for actions
 
or omissions constituting
 
fraud
or willful misconduct
 
of the Sellers’ Representative in
 
connection therewith as
 
may be determined
in a
 
final, non-appealable
 
Order of
 
a court
 
of competent
 
jurisdiction.
 
The Sellers’ Representative
shall not have by
 
reason of this Section
 
a fiduciary relationship or
 
other special relationship with
any Seller, except
 
in respect of
 
amounts actually
 
received on behalf
 
of such
 
Person.
 
The relationship
created between the Sellers’ Representative and any Seller
 
shall not be construed as
 
a joint venture
or any form
 
of partnership for
 
purposes of U.S.
 
federal or state
 
Law, including federal
 
or state Tax
purposes.
 
The Sellers’ Representative shall
 
not be required
 
to make any
 
inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of this Agreement.
(d)
The Sellers’ Representative,
 
in the
 
Sellers’ Representative’s capacity
 
as the
 
Sellers’
Representative, shall
 
not have
 
any liability
 
to Buyer
 
for any
 
default under
 
this Agreement by
 
any
 
 
29
other Seller.
 
Buyer shall be entitled to rely upon, and shall be deemed to have relied upon and
 
shall
have
 
no
 
liability
 
therefor,
 
all
 
actions
 
taken
 
or
 
omitted
 
to
 
be
 
taken
 
by
 
the
 
Sellers’ Representative
pursuant to this Agreement.
(e)
In the
 
event that
 
the Sellers’ Representative becomes
 
unable to
 
perform the
 
Sellers’
Representative’s
 
responsibilities
 
or
 
resigns
 
from
 
such
 
position,
 
the
 
holders
 
of
 
a
 
majority
 
of
 
the
Class A Voting
 
Common
 
Stock
 
of
 
Echo
 
Lakes
 
Foods
 
as
 
of
 
the
 
date
 
hereof
 
shall
 
select
 
another
representative to fill such
 
vacancy and such substituted
 
representative shall (i) be deemed
 
to be the
Sellers’ Representative
 
(or,
 
if
 
applicable,
 
a
 
Person
 
included
 
in
 
the
 
Sellers’ Representative)
 
for
 
all
purposes
 
of
 
this
 
Agreement
 
and
 
(ii) exercise
 
the
 
rights
 
and
 
powers
 
of,
 
and
 
be
 
entitled
 
to
 
the
indemnity,
 
reimbursement
 
and
 
other
 
benefits
 
of,
 
the
 
Sellers’ Representative
 
(or,
 
if
 
applicable,
 
a
Person
 
included
 
in
 
the
 
Sellers’
 
Representative);
 
provided,
 
however,
 
that
 
any
 
such
 
replacement
Sellers’ Representative
 
must provide Buyer with prompt notice
 
that such Person has been appointed
replacement
 
Sellers’
 
Representative,
 
together
 
with
 
reasonable
 
documentary
 
evidence
 
of
 
such
appointment.
(f)
The Sellers
 
agree to indemnify
 
the Sellers’
 
Representative for,
 
and to hold
 
the Sellers’
Representative harmless
 
against, any
 
Losses incurred
 
without fraud
 
or willful
 
misconduct on
 
the part
of
 
the
 
Sellers’
 
Representative,
 
arising
 
out
 
of
 
or
 
in
 
connection
 
with
 
the
 
Sellers’
 
Representative
carrying out the
 
Sellers’
 
Representative’s duties under
 
this Section
, including costs
 
and expenses
of
 
successfully
 
defending
 
the
 
Sellers’ Representative
 
against
 
any
 
claim
 
of
 
liability
 
with
 
respect
thereto.
 
The Sellers’ Representative may consult with counsel of the Sellers’ Representative’s own
choice and
 
will have
 
full and
 
complete authorization
 
and protection
 
for any
 
action taken
 
and suffered
by it in
 
good faith and
 
in accordance with
 
the opinion of
 
such counsel.
 
The indemnity obligations
of
 
this
 
Section
 
shall
 
survive
 
the
 
resignation,
 
replacement
 
or
 
removal
 
of
 
the
 
Sellers’
Representative
 
or
 
the
 
termination
 
of
 
this
 
Agreement
 
pursuant
 
to
 
The
 
Voting
Securityholders agree, on behalf of all
 
Securityholders, that the Sellers’
 
Representative shall be able
to deduct his
 
out-of-pocket expenses (including
 
fees and expenses
 
of legal counsel,
 
accountants or
other agents or experts) incurred in serving in that capacity, and any amounts to
 
which he is entitled
pursuant
 
to the
 
indemnification
 
provisions in
 
this
 
Section
,
 
from
 
Echo Lake
 
Foods Transferor,
prior to any distribution to the Securityholders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
 
THE SELLERS
REGARDING THE COMPANY GROUP
 
AND TRANSFERORS
Except as
 
set forth in
 
a Schedule,
 
the Sellers
 
hereby jointly
 
and severally represent
 
and warrant to
Buyer as follows:
3.1
Organization; Qualification; Authorization
.
(a)
The
 
Companies
 
and Transferors
 
are corporations
 
or
 
limited
 
liability
 
companies,
 
as
applicable, duly formed,
 
duly organized, validly
 
existing and in
 
good standing under
 
the Laws of
 
the
State of Wisconsin, with full power and authority to own, operate and lease its properties and
 
assets
and to
 
carry on
 
the Business
 
in all
 
material respects.
 
Except as
 
disclosed on
 
Schedule
 
the
Companies and Transferors
 
are duly qualified
 
to do business
 
and are in
 
good standing as
 
a foreign
corporation or limited
 
liability company in
 
each jurisdiction where
 
the character of
 
its properties and
assets or the nature
 
of the Business makes
 
such qualification necessary, except
 
where the failure to
be
 
so
 
qualified
 
or
 
in
 
good
 
standing,
 
individually
 
or
 
in
 
the
 
aggregate,
 
would
 
not,
 
and
 
could
 
not
reasonably be expected to be, material to the Company Group, taken as a whole.
 
 
 
30
(b)
The
 
Sellers
 
have
 
made
 
available
 
to
 
Buyer
 
true
 
and
 
complete
 
copies
 
of
 
the
Organizational
 
Documents.
 
No
 
Company
 
or
 
Transferor
 
is
 
in
 
default
 
or
 
violation
 
of
 
any
 
term,
condition or provision of the Organizational Documents.
(c)
Each Company and Transferor has all
 
necessary power and authority to execute
 
and
deliver
 
this Agreement
 
and
 
the Ancillary Agreements
 
to
 
which
 
such
 
Company
 
or Transferor
 
is
 
a
party and the capacity and authority to make
 
and perform the representations, warranties, covenants
and
 
agreements
 
made
 
by
 
such
 
Company
 
or
 
Transferor
 
herein
 
and
 
therein.
 
The
 
execution
 
and
delivery of
 
this Agreement and
 
the Ancillary Agreements by
 
each Company
 
or Transferor
 
and the
consummation of the Transactions have been
 
duly authorized by all necessary
 
action on the part of
such Company or Transferor,
 
and no other proceedings by
 
such Company or
 
Transferor or any other
Person are necessary to authorize this
 
Agreement and the other
 
Ancillary Agreements to
 
which such
Company
 
or
 
Transferor
 
is
 
a
 
party
 
or
 
for
 
such
 
Company
 
and
 
Transferor
 
to
 
consummate
 
the
Transactions.
 
This Agreement has
 
been duly
 
executed and
 
delivered by
 
the Company
 
Group and
Transferors and constitutes,
 
and as of
 
the Closing, each
 
Ancillary
 
Agreement to which
 
any Company
or Transferor
 
is a
 
party, will
 
constitute, when
 
executed and
 
delivered by
 
such Company
 
or Transferor,
in each
 
case assuming
 
the due
 
authorization, execution
 
and delivery
 
by Buyer
 
and the
 
Sellers and
the
 
other
 
parties
 
thereto
 
(other
 
than
 
the
 
applicable
 
Company
 
or
 
Transferor),
 
the
 
legal,
 
valid
 
and
binding obligation of such
 
Company or Transferor,
 
enforceable against such
 
Company or Transferor
in
 
accordance
 
with
 
its
 
terms,
 
subject
 
to
 
applicable
 
bankruptcy,
 
insolvency,
 
reorganization,
moratorium and other similar Laws affecting creditors’ rights generally and to general principles of
equity (regardless of whether such enforceability is considered
 
in a proceeding in equity or at Law).
3.2
Non-Contravention; Consents
.
 
Except as set forth on Schedule
, neither the execution or
delivery of this Agreement or the
 
Ancillary Agreements to which any Company or
 
Transferor is a party nor
the consummation
 
of the
 
Transactions will
 
(a) conflict with
 
or result
 
in a
 
breach or
 
violation of,
 
or cause
acceleration, or constitute (with or without due notice or lapse
 
of time or both) a default under, or give rise
to any
 
right of
 
termination, cancellation,
 
acceleration, right
 
to payment
 
or loss
 
of right
 
under, any
 
of the
terms, conditions or provisions of
 
(i) any of the Organizational Documents
 
or the organizational documents
of
 
any
 
Company
 
or
 
Transferor
 
or
 
(ii) any
 
Contract,
 
Permit,
 
Law
 
or
 
Order
 
to
 
which
 
any
 
Company
 
or
Transferor is a
 
party or to
 
which any Company
 
or Transferor or the
 
assets thereof are
 
subject, (b) result in
the
 
creation
 
of
 
any
 
Lien
 
(other
 
than
 
a
 
Permitted
 
Lien)
 
on
 
any
 
properties
 
or
 
assets
 
of
 
any
 
Company
 
or
Transferor or (c) require any Company or Transferor to obtain the consent of or
 
provide notice to any third
party (other than a
 
Governmental Authority)
 
not already obtained, except,
 
in the case of
 
clauses (a)(ii) (with
respect to
 
any Contract
 
or Permit
 
only) and
 
(c), where
 
such conflict,
 
breach, default
 
or creation,
 
or the
 
failure
to obtain such consent, exemption or action or provide
 
such notice, would not reasonably be expected to be
material to
 
the Company
 
Group, taken
 
as a
 
whole.
 
Except as
 
expressly contemplated
 
by this Agreement,
no consent,
 
action, approval
 
or authorization
 
of, or
 
registration, declaration
 
or filing
 
with, any
 
Governmental
Authority is required
 
to authorize,
 
or is otherwise
 
required in
 
connection with,
 
the execution
 
and delivery
of
 
this Agreement
 
or
 
any Ancillary
 
Agreement
 
to
 
which
 
any
 
Company
 
or
 
Transferor
 
is
 
a
 
party
 
or
 
the
consummation of
 
the Transactions
 
by the
 
Company Group
 
or the
 
Transferors or
 
the validity
 
or enforceability
of this
 
Agreement or
 
such Ancillary Agreement,
 
except
 
for such
 
filings and
 
approvals, if
 
any, as
 
may be
required under the HSR Act.
3.3
Governmental
 
Authorizations
.
 
Except
 
as
 
set
 
forth
 
on
 
Schedule
,
 
the
 
Company
 
Group
holds all licenses, permits, consents, authorizations, approvals, registrations, listings, clearances,
 
variances,
exemptions,
 
orders
 
and
 
approvals
 
of
 
such
 
Governmental
 
Authorities
 
as
 
are
 
necessary
 
to
 
carry
 
on
 
the
Business or to own or lease
 
its properties and assets (the “Permits”).
 
The Company Group is in
 
compliance
in all material respects
 
with the terms
 
and requirements of its
 
Permits, and (a) the
 
Permits are in full
 
force
and effect; (b) no
 
violations or defaults are
 
or have been
 
recorded in respect
 
of any Permit and
 
the Company
Group
 
has
 
not
 
received
 
any
 
written
 
notice
 
or
 
other
 
written
 
communication,
 
or
 
to
 
the
 
Knowledge
 
of
 
the
 
 
 
 
 
 
 
 
 
 
31
Company
 
Group,
 
oral
 
notice
 
or
 
communication
 
from
 
any
 
Governmental Authorities
 
or
 
any
 
other
 
Person
regarding
 
any actual,
 
alleged
 
or
 
potential
 
violation
 
of,
 
or
 
failure
 
to
 
comply with
 
any of
 
the
 
Permits;
 
and
(c) no proceeding,
 
action or
 
claim is
 
pending or,
 
to the
 
Knowledge of
 
the Company
 
Group, threatened
 
to
revoke, withdraw,
 
modify, suspend,
 
cancel, terminate
 
or limit
 
any Permit,
 
except, in
 
each case,
 
where the
failure to
 
be in
 
compliance with
 
or in
 
possession of
 
such Permits,
 
individually or
 
in the
 
aggregate, is
 
not,
and could not reasonably be expected to be, material to the Company Group, taken as a whole.
3.4
Capitalization
.
 
Schedule
 
sets
 
forth,
 
as
 
of
 
the
 
date
 
hereof,
 
the
 
capitalization
 
of
 
each
Company and each
 
Transferor, including the
 
type and number
 
of issued and
 
outstanding Equity Interests for
each
 
Company
 
and
 
Transferor
 
and
 
the
 
record
 
and
 
beneficial
 
owner
 
thereof.
 
Except
 
as
 
set
 
forth
 
on
Schedule
 
there are no authorized, outstanding or reserved for issuance (i) equity interests, membership
interests, shares of
 
capital stock or
 
other securities of
 
any member of
 
the Company Group
 
or any Transferor,
(ii) securities of
 
any member
 
of the
 
Company Group
 
or any
 
Transferor convertible
 
into, exchangeable
 
or
exercisable for equity interests or other securities of any member of the Company Group
 
or any Transferor,
(iii) options, warrants,
 
purchase rights,
 
subscription rights,
 
exchange rights
 
or other
 
rights to
 
purchase or
acquire from
 
any member
 
of the
 
Company Group
 
or any Transferor,
 
or obligations
 
of any
 
member of
 
the
Company Group or
 
any Transferor
 
to transfer, sell
 
or issue, any
 
equity interests or
 
other securities, including
securities convertible into
 
or exchangeable for,
 
or otherwise repurchase,
 
redeem or otherwise
 
acquire, any
equity
 
interests
 
or
 
other
 
securities
 
of
 
any
 
member
 
of
 
the
 
Company
 
Group
 
or
 
any Transferor,
 
(iv) profits
interests,
 
equity
 
appreciation
 
rights,
 
participations,
 
phantom
 
equity
 
or
 
similar
 
rights
 
with
 
respect
 
to
 
any
member
 
of
 
the
 
Company
 
Group
 
or
 
any
 
Transferor
 
or
 
(v) bonds,
 
debentures,
 
notes,
 
or
 
other
 
items
 
of
Indebtedness that entitle the holders to vote (or that
 
are convertible or exercisable for or exchangeable into
securities
 
that
 
entitle
 
the
 
holders
 
to
 
vote)
 
with
 
equityholders,
 
or
 
other
 
securities
 
of
 
any
 
member
 
of
 
the
Company
 
Group
 
or
 
any Transferor
 
on
 
any
 
matter
 
(the
 
items
 
in
 
clauses (i)
 
through
 
(v)
 
being
 
referred
 
to
collectively
 
as
 
the
 
“Equity
 
Interests”).
 
Except
 
as
 
set
 
forth
 
on
 
Schedule
 
or
 
as
 
set
 
forth
 
in
 
the
Organizational
 
Documents,
 
none
 
of the
 
Equity
 
Interests
 
is
 
subject to
 
any voting
 
trust agreement,
 
option,
proxy, right
 
of first
 
refusal or
 
contract restricting
 
or otherwise
 
relating to
 
the voting,
 
distribution rights
 
or
disposition of such Equity Interests.
 
All Equity Interests of each member of the Company
 
Group and each
Transferor were duly authorized
 
and validly issued in compliance
 
with applicable securities Laws and,
 
are
free of
 
and were
 
not issued
 
in violation
 
of, any
 
preemptive rights,
 
purchase or
 
call options,
 
rights of
 
first
refusal, subscription rights or similar rights, are not subject to any unsatisfied capital commitments and are
free and clear of any Liens (other than Permitted Equity Interest Encumbrances).
3.5
Financial Statements
.
(a)
Attached
 
as
 
Schedule
 
are
 
true,
 
complete
 
and
 
correct
 
copies
 
of
 
(i)(A) the
Company
 
Group’s
 
audited
 
combined
 
balance
 
sheets
 
and
 
related
 
audited
 
combined
 
statements
 
of
income,
 
combined statements
 
of equity
 
and combined
 
statements of
 
cash flows
 
as, at
 
and for
 
the
year
 
ended
 
December 31, 2024,
 
together
 
with
 
any
 
notes
 
and
 
schedules
 
thereto
 
(collectively,
 
the
“2024 Financial Statements”), and
 
(B) the Company Group’s audited
 
combined balance sheets and
related
 
audited
 
combined
 
statements
 
of
 
income,
 
combined
 
statements
 
of
 
equity
 
and
 
combined
statements of cash
 
flows as, at
 
and for the
 
year ended December 31, 2023,
 
together with any
 
notes
and
 
schedules
 
thereto
 
(collectively,
 
the “2023
 
Financial
 
Statements,”
 
and, together
 
with
 
the
 
2024
Financial Statements, the “Annual Financial Statements”), and (ii) the Company Group’s unaudited
combined interim balance sheet and
 
related unaudited combined statement of
 
income as, at and for
the
 
two
 
months
 
ended
 
February 28, 2025
 
(the
 
“Statement
 
Date”)
 
(the
 
“Unaudited
 
Financial
Statements”).
(b)
The Annual Financial Statements and the Unaudited
 
Financial Statements (together,
the
 
“Financial
 
Statements”)
 
(i) fairly
 
present
 
in
 
all
 
material
 
respects
 
the
 
financial
 
position
 
of
 
the
Company Group as of the dates indicated therein, and the results of operation and cash flows of the
32
Company Group for the periods indicated therein, except as otherwise noted therein (subject, in the
case of the Unaudited Financial Statements, to normal year-end adjustments that are expected
 
to be
consistent with past practice and
 
not material, individually or
 
in the aggregate, in nature
 
or amount),
and
 
(ii) except
 
for
 
the items
 
set
 
forth
 
on
 
Schedule
,
 
have been
 
prepared
 
in
 
accordance
 
with
GAAP, applied on a consistent basis (except
 
as may be indicated in the
 
notes thereto or, in the case
of Unaudited
 
Financial Statements,
 
for the
 
absence of
 
footnotes and
 
normal year-end
 
adjustments
that are
 
expected to
 
be consistent
 
with past
 
practice and
 
not material,
 
individually or
 
in the
 
aggregate,
in nature or amount).
(c)
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
any
 
liabilities
 
whether
 
or
 
not
 
of
 
a
 
nature
required by GAAP
 
to be reflected
 
on a balance
 
sheet of the
 
Company Group, other
 
than (i) liabilities
reflected in,
 
reserved against
 
or otherwise
 
described in
 
the 2024
 
Financial Statements
 
or the
 
notes
thereto
 
or
 
the
 
Unaudited
 
Financial
 
Statements,
 
(ii) liabilities
 
incurred
 
in
 
the
 
ordinary
 
course
 
of
business since
 
the Statement
 
Date (none of
 
which is
 
a liability
 
resulting from noncompliance
 
with
any applicable Laws
 
or Permits or
 
breach of any
 
Material Contract), (iii) liabilities
 
arising under this
Agreement, any
 
Ancillary
 
Agreement or
 
the Transactions,
 
(iv) the items
 
set forth
 
on Schedule
or (v) liabilities that, individually or in the aggregate, are not, and could not reasonably be expected
to be, material to the Company Group, taken as a whole.
(d)
No member of the Company Group is
 
party to any “off balance sheet arrangement.”
 
The
 
Financial
 
Statements
 
have
 
been
 
prepared
 
in
 
accordance
 
with
 
the
 
books
 
and
 
records
 
of
 
the
Company Group that
 
(i) have been kept
 
in the ordinary
 
course consistent
 
with past practice,
 
(ii) have
been maintained in all material respects in compliance with GAAP, (iii) are true and complete in all
material respects
 
and (iv) correctly
 
and accurately
 
reflect all
 
material dealings
 
and transactions
 
in
respect
 
of
 
the
 
business,
 
assets,
 
liabilities
 
and
 
affairs
 
of
 
the
 
Company
 
Group.
 
All
 
corporate
proceedings and
 
actions reflected
 
in the
 
financial books
 
and records
 
of the
 
Company Group
 
have
been conducted or taken
 
in compliance in all
 
material respects with all
 
applicable Laws and with
 
the
respective Organizational Documents.
 
Except as disclosed
 
in Schedule
, in the
 
past two years,
the
 
Company
 
Group’s
 
auditors
 
have
 
not
 
identified
 
any
 
material
 
weaknesses
 
or
 
significant
deficiencies in the Company Group’s internal
 
controls over financial reporting that adversely
 
affect,
or could reasonably
 
be expected to
 
adversely affect, the
 
Company Group’s ability
 
to record, process,
summarize and
 
report financial
 
information.
 
In the
 
past three
 
years, the
 
Company Group
 
has not
identified
 
and
 
has
 
not
 
received
 
written
 
notice
 
by
 
the
 
Company
 
Group’s
 
auditors
 
of
 
any
 
fraud
 
or
allegations
 
of
 
fraud,
 
whether
 
or
 
not
 
material,
 
that
 
involves
 
management
 
or
 
other
 
employees
 
who
have a role in the Company Group’s financial reporting.
3.6
No Adverse Changes
.
 
There has been no Material
 
Adverse Effect since December 31, 2024.
 
Except as set forth
 
on Schedule
, since December 31, 2024 to the
 
date of this Agreement, the Company
Group has operated
 
in the ordinary
 
course of business
 
and has not
 
taken any action
 
that, if taken
 
after the
date of this Agreement, would require Buyer’s consent under Section
3.7
Sufficiency of Assets
.
 
Except for the Excluded Assets
 
or as set forth on Schedule
 
(a) the
assets
 
and
 
properties
 
owned,
 
leased
 
and
 
licensed
 
by
 
the
 
members
 
of
 
the
 
Company
 
Group
 
(including
 
the
Company Group Leases,
 
contractual rights and
 
Intellectual Property) are
 
sufficient in all
 
material respects
for the conduct of the business of the Company Group
 
as currently conducted, and (b) without limiting the
generality of
 
the foregoing,
 
none of
 
the assets
 
and properties
 
used by
 
the Company
 
Group in
 
connection
with
 
the
 
conduct
 
of
 
the
 
business
 
of
 
the
 
Company
 
Group
 
(including
 
contractual
 
rights
 
and
 
Intellectual
Property) are owned, leased or
 
licensed by any Seller or
 
any Affiliate or Related Party thereof that is
 
not a
member of the Company Group.
 
33
3.8
Real Property
.
(a)
Schedule
 
sets
 
forth
 
a
 
true,
 
correct
 
and
 
complete
 
list
 
of
 
the
 
addresses
 
of
 
all
Owned Real Property and the record owner thereof.
 
The Company Group has good and marketable
fee simple
 
title to
 
all Owned
 
Real Property,
 
free and
 
clear of
 
all Liens
 
other than
 
Permitted Liens.
 
There are no outstanding
 
options, rights of first
 
offer or rights of
 
first refusal to purchase
 
or lease the
Owned Real Property or any portion thereof or interest therein or any other real property.
(b)
Schedule
 
sets
 
forth
 
a
 
true,
 
correct
 
and
 
complete
 
list
 
of
 
the
 
Company
 
Group
Leases.
 
The
 
Company
 
Group
 
holds
 
a
 
valid
 
and
 
existing
 
leasehold
 
interest
 
in
 
the
 
Leased
 
Real
Property, free and clear of all
 
Liens other than Permitted Liens, and
 
each Company Group Lease is
a valid and binding obligation
 
of the applicable Company,
 
enforceable by such Company
 
and, to the
Knowledge of the Company Group,
 
each other party thereto, in
 
accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of
general
 
applicability
 
relating
 
to
 
or
 
affecting
 
creditors’ rights,
 
and
 
by
 
general
 
equitable
 
principles.
 
None of
 
the Company
 
Group has
 
received any
 
written notice
 
regarding any
 
violation or
 
breach or
default under any Company Group
 
Lease that has not since
 
been cured.
 
No event, development or
condition has occurred that, with the giving of
 
notice or lapse of time (or both),
 
could reasonably be
expected
 
to
 
constitute
 
a
 
material
 
breach
 
of
 
or
 
default
 
under
 
any
 
Company
 
Group
 
Lease
 
by
 
any
member
 
of
 
the
 
Company
 
Group
 
or,
 
to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
any
 
other
 
party
thereto.
 
The
 
Company
 
Group
 
has
 
not
 
assigned,
 
transferred
 
or
 
pledged
 
any
 
interest
 
in
 
any
 
of
 
the
Company Group Leases.
 
Neither the whole
 
nor any part
 
of the Owned
 
Real Property or
 
Leased Real
Property
 
is
 
subject
 
to
 
any
 
pending
 
suit
 
for
 
condemnation
 
or
 
other
 
taking
 
by
 
any
 
Governmental
Authority, and, to the
 
Knowledge of the Company Group,
 
no such condemnation or
 
other taking is
threatened or contemplated.
 
The use and
 
occupancy of the
 
Owned Real Property
 
and Leased Real
Property by the
 
Company Group and
 
the conduct of
 
the business thereat
 
as presently conducted
 
does
not violate in
 
any material respect:
 
(i) any applicable Laws
 
(including zoning, building
 
and land use
Laws)
 
nor
 
(ii) any
 
easements,
 
covenants,
 
rights
 
of
 
way
 
or
 
other
 
encumbrances
 
applicable
 
to
 
the
Owned Real Property or Leased Real Property.
(c)
Except
 
as
 
set
 
forth
 
on
 
Schedule
,
 
there
 
are
 
no
 
leases,
 
subleases,
 
licenses,
 
or
other agreements granting to any Person the right of use or occupancy
 
of any portion of the Owned
Real Property
 
or Leased
 
Real Property
 
(except under
 
the Company
 
Group Leases).
 
All buildings,
structures,
 
facilities
 
and
 
improvements
 
located
 
on
 
the
 
Owned
 
Real
 
Property
 
and
 
Leased
 
Real
Property, including all buildings, structures, facilities and improvements that are under construction
(collectively,
 
“Improvements”)
 
comply
 
in
 
all
 
material
 
respects
 
with
 
certificates
 
of
 
occupancy
 
or
similar
 
Permits
 
to
 
the
 
extent
 
required
 
by
 
Laws
 
for
 
the
 
use
 
thereof.
 
The
 
Improvements
 
are
 
in
 
all
material respects:
 
(A) in good operating condition and repair
 
(ordinary wear and tear excepted) and
(B) suitable and
 
adequate for
 
continued use
 
in the
 
manner in
 
which they
 
are presently
 
being used.
 
The Company Group has
 
rights of ingress and
 
egress to each Owned
 
Real Property and Leased Real
Property to conduct the Business in
 
the ordinary course of business.
 
No security deposit or portions
thereof deposited with respect
 
to any Leased Real
 
Property has been applied
 
in respect of a
 
breach
or default
 
with respect
 
to the
 
Company Group
 
Lease thereof
 
that has
 
not been
 
redeposited in
 
full.
 
No Company owes any brokerage commissions
 
with respect to any Owned
 
Real Property or Leased
Real Property (other
 
than any contingent
 
obligation in respect
 
of any future
 
lease extensions).
 
There
are
 
no
 
unpaid
 
and
 
presently
 
due
 
charges,
 
debts,
 
liabilities,
 
claims
 
or
 
obligations
 
arising
 
from
 
the
construction,
 
occupancy,
 
ownership,
 
use
 
or
 
operation
 
of
 
the
 
Owned
 
Real
 
Property
 
and/or
 
Leased
Real
 
Property
 
or
 
the
 
Business
 
operated
 
thereon
 
that
 
could
 
give
 
rise
 
to
 
any
 
mechanic
’
s
 
or
materialmen
’
s or
 
other statutory
 
Liens (A) against
 
the Owned
 
Real Property
 
or Leased
 
Real Property,
or any part thereof or (B) for which any member of the Company Group will be responsible.
 
There
 
 
 
34
are no outstanding disputes
 
with the owners of
 
the Leased Real Property
 
that have not been
 
resolved
prior to the date of this Agreement.
3.9
Title to
 
Assets
.
 
Except as
 
reflected or reserved
 
against or otherwise
 
disclosed in the
 
Financial
Statements, (i) and, except as a result of dispositions in the ordinary course of business since the Statement
Date, the Company Group has
 
good and valid title to,
 
a valid leasehold or licensed
 
interest in or otherwise
has
 
the
 
right
 
to
 
use
 
all
 
material
 
personal
 
tangible
 
and
 
intangible
 
property
 
and
 
assets,
 
claims
 
and
 
rights
reflected
 
in
 
the
 
balance
 
sheet
 
contained
 
in
 
the
 
Unaudited
 
Financial
 
Statements
 
or
 
acquired
 
since
 
the
Statement Date used (or held for use) in the Business, free and clear of all
 
Liens other than Permitted Liens
and
 
(ii) such
 
assets
 
described
 
in
 
the
 
foregoing
 
clause (i)
 
constitute
 
all
 
of
 
the
 
assets
 
necessary
 
for
 
the
Company Group to carry on the Business.
 
All material personal property owned or leased by
 
the Company
Group is in sufficiently good operating condition and repair (ordinary wear and tear excepted) to permit its
use in continuing
 
the operations of
 
the Business in
 
the manner in
 
which they are
 
presently being used
 
and
as consistent with past practice in all material respects.
3.10
Litigation, Orders, Etc.
(a)
Except
 
as
 
(i) set
 
forth
 
in
 
Schedule
 
or
 
(ii) individually
 
or
 
in
 
the
 
aggregate,
(A) is not, and
 
could not reasonably
 
be expected to
 
be, material to
 
the Company Group,
 
taken as a
whole, or will not prevent
 
or materially delay, and (B) could
 
not reasonably be expected to
 
prevent
or materially
 
delay, the
 
consummation of
 
the Transactions,
 
there are
 
no, and
 
in the
 
last five
 
years
there have been no, actions, suits, proceedings, claims, demands, requests for injunctive relief or, to
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
inquiries,
 
requests
 
for
 
information
 
or
 
investigations
(collectively,
 
“Proceedings”)
 
pending
 
or,
 
to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
threatened
against any member
 
of the Company Group
 
or any of their
 
respective assets in any
 
court or before
any other Governmental Authority, or before any arbitrator.
(b)
Except
 
as
 
(i) individually
 
or
 
in
 
the
 
aggregate,
 
is
 
not,
 
and
 
could
 
not
 
reasonably
 
be
expected to be, material
 
to the Company Group,
 
taken as a whole,
 
and (ii) could not
 
reasonably be
expected to
 
prevent or
 
materially delay,
 
the consummation
 
of the
 
Transactions, no
 
member of
 
the
Company Group is party to,
 
or otherwise bound by or
 
subject to (including with respect
 
to any of its
assets and properties) any
 
Order of any court
 
or other Governmental Authority or arbitrator having
jurisdiction over it or any
 
Order.
 
All Orders to which any
 
member of the Company Group
 
is subject
are listed in Schedule
3.11
Compliance
 
With
 
Laws
.
 
Except
 
as
 
set
 
forth
 
in
 
Schedule
 
(a) Each
 
member
 
of
 
the
Company
 
Group
 
is,
 
and
 
has
 
been
 
in
 
the
 
last
 
five
 
years,
 
in
 
compliance
 
in
 
all
 
material
 
respects
 
with
 
any
applicable Law
 
or Order,
 
and (b) no
 
member of
 
the Company
 
Group has
 
received at
 
any time
 
during the
past five
 
years any
 
written or,
 
to the
 
Knowledge of
 
the Company
 
Group, oral
 
notice, Order
 
or complaint
from any
 
Governmental Authority alleging
 
that any
 
member of
 
the Company
 
Group is
 
not in
 
compliance
with any applicable Law, and to
 
the Knowledge of the Company Group,
 
no such notice, Order or
 
complaint
is threatened, except, in each case, for such non-compliance that, individually or in the aggregate, is not, or
could not reasonably be expected to be, material to the Company Group, taken as a whole.
3.12
Intellectual Property and Intellectual Property Licenses; Data Protection
.
(a)
Schedule
1 contains a
 
complete and accurate
 
list of
 
all Intellectual
 
Property
that is
 
owned by
 
the Company
 
Group that
 
is subject
 
to an
 
application or
 
registration (collectively,
the “Registered
 
Intellectual Property”),
 
including, for
 
each item,
 
the name
 
of the
 
owner of
 
record,
and, where applicable, the
 
jurisdiction, registration or application
 
number, filing date and
 
issue date.
 
Schedule
2 contains a
 
complete and accurate
 
list of all
 
material unregistered Marks
 
owned
by the Company Group and the name of the owner thereof.
 
35
(b)
Schedule
 
contains a complete and accurate
 
list of all Domain Names
 
owned
or purported to be owned by the Company Group (“Company Group Domain Names”).
(c)
Except as set forth on Schedule
(i)
The Company Group is the owner
 
of the entire right, title
 
and interest in and
to
 
the
 
Registered
 
Intellectual
 
Property
 
identified
 
in
 
Schedule
 
free
 
and
 
clear
 
of
 
all
Liens, except for Permitted
 
Liens.
 
The Company Group either
 
owns or has a
 
valid license,
or
 
otherwise
 
has
 
the
 
right
 
to
 
use
 
all
 
other
 
Company
 
Group
 
Intellectual
 
Property
 
and
 
the
Company
 
Group
 
Domain
 
Names.
 
The
 
Company
 
Group
 
possesses
 
sufficient
 
rights
 
in
 
the
formulae
 
of
 
the
 
products
 
commercially
 
distributed
 
by
 
the
 
Company
 
Group
 
as
 
of
 
the
 
date
hereof
 
such
 
that
 
the
 
Company
 
Group
 
would
 
be
 
able
 
to
 
provide
 
such
 
product
 
formulae
 
to
alternate third-party manufacturers to use
 
such formulae.
 
No funding, facilities or personnel
of any educational institution
 
or Governmental
 
Authority were used, directly
 
or indirectly, to
develop or create, in whole or in part, any owned Company Group Intellectual Property.
(ii)
(A) All
 
registrations
 
for
 
Registered
 
Intellectual
 
Property
 
identified
 
in
Schedule
 
are
 
valid,
 
subsisting
 
and
 
enforceable
 
and
 
(B) all
 
applications
 
to
 
register
Registered
 
Intellectual
 
Property
 
so
 
identified
 
are
 
pending
 
and
 
in
 
good
 
standing.
 
To
 
the
Knowledge of the Company
 
Group, no written claim
 
has been made or
 
threatened in the past
five years that any of the Registered Intellectual Property is invalid or unenforceable.
(iii)
All
 
fees
 
necessary
 
to
 
maintain
 
the
 
Registered
 
Intellectual
 
Property
 
and
Domain Names have been
 
paid.
 
The consummation of the
 
Transactions will not result
 
in the
loss or
 
impairment of
 
or payment
 
of any
 
additional amounts
 
with respect
 
to the
 
Company
Group’s
 
right
 
to
 
own,
 
use
 
or
 
hold
 
for
 
use
 
any
 
Company
 
Group
 
Intellectual
 
Property
 
or
Company Group Domain Names.
(iv)
To
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
no
 
third
 
party
 
is
 
currently
interfering
 
with,
 
infringing
 
upon,
 
violating
 
or
 
misappropriating
 
any
 
of
 
the
 
Intellectual
Property
 
identified
 
in
 
Schedule
 
or
 
other
 
owned
 
Company
 
Group
 
Intellectual
Property.
(v)
The Company
 
Group and
 
the operation
 
of the
 
Business do
 
not violate,
 
infringe
or
 
misappropriate
 
any
 
Intellectual
 
Property
 
of
 
any
 
Person,
 
and
 
they
 
have
 
not
 
violated,
infringed
 
or misappropriated
 
any such
 
Intellectual Property.
 
No written
 
allegation, claim,
action
 
or
 
other
 
proceeding
 
has
 
been
 
brought
 
or
 
made
 
in
 
the
 
past
 
five
 
years,
 
and,
 
to
 
the
Knowledge of the Company Group, there is
 
no good faith basis for a
 
third party to bring any
action or
 
proceeding or to
 
claim or
 
allege, that
 
the Company Group
 
or the
 
operation of the
Business infringe
 
upon, misappropriate,
 
or violate
 
the Intellectual
 
Property rights
 
of any
 
third
party, or have infringed upon, misappropriated or violated such rights.
(vi)
The
 
Company
 
Group
 
has
 
taken
 
all
 
reasonable
 
steps
 
to
 
maintain
 
the
 
owned
Company Group
 
Intellectual Property
 
and to
 
protect and
 
preserve the
 
confidentiality of
 
all
Trade
 
Secrets
 
included
 
in
 
the
 
owned
 
Company
 
Group
 
Intellectual
 
Property,
 
including
requiring all Persons having access thereto to execute written non-disclosure agreements.
(vii)
No present or
 
former employee, officer,
 
consultant or individual
 
contractor of
the
 
Company
 
Group
 
has
 
any
 
right,
 
title
 
or
 
interest
 
in
 
any
 
Company
 
Group
 
Intellectual
Property.
 
Each
 
current
 
and
 
former
 
employee,
 
manager,
 
officer,
 
consultant
 
and
 
individual
contractor of
 
the Company
 
Group who
 
is or
 
has been
 
involved in
 
the development
 
of any
Intellectual
 
Property
 
by
 
or
 
for
 
the
 
Company
 
Group
 
has
 
executed
 
and
 
delivered
 
to
 
the
 
 
 
 
 
36
Company Group
 
a written,
 
valid and
 
enforceable contract
 
that assigns
 
to the
 
Company Group
all right, title and interest in and to any such Intellectual Property.
(viii)
To the Knowledge of the Company
 
Group, the Company Group owns or
 
has
a valid
 
right to
 
access and
 
use all
 
computer systems,
 
networks, hardware,
 
software, databases,
websites and
 
equipment used
 
to process,
 
store, maintain
 
and operate
 
data, information
 
and
functions
 
used
 
in
 
the
 
operation
 
of
 
the
 
Business
 
(collectively,
 
the
 
“Company
 
Group
Information Technology Systems”).
 
The Company Group Information Technology Systems
owned or controlled
 
by the Company Group
 
have been properly
 
maintained, in all
 
material
respects, in accordance with standards set by
 
manufacturers or otherwise in accordance with
industry
 
standards.
 
To
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
the
 
Company
 
Group
Information Technology
 
Systems are
 
in good
 
working condition
 
to effectively
 
perform all
information technology operations used by the Company Group.
 
Since January 1, 2023, no
complaint
 
relating to
 
an improper
 
use or
 
disclosure
 
of,
 
or
 
a breach
 
in the
 
security
 
of, any
Company
 
Group
 
Data
 
has
 
been
 
made
 
or,
 
to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
threatened against
 
the Company
 
Group.
 
To the
 
Knowledge of
 
the Company
 
Group, since
January 1, 2023, there
 
has been
 
no (A) unauthorized
 
disclosure of
 
any third-party
 
proprietary
or
 
confidential
 
information
 
in
 
the
 
possession,
 
custody
 
or
 
control
 
of
 
any
 
of
 
the
 
Company
Group
 
or
 
(B) breach
 
of
 
any
 
of
 
the
 
Company
 
Group’s
 
security
 
procedures
 
wherein
confidential information has been disclosed to a third party.
(d)
Intellectual
 
Property
 
Licenses
.
 
Schedule
 
contains
 
a
 
list
 
of
 
all
 
Intellectual
Property Licenses,
 
other than
 
licenses for
 
Off-the-Shelf Software
 
and Open
 
Source Licenses.
 
All
Intellectual Property
 
Licenses are
 
valid, binding
 
and enforceable
 
on all
 
parties thereto,
 
and, to
 
the
Knowledge of
 
the Company
 
Group, there
 
exists no
 
event or
 
condition that
 
violates or
 
breaches or
will result in
 
a violation or
 
breach of, or
 
otherwise constitutes (with
 
or without due
 
notice or lapse
of time or both) a default by any party thereunder.
(e)
The Company Group has implemented and maintained administrative, technical and
physical safeguards to
 
protect the confidentiality,
 
privacy and security
 
of Personal Data
 
that, when
implemented,
 
are
 
appropriate
 
to
 
the
 
nature
 
and
 
risks
 
that
 
are
 
presented
 
by
 
the
 
Personal
 
Data
Processed by the Company Group.
(f)
Except
 
as set
 
forth on
 
Schedule
, the
 
Company Group
 
has, in
 
the five
 
years
prior
 
to
 
the
 
date
 
of
 
this Agreement,
 
entered
 
into
 
written
 
agreements
 
with
 
each
 
material
 
service
provider, processor or other third party that Processes Personal Data for or on
 
its behalf that contain
commercially
 
reasonable
 
provisions
 
requiring
 
such
 
service
 
providers,
 
processors
 
and
 
other
 
third
parties to comply
 
with applicable Privacy
 
Laws.
 
To the Knowledge
 
of the Company
 
Group and with
respect
 
to
 
Personal
 
Data
 
Processed
 
on
 
the
 
Company
 
Group’s
 
behalf,
 
in
 
the
 
last
 
five
 
years,
 
such
service providers, processors
 
or other third
 
parties have materially complied
 
with the provisions
 
in
such agreements regarding
 
compliance with applicable
 
Privacy Laws and,
 
with respect to
 
credit card
information
 
processed
 
for
 
or
 
on
 
behalf
 
of
 
the
 
Company
 
Group,
 
the
 
Payment
 
Card
 
Industry
 
Data
Security Standard (“PCI DSS”).
(g)
In the past five years, to the Knowledge of the Company Group, no Personal Data in
the possession
 
or control
 
of the
 
Company Group
 
has been
 
subject to
 
any data
 
breach or
 
other security
incident that presented
 
a material risk
 
of unauthorized Processing
 
of such Personal
 
Data (a “Security
Incident”) and the Company Group
 
has not been required to
 
notify any Governmental Authority or
other Person of
 
any Security Incident
 
under any applicable
 
Privacy Law or
 
Contract.
 
In the past
 
five
years, the Company
 
Group has complied,
 
in all material
 
respects, with Privacy
 
Laws applicable to
Personal Data in its
 
custody, possession or control.
 
In the past five
 
years, to the Knowledge
 
of the
 
 
 
37
Company Group,
 
no Personal
 
Data held
 
or Processed
 
by any
 
service
 
provider, processor
 
or other
third
 
party
 
for
 
and
 
on
 
behalf
 
of
 
the
 
Company
 
Group
 
has
 
been
 
subject
 
to
 
any
 
Security
 
Incident,
including any Security Incident that would require the
 
Company Group to notify any Governmental
Authority or other Person of any Security Incident under any applicable Law or Contract.
(h)
In
 
the
 
past
 
five
 
years,
 
the
 
Company
 
Group
 
has
 
not
 
received
 
any
 
written
 
notice
(including any
 
enforcement notice),
 
letter or
 
complaint from
 
a Governmental Authority
 
or Person
alleging noncompliance
 
with any
 
Privacy Law,
 
and there
 
has not
 
been any
 
audit, investigation
 
(to
the
 
Knowledge
 
of
 
the
 
Company
 
Group),
 
enforcement
 
action
 
or
 
other
 
Proceeding
 
or
 
action
 
by
 
a
Governmental Authority relating
 
to any
 
actual, alleged
 
or suspected
 
Security Incident
 
or violation
of
 
any
 
Privacy
 
Law,
 
or
 
the
 
Company
 
Group
 
Privacy
 
and
 
Data
 
Security
 
Policies,
 
and,
 
to
 
the
Knowledge
 
of
 
the
 
Company
 
Group,
 
there
 
are
 
no
 
facts
 
or
 
circumstances
 
that
 
could
 
reasonably
 
be
expected to give rise to any of the foregoing.
(i)
The
 
Company
 
Group
 
has
 
conducted
 
security
 
risk
 
assessments
 
and
 
has
 
used
reasonable efforts
 
to address
 
and remediate
 
all material
 
threats and
 
deficiencies identified
 
in such
security
 
risk
 
assessments.
 
The
 
execution,
 
delivery
 
and
 
performance
 
of
 
this Agreement
 
and
 
the
consummation of the Transactions, including the transfer of
 
all Personal Data, will not conflict with
any applicable Privacy
 
Laws or the
 
Company Group Privacy and
 
Data Security Policies
 
and will not
require consent of or notice to any Person concerning such Person’s Personal Data.
3.13
Material Contracts
.
(a)
Schedule
 
sets
 
forth
 
a
 
list
 
as
 
of
 
the
 
date
 
hereof
 
of
 
the
 
following
 
contracts
(collectively, the “Material Contracts”):
(i)
all
 
of
 
the
 
contracts,
 
leases,
 
licenses
 
and
 
other
 
agreements
 
(other
 
than
 
any
Employee
 
Plan)
 
involving
 
payments
 
by
 
or
 
to
 
the
 
Company
 
Group
 
of
 
at
 
least
 
$300,000
annually;
(ii)
all of
 
the individual
 
purchase orders
 
for purchase
 
of goods
 
or raw
 
materials
(but excluding service requests, equipment purchases,
 
equipment maintenance or orders for
purchase
 
of
 
equipment
 
parts)
 
involving
 
payments
 
by
 
the
 
Company
 
Group
 
in
 
excess
 
of
$200,000;
(iii)
(A) all
 
notes,
 
bonds,
 
indentures
 
and
 
other
 
instruments
 
and
 
agreements
evidencing or creating Indebtedness
 
of the Company
 
Group, (B) all contracts that
 
restrict the
incurrence
 
of Indebtedness
 
or
 
payment
 
of
 
dividends,
 
or
 
(C) all
 
contracts that
 
grant
 
a Lien
(other than a Permitted
 
Lien) or restricts the
 
granting of Liens on
 
any property or
 
asset that
is material to the Company Group;
(iv)
all contracts between a member of
 
the Company Group, on the one
 
hand, and
(a) any Seller or any Affiliate, director, manager,
 
officer of the Company
 
Group (other than
another member of the
 
Company Group) or, to
 
the Knowledge of the
 
Company Group, any
direct
 
or indirect
 
beneficial
 
owner or
 
individual
 
related
 
by
 
blood, marriage
 
or
 
adoption to
any such individual
 
or any entity
 
in which any
 
such Person or
 
individual owns any
 
beneficial
interest (the “Related Parties”), on the other hand (such contracts, “Affiliate Contracts”);
(v)
all
 
joint
 
venture,
 
limited
 
liability
 
company,
 
development,
 
partnership
agreements or similar contracts that
 
involve a sharing of profits
 
or losses of any member
 
of
the Company Group;
38
(vi)
all contracts containing covenants
 
that (A) materially limit the
 
freedom of the
Company Group to engage, or to
 
compete with any Person, in the
 
Business; (B) granting the
other party “most favored nation” status or equivalent preferential pricing or payment terms
that materially limit the operations
 
or conduct of the
 
Company Group, (C) granting the
 
other
party exclusivity
 
or similar
 
rights that,
 
in each
 
case, materially
 
limit the
 
operations or
 
conduct
of
 
the
 
Company
 
Group,
 
or
 
(D) granting
 
a
 
right
 
of
 
first
 
refusal
 
or
 
right
 
of
 
first
 
offer
 
with
respect to an acquisition of any material asset of the Company Group;
(vii)
all
 
contracts
 
providing
 
for
 
employment,
 
severance
 
or
 
change
 
in
 
control
payments between
 
any member
 
of the
 
Company Group
 
and any
 
of its
 
employees, officers,
equityholders
 
or
 
directors,
 
in
 
each
 
case,
 
other
 
than
 
any
 
Employee
 
Plan
 
or
 
employment
agreement or offer letter that provides for at-will employment and may be terminated at any
time without liability for severance or similar benefits;
(viii)
any settlement
 
or similar
 
agreement, the
 
performance of
 
which will
 
involve
payment by any member of the Company Group after the Statement Date or that restricts or
imposes obligations on any member of the Company Group;
(ix)
all
 
contracts
 
regarding
 
acquisitions
 
or
 
dispositions
 
pursuant
 
to
 
which
 
any
member of the Company Group
 
has any continuing “earn out”
 
or other contingent payment
obligations (including any
 
potential purchase price
 
adjustment payments), or
 
any surviving
material obligations;
(x)
agreements under
 
which any
 
member of
 
the Company
 
Group has
 
advanced
or
 
loaned
 
monies
 
to
 
any
 
other
 
Person
 
or
 
otherwise
 
agreed
 
to
 
advance,
 
loan
 
or
 
invest
 
any
funds
 
(other
 
than
 
advances
 
to
 
the
 
Company
 
Group’s
 
employees
 
in
 
the
 
ordinary
 
course
 
of
business) to the
 
extent such advance
 
or loan remains
 
outstanding or the
 
obligation to make
future
 
advances
 
or
 
loans
 
remains
 
(regardless
 
of
 
whether
 
subject
 
to
 
any
 
condition
 
or
contingency);
(xi)
all
 
collective
 
bargaining
 
agreements
 
or
 
other
 
similar
 
contracts
 
with
 
a
 
labor
union or labor organization;
(xii)
(A) any contract with a Key
 
Customer or Key Supplier, (B) any
 
contract with
a
 
Governmental
 
Authority,
 
(C) any
 
material
 
Intellectual
 
Property
 
Licenses
 
and
 
(D) any
assignments
 
of
 
owned
 
Company
 
Group
 
Intellectual
 
Property
 
(excluding
 
assignments
 
of
owned
 
Company
 
Group
 
Intellectual
 
Property
 
to
 
the
 
Company
 
Group
 
by
 
any
 
employee,
officer, consultant
 
or contractor
 
of the
 
Company Group
 
entered into
 
in the
 
ordinary course
of business);
(xiii)
any
 
contract
 
containing
 
any
 
future
 
capital
 
expenditure
 
obligations
 
of
 
any
member of the Company Group in excess of $75,000; and
(xiv)
any
 
outstanding
 
and
 
binding
 
commitment
 
to
 
enter
 
into
 
any
 
Contract
 
of
 
the
types described in the foregoing clauses
 
through
(b)
Except
 
as
 
individually
 
or
 
in
 
the
 
aggregate,
 
are
 
not,
 
and
 
could
 
not
 
reasonably
 
be
expected to be
 
material to the
 
Company Group, taken
 
as a whole,
 
no member of
 
the Company Group
is, or, but for a requirement that notice be given or that a period of time elapse or both, would be, in
default under any
 
Material Contract and,
 
to the Knowledge
 
of the Company
 
Group, no other
 
party
to any Material Contract is in breach of any
 
Material Contract.
 
All of the Material Contracts of the
Company Group are legal, valid and binding obligations of the applicable member of the Company
39
Group
 
and,
 
to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
the
 
other
 
parties
 
thereto,
 
enforceable
 
in
accordance with their
 
respective terms (except
 
as the enforceability
 
thereof may be
 
limited by any
applicable
 
bankruptcy,
 
insolvency,
 
reorganization,
 
moratorium
 
and
 
other
 
similar
 
Laws
 
affecting
creditors’
 
rights
 
generally
 
and
 
to
 
general
 
principles
 
of
 
equity,
 
regardless
 
of
 
whether
 
such
enforceability is
 
considered in
 
a proceeding
 
in equity
 
or at
 
Law), and
 
are in
 
full force
 
and effect.
 
Except
 
as
 
set
 
forth
 
on
 
Schedule
 
(i) in
 
the
 
past
 
five
 
years,
 
the
 
Company
 
Group
 
has
 
not
received
 
any
 
written
 
or, to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
other
 
notice
 
of
 
any
 
breach
 
or
default under any Material Contract, and
 
(ii) the Company Group has not received
 
any written or, to
the Knowledge of the
 
Company Group, other notice
 
that the counterparty to
 
any Material Contract
intends to
 
terminate, accelerate
 
or adversely
 
modify in
 
any material
 
respect the
 
terms of
 
any such
Material
 
Contract.
 
The
 
Company
 
Group
 
has
 
made
 
available
 
to
 
Buyer
 
copies
 
of
 
each
 
Material
Contract, including any amendment, modification or supplement thereto.
3.14
Environmental Laws
.
(a)
Except as set forth on Schedule
, each member of the Company Group is,
 
and
has
 
been
 
in
 
the
 
last
 
five
 
years,
 
in
 
compliance,
 
in
 
all
 
material
 
respects,
 
with
 
all
 
applicable
Environmental Laws, and
 
no operations, properties
 
or assets of
 
the Company Group
 
are subject to
any remedial obligations under any Environmental Law.
(b)
Without
 
limiting
 
Section
,
 
and
 
except
 
as
 
set
 
forth
 
on
 
Schedule
 
no
member
 
of
 
the
 
Company
 
Group
 
is
 
subject
 
to
 
any
 
existing,
 
pending
 
or,
 
to
 
the
 
Knowledge
 
of
 
the
Company Group, threatened,
 
action, suit, inquiry,
 
investigation or proceeding
 
by or before
 
any court
or other Governmental Authority under any Environmental Law.
(c)
All Permits,
 
if any,
 
required to
 
be obtained,
 
filed or
 
issued by
 
the Company
 
Group
under any Environmental Law
 
have been duly obtained,
 
filed or issued, except,
 
in where the failures
to
 
obtain,
 
file
 
or
 
issue
 
such
 
Permits,
 
individually
 
or
 
in
 
the
 
aggregate,
 
are
 
not,
 
and
 
could
 
not
reasonably be expected to be,
 
material to the Company Group,
 
taken as a whole, and
 
the Company
Group is,
 
and has
 
been in
 
the last
 
five years,
 
in compliance
 
in all
 
material respects
 
with the
 
terms
and conditions of all such Permits except as may be set forth and described on Schedule
(d)
Except
 
as
 
set
 
forth
 
on
 
Schedule
,
 
in
 
the
 
past
 
five
 
years,
 
no
 
member
 
of
 
the
Company Group has received from any Person any written notice, claim,
 
demand, inquiry, Order or
request for information
 
alleging any violation
 
of or liability
 
under any Environmental
 
Law, which,
in
 
each
 
case,
 
either
 
remains
 
pending
 
or
 
unresolved,
 
or
 
is
 
the
 
source
 
of
 
ongoing
 
obligations
 
or
requirements.
(e)
Except as set forth
 
on Schedule
, there has been
 
no Release of, or
 
exposure to,
any Hazardous Material
 
on, at, under
 
or from the
 
Owned Real Property,
 
the Leased Real
 
Property,
any real property formerly owned, leased
 
or operated by any member of
 
the Company Group or any
other location in a manner that
 
has given rise to, or
 
could reasonably be expected to give
 
rise to, any
remedial or corrective
 
action, obligation or
 
any material liability
 
on the part
 
of any member
 
of the
Company Group under Environmental Laws.
(f)
No member of the
 
Company Group has assumed or
 
provided indemnity against any
liability of any other Person under any
 
Environmental Laws, including any obligation for corrective
or remedial action.
40
3.15
Taxes
.
(a)
References to Echo
 
Lake Foods or
 
the Company Group
 
in this Section
 
include
any predecessor of Echo Lake Foods
 
or Person that merged with or
 
was liquidated or converted into
the Company (including prior to the Pre-Closing Restructuring).
(b)
Each member of the Company Group has timely filed (or has had filed on its behalf)
all income and other material
 
Tax Returns that it was
 
required to file (taking into
 
account extensions
properly obtained) under applicable Laws.
 
All such Tax Returns were true, correct and complete in
all material respects
 
and were prepared
 
in material compliance
 
with all applicable
 
Laws.
 
All income
and other material Taxes
 
required to be paid
 
by any member of
 
the Company Group that
 
are due and
payable
 
(whether
 
or
 
not
 
shown
 
on
 
a
 
Tax
 
Return)
 
either
 
have
 
been
 
paid
 
by
 
it
 
or
 
are
 
reflected
 
in
accordance
 
with
 
GAAP in
 
the
 
most
 
recent
 
financial
 
statements
 
of
 
such
 
member
 
of
 
the
 
Company
Group.
(c)
There are no
 
Liens for Taxes
 
outstanding against any
 
of the assets
 
or properties of
 
the
Company Group (other than Permitted Liens).
(d)
No
 
action,
 
suit,
 
proceeding
 
or
 
audit
 
is
 
pending,
 
being
 
conducted
 
or
 
threatened
 
in
writing
 
against
 
or
 
with
 
respect
 
to
 
the
 
members
 
of
 
the
 
Company
 
Group
 
regarding
 
Taxes.
 
No
outstanding deficiencies have been asserted in writing or assessments made in writing as a result of
any examinations of any
 
Tax Return of the
 
Company, in each case,
 
that have not been
 
settled or paid
in full.
(e)
The
 
members
 
of
 
the
 
Company
 
Group
 
have
 
withheld
 
and
 
paid
 
to
 
the
 
appropriate
Governmental Authority all material
 
amounts of Taxes
 
required to have
 
been withheld and
 
paid in
connection
 
with
 
any
 
amounts
 
paid
 
or
 
owing
 
to
 
any
 
employee,
 
independent
 
contractor,
 
creditor,
equity holder or other Person.
(f)
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
granted
 
an
 
extension,
 
or
 
become
 
the
beneficiary
 
of
 
any
 
extension
 
of
 
time,
 
in
 
which any
 
Tax
 
may
 
be
 
assessed
 
or
 
collected
 
by
 
any Tax
authority that remains in effect.
(g)
No
 
written
 
claim
 
has
 
been
 
made
 
by
 
a
 
Governmental Authority
 
in
 
a
 
jurisdiction
 
in
which a
 
member of
 
the Company
 
Group does
 
not file Tax
 
Returns that
 
such member
 
is or
 
may be
required to file a Tax Return in, or subject to taxation by, such jurisdiction.
(h)
No member of the Company Group (i) is or has been in the last five years a member
of any affiliated, combined, consolidated, unitary or similar group for
 
Tax purposes, (ii) is liable for
the Taxes
 
of another
 
Person under
 
Treasury Regulations Section
 
1.1502-6 (or comparable
 
provisions
of state, local or
 
non-U.S. Tax law),
 
as a transferee or
 
successor, by contract or
 
otherwise as a matter
of Law, or (iii) is currently party to or has any
 
obligation under any Tax allocation,
 
Tax sharing, Tax
indemnity, Tax reimbursement
 
agreement or similar
 
arrangement with respect
 
to Taxes (other
 
than
customary
 
commercial
 
agreements
 
entered
 
into
 
in
 
the
 
ordinary
 
course
 
of
 
business,
 
the
 
principal
purpose of which is not related to Taxes).
(i)
No member of the
 
Company Group will be
 
required to include any
 
material item of
income
 
in,
 
or
 
exclude
 
any
 
material
 
item
 
of
 
deduction
 
from,
 
taxable
 
income
 
for
 
any
 
Tax
 
period
beginning after
 
the Closing
 
Date as
 
a result
 
of any
 
(i) change in
 
or use
 
of an
 
incorrect method
 
of
accounting for a
 
taxable period ending
 
on or prior
 
to the Closing
 
Date, (ii) “closing agreement”
 
as
described in Section 7121
 
of the Code
 
(or any corresponding
 
or similar provision
 
of state, local
 
or
non-U.S. Law) entered into on or prior to the
 
Closing Date, (iii) installment sale or open transaction
 
 
41
disposition made
 
on or
 
prior to
 
the Closing
 
Date, or
 
(iv) prepaid amount
 
received or
 
paid, or
 
deferred
revenue accrued, on or prior to the Closing Date.
(j)
No member of the Company Group is or has been a
 
party to any “listed transaction”
within the meaning of Treasury Regulations Section 1.6011-4(b).
(k)
Each member of
 
the Company Group
 
has collected all
 
material sales and
 
use Taxes
required
 
to
 
be
 
collected,
 
and
 
has
 
remitted,
 
or
 
will
 
remit
 
on
 
a
 
timely
 
basis,
 
such
 
amounts
 
to
 
the
appropriate
 
Governmental
 
Authorities,
 
or
 
has
 
been
 
furnished
 
properly
 
completed
 
exemption
certificates and
 
has maintained
 
all such
 
records and
 
supporting documents
 
in the
 
manner required
by all applicable sales and use Tax statutes and regulations.
(l)
No member of the Company Group that is a partnership for U.S. federal Income Tax
purposes has made
 
any election to
 
apply the provisions
 
of Section 1101 of
 
the Bipartisan Budget
 
Act
of 2015 (Partnership Audits and
 
Adjustments) for any taxable period prior to January 1, 2018.
(m)
In
 
the
 
past
 
five
 
years,
 
no
 
member
 
of
 
the
 
Company
 
Group
 
has
 
distributed
 
Equity
Interests
 
of
 
another
 
Person,
 
or
 
has
 
had
 
its
 
Equity
 
Interests
 
distributed
 
by
 
another
 
Person,
 
in
 
a
transaction that was purported
 
or intended to be
 
governed in whole or
 
in part by Sections 355
 
or 361
of the Code.
(n)
At all times from
 
August 3, 2013 until immediately prior to the QSub Election,
 
Echo
Lake
 
Foods
 
has
 
been
 
and
 
shall
 
be
 
validly
 
treated
 
for
 
federal
 
Income
 
Tax
 
purposes
 
as
 
an
“S corporation” within the meaning of Sections 1361 and 1362
 
of the Code and was validly treated
in a similar manner for
 
purposes of the Income Tax
 
Laws of all states
 
and localities in which it
 
has
been
 
subject
 
to
 
taxation.
 
At
 
all
 
times
 
from
 
October 16, 2013
 
until
 
immediately
 
prior
 
to
 
the
Conversions, Huntington was treated as a “qualified subchapter S
 
subsidiary” of Echo Lake Foods,
within the
 
meaning of
 
Section 1361(b)(3)(B) of
 
the Code,
 
and was
 
validly treated
 
in a
 
similar manner
for
 
purposes
 
of
 
the
 
Income
 
Tax
 
Laws
 
of
 
all
 
states
 
and
 
localities
 
in
 
which
 
it
 
has
 
been
 
subject
 
to
taxation.
 
At all times
 
from August 27, 2022
 
until immediately prior to
 
the Conversions, Xenitel
 
was
treated
 
as
 
a
 
“qualified
 
subchapter S
 
subsidiary”
 
of
 
Echo
 
Lake
 
Foods,
 
within
 
the
 
meaning
 
of
Section 1361(b)(3)(B) of the Code,
 
and was validly treated
 
in a similar manner
 
for purposes of the
Income Tax Laws of all states and localities
 
in which it has been subject to taxation.
 
The respective
dates of
 
initial qualification
 
and termination
 
as an
 
S corporation or
 
qualified subchapter S
 
subsidiary,
as applicable,
 
represented in
 
this Section
 
are
 
collectively referred
 
to as
 
the “Qualification
Dates.”
 
At all times from the QSub Election until the effective date of the Conversions, Echo Lake
Foods has
 
been and
 
shall be
 
treated as
 
a “qualified
 
subchapter S subsidiary”
 
of Echo
 
Lake Foods
Transferor, within
 
the meaning
 
of Section 1361(b)(3)(B)
 
of the
 
Code, and
 
was validly
 
treated in
 
a
similar manner for purposes of the Income Tax Laws of all states and localities in which it has been
subject to
 
taxation.
 
At all
 
times
 
from and
 
after the
 
effective date
 
of the
 
Conversions, Echo
 
Lake
Foods, Huntington and
 
Xenitel have each
 
been treated as
 
a disregarded entity
 
of Echo Lake
 
Foods
Transferor for
 
federal Income Tax
 
purposes, and
 
have been
 
validly treated
 
in a
 
similar manner
 
for
purposes
 
of
 
the
 
Income Tax
 
Laws
 
of
 
all
 
states
 
and
 
localities
 
in
 
which
 
they
 
have
 
been
 
subject
 
to
taxation.
 
Echo
 
Lake
 
Foods,
 
Huntington
 
and
 
Xenitel
 
have
 
not,
 
since
 
the
 
effective
 
date
 
of
 
the
Conversions, elected to be treated as an association taxable as a corporation for any federal, state or
local
 
Income Tax
 
purposes.
 
Except
 
as
 
expressly
 
contemplated
 
by
 
the
 
Pre-Closing
 
Restructuring,
from August 3, 2013 until immediately prior to the F Reorganization, no
 
Person has taken or failed
to take any action that could cause
 
or otherwise result in the termination of the
 
status of Echo Lake
Foods as an S corporation
 
during such period.
 
Echo Lake Foods is
 
not and never has
 
been subject
to
 
Tax
 
under
 
Section 1375
 
of
 
the
 
Code.
 
No
 
Governmental
 
Authority
 
has
 
ever
 
challenged
 
or
threatened
 
in
 
writing
 
to
 
challenge
 
the
 
status
 
of
 
the
 
Echo
 
Lake
 
Foods
 
as
 
an
 
S corporation
 
for Tax
42
purposes.
 
All holders of Equity Interests of
 
Echo Lake Foods Transferor and Echo Lake Foods
 
are
(and have been) eligible “S corporation” shareholders.
(o)
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
ever
 
been
 
a
 
“United
 
States
 
real
 
property
holding company” within the meaning of Section 897(c)(2) of the Code.
(p)
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
elected
 
to
 
defer
 
the
 
payment
 
of
 
any
“applicable employment
 
taxes”
 
(as defined
 
in Section
 
2302(d)(1) of
 
the CARES
 
Act) pursuant
 
to
Section 2302
 
of
 
the
 
CARES and
 
no
 
member
 
of
 
the
 
Company
 
Group
 
has
 
claimed
 
any
 
“employee
retention credit” pursuant to Section 2301 of the CARES Act.
(q)
Each
 
member
 
of
 
the
 
Company
 
Group
 
(other
 
than
 
those
 
otherwise
 
described
 
in
Section
 
has been
 
since its
 
formation, and
 
is currently,
 
properly treated
 
as having
 
the U.S.
federal Income Tax status indicated opposite its name on Schedule
3.16
Employee Plans
.
(a)
Schedule
 
sets
 
forth
 
a
 
list
 
of
 
each
 
material
 
Employee
 
Plan
 
and
 
separately
identifies whether each material
 
Employee Plan is a
 
Company Group Plan and
 
the sponsor of such
Company Group Plan.
 
The Sellers have delivered or caused to be delivered to Buyer the following
with respect to each
 
Employee Plan, as applicable:
 
(i) all current plan
 
documents (or, with respect
to
 
any
 
unwritten
 
Employee
 
Plan,
 
a
 
written
 
summary
 
thereof),
 
related
 
trust
 
agreements
 
and
 
all
amendments
 
thereto;
 
(ii) insurance
 
contracts
 
and
 
policies
 
and
 
certificates
 
of
 
coverage
 
and
 
all
amendments
 
thereto
 
since
 
the
 
last
 
plan
 
document
 
restatement;
 
(iii) all
 
current
 
summary
 
plan
descriptions and
 
summaries of
 
material modifications
 
thereto; (iv) the Form
 
5500 annual
 
reports and
accompanying schedules
 
and financial
 
statements, as
 
filed, for
 
the three
 
most
 
recently completed
plan years;
 
(v) annual testing
 
(including nondiscrimination
 
and coverage
 
testing) results
 
for the
 
three
most
 
recently
 
completed
 
plan
 
years;
 
(vi) the
 
most
 
recent
 
determination
 
letter,
 
advisory
 
letter
 
or
opinion
 
letter
 
issued
 
by
 
the
 
IRS;
 
(vii) material
 
administrative
 
or
 
service
 
provider
 
agreements;
(viii) documents
 
related
 
to
 
any
 
open
 
disputes
 
related
 
to
 
the
 
plan;
 
and
 
(ix) all
 
non-routine
correspondence received
 
from or
 
provided to
 
the Department
 
of Labor,
 
the Pension
 
Benefit Guaranty
Corporation, the IRS or any other Governmental Authority during the past six years.
(b)
Except as set forth on
 
Schedule
, each Employee Plan has
 
been administered
and maintained
 
in all
 
respects in
 
accordance with
 
its terms
 
and applicable
 
Law, including
 
ERISA
and the
 
Code, and
 
all filing
 
and disclosure
 
requirements imposed
 
on the
 
plan sponsor
 
thereunder.
 
There is no pending or
 
threatened action, claim or lawsuit
 
relating to any Employee Plan
 
(other than
routine
 
claims
 
for
 
benefits).
 
There
 
is
 
no
 
audit,
 
inquiry,
 
investigation
 
or
 
examination
 
pending
 
or
threatened by the
 
IRS, the Department
 
of Labor, the
 
Pension Benefit Guaranty
 
Corporation or any
other Governmental Authority with respect to any Employee Plan.
(c)
Each
 
Employee
 
Plan
 
that
 
is
 
intended
 
to
 
be
 
a
 
qualified
 
plan
 
within
 
the
 
meaning
 
of
Section 401(a) of the Code is
 
so qualified and no circumstances
 
exist (i) that could result in
 
loss of
such qualification
 
under Section 401(a)
 
of the
 
Code or
 
(ii) that could
 
result in
 
a penalty
 
under the
IRS
 
Closing Agreement
 
Program
 
if
 
discovered
 
during
 
an
 
IRS
 
audit
 
or
 
investigation.
 
Each
 
such
Employee Plan either has received a favorable and
 
currently effective determination letter from the
IRS or
 
is in
 
the form
 
of a
 
preapproved plan
 
document that
 
is the
 
subject of
 
a favorable
 
opinion or
advisory letter from the IRS on which it is entitled to rely.
(d)
No fiduciary (within the meaning of Section 3(21) of ERISA) of any Employee Plan
subject to
 
Part 4 of
 
Subtitle B of
 
Title I
 
of ERISA
 
has committed
 
a breach
 
of fiduciary
 
duty with
respect to that Employee
 
Plan that could subject
 
a member of the
 
Company Group or an
 
employee
43
of
 
a
 
member
 
of
 
the
 
Company
 
Group
 
to
 
any
 
liability
 
(including
 
liability
 
on
 
account
 
of
 
an
indemnification
 
obligation).
 
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
incurred
 
any
 
excise
 
Taxes
under
 
Chapter 43
 
of
 
the
 
Code
 
with
 
respect
 
to
 
any
 
Employee
 
Plan
 
and
 
nothing
 
has
 
occurred
 
with
respect
 
to
 
any
 
Employee
 
Plan
 
that
 
could
 
reasonably
 
be
 
expected
 
to
 
subject
 
any
 
member
 
of
 
the
Company Group to any such Taxes.
(e)
No Company Group
 
Plan, and no
 
member of the
 
Company Group or
 
ERISA
 
Affiliate
sponsors, has sponsored, contributes to, has contributed to or has any liability (including contingent
liability) with respect to:
 
(i) a plan subject to Title IV of
 
ERISA, including any defined benefit plan
(as
 
defined
 
in
 
Section 3(35)
 
of
 
ERISA);
 
(ii) a
 
multiemployer
 
plan
 
(as
 
defined
 
in
 
Section 3(37)
or 4001(a)(3) of ERISA); (iii) a
 
multiple employer plan subject
 
to Sections 4063 or 4064 of
 
ERISA;
or
 
(iv) a
 
plan subject
 
to Section
 
302 of
 
ERISA or
 
Section 412
 
of
 
the
 
Code.
 
No Company
 
Group
Plan,
 
and
 
no
 
member
 
of
 
the
 
Company
 
Group,
 
sponsors,
 
has
 
sponsored,
 
contributes
 
to,
 
has
contributed to,
 
has or
 
had an
 
obligation to
 
contribute to
 
or has
 
any liability
 
(including contingent
liability) with respect to a multiple employer welfare arrangement (as defined in Section 3(4)(A) of
ERISA) or a voluntary employees’
 
beneficiary association under Section 501(c)(9) of
 
the Code.
 
No
member of the
 
Company Group nor
 
any ERISA Affiliate has any liability
 
as a result
 
of a violation
of COBRA.
 
No member of the Company Group has any liability under
 
Sections 502(i) or 502(l) of
ERISA.
(f)
With
 
respect
 
to
 
each
 
Employee
 
Plan
 
for
 
which
 
a
 
separate
 
fund
 
of
 
assets
 
is
 
or
 
is
required to be
 
maintained, full and
 
timely payment and
 
contribution has been
 
made of all
 
amounts
due
 
and
 
required
 
under
 
the
 
terms
 
of
 
such
 
Employee
 
Plan
 
or
 
applicable
 
Law
 
and
 
all
 
obligations
accrued on or prior to the Closing Date that relate to directors, officers, employees
 
or consultants of
any member
 
of the
 
Company Group
 
and that
 
are not
 
yet due
 
have either
 
been made
 
or have
 
been
accrued in the Financial Statements.
 
All premiums, fees and administrative expenses required to be
paid under or in connection with
 
the Company Group Plans for the period
 
on or before the Closing
Date have been paid or have been accrued in full on the Financial Statements.
(g)
No Employee Plan
 
or member of
 
the Company Group
 
provides, or has
 
any obligation
to provide,
 
current or
 
former employees
 
of the
 
Company Group
 
(or any
 
beneficiaries thereof)
 
welfare
benefits
 
(including medical
 
and life
 
insurance
 
benefits) after
 
such Person
 
terminates
 
employment
with
 
the
 
Company
 
Group
 
or
 
its
 
applicable
 
Affiliate,
 
except
 
for
 
the
 
coverage
 
continuation
requirements of COBRA
 
or continued coverage until
 
the end of the
 
month during which termination
occurs.
 
No Employee
 
Plan or
 
member of
 
the Company
 
Group provides,
 
or has
 
any obligation
 
to
provide, welfare benefits to any Person who is not a current
 
or former employee of a member of the
Company Group or its Affiliates, or a beneficiary thereof.
(h)
Except
 
as set
 
forth
 
on
 
Schedule
,
 
each
 
Employee Plan
 
that
 
is
 
or has
 
been a
nonqualified deferred compensation plan within the meaning of Section 409A of the Code has been
administered, operated and
 
maintained in all
 
respects according to
 
the requirements of
 
Section 409A
of the Code, and no member of the Company Group or, with respect to a current or former director,
officer, employee or
 
consultant of any
 
member of the
 
Company Group, or
 
Affiliate thereof, has
 
been
required to
 
withhold or
 
pay any
 
Taxes as
 
a result
 
of a
 
failure to
 
comply with
 
Section 409A of the
Code.
 
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
any
 
obligation
 
to
 
make
 
a
 
“gross-up”
 
or
 
similar
payment in respect of any Taxes that may become payable under Section 409A of the Code.
(i)
The
 
Company
 
Group
 
and
 
its
 
Affiliates
 
have
 
complied
 
in
 
all
 
respects
 
with
 
the
applicable provisions of the
 
Patient Protection and
 
Affordable Care
 
Act of 2010 and the
 
Health Care
and Education
 
Reconciliation Act of 2010, to
 
the extent
 
applicable, including
 
the employer
 
shared
responsibility
 
provisions
 
relating
 
to
 
the
 
offer
 
of
 
“affordable”
 
health
 
coverage
 
that
 
provides
44
“minimum
 
essential
 
coverage”
 
to
 
“full-time”
 
employees
 
(as
 
those
 
terms
 
are
 
defined
 
in
Section 4980H
 
of
 
the
 
Code
 
and
 
related
 
regulations)
 
and
 
the
 
applicable
 
employer
 
information
reporting requirements under Sections 6055 and 6056 of the Code.
(j)
Neither the
 
execution of
 
this Agreement nor
 
the consummation
 
of the
 
Transactions
(either alone or in combination
 
with another event) will or
 
can reasonably be expected to
 
(i) entitle
any
 
current
 
or
 
former
 
director,
 
officer,
 
employee
 
or
 
consultant
 
of
 
the
 
Company
 
Group
 
or
 
any
Affiliate thereof
 
to any
 
payment (including
 
severance pay
 
or similar
 
compensation), any
 
cancellation
of
 
Indebtedness
 
or
 
any
 
increase
 
in
 
compensation,
 
(ii) accelerate
 
the
 
time
 
of
 
payment,
 
funding
 
or
vesting
 
under
 
any
 
Employee
 
Plan,
 
or
 
(iii) result
 
in
 
any
 
increase
 
in
 
benefits
 
payable
 
under
 
any
Employee Plan.
 
No amount paid or payable
 
(whether in cash, in
 
property or in the form
 
of benefits)
in connection
 
with the
 
Transactions (either
 
alone or
 
in combination
 
with another
 
event) will
 
be a
“parachute payment”
 
or an
 
“excess parachute
 
payment” with
 
respect to
 
any “disqualified
 
individual”
in respect
 
of the
 
Company Group,
 
in each
 
case, within
 
the meaning
 
of Section 280G
 
of the
 
Code.
 
No entity (including any
 
entity that is not
 
a Company or
 
Transferor) that is a
 
member of an affiliated
group (within the
 
meaning of Section 280G
 
of the Code)
 
in which any
 
Company is also
 
a member
is a
 
corporation (other
 
than an S
 
Corporation or QSub)
 
for U.S. federal
 
Income Tax purposes.
 
No
Employee Plan provides
 
for, and
 
no member
 
of the Company
 
Group has any
 
obligation to make
 
a
“gross-up” or similar payment in
 
respect of any
 
Taxes that may become payable
 
under Section 4999
of the Code.
(k)
No Employee
 
Plan
 
is
 
subject to
 
any Law
 
of
 
any
 
jurisdiction
 
outside
 
of the
 
United
States of America.
3.17
Labor Matters
.
 
Except as set forth on Schedule
, in the last five years:
(a)
No member of the Company Group
 
is or has been in the
 
last five years a party to,
 
is
or has
 
been in
 
the last
 
five years
 
bound by,
 
is or
 
has been
 
in the
 
last five
 
years negotiating,
 
or has
been in the
 
last five years
 
asked to negotiate
 
a collective bargaining
 
agreement or other
 
agreement
or understanding with
 
any labor organization.
 
There is not
 
currently, nor has
 
there been in
 
the last
five years, any organized effort by
 
any labor union to organize
 
any employees of any member
 
of the
Company Group into one
 
or more collective bargaining
 
units.
 
No member of the
 
Company Group
is or has been in the last five
 
years a party to, and is not affected
 
by or threatened with, any dispute
or controversy with a labor union or with respect to unionization
 
or collective bargaining involving
any
 
of
 
its
 
current
 
or
 
former
 
employees
 
(including
 
any
 
actual
 
or
 
threatened
 
labor
 
strikes,
 
work
slowdown,
 
lock-outs,
 
work
 
stoppages,
 
interruptions
 
of
 
work,
 
picketing,
 
arbitrations,
 
grievances,
unfair labor practice charges
 
or proceedings, or other
 
disputes involving a labor
 
organization or with
respect to unionization or
 
collective bargaining), and none are
 
pending or, to the Knowledge
 
of the
Company Group, threatened.
(b)
Each
 
member
 
of
 
the
 
Company
 
Group
 
is
 
in
 
compliance
 
and
 
has
 
complied
 
in
 
all
material
 
respects
 
with
 
all
 
applicable
 
Laws
 
that
 
relate
 
to
 
employment
 
and
 
to
 
the
 
operation
 
of
 
the
Business, including
 
applicable Laws
 
that relate
 
to wages,
 
hours, wage
 
payment, employee
 
record
keeping,
 
labor,
 
employment,
 
fair
 
employment
 
practices,
 
terms
 
and
 
conditions
 
of
 
employment,
workers’
 
compensation,
 
occupational
 
safety
 
and
 
health,
 
plant
 
closings,
 
withholding
 
of
 
Taxes,
discrimination
 
in
 
employment,
 
disability
 
rights
 
or
 
benefits,
 
equal
 
employment
 
opportunity,
immigration (including
 
applicable I-9
 
applicable Laws),
 
reasonable accommodations,
 
labor relations
and collective
 
bargaining, employee
 
leave issues
 
and unemployment
 
insurance, and
 
are not
 
liable
for any arrears of wages or
 
any Taxes or penalties for
 
failure to comply with the foregoing.
 
There is
no pending
 
or, to
 
the Knowledge
 
of the
 
Company Group,
 
threatened claim,
 
investigation or
 
other
Proceeding in
 
respect of
 
any such
 
applicable Laws
 
(including any
 
employment discrimination
 
charge
45
or employment-related
 
multi-claimant or
 
class action
 
claims), nor,
 
to the
 
Knowledge of
 
the Company
Group, is there any basis therefor.
(c)
No claim with respect to payment
 
of wages, salary, overtime, commissions, bonuses,
premiums, fees
 
or other
 
compensation of
 
any kind
 
has been
 
asserted, or
 
is now
 
pending or,
 
to the
Knowledge
 
of
 
the
 
Company
 
Group,
 
threatened
 
by
 
or
 
before
 
any
 
Governmental Authority,
 
with
respect to current or
 
former employees or independent contractors
 
of any member of
 
the Company
Group, and there is no charge or other proceeding with
 
respect to alleged violation of any collective
bargaining requirements or occupational safety or
 
health standards that has been
 
asserted or is now
pending or, to the Knowledge of the
 
Company Group, threatened with respect to any
 
member of the
Company Group.
 
No material charge
 
or complaint of
 
discrimination in employment
 
or employment
practices for
 
any reason,
 
including age,
 
sex, race,
 
religion, national
 
origin, veteran
 
status or
 
other
legally protected
 
category, has
 
been asserted
 
or is
 
now pending
 
or threatened
 
before the
 
United States
Equal Employment Opportunity Commission
 
or other Governmental
 
Authority by current or
 
former
employees of any member of
 
the Company Group.
 
No member of the Company
 
Group is subject to
any pending material investigation
 
by any Governmental
 
Authority respecting any current
 
or former
employees of any
 
member of the
 
Company Group.
 
There are no
 
outstanding, unsatisfied obligations
to reinstate, re-engage, pay compensation
 
to or comply with any
 
recommendation or declaration of
any court or any other tribunal in respect of any of the employees, whether past or present.
(d)
Each
 
member
 
of
 
the
 
Company
 
Group
 
is
 
and
 
has
 
been
 
in
 
full
 
compliance
 
with
 
the
WARN Act,
 
and
 
no
 
member
 
of
 
the
 
Company
 
Group
 
has
 
taken
 
any
 
action
 
that
 
could
 
at
 
any
 
time
require notification
 
of any
 
of the
 
current or
 
former employees
 
of any
 
member of
 
the Company
 
Group
pursuant to the
 
provisions of the
 
WARN Act
 
or that could cause
 
any member of the
 
Company Group
to have liability thereunder.
(e)
Each Company
 
Group Employee
 
is employed
 
at will
 
and may
 
terminate his
 
or her
employment or
 
be terminated
 
from such
 
employment at
 
any time
 
for any
 
or no
 
reason with
 
or without
prior notice.
(f)
Each Company Group
 
Employee is legally
 
authorized to work
 
in the United
 
States.
 
Each member of
 
the Company
 
Group has completed
 
and maintains in
 
its files Forms I-9
 
with respect
to each of its
 
employees.
 
The qualifications for employment
 
of each current
 
and former employee
of each member of the Company Group have been
 
reviewed and confirmed by such member of the
Company Group.
(g)
(i) No
 
officer,
 
director
 
or
 
management
 
level
 
employee
 
of
 
any
 
member
 
of
 
the
Company Group (A) has been the subject of an allegation of sexual harassment or sexual assault by
any employee
 
of any
 
member of
 
the Company
 
Group, nor
 
(B) to the
 
Knowledge of
 
the Company
Group, has
 
engaged in
 
any such
 
conduct, and
 
(ii) no member
 
of the
 
Company Group
 
has entered
into any settlement agreements
 
related to allegations of
 
sexual harassment or sexual
 
assault by any
current or former employee or individual independent contractor.
3.18
Company Group Employee List; Contractor List
.
(a)
Schedule
 
contains a
 
true and
 
complete list
 
of the
 
Company Group
 
Employees,
in
 
each
 
case,
 
listing,
 
as
 
applicable,
 
each
 
such
 
Company
 
Group
 
Employee’s:
 
(i) name;
 
(ii) job
location
 
(city
 
and
 
state);
 
(iii) date
 
of
 
hire;
 
(iv) employing
 
entity;
 
(v) annual
 
base
 
salary
 
or
 
hourly
rate, as applicable,
 
and target bonus
 
opportunity; (vi) most recent
 
annual bonus received;
 
(vii) title
or
 
functional
 
position;
 
(viii) classification
 
as
 
exempt
 
or
 
non-exempt;
 
(ix) leave
 
status
 
(including
leave
 
type
 
and
 
return
 
to
 
work
 
date);
 
(x) vacation/paid
 
time
 
off
 
balance
 
or
 
annual
 
vacation
entitlements;
 
(xi) full-time
 
or
 
part-time
 
status;
 
and
 
(xii) visa
 
status
 
(including
 
visa
 
type
 
and
 
 
 
46
expiration date) (the “Company
 
Group Employee List”).
 
There are a
 
sufficient number of
 
Company
Group
 
Employees
 
to
 
operate
 
the
 
Business
 
in
 
all
 
material
 
respects
 
in
 
the
 
manner
 
in
 
which
 
it
 
is
currently
 
conducted.
 
No
 
Affiliate
 
of
 
any
 
member
 
of
 
the
 
Company
 
Group
 
(other
 
than
 
another
member
 
of
 
the
 
Company
 
Group)
 
employs
 
any
 
individuals
 
who
 
exclusively
 
devote
 
their
 
working
time to the
 
Business but who
 
are not considered
 
Company Group Employees,
 
and the members
 
of
the Company Group
 
do not employ any
 
individuals who do not
 
provide services primarily
 
in respect
of the Business.
(b)
Schedule
 
contains a true and complete
 
list of each consultant and
 
individual
independent
 
contractor
 
whose
 
services
 
have
 
been
 
retained
 
by
 
a
 
member
 
of
 
the
 
Company
 
Group,
identifying in each case:
 
(i) the applicable Company Group member; (ii) the individual’s employer
(if any); (iii) brief description of
 
services provided; (iv) engagement start date; (v) the
 
total amount
paid in calendar year 2024 and year to date in calendar year 2025; and (vi) whether the individual’s
services to the Company Group may
 
be terminated without cause and without
 
penalty upon notice,
or details of any required notice period.
3.19
Brokerage Agreements
.
 
Except as
 
set forth
 
on Schedule
, no
 
member of
 
the Company
Group
 
has
 
entered
 
into
 
any
 
agreement
 
with
 
any
 
Person,
 
firm
 
or
 
corporation
 
for
 
the
 
payment
 
of
 
any
commission, brokerage or “finder’s
 
fee” in connection
 
with the Transactions
 
or for which
 
it could otherwise
become liable.
3.20
Suppliers
.
 
Schedule
 
sets
 
forth
 
the
 
20 most
 
significant
 
third-party
 
suppliers
 
(i.e.,
components, parts, packaging)
 
of the Company
 
Group, taken as
 
a whole (based
 
on aggregate dollar
 
amounts
paid directly by the Company
 
Group), during the years ended
 
December 31, 2023 and December 31, 2024
and during the two months ended on the
 
Statement Date (collectively, the “Key Suppliers”).
 
Schedule
includes
 
the
 
total
 
dollar
 
volume
 
for
 
the
 
Key
 
Suppliers
 
during
 
such
 
periods.
 
Except
 
as
 
set
 
forth
 
on
Schedule
, there are
 
no minimum purchase
 
contracts or understandings
 
between the Company
 
Group,
on the
 
one hand,
 
and any
 
Key Supplier,
 
on the
 
other hand.
 
Since the
 
Statement Date,
 
no member
 
of the
Company
 
Group
 
has
 
received
 
any
 
written,
 
or
 
to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
 
oral
 
notice
 
or
proposal
 
from
 
a
 
Key
 
Supplier
 
(a) requiring
 
or
 
proposing
 
modifications
 
in
 
the
 
terms
 
on
 
which
 
such
 
Key
Supplier conducts business with the Company Group, (b) terminating
 
or cancelling its relationship with the
Company Group or (c) informing
 
or notifying a member
 
of the Company
 
Group of any violation
 
of, or non-
compliance with, any Laws.
3.21
Customers
.
 
Schedule
 
sets forth the 20 largest customers of the Company Group, taken
as
 
a
 
whole
 
(based
 
on
 
aggregate
 
revenues)
 
during
 
the
 
years
 
ended
 
December 31, 2023
 
and
December 31, 2024
 
and
 
during
 
the
 
two months
 
ended
 
on
 
the
 
Statement
 
Date
 
(the
 
“Key
 
Customers”).
 
Schedule
 
includes the
 
total dollar
 
revenues from
 
the Key
 
Customers during
 
such periods.
 
Since the
Statement Date, no member of the Company Group
 
has received any written notice or proposal from
 
a Key
Customer
 
(a) requiring
 
or
 
proposing
 
modifications
 
in
 
the
 
terms
 
on
 
which
 
such
 
Key
 
Customer
 
conducts
business with the Company
 
Group, (b) terminating or cancelling
 
its relationship with the
 
Company Group
or (c) informing or notifying
 
a member of the
 
Company Group of any
 
violation of, or non-compliance
 
with,
any Laws.
3.22
Product Liability
.
 
Except as set forth on Schedule
, in the past five years, the Company
Group
 
has
 
not
 
(a) recalled
 
any
 
products
 
or
 
received
 
an
 
Order
 
or
 
request
 
to
 
recall
 
any
 
products
 
by
 
any
Governmental Authority,
 
customer
 
or
 
supplier
 
or
 
(b) been
 
subject
 
to,
 
or
 
received
 
any
 
written
 
or,
 
to
 
the
Knowledge of the Company Group, oral notice of any, claim arising from or
 
caused by any product offered
for sale, sold or distributed by the Company Group.
 
The Company Group has no Knowledge of any fact or
condition that
 
could reasonably be
 
expected to (i) impose
 
a duty to
 
recall, withdraw, remove
 
or undertake
corrective action
 
in any
 
material respect
 
or (ii) result
 
in any
 
material product
 
liability claim,
 
in each
 
case,
 
 
 
 
 
 
 
47
with
 
respect
 
to
 
any
 
products
 
offered for
 
sale,
 
sold or
 
distributed by
 
the Company
 
Group
 
in
 
the past
 
five
years.
3.23
Food Safety Requirements
.
(a)
All
 
products
 
being
 
distributed,
 
sold,
 
manufactured
 
or
 
developed
 
by
 
the
 
Company
Group that are subject to the jurisdiction of the FDA, USDA, FTC, any comparable state or foreign
Governmental
 
Authority
 
have
 
been
 
formulated
 
and
 
are
 
being
 
processed,
 
labeled,
 
stored,
 
tested,
packed, transported,
 
distributed, manufactured,
 
marketed, advertised
 
and promoted
 
in compliance
with all
 
applicable requirements
 
under the
 
Federal Food,
 
Drug, and
 
Cosmetic Act
 
(“FDCA”) and
other
 
Laws,
 
including
 
current
 
Good
 
Manufacturing
 
Practices
 
(“cGMP”)
 
for
 
foods,
 
the
 
facility
registration, prior import
 
notice and recordkeeping
 
requirements of the
 
Public Health Security
 
and
Bioterrorism Preparedness
 
and Response Act
 
of 2002, the
 
allergen disclosure
 
requirements of
 
the
Food Allergen
 
Labeling and Consumer
 
Protection Act
 
of 2004, the FDA
 
Food Safety Modernization
Act, as
 
applicable, the
 
Egg Products
 
Inspection Act (“EPIA”),
 
the Organic
 
Foods Production Act,
the Sanitary Food
 
Transportation Act
 
and all comparable
 
state and foreign
 
Laws (collectively, “Food
and Beverage Laws”).
(b)
To the Knowledge of
 
the Sellers, none of the
 
Company Group’s products have
 
been
the
 
subject
 
of
 
any
 
warning
 
letter,
 
notice
 
of
 
violation,
 
notice
 
of
 
warning,
 
seizure,
 
injunction,
regulatory enforcement action or criminal action issued, initiated or
 
threatened by the FDA, USDA,
FTC or any comparable
 
state or foreign Governmental
 
Authority during the five-year
 
period prior to
the date hereof.
(c)
No
 
member
 
of
 
the
 
Company
 
Group
 
has
 
received
 
any
 
FDA
 
Form 483
 
notice
 
of
inspectional
 
observations,
 
notice
 
of
 
adverse
 
findings,
 
untitled
 
letters
 
or
 
warning
 
letters
 
from
 
the
FDA, or noncompliance
 
record from USDA
 
or Food Safety
 
and Inspection Service
 
(“FSIS”) or been
subject to any material
 
investigation by any Governmental
 
Authority, or been subject
 
to any penalty,
fine,
 
Sanction,
 
assessment,
 
audit,
 
request
 
for
 
corrective
 
or
 
remedial
 
action
 
or
 
other
 
material
compliance or enforcement-related action or material communication, in each case in writing, from
any Governmental Authority (including FDA
 
and USDA).
(d)
For the five-year
 
period prior to
 
the date hereof,
 
each member of
 
the Company Group
has been in material compliance with the Federal Trade Commission Act (“FTCA”) with respect to
the advertising
 
and promotion,
 
product descriptions
 
and claims
 
for the
 
products they
 
sell.
 
To the
Knowledge
 
of
 
the
 
Sellers,
 
all
 
claims
 
about
 
the
 
Company
 
Group’s
 
products
 
are
 
appropriately
substantiated and are truthful
 
and non-misleading under both
 
the FDCA
 
and the FTCA.
 
No member
of the Company
 
Group has received
 
written notice of
 
and, to the
 
Knowledge of the
 
Company Group,
there is no written claim filed by the FTC
 
against any member of the Company Group alleging
 
any
violation of any of the Laws implemented by it.
(e)
The
 
Company
 
Group’s
 
products
 
are
 
neither
 
adulterated
 
nor
 
misbranded
 
within
 
the
meaning of
 
the FDCA or EPIA,
 
nor do they
 
contain unapproved
 
food additives
 
or ingredients
 
that
are not
 
generally recognized
 
as safe,
 
nor are
 
they products
 
that may
 
not, under
 
Sections 404, 505
or 512 of the FDCA,
 
be introduced into
 
United States commerce.
 
For the five-year period
 
prior to
the date
 
hereof, no
 
member of
 
the Company
 
Group has,
 
in connection
 
with any
 
Company Group
product,
 
either
 
voluntarily
 
or
 
as
 
requested
 
by
 
a
 
Governmental Authority
 
initiated,
 
conducted
 
or
issued, or caused to be initiated, conducted or issued, any recall, or market withdrawal.
(f)
No member of
 
the Company Group
 
has or, to
 
the Knowledge of
 
the Company Group,
any of its Representatives, been convicted of any crime or engaged
 
in any conduct that could result
in
 
debarment
 
or
 
exclusion
 
under
 
21 U.S.C. Section 335a(a),
 
21 U.S.C. Section 335a(b)
 
or
 
any
48
similar legal requirements.
 
No claims, actions, proceedings
 
or investigations that have
 
resulted, or
could
 
reasonably
 
be
 
expected
 
to
 
result,
 
in
 
such
 
a
 
debarment
 
or
 
exclusion
 
are
 
pending
 
or,
 
to
 
the
Knowledge of
 
the Company
 
Group, threatened
 
against any
 
member of
 
the Company
 
Group or
 
the
managers, officers, employees or agents of any member of the Company Group.
3.24
Inventory
.
 
All of the finished goods inventory of the Business (a) is merchantable, fit for its
intended purpose, of a quality and quantity fully usable and
 
saleable in the ordinary course of business, and
(b) is
 
not
 
obsolete,
 
defective
 
or
 
damaged,
 
except
 
for
 
those
 
items
 
that
 
have
 
been
 
reserved
 
against
 
in
 
the
Financial Statements.
 
Except as set
 
forth on Schedule
, no member
 
of the Company
 
Group has made
sales on consignment or granted return privileges to buyers of its finished goods
 
other than spoilage, defect
or damage allowances in the ordinary
 
course of business.
 
All finished goods inventories not written-off
 
in
accordance with GAAP have been reflected on the Company Group’s books at cost or net realizable value,
whichever is lower.
3.25
Certain Business Relationships
 
with the Company
 
Group.
 
Except for the
 
Affiliate Contracts,
the
 
Organizational
 
Documents,
 
any
 
Employee
 
Plan
 
or
 
employment
 
or
 
consulting
 
agreements
 
with
 
any
employee, officer
 
or consultant
 
of any
 
Company or
 
any of
 
their Subsidiaries
 
or as
 
set forth
 
on Schedule
,
no Related Party is a party
 
to any agreement, contract, commitment, transaction
 
or other arrangement with
any Company or any
 
of their Subsidiaries
 
or has any interest
 
in any property or
 
assets owned or leased
 
by
any Company or any of their Subsidiaries.
3.26
Insurance
.
 
Schedule
 
contains a
 
complete list
 
of all
 
insurance policies
 
(specifying the
location,
 
insured,
 
insurer,
 
amount
 
of
 
coverage,
 
type
 
of
 
insurance
 
and
 
policy
 
number)
 
maintained
 
by
 
the
Company
 
Group
 
other
 
than insurance
 
policies maintained
 
to provide
 
benefits
 
under any
 
Employee Plan.
 
All such
 
policies are
 
in full
 
force and
 
effect, all
 
premiums with
 
respect thereto
 
covering all
 
periods up
 
to
and including
 
the Closing
 
Date have
 
been paid,
 
and no
 
written notice of
 
cancellation or
 
termination has
 
been
received by any member of the Company Group with respect to any such policy.
 
There is no default under
any such policy and no insurer has advised any member of the Company Group in writing that it intends to
reduce
 
coverage, increase
 
premiums or
 
fail to
 
renew any
 
existing
 
policy or
 
binder.
 
There
 
is no
 
material
claim
 
pending
 
with
 
respect
 
to
 
any
 
member
 
of
 
the
 
Company
 
Group
 
under
 
any
 
such
 
policies
 
as
 
to
 
which
coverage has been questioned, denied or disputed in writing, or,
 
to the Knowledge of the Company Group,
orally by the underwriters
 
of such policies
 
(other than pursuant to
 
a customary reservation of
 
rights notice
or in connection with claims for benefits under the Employee Plans).
3.27
Certain
 
Payments
.
 
No
 
member
 
of
 
the
 
Company
 
Group
 
or
 
any
 
manager,
 
officer
 
or
 
other
employee of any member of the
 
Company Group, or to the Knowledge
 
of the Company Group, any agent,
representative or third party acting on behalf of the Company Group has:
(a)
offered or used
 
any corporate funds
 
for any unlawful
 
contribution, gift, entertainment
or other unlawful expense relating to any political campaign or activity;
(b)
offered, authorized, promised, or
 
used any corporate funds
 
for any direct or
 
indirect
unlawful payments to any Person or foreign or domestic “Government Official,” which includes:
(i)
any officer,
 
employee, or Person acting
 
in an official
 
capacity or performing
public
 
duties
 
or
 
functions
 
on
 
behalf
 
of
 
(A) any
 
government,
 
including
 
all
 
levels
 
and
subdivisions of government
 
from national to
 
local; (B) any department,
 
committee, agency
or instrumentality of
 
government; (C) any business
 
or commercial entity
 
owned, managed or
controlled by a government; or (D) any political party or official thereof;
(ii)
any candidate for public office;
 
 
 
49
(iii)
any
 
officer,
 
employee
 
or
 
agent
 
of
 
a
 
public
 
international
 
organization,
including
 
for
 
example
 
the
 
United
 
Nations,
 
the
 
International
 
Monetary
 
Fund
 
or
 
the
 
World
Bank; or
(iv)
any relative of any Government Official;
(c)
violated
 
any
 
provision
 
of
 
the
 
U.S.
 
Foreign
 
Corrupt
 
Practices
 
Act
 
of
 
1977
 
(the
“FCPA”), the U.K. Bribery
 
Act of 2010,
 
or any statute,
 
regulation or any
 
other applicable laws,
 
rules
or
 
regulations
 
of
 
relevant
 
jurisdictions
 
prohibiting
 
bribery
 
and
 
corruption,
 
including
 
local
 
anti-
corruption laws in the countries in which the Company Group conducts business (“Anti-Corruption
Laws”);
(d)
offered, authorized, promised
 
or given any
 
unlawful bribe, rebate,
 
payoff, influence
payment,
 
kickback
 
or
 
other
 
unlawful
 
payment
 
or
 
gift
 
of
 
money
 
or
 
anything
 
of
 
value
 
to
 
any
Government Official or Person;
(e)
established or
 
maintained, or
 
is maintaining,
 
any fund
 
of corporate
 
monies or
 
other
properties
 
for
 
the
 
purpose
 
of
 
supplying
 
funds
 
for
 
any
 
of
 
the
 
purposes
 
described
 
in
 
the
 
foregoing
subparagraphs
 
through
 
or
(f)
knowingly received
 
any unlawful
 
discounts or
 
rebates in
 
violation of
 
any statute
 
or
regulation relating to antitrust or competition.
No
 
member
 
of
 
the
 
Company
 
Group
 
or
 
any
 
manager,
 
officer
 
or
 
other
 
employee
 
of
 
any
 
member
 
of
 
the
Company Group,
 
or to
 
the Knowledge
 
of the
 
Company Group,
 
any agent,
 
representative or
 
third party
 
acting
on behalf of the Company Group has been the subject
 
of any Proceedings by any Governmental Authority,
any customer, or other business partner
 
regarding actual or alleged violations of
 
any Anti-Corruption Laws.
 
No such Proceeding
 
is pending or,
 
to the Knowledge
 
of the Company
 
Group, threatened, and
 
there are no
circumstances that are likely to give rise to any such investigation, inquiry, allegations or proceedings.
3.28
Trade Control Laws; Sanctions
.
(a)
During the past five years, the
 
Company Group and its directors, officers,
 
employees
and agents, have (i) conducted the Business in compliance with applicable Trade Control Laws and
Sanctions
 
in all
 
material respects,
 
(ii) not engaged
 
in a
 
transaction
 
or dealing
 
with or
 
involving
 
a
Sanctioned Country or
 
a Person that
 
is the subject
 
or target of
 
applicable Sanctions and
 
(iii) not been
the subject of
 
or otherwise involved
 
in, enforcement actions
 
or, to the
 
Knowledge of the Company
Group, investigations by any Governmental Authority or other actions with respect to any actual or
alleged violations
 
of Trade
 
Control Laws
 
or Sanctions,
 
and not
 
been notified
 
in writing
 
(or, to
 
the
Knowledge of the Company Group, orally) of any such pending or threatened actions.
(b)
During the past
 
five years,
 
no member of
 
the Company Group
 
or any director,
 
officer,
employee or,
 
to the
 
Knowledge of
 
the Company
 
Group, agent
 
of any
 
member of
 
the Company
 
Group
has:
 
(i) been
 
the
 
subject
 
or
 
target
 
of
 
Sanctions,
 
(ii) been
 
subject
 
to
 
debarment
 
or
 
any
 
list-based
designations
 
under
 
any
 
Trade
 
Control
 
Law,
 
(iii) maintained
 
or
 
maintains
 
any
 
offices,
 
branches,
operations,
 
assets,
 
investments,
 
employees
 
or
 
agents
 
in
 
a
 
Sanctioned
 
Country
 
or
 
(iv) engaged
 
in
transactions, dealings or
 
activities that could
 
reasonably be expected
 
to cause
 
such Person to
 
become
a target of Sanctions.
3.29
No
 
Other
 
Representations
 
or
 
Warranties
.
 
PRIOR
 
TO
 
ITS
 
EXECUTION
 
OF
 
THIS
AGREEMENT,
 
BUYER
 
HAS
 
CONDUCTED
 
AN
 
INDEPENDENT
 
INVESTIGATION
 
AND
 
HAS
FORMED
 
AN
 
INDEPENDENT
 
JUDGMENT
 
CONCERNING
 
THE
 
CURRENT
 
CONDITION
 
AND
50
AFFAIRS
 
OF
 
THE
 
COMPANY
 
GROUP.
 
IN
 
MAKING
 
ITS
 
DECISION
 
TO
 
EXECUTE
 
THIS
AGREEMENT AND
 
TO
 
ENTER
 
INTO
 
THE
 
TRANSACTIONS,
 
BUYER
 
HAS
 
RELIED AND
 
WILL
RELY
 
SOLELY
 
UPON
 
THE
 
REPRESENTATIONS
 
AND
 
WARRANTIES
 
REGARDING
 
THE
COMPANY GROUP AND
 
TRANSFERORS
 
SET
 
FORTH
 
IN
 
AND
 
THE
 
SELLERS
 
SET
FORTH
 
IN
 
(IN
 
EACH
 
CASE,
 
AS
 
QUALIFIED
 
BY
 
THE
 
SCHEDULES)
 
OR
 
IN
 
ANY
CERTIFICATE DELIVERED PURSUANT HERETO AND HAS NOT AND WILL
 
NOT BE ENTITLED
TO
 
RELY
 
ON
 
ANY
 
OTHER
 
STATEMENTS
 
OR
 
ADVICE
 
FROM
 
THE
 
COMPANY
 
GROUP,
 
ANY
SUBSIDIARY OF
 
THE COMPANY
 
GROUP,
 
ANY SELLER
 
OR THEIR RESPECTIVE
 
AFFILIATES OR
REPRESENTATIVES.
 
BUYER ACKNOWLEDGES
 
THAT:
 
(a) IT HAS HAD
 
THE OPPORTUNITY
 
TO
VISIT WITH THE COMPANY
 
GROUP
 
AND MEET WITH THEIR REPRESENTATIVES TO DISCUSS
THE
 
COMPANY
 
GROUP,
 
THE
 
BUSINESS
 
AND
 
THE
 
COMPANY
 
GROUP’S
 
CONDITION
 
AND
PROSPECTS, AND (b) EXCEPT
 
AS EXPRESSLY SET FORTH IN
 
AND
 
(IN
EACH
 
CASE,
 
AS
 
QUALIFIED
 
BY
 
THE
 
SCHEDULES)
 
OR
 
IN
 
ANY
 
CERTIFICATE
 
DELIVERED
PURSUANT HERETO,
 
NO MEMBER
 
OF THE
 
COMPANY GROUP,
 
NO SELLER
 
AND
 
NO OTHER
PERSON
 
IS
 
MAKING,
 
AND
 
EACH
 
SUCH
 
PERSON
 
HEREBY
 
EXPRESSLY
 
DISCLAIMS,
 
ANY
REPRESENTATION OR
 
WARRANTY, EXPRESS OR
 
IMPLIED, AT
 
LAW OR
 
IN EQUITY,
 
AS TO
 
ANY
MEMBER
 
OF
 
THE
 
COMPANY
 
GROUP,
 
THE
 
BUSINESS,
 
OR ANY
 
SELLER
 
OR ANY
 
OF
 
THEIR
RESPECTIVE
 
ASSETS,
 
LIABILITIES
 
OPERATIONS
 
OR
 
BUSINESS
 
(INCLUDING
 
ANY
WARRANTIES OF
 
MERCHANTABILITY
 
OR FITNESS
 
FOR
 
A
 
PARTICULAR PURPOSE).
 
WITHOUT
LIMITING
 
THE
 
GENERALITY
 
OF
 
THE
 
FOREGOING,
 
NO
 
SELLER
 
NOR ANY
 
OTHER
 
PERSON
WILL
 
HAVE
 
OR
 
BE
 
SUBJECT
 
TO
 
ANY
 
LIABILITY
 
TO
 
BUYER
 
OR
 
ANY
 
OTHER
 
PERSON
RESULTING FROM THE DISTRIBUTION TO BUYER, OR
 
BUYER’S USE OF, ANY PROJECTIONS
OR
 
FORECASTS
 
MADE
 
AVAILABLE
 
TO
 
BUYER
 
OR
 
ITS
 
REPRESENTATIVES
 
IN
 
ANY
 
“DATA
ROOMS,”
 
“VIRTUAL
 
DATA
 
ROOMS,”
 
MANAGEMENT
 
PRESENTATIONS
 
OR
 
IN
 
ANY
 
OTHER
FORM IN
 
EXPECTATION OF,
 
OR IN
 
CONNECTION WITH,
 
THE TRANSACTIONS,
 
OR IN
 
RESPECT
OF
 
ANY
 
OTHER
 
MATTER
 
OR
 
THING
 
WHATSOEVER
 
(ELECTRONIC
 
OR
 
OTHERWISE)
 
OR
OTHERWISE IN EXPECTATION OF THE TRANSACTION.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
 
SECURITYHOLDERS
4.1
Representations of
 
the Securityholders
.
 
Each Voting
 
Securityholder, jointly
 
and severally,
hereby represents and warrants to Buyer as follows:
(a)
Organization, Existence
 
and Good
 
Standing.
 
If a
 
Securityholder is
 
an entity,
 
such
Securityholder
 
is
 
duly
 
organized
 
(if
 
applicable),
 
validly
 
existing
 
and
 
in
 
good
 
standing
 
under
 
the
Laws of the jurisdiction of its organization and such
 
Securityholder is duly qualified to do business
and is in
 
good standing as
 
a foreign entity
 
in each jurisdiction
 
where the character
 
of its properties
or
 
the
 
nature
 
of
 
its
 
business
 
makes
 
such
 
qualification
 
necessary,
 
except
 
for
 
failures
 
to
 
have
 
such
power or
 
authority that,
 
individually or
 
in the
 
aggregate, will
 
not prevent
 
or materially
 
delay, and
could
 
not
 
reasonably
 
be
 
expected
 
to
 
prevent
 
or
 
materially
 
delay,
 
the
 
consummation
 
of
 
the
Transactions.
(b)
Authorization; Absence of Conflicts
.
(i)
Each
 
Securityholder
 
has
 
all
 
necessary
 
power
 
and
 
authority
 
to
 
execute
 
and
deliver this
 
Agreement and the
 
Ancillary Agreements
 
to which such
 
Securityholder is a
 
party
and
 
the
 
capacity
 
and
 
authority
 
to
 
make
 
and
 
perform
 
the
 
representations,
 
warranties,
covenants and agreements
 
made by such
 
Securityholder herein and
 
therein.
 
The execution
and delivery of
 
this Agreement
 
and the
 
Ancillary
 
Agreements by each
 
Securityholder and the
51
consummation of the Transactions have been duly authorized
 
by all necessary action on the
part
 
of
 
such
 
Securityholder,
 
and
 
no
 
other
 
actions
 
or
 
other
 
proceedings
 
are
 
necessary
 
to
authorize this Agreement and the
 
other Ancillary Agreements to which such Securityholder
is a
 
party or for
 
such Securityholder to
 
consummate the Transactions.
 
This Agreement has
been duly
 
executed and
 
delivered by
 
each Voting
 
Securityholder and
 
constitutes, and
 
as of
the Closing, each Ancillary Agreement to which
 
a Securityholder is
 
a party, will
 
constitute,
when
 
executed
 
and
 
delivered
 
by
 
such
 
Securityholder,
 
in
 
each
 
case
 
assuming
 
the
 
due
authorization,
 
execution
 
and
 
delivery
 
by
 
Buyer
 
and
 
the
 
other
 
parties
 
to
 
such
 
Ancillary
Agreement,
 
the
 
legal,
 
valid
 
and
 
binding
 
obligation
 
of
 
such
 
Securityholder,
 
enforceable
against such
 
Securityholder in
 
accordance with
 
its terms,
 
subject to
 
applicable bankruptcy,
insolvency,
 
reorganization,
 
moratorium
 
and
 
other
 
similar
 
Laws
 
affecting
 
creditors’ rights
generally
 
and
 
to
 
general
 
principles
 
of
 
equity
 
(regardless
 
of
 
whether
 
such
 
enforceability
 
is
considered in a proceeding in equity or at Law).
(ii)
Neither
 
the
 
execution
 
or
 
delivery
 
of
 
this
 
Agreement
 
or
 
the
 
Ancillary
Agreements to which
 
a Securityholder is
 
a party nor
 
the consummation of
 
the Transactions
will
 
conflict
 
with
 
or
 
result
 
in
 
a
 
breach
 
or
 
violation
 
of,
 
or
 
cause
 
acceleration,
 
or
 
constitute
(with or without due notice or lapse of time or both) a
 
default under, or give rise to any right
of termination, cancellation or acceleration under, any of the terms, conditions or provisions
of (A) any contract, Law
 
or Order to which
 
such Securityholder is a
 
party or to which
 
such
Securityholder or
 
such Securityholder’s
 
assets are
 
subject or
 
(B) the governing
 
documents
of such Securityholder, if applicable.
(iii)
No consent,
 
action, approval
 
or authorization
 
of, or
 
registration, declaration
or filing with, any Governmental Authority is required to authorize, or is otherwise required
in connection
 
with, the
 
execution and
 
delivery of
 
this
 
Agreement or
 
any
 
Ancillary
 
Agreement
to
 
which
 
a
 
Securityholder
 
is
 
a
 
party
 
by
 
such
 
Securityholder
 
or
 
the
 
performance
 
by
 
such
Securityholder
 
of
 
the
 
terms
 
hereof
 
or
 
thereof
 
or
 
the
 
validity
 
or
 
enforceability
 
of
 
this
Agreement
 
or
 
such Ancillary Agreement,
 
except
 
for
 
such
 
filings
 
and
 
approvals,
 
if
 
any,
 
as
may be required under the HSR Act.
(iv)
There are no actions, suits, investigations or other Proceedings pending
 
or, to
the
 
Knowledge
 
of
 
the
 
Voting
 
Securityholders,
 
threatened
 
against
 
a
 
Securityholder
 
or
involving
 
any
 
of
 
a
 
Securityholder’s
 
properties
 
or
 
assets
 
in
 
any
 
court
 
or
 
before
 
any
 
other
Governmental Authority, or before any arbitrator except as, individually or in
 
the aggregate,
will not, and not reasonably be expected to have, an adverse effect on such Securityholder’s
ability
 
to
 
perform
 
such
 
Securityholder’s
 
obligations
 
under
 
this
 
Agreement
 
or
 
otherwise
prevent, hinder or
 
delay the consummation
 
of the Transactions.
 
No Securityholder is
 
subject
to
 
any
 
outstanding
 
Order
 
that
 
prohibits
 
or
 
otherwise
 
restricts
 
the
 
ability
 
of
 
such
Securityholder to consummate fully the
 
Transactions or any of
 
the Ancillary Agreements to
which such Securityholder is a party.
(c)
Ownership
 
of
 
Equity
 
Interests
.
 
The
 
Securityholders
 
are
 
the
 
record
 
and
 
beneficial
owner of and has good
 
and valid title to
 
the number and class of
 
Equity Interests set forth
 
opposite
each Securityholder’s name on Schedule
 
and such Equity Interests are
 
owned free and clear of
all Liens (other than
 
Permitted Equity Interest Encumbrances).
 
Other than Equity Interests listed
 
on
Schedule
, no Securityholder has
 
any beneficial ownership of
 
any Purchased Equity Interests
 
or
any Equity Interest
 
in any Company
 
or any right
 
of any kind
 
to have any
 
such Equity Interest
 
issued.
 
Except
 
as
 
set
 
forth
 
on
 
Schedule
,
 
no
 
Securityholder
 
is
 
a
 
party
 
to
 
any
 
contract
 
(other
 
than
 
this
Agreement)
 
that
 
could
 
require
 
such
 
Securityholder
 
to
 
sell
 
or
 
otherwise
 
dispose
 
of,
 
or
 
grant
 
any
interest in, any of such Securityholder’s Equity Interests.
52
(d)
Brokerage Agreements.
 
No Person has acted as
 
a broker, finder or financial
 
advisor
for in
 
connection with
 
the Transactions
 
based on
 
any arrangement
 
or agreement
 
made by
 
or on
 
behalf
of
 
any
 
Securityholder
 
or
 
any
 
Securityholder’s Affiliates
 
for
 
which
 
Buyer
 
or
 
any
 
member
 
of
 
the
Company Group could be liable following the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
 
BUYER
Buyer hereby represents and warrants to the Voting Securityholders as follows:
5.1
Organization and Qualification
.
 
Buyer is a corporation duly organized, validly existing
 
and
in good standing
 
under the Laws
 
of Delaware, with
 
full power and
 
authority to own,
 
operate and lease
 
its
properties and to carry on its business,
 
and Buyer is duly qualified to do
 
business and is in good standing as
a foreign corporation
 
in each jurisdiction
 
where the character
 
of its properties
 
or the nature
 
of its business
makes such qualification necessary, except for failures to have
 
such power or authority that, individually or
in the
 
aggregate, will
 
not prevent
 
or materially
 
delay, and
 
could not
 
reasonably be
 
expected to
 
prevent or
materially delay, the consummation of the Transactions.
5.2
Authorization of Agreement; No Violation; No Consents; No Litigation
.
(a)
Buyer has
 
all necessary
 
power and
 
authority to
 
execute and
 
deliver this Agreement
and
 
the Ancillary Agreements
 
to
 
which
 
it
 
is
 
a
 
party
 
and
 
the
 
capacity
 
and
 
authority
 
to
 
make
 
and
perform
 
the
 
representations,
 
warranties,
 
covenants
 
and
 
agreements
 
made
 
by
 
Buyer
 
herein
 
and
therein.
 
The execution and delivery of this Agreement and the Ancillary
 
Agreements by Buyer and
the consummation of the Transactions have been duly authorized by all
 
necessary action on the part
of Buyer, and
 
no other actions
 
or other proceedings
 
are necessary to
 
authorize this Agreement and
the
 
other
 
Ancillary
 
Agreements
 
to
 
which
 
Buyer
 
is
 
a
 
party
 
or
 
for
 
Buyer
 
to
 
consummate
 
the
Transactions.
 
This Agreement has been duly executed and delivered by
 
Buyer and constitutes, and
as of
 
the Closing,
 
each
 
Ancillary
 
Agreement to
 
which Buyer
 
is a
 
party, will
 
constitute, when
 
executed
and delivered by Buyer, in each case assuming the due authorization, execution and delivery by the
other parties thereto, the
 
legal, valid and binding
 
obligation of Buyer, enforceable
 
against Buyer in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
 
moratorium
and
 
other
 
similar
 
Laws
 
affecting
 
creditors’
 
rights
 
generally
 
and
 
to
 
general
 
principles
 
of
 
equity
(regardless of whether such enforceability is considered in a proceeding in equity or at Law).
(b)
Neither the
 
execution or
 
delivery of
 
this Agreement or the Ancillary Agreements
 
to
which Buyer is a party nor the consummation of the Transactions (i) will conflict with or result in a
breach or
 
violation of,
 
or cause
 
acceleration, or
 
constitute (with
 
or without
 
due notice
 
or lapse
 
of
time or
 
both) a
 
default under,
 
or give
 
rise to
 
any right
 
of termination,
 
cancellation or
 
acceleration
under, any
 
of the
 
terms, conditions
 
or provisions
 
of (A) any
 
material Contract,
 
Law or
 
Order to
 
which
Buyer is
 
a party
 
or to
 
which Buyer
 
or its
 
assets is
 
subject or
 
(B) the certificate
 
of incorporation
 
or
other
 
organizational
 
document
 
of
 
Buyer, or
 
(ii) require
 
Buyer
 
to
 
obtain
 
the
 
consent
 
of
 
or
 
provide
notice to any third party (other than a Governmental Authority) not already obtained.
(c)
No consent, action, approval or authorization of, or registration, declaration or filing
with, any
 
Governmental Authority is
 
required to
 
authorize, or
 
is otherwise
 
required in
 
connection
with, the execution and delivery of this Agreement or any Ancillary
 
Agreement to which Buyer is a
party
 
by
 
Buyer
 
or
 
the
 
performance
 
by
 
Buyer
 
of
 
the
 
terms
 
hereof
 
or
 
thereof
 
or
 
the
 
validity
 
or
enforceability of this
 
Agreement or such
 
Ancillary
 
Agreement, except for
 
such filings and
 
approvals,
if any, as may be required under the HSR Act.
 
53
(d)
There
 
are
 
no
 
actions,
 
suits,
 
investigations
 
or
 
other
 
Proceedings
 
pending
 
or,
 
to
 
the
Knowledge of
 
Buyer, threatened
 
against Buyer
 
or any
 
of its
 
Subsidiaries or
 
involving any
 
of their
respective properties
 
or assets
 
in any
 
court or
 
before any
 
other Governmental Authority,
 
or before
any arbitrator except as
 
could not, individually or in
 
the aggregate, have or be
 
reasonably expected
to
 
have
 
an
 
adverse
 
effect
 
on
 
Buyer’s
 
ability
 
to
 
perform
 
its
 
obligations
 
under
 
this Agreement
 
or
otherwise prevent,
 
hinder or
 
delay the
 
consummation of
 
the Transactions.
 
Buyer is
 
not subject
 
to
any outstanding Order that prohibits or otherwise restricts the ability of Buyer to
 
consummate fully
the Transactions.
5.3
Financial Ability
.
 
Buyer has,
 
and will
 
have at
 
the Closing,
 
on an
 
unconditional basis,
 
the
financial capability
 
and cash
 
in immediately
 
available U.S.
 
funds sufficient
 
to fund
 
the consummation
 
of
the Transactions,
 
to satisfy
 
all other
 
reasonably anticipated
 
costs and
 
expenses of
 
Buyer arising
 
in connection
therewith and payable
 
at the Closing
 
and to permit
 
Buyer to perform
 
in a timely
 
manner all of
 
its obligations
under this Agreement to be performed at the Closing.
5.4
Brokerage Agreements
.
 
Buyer
 
has
 
not
 
entered
 
(directly
 
or
 
indirectly)
 
into
 
any
 
agreement
with any Person, firm or corporation providing
 
for the payment of any commission, brokerage
 
or “finder’s
fee” in connection
 
with the Transactions for
 
which any Securityholder
 
or any Affiliate thereof (excluding,
if the Closing occurs, any member of the Company Group) will have any responsibility.
5.5
Investment Intention
.
 
Buyer is acquiring the Purchased Equity Interests
 
for its own account,
for investment purposes only and not with a view to any public distribution
 
thereof or with any intention of
selling, distributing or otherwise disposing of
 
the Purchased Equity Interests in a
 
manner that would violate
the registration
 
requirements of
 
the Securities Act of
 
1933 (the
 
“Securities Act”).
 
Buyer understands
 
that
the Purchased Equity Interests have
 
not been registered under the
 
Securities Act and cannot be sold unless
subsequently registered under the Securities
 
Act or an exemption
 
from such registration is available.
 
Buyer
is able
 
to bear
 
the economic
 
risk of
 
holding the
 
Purchased Equity
 
Interests for
 
an indefinite
 
period (including
total loss of
 
its investment) and
 
has sufficient knowledge and
 
experience in financial and
 
business matters
so as to be capable of evaluating the merits and risk of its investment.
ARTICLE VI
CERTAIN COVENANTS
6.1
Conduct
 
of
 
the
 
Business
 
Prior
 
to
 
the
 
Closing
 
Date
.
 
The
 
Sellers
 
agree
 
that,
 
except
 
(w) as
expressly set
 
forth in
 
or contemplated,
 
permitted or
 
required by
 
this
 
Agreement, (x) as
 
required by
 
applicable
Law, (y) as set
 
forth in Schedule
 
or (z) as approved
 
by Buyer in
 
writing (which Buyer
 
agrees shall not
be unreasonably
 
withheld, conditioned
 
or delayed),
 
from the
 
date hereof
 
through the
 
Closing Date
 
or the
termination
 
of
 
this Agreement,
 
each
 
member
 
of
 
the
 
Company
 
Group
 
shall
 
use
 
commercially
 
reasonable
efforts to operate the
 
Business in all
 
material respects in the
 
ordinary course of business
 
consistent with past
practice
 
and
 
use
 
commercially
 
reasonable
 
efforts
 
to
 
maintain
 
intact
 
their
 
respective
 
businesses
 
and
relationships
 
and
 
goodwill
 
with
 
employees,
 
customers,
 
lenders,
 
suppliers
 
and
 
others
 
having
 
material
business relationships with the Company Group in each case, in all material respects.
 
Without limiting the
generality of the
 
foregoing, except as
 
expressly set forth
 
in or contemplated,
 
permitted or required
 
by this
Agreement,
 
as
 
Buyer
 
may
 
approve
 
in
 
writing
 
(which
 
Buyer
 
agrees
 
shall
 
not
 
be
 
unreasonably
 
withheld,
conditioned or delayed), or as set forth in Schedule
, no member of the Company Group or Seller will:
(a)
except
 
as
 
expressly
 
contemplated
 
by
 
the
 
Pre-Closing
 
Restructuring,
 
amend
 
the
Organizational Documents or any
 
organizational document of any
 
member of the Company
 
Group
or any Transferor;
 
 
 
 
54
(b)
except
 
for
 
the
 
F Reorganization
 
and
 
the
 
ELT
 
Contribution,
 
(i) issue,
 
authorize
 
for
issuance, sell,
 
grant, transfer,
 
dispose of,
 
subject to
 
any Lien
 
(other than
 
Permitted Equity
 
Interest
Encumbrances) any Equity Interests of
 
any member of the Company
 
Group or Transferor, including
pursuant
 
to
 
any
 
split,
 
combination,
 
subdivision
 
or
 
reclassification
 
of
 
any
 
such
 
Equity
 
Interest;
(ii) issue, authorize
 
for issuance,
 
sell, make
 
or grant
 
any option,
 
warrant, call,
 
right, commitment,
conversion right, right of first refusal, pledge, hypothecation or agreement of any
 
character relating
to the Equity Interests of any member of the Company Group or Transferor; or (iii) issue, authorize
for issuance, grant, transfer, grant, dispose of or sell any securities or
 
obligations convertible into or
redeem,
 
acquire
 
or
 
purchase
 
any
 
Equity
 
Interest
 
of
 
any
 
member
 
of
 
the
 
Company
 
Group
 
or
Transferor;
(c)
(i) incur
 
any
 
Indebtedness
 
for
 
borrowed
 
money
 
in
 
addition
 
to
 
any
 
Indebtedness
outstanding on the date
 
hereof, except for borrowings
 
made in the ordinary
 
course of business under
the
 
Existing
 
Credit
 
Facility,
 
(ii) assume,
 
guarantee,
 
endorse
 
or
 
otherwise
 
become
 
liable
 
or
responsible
 
(whether
 
directly,
 
contingently
 
or
 
otherwise)
 
for
 
the
 
obligations
 
of
 
any
 
other
 
Person,
except for the endorsement of
 
checks for collection in the
 
ordinary course of business or
 
(iii) make
any
 
loans,
 
advances
 
or
 
capital
 
contributions
 
to,
 
or
 
investments
 
in,
 
any
 
other
 
Person;
 
provided,
however, that
 
clause (iii) shall
 
not prohibit payments
 
in connection
 
with normal relocations,
 
travel
advances or other advances to employees of the Company Group in the ordinary course of business
and not in excess of $5,000 individually or $25,000 in the aggregate;
(d)
(i) increase the base cash compensation payable to any officer, director, employee or
independent contractor, other than any such increases in the ordinary
 
course of business that do not
on an
 
annualized basis
 
exceed 3%
 
individually or
 
3% in
 
the aggregate,
 
(ii) create, establish,
 
enter
into, amend
 
or terminate
 
any bonus
 
plan, agreement,
 
policy or
 
other employee
 
benefit plan,
 
including
any retention or change in control bonus, (iii) materially increase the coverage or benefits available
under
 
or
 
otherwise
 
amend
 
any
 
Employee
 
Plan,
 
(iv) hire
 
or
 
terminate
 
the
 
employment
 
of
 
any
employee
 
or
 
services
 
of
 
any
 
independent
 
contractor
 
whose
 
annual
 
base
 
compensation
 
exceeds
$100,000, other than
 
termination for
 
“cause,” (v) transfer or
 
reassign the duties
 
of a Company
 
Group
Employee such that he or she
 
is no longer a Company Group
 
Employee, (vi) transfer or reassign the
duties of an employee who is not a Company Group Employee such that he or she
 
would become a
Company
 
Group
 
Employee
 
other
 
than
 
to
 
the
 
extent
 
such
 
employee
 
would
 
not
 
have
 
annual
 
base
compensation in
 
excess of
 
$100,000 and
 
such transfer
 
or reassignment
 
is to
 
fill a
 
vacant position,
(vii) grant any severance
 
or termination pay
 
to any current
 
or former officer,
 
director, employee or
independent contractor, other
 
than pursuant to
 
agreements and arrangements
 
already in place
 
as of
the
 
date
 
of
 
this Agreement,
 
(viii) grant
 
any
 
equity
 
or
 
equity-based
 
awards,
 
(ix) loan
 
or
 
advance
money (other than advances for
 
business expenses made in the
 
ordinary course of business) or
 
other
property to any current or former officer, director, employee or independent contractor, (x) take any
action to
 
accelerate the
 
vesting or
 
payment of
 
or to
 
fund any
 
benefit or
 
payment to
 
any current
 
or
former
 
officer,
 
director,
 
employee
 
or
 
independent
 
contractor
 
other
 
than
 
pursuant
 
to
 
existing
agreements or arrangements described
 
on subsection (d)(x) of
 
Schedule
 
or (xi) waive, amend
 
or
terminate the terms of any restrictive covenant obligation of any Company Group Employee;
(e)
(i) except for
 
sales of
 
inventory in
 
the ordinary
 
course of
 
business to
 
the Company
Group’s customers and distributors and non-exclusive licenses in the ordinary course of business to
the
 
Company
 
Group’s
 
customers,
 
contractors,
 
distributors,
 
and
 
suppliers,
 
sell,
 
transfer,
 
mortgage,
license, lease or
 
otherwise dispose of,
 
or encumber, or
 
agree to sell,
 
transfer, mortgage, license,
 
lease
or
 
otherwise
 
dispose
 
of
 
or
 
encumber,
 
any
 
(A) properties,
 
real,
 
personal
 
or
 
mixed,
 
tangible
 
or
intangible,
 
that
 
have
 
a
 
value
 
on
 
the
 
books
 
of
 
the
 
Company
 
Group,
 
either
 
individually
 
or
 
in
 
the
aggregate,
 
in
 
excess
 
of
 
$50,000
 
or
 
(B) owned
 
Company
 
Group
 
Intellectual
 
Property
 
or
 
(ii) allow
such properties, rights or assets to become subject to any Liens (other than Permitted Liens);
 
55
(f)
make
 
or
 
commit
 
to
 
make
 
any
 
capital
 
expenditure,
 
capital
 
addition
 
or
 
capital
improvement in an amount exceeding $100,000;
(g)
settle,
 
cancel,
 
compromise,
 
release
 
or
 
provide
 
a
 
waiver
 
with
 
respect
 
to
 
any
 
claim,
action or proceeding (i) if
 
the amount payable by
 
the Company Group could
 
be in excess of
 
$50,000
individually
 
or,
 
with
 
all
 
other
 
settlements
 
since
 
the
 
date
 
of
 
this
 
Agreement,
 
$150,000
 
in
 
the
aggregate, (ii) if
 
doing so would
 
require any
 
payments following
 
the Closing
 
or (iii) results
 
in any
other
 
liability
 
or
 
involving
 
equitable
 
remedies
 
or
 
an
 
admission
 
by
 
any
 
member
 
of
 
the
 
Company
Group
 
of
 
wrongdoing
 
or
 
violation
 
of
 
Law
 
(other
 
than
 
the
 
payment
 
of
 
cash
 
pursuant
 
to
 
clause (i)
above);
(h)
(i) declare, set aside or pay any distributions with respect to its equity or redeem any
equity
 
for
 
cash
 
or
 
otherwise
 
(other
 
than
 
Tax
 
distributions
 
to
 
the
 
members
 
of
 
a
 
Company
 
(or
 
its
applicable Transferor) in accordance with the applicable Organizational Documents and a final Tax
distribution immediately prior
 
to the
 
Closing with respect
 
to estimated
 
Tax liabilities of
 
the members
of a
 
Company through
 
the Closing)
 
or (ii) following
 
the Calculation
 
Time, use
 
any Cash
 
to repay
any Indebtedness or Company Group Expenses;
(i)
acquire any
 
business (in
 
any form
 
of transaction)
 
or assets
 
or other
 
property (other
than
 
inventory,
 
goods,
 
supplies,
 
raw
 
materials
 
and
 
other
 
equipment
 
in
 
the
 
ordinary
 
course
 
of
business) or lease or sublease any real property;
(j)
recognize any
 
labor union
 
or labor
 
organization as
 
the representative
 
of any
 
of the
employees
 
of
 
the
 
Company
 
Group,
 
or
 
enter
 
into
 
any
 
collective
 
bargaining
 
agreement
 
or
 
other
contract with a labor union or labor organization;
(k)
other than
 
in the
 
ordinary course
 
of business,
 
(i) enter into
 
any contract
 
that, had
 
it
been entered into prior to the date
 
of this Agreement,
 
would be a Material Contract or (ii) terminate,
cancel, waive
 
any material
 
right under
 
or materially
 
amend any
 
Material Contract
 
or any
 
contract
that, had it been entered into prior to the date of this Agreement, would be a Material Contract;
(l)
adopt a
 
plan of
 
liquidation, dissolution,
 
merger, consolidation
 
or other
 
reorganization,
other than the F Reorganization or ELT Contribution;
(m)
make
 
any
 
material
 
change
 
with
 
respect
 
to
 
accounting
 
policies
 
or
 
procedures,
including the Accounting Principles, except as required by GAAP
 
or change in Law;
(n)
cancel, terminate
 
or allow
 
to lapse
 
any insurance
 
policy, unless
 
within 15 Business
Days of
 
such cancellation,
 
termination or
 
lapse, replacement
 
coverage with
 
a substantially
 
similar
limit is obtained with no gap in coverage;
(o)
(i) terminate, fail to renew, abandon, cancel, let lapse or fail to continue to prosecute
or
 
defend
 
any Registered
 
Intellectual
 
Property
 
or
 
(ii) fail
 
to take
 
reasonable
 
steps
 
to maintain
 
the
confidentiality
 
of
 
all
 
material
 
Trade
 
Secrets
 
included
 
in
 
the
 
owned
 
Company
 
Group
 
Intellectual
Property;
(p)
(i) make,
 
change
 
or
 
revoke
 
any
 
material
 
Tax
 
election
 
(except
 
as
 
expressly
contemplated by the Pre-Closing
 
Restructuring), (ii) change any accounting
 
period or method with
respect to Taxes (except
 
as expressly contemplated
 
by the Pre-Closing Restructuring),
 
(iii) file any
amended Tax
 
Return,
 
(iv) enter into
 
any
 
“closing agreement”
 
as
 
described in
 
Section 7121 of
 
the
Code,
 
(v) settle
 
or
 
compromise
 
any
 
proceeding
 
with
 
respect
 
to
 
any
 
Tax
 
claim
 
or
 
assessment,
(vi) surrender any right
 
to claim a material
 
refund of Taxes, (vii) request
 
any ruling with
 
respect to
 
 
 
 
 
 
 
 
 
 
 
56
any Taxes
 
or (viii) consent
 
to any
 
extension or
 
waiver of
 
the limitation
 
period applicable
 
to any
 
Taxes
of any Company, in each case, except as required by applicable Law; or
(q)
agree to do any of the foregoing.
Notwithstanding anything to the contrary
 
in this
 
Agreement, nothing contained in this
 
Agreement shall give
Buyer,
 
directly
 
or
 
indirectly,
 
the
 
right
 
to
 
control
 
or
 
direct
 
the
 
Company
 
Group’s
 
operations
 
prior
 
to
 
the
Closing.
 
Prior to the Closing, the Company Group shall exercise, consistent with
 
the terms and conditions
of this Agreement, complete control and supervision over its business, assets and operations.
6.2
Access by Buyer
.
 
From the date hereof
 
until the Closing Date
 
or the prior termination
 
of this
Agreement
 
pursuant
 
to
 
Section
 
Buyer,
 
its Affiliates
 
and their
 
respective
 
employees,
 
representatives
and agents
 
will be
 
given reasonable
 
access, upon
 
reasonable notice
 
and during
 
normal business
 
hours, to
the facilities,
 
properties, management
 
personnel (including
 
appropriate access
 
to outside
 
accountants and
attorneys),
 
books
 
and
 
records
 
(including
 
Tax,
 
regulatory,
 
financial,
 
intellectual
 
property,
 
accounting,
commercial, logistical,
 
R&D and
 
human resources
 
records) as
 
Buyer may
 
reasonably request
 
for the
 
purpose
of conducting an investigation of its financial condition, status, business, properties and
 
assets or otherwise
with
 
respect
 
to
 
the
 
Transactions
 
and
 
for
 
transition
 
planning
 
purposes;
 
provided,
 
however,
 
that
 
such
investigation will be conducted in a manner that does not unreasonably interfere with normal operations of
the Company Group;
 
provided further that
 
(i) all requests for
 
access shall be
 
directed to such
 
Person(s) as
the
 
Sellers’
 
Representative
 
may
 
designate
 
in
 
writing
 
from
 
time
 
to
 
time
 
(the
 
“Company
 
Group
 
Access
Contact”), (ii) such access shall be conducted under
 
the supervision of the Company Group
 
Access Contact
or
 
other
 
applicable
 
personnel
 
specifically
 
designated
 
by
 
a
 
Company
 
Group Access
 
Contact
 
in
 
writing,
(iii) no
 
Personal
 
Data
 
shall
 
be
 
disclosed
 
or
 
used
 
other
 
than
 
in
 
compliance
 
with
 
applicable
 
Privacy
 
Law,
(iv) Buyer shall not
 
(and shall not
 
permit any of
 
its representatives or Affiliates
 
to), contact any
 
customer,
supplier, distributor or
 
other material business
 
relation of the
 
Company Group (in
 
each case that
 
is known
by Buyer to
 
have such relationship
 
with the Company
 
Group) for the
 
purpose of discussing,
 
and shall not
discuss,
 
the
 
Company
 
Group,
 
the
 
Business
 
or
 
the
 
Transactions
 
without
 
the
 
prior
 
written
 
consent
 
of
 
the
Sellers’
 
Representative,
 
which
 
consent
 
shall
 
not
 
be
 
unreasonably
 
withheld,
 
conditioned
 
or
 
delayed
(provided,
 
however,
 
that
 
nothing
 
herein
 
shall
 
prevent
 
Buyer
 
from
 
having
 
conversations
 
with
 
any
 
of
 
the
foregoing in
 
the ordinary
 
course of
 
business of
 
Buyer and
 
its Affiliates unrelated
 
to the
 
Company Group,
the Business or
 
the Transactions) and (v) nothing
 
herein shall require
 
any member of the
 
Company Group
or its
 
representatives to
 
furnish to
 
Buyer or
 
provide Buyer
 
with information
 
that (A) is
 
subject to
 
an attorney-
client
 
privilege
 
or
 
an
 
attorney
 
work-product
 
privilege
 
or
 
confidentiality
 
obligations,
 
(B) outside
 
legal
counsel for the Company Group reasonably concludes may give rise to antitrust or competition Law issues
or
 
otherwise
 
violate
 
applicable
 
Laws
 
or
 
(C) violate
 
any
 
Law
 
or
 
Contract
 
disclosed
 
on
 
Schedule
 
as
containing confidentiality obligations
 
that would prohibit
 
disclosures to Buyer
 
under these circumstances;
provided
 
further
 
that
 
(x) in
 
the
 
case
 
of
 
clause (v),
 
the
 
Parties
 
shall
 
use
 
their
 
respective
 
commercially
reasonable
 
efforts
 
to
 
make
 
appropriate
 
substitute
 
arrangements
 
to
 
allows
 
such
 
disclosure
 
under
circumstances
 
in
 
which
 
such
 
restrictions
 
apply
 
and
 
(y) Buyer
 
will,
 
and
 
will
 
direct
 
its
 
employees,
representatives and agents
 
to, keep all
 
information furnished to
 
Buyer in connection with
 
the Transactions
confidential in accordance with the terms and conditions of the Confidentiality
 
Agreement.
 
Any disclosure
during
 
Buyer’s
 
investigation
 
pursuant
 
to
 
this
 
Section
 
shall
 
not
 
constitute
 
additions,
 
modifications,
qualifications, or
 
limitations to
 
the representations
 
or warranties
 
of any
 
member
 
of the
 
Company Group,
Transferors or Voting Securityholders,
 
nor shall any such
 
disclosure in any
 
way limit Buyer’s
 
rights under
this Agreement with respect to any such representations or warranties.
 
Notwithstanding anything herein to
the
 
contrary,
 
prior
 
to
 
the
 
Closing,
 
Buyer
 
shall
 
have
 
no
 
right
 
to
 
perform
 
any
 
invasive
 
or
 
subsurface
investigations of the properties or facilities
 
of any member of the Company
 
Group without the prior written
consent of the Sellers’ Representative.
 
 
 
 
57
6.3
Satisfaction of Closing Conditions; Competition Filings; Required Consents
.
(a)
From
 
the
 
date
 
hereof
 
through
 
the
 
Closing
 
Date
 
or
 
the
 
prior
 
termination
 
of
 
this
Agreement pursuant
 
to Section
, each
 
Party agrees
 
to use
 
its reasonable
 
best efforts
 
to satisfy
the conditions to the Closing set forth in
 
in an expeditious manner.
(b)
Subject to the terms and conditions herein provided, each Party shall make, or cause
to be
 
made, any
 
filings required
 
by such
 
Party under
 
any applicable
 
antitrust or
 
competition Laws
as soon as
 
practicable after the
 
date hereof (but,
 
with respect to
 
any HSR
 
Act submission, in
 
no event
later
 
than
 
15 Business
 
Days
 
after
 
the
 
date
 
hereof)
 
and
 
request
 
early
 
termination
 
of
 
any
 
waiting
periods
 
in
 
connection
 
with
 
such
 
competition
 
filings.
 
Each
 
Party
 
shall
 
be
 
responsible
 
for
 
its
respective filing fees incurred in connection with all filings contemplated by this Section
(c)
Notwithstanding anything to the
 
contrary in this Agreement, each Party
 
shall use its
reasonable best
 
efforts to
 
(i) make, after
 
the filings
 
contemplated by
 
Section
 
are made,
 
any
other
 
submissions
 
required
 
or
 
reasonably
 
requested
 
by
 
any
 
Governmental Authority
 
under
 
such
Laws, (ii) cooperate with one another in preparing and making all such filings and submissions and
timely
 
seeking
 
all
 
such
 
consents,
 
Permits,
 
authorizations
 
or
 
approvals,
 
(iii) keep
 
the
 
Sellers’
Representative
 
and
 
the
 
Company
 
Group’s
 
counsel
 
informed
 
in
 
all
 
material
 
respects
 
and
 
on
 
a
reasonably
 
timely
 
basis
 
of
 
any
 
substantive
 
or
 
material
 
procedural
 
communication
 
relating
 
to
 
the
Transactions received by such party from,
 
or given by such party to,
 
the FTC, the
 
Antitrust Division
of
 
the
 
Department
 
of
 
Justice
 
or
 
any
 
other
 
Governmental
 
Authority
 
or
 
in
 
connection
 
with
 
any
proceeding relating to the
 
Transactions pending or threatened
 
by a private party
 
(iv) permit Buyer or
the
 
Sellers’ Representative,
 
as
 
applicable,
 
to
 
review
 
any
 
such
 
substantive
 
or
 
material
 
procedural
communication
 
and
 
incorporate
 
reasonable
 
comments
 
thereto,
 
(v) use
 
reasonable
 
best
 
efforts
 
to
consult
 
with
 
Buyer
 
or
 
the
 
Sellers’
 
Representative,
 
as
 
applicable,
 
in
 
advance
 
of
 
any
 
meeting
 
or
conference with any Governmental Authority relating to the Transactions or in connection with any
proceeding relating
 
to the
 
Transactions pending
 
or threatened
 
by a
 
Person other
 
than a
 
Governmental
Authority, (vi) give Buyer
 
or the Sellers’
 
Representative, as applicable,
 
the opportunity to
 
attend and
participate
 
in
 
such
 
meetings
 
and
 
conferences
 
(to
 
the
 
extent
 
permitted
 
by
 
such
 
Governmental
Authority
 
or
 
other
 
Person),
 
and
 
(vii) take,
 
or
 
cause
 
to
 
be
 
taken,
 
all
 
other
 
actions
 
necessary
 
or
advisable
 
to
 
consummate
 
and
 
make
 
effective
 
the
 
Transactions
 
on
 
or
 
prior
 
to
 
the
 
Outside
 
Date.
 
Notwithstanding anything to the contrary
 
in this Agreement, in no event will Buyer be
 
obligated to
propose or agree
 
to accept any
 
undertaking or condition,
 
to enter into
 
any consent decree,
 
to make
any divestiture, to accept
 
any operational restriction or take
 
any other action that, in
 
the reasonable
judgment of Buyer, could
 
be expected to limit
 
the right of Buyer
 
to own or operate
 
all or any portion
of its respective businesses or assets.
 
Neither the Sellers nor any of their respective Affiliates shall,
without
 
Buyer’s
 
written
 
consent,
 
in
 
Buyer’s
 
sole
 
discretion,
 
discuss
 
or
 
commit
 
to
 
any
 
divestiture
transaction, or
 
discuss or
 
commit to
 
alter their
 
businesses or
 
commercial practices
 
in any
 
way, or
otherwise take or commit to take
 
any action that limits Buyer’s freedom
 
of action with respect to,
 
or
Buyer’s
 
ability to
 
retain any
 
of the
 
businesses, product
 
lines or
 
assets of,
 
the
 
Company Group
 
or
otherwise receive
 
the full
 
benefits of
 
this Agreement.
 
Neither Buyer,
 
on the
 
one hand,
 
nor Sellers
nor
 
the
 
Company
 
Group,
 
on
 
the
 
other
 
hand,
 
shall
 
litigate
 
with
 
any
 
Governmental Authorities
 
to
oppose
 
any
 
enforcement action
 
or
 
remove any
 
court
 
or
 
regulatory
 
Orders
 
impeding
 
the ability
 
to
consummate the Transactions without
 
the written consent of
 
the other (to be
 
the written consent of
the Sellers’ Representative in the case of Sellers and the Company Group); provided, however,
 
that
Buyer shall
 
direct the
 
defense of
 
the Transactions
 
in any
 
investigation, litigation,
 
enforcement action,
court or
 
regulatory Order,
 
or negotiations
 
with any
 
Governmental Authority; provided
 
further that
Buyer shall reasonably consult with the Sellers and in good faith consider their views regarding the
strategy and process relating to the defense.
 
 
 
 
 
58
(d)
No
 
Party
 
shall
 
consent
 
to
 
any
 
voluntary
 
delay
 
of
 
the
 
consummation
 
of
 
the
Transactions hereby
 
at the
 
behest of
 
any Governmental Authority
 
without the
 
consent of
 
Buyer or
the
 
Sellers’
 
Representative,
 
as
 
applicable,
 
which
 
consent
 
shall
 
not
 
be
 
unreasonably
 
withheld,
conditioned or delayed.
(e)
Buyer
 
shall
 
not,
 
and
 
shall
 
cause
 
its Affiliates
 
not,
 
acquire
 
or
 
agree
 
to
 
acquire,
 
by
merging with or into
 
or consolidating with, or by
 
purchasing a portion of
 
the assets of or
 
equity in,
any
 
business
 
or
 
corporation,
 
partnership,
 
association
 
or
 
other
 
business
 
organization
 
or
 
division
thereof, in each case, if the entering into of a
 
definitive agreement relating to, or the consummation
of
 
such
 
acquisition,
 
merger
 
or
 
consolidation
 
could
 
reasonably
 
be
 
expected
 
to
 
materially
 
delay
 
or
prevent the consummation of the Transactions.
6.4
Further
 
Actions
.
 
In
 
addition
 
to
 
the
 
governmental
 
filing
 
and
 
submission
 
requirements
addressed by
 
Section
, each
 
of the
 
Parties will
 
cooperate and
 
use reasonable
 
best efforts
 
to take,
 
or
cause
 
to
 
be
 
taken,
 
all
 
appropriate
 
actions
 
and
 
to
 
make,
 
or
 
cause
 
to
 
be
 
made,
 
all
 
filings
 
and
 
submissions
necessary or advisable
 
under all other
 
applicable Laws, to
 
consummate and make
 
effective the
 
Transactions.
 
Without
 
limiting
 
the
 
generality
 
of
 
the
 
foregoing,
 
(i) the
 
Parties
 
will
 
use
 
reasonable
 
best
 
efforts,
 
as
applicable, to obtain all licenses, Permits,
 
consents, approvals, authorizations, qualifications and
 
Orders of
Governmental Authorities and to the extent required by Law to be obtained prior
 
to the Closing in order to
consummate
 
the
 
Transactions,
 
to
 
obtain
 
them
 
prior
 
to
 
the
 
Closing
 
and
 
(ii) the
 
Sellers
 
and
 
the
 
Company
Group will use reasonable
 
best efforts to obtain
 
all consents approvals, authorizations
 
of parties to contracts
with
 
the
 
Company
 
Group,
 
in
 
each
 
case,
 
as
 
are
 
necessary
 
in
 
connection
 
with
 
the
 
consummation
 
of
 
the
Transactions and to fulfill the conditions to the Transactions.
6.5
D&O Indemnification; D&O Insurance
.
(a)
For a period
 
of six years
 
after the Closing,
 
Buyer agrees that
 
all rights provided
 
in the
Organizational Documents or in any Contract to which
 
a member of the Company Group is a
 
party
with
 
respect
 
to
 
exculpation,
 
indemnification
 
and
 
advancement
 
of
 
expenses
 
for
 
acts
 
or
 
omissions
occurring
 
at
 
or
 
prior
 
to
 
the
 
Closing,
 
whether
 
asserted
 
or
 
claimed
 
prior
 
to,
 
at
 
or
 
after
 
the
 
Closing
(including in respect of any
 
matters arising in connection with
 
this Agreement and
 
the Transactions)
in favor
 
of each
 
individual who
 
at the
 
Closing is,
 
or at
 
any time
 
prior to
 
the Closing
 
was, (i) a
 
director,
manager or officer
 
of any member
 
of the
 
Company Group or
 
(ii) serving as a
 
director, manager
 
or
officer
 
of
 
any
 
other
 
Person
 
at
 
the
 
request
 
of
 
any
 
member
 
of
 
the
 
Company
 
Group
 
(each
 
Person
referred
 
to
 
in
 
clause (i)
 
or
 
(ii),
 
a
 
“D&O
 
Indemnified
 
Party”)
 
shall
 
survive
 
the
 
Closing
 
and
 
shall
continue in
 
full force
 
and effect.
 
For a
 
period of
 
six years
 
after the
 
Closing, Buyer
 
shall not,
 
and
shall not
 
permit any member
 
of the Company
 
Group to,
 
amend, repeal or
 
modify any provision
 
in
the
 
Organizational
 
Documents
 
relating
 
to
 
the
 
exculpation,
 
indemnification
 
or
 
advancement
 
of
expenses of
 
any D&O
 
Indemnified Party
 
with respect
 
to acts
 
or omissions
 
occurring at
 
or prior
 
to
the Closing, whether asserted or claimed prior to,
 
at or after the Closing (including in
 
respect of any
matters
 
arising
 
in
 
connection
 
with
 
this
 
Agreement
 
and
 
the
 
Transactions),
 
and
 
all
 
such
 
D&O
Indemnified
 
Parties
 
shall
 
continue
 
to
 
be
 
entitled
 
to
 
such
 
exculpation,
 
indemnification
 
and
advancement
 
of
 
expenses
 
to
 
the
 
fullest
 
extent
 
permitted
 
by
 
applicable
 
Law
 
and
 
that
 
no
 
change,
modification or
 
amendment of
 
such documents
 
or arrangements
 
may be
 
made that
 
will adversely
affect
 
any
 
such
 
D&O
 
Indemnified
 
Parties’ right
 
thereto
 
without
 
the
 
prior
 
written
 
consent
 
of
 
that
D&O Indemnified Party.
(b)
In addition
 
to the
 
other rights
 
provided for
 
in this
 
Section
 
and not
 
in limitation
thereof,
 
from
 
and
 
after
 
the
 
Closing,
 
Buyer
 
shall
 
cause
 
the
 
Company
 
Group
 
(each,
 
a
 
“D&O
Indemnifying Party”)
 
to, to
 
the fullest
 
extent permitted
 
by applicable
 
Law, (i) indemnify
 
and hold
harmless the D&O Indemnified Parties against
 
all D&O Expenses (as defined below)
 
and all losses,
 
 
 
 
 
 
 
 
59
claims,
 
damages,
 
judgments,
 
fines,
 
penalties,
 
liabilities
 
and
 
amounts
 
paid
 
in
 
settlement
 
(“D&O
Losses”)
 
in
 
respect
 
of
 
any
 
threatened,
 
pending
 
or
 
completed
 
investigation,
 
claim,
 
action,
 
inquiry,
suit, judgment
 
or other
 
Proceeding, whether
 
criminal, civil,
 
administrative or
 
investigative, based
on, arising
 
out of,
 
relating to
 
or in
 
connection with
 
the fact
 
that such
 
Person is
 
or was
 
a director
 
,
officer
 
or
 
manager
 
of
 
any
 
member
 
of
 
the
 
Company
 
Group
 
arising
 
out
 
of
 
or
 
relating
 
to
 
acts
 
or
omissions occurring
 
or existing
 
(or alleged
 
to have
 
occurred or
 
existed) at
 
or prior
 
to the
 
Closing
(including in respect
 
of acts or
 
omissions in connection
 
with this Agreement and the Transactions)
(a “D&O Indemnifiable Claim”) and (ii) advance, interest-free, to such
 
D&O Indemnified Party all
D&O
 
Expenses
 
incurred
 
in
 
connection
 
with
 
any
 
D&O
 
Indemnifiable
 
Claim
 
(including
 
in
circumstances where
 
the D&O
 
Indemnifying Party
 
is otherwise
 
entitled to
 
assume the
 
defense of
such claim and has assumed
 
such defense) reasonably promptly after
 
receipt of statements therefor
(subject
 
to
 
reimbursement
 
if
 
the
 
D&O
 
Indemnified
 
Party
 
is
 
subsequently
 
determined
 
by
 
a
 
non-
appealable judgment not
 
to be entitled
 
to indemnification under
 
this Section
.
 
Advance payment
of D&O
 
Expenses in
 
connection with
 
any D&O
 
Indemnifiable Claims
 
shall continue
 
until such
 
D&O
Indemnifiable Claim is disposed
 
of or all judgments,
 
orders, decrees or other
 
rulings in connection
with
 
such
 
D&O
 
Indemnifiable
 
Claim
 
become
 
final
 
and
 
nonappealable
 
and
 
are
 
fully
 
and
 
finally
satisfied.
 
None of Buyer or
 
any member of the
 
Company Group shall settle,
 
compromise or consent
to the entry of judgment in any action or investigation or
 
threatened action or investigation, in each
case, in any manner
 
that would impose upon
 
the D&O Indemnified Party
 
any penalty or limitation
without the prior written consent of such D&O
 
Indemnified Party (not to be unreasonably withheld,
conditioned
 
or
 
delayed).
 
For
 
the
 
purposes
 
of
 
this
 
Section
,
 
“D&O
 
Expenses”
 
shall
 
include
reasonable and
 
documented attorneys’ fees,
 
expert fees,
 
arbitrator and
 
mediator fees
 
and all
 
other
out-of-pocket
 
costs,
 
charges
 
and
 
expenses
 
reasonably
 
paid
 
or
 
incurred
 
in
 
connection
 
with
investigating, defending, being a witness
 
in or otherwise participating in
 
(including on appeal or in
response to a
 
non-party subpoena), or
 
preparing to defend,
 
to be a
 
witness in or
 
otherwise participate
in, any D&O Indemnifiable Claim.
(c)
On or
 
prior to
 
the Closing
 
Date, Buyer
 
will (or
 
will cause
 
the Company
 
Group to)
purchase (the costs,
 
fees and expenses
 
of which shall
 
be borne equally
 
by Buyer, on
 
the one hand,
and the
 
Sellers, on
 
the other
 
hand), and
 
for the
 
six-year period
 
commencing on
 
the Closing
 
Date,
Buyer shall maintain in
 
effect directors’ and officers’ liability insurance covering acts or omissions
occurring at
 
or prior
 
to the
 
Closing Date
 
with respect
 
to those
 
Persons who
 
are currently
 
(and any
directors
 
or
 
officers
 
of
 
any
 
member
 
of
 
the
 
Company
 
Group
 
who
 
prior
 
to
 
the
 
Closing
 
become)
covered
 
by
 
the
 
existing
 
director
 
and
 
officer
 
insurance
 
of
 
the
 
Company
 
Group,
 
in
 
an
 
amount
 
and
scope,
 
as
 
well
 
as
 
terms,
 
conditions
 
and
 
retentions,
 
at
 
least
 
as
 
favorable
 
as
 
the
 
Company
 
Group’s
existing
 
directors’
 
and
 
officers’
 
liability
 
insurance
 
policies
 
(the
 
“D&O
 
Tail
 
Policy”);
 
provided,
however, that in no event will
 
Buyer or the Company Group be
 
required to expend for such six-year
period an amount in
 
excess of 125% of
 
the annual premium currently
 
paid by the Company
 
Group
for such insurance
 
policy (the “Maximum
 
Premium”).
 
Buyer will maintain
 
such D&O Tail Policy
in full force
 
and effect, and
 
continue to honor
 
the obligations thereunder.
 
If such insurance
 
coverage
cannot be obtained at
 
all, or can be
 
obtained only at a
 
premium in excess of
 
the Maximum Premium,
Buyer
 
will
 
cause
 
to
 
be
 
maintained
 
the
 
most
 
advantageous
 
tail
 
policies
 
of
 
directors’ and
 
officers’
insurance obtainable for a premium equal to the Maximum Premium.
(d)
The provisions of this Section
 
(i) will survive the Closing Date,
 
(ii) are intended
to be for the
 
benefit of, and will
 
be enforceable by, each
 
D&O Indemnified Party and
 
his or her heirs
and
 
representatives,
 
each
 
of
 
whom
 
is
 
an
 
intended
 
third-party
 
beneficiary
 
of
 
this
 
Section
,
 
and
(iii) are in
 
addition to,
 
and not
 
in substitution
 
for, any
 
other rights,
 
including rights
 
to indemnification
or contribution that any such Person may have
 
be Contract or otherwise.
 
Buyer will pay or cause to
be
 
paid
 
(as
 
incurred)
 
all
 
reasonable
 
and
 
documented
 
expenses,
 
including
 
reasonable
 
fees
 
and
expenses of counsel, that a D&O Indemnified Party may incur in enforcing the indemnity and other
 
 
 
60
obligations provided for
 
in this Section
 
(subject to reimbursement
 
if the D&O
 
Indemnified Party
is
 
subsequently
 
determined
 
not
 
to
 
be
 
entitled
 
to
 
indemnification
 
under
 
this
 
Section
.
 
Notwithstanding
 
anything herein
 
to the
 
contrary, the
 
rights and
 
benefits of
 
the D&O
 
Indemnified
Parties under
 
this Section
 
shall not
 
be terminated
 
or modified
 
in any
 
manner adverse
 
to any
 
D&O
Indemnified Party without the prior written consent of such D&O Indemnified Party.
(e)
If (i) Buyer, any
 
member of the
 
Company Group or
 
any of their
 
respective successors
or
 
assigns
 
(A) consolidates
 
with
 
or
 
merges
 
into
 
any
 
other
 
Person
 
and
 
is
 
not
 
the
 
continuing
 
or
surviving
 
corporation
 
or
 
entity
 
of
 
such
 
consolidation
 
or
 
merger
 
or
 
(B) transfers
 
or
 
conveys
 
all
 
or
substantially all
 
of its
 
properties and
 
assets to
 
any Person
 
(including by
 
liquidation, dissolution
 
or
assignment for the benefit of creditors or similar action), then,
 
and in each such case and (ii) neither
Buyer
 
or
 
a
 
member
 
of
 
the
 
Company
 
Group
 
to
 
be
 
controlled
 
by
 
Buyer
 
after
 
such
 
transaction
 
has
assumed
 
the
 
obligations
 
set
 
forth
 
in
 
this
 
Section
,
 
then
 
Buyer
 
shall,
 
or
 
shall
 
cause,
 
proper
provision to be
 
made so that
 
the successors and
 
assigns of the
 
Company Group member
 
subject to
such transaction will assume the obligations set forth in this Section
(f)
Each of
 
the Company
 
Group shall
 
be a
 
full indemnitor
 
of first
 
resort, shall
 
be required
to advance the full amount of
 
all D&O Expenses incurred by
 
a D&O Indemnified Party and shall
 
be
liable for the full amount of all D&O
 
Losses to the extent legally permitted and as
 
required, without
regard to any rights a D&O Indemnified Party may have against any
 
direct or indirect holder of the
Company
 
Group
 
or
 
any
 
of
 
its
 
respective Affiliates
 
(collectively,
 
the
 
“Other
 
Indemnitors”)
 
or
 
any
insurer providing insurance coverage
 
under an insurance policy
 
issued to any Seller
 
or any of their
respective Affiliates.
 
Each of Buyer and the
 
Company Group further agrees that
 
no advancement or
payment
 
by
 
any
 
Other
 
Indemnitor
 
with
 
respect
 
to
 
any
 
D&O
 
Indemnifiable
 
Claim
 
or
 
any
 
D&O
Expenses shall
 
alter or
 
limit the
 
obligations of
 
the Company
 
Group hereunder
 
and that
 
any Other
Indemnitor shall have
 
a right of
 
contribution and be
 
subrogated to the
 
extent of such
 
advancement
or
 
payment
 
to
 
all
 
of
 
the
 
rights
 
of
 
recovery
 
of
 
the
 
D&O
 
Indemnified
 
Party
 
against
 
the
 
Company
Group
 
with
 
respect
 
thereto,
 
and
 
the
 
Company
 
Group
 
hereby
 
irrevocably
 
waive,
 
relinquish
 
and
release the Other Indemnitors for indemnification, contribution or subrogation in respect thereof.
6.6
Employee Matters
.
(a)
Continuation
 
of
 
Employment
.
 
The
 
Parties
 
intend
 
that
 
there
 
shall
 
be
 
continuity
 
of
employment with respect to
 
the Company Group Employees
 
as set forth below.
 
Prior to the Closing
Date, the Sellers shall transfer
 
(or cause to be transferred)
 
the employment of any Company
 
Group
Employee who is not employed by a
 
member of the Company Group as of
 
the date hereof (i.e., the
Company Group
 
Employees listed
 
on Schedule
1) to
 
a member
 
of the
 
Company Group.
 
Each
Company Group Employee
 
who is actively
 
employed by the
 
Company Group as
 
of the Closing
 
shall
be known as a “Continuing
 
Employee.”
 
Following the date hereof,
 
Sellers shall provide Buyer
 
with
an updated version
 
of the Company Group
 
Employee List (i) upon
 
Buyer’s reasonable request
 
and
(ii) to the extent not already updated, no less than 15 days prior to the Closing.
(b)
Inactive
 
Company
 
Group
 
Employees
.
 
Notwithstanding
 
the
 
provisions
 
of
Section
, and to the
 
extent allowable under applicable Law,
 
the employment of each Company
Group Employee
 
who is
 
not actively
 
at work
 
and is
 
on a
 
leave of
 
absence as
 
of the
 
Closing Date
(each, an
 
“Inactive Company Group
 
Employee”) shall,
 
prior to the
 
Closing Date, be
 
transferred to
an Affiliate
 
of
 
the
 
Company
 
Group
 
(other
 
than
 
a
 
member
 
of
 
the
 
Company
 
Group).
 
An
 
Inactive
Company
 
Group
 
Employee
 
shall
 
become
 
a
 
Continuing
 
Employee
 
only
 
upon
 
his
 
or
 
her
 
return
 
to
active employment with Buyer or
 
its Affiliates,
 
but only if such
 
Inactive Company Group Employee
returns to active
 
employment within six
 
months following the
 
Closing Date (or
 
such longer period
 
 
 
 
61
as required by
 
applicable Law).
 
The Sellers agree
 
to promptly notify
 
Buyer upon receiving
 
notice
of an Inactive Company Group Employee’s pending return to work.
(c)
Terms
 
of
 
Employment
.
 
During
 
the
 
period
 
from
 
the
 
Closing
 
Date
 
until
December 31, 2025, Buyer will,
 
or will cause its
 
Subsidiaries (including the
 
Company Group after
the
 
Closing)
 
to,
 
provide
 
to
 
each
 
Continuing
 
Employee
 
(except
 
as
 
otherwise
 
agreed
 
to
 
in
 
an
employment agreement
 
with an
 
individual listed
 
in Schedule A)
 
(i) a base
 
salary or
 
wage rate,
 
as
applicable, and target annual
 
cash incentive opportunities (determined
 
as a percentage
 
of base salary
or wage
 
rate), if
 
any, that
 
are at
 
least as
 
favorable on
 
an aggregate
 
basis to
 
such Continuing
 
Employee
as
 
those
 
provided
 
to
 
such
 
Continuing
 
Employee
 
immediately
 
prior
 
to
 
the
 
Closing
 
(provided,
however, that
 
the performance
 
metrics and
 
structure of
 
such annual
 
cash incentive
 
opportunities shall
be comparable
 
to Buyer’s
 
annual cash
 
incentive plan),
 
and (ii) other
 
compensation and
 
employee
benefits
 
(excluding
 
defined
 
benefit
 
pension,
 
nonqualified
 
deferred
 
compensation,
 
phantom
 
share,
equity
 
or
 
equity-based
 
or
 
other
 
long-term
 
incentive
 
compensation,
 
retention,
 
change
 
in
 
control,
transaction bonus
 
and retiree
 
or post-employment
 
welfare or
 
similar plans
 
and arrangements)
 
that
are
 
substantially
 
comparable
 
in
 
the
 
aggregate
 
to
 
those
 
provided
 
to
 
such
 
Continuing
 
Employee
immediately prior to the Closing.
(d)
Closing
 
Year Bonuses
.
 
On the
 
Closing
 
Date,
 
the Sellers
 
shall,
 
or
 
shall cause
 
their
applicable Affiliates
 
(which,
 
for
 
the
 
avoidance
 
of
 
doubt,
 
includes
 
any
 
member
 
of
 
the
 
Company
Group), to
 
make pro-rated
 
payments under
 
each annual
 
cash bonus
 
plan maintained
 
by the
 
Sellers
or their Affiliates
 
(including the
 
Company Group)
 
to eligible
 
Continuing Employees
 
in respect
 
of
the
 
performance
 
period
 
in
 
effect
 
as
 
of
 
the
 
Closing
 
Date,
 
with
 
such
 
pro-ration
 
determined
 
by
multiplying the actual annual cash bonus earned as of the Closing Date by a fraction, the numerator
of which is
 
the number
 
of days in
 
such performance period
 
that elapsed prior
 
to the Closing
 
Date,
and the
 
denominator
 
of which
 
is 365.
 
Effective
 
as of
 
the Closing
 
Date, Buyer
 
shall maintain,
 
or
shall
 
cause
 
its
 
Subsidiaries
 
(including
 
the
 
Company
 
Group
 
after
 
the
 
Closing)
 
to
 
maintain
 
one
 
or
more annual cash
 
bonus plans in
 
which Continuing Employees
 
who participated in
 
an annual cash
bonus
 
plan
 
of
 
a
 
member
 
of
 
the
 
Company
 
Group
 
immediately
 
prior
 
to
 
the
 
Closing
 
Date
 
shall
 
be
eligible to participate.
(e)
Certain Welfare Plan Matters
.
 
From and after the
 
Closing Date, Buyer shall,
 
or shall
cause its applicable Affiliate to, grant
 
each Continuing Employee with credit for all service with the
Company Group earned prior to the Closing Date, to the same extent as such Continuing Employee
was or would
 
have been entitled
 
to such service
 
under applicable Employee
 
Plans before the
 
Closing
Date,
 
(i) for
 
eligibility
 
and
 
vesting
 
purposes
 
and
 
(ii) for
 
purposes
 
of
 
vacation
 
and
 
paid
 
time
 
off
accrual
 
and
 
severance
 
benefit
 
determinations
 
under
 
each
 
employee
 
benefit
 
plan
 
or
 
arrangement
maintained by Buyer or its Affiliates (including vacation, paid
 
time off and severance plans)
 
that is
made available to
 
such Continuing Employee
 
after the Closing
 
(each, a “Buyer
 
Plan”) (but not
 
for
defined benefit pension plan accruals or where such
 
service would result in duplication of benefits).
 
Without limiting the
 
foregoing, Buyer shall,
 
and shall cause
 
its Subsidiaries (including
 
the Company
Group after the Closing) to, provide, honor
 
and recognize all accrued but unused vacation
 
as of the
Closing Date.
 
Buyer shall,
 
or shall
 
cause its
 
applicable Affiliate to,
 
use commercially
 
reasonable
efforts
 
to
 
(x) waive,
 
or
 
cause
 
to
 
be
 
waived,
 
any
 
pre-existing
 
condition
 
limitation,
 
exclusions,
actively-at work
 
requirements, waiting
 
periods and
 
any similar
 
limitations under
 
Buyer Plans
 
that
would
 
prevent
 
immediate
 
or
 
full
 
participation
 
under
 
any
 
welfare
 
benefit
 
plan
 
providing
 
medical,
dental,
 
hospital,
 
pharmaceutical
 
or
 
vision
 
benefits,
 
except
 
to
 
the
 
extent
 
that
 
such
 
pre-existing
condition limitation,
 
exclusions, actively-at
 
work requirements
 
and waiting
 
periods would
 
have been
applicable under the comparable benefit plan immediately prior
 
to the Closing and (y) recognize, or
cause to
 
be recognized,
 
the dollar
 
amount of
 
all deductible
 
or co-insurance
 
expenses paid
 
by each
Continuing
 
Employee
 
(and
 
his
 
or
 
her
 
eligible
 
dependents)
 
under
 
an
 
Employee
 
Plan
 
prior
 
to
 
the
 
62
Closing Date in the same
 
plan year in which the
 
Closing Date occurs for purposes
 
of satisfying such
year’s deductible and
 
co-payment limitations under
 
any applicable, comparable
 
Buyer Plan in
 
which
the Continuing Employees participate from and after the Closing, as if such amounts
 
had been paid
in accordance with such Buyer Plan.
(f)
Employee Plans Other than
 
Company Group Plans; Sponsorship
 
of Company Group
Plans
.
 
Buyer and its Affiliates shall not
 
assume any obligations or
 
liabilities under or with
 
respect
to,
 
or
 
receive
 
any
 
right
 
or
 
interest
 
in
 
any
 
trusts
 
relating
 
to,
 
any
 
assets
 
of
 
or
 
any
 
insurance,
administration
 
or
 
other
 
contracts
 
pertaining
 
to,
 
any
 
of
 
the
 
Employee
 
Plans
 
that
 
are
 
not
 
Company
Group Plans.
 
Unless Buyer instructs the Sellers otherwise
 
prior to the Closing, the
 
Sellers shall, at
least five Business Days prior to the
 
Closing, transfer (or cause to be transferred)
 
the sponsorship of
any Company Group
 
Plan that is
 
not sponsored by
 
a member of
 
the Company Group
 
to a member
of
 
the
 
Company
 
Group
 
and
 
take
 
action
 
as
 
may
 
be
 
necessary
 
to
 
exclude
 
any
 
entity
 
that
 
is
 
not
 
a
member
 
of
 
the
 
Company
 
Group
 
from
 
participating
 
in
 
such
 
Company
 
Group
 
Plans
 
(including
amending any such Company Group Plan to reflect the transfer of sponsorship, and to exclude such
entities contingent on, and as of the Closing Date).
 
The Company Group shall provide to Buyer for
its
 
reasonable
 
review
 
and
 
approval
 
copies
 
of
 
all
 
documents
 
effectuating
 
such
 
transfer
 
and
amendments.
 
Buyer or its Affiliates shall assume, or cause the applicable member of the Company
Group to continue, sponsorship of and all obligations with respect to, the Company Group Plans.
(g)
No
 
Third-Party
 
Beneficiaries
.
 
Nothing
 
in
 
this
 
Agreement
 
shall
 
be
 
construed
 
to
prevent Buyer or any of its Affiliates
 
from (i) terminating or modifying the terms of employment of
any Continuing Employee following the Closing
 
Date or (ii) terminating or modifying to
 
any extent
any Company
 
Group Plan.
 
Nothing in
 
this Agreement will
 
be construed
 
as an
 
amendment to
 
any
Employee Plan or any
 
other compensation or benefit plans
 
maintained for or provided to
 
directors,
officers
 
or
 
employees
 
of
 
Buyer,
 
its
 
Affiliates
 
or
 
the
 
Company
 
Group
 
prior
 
to
 
or
 
following
 
the
Closing.
 
The
 
Sellers
 
and
 
Buyer
 
acknowledge
 
and
 
agree
 
that
 
all
 
provisions
 
contained
 
in
 
this
Section
 
are included for the sole benefit of the Sellers, Buyer
 
and their respective
 
Affiliates, and
that nothing in this Section
, whether express or implied, shall create any third-party
 
beneficiary
or
 
other
 
rights
 
in
 
any
 
other
 
Person,
 
including
 
any
 
Continuing
 
Employee
 
or
 
any
 
other
 
current
 
or
former
 
employee
 
or
 
participant
 
(or
 
any
 
spouse,
 
dependent
 
or
 
other
 
beneficiary
 
thereof),
 
of
 
the
Sellers,
 
Buyer
 
or
 
their
 
respective Affiliates,
 
including
 
with
 
respect
 
to
 
continued
 
employment,
 
the
terms
 
and
 
conditions
 
of
 
employment,
 
or
 
to
 
any
 
benefit
 
or
 
compensation
 
plan,
 
program,
 
policy,
agreement or arrangement.
6.7
Tax Matters
.
(a)
Tax Certificates
.
 
At or prior to
 
the Closing, the Sellers’ Representative shall deliver
or cause to be delivered to Buyer an executed IRS Form W-9 from each Transferor.
(b)
Pre-Closing Tax Returns
.
(i)
The Sellers’ Representative shall have exclusive control over the preparation
and filing
 
of any
 
Tax
 
Return of
 
any Seller
 
or Transferor
 
,
 
including IRS
 
Form 1120-S
 
and
IRS
 
Form 1065
 
and
 
any
 
similar
 
state,
 
local
 
or
 
foreign
 
income
 
Tax
 
Returns
 
filed
 
by
 
Echo
Lake Foods Transferor (as
 
a successor to Echo Lake Foods), Echo
 
Lake Properties or Elkin
Properties (such Tax Returns, the “Seller Returns”).
(ii)
The
 
Sellers’
 
Representative
 
will
 
prepare
 
and
 
timely
 
file
 
any
 
income
 
Tax
Return of any
 
member of the
 
Company Group for
 
any Pre-Closing Tax Period
 
that ends on
or prior to
 
the Closing Date
 
that is required to
 
be filed after
 
the Closing Date
 
and that reflects
items that flow through to (or are otherwise reportable by) any Seller or
 
the Securityholders
 
 
 
 
 
 
 
63
(such Tax Return, a
 
“Passthrough Return”).
 
Each Passthrough Return
 
shall be prepared
 
on
a
 
basis
 
consistent
 
with
 
past
 
practice
 
except
 
to
 
the extent
 
otherwise
 
required
 
by
 
applicable
Law.
 
At least 20 days prior to the due
 
date (including extensions) for filing any
 
Passthrough
Return, the Sellers’
 
Representative shall deliver a copy
 
of such Passthrough Return, together
with all supporting
 
documentation and work papers,
 
to Buyer for
 
its review and
 
reasonable
comment,
 
and
 
the
 
Sellers’
 
Representative
 
shall
 
consider
 
in
 
good
 
faith
 
all
 
reasonable
comments received from Buyer at least five days prior to the due date
 
(after giving effect to
any valid extensions thereof) of such Passthrough Return and
 
shall provide an as-filed copy
of such Passthrough Return to Buyer upon filing.
(iii)
Buyer shall prepare
 
and file, or
 
cause to be
 
prepared and filed,
 
all Tax Returns
required to
 
be filed
 
by any
 
member of
 
the Company
 
Group for
 
any Straddle
 
Period that
 
is
required
 
to
 
be
 
filed
 
after
 
the
 
Closing
 
Date
 
and
 
that
 
is
 
not
 
a
 
Passthrough
 
Return
 
(each,
 
a
“Buyer
 
Prepared
 
Return”).
 
To
 
the
 
extent
 
such
 
Buyer
 
Prepared
 
Return
 
(A) reflects
 
an
Indemnified Tax,
 
(B) reflects
 
a Tax
 
included
 
as
 
a
 
liability
 
in
 
the
 
determination
 
of
 
the Tax
Liability
 
Amount,
 
Working
 
Capital,
 
Company
 
Group
 
Expenses
 
or
 
Indebtedness,
 
or
(C) reflects
 
a
 
Tax
 
Refund
 
Sellers
 
are
 
entitled
 
to
 
pursuant
 
to
 
Section
,
 
each
 
Buyer
Prepared
 
Return
 
shall
 
be
 
prepared
 
on
 
a
 
basis
 
consistent
 
with
 
past
 
practice
 
to
 
the
 
extent
permitted by applicable
 
Law under a
 
“more likely than
 
not” (or higher)
 
level of authority.
 
At
least
 
30 days
 
prior
 
to
 
the
 
due
 
date
 
(including
 
extensions)
 
for
 
filing
 
any
 
Buyer
 
Prepared
Return (other than
 
Buyer Prepared Returns
 
relating to payroll
 
Tax, social security
 
or property
Tax
 
or
 
similar
 
Taxes,
 
in
 
each
 
case
 
a
 
copy
 
of
 
which
 
shall
 
be
 
provided
 
to
 
the
 
Sellers’
Representative
 
by
 
Buyer
 
upon
 
the
 
Sellers’ Representative’s
 
written
 
request),
 
Buyer
 
shall
deliver a
 
copy of
 
such Buyer
 
Prepared Return,
 
together with
 
all supporting
 
documentation
and work
 
papers, to
 
the Sellers’ Representative
 
for its
 
review and
 
reasonable comment.
 
If
the
 
Sellers’ Representative
 
objects
 
to
 
any
 
item
 
on
 
any
 
such
 
Buyer
 
Prepared
 
Return,
 
the
Sellers’ Representative
 
shall,
 
within
 
15 days
 
after
 
receipt
 
of
 
such
 
Buyer
 
Prepared
 
Return,
notify
 
Buyer
 
in
 
writing
 
of
 
the
 
Sellers’
 
Representative’s
 
objection,
 
which
 
the
 
Sellers’
Representative
 
and
 
Buyer
 
shall
 
cooperate
 
in
 
good
 
faith
 
to
 
resolve.
 
If
 
the
 
Sellers’
Representative and Buyer are unable to resolve such objection within five days after receipt
by
 
Buyer
 
of
 
notice
 
thereof,
 
then
 
the
 
Sellers’
 
Representative
 
and
 
Buyer
 
shall
 
submit
 
the
objection
 
to
 
the
 
Independent Accountant
 
for
 
resolution
 
using
 
the
 
procedures
 
outlined
 
in
Section
, applied
mutatis mutandis
.
 
If the Independent
 
Accountant is unable
 
to resolve
any such objection
 
before the due
 
date (with extensions)
 
for the applicable
 
Buyer Prepared
Return, the
 
applicable Buyer
 
Prepared Return
 
shall be
 
filed as
 
prepared by
 
Buyer and
 
then
amended to
 
reflect the
 
Independent Accountant’s resolution.
 
Buyer will
 
cause each
 
Buyer
Prepared Return to be timely filed and will provide a copy to the Sellers’ Representative.
(iv)
In
 
any
 
case
 
under
 
this
 
Agreement
 
involving
 
a
 
Straddle
 
Period,
 
(i) real,
personal
 
and intangible
 
property Taxes
 
(“Property Taxes”)
 
for
 
the
 
Pre-Closing Tax
 
Period
shall be equal to the amount of such Property
 
Taxes for the entire Straddle Period multiplied
by a fraction,
 
the numerator of
 
which is the
 
number of days
 
during the Straddle
 
Period that
are in the Pre-Closing Tax Period and
 
the denominator of which is the number of days
 
in the
Straddle
 
Period
 
(provided,
 
however,
 
that
 
for
 
the
 
purposes
 
of
 
apportioning
 
such
 
Straddle
Period Property Taxes, the effective date of any adjustment to the rate,
 
taxability, exemption
or
 
other
 
change
 
upon
 
which
 
such
 
Property
 
Taxes
 
are
 
computed
 
shall
 
be
 
respected),
 
and
(ii) Taxes (other than Property Taxes)
 
for the Pre-Closing Tax Period
 
shall be computed as if
such Tax period
 
ended as
 
of the
 
close of business
 
on the
 
Closing Date;
 
provided, however,
that, for
 
the avoidance
 
of doubt,
 
all permitted
 
allowances, credits,
 
exemptions and
 
deductions
that are
 
normally computed
 
on the
 
basis of
 
an entire
 
year period
 
(such as
 
depreciation and
amortization deductions) shall
 
accrue on a
 
daily basis and
 
shall be allocated
 
between the pre-
 
 
64
Closing portion of the Straddle Period
 
and the post-Closing portion of the Straddle
 
Period in
proportion to the number of days in each such period.
(v)
Except to the extent attributable, in whole or in part, to
 
the use of any item of
loss,
 
deduction,
 
creditor
 
or
 
other
 
similar
 
item
 
arising
 
in
 
a
 
Tax
 
period
 
beginning
 
after
 
the
Closing
 
Date,
 
without
 
duplication
 
of
 
any
 
Tax
 
Refunds
 
payable
 
to
 
the
 
Sellers
 
under
Section
, Buyer
 
shall pay
 
to the
 
Sellers an
 
amount of
 
cash equal
 
to the
 
amount by
 
which
(A) the Closing
 
Tax
 
Liability Amount
 
exceeds (B) the
 
Tax
 
Liability Amount
 
actually paid
(determined as of the date on which the final Tax
 
Return for Income Taxes
 
of the Company
Group for the Pre-Closing Tax
 
Period is filed) within 30 days after the
 
filing of the last Tax
Return for Income Taxes of the Company Group for the Pre-Closing Tax
 
Period.
(c)
Cooperation on Tax
 
Matters
.
 
Buyer and the
 
Sellers will cooperate
 
fully, as and
 
to the
extent reasonably requested
 
by any other
 
Party, in connection
 
with the filing
 
of Tax
 
Returns pursuant
to
 
this
 
Section
 
and
 
any
 
audit,
 
litigation
 
or
 
other
 
Proceeding
 
with
 
respect
 
to
 
Taxes.
 
Such
cooperation shall include the retention and (upon any other Party’s
 
request) the provision of records
and information
 
that are
 
reasonably relevant
 
to any
 
such audit,
 
litigation or
 
other Proceeding,
 
making
employees
 
available
 
on
 
a
 
mutually
 
convenient
 
basis
 
to
 
provide
 
additional
 
information
 
and
explanation of any material provided hereunder and signing any Tax Return prepared in accordance
with this
 
Section
 
Buyer agrees
 
(i) to retain
 
all books
 
and records
 
with respect
 
to Tax
 
matters
pertinent to the Company Group relating to any Tax period beginning before the Closing Date until
the expiration
 
of the
 
statute of
 
limitations (including
 
any extensions
 
thereof) of
 
the Tax periods
 
to
which
 
such
 
books
 
and
 
records
 
relate
 
(or
 
such
 
longer
 
period
 
as
 
may
 
be
 
necessary
 
to
 
resolve
 
any
disputes
 
hereunder),
 
and
 
to
 
abide
 
by
 
all
 
record
 
retention
 
agreements
 
entered
 
into
 
with
 
any
 
Tax
authority and (ii) to
 
give the Sellers’ Representative reasonable
 
written notice prior
 
to transferring,
destroying or discarding any such books and records and, if
 
the Sellers’ Representative so requests,
the
 
Company
 
Group
 
or
 
Buyer,
 
as
 
the
 
case
 
may
 
be,
 
will
 
allow
 
the
 
Sellers’ Representative
 
to
 
take
possession of such books and records.
(d)
Tax Contests
.
 
From and after the
 
Closing Date, Buyer shall
 
give prompt notice to
 
the
Sellers’ Representative if any Governmental Authority provides notice of an
 
intent to audit, review
or
 
conduct
 
any
 
other
 
proceeding
 
with
 
respect
 
to
 
the Taxes
 
or Tax
 
Returns
 
of
 
any
 
member
 
of
 
the
Company
 
Group
 
for
 
any
 
Pre-Closing
 
Tax
 
Period.
 
The
 
Sellers’ Representative,
 
at
 
the
 
cost
 
and
expense
 
of
 
the
 
Sellers,
 
shall
 
have
 
the
 
right
 
to
 
control
 
any
 
audit,
 
examination,
 
claim
 
or
 
other
proceeding
 
by
 
any
 
Governmental
 
Authority
 
with
 
respect
 
to
 
any
 
Taxes
 
or
 
Tax
 
Returns
 
of
 
the
Company
 
Group
 
(a
 
“Tax
 
Claim”)
 
for
 
any Tax
 
period
 
ending
 
on
 
or
 
prior
 
to
 
the
 
Closing
 
Date
 
that
would
 
or
 
could
 
reasonably
 
be
 
expected
 
to
 
(i) result
 
in
 
an
 
Indemnified
 
Tax,
 
(ii) increase
 
any
 
Tax
liability of any
 
Seller, Securityholder or
 
any of their Affiliates,
 
(iii) increase any Tax
 
reflected as a
liability
 
in
 
the
 
determination
 
of
 
the
 
Tax
 
Liability
 
Amount,
 
Working
 
Capital,
 
Company
 
Group
Expenses
 
or
 
Indebtedness,
 
or
 
(iv) reduce
 
a
 
Tax
 
Refund
 
Sellers
 
are
 
entitled
 
to
 
pursuant
 
to
Section
 
(a
 
“Seller
 
Tax
 
Claim”).
 
With
 
respect
 
to
 
any
 
Seller
 
Tax
 
Claim,
 
(i) the
 
Sellers’
Representative shall
 
provide Buyer with
 
a timely and
 
reasonably detailed account
 
of each stage
 
of
such Seller Tax
 
Claim, (ii) the Sellers’ Representative shall
 
consult with Buyer
 
and offer Buyer
 
an
opportunity to
 
comment before
 
taking any
 
significant action
 
or submitting
 
any written
 
materials with
respect to such Seller
 
Tax Claim, (iii) the Sellers’
 
Representative shall defend such Seller
 
Tax Claim
diligently and in good faith as
 
if it were the only party in
 
interest, (iv) Buyer shall be entitled, at
 
its
own expense, to participate and attend any
 
meetings or conferences with the relevant
 
Governmental
Authority with
 
respect to
 
such Seller Tax
 
Claim and
 
(v) the Sellers’ Representative shall
 
not settle
or compromise
 
any material
 
issue with
 
respect to
 
such Seller
 
Tax Claim
 
without the
 
prior written
consent of Buyer, which
 
consent shall not be
 
unreasonably withheld, conditioned or
 
delayed.
 
Buyer
shall control any Tax
 
Claim for any
 
Pre-Closing Tax Period (including
 
any Straddle Period)
 
that is
 
 
 
 
 
 
 
65
not a Seller
 
Tax Claim (a
 
“Buyer Tax
 
Claim”).
 
With respect to
 
any Buyer
 
Tax Claim, (1) Buyer
 
shall
provide the
 
Sellers’ Representative with a
 
timely and
 
reasonably detailed
 
account of
 
each stage
 
of
such Buyer Tax
 
Claim, (2) Buyer shall consult
 
with the Sellers’
 
Representative and offer the
 
Sellers’
Representative an
 
opportunity
 
to comment
 
before taking
 
any significant
 
action
 
or submitting
 
any
written
 
materials
 
with
 
respect
 
to
 
such
 
Buyer
 
Tax
 
Claim,
 
(3) Buyer
 
shall
 
defend
 
such
 
Buyer
 
Tax
Claim
 
diligently
 
and
 
in
 
good
 
faith
 
as
 
if
 
it
 
were
 
the
 
only
 
party
 
in
 
interest,
 
(4) the
 
Sellers’
Representative shall
 
be entitled,
 
at the
 
Sellers’ expense, to
 
participate and
 
attend any
 
meetings or
conferences with
 
the relevant
 
Governmental Authority with
 
respect to
 
such Buyer
 
Tax Claim
 
and
(5) Buyer shall
 
not settle
 
or compromise
 
any material
 
issue with
 
respect to
 
such Buyer Tax
 
Claim
that would
 
or could
 
reasonably be
 
expected to
 
(A) result
 
in an
 
Indemnified Tax,
 
(B) increase any
Tax liability of any Seller,
 
Securityholder or any of their
 
Affiliates, (C) increase any Tax
 
reflected as
a
 
liability
 
in
 
the
 
determination
 
of
 
the
 
Tax
 
Liability Amount,
 
Working
 
Capital,
 
Company
 
Group
Expenses
 
or
 
Indebtedness,
 
or
 
(D) reduce
 
a
 
Tax
 
Refund
 
Sellers
 
are
 
entitled
 
to
 
pursuant
 
to
Section
, in each
 
case without the
 
prior written consent
 
of the Sellers’ Representative, which
consent shall
 
not be
 
unreasonably withheld,
 
conditioned or
 
delayed.
 
Notwithstanding anything
 
to
the
 
contrary
 
contained
 
in
 
this
 
Agreement,
 
the
 
procedures
 
for
 
all
 
Tax
 
Claims
 
shall
 
be
 
governed
exclusively by this Section
 
(and not
.
(e)
Transfer Taxes
.
 
All transfer,
 
documentary, sales,
 
use, stamp,
 
registration and
 
other
such Taxes (“Transfer Taxes”) incurred by a member of the Company Group in connection with the
Equity Purchase (but excluding any Taxes based
 
on net income) shall be borne and paid 50%
 
by the
Sellers, on one hand,
 
and 50% by Buyer,
 
on the other hand,
 
when due.
 
Buyer and the Sellers
 
will,
at their joint
 
expense, file all
 
necessary Tax
 
Returns and other
 
documentation with respect
 
to all such
Transfer Taxes, and, if required
 
by applicable Law, Buyer and
 
the Sellers will join in
 
the execution
of any
 
such Tax
 
Returns and
 
other documentation.
 
The costs
 
associated with
 
filing these
 
Tax Returns
and documentation will be borne
 
and paid 50% by the
 
Sellers, on one hand, and
 
50% by Buyer, on
the other hand.
(f)
Allocation of
 
Purchase Price
.
 
The Final
 
Adjusted Equity
 
Price paid
 
in connection
with the Equity Purchase (along with any other items that are treated as additional
 
consideration for
U.S.
 
federal
 
and
 
applicable
 
state
 
and
 
local
 
Income Tax
 
purposes
 
(including,
 
for
 
the
 
avoidance
 
of
doubt, any liabilities
 
that, for
 
U.S. federal and
 
applicable state and
 
local Income Tax
 
purposes, are
treated
 
as
 
assumed
 
by
 
Buyer))
 
shall
 
be
 
allocated
 
among
 
the
 
assets
 
of
 
the
 
Company
 
Group
 
in
accordance with
 
Section 1060 of
 
the Code,
 
the Treasury
 
Regulations promulgated
 
thereunder, and
the
 
methodologies
 
set
 
forth
 
in
 
Schedule B-2
 
attached
 
hereto
 
(the
 
“Allocation
 
Methodology”).
 
Within 60 days after the
 
final determination of the
 
Closing Statement pursuant to
 
Section
, Buyer
shall
 
prepare
 
and
 
provide,
 
or
 
cause
 
to
 
be
 
provided,
 
to
 
the
 
Sellers’ Representative
 
an
 
initial
 
draft
allocation
 
prepared
 
in
 
accordance
 
with
 
the Allocation
 
Methodology
 
(the
 
“Proposed Allocation”).
 
Within 30 days after its receipt of such Proposed Allocation, the Sellers’
 
Representative will review
and comment on the allocation, and, absent objection, will sign and
 
return an executed copy thereof
to Buyer, which allocation will be final.
 
If the Sellers’ Representative requests any revisions to the
allocation, Buyer
 
and the
 
Sellers’ Representative will
 
discuss such
 
revisions in
 
good faith,
 
and, if
Buyer and the Sellers’
 
Representative are unable to finalize the allocation
 
following such good faith
discussions,
 
the
 
allocation
 
will
 
be
 
as
 
finally
 
determined
 
by
 
the
 
Independent Accountant,
 
or
 
if
 
the
Independent Accountant
 
is
 
not
 
willing
 
to
 
be
 
retained
 
for
 
such purpose
 
or
 
is
 
determined
 
not
 
to
 
be
independent
 
of
 
either
 
the
 
Sellers’
 
Representative
 
or
 
Buyer,
 
a
 
reputable,
 
nationally
 
recognized
independent accounting
 
firm
 
that is
 
mutually
 
agreed
 
on
 
by Buyer
 
and
 
the Sellers’
 
Representative
(with
 
such
 
Parties
 
sharing
 
the
 
costs
 
of
 
such
 
equally);
 
provided,
 
however,
 
that
 
in
 
any
 
event
 
the
Independent Accountant
 
or independent accounting firm
 
retained pursuant to this
 
Section
 
will
be instructed and
 
bound to make
 
such determination in
 
a manner consistent
 
with this
 
Agreement and
the Allocation Methodology.
 
The determination of such allocation shall be final and binding for all
 
 
 
 
 
66
applicable Tax
 
purposes.
 
The
 
Parties
 
(and their
 
respective Affiliates)
 
shall
 
not take
 
(or
 
cause
 
the
Company Group to take) any
 
position inconsistent with the foregoing
 
intent on any Tax
 
Return or in
any Tax
 
proceeding, except
 
upon a
 
final “determination”
 
by a
 
Governmental Authority within
 
the
meaning of Section 1313(a)(1) of the
 
Code; provided, however, that this
 
Section
 
shall not be
interpreted
 
to
 
prohibit
 
or
 
hinder
 
any
 
Party
 
from
 
settling
 
any
 
Tax
 
audit
 
or
 
dispute
 
in
 
a
 
manner
inconsistent with the final allocation determined hereunder.
(g)
Intended Tax Treatment
.
 
For U.S. federal and applicable state and
 
local Income Tax
purposes, the Parties covenant
 
and agree to characterize
 
the F Reorganization as an
 
Income Tax-free
reorganization of
 
Echo Lake
 
Foods (as
 
it existed
 
as an
 
S corporation for
 
U.S. federal
 
Income Tax
purposes immediately before the F Reorganization) under Section 368(a)(1)(F) of the Code (and all
comparable state,
 
local and
 
non-U.S. Income
 
Tax Laws)
 
into Echo
 
Lake Foods
 
Transferor (as
 
the
continuing
 
S corporation
 
immediately
 
after
 
the
 
QSub
 
Election
 
and
 
no
 
separate
 
election
 
for
 
Echo
Lake Foods Transferor to
 
be treated as
 
an S corporation for
 
U.S. federal Income Tax
 
purposes was
required)
 
as
 
contemplated
 
by
 
Revenue
 
Ruling
 
2008-18,
 
with
 
Echo
 
Lake
 
Foods
 
becoming
 
a
disregarded
 
entity
 
of
 
Echo
 
Lake
 
Foods
 
Transferor
 
as
 
a
 
“qualified
 
subchapter S
 
subsidiary”
 
as
described
 
in
 
Sections 1361
 
and 1362
 
of
 
the
 
Code,
 
and
 
then
 
(after
 
the
 
Conversions)
 
each
 
of
 
Echo
Lake Foods, Xenitel and Huntington becoming a disregarded entity of Echo Lake Foods Transferor
pursuant to
 
Treasury Regulations Section 301.7701-3(b)(1)(ii).
 
For U.S.
 
federal and
 
applicable state
and
 
local
 
Income
 
Tax
 
purposes,
 
the
 
Parties
 
(and
 
their
 
respective
 
Affiliates)
 
shall
 
treat
 
the
 
ELT
Contribution
 
as
 
an
 
“assets-over”
 
partnership
 
merger
 
pursuant
 
to
 
Treasury
 
Regulations
 
Sections
1.708-1(c)(1) and 1.708-1(c)(3)(i),
 
with the result
 
that (i) Echo Lake
 
Properties will be
 
treated as the
“resulting partnership,” (ii) ELT will be deemed to contribute all of its assets and all of
 
its liabilities
to Echo Lake Properties in
 
exchange for interests in Echo
 
Lake Properties in a transaction
 
described
in Section 721(a) of the
 
Code, and immediately thereafter ELT
 
will be deemed to distribute
 
interests
in Echo Lake Properties to its members in complete liquidation, and (iii) Echo Lake Properties
 
will
be treated as a continuation of
 
the Echo Lake Properties partnership
 
for purposes of Section 708 of
the Code.
 
For U.S. federal
 
and applicable state
 
and local Income
 
Tax purposes, the
 
Parties (and their
respective Affiliates) shall treat the
 
Equity Purchase as a
 
taxable sale of
 
the assets of
 
each member
of
 
the
 
Company
 
Group
 
pursuant
 
to
 
Section 1001
 
of
 
the
 
Code.
 
Each
 
of
 
the
 
Parties
 
(and
 
their
respective Affiliates) shall file all
 
Tax Returns consistent
 
with the Tax treatment
 
as set forth
 
in this
Section
 
and shall
 
not voluntarily
 
take any
 
position inconsistent
 
therewith upon
 
examination
of any relevant Tax
 
Return in any
 
Tax proceeding with
 
respect to such Tax
 
Returns, except upon
 
a
final “determination” by a Governmental
 
Authority within the meaning of Section 1313(a)(1) of
 
the
Code; provided, however,
 
that this
 
Section
 
shall not
 
be interpreted to
 
prohibit or hinder
 
any
Party from
 
settling any
 
Tax audit
 
or dispute
 
in a
 
manner inconsistent
 
with the
 
Tax treatment
 
described
herein.
(h)
Tax Refunds
.
 
Except to the
 
extent (i) reflected as
 
an asset in
 
Closing Working
 
Capital
or (ii) attributable to a carry back or other
 
use of any item of loss, deduction, credit or other
 
similar
item arising in a Tax period
 
beginning after the Closing
 
Date, any refund of Taxes of
 
the Company
Group
 
for
 
any
 
Pre-Closing
 
Tax
 
Period
 
(determined
 
in
 
accordance
 
with
 
the
 
principles
 
of
Section
 
for any
 
Straddle Period),
 
including interest
 
paid or
 
credited with
 
respect thereto
by
 
the
 
applicable
 
Governmental Authority
 
(each,
 
a
 
“Tax
 
Refund”),
 
whether
 
in
 
the
 
form
 
of
 
cash
received
 
or
 
a
 
credit
 
for
 
overpayment
 
of
 
Taxes
 
that
 
may
 
be
 
used
 
to
 
offset
 
cash
 
Taxes
 
otherwise
payable, shall be the property of the Sellers.
 
For the avoidance of doubt, the Specified
 
Tax Refunds
are Tax
 
Refunds that
 
shall
 
be
 
the property
 
of the
 
Sellers.
 
Buyer
 
shall
 
pay or
 
cause
 
to
 
be
 
paid
 
to
Sellers the amount of any
 
such Tax Refund no later
 
than five Business Days after the
 
receipt of such
Tax Refund from
 
the applicable
 
Governmental Authority (or,
 
if the Tax Refund
 
is in
 
the form
 
of a
credit
 
for
 
overpayment
 
of
 
Taxes
 
used
 
to
 
offset
 
cash
 
Taxes
 
otherwise
 
payable,
 
no
 
later
 
than
five Business Days after the earlier of (x) the filing of
 
the Tax Return claiming such credit or offset
 
67
and (y) the due date of such Tax Return after taking into account all valid extensions), in each case,
net of any unreimbursed reasonable and documented out-of-pocket costs
 
(including Taxes) incurred
by Buyer and its Affiliates in respect of
 
such refund (or credit).
 
Buyer shall, at the sole
 
expense of
the Sellers, if the
 
Sellers’ Representative reasonably requests, cause the Company Group to
 
file for
and use commercially
 
reasonable efforts to
 
obtain the receipt
 
of any Tax
 
Refund to which
 
Sellers are
entitled
 
under
 
this
 
Section
 
If
 
any
 
Tax
 
refunds
 
(including
 
any
 
interest
 
related
thereto) previously paid
 
to the
 
Sellers pursuant
 
to this
 
Section
 
are required
 
to be repaid
 
to a
Governmental Authority or
 
are subsequently
 
disallowed by
 
a Governmental Authority,
 
the Sellers
shall promptly repay to Buyer such previously paid amounts.
(i)
Certain Tax
 
Matters
.
 
Without the
 
prior written
 
consent of
 
the Sellers’
 
Representative,
Buyer shall not, and shall cause each member of the Company Group not to, (i) amend or cause the
amendment of a Tax Return of any of the members of the Company Group with respect
 
to any Pre-
Closing
 
Tax
 
Period,
 
(ii) change
 
an
 
annual
 
accounting
 
period
 
or
 
adopt
 
or
 
change
 
any
 
accounting
method with respect to any Pre-Closing Tax
 
Period, (iii) file or amend any Tax election
 
concerning
any member
 
of the
 
Company Group
 
with respect
 
to any
 
Pre-Closing Tax
 
Period, (iv) extend
 
or waive
the applicable statute of limitations with respect to a Tax of any member of the Company Group
 
for
a Pre-Closing Tax
 
Period, (v) file
 
any ruling
 
request with
 
any Governmental Authority that
 
relates
to Taxes
 
or Tax
 
Returns
 
of
 
any member
 
of the
 
Company
 
Group
 
for
 
a
 
Pre-Closing Tax
 
Period,
 
or
(vi) initiate
 
or
 
participate
 
in
 
any
 
voluntary
 
disclosure
 
program
 
with
 
any
 
Governmental Authority
regarding any Tax (or potential Taxes)
 
or Tax Returns of any
 
member of the Company
 
Group for a
Pre-Closing
 
Tax
 
Period,
 
in
 
each
 
case,
 
if
 
such
 
action
 
would,
 
or
 
could
 
reasonably
 
be
 
expected
 
to,
(A) increase any Tax liability of any Seller, Securityholder or any of their
 
Affiliates, (B) give rise to
any Indemnified Taxes, (C) increase
 
any Tax reflected as
 
a liability in the
 
determination of the Tax
Liability Amount,
 
Working Capital, Company
 
Group Expenses or
 
Indebtedness, or (D) reduce a
 
Tax
Refund Sellers are entitled to pursuant to Section
(j)
Other Tax Matters
.
(i)
The
 
Parties
 
agree
 
that
 
any
 
gains,
 
income,
 
deductions,
 
losses
 
or
 
other
 
items
realized by any member of the Company Group for U.S.
 
federal, state and local Income Tax
purposes with
 
respect to
 
any Buyer
 
Closing Date
 
Transaction
 
shall be
 
treated as
 
occurring
on the day immediately following the Closing Date.
(ii)
The members
 
of the
 
Company Group
 
shall treat
 
any deductions
 
attributable
to (A) any
 
Transaction
 
Tax
 
Deductions and
 
all related
 
amounts paid,
 
accrued or
 
accruable
on
 
or
 
before
 
the
 
Closing
 
Date,
 
and
 
(B) any
 
Company
 
Group
 
Expenses
 
paid,
 
accrued
 
or
accruable on
 
or before
 
the Closing
 
Date, as
 
deductible in
 
a Pre-Closing
 
Tax
 
Period to
 
the
fullest extent allowed by Law.
(iii)
Buyer shall
 
not, and
 
shall not
 
allow any
 
member of
 
the Company
 
Group to,
engage in
 
any transaction
 
after the
 
Closing, but
 
on the
 
Closing Date,
 
that is
 
outside of
 
the
ordinary
 
course
 
of
 
business
 
and
 
is
 
not
 
contemplated
 
by
 
this
 
Agreement
 
for
 
the
 
intended
purpose
 
of (A) increasing
 
any Tax
 
liability
 
of any
 
Seller
 
or Securityholder
 
or any
 
of their
Affiliates,
 
(B) giving rise
 
to any
 
Indemnified Taxes,
 
(C) increasing any
 
Tax
 
reflected as
 
a
liability in
 
the determination
 
of the
 
Tax Liability Amount,
 
Working Capital, Company Group
Expenses or
 
Indebtedness, or
 
(D) reducing a
 
Tax
 
Refund Sellers
 
are entitled
 
to pursuant
 
to
Section
6.8
Confidentiality.
 
For a period
 
of five years
 
after the Closing,
 
each Seller shall,
 
and shall cause
its
 
post-Closing Affiliates
 
(excluding,
 
for
 
the
 
avoidance
 
of
 
doubt,
 
Buyer
 
and
 
the
 
Company
 
Group)
 
and
 
 
 
 
 
68
representatives
 
to,
 
treat
 
as
 
confidential
 
and
 
safeguard
 
any
 
and
 
all
 
information,
 
knowledge,
 
data,
 
ideas,
concepts, plans and strategies whether now or hereafter existing relating to or arising from the past, current
or planned business,
 
activities, finances and/or
 
operations of the
 
Company Group and
 
the Business that
 
is
known to the Sellers or
 
such Affiliates
 
(the “Confidential Information”) except (a) as
 
otherwise agreed to in
writing by
 
Buyer, (b) for
 
disclosures to
 
any Governmental
 
Authority having
 
jurisdiction to
 
require disclosure
or to any arbitral body to the extent required by same, (c) as otherwise may be required by applicable Law,
(d) in
 
connection
 
with
 
enforcing
 
any
 
rights
 
under
 
this
 
Agreement
 
or
 
any
 
Ancillary
 
Agreement,
 
(e) as
required
 
for
 
internal
 
audit,
 
financial
 
and Tax
 
purposes,
 
or
 
(f) for
 
disclosures
 
to
 
its
 
representatives
 
in
 
the
ordinary course of business, but only if such representatives are
 
made aware of and directed to abide by the
provisions
 
of
 
this
 
Section
 
and
 
such
 
Seller
 
shall
 
be
 
responsible
 
for
 
any
 
breach
 
hereof
 
by
 
such
representatives.
 
Notwithstanding the
 
foregoing, if
 
any Seller
 
or any
 
of its Affiliates
 
or representatives
 
is
requested
 
or
 
required
 
disclose
 
any
 
Confidential
 
Information
 
in
 
response
 
to
 
a
 
court
 
order
 
or
 
as
 
otherwise
requested or required by any Law, or to comply with Tax reporting requirements (including the preparation
of Tax Returns), regulatory
 
reporting, audit or other
 
compliance obligations, to the
 
extent permitted by such
Law
 
or
 
other
 
compliance
 
obligation,
 
such
 
Seller, Affiliate
 
or
 
representative
 
thereof
 
will
 
notify
 
Buyer
 
in
writing
 
of
 
such
 
request
 
or
 
obligation
 
as
 
soon
 
as
 
practicable
 
after
 
such
 
Seller, Affiliate
 
or
 
representative
thereof becomes aware of it
 
and, if possible, before any information
 
is disclosed, so that a protective
 
order
or other appropriate remedy may
 
be obtained by Buyer at Buyer’s
 
sole expense.
 
The Parties acknowledge
that the confidentiality
 
obligations set forth
 
in this Section
 
shall not extend
 
to information, knowledge
and data that (i) is or becomes
 
generally available to the public other
 
than as a result of a
 
disclosure by such
Seller or any of
 
its Affiliates or representatives, (ii) is available
 
or becomes available to
 
such Seller or any
of its Affiliates or their respective representatives on
 
a non-confidential basis from a
 
source other than any
member of
 
the Company
 
Group that
 
is not
 
bound by
 
a confidentiality
 
or fiduciary
 
obligation to
 
the Company
Group, (iii) is
 
requested or
 
required by
 
applicable Law
 
to be
 
disclosed, (iv) was
 
independently developed
by such
 
Seller, its Affiliates
 
or their
 
respective representatives
 
without reference
 
to or
 
otherwise utilizing
the Company Group’s information, (v) to the extent it is owned by an Excluded Company but
 
is not related
to or owned by a
 
member of the Company
 
Group.
 
The Confidentiality
 
Agreement shall terminate and
 
be of
no further
 
force and
 
effect on
 
the Closing
 
Date.
 
For the
 
avoidance of
 
doubt, the
 
provisions of
 
this Section
will
 
not
 
apply
 
to
 
any
 
information
 
regarding
 
the
 
negotiation
 
or
 
execution
 
of
 
this
 
Agreement
 
or
 
the
consummation of the Transactions
 
or the public announcement
 
thereof, which shall be
 
governed solely by
Section
6.9
Access to Books and
 
Records.
 
From and after the
 
Closing Date and for
 
a period of five
 
years
thereafter, the Sellers’ Representative and its representatives shall have reasonable access, upon reasonable
notice and during normal business
 
hours to all of the
 
books and records of the
 
Company Group (including
the ability
 
to make
 
copies of
 
any such
 
information) to
 
the extent
 
that such
 
access may
 
be reasonably
 
required
to permit the
 
Sellers to perform
 
or satisfy any
 
accounting or regulatory
 
obligation, in connection
 
with any
legal
 
proceeding
 
by
 
or
 
before
 
a
 
Governmental Authority
 
or
 
the
 
preparation
 
and
 
filing
 
of Tax
 
filings
 
and
other Tax compliance
 
obligations, in each
 
case, relating to
 
any period on
 
or prior to
 
the Closing Date,
 
but
only to the
 
extent that Buyer
 
may do so
 
without violating any
 
obligations to any
 
Person or waiving
 
any legal
privilege and
 
to the
 
extent that
 
Buyer has
 
the authority
 
to grant
 
such access
 
without breaching
 
applicable
Law or any contract or
 
other restriction binding on Buyer
 
or the Company Group; provided,
 
however, that
in any such
 
case, Buyer shall,
 
and shall cause
 
the Company Group
 
to, reasonably cooperate
 
with the Sellers’
Representative to
 
seek an
 
appropriate remedy
 
to permit
 
the access
 
contemplated hereby;
 
provided further
that (i) such investigation
 
will be conducted
 
in a manner
 
that does not
 
unreasonably interfere with
 
normal
operations
 
of
 
Buyer
 
or
 
the
 
Company
 
Group,
 
(ii) such
 
access
 
(including
 
the
 
making
 
of
 
copies)
 
shall
 
be
conducted
 
at
 
the
 
Sellers’ Representative’s
 
sole
 
expense,
 
(iii) no
 
Personal
 
Data
 
shall
 
be
 
disclosed
 
or
 
used
other than in compliance with applicable Privacy
 
Law, (iv) neither Buyer nor the Company Group
 
shall be
required
 
to incur
 
any third-party
 
costs or
 
expenses in
 
connection with
 
the rights
 
granted pursuant
 
to this
Section
, (v) nothing
 
herein shall
 
require any
 
member of
 
the Company
 
Group or
 
its representatives
 
to
furnish to
 
the Sellers’ Representative
 
or provide
 
the Sellers’ Representative
 
with information
 
or access
 
to
69
any Trade Secrets related to
 
any Company Group Intellectual
 
Property and (vi) the Sellers’ Representative
and the
 
Sellers will,
 
and will
 
direct their
 
respective Affiliates and
 
representatives to,
 
keep all
 
information
furnished in
 
accordance with
 
Section
 
confidential in
 
accordance with
 
the terms
 
of Section
 
For a
period of
 
six years following
 
the Closing,
 
or such
 
longer period
 
as may be
 
required by
 
applicable Law
 
or
necessitated
 
by
 
applicable
 
statutes
 
of
 
limitations,
 
Buyer
 
shall,
 
and
 
shall
 
cause
 
the
 
Company
 
Group
 
to,
maintain all such books and records and shall not destroy, alter or otherwise dispose of any such books and
records, in each case, relating to the purposes
 
described in the foregoing sentence.
 
On and after the end of
such period, Buyer
 
shall, and shall
 
cause the Company
 
Group to, provide
 
the Sellers’ Representative with
at least ten Business Days’ notice before destroying, altering or otherwise disposing of any such books and
records, during which
 
period the
 
Sellers’ Representative may elect
 
to take possession,
 
at its
 
own expense,
of such books and records relating to the purposes described in the first sentence of this Section
6.10
R&W Insurance Policy
.
(a)
If Buyer
 
obtains an
 
R&W Insurance
 
Policy, (i) the
 
costs, fees
 
and expenses
 
of any
such R&W Insurance
 
Policy shall be
 
borne equally by
 
Buyer, on the
 
one hand, and
 
the Sellers, on
the other hand
 
and (ii) then such
 
R&W Insurance
 
Policy shall provide
 
that the insurer
 
for such R&W
Insurance Policy shall not receive, irrevocably and unconditionally waives and releases,
 
and agrees
not
 
to
 
exercise,
 
directly
 
or
 
indirectly,
 
any
 
rights
 
and
 
claims
 
of
 
subrogation,
 
contribution,
indemnification or recourse or other rights of recovery, or rights and claims acquired by assignment
against
 
the
 
Sellers,
 
except
 
in
 
the
 
case
 
that
 
a
 
Seller
 
commits
 
Fraud.
 
Prior
 
to
 
binding
 
any
 
R&W
Insurance Policy, Buyer
 
shall provide notice
 
to the Sellers’ Representative and
 
provide the Sellers’
Representative a reasonable
 
opportunity to comment
 
on such policy
 
with respect to
 
the matters set
forth in the preceding sentence, which comments shall be considered in good faith and presented to
the
 
insurer of
 
the
 
R&W Insurance
 
Policy for
 
inclusion
 
into
 
the R&W
 
Insurance
 
Policy by
 
Buyer
prior to the binding thereof.
 
In addition, the R&W Insurance Policy shall not be amended, restated,
supplemented, modified or altered, nor shall any terms thereof be waived, in any manner adverse to
the Sellers without the prior written consent of the Sellers’ Representative.
(b)
Except for those matters set forth in
, Buyer acknowledges and agrees that
if it obtains
 
an R&W Insurance
 
Policy, then such
 
R&W Insurance Policy
 
(whether or not
 
such R&W
Insurance Policy is sufficient to cover
 
the applicable losses) shall be the sole
 
and exclusive remedy
of
 
Buyer
 
and
 
its Affiliates
 
(including,
 
from
 
and
 
after
 
the
 
Closing,
 
the
 
Company
 
Group),
 
in
 
Law,
equity or
 
otherwise, arising
 
out of,
 
or related
 
to any
 
inaccuracy or
 
breach of
 
any representation
 
or
warranty regarding the
 
Company Group contained
 
in this Agreement, the Ancillary Agreements or
in any certificates delivered with respect thereto, and Buyer, its Affiliates
 
(including, from and after
the
 
Closing,
 
the
 
Company
 
Group),
 
and
 
the
 
insurers
 
under
 
any
 
such
 
R&W Insurance
 
Policy
 
shall
have no recourse against any
 
Seller with respect thereto, except
 
with respect to claims for
 
Fraud and
claims related to pre-Closing Taxes.
6.11
Notices of Certain Events
.
 
From the date hereof until the Closing Date or
 
the termination of
this Agreement in accordance with
 
the terms of
, whichever is
 
earlier, the Sellers’ Representative
shall promptly notify Buyer of:
(a)
any notice or other
 
written communication received by
 
any Seller or member
 
of the
Company Group from any Person alleging
 
that the consent of such Person
 
is or may be required
 
in
connection with the Transactions or any Ancillary
 
Agreement;
(b)
any notice or other
 
written communication received by
 
any Seller or member
 
of the
Company
 
Group
 
from
 
any
 
Governmental Authority
 
in
 
connection
 
with
 
the
 
Transactions
 
or
 
any
Ancillary Agreement;
 
 
70
(c)
any
 
Proceedings
 
(i) commenced
 
or
 
(ii) to
 
the
 
Knowledge
 
of
 
the
 
Company
 
Group,
threatened against any Seller
 
or member of the
 
Company Group that, if
 
pending on the date
 
of this
Agreement, would have been required to have been disclosed pursuant to Section
(d)
any breach of
 
any (i) representation or
 
warranty set
 
forth in
 
or
or (ii) Pre-Closing Covenant; or
(e)
any
 
change,
 
event,
 
circumstance,
 
occurrence,
 
state
 
of
 
facts,
 
development
 
or
 
effect
that has had
 
or could reasonably
 
be expected to
 
have a Material
 
Adverse Effect, or
 
would reasonably
be expected to
 
make the satisfaction
 
of any of
 
the conditions in
 
Section
 
impossible or reasonably
unlikely;
provided, however, that
 
no such
 
notification required
 
by this
 
Section
 
(and no
 
other notification
 
required
to be
 
given under
 
any other
 
Section of
 
this Agreement)
 
shall affect
 
the representations,
 
warranties, covenants
or agreements of the Parties or the conditions to the obligations of the Parties under this Agreement.
6.12
Director,
 
Manager
 
and
 
Officer
 
Resignations
.
 
At
 
least
 
five
 
Business
 
Days
 
prior
 
to
 
the
Closing, the Sellers
 
shall deliver to
 
Buyer a true
 
and complete list
 
of the directors,
 
managers and officers,
as applicable, of
 
each member of
 
the Company Group.
 
At the request
 
of Buyer at
 
least one Business
 
Day
prior
 
to
 
the
 
Closing,
 
the
 
Sellers
 
and
 
the
 
Company
 
Group
 
shall
 
cause
 
the
 
resignation
 
of
 
any
 
directors,
managers or officers identified by Buyer in writing, with effect as of the Closing.
6.13
Termination of Affiliate Contracts
.
 
Except as set forth on Schedule
, the Sellers and the
Company Group shall, prior to the Closing, terminate or settle in full (without any payments by Buyer, any
Affiliate
 
of
 
Buyer
 
or
 
any
 
member
 
of
 
the
 
Company
 
Group
 
following
 
the
 
Calculation
 
Time)
 
all Affiliate
Contracts, pursuant to documentation that is reasonably acceptable to Buyer such that as of the Closing, all
such
 
Contracts,
 
transactions
 
or
 
other
 
obligations
 
or
 
liabilities
 
shall
 
be
 
of
 
no
 
further
 
force
 
or
 
effect
 
and
without any liability
 
to Buyer or
 
any of its
 
Affiliates or any
 
member of the
 
Company Group notwithstanding
any terms thereof to the contrary.
6.14
Exclusivity
.
 
Each
 
of
 
the
 
Sellers
 
and
 
the
 
Company
 
Group
 
agree
 
that
 
from
 
the
 
date
 
of
 
this
Agreement until the Closing Date or the
 
prior termination of this
 
Agreement pursuant to Section
, none
of the
 
Sellers or
 
any member
 
of the
 
Company Group
 
shall, and
 
the Sellers
 
and the
 
Company Group
 
shall
instruct
 
their
 
respective Affiliates
 
and
 
representatives
 
not
 
to,
 
directly
 
or
 
indirectly,
 
(a) provide
 
any
 
non-
public information
 
to any
 
third party
 
(including via
 
access to
 
any data
 
room or
 
other records)
 
other than
Buyer and its
 
representatives with respect
 
to any Conflicting Transaction,
 
(b) solicit, initiate or
 
knowingly
encourage
 
proposals,
 
offers
 
or
 
inquiries
 
from
 
a
 
third
 
party
 
other
 
than
 
Buyer
 
and
 
its
 
representatives
 
with
respect to any
 
Conflicting Transaction,
 
(c) participate in any
 
negotiations or discussions
 
with any third
 
party
other than Buyer and its representatives with
 
respect to any Conflicting Transaction
 
or (d) enter into a letter
of intent or other agreement
 
with a third party
 
other than Buyer with
 
respect to any Conflicting
 
Transaction.
 
In furtherance
 
of the
 
foregoing, promptly
 
after the
 
execution of
 
this
 
Agreement, the
 
Sellers and
 
the Company
Group shall, and
 
shall cause their Affiliates and
 
representatives to, (x) within
 
two Business Days
 
from the
date of this
 
Agreement, terminate access of
 
any Person (other
 
than Buyer, any
 
of its
 
Affiliates or any
 
of their
respective agents or representatives) to any
 
physical or electronic data rooms hosted by
 
or on behalf of the
Company Group and (y) deliver written notice to each
 
such Person requesting that such Person (other than
Buyer,
 
any
 
of
 
its
 
Affiliates
 
or
 
any
 
of
 
their
 
respective
 
representatives)
 
promptly
 
return
 
or
 
destroy
 
all
confidential
 
information
 
regarding
 
the
 
Company
 
Group
 
in
 
accordance
 
with
 
applicable
 
confidentiality
agreements.
 
 
 
 
 
 
 
 
71
6.15
Non-Compete and Non-Solicit
.
 
In order to induce Buyer to enter into this Agreement
 
and to
induce Buyer to consummate the Transactions, the Sellers agree as follows:
(a)
Each
 
Transferor
 
and
 
each
 
Person
 
listed
 
on
 
Schedule
 
(each,
 
Transferor
 
and
each
 
such
 
Person,
 
a
 
“Restricted
 
Party”)
 
hereby
 
agrees
 
that,
 
without
 
the
 
prior
 
written
 
consent
 
of
Buyer, during the
 
period beginning immediately
 
following the Closing
 
and ending on
 
the date that
is five years after the Closing Date, such Restricted Party shall not, and shall cause its Affiliates not
to, directly or indirectly:
(i)
(A) enter
 
into
 
or
 
engage
 
in
 
(or
 
prepare
 
to
 
enter
 
into
 
or
 
engage
 
in)
 
any
Competitive
 
Activity,
 
(B) manage,
 
operate
 
or
 
control
 
any
 
business
 
or
 
Person
 
that
 
is
 
or
proposes to be engaged in any business that is competitive with the Business (a “Competing
Business”),
 
or
 
(C) permit
 
Restricted
 
Party’s
 
name
 
to
 
be
 
used
 
in
 
connection
 
with
 
any
Competing Business, in the
 
case of each of
 
clauses (A) through (C) above, anywhere
 
in the
United States of America (the “Restricted Territory”); or
(ii)
(A) solicit
 
or
 
contact
 
any
 
customer
 
or
 
supplier
 
or
 
prospective
 
customer
 
or
supplier to induce or attempt to induce such Person to
 
cease doing business with, or reduce,
divert or transfer the amount of business conducted with, the Company Group, (B) solicit or
contact any customer or supplier or prospective customer or supplier to induce or attempt to
induce such
 
Person to
 
conduct business
 
with any
 
Person that
 
is a
 
Competing Business;
 
or
(C) solicit
 
or
 
contact
 
any
 
customer
 
or
 
supplier
 
or
 
prospective
 
customer
 
or
 
supplier
 
to
adversely impact such Person’s business relationship with the Company Group.
(b)
Without the prior written consent of
 
Buyer, during the period beginning immediately
following the Closing
 
and ending on the
 
date that is
 
three years after
 
the Closing Date,
 
each Seller
agrees that
 
such Seller
 
shall not,
 
and shall
 
cause its Affiliates (and
 
its or
 
their respective
 
directors,
officers, executors, trustees or fiduciaries (or
 
their equivalents)), (i) solicit, induce, entice or
 
recruit
or
 
attempt
 
to
 
solicit,
 
induce,
 
entice
 
or
 
recruit,
 
directly
 
or
 
indirectly,
 
any
 
employee,
 
independent
contractor
 
or
 
consultant
 
of
 
the
 
Company
 
Group
 
to
 
terminate
 
such
 
Person’s
 
employment
 
or
engagement with the
 
Company Group, or
 
(ii) solicit, recruit or
 
hire, or attempt
 
to solicit, recruit
 
or
hire,
 
directly
 
or
 
indirectly,
 
any
 
employee,
 
independent
 
contractor
 
or
 
consultant
 
of
 
the
 
Company
Group
 
who
 
was
 
employed
 
or
 
engaged
 
by
 
the
 
Company
 
Group
 
at
 
any
 
time
 
during
 
the
 
12-month
period immediately prior to the Closing Date;
 
provided, however, that nothing herein shall prohibit
any Seller from
 
(i) conducting a general
 
solicitation of prospective
 
employees in the
 
ordinary course
of business consistent with past practice or hiring any Person as a result of such general solicitation
or (ii) soliciting or hiring any individual whose employment with a member of the Company Group
is involuntarily terminated by the Company Group.
(c)
The
 
Sellers
 
acknowledge
 
that
 
the
 
covenants
 
set
 
forth
 
in
 
this
 
Section
 
are
 
an
essential element
 
of this Agreement
 
and that,
 
but for
 
the agreement
 
of the
 
Sellers to
 
comply with
these covenants, Buyer would not have entered into this Agreement.
(d)
If
 
any
 
provision
 
contained
 
in
 
this
 
Section
 
is
 
held
 
by
 
any
 
court
 
of
 
competent
jurisdiction
 
to
 
be
 
unenforceable
 
because
 
of
 
the
 
duration
 
of
 
such
 
provision,
 
the
 
geographic
 
area
covered thereby or
 
otherwise, the court
 
making such determination
 
shall have the
 
power to, and
 
is
hereby
 
directed
 
by
 
the
 
Parties
 
to,
 
reduce
 
the
 
duration
 
or
 
geographic
 
area
 
of
 
such
 
provision
 
or
otherwise
 
modify
 
such
 
provision,
 
and,
 
in
 
its
 
reduced
 
or
 
modified
 
form,
 
such
 
provision
 
shall
 
be
enforceable.
 
In addition, upon a determination that any
 
such term or other provision, or
 
any portion
thereof, is invalid, illegal or incapable of being enforced, the Parties
 
shall negotiate in good faith to
 
 
 
 
 
 
 
 
 
72
modify this Agreement so
 
as to
 
effect the
 
original intent
 
of the
 
Parties as
 
closely as
 
possible in
 
an
acceptable manner to the end that the Transactions are consummated to the fullest extent possible.
ARTICLE VII
CONDITIONS TO CLOSING
7.1
Conditions of
 
Buyer to
 
Closing
.
 
The obligations
 
of Buyer
 
to effect
 
the Transactions
 
at the
Closing are subject
 
to the satisfaction
 
(or, to the
 
extent permitted by
 
Law, waiver by
 
Buyer) of the
 
following
conditions:
(a)
Representations, Warranties and Covenants of the Sellers.
(i)
(A) The representations and warranties of the Sellers regarding the Company
Group and Transferors
 
set forth in
 
Sections
 
(first sentence
 
only),
,
,
,
(first sentence only) and
 
shall be true and correct in all
 
respects at and as of the Closing
as
 
if
 
made
 
at
 
and
 
as
 
of
 
the
 
Closing,
 
(B) the
 
representations
 
and
 
warranties
 
of
 
the
 
Sellers
regarding the Company Group and Transferors set forth in
 
Sections
 
(second sentence
only),
 
and
 
shall be true
 
and correct
 
in all
 
respects at and
 
as of
 
the Closing as
 
if
made
 
at
 
and
 
as
 
of
 
the
 
Closing
 
(except
 
for
de
 
minimis
 
inaccuracies),
 
and
 
(C) the
representations and warranties of the Sellers regarding the Company Group and Transferors
set forth
 
in
 
(other than those
 
that are the
 
subject of clauses
 
(A) and (B))
 
shall be
true
 
and
 
correct
 
in
 
all
 
respects
 
(ignoring
 
and
 
disregarding
 
all
 
materiality
 
and
 
Material
Adverse Effect qualifications set
 
forth therein) at and as
 
of the Closing as
 
if made at and as
of the Closing, except for inaccuracies of a representation or
 
warranty (individually or when
aggregated with other
 
such inaccuracies of
 
representations or warranties)
 
that have not
 
had
and could not reasonably be expected
 
to have a Material
 
Adverse Effect; provided, however,
that,
 
in
 
each
 
case,
 
representations
 
and
 
warranties
 
that
 
are
 
made
 
as
 
of
 
a
 
particular
 
date
 
or
period
 
shall
 
be
 
so
 
true
 
and
 
correct
 
(in
 
the
 
manner
 
set
 
forth
 
in
 
clause (A),
 
(B)
 
or
 
(C),
 
as
applicable) only as of such date or period;
(ii)
The
 
representations
 
and
 
warranties
 
of
 
the
 
Securityholders
 
set
 
forth
 
in
Section
 
shall
 
be
 
true
 
and
 
correct
 
in
 
all
 
respects
 
(except
 
for
de
 
minimis
 
inaccuracies);
provided, however,
 
that, in
 
each case,
 
representations and
 
warranties that
 
are made
 
as of
 
a
particular date or period shall be so true and correct only as of such date or period;
(iii)
The Sellers and the Company Group shall each have performed (or caused to
have been performed) in all
 
material respects all covenants required
 
to be performed by the
Sellers or the
 
Company Group (as
 
applicable) at or
 
prior to the
 
Closing under this
 
Agreement
(except for such covenants that by their nature may be performed only at the Closing);
(iv)
The Sellers’ Representative
 
and each
 
Transferor shall
 
have furnished
 
Buyer
at the
 
Closing with
 
a certificate
 
certifying the
 
matters set
 
forth in
 
Sections
,
and
, as applicable; and
(v)
The Sellers’ Representative shall have furnished Buyer
 
at the Closing with
 
a
certificate certifying the matters set forth in Sections
 
 
 
 
 
 
 
 
 
73
(b)
Statutory Requirements; No Governmental Restraints.
(i)
Any applicable waiting period under the HSR Act and any timing agreement
with any
 
Governmental Authority to
 
delay or
 
not consummate
 
the Transactions
 
shall have
expired or been terminated; and
(ii)
There
 
shall
 
not
 
be
 
any
 
pending
 
action,
 
suit
 
or
 
proceeding
 
initiated
 
by
 
any
Governmental Authority seeking to restrain or invalidate the Transactions; and
(iii)
There shall
 
not be
 
in effect
 
any Law
 
or Order
 
enacted, issued,
 
promulgated,
enforced or entered by any court or other Governmental Authority of competent jurisdiction
that
 
enjoins,
 
restrains,
 
makes
 
illegal
 
or
 
otherwise
 
prohibits
 
the
 
consummation
 
of
 
the
Transactions.
(c)
Completion of Pre-Closing Restructuring
.
 
The Sellers shall have completed the Pre-
Closing Restructuring
 
pursuant to
 
documentation that
 
complies with
 
the requirements
 
set forth
 
in
Section
(d)
Payment
 
of
 
Company
 
Group
 
Indebtedness;
 
Release
 
of
 
Liens
.
 
At
 
or
 
prior
 
to
 
the
Closing, the Sellers have repaid, or caused to be repaid, in full all outstanding secured Indebtedness
of the Company Group
 
identified in clauses (a), (b),
 
(d) and (e) of
 
the definition of Indebtedness
 
and
terminated
 
the
 
Existing
 
Credit
 
Facility,
 
and,
 
as
 
applicable,
 
have
 
obtained
 
payoff
 
letters
 
and
 
lien
releases with respect
 
to any
 
Liens relating
 
to any
 
of the
 
foregoing Indebtedness,
 
which payoff
 
letters,
termination documents
 
and release
 
instruments shall
 
be delivered
 
to Buyer
 
at least
 
three Business
Days prior to the Closing Date.
(e)
Ancillary
 
Agreements
.
 
Each
 
of
 
the
 
Ancillary
 
Agreements
 
contemplated
 
by
 
this
Agreement to
 
be executed
 
at Closing,
 
and to
 
which any
 
member of
 
the Company
 
Group or
 
any Seller
is a party, shall have been executed and delivered by such Party and shall
 
be in full force and effect.
(f)
No Material
 
Adverse Effect
.
 
No Material Adverse
 
Effect shall
 
have occurred
 
since
the date hereof.
(g)
Instruments
 
of
 
Transfer
.
 
Each
 
Transferor
 
shall
 
have
 
delivered
 
to
 
Buyer
 
a
 
duly
executed unit power
 
or similar
 
instrument of assignment
 
and conveyance,
 
transferring the Purchased
Equity Interests from such Seller to Buyer.
7.2
Conditions of the Sellers to Closing
.
 
The obligation of the Sellers to effect the Transactions
at
 
the
 
Closing
 
are
 
subject
 
to
 
the
 
satisfaction
 
(or,
 
to
 
the
 
extent
 
permitted
 
by
 
Law,
 
waiver
 
by
 
the
 
Sellers’
Representative) of the following conditions:
(a)
Representations, Warranties and Covenants of Buyer.
(i)
(A) The
 
representations
 
and
 
warranties
 
of
 
Buyer
 
set
 
forth
 
in
 
Sections
,
 
and
 
shall be true
 
and correct in
 
all respects at
 
and as of
 
the Closing as
 
if made at
and as
 
of the
 
Closing (except
 
for
de minimis
 
inaccuracies), and
 
(B) the representations
 
and
warranties of Buyer set forth in
 
(other than those that are the
 
subject of clause (A))
shall be true and correct in all material respects at and as of the Closing as if made
 
at and as
of the Closing; provided, however, that
 
representations and warranties that are made as
 
of a
particular date or period shall be so true and correct (in the manner set forth in clause (A) or
(B), as applicable) only as of such date or period;
 
74
(ii)
Buyer
 
shall
 
have
 
performed
 
(or
 
caused
 
to
 
be
 
performed)
 
in
 
all
 
material
respects all covenants
 
required to be
 
performed by Buyer
 
at or prior
 
to the Closing
 
under this
Agreement
 
(except
 
for
 
such
 
covenants
 
that
 
by
 
their
 
nature
 
may
 
be
 
performed
 
only
 
at
 
the
Closing); and
(iii)
Buyer shall
 
have furnished
 
the Sellers’ Representative
 
at the
 
Closing with
 
a
certificate certifying the matters set forth in Sections
 
and
(b)
Statutory Requirements; No Governmental Restraints.
(i)
Any applicable waiting period under the HSR Act and any timing agreement
with any
 
Governmental
 
Authority to
 
delay or
 
not consummate
 
the contemplated
 
Transactions
shall have expired or been terminated;
(ii)
There
 
shall
 
not
 
be
 
any
 
pending
 
action,
 
suit
 
or
 
proceeding
 
initiated
 
by
 
any
Governmental Authority seeking to restrain or invalidate the Transactions; and
(iii)
There shall
 
not be
 
in effect
 
any Law
 
or Order
 
enacted, issued,
 
promulgated,
enforced or entered by any court or other Governmental Authority of competent jurisdiction
that
 
enjoins,
 
restrains,
 
makes
 
illegal
 
or
 
otherwise
 
prohibits
 
the
 
consummation
 
of
 
the
Transactions.
(c)
Ancillary
 
Agreements
.
 
Each
 
of
 
the
 
Ancillary
 
Agreements
 
contemplated
 
by
 
this
Agreement to be
 
executed at Closing,
 
and to which
 
Buyer is a
 
party, shall have
 
been executed and
delivered by Buyer and shall be in full force and effect.
ARTICLE VIII
NON-SURVIVAL OF
 
REPRESENTATIONS
8.1
Survival of Representations and Warranties
.
 
Without limiting any claims against
 
any Party
for
 
Fraud
 
or
 
any
 
rights
 
to
 
indemnification
 
set
 
forth
 
in
,
 
the
 
representations
 
and
 
warranties
contained
 
in
,
 
and
 
and
 
in
 
the
 
certificates
 
delivered
 
pursuant
 
to
Section
,
 
Section
 
and
 
Section
 
will
 
immediately
 
terminate
 
as
 
of
 
the
 
Closing,
and thereafter there shall be no liability on the part of, nor shall any claim be made by, any Party in
 
respect
thereof.
8.2
Survival
 
of
 
Covenants
 
and
 
Agreements
.
 
The
 
covenants
 
in
 
this
 
Agreement
 
requiring
performance solely prior
 
to or at
 
the Closing (each,
 
a “Pre-Closing Covenant”)
 
shall, in each
 
case, terminate
effective as of
 
the Closing and
 
shall not
 
survive the
 
Closing for any
 
purpose, and thereafter
 
there shall be
no liability on the part of, nor
 
shall any claim be made by, any
 
party in respect thereof, and the covenants
 
in
this Agreement
 
that contemplate performance on or
 
after the Closing or
 
expressly by their terms
 
survive the
Closing shall survive the Closing in accordance with their respective terms.
8.3
Statute of Limitations
.
 
Each of the Parties acknowledges and agrees that
 
this
 
is
expressly intended to limit an otherwise applicable statute of
 
limitations under applicable Law, and waives
the statute of limitations under such Law
 
to the extent such statute of limitations period
 
exceeds the periods
described in this
8.4
No
 
Post-Closing
 
Liability
 
for
 
Representations
 
or
 
Pre-Closing
 
Covenants
.
 
Buyer
acknowledges
 
and
 
agrees
 
that,
 
regardless
 
of
 
whether
 
Buyer
 
obtains
 
an
 
R&W
 
Insurance
 
Policy
 
(and
regardless of
 
whether any
 
R&W Insurance
 
Policy it
 
obtains is
 
sufficient to
 
cover the
 
applicable Losses),
 
 
 
 
 
75
except
 
as
 
set
 
forth
 
in
,
 
neither
 
Buyer
 
nor
 
any Affiliate
 
thereof
 
(including,
 
from
 
and
 
after
 
the
Closing, the
 
Company Group),
 
shall have
 
any remedy
 
at law,
 
in equity
 
or otherwise,
 
arising out
 
of, or
 
related
to, any inaccuracy
 
or breach of
 
any representation, warranty
 
or Pre-Closing
 
Covenant by or
 
regarding the
Company Group or the Sellers contained in this
 
Agreement, the Ancillary
 
Agreements or in any certificates
delivered with respect hereto or thereto.
 
Buyer and its Affiliates
 
(including, from and after the Closing, the
Company Group),
 
and the
 
insurers under
 
any such
 
R&W Insurance
 
Policy shall
 
have no
 
recourse against
any Seller or any Affiliate thereof with respect thereto.
 
Buyer expressly waives any other rights, remedies,
claims or
 
causes of
 
action Buyer
 
may have
 
against any
 
Person, by
 
contract, statute
 
or otherwise,
 
with respect
to the foregoing, whether in contract, tort or otherwise, or whether at law or in equity, and regardless of the
legal
 
theory
 
under
 
which
 
such
 
entitlement,
 
remedy
 
or
 
recourse
 
may
 
be
 
sought
 
or
 
imposed
 
(including
 
all
rights
 
afforded by
 
any
 
statute
 
that
 
limits the
 
effects
 
of
 
a
 
release
 
with
 
respect
 
to
 
unknown claims).
 
Each
Seller acknowledges and agrees that, at
 
and as of the Closing, neither such
 
Seller nor any Affiliate thereof,
shall have any remedy at law, in
 
equity or otherwise, arising out of, or
 
related to, any inaccuracy or breach
of any
 
representation, warranty
 
or Pre-Closing
 
Covenant by
 
or regarding
 
Buyer contained
 
in this
 
Agreement,
the
 
Ancillary
 
Agreements
 
or
 
in
 
any
 
certificates
 
delivered
 
with
 
respect
 
hereto
 
or
 
thereto.
 
Each
 
Seller
expressly waives any other rights or
 
remedies such Seller may have with
 
respect to the foregoing, whether
in contract, tort or otherwise, or whether at law or in equity, and regardless of the
 
legal theory under which
such entitlement, remedy or
 
recourse may be sought
 
or imposed (including all
 
rights afforded by any
 
statute
that limits
 
the effects
 
of a
 
release with
 
respect to
 
unknown claims).
 
Notwithstanding anything
 
to the
 
contrary
in this
 
Agreement, nothing in
 
this
 
Agreement shall limit,
 
impair or release
 
any claims for
 
Fraud or any
 
rights
to indemnification set forth in
ARTICLE IX
SPECIAL INDEMNIFICATION
9.1
Indemnification Provision
.
 
From and after the Closing, subject to the terms,
 
and conditions
provided
 
in
 
this
 
the
 
Sellers
 
shall,
 
jointly
 
and
 
severally,
 
indemnify,
 
defend
 
and
 
hold
 
harmless
Buyer
 
and
 
its
 
Affiliates
 
and
 
each
 
of
 
their
 
respective
 
members,
 
partners,
 
directors,
 
managers,
 
officers,
employees, stockholders, agents and other Representatives (in each case,
 
the “Buyer Indemnified Parties”),
from and against (a) any and all
 
Losses incurred by the Buyer Indemnified
 
Parties to the extent arising
 
out
of or resulting from any of the items
 
listed on Schedule
 
(the “Specified Liabilities”), and (b) any and all
Indemnified Taxes.
 
Payment in
 
full of
 
any amount
 
due from
 
the Sellers
 
to Buyer
 
under clause (b)
 
of this
Section
 
shall be
 
made to the
 
affected party
 
in immediately available
 
funds at
 
least five Business
 
Days
before
 
the
 
date
 
the payment
 
of the
 
Taxes
 
to
 
which such
 
payment relates
 
is
 
due,
 
or, if
 
no Tax
 
is payable,
within 15 days after written demand is made for such payment.
9.2
Indemnification Procedure
.
(a)
A
 
written
 
notice
 
of
 
all
 
Specified
 
Liabilities
 
shall
 
be
 
deemed
 
to
 
have
 
been
 
given
pursuant to this Section
 
on the Closing Date.
 
If any claim or action at law or suit in equity is
instituted
 
by
 
a
 
third
 
party
 
against
 
a
 
Buyer
 
Indemnified
 
Party
 
(each,
 
a
 
“Third
 
Party
 
Claim”)
 
with
respect
 
to
 
any
 
Specified
 
Liability,
 
which
 
such
 
Buyer
 
Indemnified
 
Party
 
intends
 
to
 
claim
indemnification
 
for
 
any
 
Losses
 
under
 
Section
,
 
the
 
Buyer
 
Indemnified
 
Party
 
shall
 
supply
 
the
Sellers’ Representative with
 
such information
 
and documents
 
as it
 
has in
 
its possession
 
regarding
such
 
claim,
 
and
 
will
 
allow
 
reasonable
 
access
 
to
 
relevant
 
personnel,
 
auditors
 
and
 
other
Representatives of the
 
Buyer Indemnified Party
 
(subject to customary
 
exceptions for legal
 
privilege)
together
 
with
 
all
 
pertinent
 
information
 
in
 
its
 
possession
 
regarding
 
the
 
amount
 
of
 
the
 
Loss
 
that
 
it
asserts it
 
has sustained
 
or incurred,
 
and will
 
permit the
 
Sellers (as
 
well as
 
the Sellers’
 
Representatives,
agents or
 
assigns) to
 
inspect such
 
other records
 
and books
 
in the
 
possession of
 
the Buyer
 
Indemnified
Party and relating to the
 
Third Party Claim and asserted
 
Loss as the Sellers shall
 
reasonably request,
 
 
 
 
 
 
76
and the
 
Buyer Indemnified Party
 
shall cooperate with
 
the Seller
 
with respect to
 
matters relating to
any Third Party Claims.
(b)
The Sellers,
 
acting through
 
the Sellers’
 
Representative, shall
 
have the
 
right to
 
conduct
and control,
 
at their
 
own expense,
 
through counsel
 
of their
 
choosing, the
 
defense of
 
a Third
 
Party
Claim so
 
long as
 
the Sellers’ Representative
 
notifies the
 
Buyer Indemnified
 
Party that
 
the Sellers
have
 
agreed
 
to
 
indemnify
 
the
 
Buyer
 
Indemnified
 
Party
 
for
 
any
 
and
 
all
 
Losses
 
arising
 
out
 
of
 
or
resulting from the
 
Third Party Claim
 
of which they
 
are assuming the
 
right to conduct and
 
control the
defense within 30 days of their receipt of the initial notice of the Third Party Claim, and shall do so
in
 
good
 
faith;
 
provided,
 
however,
 
that
 
the
 
Buyer
 
Indemnified
 
Party
 
may
 
participate
 
at
 
its
 
own
expense, with counsel of its choosing, in
 
the defense of such Third Party
 
Claim although such Third
Party Claim shall be
 
controlled by the Sellers; provided
 
further that if the Buyer
 
Indemnified Party
requests,
 
and
 
the
 
Sellers
 
fail
 
to
 
provide
 
to
 
the
 
Buyer
 
Indemnified
 
Party,
 
evidence
 
reasonably
acceptable to the
 
Buyer Indemnified Party that
 
the Sellers have
 
sufficient resources to defend
 
such
third-party action or
 
suit and fulfill
 
its indemnity obligations
 
hereunder, the Sellers
 
shall no longer
be entitled to conduct and control
 
the defense of said third-party action
 
or suit.
 
The Party defending
such action or suit shall in any event defend any such matters vigorously and in good faith.
(c)
The Buyer Indemnified
 
Party and the
 
Sellers shall in
 
each case cooperate
 
with each
other to the
 
fullest extent possible
 
in regard to
 
all matters relating
 
to the
 
Third Party Claim,
 
including
corrective actions required
 
by applicable Law, assertion
 
of defenses, the
 
determination, mitigation,
negotiation
 
and
 
settlement
 
of
 
all
 
amounts,
 
costs,
 
actions,
 
penalties,
 
damages
 
and
 
the
 
like
 
related
thereto, access to the books
 
and records of the
 
Buyer Indemnified Party and its
 
Subsidiaries and, if
necessary, providing the Party controlling the defense of the Third Party Claim and its counsel with
any powers
 
of attorney
 
or other
 
documents required
 
to permit
 
the Party
 
controlling the
 
defense of
the Third Party Claim and its counsel to act on behalf of the other Party.
(d)
Neither the
 
Buyer Indemnified
 
Party nor
 
the Sellers
 
shall settle
 
any Third
 
Party Claim
without
 
the
 
consent
 
of
 
the
 
other
 
Party,
 
which
 
consent
 
shall
 
not
 
be
 
unreasonably
 
withheld,
conditioned
 
or
 
delayed;
 
provided,
 
however,
 
that
 
if
 
such
 
settlement
 
involves
 
only
 
the
 
payment
 
of
money
 
and
 
the
 
release
 
of
 
the
 
Third
 
Party
 
Claim
 
and
 
the
 
Buyer
 
Indemnified
 
Party
 
is
 
completely
indemnified therefor
 
and nonetheless
 
refuses to
 
consent to
 
such settlement,
 
then the
 
Seller shall
 
cease
to
 
be
 
obligated
 
for
 
such Third
 
Party
 
Claim
 
or
 
any
 
Losses
 
thereunder
 
in
 
excess
 
of
 
the
 
amount
 
of
Losses that
 
would have
 
been paid
 
in such
 
settlement.
 
Any compromise
 
or settlement
 
of the Third
Party Claim under
 
this Section
 
shall include as
 
an unconditional and
 
irrevocable term thereof
 
the
giving
 
by
 
the
 
claimant
 
in
 
question
 
to
 
the
 
Seller
 
and
 
the
 
Buyer
 
Indemnified
 
Party
 
a
 
full
 
and
 
final
release of all liabilities in respect of such claims.
9.3
Determination of Losses
.
(a)
In calculating the amounts payable to
 
a Buyer Indemnified Party, the
 
amount of any
indemnified
 
Losses
 
shall
 
be
 
computed
 
net
 
of
 
(i) payments
 
already
 
recovered
 
by
 
the
 
Buyer
Indemnified
 
Party
 
under
 
any
 
insurance
 
policy,
 
with
 
respect
 
to
 
such
 
Losses
 
or
 
pursuant
 
to
 
any
contribution rights; and
 
(ii) any prior recovery
 
by the Buyer
 
Indemnified Party from
 
any Person with
respect to
 
such Losses
 
(including pursuant
 
to any
 
indemnification agreement
 
or arrangement
 
with
any third party).
(b)
In
 
respect
 
of
 
any
 
Loss
 
for
 
which
 
indemnification
 
may
 
be
 
sought
 
pursuant
 
to
 
this
, the Buyer
 
Indemnified Party shall
 
(i) use reasonable best
 
efforts to mitigate
 
any Losses
upon becoming aware
 
of any event
 
that could reasonably
 
be expected to,
 
or does, give
 
rise thereto
to
 
the
 
extent that
 
such
 
Losses can
 
be mitigated;
 
and
 
(ii) use
 
reasonable
 
efforts to
 
pursue
 
all
 
legal
 
 
 
 
 
77
rights
 
and
 
remedies
 
available
 
(including
 
insurance
 
recoveries
 
and
 
third-party
 
indemnification)
 
in
order to minimize
 
the Losses to
 
which it may
 
be entitled to
 
indemnification under this Agreement.
 
Notwithstanding anything
 
to the
 
contrary in
 
this
 
Agreement, the
 
Sellers shall
 
not be
 
required to
 
make
any
 
payment
 
to
 
a
 
Buyer
 
Indemnified
 
Party
 
in
 
respect
 
of
 
such
 
Loss
 
to
 
the
 
extent
 
the
 
Buyer
Indemnified Party has failed to comply with its obligations under this Section
(c)
Notwithstanding anything to the contrary
 
in this Agreement, no Party shall be liable
for any (i) punitive damages,
 
except to the extent
 
such damages are finally
 
determined to be payable
and actually paid
 
to a third
 
party in respect
 
of a Third Party
 
Claim in accordance
 
with the terms of
this
, or (ii) consequential, special
 
or other indirect damages, including
 
any loss of future
business, distributions,
 
revenue, profits
 
or income,
 
or loss
 
of reputation
 
(whether calculated
 
based
on a
 
multiple of
 
lost profit
 
or cash
 
flow (or
 
similar metric)
 
or otherwise),
 
in each
 
case in
 
the foregoing
clause (ii),
 
except
 
to
 
the
 
extent
 
such
 
damages
 
or
 
Losses
 
arise
 
from
 
(A) a
 
breach
 
of
 
a
 
Party’s
confidentiality obligations expressly set
 
forth in this
 
Agreement or the Confidentiality
 
Agreement or
(B) such Party’s Fraud.
9.4
Payments
.
 
Subject
 
to
 
the
 
other
 
provisions
 
of
 
this
 
Agreement,
 
any
 
Losses
 
payable
 
by
 
the
Sellers
 
to
 
a
 
Buyer
 
Indemnified
 
Party
 
pursuant
 
to
 
Section
 
shall
 
be
 
satisfied
 
(a) first, from
 
the
Indemnification
 
Escrow
 
Account
 
and
 
(b) then,
 
to
 
the
 
extent
 
the
 
amount
 
of
 
Losses
 
exceeds
 
the
 
amounts
available to
 
the Buyer
 
Indemnified Party
 
in the
 
Indemnification Escrow
 
Account, from
 
the Sellers;
 
provided,
however, that with respect to the Sellers’ indemnification for Indemnified Taxes set forth in Section
(b),
with
 
the
 
exception
 
of
 
the
 
Sellers’
 
indemnification
 
for
 
any
 
Losses
 
attributable
 
to any
 
Indemnified
 
Taxes
relating to (i) Echo Lake
 
Foods not qualifying as
 
an S corporation for purposes
 
of Subchapter S of the
 
Code
and
 
(ii) Huntington
 
and
 
Xenitel
 
each
 
not
 
qualifying
 
as
 
a
 
“qualified
 
subchapter S
 
subsidiary”
 
as
 
defined
under Section 1361(b)(3)(B) of the Code (in each case, as
 
of the respective Qualification Dates set forth in
Section
, which, in each case,
 
Buyer shall be entitled
 
to receive payment from
 
the Indemnification
Escrow Account
 
and from
 
the Sellers,
 
Buyer shall
 
be required
 
to satisfy
 
any Losses
 
first from
 
the R&W
Insurance Policy until
 
the applicable caps
 
or other limits
 
under the R&W
 
Insurance Policy have
 
been met
(or recovery
 
under the
 
R&W Insurance
 
Policy is
 
not reasonably
 
expected to
 
be available)
 
before seeking
recovery from the
 
Indemnification Escrow Account
 
or from the
 
Sellers.
 
If Buyer becomes
 
entitled to any
distribution of all or any portion of the Indemnification Escrow Account
 
pursuant to this
, Buyer
and the Sellers’ Representative will
 
provide a joint written instruction to
 
the Escrow Agent to pay
 
to Buyer,
on behalf of
 
the Sellers, by
 
wire transfer of
 
immediately available funds
 
from the Indemnification
 
Escrow
Account
 
to
 
the
 
account
 
designated
 
by
 
Buyer,
 
the
 
amounts
 
to
 
be
 
paid
 
from
 
the
 
Indemnification
 
Escrow
Account to Buyer in accordance with this Agreement.
9.5
Tax
 
Treatment
 
of
 
Indemnification
 
Payments
.
 
For
 
all Tax
 
purposes,
 
Buyer
 
and
 
the
 
Sellers
agree to treat any indemnity
 
payment made by an indemnitor
 
pursuant to this
 
as an adjustment to
the Adjusted Equity Price, unless otherwise required by Law.
9.6
Potential
 
Partial
 
Release
 
from
 
the
 
Indemnification
 
Escrow
 
Account
.
 
If
 
(x) the
 
Company
Group has
 
received or entered
 
into a Qualifying
 
Order (as
 
defined below) with
 
respect to both
 
Item 2 and
Item 3
 
on
 
Schedule
 
with
 
the
 
applicable
 
Governmental
 
Authority,
 
(y) all
 
indemnification
 
payments
required to
 
be made
 
by the
 
Sellers to
 
Buyer under
 
this
 
with respect
 
to both
 
such matters
 
have
been paid in
 
full, including any
 
applicable documentation, remediation
 
and corrective costs
 
required to be
taken by the
 
Company Group with
 
respect to each
 
such matter addressed
 
in the applicable
 
Qualifying Order,
and
 
(z) after
 
all
 
such
 
indemnification
 
payments
 
have
 
been
 
made,
 
the
 
then-remaining
 
balance
 
in
 
the
Indemnification Escrow
 
Account is greater
 
than $2,500,000, then
 
Buyer and the
 
Sellers’
 
Representative will
provide
 
a
 
joint
 
written
 
instruction
 
to
 
the
 
Escrow
 
Agent
 
to
 
pay
 
such
 
excess
 
amount
 
to
 
the
 
Sellers’
Representative,
 
for
 
the
 
benefit
 
of
 
the
 
Sellers,
 
by
 
wire
 
transfer
 
of
 
immediately
 
available
 
funds
 
from
 
the
Indemnification
 
Escrow
 
Account
 
to
 
the
 
account
 
designated
 
by
 
the
 
Sellers’
 
Representative.
 
The
 
term
 
 
 
 
 
 
 
 
 
 
 
78
“Qualifying Order” means
 
a final Order
 
issued by
 
the applicable Governmental
 
Authority that includes
 
such
Governmental
 
Authority’s
 
unconditional
 
confirmation
 
to
 
the
 
Company
 
Group
 
that
 
no
 
further
documentation, remediation or corrective
 
action is required to
 
be taken by the
 
Company Group with
 
respect
to the
 
matter addressed in
 
such Order.
 
Any amount
 
remaining in the
 
Indemnification Escrow Account
 
as
of expiration of the
 
latest-expiring statute of limitations
 
applicable to Item 4 on
 
Schedule
 
shall be paid
to the Sellers’ Representative, for the benefit of the
 
Sellers, by wire transfer of immediately available funds
from
 
the
 
Indemnification
 
Escrow
 
Account
 
to
 
the
 
account
 
designated
 
by
 
the
 
Sellers’
 
Representative;
provided,
 
however,
 
that
 
if
 
one
 
or
 
more
 
Proceedings
 
with
 
respect
 
to
 
any
 
of
 
the
 
Specified
 
Liabilities
 
are
pending at such time, then
 
any amount remaining in the
 
Indemnification Escrow Account shall remain
 
until
such
 
Proceedings
 
are
 
no
 
longer
 
pending
 
or
 
subject
 
to
 
appeal.
 
Notwithstanding
 
any
 
provision
 
in
 
this
Section
, the release of
 
amounts from the Indemnification
 
Escrow Account shall not
 
modify or terminate
the indemnification obligations of the Sellers expressly provided in this
ARTICLE X
TERMINATION, AMENDMENT
 
AND WAIVER
10.1
Termination
.
 
This Agreement may be terminated,
 
and the Transactions may
 
be abandoned,
at any time prior to the Closing Date, as follows:
(a)
by mutual written agreement of the Sellers’ Representative and Buyer;
(b)
by
 
Buyer,
 
if
 
there
 
has
 
been
 
a
 
breach
 
by
 
the
 
Company
 
Group
 
or
 
the
 
Sellers,
 
as
applicable,
 
of
 
any
 
covenant,
 
representation
 
or
 
warranty
 
of
 
the
 
Company
 
Group
 
or
 
the
 
Sellers
contained in this Agreement, or if any such representation or warranty shall have become untrue, in
either case
 
that would prevent
 
or has prevented
 
the satisfaction of
 
any condition
 
to the obligations
of Buyer
 
at the
 
Closing contained
 
in Section
, Section
 
or Section
, and
such breach has not been waived by Buyer
 
or cured, or cannot be cured, by the
 
Company Group or
the Sellers, as applicable, on or prior to the date that is 30 days after written notice thereof has been
provided by Buyer
 
(or by the
 
second Business Day
 
prior to the
 
Outside Date, if
 
earlier); provided,
however, that Buyer
 
may not terminate
 
this Agreement pursuant to this
 
Section
 
if Buyer is
in breach of this Agreement that would prevent
 
or has prevented the satisfaction of any condition to
the obligations of the Sellers at the Closing contained in Section
 
or Section
(c)
by the Sellers’ Representative, if there has
 
been a breach by
 
Buyer of any covenant,
representation or warranty contained in this
 
Agreement, or if any such representation or warranty
 
of
Buyer shall have become untrue, in either
 
case that would prevent or has
 
prevented the satisfaction
of
 
any
 
condition
 
to
 
the
 
obligations
 
of
 
the
 
Sellers
 
at
 
the
 
Closing
 
contained
 
in
 
Section
 
or
Section
, and such
 
breach has not
 
been waived by
 
the Sellers’ Representative or
 
cured, or
cannot be cured, by Buyer
 
on or prior to the
 
date that is 30 days after
 
written notice thereof has been
provided by the Sellers’
 
Representative (or by the second Business Day prior to the Outside
 
Date, if
earlier);
 
provided,
 
however,
 
that
 
the
 
Sellers’
 
Representative
 
may
 
not
 
terminate
 
this
 
Agreement
pursuant to this Section
 
if the Company Group
 
or the Sellers are
 
in breach of this
 
Agreement
that would prevent or
 
has prevented the satisfaction
 
of any condition to
 
the obligations of Buyer
 
at
the Closing contained in Section
, Section
 
or Section
(d)
by either the Sellers’ Representative or Buyer,
 
upon written notice to the other, if the
Closing shall not have
 
occurred on or
 
prior to July 7, 2025
 
(the “Outside Date”); provided,
 
however,
if the conditions set
 
forth in Section
 
and Section
 
are not satisfied as
 
of the Outside
Date, but all of the
 
other conditions set forth in
 
have been satisfied or waived
 
(other than
(a) those that by their
 
terms are to be
 
satisfied at the Closing,
 
but subject to the
 
satisfaction thereof
 
 
 
 
 
 
 
 
79
at the
 
Closing and
 
(b) the completion
 
of the
 
Pre-Closing
 
Restructuring, subject
 
to the
 
completion
thereof
 
in
 
accordance
 
with
 
Section
,
 
either
 
Buyer
 
(upon
 
written
 
notice
 
from
 
Buyer
 
to
 
the
Sellers’
 
Representative)
 
or
 
the
 
Sellers’
 
Representative
 
(upon
 
written
 
notice
 
from
 
the
 
Sellers’
Representative to
 
Buyer) may
 
elect to
 
extend the
 
Outside Date
 
by up
 
to 30 days;
 
provided further
that (i) the
 
Sellers’
 
Representative may
 
not terminate
 
this
 
Agreement pursuant
 
to this
 
Section
if such non-occurrence of the Closing prior to the Outside Date is primarily due to the failure of the
Company
 
Group
 
or
 
any
 
Seller,
 
as
 
applicable,
 
to
 
perform
 
or
 
observe
 
in
 
all
 
material
 
respects
 
the
covenants and agreements
 
hereof to be
 
performed or observed
 
by it and
 
(ii) Buyer may not
 
terminate
this Agreement pursuant
 
to this
 
Section
 
if such
 
non-occurrence of
 
the Closing
 
prior to
 
the
Outside Date is
 
primarily due to
 
the failure of
 
Buyer to perform
 
or observe in
 
all material respects
the covenants and agreements hereof to be performed or observed by it; or
(e)
by
 
either
 
Buyer
 
or
 
the
 
Sellers’ Representative
 
if
 
there
 
shall
 
be
 
any
 
Law
 
or
 
Order
enacted, issued, promulgated, enforced or entered by any court or other Governmental Authority of
competent
 
jurisdiction
 
that
 
is
 
final
 
and
 
non-appealable
 
permanently
 
enjoining,
 
restraining
 
or
otherwise prohibiting
 
the consummation
 
of the
 
Equity Purchase, but
 
only if, prior
 
to invoking this
condition, Buyer or the Sellers’
 
Representative (or with respect to the
 
Sellers’
 
Representative’s right
to invoke
 
this condition,
 
the Sellers
 
and the
 
Company Group)
 
shall have
 
complied in
 
all material
respects with its obligations under Section
 
and Section
10.2
Effect of
 
Termination
.
 
In the
 
event of
 
termination of
 
this
 
Agreement pursuant
 
to Section
,
(a) this Agreement shall forthwith become void and have no further effect, except for the provisions of this
Section
,
 
Section
,
 
Section
,
 
Section
,
 
Section
,
 
Section
 
Section
 
and
Section
; and (b) there shall be no liability under this
 
Agreement on the part of Buyer or the Company
Group, the Sellers or
 
any of their respective
 
officers or directors, and
 
all rights and obligations
 
of each Party
shall
 
cease;
 
provided,
 
however,
 
that
 
nothing
 
herein
 
shall
 
relieve
 
any
 
Party
 
from
 
liability
 
for
 
any
 
willful
breach
 
hereof
 
occurring
 
prior
 
to
 
such
 
termination;
 
provided
 
further
 
that
 
any
 
failure
 
of
 
any
 
Party
 
to
consummate the
 
Transactions in
 
breach of
 
this
 
Agreement shall
 
be deemed
 
to be
 
a willful
 
breach (regardless,
in
 
the
 
case
 
of
 
Buyer,
 
of
 
whether
 
Buyer
 
had
 
sufficient
 
funds
 
available
 
to
 
consummate
 
the Transactions);
provided further
 
that following
 
the termination
 
of this Agreement, the
 
obligations of
 
the parties
 
under the
Confidentiality Agreement shall continue in full force
 
and effect in accordance
 
with its terms.
 
The Parties
agree
 
not
 
to
 
bring
 
any
 
lawsuit,
 
action
 
or
 
claim
 
against
 
any
 
other
 
Party
 
inconsistent
 
with
 
the
 
foregoing
provisions
 
of
 
this
 
Section
.
 
For
 
purposes
 
hereof,
 
“willful
 
breach”
 
means,
 
with
 
respect
 
to
 
any
representation, warranty or
 
covenant in this Agreement,
 
acting or failing
 
to act with
 
the actual
 
knowledge
that such action or failure to
 
act could reasonably be expected to
 
cause a material breach of this
 
Agreement.
ARTICLE XI
MISCELLANEOUS
11.1
No Third-Party
 
Beneficiaries
.
 
Except as
 
expressly provided
 
in this
 
Section
or
,
 
after
 
the
 
Closing,
 
nothing
 
in
 
this Agreement
 
will
 
provide
 
any
 
benefit
 
to
 
any
 
third
 
party
 
or
entitle any third
 
party to any
 
claim, cause of
 
action, remedy or
 
right of any
 
kind, it being
 
the intent of
 
the
Parties that this Agreement will not be construed as a third-party beneficiary contract.
11.2
Expenses
.
 
Except as otherwise set forth herein (including the definition of Company Group
Expenses),
 
and
 
notwithstanding
 
anything
 
to
 
the
 
contrary
 
in
 
the
 
Organizational
 
Documents,
 
all
 
costs
 
and
expenses
 
incurred
 
in
 
connection
 
with
 
this
 
Agreement,
 
the
 
Ancillary
 
Agreements
 
and
 
the
 
Transactions
(including the
 
fees and
 
expenses of
 
financial advisors,
 
accountants and
 
legal counsel):
 
(a) if incurred
 
by
Buyer, will
 
be paid
 
by Buyer,
 
and (b) if
 
incurred by
 
the Sellers
 
or the
 
Company Group
 
(but solely
 
to the
extent incurred at or prior to Closing), will be paid by the Sellers prior to the Closing Date.
80
11.3
Notices
.
 
All notices,
 
requests, demands
 
or other
 
communications that
 
are required
 
or may
be given pursuant to the terms
 
of this Agreement must be in writing and will
 
be deemed to have been duly
given:
 
(a) on the date of delivery, if personally delivered
 
by hand; (b) upon the date scheduled for delivery,
if such notice is sent by a nationally recognized overnight-express courier or (c) upon written confirmation
of
 
receipt
 
by
 
the
 
recipient
 
of
 
such
 
notice
 
(including
 
any
 
automatic
 
confirmation
 
that
 
is
 
received),
 
if
transmitted by electronic mail:
If to the Company Group (prior to the Closing) or any Seller, to the Sellers’ Representative:
c/o Echo Lake Foods, Inc.
316 W Grove St.
Burlington, WI 53105
Attention:
 
Scott Meinerz, President
Email:
 
with a
 
copy, in
 
connection with
 
any notice
 
to the
 
Company Group
 
(prior to
 
the Closing)
 
or to
 
any
Seller or to the Sellers’ Representative, which will not constitute notice, to:
Reinhart Boerner Van Deuren s.c.
N16 W23250 Stone Ridge Dr., Suite One
Waukesha, WI 53188
Attention:
 
Vincent J. Beres; Blake Knickelbein
Email:
 
and in the case of Buyer (or following the Closing, the Company Group) to:
Cal-Maine Foods, Inc.
1052 Highland Colony Pkwy
Suite 200
Ridgeland, MS 39157
Attention:
 
Sherman L. Miller, President and CEO
 
Robert L. Holladay, Jr., Vice President and General Counsel
Email:
 
with a copy, which will not constitute notice, to:
Sidley Austin LLP
1000 Louisiana, Suite 5900
Houston, Texas 77002
Attention:
 
J. Mark Metts
Email:
 
or at such other address
 
or electronic mail address, as
 
applicable, as may have been
 
specified by like notice.
11.4
Headings
.
 
The descriptive headings
 
of the several Articles and
 
Sections of this Agreement
are inserted for convenience only and do not constitute a part of the Agreement.
11.5
Entire Agreement
.
 
This Agreement, the Ancillary Agreements, the
 
Exhibits, the
 
Schedules
and the Confidentiality Agreement
 
constitute the entire agreement between the Parties (to the extent
 
parties
thereto) pertaining
 
to the
 
subject matter
 
hereof and
 
supersede all
 
prior and
 
contemporaneous agreements,
understandings, negotiations and
 
discussions, whether oral
 
or written, of
 
the Parties pertaining
 
to the subject
matter hereof.
 
 
 
 
 
 
 
 
 
81
11.6
Waiver
.
 
At any
 
time prior
 
to the
 
Closing, any
 
Party hereto
 
may (a) extend
 
the time
 
for the
performance of any of the obligations or
 
other acts of any other Party or
 
(b) waive compliance with any of
the agreements of any other Party or with any
 
conditions to its own obligations.
 
Any agreement on the part
of a Party hereto
 
to any such extension
 
or waiver will be
 
valid only if
 
set forth in an
 
instrument in writing
signed on
 
behalf of
 
such Party.
 
Notwithstanding the
 
foregoing provisions
 
of this
 
Section
, any
 
extension
or waiver
 
executed by
 
the Sellers’ Representative
 
on behalf
 
of the
 
Sellers in
 
accordance with
 
Section
shall be valid and binding with respect to each Seller.
11.7
Amendment
.
 
This Agreement
 
may not be
 
amended except by
 
an instrument in
 
writing signed
by each of the Parties.
 
No supplement, alteration or modification of this Agreement will be binding unless
executed
 
in
 
writing
 
by
 
the
 
Parties.
 
Notwithstanding
 
the
 
foregoing
 
provisions
 
of
 
this
 
Section
,
 
any
supplement, alteration
 
or modification
 
executed by
 
the Sellers’ Representative
 
on behalf
 
of the
 
Sellers in
accordance with Section
 
shall be valid and binding with respect to each Seller.
11.8
Public
 
Statements
.
 
Following
 
the
 
date
 
hereof,
 
no
 
Party
 
(or Affiliate
 
thereof)
 
will
 
issue
 
a
press release
 
or announcement
 
concerning this Agreement
 
and the
 
Transactions without
 
the prior
 
written
consent
 
of
 
the
 
Sellers’ Representative
 
and
 
Buyer;
 
provided,
 
however,
 
that
 
Buyer
 
may
 
issue
 
any
 
public
announcement or other public disclosures (a) required
 
by applicable Law or (b) required
 
by the rules of any
stock exchange upon
 
which any class
 
of Buyer’s capital
 
stock is traded,
 
but only if,
 
in each case,
 
Buyer uses
commercially
 
reasonable
 
efforts
 
to
 
afford
 
the
 
Sellers’ Representative
 
an
 
opportunity
 
to
 
first
 
review
 
the
content of the proposed disclosure and provide reasonable comments thereon.
 
Buyer agrees to provide the
Sellers’ Representative a
 
copy of any proposed press release or announcement permitted hereunder as soon
as practicable
 
prior to
 
the proposed
 
date of
 
dissemination thereof.
 
Buyer shall
 
give reasonable
 
consideration
to any suggested changes to such proposed press release or
 
announcement that are requested by the Sellers’
Representative.
 
Notwithstanding the
 
foregoing, no
 
additional consent
 
from the
 
Sellers’ Representative is
required for
 
any subsequent
 
statements by
 
or on
 
behalf of
 
Buyer that
 
are consistent
 
with any
 
such public
announcements
 
or
 
other
 
public
 
disclosures
 
that
 
have
 
already
 
been
 
made
 
in
 
compliance
 
with
 
this
Section
11.9
Assignment
.
 
The provisions of this Agreement will be binding
 
upon and inure to the benefit
of the
 
Parties to
 
this Agreement
 
and their
 
respective successors
 
and permitted
 
assigns, but
 
no Party
 
may
assign,
 
delegate
 
or
 
otherwise
 
transfer
 
any
 
of
 
its
 
rights
 
or
 
obligations
 
under
 
this Agreement
 
without
 
the
consent
 
of Buyer
 
or
 
the
 
Sellers’ Representative,
 
as
 
the case
 
may
 
be;
 
provided,
 
however, that
 
Buyer
 
may
assign
 
its
 
rights
 
and
 
obligations
 
hereunder
 
without
 
the
 
prior
 
written
 
consent
 
of
 
the
 
other
 
Parties
 
to
 
any
Affiliates;
 
provided
 
further
 
that
 
no
 
such
 
assignment
 
shall
 
relieve
 
Buyer
 
of
 
its
 
obligations
 
under
 
this
Agreement.
11.10
Independent Covenants
.
 
The covenants contained herein are independent and
 
separate, and
in the
 
event that
 
any provision
 
contained herein
 
is declared
 
invalid or
 
illegal, the
 
other provisions
 
hereof
will not be affected or impaired thereby and will remain valid and enforceable.
11.11
Governing Law
.
 
This Agreement
 
and the other documents
 
delivered pursuant hereto and
 
the
legal relations between the Parties will be governed
 
and construed in accordance with the Laws of
 
the State
of Delaware, without giving effect to principles of conflict of laws.
11.12
Jurisdiction; Venue
.
(a)
Except
 
as
 
specifically
 
provided
 
in
 
Section
 
(which
 
shall
 
govern
 
any
 
dispute
thereunder), each of the
 
Parties (i) irrevocably submits itself
 
to exclusive jurisdiction of
 
the Court of
Chancery of the State of Delaware (provided, however, that, in the event subject matter jurisdiction
is declined by or
 
unavailable in the Court
 
of Chancery, then such
 
action, suit or proceeding
 
will be
heard and determined exclusively in any other state court sitting
 
in the State of Delaware; provided
 
 
 
82
further that,
 
in the
 
event subject
 
matter jurisdiction
 
is declined
 
by or
 
unavailable in
 
any such
 
state
court,
 
then such
 
action, suit
 
or proceeding
 
will be
 
heard
 
and determined
 
exclusively in
 
any other
federal court sitting
 
in the State
 
of Delaware) with
 
respect to any
 
action, suit or
 
proceeding arising
out of or relating to this Agreement, any of the Transactions or any facts and circumstances leading
to its execution or performance,
 
(ii) agrees that it will not
 
attempt to deny or defeat
 
such jurisdiction
by motion
 
or other
 
request for
 
leave from
 
such courts,
 
(iii) agrees not
 
to bring
 
any action,
 
suit or
proceeding
 
against
 
any
 
other
 
Party
 
arising
 
out
 
of
 
or
 
relating
 
to
 
this
 
Agreement,
 
any
 
of
 
the
Transactions
 
or
 
any
 
facts and
 
circumstances
 
leading to
 
its
 
execution
 
or performance
 
in
 
any
 
other
court and
 
(iv) waives any
 
defense of
 
inconvenient forum
 
to the
 
maintenance of
 
any action,
 
suit or
proceeding so
 
brought.
 
The Parties
 
agree
 
that
 
a final
 
judgment in
 
any such
 
action
 
or proceeding
shall be conclusive
 
and may
 
be enforced
 
in other
 
jurisdictions by
 
suit on
 
the judgment
 
or in
 
any other
manner provided by applicable Law.
 
Each of the Parties
 
agrees to waive any bond,
 
surety or other
security
 
that
 
might
 
be
 
required
 
of
 
any
 
other
 
Party
 
with
 
respect
 
to
 
any
 
action,
 
suit
 
or
 
proceeding,
including any appeal thereof.
(b)
Each of the Parties agrees that service of any process, summons, notice or document
in accordance
 
with Section
 
will be
 
effective service
 
of process
 
for any
 
action, suit
 
or proceeding
brought against
 
it by
 
any other
 
Party in
 
connection with
 
Section
; provided,
 
however, that
nothing contained herein will affect
 
the right of any
 
Party to serve legal process
 
in any other manner
permitted by applicable
 
Law.
 
Notwithstanding the
 
foregoing, the consents
 
to jurisdiction set
 
forth
in Section
 
will not constitute
 
general consents to
 
service of process
 
in the State
 
of Delaware
and shall
 
have no
 
effect for
 
any purpose
 
except as
 
provided in
 
this
 
Section
 
and will
 
not be
deemed to confer rights on any Person other than the Parties.
(c)
EACH OF THE
 
PARTIES HERETO HEREBY
 
ACKNOWLEDGES AND
 
AGREES
THAT
 
ANY
 
CONTROVERSY
 
THAT
 
MAY
 
ARISE
 
UNDER
 
OR
 
RELATING
 
TO
 
THIS
AGREEMENT, THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS IS
 
LIKELY TO
INVOLVE
 
COMPLICATED
 
AND
 
DIFFICULT
 
ISSUES,
 
AND
 
THEREFORE
 
IT
 
HEREBY
IRREVOCABLY AND
 
UNCONDITIONALLY
 
WAIVES
 
ALL
 
RIGHTS
 
IT
 
MAY
 
HAVE
 
TO
 
A
TRIAL BY JURY IN
 
RESPECT OF ANY LITIGATION (WHETHER
 
BASED ON
 
CONTRACT,
TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY
 
ARISING OUT OF OR RELATING TO
THIS
 
AGREEMENT,
 
THE
 
ANCILLARY
 
AGREEMENTS,
 
THE
 
TRANSACTIONS
 
OR
 
THE
FACTS OR CIRCUMSTANCES LEADING
 
TO ITS EXECUTION OR PERFORMANCE.
 
EACH
PARTY CERTIFIES
 
AND ACKNOWLEDGES
 
THAT (i) NO
 
PARTY OR
 
REPRESENTATIVE OR
AFFILIATE
 
THEREOF
 
HAS
 
REPRESENTED,
 
EXPRESSLY
 
OR
 
OTHERWISE,
 
THAT
 
SUCH
OTHER PARTY WOULD
 
NOT, IN
 
THE EVENT
 
OF LITIGATION,
 
SEEK TO
 
ENFORCE THE
FOREGOING
 
WAIVER,
 
(ii) IT
 
UNDERSTANDS
 
AND
 
HAS
 
CONSIDERED
 
THE
IMPLICATIONS
 
OF
 
SUCH
 
WAIVER,
 
(iii) IT
 
MAKES
 
SUCH
 
WAIVER
 
KNOWINGLY AND
VOLUNTARILY
 
AND (iv) IT
 
HAS BEEN
 
INDUCED TO
 
ENTER INTO
 
THIS
 
AGREEMENT BY,
AMONG OTHER THINGS,
 
THE MUTUAL WAIVERS AND CERTIFICATIONS
 
CONTAINED
IN THIS PARAGRAPH.
11.13
Counterparts
.
 
This Agreement
 
may
 
be
 
executed
 
in
 
any
 
number
 
of
 
counterparts,
 
each
 
of
which when
 
so executed
 
will be
 
deemed an
 
original but
 
all of
 
which together
 
will constitute
 
one and
 
the
same instrument.
 
Delivery of
 
an executed counterpart
 
of a signature
 
page to this Agreement
 
by facsimile
transmission or by electronic
 
transmission of a .pdf or
 
other electronic file shall be
 
as effective as delivery
of a manually signed counterpart of this Agreement.
11.14
Withholding
 
or
 
Granting
 
of
 
Consent
.
 
Except
 
as
 
otherwise
 
provided
 
in
 
this
 
Agreement
(including
 
any
 
provision
 
that
 
requires
 
that
 
consent
 
is
 
not
 
to
 
be
 
unreasonably
 
withheld,
 
conditioned
 
or
delayed), each Party hereto may, with respect to any consent or approval that such Party is entitled to grant
 
 
 
83
pursuant
 
to
 
this Agreement
 
or
 
any
 
other
 
document
 
or
 
instrument
 
or
 
agreement
 
delivered
 
or
 
entered
 
into
pursuant hereto, grant or withhold such
 
consent or approval in its sole
 
and uncontrolled discretion, with or
without cause, and subject to such conditions as it will deem appropriate.
11.15
Specific
 
Enforcement
.
 
The
 
Parties
 
acknowledge
 
that,
 
in
 
view
 
of
 
the
 
uniqueness
 
of
 
the
business of the
 
Company Group and
 
the Transactions, neither Buyer
 
nor the Sellers
 
will have an
 
adequate
remedy
 
at
 
law
 
for
 
money
 
damages,
 
and
 
that
 
irreparable
 
damage
 
would
 
occur,
 
in
 
the
 
event
 
that
 
this
Agreement
 
has
 
not
 
been
 
performed
 
in
 
accordance
 
with
 
its
 
terms
 
by
 
the
 
other
 
Parties,
 
and
 
therefore,
 
the
Parties
 
agree
 
that
 
Buyer
 
or
 
the
 
Sellers’ Representative,
 
as
 
the
 
case
 
may
 
be,
 
will
 
be
 
entitled
 
to
 
seek
 
an
injunction or
 
injunctions and
 
specific enforcement
 
of the
 
terms hereof
 
with respect
 
to the
 
Transactions in
the event
 
of breach
 
or expressly
 
threatened
 
breach by
 
the other
 
Party in
 
addition to
 
any other
 
remedy
 
to
which the
 
Parties may
 
be entitled,
 
at Law
 
or in
 
equity, for
 
such breach
 
without the
 
requirement of
 
the posting
of any bond therefor.
 
The rights in this Section
 
are in addition to any other
 
remedy to which a Party
may be entitled at
 
law or in equity,
 
and the exercise by
 
a Party of one
 
remedy shall not preclude
 
the exercise
of any other remedy, and except as
 
otherwise provided in this
 
Agreement, nothing herein shall be construed
as a
 
waiver by
 
Buyer or
 
the Sellers
 
of any
 
right they
 
may now
 
have or
 
hereafter acquire
 
to monetary
 
damages
from the other Parties by reason
 
of any injury to its property, or
 
otherwise arising out of any breach
 
or any
otherwise wrongful act
 
or omission by
 
such Parties; provided,
 
however, that, notwithstanding
 
the foregoing,
under
 
no
 
circumstances
 
shall
 
any
 
Person
 
be
 
permitted
 
or
 
entitled
 
to
 
receive
 
in
 
connection
 
with
 
this
Agreement both (a) a grant
 
of specific performance to
 
require Buyer to consummate
 
the Closing and (b) the
payment of monetary damages of any kind.
11.16
Non-Recourse
.
 
All claims, obligations, liabilities or causes of action (whether in contract or
in tort, at law or in
 
equity or granted by statute) that
 
may be based upon, in respect
 
of, arise under, out or by
reason
 
of, be
 
connected with,
 
or relate
 
in any
 
manner
 
to this
 
Agreement or
 
the negotiation,
 
execution or
performance of this
 
Agreement (including any representation
 
or warranty made in,
 
in connection with, or
 
as
an inducement to, this
 
Agreement), may be made
 
against (and such representations and
 
warranties are those
solely of) only
 
the Parties.
 
Notwithstanding anything that
 
may be expressed
 
or implied in
 
this Agreement
to the contrary, the Parties agree and
 
acknowledge that no recourse under this
 
Agreement or any documents
or instruments delivered hereunder or
 
the Transactions shall be
 
had against any Person who
 
is not a Party to
this
 
Agreement,
 
including
 
any
 
director,
 
officer,
 
employee,
 
incorporator,
 
member,
 
partner,
 
manager,
stockholder, Affiliate, agent, attorney or
 
representative of, and any financial advisor or lender to, any of the
foregoing
 
(together,
 
the
 
“Nonparty Affiliates,”
 
it
 
being
 
acknowledged
 
and
 
agreed,
 
for
 
the
 
avoidance
 
of
doubt,
 
that
 
none
 
of
 
Buyer,
 
the
 
Company
 
Group
 
or
 
the
 
Sellers
 
shall
 
be
 
Nonparty Affiliates
 
hereunder),
whether by
 
the enforcement
 
of any
 
assessment or
 
by any
 
legal or
 
equitable litigation,
 
or by
 
virtue of
 
any
Law,
 
or
 
by
 
virtue
 
of
 
any
 
breach
 
or
 
alleged
 
breach
 
hereof
 
or
 
thereof,
 
the
 
negotiation,
 
execution
 
or
performance hereof or
 
thereof or the
 
Transactions or in
 
respect of any
 
other document or
 
theory of law
 
or
equity or in
 
respect of any
 
oral or written
 
representations made or
 
alleged to be
 
made in connection
 
herewith
or therewith
 
(whether by
 
or through
 
attempted piercing
 
of the
 
corporate veil,
 
whether at
 
law or
 
in equity,
and whether
 
in contract
 
or in
 
tort or
 
otherwise), it
 
being expressly
 
agreed and
 
acknowledged that
 
no personal
liability whatsoever
 
shall attach
 
to, be
 
imposed on
 
or otherwise
 
be incurred
 
by any
 
Nonparty Affiliate for
any obligation of
 
any Party under
 
this Agreement,
 
any or any
 
documents or instruments
 
delivered hereunder
or the Transactions for any
 
claim based on, in
 
respect of or by reason
 
of such obligations or their
 
creation.
 
Without
 
limiting
 
the
 
foregoing,
 
no
 
claim
 
will
 
be
 
brought
 
or
 
maintained
 
by
 
any
 
Party
 
or
 
any
 
Nonparty
Affiliate
 
or
 
any
 
of
 
their
 
respective
 
successors
 
or
 
permitted
 
assigns
 
against,
 
and
 
no
 
Person
 
shall
 
seek
 
to
recover monetary damages from,
 
any Nonparty
 
Affiliate, and no recourse
 
will be brought or
 
granted against
any
 
of
 
them,
 
by
 
virtue
 
of
 
or
 
based
 
upon
 
any
 
alleged
 
misrepresentation
 
or
 
inaccuracy
 
in
 
or
 
breach
 
or
nonperformance of any of the
 
representations, warranties, covenants or agreements
 
of any Party set forth
 
or
contained in
 
this
 
Agreement or
 
any documents
 
or instruments
 
delivered hereunder
 
or the
 
Transactions.
 
Each
Nonparty Affiliate shall be an
 
express third-party beneficiary of, and entitled to enforce, this Section
 
 
 
84
11.17
Waiver
 
of
 
Conflicts
.
 
Reinhart
 
Boerner
 
Van
 
Deuren
 
s.c
.
(“Reinhart”)
 
has
 
acted
 
as
 
legal
counsel to
 
the Company
 
Group, its
 
Affiliates and
 
the Sellers
’
 
Representative prior
 
to the
 
Closing with
 
respect
to
 
various
 
matters,
 
including
 
the
 
Transactions
 
and
 
by
 
acting
 
as
 
legal
 
counsel
 
to
 
certain Affiliates
 
of
 
the
Company
 
Group
 
and
 
the
 
Sellers
’
 
Representative,
 
and
 
may
 
continue
 
following
 
the
 
Closing
 
to
 
represent
certain Affiliates
 
of the
 
Company
 
Group
 
and the
 
Sellers
’
 
Representative with
 
respect to
 
various matters,
including the
 
Transactions and
 
by acting
 
as legal
 
counsel to
 
certain Affiliates of
 
the Company
 
Group and
the
 
Sellers
’
 
Representative.
 
Each
 
of
 
the
 
Parties,
 
on
 
behalf
 
of
 
themselves
 
and
 
each
 
of
 
their
 
respective
Affiliates, hereby
 
waives any
 
conflicts of
 
interest that
 
may arise
 
in connection
 
with the
 
representation by
Reinhart of
 
the Company
 
Group, its Affiliates and
 
the Sellers
’
 
Representative with
 
respect to
 
any matters
that have already occurred or that may arise in the future,
 
including the Transactions and by acting as legal
counsel to
 
certain Affiliates of
 
the Company
 
Group and
 
the Sellers
’
 
Representative.
 
All communications
that involve
 
attorney-client confidences
 
and that
 
have arisen
 
or may
 
arise in
 
the future
 
between the
 
Company
Group, on the one
 
hand, and Reinhart, on
 
the other hand, to
 
the extent related to
 
negotiation, documentation
and consummation of the Transactions, shall be deemed to be confidences that belong solely to the Sellers
’
Representative, and
 
no other
 
Person shall
 
have any
 
access thereto.
 
Furthermore, all
 
communications that
involve
 
attorney-client
 
confidences
 
and
 
that
 
have
 
arisen
 
or
 
may
 
arise
 
in
 
the
 
future
 
with
 
respect
 
to
 
any
representation by Reinhart of any Affiliate
 
of the Company Group or the Sellers
’
 
Representative (including
any that may
 
have arisen or
 
that may in
 
the future arise
 
in connection with
 
the Transactions)
 
shall be deemed
to
 
be
 
attorney-client
 
confidences
 
that
 
belong
 
solely
 
to
 
such
 
Person,
 
and
 
no
 
other
 
Person
 
shall
 
have
 
any
access
 
thereto.
 
Without
 
limitation
 
of
 
the
 
foregoing,
 
no
 
Person
 
may
 
use
 
or
 
rely
 
on
 
any
 
communications
described in the immediately preceding sentence in any claim, dispute, action,
 
suit or proceeding against or
involving any
 
of the
 
Sellers.
 
Notwithstanding the foregoing,
 
if after
 
the Closing
 
a dispute
 
arises between
Buyer or one or more
 
of its Affiliates (including, after the Closing, the Company Group),
 
on the one hand,
and a third party other than (and unaffiliated with) any of the Sellers, on the other hand,
 
then Buyer or such
Affiliate (to the
 
extent applicable) may
 
assert the attorney-client
 
privilege to prevent
 
disclosure to such
 
third
party
 
of
 
confidential
 
communications
 
by
 
Reinhart;
 
provided,
 
however,
 
that
 
neither
 
Buyer
 
nor
 
any
 
of
 
its
Affiliates may
 
waive such
 
privilege without
 
the prior
 
written consent
 
of the
 
Sellers
’
 
Representative.
 
No
term
 
of
 
this
 
Section
 
may
 
be
 
amended,
 
waived
 
or
 
modified
 
without
 
the
 
prior
 
written
 
consent
 
of
Reinhart.
[Signature Pages Follow; Remainder of Page Intentionally Left Blank]
 
 
1
IN WITNESS
 
WHEREOF, each of
 
the Parties has
 
executed this
 
Agreement as of
 
the date first
 
above
written.
BUYER:
CAL-MAINE FOODS, INC.
By: /s/ Sherman L. Miller
 
Sherman L. Miller
President and CEO
[Signature Pages Continue on Next Page]
 
 
 
 
 
 
 
1
TRANSFERORS:
ECHO LAKE PROPERTIES, LLC
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
Manager and President
ELKIN PROPERTIES, LLC
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
Manager and President
COMPANY GROUP:
ECHO LAKE FOODS, INC.
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title: President
ELT, LLC
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
Manager and President
ECHO LAKE HUNTINGTON, INC.
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
President
 
 
 
 
 
2
XENITEL, INC.
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
President
ECHO LAKE HUNTINGTON 435, LLC
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
Manager
BLUE GRASS REAL ESTATE CO, LLC
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
Manager
ECHO YORKVILLE, LLC
By: /s/ Scott Meinerz
 
Name:
 
Scott Meinerz
Title:
 
Manager
[Signature Pages Continue on Next Page]
 
 
 
 
 
 
 
 
1
VOTING SECURITYHOLDERS:
THORNHILL FAMILY
 
TRUST
By: /s/ Lynn Thornhill
 
Lynn Thornhill
Trustee
/s/ Leigh Peterson
 
Leigh Peterson
/s/ Sandra Townsend
 
Sandra Townsend
/s/ Timothy Meinerz
 
Timothy Meinerz
/s/ Gregory Meinerz
 
Gregory Meinerz
/s/ Scott Meinerz
 
Scott Meinerz
/s/ Luann Meinerz Namowicz
 
Luann Meinerz Namowicz
 
 
 
 
 
 
 
2
EXHIBIT A
ACCOUNTING PRINCIPLES
ARTICLE XIICAPITALIZED
 
TERMS USED BUT NOT DEFINED IN THIS EXHIBIT A (THESE
“ACCOUNTING PRINCIPLES”) SHALL HAVE
 
THE RESPECTIVE MEANINGS ASCRIBED
TO SUCH TERMS IN THE AGREEMENT.
ARTICLE XIIITHE CLOSING CERTIFICATE
 
AND CLOSING STATEMENT
 
(TOGETHER,
THE “STATEMENTS
 
”) SHALL BE PREPARED ON A COMBINED BASIS FOR THE
COMPANY GROUP IN ACCORDANCE WITH THE FOLLOWING POLICIES AND
PROCEDURES IN THE FOLLOWING ORDER OF PRIORITY:
13.1
the accounting principles, policies, practices, methodologies
 
and procedures set out in these
Accounting Principles (“Specific Accounting Policies”);
13.2
to
 
the
 
extent
 
not
 
covered
 
by
 
clause
 
above,
 
consistent
 
with
 
accounting
 
principles,
policies, treatments, categorizations,
 
practices, methods, and
 
bases as were
 
used in the
 
preparation of the
unaudited combined interim
 
balance sheets as
 
of February 28, 2025, included
 
in the Unaudited
 
Financial
Statements; and
13.3
to the extent not
 
covered by clauses
 
and
 
above, in accordance with
 
GAAP as of
 
the
Calculation Time.
In the event of a conflict,
 
clause
 
will have priority over clauses
 
and
, and clause
will have priority over clause
Specific Accounting Policies
As required
 
by clause
 
above, the
 
Statements shall
 
be prepared
 
in accordance
 
with the
 
following specific
principles:
ARTICLE XIVTHE SOLE REFERENCE FOR THE PREPARATION
 
OF THE STATEMENTS
SHALL BE THE ASSOCIATED DEFINITIONS SET OUT IN THE AGREEMENT AND THESE
ACCOUNTING PRINCIPLES, AND IN THE EVENT OF A CONFLICT BETWEEN THE
DEFINITIONS SET OUT IN THE AGREEMENT AND THESE ACCOUNTING PRINCIPLES
THE DEFINITIONS SET OUT IN THE AGREEMENT SHALL PREVAIL.
ARTICLE XVTHE STATEMENTS
 
SHALL:
15.1
be prepared on the basis the
 
Company Group is a going concern
 
and shall exclude the effect
of any change of Law or GAAP after the Calculation Time.
15.2
be
 
interpreted
 
to
 
avoid
 
double
 
counting
 
(whether
 
positive
 
or
 
negative)
 
of
 
any
 
item
 
to
 
be
included in the Statements.
15.3
be prepared in accordance with the specific procedures that would be
 
adopted at a financial
year-end, including detailed analyses of prepayments and accruals and performance of cut-off procedures.
15.4
be prepared
 
in a
 
format set
 
out in
 
Schedule B-1 to
 
the Agreement (the
 
“Reference Balance
Sheet”) by reference to the trial balance account codes of the Company Group.
 
The underlying assets and
liabilities
 
shall
 
be
 
classified
 
between
 
the
 
columns
 
labeled
 
“Cash,”
 
“Working
 
Capital,”
 
“Indebtedness,”
“Company
 
Group
 
Expenses,”
 
“Tax
 
Liability
 
Amount”
 
and
 
“Other”
 
on
 
a
 
basis
 
consistent
 
with
 
the
3
classification
 
of
 
the
 
equivalent
 
line
 
item
 
set
 
forth
 
in
 
the
 
Reference
 
Balance
 
Sheet.
 
To
 
the
 
extent
 
the
methodologies
 
utilized
 
in
 
calculating
 
the
 
underlying
 
amounts
 
set
 
forth
 
in
 
the
 
Reference
 
Balance
 
Sheet
conflict
 
with
 
the
 
Accounting
 
Principles,
 
the
 
Accounting
 
Principles
 
shall
 
prevail.
 
To
 
the
 
extent
 
any
 
new
account codes are
 
created between the
 
date of the
 
Reference Balance Sheet
 
and the Calculation
 
Time, the
amounts included therein
 
will be (i) classified and
 
allocated to an
 
existing trial balance
 
account code based
on the nature
 
of the
 
new account
 
code and (ii)
 
included in
 
or excluded from
 
“Cash,” “Working
 
Capital,”
“Indebtedness,” “Company Group Expenses,” “Tax Liability Amount”
 
and “Other” on a basis consistent
with the existing account code.
15.5
exclude
 
any
 
right-of-use
 
assets
 
or
 
liabilities
 
required
 
to
 
be
 
recorded
 
as
 
such
 
by
 
FASB
Accounting
 
Standards
 
Codification
 
Topic
 
842, Accounting
 
for
 
Leases,
 
in
 
respect
 
of
 
any
 
operating
 
leases
(except for any past due related liabilities, which shall be included as a liability in Working Capital).
15.6
not exclude any item or amount solely on the grounds of materiality.
ARTICLE XVIANY INTERCOMPANY BALANCES BETWEEN OR AMONG THE COMPANY
GROUP SHALL BE RECONCILED AND ELIMINATED PRIOR TO
 
THE CALCULATION
TIME.
 
ANY BALANCES THAT ARE NOT RECONCILED AS OF THE CALCULATION
 
TIME
SHALL BE EXCLUDED FROM WORKING CAPITAL.
ARTICLE XVIIFOR PURPOSE OF CALCULATING
 
WORKING CAPITAL:
17.1
there shall
 
be no
 
change in
 
the classification
 
(i) to a
 
current asset
 
or a
 
current liability
 
of
any asset or liability that has not previously been characterized as a
 
current asset or current liability in the
Reference Balance Sheet or
 
(ii) to a long-term asset
 
or long-term liability of
 
any asset or liability
 
that has
not previously
 
been characterized
 
as a
 
long-term asset
 
or long-term
 
liability in
 
the Reference
 
Balance Sheet,
in each
 
case, other
 
than such
 
a change
 
resulting solely
 
from the
 
passage of
 
time between
 
the date
 
of the
Reference Balance Sheet and the Calculation Time.
17.2
prepayments made as
 
of the Calculation
 
Time shall be
 
included in Working
 
Capital only to
the extent they give rise to an economic benefit to Buyer after the Closing.
ARTICLE XVIIITHE OBLIGATION
 
FOR FISCAL YEAR 2025 ANNUAL BONUS EARNED AND
UNPAID AS OF IMMEDIATELY
 
PRIOR TO CLOSING SHALL BE INCLUDED IN
INDEBTEDNESS, CALCULATED ON A PRO RATA
 
BASIS, BASED ON (A) THE NUMBER OF
DAYS
 
BETWEEN JANUARY 1, 2025 AND THE CLOSING DATE
 
AND (B) THE EMPLOYEE
BONUS BUDGET FOR FISCAL YEAR 2025.
 
FOR AVOIDANCE
 
OF DOUBT, THE
EMPLOYER PORTION OF ANY TAXES
 
DUE ON SUCH AMOUNTS SHALL BE
CALCULATED AND INCLUDED IN INDEBTEDNESS IN ADDITION TO
 
THE PRO RATA
PORTION OF THE UNPAID
 
BONUSES EARNED AS OF IMMEDIATELY
 
PRIOR TO
CLOSING.
 
TO THE EXTENT THE BONUS IS EXPECTED TO EXCEED THE EMPLOYEE
BONUS BUDGET FOR FISCAL YEAR 2025, THE BONUS LIABILITY SHALL BE EQUAL TO
THE PRO-RATA
 
AMOUNT BASED ON THE REVISED EMPLOYEE BONUS BUDGET FOR
FISCAL YEAR 2025.
ARTICLE XIXTHE REFUND FROM KENTUCKY RELATED
 
TO SALES AND USE TAX
RECORDED IN
ACCOUNT #1212-00 (TAX RECEIVABLES)
, SHALL BE INCLUDED IN THE
CALCULATION OF CASH.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
EXHIBIT B
FORM OF
CLOSING CERTIFICATE
Reference is
 
made to
 
that certain
 
Securities Purchase Agreement,
 
dated as
 
of April [●], 2025
 
(the
“Agreement”),
 
by
 
and
 
among
 
Cal-Maine
 
Foods,
 
Inc.,
 
a
 
Delaware
 
corporation
 
(“Buyer”);
 
the
 
following
companies to be
 
acquired, directly or
 
indirectly, by Buyer
 
on the terms
 
and subject to
 
the conditions set
 
forth
in the
 
Agreement (each,
 
a “Company”
 
and, collectively,
 
the “Companies”
 
or the
 
“Company Group”):
 
(i)
Echo Lake Foods, Inc., a Wisconsin corporation
 
(“Echo Lake Foods”), (ii) ELT,
 
LLC, a Wisconsin limited
liability company (“ELT”), (iii)
 
Echo Lake Huntington, Inc.,
 
a Wisconsin corporation (“Huntington”), (iv)
Xenitel, Inc.,
 
a Wisconsin
 
corporation (“Xenitel”),
 
(v) Echo
 
Lake Huntington
 
435, LLC,
 
a Wisconsin
 
limited
liability company
 
(“Huntington 435”),
 
(vi) Blue
 
Grass Real
 
Estate Co,
 
LLC, a Wisconsin
 
limited liability
company
 
(“Blue
 
Grass”),
 
and
 
(vii)
 
Echo
 
Yorkville,
 
LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company
(“Yorkville”); the following transferring entities and securityholders (each,
 
a “Seller” and, collectively, the
“Sellers”): (i) Echo Lake
 
Properties, LLC, a
 
Wisconsin limited liability company
 
(“Echo Lake Properties”),
(ii)
 
Elkin
 
Properties,
 
LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company
 
(“Elkin
 
Properties”),
 
(iii)
 
the
 
holders,
collectively, of 100% of
 
the Class A voting shares of Echo Lake
 
Foods, as set forth
 
on the signature pages
to
 
the Agreement
 
(each,
 
a
 
“Voting
 
Securityholder”
 
and,
 
collectively,
 
the
 
“Voting
 
Securityholders”);
 
and
Scott
 
Meinerz,
 
in
 
his
 
capacity
 
as
 
Sellers’ Representative.
 
All
 
capitalized
 
terms
 
used
 
but
 
not
 
otherwise
defined herein shall have the respective meanings ascribed to them in the Agreement.
This
 
Closing
 
Certificate
 
is
 
delivered
 
to
 
Buyer
 
pursuant
 
to
 
Section 2.3
 
of
 
the
 
Agreement.
 
In
accordance with Section 2.3 of the Agreement, the Sellers’ Representative, on behalf of the Sellers, hereby
certifies that the items
 
below set forth, in
 
reasonable detail, the Sellers’
 
Representative’s good faith estimate
of:
 
(a) the Estimated Adjustment
 
Amount (and each component thereof and including the subtotal for each
Transferor
 
Group);
 
(b) the
 
Estimated Adjusted
 
Equity
 
Price
 
(including
 
the
 
subtotal
 
for
 
each
 
Transferor
Group); and
 
(c) the Closing
 
Date Payment,
 
in each
 
case, as
 
calculated in
 
accordance with
 
the Accounting
Principles.
1
Note to Draft
:
 
The amounts shown below are illustrative and are consistent with the amounts shown in Exhibit C.
 
 
5
ARTICLE XXESTIMATED
 
ADJUSTMENT AMOUNT:
20.1
Estimated Cash
 
$[●]
(a)
Echo Lake Foods Group
$[●]
(b)
Echo Lake Properties Group
$[●]
(c)
Elkin Properties Group
$[●]
20.2
Estimated Company Group Expenses
$[●]
(a)
Echo Lake Foods Group
$[●]
(b)
Echo Lake Properties Group
$[●]
(c)
Elkin Properties Group
$[●]
20.3
Estimated Indebtedness
$[●]
(a)
Echo Lake Foods Group
$[●]
(b)
Echo Lake Properties Group
$[●]
(c)
Elkin Properties Group
$[●]
20.4
Estimated
 
Working
 
Capital
 
over
 
Target
 
Working
Capital
$[●]
(a)
Echo Lake Foods Group
$[●]
(b)
Echo Lake Properties Group
$[●]
(c)
Elkin Properties Group
$[●]
20.5
Target
 
Working
 
Capital
 
over
 
Estimated
 
Working
Capital
$[●]
(a)
Echo Lake Foods Group
$[●]
(b)
Echo Lake Properties Group
$[●]
(c)
Elkin Properties Group
$[●]
20.6
Estimated Tax Liability Amount
$[●]
(a)
Echo Lake Foods Group
$[●]
(b)
Echo Lake Properties Group
$[●]
(c)
Elkin Properties Group
$[●]
20.7
Estimated
 
Adjustment
 
Amount
 
(I.A
 
minus
 
I.B
minus I.C plus
 
the excess,
 
if any,
 
of I.D minus
 
the excess,
 
if any,
of I.E minus I.F)
($[●])
(a)
Echo Lake Foods Group
($[●])
(b)
Echo Lake Properties Group
($[●])
(c)
Elkin Properties Group
($[●])
ARTICLE XXIESTIMATED
 
ADJUSTED EQUITY PRICE:
 
6
21.1
Purchase Price
$[250,000,000]
 
21.2
Estimated Adjustment Amount
$[●]
 
1.
Echo Lake Foods Group
$[●]
2.
Echo Lake Properties Group
$[●]
3.
Elkin Properties Group
$[●]
21.3
Adjustment Escrow Amount
$[●]
21.4
Indemnification Escrow Amount
$[●]
21.5
Estimated Adjusted
 
Equity Price
(II.A minus
 
II.B,
if II.B is negative
 
or plus II.B, if II.B
 
is positive minus II.C
 
minus
II.D)
$[●]
 
1.
Echo Lake Foods Group
$[●]
2.
Echo Lake Properties Group
$[●]
3.
Elkin Properties Group
$[●]
ARTICLE XXIICLOSING DATE
 
PAYMENT:
 
$[●]
[Signature Page Follows; Remainder of Page Intentionally Left Blank]
 
7
IN WITNESS WHEREOF, the undersigned has executed this Closing Certificate as of the date first
written above.
 
SCOTT MEINERZ,
solely in his capacity as Sellers’ Representative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
EXHIBIT C
CONSIDERATION ALLOCATION
 
SCHEDULE
Reference is
 
made to
 
that certain
 
Securities Purchase Agreement,
 
dated as
 
of April [●], 2025
 
(the
“Agreement”),
 
by
 
and
 
among
 
Cal-Maine
 
Foods,
 
Inc.,
 
a
 
Delaware
 
corporation
 
(“Buyer”);
 
the
 
following
companies to be
 
acquired, directly or
 
indirectly, by Buyer
 
on the terms
 
and subject to
 
the conditions set
 
forth
in the
 
Agreement (each,
 
a “Company”
 
and, collectively,
 
the “Companies”
 
or the
 
“Company Group”):
 
(i)
Echo Lake Foods, Inc., a Wisconsin corporation
 
(“Echo Lake Foods”), (ii) ELT,
 
LLC, a Wisconsin limited
liability company (“ELT”), (iii)
 
Echo Lake Huntington, Inc.,
 
a Wisconsin corporation (“Huntington”), (iv)
Xenitel, Inc.,
 
a Wisconsin
 
corporation (“Xenitel”),
 
(v) Echo
 
Lake Huntington
 
435, LLC,
 
a Wisconsin
 
limited
liability company
 
(“Huntington 435”),
 
(vi) Blue
 
Grass Real
 
Estate Co,
 
LLC, a Wisconsin
 
limited liability
company
 
(“Blue
 
Grass”),
 
and
 
(vii)
 
Echo
 
Yorkville,
 
LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company
(“Yorkville”); the following transferring entities and securityholders (each,
 
a “Seller” and, collectively, the
“Sellers”): (i) Echo Lake
 
Properties, LLC, a
 
Wisconsin limited liability company
 
(“Echo Lake Properties”),
(ii)
 
Elkin
 
Properties,
 
LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company
 
(“Elkin
 
Properties”),
 
(iii)
 
the
 
holders,
collectively, of 100% of
 
the Class A voting shares of Echo Lake
 
Foods, as set forth
 
on the signature pages
to
 
the Agreement
 
(each,
 
a
 
“Voting
 
Securityholder”
 
and,
 
collectively,
 
the
 
“Voting
 
Securityholders”);
 
and
Scott
 
Meinerz,
 
in
 
his
 
capacity
 
as
 
Sellers’ Representative.
 
All
 
capitalized
 
terms
 
used
 
but
 
not
 
otherwise
defined herein shall have the respective meanings ascribed to them in the Agreement.
 
 
 
9
ARTICLE XXIIIALLOCATION
 
OF PURCHASE PRICE:
THE PURCHASE PRICE SHALL BE ALLOCATED AMONG THE TRANSFEROR
GROUPS AS FOLLOWS:
23.1
Echo Lake Foods Group
 
$[248,540,813]
23.2
Echo Lake Properties Group
$[1,762,300]
23.3
Elkin Properties Group
$[7,777,550]
ARTICLE XXIVESTIMATED
 
ADJUSTMENT AMOUNT / FINAL ADJUSTMENT AMOUNT (
AS
APPLICABLE
):
24.1
Estimated Cash / Closing Cash (as applicable)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
24.2
Estimated
 
Company
 
Group
 
Expenses
 
/
 
Company
Group Expenses (as applicable)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
24.3
Estimated Indebtedness / Closing Indebtedness (as
applicable)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
24.4
Estimated
 
Working
 
Capital
 
over
 
Target
 
Working
Capital /
 
Closing Working
 
Capital over
 
Target Working
 
Capital
(as applicable)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
24.5
Target
 
Working
 
Capital
 
over
 
Estimated
 
Working
Capital /
 
Target Working
 
Capital over
 
Closing Working
 
Capital
(as applicable)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
24.6
Estimated
 
Tax
 
Liability
 
Amount
 
/
 
Closing
 
Tax
Liability Amount (as applicable)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
24.7
Estimated Adjustment
 
Amount /
 
Final
 
Adjustment
Amount
 
(as
 
applicable)
 
(II.A
 
minus
 
II.B
 
minus
 
II.C
 
plus
 
the
excess, if any, of II.D minus the excess, if any, of II.E minus II.F)
$__________
(a)
Echo Lake Foods Group
$__________
(b)
Echo Lake Properties Group
$__________
(c)
Elkin Properties Group
$__________
 
 
 
 
10
ARTICLE XXVESTIMATED
 
ADJUSTED EQUITY PRICE / FINAL ADJUSTED EQUITY PRICE
(
AS APPLICABLE
):
25.1
Purchase Price
$[258,080,663]
 
1.
Echo Lake Foods Group
 
$[248,540,813]
2.
Echo Lake Properties Group
$[1,762,300]
3.
Elkin Properties Group
$[7,777,550]
25.2
Estimated
 
Adjustment
 
Amount
 
/
 
Final
 
Adjustment
Amount (as applicable)
$__________
 
1.
Echo Lake Foods Group
$__________
2.
Echo Lake Properties Group
$__________
3.
Elkin Properties Group
$__________
25.3
Adjustment Escrow
 
Amount (allocated
 
in the
 
same
proportions as the Purchase Price)
$__________
1.
Echo Lake Foods Group
 
$__________
2.
Echo Lake Properties Group
$__________
3.
Elkin Properties Group
$__________
25.4
Indemnification
 
Escrow
 
Amount
 
(allocated
 
in
 
the
same proportions as the Purchase Price)
$__________
1.
Echo Lake Foods Group
 
$__________
2.
Echo Lake Properties Group
$__________
3.
Elkin Properties Group
$__________
25.5
Estimated Adjusted Equity
 
Price /
 
Final Adjusted
Equity Price (as applicable)
(III.A minus III.B, if III.B is
 
negative
or plus III.B, if III.B is positive minus III.C minus III.D)
$__________
 
1.
Echo Lake Foods Group
$__________
2.
Echo Lake Properties Group
$__________
3.
Elkin Properties Group
$__________
2
 
Note to Draft:
 
Allocations to Echo Lake Properties Group and Elkin Properties Group tie to tax gross-up calculation, with the
remainder allocated to Echo Lake Foods Group.
 
 
 
 
 
11
EXHIBIT D
FORM OF
EXCLUDED ASSET ASSIGNMENT AGREEMENT
THIS EXCLUDED
 
ASSET
 
ASSIGNMENT
 
AGREEMENT (this
 
“Agreement”) is
 
made and
 
entered
into
 
as
 
of
 
April [__], 2025
 
by
 
and
 
between
 
ECHO
 
LAKE
 
FOODS, LLC,
 
a
 
Delaware
 
limited
 
liability
company,
 
as
 
successor
 
by
 
conversion
 
to
 
ECHO
 
LAKE
 
FOODS,
 
INC.,
 
a
 
Wisconsin
 
corporation
(“Assignor”), and
 
MEINERZ HOLDINGS,
 
INC., a
 
Wisconsin corporation
 
(“Assignee”).
 
Reference is
 
made
to that certain
 
Securities Purchase Agreement, dated April [__], 2025 (the
 
“Purchase Agreement”), by and
among
 
Assignor,
 
ELT, LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company,
 
Echo
 
Lake
 
Properties, LLC,
 
a
Wisconsin limited
 
liability company,
 
Elkin Properties, LLC,
 
a Wisconsin
 
limited liability
 
company, Echo
Lake
 
Huntington, Inc.,
 
a
 
Wisconsin
 
corporation,
 
Xenitel, Inc.,
 
a
 
Wisconsin
 
corporation,
 
Echo
 
Lake
Huntington 435, LLC, a
 
Wisconsin limited liability
 
company, Blue Grass
 
Real Estate Co, LLC,
 
a Wisconsin
limited
 
liability
 
company,
 
Echo
 
Yorkville, LLC,
 
a
 
Wisconsin
 
limited
 
liability
 
company,
 
Cal-Maine
Foods, Inc., a
 
Delaware corporation,
 
the holders
 
of 100%
 
of the
 
issued and
 
outstanding shares
 
of Class A
voting common stock of Assignor and certain other parties.
RECITALS
A.
 
Assignee is the
 
sole member of Assignor,
 
and Assignor is classified
 
as a disregarded
 
entity
(within
 
the
 
meaning
 
of Treasury
 
Regulations
 
Section 301.7701-3(b)(1)(ii)
 
and
 
analogous
 
state
 
and
 
local
provisions) of Assignee for U.S. federal and applicable state and local income tax purposes.
B.
 
Assignor
 
desires
 
to
 
distribute
 
and
 
assign
 
the
 
Excluded Assets
 
to Assignee,
 
and Assignee
desires to accept such assignment.
C.
 
Capitalized
 
terms
 
not
 
otherwise
 
defined
 
herein
 
have
 
the
 
meaning
 
given
 
to
 
them
 
in
 
the
Purchase Agreement.
AGREEMENTS
In
 
consideration
 
of
 
the
 
recitals
 
and
 
the
 
mutual
 
agreements
 
contained
 
herein,
 
the
 
parties
 
agree
 
as
follows:
12
ARTICLE XXVIEFFECTIVE AS OF IMMEDIATELY
 
AFTER THE CONVERSIONS, ASSIGNOR
HEREBY DISTRIBUTES, TRANSFERS AND ASSIGNS TO ASSIGNEE ALL RIGHT,
 
TITLE
AND INTEREST IN AND TO THE EXCLUDED ASSETS, AND ASSIGNEE HEREBY ACCEPTS
SUCH ASSIGNMENT.
ARTICLE XXVIITHE PARTIES AGREE THAT
 
THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT ARE INTENDED TO BE TREATED
 
AS DISREGARDED FOR FEDERAL
AND APPLICABLE STATE
 
AND LOCAL INCOME TAX PURPOSES, AND SHALL FILE ALL
TAX RETURNS IN A MANNER CONSISTENT WITH SUCH INTENT.
ARTICLE XXVIIIIN THOSE CASES WHERE (A) ANY EXCLUDED ASSET IS NOT BY ITS
TERMS ASSIGNABLE OR (B) THE ASSIGNMENT OF SUCH EXCLUDED ASSETS
REQUIRES THE CONSENT OF A THIRD PARTY
 
IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
 
ASSIGNOR AND ASSIGNEE
WILL, PRIOR TO AND AFTER THE CLOSING, COOPERATE
 
AND USE THEIR
RESPECTIVE REASONABLE BEST EFFORTS TO OBTAIN
 
ALL CONSENTS AND WAIVERS
AND TO RESOLVE
 
ALL IMPRACTICALITIES OF ASSIGNMENTS AND TRANSFERS
NECESSARY TO CONVEY OR GIVE ASSIGNEE THE RIGHT TO ANY SUCH EXCLUDED
ASSETS.
 
IF ASSIGNOR COLLECTS ANY PAYMENTS
 
WITH RESPECT TO THE
EXCLUDED ASSETS, ASSIGNOR WILL REMIT SUCH AMOUNTS, WITHOUT OFFSET OR
HOLDBACK, TO ASSIGNEE NO LATER
 
THAN FIVE BUSINESS D
AY
S AFTER THE DATE
ON WHICH SUCH COLLECTION OCCURS.
ARTICLE XXIXTHE TERMS AND CONDITIONS OF THIS AGREEMENT SHALL BE BINDING
UPON AND SHALL INURE TO THE BENEFIT OF THE PARTIES
 
AND THEIR RESPECTIVE
SUCCESSORS, ASSIGNS AND HEIRS.
 
THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
 
OF THE STATE
 
OF
DELAWARE,
 
REGARDLESS OF CONFLICT OF LAW
 
PRINCIPLES.
 
THIS AGREEMENT
MAY
 
BE EXECUTED IN ONE OR MORE COUNTERPARTS,
 
EACH OF WHICH SHALL BE
DEEMED AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE
DOCUMENT.
 
THIS AGREEMENT MAY
 
BE SIGNED AND DELIVERED BY FACSIMILE OR
ELECTRONICALLY
 
IN PORTABLE
 
DOCUMENT FORMAT (“.PDF”) OR ANY SIMILAR
ELECTRONIC FORMAT,
 
AND FACSIMILE OR .PDF SIGNATURES
 
SHALL BE BINDING
FOR ALL PURPOSES HEREOF.
[
Signature Page Follows; Remainder of Page Left Intentionally Blank
]
 
 
13
IN WITNESS WHEREOF, the parties have executed
 
this Assignment Agreement as
 
of the date first
written above.
ASSIGNOR:
ECHO LAKE FOODS, LLC
By:
 
Scott Meinerz, President
ASSIGNEE:
MEINERZ HOLDINGS, INC.
By:
 
Scott Meinerz, President
 
 
 
14
EXHIBIT E
FORM OF
OPERATING AGREEMENT
OF
ECHO LAKE FOODS, LLC
The
 
undersigned,
 
Meinerz
 
Holdings, Inc.,
 
a
 
Wisconsin
 
corporation
 
(the
 
“Member”),
 
is
 
entering
 
into
 
this
Operating
 
Agreement
 
(this
 
“Operating
 
Agreement”)
 
for
 
the
 
purpose
 
of
 
establishing
 
the
 
governance,
management
 
and
 
capitalization
 
of
 
Echo
 
Lake
 
Foods,
 
LLC,
 
a
 
Delaware
 
limited
 
liability
 
company
 
(the
“Company”).
 
The undersigned acknowledges and agrees as follows:
 
15
1.
THE CERTIFICATE
 
OF
 
FORMATION
 
OF
 
THE COMPANY,
 
FILED
 
WITH
 
THE
DELAWARE
 
SECRETARY
 
OF
 
STATE
 
,
 
EFFECTIVE
 
AS
 
OF
 
[__], 2025,
 
PURSUANT
 
TO
 
THE
CONVERSION
 
OF
 
ECHO
 
LAKE
 
FOODS,
 
INC.,
 
A
 
WISCONSIN
 
CORPORATION,
 
INTO
 
A
DELAWARE
 
LIMITED
 
LIABILITY
 
COMPANY,
 
IS
 
HEREBY
 
ADOPTED,
 
RATIFIED
 
AND
CONFIRMED.
2.
THIS
 
OPERATING
 
AGREEMENT,
 
TOGETHER
 
WITH
 
THE
 
APPLICABLE
PROVISIONS OF THE DELAWARE
 
LIMITED LIABILITY COMPANY
 
ACT (THE “ACT”), AS
SUPPLEMENTED BY THIS
 
OPERATING AGREEMENT,
 
SHALL GOVERN ALL RIGHTS
 
AND
OBLIGATIONS OF THE MEMBER.
3.
THE
 
SOLE
 
MEMBER
 
AND
 
EQUITY
 
OWNER
 
OF
 
THE
 
COMPANY
 
SHALL
 
BE
THE
 
MEMBER,
 
WHO
 
SHALL
 
OWN
 
100%
 
OF
 
THE
 
ISSUED
 
AND
 
OUTSTANDING
 
EQUITY
INTERESTS
 
IN
 
THE
 
COMPANY,
 
CONSISTING
 
OF
 
ONE
 
CLASS
 
CALLED
 
LIMITED
LIABILITY COMPANY MEMBERSHIP INTERESTS.
4.
THE
 
MEMBER
 
SHALL
 
BE
 
ENTITLED
 
TO
 
A
 
100%
 
INTEREST
 
IN
 
THE
CONTRIBUTIONS,
 
PROFITS,
 
LOSSES
 
AND
 
DISTRIBUTIONS
 
OF
 
THE
 
COMPANY.
 
ANY
DISTRIBUTION
 
OR
 
RETENTION
 
OF
 
THE
 
PROFITS
 
AND
 
ASSETS
 
OF
 
THE
 
COMPANY
SHALL BE MADE IN THE DISCRETION OF THE MEMBER.
5.
THE
 
COMPANY
 
SHALL
 
BE
 
MEMBER-MANAGED
 
AND
 
SHALL
 
CONDUCT
SUCH OPERATIONS
 
AND BUSINESS
 
AS THE
 
MEMBER SHALL
 
DETERMINE ARE
 
IN THE
COMPANY’S BEST INTERESTS.
6.
UNLESS OTHERWISE SET FORTH IN A WRITTEN AGREEMENT, ALL DEBTS,
OBLIGATIONS AND LIABILITIES OF THE
 
COMPANY,
 
WHETHER ARISING IN
 
CONTRACT
OR
 
OTHERWISE,
 
SHALL
 
BE
 
THE
 
DEBTS,
 
OBLIGATIONS
 
AND
 
LIABILITIES
 
OF
 
THE
COMPANY AND NOT OF ANY MEMBER.
7.
THE
 
MEMBER
 
IS
 
HEREBY
 
AUTHORIZED
 
AND
 
DIRECTED,
 
FOR
 
AND
 
ON
BEHALF
 
OF
 
THE
 
COMPANY,
 
TO
 
TAKE
 
ANY
 
ACTIONS
 
AND
 
EXECUTE,
 
DELIVER
 
AND
PERFORM
 
ANY
 
DOCUMENTS,
 
AGREEMENTS
 
AND
 
OTHER
 
INSTRUMENTS
 
AS
 
THE
MEMBER
 
DEEMS
 
NECESSARY
 
OR
 
APPROPRIATE
 
TO
 
ORGANIZE
 
THE
 
COMPANY
 
AND
CONDUCT
 
ITS
 
BUSINESS.
 
ALL
 
OF
 
SUCH
 
DOCUMENTS,
 
AGREEMENTS
 
AND
 
OTHER
INSTRUMENTS
 
ARE
 
TO
 
BE
 
IN
 
SUCH
 
FORM
 
AND
 
CONTAIN
 
SUCH
 
PROVISIONS
 
AS
 
THE
MEMBER
 
EXECUTING
 
THE
 
SAME
 
SHALL
 
APPROVE,
 
AND
 
THE
 
SIGNATURE
 
OF
 
THE
MEMBER APPEARING THEREON
 
SHALL BE CONCLUSIVE
 
EVIDENCE OF ITS
 
APPROVAL
THEREO
F.
8.
THE MEMBER
 
MAY BESTOW UPON EMPLOYEES
 
OR REPRESENTATIVES OF
THE COMPANY SUCH TITLES AS THE MEMBER DEEMS NECESSARY OR EXPEDIENT TO
ENABLE IT TO
 
CARRY OUT
 
ITS DUTIES
 
ON BEHALF OF
 
THE COMPANY
 
.
 
SUCH TITLES
MAY
 
INCLUDE
 
“CHAIR,”
 
“PRESIDENT,”
 
“CHIEF
 
EXECUTIVE
 
OFFICER,”
 
“CHIEF
FINANCIAL
 
OFFICER,”
 
ONE
 
OR
 
MORE
 
“VICE
 
PRESIDENTS,”
 
“TREASURER”
 
OR
“SECRETARY
 
,”
 
OR
 
SUCH
 
OTHER
 
POSITIONS
 
OR
 
TITLES
 
AS
 
THE
 
MEMBER
 
DEEMS
ADVISABLE.
 
SUCH
 
PERSONS,
 
IN
 
THEIR
 
RESPECTIVE
 
ROLES
 
AS
 
OFFICERS
 
OF
 
THE
COMPANY,
 
MUST DISCHARGE
 
THEIR DUTIES
 
IN GOOD
 
FAITH
 
WITH THE
 
CARE THAT
AN
 
ORDINARY,
 
PRUDENT
 
PERSON
 
IN
 
A
 
LIKE
 
POSITION
 
WOULD
 
EXERCISE
 
UNDER
SIMILAR CIRCUMSTANCES, AND IN A MANNER THE MEMBER REASONABLY BELIEVES
TO BE IN THE BEST INTERESTS OF THE COMPANY.
 
 
16
9.
NO OFFICER
 
OR AGENT
 
APPOINTED BY
 
THE MEMBER SHALL
 
BE LIABLE,
RESPONSIBLE OR ACCOUNTABLE IN DAMAGES OR
 
OTHERWISE TO THE COMPANY OR
THE MEMBER
 
FOR ANY
 
ACTS PERFORMED
 
OR OMITTED
 
BY SUCH
 
PERSON IN
 
GOOD
FAITH, EXCEPT FOR ACTS OR OMISSIONS THAT CONSTITUTE GROSS NEGLIGENCE OR
WILLFUL
 
MISCONDUCT.
 
THE
 
OFFICERS
 
SHALL
 
BE
 
INDEMNIFIED
 
AND
 
HELD
HARMLESS BY THE
 
COMPANY,
 
TO THE EXTENT
 
OF THE COMPANY’S ASSETS, AGAINST
OBLIGATIONS
 
AND
 
LIABILITIES
 
ARISING
 
OR
 
RESULTING
 
FROM
 
OR
 
INCIDENTAL
 
TO
THE MANAGEMENT
 
OF THE
 
COMPANY’S AFFAIRS AND, IN ALL
 
CASES, TO THE
 
EXTENT
THAT
 
THE
 
ACT
 
PROVIDES
 
FOR
 
INDEMNIFICATION
 
OF
 
SUCH
 
PERSONS;
 
PROVIDED,
HOWEVER, THAT NO PARTY
 
SHALL BE ENTITLED TO INDEMNIFICATION HEREUNDER
FOR
 
ACTS
 
OR
 
OMISSIONS
 
CONSTITUTING
 
GROSS
 
NEGLIGENCE
 
OR
 
WILLFUL
MISCONDUCT.
10.
AT ANY TIME
 
WHEN THERE
 
IS ONLY ONE MEMBER
 
OF THE
 
COMPANY AND
THERE
 
IS
 
AN
 
EVENT
 
OF
 
DISSOCIATION,
 
INCLUDING
 
A
 
MEMBER
 
CEASING
 
TO
 
BE
 
A
MEMBER OF THE COMPANY
 
BY REASON OF DEATH,
 
A SALE OR OTHER TRANSFER OF
INTEREST
 
OR
 
BANKRUPTCY,
 
ANY
 
PERSON
 
OR
 
ENTITY
 
SUCCEEDING
 
TO
 
THE
MEMBER’S
 
INTEREST
 
AS
 
A
 
RESULT
 
OF
 
SUCH
 
EVENT
 
OF
 
DISSOCIATION
 
SHALL
 
BE
 
A
MEMBER
 
WITHOUT
 
FURTHER
 
ACTION
 
ON
 
THE
 
PART
 
OF
 
THE
 
TRANSFEREE,
 
THE
COMPANY
 
OR
 
THE
 
DISSOCIATED
 
MEMBER,
 
AND
 
SUCH
 
EVENT
 
OF
 
DISSOCIATION
SHALL NOT CAUSE OR RESULT
 
IN THE DISSOLUTION OF THE COMPANY.
[
Signature Page Follows; Remainder of Page Intentionally Left Blank
]
 
17
Dated as of the ____ day of __________________, 2025.
MEMBER
:
MEINERZ HOLDINGS, INC.
By:
 
 
Scott Meinerz, President