ASSET PURCHASE AGREEMENT by and between DYNATRONICS CORPORATION (as "Buyer") and HAUSMANN INDUSTRIES, INC. (as "Seller") Dated as of March 21, 2017

 

A. Seller owns certain assets and uses them in the conduct of the Business.

B. Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all assets of Seller except specified assets, and Buyer desires to assume specified liabilities related to such purchased assets, upon the terms contained in this Agreement.

Section 1.1

Certain Defined Terms

Section 1.2

Usage and Interpretation

Section 1.3

Definitions related to Purchase Price Adjustments.

Section 2.1

Purchased Assets

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

(b) all inventory, finished goods, raw materials, work in progress and packaging materials of Seller (the "Inventory");

(c) all supplies, machinery, equipment, computers, furnishings, tools, and other tangible personal property (except Inventory) (the "Tangible Personal Property");

(d) the Assigned Contracts; provided, that since Seller has agreed to provide copies of the potential Assigned Contracts only after the Closing (and shall provide such Contracts within the two (2) Business Day period following the Closing), Buyer will determine within thirty (30) days of receipt which such potential Assigned Contracts it wishes to have assigned and assumed, and any such Assigned Contracts will thereafter be transferred by Seller (without payment of any additional amount by Buyer) by means of an additional Assignment and Assumption Agreement executed after the Closing but effective as of the Closing.

(e) the Seller Intellectual Property, including the Intellectual Property listed on Schedule 4.11(a), the Specified Trademarks and the name of Seller (subject to the license set forth in Section 11.2);

(f) all Permits which are held by Seller, including the Permits listed on Schedule 4.7(b);

(g) all claims of Seller against Third Parties relating to the Purchased Assets or the Assumed Liabilities, whether actual or contingent, matured or unmatured, known or unknown;

(h) all rights of Seller to insurance benefits payable under any insurance policy of Seller with respect to any damage to Purchased Assets that exists on the Closing Date;

(i) all rights of Seller under and assets attributable to the Seller 401(k) Plan, including its sole and complete discretion as to profit sharing bonus contributions thereunder (for the avoidance of doubt, the payments required to be made by Buyer pursuant to Section 11.7 are not discretionary);

(j) all rights and assets of Seller under or attributable to Seller FSA Plan (including the excess (if any) of the aggregate accumulated contributions to the flexible spending reimbursement accounts under the Seller FSA Plan made during 2017 to the Closing Date by Transferred Employees over the aggregate reimbursement payments made during 2017 to the Closing Date from such accounts to such Transferred Employees);

(k) all rights and assets of Seller under or attributable to Seller HRA Plan;

(l) the Seller Books and Records; and

(m) to the fullest extent possible under applicable Law, all defenses, counterclaims and other rights of Seller with respect to any matter described in Schedule 2.3(f) (and if any such rights are retained by Seller under applicable Law, then Seller shall preserve and not waive such retained rights).

Section 2.2

Excluded Assets

(a) all cash, cash equivalents and short-term investments;

(b) all Contracts that are not Assigned Contracts;

(c) all Seller Plans and assets attributable thereto (other than the Seller 401(k) Plan);

(d) all claims for refunds of Taxes and other governmental charges of whatever nature;

(e) any shares of capital stock of Seller held in treasury;

(f) the Facility (including the rights to the solar renewable energy credits related to the Facility);

(g) all insurance policies of Seller and rights thereunder (including claims and rights to refunds of premiums or overpayment, if any), other than the rights specifically set forth in Section 2.1(g);

(h) all claims of Seller as creditor in connection with the matter set forth on Schedule 4.8(b);

(i) the rights which accrue or will accrue to Seller under this Agreement and the Transaction Agreements;

(j) prepayments of insurance, including workers compensation insurance; and

(k) freight claims made by Seller prior to Closing.

Section 2.3

Assumed Liabilities

(a) all liabilities and obligations under the Assigned Contracts, but only to the extent that such liabilities or obligations are not required to be performed prior to the Closing Date and do not relate to any warranty or other breach, default, or violation by Seller, on or prior to the Closing;

(b) all accounts payable of Seller to Third Parties in connection with the Business that remain unpaid as of the Closing Date and that are of a category of payables taken into account in the Working Capital Calculation ("Accounts Payable");

(c) all liabilities and obligations of Seller, whether as sponsor, plan administrator or named fiduciary, under the Seller 401(k) Plan and the Specified COBRA Coverage Liabilities;

(d) all claims for reimbursement by Transferred Employees with respect to such Transferred Employee's respective (i) 2017 flexible spending account under Buyer's flexible spending plan and (ii) 2017 health reimbursement account under Buyer's health reimbursement account plan, in each case, whether incurred prior to, on or after the Closing;

(e) any Product or service guaranty or warranty, right of return, or other indemnity obligation relating to the Products or relating to the services provided by Seller prior to the Closing, arising by reason of any express or implied Contract (including any warranty of merchantability or fitness), or any doctrine of common law (contract);

(f) the matters described on Schedule 2.3(f); and

(g) without duplication of any other assumption of liabilities provided for in this Agreement (e.g., Accounts Payable provided for in Section 2.3(b)) all liabilities of Seller that are included in Closing Net Working Capital (through clause (b) of such definition), in each case up to the line item amount of the Closing Date liability so included.

Section 2.4

Excluded Liabilities

Section 2.5

Purchase Price, etc.

(a) An amount equal to the Holdback Amount shall be retained by Buyer in accordance with Section 2.8; and

(b) An amount equal to the Closing Consideration less the Holdback Amount shall be paid at Closing by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer no later than two (2) Business Days prior to the Closing Date.

Section 2.6

Allocation of Purchase Price

Section 2.7

Working Capital Adjustment

(a) Schedule 2.7.  Schedule 2.7 contains all definitions relating to the working capital adjustment provided for in this Section 2.7.

(b) Calculation of Closing Net Working Capital; Review and Cooperation.  No later than sixty (60) days after the Closing Date, Buyer shall deliver to Seller a calculation of the Closing Net Working Capital (the "Working Capital Calculation").  Seller and its Representatives shall have the right to review the Working Capital Calculation, and Buyer shall reasonably cooperate with them in the review process and shall provide to them reasonable access to all information of the Purchased Assets used in the preparation of the Working Capital Calculation as reasonably requested by them.  If Seller disputes any item or amount in the Working Capital Calculation, Seller shall deliver to Buyer a notice (the "Working Capital Adjustment Dispute Notice") describing any item or amount in the Working Capital Calculation that is so disputed within thirty (30) days after receipt of the Working Capital Calculation.

(c) Adjustment Dispute Resolution.

(i)

Buyer and Seller shall attempt in good faith to resolve any such dispute, but if such dispute is not resolved within fifteen (15) Business Days after the date that Buyer receives the Working Capital Adjustment Dispute Notice, then either Seller or Buyer may refer such dispute to the Independent Accountants for resolution.

(ii)

If any dispute is submitted to the Independent Accountants for resolution, Buyer and Seller shall execute any agreement required by the Independent Accountants to accept such engagement, and such agreement shall provide that the Independent Accountants' determination shall not be in an amount that is outside the range of the disagreement between Buyer and Seller, and shall be solely based on submissions made by Buyer and Seller.

(iii)

Furthermore, Buyer and Seller agree that such resolution by the Independent Accountants shall be deemed conclusive of the matter.

(iv)	Buyer and Seller shall each bear one-half of the fees and costs of such Independent Accountants.

(d) Adjustment Payments.

(i)

If it is determined pursuant to this Section 2.7 that there is a Net Working Capital Deficit, then, Seller shall pay to Buyer an amount equal to the Net Working Capital Deficit.  Funds retained by Buyer from the Holdback Fund will be applied towards the satisfaction of Seller's payment obligations under this Section 2.7(d)(i).

(ii)	If it is determined pursuant to this Section 2.7 that there is a Net Working Capital Excess, then, Buyer shall pay to Seller an amount equal to the Net Working Capital Excess.

(e) Tax Treatment of Working Capital Adjustment.  Any payments pursuant to this Section 2.7 shall be treated for all Tax purposes as an adjustment to the Purchase Price unless otherwise required by Law.

Section 2.8

Holdback Amount

(a) Holdback Amount.  At the Closing, Buyer shall retain an amount equal to the Holdback Amount for purposes of satisfying (i) the Purchase Price adjustments set forth in Section 2.7 and (ii) claims pursuant to and in accordance with Article 10 of this Agreement (such retained amount, as reduced from time to time pursuant to Section 2.7(d) or Section 10.2(g), together with interest accrued thereon at a rate equal to Holdback Interest Rate, the "Holdback Fund").

(b) Holdback Release Date I.  Promptly following Holdback Release Date I, Buyer shall pay to Seller (by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two (2) Business Days prior to such payment) twenty-five percent (25%) of the Holdback Amount, minus the amount, if any, of any unresolved claims for indemnification pursuant to Article 10 (the amount payable to Seller, the "Initial Release Amount").  Notwithstanding anything to the contrary, only claims for indemnification made within six (6) months of the Closing Date shall be included in the calculation of the Initial Release Amount.

(c) Holdback Release Date II.  Promptly following Holdback Release Date II, Buyer shall pay to Seller (by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two (2) Business Days prior to such payment), both (i) the Holdback Release Amount (if positive), and (ii) any remaining amount of the Holdback Fund, minus, without double counting, the amounts, if any, of any unresolved payment related to a Working Capital Adjustment Dispute Notice pursuant to Section 2.7 or any unresolved claims for indemnification pursuant to Article 10.  Following resolution of any such adjustment and claims, Buyer shall pay promptly to Seller (by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer at least two (2) Business Days prior to such payment) any remaining amount of the Holdback Fund.

(d) Default Interest Rate.  If Buyer fails to deliver all or any portion of the Holdback Amount to the Seller when due (including as a result of withholding a greater portion of the Holdback Amount than Buyer is entitled to retain pursuant to Section 2.7 or Article 10), then, interest shall accrue on such undelivered amount at rate equal to the Prime Rate (as reported by the Wall Street Journal) plus eight percent (8%), compounded annually from and after the first Business Day following such failure until all such unpaid amounts (plus all accrued but unpaid interest thereon) are delivered to the Seller. 

Section 2.9

Consents, etc.

(a) Consents.  This Agreement shall not constitute an agreement to sell, convey, transfer, assign or deliver any Purchased Asset if such sale, conveyance, transfer, assignment or delivery thereof, without the consent of a Third Party, (i) would constitute a breach of the rights of such Third Party, (ii) would be ineffective with respect to any Third Party to a Contract concerning such Purchased Asset, or (iii) would adversely affect the rights of Buyer with respect to such Purchased Asset, in which case such sale, conveyance, transfer, assignment or delivery, and the assumption by Buyer of any related Assumed Liabilities, shall be subject to such consent being obtained.  Seller shall use commercially reasonable efforts to obtain any such consent, whether prior to or after the Closing.  Seller shall not make any agreement or understanding affecting the Purchased Assets or the Business in connection with obtaining any such consent, except with the prior written consent of Buyer, such consent not to be unreasonably withheld.  In addition, Seller shall cooperate with Buyer to provide Buyer with the benefit of any Assigned Contract with respect to which such consent has not yet been obtained, and Buyer shall cooperate with Seller to assume and perform the obligations and liabilities of any Assigned Contract with respect to which such consent has not yet been obtained.

(b) Post-Closing Assignment and Assumption.  Promptly after any such consent is obtained, Seller shall convey, transfer, assign and deliver such Purchased Asset or assign such Assigned Contract to Buyer, and Buyer shall assume Seller's liabilities and obligations under any such Assigned Contract pursuant to a special-purpose assignment and assumption agreement that is substantially similar to the Assignment and Assumption Agreement.

(c) No Waiver or Exclusion.  Nothing contained in this Section 2.9 or elsewhere in this Agreement shall be deemed a waiver by Buyer of its right to have received at Closing an effective assignment of all of the Purchased Assets, nor shall this Section 2.9 or any other provision of this Agreement be deemed to constitute an agreement to exclude from the Purchased Assets any Assigned Contract or other Purchased Asset as to which a consent may be necessary.

Section 2.10

Withholding

Section 3.1

Closing

Section 3.2

Closing Agenda

Section 4.1

Organization; Qualifications

Section 4.2

Power and Actions; Execution, Delivery and Enforceability

(a) Power and Actions.  Except with respect to the required approval by Seller's shareholders (which will be delivered at Closing), Seller has all requisite corporate power and authority, and has taken all corporate action necessary, to execute and deliver this Agreement and any Transaction Agreement to which it is a party, to consummate the transactions contemplated on its part hereby and thereby, and to perform its obligations hereunder and thereunder.

(b) Execution, Delivery and Enforceability.  Seller has duly executed and delivered this Agreement and each Signing Date Transaction Agreement to which it is a party and on the Closing Date will have duly executed and delivered each Closing Date Transaction Agreement to which it is a party, and each of this Agreement and each such Signing Date Transaction Agreement is, and each such Closing Date Transaction Agreement will be, when so executed and delivered, a valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, or similar Laws affecting the enforcement of creditors' rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding in law or at equity).

Section 4.3

No Conflict or Violation

Section 4.4

No Brokers

Section 4.5

Financial Statements

(a) Financial Statements. The Financial Statements (i) fairly present the financial condition and the results of operations, changes in stockholders' equity, and cash flows of Seller as at the respective dates thereof, and for the periods referred to therein, and (ii) except as set forth on Schedule 4.5(a)(i), were prepared in accordance with historical Seller accounting methodologies and reflect the consistent application of such accounting methodologies throughout the periods involved.

(b) No Undisclosed Liabilities.  Seller has no liabilities or obligations (whether absolute, accrued or contingent, whether matured or unmatured, and whether known or unknown) except: (i) liabilities reflected on the Balance Sheet; (ii) current liabilities incurred in the Ordinary Course since the Balance Sheet Date; and (iii) as set forth in Schedule 4.5(b).

(c) Indebtedness.  Except as set forth on Schedule 4.5(c), Seller has no outstanding Indebtedness.

(d) Accounting Matters. The Financial Statements were prepared from, and are consistent with, the Seller Books and Records.  The Seller Books and Records accurately and completely reflect the activities of Seller in reasonable detail.  Seller has maintained a standard system of accounting, and has had in place internal controls that are adequate and appropriate for Seller. 

Section 4.6

Absence of Certain Changes

(a) Ordinary Course. Except as set forth on Schedule 4.6(a), since the Balance Sheet Date, Seller has operated in the Ordinary Course in all material respects, and Seller has not:

(b) No Material Adverse Effect. Since the Balance Sheet Date, there has not been a Material Adverse Effect.

Section 4.7

Compliance with Laws; Permits

(a) Compliance with Laws.  Seller has materially complied since January 1, 2012, and is in material compliance, with all material Laws applicable to its conduct of the Business as currently conducted or its ownership and use of the Purchased Assets.  Seller has no Knowledge that any existing circumstances are likely to result in any material noncompliance with such Laws.

(b) Permits.  All material Permits required to be obtained by Seller for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets have been obtained by Seller.  All Permits held by Seller are listed on Schedule 4.7(b) and are valid and in full force and effect.  No Governmental Authority has notified or advised Seller that it intends to limit, suspend or revoke any Permit of Seller.

Section 4.8

Proceedings

(a) Against Seller.  Except as set forth on Schedule 4.8(a), there is no Proceeding pending or, to the Knowledge of Seller, threatened against Seller or its Affiliates.  Seller is not subject to or bound by any outstanding Orders.

(b) By Seller.  Except as set forth on Schedule 4.8(b), there is no Proceeding pending and brought by Seller or its Affiliates against any Person relating to the Business, the Purchased Assets or the Assumed Liabilities.

Section 4.9

Title to and Sufficiency of Assets

(a) Title. Seller has good and transferable title to, or otherwise has the right to use pursuant to a valid and enforceable Assigned Contract, all of the Purchased Assets, and will transfer to Buyer at the Closing such title or such right, in each case, free and clear of any Encumbrances.

(b) Sufficiency. Except as set forth in Schedule 4.9, assuming the Assigned Contracts include all of the Seller's contracts, the Purchased Assets constitute all of the assets, tangible or intangible, used by the Seller or held for use by Seller to conduct the Business in the manner currently operated and are sufficient for the continued conduct of the Business in substantially such manner. 

Section 4.10

Contracts

(a) Material Contracts.  Schedule 4.10(a) lists all Contracts (other than purchase orders) to which Seller is a party that are (i) with customers; (ii) with or for sales representatives, brokers, dealers, distributors, marketing, consultants, contractors, promotion, market research, advertising; (iii) with suppliers; (iv) with Seller Employees (including employment agreements and severance agreements but excluding Seller Plans); (v) with any Governmental Authority; (vi) powers of attorney with respect to the Business or any Purchased Asset; (vii) Contracts that limit or purport to limit the method or scope of conduct of the Business or preventing Seller or the Seller Employees from engaging freely in the Business anywhere in the world; (viii) the Contracts required to be listed on Schedule 4.11(a); (ix) the CBA; and (x) Contracts that are to the Knowledge of Seller material to Seller and not otherwise referenced in clauses (i) through (ix) above (collectively, the "Material Contracts"). 

(b) Copies.  Copies of all Contracts requested by Buyer have been or will be (in accordance with the provisions herein), provided to Buyer, including any and all amendments, waivers, modifications, or other changes thereto. 

(c) No Breach or Termination. Seller is not in breach or default of any Material Contract, and, to the Knowledge of Seller, no other party is in breach or default of any Material Contract.  Seller has not given and is not in receipt of any pending written notice of termination or non-renewal under any Material Contract.  All of the Material Contracts are binding on and enforceable against Seller and, to the Knowledge of Seller, the other parties to such Material Contracts, in accordance with their respective terms and, except as set forth on Schedule 4.3, the transactions contemplated by this Agreement and the other Transaction Agreements will not afford any other party the right to terminate, accelerate or make any modifications to any of the terms of any such Material Contract.

Section 4.11

Intellectual Property

(a) Certain Lists and Copies.  Schedule 4.11(a) lists the following:

(i)	all registered Trademarks, Patents and Copyrights owned by Seller, and all applications therefor, in each case including all registration information;

(ii)	all unregistered Trademarks used by Seller in the Business at any time since January 1, 2012;

(iii)

all licenses, sublicenses and other Contracts pursuant to which Seller is authorized to use any Intellectual Property belonging to any Third Party (other than Commercial Software and customary provisions in commercial Contracts permitting Seller to use Third-party Intellectual Property as necessary to perform its obligations under such commercial Contracts);

(iv)	all material Commercial Software; and

(v)	all licenses, sublicenses and other Contracts pursuant to which Seller has granted or promised to grant to any Third Party the right to use any Intellectual Property.

(b) Recorded; Unnamed Inventors.

(i)	Except as set forth in Schedule 4.11(b)(i), each registered Patent, Trademark and Copyright included in the Seller Intellectual Property is valid and subsisting and properly recorded with the appropriate Governmental Authority; and

(ii)	With regard to each Patent set forth on Section 4.11(a)(i), there are no unnamed inventors who can claim rights in any such Patents.

(c) No Infringement by Business of Others' Intellectual Property.  The conduct of the Business does not infringe, misappropriate, or conflict with any Intellectual Property of any Person or constitute unfair competition or trade practices under applicable Laws.  Except as set forth on Schedule 4.11(c), since January 1, 2012, there have been no Proceedings pending or, to the Knowledge of Seller, threatened, alleging that the conduct of the Business infringes, misappropriates, or conflicts with the Intellectual Property of any Person or constitutes unfair competition or trade practices under applicable Laws.

(d) No Infringement by Others of Specified Trademarks.  To the Knowledge of Seller, since January 1, 2012, there has been no unauthorized use, infringement or misappropriation of any Specified Trademarks by any Person, including any employee or former employee of Seller.

(e) Hausmann Trademark.  Since January 1, 2012, to the Knowledge of Seller, no Person has used the "HAUSMANN" Trademark for any business-related or commercial purpose except on set forth on Schedule 4.11(e). 

(f) Invention Assignments and Confidentiality Agreements.  Except as set forth in Schedule 4.1(f), all current and former employees and individual independent contractors of Seller who have been engaged in any research, development, design or other services likely to involve the creation of Intellectual Property used in the Business have assigned such Intellectual Property to Seller pursuant to invention assignment, work made for hire or other Intellectual Property assignment agreements with Seller and have entered into confidentiality agreements with Seller, in each case substantially in the forms that have been provided to Buyer.

Section 4.12

Taxes

(a) Tax Returns.  All Tax Returns required to be filed by Seller have been timely filed (taking into account any applicable extensions of time to file) with the appropriate Governmental Authority, and all such Tax Returns are accurate and complete in all material respects.  Seller is not currently the beneficiary of any extension of time to file any such Tax Return.  Copies of all Tax Returns of Seller filed since December 31, 2013 have been provided to Buyer.

(b) Tax Liabilities.  Seller has timely paid all Taxes due and payable.  The accruals and reserves with respect to Taxes set forth on the Balance Sheet are adequate to cover all Taxes of Seller accruing or payable with respect to Tax Periods (or portions thereof) ending on or before the Balance Sheet Date.  All Taxes of Seller attributable to Tax Periods (or portions thereof) commencing after the Balance Sheet Date have arisen in the Ordinary Course, and Seller has no liability for Taxes in excess of the amounts paid, or the reserves established, for such Taxes.

(c) Tax Withholding.  All Taxes that Seller has been required to collect or withhold have been duly collected or withheld and, to the extent required by any Tax Law, have been timely paid to the proper Governmental Authority.   Seller has properly requested, received and retained all necessary exemption certificates and other documentation supporting any claimed exemption or waiver of Taxes on sales or other transactions as to which Seller otherwise would have been obligated to collect or withhold Taxes.

(d) Purchased Assets.  There are no Encumbrances other than Permitted Encumbrances for Taxes upon the Purchased Assets.

(e) Tax Administrative Matters.  Except as set forth Schedule 4.12(e), (i) no deficiencies for Taxes or other assessments relating to the Taxes of Seller have been claimed, proposed or assessed in writing by any Governmental Authority, (ii) there are no ongoing, pending or, to the Knowledge of Seller, threatened, Proceedings for or relating to any liability in respect of Taxes of Seller, (iii) no claim has been made in writing by a Governmental Authority in a jurisdiction where Seller does not file Tax Returns that Seller is or may be subject to taxation in that jurisdiction, and (iv) there have been no audits of any of Seller's Tax Returns by the relevant Governmental Authorities at any time since January 1, 2012.  Seller acknowledges that any future audits of any of Seller's Tax Returns by the relevant Governmental Authorities covering periods before or after Closing are the responsibility of Seller.  No waiver or extension of a statute of limitations relating to Taxes is in effect with respect to Seller.

(f) Other Person's Taxes; Tax Agreements.  Seller is not liable for the Taxes of any Person under any provision of Tax Law, as a transferee or successor, by Contract, or otherwise.  Seller is not a party to or bound by any Tax sharing, indemnity or allocation Contract or other similar arrangement with any other Person.  Seller has no contractual obligations to indemnify any other Person with respect to Taxes.

Section 4.13

Employees and Seller Plans

(a) Seller Employees, etc.  Schedule 4.13(a) lists all current employees of Seller (including any such employee who is on a leave of absence or on layoff status) (the "Seller Employees"), stating their names, job titles, locations, hourly rates of compensation or base salary, total compensation for 2016, commencement date of employment and earned PTO (as of March 3, 2017).  Schedule 4.13(a) also lists each employee of Seller whose employment with Seller has ended after January 1, 2016 and the amount of severance, if any, paid to such Person

(b) Individual Independent Contractors.  Schedule 4.13(b) lists all current independent contractors retained by Seller who are individuals, stating their names, dates of commencement of services and rates of compensation.

(c) No Restrictions on Termination; Severance Policies.  Except for the CBA and as set forth on Schedule 4.13(c), there are no Contracts that provide for employment for a specified duration, provide for severance or other benefits in the event of termination or establish a standard of just cause for dismissal between Seller and any current Seller Employee or Person who was a Seller Employee at any time after January 1, 2016.  Seller has provided to Buyer copies of any severance policies applicable to any such Persons.

(d) Certain Compliance and Labor Matters.  Without limiting the generality of the representations and warranties made in Section 4.7, (i) Seller is, and has been, in compliance in all material respects with all Laws regarding employment, employment practices and terms and conditions of employment, including any such Laws regarding wages and hours, including minimum wage and overtime payments, employment discrimination, workers' compensation, family and medical leave, the Immigration Reform and Control Act, the National Labor Relations Act, occupational safety and health requirements, or termination of employment, (ii) there is no, and there has been no, labor strike, slowdown, work stoppage or lockout in effect or, to the Knowledge of Seller, threatened, against Seller, or directly affecting Seller since January 1, 2012.

(e) No Proceedings or Orders.  Without limiting the generality of the representations and warranties made in Section 4.8, and except as set forth on Schedule 4.13(e), there is no Proceeding pending or, to the Knowledge of Seller, threatened, relating to employment or labor matters in any way.  Seller is not subject to any judgment or order of, or any enforcement, regulatory or administration Proceeding by any Governmental Authority relating to employment or labor matters in any way, and, to the Knowledge of Seller, no such judgments, order or Proceedings have been threatened.

(f) Manuals, Handbooks, etc.  Seller has provided Buyer with copies of all material written employee manuals, material written handbooks and material written policy statements currently in effect that relate to the employment or retention of employees of Seller, all of which are listed on Schedule 4.13(f).

(g) Collective Bargaining Agreement.  Except for the CBA, Seller is not a party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to the Seller Employees.

(h) Restrictive Covenants.  To the Knowledge of Seller: (i) except as set forth on Schedule 4.13(h), no Seller Employee is a party to or is bound by any confidentiality agreement, noncompetition, nonsolicitation agreement or similar Contract with Seller or any other Person that has been an employer of such Seller Employee since January 1, 2012; and (ii) to the Knowledge of Seller, no Seller Employee has expressed an intention to terminate such Seller Employee's employment with Seller.

(i) Seller Plans.  Except as set forth on Schedule 4.13(i), there are no Seller Plans.  Copies of all Seller Plans set forth on Schedule 4.13(i) have been provided to Buyer, including any and all amendments, waivers, modifications, or other changes thereto.

(j) Seller 401(k) Plan Documents.  With respect to the Seller 401(k) Plan, Seller has provided Buyer a copy of (i) the plan document, trust agreement, insurance policies, service agreements and amendments thereto; (ii) the most recent summary plan description and amendments thereto; (iii) the three most recently filed Form 5500s and attached schedules; (iv) the most recent determination or opinion letter issued by the Internal Revenue Service; and (v) any written notices issued by the Internal Revenue Service, the federal Department of Labor or any other Governmental Authority since January 1, 2012 with respect to such Seller Plan that relate to a Proceeding or the plan's tax qualified status.

(k) Compliance.  Without limiting the generality of the representations and warranties made in Sections 4.7:  (i) Each of the Seller 401(k) Plan, Seller HRA Plan and Seller FSA Plan has been maintained and operated in all respects in accordance with its terms and applicable Laws, including ERISA, and the Code; and (ii) all payments and/or contributions required to have been made prior to the date hereof with respect to the Seller 401(k) Plan, the Seller HRA Plan or Seller FSA Plan have been made.  To the Knowledge of Seller, (i) each Seller Plan has been maintained and operated in all respects in accordance with its terms and applicable Laws, including ERISA, and the Code; and (ii) all payments and/or contributions required to have been made prior to the date hereof with respect to each Seller Plan have been made. To the Knowledge of Seller, there has been no breach of fiduciary duty with respect to any Seller Plan.  To the Knowledge of Seller, no "prohibited transaction," within the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, that is not otherwise exempt under Section 408 of ERISA, has occurred with respect to the Seller 401(k) Plan.  There are no claims or Proceedings pending, or, to the Knowledge of Seller, threatened or reasonably anticipated (other than routine claims for benefits), against the Seller 401(k) Plan, the Seller HRA Plan, the Seller FSA Plan or against the assets of any of the foregoing.  There are no audits, inquiries or Proceedings pending or, to the Knowledge of Seller, threatened by the IRS, the DOL or any other Governmental Authority with respect to the Seller 401(k) Plan. 

Section 4.14

Insurance

Section 4.15

Condition of Assets

Section 4.16

Contract Warranty Claims History and Product Liability Claims History

(a) Contract Warranty Claim History.   Schedule 4.16(a) reflects the aggregate number of products shipped to customers for no charge for each calendar year ending after January 1, 2012, on a quarterly basis.

(b) Product Liability Claim History.  Schedule 4.16(b) lists all product liability claims against Seller (other than Contract Warranty Claims) for each calendar year ending after January 1, 2012. 

(c) No Alleged Defect or Recall.  Except as set forth on Schedule 4.16(c), without limiting the generality of the representations made in Section 4.7 or Section 4.8: (i) no Governmental Authority has alleged in writing that any Product is defective or unsafe or fails to meet any Product warranty or any standards promulgated by any such Governmental Authority; (ii) no Product has been recalled; and (iii) Seller has not received any notice of recall (written or oral) of any Product from any Governmental Authority.

(d) Standard Warranty.  Except as set forth on Schedule 4.16(d) (the "Standard Warranty"), Seller has not given to any Person, since January 1, 2012, any contractual Product or service guaranty or warranty, right of return, or other indemnity relating to the Products or relating to the services provided by Seller.

Section 4.17

Customers and Suppliers

Section 4.18

Real Property; Environmental Matters

(a) Owned Real Property.  Seller does not own, and has never owned, any real property other than the Facility.

(b) Leased Real Property.  Seller does not lease any real property to or from any Person.

(c) Compliance.  The use and operation of the Facility in the conduct of the Business has materially complied with all Environmental Laws and Environmental Permits, and with all applicable covenants, restrictions and easements.  Except as set forth on Schedule 4.18(c), Seller has not received, since January 1, 2012, any notice or other communication relating to any alleged failure to comply with any Environmental Law or Environmental Permit, or to any potential liability under any Environmental Law or Environmental Permit.  Seller has no Knowledge that any existing circumstances are likely to result in any material noncompliance with any Environmental Law or Environmental Permit.

(d) Environmental Permits.  All material Environmental Permits required to be obtained by Seller for Seller to own or operate the Facility have been obtained by Seller.  All Environmental Permits obtained by Seller are listed on Schedule 4.18(d) and are valid and in full force and effect.  No Governmental Authority has notified or advised Seller that it intends to limit, suspend or revoke any Environmental Permit. 

(e) Environmental Proceedings and Environmental Orders.  Except as set forth on Schedule 4.18(e), to the Knowledge of Seller, there is no Environmental Proceeding pending or, to the Knowledge of Seller, threatened against Seller or its Affiliates.  Seller is not subject to or bound by any outstanding Environmental Orders.

(f) No Material Defects.  To the Knowledge of Seller, no defect exists in any of the buildings or other improvements constituting the Facility that could reasonably be expected to cause a Material Adverse Effect.

(g) Hazardous Substances; Hazardous Activities.  Except as set forth on Schedule 4.18(g), (i) to the Knowledge of Seller, there is no Hazardous Substance present on or under the Facility; and (ii) neither Seller nor, to the Knowledge of Seller, any other Person, has permitted or conducted, or is aware of, any Hazardous Activity with respect to the Facility.

(h) Tanks, Landfills, etc.  To the Knowledge of Seller, except as set forth on Schedule 4.18(h), there currently do not exist any above ground or underground storage tanks, landfills, surface impoundments, or disposal areas at the Facility

(i) Certain Copies.  Seller has provided to Buyer copies of all material reports, studies, analyses, or tests initiated by or on behalf of, or in the possession of, Seller pertaining to the environmental condition of, or Hazardous Substances or Hazardous Activity in, on, or under, the Facility, or concerning compliance by Seller or any other Person for whose conduct Seller could be held responsible under any Environmental Law.

(j) Environmental Matters.  Notwithstanding Sections 4.7 and 4.8 of this Agreement, the representations regarding Environmental Laws, Environmental Orders, Environmental Permits and Environmental Proceedings contained in this Section 4.18 are the only representations made by Seller in this Agreement with regard to such Laws, Orders, Permits and Proceedings.

Section 4.19

Affiliate Transactions

Section 4.20

Regulatory Matters

Section 4.21

Solvency

Section 4.22

Disclosure

Section 4.23

Disclaimer of Other Representations and Warranties.

Section 5.1

Organization; Power and Actions; Execution, Delivery and Enforceability

(a) Organization.  Buyer is a corporation duly organized, validly existing and in good standing (or the equivalent) under the Laws of the State of Utah.

(b) Power and Actions.  Buyer has all requisite corporate power and authority, and has taken all corporate action necessary (including, if necessary, seeking and/or obtaining equity holder approval), to execute and deliver this Agreement and any Transaction Agreement to which it is a party, to consummate the transactions contemplated on its part hereby and thereby, and to perform its obligations hereunder and thereunder.

(c) Execution, Delivery and Enforceability. Buyer has duly executed and delivered this Agreement and each Signing Date Transaction Agreement  to which it is a party, and on the Closing Date will have duly executed and delivered each Closing Date Transaction Agreement to which it is a party, and each of this Agreement and each such Signing Date Transaction Agreement is, and each such Closing Date Transaction Agreement will be, when so executed and delivered, a valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, or similar Laws affecting the enforcement of creditors' rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding in law or at equity).

Section 5.2

No Conflict or Violation

Section 5.3

No Brokers

Section 5.4

Solvency

Section 5.5

Financing Agreements

Section 6.1

Representations, Warranties and Covenants

(a) Representations, Warranties and Covenants.  All representations and warranties of Seller contained in this Agreement or in any Transaction Agreement or any certificate or other writing delivered pursuant to this Agreement (i) that are qualified by materiality or incorporate a defined term that itself incorporates a materiality qualifier will be true and correct in all respects, and (ii) that are not qualified by materiality will be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date.  Seller will have performed in all material respects all covenants required by this Agreement to be performed by it prior to or as of the Closing.

(b) Closing Certificate.  Seller will have delivered to Buyer a certificate, dated the Closing Date and signed by an officer of Seller, certifying that the conditions set forth in Section Section 6.1(a) have been met.

Section 6.2

[Intentionally omitted.]

Section 6.3

No Injunction, etc.

Section 6.4

No Proceedings

Section 6.5

No Material Adverse Effect

Section 6.6

Audited Financial Statements

Section 6.7

Financing

Section 6.8

Other Closing Deliverables

Section 7.1

Representations, Warranties and Covenants

(a) Representations, Warranties and Covenants. All representations and warranties of Buyer contained in this Agreement, any Transaction Agreement or any certificate or other writing delivered pursuant to this Agreement (a) that are qualified by materiality or incorporate a defined term that itself incorporates a materiality qualifier will be true and correct in all respects and (b) that are not qualified by materiality will be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date.  Buyer will have performed in all material respects all covenants required by this Agreement to be performed by it prior to or as of the Closing.

(b) Closing Certificate.  Buyer will have delivered to Seller a certificate, dated the Closing Date and signed by an officer of Buyer, certifying that the conditions set forth in Section 7.1(b) have been met.

Section 7.2

No Injunction, etc.

Section 7.3

Other Closing Deliverables

Section 8.1

Access and Investigation

Section 8.2

Affirmative Covenant Regarding Operations

(a) conduct the Business only in the Ordinary Course, except as set forth in Section 8.2(b)(iii) or approved by Buyer in writing;

(b) use (i) its commercially reasonable efforts to preserve intact the Business and the Purchased Assets, (ii) its commercially reasonable efforts to maintain its existing positive relations with Persons having business relationships with the Business and (iii) prepare and file any environmental reports or notices required by Law that are due to be filed before the Closing Date, including a General Information Notice to the New Jersey Department of Environmental Protection, at the times required under such Laws;

(c) confer with Buyer prior to implementing operational changes of a material nature with respect to the Business; and 

(d) comply with all Laws and obligations under Contracts.

Section 8.3

Filings and Approvals

Section 8.4

Seller's Commercially Reasonable Efforts

Section 8.5

Negative Covenant Regarding Operations

Section 8.6

No Negotiation, etc.

Section 8.7

Interim Financials.

Section 8.8

Buyer's Commercially Reasonable Efforts

Section 8.9

Confidentiality

Section 9.1

Termination

(a) By written consent of Buyer and Seller;

(b) By Buyer if (i) there is a material breach of any covenant to be performed by Seller under this Agreement which has not been waived by Buyer or cured within fifteen (15) days after being notified of the same or is incapable of being cured, (ii) it is not in material breach of its obligations under this Agreement and if any of the conditions contained in Article 6 (Conditions to Obligations of Buyer) has not been satisfied as of the End Date and such condition has not been waived by Buyer, or (iii) it is not in material breach of its obligations under this Agreement and satisfaction of any of the conditions contained in Article 6 (Conditions to Obligations of Buyer) has become impossible and Buyer has not waived such condition;

(c) By Seller if (i) there is a material breach of any covenant to be performed by Buyer under this Agreement which has not been waived by Seller or cured within fifteen (15) days after being notified of the same or is incapable of being cured, (ii) it is not in material breach of its obligations under this Agreement and if any of the conditions contained in Article 7 (Conditions to Obligations of Seller) has not been satisfied as of the End Date and such condition has not been waived by Seller, or (iii) it is not in material breach of its obligations under this Agreement and satisfaction of any of the conditions contained in Article 7 (Conditions to Obligations of Seller) has become impossible and Seller has not waived such condition; or

(d) By Seller if Buyer has not obtained financing required to pay the Purchase Price to Seller as of the June 15, 2017.

Section 9.2 Effect of Termination

(a) The provisions of any confidentiality provision between the Parties shall continue in full force and effect;

(b)  Each Party shall retain any and all rights, claims or causes of action in existence at the time of such termination that are based upon, or arose incidental to, a breach of any covenant, representation or warranty set forth in this Agreement;

(c) In the case of termination by Buyer pursuant to Section 9.1(b) related to a condition of Buyer's obligation to consummate the transaction set forth in Section 6.7 (Financing), Buyer shall pay One Hundred and Fifty Thousand Dollars ($150,000) (the "Reverse Break-Up Termination Transaction Fee") to Seller by wire transfer of immediately available funds within two (2) Business Days of Seller designating to Buyer in writing the account into which to deposit such amount; provided, however, Buyer shall only be obligated to pay the Reverse Break-Up Termination Transaction Fee if Seller is not in material breach of its obligations under this Agreement at such time; and 

(d) In the case of termination by Seller pursuant to Section 9.1(d), Buyer shall pay the Reverse Break-Up Termination Transaction Fee to Seller by wire transfer of immediately available funds within two (2) Business Days of Seller designating to Buyer in writing the account into which to deposit such amount; provided, however, Buyer shall only be obligated to pay the Reverse Break-Up Termination Transaction Fee if Seller is not in material breach of its obligations under this Agreement at such time.

Section 10.1

Survival

(a) Survival Period.  The representations, warranties and covenants of the Parties made in this Agreement shall survive the Closing as follows (with respect to each, such period of survival is the "Survival Period"):

(i)

The representations and warranties of Seller set forth in Section 4.1 (Organization; Qualifications) (first sentence only), Section 4.2 (Power and Actions; Execution, Delivery and Enforceability), Section 4.4 (No Brokers), Section 4.9(a) (Title), and Section 4.12 (Taxes) (collectively, the "Fundamental Representations"), shall survive until sixty (60) days after the expiration of the applicable statute of limitations, and the Parties hereby agree, pursuant to Section 8106(c) of Title 10 of the Delaware Code, that the statute of limitations for claims related to Fundamental Representations shall be ten (10) years;

(ii)	all other representations and warranties made in this Agreement shall survive until September 30, 2018; and

(iii)

the covenants and agreements in this Agreement shall survive until the expiration of the applicable statute of limitations.

(b) Indemnity Claim Notices.  Notwithstanding the foregoing, any claims asserted by means of an Indemnity Claim Notice prior to the expiration date of the applicable Survival Period shall not thereafter be barred by the expiration of the Survival Period, and such claims shall survive until finally resolved.

(c) Contractual Statute of Limitations.  For the avoidance of doubt, the Parties hereby agree and acknowledge that the Survival Period is a contractual statute of limitations and any claim brought pursuant to this Article 10 must be brought or filed prior to the expiration of the Survival Period.

Section 10.2

Indemnification

(a) By Seller.  Subject to the other terms and conditions of this Article 10, Seller agrees to indemnify and hold harmless Buyer, its Affiliates, and its and their respective officers and directors (collectively, the "Buyer-Side Indemnified Persons"), from and against, and pay or reimburse the Buyer-Side Indemnified Persons for, any Losses to the extent arising out of:

(i)	any breach of a representation or warranty made by Seller in Article 4 of this Agreement or any Closing Date Transaction Agreement;

(ii)	any breach of a covenant made by Seller in this Agreement or any Closing Date Transaction Agreement;

(iii)

any Excluded Liability;

(iv)	Seller's termination of the Seller Employees prior to Closing (other than in connection with the transactions contemplated hereby);

(v)	Taxes of Seller;

(vi)	any noncompliance by Seller with any Laws relating to bulk sales or fraudulent transfers with respect to the transactions contemplated hereby;

(vii)

Buyer's insurance deductible (up to $15,000 per occurrence) related to insurance claims first brought by Buyer during the five (5) year period following the Closing related to any matter covered by Section 2.3(f); or

(viii)

fifty percent (50%) of the expenses of any Certain Remedial Action, up to $75,000 in the aggregate.

(b) By Buyer.  Subject to the other terms and conditions of this Article 10, Buyer agrees to indemnify and hold harmless Seller, its Affiliates and its and their respective officers and directors (collectively, the "Seller-Side Indemnified Persons"), from and against, and pay or reimburse the Seller-Side Indemnified Persons for, any Losses to the extent arising out of:

(i)	any breach of any representation or warranty made by Buyer in Article 5 of this Agreement or any Closing Date Transaction Agreement;

(ii)	any breach of a covenant made by Buyer in this Agreement or any Closing Date Transaction Agreement;

(iii)

any Assumed Liability; and

(iv)	any Taxes of Buyer.

(c) Indemnity Notices; Defense of Third-Party Claims.  All definitions and provisions regarding indemnity notices and procedures are set forth on Schedule 10.2(c)(ii).

(d) Limits on Liability.

(i)

Limits on Liability of Seller.  Except with respect to fraud by Seller, (X) Seller shall not be obligated to indemnify Buyer-Side Indemnified Persons for Losses described in Section 10.2(a)(i) unless and until such Losses collectively suffered or incurred by all Buyer-Side Indemnified Persons exceed Seventy-Five Thousand Dollars ($75,000) (the "Deductible"), in which event such indemnification obligations of Seller shall be for the amount of such Losses in excess of the amount of the Deductible, up to a maximum aggregate amount equal to Two Million Dollars ($2,000,000) (the "Cap") and (Y) the aggregate amount of all Losses described in Section 10.2(a) for which Seller shall be liable shall not exceed the Purchase Price.

(ii)

Limits on Liability of Buyer.  Except with respect to fraud by Buyer, (X) Buyer shall not be obligated to indemnify Seller-Side Indemnified Persons for Losses described in Section 10.2(b)(i), unless and until such Losses collectively suffered or incurred by all Seller-Side Indemnified Persons exceed the amount of the Deductible, in which event such indemnification obligations shall be for the amount of such Losses in excess of the amount of the Deductible, up to a maximum aggregate amount equal to the Cap and (Y) the aggregate amount of all Losses described in Section 10.2(b) for which Buyer shall be liable shall not exceed the Purchase Price.

(iii)

Materiality.  The Parties agree that qualifications as to materiality in any representation or warranty made by a Party under this Agreement (or any defined term therein) shall be taken into account in under Section 10.2(a)(i) or Section 10.2(b)(i) determining whether there has been a breach of such representation or warranty but not in calculating the amount of any related Losses.

(e) Sole Remedy.  Subject to Section 13.1(e), the Parties acknowledge and agree that their sole remedy with respect to any claims (other than claims arising from fraud on the part of a Party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty or covenant set forth herein or in any Closing Date Transaction Agreement or otherwise relating to the subject matter of this Agreement shall be pursuant to the indemnification provisions set forth in this Article 11.

(f) Tax Treatment.  Any indemnification payments made pursuant to this Article 11 shall be treated for all Tax purposes as an adjustment to the Purchase Price unless otherwise required by Law.

(g) Set-Off Against Holdback.  Upon final resolution of an indemnity claim, Buyer shall first set off any amount to which Buyer is entitled from Seller pursuant to Seller's indemnification obligations hereunder against any Holdback Fund then held by Buyer as a non-exclusive first source of recovery with respect to such indemnity obligations.  Such right of setoff will not be deemed a liability cap in the event amounts entitled to Buyer with respect to such indemnity obligations exceed the then existing Holdback Fund.

Section 10.3

Insurance Proceeds

Section 11.1

Publicity

Section 11.2

Limited Trademark License

Section 11.3

Accounts Receivable

Section 11.4

Seller Employee Matters

(a) Potential Transferred Employees.  Buyer shall make offers of employment, on an at-will basis, to the Seller Employees described on Schedule 11.4(a) effective as of the Closing (such Seller Employees who accept the terms and conditions of such offer and who are employed by Buyer are the "Transferred Employees").  The Parties acknowledge that Buyer may elect to require any potential Transferred Employee to execute a restrictive covenant agreement as a condition of employment with Buyer.

(b) Buyer 2017-18 Benefits Package for Transferred Employees.  Each such offer of employment by Buyer to a potential Transferred Employee shall reflect the overall package of employee benefits set forth on Schedule 11.4(b) which will apply to each Transferred Employee from the date of acceptance of such offer until the earlier of (i) such Transferred Employee's termination of employment with Buyer, and (ii) December 31, 2018.  David Hausmann is not a Transferred Employee.  The terms and conditions of his offer of employment by Buyer, including compensation and any related benefits, are set forth in the Employment Agreement.

(c) The CBA.  Buyer acknowledges that certain of the potential Transferred Employees are subject to the CBA, which will be an Assigned Contract under this Agreement.

(d) Termination of Employment as of Closing.  Seller agrees to terminate the employment of the Seller Employees and David Hausmann effective as of the Closing.

(e) 401(k).  Effective upon the Closing, Buyer shall assume and become the sponsor, plan administrator and named fiduciary of Seller 401(k) Plan.  After the Closing, Buyer shall amend the Seller 401(k) Plan to substitute Buyer for Seller as sponsor of the Plan.  From and after the Closing, Seller shall have no liability or responsibility with respect to Seller 401(k) Plan, all such liabilities and obligations being assumed by Buyer upon the Closing.  Without limitation of the foregoing, Buyer shall have sole responsibility for making any filings with respect to the Seller 401(k) Plan the due date of which is after the Closing.

(f) Credit for Prior Service.  (i) Buyer shall credit each Transferred Employee (and David Hausmann) for all service with Seller prior to the Closing for purposes of eligibility and vesting under all employee benefit plans, programs, policies, and fringe benefits of Buyer, (ii) with respect to any medical, dental and/or vision benefit plan of Buyer in which Transferred Employees (and/or David Hausmann) participate after the Closing, Buyer shall (x) waive or cause to be waived any pre-existing condition exclusions and actively-at-work requirements, and (y) give full credit to each such individual for all co-payments and deductibles made by such individual and for his or her dependents prior to the Closing in the same plan year as the Closing, and (iii) notwithstanding anything contained herein to the contrary, Buyer shall cause the Transferred Employee's (and David Hausmann's) date of hire by Buyer to be a special entry date under each employee benefit plan, program, policy, and fringe benefit of Buyer for each Transferred Employee (including David Hausmann) who had satisfied the eligibility requirements of a comparable plan, program, policy, or fringe benefit of Seller immediately prior to the Closing. Seller's health insurance arrangement under its union plan is not a plan "of Buyer" for purposes of this Section 11.4(f).  Buyer shall credit each Transferred Employee (and David Hausmann) with the number of accrued unused vacation and/or paid time off days he or she had with Seller as of the Closing, and shall permit such individuals to use such days on terms no less favorable than in effect under Seller's vacation and/or paid time off days policy in effect immediately prior to the Closing until December 31, 2018.

(g) COBRA.  Buyer acknowledges that the Seller does not intend to continue its group health plan following the Closing.  Accordingly, Buyer agrees that it shall be treated as a "successor employer" (as defined in Treas. Reg. §54.4980B-9, Q&A-8(c)(1)) to the Seller with respect to the Seller's obligations to provide and/or offer continued health coverage in accordance with Sections 601 et seq. of ERISA and Section 4980B of the Code (hereinafter referred to as "COBRA Coverage") to "M&A Qualified Beneficiaries" (as defined in Treas. Reg. §54.4980B-9, Q&A-4(a) and (b)) who have timely elected COBRA Coverage or are eligible to elect COBRA Coverage as a result of a "qualifying event" (as defined under Section 603 of ERISA) occurring on or prior to the Closing.("Specified COBRA Coverage Liabilities").

(h) Consent to Employment and Use of Business Opportunities.  Seller hereby (i) consents to the employment of the Transferred Employees by Buyer, and agrees that Transferred Employees are permitted to direct all business opportunities that they develop with respect to the Business to Buyer, regardless of whether such business opportunities are developed by the Transferred Employees based on information or relationships he or she possessed while employed by Seller and regardless of whether any such information or relationships constituted or was considered confidential or proprietary information of Seller, (ii) agrees that neither Seller nor any Affiliate thereof will have or acquire or be entitled to any interest or expectancy or participation (such right to any interest, expectancy or participation, if any, being hereby renounced and waived) in any business opportunity as a result of the involvement therein of the Transferred Employees or the use of any such information or relationships in developing the business opportunity, (iii) agrees that the involvement of the Transferred Employees in any business opportunity, or the use of any such information or relationships in developing any business opportunity, will not constitute a breach of any fiduciary duty or other legal obligation owed by the Transferred Employees to Seller or its Affiliates, and (iv) agrees that the terms of any restrictive covenant agreements between the Transferred Employees and Seller or its Affiliates shall not prevent any of Buyer or its subsidiaries, Affiliates or employees (including the Transferred Employees), agents, independent contractors or other representatives from soliciting, communicating with, accepting business from, servicing or otherwise dealing with any of the customers of Seller with respect to the Business.

(i) Employees are Not Third-Party Beneficiaries.  The provisions of this Agreement are for the benefit of the Parties hereto, and no employee of Seller or Buyer shall have any rights hereunder.  Nothing herein expressed or implied shall be deemed an amendment of any employee benefit plan or otherwise confer upon any employee of Seller or Buyer, or any legal representatives or beneficiaries thereof, any rights or remedies, including any right to employment or continued employment for any specified period or to be covered under or by any employee benefit plan or arrangement, or shall cause the employment status of any employee to be other than terminable at-will.

(j) Seller FSA.  From and after the Closing, the Buyer shall provide a flexible spending account plan for the Transferred Employees.  Seller shall transfer to Buyer an amount equal to the excess (if any) of the aggregate accumulated contributions to the flexible spending reimbursement accounts under the Seller FSA Plan made during 2017 to the Closing by Transferred Employees over the aggregate reimbursement payments made during 2017 to the date Closing from such accounts to such Transferred Employees.  Buyer shall cause such amounts to be credited to each Transferred Employee's respective flexible spending account under Buyer's flexible spending plan.  Immediately after the Closing, Buyer shall assume and be solely responsible for all claims for reimbursement by Transferred Employees with respect to such Transferred Employee's respective 2017 flexible spending account, whether incurred prior to, on or after the Closing, which claims shall be paid pursuant to Buyer's flexible spending plan.  Buyer shall cause its flexible spending plan to honor and continue through December 31, 2017 the elections made by each Transferred Employee under the Sellers' flexible spending plan for the plan year ending December 31, 2017 and that were in effect immediately prior to the Closing. To the extent, if any, that the aggregate reimbursement payments made by Seller during 2017 to the Closing Date from such accounts to such Transferred Employees exceeds the aggregate accumulated contributions to the flexible spending reimbursement accounts, Buyer shall reimburse Seller for such excess within ninety (90) days following the Closing.

(k) Seller HRA.  From and after the Closing, the Buyer shall provide a health reimbursement account plan for the Transferred Employees.  Seller shall transfer to Buyer an amount equal to the excess (if any) of the aggregate accumulated contributions to the health reimbursement accounts under the Seller HRA Plan made during 2017 to the Closing by Transferred Employees over the aggregate reimbursement payments made during 2017 to the date Closing from such accounts to such Transferred Employees.  Buyer shall cause such amounts to be credited to each Transferred Employee's respective health reimbursement account under Buyer's health reimbursement account plan.  Immediately after the Closing, Buyer shall assume and be solely responsible for all claims for reimbursement by Transferred Employees with respect to such Transferred Employee's respective 2017 health reimbursement account, whether incurred prior to, on or after the Closing, which claims shall be paid pursuant to Buyer's health reimbursement account plan.  Buyer shall cause its health reimbursement account plan to honor and continue through December 31, 2017 the elections made by each Transferred Employee under the Sellers' health reimbursement account plan for the plan year ending December 31, 2017 and that were in effect immediately prior to the Closing.

Section 11.5

Preservation of Certain Seller Books and Records

Section 11.6

Notices Regarding Assumed Liabilities

Section 11.7

Certain Contributions

(a) For 2016.  Buyer agrees that on or prior to July 31, 2017, Two Hundred Sixty Eight Thousand Dollars ($268,000) shall be paid into the Seller 401(k) Plan by Buyer for the benefit of the Transferred Employees.

(b) For 2017.  Buyer agrees that on or prior to July 31, 2018, One Hundred and Ten Thousand Dollars ($110,000) shall be paid into the Seller 401(k) Plan by Buyer for the benefit of the Transferred Employees, along with an additional amount for 2017 that, when taken together with such $110,000, is consistent with Seller's historical practices based on the profitability of the business for 2017 (without taking into account, in determining such profitability, any transaction expenses or integration costs in connection with the transactions contemplated by this Agreement).

(c) For 2018.  Buyer agrees that on or prior to July 31, 2019, an amount that is consistent with Seller's historical practices based on the profitability of the business for 2018 shall be paid into the Seller 401(k) Plan by Buyer for the benefit of the Transferred Employees (without taking into account, in determining such profitability, any transaction expenses or integration costs in connection with the transactions contemplated by this Agreement).

Section 11.8

Environmental Filings

Section 11.9

Product Liability Insurance

Section 11.10

Restrictive Covenants

Section 12.1

Transfer Taxes

Section 12.2

Expenses

Section 13.1

General Provisions

(a) Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns.  No Party may assign its rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, however, Buyer may, without the prior written consent of Seller, assign all or any portion of its rights under this Agreement to one or more of its wholly-owned subsidiaries. No assignment shall relieve the assigning Party of any of its obligations hereunder. 

(b) No Third-Party Beneficiaries.  This Agreement shall be binding upon and inure to the benefit of the Parties, and, except for the Indemnified Persons, no other Person shall have any right, benefits, remedies or obligation under this Agreement, as a third-party beneficiary or otherwise.

(c) Notices.  All notices and other communications that are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given:  (i) when received if personally delivered or sent by certified or registered mail, return receipt requested; or (ii) the Business Day after being sent, if sent for next-day delivery by an overnight delivery service.  In each case notice shall be sent to the following address or to such other place as a Party may designate as to itself by notice hereunder:

(d) Choice of Law; Jurisdiction; Waiver of Jury Trial.  This Agreement shall be construed, governed and interpreted in accordance with the Laws of the State of Delaware, without regard to conflicts of laws principles.  Each Party irrevocably and unconditionally: (i) agrees and consents, with respect to any dispute arising out of or relating to this Agreement, to be subject to the exclusive jurisdiction of the Chancery Court in the State of Delaware; (ii) waives any objection to such venue and (iii) waives trial by jury in any Proceeding relating to this Agreement or the transactions contemplated hereby. 

(e) Enforcement of Agreement.  The Parties acknowledge and agree that breaches of this Agreement could cause irreparable harm, which may not be adequately compensated by monetary damages alone.  Accordingly, the Parties agree that, in addition to any other right or remedy to which a Party may be entitled at law or in equity, the Parties shall be entitled to seek injunctive or other equitable relief, including specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

(f) Entire Agreement.  This Agreement, together with all schedules hereto, and any Transaction Agreement having the same Parties, constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, representations, warranties, negotiations and discussions, whether oral or written, including the Letter of Intent dated August 9, 2016 between Buyer and Seller and the Non-disclosure Agreement.

(g) Amendments and Waivers.  No amendment, supplement or waiver of this Agreement shall be binding unless executed in writing by the Party to be bound thereby.  No waiver of any provision of this Agreement shall constitute a waiver of any other provision hereof, nor shall any such waiver constitute a continuing waiver unless expressly so provided therein.

(h) Counterparts; Electronic Transmission.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  A manual signature on a counterpart of this Agreement or of any other document to be delivered pursuant to this Agreement, an image of which has been transmitted electronically, will constitute an original signature for all purposes, and electronic transmission of such signature will constitute effective delivery of this Agreement or any such document for all purposes.

(i) Severability; Judicial Modification.  If any provision contained in this Agreement shall be held to be invalid or unenforceable in any respect, then, to the maximum extent permitted by Law, such invalidity or unenforceability shall not affect any other provision of this Agreement.  Should any provision of this Agreement be deemed to be too broad in scope to permit enforcement to its full extent, then it shall be enforced to the maximum extent permitted by Law, and the Parties agree that such scope may be judicially modified to the extent necessary to make it enforceable.

(j) Cumulative Remedies.  Except as otherwise specifically provided in this Agreement, all rights and remedies of any Party are cumulative of each other and of every other right or remedy such Party may otherwise have at Law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies.

(k) Investigation.  The representations, warranties, covenants and agreements contained herein, and the rights of indemnification hereunder with respect thereto, shall not be affected by any investigation conducted, or knowledge acquired or deemed acquired, by or on behalf of any Party.

(l) Incorporation of Schedules and Attachments.  Any schedules or other attachments that are attached to this Agreement are a part of this Agreement and are incorporated herein by reference.

(m) Further Assurances.  Following the Closing, each of the Parties hereto shall, and shall cause their respective stockholders to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the Transaction Agreements.