Stock Purchase Agreement, dated as of March 3, 2025, by and among Willdan Group, Inc., Willdan Energy Solutions, Inc. and each of the stockholders of APG
Exhibit 2.1
EXECUTION VERSION
CERTAIN IDENTIFIED INFORMATION MARKED BY [REDACTED] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE COMPANY CUSTOMARILY TREATS AS PRIVATE OR CONFIDENTIAL.
STOCK PURCHASE AGREEMENT
among
WILLDAN ENERGY SOLUTIONS
and
WILLDAN GROUP, INC.
and
[REDACTED],
[REDACTED],
[REDACTED]
and
[REDACTED]
Dated as of March 3, 2025
TABLE OF CONTENTS
Page
i
EXECUTION VERSION
ii
EXECUTION VERSION
iii
EXECUTION VERSION
SCHEDULE INDEX
Schedule 3.1Organization; Good Standing
Schedule 3.3Shares
Schedule 3.4(a)Conflicts
Schedule 3.4(b)Government Filings
Schedule 3.5(a)Leased Real Property
Schedule 3.5(c)Liens on Real Property
Schedule 3.6Title to Assets
Schedule 3.7Financial Statements
Schedule 3.8Receivables
Schedule 3.9(d)Withholding of Taxes
Schedule 3.9 (e)Matters Relating to Tax Periods
Schedule 3.9(i)Tax Deficiency
Schedule 3.9(l)Affiliated Group Tax Returns
Schedule 3.10Liabilities
Schedule 3.11Absence of Changes
Schedule 3.12Legal Proceedings
Schedule 3.13Compliance with Laws
Schedule 3.14(a)Contracts
Schedule 3.14(c)Contract Exceptions
Schedule 3.14(c)(vi)Contract Overruns
Schedule 3.14(d)Government Contracts
Schedule 3.15(a)Employee Benefit Plans
Schedule 3.15(b)Amendments to Employee Benefit Plans
Schedule 3.15(c)Employee Benefit Plan subject to Title IV or the Code
Schedule 3.15(d)Multi-Employer Plans
Schedule 3.15(g)Employee Benefit Plan Compliance with Law
Schedule 3.15(i)Prohibited Transactions
Schedule 3.15(n)Change of Control Payments
Schedule 3.15(t)Employees Absent from Active Employment
Schedule 3.15(u)COBRA Elections
Schedule 3.16(a)Labor Relations
Schedule 3.16(b)Terminating Employees
Schedule 3.17Employees and Contractors
Schedule 3.18(b)Insurance Policies
Schedule 3.18(c)Bonds
Schedule 3.19(a)Compliance with Environmental Laws
Schedule 3.19(d)Health and Safety and Environmental Events
Schedule 3.20Transactions with Affiliates
Schedule 3.21(a)Customers and Vendors
Schedule 3.22Product and Service Warranties
Schedule 3.23(a)Company Registered Intellectual Property
Schedule 3.23(e)Works of Original Authorship
Schedule 3.24(a)Company Proprietary Software and Company Licensed Software
Schedule 3.24(d)Source Code for Company Proprietary Software
Schedule 3.25Licenses
iv
EXECUTION VERSION
Schedule 3.26Bank Accounts and Powers of Attorney
Schedule 3.27Accounting Records
Schedule 3.28Brokers, Finders and Investment Bankers
v
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EXHIBIT INDEX
Exhibit A – Credit As Adjustment To Earn-Out Agreement
Exhibit B – TNAV Sample Calculation
Exhibit 7.2(d)(2) – Form of Non-Competition Agreement for [REDACTED], [REDACTED], [REDACTED] and [REDACTED]
EXECUTION VERSION
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of March 3, 2025, is made and entered into by and among Willdan Energy Solutions, a California corporation (the “Purchaser”), a subsidiary of Willdan Group, Inc., a Delaware corporation (“Willdan”), each of the holders of shares identified as such on the signature pages to this Agreement (the “Sellers”) of Alternative Power Generation, Inc., an Illinois corporation (the “Company”), and [REDACTED], as Seller Representative (as defined in Section 9.14). The Purchaser, the Sellers and the Seller Representative are sometimes individually referred to herein as a “Party” and collectively as the “Parties.”
W I T N E S S E T H:
WHEREAS, the Sellers own, in the aggregate, all of the outstanding shares in the Company, consisting of 1,000 shares of common stock, no par value (the “Shares”);
WHEREAS, the Purchaser desires to acquire from the Sellers, and the Sellers desire to sell to the Purchaser, all of the Shares, on the terms and subject to the conditions set forth in this Agreement (the “Acquisition”), so that the Purchaser will become the owner of all of the Shares as of the Closing Date (as defined below); and
WHEREAS, the Parties desire to make and agree to certain representations, warranties, covenants and agreements in connection with the Acquisition, as set forth more fully herein.
WHEREAS, the Company is a “S” corporation under the Code.
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereby agree as follows:
DEFINITIONS; CONSTRUCTION
“Affiliate” of any specified Person means any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such specified Person.
“Balance Sheet” has the meaning set forth in Section 3.7.
“Balance Sheet Date” has the meaning set forth in Section 3.7.
“Books and Records” means any books, records, files, research and production records, customer files, customer lists, customer product specifications, customer purchasing histories, distributor files, vendor files, vendor lists, advertising and marketing materials, sales materials, budgets, forecasts, ledgers, journals, reports, technical information, databases, or documents,
EXECUTION VERSION
information and files of any kind, regardless of whether any of the foregoing are stored or maintained in traditional paper format, by means of electronic, optical or magnetic media or devices, photographic or video images, or any other format or media.
“Business” means the business of the Company in providing data centers, renewable and microgrid partners with design, engineer, construct, install and interconnect progressive, customized electric power solutions.
“Business Day” means any day except Saturday, Sunday or any day on which banks are generally not open for business in the city of Anaheim, California.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq., any amendments thereto, any successor statutes and any regulations promulgated thereunder.
“Claims Period” means the period during which a claim for indemnification may be asserted hereunder by any Indemnified Party.
“Closing” means the consummation of the transactions contemplated by Article II of this Agreement.
“Closing Date” means the date on which the Closing occurs.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Company Ancillary Documents” means any certificate, agreement, document or other instrument, other than this Agreement, to be executed and delivered by the Company or the Sellers at Closing in connection with the transactions contemplated hereby.
“Company Intellectual Property” means any Intellectual Property that is owned by or licensed to the Company, including the Company Software.
“Company Licensed Software” means all Software (other than Company Proprietary Software) licensed to and used by the Company.
“Company Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate, has had a material adverse effect on the assets, Liabilities, properties, operations, Business, or financial condition of the Company, considered as a whole; provided, however, that no facts, circumstances, events, changes, effects or occurrences resulting from, relating to or arising out of the following shall be deemed to be or constitute a Company Material Adverse Effect or shall be taken into account when determining whether there has, may, would or could have occurred a Company Material Adverse Effect: (a) the effect of any change generally affecting the industries in which the Company operates as of the date hereof (including general pricing changes), (b) the effect of any change in the economy or the financial or securities markets in the United States or elsewhere in the world, (c) the effect of any outbreak or escalation of hostilities, declared or undeclared acts of war, sabotage or terrorism, (d) any change in Laws or accounting rules or principles, or (e) the execution and delivery of this Agreement or the announcement and performance hereunder (including any cancellations or delays in contract awards any impact on relationships with customers, subcontractors, suppliers or
EXECUTION VERSION
employees), except in the cases of clauses (a), (b) or (c), to the extent the effect of any such changes disproportionately and materially impact the operations, Business or financial condition of the Company, considered as a whole, relative to other participants in the industry in which the Company operates.
“Company Proprietary Software” means all Software owned by the Company.
“Company Registered Intellectual Property” means all Registered Intellectual Property owned by or filed in the name of the Company.
“Company Software” means either the Company Licensed Software or the Company Proprietary Software.
“Contract” means any written or oral contract, agreement, arrangement, commitment, license, lease, easement, right of way, guaranty, distribution agreement, product swap agreement, customer contract, sales contract, supply agreement, or any other contract, agreement or arrangement of any kind, including all transferable rights under warranties and guarantees, express or implied, contained therein.
“Control” means, when used with respect to any specified Person, the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. The terms “Controlling” and “Controlled” have correlative meanings.
“Customers” means all of the customers of the Company.
“Damages” means any damage, loss, Liability, assessment, levy, fine, charge, claim, demand, action, suit, proceeding, payment, judgment, settlement, penalty, cost or expense, including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection therewith.
“Deferred Revenue” means consideration received or receivable from a Customer before the performance obligations have been satisfied by the entity, and calculated in a manner consistent with GAAP.
“Disclosure Schedule” means the disclosure schedules delivered by the Sellers in accordance with Article III and Article IV.
“Employment Agreements” means any employment contract, consulting agreement, termination or severance agreement, change of control agreement, non-compete agreement, non-solicitation agreement, or any other agreement or understanding (written or oral) between the Company and one or more other parties respecting the terms and conditions of employment or payment of compensation, or of a consulting or independent contractor relationship, in respect of any current or former officer, employee, consultant or independent contractor who is one of the parties to such agreement.
“Employment Laws” means all Laws in effect at or prior to Closing relating to employees and independent contractors and their employment, or rendition of services, including but not limited to health, labor, labor/management relations, occupational health and safety, pay equity,
EXECUTION VERSION
equal opportunity, discrimination, immigration, employment standards, benefits, workers’ compensation, wages, hours, collective bargaining, and the payment of social security and similar Taxes.
“Environmental Claims” means any complaint, summons, citation, notice, directive, Order, ruling, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication from any Governmental Entity or any third party involving actual, potential or alleged violations of or liability under Environmental Laws or Releases of Hazardous Substances, and any information request from a Governmental Entity issued pursuant to any Environmental Law.
“Environmental Law” means any Law relating to the regulation or protection of human health, safety or the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including without limitation, ambient air, soil, surface water, ground water, wetlands, land or subsurface strata), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or Hazardous Substances (including without limitation, CERCLA, RCRA, and rule or regulation promulgated by the United States Occupational Safety and Health Administration and equivalent or similar state, local or foreign law).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and all rules and regulations promulgated thereunder.
“Financial Statements” has the meaning set forth in Section 3.7.
“Foreign Official” means any officer or employee of a foreign government or any department, agency or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality, or for or on behalf of any such public international organization, or any political party or official thereof, or any candidate for political or political party office.
“Fraud” means actual and intentional fraud by the Sellers or the Purchaser, as applicable, in making the representations and warranties in Article II, Article III or Article IV of this Agreement (as applicable). For the avoidance of doubt, the definition of “Fraud” in this Agreement is limited to actual and intentional fraud and does not include, and no claim may be made by any Person in relation to this Agreement or the transactions contemplated hereby against any Person other than a Party to this Agreement or for (i) constructive fraud or other claims based on constructive knowledge or (ii) negligent misrepresentation, equitable fraud or any other fraud based claim or theory that requires something less than actual knowledge of the fraudulent conduct and fraudulent intent.
“GAAP” means generally accepted accounting principles as applied in the United States of America as consistently applied by the Company, where the Company’s practice do not conflict with GAAP.
“Government Bid” means any bid that if accepted or awarded would result in a contract or agreement with (a) any Governmental Entity, (b) any prime contractor to any Governmental Entity
EXECUTION VERSION
in its capacity as a prime contractor, or (c) any subcontractor with respect to any contract of the type described in clauses (a) and (b) above.
“Government Contract” means any contract or agreement between the Company and (a) any Governmental Entity, (b) any prime contractor to any Governmental Entity in its capacity as a prime contractor, or (c) any subcontractor with respect to any contract of the type described in clauses (a) and (b) above.
“Governmental Entity” means any federal, state or local or foreign government, any political subdivision thereof or any court, administrative or regulatory agency, department, instrumentality, body or commission or other governmental authority or agency, domestic or foreign.
“Hazardous Substances” means any wastes, substances, radiation, or materials (whether solids, liquids or gases): (a) which are hazardous, toxic, infectious, explosive, radioactive, carcinogenic, or mutagenic pursuant to any Environmental Law; (b) which are or become defined as “pollutants,” “contaminants,” “hazardous materials,” “hazardous wastes,” “hazardous substances,” “toxic substances,” “radioactive materials,” “solid wastes,” or other similar designations in, or otherwise subject to regulation under, any Environmental Law; (c) the presence of which on, under or emanating from the Leased Real Property would be subject to applicable statutory or common laws; (d) which contain, without limitation, polychlorinated biphenyls (PCBs), mold, methyl-tertiary butyl ether (MTBE), asbestos or asbestos-containing materials, lead-based paints, urea-formaldehyde foam insulation, or petroleum or petroleum products (including crude oil or any fraction thereof); or (e) which have been deemed to pose a hazard to human health, safety, natural resources, employees or the environment under any Environmental Law.
“Holdback Amount” has the meaning set forth in Section 2.2(a).
“Indebtedness” means, without duplication, the sum of (a) all obligations of the Company for borrowed money or issued in substitution for or exchange of indebtedness for borrowed money, including intercompany and shareholder indebtedness; (b) other indebtedness of the Company evidenced by notes, bonds, debentures or other debt securities; (c) indebtedness of the types described in clauses (a) and (b) guaranteed, directly or indirectly, in any manner by the Company through an agreement, contingent or otherwise, to supply funds to, or in any other manner invest in, the debtor, or to purchase indebtedness, primarily for the purpose of enabling the debtor to make payment of the indebtedness or to insure the owners of indebtedness against loss; (d) indebtedness for the deferred purchase price of property or services with respect to which the Company is liable, contingently or otherwise, other than ordinary course trade payables; (e) all obligations of the Company as lessee or lessees under capital leases; (f) all payment obligations under any interest rate swap agreements or interest rate hedge agreements to which the Company is party or by which the Company is otherwise bound; (g) any interest owed with respect to the indebtedness referred to above and prepayment premiums or fees related thereto; (h) all obligations under or evidenced by any letter of credit, banker’s acceptance, guarantee, surety, bonds (including a performance bond, bid bond or appeal bond) or similar credit transaction or debt security; and (i) any income tax liability associated with the related Deferred Revenue or other cash-to-accrual deferred tax liabilities.
EXECUTION VERSION
“Indefinite Purchaser Claims” means any claim by the Purchaser under Article VIII hereof for Purchaser Losses arising out of or relating to (a) a breach or inaccuracy of any representation or warranty contained in the first sentence in Section 3.1 (Organization), Section 3.2 (Authorization), Section 3.3 (Shares), Section 4.1 (Authorization), or Section 4.3 (Ownership of Shares), or (b) Fraud.
“Indefinite Seller Claims” means any claim by the Sellers under Article VIII hereof for Seller Losses arising out of or relating to (a) a breach or inaccuracy or any representation and warranty contained in Section 5.1 (Organization) or Section 5.2 (Authorization), or (b) Fraud.
“Intellectual Property” means all intellectual property rights of the Company, including: (a) all United States and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof; (b) all inventions (whether patentable or not), invention disclosures, improvements, mask works, trade secrets, manufacturing processes, test and qualification processes, designs, drawings, schematics, proprietary information, know-how, technology, technical data and customer lists, and all documentation to the extent embodying any of the foregoing throughout the world; (c) all works of authorship (whether copyrightable or not), copyrights, copyright registrations and applications therefor throughout the world; (d) all industrial designs and any registrations and applications therefor throughout the world; (e) all Software; (f) all internet uniform resource locators, domain names, trade names, logos, slogans, designs, trade dress, common law trademarks and service marks, trademark and service mark and trade dress registrations and applications therefor throughout the world; (g) all databases and data collections and all rights therein throughout the world.
“Interim Balance Sheet” has the meaning set forth in Section 3.7.
“Interim Balance Sheet Date” has the meaning set forth in Section 3.7.
“Interim Financial Statements” has the meaning set forth in Section 3.7.
“IRS” means the United States Internal Revenue Service.
“Knowledge of the Sellers” or “Knowledge” means a prudent Seller would be reasonably likely to discover or otherwise become aware of the fact or matter following reasonable inquiry regarding the accuracy of any representation or warranty contained in this Agreement.
“Laws” means all statutes, rules, codes, regulations, restrictions, ordinances, Orders, rulings (including common law rulings), approvals, or awards issued by any Governmental Entity.
“Leased Real Property” means those parcels of real property or portions thereof of which the Company is the lessee (together with those fixtures or improvements thereon that are included in the terms of the leases therefor).
“Liability” or “Liabilities” means any and all debts, liabilities, commitments, obligations, duties or responsibilities of any kind and description, whether absolute or contingent, accrued or fixed, monetary or non-monetary, direct or indirect, known or unknown, or matured or unmatured, or of any other nature.
EXECUTION VERSION
“Licenses” means all notifications, licenses, permits, franchises, certificates, approvals, exemptions, classifications, registrations and other similar documents and authorizations issued by any Governmental Entity, and applications therefor.
“Liens” means all mortgages, liens, pledges, security interests, charges, claims, and encumbrances of any nature whatsoever.
“Litigation” means any litigation, legal action, arbitration, mediation, administrative or judicial proceeding, demand, or claim pending or, to the Knowledge of the Sellers, threatened, or, to the Knowledge of the Sellers, any investigation pending or threatened, against, affecting or brought by or against the Company, or any of the Company’s (i) assets or properties or (ii) present or former officers, directors, managers, employees or independent contractors, in each case in their capacities as such, in any jurisdiction, foreign or domestic.
“Maximum Earnout” has the meaning set forth in Section 2.5.
“Order” means any order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction, or other similar determination or finding by, before or under the supervision of any Governmental Entity, arbitrator or mediator.
“Ordinary Course” means the ordinary course of business consistent with past practice of the Company.
“Permitted Liens” means (a) Liens for Taxes not yet due and payable or being contested in good faith, (b) Liens of landlords with respect to Leased Real Property, (c) Liens of carriers, warehousemen, mechanics, materialmen and repairmen incurred in the Ordinary Course and not yet delinquent, and (d) in the case of Leased Real Property, in addition to items (a), (b) and (c), zoning, building, or other restrictions, variances, covenants, rights of way, encumbrances, easements and other minor irregularities in title, none of which, individually or in the aggregate, interfere in any material respect with the present use of or occupancy of the affected parcel by the Company.
“Person” means, any individual, corporation, partnership, joint venture, limited liability company, trust, unincorporated organization or association or other similar entity, Governmental Entity or other legal entity.
“Purchaser Ancillary Documents” means any certificate, agreement, document or other instrument, other than this Agreement, to be executed and delivered by the Purchaser at Closing in connection with the transactions contemplated hereby.
“Purchaser Indemnified Parties” means the Purchaser and its Affiliates (which following the Closing, shall include the Company) and each of their respective officers and directors, and each of the successors and assigns of any of the foregoing.
“Purchaser Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate, has had or has a material adverse effect on (i) the assets, Liabilities, properties, operations, business or financial condition of the Purchaser or (ii) Purchaser’s ability to consummate the transactions contemplated by this Agreement and to
EXECUTION VERSION
perform its obligations hereunder (including, without limitation, its obligations under Section 2.5 hereof); provided, however, that no facts, circumstances, events, changes, effects or occurrences resulting from, relating to or arising out of the following shall be deemed to be or constitute a Purchaser Material Adverse Effect or shall be taken into account when determining whether there has, may, would or could have occurred a Purchaser Material Adverse Effect: (a) the effect of any change generally affecting the industries in which the Purchaser operate as of the date hereof (including general pricing changes), (b) the effect of any change in the economy or the financial or securities markets in the United States or elsewhere in the world, (c) the effect of any outbreak or escalation of hostilities, declared or undeclared acts of war, sabotage or terrorism, or (d) any change in Laws or accounting rules or principles, except in the cases of clauses (a), (b) or (c), to the extent the effect of any such changes disproportionately and materially impact the operations, business or financial condition of the Purchaser relative to other participants in the industries in which the Purchaser operates.
“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., and any successor statute, and any regulations promulgated thereunder.
“Registered Intellectual Property” means all United States and foreign: (a) patents and patent applications (including provisional applications); (b) registered trademarks and service marks, applications to register trademarks and service marks, registered and applications to register trade dress, intent-to-use trademark or service mark applications, or other registrations or applications for trademarks and service marks and trade dress; (c) registered copyrights and applications for copyright registration; and (d) domain name registrations.
“Release” means the presence, release, spill, emission, leaking, pulping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Hazardous Substances through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, and any exposure to Hazardous Substances.
“Representative” means, with respect to any Person, such Person’s equity holders, directors, members, managers, officers, employees, agents, consultants or Persons acting in a similar capacity.
“Section 338(h)(10) Elections” has the meaning specified in Section 6.3(d)(i).
“Seller Indemnified Parties” means the Sellers and any of their respective heirs, executors, members, successors and assigns.
“Senior Creditor” means a syndicate of financial institutions with BMO Harris Bank N.A. as the administrative agent under the Senior Financing Agreement, together with its successors and assigns.
“Senior Event of Default” means an “Event of Default” as defined in the Senior Financing Agreement.
“Senior Financing Agreement” means that certain Credit Agreement dated as September 29, 2023, among Willdan Group, Inc., as the Borrower, Purchaser as a Guarantor, the other guarantors and loan parties thereunder, and a syndicate of BMO Harris Bank N.A., as the
EXECUTION VERSION
administrative agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Software” means all computer software programs, together with any error corrections, updates, modifications or enhancements thereto, in both machine-readable form and human-readable form.
“SOL Purchaser Claims” means any claim by the Purchaser under Article VIII for Purchaser Losses arising out of or relating to a breach or inaccuracy of any representation or warranty contained in Section 3.9 (Tax Returns; Taxes) or Section 3.15 (Company Employee Benefit Plans).
“Tax” or “Taxes” means all federal, state, local and foreign taxes, assessments, charges, duties, fees, levies and other governmental charges, including income, franchise, stamp, capital stock, real property, personal property, withholding, employment, payroll, social security, social contribution, unemployment compensation, disability, transfer, sales, use, excise, gross receipts, value-added, premium, windfall profits, environmental, customs duty, profits, transaction, registration, alternative or add-on minimum and estimated taxes, composite taxes payable by the Company on behalf of shareholders, and all other taxes of any kind for which the Company has any liability imposed by any Governmental Entity, whether disputed or not, and any associated charges, interest, additions to tax, or penalties imposed by any Governmental Entity.
“Tax Return” means any report, return, declaration or other information return or other document (including schedules or any related or supporting information) required to be supplied to a Governmental Entity or other authority in connection with the determination, assessment or collection of any Tax or the administration of any Laws, regulations or administrative requirements relating to any Tax.
“Transaction Expenses” means any legal, accounting, financial advisory and other third party advisory, brokerage, or consulting fees and other expenses incurred by a Party in connection with the transactions contemplated by this Agreement and other related matters.
“Treasury Regulations” means any regulations promulgated under the Code.
“Vendors” means the top twenty (20) vendors, suppliers, materialmen and other subcontractors of the Company in terms of amounts paid to such Vendors during the Company’s fiscal year ended 2024.
“Willdan” means Willdan Group, Inc., a Delaware corporation.
“Willdan Common Stock” means shares of common stock of Willdan Group, Inc., a Delaware corporation (NASDAQ: WLDN), par value $0.01 per share.
“Year 1” has the meaning specified in Section 2.5(b).
“Year 1 EBITDA Target” has the meaning specified in Section 2.5(b).
“Year 2” has the meaning specified in Section 2.5(b).
“Year 2 EBITDA Target” has the meaning specified in Section 2.5(c).
EXECUTION VERSION
“Year 3” has the meaning specified in Section 2.5(c).
“Year 3 EBITDA Target” has the meaning specified in Section 2.5(d).
“Year-End Financial Statements” has the meaning specified in Section 3.7.
TermSection
Accountants2.4(d)
AcquisitionRecitals
AgreementPreamble
Causes of Action6.5(a)
Certificates2.3(a)
Claim Notice8.3(a)
Closing TNAV2.4(a)
COBRA3.15(q)
CompanyPreamble
Company Contracts3.14(a)
Continuing Employee6.6
Deductible8.5
Direct Claim8.3(a)
Dispute Period8.3(b)
Earn-Out Disagreement2.5(g)
EXECUTION VERSION
Earn-Out Financial Statement2.5(e)
Earn-Out Payment2.5(a)
Earn-Out Period2.5(a)
Earn-Out Resolution Discussions2.5(i)
EBITDA2.5(a)
Employee Benefit Plans3.15(a)
ERISA Affiliate3.15(a)
ERISA Plans3.15(a)
Final Statement2.4(b)
Final Statement Disagreement2.4(c)
Indemnification Cap8.5
Indemnification Claims8.3(a)
Indemnified Party8.3
Indemnifying Party8.3
Initial Purchase Price2.2(a)
Initial Purchase Price Adjustment2.4(a)
Leases3.5(a)
Licensed Professionals3.13(a)
PartiesPreamble
PartyPreamble
Post-Closing Tax Period3.9(e)
Pre-Closing Tax Period3.9(e)
Proceeding8.3(a)
Purchase Price2.2(b)
PurchaserPreamble
Purchaser Losses8.1
Purchaser Plan6.6(b)
Released Parties6.5(a)
Releasing Parties6.5(a)
SellerPreamble
Seller Agreements7.2(d)
Seller Losses8.2
Seller Representative9.14
Settlement8.3(b)
SharesRecitals
Straddle Period6.3(b)
Target TNAV2.4(a)
Third Party Claim8.3(a)
Transfer Taxes6.3(d)
PURCHASE AND SALE
EXECUTION VERSION
hereby purchases and acquires from each Seller, free and clear of all Liens, all of the Shares owned by such Seller.
EXECUTION VERSION
EXECUTION VERSION
(a)With respect to the period of the first thirty-six months of operations as a unit or subsidiary of the Purchaser (the “Earn-Out Period”), the Purchaser will make an earn-out payment based upon the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) during the first, second and third twelve-month period
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comprising the Earn-Out Period (the “Earn-Out Payment). For purposes of determining the Earn-Out, EBITDA for any twelve-month period is defined as earnings from operations of the Company during such twelve-month period determined in accordance with GAAP as adjusted for interest, income taxes, depreciation and amortization allocable to such twelve-month period in accordance with GAAP. The calculation of the Company’s EBITDA will include [REDACTED].
(b)If the Company generates EBITDA of or exceeding [REDACTED] (the “Year 1 EBITDA Target”) during the twelve-month period beginning on the Closing Date and ending on the day prior to the first anniversary of the Closing Date (such period, “Year 1”), the Purchaser will make an Earn-Out Payment of [REDACTED]. For EBITDA of less than [REDACTED] but more than [REDACTED] for Year 1, the amount of the Earn-Out Payment required to be paid in respect of year 1 will be pro rated based upon [REDACTED]. No Earn-Out Payment is payable for Year 1 if the Company’s EBITDA is less than [REDACTED]. The Earn-Out Payment is to be paid in cash to the Seller Representative for distribution to the Sellers under Section 2.2(b) within eighty-five (85) days after the first anniversary of the Closing Date, or ten (10) days after the resolution of an Earn-Out Disagreement. If the maximum Earn-Out Payment of $[REDACTED] is not fully achieved in Year 1, the balance not earned shall be carried over into the twelve-month period beginning on the first anniversary of the Closing Date and ending on the day prior to the second anniversary of the Closing Date (such period, “Year 2”) as an addition to the maximum $[REDACTED] Earn-Out Payment potentially earned in respect of Year 2. Additionally, if the Company’s EBITDA for Year 1 exceeds or falls short of the Year 1 EBITDA Target, the excess shall be carried over into Year 2 as a credit or the shortfall shall be carried into Year 2 as a debit, to the Company’s EBITDA for Year 2.
Year 1 Example #1: [REDACTED].
Year 1 Example #2: [REDACTED].
(c)If the Company generates EBITDA (adjusted to reflect any amount carried over from Year 1 as a credit or debit) of or exceeding [REDACTED] (the “Year 2 EBITDA Target”) during Year 2, the Purchaser will make an Earn-Out Payment of $[REDACTED] plus any carry over from Year 1 added to the maximum Earn-Out Payment for Year 2 as described in (b) above. For EBITDA (adjusted to reflect any amount carried over from Year 1 as a credit or debit) of less than $[REDACTED] but more than $[REDACTED] for Year 2, the Earn-Out Payment will be pro rated based upon the quotient of (i) the amount by which the Company’s EBITDA for Year 2 exceeds $[REDACTED], divided by (ii) $[REDACTED] plus the Earn-Out Tax Gross Up. No Earn-Out Payment is payable for Year 2 if the Company’s EBITDA for Year 2 is less than [REDACTED]. The Earn-Out Payment is to be paid in cash to the Seller Representative for distribution to the Sellers under Section 2.2(b) within eighty-five (85) days after the second anniversary of the Closing Date, or ten (10) days after the resolution of an Earn-Out Disagreement. If the maximum Earn-Out Payment is not fully achieved in Year 2 (which maximum shall be $[REDACTED] plus any portion of the Earn-Out not fully achieved in Year 1 that has been carried over into Year 2), the balance shall be carried over as an addition to the maximum $[REDACTED] Earn-Out Payment potentially earned
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in respect of the twelve-month period beginning on the second anniversary of the Closing Date and ending on the day prior to the third anniversary of the Closing Date (such period, “Year 3”). Additionally, if the Company’s EBITDA for Year 2 (adjusted to reflect any amount carried over from Year 1 as a credit or debit) exceeds or falls short of the Year 2 EBITDA Target, the excess shall be carried over into Year 3 as a credit or the shortfall shall be carried into Year 3 as a debit, to the Company’s EBITDA for Year 3[REDACTED].
Year 2 Example #1: [REDACTED].
Year 2 Example #2: [REDACTED].
(d)If the Company generates EBITDA (adjusted to reflect any amount carried over from Year 2 as a credit or debit) of or exceeding $[REDACTED] (the “Year 3 EBITDA Target”) during Year 3, the Purchaser will make an Earn-Out Payment of $[REDACTED] plus any carry over from Year 2 as described in (c) above. For EBITDA (adjusted to reflect any amount carried over from Year 2 as a credit or debit) of less than $[REDACTED] but more than $[REDACTED], the Earn-Out Payment will be pro rated based upon the quotient of (i) the amount by which the Company’s EBITDA for Year 3 exceeds $[REDACTED], divided by (ii) $[REDACTED]. No Earn-Out Payment is payable if the Company’s EBITDA (adjusted to reflect any amount carried over from Year 2 as a credit or debit) is less than $[REDACTED] for Year 3. The Earn-Out Payment is to be paid in cash to the Seller Representative for distribution to the Sellers under Sections 2.2(b) within eighty-five (85) days after the third anniversary of the Closing Date, or ten (10) days after the resolution of an Earn-Out Disagreement.
Year 3 Example 1: [REDACTED].
(e)The financial statement showing the Company’s EBITDA for each year of the Earn-Out Period (the “Earn-Out Financial Statement”) shall be prepared by the Purchaser in accordance with GAAP and delivered to the Seller Representative no later than forty-five (45) days following the end of each year of the Earn-Out Period. Unless there is a disagreement with the Earn-Out Financial Statement (an “Earn-Out Disagreement”) (which shall be resolved in accordance with subparagraph (h) below), the Purchaser shall, within ten (10) days following the acceptance or deemed acceptance by the Seller Representative of the Earn-Out Financial Statement, pay the appropriate Earn-Out Payment to the Seller Representative in cash via wire transfer of immediately available funds for appropriate distribution under Sections 2.2(b). If there is an Earn-Out Disagreement, the amount of the Earn-Out Payment not in dispute shall be paid pursuant to the immediately preceding sentence.
(f)The Earn-Out Financial Statement shall be final and binding upon the parties hereto unless the Seller Representative notify the Purchaser in writing, not later than thirty (30) days from the Seller Representative’s receipt of the Earn-Out Financial Statement, of an Earn-Out Disagreement. Such notice of Earn-Out Disagreement shall specify all items as to which there is an Earn-Out Disagreement, including the amount,
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and provide an explanation of the basis for such Earn-Out Disagreement; provided, however, that the Seller Representative shall not be precluded from raising additional points of disagreement or providing additional explanations in the subsequent discussions and arbitration discussed in subparagraph (i) below. The Seller Representative’s failure to timely notify the Purchaser in writing of the existence of an Earn-Out Disagreement shall be deemed, for all purposes, to be the Seller Representative’s acceptance of the Earn-Out Financial Statement.
(g) In the event and to the extent that the Seller Representative shall timely notify the Purchaser in writing, as provided in subparagraph (g) above, of an Earn-Out Disagreement, the Parties hereto shall attempt, in good faith, to resolve such Earn-Out Disagreement (“Earn-Out Resolution Discussions”). In the event that the Parties are unable to resolve such Earn-Out Disagreement within twenty (20) Business Days after the date of receipt by the Purchaser of notice from the Seller Representative of the Earn-Out Disagreement, the Purchaser and the Seller Representative shall, within ten (10) Business Days, submit to the Accountants its or his proposal to settle the Earn-Out Disagreement. Further, the Parties shall submit to the Accountants all relevant financial data, and the Earn-Out Disagreement shall be submitted for final and binding arbitration and resolution by the Accountants. In resolving the Earn-Out Disagreement, the Accountants shall only consider those items or amounts in the Earn-Out Financial Statement as to which the Parties have continued to disagree after the Earn-Out Resolution Discussions. After completing their review of the Earn-Out Disagreement, the Accountants shall resolve each item in dispute and confirm their conclusion in writing to the Seller Representative and the Purchaser. The Parties shall instruct the Accountants to deliver their written conclusion to the Purchaser and the Seller Representative no later than thirty (30) days following the conclusion of the presentation of the Purchaser’s and the Seller Representative’s respective proposals on the Earn-Out Disagreement to the Accountants. The decision of the Accountants shall be final and binding upon the parties hereto for all purposes and enforceable in any court of competent jurisdiction. Within ten (10) days following the decision of the Accountants, the Purchaser shall make the required payment in cash to the Seller Representative for appropriate distribution, via wire transfer of immediately available funds. The fees and costs of the Accountants, if any, in connection with such arbitration shall be shared by the Purchaser and the Sellers in inverse proportion to the amounts of the disputed EBITDA amount determined to be for the account of the Sellers and the Purchaser, respectively.
(h)The Purchaser will make the work papers and back-up materials used in preparing the Earn-Out Financial Statements, and the books, records and financial staff of the Purchaser and the Company, available to the Seller Representative and his accountants and other representatives at reasonable times and upon reasonable notice at any time during (A) the preparation by the Purchaser of the Earn-Out Financial Statement, (B) the review by the Seller Representative of the Earn-Out Financial Statement, and (C) the resolution by the Parties of any objections thereto.
(i)Until the expiration of the Earn-Out Period, except as consented to in writing by the Seller Representative, the Purchaser shall:
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(i)conduct the operations of the Company in the usual and Ordinary Course to the extent such conduct is in compliance with the Purchaser’s operating policies (copies of which have been provided to Seller Representative) and take no action intended to, or that would knowingly result in a reduction in EBITDA below that which would have been achieved if such action had not been taken;
(ii) use best efforts to maintain the relations and good will with suppliers, customers, landlords, creditors, employees, agents and others having business relationships with Company as of the Closing Date and during the Earn-Out Period;
(iii)maintain a financial reporting system that will separately account for EBITDA, and allow Seller Representative reasonable access to such system from time to time during the Earn-Out Period;
(iv)make reasonable commercial efforts to ensure that the Company maintains the services of any technical and management employees who are essential to perform any then current Contracts of the Company;
(v)not terminate, transfer, assign or novate to any Person any then current Contracts of the Company or those executed within the Earn-Out Period without first mutually agreeing to make a pro-rata adjustment of the Earn-Out targets;
(vi) regularly consult with and consider in good faith the recommendations and requests of the Seller Representative regarding management of then current projects, and bidding on new projects proposed to be undertaken by the Company;
(vii)consult with and consider in good faith the recommendations and requests of the Seller Representative regarding the budget for the Company during the Earn-Out Period;
(viii)consult with and consider in good faith the recommendations and requests of the Seller Representative regarding employees’ salaries and bonuses and office openings and closures; and
(ix) provide as appropriate in the then current circumstances reasonable support to the Company as may be reasonably requested by the Seller Representative from time to time, in the Ordinary Course, including, without limitation, working capital, technical support, equipment, office space, supplies and assistance with recruiting and other corporate functions; provided, however, that any direct costs mutually agreed to be borne by the Purchaser solely for the benefit of the Company will be accrued for purposes of determining the Earn-Out Payment.
(j)Notwithstanding anything to the contrary in this Agreement, Purchaser shall not be obligated to pay any portion of the Earn-Out Payment on the date of such payment is otherwise due hereunder if and to the extent that the payment of such amount would result in a Senior Event of Default or a Senior Event of Default exists at the time of such
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contemplated payment.. Purchaser shall pay any amount which is deferred under this section as soon as the restrictions set forth in the preceding sentence no longer apply. Sellers acknowledge and agree that any failure by Purchaser to pay all or any portion of the Earn-Out Payment on the date otherwise due hereunder by virtue of this section shall not constitute a default under or a breach of this Agreement for any reason provided, however, that any portion of the Earn-Out Payment that is deferred pursuant to this Section 2.5(j) shall bear interest at a per annum rate of 10%, compounded quarterly from the date of the deferral until paid in full. . The Senior Creditor shall be an express third-party beneficiary with respect to this section.
(k) The Earn-Out Payment shall not be dependent on the Sellers, or any of them remaining in the employ of the Company.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS RELATING TO THE COMPANY
The Sellers hereby represent and warrant to the Purchaser, jointly and severally, as of the date hereof, that, except as set forth in the Disclosure Schedule:
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(b) Schedule 3.5(b) correctly identifies all real property owned by the Company including any liens or other contingent liabilities attached thereto. The real property value is equal to or greater than it’s carrying value on the Company’s financial statements.(c) With respect to each piece of Leased Real Property, the Company, as applicable, has a good and valid leasehold interest, and, to the Knowledge of the Sellers, each such leasehold interest is free and clear of any Lien except for Permitted Liens, except as set forth on Schedule 3.5(c). To the Knowledge of the Sellers, there are no pending or threatened condemnation proceedings, lawsuits or administrative actions relating to the Leased Real Property. Other than the Company, as applicable, to the Knowledge of the Sellers, there are no parties in possession or parties having any rights to occupy any of the Leased Real Property that is leased by the Company.
(d) Each piece of Leased Real Property is adequate and suitable in all material respects for the purposes for which it is currently being used. To the Knowledge of the Sellers, the Company has reasonably adequate rights of ingress and egress with respect to all Leased Real Property and the improvements thereon pursuant to public streets and roads or by good, marketable and insurable appurtenant easements.
(e)The Company does not owe any brokerage commission with respect to any Leased Real Property.
(f)The Leased Real Property constitutes all of the real property utilized by the Company in the operation of its Business and is sufficient for the Company to operate the Business as currently conducted.
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(o)The Company is not under examination by any taxing authority.
(p)The Company has at all times from its incorporation through the Acquisition been treated as a validly existing “S corporation” within the meaning of Section 1361(b) and 1362 of the Code for U.S. federal and applicable state and local income Tax purposes.
(q)There are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year.
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(xx) all other Contracts not made in the Ordinary Course which are material to the Company; and
(xxi) any Contract, other than as set forth above, to which the Company, or any Affiliate of the Company, is a party, the breach, violation or termination of which, or default under, by any party thereto, would reasonably be expected to result in a Company Material Adverse Effect.
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length of service, respectively, and (b) as of January 1, 2025 all of the other employees (whether full-time, part-time or otherwise) and independent contractors of the Company specifying their position, status, work location and length of service, and with respect to independent contractors, consulting or other independent contractor fees, together with an appropriate notation next to the name of any officer or other employee or independent contractor on such list who is subject to any Employment Agreement. Except to the extent set forth in Schedule 3.17:
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in the Federal Acquisition Regulation). There is no pending or, to the Knowledge of the Sellers, threatened claim alleging, or any existing facts or circumstances that could reasonably be expected to give rise to, any breach of any express or implied warranty or guaranty or request for credit for defective services. The Company has not been required to pay direct, incidental or consequential Damages to any Person or to incur any direct or indirect costs in connection with a warranty or guaranty claim in connection with any of such services during the three years prior to the date hereof.
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also sets forth the name of each Person, firm, corporation or business organization holding a general or special power of attorney from the Company and a summary of the terms thereof.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS RELATING TO THE SELLERS
Each Seller hereby represents and warrants to the Purchaser, severally, as of the date hereof, that, except as set forth in the Disclosure Schedule:
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defaults or other occurrences that would not, individually or in the aggregate reasonably be expected to result in a Company Material Adverse Effect.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Sellers, as of the date hereof, that:
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insolvency, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally, and (b) is subject to general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).
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CERTAIN COVENANTS AND AGREEMENTS
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(d)Section 338(h)(10) Elections.
(i)The Sellers and the Purchaser may make a timely, effective, and irrevocable election under Section 338(h)(10) of the Code and under any comparable statutes in any other jurisdiction with respect to Alternative Power Generation, Inc. (collectively, the “Section 338(h)(10) Elections”) and shall file such Section 338(h)(10) Elections in accordance with applicable regulations. The Sellers and the Purchaser shall cooperate in
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all respects for the purpose of effectuating the Section 338(h)(10) Elections, including the execution and filing of any required Tax Returns and the grant of consent to the Section 338(h)(10) Elections by the Sellers. Without limiting the foregoing, the Purchaser and the Sellers shall each execute a Form 8023 with respect to Alternative Power Generation, Inc. at the Closing, which form shall be timely filed by the Purchaser.
(ii)Within 120 days after the Closing Date, the Purchaser shall deliver to the Sellers an allocation of the Aggregate Deemed Sales Price (as such term is defined in Treasury Regulation § 1.338-4) among the assets of Alternative Power Generation, Inc. in accordance with Treasury Regulations §§ 1.338-6 and 1.338-7 (the “Allocation Statement”). The allocation of the Aggregate Deemed Sales Price shall be in accordance with the fair market value of the acquired assets as provided in Section 1060 of the Code. The Purchaser shall have the right to review the Allocation Statement. Within twenty (20) days after the Seller’s receipt of the Allocation Statement, the Seller shall indicate its concurrence therewith, or propose to the Purchaser any changes to the Allocation Statement. The Seller’s failure to notify the Purchaser of any objection to the Allocation Statement within twenty (20) days after receipt thereof shall constitute the Seller’s concurrence therewith. Should the Seller propose any change to the Allocation Statement, the Purchaser and the Sellers shall resolve any disagreement regarding the Allocation Statement in accordance with the provisions of Section 2.4(d). The allocation(s) so determined in accordance with this Section 6.3(d) shall be binding on the parties, and all Tax Returns filed by the Purchaser, the Sellers, and each of their Affiliates, if any, shall be prepared consistently with such allocation(s), and none of them shall take a position on any Tax Return or other form or statement contrary to or inconsistent with such allocation(s) (unless required to do so by Law). Appropriate adjustments shall be made with respect to the allocation for all payments made after the Closing Date in accordance with Section 6.3(d)(iii). Each of the parties agrees to notify the other if the IRS or any other authority proposes a reallocation of amounts allocated pursuant to this Section 6.3(d)(ii).
(iii)With respect to payments made after the Closing Date and not included in the original Allocation Statement, Sellers shall prepare and provide to Purchaser within sixty (60) days after such payments are made a revised Allocation Statement that reflects such payments and is prepared in accordance with Section 6.3(d)(ii). Thereafter, Sellers and Purchaser shall follow the same procedures contained in Section 6.3(d)(ii) in finalizing the revised Allocation Statement. The allocations determined in accordance with this Section 6.3 shall be binding on the parties, and all Tax Returns filed by the Purchaser, the Sellers, and each of their Affiliates, if any, shall be prepared consistently with such allocations, and none of them shall take a position on any Tax Return or other form or statement contrary to or inconsistent with such allocation (unless required to do so by Law). Each of the parties agrees to notify the other if the IRS or any other authority proposes a reallocation of amounts allocated pursuant to this Section 6.3(d)(iii).
(iv)Buyer shall reimburse Sellers for all of Sellers’s costs and expenses, including but not limited to legal and accounting, relating to the Section 338(h)(10) Election. The Buyer shall also pay to the Sellers the amount necessary (such amount, the “Tax Adjustment Amount”) to cause the Sellers’ after Tax net proceeds from the sale of the Shares pursuant to this Agreement, taking into account the Section 338(h)(10) Election (and taking into account additional Taxes as a result of all payments made after the Closing
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Date (including but not limited to the payment pursuant to this Section 6.3(d)(iv)) and calculated based on the allocations determined pursuant to the preceding paragraphs to be equal to the after-Tax net proceeds that the Sellers would have received had the 338(h)(10) Election not been made, in each case without taking into account any of the Sellers’ tax items or attributes not directly related to the Company, subject to any adjustments by any Taxing Authority and/or as necessary to reflect any subsequent adjustments to the Purchase Price pursuant to this Agreement. Within thirty (30) days after the final determination of the allocation in accordance with the above paragraph and on an annual basis thereafter through the year ending December 31, 2029, the Sellers shall provide the Buyer a schedule, with supporting workpapers, setting forth a calculation of the Tax Adjustment Amount (the “Tax Adjustment Schedule”). Purchaser shall notify the Seller Representative in writing, not later than thirty (30) days from Purchaser’s receipt of the Tax Adjustment Schedule, of a disagreement with the amounts reflected in the Final Statement (the “Tax Adjustment Disagreement”). Such notice shall specify all items as to which there is disagreement, including the amount, and provide an explanation of the basis for such disagreement. The failure of Purchaser to timely notify the Seller Representative in writing of the existence of a Tax Adjustment Disagreement shall be deemed, for all purposes, Purchaser’s acceptance of the Tax Adjustment Schedule. Purchaser and the Seller Representative shall attempt in good faith to agree upon the Tax Adjustment Amount and, if they are unable to do so within twenty (20) days, they shall resolve in accordance with the provisions of Section 2.4(d). The Tax Adjustment Amount shall be payable within ten (10) days after the determination of the final Tax Adjustment Amount and will be treated for all purposes as an adjustment to the Purchase Price.
(e) Transfer Taxes. All excise, transfer, stamp, documentary, filing, recordation and other similar taxes, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties, resulting directly from the sale and transfer by the Sellers to the Purchaser of the Shares (the “Transfer Taxes”) under California law, shall be borne by the Sellers. Notwithstanding Sections 6.3(a) and (b), which shall not apply to Tax Returns relating to Transfer Taxes, any Tax Returns that must be filed in connection with Transfer Taxes shall be prepared and filed when due by the Sellers, taking into account extensions.
(f)Amendments, Modifications, Etc. Notwithstanding anything to the contrary in this Agreement, except to the extent required by applicable Law, the Purchaser shall not, and shall not permit any of its Affiliates to, (i) amend any Tax Returns with respect to any Pre-Closing Tax Period or any Straddle Period, (ii) file any Tax Return of the Company for any taxable period (or portion thereof) ending on or before the Closing Date, or (iii) make or change any Tax election that has retroactive effect to any taxable period (or portion thereof) ending on or before the Closing Date, in each case, without the prior written consent of the Sellers, which consent shall not be unreasonably delayed, conditioned or withheld.
(g)Cooperation. The Purchaser and the Sellers shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the preparation and filing of Tax Returns pursuant to this Section 6.3 and any audit or Litigation with respect to Taxes.
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resignations from their positions, in form and substance satisfactory to the Purchaser, effective as of the Closing.
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(a) With respect to any one or more employee benefit policies, plans or programs maintained by the Purchaser or its Affiliates from time to time (each, a “Purchaser Plan”) in which Continuing Employees participate after the Closing, the Purchaser shall, or shall cause the Company or such Affiliates to recognize all service of Continuing Employees with the Company and its current and former Affiliates from each such employee’s most recent date of hire as reflected in the Company’s records for purposes of eligibility to participate, vesting credit (other than vesting of equity awards), form of payment, and accrual of paid time off benefits or severance in applicable Purchaser Plans, as such plans may be amended from time to time, to the same extent taken into account under a comparable Employee Benefit Plan immediately prior to Closing, but not to any extent that such recognition would result in any duplication of benefits.
| (b) | The Purchaser will provide an annual bonus pool opportunity for the Company’s employees, consistent with the Company’s past practice and not reduce the salary of any Continuing Employee. The Purchaser may not amend, modify or terminate these bonus opportunities prior to December 31, 2027 without the prior consent of the Seller Representative. In addition, commencing in March 1, 2025, all eligible employees of the Company will be able to purchase the Purchaser’s common stock at a discount in accordance with the terms and condition of the Purchaser’s Employee Stock Purchase Plan. The discount as of the date of this Agreement is a minimum of fifteen percent (15%) to market price applied to a maximum $25,000 purchase per year and will remain the discount absent modification to the Purchaser’s Employee Stock Purchase Plan. All key employees will be eligible for stock options and restricted stock units (RSUs) under Willdan Group Inc.’s Restricted Stock Program (the “Program”), granted annually by the Board of Directors for senior staff and significant contributors. Each Seller will be considered a key employee for purposes of receiving stock options and RSUs under the Program, and, to the extent the Company’s performance permits the award of RSUs under the Program, Purchaser or its Affiliates will recommend to the Board of Directors of Willdan Group Inc. that Sellers are awarded RSUs under the Program. |
| (c) | Nothing contained in this Section 6.6 shall be construed to (i) establish, amend, or modify any benefit or compensation plan, program, agreement or arrangement, (ii) limit the ability of the Purchaser or the Company to amend, modify or terminate any compensation or benefit plan, program or arrangement maintained by the Company or Purchaser at any time after the Closing Date, or (iii) provide any third party beneficiary rights to any Person under this Agreement. |
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Section 6.9Purchaser Waivers. The Purchaser hereby waives any requirement that the Company or the Sellers (i) obtain the consent of the Company’s landlords to or (ii) provide prior written notice to the Company’s landlords of, the consummation of the Acquisition and the other transactions contemplated in the Agreement and the Company Ancillary Documents.
CLOSING
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INDEMNIFICATION
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Notwithstanding anything to the contrary in this Agreement, Section 3.9(e) provides the sole and exclusive representations and warranties of the Sellers regarding Taxes for any Post-Closing Tax Period, and no breach or inaccuracy of any representation or warranty of any of the Sellers other than the representations and warranties set forth in Section 3.9(e) shall entitle any of the Purchaser Indemnified Parties to be indemnified or reimbursed with respect to any Taxes of any of the Purchaser Indemnified Parties relating to any Post-Closing Tax Period.
The Damages of the Purchaser Indemnified Parties described in this Section 8.1 as to which the Purchaser Indemnified Parties are entitled to indemnification are collectively referred to as “Purchaser Losses.” The Sellers’ liability with respect to Purchaser Losses shall be joint and several among the Sellers, other than Purchaser Losses incurred, resulting or arising from any breach or inaccuracy of any representation or warranty made by the Sellers in Article IV of this Agreement, which shall be several for all Sellers.
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The Damages of the Seller Indemnified Parties described in this Section 8.2 as to which the Seller Indemnified Parties are entitled to indemnification are collectively referred to as “Seller Losses.”
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No claim or cause of action for indemnification under this Article VIII may be made following the expiration of the applicable Claims Period; it being understood that in the event notice of any claim for indemnification under this Article VIII shall have been given within the
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applicable Claims Period, the representations, warranties, covenants or obligations that are the subject of such indemnification claim shall survive with respect to such indemnification claim until such time as such claim is fully and finally resolved, including by final non-appealable Order of a court of competent jurisdiction, even if the date of such full and final resolution occurs after the applicable Claims Period.
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MISCELLANEOUS PROVISIONS
To the PurchaserWilldan Energy Solutions
and after the Closing2401 E. Katella Ave. Suite 300
to the Company:Anaheim, CA 92806
[REDACTED]
with a copy to (which shallWilldan Energy Solutions
not constitute notice):2401 E. Katella Ave. Suite 300
Anaheim, CA 92806
[REDACTED]
To the Seller Representative andAs set forth on the signature pages hereto
the Sellers:
with a copy to (which shall
not constitute notice):[REDACTED]
or to such other representative or at such other address as such Person may furnish to the other Party in writing.
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Purchaser Indemnified Parties and the Seller Indemnified Parties) any right, remedy, obligation or liability under or by reason of this Agreement, or result in such Person being deemed a third-party beneficiary hereof.
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[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first above written.
THE PURCHASER:
WILLDAN ENERGY SOLUTIONS
By: /s/ Mike Bieber
Name: Mike Bieber
Title: Chairman and Chief Executive Officer
WILLDAN
WILLDAN GROUP, INC.
By: /s/ Mike Bieber
Name: Mike Bieber
Title: Chief Executive Officer
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
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SELLER REPRESENTATIVE:
/s/ [REDACTED]
By:[REDACTED]
Address:
Email:
SELLERS:
/s/ [REDACTED]
By:[REDACTED]
Address:
Email:
/s/ [REDACTED]
By:[REDACTED]
Address:
Email:
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
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/s/ [REDACTED]
By: [REDACTED]
Address:
Email:
/s/ [REDACTED]
By: [REDACTED]
Address:
Email:
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
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