Contract analysis

Section 1.1 — Definitions. As used in this Agreement, the following terms shall have the meanings set forth below: "Acquired Assets" has the meaning set forth in Section 2.1. "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including, with correlative meanings

Section 1.2 — Interpretation. Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement: (a) The words "hereof," "herein," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. (b) The terms defined in the singular shall have a comparable meaning when used i

ARTICLE II — PURCHASE AND SALE OF ASSETS

Section 2.1 — Acquired Assets. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller agrees to sell, transfer, assign, convey, and deliver to Buyer, and Buyer agrees to purchase and accept from Seller, free and clear of all Encumbrances (other than Permitted Encumbrances), all of Seller's right, title, and interest in and to substantially all of the assets used in or related

Section 2.2 — Excluded Assets. Notwithstanding anything to the contrary in this Agreement, the following assets of Seller shall be excluded from the Acquired Assets and shall be retained by Seller (collectively, the "Excluded Assets"): (a) All cash, cash equivalents, bank accounts, and deposits of Seller; (b) All accounts receivable and notes receivable of Seller arising out of or generated by the Business on or prio

Section 2.3 — No Transfer of Real Property. No real property is being transferred, conveyed, or assigned by Seller to Buyer pursuant to this Agreement. The Tonawanda Facility is leased by Seller from Niagara Industrial Realty LLC. Buyer is negotiating a new direct lease with Niagara Industrial Realty LLC for the continued occupancy and use of the Tonawanda Facility, consisting of approximately forty-two thousand (42,

Section 2.4 — Assumed Liabilities. At the Closing, Buyer shall assume and agree to discharge only the following liabilities and obligations of Seller, and no others (collectively, the "Assumed Liabilities"): (a) All trade payables arising under the Assumed Contracts to the extent arising from and after the Closing Date in connection with the operation of the Business by Buyer; (b) All warranty obligations relating to

Section 2.5 — Excluded Liabilities. Buyer shall not assume, and shall have no liability or obligation with respect to, any liabilities or obligations of Seller of any kind or nature whatsoever, whether known or unknown, accrued, absolute, contingent, or otherwise, other than the Assumed Liabilities (collectively, the "Excluded Liabilities"). Without limiting the generality of the foregoing, the Excluded Liabilities s

ARTICLE III — PURCHASE PRICE AND PAYMENT

Section 3.1 — Purchase Price. The aggregate purchase price for the Acquired Assets shall be Eighteen Million Dollars ($18,000,000) (the "Purchase Price"), subject to adjustment as provided in Section 3.2, payable as follows: (a) Closing Payment. At the Closing, Buyer shall pay to Seller the Closing Payment in the amount of Fourteen Million Five Hundred Thousand Dollars ($14,500,000) in cash by wire transfer of immedi

Section 3.2 — Working Capital Adjustment. (a) Estimated Net Working Capital. No later than three (3) Business Days prior to the Closing Date, Seller shall deliver to Buyer a certificate, executed by the chief financial officer of Seller (or, in the absence of a chief financial officer, by Frederick G. Voss as President), setting forth Seller's good faith estimate of the Net Working Capital as of the Closing Date (the

Section 3.3 — Earnout. (a) Earnout Measurement. The Earnout Amount, if any, shall be calculated based on the total Gallons Shipped during the Earnout Period, in accordance with this Section 3.3. (b) Earnout Calculation. The Earnout Amount shall be determined as follows: (i) If total Gallons Shipped during the Earnout Period is less than the Threshold (2,400,000 gallons), no Earnout Amount shall be payable to Seller;

Section 3.4 — Purchase Price Allocation. The Purchase Price (including, for this purpose, the Escrow Amount, the Earnout Amount (if any), and any Assumed Liabilities to the extent properly treated as additional consideration for United States federal income Tax purposes) shall be allocated among the Acquired Assets in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder, as set

Section 3.5 — Withholding. Buyer shall be entitled to deduct and withhold from any amounts payable pursuant to this Agreement such amounts as Buyer is required to deduct and withhold under the Code, or any provision of federal, state, local, or foreign Tax Law. To the extent that amounts are so withheld and remitted to the applicable Governmental Authority, such withheld amounts shall be treated for all purposes of t

Section 4.1 — Closing Date and Location. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at 10:00 a.m. Eastern Time on the Target Closing Date (January 16, 2023), or on such other date as Buyer and Seller may mutually agree in writing (the "Closing Date"). The Closing may take place remotely via the electronic exchange of signature pages and other closing deliverables,

Section 4.2 — Deliverables of Seller at Closing. At or prior to the Closing, Seller shall deliver (or cause to be delivered) to Buyer each of the following: (a) The Bill of Sale, substantially in the form attached hereto as Exhibit A, duly executed by Seller; (b) The Assignment and Assumption Agreement, substantially in the form attached hereto as Exhibit D, duly executed by Seller; (c) The IP Assignment, substantial

Section 4.3 — Deliverables of Buyer at Closing. At or prior to the Closing, Buyer shall deliver (or cause to be delivered) to Seller (or, as applicable, to the Escrow Agent) each of the following: (a) The Closing Payment in the amount of Fourteen Million Five Hundred Thousand Dollars ($14,500,000), by wire transfer of immediately available funds to the account or accounts designated by Seller; (b) The Escrow Amount i

ARTICLE V — REPRESENTATIONS AND WARRANTIES OF SELLER Except as set forth in the Disclosure Schedules delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement (each of which shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article V), Seller represents and warrants to Buyer as of the date of this Agree

Section 5.1 — Organization and Good Standing. Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of New York. Seller has full corporate power and authority to own, operate, and lease its properties and to carry on the Business as currently conducted. Seller is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the own

Section 5.2 — Authority; Binding Effect. Seller has full corporate power and authority to execute and deliver this Agreement and each other Transaction Document to which it is a party, and to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each other Transaction Document to which Seller is a party, t

Section 5.3 — No Conflicts; Consents. Except as set forth on Schedule 5.3, the execution, delivery, and performance by Seller of this Agreement and each other Transaction Document to which it is a party, and the consummation by Seller of the transactions contemplated hereby and thereby, do not and will not (a) violate or conflict with the certificate of incorporation, bylaws, or other organizational documents of Sell

Section 5.4 — Financial Information. Seller has made available to Buyer the unaudited financial statements of the Business for the fiscal years ended December 31, 2020 ("FY2020") and December 31, 2021 ("FY2021"), and for the interim period ended September 30, 2022, consisting of statements of revenue and expenses and balance sheets (collectively, the "Financial Statements"). The following is a summary of the key fina

Section 5.5 — Title to Acquired Assets. Seller has good and marketable title to all of the Acquired Assets, free and clear of all Encumbrances, except for Permitted Encumbrances as set forth on Schedule 5.5. At the Closing, Seller will convey to Buyer good and marketable title to all of the Acquired Assets, free and clear of all Encumbrances other than Permitted Encumbrances. This Section 5.5 is a Fundamental Represe

Section 5.6 — Condition of Assets. The tangible personal property and equipment included in the Acquired Assets are in good operating condition and repair (ordinary wear and tear excepted) and are suitable for their intended use in the Business as currently conducted. The Acquired Assets, together with the services to be provided under the Transition Services Agreement, constitute all of the assets, properties, and r

Section 5.7 — Material Contracts. (a) Schedule 5.7 lists all Material Contracts related to the Business, including the twenty-three (23) active supply agreements. The top five (5) customers of the Business represent approximately fifty-eight percent (58%) of the Business's total revenue. (b) Each Material Contract is in full force and effect and constitutes a legal, valid, and binding obligation of Seller and, to the

Section 5.8 — Litigation. Except as set forth on Schedule 5.8, there is no litigation, action, suit, claim, investigation, arbitration, or proceeding of any nature (whether civil, criminal, administrative, regulatory, or otherwise) pending or, to the Knowledge of Seller, threatened against Seller or any of the Seller Principals relating to the Business, the Acquired Assets, or the transactions contemplated by this Ag

Section 5.9 — Compliance with Laws; Permits. (a) Seller is, and during the three (3)-year period preceding the date of this Agreement has been, in compliance in all material respects with all Laws applicable to the Business and the ownership and operation of the Acquired Assets. (b) Seller holds all Permits necessary for the lawful conduct of the Business as currently conducted. All such Permits are in full force and

Section 5.10 — Intellectual Property. (a) Schedule 5.10(a) sets forth a complete and accurate list of all registered intellectual Property owned by Seller and used in the Business, including the ProShield trademark (U.S. Registration No. 2,876,411), together with a description of each of the forty-seven (47) ProShield Formulations. All registrations for intellectual Property listed on Schedule 5.10(a) are valid, subs

Section 5.11 — Environmental Matters. (a) Seller is, and during the five (5)-year period preceding the date of this Agreement has been, in compliance in all material respects with all Environmental Laws applicable to the Business and the Tonawanda Facility. (b) Seller has not received any writ