UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

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FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 1.01.

Entry Into a Material Definitive Agreement.

On February 1, 2017, The William L. Bonnell Company, Inc. (“Buyer”), which is a wholly-owned subsidiary of Tredegar Corporation (the “Company”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Futura Industries Corporation, Futura Corporation, Susan D. Johnson, The Susan D. Johnson Trust, Ken Wells and, in his capacity as Sellers’ Representative, Brent F. Lloyd (collectively, the “Sellers”), pursuant to which the Buyer agreed to purchase from the Sellers, and the Sellers agreed to sell to the Buyer (the “Transaction”), 100% of the outstanding shares of capital stock of Futura Industries Corporation (“Futura Industries”) for an aggregate purchase price of approximately $92,000,000, subject to certain adjustments (the “Purchase Price”).  Completion of the Transaction (the “Closing”) is expected to occur on February 15, 2017.

The Purchase Agreement contains customary representations, warranties, covenants, agreements and indemnification obligations of the Sellers and the Buyer.  At the Closing, the Buyer will deposit a total of $35,000,000 of the Purchase Price into three segregated escrow accounts to cover the Sellers’ indemnification obligations under the Purchase Agreement.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

The above description of the Purchase Agreement has been included to provide information regarding the terms of the Purchase Agreement.  It is not intended to provide any other information about the Company, the Buyer, the Sellers, Futura Industries or their respective subsidiaries or affiliates. The Purchase Agreement contains representations and warranties of the parties thereto that were made solely for the benefit of the other party.  The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Purchase Agreement.  The disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Purchase Agreement.  In addition, such representations and warranties may apply a contractual standard of materiality that is different from that generally applicable to shareholders.  The representations and warranties were made for the purposes of allocating contractual risk between the parties to the Purchase Agreement and should not be relied upon as a disclosure of factual information relating to the parties thereto or the Company.

 

Item 8.01.

Other Events.

On February 1, 2017, the Company issued a press release announcing the Transaction.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01.

Financial Statement and Exhibits.

(d)

Exhibits.

2.1

Stock Purchase Agreement, dated as of February 1, 2017, by and among Futura Industries Corporation, Futura Corporation, Susan D. Johnson, The Susan D. Johnson Trust, Ken Wells, The William L. Bonnell Company, Inc., and, in his capacity as Sellers’ Representative, Brent F. Lloyd.  (Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibit or schedule upon request.)

99.1

Press release issued on February 1, 2017.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  February 2, 2017

 

EXHIBIT INDEX

 

Exhibit No.	Description
2.1	Stock Purchase Agreement, dated as of February 1, 2017, by and among Futura Industries Corporation, Futura Corporation, Susan D. Johnson, The Susan D. Johnson Trust, Ken Wells, The William L. Bonnell Company, Inc., and, in his capacity as Sellers’ Representative, Brent F. Lloyd.  (Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibit or schedule upon request.)
99.1	Press release issued on February 1, 2017.

 

 

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EXECUTION COPY

STOCK PURCHASE AGREEMENT

among

FUTURA INDUSTRIES CORPORATION, A DELAWARE CORPORATION,

(as the “Company”)

and

FUTURA CORPORATION, AN IDAHO CORPORATION,

SUSAN D. JOHNSON,

THE SUSAN D. JOHNSON TRUST

and

KEN WELLS

(collectively, as “Sellers”)

and

THE WILLIAM L. BONNELL COMPANY, INC., A GEORGIA CORPORATION,

(as “Buyer”)

and

BRENT F. LLOYD

(as “Sellers’ Representative”)

dated as of

February 1, 2017

 

TABLE OF CONTENTS

 

 

 

 

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) dated as of February 1, 2017 is entered into among FUTURA INDUSTRIES CORPORATION, a Delaware corporation (the “Company”), FUTURA CORPORATION, an Idaho corporation (“Futura Corp.”), Susan D. Johnson (“Johnson”), The Susan D. Johnson Trust, a Utah trust (the “Trust”), and Ken Wells (“Wells”) (Futura Corp., Johnson, the Trust and Wells, each individually, a “Seller,” and collectively, “Sellers”), and THE WILLIAM L. BONNELL COMPANY, INC., a Georgia corporation (“Buyer”), and, in his capacity as Sellers’ Representative, Brent F. Lloyd.  The Company, each Seller and Buyer are referred to individually herein as a “Party,” and collectively, as the “Parties.”

RECITALS

A.          Sellers own all of the issued and outstanding shares of common stock with no par value (the “Shares”), of the Company; and

B.          Sellers wish to sell to Buyer, and Buyer wishes to purchase from Sellers, the Shares, subject to the terms and conditions set forth herein; and

C.          Contemporaneously with the execution of this Agreement, Sellers are delivering to Buyer employment agreements, to take effect upon the Closing Date, between the Company and each of Ken Wells, Adam Wells, Jared Bringhurst, Spencer Burt and Brett Francom on the other hand; and

D.          In consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

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

“ACS” has the meaning set forth in Section 5.16.1.

“Actual Earn-Out EBITDA” means the aggregate EBITDA for the Company’s eleven fiscal month period beginning February 2017 and ending December 2017.

“Actual Earn-Out EBITDA Statement” has the meaning set forth in Section 2.4.5.3.

 

“Adjustment” has the meaning set forth in Section 2.4.6.2.

“Adoption Date” has the meaning set forth in Section 5.4.4.

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

“Affiliate Landlord” means Rock N’ Roll Stew, LLC, a Utah limited liability company and an Affiliate of the Company.

“Affiliate Transaction” has the meaning set forth in Section 3.20.

“Agreement” has the meaning set forth in the preamble.

“Allocation” has the meaning set forth in Section 2.6.1.

“Asset Sale Tax Election” has the meaning set forth in Section 5.17.

“Audited Financial Statements” has the meaning set forth in Section 3.6.

“Balance Sheet” has the meaning set forth in Section 3.6.

“Balance Sheet Date” has the meaning set forth in Section 3.6.

“Benefit Plan” has the meaning set forth in Section 3.15.1.

“Business” means the Company’s business of designing, manufacturing, extruding, anodizing, fabricating and selling aluminum and associated products.

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Boise, Idaho are authorized or required by Law to be closed for business.

“Buyer” has the meaning set forth in the preamble.

“Buyer’s Indemnified Parties” has the meaning set forth in Section 7.2.

“Buyer Benefit Plans” has the meaning set forth in Section 5.4.2.

“Buyer-Prepared Returns” has the meaning set forth in Section 5.18.1.

“Closing” has the meaning set forth in Section 2.5.

“Closing Accruals” means any customer rebates as of the Closing Date related to the fiscal year ending December 31, 2016 and any unpaid Management Incentive.

 

“Closing Date” has the meaning set forth in Section 2.5.

“Closing Working Capital” means the Working Capital as of the Effective Time.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the preamble.

“Company Continuing Employee” has the meaning set forth in Section 5.4.1.

“Company 401(k) Plan” has the meaning set forth in Section 5.4.3.

“Company Intellectual Property” means all Intellectual Property owned by the Company.

“Company Registered Intellectual Property” has the meaning set forth in Section 3.11.2.

“Company Welfare Plans” has the meaning set forth in Section 5.4.5.

“Confidentiality Agreement” means the Letter Agreement regarding confidentiality and non-disclosure dated as of May 16, 2016 between Buyer and the Company.

“Conflict Minerals” has the meaning assigned to it under Section 1502 of the Dodd‑Frank Act, and the regulations promulgated thereunder.

“Covered Country” has the meaning assigned to it under Section 1502 of the Dodd‑Frank Act, and the regulations promulgated thereunder.

“Data Room” means the electronic documentation site established by DataSite on behalf of Sellers containing the documents set forth in the index included in Section 1.01(a) of the Disclosure Schedules as of the date hereof.

“Deductible” has the meaning set forth in Section 7.4.1.

“Deferred Bonus Plan” means the Futura Industries Corporation 2011 Deferred Bonus Plan, as amended effective June 1, 2016.

“Direct Claim” has the meaning set forth in Section 7.5.3.

“Disclosure Schedules” means the Disclosure Schedules delivered by Sellers and Buyer concurrently with the execution and delivery of this Agreement.

“Disputed Amounts” has the meaning set forth in Section 2.4.6.3.

“Dollars or $” means the lawful currency of the United States.

“Earn-Out Escrow Amount” means cash in the amount of $5,000,000 to be deposited with the Escrow Agent and held in a segregated account pursuant to the Escrow Agreement.

 

“EBITDA” has the meaning set forth in Section 2.4.5.1.

“EBITDA Adjustment Payment” has the meaning set forth in Section 2.4.5.4.

“EBITDA Shortfall” has the meaning set forth in Section 2.4.5.4.

“Effective Time” means 12:01 a.m., Salt Lake City, Utah time on the Closing Date.

“Employees” means those Persons employed by the Company immediately prior to the Closing.

“Encumbrance” means any lien, including any Tax lien, pledge, mortgage, deed of trust, security interest, charge, claim, attachment, levy, charge, reservation, restriction, imposition or other similar encumbrance, including easements, rights-of-way and encroachments, conditional sale or title retention arrangement or any other interest in any property or assets (or the income or profits therefrom), whether designed to secure the payment of indebtedness or otherwise, whether consensual or nonconsensual and whether arising by agreement or under any Law, or otherwise.

“Environmental Claim” means any action, suit, claim, judicial complaint, governmental order, investigation or other legal proceeding brought by any Person and alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from:  (a) the presence of, Release of or exposure to any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

“Environmental Law” means (a) any Law relating to the generation, use, handling, treatment, storage, Release, disposal or transportation of any Hazardous Material, or (b) the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; the Hazardous Substances Transportation Authorization Act of 1994, 49 U.S.C. §§ 5101 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. §§ 2701 et seq.; the Endangered Species Act of 1973, 16 U.S.C. 1531 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136 et seq.; and the Safe Drinking Water Act, 42 U.S.C. §§ 300(f) et seq. with any amendments or reauthorization thereto or thereof, and any and all regulations promulgated thereunder, and all analogous state and local counterparts or equivalents.

“Environmental Notice” means any written notice of violation, demand, inquiry, request for information, citation, summons, order or infraction from a domestic Governmental Authority respecting any Environmental Claim relating to (a) the presence of, Release of or exposure to any Hazardous Materials; or (b) actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

 

“Environmental Permit” means any Permit required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

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

“ERISA Affiliate” means any trade or business, whether or not incorporated, that, together with the Company, is, or during the preceding six (6) years was, treated as a single employer under Section 414 of the Code or ERISA.

“Escrow Agent” means KeyBank National Association.

“Escrow Agreement” means the Escrow Agreement among Buyer, Sellers’ Representative and Escrow Agent, to be executed and delivered at the Closing in the form attached hereto as Exhibit A.

“Escrow Amount” means the sum of the Earn-Out Escrow Amount, Regular Indemnity Escrow Amount and the Limited Tax Indemnity Escrow Amount.

“Estimated Closing Working Capital” has the meaning set forth in Section 2.4.1.1.

“Estimated Closing Working Capital Statement” has the meaning set forth in Section 2.4.1.1.

“Estimated Phase IV Post-Closing Costs” has the meaning set forth in Section 2.4.3.2.

“Exemption Certificates” has the meaning set forth in Section 5.18.7.

“Expansion” has the meaning set forth in Section 5.16.1.

“Expansion Post-Closing Costs” has the meaning set forth in Section 2.4.4.1.

“Expansion Post-Closing Statement” has the meaning set forth in Section 2.4.4.1.

“Expansion Purchase Price Payment” has the meaning set forth in Section 2.4.3.

“Expansion Scope” has the meaning set forth in Section 5.16.2.

“Facilities” means all buildings, structures, improvements and fixtures located on any Real Property.

“Facility Renovations” has the meaning set forth in Section 5.16.1.

 

“Final Working Capital” means the average of the month-end Working Capital for each of the twelve (12) months beginning May 2016 and ending April 2017, with each month ending date defined consistently in accordance with the Company’s accounting policies, but in no event shall the average be greater than $12,680,000 or be less than $11,740,000.  For the avoidance of doubt, if the average of the month-end Working Capital for each of the twelve (12) months beginning May 2016 and ending April 2017 is (i) greater than $12,680,000, then Final Working Capital shall be $12,680,000, or (ii) less than $11,740,000, then Final Working Capital shall be $11,740,000.

“Final Working Capital Statement” has the meaning set forth in Section 2.4.2.1.

“Financial Statements” has the meaning set forth in Section 3.6.

“Form 8023” has the meaning set forth in Section 5.17.1.

“Fundamental Representations” has the meaning set forth in Section 7.1.

“Futura Corp.” has the meaning set forth in the preamble.

“GAAP” means United States generally accepted accounting principles in effect for the relevant period of time.

“Governmental Authority” means any transnational, domestic, foreign, federal, state, municipal, provincial or local government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination, decision, citation, ruling or award entered by or with any Governmental Authority.

“H11 Lease” has the meaning set forth in Section 5.15.

“Hazardous Materials” means:  (a) any chemical, waste, substance or material (whether solid, liquid or gas) designated, listed, defined or classified by a Governmental Authority as (i) a contaminant or pollutant or (ii) ignitable, corrosive, radioactive, dangerous, toxic, explosive, infectious, mutagenic or otherwise hazardous under applicable Environmental Law; or (b) petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, mold, mycotoxin, urea formaldehyde foam insulation and polychlorinated biphenyls.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

“Indebtedness” means (without duplication):  (a) all obligations of the Company for borrowed money; (b) all obligations, contingent or otherwise, of the Company evidenced by bonds, debentures, notes or other similar instruments (including any notes, deferred purchase price obligations or earn-out obligations issued or entered into in connection with any acquisition undertaken by the Company) and any other contingent and off-balance sheet liabilities, undisclosed liabilities and unpaid restructuring charges; (c) all obligations in respect of letters of credit, performance bonds, surety bonds or similar instruments issued on behalf of the Company to the extent drawn, called for payment or otherwise due and payable, and bankers’ acceptances issued for the account of the Company; (d) any commitment by which the Company assures a creditor against loss, other than contingent indemnification obligations of the Company incurred in the ordinary course of the Business pursuant to Material Contracts and under which the Company owes no indemnification payments; (e) any indebtedness guaranteed in any manner by the Company (including guarantees in the form of an agreement to repurchase or reimburse); (f) any liabilities or obligations under capitalized leases for which the Company is liable, contingently or otherwise, as obligor, guarantor or otherwise or with respect to which obligations the Company assures a creditor against loss; (g) any indebtedness or liabilities secured by an Encumbrance on any of the assets of the Company; (h) any net liabilities of the Company with respect to interest rate or currency swaps, collars or similar hedging agreements; and (i) any accrued interest, prepayment premiums or penalties related to any of the foregoing.

“Indebtedness Payoff Amount” has the meaning set forth in Section 2.2.1.

“Indemnified Party” has the meaning set forth in Section 7.4.

“Indemnifying Party” has the meaning set forth in Section 7.4.

“Independent Accountants” has the meaning set forth in Section 2.4.6.3.

“Intellectual Property” has the meaning set forth in Section 3.11.1.

“Interim Balance Sheet” has the meaning set forth in Section 3.6.

“Interim Balance Sheet Date” has the meaning set forth in Section 3.6.

“Interim Financial Statements” has the meaning set forth in Section 3.6.

“Inventory” means all inventory, merchandise or finished goods of a type that the Company sells in the ordinary course of the Business, including work-in-progress, raw materials, packaging, labels and supplies used or consumed in the manufacture, production, shipment or sale of other Inventory, and any prepaid deposits for any of the foregoing.

“Johnson” has the meaning set forth in the preamble.

“Knowledge of Sellers or Sellers’ Knowledge” or any other similar knowledge qualification, means the actual knowledge, after reasonable inquiry, of those persons set forth on Section 1 of the Disclosure Schedules.

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

“Leased Real Property” means the Real Property leased, occupied or used by the Company for the Company’s Business pursuant to a Lease, together with all Facilities thereon and all easements, rights of way and other appurtenances thereto, which shall include the real property subject to the New P‑2 Lease.

 

“Leases” means any and all leases, subleases, concessions, licenses and other similar agreements (whether written or oral) in connection with the occupancy or use of Real Property, including all amendments, modifications, extensions, renewals, guaranties and other agreements with respect thereto.

“Limited Tax Indemnity Escrow Amount” means cash in the amount of $22,500,000 to be deposited with the Escrow Agent and held in a segregated account pursuant to the Escrow Agreement.

“Losses” means losses, damages (including natural resource damages), liabilities, Taxes, costs or expenses, including reasonable attorneys’ fees.

“Major Customers” has the meaning set forth in Section 3.23.1.

“Major Suppliers” has the meaning set forth in Section 3.23.2.

“Management Incentive” means any accrued and unpaid management incentive for the fiscal year ending December 31, 2016 and any transaction bonus, discretionary bonus, success fee, equity award, change-of-control payment, phantom equity payout, “stay put” or other compensatory payment obligations that becomes payable upon the Closing, including the Vested Amount payable to Jared Bringhurst at Closing under the Deferred Bonus Plan and the severance payable to Johnson pursuant to the Separation Agreement.

“Material Adverse Effect” means any event, occurrence, fact, condition or change that, individually or in the aggregate, has, or would reasonably be expected to have, a material and adverse effect on (a) the business, results of operations, financial condition or assets of the Company, or (b) the ability of Sellers to consummate the transactions contemplated hereby.  Notwithstanding the foregoing, “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to:  (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Company operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism or the escalation or worsening thereof; (v) any action expressly required or permitted by this Agreement or any action taken (or omitted to be taken) with the prior written consent of or at the prior written request of Buyer; (vi) any changes in applicable Laws or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; (vii) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Company; (viii) any natural or man-made disaster or acts of God; (ix) any failure by the Company to meet any internal or published projections, forecasts or revenue or earnings predictions (provided, however, that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded); or (x) and effects that are cured by Sellers prior to Closing; provided, however, that any event, occurrence, fact, condition or change referred to in clauses (i), (ii), (iii), (iv) or (vi) does not have a materially disproportionate negative effect on the Company or the Business, taken as a whole, as compared to other companies in similar industries.

 

“Material Contracts” has the meaning set forth in Section 3.9.1.

“New 401(k) Plan” has the meaning set forth in Section 5.4.4.

“New P‑2 Lease” means the Lease Agreement, entered into as of June 3, 2016, between the Affiliate Landlord, as landlord, and the Company, as tenant, for building P‑2.

“New Welfare Plans” has the meaning set forth in Section 5.4.5.

“Outside Closing Date” has the meaning set forth in Section 8.1.2.1.

“Party” or “Parties” has the meaning set forth in the preamble.

“Pay-Off Letters” means, collectively, the pay-off letters from the Company’s lenders and creditors with respect to the repayment of outstanding Indebtedness to such lenders and creditors as of immediately prior to the Closing, as set forth on Section 2.2.1 of the Disclosure Schedules.  Each Pay-Off Letter will provide for (a) the release and termination of all Encumbrances (other than Permitted Encumbrances), if any, on any of the assets of the Company associated with the Indebtedness subject to such Pay-Off Letter upon the receipt of the amount specified therein to be paid on the Closing Date; and (b) the delivery of, or authorization or agreement to file, a Uniform Commercial Code termination statement or other appropriate release document with respect to any such Encumbrance following repayment of the outstanding amount specified in the Pay-Off Letter.

“Permits” means all permits, licenses, franchises, approvals, authorizations and consents required to be obtained from Governmental Authorities.

“Permitted Encumbrances” has the meaning set forth in Section 3.10.1.

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

“Phase IV” has the meaning set forth in Section 5.16.1.

“Phase IV Post-Closing Costs” has the meaning set forth in Section 2.4.4.2.

“Phase IV Post-Closing Costs Shortfall” has the meaning set forth in Section 2.4.4.2.

“Phase IV Post-Closing Statement” has the meaning set forth in Section 2.4.4.2.

“Phase IV Scope” has the meaning set forth in Section 5.16.2.

“Post-Closing Statement” has the meaning set forth in Section 2.4.6.1.

 

“Post-Closing Straddle Period” has the meaning set forth in Section 5.18.2.

“Pre-Closing Customer Transactions” has the meaning set forth in Section 5.18.7.

“Pre-Closing Straddle Period” has the meaning set forth in Section 5.18.2.

“Privileged Communications” has the meaning set forth in Section 10.12.3.

“Pro Rata Share” means, with respect to each Seller, the quotient obtained by dividing (a) the number of the Shares owned by such Seller as set forth on Section 3.3.1 of the Disclosure Schedules by (b) the total number of issued and outstanding Shares set forth in Section 3.3.1.

“Purchase Price” has the meaning set forth in Section 2.2.

“Purchase Price Disbursement Amount” means the amount equal to Purchase Price (a) plus any remaining cash of the Company (net of all outstanding checks) as of the Effective Time, (b) plus the amount required to pay and discharge in full on the Closing Date the notes receivable made by Johnson and Wells in favor of the Company, (c) plus or minus the Working Capital Closing Adjustment, (d) plus the Expansion Purchase Price Payment, (e) minus the Estimated Phase IV Post Closing Costs, if any, (f) minus the sum of the Indebtedness Payoff Amount, the Transaction Expenses, the Earn-Out Escrow Amount, the Regular Indemnity Escrow Amount, the Closing Accruals and any Indebtedness identified in the Purchase Price Disbursement Certificate and not included in the Indebtedness Payoff Amount.

“Purchase Price Disbursement Certificate” has the meaning set forth in Section 6.2.3.5.

“Qualified Benefit Plan” has the meaning set forth in Section 3.15.2.

“Real Property” means the real property owned, leased or subleased by the Company, together with all Facilities located thereon and appurtenances related thereto, which shall include the real property subject to the New P‑2 Lease.

“Regular Indemnity Escrow Amount” means the sum of $7,500,000 to be deposited with the Escrow Agent and held in a segregated account pursuant to the Escrow Agreement.

“Release” means: (a) any release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture) of Hazardous Materials; and (b) the abandonment of barrels, tanks, containers or other closed receptacles containing Hazardous Materials.

“Releasees” has the meaning set forth in Section 5.7.

“Release Date” has the meaning set forth in Section 7.4.7.

 

“Remedial Action” means any action to investigate, remediate, remove, abate, clean up, dispose or monitor any Release or threatened Release of Hazardous Materials.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Resolution Period” has the meaning set forth in Section 2.4.6.2.

“Restricted Area” has the meaning set forth in Section 5.22.2.

“Review Period” has the meaning set forth in Section 2.4.6.1.

“Sale Income Taxes” has the meaning set forth in Section 7.7.

“Schedule Supplement” has the meaning set forth in Section 5.3.

“Seller” or “Sellers” has the meaning set forth in the preamble.

“Seller-Prepared Returns” has the meaning set forth in Section 5.18.1.

“Sellers’ Indemnified Parties” has the meaning set forth in Section 7.3.

“Sellers’ Representative” has the meaning set forth in Section 9.1.

“Separation Agreement” means the Separation Agreement and Release of Claims dated January 13, 2017 between Johnson and the Company.

“Settlement Agreement” has the meaning set forth in Section 5.16.1.

“Shares” has the meaning set forth in the recitals.

“SNDA” means a subordination, non-disturbance and attornment agreement between the Company, on the one hand, and any lender that holds a monetary Encumbrance or any ground lessor that is a party to a ground lease on the Leased Real Property, on the other hand, dated on or before the Closing Date in a form mutually agreeable to Buyer and each such lender or ground lessor, whereby, in the event that the lender forecloses on any Leased Real Property or ground lessor declares a default under the ground lease, such lender or ground lessor agrees not to disturb the Company’s occupancy and use of such Leased Real Property pursuant to the terms and conditions of the Lease between the Company and the lessor or sublessor of the Leased Real Property, and the Company shall attorn to such lender’s, third party purchaser’s or ground lessor’s rights as lessor or sublessor thereunder.

“Statement of Objections” has the meaning set forth in Section 2.4.6.2.

“Straddle Period” has the meaning set forth in Section 5.18.2.

“Straddle Period Tax Return” has the meaning set forth in Section 5.18.2.

“Target Working Capital” means $12,680,000.

 

“Taxes” means all federal, state, local, foreign and other income, capital gains, gross receipts, sales, use, production, ad valorem, transfer, franchise, recording, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, insurance premium, social security (or similar), documentary, recapture, alternative or add-on minimum, estimated, excise, severance, environmental, workers compensation, value added, stamp, occupation, escheat, unclaimed property, estimated, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever in the nature of a tax, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Tax Return” means any return, declaration, report, claim for refund, information return, statement or other document required to be filed with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Third-Party Claim” has the meaning set forth in Section 7.5.1.

“Transaction Expenses” means all fees, expenses and other payment obligations of the Company and Sellers payable (a) to third party service providers that are incurred or to be incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the Closing and the consummation of the transactions contemplated hereby, including out-of-pocket costs, fees and expenses of or to financial advisors (including Wells Fargo), attorneys, accountants and other service providers; (b) in connection with obtaining consents required from third parties to the Material Contracts set forth on Section 3.5.1 of the Disclosure Schedules; and (c) the premiums for the “tail” or “run-off” insurance policies required by Section 5.6.

“Transfer Taxes” has the meaning set forth in Section 5.14.

“Tredegar” means Tredegar Corporation, a Virginia corporation and the ultimate parent entity of Buyer.

“Trust” has the meaning set forth in the preamble.

“Undisputed Amounts” has the meaning set forth in Section 2.4.6.3.

“Vested Amount” has the meaning set forth in Section 3.15.7.

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

“Wells” has the meaning set forth in the preamble.

“Wells Fargo” means Wells Fargo Securities, LLC, a Delaware limited liability company, who is serving as financial advisor to Sellers and the Company in connection with the transactions contemplated hereby.

 

“Working Capital” means, as of any determination date, the amount calculated in accordance with the Accounting Principles and Exhibit B.

“Working Capital Closing Adjustment” has the meaning set forth in Section 2.4.1.2.

“Working Capital Post-Closing Adjustment” has the meaning set forth in Section 2.4.2.2.

ARTICLE II.

PURCHASE AND SALE

2.1          Purchase and Sale.  Subject to the terms and conditions set forth herein, at the Closing, Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, the Shares for the consideration specified in Section 2.2.

2.2          Purchase Price.  Subject to the Closing and post-Closing adjustments set forth in Section 2.4, the aggregate purchase price for the Shares shall be $90,000,000 (the “Purchase Price”).  The Purchase Price shall be paid as follows:

2.2.1        To each holder of Indebtedness of the Company set forth on Section 2.2.1 of the Disclosure Schedules by wire transfer of immediately available funds to an account designated by such holder in writing, the aggregate amount of cash required to pay and discharge in full on the Closing Date all such Indebtedness as set forth in each holder’s Pay-Off Letter (the “Indebtedness Payoff Amount”).

2.2.2        To each Person identified on the Purchase Price Disbursement Certificate by wire transfer of immediately available funds to an account designated by such Person in writing, the corresponding amount of Transaction Expenses identified on the Purchase Price Disbursement Certificate.

2.2.3        To the Escrow Agent by wire transfers of immediately available funds to three (3) segregated accounts designated by the Escrow Agent no later than two (2) Business Days prior to the Closing Date, the Escrow Amount to be held and distributed by the Escrow Agent in accordance with the terms of the Escrow Agreement to satisfy any and all indemnification obligations of Sellers and the obligations set forth in Section 2.4.5.

2.2.4        To Futura Corp. by wire transfer of immediately available funds to an account or accounts designated in writing by Sellers’ Representative to Buyer no later than two (2) Business Days prior to the Closing Date, Futura Corp.’s Pro Rata Share of the Purchase Price Disbursement Amount minus the Limited Tax Indemnity Escrow Amount.

2.2.5        To Johnson by wire transfer of immediately available funds to an account or accounts designated in writing by Sellers’ Representative to Buyer no later than two (2) Business Days prior to the Closing Date, Johnson’s Pro Rata Share of the Purchase Price Disbursement Amount minus the aggregate amount of cash required to pay and discharge in full on the Closing Date the notes receivable made by Johnson in favor of the Company.

 

2.2.6        To the Trust by wire transfer of immediately available funds to an account or accounts designated in writing by Sellers’ Representative to Buyer no later than two (2) Business Days prior to the Closing Date, the Trust’s Pro Rata Share of the Purchase Price Disbursement Amount.

2.2.7        To Wells by wire transfer of immediately available funds to an account or accounts designated in writing by Sellers’ Representative to Buyer no later than two (2) Business Days prior to the Closing Date, Wells’ Pro Rata Share of the Purchase Price Disbursement Amount minus the aggregate amount of cash required to pay and discharge in full on the Closing Date the note receivable made by Wells in favor of the Company.

2.3         Transactions to be Effected at the Closing.

2.3.1        At the Closing, Buyer shall deliver:

2.3.1.1          the Purchase Price (a) plus any remaining cash of the Company (net of all outstanding checks) as of the Effective Time, (b) plus or minus the Working Capital Closing Adjustment, (c) plus the Expansion Purchase Price Payment, (d) minus the Estimated Phase IV Post Closing Costs, if any, (e) minus the sum of the Indebtedness Payoff Amount, the Transaction Expenses, the Escrow Amount, the Closing Accruals, any Indebtedness identified in the Purchase Price Disbursement Certificate and not included in the Indebtedness Payoff Amount, by wire transfers of immediately available funds to Sellers to the accounts designated by Sellers’ Representative in accordance with Sections 2.2.4, 2.2.5, 2.2.6 and 2.2.7;

2.3.1.2          evidence that Buyer has paid the Indebtedness Payoff Amount to each holder of Indebtedness set forth on Section 2.2.1 of the Disclosure Schedules and the Transaction Expenses to each Person identified in the Purchase Price Disbursement Certificate and deposited the Escrow Amount with the Escrow Agent, in each case by wire transfer of immediately available funds to the accounts designated by each such Person pursuant to Sections 2.2.1, 2.2.2 and 2.2.3, respectively; and

2.3.1.3          all other agreements, documents, instruments or certificates required to be delivered by Buyer at or prior to the Closing pursuant to Section 6.3 of this Agreement.

2.3.2        At the Closing, Sellers shall deliver to Buyer all agreements, documents, instruments or certificates required to be delivered by Sellers at or prior to the Closing pursuant to Section 6.2 of this Agreement.

2.4          Purchase Price Adjustments.

2.4.1        Working Capital Closing Adjustment.

2.4.1.1          At least three (3) Business Days before the Closing, Sellers’ Representative shall prepare and deliver to Buyer a statement setting forth his good faith estimate of Closing Working Capital (the “Estimated Closing Working Capital”), which statement shall contain an estimated balance sheet of the Company as of the Effective Time (after giving effect to the transactions contemplated by this Agreement to occur by Closing and calculated in accordance with the Accounting Principles) and a calculation of Estimated Closing Working Capital (the “Estimated Closing Working Capital Statement”), and a certificate of an officer of the Company that the Estimated Closing Working Capital Statement was prepared in accordance with the Accounting Principles.  The calculation of Estimated Closing Working Capital in the Estimated Closing Working Capital Statement shall be subject to Buyer’s review and approval, which shall not be unreasonably withheld.

 

2.4.1.2          The “Working Capital Closing Adjustment” shall be an amount equal to the Estimated Closing Working Capital minus the Target Working Capital.  If the Working Capital Closing Adjustment is a positive number, the Purchase Price shall be increased by the amount of the Working Capital Closing Adjustment.  If the Working Capital Closing Adjustment is a negative number, the Purchase Price shall be reduced by the amount of the Working Capital Closing Adjustment.

2.4.2        Working Capital Post-Closing Adjustment.

2.4.2.1          On or before June 15, 2017, Buyer shall prepare and deliver to Sellers’ Representative (i) a statement setting forth its calculation of Closing Working Capital, which statement shall contain a true and accurate balance sheet of the Company as of the Effective Time (after giving effect to the transactions contemplated by this Agreement to occur on or before June 15, 2017 and calculated in accordance with by the Accounting Principles), included in the calculation of Closing Working Capital, (ii) a statement setting forth its calculation of Final Working Capital, which statement shall contain a true and accurate balance sheet of the Company as of each month end included in the calculation of Final Working Capital (together, the statements described in this clause (ii) and the preceding clause (i) are referred to as the “Final Working Capital Statement”), and (iii) a certificate of an officer of Buyer that the Final Working Capital Statement was prepared in accordance with the Accounting Principles.

2.4.2.2          The post-closing adjustment (the “Working Capital Post-Closing Adjustment”) shall be an amount equal to the Closing Working Capital minus the Estimated Closing Working Capital plus the Target Working Capital minus the Final Working Capital.  If the Working Capital Post-Closing Adjustment is a positive number, Buyer shall pay to Sellers, in accordance with each Seller’s Pro Rata Share, an amount equal to the Working Capital Post-Closing Adjustment.  If the Working Capital Post-Closing Adjustment is a negative number, Sellers shall pay to Buyer, in accordance with each Seller’s Pro Rata Share, an amount equal to the Working Capital Post-Closing Adjustment.  For the avoidance of doubt, Buyer is entitled to recover the Working Capital Post-Closing Adjustment directly from Sellers, in accordance with each Seller’s Pro Rata Share, and will not be required to make any claims against the Regular Indemnity Escrow Amount for the Working Capital Post-Closing Adjustment.

2.4.3        Facility Renovations Closing Adjustments.  Sellers shall pay for the total cost of the Phase IV portion of the Facility Renovations.  Buyer shall pay for $1,850,000 of the Expansion portion of the Facility Renovations (the “Expansion Purchase Price Payment”).  In furtherance of the foregoing, Sellers and Buyer have agreed upon adjustments to the Purchase Price as follows:

 

2.4.3.1          The Purchase Price set forth in Section 2.2 shall be increased by the Expansion Purchase Price Payment.

2.4.3.2          If the cost of the Phase IV portion of the Facility Renovations has not been fully paid by the Company before Closing, then no later than three (3) Business Days prior to Closing, Sellers’ Representative and Buyer will agree on a reasonable estimate of the costs that were incurred but not paid prior to Closing and costs that will be incurred after the Closing in order to complete the Phase IV portion of the Facility Renovations (the “Estimated Phase IV Post-Closing Costs”).  The Purchase Price set forth in Section 2.2 shall be decreased by an amount equal to the Estimated Phase IV Post-Closing Costs.

2.4.4        Facility Renovations Post-Closing Adjustments.

2.4.4.1          Within forty-five (45) days after the completion of the Facility Renovations, Buyer shall prepare and deliver to Sellers’ Representative a statement (“Expansion Post-Closing Statement”) setting forth all costs incurred and actually paid by the Company on or after Closing for the Expansion portion of the Facility Renovations (“Expansion Post-Closing Costs”).  Sellers shall reimburse Buyer, in accordance with each Seller’s Pro Rata Share, for the Expansion Post-Closing Costs.  For the avoidance of doubt, Buyer is entitled to recover the Expansion Post-Closing Costs directly from Sellers, in accordance with each Seller’s Pro Rata Share, and will not be required to make any claims against the Regular Indemnity Escrow Amount for the Expansion Post-Closing Costs.

2.4.4.2          If the cost of the Phase IV portion of the Facility Renovations has not been fully paid by the Company before Closing, within forty-five (45) days after the completion of the Facility Renovations, Buyer shall also prepare and deliver to Sellers’ Representative a statement (“Phase IV Post-Closing Statement”) setting forth all costs incurred and actually paid by the Company on or after Closing for the Phase IV portion of the Facility Renovations (“Phase IV Post-Closing Costs”).  If the amount equal to the Estimated Phase IV Post-Closing Costs minus the Phase IV Post-Closing Costs is negative, then Sellers shall reimburse Buyer, in accordance with each Seller’s Pro Rata Share, for the absolute value of such negative amount (the “Phase IV Post-Closing Costs Shortfall”).  If the amount equal to the Estimated Phase IV Post-Closing Costs minus the Phase IV Post-Closing Costs is positive, then Buyer will reimburse Sellers, in accordance with each Seller’s Pro Rata Share, for such positive amount.  For the avoidance of doubt, Buyer is entitled to recover the Phase IV Post-Closing Costs Shortfall directly from Sellers, in accordance with each Seller’s Pro Rata Share, and will not be required to make any claims against the Regular Indemnity Escrow Amount for the Phase IV Post-Closing Costs Shortfall.

2.4.5        EBITDA Earn-Out Adjustment.

2.4.5.1          As used in this Agreement, “EBITDA” means the actual amount computed for a particular month from the Company’s “Income Statements” page of its monthly “Financial Statements” package equal to “Operating Income” minus “Sundry (Income) & Expense” minus “Profit Participation” plus depreciation and amortization.  Depreciation and amortization shall be an amount computed from the Company’s “Conversion Cost Analysis” page of its monthly “Financial Statements” package equal to “Depreciation - Dies/Tooling” plus “Broken/Obsolete Dies” plus “Depreciation - PP&E.”  An example copy of the relevant pages from the Company’s monthly “Financial Statements” package is attached as Exhibit C.  The financial information included in the “Financial Statements” package shall be prepared in accordance with GAAP consistently applied and shall exclude any Transaction Expenses and “pushdown” purchase accounting adjustments associated with the Buyer’s acquisition of the Company.

 

2.4.5.2          For informational purposes only, for each of the first through third fiscal quarters of 2017 Buyer will deliver to Sellers’ Representative a statement of EBITDA for such fiscal quarter and the relevant pages from the Company’s monthly “Financial Statements” package in the form attached as Exhibit C for each of the three (3) months within such fiscal quarter fifteen (15) days after Tredegar files its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission for such fiscal quarter.

2.4.5.3          Within fifteen (15) days after Tredegar files its annual report on Form 10-K with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2017, Buyer shall prepare and deliver to Sellers’ Representative and to the Escrow Agent (a) a statement setting forth its calculation of Actual Earn-Out EBITDA and the relevant pages from the Company’s monthly “Financial Statements” package in the form attached as Exhibit C for each of the three (3) months within the fourth calendar quarter of 2017 (the “Actual Earn-Out EBITDA Statement”) and the amounts payable to Buyer or to Sellers pursuant to Section 2.4.5.4; and (b) a certificate of an officer of Buyer that the Actual Earn-Out EBITDA Statement was prepared in accordance with this Section 2.4.5.

2.4.5.4          If the Actual Earn-Out EBITDA is less than $16,175,000 (such difference, the “EBITDA Shortfall”), then Buyer will be entitled to a payment from the Earn-Out Escrow Amount (the “EBITDA Adjustment Payment”) equal to the product of 5.56 multiplied by the EBITDA Shortfall; provided, however, that in no event shall Buyer be entitled to an EBITDA Adjustment Payment greater than $5,000,000, nor shall Buyer be required to make any additional payments pursuant to this Section 2.4.5 if the Actual Earn-Out EBITDA exceeds $16,175,000.  For example, if the Actual Earn-Out EBITDA is $15,925,000, then the EBITDA Adjustment Payment payable to Buyer pursuant to this Section 2.4.5 shall equal $1,390,000 (i.e., ($16,175,000 - $15,925,000) x 5.56 = $1,390,000).  After payment of the EBITDA Adjustment Payment to Buyer, the Escrow Agent will pay any amounts remaining in the Earn-Out Escrow Amount to Sellers, in accordance with each Sellers’ Pro Rata Share.  The Escrow Agent will make any payments contemplated by this Section 2.4.5.4 after the resolution of any disputes regarding the Actual Earn-Out EBITDA Statement in accordance with Section 2.4.6.2 or Section 2.4.6.6 and the terms of the Escrow Agreement.

2.4.5.5          From the date hereof until December 31, 2017, Buyer shall not, and shall cause the Company to not, take any action, directly or indirectly, the primary intent or purpose of which is to avoid or reduce the Actual Earn-Out EBITDA.  Notwithstanding the foregoing, (a) the Company’s 2017 fiscal year will end on December 24, 2017 even though the Company’s 2017 fiscal year, if Closing had not occurred, would have ended on December 30, 2017, and (b) as a result, the Actual Earn-Out EBITDA shall be equitably increased by an amount equal to the product of the Company’s net sales for December 25 through 30, 2017 multiplied by 17.5%.

 

2.4.6        Examination and Review.

2.4.6.1          Examination.  After receipt of the Final Working Capital Statement, Expansion Post-Closing Statement, Phase IV Post-Closing Statement or Actual Earn-Out EBITDA Statement (in each case, as applicable, the “Post-Closing Statement”), Sellers’ Representative shall have fifteen (15) days (the “Review Period”) to review any such Post-Closing Statement.  During the Review Period, Sellers’ Representative and Sellers’ Representative’s accountants (at Sellers’ Representative’s own cost) shall have the right to examine invoices or other documentation supporting the applicable Post-Closing Statement, including work papers used or generated in connection with the preparation of the applicable Post-Closing Statement, and to prepare a Statement of Objections (defined below).

2.4.6.2          Objection.  On or prior to the last day of the Review Period, Sellers’ Representative may object to the Post-Closing Statement by delivering to Buyer a written statement setting forth Sellers’ Representative’s objections in reasonable detail, indicating each disputed item or amount and the basis for Sellers’ Representative’s disagreement therewith (the “Statement of Objections”).  If the Statement of Objections is for the Actual Earn-Out EBITDA Statement, Sellers’ Representative will also deliver a copy thereof to the Escrow Agent.  If Sellers’ Representative fails to deliver the Statement of Objections before the expiration of the Review Period, the Post-Closing Statement shall be deemed to have been accepted by Sellers and the payment required under Sections 2.4.2.2, 2.4.4.1 or 2.4.4.2 or 2.4.5.4 as applicable (in each case, the “Adjustment”), shall be made in accordance with the provisions thereof (including the terms of the Escrow Agreement if the Statement of Objections, or lack thereof, is for the Actual Earn-Out EBITDA Statement).  If Sellers’ Representative delivers the Statement of Objections before the expiration of the Review Period, Buyer and Sellers’ Representative shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the Statement of Objections (the “Resolution Period”), and, if the same are so resolved within the Resolution Period, the Adjustment and the Post-Closing Statement with such changes as may have been previously agreed in writing by Buyer and Sellers’ Representative shall be final and binding.

2.4.6.3          Resolution of Disputes.  If Sellers’ Representative and Buyer fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then only those amounts remaining in dispute, if any (“Disputed Amounts” and any amounts not so disputed, the “Undisputed Amounts”), shall be submitted for resolution to the office of Deloitte & Touche LLP or, if Deloitte & Touche LLP is unable to serve, Buyer and Sellers’ Representative shall appoint by mutual agreement the office of an impartial nationally recognized firm of independent certified public accountants other than the Company’s, Sellers’ or Buyer’s auditing firm (the “Independent Accountants”) who shall resolve the Disputed Amounts only and make any adjustments to the Adjustment, as the case may be, and the applicable Post-Closing Statement.  The Parties agree that they will instruct and permit the Independent Accountants (a) to decide only the specific Disputed Amounts (and not any Undisputed Amount) regardless of the materiality of such Disputed Amounts and (b) further to decide each Disputed Amount within the range of values assigned to each such item in the Post-Closing Statement and the Statement of Objections, respectively.

 

2.4.6.4          Fees of the Independent Accountants.  The fees and expenses of the Independent Accountant shall be paid by Sellers, on the one hand, and by Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to Sellers or Buyer, respectively, bears to the aggregate amount actually contested by Sellers and Buyer.

2.4.6.5          Determination by Independent Accountants.  The Independent Accountants shall make a determination as soon as practicable within thirty (30) days (or such other time as the Parties shall agree in writing) after their engagement, and their resolution of the Disputed Amounts and their adjustments to the Post-Closing Statement and/or the applicable Adjustment shall be conclusive and binding upon the Parties.

2.4.6.6          Payments of Adjustment.  Except as otherwise provided herein, any payment of the Adjustment shall (a) be due (x) within five (5) Business Days of acceptance of the applicable Post-Closing Statement or (y) if there are Disputed Amounts, then within five (5) Business Days of the resolution described in Section 2.4.6.5 above; and (b) for Statements of Objections to Post-Closing Statements other than the Actual Earn-Out EBITDA Statement, be paid by wire transfer of immediately available funds to Buyer to such account as is directed by Buyer or to Sellers, in accordance with each Seller’s Pro Rata Share, to such account as directed by each Seller, as the case may be, or for a Statement of Objection to the Actual Earn-Out EBITDA Statement, be paid from the Earn-Out Escrow Amount as contemplated by Section 2.4.5.4 and the terms of the Escrow Agreement.

2.4.7        Withholding.  Notwithstanding anything to the contrary in this Agreement, Buyer and Escrow Agent will each be entitled to deduct and withhold from the amounts otherwise payment payable by it pursuant to this Agreement to any Person, including payments made under the Escrow Agreement, such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code or under any provision of state, local or foreign Tax Law, and to collect any necessary Tax forms, including Forms W-8 or W-9, as applicable, or any similar information from any recipient of payments hereunder.  In the event that any amount is so deducted and withheld, and properly remitted to the appropriate Governmental Authority, such amount will be treated for all purposes of this Agreement as having been paid to the Person to whom the payment from which such amount was withheld was made.  Promptly upon any determination by Buyer that Buyer believes an amount must be withheld under the Code or under any provision of state, local or foreign Tax Law, Buyer shall notify Sellers’ Representative in writing of such belief and the basis therefor and shall cooperate with Sellers’ Representative in using commercially reasonable efforts to eliminate or reduce such withholding requirement.

2.4.8        Adjustments for Tax Purposes.  Any payments made pursuant to Section 2.4 shall be treated as an adjustment to the Purchase Price by the Parties for Tax purposes, unless otherwise required by Law.

 

2.5           Closing.  Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing”) at the offices of Holland & Hart LLP, 222 Main St #2200, Salt Lake City, UT 84101 on February 15, 2017, at 10:00 a.m. Mountain time, to be effective as of the Effective Time; provided, however, that if the last of the conditions to Closing set forth in Article VI have not been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date) by such date, then Closing will occur on the date that is two (2) Business Days following the date on which the last of the conditions to Closing set forth in Article VI have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date) or such other date, time or place is agreed to by Buyer and Sellers (the day on which the Closing takes place being the “Closing Date”); provided, further, that Buyer and Sellers intend that Closing will be effected, to the extent practicable, by conference call, the electronic delivery of documents (by fax, pdf or other electronic exchanges) and the prior physical exchange of certificates and certain other instruments to be held in escrow by outside counsel to the recipient party pending authorization by the delivering party (or its outside counsel) of their release on the Closing Date.  For Tax and accounting purposes, the Closing shall be effective as of the Effective Time.

2.6           Allocation.

2.6.1        Pursuant to Section 5.17, Sellers and Buyer have agreed to an Asset Sale Tax Election and in connection therewith, Sellers and Buyer further agree that (a) the Purchase Price, as increased by any liabilities of the Company as of the Closing Date, shall be allocated for income Tax purposes among the assets of the Company; and (b) as promptly as practicable, but no later than sixty (60) days after the Purchase Price is finally determined in accordance with Section 2.4.6, Buyer shall prepare a statement reflecting the allocation of the Purchase Price (and the assumed liabilities and all other capitalized costs) among the assets of the Company in a manner that is consistent with the allocation methodology provided by Section 338 of the Code (the “Allocation”).

2.6.2        Sellers’ Representative, on the one hand, and Buyer, on the other hand, each agrees to use reasonable best efforts to attempt to agree on the Allocation. If Buyer and Sellers’ Representative are able to agree on the Allocation, then (a) Buyer, Sellers and their Affiliates shall report, act and file all Tax Returns (including Internal Revenue Service Form 8883 and any applicable state income Tax Returns) in all respects and for all purposes consistent with such Allocation; (b) neither Buyer nor Sellers shall take any position (whether in Tax Returns or otherwise) that is inconsistent with the Allocation unless required to do so by applicable Law; and (c) Buyer and Sellers will make all subsequent Purchase Price adjustments, if any, consistent with this agreed Allocation.  If, despite their reasonable best efforts, Buyer and Sellers’ Representative are unable to agree within sixty (60) days after Buyer’s delivery of the Allocation to Sellers’ Representative, then Buyer and Sellers shall be permitted to file their respective federal tax Form 8883 and similarly applicable state income Tax Returns as they each determine to be correct.  For all purposes under this Agreement, to the extent permitted by applicable Law, any indemnification payments made pursuant to Article VII hereof will be treated as an adjustment to the Purchase Price as finally determined in accordance with Section 2.4.6 and will be reflected in the Allocation of the Purchase Price as finally determined in accordance with Section 2.4.6 among the assets of the Company in a manner consistent with the Allocation as either agreed or, if not agreed by Buyer and Sellers’ Representative, then as determined severally to be correct by Sellers’ Representative and Buyer.  Unless otherwise agreed to by Buyer and Sellers, the Allocation shall allocate any amounts of the Regular Indemnity Escrow Amount and the Earn-Out Escrow Amount that are released to Sellers pursuant to the Escrow Agreement (other than any such amounts treated as accrued, but unpaid interest) as allocable to residual goodwill and going concern value.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY

Sellers and the Company make the representations and warranties to Buyer contained in this Article III.

3.1           Authorization of the Company and Sellers.

3.1.1        The Company has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Company.  This Agreement has been duly executed and delivered by the Company, and (assuming due authorization, execution and delivery by Sellers and Buyer) this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.1.2        Futura Corp. has all necessary corporate power and authority to enter into this Agreement, Trust has all necessary trust power and authority to enter into this Agreement, and Johnson and Wells each has full legal capacity and authority, in each case, to carry out each of their obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by Sellers of this Agreement, the performance by Sellers of their obligations hereunder and the consummation by Sellers of the transactions contemplated hereby have been duly authorized by all requisite corporate, trust or other action, as applicable, on the part of Sellers.  This Agreement has been duly executed and delivered by Sellers, and (assuming due authorization, execution and delivery by the Company and Buyer) this Agreement constitutes a legal, valid and binding obligation of Sellers, enforceable against Sellers in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.2           Organization, Authority and Qualification of the Company and Sellers.

3.2.1        The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its Business as it is currently conducted.  The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its Business as currently conducted makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect.  Section 3.2.1 of the Disclosure Schedules sets forth a complete and correct list of each director and officer of the Company.

 

3.2.2        Futura Corp. is a corporation duly organized, validly existing and in good standing under the Laws of the State of Idaho and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it is currently conducted.  Trust is a trust duly organized, validly existing and in good standing under the Laws of the State of Utah and has all necessary trust power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it is currently conducted.

3.3           Capitalization.

3.3.1        The authorized capital stock of the Company consists of five hundred thousand (500,000) shares of common stock, no par value, of which 188,515 shares are issued and outstanding and constitute the Shares.  All of the Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by Sellers, free and clear of all Encumbrances, other than those Encumbrances set forth on Section 3.3.1 of the Disclosure Schedules.  The number of Shares so owned by each Seller is set forth on Section 3.3.1 of the Disclosure Schedules.

3.3.2        There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of the Company or obligating Sellers or the Company to issue or sell any shares of capital stock of, or any other interest in, the Company.  The Company does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights.  There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.

3.4           No Subsidiaries.  Company does not own, or have any interest in, any shares or have an ownership interest in any other Person.

3.5           No Conflicts; Consents.

3.5.1        The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not:  (a) result in a violation or breach of any provision of the certificate of incorporation or by-laws of the Company; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to the Company; or (c) except as set forth on Section 3.5.1 of the Disclosure Schedules, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or permit the acceleration of any Material Contract or result in the imposition of any Encumbrances, with or without notice of lapse of time or both, on any properties or assets owned or used by the Company.  No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to the Company in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except for such filings as may be required under the HSR Act and as set forth on Section 3.5.1 of the Disclosure Schedules.

 

3.5.2        The execution, delivery and performance by Sellers of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not:  (a) result in a violation or breach of any provision of the certificate of incorporation or by-laws of Futura Corp. or the constituent documents of the Trust; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to any Seller; or (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or permit the acceleration of any contract to which any Seller is bound or by which such Seller’s assets are bound or result in the imposition of any Encumbrances on any of the Shares owned of record by such Seller, or to any Seller’s actual knowledge, any properties or assets used by the Company.  No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to any Seller in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except for such filings as may be required under the HSR Act.

3.6           Financial Statements.  Copies of the Company’s audited financial statements consisting of the balance sheet of the Company as of December 28, 2013, December 27, 2014 and December 26, 2015 and the related statements of operations, shareholders’ equity and cash flow for the years then ended (the “Audited Financial Statements”), and unaudited financial statements consisting of the balance sheet of the Company as of November 30, 2016 and the related statements of income and cash flow for the eleven (11)-month period then ended (the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial Statements”) are attached to Section 3.6 of the Disclosure Schedules.  The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved, subject, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments and the absence of notes.  The Financial Statements fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated.  The balance sheet of the Company as of December 26, 2015 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date” and the balance sheet of the Company as of November 30, 2016 is referred to herein as the “Interim Balance Sheet” and the date thereof as the “Interim Balance Sheet Date.”

3.7           Undisclosed Liabilities.  The Company has no liabilities, obligations or commitments of a type required to be reflected on a balance sheet prepared in accordance with GAAP, except (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business since the Balance Sheet Date and which are not material in amount.

3.8           Absence of Certain Changes, Events and Conditions.  Except as expressly contemplated by the Agreement or as set forth on Section 3.8 of the Disclosure Schedules, since the Balance Sheet Date with respect to Sections 3.8.1, 3.8.3, 3.8.4, 3.8.5 and 3.8.19, and since the Interim Balance Sheet Date with respect to all other provisions of this Section 3.8, the Company has operated in the ordinary course of business in all material respects and there has not been, with respect to the Company, any:

 

3.8.1        event, occurrence or development that has had a Material Adverse Effect;

3.8.2        single or aggregate loss, damage, condemnation or destruction of or to, as applicable, any of the property of the Company (whether or not covered by insurance) with an aggregate value greater than $50,000;

3.8.3        material amendment of the charter, by-laws or other organizational documents of the Company;

3.8.4        split, combination or reclassification of any shares of its capital stock;

3.8.5        redemption, repurchase, issuance, sale or other acquisition or disposition of any of its capital stock, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock;

3.8.6        declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase or acquisition of its capital stock;

3.8.7        election, revocation or change to any Tax election or change in any method of accounting or accounting practice of the Company, except as required by GAAP or applicable Law or as disclosed in the notes to the Financial Statements;

3.8.8        other than ordinary course borrowings for working capital purposes under the Company’s existing lines of credit, incurrence or assumption of any Indebtedness unless, in each case, the amount was less than $50,000;

3.8.9        filing of any amended Tax Return, entering into any closing agreement, surrendering of any right to claim a refund of Taxes, settling or compromising any Tax liability, claim or assessment, extending or waiving the statute of limitations for any Tax liability or taking any other similar action relating to the filing of Tax Return or the payment of any Tax;

3.8.10      other than those Tax controversies described in Section 3.8.9, canceling or waiving any claims or rights of material value or discharging, settling or satisfying any disputed claim, litigation, arbitration, disputed liability or other controversy, including releasing of indebtedness owed to the Company, unless the amount in controversy was less than $50,000;

3.8.11      material revaluation of any of the assets of the Company, including writing off, writing down or writing up (or failure to write off, write down or write up in accordance with GAAP) the value of any Inventory, note or account receivable;

3.8.12      sale or other disposition of any of the assets shown or reflected on the Interim Balance Sheet, except in the ordinary course of business and except for any assets having an aggregate value of less than $50,000;

 

3.8.13      mortgaging, pledging or otherwise encumbering any assets of the Company (other than a Permitted Encumbrance);

3.8.14      other than the Facility Renovations described in Section 5.16, making of a capital expenditure or a commitment therefor by the Company that is in excess of $50,000 individually or $100,000 in the aggregate;

3.8.15      any Affiliate Transaction or any arrangement or transaction with any Employee (or with any relative, beneficiary, spouse or Affiliate of such Employee);

3.8.16      entering into or amending any Material Contract other than those Material Contracts set forth on Section 3.9.1 of the Disclosure Schedules or terminating any agreement that would have been required to be set forth on Section 3.9.1 of the Disclosure Schedules but for such termination (except terminations that have occurred by the terms of any such agreement);

3.8.17      increase in the compensation of its Employees, other than as provided for in any written agreements or in the ordinary course of business;

3.8.18      adoption of any Benefit Plan or amendment or modification of any Benefit Plan other than the changes to the Benefit Plans contemplated by this Agreement or changes in the ordinary course of Business;

3.8.19      adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consenting to the filing of any bankruptcy petition against it under any similar Law; or

3.8.20      any agreement to do any of the foregoing, or taking or omitting to take any action that would result in any of the foregoing.

3.9           Material Contracts.

3.9.1        Section 3.9.1 of the Disclosure Schedules sets forth a complete and correct list of each of the following contracts and other agreements (whether written or oral) of the Company, including all amendments thereto (together with all Leases set forth on Section 3.10.2 of the Disclosure Schedules, collectively, the “Material Contracts”):

3.9.1.1          each agreement of the Company involving aggregate consideration in excess of $100,000 or requiring performance by any Party thereto more than one (1) year from the date hereof, unless, in each case, the Company may cancel without penalty by giving one hundred eighty (180) or fewer days’ notice;

3.9.1.2          each agreement of the Company with a customer that (a) includes any requirements or “take-or-pay” provision; (b) includes any “most favored customer” provision; (c) requires any retroactive adjustment to its terms as a result of any other subsequent agreement entered into with other parties; or (d) provides for the receipt or payment of a rebate;

 

3.9.1.3          each agreement that relates to the sale of any of the Company’s assets, other than in the ordinary course of business, for consideration in excess of $50,000;

3.9.1.4          each agreement that relates to the acquisition of (a) any business, stock or assets of any other Person, in each case involving amounts in excess of $25,000, or (b) any real property, in either the case of (a) or (b), whether by merger, sale of stock, sale of assets or otherwise;

3.9.1.5          each agreement relating to Indebtedness;

3.9.1.6          each swap, forward, future, option, hedge or similar agreement;

3.9.1.7          each Affiliate Transaction;

3.9.1.8          each agreement pursuant to which the Company licenses Intellectual Property from or to a Person (other than off-the-shelf licenses for software);

3.9.1.9          each agreement (a) that purports to limit or restrict the ability of the Company to enter into or engage in any market or line of business, other than an agreement that may be terminated or cancelled by each party thereto on ninety (90) days’ or fewer notice without payment of any material penalty or other payment obligation; or (b) by which any officer, director, shareholder or, to the Knowledge of Sellers, any Employee, agent, consultant or contractor of the Company is bound that purports to limit the ability of any of the foregoing to engage in or continue any conduct, activity or practice relating to the Business;

3.9.1.10        each agreement (other than Benefit Plans and the agreements contemplated by Section 3.9.1.11) that was entered into in the last two (2) years setting forth any of the terms or conditions related to, the employment or termination of employment of any Employee of the Company or the provision or termination of any professional services of any consultant or independent contractor of the Company (including former employees, consultants or independent contractors to the extent the terms of such agreements contain obligations that remain binding on any of the parties thereto);

3.9.1.11        each (a) agreement (other than Benefit Plans) that provides for an increased payment or benefit, or accelerated vesting, upon the execution of this Agreement or the Closing or in connection with the transactions contemplated hereby; and (b) non-competition, consulting or deferred compensation arrangement (other than Benefit Plans) under which the Company owes compensation to any Person; and

3.9.1.12        each joint venture or partnership agreement, cooperative agreement and other agreement providing for the sharing of any profit of the Company or any such joint venture or partnership.

3.9.2        Sellers have previously made available to Buyer in the Data Room true and complete copies of all Material Contracts.  Each Material Contract is in full force and effect and is the legal, valid and binding obligation of the Company, and to the Knowledge of Sellers, the other party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).  The Company is not in breach of, or default under, any Material Contract.  To the Knowledge of Sellers, no party to any Material Contract intends to cancel, terminate or materially modify such Material Contract, and there are no disputes in connection therewith.

 

3.10         Title to Assets; Real Property.

3.10.1      The Company has a good, valid and marketable fee simple title to, or a valid leasehold interest in, all Real Property and good and valid title to, or a valid leasehold interest in, all tangible personal property and other assets as reflected in the Audited Financial Statements or acquired after the Balance Sheet Date, other than properties and assets sold or otherwise disposed of in the ordinary course of business since the Balance Sheet Date.  All such Real Property and other properties and assets are sufficient for the Company to conduct the Business after the Closing Date in substantially the same manner as it currently operates.  All such properties and assets (including leasehold interests) are free and clear of Encumbrances except for Encumbrances that will be removed prior to or at Closing pursuant to Section 5.19 and the following (collectively referred to as “Permitted Encumbrances”):

3.10.1.1        those items set forth on Section 3.10.1 of the Disclosure Schedules;

3.10.1.2        liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures with adequate reserves established therefor in accordance with GAAP;

3.10.1.3        mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business for amounts not yet due and payable;

3.10.1.4        easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property that they do not materially impair or materially interfere with the operation of the Business as currently conducted;

3.10.1.5        licenses of Company Intellectual Property as set forth on Section 3.9.1.8 of the Disclosure Schedules; or

3.10.1.6        other imperfections of title or Encumbrances, if any, that do not materially impair or materially interfere with the Company’s possessory rights under the Leases for the Leased Real Property.

3.10.2      Section 3.10.2 of the Disclosure Schedules set forth a complete and correct list of the addresses of all Leased Real Property and all Leases for each Leased Real Property, including the identification of the lessee and lessor thereunder, and (a) the Company’s possession and quiet enjoyment of the Leased Real Property has not been disturbed; (b) no security deposit or portion thereof has been applied in respect of a breach or default under any of the Leases for the Leased Real Property that has not been redeposited in full; and (c) other than the Leased Real Property set forth on Section 3.10.2 of the Disclosure Schedules, the Company does not have any other right, title or interest in Real Property, whether owned, leased or otherwise granted.

 

3.10.3      Except as set forth on Section 3.10.3 of the Disclosure Schedules:

3.10.3.1        the other party to each Lease is not an Affiliate of the Company;

3.10.3.2        to Sellers’ Knowledge, there is no condemnation, expropriation or eminent domain proceeding of any kind pending or, threatened against any of the Leased Real Property, or any portion thereof, or other matters adversely affecting any of the Company’s occupancy and use thereof for the operation of the Business as currently conducted;

3.10.3.3        to Sellers’ Knowledge, no Encumbrances on the Leased Real Property could reasonably be expected to affect materially and adversely the Company’s use or occupancy of the Leased Real Property for the operation of the Business as currently conducted;

3.10.3.4        the Company has not collaterally assigned or granted any security interest in any of the Leases or any interest therein;

3.10.3.5        the Company has not subleased or granted any third party the right to use or occupy the Leased Real Property and there are no parties in possession of the Leased Real Property that are not entitled to such possession;

3.10.3.6        the Leased Real Property has, sufficient (in quality and quantity) water supply, storm and sanitary sewage facilities, telephone, gas, electricity, fire protection and other required public utilities and services necessary for the operation of the Business as currently conducted;

3.10.3.7        the Leased Real Property has sufficient access (both pedestrian and vehicular) for the operation of the Business as currently conducted and there is no condition that would result in the termination or impairment of such access; and

3.10.3.8        the Company does not owe, nor will owe in the future in connection with activities conducted prior to the Closing Date, any brokerage commissions or finder’s fees with respect to the Leased Real Property.

3.10.4      Except as set forth on Section 3.10.4 of the Disclosure Schedules and as described in Section 5.16 with respect to the Phase IV portion of the Facility Renovations, the Leased Real Property, plants, furniture, machinery, equipment, vehicles and other items of tangible personal property of Company are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such Leased Real Property, plants, furniture, machinery, equipment, vehicles and other items of tangible personal property of the Company is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.

3.10.5      Section 3.10.5 of the Disclosure Schedules (a) identifies the location of any tangible asset of the Company not located at the Leased Real Property (other than Inventory in the process of being shipped in the ordinary course of business); and (b) sets forth each material asset other than Intellectual Property used by the Company in the conduct of the Business and not owned or leased by the Company.

 

3.11         Intellectual Property.

3.11.1      “Intellectual Property” means any and all rights in and to any of the following in any jurisdiction throughout the world:  (a) trademarks, service marks trade dress, logos, trade names, corporate names, and their indicia of origin, together with all combinations thereof, including all applications, registrations and renewals and the goodwill connected with the use of and symbolized by the foregoing; (b) copyrightable works, copyrights, including all applications, registrations and renewals related to the foregoing; (c) all inventions (whether patentable or not), invention disclosures, trade secrets and confidential and protectable business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals); (d) patents, patent applications and patent disclosures, together with all reissuances, divisions, continuations and renewals; (e) internet domain name registrations, internet addresses, websites and web pages; (f) computer software (including all source code, object code, data and related documentation); and (g) other intellectual property and related proprietary rights, interests and protections.

3.11.2      Section 3.11.2 of the Disclosure Schedules sets forth a complete and correct list of all currently effective (a) patents and patent applications, (b) trademark registrations and pending applications for registration, (c) copyright registrations and pending applications for registration and (d) internet domain name registrations owned by the Company (the “Company Registered Intellectual Property”).  All Company Registered Intellectual Property is subsisting, valid and enforceable and is not subject to any outstanding Governmental Order materially adversely affecting the Company’s use thereof or the Company’s rights thereto.  No claim has been asserted, and the Company has not received any threat regarding the ownership or validity of, any Company Registered Intellectual Property.

3.11.3      To the Knowledge of Sellers, no Person has infringed or misappropriated or is engaging in any activity that infringes the Company Intellectual Property.  The Company is not infringing and has not infringed or misappropriated the Intellectual Property of any third party.  No claim has been asserted, or, to the Knowledge of Sellers, threatened, and the Company has not received written notice alleging, that the Company has misappropriated any Intellectual Property of any third party or that any activity in the conduct of the Business is infringing the Intellectual Property rights of any third parties.

3.11.4      The Company owns the entire right, title and interest in and to all Company Intellectual Property, free and clear of all Encumbrances, other than Permitted Encumbrances or Encumbrances that will be removed at or prior to Closing pursuant to Section 5.19.  The Company owns or has the right to use and practice all Intellectual Property used to conduct the Business as currently conducted.  Subject to getting the consents set forth on Section 3.5.1 of the Disclosure Schedules, upon consummation of the transactions contemplated by this Agreement, the Company will be entitled to continue to use and practice such Intellectual Property to the same extent and under the same conditions it has heretofore used and practiced, where applicable, in the Business without any additional or extraordinary financial obligation (other than taxes and fees to a Governmental Authority) to any third party arising in connection with such Intellectual Property.

 

3.12         Legal Proceedings; Governmental Orders.

3.12.1      Except as set forth in Section 3.12.1 of the Disclosure Schedules and for actions, suits, claims, investigations or other legal proceedings seeking monetary damages only (and no other remedy) in an amount less than $25,000, there are currently no, nor have there been during the past three (3) years any, actions, suits, claims, investigations or other legal proceedings pending or, to Sellers’ Knowledge, threatened (a) against or by the Company; (b) affecting the Business or the assets, properties or products of the Company or the conduct of the Business; (c) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement; or (d) that could reasonably be expected to result in a revocation, cancellation, suspension or adverse modification of any Permit held by the Company that is necessary to conduct the Business as currently conducted.

3.12.2      There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or adversely affecting the Company or any of its properties or assets.

3.12.3      None of the representations and warranties contained in this Section 3.12 shall be deemed to relate to intellectual property matters (which are governed by Section 3.11), environmental matters (which are governed by Section 3.14), employee benefits matters (which are governed by Section 3.15), employment matters (which are governed by Section 3.16), tax matters (which are governed by Section 3.17), insurance matters (which are governed by Section 3.19) or product warranties matters (which are governed by Section 3.21).

3.13         Compliance With Laws; Permits.

3.13.1      The Company is in compliance in all material respects with all Laws applicable to it or its Business, properties or assets.  Without limiting the generality of the foregoing, neither the Company nor any director, officer, Employee or former employee of the Company, nor, to Sellers’ Knowledge, any agent thereof has, directly or indirectly, made any contribution, gift, bribe, rebate, payoff, influence payments, kick-back or other payment to any Person, private or public, regardless of form, whether in money, property or services, (a) to obtain favorable treatment in securing business for the Company; (b) to pay for favorable treatment for business secured for the Company; or (c) to obtain special concessions, or for special concessions already obtained, in violation of any law, rule, regulation or other legal requirement applicable to the Company or in respect of the Business.  Neither the Company, any director, officer, Employee or former employee of the Company nor, to Sellers’ Knowledge, any agent of the Company has, established or maintained any fund or bank account for the Company or its Business that has not been recorded in the books and records of the Company.

3.13.2      All Permits required for the Company to conduct the Business as currently conducted have been obtained by it and are valid and in full force and effect.

 

3.13.3      None of the representations and warranties contained in this Section 3.13 shall be deemed to relate to environmental matters (which are governed by Section 3.14), employee benefits matters (which are governed by Section 3.15), employment matters (which are governed by Section 3.16) or tax matters (which are governed by Section 3.17).

3.14         Environmental Matters.

3.14.1      Except as set forth in Section 3.14.1 of the Disclosure Schedules, the Company is in compliance in all material respects with all applicable Environmental Laws and has not, and Sellers have not, received from any Person any (a) Environmental Notice or Environmental Claim, or (b) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

3.14.2      Except as set forth in Section 3.14.2 of the Disclosure Schedules, the Company has obtained and is in compliance in all material respects with all Environmental Permits (each of which is disclosed in Section 3.14.2 of the Disclosure Schedules) necessary for the ownership, lease, operation or use of the Business or assets of the Company.

3.14.3      Except as set forth in Section 3.14.3 of the Disclosure Schedules, to Sellers’ Knowledge, there has been no Release of Hazardous Materials with respect to the Business or assets of the Company or any Real Property currently owned, operated or leased by the Company or any real property previously owned, operated or leased by the Company at any time that currently gives rise to, or would reasonably be expected to result in, an Environmental Claim against Sellers or the Company, and neither the Company nor Sellers have received an Environmental Notice that any Real Property currently owned, operated or leased in connection with the Business of the Company or, to the Knowledge of Sellers, any real property previously owned, operated or leased by the Company at any time (including, in each case, soils, groundwater, surface water, buildings and other structure located on any such Real Property) has been the location of a Release of any Hazardous Material that would reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Laws or term of any Environmental Permit by, Sellers or the Company.

3.14.4      Sellers have previously made available to Buyer in the Data Room all non-privileged environmental reports, studies, audits, records, sampling data, site assessments and other similar documents with respect to the Business or assets of the Company, any currently owned, operated or leased Real Property or any real property previously owned, operated or leased by the Company or any predecessor in interest thereto that are in the possession or control of Sellers or the Company.  Such documents and information have been made available to Buyer pursuant and subject to the provisions of Section 4.7.

3.14.5      Except as set forth in Section 3.14.5 of the Disclosure Schedules, there has not been at any time any off-site shipment of any Hazardous Materials by the Company or, to the Knowledge of Sellers, by any predecessors in interest thereto that currently gives rise to, or would reasonably be expected to give rise to, material unresolved liabilities or obligations of the Company or a predecessor in interest thereto under any Environmental Law.

 

3.14.6      The Company has not, nor, to the Knowledge of Sellers, has any predecessor in interest thereto, given any release or waiver of liability that would waive or impair any claim, demand or action related to any Release of any Hazardous Material in, on, under, to or from the Real Property or any real property previously owned, operated or leased by the Company or any predecessor in interest thereto against a previous owner or operator of the Real Property or such other real property or against any other Person who may be potentially responsible for such Release.

3.14.7      Except with respect to a Release of Hazardous Materials by the Company on, to, at or under the Real Property, neither the Company nor, to the Knowledge of Sellers, any predecessor in interest thereto has assumed by agreement (including any Governmental Order, Lease or sale-leaseback) or operation of law, or otherwise agreed to, an obligation to (a) indemnify or hold harmless any other Person for any violation of Environmental Law or any obligation or liability arising thereunder; or (b) assume any liability for any Release of any Hazardous Materials by any other Person or conduct any Remedial Action with regard to any Release of any Hazardous Materials by any other Person.

3.14.8      The representations and warranties set forth in this Section 3.14 are Sellers’ sole and exclusive representations and warranties regarding environmental matters.

3.15         Employee Benefit Matters.

3.15.1      Section 3.15.1 of the Disclosure Schedules sets forth a complete and correct list of each material benefit, retirement, employment, consulting, compensation, incentive, bonus, stock option, restricted stock, stock appreciation right, phantom equity, change in control, severance, vacation, paid time off, welfare and fringe-benefit agreement, plan, policy and program, whether or not reduced to writing, in effect and covering one or more Employees, former employees of the Company, current or former directors of the Company or the beneficiaries or dependents of any such Persons, and is maintained, sponsored, contributed to or required to be contributed to by the Company or any ERISA Affiliate, or under which the Company has any material liability for premiums or benefits (each, a “Benefit Plan”).  The Company has made available in the Data Room true and complete copies of (a) each Benefit Plan, including all amendments thereto, and all summary plan descriptions and other summaries thereof; (b) each trust agreement, annuity or insurance contract, or other funding instrument pertaining to each Benefit Plan; (c) the most recent determination letter (or opinion letter) issued by the Internal Revenue Service with respect to each Benefit Plan that is intended to be tax-qualified and a copy of any pending applications for such letters; (d) the two (2) most recent actuarial valuation reports for each Benefit Plan for which an actuarial valuation report has been prepared; (e) the two (2) most recent annual reports (Internal Revenue Service Form 5500 Series), including all schedules to such reports, if applicable, filed with respect to each Benefit Plan; (f) the most recent plan audits, financial statements and accountant’s opinion (with footnotes) for each Benefit Plan; (g) all relevant schedules and reports concerning the administrative costs, benefit payments, employee and employer contributions, claims experience, financial information and insurance premiums for each Benefit Plan; (h) an accurate and complete summary of the terms of any Benefit Plan that is not evidenced by a written plan document; and (i) all correspondence with Governmental Authorities concerning any Benefit Plan (other than as previously referenced above).

 

3.15.2      Except as set forth on Section 3.15.2 of the Disclosure Schedules, each Benefit Plan and related trust complies in all material respects with all applicable Laws (including ERISA and the Code) and has been administered in accordance with its terms and in compliance with applicable Laws.  Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified Benefit Plan”) has received a favorable determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, and, to Sellers’ Knowledge, nothing has occurred that could reasonably be expected to cause the revocation of such determination letter from the Internal Revenue Service or the unavailability of reliance on such opinion letter from the Internal Revenue Service.  Except as set forth on Section 3.15.2 of the Disclosure Schedules, all benefits, contributions and premiums required by and due under the terms of each Benefit Plan or applicable Law have been timely paid in accordance with the terms of such Benefit Plan, the terms of all applicable Laws and GAAP and adequate reserves have been established for any contributions or premiums that are accrued but have not been paid.  With respect to any Benefit Plan, no event has occurred or is reasonably expected to occur that has resulted in or would subject the Company to a Tax under Section 4971 of the Code or the assets of the Company to an Encumbrance under Section 430(k) of the Code.

3.15.3      Except as set forth on Section 3.15.3 of the Disclosure Schedules, no Benefit Plan:  (a) is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code or Title IV of ERISA; (b) is a “multi-employer plan” (as defined in Section 3(37) of ERISA); (c) is a “multiple employer plan” within the meaning of Section 413(c) of the Code; or (d) is a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).  The Company does not have, and after Closing neither the Company nor Buyer will have, any liability under ERISA, the Code or other Law with respect to any plan maintained or previously maintained or contributed by an ERISA Affiliate.

3.15.4      Except as set forth on Section 3.15.4 of the Disclosure Schedules and other than as required under Section 4980B of the Code or other applicable Law, no Benefit Plan provides benefits or coverage in the nature of health, life or disability insurance following retirement or other termination of employment (other than death benefits when termination occurs upon death).

3.15.5      Except as set forth on Section 3.15.5 of the Disclosure Schedules:  (a) there are currently no, nor have there been during the past three (3) years, actions, suits, claims, investigations or other legal proceedings pending or, to Sellers’ Knowledge, threatened, relating to a Benefit Plan; and (b) no Benefit Plan has within the three (3) years prior to the date hereof been the subject of an examination or audit by a Governmental Authority.

3.15.6      Except as set forth on Section 3.15.6 of the Disclosure Schedules, no Benefit Plan exists that could, as a result of the execution of this Agreement:  (a) result in the payment to any Employee, director or consultant of any money or other property; (b) accelerate the vesting of or provide any additional rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any Employee, director or consultant, except as a result of any partial plan termination resulting from this Agreement; or (c) limit or restrict the ability of Buyer or its Affiliates to merge, amend or terminate any Benefit Plan.  Except as set forth on Section 3.15.6 of the Disclosure Schedules, no Benefit Plans exist that could result in “excess parachute payments” within the meaning of Section 280G(b) of the Code or require the Company to reimburse or otherwise “gross-up” any Person for any interest or additional tax set forth under Section 409A(a)(1)(B) of the Code.

 

3.15.7      Jared Bringhurst is the only Person who is entitled to receive compensation or otherwise has any rights under the Deferred Bonus Plan.  The amount of Jared Bringhurst’s vested interest in the Deferred Bonus Plan (prior to reduction for applicable income and employment tax withholdings) will be equal to $109,863.86 as of the Closing Date, which shall be adjusted in accordance with Section 5.5 of the Deferred Bonus Plan if the Closing occurs on a date other than February 15, 2017 (the “Vested Amount”).

3.16         Employment Matters.

3.16.1      The Company is not a Party to, or bound by, any collective bargaining or other agreement with a labor organization representing any of its Employees, nor is the Company a Party to, or bound by, any agreement with a labor organization with neutrality, card check or other provisions in respect of any of the Company’s Employees.  The Company is not the subject of any existing or, to Sellers’ Knowledge, threatened charge, claim, action or other legal proceeding asserting that the Company has committed an unfair labor practice or that is seeking to compel the Company to bargain with any labor organization.  Within the last three (3) years, (a) no labor union or labor organization has filed or, to Sellers’ Knowledge, threatened to file a union representation petition against the Company or otherwise engaged in union organizational activities with respect to its Employees or former employees; and (b) there has not been, nor to Sellers’ Knowledge any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting the Company.

3.16.2      The Company is in compliance in all material respects with (a) all employment agreements and other agreements relating to employment set forth on Section 3.9.1.11 of the Disclosure Schedules and (b) all applicable Laws pertaining to labor relations, employment, employment practices, workers’ compensation, unemployment, terms and conditions of employment, joint employment, and wages and hours, including any such Laws respecting employment discrimination and occupational safety and health requirements, to the extent they relate to Employees.  Except as set forth on Section 3.16.2 of the Disclosure Schedules, (a) there are currently no actions, suits, claims investigations or other legal proceedings pending or, to Sellers’ Knowledge, threatened, against or by the Company and material to the Company and (b) there have not been during the past three (3) years any actions, suits, claims investigations or other legal proceedings pending or, to Sellers’ Knowledge, threatened, against or by the Company and material to the Company of an amount in controversy in excess of $50,000, in either the case of (a) or (b), relating to labor relations, unfair labor practices, employment practices, employment discrimination, harassment, retaliation, equal pay, wages and hours, terms and conditions of employment, joint employment, occupational safety and health, workers’ compensation, unemployment or any other employment related matter arising under applicable Laws.

 

3.16.3      Within the past three (3) years, the Company has not engaged in any lay-offs of former employees or Employees that would trigger any notice or other requirements under the WARN Act.

3.16.4      To the Knowledge of Sellers, and to the extent the Company is permitted by Law to ascertain, none of the directors, officers or Employees of the Company is an unauthorized alien under, and within the past three (3) years, the Company has at all times complied in all material respects with, the U.S. Immigration Reform and Control Act of 1986 and its successor, if any, and any implementing regulations therefor.  To Sellers’ Knowledge, any and all documentation (including I-9s) prepared in conjunction with the hiring by the Company of Employees and former employees of the Company in the last two (2) years was completed in compliance with all applicable Laws in all material respects.  In the last two (2) years, the Company has not received any (i) Social Security mismatch letters from any Governmental Authority or (ii) written correspondence from INS/ICE regarding possible employment of unauthorized aliens.  The Company is in compliance in all material respects with all applicable state and federal Laws, regulations and official policies regarding use of the DHS E-Verify program and, if applicable, including compulsory use of E-Verify by certain state and federal contractors.

3.17          Taxes.

3.17.1      Except as set forth on Section 3.17 of the Disclosure Schedules:

3.17.1.1        The Company has timely filed (taking into account any valid extensions) with the appropriate Governmental Authority all material Tax Returns required to be filed by the Company.  Such Tax Returns are true, complete and correct in all material respects.  The Company is not currently the beneficiary of any extension of time within which to file any material Tax Return other than extensions of time to file Tax Returns obtained in the ordinary course of business.  All material Taxes due and owing by the Company have been timely paid.

3.17.1.2        Futura Corp. has timely filed (taking into account any valid extensions) with the appropriate Governmental Authority all consolidated, combined or unitary material Tax Returns required to be filed by Futura Corp. that include the Company or with respect to which the Company could be liable. Such Tax Returns are true, complete and correct in all material respects. All material Taxes due and owing by Futura Corp. with respect to which the Company could be directly, indirectly or otherwise by liable have been timely paid.

3.17.1.3        No extensions or waivers of statutes of limitations with respect to any material Taxes or Tax Returns have been given by or requested from the Company.

3.17.1.4        To the Knowledge of Sellers, there are no actions, suits, claims, investigations or other legal proceedings by any Governmental Authority against the Company (or any Person that was included in the filing of a Tax Return with the Company on a consolidated, combined, unitary or similar basis) currently in progress, pending or threatened or proposed in respect of any Taxes or Tax Returns for which the Company is or may become liable.

 

3.17.1.5        The Company is not a party to or bound by any Tax sharing agreement or similar arrangement (including indemnity agreements but excluding any commercial agreements entered into in the ordinary course of business the primary purposes of which do not relate to taxes).  The Company has no liability for the Taxes of any other Person as a transferee or successor.

3.17.1.6        All material Taxes that the Company is or was obligated to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the appropriate Governmental Authority.  The Company has complied with all information reporting and backup withholding requirements, including the maintenance of required records with respect thereto, in connection with amounts owing to any employee, independent contractor, creditor or other third party.

3.17.1.7        Other than Permitted Encumbrances, there are no Encumbrances with respect to Taxes on or against any of the assets of the Company.

3.17.1.8        The Company is not, and has never been, a member of an affiliated group with which it has filed (or been required to file) consolidated, combined, unitary or similar Tax Returns, other than a group of which the common parent is the Company or Futura Corp.

3.17.1.9        The Company is not a party to any joint venture, partnership or other arrangement that is treated as a partnership for U.S. federal income tax purposes.

3.17.1.10      The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of (a) any adjustments under Section 481 of the Code (or any comparable adjustments under state, local or foreign Tax Law); (b) deferred intercompany gain or any excess loss account described in the Treasury Regulations under Section 1502 of the Code; (c) use of an improper method of accounting for a taxable period ending on or prior to the Closing Date; (d) closing agreement as described in Section 7121 of the Code (or any corresponding provision under state, local or foreign Tax Law) executed on or prior to the Closing Date; (e) installment sale or open transaction disposition made on or prior to the Closing Date; (f) prepaid amount received on or prior to the Closing Date; or (g) any election made pursuant to Section 108(i) of the Code on or prior to the Closing Date.

3.17.1.11      All transactions and arrangements between the Company and an Affiliate of the Company have been conducted (or would be treated as having been conducted for U.S. federal income tax purposes) on an arm’s length basis.

3.17.1.12       The Company has not distributed to its shareholders or security holders stock or securities of a controlled corporation, nor has stock or securities of the Company been distributed, in a transaction to which Section 355 of the Code applies (a) in the two (2) years prior to the date of this Agreement; or (b) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement.

 

If to Sellers:	FUTURA CORPORATION
	P.O. Box 7968
	Boise, ID 83707
	E-mail:    blloyd@futuracorp.com
	Attention:     President
	SUSAN D. JOHNSON
	8943 E. 100 South
	Huntsville, UT 84317
	E-mail:     sjohnson@futuraind.com
	THE SUSAN D. JOHNSON TRUST
	8943 E. 100 South
	Huntsville, UT 84317
	E-mail:     sjohnson@futuraind.com
	KEN WELLS
	P.O. Box 763
	Clearfield, Utah 84089
	E-mail:    kwells@futuraind.com

with a copy to:	Holland & Hart LLP
	800 W. Main Street, Ste. 1750
	Boise, Idaho  83702
	Facsimile:  (208) 343-8869
	E-mail:    fmack@hollandhart.com and
	ncsnyder@hollandhart.com
	Attention:      J. Frederick Mack and
	Nicole Snyder

If to the Company (prior to Closing):	FUTURA INDUSTRIES CORPORATION
	380 E. Parkcenter Blvd., Suite 230
	Boise, Idaho  83706
	E-mail:    brentlloyd@futuracorp.com
	Attention:    Brent Lloyd, CEO
with a copy to:	Holland & Hart LLP
	800 W. Main Street, Ste. 1750
	Boise, Idaho  83702
	Facsimile:  (804) 788-8200
	E-mail:    fmack@hollandhart.com and
	ncsnyder@hollandhart.com
	Attention:     J. Frederick Mack and
	Nicole Snyder

If to Sellers’ Representative:	Brent F. Lloyd
	c/o FUTURA CORPORATION
	P.O. Box 7968
	Boise, ID 83707
	E-mail:    blloyd@futuracorp.com
with a copy to:	Holland & Hart LLP
	800 W. Main Street, Ste. 1750
	Boise, Idaho  83702
	Facsimile:  (208) 343-8869
	E-mail:    fmack@hollandhart.com and
	ncsnyder@hollandhart.com
	Attention:     J. Frederick Mack and
	Nicole Snyder

If to Buyer:	The William L. Bonnell Company, Inc.
	25 Bonnell Street
	Newnan, Georgia  30263
	Facsimile:  (770) 252-0172
	E-mail:     bhamilton@bonlalum.com
	Attention:     President
with a copy to:	Tredegar Corporation
	1100 Boulders Parkway
	Richmond, VA 23225
	Facsimile:  (804) 330-1201
	E-mail:     michael.schewel@tredegar.com
	Attention:    General Counsel

and a copy to:	Hunton & Williams LLP
	Riverfront Plaza, East Tower
	951 East Byrd Street
	Richmond, Virginia 23219-4074
	Facsimile:  (804) 788-8218
	E-mail:   sducharme@hunton.com and
	rnorthup@hunton.com
	Attention:     Sean P. Ducharme and
	Rachel W. Northup

			THE COMPANY:
			FUTURA INDUSTRIES CORPORATION
Date:	February 1, 2017		By		/s/ Brent F. Lloyd
			Name:		Brent F. Lloyd
			Title:		CEO

			SELLERS:
Date:	February 1, 2017		By		/s/ Susan D. Johnson
			Name:		Susan D. Johnson

			THE SUSAN D. JOHNSON TRUST
Date:	February 1, 2017		By		/s/ Susan D. Johnson
			Name:		Susan D. Johnson
			Title:		Trustee u/t/a dated April 23, 1999

Date:	February 1, 2017		By		/s/ Ken Wells
			Name:		Ken Wells

			FUTURA CORPORATION
Date:	February 1, 2017		By		/s/ Brent F. Lloyd
			Name:		Brent F. Lloyd
			Title:		CEO and President

			BUYER:
			THE WILLIAM L. BONNELL COMPANY, INC.
Date:	February 1, 2017		By		/s/ William  Brook Hamilton
			Name:		William  Brook Hamilton
			Title:		President and General Manager

			SELLERS’ REPRESENTATIVE:
Date:	February 1, 2017		By		/s/ Brent F. Lloyd
			Brent F. Lloyd, in his capacity as Sellers’ Representative

Stock Purchase Agreement – Signature Page

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