Arxis, Inc.

EX-99.1 · arxs-ex99_1.htm

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 Arxis Announces Acquisitions of Omnetics Connector Corporation and MagCanica Inc.
 BLOOMFIELD, Conn., June 2, 2026 — Arxis, Inc. (NASDAQ: ARXS) (the “Company” or “Arxis”), a publicly-traded industrial compounder formed in partnership with Arcline Investment Management (“Arcline”), today announced it has entered into a definitive agreement to acquire Omnetics Connector Corporation (“Omnetics”), a leading designer and manufacturer of proprietary high-reliability Micro-D-Sub and Nano-D-Sub connectors and interconnect assemblies used in critical defense and space, commercial aerospace, and medical applications.
 Omnetics, headquartered in Minneapolis, Minnesota, maintains deeply embedded positions across leading defense and space, commercial aerospace, and medical technology platforms where size, weight, and reliability are mission critical. Omnetics is currently privately held and owned by its long-term shareholders.
 In addition, Arxis announced the acquisition of MagCanica, Inc. (“MagCanica”), a designer and manufacturer of non-contact, high-precision torque sensors that operate under extreme conditions. MagCanica was previously owned by its founders and employees.
 The acquisitions reflect the differentiated value of the Arxis–Arcline partnership. Arcline provides Arxis with institutional capabilities that complement Arxis’ operating expertise, including research-driven market mapping, proprietary sourcing access, disciplined underwriting, and capital allocation expertise. These capabilities, which are difficult for a standalone strategic acquiror to replicate, expand Arxis’ addressable acquisition universe and strengthen its ability to acquire high-quality businesses with leading positions on long-duration platforms.

“The addition of Omnetics and MagCanica reinforces the power of the Arxis–Arcline partnership in creating a repeatable engine of value creation for Arxis as a next-generation industrial compounder,” said Rajeev Amara, Chairman of Arxis and CEO of Arcline.
 The combined purchase price is approximately $890 million, representing 12x FY27 estimated adjusted EBITDA.

 Omnetics Transaction

 Under the terms of the agreement, Arxis is acquiring Omnetics in an all-stock transaction (subject to lockup provisions), reflecting the Omnetics shareholders’ requirement to receive public company stock over cash consideration and reinforcing one of the key drivers and benefits of Arxis becoming a public company.
 "Omnetics is exactly the kind of business we built Arxis to own. For over 40 years, the company has been the trusted standard in Nano- and Micro-D-Sub connectors for applications where failure is not an option, earning preferred-source positions on long-tenured programs that are highly difficult to replicate," said Kevin Perhamus, President and Chief Executive Officer of Arxis.
 Gary Jacobs, President of Omnetics, said, "Arxis shares our deep commitment to innovation, quality, and the customers who rely on us. Joining Arxis gives us the resources and platform to

 accelerate investment in our products, our technology, and our people, while continuing to deliver high performance and reliability to our customers."
 The transaction is subject to customary regulatory approvals and closing conditions and is expected to close in the third quarter of 2026.
 Upon closing, Omnetics will operate within Arxis' Electronic Components segment.
 William Blair & Company, L.L.C. is serving as financial advisor to Arxis and Vermillion Capital is serving as advisor to Omnetics.
 MagCanica Transaction
 On June 1, 2026, Arxis completed its acquisition of MagCanica in an all-cash transaction.
 "MagCanica's non-contact torque sensors are highly complementary to our existing military flexible driveshaft capabilities and address a growing need across aerospace and defense for real-time monitoring of mission-critical rotating systems," said Kevin Perhamus. "We see clear runway to cross-sell this technology alongside the Arxis portfolio where operators require precise visibility into performance under heavy loads."
 MagCanica will operate within Arxis' Electronic Components segment.
 Kroll Securities served as financial advisor to MagCanica.
 About Arxis
Arxis is a leading designer and manufacturer of proprietary, mission-critical electronic and mechanical components for aerospace and defense, medical technology, and specialized industrial markets. Leveraging significant intellectual property and world-class engineering and operational capabilities, Arxis designs and delivers innovative solutions that address its customers' most complex performance needs. Arxis is a portfolio company of Arcline Investment Management. For more information, visit www.arxis.com .
 About Arcline Investment Management
Arcline Investment Management is a growth-oriented private equity firm with over $30 billion in assets under management. Arcline seeks to build the next generation of Industrial Compounders – market-leading, non-disruptible industrial platforms designed to consistently grow earnings over decades. For more information visit www.arcline.com .
 About Omnetics Connector Corporation
Founded in 1984, Omnetics designs and manufactures micro-miniature and nano-miniature high reliability connectors and interconnect systems for aerospace, defense, space, medical and industrial customers worldwide. Since its inception, Omnetics has been at the forefront of innovation and excellence in the world of connectors and interconnect solutions. For more information, visit www.omnetics.com .
 About MagCanica Inc.
Founded in 2000, MagCanica designs and manufactures non-contact, high-precision torque sensors used in high-performance rotating systems worldwide. For more information, visit www.magcanica.com .

 Contacts

Investors
 ir@arxis.com
+1 860-243-7100 (Select 1 for Arxis)
 Media
 Kate Thompson / Tim Ragones / Alexander Wolfsohn
 Joele Frank, Wilkinson Brimmer Katcher
 (212) 355-4449

 Forward-looking Statements
 This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may contain words and terms such as: “anticipate,” “could,” “believe,” “continue,” “expect,” “estimate,” “forecast,” “ongoing,” “project,” “seek,” “predict,” “target,” “will,” “intend,” “plan,” “look ahead,” “optimistic,” “potential,” “guidance,” “may,” “should,” or “would” and other words and terms of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected 2027 sales and EBITDA margins, future accretion, anticipated benefits of the acquisition, financing sources, the expected timing for closing the acquisition the Omnetics acquisition and other matters. These statements are only predictions, and such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Risks and uncertainties include, but are not limited to: (i) the risk that the proposed acquisition may not be completed in a timely manner or at all, or if it is completed, that the expected benefits of the proposed acquisition may not be realized, (ii) the failure to satisfy the conditions to the consummation of the proposed acquisition, including the receipt of certain regulatory and other approvals, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the purchase agreement between the parties and (iv) unanticipated difficulties or expenditures relating to the acquisition, the response of business partners and competitors to the announcement of the proposed acquisition, potential disruptions to current plans and operations and/or potential difficulties in employee retention as a result of the announcement and pendency of the acquisition. The actual financial impact of the proposed acquisition may differ from the expected financial impact described in this press release. The foregoing list of risk factors is not exhaustive. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect Arxis’ business, particularly those identified in the risk factor discussion in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Arxis undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. The forward-looking statements made in this communication relate only to events as of the date on which the statements are made.

EX-2.1 · arxs-ex2_1.htm

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 Execution Version

  
  
  
  
 AGREEMENT AND PLAN OF MERGER
  
 among
  
 ARXIS, INC.
  
 and
  
 ORION MERGER SUB, INC.
  
 and
  
 OMNETICS CONNECTOR CORPORATION
  
 and
  
 GARY JACOBS, Solely in his Capacity as Shareholder Representative
  
 dated as of May 29, 2026
  
  
  
  
  
  
  
  
  

  

 TABLE OF CONTENTS
 RECITALS 1
 ARTICLE 1 — DEFINITIONS 2
 ARTICLE 2 — MERGER 11
 Section 2.01 — The Merger	11
 Section 2.02 — Closing	11
 Section 2.03 — Closing Deliverables	12
 Section 2.04 — Effective Time	14
 Section 2.05 — Effects of the Merger	14
 Section 2.06 — Articles of Incorporation; Bylaws	14
 Section 2.07 — Directors and Officers	15
 Section 2.08 — Effect of the Merger on Common Stock	15
 Section 2.09 — Dissenting Shares	15
 Section 2.10 — Surrender and Payment	16
 Section 2.11 — Escrow Funds	17
 Section 2.12 — No Further Ownership Rights in Company Common Stock	17
 Section 2.13 — Adjustments	17
 Section 2.14 — Withholding Rights	18
 Section 2.15 — Lost Certificates	18
 Section 2.16 — Working Capital Adjustment	18
 Section 2.17 — Consideration Spreadsheet	22
 ARTICLE 3 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY 22
 Section 3.01 — Organization and Qualification of the Company	22
 Section 3.02 — Authority; Board Approval	22
 Section 3.03 — No Conflicts; Consents	23
 Section 3.04 — Capitalization	23
 Section 3.05 — Subsidiaries	24
 Section 3.06 — Financial Statements	24
 Section 3.07 — Undisclosed Liabilities	24

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 Section 3.08 — Absence of Certain Changes, Events and Conditions	24
 Section 3.09 — Material Contracts	26
 Section 3.10 — Title to Assets; Real Property	28
 Section 3.11 — Intellectual Property	28
 Section 3.12 — Insurance	29
 Section 3.13 — Legal Proceedings; Governmental Orders	29
 Section 3.14 — Compliance with Laws; Permits	29
 Section 3.15 — Environmental Matters	30
 Section 3.16 — Employee Benefit Matters	31
 Section 3.17 — Employment Matters	32
 Section 3.18 — Taxes	32
 Section 3.19 — Brokers	33
 Section 3.20 — Suppliers and Customers	33
 Section 3.21 — No Other Representations and Warranties	33
 ARTICLE 4 — REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 34
 Section 4.01 — Organization and Authority of Parent and Merger Sub	34
 Section 4.02 — No Conflicts; Consents	34
 Section 4.03 — No Prior Merger Sub Operations	34
 Section 4.04 — Brokers	35
 Section 4.05 — Capitalization of Parent; Valid Issuance	35
 Section 4.06 — Legal Proceedings	35
 Section 4.07 — Independent Investigation	35
 Section 4.08 — [Reserved.]	36
 Section 4.09 — SEC Filings; Financial Statements	36
 Section 4.10 — Absence of Certain Changes	36
 Section 4.11 — Compliance with Securities Laws	36
 Section 4.12 — Stock Exchange Listing	36
 Section 4.13 — Tax Matters	37

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 Section 4.14 — Rule 144(i) Status; Resale Eligibility	37
 Section 4.15 — Rule 506(d) Compliance	37
 ARTICLE 5 — COVENANTS 37
 Section 5.01 — Conduct of Business Prior to the Closing	37
 Section 5.02 — Access to Information	38
 Section 5.03 — Shareholder Consent	38
 Section 5.04 — Supplement to Disclosure Schedules	38
 Section 5.05 — Resignations	39
 Section 5.06 — Employees; Benefit Plans	39
 Section 5.07 — Director and Officer Indemnification and Insurance	40
 Section 5.08 — Governmental Approvals and Other Third-Party Consents	40
 Section 5.09 — Closing Conditions	41
 Section 5.10 — Public Announcements; SEC Filings	41
 Section 5.11 — Further Assurances	41
 Section 5.12 — Tax Certificate	42
 Section 5.13 — Tax-Free Reorganization	42
 Section 5.14 — Transfer Taxes	42
 Section 5.15 — [Reserved.]	42
 Section 5.16 — Stock Exchange Listing	42
 Section 5.17 — Registration Rights	42
 ARTICLE 6 — CONDITIONS TO CLOSING 43
 Section 6.01 — Conditions to Obligations of All Parties	43
 Section 6.02 — Conditions to Obligations of Parent and Merger Sub	43
 Section 6.03 — Conditions to Obligations of the Company	44
 ARTICLE 7 — INDEMNIFICATION 45
 Section 7.01 — Survival	45
 Section 7.02 — Indemnification By Shareholders	45
 Section 7.03 — Indemnification By Parent	46
 Section 7.04 — Certain Limitations	46

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 Section 7.05 — Indemnification Procedures	47
 Section 7.06 — Payments	47
 Section 7.07 — Tax Treatment of Indemnification Payments	48
 Section 7.08 — Exclusive Remedies	48
 ARTICLE 8 — TERMINATION 48
 Section 8.01 — Termination	48
 Section 8.02 — Effect of Termination	49
 ARTICLE 9 — MISCELLANEOUS 49
 Section 9.01 — Shareholder Representative	49
 Section 9.02 — Expenses	51
 Section 9.03 — Notices	51
 Section 9.04 — Interpretation	52
 Section 9.05 — Disclosure Schedules	52
 Section 9.06 — Headings	52
 Section 9.07 — Severability	52
 Section 9.08 — Entire Agreement	52
 Section 9.09 — Successors and Assigns	53
 Section 9.10 — No Third-Party Beneficiaries	53
 Section 9.11 — Amendment and Modification; Waiver	53
 Section 9.12 — Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	53
 Section 9.13 — Specific Performance	54
 Section 9.14 — Counterparts	54
 Section 9.15 — Conflict Waiver; Attorney-Client Privilege	54
 Section 9.16 — Non-Recourse	56
 EXHIBITS
 Exhibit A – Escrow Agreement
 Exhibit B – Registration Rights Agreement
 Exhibit C – Working Capital Methodology
 Exhibit D – Share Valuation Methodology

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 Exhibit E – Lock-Up Agreement Term Sheet
  

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 AGREEMENT AND PLAN OF MERGER
  
 This Agreement and Plan of Merger (this “ Agreement ”), dated as of May 29, 2026 (the “ Effective Date ”), is entered into among Arxis, Inc., a Delaware corporation (“ Parent ”), Orion Merger Sub, Inc., a Minnesota corporation (“ Merger Sub ”), Omnetics Connector Corporation, a Minnesota corporation (together, as applicable, with its subsidiaries, the “ Company ”), and Gary Jacobs, an individual resident of the State of Minnesota, solely in his capacity as Shareholder Representative (“ Shareholder Representative ”).
  
 Recitals
  
 WHEREAS , the parties intend that Merger Sub be merged with and into the Company, with the Company surviving that merger on the terms and subject to the conditions set forth herein (the “ Merger ”), such that the Merger shall constitute a reorganization within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the “ Code ”), and this Agreement shall constitute a “plan of reorganization” within the meaning of Treasury Regulations Section 1.368-2(g);
  
 WHEREAS , the board of directors of the Company (the “ Company Board ”) has unanimously (a) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Company and its shareholders, (b) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger, and (c) resolved to recommend adoption of this Agreement by the shareholders of the Company in accordance with the Minnesota Business Corporation Act, Minnesota Statutes Chapter 302A, as amended (the “ MBCA ”);
  
 WHEREAS , the Company has called and held a special meeting of its shareholders and obtained approval of this Agreement, the Merger and the transactions contemplated hereby in accordance with Sections 302A.611 through 302A.615 of the MBCA;
  
 WHEREAS , the respective boards of directors of Parent and Merger Sub have unanimously (a) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of Parent, Merger Sub and their respective shareholders, and (b) approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger;
  
 WHEREAS , this Agreement constitutes the “plan of merger” within the meaning of Section 302A.611, Subdivision 1 of the MBCA, setting forth the terms and conditions of the Merger, the manner and basis of converting the outstanding shares of the Company into the right to receive shares of Parent Common Stock as the Merger Consideration, and such other provisions as are necessary or desirable in connection with the Merger;
  
 WHEREAS , concurrent with the execution and delivery of this Agreement, Parent, Merger Sub, and each Shareholder entered into support agreements to become effective upon the Closing (each such agreement, a “ Support Agreement ”);
  
 WHEREAS , a portion of the consideration otherwise payable by Parent to the shareholders of the Company in connection with the Merger shall be deposited in cash escrow by Parent for the purpose of securing the working capital adjustment obligations and funding Shareholder Representative expenses as set forth herein, the release of which shall be contingent upon certain events and conditions, all as set forth in this Agreement and the Escrow Agreement (as defined herein); and
  

  

  

 WHEREAS , it is intended that for federal income Tax purposes, the Merger shall qualify as a reorganization within the meaning of Section 368(a)(2)(E) of the Code, and this Agreement is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulations Section 1.368-2(g).
  
 NOW, THEREFORE , 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 1
DEFINITIONS

  
 The following terms have the meanings specified or referred to in this ARTICLE 1 :
  
 “ 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.
  
 “ Agreement ” has the meaning set forth in the preamble.
  
 “ Ancillary Documents ” means the Escrow Agreement, the Exchange Agent Agreement, the Registration Rights Agreement and all other agreements, documents, instruments or certificates contemplated by this Agreement to be executed in connection with the transactions contemplated hereby.
  
 “ Articles of Merger ” has the meaning set forth in Section 2.04 .
  
 “ Audited Financial Statements ” has the meaning set forth in Section 3.06 .
  
 “ Balance Sheet ” has the meaning set forth in Section 3.06 .
  
 “ Balance Sheet Date ” has the meaning set forth in Section 3.06 .
  
 “ Benefit Plan ” has the meaning set forth in Section 3.16(a) .
  
 “ Business Day ” means any day except Saturday, Sunday or any other day on which commercial banks located in Minneapolis, Minnesota are authorized or required by Law to be closed for business.
  
 “ Cash ” means, with respect to the Company, cash, cash equivalents that are readily convertible into cash within 30 days, and other short-term marketable securities of the Company as of immediately prior to the Closing, less the amounts of (a) any outstanding (issued but uncleared) checks, drafts, ACH transactions, and wire transfers (but without duplication of any such unpaid amounts being taken into account in the determination of the Working Capital), and (b) any trapped cash and restricted cash.
  
 “ Cash True-Up Amount ” means, if the Measurement Price is less than the Collar Floor, an amount in cash equal to (a) the Equity Value, minus (b) the product of (i) the Closing Merger Consideration (calculated using the Collar Floor as the Final Parent Stock Value) and (ii) the Measurement Price. If the Measurement Price is greater than or equal to the Collar Floor, the Cash True-Up Amount shall be zero.
  
 “ Certificate ” has the meaning set forth in Section 2.10(a) .
  

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 “ Closing ” has the meaning set forth in Section 2.02 .
  
 “ Closing Date ” has the meaning set forth in Section 2.02 .
  
 “ Closing Indebtedness Certificate ” means a certificate executed by the Chief Financial Officer of the Company certifying on behalf of the Company an itemized list of all outstanding Indebtedness as of immediately prior to the Closing and the Person to whom such outstanding Indebtedness is owed and an aggregate total of such outstanding Indebtedness.
  
 “ Closing Merger Consideration ” means a number of shares of Parent Common Stock equal to (a) the Equity Value, divided by (b) the Final Parent Stock Value. For the avoidance of doubt, the Closing Merger Consideration shall be expressed as a number of shares of Parent Common Stock, and any fractional share shall be treated in accordance with Section 2.08(d) .
  
 “ Closing Per Share Merger Consideration ” means (a) the Closing Merger Consideration (expressed in shares of Parent Common Stock), divided by (b) the Total Share Number.
  
 “ Closing Statement ” has the meaning set forth in Section 2.16(b)(i) .
  
 “ Closing Transaction Expenses Certificate ” means a certificate executed by the Chief Financial Officer of the Company, certifying the amount of Transaction Expenses remaining unpaid as of immediately prior to the Closing.
  
 “ Closing Working Capital ” means Working Capital, calculated as of immediately prior to the Closing.
  
 “ Code ” has the meaning set forth in the recitals.
  
 “ Collar Floor ” means an amount equal to 85% of the Exchange Ratio Calculation Price.
  
 “ Company ” has the meaning set forth in the preamble.
  
 “ Company Board ” has the meaning set forth in the recitals.
  
 “ Company Charter Documents ” has the meaning set forth in Section 3.03 .
  
 “ Company Common Stock ” means the common stock, par value $0.01 per share, of the Company.
  
 “ Company Intellectual Property ” has the meaning set forth in Section 3.11(b) .
  
 “ Current Assets ” means, as of any determination date, the sum of (a) accounts receivable (net of allowances for doubtful accounts determined in accordance with the Working Capital Methodology), (b) inventories (net of reserves determined in accordance with the Working Capital Methodology), (c) deposits, (d) prepaid expenses (excluding any prepaid insurance, software or similar items with terms extending more than thirty-six (36) months beyond the Closing Date and any prepaid Transaction Expenses), and (e) other current assets including but not limited to those set forth on the illustrative Part 3 of EXHIBIT C (Working Capital Methodology), in each case, of the Company and determined in accordance with Part 1 of EXHIBIT C , but in each case excluding (i) any income or deferred Tax assets, (ii) any intercompany receivables among the Company, (iii) any loans and amounts receivable from shareholders, officers, directors or Affiliates of the Company, and (iv) cash and cash equivalents.
  

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 “ Current Liabilities ” means, as of any determination date, the sum of (a) accounts payable, (b) accrued expenses (including accrued payroll and accrued bonuses earned in the ordinary course of business, but excluding any Transaction Expenses, any change of control payments, retention bonuses, or similar amounts, in each case, to the extent included in Transaction Expenses), and (c) other current liabilities including but not limited to those set forth on the illustrative Part 3 of EXHIBIT C (Working Capital Methodology), in each case, of the Company and determined in accordance with Part 1 of EXHIBIT C , but in each case excluding (i) any income or deferred Tax liabilities, (ii) any Transaction Expenses, (iii) any Indebtedness of the Company and any assets or contra liabilities associated with Indebtedness (such as unamortized debt issuance costs), (iv) any intercompany payables among the Company to the extent reconciled and eliminated, and (v) any payables to shareholders, officers, directors or Affiliates of the Company, solely to the extent included in Indebtedness.
  
 “ Data Room ” means the electronic documentation Datasite LLC site established by Vermillion Capital, LLC on behalf of the Company containing the documents set forth in the index included on Schedule 1.01(a) .
  
 “ Determination Date ” has the meaning set forth on EXHIBIT D .
  
 “ Direct Claim ” has the meaning set forth in Section 7.05(c) .
  
 “ Disclosure Schedules ” means the Disclosure Schedules delivered by the Company and Parent concurrently with the execution and delivery of this Agreement.
  
 “ Disputed Amounts ” has the meaning set forth in Section 2.16(c)(iv) .
  
 “ Dissenting Shares ” has the meaning set forth in Section 2.09 .
  
 “ Dollars ” or “ $ ” means the lawful currency of the United States.
  
 “ Drop Dead Date ” has the meaning set forth in Section 8.01(b) .
  
 “ Effective Time ” has the meaning set forth in Section 2.04 .
  
 “ Employees ” means those Persons employed by the Company immediately prior to the Closing.
  
 “ Encumbrance ” means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment or other similar encumbrance.
  
 “ Environmental Claim ” means any action, suit, claim, investigation or other legal proceeding by any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, 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 any applicable Law in effect as of the date of this Agreement, and any Governmental Order or binding agreement with any Governmental Authority in effect as of the date of this Agreement: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient or indoor air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure

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 to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal, or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): 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 Resource Conservation and Recovery Act, 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.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.; and the Minnesota Environmental Response and Liability Act, Minn. Stat. §§ 115B.01 et seq.
  
 “ Environmental Permit ” means any Permit required under any Environmental Law.
  
 “ Equity Value ” means the Purchase Price, plus or minus the Closing Adjustment, minus the outstanding Indebtedness of the Company as of immediately prior to the Closing, plus the amount of Cash of the Company as of immediately prior to the Closing, minus the amount of unpaid Transaction Expenses of the Company as of immediately prior to the Closing, minus the Purchase Price Adjustment Escrow Amount, minus the Shareholder Representative Expense Amount.
  
 “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
  
 “ Escrow Agent ” means Citibank, N.A.
  
 “ Escrow Agreement ” means the Escrow Agreement to be entered into by Parent, Shareholder Representative and the Escrow Agent at the Closing, substantially in the form of EXHIBIT A .
  
 “ Escrow Funds ” has the meaning set forth in Section 2.11 .
  
 “ Estimated Closing Statement ” has the meaning set forth in Section 2.16(a)(i) .
  
 “ Estimated Closing Working Capital ” has the meaning set forth in Section 2.16(a)(i) .
  
 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
  
 “ Exchange Agent ” has the meaning set forth in Section 2.10(b) .
  
 “ Exchange Agent Agreement ” has the meaning set forth in Section 2.10(b) .
  
 “ Exchange Ratio ” means the Closing Per Share Merger Consideration, expressed as the number of shares of Parent Common Stock issuable per Share.
  
 “ Exchange Ratio Calculation Price ” means the price per share of Parent Common Stock determined in accordance with the Share Valuation Methodology, with a Determination Date as of the day immediately prior to the Effective Date.
  
 “ Final Closing Working Capital ” has the meaning set forth in Section 2.16(c)(vi) .

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 “ Final Parent Stock Value ” means the price per share of Parent Common Stock used to calculate the number of shares of Parent Common Stock issuable as Merger Consideration, determined as follows:
  
 (a) If the Measurement Price is greater than or equal to the Collar Floor, then the Final Parent Stock Value shall equal the Measurement Price; or
  
 (b) If the Measurement Price is less than the Collar Floor, then the Final Parent Stock Value shall equal the Collar Floor.
  
 (c) For the avoidance of doubt, if the Measurement Price is less than the Collar Floor, the Final Parent Stock Value for purposes of determining the number of shares of Parent Common Stock issuable as Closing Merger Consideration shall equal the Collar Floor, and Parent shall pay the Cash True-Up Amount in cash to the Shareholders in accordance with Section 2.03(b) .
  
 “ Financial Statements ” has the meaning set forth in Section 3.06 .
  
 “ Fraud ” means, with respect to a party, an actual and intentional misrepresentation of a material existing fact with respect to the making of any representation or warranty in ARTICLE 3 or ARTICLE 4 , made by such party, (a) with respect to the Company, to the Company’s Knowledge or (b) with respect to Parent, to Parent’s actual knowledge, of its falsity and made for the purpose of inducing the other party to act, and upon which the other party justifiably relies with resulting Losses. For the avoidance of doubt, Fraud shall not include any claim for equitable fraud, constructive fraud, promissory fraud, unfair dealings fraud, fraud by reckless or negligent misrepresentations or any tort based on negligence or recklessness.
  
 “ GAAP ” means United States generally accepted accounting principles in effect from time to time.
  
 “ Governmental Authority ” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (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, or award entered by or with any Governmental Authority.
  
 “ Hazardous Materials ” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or man-made, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls and per- and poly-fluoroalkyl substances (PFAS) and other emerging contaminants.
  
 “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
  
 “ Indebtedness ” means, without duplication, the aggregate amount of the following obligations (including in respect of principal, accrued interest, penalties, fees, reimbursements, indemnities, and premiums): (a) all indebtedness for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, guaranties, or similar instruments, (c) all obligations under capital or finance leases in the Financial Statements or that are required to be recognized as capital or finance leases in accordance with GAAP (excluding any leases

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 classified as operating leases in the Financial Statements), (d) all obligations under conditional sale or other title retention agreements, (e) all obligations for the deferred or unpaid purchase price of assets, business, securities, property, or services, whether contingent or otherwise, including earn-outs, holdbacks, seller notes, post-closing true-up obligations, or similar payment arrangements, in each case, calculated as the maximum amount payable under or pursuant to such obligations, in each case related to the acquisition of a business, (f) all obligations under interest rate or currency swap transactions, collars, caps, forward contracts, and similar hedging obligations, (g) all letters of credit, banker’s acceptances, performance bonds, surety bonds, and similar credit transactions (to the extent drawn), (h) all guarantees of any Indebtedness of any other Person, (i) any obligations related to sick leave, and benefits related to vacation and paid time off (whether accrued or not, and provided, however, that only paid time-off balances in excess of 160 hours shall be included) and the employer portion of any payroll, social security, unemployment or similar Taxes imposed thereon, (j) any unpaid severance obligations and the employer portion of any payroll, social security, unemployment or similar Taxes imposed thereon, (k) any obligations in respect of underfunded or unfunded defined benefit pension plans, (l) any obligation secured by an Encumbrance on any property of the Company, (m) any declared or unpaid dividends or distributions, or any amounts owed to any Shareholder, equityholder, officer, director, related party, or any Affiliates of the Company (including, for the avoidance of doubt, any amounts owed to Omnetics, LLC, or any of its subsidiaries), (n) all obligations for stock-based compensation, (o) the aggregate amount (which shall not be less than zero dollars in the aggregate or in any jurisdiction) of all unpaid income Taxes attributable to any pre-Closing tax period or portion thereof (whether or not due and payable), (p) all deferred revenue, customer deposits, or other amounts billed prior to the performance of services, and (q) all accrued or unpaid interest, premiums, penalties, breakage costs, unwind costs and other obligations relating to any of the foregoing.
  
 “ Indemnified Party ” has the meaning set forth in Section 7.04 .
  
 “ Indemnifying Party ” has the meaning set forth in Section 7.04 .
  
 “ Independent Accountant ” has the meaning set forth in Section 2.16(c)(iv) .
  
 “ Insurance Policies ” has the meaning set forth in Section 3.12 .
  
 “ Intellectual Property ” has the meaning set forth in Section 3.11(a) .
  
 “ Knowledge ” means, when used with respect to the Company, the actual knowledge, after due inquiry, of those persons listed on Schedule 1.01 .
  
 “ 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.
  
 “ Leases ” has the meaning set forth in Section 3.10(b) .
  
 “ Letter of Transmittal ” has the meaning set forth in Section 2.10(c) .
  
 “ Losses ” means actual out-of-pocket losses, damages, liabilities, costs or expenses, including reasonable attorneys’ fees.
  
 “ Majority Holders ” has the meaning set forth in Section 9.01(c) .
  
 “ Material Adverse Effect ” means any event, occurrence, fact, condition or change that is, or would reasonably be expected to become, individually or in the aggregate, materially adverse to: (a) the business, results of operations, condition (financial or otherwise), or assets of the Company, taken as a whole; or (b)

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 the ability of the Company to consummate the transactions contemplated hereby on a timely basis; provided, however, that “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 or securities markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement; (vi) any changes in applicable Laws or accounting rules; (vii) natural disasters, epidemics, pandemics, and public health emergencies; (viii) failure to meet internal projections or forecasts (it being understood that the facts or circumstances giving rise to such failure may be taken into account in determining whether a Material Adverse Effect has occurred to the extent not otherwise excluded by another clause of this definition); (ix) customer or supplier reactions to the transaction; or (x) the public announcement, pendency, or completion of the transactions contemplated by this Agreement.
  
 “ Material Contracts ” has the meaning set forth in Section 3.09(a) .
  
 “ MBCA ” has the meaning set forth in the recitals.
  
 “ Measurement Price ” means the price per share of Parent Common Stock calculated in accordance with the Share Valuation Methodology, with a Determination Date as of the day immediately prior to the Closing Date.
  
 “ Merger ” has the meaning set forth in the recitals.
  
 “ Merger Consideration ” means (a) shares of Parent Common Stock issuable as the Closing Merger Consideration, (b) the Cash True-Up Amount, if any, (c) any cash amounts payable in connection with a positive Purchase Price Adjustment pursuant to Section 2.16(d)(iii), and (d) any cash amounts released to Shareholders from the Escrow Funds pursuant to the terms of this Agreement and the Escrow Agreement.
  
 “ Merger Sub ” has the meaning set forth in the preamble.
  
 “ Minimum Trading Price ” has the meaning set forth in Section 6.03(h)(iii) .
  
 “ Non-Party Affiliates ” has the meaning set forth in Section 9.16 .
  
 “ Notice of Disagreement ” has the meaning set forth in Section 2.16(c)(ii) .
  
 “ Parent ” has the meaning set forth in the preamble.
  
 “ Parent Benefit Plans ” has the meaning set forth in Section 5.06(b) .
  
 “ Parent Common Stock ” means the Class A Common Stock, par value $0.01 per share, of Parent.
  
 “ Parent Material Adverse Effect ” means any event, occurrence, fact, condition or change that is, or would reasonably be expected to become, individually or in the aggregate, materially adverse to: (a) the business, results of operations, condition (financial or otherwise), or assets of Parent and its subsidiaries, taken as a whole; or (b) the ability of Parent and Merger Sub to consummate the transactions contemplated hereby on a timely basis.
  
 “ Parent SEC Documents ” has the meaning set forth in Section 4.09(a) .
  
 “ Parent Stock Value ” means the Final Parent Stock Value.

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 “ 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(a) .
  
 “ Person ” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
  
 “ Pre-Closing Measurement Price ” has the meaning set forth in Section 6.03(h)(iii) .
  
 “ Privileged Communications ” has the meaning set forth in Section 9.15(b) .
  
 “ Pro Rata Share ” means, with respect to any Shareholder, such Person’s ownership interest in the Company as of immediately prior to the Effective Time, determined by dividing (a) the number of Shares owned of record by such Person as of immediately prior to the Effective Time by (b) the Total Share Number.
  
 “ Proposed Closing Working Capital ” has the meaning set forth in Section 2.16(b)(i) .
  
 “ Purchase Price ” means $770,000,000, which amount represents the agreed enterprise value of the Company for purposes of calculating the number of shares of Parent Common Stock to be issued as Merger Consideration.
  
 “ Purchase Price Adjustment ” has the meaning set forth in Section 2.16(d)(i) .
  
 “ Purchase Price Adjustment Escrow Amount ” means $7,700,000.00, to be deposited in cash with the Escrow Agent as set forth in Section 2.11 .
  
 “ Purchase Price Adjustment Escrow Fund ” has the meaning set forth in Section 2.11(a) .
  
 “ Qualified Benefit Plan ” has the meaning set forth in Section 3.16(b) .
  
 “ Real Property ” means the real property owned by, leased or subleased to, the Company, together with all buildings, structures and facilities located thereon.
  
 “ Registration Rights Agreement ” means the Registration Rights Agreement to be entered into at the Closing among Parent and the Shareholders, substantially in the form of EXHIBIT B , providing for the registration of the resale of the shares of Parent Common Stock issued as Merger Consideration.
  
 “ Release ” means any actual or threatened 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, without limitation, ambient or indoor air, surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).
  
 “ Representative ” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
  
 “ Representative Losses ” has the meaning set forth in Section 9.01(d) .
  
 “ Requisite Company Vote ” has the meaning set forth in Section 3.02(a) .

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 “ Resolution Period ” has the meaning set forth in Section 2.16(c)(iii) .
  
 “ Review Period ” has the meaning set forth in Section 2.16(c)(i) .
  
 “ Schedule Supplement ” has the meaning set forth in Section 5.04 .
  
 “ SEC ” means the United States Securities and Exchange Commission.
  
 “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
  
 “ Shares ” has the meaning set forth in Section 2.08(a) . For the avoidance of doubt, references in this Agreement to “shares of capital stock,” “shares of Company Common Stock,” or similar phrases shall be deemed to refer to the Shares unless the context clearly requires otherwise.
  
 “ Shareholder ” means a holder of Company Common Stock.
  
 “ Shareholder Group ” has the meaning set forth in Section 9.15(a) .
  
 “ Shareholder Group Law Firm ” has the meaning set forth in Section 9.15(a) .
  
 “ Shareholder Representative ” has the meaning set forth in the preamble.
  
 “ Shareholder Representative Expense Amount ” means $300,000.00, to be deposited in cash with the Escrow Agent as set forth in Section 2.11 .
  
 “ Shareholder Representative Expense Fund ” has the meaning set forth in Section 2.11(b) .
  
 “ Share Valuation Methodology ” means the methodology set forth on EXHIBIT D .
  
 “ Stock Exchange ” means Nasdaq.
  
 “ Surviving Corporation ” has the meaning set forth in Section 2.01 .
  
 “ Target Working Capital ” means an amount equal to $47,852,000.
  
 “ Taxes ” means all federal, state, local, foreign and other income, gross receipts, production, ad valorem, transfer, real estate transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.
  
 “ Tax Opinion ” means the opinion of counsel contemplated by Section 6.03(i) .
  
 “ Tax Return ” means any return, declaration, report, claim for refund, information return or 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 7.05(a) .

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 “ Total Share Number ” means the aggregate number of Shares outstanding immediately prior to the Effective Time (other than Shares owned by the Company which are to be cancelled and retired in accordance with Section 2.08(a) ).
  
 “ Trading Day ” means any day on which the Stock Exchange is open for trading.
  
 “ Transaction Expenses ” means, without duplication and only to the extent not paid prior to Closing, the aggregate amount of (a) all fees, costs and expenses payable to third parties (including legal counsel, investment bankers, accountants, auditors, consultants or other experts) in connection with the transactions contemplated hereby (including all broker’s and finder’s fees) incurred by or on behalf of the Company in connection with the preparation, negotiation and execution of this Agreement and the Ancillary Documents, and the performance and consummation of the Merger and the other transactions contemplated hereby and thereby, and (b) any fees, costs, and expenses or payments of the Company related to any transaction bonus, discretionary bonus, change-of-control payment, retention, severance, or other compensatory payments made to any current or former officer, director, employee, independent contractor, consultant, or other service provider as a result of the execution of this Agreement or in connection with or triggered by the transactions contemplated by this Agreement (including the employer portion of any payroll, social security, unemployment or similar Taxes).
  
 “ Working Capital ” means, as of any determination date, (a) Current Assets minus (b) Current Liabilities, in each case as calculated in accordance with “Part 1 - Accounting Hierarchy of Working Capital Methodology” and the Working Capital Methodology attached hereto as EXHIBIT C . For the avoidance of doubt, Working Capital shall be calculated (i) without giving effect to any purchase accounting arising out of the consummation of the transactions contemplated hereby, (ii) without giving effect to Parent’s financing or refinancing arrangements entered into in connection with or in anticipation of the transactions contemplated hereby. In the event of any conflict between GAAP and the Working Capital Methodology, the Working Capital Methodology shall govern. Working Capital shall exclude (A) all Indebtedness, (B) all Transaction Expenses, (C) all income Tax assets and income Tax liabilities (whether current or deferred), (D) all cash and cash equivalents, (E) any intercompany receivables or payables, (F) any receivables from shareholders, officers, directors or Affiliates of the Company.
  
 “ Working Capital Methodology ” means the methodology for calculating Working Capital, Estimated Closing Working Capital, Proposed Closing Working Capital, and Final Closing Working Capital set forth on Part 1 of EXHIBIT C attached hereto.
  
 ARTICLE 2
MERGER

  
 Section 2.01 The Merger . On the terms and subject to the conditions set forth in this Agreement, and in accordance with the MBCA, at the Effective Time, (a) Merger Sub will merge with and into the Company, and (b) the separate corporate existence of Merger Sub will cease and the Company will continue its corporate existence under the MBCA as the surviving corporation in the Merger (sometimes referred to herein as the “ Surviving Corporation ”). This Agreement constitutes a “plan of merger” as contemplated by Section 302A.611 of the MBCA. The names of the constituent corporations are Merger Sub and the Company. The surviving corporation is the Company. The Merger is intended to constitute a reorganization within the meaning of Section 368(a)(2)(E) of the Code, and this Agreement is intended to constitute a “plan of reorganization” within the meaning of Treasury Regulations Section 1.368-2(g).

  
 Section 2.02 Closing . Subject to the terms and conditions of this Agreement, the closing of the Merger (the “ Closing ”) shall take place at 10:00 a.m., Central time, no later than two (2) Business Days after the

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 last of the conditions to Closing set forth in ARTICLE 6 have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), remotely by exchange of documents and signatures (or their electronic counterparts), or at such other time or on such other date or at such other place as the Company and Parent may mutually agree upon in writing; provided that, notwithstanding the foregoing, unless Parent, the Company, and Shareholder Representative otherwise agree in writing, in no event shall the Closing take place prior to August 15, 2026 (the day on which the Closing takes place being the “ Closing Date ”).

  
 Section 2.03 Closing Deliverables .

  
 (a) At the Closing, the Company shall deliver to Parent:

  
 (i) a certificate of the Secretary or an Assistant Secretary of the Company certifying the names and signatures of the officers of the Company authorized to sign this Agreement, the Ancillary Documents and the other documents to be delivered hereunder and thereunder;

  
 (ii) a certificate of the Secretary (or equivalent officer) of the Company certifying that attached thereto are true and complete copies of all resolutions adopted by the Company Board authorizing the execution, delivery and performance of this Agreement and the Ancillary Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby;

  
 (iii) a certificate of good standing (or its equivalent) for the Company from the Secretary of State of Minnesota, dated within five (5) Business Days prior to the Closing Date;

  
 (iv) the Closing Indebtedness Certificate;

  
 (v) the Closing Transaction Expenses Certificate;

  
 (vi) duly executed payoff letters from each holder of Indebtedness reflecting the payoff amounts for all outstanding Indebtedness of the Company as of the Closing Date in form and substance reasonably satisfactory to Parent, together with, to the extent applicable, UCC-3 termination statements, mortgage releases, intellectual property security interest releases and any other releases required in connection with such payoff;

  
 (vii) a certificate of the Secretary (or equivalent officer) of the Company certifying that attached thereto are true and complete copies of all resolutions duly adopted and approved by the Shareholders at the Special Meeting representing no less than the Requisite Company Vote approving the execution, delivery and performance of this Agreement and the Ancillary Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby;

  
 (viii) the tax certificate contemplated in Section 5.12 ;

  
 (ix) the Estimated Closing Statement contemplated in Section 2.16(a) ;

  
 (x) the Consideration Spreadsheet contemplated in Section 2.17 ;

  

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 (xi) evidence that the agreements set forth on Schedule 2.03(a)(xi) have been terminated in full, effective as of the Closing;

  
 (xii) a certificate dated as of the Closing Date, signed by an officer of the Company, in his or her capacity as such and not in his or her individual capacity, to the effect that the conditions set forth in Sections 6.02(a) , 6.02(b) , and 6.02(e) have been satisfied (the “ Company Certificate ”);

  
 (xiii) the Registration Rights Agreement, duly executed by the Shareholders;

  
 (xiv) a Lock-Up Agreement (the “ Lock-Up Agreement ”), duly executed by the Shareholders and consistent with the term sheet attached hereto as EXHIBIT E ; and

  
 (xv) such other documents or instruments as Parent may reasonably request prior to the Closing and that are reasonably necessary to consummate the transactions contemplated by this Agreement.

  
 (b) At the Closing, Parent shall deliver to the Company:

  
 (i) irrevocable instructions to Parent’s transfer agent to issue to the Exchange Agent book-entry shares of Parent Common Stock representing the Closing Merger Consideration for distribution to the Shareholders (other than holders of Dissenting Shares) in accordance with Section 2.10 , together with evidence reasonably satisfactory to the Company that such shares have been so issued;

  
 (ii) payment by wire transfer of immediately available funds (A) to the holders of Indebtedness of the Company, the payoff amounts set forth in the payoff letters delivered pursuant to Section 2.03(a)(vi) , and (B) to the Persons to whom Transaction Expenses are owed, as specified in the Closing Transaction Expenses Certificate, the amount of all unpaid Transaction Expenses of the Company;

  
 (iii) payment by wire transfer of immediately available funds:

  
 (A) to the Escrow Agent of an amount equal to the sum of the Purchase Price Adjustment Escrow Amount and the Shareholder Representative Expense Amount, for deposit into escrow in accordance with Section 2.11 ;

  
 (B) if the Cash True-Up Amount is greater than zero, to the Exchange Agent, for distribution to the Shareholders in accordance with their Pro Rata Shares, of the Cash True-Up Amount;

  
 (iv) the Escrow Agreement, duly executed by Parent;

  
 (v) the Exchange Agent Agreement, duly executed by Parent;

  
 (vi) the Registration Rights Agreement, duly executed by Parent;

  
 (vii) the Lock-Up Agreement, duly executed by Parent;

  
 (viii) a certificate of the Secretary (or equivalent officer) of Parent and Merger Sub certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Parent and Merger Sub authorizing the execution, delivery and performance of this

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 Agreement and the Ancillary Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby;

  
 (ix) a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Parent and Merger Sub certifying the names and signatures of the officers of Parent and Merger Sub authorized to sign this Agreement, the Ancillary Documents and the other documents to be delivered hereunder and thereunder;

  
 (x) the Parent Stock Trading Certificate contemplated in Section 6.03(h)(iv) ;

  
 (xi) the tax opinion contemplated in Section 6.03(i) ;

  
 (xii) evidence that the shares of Parent Common Stock to be issued as Merger Consideration have been approved for listing on the Stock Exchange, subject to official notice of issuance;

  
 (xiii) a certificate dated as of the Closing Date, signed by an officer of each of Parent and Merger Sub, in his or her capacity as such and not in his or her individual capacity, to the effect that the conditions set forth in Sections 6.03(a) , 6.03(b) , and 6.03(f) have been satisfied (the “ Parent Certificate ”); and

  
 (xiv) such other documents or instruments as the Company reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

  
 Section 2.04 Effective Time . Subject to the provisions of this Agreement, at the Closing, the Company, Parent and Merger Sub shall cause articles of merger (the “ Articles of Merger ”) to be executed, acknowledged and filed with the Secretary of State of the State of Minnesota in accordance with Section 302A.615 of the MBCA and shall make all other filings or recordings required under the MBCA. The Articles of Merger shall contain the plan of merger as required by Section 302A.615 of the MBCA, together with a statement that the plan of merger has been approved by each constituent corporation. The Merger shall become effective at such time as the Articles of Merger have been duly filed with the Secretary of State of the State of Minnesota or at such later date or time as may be agreed by the Company and Parent in writing and specified in the Articles of Merger in accordance with the MBCA (the effective time of the Merger being hereinafter referred to as the “ Effective Time ”).

  
 Section 2.05 Effects of the Merger . The Merger shall have the effects set forth herein and in the applicable provisions of the MBCA, including Section 302A.617 thereof. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, immunities, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

  
 Section 2.06 Articles of Incorporation; Bylaws .

  
 (a) At the Effective Time, the articles of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law.

  
 (b) At the Effective Time, the bylaws of the Company, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter changed or amended as

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 provided therein or by applicable Law; provided, that references to the Company’s name in the bylaws shall be replaced with the name of the Surviving Corporation if different.

  
 Section 2.07 Directors and Officers . The directors and officers of Merger Sub immediately prior to the Effective Time shall be the initial directors and officers of the Surviving Corporation, each to hold office in accordance with the articles of incorporation and bylaws of the Surviving Corporation and until such director’s or officer’s successor is duly elected or appointed and qualified, or until the earlier of their death, resignation or removal.

  
 Section 2.08 Effect of the Merger on Common Stock .

  
 (a) Cancellation of Treasury Stock . At the Effective Time, all shares of Company Common Stock (the “ Shares ”) that are owned by Parent, Merger Sub or the Company (as treasury stock or otherwise) or any of their respective direct or indirect wholly owned subsidiaries shall automatically be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor.

  
 (b) Conversion of Company Common Stock . Each Share issued and outstanding immediately prior to the Effective Time (other than (i) Shares to be cancelled and retired in accordance with Section 2.08(a) , and (ii) Dissenting Shares) shall be converted into the right to receive the Closing Per Share Merger Consideration, payable in shares of Parent Common Stock, together with any additional amounts that may become payable in respect of such Share in the future from the Escrow Funds as provided in this Agreement and the Escrow Agreement or in respect of the Purchase Price Adjustment, at the respective times and subject to the contingencies specified herein and therein.

  
 (c) Conversion of Merger Sub Capital Stock . Each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.

  
 (d) No Fractional Shares . No fractional shares of Parent Common Stock shall be issued in the Merger. Each Shareholder who would otherwise be entitled to receive a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock that otherwise would be received by such Shareholder) shall receive, in lieu thereof, an amount in cash (without interest) determined by multiplying such fractional share interest by the Final Parent Stock Value. The parties agree that payment of cash in lieu of fractional shares is not separately bargained-for consideration but merely represents a mechanical rounding off for purposes of avoiding the expense and inconvenience to Parent that would otherwise be caused by the issuance of fractional shares.

  
 Section 2.09 Dissenting Shares . Notwithstanding any provision of this Agreement to the contrary, including Section 2.08 , Shares issued and outstanding immediately prior to the Effective Time (other than Shares cancelled in accordance with Section 2.08(a) ) and held by a holder who has not voted in favor of adoption of this Agreement at the Special Meeting and who has properly exercised dissenters’ rights with respect to such Shares in accordance with Sections 302A.471 and 302A.473 of the MBCA (such Shares being referred to collectively as the “ Dissenting Shares ” until such time as such holder fails to perfect or otherwise loses such holder’s dissenters’ rights under the MBCA with respect to such Shares) shall not be converted into a right to receive a portion of the Merger Consideration, but instead shall be entitled to only such rights as are granted by Sections 302A.471 and 302A.473 of the MBCA; provided, however, that if, after the Effective Time, such holder fails to perfect, withdraws or loses such holder’s right to dissent pursuant to Sections 302A.471 and 302A.473 of the MBCA or if a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by such sections, such Shares shall be treated as if they had been converted as of the Effective Time into the right to receive the portion of the Merger

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 Consideration, if any, to which such holder is entitled pursuant to Section 2.08(b) , without interest thereon. The Company shall give Parent (i) prompt notice of any demand for payment of fair value of Shares received by the Company pursuant to the MBCA and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), voluntarily make any payment with respect to, or settle, or offer to settle, any such demand for payment.

  
 Section 2.10 Surrender and Payment .

  
 (a) Each holder of Shares that have been converted into the right to receive a portion of the Merger Consideration shall be entitled to receive, upon surrender to the Exchange Agent of a certificate or, as applicable, an affidavit of lost certificate (each, a “ Certificate ”) formerly representing such Shares, together with a duly executed and completed Letter of Transmittal and such other documents as may be required pursuant to such instructions, the Merger Consideration (in the form of shares of Parent Common Stock) for each Share formerly represented by such Certificate. Until so surrendered, outstanding Certificates will be deemed from and after the Effective Time, for all corporate purposes, to evidence only the right to receive the applicable portion of the Merger Consideration.

  
 (b) Prior to the Effective Time, Parent shall select a bank or trust company reasonably acceptable to the Company to act as agent (the “ Exchange Agent ”) for the delivery of the Merger Consideration upon surrender of the Certificates. At or prior to the Effective Time, Parent shall enter into an agreement with the Exchange Agent, in a form reasonably satisfactory to the Company, providing for the delivery of the Merger Consideration (the “ Exchange Agent Agreement ”). Parent shall cause to be deposited with the Exchange Agent at or prior to the Effective Time book-entry shares of Parent Common Stock representing the aggregate Closing Merger Consideration.

  
 (c) Promptly following the Effective Date, the Company shall mail, or shall cause the Exchange Agent to mail, to each Shareholder (i) a letter of transmittal (each, a “ Letter of Transmittal ”) in customary form, which shall be reasonably satisfactory to Parent, and (ii) instructions for surrendering the Certificates in exchange for the Merger Consideration, in each case in form and substance reasonably satisfactory to Parent, specifying that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates (or affidavits of loss in lieu thereof) to the Exchange Agent.

  
 (d) Each Shareholder shall also be entitled to any additional amounts that may become payable in the future in respect of the Shares formerly represented by such Certificate from the Escrow Funds as provided in this Agreement and the Escrow Agreement and on account of the Purchase Price Adjustment, at the respective times and subject to the contingencies specified herein and therein.

  
 (e) If any portion of the Merger Consideration is to be delivered to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition to such delivery that (i) such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer, and (ii) the Person requesting such delivery shall pay to the Exchange Agent any transfer or other Tax required as a result of such delivery to a Person other than the registered holder of such Certificate or establish to the reasonable satisfaction of the Exchange Agent that such Tax has been paid or is not payable.

  
 (f) Any portion of the Merger Consideration that remains unclaimed by the Shareholders twelve (12) months after the Effective Time shall be returned to Parent, upon demand, and any such Shareholder who has not exchanged Certificates for the Merger Consideration in accordance with this Section 2.10 prior to that time shall thereafter look only to Parent for delivery of the Merger Consideration; provided, that amounts held in the Escrow Funds shall be held and distributed to the Persons entitled thereto

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 in accordance with the terms of this Agreement and the Escrow Agreement, at the times and subject to the contingencies specified herein and therein and any portion of the Purchase Price Adjustment to which the Shareholders may become entitled shall become deliverable at the times and subject to the contingencies specified herein. Notwithstanding the foregoing, Parent shall not be liable to any holder of Certificates for any amounts paid to a public official pursuant to applicable abandoned property, escheat or similar Laws. Any amounts remaining unclaimed by Shareholders two (2) years after the Effective Time (or such earlier date, immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Authority) shall become, to the extent permitted by applicable Law, the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.

  
 (g) Any portion of the Merger Consideration made available to the Exchange Agent in respect of any Dissenting Shares shall be returned to Parent, upon demand.

  
 (h) Parent shall pay, or cause the Surviving Corporation to pay, all charges and expenses, including those of the Exchange Agent, in connection with the exchange of Shares for the Merger Consideration.

  
 Section 2.11 Escrow Funds . In accordance with the Escrow Agreement, Parent shall deposit or cause to be deposited with the Escrow Agent:

  
 (a) the Purchase Price Adjustment Escrow Amount in cash (such amount, including any interest or other amounts earned thereon and less any disbursements therefrom in accordance with the Escrow Agreement, the “ Purchase Price Adjustment Escrow Fund ”), to be held for the purpose of securing the obligations of the Shareholders in Section 2.16(d) ; and

  
 (b) the Shareholder Representative Expense Amount in cash (such amount, including any interest or other amounts earned thereon and less any disbursements therefrom in accordance with the Escrow Agreement, the “ Shareholder Representative Expense Fund ” and together with the Purchase Price Adjustment Escrow Fund, the “ Escrow Funds ”), to be held for the purpose of funding any expenses of Shareholder Representative arising in connection with the administration of Shareholder Representative’s duties in this Agreement after the Effective Time.

  
 Section 2.12 No Further Ownership Rights in Company Common Stock . All Merger Consideration delivered or deliverable upon the surrender of Certificates in accordance with the terms hereof shall be deemed to have been delivered or made deliverable in full satisfaction of all rights pertaining to the Shares formerly represented by such Certificate, and from and after the Effective Time, there shall be no further registration of transfers of Shares on the stock transfer books of the Surviving Corporation. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be cancelled and exchanged for the Merger Consideration provided for, and in accordance with the procedures set forth, in this ARTICLE 2 and elsewhere in this Agreement.

  
 Section 2.13 Adjustments . Without limiting the other provisions of this Agreement, if at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of the Company or Parent Common Stock shall occur, including by reason of any reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend or distribution paid in stock, the Merger Consideration (including the Exchange Ratio) and any other amounts payable or shares issuable pursuant to this Agreement shall be appropriately adjusted to reflect such change so as to provide the Shareholders with the same economic effect as contemplated by this Agreement prior to such event.

  

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 Section 2.14 Withholding Rights . Each of the Exchange Agent, Parent, Merger Sub and the Surviving Corporation shall be entitled to deduct and withhold from the consideration otherwise deliverable to any Person pursuant to this ARTICLE 2 such amounts as may be required to be deducted and withheld with respect to the making of such delivery under any provision of Tax Law; provided, however, that the Person intending to deduct or withhold shall use reasonable best efforts to notify such Persons of any amounts otherwise deliverable to such Persons that it intends to deduct and withhold at least five (5) Business Days prior to the due date for any relevant delivery, other than required withholdings in respect of compensatory payments for income, employment and similar Taxes, and the Person intending to withhold with respect to such deliveries shall provide reasonable details regarding the provisions of Law that require such deduction or withholding and the parties shall work together in good faith to minimize such deduction or withholding. To the extent that amounts are so deducted and withheld by the Exchange Agent, Parent, Merger Sub or the Surviving Corporation, as the case may be, such amounts shall be treated for all purposes of this Agreement as having been delivered to the Person in respect of which the Exchange Agent, Parent, Merger Sub or the Surviving Corporation, as the case may be, made such deduction and withholding. Any withholding shall be satisfied, to the extent permissible under applicable Law, by withholding shares of Parent Common Stock having a value (based on the Final Parent Stock Value) equal to the amount required to be withheld, unless Parent determines in good faith that cash withholding is required under applicable Law.

  
 Section 2.15 Lost Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent shall deliver, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be delivered in respect of the Shares formerly represented by such Certificate as contemplated under this ARTICLE 2 .

  
 Section 2.16 Working Capital Adjustment .

  
 (a) Pre-Closing Estimate.

  
 (i) At least five (5) Business Days before the Closing, the Company shall prepare and deliver to Parent a statement setting forth its good faith estimates as of immediately prior to the Closing of (A) the Transaction Expenses of the Company (the “ Estimated Transaction Expenses ”), including the amounts and payees thereof, (B) the Indebtedness of the Company (the “ Estimated Indebtedness ”), (C) the Cash of the Company (the “ Estimated Cash ”), (D) the Closing Working Capital (the “ Estimated Closing Working Capital ”), which statement shall contain an estimated balance sheet of the Company as of the Closing Date (without giving effect to the transactions contemplated herein), a calculation of Estimated Closing Working Capital and a line-item breakdown of each component of Current Assets and Current Liabilities included therein (the “ Estimated Closing Statement ”), prepared in accordance with the Working Capital Methodology attached hereto as EXHIBIT C, and (E) the resulting calculation of the Equity Value (the “ Estimated Equity Value ”). The Company shall provide Parent with reasonable access to the books, records and work papers used to prepare the Estimated Closing Statement, and shall consider in good faith any comments provided by Parent prior to the Closing.

  
 (ii) The “ Closing Adjustment ” shall be an amount equal to the Closing Working Capital minus the Target Working Capital.

  
 (b) Closing Statement.

  

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 (i) Within ninety (90) days after the Closing Date, Parent shall prepare and deliver to Shareholder Representative a proposed closing statement (the “ Closing Statement ”) setting forth Parent’s good faith proposed calculation of (A) the Transaction Expenses of the Company (the “ Proposed Closing Transaction Expenses ”), including the amounts and payees thereof, (B) the Indebtedness of the Company (the “ Proposed Closing Indebtedness ”), (C) the Cash of the Company (the “ Proposed Closing Cash ”), (D) the Closing Working Capital (the “ Proposed Closing Working Capital ”), which Closing Statement shall be subject to review and adjustment in accordance with Section 2.16(c) and shall contain (1) a balance sheet of the Company as of the Closing Date (without giving effect to the transactions contemplated herein), (2) a calculation of Proposed Closing Working Capital and a line-item breakdown of each component of Current Assets and Current Liabilities included therein, prepared in accordance with the Working Capital Methodology attached hereto as EXHIBIT C , and (E) the resulting calculation of the Equity Value (the “ Proposed Closing Equity Value ”).

  
 (ii) If Parent fails to deliver the Closing Statement within the ninety (90)-day period set forth in Section 2.16(b)(i) , then the Estimated Equity Value shall be deemed to be the Final Equity Value (as defined below) for all purposes hereunder.

  
 (c) Examination, Review and Final Determination.

  
 (i) Access and Review Period . After receipt of the Closing Statement, Shareholder Representative shall have forty-five (45) days (the “ Review Period ”) to review the Closing Statement. During the Review Period, Shareholder Representative and its accountants shall have reasonable access to the books and records of the Surviving Corporation, the personnel of, and work papers prepared by, Parent and/or its accountants to the extent that they relate to the Closing Statement and to such historical financial information (to the extent in Parent’s possession) relating to the Closing Statement as Shareholder Representative may reasonably request for the purpose of reviewing the Closing Statement and to prepare a Notice of Disagreement (defined below). Parent shall, and shall cause the Surviving Corporation to, reasonably cooperate with Shareholder Representative and its accountants in connection with such review, including by making available, upon reasonable notice and during normal business hours, the employees, books, records, work papers, and other relevant documents of the Surviving Corporation.

  
 (ii) Notice of Disagreement . On or prior to the last day of the Review Period, Shareholder Representative may object to the Closing Statement by delivering to Parent a written statement (a “ Notice of Disagreement ”) setting forth its objections in reasonable detail, indicating each disputed item or amount and the basis for Shareholder Representative’s disagreement therewith, and setting forth Shareholder Representative’s alternative calculation of the Closing Working Capital. If Shareholder Representative fails to deliver a Notice of Disagreement before the expiration of the Review Period, the Closing Statement and the Proposed Closing Working Capital reflected therein shall be deemed to have been accepted by Shareholder Representative and shall become final and binding upon the parties, and the Proposed Closing Working Capital set forth therein shall constitute the Final Closing Working Capital (as determined pursuant to Section 2.16(c)(vi) ) for purposes of calculating the Purchase Price Adjustment pursuant to Section 2.16(d) .

  
 (iii) Negotiation Period . If Shareholder Representative delivers a Notice of Disagreement before the expiration of the Review Period, Parent and Shareholder Representative shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the Notice of Disagreement (the “ Resolution Period ”). If the parties are able to resolve all disputed matters within the Resolution Period, the Closing Statement (with such changes as may have been agreed in writing by Parent and Shareholder Representative) shall be final and binding upon the

 19
  

  

 parties, and the Working Capital reflected therein (as so adjusted) shall constitute the Final Closing Working Capital for purposes of calculating the Purchase Price Adjustment pursuant to Section 2.16(d) .

  
 (iv) Resolution of Disputes by Independent Accountant . If Shareholder Representative and Parent fail to reach an agreement with respect to all of the matters set forth in the Notice of Disagreement before expiration of the Resolution Period, then any amounts remaining in dispute (“ Disputed Amounts ” and any amounts not so disputed, the “ Undisputed Amounts ”) shall be submitted for resolution to the office of Grant Thornton or, if Grant Thornton is unable to serve, Parent and Shareholder Representative shall appoint by mutual agreement the office of an impartial nationally recognized firm of independent certified public accountants, other than the Shareholder Representative’s and Parent’s accountants (the “ Independent Accountant ”), who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Proposed Closing Working Capital and the Closing Statement. The Independent Accountant shall, as applicable, resolve all disputes in accordance with the Working Capital Methodology attached hereto as EXHIBIT C . The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Closing Statement and the Notice of Disagreement, respectively.

  
 (v) Independent Accountant Procedures . Each of Parent and Shareholder Representative shall submit to the Independent Accountant, within fifteen (15) Business Days after the engagement of the Independent Accountant, a written statement setting forth such party’s position with respect to each Disputed Amount, together with such supporting documentation as such party deems appropriate. The Independent Accountant shall be instructed to consider only those items and amounts that are identified in the Notice of Disagreement as being items which Parent and Shareholder Representative are unable to resolve. The Independent Accountant shall be instructed to deliver to Parent and Shareholder Representative, as promptly as practicable and in any event within thirty (30) days (or such other time as the parties hereto shall agree in writing) after engagement of the Independent Accountant, a written determination setting forth its resolution of the Disputed Amounts and its calculation of the Transaction Expenses of the Company (the “ Final Transaction Expenses ”), the Indebtedness of the Company (“ Final Indebtedness ”), the Cash of the Company (the “ Final Cash ”), the Working Capital of the Company as of immediately prior to the Closing (such amount, as finally determined by the Independent Accountant, shall constitute the “ Final Closing Working Capital ” for all purposes hereunder), and the resulting calculation of the Equity Value (the “ Final Equity Value ”). The determination of the Independent Accountant shall be conclusive and binding upon the parties hereto, absent fraud or manifest error.

  
 (vi) Final Determination . For the avoidance of doubt, the Final Transaction Expenses, Final Indebtedness, Final Cash, Final Closing Working Capital, and Final Equity Value shall be finally determined, and shall become final and binding upon all parties for all purposes under this Agreement, only upon the earliest to occur of: (A) the deemed acceptance of the Closing Statement and Proposed Closing Working Capital by Shareholder Representative pursuant to Section 2.16(c)(ii) upon expiration of the Review Period without delivery of a Notice of Disagreement; (B) the written agreement of Parent and Shareholder Representative resolving all disputed matters during the Resolution Period pursuant to Section 2.16(c)(iii) ; or (C) the delivery by the Independent Accountant of its written determination pursuant to Section 2.16(c)(v) . Prior to such final determination, the Proposed Closing Transaction Expenses, Proposed Closing Indebtedness, Proposed Closing Cash, Proposed Closing Working Capital, and Proposed Closing Equity Value

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 set forth in the Closing Statement shall be deemed preliminary and subject to adjustment in accordance with this Section 2.16(c) .

  
 (vii) Fees of the Independent Accountant . The fees and expenses of the Independent Accountant shall be paid by Parent and Shareholder Representative in inverse proportion to the amounts by which their respective positions differ from the Independent Accountant’s final determination (i.e., the party whose position is furthest from the Independent Accountant’s determination shall bear a proportionally greater share of such fees and expenses). Any such fees and expenses payable by Shareholder Representative shall be paid from the Shareholder Representative Expense Fund to the extent funds are available therein.

  
 (d) Purchase Price Adjustment.

  
 (i) The “ Purchase Price Adjustment ” shall be an amount equal to the Final Equity Value (as finally determined in accordance with Section 2.16(b) or Section 2.16(c) , as applicable) minus the Estimated Equity Value.

  
 (ii) Negative Purchase Price Adjustment (Adjustment Favoring Parent) . If the Purchase Price Adjustment is a negative number (meaning Final Equity Value is less than Estimated Equity Value), Shareholder Representative and Parent shall, within five (5) Business Days after the final determination of the Purchase Price Adjustment, jointly instruct the Escrow Agent to disburse from the Purchase Price Adjustment Escrow Fund to Parent (or at Parent’s direction, to the Surviving Corporation) an amount in cash equal to the absolute value of the Purchase Price Adjustment. The remaining cash balance of the Purchase Price Adjustment Escrow Fund, if any, shall be released to the Exchange Agent for distribution to the Shareholders in accordance with their Pro Rata Shares. If the absolute value of the Purchase Price Adjustment is greater than the cash balance of the Purchase Price Adjustment Escrow Fund, then the Escrow Agent shall deliver the entire remaining balance of the Purchase Price Adjustment Escrow Fund to Parent, or at Parent’s direction, to the Surviving Corporation. In no event shall Shareholder Representative or any Shareholder be liable under this Section 2.16 for any amount in excess of the balance of the Purchase Price Adjustment Escrow Fund, which shall represent Parent’s sole and exclusive recourse with respect to any negative Purchase Price Adjustment.

  
 (iii) Positive Purchase Price Adjustment (Adjustment Favoring Shareholders) . If the Purchase Price Adjustment is a positive number (meaning Final Equity Value is greater than Estimated Equity Value), Parent shall, within five (5) Business Days after the final determination of the Purchase Price Adjustment: (A) pay or cause to be paid to the Exchange Agent, for distribution to the Shareholders in accordance with their Pro Rata Shares, by wire transfer of immediately available funds, an amount in cash equal to the Purchase Price Adjustment; and (B) jointly instruct (together with Shareholder Representative) the Escrow Agent to release from the Purchase Price Adjustment Escrow Fund to the Exchange Agent, for distribution to the Shareholders in accordance with their Pro Rata Shares, the remaining cash balance held in the Purchase Price Adjustment Escrow Fund.

  
 (iv) No Purchase Price Adjustment . If the Purchase Price Adjustment is equal to zero, Shareholder Representative and Parent shall, within five (5) Business Days after such final determination, jointly instruct the Escrow Agent to release from the Purchase Price Adjustment Escrow Fund to the Exchange Agent, for distribution to the Shareholders in accordance with their Pro Rata Shares, the entire remaining cash balance held in the Purchase Price Adjustment Escrow Fund.

  

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 (e) Cooperation . Each of the parties shall reasonably cooperate with the other and their respective accountants and representatives in connection with the preparation, review, and finalization of the Closing Statement and the calculation of Final Closing Working Capital, including making available, upon reasonable notice and during normal business hours, books, records, work papers, personnel, and such other information as may be reasonably requested.

  
 (f) Tax Treatment . Any payments made pursuant to this Section 2.16 shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.

  
 Section 2.17 Consideration Spreadsheet .

  
 (a) At least five (5) Business Days before the Closing and concurrently with the delivery of the Estimated Closing Statement, the Company shall prepare and deliver to Parent a spreadsheet (the “ Consideration Spreadsheet ”), certified by the Chief Executive Officer of the Company, which shall set forth, as of the Closing Date and immediately prior to the Effective Time, the following: (i) the names and addresses of all Shareholders and the number of Shares held by such Persons; (ii) detailed calculations of the Closing Merger Consideration (in shares of Parent Common Stock), the Exchange Ratio, the Total Share Number and the Closing Per Share Merger Consideration; (iii) each Shareholder’s Pro Rata Share (as a percentage interest and the number of shares of Parent Common Stock) of the Closing Merger Consideration; and (iv) each Shareholder’s Pro Rata Share (as a percentage interest) of the Escrow Funds.

  
 (b) The parties agree that Parent and Merger Sub shall be entitled to rely on the Consideration Spreadsheet in issuing shares of Parent Common Stock and making any other deliveries under this ARTICLE 2 and Parent and Merger Sub shall not be responsible for the calculations or the determinations regarding such calculations in such Consideration Spreadsheet.

  
 ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  
 Except as set forth in the Disclosure Schedules, the Company represents and warrants to Parent that the statements contained in this ARTICLE 3 are true and correct as of the Effective Date.
  
 Section 3.01 Organization and Qualification of the Company . The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Minnesota 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 3.02 Authority; Board Approval .

  
 (a) The Company has all necessary corporate power and authority to enter into and perform its obligations under this Agreement and the Ancillary Documents to which it is a party and, subject to, in the case of the consummation of the Merger, adoption of this Agreement by the affirmative vote or consent of Shareholders holding a majority of the voting power of all Shares entitled to vote thereon (the “ Requisite Company Vote ”) in accordance with Section 302A.613 of the MBCA, to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company of this Agreement and any Ancillary Document to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate

 22
  

  

 action on the part of the Company, subject only, in the case of consummation of the Merger, to the receipt of the Requisite Company Vote. The Requisite Company Vote is the only vote or consent of the holders of any class or series of the Company’s capital stock required to approve and adopt this Agreement and the Ancillary Documents, approve the Merger and consummate the Merger and the other transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by the Company, and (assuming due authorization, execution and delivery by each other party hereto) 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, moratorium and other similar laws affecting creditors’ rights generally and by general principles of equity. When each Ancillary Document to which the Company is or will be a party has been duly executed and delivered by the Company (assuming due authorization, execution and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of the Company enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights generally and by general principles of equity.

  
 (b) The Company Board, by resolutions duly adopted by unanimous vote at a meeting of the directors of the Company duly called and held and, as of the Effective Date, not subsequently rescinded or modified in any way, has, as of the Effective Date (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, are in the best interests of the Shareholders, (ii) approved and declared advisable the plan of merger contained in this Agreement and the transactions contemplated by this Agreement, including the Merger, in accordance with the MBCA, (iii) directed that this Agreement, including the plan of merger contained herein, be submitted to the Shareholders for adoption in accordance with Sections 302A.613 and 302A.441 of the MBCA, and (iv) resolved to recommend that the Shareholders adopt this Agreement, including the plan of merger set forth herein (collectively, the “ Company Board Recommendation ”) and directed that such matter be submitted for consideration of the Shareholders.

  
 Section 3.03 No Conflicts; Consents . The execution, delivery and performance by the Company of this Agreement and the Ancillary Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, including the Merger, do not and will not: (a) result in a violation or breach of any provision of the articles of incorporation or bylaws of the Company (“ Company Charter Documents ”); (b) subject to, in the case of the Merger, obtaining the Requisite Company Vote, 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 Schedule 3.03 , 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 result in the acceleration of any Material Contract, except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice or obtain consent would not have a Material Adverse Effect. 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 Ancillary Documents and the consummation of the transactions contemplated hereby and thereby, except for the filing of the Articles of Merger with the Secretary of State of Minnesota, such filings as may be required under the HSR Act, such filings as may be required under the Securities Act or the Exchange Act and as set forth on Schedule 3.03 and except where the failure to make or obtain such consents, approvals, Permits, Governmental Orders, declarations, filings, or notices would not have, in the aggregate, a Material Adverse Effect.

  
 Section 3.04 Capitalization .

  
 (a) The authorized capital stock of the Company consists of 1,000,000 shares of Company Common Stock, par value $0.01 per share, of which 618,831 shares are issued and outstanding as of the Effective Date. All of the outstanding Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are not subject to preemptive or similar rights. Except as set forth on Schedule 3.04(a) ,

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 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 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, proxies, shareholder agreements or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.

  
 (b) There are no outstanding options, warrants, convertible securities or other rights to purchase or acquire any shares of Company Common Stock.

  
 Section 3.05 Subsidiaries . Except as set forth on Schedule 3.05 , the Company does not have any subsidiaries and does not own, directly or indirectly, any equity or other ownership interest in any Person.

  
 Section 3.06 Financial Statements .

  
 (a) Complete copies of the following financial statements have been delivered to Parent: (i) the audited consolidated balance sheets and related statements of operations and comprehensive income, shareholders’ equity and cash flows of the Company as of and for the fiscal years ended 2023, 2024, and 2025 (the “ Audited Financial Statements ”); and (ii) the unaudited consolidated balance sheet and related statements of income of the Company as of and for the two-month period ended February 28, 2026 (the “ Interim Financial Statements ” and together with the Audited Financial Statements, the “ Financial Statements ”). The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, subject, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (which if presented would not differ materially from those presented in the Audited Financial Statements dated December 31, 2025). The Financial Statements are based on the books and records of the Company and fairly present, in all material respects, the financial position of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated.

  
 (b) The balance sheet of the Company as of December 31, 2025 is referred to herein as the “ Balance Sheet ” and the date thereof as the “ Balance Sheet Date ”. The balance sheet of the Company included in the Interim Financial Statements is referred to herein as the “ Interim Balance Sheet ” and the date thereof as the “ Interim Balance Sheet Date ”.

  
 Section 3.07 Undisclosed Liabilities . The Company has no liabilities, obligations or commitments of any nature whatsoever, whether asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise, except (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date, (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date (none of which is a liability for breach of contract, breach of warranty, tort, infringement, violation of law, environmental matter, misappropriation, or that relates to any cause of action, claim, or lawsuit) and which are not, individually or in the aggregate, material in amount, and (c) those incurred in connection with the execution of this Agreement or the transactions contemplated hereby.

  
 Section 3.08 Absence of Certain Changes, Events and Conditions . Since the Interim Balance Sheet Date and other than in the ordinary course of business consistent with past practice, except as set forth on Schedule 3.08 , there has not been any:

  
 (a) event, occurrence or development that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

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 (b) amendment of the Company Charter Documents;

  
 (c) split, combination or reclassification of any shares of the Company’s capital stock;

  
 (d) issuance, sale or other disposition of, or creation of any Encumbrance on, any shares of the Company’s capital stock, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any shares of the Company’s capital stock;

  
 (e) declaration or payment of any dividends or distributions on or in respect of any shares of the Company’s capital stock or redemption, purchase or acquisition of the Company’s capital stock;

  
 (f) material change in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed in the notes to the Financial Statements;

  
 (g) material change in the Company’s cash management practices and its policies, practices and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

  
 (h) entry into any agreement that would constitute a Material Contract, or termination of any Material Contract (other than upon any expiration of the term of any Material Contract, or entry into a material amendment or extension of any Material Contract, in each case, other than amendments or extensions that are set forth on Schedule 3.09(a) ;

  
 (i) (i) incurrence, assumption, or guarantee of any Indebtedness, except unsecured current obligations and liabilities incurred in the ordinary course of business consistent with past practice under any existing revolving credit facility or working capital purposes, (ii) modification of any existing Indebtedness, or (iii) issuance of any letter of credit;

  
 (j) transfer, assignment or grant of any license or sublicense of any material rights under or with respect to any Company Intellectual Property;

  
 (k) increase the obligations of the Company by more than five percent (5%) of its existing annual obligations to its Benefit Plans, or adoption or entry into any material broad-based Benefit Plans or modification or termination of any material broad-based Benefit Plans (other than renewals of such Benefit Plans in the ordinary course of business, consistent with past practice);

  
 (l) sale, lease, transfer, or assignment of any material assets of the Company, other than in the ordinary course of business consistent with past practice, or acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

  
 (m) except for the Merger, 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 consent to the filing of any bankruptcy petition against it under any similar Law;

  
 (n) capital expenditure or commitment therefor in excess of $1,000,000 individually or $3,000,000 in the aggregate;

  

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 (o) imposition of any Encumbrance upon any of the Company’s properties, capital stock or assets, tangible or intangible;

  
 (p) grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension or other compensation or benefits in respect of any Employees, other than as provided for in any written agreements or in the ordinary course of business consistent with past practice;

  
 (q) action by the Company to accelerate the vesting or payment of any compensation or benefit for any Employee;

  
 (r) loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its shareholders or current or former directors, officers or Employees; or

  
 (s) termination, replacement, or accepting of the resignation or departure of any employee, independent contractor, or consultant, or learned of the impending termination, replacement, resignation, or departure of any employee, independent contractor, or consultant, in each case, with annual compensation in excess of $100,000;

  
 (t) implementation of any layoffs or plant closings affecting more than 25 employees, placement of more than 25 employees on unpaid leave or furlough, or material reduction in the hours or weekly pay of more than 25 employees;

  
 (u) cancellation, compromise, waiver, or release of any material right or claim outside of the ordinary course of business, consistent with past practice;

  
 (v) (i) making, change, or revocation of any material Tax election, (ii) adoption or change of any annual Tax accounting period, (iii) adoption or change of any material method of Tax accounting, (iv) amendment of any material Tax Return or filing of any claim for a material Tax refund, or (v) entry into any Tax closing agreement or settlement of any material Tax claim, audit, or assessment, or surrender of any right to claim a material Tax refund or credit; or

  
 (w) any agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing.

  
 Section 3.09 Material Contracts .

  
 (a) Schedule 3.09(a) lists each of the following contracts and other agreements of the Company (together with all Leases listed on Schedule 3.10 and the contracts and other agreements that are or should be identified on Schedule 3.09(a) , collectively, the “ Material Contracts ”):

  
 (i) each agreement of the Company involving aggregate consideration in excess of $500,000 or requiring performance by any party more than one year from the Effective Date, which, in each case, cannot be cancelled by the Company without penalty or without more than one hundred eighty (180) days’ notice;

  
 (ii) all agreements that relate to the sale of any of the Company’s assets, other than in the ordinary course of business, for consideration in excess of $250,000;

  
 (iii) all agreements that relate to the acquisition of any business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise), in each case involving amounts in excess of $250,000;

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 (iv) (A) except for agreements relating to trade payables, all agreements relating to Indebtedness (including, without limitation, guarantees) of the Company, in each case having an outstanding principal amount in excess of $250,000, (B) pursuant to which the Company has imposed or permitted any Encumbrance to exist on any of its assets, or (C) relates to any outstanding letters of credit;

  
 (v) all agreements between the Company and any Affiliate of the Company;

  
 (vi) all collective bargaining agreements or agreements with any labor organization, union or association to which the Company is a party;

  
 (vii) all agreements containing covenants that restrict the business activity of the Company or limit the freedom of the Company to engage in any line of business or to compete with any Person;

  
 (viii) all agreements under which the Company has made advances or loans to any other Person;

  
 (ix) all agreements relating to the distribution, marketing, or sales of the Company’s products or services, including all agreements requiring the purchase of all or substantially all of the Company’s requirements of a particular product or service from a supplier, or otherwise containing “take or pay” or minimum purchase provisions or that contain pricing, discounts, or benefits that change based on the pricing, discounts, or benefits offered to other customers, including agreements that provide for “most favored nation” pricing or similar preferential pricing terms;

  
 (x) all agreements relating to joint ventures, strategic alliances, partnerships or similar arrangements; and

  
 (xi) (A) all agreements with any Governmental Authority or entered into by the Company as a subcontractor (at any tier) in connection with a contract between another Person and a Governmental Authority (“ Government Contract ”), and (B) bids, proposals, offers, or quotes for supplies, services, or construction, submitted by the Company prior to the Closing Date that, if accepted, would result in a Government Contract (“ Government Bid ”), in the case of (B), to the extent in excess of $200,000 in value;

  
 (xii) all agreements with Top Suppliers or Top Customers;

  
 (xiii) all agreements with any officer, director, or Employee of the Company, other than (A) the Benefit Plans, or (B) an employment letter that sets forth the terms of an at-will employment arrangement;

  
 (xiv) all (A) bonus, commission, and sales agreements with any Employees, independent contractors, or consultants providing for commission or sales-based services to the Company, and (B) all agreements relating to stock appreciation, phantom stock, or similar arrangements.

  
 (xv) provides for capital expenditures by the Company and has an outstanding amount of unpaid obligations thereunder in excess of $1,000,000; and

  

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 (xvi) is for the development of Company Intellectual Property that is material to the business as presently conducted for the benefit of the Company.

  
 (b) Except as set forth on Schedule 3.09(b) , the Company is not in breach of, or default under, any Material Contract, except for such breaches or defaults that would not have a Material Adverse Effect. To the Company’s Knowledge, no other party to any Material Contract is in breach of, or default under, such Material Contract, except for such breaches or defaults that would not have a Material Adverse Effect. Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Parent.

  
 Section 3.10 Title to Assets; Real Property .

  
 (a) The Company has good and valid title to, or a valid leasehold interest in, all Real Property and personal property and other assets 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 consistent with past practice since the Balance Sheet Date. All such properties and assets (including leasehold interests) are free and clear of Encumbrances except for the following (collectively, the “ Permitted Encumbrances ”): (i) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures and for which adequate reserves have been established in the Financial Statements in accordance with GAAP; (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business consistent with past practice; (iii) easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property that do not materially interfere with the ordinary conduct of the business of the Company; or (iv) liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business consistent with past practice.

  
 (b) Schedule 3.10(b) lists all real property leased or subleased by the Company, together with a list of all leases, subleases and other agreements under which the Company uses or occupies or has the right to use or occupy, now or in the future, any real property (the “ Leases ”). The Company has delivered to Parent a true and complete copy of each Lease, including all amendments, extensions, renewals, guaranties and other agreements with respect thereto. Each Lease is valid and binding on the Company in accordance with its terms, is in full force and effect and there is no material default under any Lease by the Company or, to the Company’s Knowledge, by any other party thereto.

  
 (c) Schedule 3.10(c) lists all Real Property owned in fee by the Company as of the Effective Date. With respect to each parcel of Real Property owned in fee by the Company, the Company has good and marketable fee simple title to such Real Property, free and clear of all Encumbrances other than Permitted Encumbrances.

  
 Section 3.11 Intellectual Property .

  
 (a) “ Intellectual Property ” means any and all of the following arising pursuant to the Laws of any jurisdiction throughout the world: (i) trademarks, service marks, trade names, and similar indicia of source or origin, all registrations and applications for registration thereof, and the goodwill connected with the use of and symbolized by the foregoing; (ii) copyrights and all registrations and applications for registration thereof; (iii) trade secrets and know-how; (iv) patents and patent applications; (v) internet domain name registrations; and (vi) other intellectual property and related proprietary rights.

  
 (b) Schedule 3.11(b) lists all patents, patent applications, trademark registrations and pending applications for registration, copyright registrations and pending applications for registration and internet

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 domain name registrations owned by the Company. Except as set forth in Schedule 3.11(b) , or as would not have a Material Adverse Effect, the Company owns or has the right to use all Intellectual Property necessary for the conduct of the Company’s business as currently conducted (the “ Company Intellectual Property ”). All Company Intellectual Property owned by the Company is owned free and clear of all Encumbrances other than Permitted Encumbrances.

  
 (c) Except as set forth in Schedule 3.11(c) , or as would not have a Material Adverse Effect, to the Company’s Knowledge: (i) the conduct of the Company’s business as currently conducted does not infringe, misappropriate or otherwise violate the Intellectual Property of any Person; and (ii) no Person is infringing, misappropriating or otherwise violating any Company Intellectual Property. This Section 3.11(c) constitutes the sole representation and warranty of the Company under this Agreement with respect to any actual or alleged infringement, misappropriation or other violation of Intellectual Property.

  
 (d) The Company has taken commercially reasonable measures to protect the confidentiality and value of all trade secrets included in the Company Intellectual Property. To the Company’s Knowledge, no trade secret included in the Company Intellectual Property has been disclosed to any Person other than pursuant to a written confidentiality agreement.

  
 Section 3.12 Insurance . Schedule 3.12 sets forth a list, as of the Effective Date, of all material insurance policies maintained by the Company or with respect to which the Company is a named insured or otherwise the beneficiary of coverage (collectively, the “ Insurance Policies ”). Such Insurance Policies are in full force and effect on the date of this Agreement and all premiums due on such Insurance Policies have been paid, except as would not have a Material Adverse Effect. The Company has not received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. The Company is not in default under, and has not otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy.

  
 Section 3.13 Legal Proceedings; Governmental Orders .

  
 (a) Except as set forth on Schedule 3.13(a) , there are no actions, suits, claims, investigations or other legal proceedings pending or, to the Company’s Knowledge, threatened against or by the Company affecting any of its properties or assets (or by or against any Affiliate thereof and relating to the Company), which if determined adversely to the Company (or to any Affiliate thereof) would result in a Material Adverse Effect. There are no actions, suits, claims, investigations or other legal proceedings pending or, to the Company’s Knowledge, threatened against or by the Company that seek injunctive or other equitable relief against the Company.

  
 (b) Except as set forth on Schedule 3.13(b) , there are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Company or any of its properties or assets which would have a Material Adverse Effect.

  
 Section 3.14 Compliance with Laws; Permits .

  
 (a) Except as set forth on Schedule 3.14(a) , the Company is in compliance with all Laws applicable to it or its business, properties or assets, except where the failure to be in compliance would not have a Material Adverse Effect.

  
 (b) All Permits required for the Company to conduct its business have been obtained by it and are valid and in full force and effect, except where the failure to obtain such Permits would not have a Material Adverse Effect. All fees and charges with respect to such Permits as of the Effective Date have been paid in full. Schedule 3.14(b) lists all current Permits issued to the Company that are material to the

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 operation of the Company’s business as currently conducted, including the names of the Permits and their respective dates of issuance and expiration.

  
 (c) The Company is in compliance in all material respects with all applicable export control and sanctions Laws, including the International Traffic in Arms Regulations (ITAR) (22 C.F.R. Parts 120-130), the Export Administration Regulations (EAR) (15 C.F.R. Parts 730-774), and the regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). The Company holds all export licenses, agreements and other authorizations required for the export, re-export, deemed export or transfer of its products, technical data and services.

  
 Section 3.15 Environmental Matters .

  
 (a) Except as set forth on Schedule 3.15 or as would not have a Material Adverse Effect:

  
 (i) The Company is currently and has been in compliance with all Environmental Laws. The Company has not received any written notice, report or other information regarding any actual or alleged violation of Environmental Laws, or any liabilities or potential liabilities, including any investigatory, remedial or corrective obligations, relating to the Company or its facilities arising under Environmental Laws.

  
 (ii) The Company has obtained, and is in compliance with, all Environmental Permits necessary for the ownership, lease, operation or use of the business or assets of the Company. A list of all Environmental Permits is set forth on Schedule 3.15(a)(ii) .

  
 (iii) There are no Environmental Claims pending or, to the Company’s Knowledge, threatened against the Company or any Person whose liability for any Environmental Claim the Company has retained or assumed either contractually or by operation of Law.

  
 (iv) There has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the business or assets of the Company or any Real Property currently or formerly owned, operated or leased by the Company, and neither the Company nor any predecessor entity has received any written notice that any Real Property currently or formerly owned, operated or leased by the Company (including soils, groundwater, surface water, buildings and other structure located on any such Real Property) has been contaminated with any Hazardous Material which could reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by, the Company.

  
 (v) The Company has not retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under any Environmental Law.

  
 (b) The Company has provided or otherwise made available to Parent complete and correct copies of all environmental reports, studies, audits, records, sampling data, site assessments, risk assessments, economic models and other similar documents with respect to the business or assets of the Company or any Real Property currently or formerly owned, operated or leased by the Company which are in the Company’s possession or under its reasonable control.

  
 (c) The representations and warranties set forth in this Section 3.15 are the Company’s sole and exclusive representations and warranties regarding environmental matters.

  
  
  

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 Section 3.16 Employee Benefit Matters .

  
 (a) Schedule 3.16(a) contains a 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 which is maintained, sponsored, contributed to, or required to be contributed to by the Company, or under which the Company has any material liability for premiums or benefits (as listed on Schedule 3.16(a) , each, a “ Benefit Plan ”).

  
 (b) Except as set forth on Schedule 3.16(b) , or as would not have a Material Adverse Effect, to the Company’s Knowledge, each Benefit Plan and related trust complies with all applicable Laws (including ERISA, the Code and applicable local 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 the Company’s 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 Schedule 3.16(b) , or as would not have a Material Adverse Effect, 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. With respect to any Benefit Plan, to the Company’s Knowledge, 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 a lien under Section 430(k) of the Code.

  
 (c) Except as set forth on…