(1)

AEROVIRONMENT, INC., a corporation incorporated under the laws of the State of Delaware, USA, with principal offices at 900 Innovators, Simi Valley, CA 93065, USA (the “Purchaser”);

(2)

UNMANNED SYSTEMS INVESTMENTS GMBH a limited liability company incorporated under the laws of Germany, registered in the commercial register (Handelsregister) at the local court (Amtsgericht) of Stuttgart under HRB 757871, whose registered office is at Vogelsangstraße 8, 73760 Ostfildern, Germany (the “Seller”);

(3)

Norbert Gebbeken [***];

(4)

Thomas Biehne [***];

(5)

Adam Jaroh [***];

(A)

The Seller owns all of the Shares (Geschäftsanteile) of the Company, the Shareholders are the only shareholders of the Seller, and Norbert Gebbeken and Thomas Biehne are the only managing directors of the Company;

(B)

The Company is in the business of developing, manufacturing and selling equipment and systems for the handling of dangerous tasks from a safe distance (the “Line of Business”);

(C)

The Parties and the Shareholders desire to enter into this Agreement pursuant to which the Seller proposes to sell to the Purchaser, and the Purchaser proposes to purchase from the Seller, all of the Shares on the terms and subject to the conditions set forth herein (the “Acquisition”).

1.

CONSTRUCTION; DEFINITIONS

1.1

Definitions

(a)

any action necessary to comply with and ensure compliance with Environmental Laws; and/or

(b)

taking all actions to protect against and/or respond to, remove, remediate, investigate or monitor the release or threatened release of Materials of Environmental Concern at, on, in, about, under, within or near the air, soil, surface water, groundwater, or soil vapour,

(a)

any violation, potential violation of, actual or potential liability under, or non-compliance with, any Environmental Law,

(b)

improper use or treatment of wetlands or other protected land or wildlife,

(c)

noise,

(d)

radioactive materials (including naturally occurring radioactive materials),

(e)

explosives,

(f)

pollution, contamination, preservation, protection, decontamination, or clean-up of, or Environmental Response to, the air, surface water, groundwater, soil or protected lands,

(g)

the generation, handling, discharge, release, threatened release, treatment, storage, disposal or transportation of Materials of Environmental Concern,

(j)

injury to, death of or threat to the health or safety of, any person or persons caused directly or indirectly by Materials of Environmental Concern,

(k)

damage or destruction to real or personal property caused directly or indirectly by Materials of Environmental Concern or the release or threatened release of any Materials of Environmental Concern,

(l)

community right-to-know and other disclosure laws relating to Materials of Environmental Concern or Environmental Laws, or

(m)

maintaining, disclosing, or reporting information to Governmental Entities or any other third person under any Environmental Law. Further, the term, “Environmental Responsibility,” also includes any liability incurred in connection with any investigation to determine whether Environmental Response is required or for breach or violation of any requirements of Environmental Laws, monitoring or responding to efforts to require Environmental Response, and any claim based upon any asserted or actual breach or violation of any Environmental Law.

(a)

the unaudited consolidated annual accounts (Konzernbilanz, Konzern-Gewinn- und Verlustrechnung, Konzernkapitalflussrechnung) of the Company Group as of December 31, 2019;

(b)

the audited annual accounts (Jahresabschluss) of the Company as of December 31, 2019;

(c)

for the Subsidiary, the unaudited balance sheet as of December 31, 2019, and statements of income and cash flows for the 12-month period then ended;

(d)

the consolidated interim accounts (Konzernzwischenbilanz, Konzern-Zwischengewinn- und Verlustrechnung, Konzernzwischenkapitalflussrechnung) of the Company Group prepared under Locked Box Date Accounts Principles but without notes (Anhang) to such accounts;

(e)

the interim accounts of the Company prepared under Locked Box Date Accounts Principles and reviewed in accordance with International Standards on Review Engagements No 2400/2410; and

(f)

for the Subsidiary, the unaudited balance sheet as of the Locked Box Date and statements of income and cash flows for the period beginning on January 1, 2020 and ending on the Locked Box Date (the financial statements as defined in lit. (d), (e) and (f) together the “Locked Box Accounts”).

(a)

all patents and applications therefor and all reissues, divisions, renewals, extensions, re-examinations, revisions, provisionals, continuations and continuations-in-part thereof, and other patent rights;

(b)

all inventions (whether patentable or not and whether or not reduced to practice), invention disclosures, improvements, mask works, trade secrets, proprietary information, confidential business information (including ideas, research and development, know-how, technology, technical data and customer lists, inventor notebooks, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, software, specifications, customer and supplier lists, pricing and cost information, business and marketing

(c)

all works of authorship (whether copyrightable or not), all copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto throughout the world;

(d)

all industrial designs and any registrations and applications therefor throughout the world;

(e)

all internet uniform resource locators, domain names, trade names, logos, slogans, designs, trade dress, common law trademarks and service marks, trademark and service mark and trade dress registrations and applications therefor throughout the world;

(f)

all databases and data collections and all rights therein throughout the world;

(g)

all moral and economic rights of authors and inventors, however denominated, throughout the world; and

(h)

any similar or equivalent rights to any of the foregoing anywhere in the world.

(a)

all facts that are positively known (positive Kenntnis) by any Officer or Director of a Group Company or of the Seller or by any Shareholder or by those additional individuals listed on Appendix 1.1(b) on the date hereof with respect to the matters at hand; and

(b)

all facts that any of the foregoing Persons should have known on the date hereof with respect to the matters at hand if such Person had made due inquiry and exercised reasonable diligence.

(a)

substances, materials, or wastes that are classified or regulated under any applicable Environmental Law;

(b)

those substances, materials, or wastes included within statutory and/or regulatory definitions or listings designated as hazardous substance, special waste, hazardous waste, extremely hazardous substance, solid waste, medical waste, regulated substance, Hazardous Materials, toxic substances, or air contaminant or any similar term of any language under any Environmental Law; and/or

(c)

any substance, material, or waste which is or contains:

(i)

petroleum, oil or any fraction thereof,

(ii)

explosives, or

(iii)

radioactive materials (including naturally occurring radioactive materials).

(a)

Liens for Taxes;

(b)

statutory Liens of landlords;

(c)

Liens of carriers, warehousemen, mechanics, materialmen and repairmen incurred in the Ordinary Course;

(d)

customary retention of title rights (Eigentumsvorbehaltsrechte) of suppliers;

(e)

Liens held by Lockman on assets and receivables of the Company Group and the Shares securing obligations of the Company under the Lockman Loan Agreement.

(a)

patents and patent applications (including provisional applications);

(b)

registered trademarks and service marks, applications to register trademarks and service marks, and trade dress; intent-to-use applications, or other registrations or applications related to trademarks and service marks and trade dress;

(c)

registered copyrights and applications for copyright registration;

(d)

domain name registrations;

(e)

registered mask works and applications for mask work registration; and

(f)

any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded with any federal, state or local Governmental Entity or other public body.

(a)

the Change of Control Payments; and

(b)

the Transaction Expenses.

1.2

Construction

1.2.1

Unless the context of this Agreement clearly requires otherwise:

a)

references to the plural include the singular, and references to the singular include the plural (including in defined terms),

b)

references to any gender include the other genders;

c)

the words “include,” “includes” and “including” do not limit the preceding terms or words and shall be deemed to be followed by the words “without limitation”;

d)

the terms “hereof”, “herein”, “hereunder”, “hereto” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement;

e)

the terms “day” and “days” mean and refer to calendar day(s);

f)

references to a time of Day shall be construed as a reference to Frankfurt am Main, Germany, time and all periods of time (namely, a day, month and year) shall be calculated by reference to Frankfurt am Main, Germany time;

g)

the terms “year” and “years” mean and refer to calendar year(s);

h)

references to any type of company or participation (Gesellschafts- oder Beteiligungsformen), proceedings, authorities or other bodies, rights, institutions (Einrichtungen), legal provisions or legal relationships or concepts (each a “Legal Term”) under German law shall comprise any corresponding (funktionsgleich) Legal Term under other than German law to the extent that such foreign law is applicable to the relevant facts and circumstances and to the extent that no such corresponding Legal Term exists under such foreign law, the Legal Term whose effect and function is closest to the German Legal Term shall be used instead;

i)

where a German term has been inserted in italics it alone (and not the English term to which it relates) shall be authoritative for the purpose of the interpretation of the relevant English term in this Agreement; and

j)

any express obligation or liability of a Party to cause, ensure or procure (stehen dafür ein) the performance of any obligation by any other Person shall not be reduced, discharged or otherwise adversely affected by any act, omission, matter or thing which would have discharged or affected the liability of that Party had it been a principal obligor or by anything done or omitted by any Person which, but for this provision, might operate or exonerate or discharge that Party or otherwise reduce or extinguish its liability under this Agreement

1.2.2

Unless otherwise set forth herein, references in this Agreement to

a)

any document, instrument or agreement (including this Agreement):

(i)

includes and incorporates all exhibits, schedules and other attachments thereto;

(ii)

includes all documents, instruments or agreements issued or executed in replacement thereof; and

(iii)

means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any given time; and

b)

a particular Law means such Law as amended, modified, supplemented or succeeded, from time to time and in effect at any given time.

1.2.3

All Clause, Sub-Clause, Appendix and Schedule references herein are to Clauses, Sub-Clauses, Appendices and Schedules of this Agreement, unless otherwise specified.

1.2.4

A reference to a Disclosure Schedule is a reference to the particular paragraph of Schedule 1.

1.2.5

The table of contents and all headings in this Agreement are for ease of reference only and shall not affect the interpretation of this Agreement.

1.2.6

This Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if all Parties had prepared it.

1.2

Other Definitions

2.

PURCHASE AND SALE, TRANSFER OF SHARES

2.1

Agreement to Sell and Transfer the Shares

2.1.1

Subject to the terms and conditions of this Agreement, the Seller hereby sells (verkauft) and, subject to Sub-Clause 2.1.2 (aufschiebend bedingt), assigns (tritt ab) the Shares to the Purchaser; the Purchaser hereby accepts such sale and assignment of the Shares.

2.1.2

The Parties agree that the assignment (Abtretung) of the Shares shall be subject to (aufschiebend bedingt) the making of the full payments provided for in Clauses 3.4 (Payment of the Closing Payment Shares) and 3.5 (Payment of other amounts payable at Closing).

2.1.3

The Shares are sold with all rights that attach, or may in the future attach, to them (including the right to receive all dividends and distributions (Gewinnbezugsrecht) declared, made or paid on or after the Closing).

2.1.4

The Seller irrevocably waives and each Shareholder agrees to procure the waiver of any and all rights of pre-emption or other restrictions on transfer which may exist in respect of the Shares or any of them under the constitutional documents of the Company (or other equivalent document of the Company) or otherwise and undertakes to take all steps necessary to ensure that any rights of pre-emption or other restrictions on transfer over any of the Shares are waived.

3.

PURCHASE PRICE

3.1

Purchase Price

a)

Thirty seven million four hundred fifty five thousand three hundred ninety eight Euros and eleven cents (€37,455,398.11), (the “Purchase Price”);

b)

minus the Notified Leakage, if any;

c)

minus the Escrow Amount,

d)

minus the aggregate amount of all Transaction Payments,

e)

minus the Seller R&W Insurance Contribution.

3.2

Escrow

3.2.1

On the Closing Date, the Purchaser shall pay three million euros (€3,000,000) in cash (the “Escrow Amount”) to a notary trust account (Notaranderkonto) of the Notary set up and notified to the Parties by the Notary to be held in trust by him for the Seller and the Purchaser and to be distributed in accordance with the terms of this Agreement. The Escrow Amount, as adjusted from time to time, together with any interest earned thereon and minus any negative interest charged by the relevant bank, shall be referred to as the “Escrow Fund”.

3.2.2

The Notary is hereby irrevocably instructed by the Seller and the Purchaser to disburse any funds out of the Escrow Fund only (i) upon concurrent (übereinstimmende) written instructions of the Seller and the Purchaser; or (ii) upon an order contained in a final and binding judgement or court settlement (rechtskräftiges Urteil oder rechtskräftiger gerichtlicher Vergleich) of a German court.

3.2.3

The Parties shall be under obligation to provide a written instruction to the Notary for disbursement as per Clause 3.2.2 (i) as follows, in each case up to the amount remaining in the Escrow Fund at the relevant time:

a)

for disbursement to the Purchaser in the event and to the extent the Purchaser has claimed a Claim in accordance with Clause 3.9.1 which is objectively well founded (begründet);

b)

for disbursement to the Seller after the date falling 30 (thirty) months following the Closing Date upon written demand of the Seller unless and not to the extent that the Purchaser has claimed a Claim in accordance with Clause 3.9.1 which is objectively well founded (begründet).

3.2.4

The duties and obligations and the rights of the Notary in respect of the Escrow Fund shall be determined by applicable statutory law (in particular, §§ 57 et seqq. German Notarization Act (BeurkG)). The Notary shall ensure that the Escrow Fund is maintained as a separate bank account identified to the account-managing bank as a trust account (Anderkonto) and that no third parties shall be entitled to grant, make or claim any rights or encumbrances to or over the Escrow Fund, save only under the general terms and conditions (Allgemeine Geschäftsbedingungen) for trust accounts (Anderkonten) of the account-managing bank to the extent they arise in relation to the Escrow Fund itself. The Notary may in good faith rely on any notice, instruction, certificate, statement, request, consent, agreement or other instrument which he believes to be genuine and to have been signed by an authorized person in accordance with this Agreement. The Notary may in good faith rely upon the representation authority of any person purporting to be an authorized representative of any Party, and shall be under no obligation to verify such representation authority.

3.3

Closing Date Statements

a)

a certificate signed by one or several managing directors of the Company, which sets forth the amount of Leakage incurred or anticipated to be incurred in the period from (but not including) the Locked Box Date until and including the Closing Date (the “Notified Leakage”);

b)

a statement (the “Transaction Payments Statement”) substantially in the form of Appendix 3.3, signed by one or several managing directors of the Company, which sets forth, by payee, the Transaction Payments.

3.4

Payment of the Closing Payment Shares

3.4.1

On the Closing Date, the Purchaser shall pay to the Seller the Closing Payment Shares to the following bank account free of costs or fees by irrevocable transfer with same day value:

3.4.2

Upon such payment, the Purchaser shall be fully released and discharged of any obligation with respect to the payment of the Closing Payment Shares.

3.4.3

The Purchaser shall not have any right of set-off or retention or deduction right with respect to its payment obligations pursuant to this Clause 3.4.

3.5

Payment of other amounts payable at Closing

a)

the Lockman Outstanding;

b)

pursuant to the Transaction Payments Statement, the aggregate amount of the Transaction Payments.

3.6

Locked Box

3.6.1

The Seller hereby warrants and guarantees to the Purchaser that as from the Locked Box Date until and including the Signing Date no Leakage has occurred and that as from the Signing Date until and including the Closing Date, unless otherwise provided in this Agreement, no Leakage will occur without Purchaser’s prior written consent.

3.6.2

In case of breach of any of the guarantees pursuant to Section 3.6.1, the Seller shall indemnify the Purchaser on an after tax EUR for EUR basis in respect of the amount received for such relevant breach by the Seller or a Seller Connected Person or otherwise incurred for the benefit of the Seller or a Seller Connected Person (unless, in each case, such Leakage constitutes Notified Leakage and has been taken into account for the calculation of the amount payable by the Purchaser to the Seller in accordance with Clause 3.1) and, if applicable to such Leakage, shall terminate, cancel and rescind any and all agreements or commitments that constitute Leakage (any claim for indemnification hereunder a “Leakage Claim”).

3.6.3

Without prejudice to Section 3.3a), the Seller shall promptly notify the Purchaser in writing if it becomes aware of a payment or transaction or any other ocurrence that constitutes or will constitute, if made, Leakage.

3.6.4

The Seller shall assure that each Group Company provides to the Purchaser any documentation and information in relation to a Leakage Claim and reasonable and prompt access to the employees, accounts and the premises owned or occupied by the Group Companies for the purpose of evaluating and considering any such claim.

3.6.5

The provisions in Clauses 3.6.1 to 3.6.4 (inclusive) shall not in any respect be extinguished or affected by Closing but, for the avoidance of doubt, no claim may be brought in respect of these provisions unless and until Closing has occurred.

3.7

Purchase Price Adjustment

3.8

Seller and Shareholder Release, Discharge of Officers and Directors

3.8.1

In consideration for the agreement and covenants of the Purchaser set forth in this Agreement, the Seller and the Shareholders hereby knowingly, voluntarily and unconditionally releases and forever discharges from and for, and covenants not to sue the Purchaser, any Group Company, or their respective predecessors, successors, parents, subsidiaries or other Affiliates, or any of their respective current and former Officers or Directors, employees, agents, or representatives for or with respect to, any and all claims, causes of action, demands, suits, debts, obligations, liabilities, damages, losses, costs, and expenses (including attorneys’ fees) of every kind or nature whatsoever, known or unknown, actual or potential, suspected or unsuspected, fixed or

a)

any claims against the Purchaser or any of its Affiliates (other than a Group Company) unrelated in any way to a Group Company; or

b)

any claims against the Purchaser arising under or in connection with this Agreement, any Seller Ancillary Document or any Purchaser Ancillary Document.

3.8.2

The Purchaser declares that as of the date hereof, it has no knowledge of any facts or circumstances that could give cause to refuse the discharge (Entlastung) of the managing directors (Geschäftsführer) for the business year 2020 and the Purchaser is obliged to grant such discharge in the ordinary course unless he becomes aware of such facts or circumstances after the date hereof.

3.9

Claims Under Escrow

3.9.1

The Purchaser shall have the option of claiming all or any part of any Claim – subject to limitations in this agreement – arising from (i) the breach of a Fundamental Seller Warranty or (ii) from the breach of any Seller Warranty to the extent it is not covered by the R&W Insurance by notifying the Seller that the Purchaser is claiming the amount of such Claim (or the Purchaser’s good faith estimate of such amount if unliquidated, pending the final determination thereof) against the Escrow Fund. Any such claim against the Escrow Fund shall be made at the latest on the day following 30 (thirty) months following the Closing Date by delivery of written notice to the Seller, stating the nature of and basis for such claim with reasonable specificity (including the applicable provision of this Agreement).

3.9.2

If the Seller objects to the amount of all or part of any claim by the Purchaser against the Escrow Fund, then the Seller shall, within 30 days of receipt of such claim, provide written notice (an “Objection Notice”) to the Purchaser setting forth the Seller’s objections.

3.9.3

If the Seller sends the Purchaser an Objection Notice, then within 15 Business Days after receipt of an Objection Notice, the Purchaser and the Seller shall work in good faith to reconcile and resolve the differences. If the Parties cannot mutually resolve such differences during such 15 Business Days period, either the Purchaser or the Seller may proceed in accordance with Sub-Clause 10.3 to determine the amount of the Claim payable to the Purchaser, provided that this provision shall not affect the right of a Party to commence legal proceedings in order to interrupt any barring by the statute of limitations (Verjährung).

3.9.4

Notwithstanding anything in this Sub-Clause 3.9 to the contrary, the Purchaser shall also be entitled to assert any Claim directly against the Seller without making such Claim against the Escrow Amount.

3.10

Earn-Out I – Performance of Company Group

3.10.1

The Purchaser shall pay an additional purchase price in the amount of €2,000,000.00 (two million Euros) (the “Earn Out First Year”) to the Seller if the Group Revenues in the First Earn Out Year exceed an amount of €34,500,000 (Euro thirtyfour million fivehundred thousand).

3.10.2

The Purchaser shall pay a further additional purchase price in the amount of €2,000,000.00 (two million Euros) (the “Earn Out Second Year”) to the Seller if the Group Revenues in the Second Earn Out Year exceed an amount of €37,500,000 (Euro thirtyseven million fivehundred thousand).

3.10.3

The Purchaser shall pay a further additional purchase price in the amount of €2,000,000.00 (two million Euros) (the “Earn Out Third Year”; together with the Earn Out First Year and the Earn Out Second Year the “Earn Outs” and each of them an “Earn Out”) to the Seller if the aggregate Group US Military Orders during the Earn Out Period exceed an amount of US$30,000,000 (US Dollar thirty million).

3.10.4

In this Agreement, the following terms have the following meanings: “First Earn Out Year” means the 12 month period starting on the first day of the calendar month following the Closing Date. “Second Earn Out Year” means the 12 month period following the First Earn Out Year. “Third Earn Out Year” means the 12 month period following the Second Earn Out Year. “Earn Out Year” means each such twelve month period. “Earn Out Period” means the period from the beginning of the First Earn Out Year until the end of the Third Earn Out Year.

3.10.5

For the avoidance of doubt, if no Earn Out should become due with respect to any calendar year, an Earn Out with respect to any of the other calendar years shall nevertheless become due if the relevant condition should be met.

3.10.6

For the duration of the Earn Out Period, the Purchaser shall refrain from exercising its rights as a shareholder of the Company in a way which can be reasonably expected to have the effect of reducing Group Revenues or Group US Military Orders which otherwise would have been achieved unless the relevant action is reasonable for the parent of a group of companies comprising, among others, the Company Group, provided that no such action shall be deemed “reasonable” within the meaning of this sentence if it should be taken with the express purpose of achieving such reduction..

3.10.7

If Purchaser transfers control over the Group Companies to a third party during the Earn Out Period, the full amount of any Earn Out relating to a period subsequent to or current during such transfer (i.e. the Earn Out Third Year in any such case, plus the Earn Out First Year and the Earn Out Second Year if the transfer occurs within the First Earn Out Year, and plus the Earn Out Second Year if the transfer occurs within the Second Earn Out Year) shall become due for payment to Seller immediately upon such transfer. If Purchaser merges the Company with another entity of the Purchaser group, the full amount of any Earn Out relating to a period subsequent to or current during the date of effectiveness of such merger shall become due for payment to Seller immediately upon such transfer unless such merger leaves the Company Group as a distinct business unit with its own bookkeeping, provided that such bookkeeping allows for unambiguous determination of revenues for each Group Company business. For the avoidance of doubt, a merger of the Subsidiary into the Purchaser or an Affiliate of the Purchaser shall not affect the conditions for the becoming due of an Earn Out.

3.10.8

If during the Earn Out Period any Shareholder (i) is removed as a Director or Officer of the relevant Group Company without cause for which he is responsible, or (ii) terminates his employment as a Director or Officer with cause for which the Purchaser or the Group Company is responsible, an amount of 50 % of any Earn Out allocable to such Shareholder and relating to a period subsequent to or current during the date of effectiveness of such removing or termination, as the case may be, shall become due for payment to Seller immediately. For purposes of the

3.10.9

For purposes of the Earn Outs, the Group Revenues and the Group US Military Orders shall be determined by the Purchaser at the latest six months after the end of each Earn Out Year and such determination (the “Earnout Determination”) shall be notified to the Seller in writing. The date when the Seller shall have received the Earnout Determination is referred to in this Agreement as the “Earnout Determination Date”.

3.10.10

The Seller shall within 30 Business Days after the Earnout Determination Date (the "Earnout Review Period") notify the Purchaser that it either

a)

approves the Earnout Determination; or

b)

disagrees with the Earnout Determination, explaining in reasonable detail the matter it disagrees with, the reasons for that disagreement and its ensuing calculation of the relevant Earn Out criterion.

3.10.11

If the Seller notifies its approval or does not notify disapproval within the Earnout Review Period, the Earnout Determination shall become final and binding on the Parties.

3.10.12

If the Seller notifies disapproval within the Earnout Review Period, the Parties shall use all reasonable endeavours to resolve the matters in dispute. Any agreement being reached shall be expressed in a joint confirmation containing the agreed Earnout Determination which shall be signed by both Parties and which shall be final and binding on the Parties.

3.10.13

If no agreement as per Sub-Clause 3.10.12 should have been reached within 20 Business Days after the end of the Earnout Review Period, the matters in dispute shall be finally decided by an arbitrating expert who — if the Parties do not come to an agreement on such expert — shall be appointed upon the request of either Party by the president of the Institut der Wirtschaftsprüfer in Deutschland e.V. (the Institute of Chartered Accountants in Germany) in Düsseldorf. In his decision, the arbitrating expert shall not be allowed to make a decision for a matter in dispute which is outside the range defined by the positions taken by the Parties at the time of initiation of the arbitrating expert procedure. The Earnout Determination shall become final and binding for the Parties in the form determined in the decision of the arbitrating expert.

3.10.14

Any Earn Out shall be paid within ten (10) Business Days after the Earnout Determination Date, but in the event of a dispute with regard to the Earnout Determination within twenty (20) Business Days after the Earnout Determination has become final and binding either by agreement or by the decision of the arbitrating expert.

3.11

Earn Out II – Lockman Oustanding

3.12

Value Added Tax

4.

WARRANTIES OF THE SELLER

4.1

Warranties

4.2

Warranties not Affected by Completion

4.3

Separate and Independent Warranty

4.4

Seller’s Liability in Case of a Breach of Seller’s Warranties

4.4.1

In the event of any breach of any of the Seller’s warranties, the Purchaser shall first give the Seller the opportunity to remedy the breach (Naturalherstellung) within a reasonable period of time, at least three (3) months after receipt of a notice; if such remediation fails or Seller chooses not to remediate, the Seller shall pay to the Purchaser monetary damages (Schadenersatz in Geld), subject to the limitations set forth in this Sub-Clause 4.4 and Clauses 10 and 11 which shall apply to claims to monetary damages arising out of or in connection with the breach of a Seller warranty. The Purchaser shall without undue delay, at latest thirty (30) days after gaining knowledge of a breach of any Seller’s warranty, notify the Seller hereof, setting out the circumstances and facts giving raise to his claim and an estimate of his claim.

4.4.2

If a third party asserts any claim against a Purchaser Indemnified Party which may result in any liability of the Seller for a breach of a Seller’s warranty, the Indemnification Procedures set forth in Sub-Clause 10.3 shall apply mutatis mutandis.

4.4.3

All disclosures made by Disclosure Schedules in Schedule 1 against any of the Sellers Warranties falling below any materiality thresholds or containing any additional information which is not required to be disclosed according to the terms of the respective Sellers Warranty shall not be construed to broaden or expand the scope of the respective Sellers Warranty or change the materiality standards implied by the respective Sellers Warranty in whatsoever form.

5.

WARRANTIES OF THE PURCHASER

5.1

Warranties

5.2

Warranties not Affected by Completion

5.3

Separate and Independent Warranty

5.4

Purchaser’s Liability in Case of a Breach of Purchaser’s Warranties

6.

BETWEEN SIGNING AND CLOSING

6.1

Conduct of Business by the Company Group

6.1.1

For the period commencing on the date hereof and ending on the Closing Date, the Seller will cause each Group Company to, except as expressly required hereby and except as (i) otherwise consented to in advance in writing by the Purchaser or (ii) required by law or any order of any governmental authority:

a)

conduct its businesses in the Ordinary Course and not engage in any new line of business or enter into any agreement, transaction or activity or make any commitment with respect to a Group Company, except those in the Ordinary Course and not otherwise prohibited under this Sub-Clause 6.1;

b)

preserve intact the goodwill and business organization of each Group Company, keep the Officers and Directors and the employees of each Group Company available to the Purchaser and preserve the relationships and goodwill of each Group Company with customers, distributors, suppliers, employees and other Persons having business relations with a Group Company;

c)

maintain its existence and good standing in its jurisdiction of organization and in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification;

d)

duly and timely file or cause to be filed all Tax Returns required to be filed with any Governmental Entity and promptly pay or cause to be paid when due all Taxes, assessments and governmental charges, including interest and penalties levied or assessed, unless diligently contested in good faith by appropriate proceedings;

e)

maintain in existing condition and repair (ordinary wear and tear excepted), consistent with past practices, all buildings, offices, shops and other structures located on the premises of any Group Company, and all equipment, fixtures and other tangible personal property located on such premises, provided that any extraordinary wear and tear shall not be considered as a breach of this obligation if it occurs in the Ordinary Course and is not caused by grossly negligent or willful acts of directors, officers or employees of any Group Company;

f)

not increase or decrease the registered capital, issue new shares or otherwise amend or modify the Articles of Association (Satzung) of the Company or take any equivalent action with respect to the Subsidiary;

g)

not authorize for issuance or issue and deliver any additional shares of its capital share or securities convertible into or exchangeable for shares of its capital share, or issue or grant any right, option or other commitment for the issuance of shares of its capital share, or split, combine or reclassify any shares of its capital share;

h)

not amend or modify its constitutional documents;

i)

not declare any dividend, pay or set aside for payment any dividend or other distribution or make any payment to any related parties other than the payment of salaries in the Ordinary Course;

j)

not do or allow to be done anything that would result in Leakage;

k)

not create any subsidiary, acquire any capital share or other equity securities of any corporation or acquire any equity or ownership interest in any business or entity;

l)

not dispose of or permit to lapse any right to the use of any patent, trademark, trade name, service mark, license or copyright of a Group Company (including any of the Company Intellectual Property), or dispose of or disclose to any Person, any trade secret, formula, process, technology or know-how of a Group Company not heretofore a matter of public knowledge;

m)

not

(i)

sell or transfer any material asset, other than finished goods or other current assets sold in the Ordinary Course;

(ii)

create, incur or assume any indebtedness secured by any asset of a Group Company;

(iii)

grant, create, incur or suffer to exist any Lien on any asset of a Group Company other than Permitted Liens;

(iv)

incur any liability or obligation (absolute, accrued or contingent) (including the guaranty of a liability or obligation of any other Person), except in the Ordinary Course;

(v)

write-off any guaranteed check, note or account receivable, except in the Ordinary Course;

(vi)

write-down the value of any asset or investment on the books or records of a Group Company, except for depreciation and amortization in the Ordinary Course, provided that any extraordinary write-down shall not be considered as a breach of this obligation if it occurs in good faith and is not caused by grossly negligent or willful acts of directors, officers or employees of any Group Company;

(vii)

cancel any debt or waive any claim or right;

(viii)

make any commitment for any capital expenditure to be made on or following the date hereof in excess of €50,000.00 in the case of any single expenditure or €150,000.00 in the case of all capital expenditures; or

(ix)

enter into any material contract or agreement without the written consent of the Purchaser.

n)

not increase in any manner the base compensation of, or enter into any new bonus or incentive agreement or arrangement with, any of its employees, Officers or Directors or consultants, except in the Ordinary Course; provided, however, that no action described in this Sub-Clause 6.1.1n) shall be taken with respect to:

(i)

Officer or Director of a Group Company; or

(ii)

any Person whose annualized compensation is €50,000 or more or whose annual compensation for the 12-month period following the date hereof is expected to be €50,000 or more;

o)

not pay or agree to pay any additional pension, retirement allowance or other employee benefit under any Company Benefit Plan to any of its employees or consultants, whether past or present, except in the Ordinary Course; provided, however, that neither no Group Company shall take any action described in this Sub-Clause 6.1.1o) with respect to:

(i)

any Officer or Director of a Group Company; or

(ii)

any Person whose annualized compensation is €50,000 or more or whose annual compensation for the 12-month period following the date hereof is expected to be €50,000 or more;

p)

not adopt, amend or terminate any Company Benefit Plan or increase the benefits provided under any Company Benefit Plan (unless foreseen for in such a Plan), or promise or commit to undertake any of the foregoing in the future;

q)

not enter into a works council agreement (Betriebsvereinbarung), collective labour agreement (Tarifvertrag) or other collective bargaining agreement;

r)

not amend or terminate any existing Employment Agreement or enter into any new Employment Agreement if the aggregate of annual salary and other benefits under such agreement exceeds € 60,000, provided that the planned employment of an electronic developer with a annual salary of € 80,000 is accepted by Purchaser;

s)

maintain supplies and inventory at levels that are in the Ordinary Course;

t)

continue to extend customers credit, collect accounts receivable and pay accounts payable and similar obligations in the Ordinary Course;

u)

perform in all material respects all of its obligations under, and not default or suffer to exist any event or condition that with notice or lapse of time or both could constitute a material default under, any Company Contract (except those being contested in good faith) and not enter into, assume or amend any contract or commitment that is or would be a Company Contract other than in the Ordinary Course;

v)

not pay, discharge or satisfy any claim, liability or obligation (absolute, contingent or otherwise) other than the payment, discharge or satisfaction in the Ordinary Course of claims, liabilities and obligations reflected or reserved against in the Balance Sheets or incurred in the Ordinary Course;

w)

maintain in full force and effect and in the same amounts policies of insurance comparable in amount and scope of coverage to that now maintained by or on behalf of the relevant Group Company;

x)

continue to maintain its books and records in accordance with GAAP;

y)

continue its cash management practices in the Ordinary Course;

z)

not make or change any election relating to Taxes, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to a Group Company, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to a Group Company, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Purchaser or a Group Company for any period ending after the Locked Box Date or decreasing any Tax attribute of a Group Company existing on the Locked Box Date; and

aa)

not authorize, or commit or agree to take, any of the foregoing actions that are prohibited by this Sub-Clause 6.1.

6.1.2

In connection with the continued operation of each Group Company during the period commencing on the date hereof and ending on the Closing Date, the Seller shall confer, and shall cause the Company to confer, in good faith on a regular and frequent basis with the Purchaser

6.1.3

The Seller shall not, and shall cause each Group Company not to, take any action that would, or that could reasonably be expected to, result in any warranty of the Seller set forth herein to become untrue.

6.2

Inspection and Access to Information

a)

provide – within the limits of applicable laws such as Data Protection Laws – the Purchaser and its accountants, investment bankers, counsel, environmental consultants and other authorised representatives full access, during reasonable hours and under reasonable circumstances, to any and all of its premises, employees (including executive officers), properties, contracts, commitments, books, records and other information (including Tax Returns filed and those in preparation); and

b)

furnish – within the limits of applicable laws such as Data Protection Laws –  to the Purchaser and its authorised representatives, promptly upon request, any and all financial, technical and operating data and other information pertaining to a Group Company and otherwise fully cooperate with the conduct of due diligence by the Purchaser and its representatives, including permission to collect samples of soil, water or other substances which such representatives may reasonably request permission to collect and analyse.

6.3

Notices of Certain Events

6.3.1

During the period commencing on the date hereof and ending on the Closing Date, the Seller shall promptly notify the Purchaser of:

a)

any change or event that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect on or otherwise result in any Seller Warranty being inaccurate in any material respect;

b)

any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated hereby;

c)

any notice or other communication from any Governmental Entity in connection with the transactions contemplated hereby;

d)

any action, suit, claim, investigation or proceeding commenced or, to the Knowledge of the Company Group, threatened against, relating to or involving or otherwise affecting a Group Company that, if pending on the date hereof, would have been required to have been disclosed pursuant to Disclosure Schedule 10 or that relates to the consummation of the transactions contemplated hereby; and

e)

(i) the damage or destruction by fire or other casualty of any material asset or material part thereof of a Group Company or (ii) any asset or part thereof becoming the subject of any proceeding (or, to the Knowledge of the Company Group, any threatened proceeding) for the taking thereof or of any right relating thereto by condemnation, eminent domain or other similar governmental action.

6.3.2

The Seller hereby acknowledges that the Purchaser does not and shall not waive any right it may have hereunder as a result of such notifications.

6.3.3

During the period according to Sub-Clause 6.3.1, the Purchaser shall promptly notify the Seller of any developments regarding the AWV Notification Process (see Clause 6.6.3), especially notices received from BMWi.

6.4

Interim Unaudited Financials

6.4.1

During the period commencing on the date hereof and ending on the Closing Date, as promptly as practicable following each end of a calendar month subsequent to the end of the most recent fiscal year for a Group Company and prior to the Closing Date, the Seller shall cause the Company Group to deliver to the Purchaser periodic unaudited financial reports in the form that it customarily prepares for its internal purposes concerning the Company Group and, if available, unaudited statements of the financial position of the Company Group as of the last day of each accounting period and statements of income and changes in financial position of such entity for the period then ended.

6.4.2

The Seller covenants that such unaudited interim statements:

a)

shall present fairly – within the limits inherent to such financial reports – the financial condition of the applicable Group Company and the related results of its operations for the respective periods then ended, and

b)

shall be prepared on a basis consistent with prior interim periods.

6.5

No Solicitation of Transactions

6.5.1

During the period commencing on the date hereof and ending on the Closing Date, the Seller and the Shareholders will not, and will cause each Group Company not to, directly or indirectly, through any Officer or Director, manager or agent of any of them or otherwise, initiate, solicit or encourage (including by way of furnishing non-public information or assistance), or enter into negotiations or discussions of any type, directly or indirectly, or enter into a confidentiality agreement, letter of intent or purchase agreement, merger agreement or other similar agreement with any Person other than the Purchaser with respect to a sale of all or any substantial portion of the assets of a Group Company, or a merger, consolidation, business combination, sale of all or any substantial portion of the capital share of a Group Company, or the liquidation or similar extraordinary transaction with respect to a Group Company.

6.5.2

The Seller shall notify the Purchaser orally (within five (5) Business Day) and in writing (as promptly as practicable, but not earlier than orally) of all relevant terms of any inquiry or proposal by a third party to do any of the foregoing that the Seller or the Company or any of its respective Affiliates or any of their respective Officers or Directors, partners, managers, employees, investment bankers, financial advisors, attorneys, accountants or other representatives may receive after the date hereof relating to any of such matters. In the event such inquiry or proposal is in writing, the Seller shall deliver to the Purchaser a copy of such inquiry or proposal together with such written notice.

6.6

Reasonable Efforts; Further Assurances; Cooperation

6.6.1

During the period commencing on the date hereof and ending on the Closing Date, and subject to the other provisions hereof, each Party shall each use its reasonable efforts to take, or cause to be taken, and do, or cause to be done, all things necessary, proper or advisable under Applicable Law to obtain all regulatory approvals and to satisfy all conditions to its obligations hereunder and to cause the transactions contemplated herein to be effected as soon as practicable,

6.6.2

During the period commencing on the date hereof and ending on the Closing Date, each Party promptly shall make all filings and submissions and shall take all other actions necessary, proper or advisable under Applicable Laws to obtain any required approval of any Governmental Entity with jurisdiction over the transactions contemplated hereby (except that the Purchaser shall have no obligation to take or consent to the taking of any action required by any such Governmental Entity that could materially adversely affect a Group Company or the transactions contemplated by this Agreement or the Purchaser Ancillary Documents). Each Party and the Shareholders shall furnish all information and documents required for any application or other filing to be made pursuant to any Applicable Law in connection with the transactions contemplated hereby or as contemplated in Clause 6.6.3 below.

6.6.3

Without in any way limiting the foregoing contained in this Sub-Clause 6.6, promptly after  execution and delivery of this Agreement, the Purchaser shall notify the German Federal Ministry for the Economy and Energy (Bundesministerium für Wirtschaft und Energie) (“BMWi”) of the signing of this Agreement in the form and with the substance required for such notifications under Section 55 para 3 AWV and (as a precaution) under Section 60 para 3 AWV (the “AWV Notification”). The Purchaser shall at the same time request issuance of a certificate of non-objection (Unbedenklichkeitsbescheinigung) under Section 58 AWV (“AWV Section 58 Clearance”) and, as a precaution, confirmation that the acquisition of the Shares is not subject to review under Section 60 AWV (“AWV Section 60 Confirmation”). Any steps in that regard taken after the date hereof shall be taken in prior consultation with the Seller and require the consent of the Seller not to be unreasonably withheld. The Purchaser may not withdraw any filings without the express written prior consent of the Seller.

(i)

keeping the products currently produced and developed by the Company Group outside the scope of application of the U.S. International Traffic in Arms Regulations,

(ii)

ensuring the security of supply of German state entities (federal or regional – Bundes- oder Landesstellen) with these products, unless the terms of the relevant supplies entail additional costs or liability risks of the Company Group in comparison to such supplies in the past exceeding EUR 2 Mio., and

(iii)

maintaining a production site in Germany for a period of up to five (5) years from the Closing Date.

6.6.4

During the period commencing on the date hereof and ending on the Closing Date, in the event any claim, action, suit, investigation or other proceeding by any Governmental Entity or other Person is commenced that questions the validity or legality of the Acquisition or any other transaction contemplated hereby or seeks damages in connection therewith, the Parties shall:

a)

cooperate and use all commercially reasonable efforts to defend against such claim, action, suit, investigation or other proceeding,

b)

in the event an injunction or other order is issued in any such action, suit or other proceeding, use all commercially reasonable efforts to have such injunction or other order lifted, and

c)

cooperate reasonably regarding any other impediment to the consummation of the transactions contemplated hereby.

6.6.5

During the period commencing on the date hereof and ending on the Closing Date, the Seller shall cause the Company Group to give all notices to third parties and use its reasonable efforts (in consultation with the Purchaser) to obtain all third-party consents:

a)

necessary, proper or advisable to consummate the transactions contemplated hereby;

b)

required to be given or obtained;

c)

required to avoid a breach of or default under any Company Contract in connection with the consummation of the transactions contemplated hereby;

d)

required to prevent a Material Adverse Effect occurring prior to, on or following the Closing Date.

6.6.6

During the period commencing on the date hereof and ending on the Closing Date, the Seller, on the one hand, and the Purchaser, on the other hand, shall give prompt notice to the other Party of:

a)

the occurrence, or failure to occur, of any event, the occurrence or failure of which would be likely to cause any warranty of the Seller, any Shareholder or the Purchaser, as the case may be, contained herein to be untrue or inaccurate at any time from the date hereof to the Closing Date or that will or may result in the failure to satisfy any condition specified in Clause 7; and

b)

any failure of the Seller, any Shareholder or the Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any of them hereunder.

6.6.7

The Seller and the Purchaser hereby acknowledge that the Purchaser or the Seller – as the case may be – do not and shall not waive any right they may have hereunder as a result of such notifications.

6.6.8

The Seller shall cause the Group Companies to do all things required to be done by a Group Company pursuant to this Agreement.

6.7

Supplements to Disclosure Schedules

6.7.1

From time to time up to the Closing, the Seller shall promptly supplement or amend the Disclosure Schedules that it has delivered with respect to any matter first existing or occurring following the date hereof that:

a)

if existing or occurring at or prior to the date hereof, would have been required to be set forth or described in the Disclosure Schedules, or

b)

is necessary to correct any information in the Disclosure Schedules that has been rendered inaccurate thereby.

6.7.2

No supplement or amendment to any Disclosure Schedule shall have any effect for the purpose of determining satisfaction of the conditions set forth in Sub-Clause 7.1 or the obligations of the Seller under Sub-Clause 10.1 or the liability of the Seller for breach of any of the Seller Warranties.

7.

CONDITIONS TO CLOSING

7.1

Conditions to Obligations of the Purchaser

7.1.1

The obligations of the Purchaser to consummate the transactions contemplated hereby shall be subject to the fulfilment at or prior to the Closing of each of the following additional conditions:

a)

Clearance under Sections 55-62 AWV. Clearance under Sections 55-62 AWV (cross-sectoral review of acquisitions of undertakings – sektorübergreifende Prüfung von Unternehmenserwerben) has been achieved by the occurrence of one of the following conditions in (i) through (iii):

(i)

AWV Section 58 Clearance has been received by the Purchaser;

(ii)

in the event (i) has not occurred, AWV Section 58 Clearance is deemed granted pursuant to Section 58 para. 2 AWV because the two month period after receipt by BMWi of the request for AWV Section 58 Clearance has expired without the Purchaser having received notice of the commencement of review (Eröffnung des Prüfverfahrens) (“AWV Section 55 Commencement Notice”);

(iii)

in the event AWV Section 55 Commencement Notice has been received by the Purchaser within such two month period, (x) the time period until which BMWi can issue prohibition or orders under Section 59 AWV has expired without any such prohibition or order (other than Permitted Orders) having been issued or (y) BMWi has confirmed to the Purchaser in writing that no such prohibition or orders (other than Permitted Orders) will be issued.

b)

Clearance under Sections 60-62 AWV. Clearance under Sections 60-62 AWV (sector specific review of acquisitions of undertakings – sektorspezifische Prüfung von Unternehmenserwerben) has been achieved by the occurrence of one of the following conditions in (i) through (iv):

(i)

AWV Section 60 Confirmation has been received by the Purchaser;

(ii)

in the event (i) has not occured, the Purchaser has received notification by BMWi that the acquisition of the Shares has been released (freigegeben) under Section 61 AWV;

(iii)

in the event (ii) has not occurred, the three month period after AWV Notification pursuant to Section 61 AWV has expired without the Purchaser having received notice of the commencement of review (Eröffnung des Prüfverfahrens) (“AWV Section 61 Commencement Notice”);

(iv)

in the event AWV Section 61 Commencement Notice has been received by the Purchaser within such three month period, the time period until which BMWi can issue prohibition or orders (other than Permitted Orders) under Section 62 AWV has expired without any such prohibition or order (other than Permitted Orders) having been issued.

c)

Injunction. There shall be no effective injunction, writ or preliminary restraining order or any order of any nature issued by a Governmental Entity of competent jurisdiction to the effect that the Acquisition may not be consummated as provided herein, no proceeding or lawsuit shall have been commenced by any Governmental Entity for the purpose of obtaining any such injunction, writ or preliminary restraining order and no written notice shall have been received from any Governmental Entity indicating an intent to restrain, prevent, materially delay or restructure the transactions contemplated hereby.

d)

Warranties. The Fundamental Seller’s Warranties and the Seller’s Warranties in Clauses 5, 7, 10, 11, 16, 17, 18, 19, 20, 21, 23, 25, 26 and 35 shall have been true and correct and complete in all material respects as of the date hereof and shall be true and correct and complete in all material respects as of the Closing Date as though made on and as of the Closing Date, provided that “material” for the purposes of this clause 7.1.1d) shall mean a breach which has an aggregate negative impact on the Company Group of more than EUR 6,500,000 and has not been cured prior to the Closing.

e)

Performance of Obligations of the Seller and the Company. The Seller and the Company shall have performed in all material respects all covenants and agreements required to be performed by each of them hereunder at or prior to the Closing.

f)

No Material Adverse Effect. Between the date hereof and the Closing Date, there shall not have occurred any Material Adverse Effect that has not been cured prior to the Closing.

g)

Lockman Outstanding; Release of Liens. In the event the Closing Date is expected to occur on a date which does not make it reasonably possible to make the repayment under Clause 3.5a) before the Lockman Repayment Agreement has terminated, the Seller shall have delivered to the Purchaser a payoff letter from Lockman (“Lockman Payoff Letter”) confirming that if the Lockman Outstanding is paid to Lockman on the Closing Date, all obligations of the Company under or in connection with the Lockman Loan Agreement will have been settled in full and that all Liens affecting the shares of the Company, any real or personal property of a Group Company including receivables assigned as security are being released, all substantially equivalent to the terms of Clause 3 of the Lockman Repayment Agreement.

h)

Transaction Payments Statement. The Seller shall have delivered to the Purchaser the Transaction Payments Statement at least two (2) Business Days prior to the Closing Date.

7.1.2

The Purchaser may waive (in its absolute discretion) any of the conditions in Clause 7.1.1 with the exception of the conditions in Clauses 7.1.1a) and 7.1.1b) by written notice to the Seller.

7.2

Conditions to Obligations of the Seller

7.2.1

The obligations of the Seller to consummate the transactions contemplated hereby shall be subject to the fulfilment at or prior to the Closing of each of the following additional conditions:

a)

Injunction. There shall be no effective injunction, writ or preliminary restraining order or any order of any nature issued by a Governmental Entity of competent jurisdiction to the effect that the Acquisition may not be consummated as provided herein, no proceeding or lawsuit shall have been commenced by any Governmental Entity for the purpose of obtaining any such injunction, writ or preliminary restraining order and no written notice shall have been received from any Governmental Entity indicating an intent to restrain, prevent, materially delay or restructure the transactions contemplated hereby.

b)

Warranties. The warranties of the Purchaser contained in Clause 5 shall have been true and correct in all material respects as of the date hereof and shall be true and correct in all material respects as of the Closing Date as though made on and as of the Closing Date, except that those warranties that by their terms are qualified by materiality shall be true and correct in all respects.

c)

Performance of Obligations by the Purchaser. The Purchaser shall have performed in all material respects all covenants and agreements required to be performed by it hereunder on or prior to the Closing Date.

d)

Ancillary Documents. The Purchaser shall have delivered, or caused to be delivered, to the Seller the documents listed in Sub-Clause 8.3.

7.2.2

The Seller may waive (in its absolute discretion) any of the conditions in Clause 7.2.1 by notice to the Purchaser.

8.

CLOSING

8.1

Closing

8.1.1

The Closing shall occur at 3 p.m. Central European Time on the third (3rd) Business Day following the satisfaction or waiver of the conditions set forth in Clause 7 that are contemplated to be satisfied prior to the Closing, or on such other date as the Parties may agree.

8.1.2

The Closing shall take place at the offices of King & Spalding LLP at Taunustor 1, 60310 Frankfurt am Main or at such other place as the Parties may agree.

8.2

Seller Closing Deliveries

a)

In the event of Clause 7.1.1g), the Lockman Payoff Letter;

b)

all other documents required to be entered into by a Group Company or the Seller pursuant hereto.

8.3

Purchaser Closing Deliveries and Payments

8.3.1

At the Closing, the Purchaser shall have delivered, or cause to be delivered, to the Seller all documents required to be entered into or delivered by the Purchaser at or prior to the Closing pursuant hereto.

8.3.2

When all deliveries as per Clause 8.2 have been effected or waived by the Purchaser and all deliveries as per Clause 8.3.1 – if any – have been effected or waived by the Seller, the Purchaser shall make the payments provided for in Clauses 3.4 (Payment of the Purchase Price) and 3.5

8.4

Closing Protocol and registrations

8.4.1

When all payments to be made pursuant to Clause 8.3.2 have been received on the respective bank accounts, the Seller and the Purchaser shall execute the Closing Protocol. For the avoidance of doubt, the time when all such payments have been made is the time when the transfer of the Shares becomes effective (Clause 2.1.2).

8.4.2

The acting notary is hereby instructed to take the following actions after receiving a certified copy of the executed Closing Protocol or upon receiving concurring instructions to that effect from Seller and Purchaser:

a)

to submit an amended list of shareholders of the Company to the commercial register;

b)

to attach the Closing Protocol to the deed in which this Agreement is recorded; and

c)

to provide copies of each of the foregoing documents to the Parties.

8.5

Waiver of Closing Events

8.5.1

The Purchaser may waive the occurrence of each of the Closing Events referred to in Clause 8.2.

8.5.2

The Seller may waive the occurrence of each of the Closing Events referred to in Clause 8.3.

8.5.3

When a Party waives the occurrence of a Closing Event, the relevant action shall no longer be a Closing Event but such waiver does not affect the obligation of the other Party to promptly take the relevant action unless expressly released from having to do so by the waiving Party.

8.6

Termination

a)

by written notice from the Seller to the Purchaser, in the event the Purchaser

(i)

fails to perform in any material respect any of its agreements contained herein required to be performed by it at or prior to the Closing; or

(ii)

materially breaches any of the Purchaser Warranties provided that for purposes of this subclause 8.6b)(ii) “material” shall have the meaning defined in Clause 7.1.1d),

b)

by written notice from the Purchaser to the Seller:

(i)

in the event the Seller or a Shareholder fails to perform in any material respect any of their agreements contained herein required to be performed by them at or prior to the Closing; or

(ii)

materially breaches any of the Seller Warranties mentioned in Clause 7.1.1d) provided that for purposes of this subclause 8.6b)(ii) “material” shall have the meaning defined in Clause 7.1.1d),

c)

by written notice by the Seller to the Purchaser or the Purchaser to the Seller, as the case may be, in the event the Closing has not occurred on or prior to the date falling six months following the date hereof (the “Expiration Date”) for any reason other than delay or non-performance of the Party seeking such termination.

8.7

Effect of Termination

a)

by the Purchaser in the event of termination pursuant to Clause 8.6a);

b)

by the Seller in the case of termination pursuant to Clause 8.6b);

c)

the costs of the data room services  by the Purchaser and the other costs by the Seller and the Purchaser at 50% each in the event of termination pursuant to Clause 8.6c) unless any Party should be at fault for the non-occurring of the Closing (es schuldhaft verursacht haben) in which case such Party shall bear such costs.

9.

TAX MATTERS

9.1.1

Tax Periods Ending on or Before the Locked Box Date. The Purchaser shall prepare or cause to be prepared and file or cause to be filed all Tax Returns of the Group Companies for all periods ending on or prior to the Locked Box Date which are filed after the Closing Date. The Purchaser shall be reimbursed by the Seller for Taxes of the Group Companies with respect to all taxable periods ending on or before the Closing Date within fifteen (15) days after payment by the Purchaser or a Group Company of such Taxes. The preceding claim for reimbursement does not apply to the extent that

i.

such Taxes were reflected as a liability in the Financial Statements as of the Locked Box Date;

ii.

the Purchaser or the respective Group Company is, as the result of an adjustment or payment giving rise to such Taxes, entitled to any benefits by refund, reduction or set-off of Taxes in periods after the Locked Box Date (e.g. in the case of a lengthening of amortization or depreciation periods or higher depreciation allowances) provided that such future Tax benefits shall be considered only to the extent relating to a period of five (5) years following the Locked Box Date and shall be discounted using a discount rate of 1.5 % p.a. as of the Locked Box Date;

iii.

the Taxes result from any change in the accounting or taxation principles or practices of the Purchaser or the respective Group Company introduced after the Locked Box Date unless such change is required by mandatory law;

iv.

the Taxes result from any restructuring or reorganisation of the respective Group Company or the Business introduced after the Locked Box Date which has retroactive Tax effect unless such restructuring or reorganisation is required by mandatory law;

v.

Purchaser or the respective Group Company have a corresponding enforceable receivable or enforceable civil law claim against any third party for reimbursement; or

vi.

Purchaser was already reimbursed for such Taxes by another payment of the Seller pursuant to this Agreement.

9.1.2

Tax Periods Beginning Before and Ending After the Locked Box Date. The Purchaser shall prepare or cause to be prepared and file or cause to be filed any Tax Returns of each Group Company for Tax periods which begin before the Closing Date and end after the Closing Date. The Purchaser shall be reimbursed by the Seller an amount equal to the portion of such Taxes which relates to the portion of such Taxable period ending on the Locked Box Date within fifteen (15) days after payment by the Purchaser or a Group Company of such Taxes. The limitations pursuant to Sub-Clause 9.1.1 sentence 3 apply mutatis mutandis. For purposes of this Sub-Clause 9.1.2, in the case of any Taxes that are imposed on a periodic basis and are payable for a Taxable period that includes (but does not end on) the Locked Box Date, the portion of such Tax that relates to the portion of such Taxable period ending on the Locked Box Date shall

a)

in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire Taxable period multiplied by a fraction the numerator of which is the number of days in the Taxable period ending on the Locked Box Date and the denominator of which is the number of days in the entire Taxable period, and

b)

in the case of any Tax based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant Taxable period ended on the Locked Box Date.

9.1.3

Preparation of Tax Returns. The Purchaser shall provide the Seller with copies of any Tax Returns to be filed by the Purchaser pursuant to Sub-Clauses 9.1.1 and 9.1.2 at least thirty (30) days prior to the due date thereof (giving effect to any extensions thereto). All such Tax Returns to be prepared pursuant to Sub-Clauses 9.1.1 and 9.1.2 shall be prepared in a manner consistent in all material respects with past practices of the relevant Group Company, except as otherwise required by applicable Tax law. The Seller shall have the right to review and comment on such Tax Returns prior to the filing of such Tax Returns. Except as otherwise required by applicable Tax law the Purchaser shall not file any such Tax Returns without prior written consent of the Seller which may not be unreasonably withheld, conditioned or delayed.

9.1.4

Cooperation on Tax Matters. Each Group Company, the Seller and the Purchaser shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Sub-Clause and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Parties agree:

a)

to retain, or to procure that the respective Group Company retains all books and records with respect to Tax matters pertinent to a Group Company relating to any Taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Purchaser, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any Taxing Authority, and

b)

to give the respective other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if either Party so requests, the other Party shall allow to take possession of such books and records.

9.1.5

Tax Sharing Agreements. Any tax sharing agreement between the Seller and any entity other than a Group Company on the one hand and a Group Company on the other hand shall be terminated as of the Closing Date and shall have no further effect for any taxable year (whether the current year, a future year, or a past year).

9.1.6

Costs. Each Party shall bear its own expenses and costs in connection with the Sub-Clauses 9.1.1 to 9.1.5.

10.

INDEMNIFICATION

10.1

Indemnification Obligations of the Seller

10.1.1

The Seller shall indemnify, defend and hold harmless the Purchaser Indemnified Parties from, against, and in respect of, any and all claims, liabilities, obligations, damages, losses, costs, expenses, penalties, fines and judgments whenever arising or incurred (including amounts paid in settlement, costs of investigation and reasonable attorneys’ fees and expenses), provided they fall within the meaning of damage (Schaden) as defined in Sections 249, 252 BGB:

a)

arising out of or relating to any breach of any covenant, agreement or undertaking made by the Seller or a Shareholder in this Agreement or the Seller Ancillary Documents other than those for which specific remedies have been agreed upon in this Agreement in Clause 4 (Warranties of the Seller), Clause 5 (Warranties of the Purchaser), Clause 10.1.1b) or in the  Non-Competition Agreement;

b)

for:

(i)

any Taxes of a Group Company with respect to any Tax period or portion thereof ending on or before the Locked Box Date (or for any Tax period beginning before and ending after the Locked Box Date to the extent allocable (determined in a manner consistent with Sub-Clause 9.1.2 to the portion of such period beginning before and ending on the Locked Box Date), or Taxes which relate to an event or transaction occurring on or before the Locked Box Date, except to the extent such Taxes were reflected as a liability in the Financial Statements as of the Locked Box Date,

(ii)

the unpaid Taxes of any Person (other than the Group Companies) for which a Group Company, the Purchaser or its Affiliates is or becomes liable, which Taxes relate to an event or transaction occurring on or before the Locked Box Date, and

(iii)

the unpaid Taxes of any Person (other than the Group Companies) as a transferee or successor, by contract, or otherwise, which Taxes relate to an event or transaction occurring on or before the Locked Box Date;

c)

any claim by the Seller or other holder of equity securities in a Group Company as a result of the transactions contemplated by this Agreement, other than any claims:

(i)

relating to the Purchaser’s failure to pay any portion of the Purchase Price pursuant to this Agreement,

(ii)

against the Purchaser or any of its Affiliates (other than a Group Company) unrelated in any way to a Group Company; or

(iii)

against the Purchaser arising under this Agreement or any Purchaser Ancillary Document; or

(iv)

arising out of any Seller Ancillary Documents;

d)

with respect to any amounts comprised in Transaction Payments to the extent not paid on or prior to the Closing Date except to the extent such Transaction Payments were reflected as a liability, write-off or provision in the Financial Statements as of the Locked Box Date;

e)

to the extent not covered by the provision (Rückstellung) set up in this respect in the interim accounts of the Company as of the Locked Box Date mentioned under lit. (e) of the definition of Financial Statements, any amount payable by the Company and not yet paid until the Locked Box Date under the agreements made between the Company and Tawazun Economic Council, Abu Dhabi or with respect to the bank guarantee issued by National Bank of Abu Dhabi in favour of Tawazun Economic Council dated October 19, 2015, in all cases to the extent relating to orders received and confirmed by the Company prior to the Closing Date. The Parties agree that they will cause the Company to seek a confirmation from Tawazun Economic Council that no such obligations of the Company are asserted which would fall under this Clause 10.1.1e) sufficiently in time before expiry of the relevant limitation period provided for in Clause 11.1.1.

10.1.2

The claims, liabilities, obligations, losses, damages, costs, expenses, penalties, fines and judgments of the Purchaser Indemnified Parties described in this Sub-Clause 10.1 as to which the Purchaser Indemnified Parties are entitled to indemnification are collectively referred to as “Purchaser Losses”. For the avoidance of doubt, in calculating the amount of any Purchaser Loss the proceeds actually received  by the relevant Purchaser Indemnified Party or any of its Affiliates under the R&W Insurance Policy with respect to such Purchaser Loss shall be deducted therefrom.

10.2

Indemnification Obligations of the Purchaser; Tax Refunds

10.2.1

The Purchaser shall indemnify and hold harmless the Seller Indemnified Parties from, against and in respect of any and all claims, liabilities, obligations, losses, damages, costs, expenses, penalties, fines and judgments whenever arising or incurred (including amounts paid in settlement, costs of investigation and reasonable attorneys’ fees and expenses arising out of or relating to:

a)

any breach or inaccuracy of any of the Purchaser Warranties or warranty made by the Purchaser in any Purchaser Ancillary Document; or

b)

any breach of any covenant, agreement or undertaking made by the Purchaser in this Agreement or in any Purchaser Ancillary Document.

10.2.2

The claims, liabilities, obligations, losses, damages, costs, expenses, penalties, fines and judgments of the Seller Indemnified Parties described in this Sub-Clause 10.2 as to which the Seller Indemnified Parties are entitled to indemnification are collectively referred to as “Seller Losses”.

10.2.3

Purchaser shall reimburse to Seller for any repayment of any Tax (including but not limited to by way of set-off or deduction) received by any Group Company which relates to any time period ending on or prior to the Locked Box Date or with respect to Seller's portion of any such time period (“Tax Refunds”), except to the extent such Tax Refunds were reflected as a current receivable in the Financial Statements as of the Locked Box Date and further subject to application mutatis mutandis of the other exceptions in the last sentence of Clause 9.1.1. Purchaser shall, and shall procure that the relevant Group Company will, as soon as reasonably practicable, at the latest within fifteen (15) days after the receipt of the respective notification from the Governmental Authority, notify Seller in writing of the receipt of any Tax Refunds and shall compensate the Seller within the next fifteen (15) days after notification.

10.3

Indemnification Procedure

10.3.1

Promptly following receipt by an Indemnified Party of notice by a third party (including any Governmental Entity) of any complaint or the commencement of any audit, investigation, action

10.3.2

The Indemnifying Party shall have the right, upon written notice delivered to the Indemnified Party within 25 days thereafter assuming full responsibility for any Purchaser Losses or Seller Losses (as the case may be) resulting from such audit, investigation, action or proceeding, to assume the defence of such audit, investigation, action or proceeding, to the extent such audit, investigation, action or proceeding involves solely monetary damages, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of the fees and disbursements of such counsel; provided, however, that an Indemnifying Party will not be entitled to assume the defence of any audit, investigation, action or proceeding if:

a)

such claim could reasonably result in criminal liability of, or any other than only payment verdict against, the Indemnified Party; or

b)

such claim is made by a customer or supplier of a Group Company; or

c)

the Indemnified Party reasonably believes that the interests of the Indemnifying Party and the Indemnified Party with respect to such claim are in conflict with one another, and as a result, the Indemnifying Party could not adequately represent the interests of the Indemnified Party in such claim; or

d)

any insurer, including the insurer under the R&W Insurance Policy, requires, as a condition to an Indemnified Party’s eligibility to recover insurance proceeds on account of such Third Party Claim, that such insurer control the matter.

10.3.3

In the event, however, that the Indemnifying Party declines or fails to assume, or is not permitted to assume, the defence of the audit, investigation, action or proceeding on the terms provided above or to employ counsel reasonably satisfactory to the Indemnified Party, in either case within such 25 day period, or if the Indemnifying Party is not entitled to assume the defence of the audit, investigation, action or proceeding in accordance with the preceding sentence, then such Indemnified Party may employ counsel to represent or defend it in any such audit, investigation, action or proceeding and the Indemnifying Party shall pay the reasonable fees and disbursements of such counsel for the Indemnified Party as incurred provided, however, that the Indemnifying Party shall not be required to pay the fees and disbursements of more than one counsel for all Indemnified Parties in any jurisdiction in any single audit, investigation, action or proceeding.

10.3.4

In any audit, investigation, action or proceeding for which indemnification is being sought hereunder, the Indemnified Party or the Indemnifying Party, whichever is not assuming the defence of such action, shall have the right to participate in such matter and to retain its own counsel at such party’s own expense.

10.3.5

The Indemnifying Party or the Indemnified Party (as the case may be) shall at all times use reasonable efforts to keep the Indemnifying Party or the Indemnified Party (as the case may be)

10.3.6

No Indemnified Party may settle or compromise any audit, investigation, action or proceeding or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without the prior written consent of the Indemnifying Party unless (i) the Indemnifying Party fails to assume, or is not permitted to assume and maintain the defence of such claim pursuant to Sub-Clause 10.3.1 or (ii) such settlement, compromise or consent includes an unconditional release of the Indemnifying Party and its officers, directors, managers, employees and Affiliates from all liability arising out of such claim. An Indemnifying Party may not, without the prior written consent of the Indemnified Party, settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless such settlement, compromise or consent:

a)

includes an unconditional release of the Indemnified Party and its officers, directors, managers, employees and Affiliates from all liability arising out of such claim;

b)

does not contain any admission or statement suggesting any wrongdoing or liability on behalf of the Indemnified Party; and

c)

does not contain any obligation other than for the payment of money or any term that in any manner affects, restrains or interferes with the business of the Indemnified Party or any of the Indemnified Party’s Affiliates.

10.3.7

In the event an Indemnified Party claims a right to payment pursuant to this Agreement, such Indemnified Party shall send written notice of such claim to the appropriate Indemnifying Party (a “Claim Notice”). The Claim Notice shall specify the basis for such claim. The failure by any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party with respect to any claim made pursuant to this Sub-Clause 10.3.

10.3.8

The Indemnifying Party shall be obliged to notify the Indemnified Party within thirty (30) days following its receipt of the Claim Notice in the event the Indemnifying Party disputes its liability to the Indemnified Party under this Clause 10 or the amount thereof. If the Indemnifying Party fails to so notify the Indemnified Party and the Indemnified Party thereafter satisfies an underlying third party claim or otherwise takes any relevant action before receiving further notifications from the Indemnifying Party, the Indemnifying Party may not object to the Indemnified Party as a defence any facts or circumstances that would have adversely affected the merits of the claim raised in the Claim Notice of which it could have informed the Indemnified Party within the thirty day period in Sentence 1. After issuance of a Claim Notice, the Indemnified Party and the Indemnifying Party shall establish the merits and amount of the relevant claim (by mutual agreement, litigation, arbitration or otherwise) and, within five (5) Business Days following the final determination of the merits and amount of such claim, the Indemnifying Party shall pay to the Indemnified Party in immediately available funds in an amount equal to such claim as determined hereunder.

10.3.9

Any indemnification obligation of the Seller pursuant to this Clause 10.3 shall be satisfied first from the Escrow Fund in pursuance of the rules provided for in Clause 3.9 and in the Escrow Agreement and, if the Escrow Fund is insufficient or has been fully distributed, by the Seller.

11.

LIMITS ON LIABILITY

11.1

Limitation Periods

11.1.1

All Claims shall become time-barred (verjähren) on the date which is twenty-seven (27) months after the Closing Date, except for (i) Claims based on a breach of Fundamental Seller Warranties or in relation to specific performance claims (Erfüllungsansprüche) to transfer title to the Shares, which shall become time-barred (verjährt) sixty-six (66) months after the Closing Date; and (ii) Claims relating to Taxes which shall become time-barred (verjährt) six months after the relevant tax assessment notice (Steuerbescheid) has become final and conclusive in terms of form and contents (formell und materiell bestandskräftig).

11.1.2

The expiry period for any Claims shall be tolled (gehemmt) pursuant to Section 209 BGB by a Claim Notice, provided that the Indemnified Party commences judicial proceedings within twelve (12) months after the issuance of the Claim Notice. Section 203 BGB shall not apply, unless the Parties agree in writing that the expiry period shall be suspended (gehemmt) on the basis of pending settlement negotiations.

11.2

Liability Limits

11.2.1

The total aggregate amount of the liability of the Seller in respect of all and any Claims shall be limited to an amount equal to (i) the Purchase Price for Fundamental Seller Warranties and Leakage Claims; (ii) €3,000,000 for Claims subject to Clauses IV C, D, E of the R&W Insurance Policy; (iii) €6,500,000 for Claims subject to Clause IV G of the R&W Insurance Policy (Corrupt Practices); (iv) €5,000,000 above the amount covered by the R&W Insurance Policy for Claims based on a breach of the Seller Warranties in Section 18 of Schedule 1 (Intellectual Property) and (v) €440,000 for any other Claims under Seller Warranties and under the indemnity in Clause 10.1.1e) (obligations under the Tawazun Economic Council agreements) and Claims under Seller Warranties subject to Clauses IV A, B, H and I of the R&W Insurance Policy.

11.2.2

Any Purchaser Indemnified Party shall only have Claims under Seller Warranties if and to the extent an individual Claim exceeds an amount of €15,000 in each case (de-minimis-amount) or the aggregate of individual Claims which are lower than such amount exceeds an amount of €60,000.

11.2.3

No Double Relief, Access to Records

a)

Compensation for any Claim with respect to the same matter or the same set of facts can only be recovered once, regardless of whether they arise under one or several provisions under this Agreement (no double-dip).

b)

The Purchaser shall give all such reasonable assistance to the Seller and the Shareholders and access to all such information and documents in its possession or control as reasonably required in order to remedy the Claim and/or determine the Claim, as applicable.

11.2.4

The Seller shall not be liable for any Claim under or in connection with this Agreement if and to the extent that:

a)

the amount of the Claim is recoverable from a third party (including the R&W Insurer or any other insurance providers);

b)

Purchaser, Purchaser's affiliates or – following the Closing Date – the Company Group have participated in causing such Claim within the meaning of Section 254 (1) BGB or have failed to comply with their obligation to mitigate damages pursuant to Section 254 (2) BGB;

c)

the relevant action or omission triggering the Claim was carried out at the direction, request or with the prior written consent of the Purchaser or was explicitly provided for in this Agreement;

d)

the Claim results or is increased (in that case limited to the increase) from the passing of, or any change in, after the Closing Date, any applicable law or administrative practice or order of any Governmental Entity;

e)

the procedures set forth in Sub-Clause 4.4 and Clause 10 were not observed by Purchaser if and to the extent damages were caused or increased by such non-compliance;

f)

it is reduced by any present or future advantage or benefit, including tax benefits, arising out of or in connection with the relevant matter giving raise to the Claim;

h)

the relevant amount is reflected as a write-off, liability or provision in the consolidated balance sheet of the Company as of the Locked Box Date.

11.2.5

Any failure of any Purchaser Indemnified Party to comply with any notification obligation shall release the Seller from its indemnification obligations only if, and only to the extent that, such failure to so notify the Seller results in the forfeiture by the Seller of rights and defences otherwise available to the Seller with respect to such claim.

11.2.6

For the avoidance of doubt no provision herein shall prohibit any Purchaser Indemnified Party from recovery of amounts under the R&W Insurance Policy.

11.3

Investigations

11.4

Exclusion of further Remedies

11.5

No Limitation for Intentional Breach

12.

NON-COMPETITION AGREEMENT

13.

APPROVAL DECISIONS

13.1.1

The Shareholders made a shareholder resolution of the Seller, attached as Appendix 13.1.1 for documentary purposes only, that the sale and assignment of the Shares by the Seller to the Purchaser in accordance with this Agreement is approved.

13.1.2

The Seller in its capacity as the only shareholder of the Company made a shareholder resolution of the Company, attached as Appendix 13.1.2 for documentary purposes only, that the sale and assignment of the Shares by the Seller to the Purchaser in accordance with this Agreement is approved.

14.

MISCELLANEOUS PROVISIONS

14.1

Shareholder Guarantee

14.2

Public Announcements

14.3

Notices

14.4

Schedules and Appendices

14.5

Assignment; Successors in Interest

14.5.1

No assignment or transfer by any Party of such Party’s rights and obligations hereunder shall be made except with the prior written consent of the other Party; provided that the Purchaser shall, without the obligation to obtain the prior written consent of any other Party, be entitled to assign this Agreement or all or any part of its rights or obligations (with the exception of any payment obligation) hereunder to one or more Affiliates of the Purchaser, provided that the Purchaser shall be obliged to re-assign any previously assigned rights and obligations to the Purchaser at the moment the Purchaser loses control over such Affiliate.

14.5.2

This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns, and any reference to a Party shall also be a reference to the successors and permitted assigns thereof.

14.6

Captions

14.7

Governing Law

14.8

Dispute Resolution

14.9

Amendments

14.10

Severability

14.11

Cooperation Following the Closing

14.12

Transaction Costs

14.13

Language

14.14

Data Room

1.

ORGANISATION

1.1

Each Group Company is a corporation or limited liability company, as applicable, duly formed and validly existing under the laws of the jurisdiction of incorporation or organisation, as applicable, set forth on Disclosure Schedule 3 and each has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

1.2

Each Group Company is duly qualified or registered as a foreign corporation or limited liability company, as applicable, to transact business under the Laws of each jurisdiction where the character of its activities or the location of the properties owned or leased by it requires such qualification or registration.

1.3

The Seller has heretofore made available to the Purchaser true, correct and complete copies of the constitutional documents of each Group Company as currently in effect and the corporate or limited liability company, as applicable, record books with respect to actions taken by its shareholders, board of directors, members or managers, as applicable.

1.4

Disclosure Schedule 1 contains a true, correct and complete list of the jurisdictions in which the Subsidiary is qualified or registered to do business as a foreign corporation.

2.

CAPITAL SHARE

2.1

Disclosure Schedule 2.1 accurately and completely sets forth the capital structure of each Group Company including the number of shares of capital share, units or other equity interests which are authorised and which are issued and outstanding.

2.2

All of the issued and outstanding shares of capital share, units or other equity interests of each Group Company:

(a)

are duly authorised, validly issued, fully paid and non-assessable,

(b)

are held of record by the Persons and in the amounts set forth on Disclosure Schedule 2.1, and

(c)

were not issued or acquired by the holders thereof in violation of any Law, agreement or the pre-emptive rights of any Person.

2.3

Except as set forth on Disclosure Schedule 2.1, no shares of capital share, units or other equity interests of a Group Company are reserved for issuance or are held as treasury shares, and

(a)

there are no outstanding options, warrants, rights, calls, commitments, conversion rights, rights of exchange, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other plans or commitments, contingent or otherwise, relating to the capital share of a Group Company;

(b)

there are no outstanding contracts or other agreements of a Group Company, the Seller or any other Person to purchase, redeem or otherwise acquire any outstanding shares of capital share, units or other equity interests of a Group Company, or securities or obligations of any kind convertible into any shares of the capital share, units or other equity interests of a Group Company;

(c)

there are no dividends which have accrued or been declared but are unpaid on the capital share, units or other equity interests of a Group Company;

(d)

there are no outstanding or authorised share appreciation, phantom share, share plans or similar rights with respect to a Group Company; and

(e)

there are no voting agreements or other agreements relating to the management of a Group Company. Except as set forth on Disclosure Schedule 2.1, no Group Company has ever purchased, redeemed or otherwise acquired any shares of capital share, units or other equity interests of a Group Company.

2.4

The merger into the Company of the former telerob Gesellschaft für Fernhantierungstechnik mbH (HRB 214151 of the Commercial Register at the Local Court (Amtsgericht) in Stuttgart) was valid and effective and does not give rise to any rights or claims of former shareholders of such merged entity.

2.5

Other than the Seller, no other Person is the record holder of any capital share, units or other equity interests in the Company. Since October 6, 2016, no prior offer, issue, redemption, call, purchase, sale, transfer, negotiation or other transaction of any nature or kind with respect to any capital share (including options, warrants or debt convertible into shares, options or warrants) of a Group Company or any entity that has been merged into a Group Company has given rise to any claim or action by any Person that is enforceable against a Group Company, the Seller, or the Purchaser, and to the knowledge of the Seller and the Shareholders, no fact or circumstance exists that could give rise to any such right, claim or action. A list of all redemptions or transfers of shares of capital share, units or other equity interests of a Group Company since incorporation is set forth on Disclosure Schedule 2.1.

3.

SUBSIDIARIES

4.

REAL PROPERTY

4.1

No Group Company is the owner of any real property or is holding any rights assimilated to real property (grundstücksgleiche Rechte).

4.2

Disclosure Schedule 4.2 sets forth a true and correct legal description of the Leased Real Property.

4.3

Each relevant Group Company, as listed on Disclosure Schedule 4.2, has a valid leasehold interest in the Leased Real Property, and the leases granting such interests are in full force and effect.

4.4

No portion of the Leased Real Property, or any building or improvement located thereon, materially violates any Law for which compliance a Group Company is responsible, including – but subject to the above limitation – those Laws relating to zoning, building, land use, environmental, health and safety, fire, air, sanitation and noise control.

(a)

any decree or order of any Governmental Entity (or, to the Knowledge of the Seller and each Group Company, threatened or proposed order) or

(b)

any rights of way, building use restrictions, exceptions, variances, reservations or limitations of any nature whatsoever.

4.5

Except as set forth in Disclosure Schedule 4.5, the improvements and fixtures on the Leased Real Property are in good operating condition and in a state of good maintenance and repair, ordinary wear and tear excepted, are adequate and suitable for the purposes for which they are presently being used. Except as set forth in Disclosure Schedule 4.5, to Sellers Knowledge, none of the buildings and improvements owned or utilized by a Group Company is constructed of, or contains as a component part thereof, any material that, either in its present form or as such material could reasonably be expected to change through aging and normal use and service, releases any substance, whether gaseous, liquid or solid, which is or may be, either in a single dose or through repeated and prolonged exposure, injurious or hazardous to the health of any individual who may from time to time be in or about such buildings or improvements. There is no condemnation, expropriation or similar proceeding pending or, to the Knowledge of the Seller and the Shareholders, threatened against any of the Leased Real Property or any improvement thereon.

4.6

The Leased Real Property constitutes all of the real property utilized by the Company Group in the operation of the Business.

5.

TITLE TO ASSETS; RELATED MATTERS

5.1

Except as set forth on Disclosure Schedule 5, the Group Companies have good and marketable title to all of their respective property and assets, free and clear of all Liens except Permitted Liens.

5.2

All equipment and other items of tangible personal property and assets of the Group Companies:

(a)

are in good operating condition and in a state of good maintenance and repair, ordinary wear and tear excepted;

(b)

were acquired and are usable in the Ordinary Course and materially conform to all Applicable Laws.

5.3

The Seller and each Group Company has no Knowledge of any material defect or problem with any of such equipment, tangible personal property or assets, other than ordinary wear and tear.

5.4

Except as set forth on Disclosure Schedule 5, since December 31, 2019, no Group Company has sold, transferred or disposed of any assets, other than sales of inventory in the Ordinary Course.

5.5

Disclosure Schedule 5 sets forth a true, correct and complete list and general description of each item of tangible personal property of each Group Company (including leased personal property) having a book value of more than €10.000 or, if not recognized in the balance sheet, aggregate lease or rent payments remaining outstanding from the Locked Box Date until the term of the lease or rental agreement of more than €10,000.

6.

INVENTORY AND PRODUCTS

6.1

The Group Companies’ inventory (both as of the date hereof and on the Closing Date)

(a)

is sufficient for the operation of the Business in the Ordinary Course,

(b)

consists of items that are good and merchantable within normal trade tolerances,

(c)

is of a quality and quantity presently usable or saleable in the Ordinary Course (subject to applicable reserves),

(d)

is valued on the books and records of a Group Company, as applicable, at the lower of cost or market value with the cost determined under the moving average cost (gleitender Durchschnitt) method consistent with past practice, and

(e)

is subject to reserves determined in accordance with GAAP consistently applied, specifically including reserves for obsolescence and excess inventory. No previously sold inventory is subject to returns in excess of those historically experienced by the Group Companies.

6.2

The products manufactured or sold by the Group Companies in the Business until the Closing Date:

(a)

are, and have been, in material compliance with all Applicable Laws;

(b)

do not and will not give raise to any recall obligation of a Group Company or to product liability or personal injury claim of any third party;

(c)

are, and at all relevant times have been, fit for ordinary purposes for which they are intended to be used and conform in all material respect to any promises or affirmations of fact made with respect to such products.

6.3

There is no design defect with respect to any of such products, and each of such products contains adequate warnings, presented in a reasonably prominent manner, in accordance with Applicable Law and current industry practice with respect to its contents and use.

7.

FINANCIAL STATEMENTS

7.1

The Financial Statements are attached as Disclosure Schedule 7.

7.2

Except as expressly noted on Disclosure Schedule 7, the Financial Statements have been prepared in accordance with GAAP from the books and records of the Group Companies, and such books and records have been maintained on a basis consistent with GAAP.

7.3

Each balance sheet included in the Financial Statements (including the related notes and schedules, if any) fairly presents the financial position of each Company and its Subsidiaries or the relevant Group Company, as applicable, as of the date of such balance sheet, and each statement of income and cash flows included in the Financial Statements (including any related notes and schedules, if any) fairly presents the results of operations and changes in cash flows of each Company and its Subsidiaries or the relevant Group Company, as applicable, for the periods set forth therein, in each case in accordance with GAAP (except as expressly noted therein or as disclosed on Disclosure Schedule 7) and in each case to the extent the relevant facts were known or could have been known using the diligence of a proper merchant at the time the relevant balance sheet or statement of income and cash flows, as the case may be, were prepared.

7.4

Since December 31, 2019, there has been no change in any accounting (or tax accounting) policy, practice or procedure of a Group Company.

7.5

The Group Companies maintain accurate books and records reflecting each of their assets and liabilities and maintain proper and adequate internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of annual financial statements for external purposes in accordance with GAAP.

8.

NO UNDISCLOSED LIABILITIES

9.

ABSENCE OF CERTAIN CHANGES

(a)

any Material Adverse Effect,

(b)

any damage, destruction, loss or casualty to property or assets of a Group Company with a value in excess of € 10.000,00, whether or not covered by insurance.

10.

LEGAL PROCEEDINGS

10.1

Except as set forth on Disclosure Schedule 10, there is no suit, action, claim, arbitration, proceeding or investigation pending or, to the Knowledge of the Seller and each Group Company, threatened against, relating to or involving a Group Company or its respective real or personal property before any Governmental Entity or arbitrator (a “Legal Proceeding”).

10.2

None of the Legal Proceedings set forth on Disclosure Schedule 10, if finally determined adversely, is reasonably likely, individually or in the aggregate, to have a Material Adverse Effect. No Group Company is subject to any judgment, decree, injunction, rule or order of any court or arbitration panel except those shown in Disclosure Schedule 10 and except those that have been fully settled.

11.

COMPLIANCE WITH LAW

11.1

Each Group Company is (and has been at all times since October 6, 2016, and to the Knowledge of Seller during the past five (5) years) in material compliance with all Applicable Laws (including Applicable Laws relating to corruption, environmental matters and the safety and health of employees).

11.2

To the Knowledge of the Seller and each Group Company each reseller who was or is engaged in selling products of the Company Group in any jurisdiction is (and has been since October 6, 2016, and to the Knowledge of Seller during the past five (5) years) in compliance with all Anti-Corruption Laws.

11.3

Except as set forth on Disclosure Schedule 11, since October 6, 2016, and to the Knowledge of Seller during the past five (5) years:

(a)

no Group Company has been charged with, nor received any written notice that it is under investigation with respect to, and, to the Knowledge of the Seller and each Group Company, no Group Company is otherwise now under investigation with respect to, any violation of any Applicable Law or other requirement of a Governmental Entity,

(b)

no Group Company is a party to, or bound by, any order, judgment, decree, injunction, rule or award of any Governmental Entity or arbitrator and

(c)

each Group Company has filed all reports and has all Licenses required to be filed with any Governmental Entity on or prior to the date hereof.

11.4

No Group Company or any of its Officers or Directors is debarred or suspended from doing business with any Governmental Entity.

11.5

Each Group Company and their agents and to the Knowledge of the Seller and each Group Company each reseller engaged in the selling of products of the Company Group in any jurisdiction are (and have been at all times since October 6, 2016, and to the Knowledge of Seller during the past five (5) years) in compliance with all Applicable Laws related to (i) participation in unsanctioned foreign boycotts and (ii) the import and export of goods, equipment, materials, software, technology, and services, including the following:

(a)

all applicable provisions of the German Foreign Trade Act (Außenwirtschaftsgesetz), Foreign Trade Ordinance (Außenwirtschaftsverordnung), War Arms Control Act (Kriegs­waffenkontrollgesetz) and other legislation concerning arms (Waffengesetze);

(b)

all applicable directly effective provisions of European Union legislation including those relating to customs duties, foreign trade, sanctions, anti-dumping, arms embargos and arms control, including Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items;

(c)

all applicable export controls compliance requirements contained in the Export Control Reform Act (50 U.S.C. § 4801) and the Export Administration Regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security (15 C.F.R. Parts 730-774) and the Arms Export Control Act (22 U.S.C. § 2778) and the International Traffic in Arms Regulations administered by the U.S. Department of State (22 C.F.R. Parts 120-130), the antiboycott regulations administered by the U.S. Department of Commerce’s Office of Antiboycott Compliance (15 C.F.R. Part 760), and the antiboycott provisions of the Internal Revenue Code administered by the U.S. Department of the Treasury’s Internal Revenue Service (26 U.S.C. § 999);

(d)

all applicable economic sanctions authorities administered by the U.S. Department of the Treasury’s office of Foreign Assets Control, including but not limited to regulations located at 31 C.F.R. Chapter V and economic sanctions promulgated pursuant to the International Emergency Economic Powers Act and the Trading With The Enemy Act, and economic sanctions authorities administered by the U.S. Department of State’s Office of Economic Sanctions Policy and Implementation;

(e)

all applicable customs and import compliance requirements contained in the Tariff Act of 1930, as amended, and related authorities administered or enforced by the U.S. Department of Commerce, U.S. International Trade Commission, U.S. Customs and Border Protection, and U.S. Immigration and Customs Enforcement; and

(f)

all applicable certification, permitting, valuation, classification, reporting, and recordkeeping requirements concerning the importation of products.

12.

COMPANY CONTRACTS

12.1

Disclosure Schedule 12 sets forth a true, correct and complete list of the following contracts to which a Group Company is a party, by which a Group Company or any property of any thereof is subject, or by which a Group Company is otherwise bound, whether oral or written (the “Company Contracts”) (other than the Employment Agreements set forth on Disclosure Schedule 14 and the insurance policies set forth on Disclosure Schedule 16) to the extent any obligation by any party thereto (including warranty obligations) is outstanding as of the date hereof regardless of whether due or not yet due:

(a)

all bonds, debentures, notes, loans, credit or loan agreements or loan commitments, mortgages, indentures, guarantees or other contracts relating to the borrowing of money or binding upon any properties or assets (real, personal or mixed, tangible or intangible) of a Group Company;

(b)

all leases relating to the Leased Real Property or other leases or licenses involving any properties or assets (whether real, personal or mixed, tangible or intangible);

(c)

all contracts and agreements that (i) limit or restrict the Group Companies or any of their Officers or Directors, employees, the Seller or other equity holders, agents or representatives (in their capacity as such) from engaging in any business or other activity in any jurisdiction; (ii) create or purport to create any exclusive or preferential relationship or arrangement; (iii) otherwise restrict or limit the ability of the Group Companies to operate or expand the Business; or (iv) impose, or purport to impose, any obligations or restrictions on Affiliates of the Company;

(d)

all confidentiality agreements;

(e)

all contracts and agreements for capital expenditures or the acquisition or construction of fixed assets requiring the payment by a Group Company of an amount in excess of €20,000.00 in each case;

(f)

all contracts and agreements that provide for an increased payment or benefit, or accelerated vesting, upon the execution hereof, or the Closing, or in connection with the transactions contemplated hereby;

(g)

all contracts and agreements granting any Person a Lien on all or any part of any asset other than Permitted Liens;

(h)

all contracts and agreements for the cleanup, abatement or other actions in connection with any Hazardous Materials, the remediation of any existing environmental condition or relating to the performance of any environmental audit or study;

(i)

all contracts and agreements granting to any Person an option or a first refusal, first-offer or similar preferential right to purchase or acquire any assets;

(j)

all contracts and agreements with any agent, distributor or representative that is not terminable without penalty on thirty (30) days’ or less notice;

(k)

all contracts and agreements for the granting or receiving of a license, sublicense or franchise or under which any Person is obligated to pay or has the right to receive a royalty, license fee, franchise fee or similar payment;

(l)

all contracts, licenses and agreements to which a Group Company is a party

(i)

with respect to Company Intellectual Property licensed or transferred to any third party (other than end-user licenses in the Ordinary Course) or

(ii)

pursuant to which a third party has licensed or transferred any Company Intellectual Property to a Group Company;

(m)

all contracts and agreements providing for the indemnification or holding harmless of any Officer or Director, employee or other Person;

(n)

all joint venture or partnership contracts and all other contracts providing for the sharing of any profits;

(o)

all contracts or agreements entered into involving the sale or purchase of assets or capital share of any Person, other than in the Ordinary Course, or a merger, consolidation, business combination or similar transaction;

(p)

all customer contracts and agreements (excluding work orders and purchase orders individually providing revenue to a Group Company of an amount (net of VAT or sales tax) of less than €100,000) for the provision of goods or services by a Group Company;

(q)

all supply contracts and agreements (excluding work orders and purchase orders individually requiring a Group Company to spend an amount (net of VAT or sales tax) of less than € 100,000) for the provision of goods or services for a Group Company;

(r)

all outstanding powers of attorney empowering any Person to act on behalf of a Group Company;

(s)

all U.S. Government Contracts; and

(t)

all existing contracts and agreements (other than those described in sub-clauses (a) through (r) of this paragraph 12.1 of the Schedule)

(i)

involving an annual commitment or annual payment to or from a Group Company of more than €100,000 (net of VAT or sales tax) individually or

(ii)

that is material to the Company Group, individually or in the aggregate.

12.2

True, correct and complete copies of all Company Contracts have been made available to the Purchaser.

12.3