Document

EX-10.1 2 equitypurchaseagreementdat.htm EQUITY PURCHASE AGREEMENT, DATED DECEMBER 16, 2021 Document

Exhibit 10.1

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

EQUITY PURCHASE AGREEMENT

dated as of

December 16, 2021

by and among

ARCADIA, INC.,

NEW ARCADIA HOLDINGS, INC.

SYNERGEX GROUP LLC, TRUSTEE OF THE MUNERA FAMILY ESBT,

JAMES HENRY SCHLADEN AND VICTORIA ANN SCHLADEN, TRUSTEES OF THE SCHLADEN FAMILY TRUST DATED DECEMBER 7, 2006

ROBERT SAYOUR,

MICHELINE SAYOUR, AS TRUSTEE OF THE LKS FAMILY TRUST,

MICHELINE SAYOUR, TRUSTEE OF THE MICHELINE SAYOUR REVOCABLE TRUST,

SHAREHOLDERS’ REPRESENTATIVE,

THE LIMITED GUARANTORS

AND

DMC GLOBAL INC.

TABLE OF CONTENTS


			Page
Article I Certain Definitions
Section 1.01 Definitions			4
Section 1.02 Table of Other Defined Terms			29
Section 1.03 Construction			33
Article II Closing
Section 2.01 The Membership Interest Purchase			35
Section 2.02 Delivery of Closing Calculations			35
Section 2.03 Closing			35
Section 2.04 Adjustment Amount			38
Section 2.05 Company Payees			42
Section 2.06 Withholding			42
Article III Representations and Warranties of the Company and Newco
Section 3.01 Organization			43
Section 3.02 Subsidiaries			43
Section 3.03 Authority			44
Section 3.04 No Conflict			44
Section 3.05 Governmental Consents			44
Section 3.06 Capitalization; Membership Interests			45
Section 3.07 Capitalization of Subsidiaries			46
Section 3.08 Financial Statements			47
Section 3.09 Undisclosed Liabilities			47
Section 3.10 Legal Compliance			47
Section 3.11 Litigation and Proceedings			48
Section 3.12 Contracts; No Defaults			49
Section 3.13 Benefit Plans			51
Section 3.14 Employment Matters			54
Section 3.15 Taxes			55
Section 3.16 Brokers’ and Finders’ Fees			57
Section 3.17 Insurance			57
Section 3.18 Licenses, Permits and Authorizations			57
Section 3.19 Real and Personal Property			58
Section 3.20 Intellectual Property; Information Technology; Privacy.			60
Section 3.21 Environmental Matters			62
Section 3.22 Absence of Changes			63
Section 3.23 Affiliate Matters			65
Section 3.24 Product Warranty; Products Liability			65


Section 3.25 Suppliers			66
Section 3.26 Anti-Corruption Matters			66
Section 3.27 No Additional Representation or Warranties			67
Article IV Representations and Warranties of the Shareholders
Section 4.01 Authority and Binding Effect			68
Section 4.02 Title to the Purchased Shares			70
Section 4.03 No Conflict			70
Section 4.04 Governmental Consents			71
Section 4.05 Litigation and Proceedings			71
Section 4.06 Brokers’ and Finders’ Fees			71
Section 4.07 Private Placement			72
No Additional Representation or Warranties			73
Article V Representations and Warranties of Buyer
Section 5.01 Organization of Buyer			74
Section 5.02 Authority			74
Section 5.03 No Conflict			74
Section 5.04 Litigation and Proceedings			75
Section 5.05 Governmental Consents			75
Section 5.06 Financial Ability; Solvency			75
Section 5.07 Brokers’ and Finders’ Fees			77
Section 5.08 No Outside Reliance			77
Section 5.09 Acquisition for Investment			78
Section 5.10 Buyer SEC Reports; Financial Statements			78
Section 5.11 Buyer Information			79
Section 5.12 Buyer Capitalization			79
Article VI Pre-Closing Covenants
Section 6.01 Conduct of Business			80
Section 6.02 Information Rights			82
Section 6.03 Contact with Key Stakeholders			83
Section 6.04 Support of Transaction			83
Section 6.05 Frustration of Conditions			84
Section 6.06 Resignations			84
Section 6.07 Real Property (Owned Real Property)			84
Section 6.08 Exclusivity			85
Section 6.09 Pre-Closing Transactions			85
Section 6.10 Shareholders’ Agreement; Redemption Amounts			86
Article VII Certain Post-Closing Covenants
Section 7.01 Indemnification and Insurance			88


Section 7.02 Employee Matters			90
Section 7.03 R&W Insurance Policy			92
Section 7.04 Retention of Books and Records; Confidentiality			93
Section 7.05 Further Assurances			93
Section 7.06 Registration of Stock Consideration			94
Article VIII HSR and Tax Covenants
Section 8.01 HSR Act Approvals			95
Section 8.02 Tax Matters			96
Article IX Conditions to Obligations
Section 9.01 Conditions to Obligations of Buyer, the Shareholders and the Company			103
Section 9.02 Conditions to Obligation of Buyer			103
Section 9.03 Conditions to the Obligations of the Company, Newco and the Shareholders			104
Section 9.04 Waiver of Conditions; Frustration of Conditions			105
Article X Indemnification
Section 10.01 Survival			106
Section 10.02 Indemnification by the Shareholders			107
Section 10.03 Indemnification by Buyer			108
Section 10.04 Limitations on Indemnification			108
Section 10.05 Other Limitations			111
Section 10.06 Third-Party Claim Indemnification Procedures			111
Section 10.07 Special Indemnification Procedures			113
Section 10.08 Investigation by Indemnifying Parties			114
Section 10.09 Indemnity Escrow			114
Section 10.10 Characterization of Indemnification Payments			115
Section 10.11 Exclusive Remedy			115
Article XI Termination; Effectiveness
Section 11.01 Termination			116
Section 11.02 Effect of Termination			117
Article XII Miscellaneous
Section 12.01 Waiver			118
Section 12.02 Notices			119
Section 12.03 Assignment			122
Section 12.04 Rights of Third Parties			122
Section 12.05 Expenses			123
Section 12.06 Governing Law			123
Section 12.07 Jurisdiction; Waiver of Jury Trial			123

iii


Section 12.08 Captions; Counterparts			124
Section 12.09 Schedules and Exhibits			124
Section 12.10 Entire Agreement			125
Section 12.11 Amendments			125
Section 12.12 Publicity			125
Section 12.13 Severability			126
Section 12.14 Enforcement			126
Section 12.15 Non-Recourse			127
Section 12.16 Waiver and Release			127
Section 12.17 Waiver of Conflicts Regarding Representations; Non-Assertion of Attorney-Client Privilege			128
Section 12.18 No Strict Construction			131
Section 12.19 Shareholders’ Representative			131

Schedules

Schedule 1.01(b)(i) – Key Employees

Schedule 1.01(b)(ii) – Permitted Liens

Schedule 6.01 – Conduct of Business

Schedule 6.10(b) Redemption Spreadsheet

Schedule 7.02(b) – Severance Program

Schedule 7.02(c) – Specified Change in Control Bonuses

Schedule 7.02(d) – Retention Awards

Schedule 7.05 – Further Assurances

Schedule 8.02(c) – Tax Adjustment Model

Schedule 9.02(d) – Amended Leases

Disclosure Schedule

Exhibits

Exhibit A-1 – Newco Governing Documents

Exhibit A-2 – Company Pre-Closing Operating Agreement

Exhibit B – Transaction Summary

Exhibit C – Operating Agreement

Exhibit D – Form of Escrow Agreement

Exhibit E – Reference Statement

Exhibit F – Form of Restrictive Covenant Agreement

Exhibit G – Form of Schladen Employment Agreement

Exhibit H – Form of Amended Lease

Exhibit I - Term Sheet for Series A Preferred Stock

EQUITY PURCHASE AGREEMENT

This Equity Purchase Agreement, dated as of December 16, 2021 (this “Agreement”), is entered into by and among Arcadia, Inc., a California corporation (and from and after the Second Conversion, Arcadia, LLC, a Colorado limited liability company) (the “Company”), New Arcadia Holdings, Inc., a Delaware corporation (“Newco”), Synergex Group LLC, Trustee of the Munera Family ESBT (the “Munera Family Trust”), James Henry Schladen and Victoria Ann Schladen, as Trustees of the Schladen Family Trust dated December 7, 2006 (the “Schladen Family Trust”), Robert Sayour (“R. Sayour”), Micheline Sayour, as Trustee of the LKS Family Trust (the “LKS Family Trust”), and Micheline Sayour, as Trustee of the Micheline Sayour Revocable Trust (the “M. Sayour Trust”), James Schladen, as the sole and exclusive representative of the Shareholders (the “Shareholders’ Representative” or, in his individual capacity, “Schladen”), the parties listed as Limited Guarantors on the signature pages hereto (in their capacity as such, the “Limited Guarantors”), and DMC Global Inc., a Delaware corporation (“Buyer” or “DMC”). Each of the Shareholders, the Company, the Shareholders’ Representative and Buyer shall be referred to in this Agreement, unless the context otherwise requires, as individually a “Party,” and collectively as the “Parties.”

RECITALS

WHEREAS, the Shareholders collectively own in the aggregate all of the issued and outstanding shares of capital stock of the Company (collectively, the “Shares”);

WHEREAS, the Shareholders have organized Newco with a Certificate of Incorporation and Bylaws as set forth in Exhibit A-1 hereto and, after the date hereof and prior to the Closing, shall (a) contribute all of the Shares to Newco (the “F Reorganization Contribution”); (b) cause Newco to elect to treat the Company as a qualified Subchapter S subsidiary within the meaning of Section 1361(b)(3)(B) of the Code (together with the F Reorganization Contribution, the “F Reorganization”); and (c) cause Newco and the Company to convert the Company from a California corporation into a California limited liability company pursuant to and in accordance with the California Corporations Code (the “Conversion”, and together with the F Reorganization, the “Pre-Closing Reorganization”), with the effect that, immediately following the Pre-Closing Reorganization, the Shareholders will together own one hundred percent (100%) of the issued and outstanding shares of capital stock of Newco as set forth on Exhibit B hereto and Newco will own one hundred percent (100%) of the issued and outstanding membership interests of the Company (the “Membership Interests”), which will at that time be a California limited liability company and will have an operating agreement as set forth on Exhibit A-2 hereto (the “Pre-Closing Operating Agreement”).

WHEREAS, after the Pre-Closing Reorganization and effective prior to Closing, the Shareholders shall cause Arcadia Architectural Products, Inc., a Connecticut corporation (“AAP”), to convert from a Connecticut corporation into a Colorado limited liability company pursuant to and in accordance with Connecticut Business Corporations Act and the Colorado Corporations and Associations Act (the “AAP Conversion”).

WHEREAS, after the Pre-Closing Reorganization and effective prior to the Closing, Buyer shall cause its wholly-owned subsidiary DMC Korea, Inc., a Colorado corporation (“DMC Korea”), to purchase, and Newco shall sell to DMC Korea (the “Partnership Formation Transaction”), one percent (1.0%) of the outstanding Membership Interests of the Company (the “DMC Korea Membership Interests”) for cash in the amount of Four Million Seven Hundred and Fifty Thousand Dollars ($4,750,000) (the “Partnership Formation Consideration”) and Newco and DMC Korea will cause the Company to convert from a California limited liability company to a Colorado limited liability company pursuant to the California Corporations Code and the Colorado Corporations and Associations Act, such conversion to be effective contemporaneously with the Closing (the “Second Conversion”); and

WHEREAS, at the Closing Date, (a) Buyer will purchase from Newco fifty-nine percent (59%) of the outstanding Membership Interests (the “Closing Date Purchased Membership Interests” and, together with the DMC Korea Membership Interests, the “Purchased Membership Interests”) in consideration of the Buyer paying (i) the Closing Cash Consideration (subject to adjustment as set forth herein) and (ii) the Stock Consideration and (b) Newco will redeem all of the shares of common stock of Newco, par value $0.01 per share (“Newco Common Stock”), held by R. Sayour, the LKS Family Trust, the M. Sayour Trust and the Schladen Family Trust, in each case for a portion of the Closing Cash Consideration (subject to adjustment as set forth herein) and Partnership Formation Consideration (and in the case of the Schladen Family Trust only, the Stock Consideration), and potentially additional payments after the Closing, in the amounts and manner provided for in Section 6.10(b) (the “Redemptions” and, together the other transactions described in this paragraph, the “Closing Transactions”);

WHEREAS, effective simultaneously with the Closing, the Operating Agreement of the Company will be as set forth on Exhibit C hereto (the “Operating Agreement”) and the Membership Interests will be held as required by this Agreement, as illustrated (in a non-binding manner) as set forth in Exhibit B hereto;

WHEREAS, immediately following the Closing, Buyer will loan approximately $24.9 million to the Munera Family Trust as evidenced by a promissory note from such Shareholder (the “Loan Transaction”);

WHEREAS, the Pre-Closing Reorganization, the AAP Conversion, the Partnership Formation Transaction, the Second Conversion, the Closing Transactions and the Loan Transaction, as further described (for illustration, in a non-binding manner) on Exhibit B hereto, are referred to collectively as the “Transactions”; and

WHEREAS, the Parties desire to effect the Transactions.

NOW, THEREFORE, in consideration of the foregoing and of the mutual representations, warranties, covenants, obligations and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

Certain Definitions

Section 1.01 Definitions. As used herein, the following terms have the following meanings:

“Action” means any dispute, charge, investigation, claim, complaint, notice of violation, citation, arbitration, action, suit or proceeding of any nature, civil, criminal, administrative, regulatory or otherwise, in law or in equity, by or before any arbitrator or other Governmental Authority.

“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, the first specified Person, through one or more intermediaries or otherwise. For the avoidance of doubt, following the Closing, Affiliates of Buyer shall include the Group Companies.

“Alpine” means Alpine Universal Inc., a California corporation.

“Anti-Corruption and Anti-Bribery Laws” means the Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq., and any rules or regulations thereunder, and any other applicable anti-corruption or anti-bribery Laws of any foreign jurisdictions in which the Company conducts its businesses.

“Antitrust Authorities” means the Antitrust Division of the United States Department of Justice, the United States Federal Trade Commission or the antitrust or competition law authorities of any other jurisdiction (whether United States, foreign or multinational).

“Antitrust Information or Document Requests” means any request or demand for the production, delivery or disclosure of documents or other evidence, or any request or demand for the production of witnesses for interviews or depositions or other oral or written testimony, by any Antitrust Authorities relating to the transactions contemplated hereby or by any Person challenging the transactions contemplated hereby, including any so called “second request” for additional information or documentary material or any civil investigative demand made or issued by the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission or any subpoena, interrogatory or deposition.

“Business Day” means each day of the week except Saturdays, Sundays and days on which banking institutions are authorized by Law to close in New York, New York.

“Calculation Time” means (a) with respect to the calculations of Closing Date Cash, Closing Date Net Working Capital and the Closing Balance Sheet, as of 11:59 p.m. (Los Angeles time) on the day immediately prior to the Closing Date, and (b) with respect to the calculations of Closing Date Indebtedness and Closing Date Transaction Expenses, as of immediately prior to the Closing.

“CARES Act” means Public Law Number 116-136, and any rules, regulations or guidance promulgated thereunder, or published with respect thereto, by any Governmental Authority.

“Cash” means all cash, cash equivalents, commercial paper, certificates of deposit, bank deposits and treasury bills held by the Group Companies, including the amount of any received but uncleared checks, drafts and wires issued, (for the avoidance of doubt, Cash shall not be reduced because it is attributable to any Customer Prepayments) less the amounts of any issued but uncleared checks, drafts and wires issued (which amounts, for the avoidance of doubt, shall not be included as current liabilities in Net Working Capital), in each case, determined in accordance with the Reference Statement.

“Closing Cash Consideration” means an amount equal to Aggregate Equity Value minus Aggregate Adjustments, where “Aggregate Equity Value” equals Sixty Percent (60%) of the sum of (a) Four Hundred Seventy Five Million Dollars ($475,000,000), minus (b) the Estimated Closing Date Indebtedness, minus (c) the amount, if any, by which the Estimated Closing Date Net Working Capital is less than the Target Closing Date Net Working Capital, plus (d) the amount, if any, by which the Estimated Closing Date Net Working Capital is greater than the Target Closing Date Net Working Capital, plus (e) the Estimated Closing Date Cash, and “Aggregate Adjustments” equals the sum of (f) the Working Capital Escrow Amount, plus (g) the Indemnity Escrow Amounts, plus (h) the Shareholders’ Representative Fund, plus (i) $ 18,613,200, representing the value of the Stock Consideration plus (j) the Partnership Formation Consideration and (k) plus the Estimated Closing Date Transaction Expenses.

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

“Company Intellectual Property” means the Intellectual Property owned or purported to be owned by the Group Companies.

“Company Payee” means any Person owed any Transaction Expenses.

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of July 29, 2021 by and between the Company and Buyer.

“Contract” means any agreement, contract, subcontract, lease or obligation to which a Person is a party and that is legally binding on such Person.

“control” of a Person means the power, directly or indirectly, either to (a) vote 50.1% of the securities having ordinary voting power for the election of directors, managers or other equivalent management of such Person, or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“COVID-19” means COVID-19 and any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks.

“COVID-19 Measures” means any quarantine, “shelter in place”, “stay at home”, workforce reduction, social distancing, shut down, closure, sequester, return to work, employment or human resources law, safety or similar Law, directive, guideline or recommendation promulgated by any Governmental Authority, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19.

[***]

“Customer Prepayments” means any and all amounts paid by customers to pre-pay any portion of the full purchase price of an order by or on behalf of such customer.

“Disclosure Schedule” means the Schedules delivered by Newco, the Company or the Shareholders, as applicable, to Buyer on the date hereof with respect to Articles III and IV of this Agreement.

“DMC Plan” means that certain DMC Global Inc. 2016 Omnibus Incentive Plan, approved by stockholders on November 4, 2016.

“DMC Stock” means the common stock of DMC, par value $0.05 per share.

“Employee” means an individual who as of immediately prior to the Closing is an employee of the Company or any of its Subsidiaries, including employees not actively at work due to vacation, injury, jury service, military service duty, disability, or other approved leave of absence.

“Employee Benefit Plan” means any plan, fund, arrangement or agreement, including each bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, equity purchase, equity option, equity ownership, equity appreciation rights, phantom equity, leave of absence, layoff, change in control, vacation, paid time off, employment, consulting, day or dependent care, legal services, cafeteria, life, health, accident, disability, welfare, workers’ compensation or other insurance, severance, separation or other employee benefit plan, practice, policy or arrangement of any kind (other than base salary or base hourly wages), whether written or oral (including any “employee benefit plan” within the meaning of Section 3(3) of ERISA).

“Environmental Laws” means all applicable Laws in effect on and as interpreted as of the date hereof relating to: (1) pollution or the protection of human health or the environment; (2) the use, storage, handling or release of Hazardous Materials in relation to the protection of human health or the environment; or (3) occupational health and safety (as it relates to exposure to Hazardous Materials), including but not limited to requirements related to noise, and the use, storage, handling or release of Hazardous Materials.

managers or other equivalent management of such Person, or to exercise other rights generally afforded to shareholders of a corporation (including the ability to exert control over such Person).

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

“ERISA Affiliate” means, with respect to any Person, any entity required to be aggregated in a controlled group or affiliated service group with such Person for purposes of ERISA or the Code (including under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA), at any relevant time.

“Escrow Agent” means BOKF, NA.

“Escrow Agreement” means the escrow agreement to be entered into as of the Closing Date, substantially in the form of Exhibit D attached hereto.

“FFCRA” means Public Law Number 116-127, and any rules, regulations or guidance promulgated thereunder, or published with respect thereto, by any Governmental Authority.

“Fraud” means an act, committed by a Party, with intent to deceive another Party and requires (a) a false representation of material fact made in the applicable representations and warranties set forth in this Agreement of such Party, (b) with actual knowledge that such representation is false and a specific intention to induce such other Party to rely on such statement, (c) causing that Party to justifiably rely on such statement to its detriment and (d) circumstances that would constitute intentional common law fraud under applicable Delaware Law. “Fraud” does not include any claim for equitable fraud, promissory fraud or any tort (including a claim for fraud) based on negligence or recklessness.

“GAAP” means United States generally accepted accounting principles as in effect (a) with respect to financial information for periods on or after the Closing Date, as of the date of this Agreement, and (b) with respect to financial information for periods prior to the Closing Date, as of such applicable time.

“Governing Document” means, with respect to any Person that is not an individual, as applicable, such Person’s (a) articles of incorporation, certificate of incorporation, certificate of formation, articles of organization, articles of association, certificate of limited partnership or other applicable similar organizational or charter documents relating to the creation or organization of such Person, and (b) bylaws, operating agreement, shareholder agreement, partnership agreement, or other applicable similar documents relating to the operation, governance or management of such Person.

“Governmental Authority” means any national, federal, state, local or foreign government, governmental authority, regulatory or administrative agency, court or tribunal.

“Governmental Order” means any binding order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, issued or entered by any Governmental Authority.

“Group Company” means each of the Company and the Company Subsidiaries.

“Hazardous Materials” means any substance, material or waste that is listed, classified or defined and regulated as “hazardous”, “toxic”, “acutely hazardous,” a “highly hazardous substance”, a “pollutant” or a “contaminant” under applicable Environmental Laws, including any petroleum or petroleum products, polychlorinated biphenyls or asbestos.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Indebtedness” means, as of any time of determination, without duplication, (a) all obligations of the Group Companies (i) for money borrowed by the Group Companies, (ii) in respect of leases of the Group Companies, that have been, in accordance with the Reference Statement, recorded as capital leases by the Group Companies, (iii) in respect of direct financing leases and purchase money and/or vendor financing (in each case other than with respect to trade payables, accrued expenses, current accounts and similar obligations incurred in the ordinary course of business), (iv) for the deferred purchase price of property or services and all earnouts and contingent payment obligations arising pursuant to any acquisition or divestiture, (v) evidenced by notes, bonds, debentures or similar Contracts of the Group Companies, (vi) [***], (vii) [***], (viii) under any interest rate or currency protection agreement or similar hedging agreement of the Group Companies, assuming such agreements were terminated minus any amounts payable to the Group Companies in connection with such termination (which may be a positive or negative number), and (ix) in respect of letters of credit, bankers’ acceptances or similar arrangements of the Group Companies, in each case, to the extent drawn or funded, and (b) obligations under indebtedness of the type referred to in clauses (a)(i) through (a)(ix) above of another Person that are guaranteed, secured by any Lien (other than a Permitted Lien) on any property or asset of, or subject to a keep well or similar obligation of, any Group Company. Indebtedness shall exclude any (A) inter-company indebtedness among the Group Companies, (B) any Customer Prepayments (whether or not otherwise includable in any of clauses (a)(i) through (a)(ix) above and (C) trade liabilities, any accrued expenses or any other liability to the extent reflected in the calculation of Net Working Capital.

“Indemnity Escrow Account” means the account established by the Escrow Agent pursuant to the Escrow Agreement to hold the Indemnity Escrow Amounts, and which shall be divided into subaccounts corresponding to each such Indemnity Escrow Amount, each of which subaccounts shall be separate and shall not be available for any matter other than the specific matters provided for herein.

“Indemnity Escrow Amount (General)” means One Million Dollars ($1,000,000).

[***]

“Indemnity Escrow Amount (Customer Prepayments)” means One Million Dollars ($1,000,000).

“Indemnity Escrow Amounts” means the aggregate dollar amount of the Indemnity Escrow Amount (General), [***], [***], [***], [***], [***] and the Indemnity Escrow Amount (Customer Prepayments).

“Information Privacy and Security Laws” means all Laws applicable to the Group Companies concerning the privacy and security of personally identifiable information.

“Intellectual Property” means any and all intellectual property, industrial or proprietary rights (by whatever name or term known or designated) arising under law or equity, whether or not filed, perfected, registered or recorded and whether now or later filed, issued or acquired, as they exist throughout the world and under any international treaties or conventions, including: (i) patents and patent applications (including any and all divisions, continuations, continuations-in-part, reissues, reexaminations and extensions thereof) and any improvements, inventions and discoveries (whether patentable or not), (ii) copyrights and all registrations, applications for registration and renewals and extensions of such copyrights and any works of authorship including software; (iii) trademarks, service marks, logos, trade dress and social media handles, together with the goodwill connected with the use of and symbolized by, and all registrations, applications and renewals for, any of the foregoing; (iv) internet domain names, whether or not trademarks, registered in any top-level domain by any authorized private register or Governmental Authority; (v) rights in utility models and industrial designs, and all applications, registrations and renewals thereof; and (vi) trade secrets and confidential and proprietary information.

“Key Employee” means those individuals listed on Schedule 1.01(b)(i).

“Knowledge of Buyer” means the actual knowledge of Kevin Longe, Michael Kuta and Michelle Shepston.

“Knowledge of the Company” means the actual knowledge of Schladen, Matthew Schladen, Greg Lefevre, Eric Bucklin and Byron Bjork.

“Law” means any statute, law, ordinance, rule or regulation, in each case, of any Governmental Authority.

“Leased Real Property” means all real property leased by the Group Companies, as tenants, from third-party landlords. For avoidance of doubt, any real property that is subject to an Amended Lease shall be excluded from the definition of Leased Real Property.

“Licensed Intellectual Property” means any Intellectual Property licensed to the Group Companies.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, security interest, encumbrance, restriction on transfer or other lien of any kind.

“Losses” means any and all losses, liabilities, actions, causes of action, damages, interest, awards, judgments, fines, penalties, fees, costs and expenses (including reasonable attorneys’ and consultants’ fees and expenses) actually suffered or incurred; provided, that “Losses” shall not include any punitive damages awarded with respect to any claim, unless such damages are part of a third party claim.

“Material Adverse Effect” means, any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate had a material adverse effect on, or that would reasonably be likely to have a material adverse effect on, the business, results of operation, or financial condition of the Group Companies or their assets or liabilities, taken as a whole; provided, however, that in no event would any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect” on or in respect of the Group Companies: (a) any change in Law, regulatory regimes (including how the Group Companies and the industry are regulated and their regulatory status), accounting standards or principles (including GAAP) or any authoritative guidance relating thereto or interpretation thereof by a Governmental Authority (including any impacts resulting, directly or indirectly, from any pandemic (including COVID-19) and/or any action taken or not taken as required by any Law or Governmental Authority to respond to the impact, presence, outbreak or spread of any such pandemic), (b) any change in interest rates or economic, political, business or financial market conditions (including any changes in credit, financial, commodities, securities or banking markets), (c) any change generally affecting any of the industries in which the Company operates or proposes to operate or the economy as a whole or in any geographical area or market (including any impacts resulting, directly or indirectly, from any pandemic (including COVID-19) and/or any action taken or not taken as required by any Law or Governmental Authority to respond to the impact, presence, outbreak or spread of any such pandemic), (d) any change in priorities, policies, planning or budgets of any Governmental Authority, (e) the announcement or the execution of this Agreement, the pendency or consummation of the Transactions or the performance of this Agreement, including the threatened or actual impact on the Group Companies’ relationships with any of its employees, customers, suppliers, vendors, partners, distributors or others having relationships with the Company and including (i) the threatened or actual termination, suspension, modification or reduction of such relationships and (ii) the failure to obtain any consent or waiver or deliver any notice under any Contract listed on Schedule 3.04, (f) any action taken or not taken at the request of Buyer or any of its Affiliates or to which Buyer or any of its Affiliates has consented in writing, (g) any earthquakes, hurricanes, tornadoes, floods or other natural disasters, weather conditions or other force majeure events, (h) any acts of declared or undeclared war, hostilities, sabotage or terrorism, or any outbreak, escalation or worsening of such hostilities, (i) any failure of the Group Companies to meet, with respect to any period or periods, any internal or published projections, forecasts, estimates or

business plans, (j) any action taken by Buyer or its Affiliates in breach of Buyer’s obligations under this Agreement, (k) any adverse change in or effect on the Group Companies that is caused by any delay in consummating the Closing as a result of any violation or breach by Buyer of any representation, warranty, covenant or agreement contained in this Agreement, (l) any change in the cost or availability of financing to Buyer, (m) any action that is expressly required to be taken pursuant to the terms of this Agreement and (n) epidemics, pandemics or disease outbreaks, including COVID-19, or COVID-19 Measures or any change in COVID-19 Measures or interpretations thereof; provided, that (i) for purposes of clause (i) above, the underlying cause of, or the facts and circumstances giving rise to, such failure that is not otherwise excluded from this definition of Material Adverse Effect may be taken into account in determining whether a Material Adverse Effect has occurred and (ii) any such change, effect, event, occurrence, state of facts or development referred to in any of clauses (a), (b), (c), (d), (g), (h) or (m) above may be taken into account in determining whether a Material Adverse Effect has occurred to the extent such change, effect, event, occurrence, state of facts or development has had a disproportionately adverse effect on the Company as compared to other companies operating in the industry in which the Company operates. For the avoidance of doubt, a “Material Adverse Effect” will not be measured against any forward-looking statements, projections or forecasts of the Group Companies or any other Person.

“Measurement Date” means the date that is two Trading Days prior to the Closing Date.

“Net Working Capital” means, as of any time of determination, (a) the consolidated current assets of the Group Companies listed and as defined in Part 1 of the Reference Statement as of such time of determination, minus (b) the consolidated current liabilities of the Group Companies listed and as defined in Part 1 of the Reference Statement as of such time of determination. For the avoidance of doubt, any item included or reflected in the calculation of any of “Cash” or “Indebtedness” shall not be included in or otherwise constitute “Net Working Capital”, and any item included or reflected in “Net Working Capital” shall not be included in or otherwise constitute “Cash” or “Indebtedness” (it being understood and agreed that the intent of this sentence is to avoid duplication or “double counting” of the same liability hereunder).

other social security Laws or regulations, (g) deposits to secure the performance of bids, trade Contracts (including customer Contracts), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary and usual course of business, (h) customary Liens (including the right of set-off) in favor of institutions at which deposit, commodity and security accounts are held encumbering such accounts and the assets held therein incurred in the ordinary and usual course of business, (i) Liens arising under this Agreement, (j) Liens incurred by the Group Companies with the written consent of Buyer, (k) non-exclusive licenses of Intellectual Property granted in the ordinary course of business, (l) with respect to real property, other Liens, imperfections in title, charges, easements, rights of way, restrictions, defects, and exceptions that do not materially impair the use or value of the property to which they relate or which would not reasonably be expected to materially detract from the value of the property, (m) Liens reserved against or identified in the Financial Statements, as the case may be, to the extent described in the notes thereto, and (n) Liens described on Schedule 1.01(b)(ii).

“Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

“Pre-Closing Refund” means any refunds or credits of Taxes (including any interest in respect thereof) of the Group Companies attributable to or arising in any taxable period that ends on or before the Closing Date and the portion of any Straddle Period ending on and including the Closing Date.

“Pre-Closing Tax Period” means any Tax period (or portion of a Straddle Period) that ends on or before the Closing Date.

“Pre-Closing Taxes” means (a) Taxes of Newco, (b) Taxes (or the non-payment thereof) of any Group Company for any Pre-Closing Tax Period (in the case of any Straddle Period, determined in the manner set forth in Section 8.02(f)), and (c) Taxes of any Person (other than the Group Companies) for which any Group Company becomes liable by reason of (i) being a member of an affiliated, combined, consolidated, unitary or aggregate group at any time prior to the Closing, including under Treasury Regulations Section 1.1502-6 or any analogous or similar provision under any federal, state, local, or foreign Law, (ii) being a successor-in interest or transferee of any other Person, which Taxes solely relate to an event or transaction occurring prior to Closing, or (iii) having an express obligation to indemnify any other Person under any Tax Sharing Agreement entered into at any time prior to Closing. The Parties acknowledge and agree that Pre-Closing Taxes shall not include any Taxes or other amounts due resulting from the [***].

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“Purchase Price” means the aggregate of (i) the Closing Cash Consideration as may be adjusted pursuant to Section 2.04, (ii) the Partnership Formation Consideration and (iii) the Stock Consideration.

“Reference Statement” means the reference statement set forth on Exhibit E attached hereto containing (a) the accounting methods, practices, principles, policies and procedures to be used in the calculation of Net Working Capital, Cash and Indebtedness (Part 1), and (b) an example calculation of Net Working Capital, Cash and Indebtedness (Part 2) prepared in accordance with the accounting methods, practices, principles, policies and procedures set forth in Part 1 of the Reference Statement.

“Release” means any release, spill, emission, leaking, pumping, pouring, emptying, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into or through the indoor or outdoor environment (including the abandonment, discarding or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material).

“Remedial Action” means all actions to (a) correct, mitigate, or address any actual, alleged or threatened violation of or non-compliance with any Environmental Law or any permit required under any Environmental Law, or (b) to clean up, remove, remediate, mitigate, abate, contain, treat, monitor, assess, evaluate, investigate, prevent, minimize or in any other way address any environmental condition or the actual, alleged or threatened presence, Release or threatened Release of any Hazardous Materials (including the performance of pre-remedial studies and investigations and post-remedial operation and maintenance activities).

“Representatives” means, with respect to any Person, any and all directors, managing members, managers, general partners, officers, employees, consultants, financial advisors, counsel, consultants, accountants, representatives, and other agents of such Person.

“Restrictive Covenant Agreement” means an agreement between Schladen and Buyer in the form attached hereto as Exhibit F.

“Retention Awards” means a number of shares of Restricted Stock granted to Key Employees pursuant the DMC Plan determined by dividing $2,601,000 by the Average VWAP of DMC Stock for the twenty (20) Trading Days immediately preceding the Measurement Date, and having the same terms and conditions as are applicable to grants by DMC to similarly situated employees at DMC.

“Retention Bonus Amount” means one third (1/3) of the aggregate dollar amount of Retention Awards.

“Restricted Stock” means shares of DMC Stock granted pursuant to Section 8 of the DMC Plan.

“Schladen Employment Agreement” means an agreement between Schladen and the Company in the form attached hereto as Exhibit G.

“Shareholders” means the M. Sayour Trust, the Munera Family Trust, Schladen Family Trust, R. Sayour and the LKS Family Trust; provided, however that a Limited Guarantor will be treated as a Shareholder for purposes of the indemnity and related provisions hereof (subject to all of the limitations on indemnity that would apply to such Shareholder), solely as such provisions relate to the last sentence of Section 4.01(a), (b), (c), (d) or (e), as applicable.

“Shareholders’ Agreement” means that certain Agreement of Shareholders of Arcadia Inc. dated as of December, 1998 between the Company and the shareholders listed on the signature pages thereto, and any other agreement purporting to cover similar subject matter that may be in effect, whether oral or written.

“Shareholders’ Representative Fund” means One Million Dollars ($1,000,000), together with any interest earned thereon in the applicable account maintained by the Shareholders’ Representative.

“Specified Change in Control Bonuses” means the bonuses the Company and its Subsidiaries are required to award on a one-time basis to Schladen subject to the consummation of the Transactions contemplated in this Agreement, which shall be equal to $1,500,000 prior to taxes.

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“Stock Consideration” means Five Hundred Fifty One Thousand Four Hundred and Fifty Eight (551,458) shares of DMC Stock (such number of shares to be proportionately adjusted to reflect any stock split, stock combination or similar change after the date hereof and prior to the Closing).

“Straddle Period” means any taxable period beginning on or before and ending after the Closing Date.

“Subsidiary” means, with respect to any Person, a corporation or other entity of which fifty percent (50%) or more of the voting power of the Equity Interests is owned, directly or indirectly, by such Person.

“Target Closing Date Net Working Capital” means Fifty Seven Million Four Hundred Thousand Dollars ($57,400,000), which has been calculated in accordance with the Reference Statement.

“Tax Returns” means any return, declaration, report, statement, information statement or other document filed or required to be filed with respect to Taxes with any Governmental Authority, including any amendments or supplements of any of the foregoing.

“Tax Sharing Agreement” means any Tax allocation agreement, Tax indemnification agreement, Tax sharing agreement or similar Contract or arrangement (other than any such Contract or arrangement entered into in the ordinary course of business, the primary subject matter of which is not Taxes).

“Taxes” means any federal, state, local, foreign and other taxes, levies, fees, imposts, duties and charges of whatever kind imposed by any Taxing Authority (including any interest, penalties, or additions attributable thereto, imposed in connection therewith, or imposed with respect thereto), including, without limitation, taxes imposed on, or measured by, net or gross income, alternative or add-on minimum, accumulated earnings, franchise, doing business, capital stock, net worth, capital, profits, windfall profits, severance, gross receipts, business, securities transaction, value added, sales, use, excise, custom, transfer, registration, stamp, environmental tax, premium, real property, personal property, production, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment, social security, disability, workers’ compensation, payroll, withholding, and estimated.

“Taxing Authority” means the IRS or any other Governmental Authority responsible for the imposition or collection of any Tax.

“Trading Day” shall mean a day on which trading in DMC Stock generally occurs on the NASDAQ Stock Exchange.

“Transaction Documents” means, collectively, the Confidentiality Agreement, the Escrow Agreement, the Amended Leases, the Operating Agreement and any other written agreements, documents and certificates to be executed and delivered by or on behalf of Buyer, the Shareholders, Newco, Schladen or the Company pursuant to this Agreement or in connection herewith.

that is expressly required to be sought by this Agreement, in each case to the extent not paid by or on behalf of the Company prior to the Calculation Time and required to be paid by the Company following the Calculation Time; provided, however, that Transaction Expenses shall exclude (a) costs and expenses contemplated to be paid by Buyer or its Affiliates pursuant to this Agreement, and (b) costs and expenses incurred by the Company after the Closing. For the avoidance of doubt, any item included or reflected in the calculation of any of “Cash”, “Indebtedness” or “Net Working Capital” shall not be included in or otherwise constitute “Transaction Expenses”, and any item included or reflected in “Transaction Expenses” shall not be included in or otherwise constitute “Cash”, “Indebtedness” or “Net Working Capital” (it being understood and agreed that the intent of this sentence is to avoid duplication or “double counting” of the same liability hereunder).

“Transfer Tax” means any excise, transfer, sales, use, value added, stamp, documentary, registration, conveyance, recording, property or real property transfer or other similar Tax, levies, charges and fees (and any interest, penalty or addition thereto), in each case, payable as a result of the consummation of the transactions contemplated hereby; provided that, for the avoidance of doubt, property Tax assessments or reassessments effective on and after the Closing (and any interest, penalty or addition thereto) shall not be treated as Transfer Tax.

“VWAP” with respect to any Trading Day, means the per share volume-weighted average price of DMC Stock as displayed under the heading “Bloomberg VWAP” on the Bloomberg page for the “<equity> AQR” page corresponding to the “ticker” for DMC Stock (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is not available, the market value per share of one share of DMC Stock on such Trading Day as determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained by the Buyer for this purpose) and the “Average VWAP” per share of DMC Stock over a specified period means the arithmetic average of the VWAP per share for each Trading Day in the relevant period.

“Working Capital Escrow Account” means the account established by the Escrow Agent pursuant to the Escrow Agreement to hold the Working Capital Escrow Amount.

“Working Capital Escrow Amount” means Four Million Dollars ($4,000,000).

not be included as current liabilities in Net Working Capital), in each case, determined in accordance with the Reference Statement.

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

“Company Intellectual Property” means the Intellectual Property owned or purported to be owned by the Group Companies.

“Company Payee” means any Person owed any Transaction Expenses.

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of July 29, 2021 by and between the Company and Buyer.

“Contract” means any agreement, contract, subcontract, lease or obligation to which a Person is a party and that is legally binding on such Person.

“COVID-19” means COVID-19 and any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks.

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“Customer Prepayments” means any and all amounts paid by customers to pre-pay any portion of the full purchase price of an order by or on behalf of such customer.

“Disclosure Schedule” means the Schedules delivered by Newco, the Company or the Shareholders, as applicable, to Buyer on the date hereof with respect to Articles III and IV of this Agreement.

“DMC Plan” means that certain DMC Global Inc. 2016 Omnibus Incentive Plan, approved by stockholders on November 4, 2016.

“DMC Stock” means the common stock of DMC, par value $0.05 per share.

“Equity Interests” means with respect to any Person, any of its capital stock, partnership interests (general or limited), limited liability company interests, trust interests or other securities or other equity interests which entitle the holder thereof to receive dividends or distributions on liquidation, winding up or dissolution of such Person, or to vote for the election of directors, managers or other equivalent management of such Person, or to exercise other rights generally afforded to shareholders of a corporation (including the ability to exert control over such Person).

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

“Escrow Agent” means BOKF, NA.

“Escrow Agreement” means the escrow agreement to be entered into as of the Closing Date, substantially in the form of Exhibit D attached hereto.

“FFCRA” means Public Law Number 116-127, and any rules, regulations or guidance promulgated thereunder, or published with respect thereto, by any Governmental Authority.

“Governmental Authority” means any national, federal, state, local or foreign government, governmental authority, regulatory or administrative agency, court or tribunal.

“Governmental Order” means any binding order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, issued or entered by any Governmental Authority.

“Group Company” means each of the Company and the Company Subsidiaries.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Indebtedness” means, as of any time of determination, without duplication, all obligations of the Group Companies for money borrowed by the Group Companies, in respect of leases of the Group Companies, that have been, in accordance with the Reference Statement, recorded as capital leases by the Group Companies, in respect of direct financing leases and purchase money and/or vendor financing (in each case other than with respect to trade payables, accrued expenses, current accounts and similar obligations incurred in the ordinary course of business), for the deferred purchase price of property or services and all earnouts and contingent payment obligations arising pursuant to any acquisition or divestiture, evidenced by notes, bonds, debentures or similar Contracts of the Group Companies, [***], [***], under any interest rate or currency protection agreement or similar hedging agreement of the Group Companies, assuming such agreements were terminated minus any amounts payable to the Group Companies in connection with such termination (which may be a positive or negative number), and in respect of letters of credit, bankers’ acceptances or similar arrangements of the Group Companies, in each case, to the extent drawn or funded, and obligations under indebtedness of the type referred to in clauses (a)(i) through (a)(ix) above of another Person that are guaranteed, secured by any Lien (other than a Permitted Lien) on any property or asset of, or subject to a keep well or similar obligation of, any Group Company. Indebtedness shall exclude any inter-company indebtedness among the Group Companies, any Customer Prepayments (whether or not otherwise includable in any of clauses (a)(i) through (a)(ix) above and trade liabilities, any accrued expenses or any other liability to the extent reflected in the calculation of Net Working Capital.